Equity Analysis

Dear Members,

The Board of Directors ("Board") of EFC (I) Limited ("Company") with immense pleasure present their report on the business and operations of your Company for the financial year 2023-24. This Report is being presented along with the audited financial statements for the year.

The financial summary on standalone basis for year ended is as follows:

(Rs. in Lakhs)

The financial summary on consolidated basis for year ended is as follows:

(Rs. in Lakhs)

During the year, 18 (Eighteen) meetings of the Board were held. The Details of the meetings are mentioned in Corporate Governance Report annexed to this Report

During the year under review, the Company has achieved turnover of Rs. 1097.24 Lakhs as against turnover of Rs. 699.50 Lakhs in the previous year. After deducting total expenditure aggregating to Rs. 1607.55 Lakhs, the Company has earned profit after tax of Rs. 253.94 Lakhs as against profit of Rs. 49.09 Lakhs of the previous year.

During the year under review, the Company has achieved turnover of Rs. 41,945.98 Lakhs as against turnover of Rs. 10,321.35 Lakhs in the previous year. After deducting total expenditure aggregating to Rs. 34,780.43 Lakhs, the Company has earned profit after tax of Rs. 6330.40 Lakhs as against profit of Rs. 386.25 Lakhs of the previous year.

The amount which is carried to any reserves, if any, is duly disclosed in Balance Sheet and Notes to Balance Sheet as part of Financial Statements.

1. EFC (I) Limited forays into sponsoring and managing Category II – Alternative Investment Fund (AIF), a "Rental Yield Fund" to acquire premium commercial real estate and lease them as Managed / Serviced Office Spaces – a legacy business that they have excelled over 10 years.

The Company to sponsor and manage Alternative Investment Fund (AIF) - Category II incorporated to SPVs in the name of EFC Alternate Investment LLP and EFC Investment Advisors Private Limited.

2. EFC (I) Limited, through its WOS – EFC Ltd, ventures into managing Small & Medium Real