Explicit Finance Ltd Directors Report

To,

The Members

Your directors have pleasure in presenting their Thirty (30^th) Annual Report on the business and operations of the company along with the Audited Financial accounts for the Financial Year ended 31^st March, 2024.

FINANCIAL RESULTS

(Amount in Lacs)

Particulars	Year Ended 31st March 2024	Year Ended 31st March 2023
Total Revenue	940.18	2,286.51
Less: Operating Expenses & Provisions	938.36	2,285.68
Profit/(Loss) before Tax	1.82	0.83
Less: Provision for Taxation	0.30	0
Profit/(Loss) after Tax	1.52	0.83
Comprehensive Income/(Loss)	0	0
Profit/(Loss) After Tax (PAT) including Other	1.52	0.83
Earnings per Share (EPS) (Rs.)	0.02	0.01

REVIEW OF OPERATION:

During the financial year under review total income of the Company is Rs. 940.18 Lacs as compared to last years total income of Rs. 2,286.51 Lacs. Company has earned profit of Rs. 1.52 lacs as compare to profit of Rs. 0.83 lacs of the previous year.

BUSINESS REVIEW:

Explicit Finance Limited (“The Company”) is a non-banking financial company engaged in Secondary capital market activities and also provide a wide range of services including: -

• Individual/Corporate Finance

• Loans against Shares and securities

• Loans against property

• Financial Consultancy Services

DIVIDEND:

Due to insufficient profits the Board of Directors has not recommended any dividend.

MANAGEMENT DISCUSSION ANALYSIS REPORT:

The Management Discussion and Analysis forms an integral part of this Report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Companys various businesses, internal controls and their adequacy, risk management systems and other material developments during the financial year 2023-2024.

A. INDUSTRY STRUCTURE & DEVELOPMENT RISKS AND CONCERNS:

NBFC is amongst highly regulated sectors and is exposed to market risk and liquidity risk. In the present economic situation in country and globally all the financial institutions are at very heavy risk. The secondary market is also highly volatile and with unstable trends of market it is also pro risk area.

For controlling inflation RBI keeps on changing norms periodically which impacts working pattern and cash flow.

OPPORTUNITIES

Micro financing and unsecured consumer loans are emerging as new avenue and with increasing purchasing power and having direct nexus to working population the available consumer base is very huge and number of NBFC/Banks/FIS catering in the area are not sufficient to cater the demand resulting in favorable demand and supply ratio for NBFCs

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Internal Control measures and systems are established to ensure the correctness of the transactions and safe guarding of the assets. Considering the size and nature of activities, the company has adequate internal control system covering both accounting and administrative control. In addition, the internal audit is carried out periodically. The management ensuring an effective internal control system so that the financial statements and reports give a true and fair view and during the year under review no material or serious observation has been received from the Internal Auditors of the Company for inadequacy or ineffectiveness of such control.

B. HUMAN RESOURCES

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

C. CAUTIONARY NOTE

Certain Statements in the Management Discussion and Analysis describing the companys views about the industry, expectations, objectives, etc. may be understood forward looking statement within the meaning of applicable laws and regulations. Factors like changes in Government regulations, tax laws and other factors such as industrial relations and economic developments etc. may further influence the companys operations or performance. Actual results may differ substantially or materially from those expressed or implied.

RESERVES:

The reserves are transferred in accordance with statutory provisions(s).

SHARE CAPITAL:

The Company had not issued any equity shares either with or without differential rights during the F.Y. 20232024 and hence, the disclosure requirements under Section 43 and Rule 4 (4) of the Companies (Share Capital and Debentures) Rules, 2014, are not applicable.

DEPOSITS:

The Company has neither accepted nor renewed any deposits from public or members during the year under review under Section 73 of the Companies Act, 2013 read with Chapter V of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed deposits, unclaimed / unpaid interest, refunds due to the deposit holders or to be deposited to the Investor Education and Protection Fund as on 31st March, 2024.

DIRECTORS:

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company:

a) Mr. Rajesh Nanda, (DIN: 06399927) (Managing Director) of the company, for the term of five years from August 14, 2023.

b) Ms. Hetal Bhanushali (DIN: 10266055) is appointed as an Independent Director under category of additional director w.e.f. August 14, 2023 and was regularized in annual general meeting of the company held on September 30, 2023.

c) Mrs. Swati Dave, (DIN: 03299627) (Managing Director) of the Company has tendered her

resignation from the Board of the Company w.e.f. August 07, 2023.

d) Mr. Jayesh Jain, (DIN: 02303327) (Non- Executive Independent Director) of the Company has tendered his resignation from the Board of the Company w.e.f. July 24, 2023.

e) Mr. Nirmal Singh Raju, (DIN: 10636825), was appointed as an independent director (Additional director) of the Company w.e.f. June 01, 2024.

CHANGES IN KEY MANAGERIAL PERSONNEL (KMPS) DURING THE YEAR 2023-2024:

Ms. Taruna Deepak Ghanekar, was appointed as Chief Financial Officer of the Company w.e.f. May 30, 2022.

Ms. Taruna Deepak Ghanekar resigned w.e.f. August 14, 2023.

Mr. Siddhesh Patil was appointed as Chief Financial Officer w.e.f. July 15, 2023. Mr. Siddhesh Patil has experience in Finance sector for more than a decade at the senior position and will be adding value to the organization with his expertise and experience going hand in hand.

DIRECTORS RESPONSIBILITY STATEMENT:

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

i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. The directors have 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 loss of the company for that period;

iii. Proper and sufficient care has been taken 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;

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 internal financial controls are adequate and were operating effectively; and

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

DECLARATION BY INDEPENDENT DIRECTOR:

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

EVALUATION OF DIRECTORS, COMMITTEE AND BOARD:

Pursuant to the provisions of the Companies Act, 2013 and the Listing Regulations, the Board of Directors has carried out evaluation of the Board, its Committees and Individual Directors. The evaluation process has been explained in the Report on Corporate Governance, which forms part of this Boards Report.

Also, the Independent Directors, at their meeting reviewed the performance of the Board, 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, including detailed 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 the Companies 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 2024, the dates are May 30, 2023, July 05, 2023, August 14, 2023 November 09, 2023 and February 14, 2024. Detailed information on the Board Meetings with regard to attendance of each of the Directors thereat have been included in the Corporate Governance Report, which forms part of this Board Report.

Additionally, during the financial year ended 31^st March 2024 a separate meeting of the Independent Directors was held on February 14, 2024, in compliance with the requirements of Schedule IV of the Companies Act, 2013 and Regulation 25(3) and 25(4) of the Listing Regulations.

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

COMMITTEES OF THE BOARD:

The Board of Directors of your company has constituted various committees in compliance with 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 and fixing 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 Governance Section in this Annual Report.

NOMINATION & REMUNERATION POLICY:

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The appointment and Remuneration Policies stated in the Corporate Governance Report 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 Act, 2013 and Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s)/amendment(s)/re-enactment thereof, for the time being in force), is set out in Annexure-I hereto, which forms part of this Boards Report.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANY:

The Company does not have any subsidiary or associate company and has not entered into joint venture with any other company during the financial year ended 31st March 2024. Accordingly, a statement under the provisions of Section 129(3) of the Companies Act, 2013, containing salient features of the financial statements of the Companys subsidiary(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 the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a separate report on Corporate Governance Report forms integral part of this Board Report. The requisite compliance certificate as required under Part E of Schedule V of the Listing Regulation is issued by the Auditors, pertaining to the compliance of the conditions of Corporate Governance is Annexed thereto.

EXTRACT OF ANNUAL RETURN:

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

In accordance with the requirements mentioned under Section 134(3)(a) and Section 92(3) of the Act and circulars issued thereon, the Annual Return of the Company for the FY 2023-24 is available on the Companys website at https://www.explicitfinance.net/.

STATUTORY AUDITORS:

M/s. GMCS & Co., Chartered Accountants, (Firm Reg. No: 141236W) as a statutory auditor of the company, for a term of five consecutive years starting from Financial Year 2023-24 till the Annual General Meeting for the year ended March 31, 2028. The resolution passed at the Annual General Meeting of the meeting along with this consent and eligibility certificate.

AUDITORS REPORT:

Independent Auditors Report

There are no qualifications, reservation or adverse remark or disclaimer in the Independent Auditors Report provided by M/s. GMCS & Co, Chartered Accountants, for the F.Y. 2023-2024. The notes to accounts forming part of financial statements 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 there under Board of Directors have appointed M/s. Vishal Manseta, Practicing Company Secretaries to conduct Secretarial Audit. The Secretarial Audit Report for the Financial Year ended 31^st March, 2024 forms the integral part of the Board Report as Annexure-III. There are no qualifications, reservation or adverse remark or disclaimer in Secretarial Audit Report.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER 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 the Companies (Meetings of Board and its Powers) Rules, 2014, the loan made, guarantee given or security provided in the ordinary course of business by a Non- Banking Financial Company (NBFC) registered with Reserve Bank of India are exempt from the applicability of provisions 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 on arms length basis and were in the ordinary course of the business. There are no materially significant related party transactions made by the company with Promoters, Key Managerial Personnel or other designated persons which may have potential conflict of interest with the company at large. Accordingly, disclosures of related party transactions in Form AOC-2 have not been furnished. All Related Party Transactions were placed before Audit Committee and Board for their approval. Your Company has formulated policy of Related 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 Companys financial position have 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 seven years. Therefore, there were no funds which were required to be transferred to Investor Education 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 provisions relating 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 and guidelines, 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 to manage uncertainty, cultivating the same in their decisionmaking process pertaining to all business divisions and corporate functions. For each of the risks identified, corresponding controls are assessed and policies and procedures are put in place for monitoring, mitigating and reporting on periodic basis.

CORPORATE SOCIAL RESPONSIBILITY:

The provisions of Corporate Social Responsibility are not applicable to the company as company does not fall into ambit of the provisions of section 135 of Companies Act, 2013 and 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 and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the timely prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. Further, the management regularly reviews the control for any possible changes and takes appropriate actions.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

The details in respect of internal control systems and their adequacy are included in the 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 the Company.

VIGIL MECHANISM/WHISTLE BLOWER POLICY:

In pursuant to the provisions of section 177(9) and (10) of the Companies Act, 2013, a Whistle Blower Policy / Vigil Mechanism for directors and employees to report genuine concerns has been established by the Company in order to maintain highest standards of ethical, moral and legal conduct, adopted Vigil Mechanism/Whistle Blower policy to provide an avenue to its employees to raise concerns of any violations of legal or regulatory requirements, incorrect or misrepresentations of any financial statements and reports, etc. 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 Whistle Blower Policy of the Company is also available on the website of the Company www.explicitfinance.net.

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

The company has in place an Anti-Harassment policy in line with the requirements of the sexual harassment of women at the workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. During the year under review, company has not received any Sexual Harassment Complaints. 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.

RBI GUIDELINES

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

SIGNIFICANT ORDERS PASSED BY REGULATORS, COURTS OR TRIBUNALS IMPACTING GOING CONCERN AND COMPANYS OPERATIONS:

No orders have been passed by any Regulator or Court or Tribunal which can have an impact on the going concern status and the Companys operations in future.

COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND GENERAL MEETING:

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

ACKNOWLEDGEMENT

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

For and on behalf of the Board of Directors

SD/- Gopal Dave DIN : 00334120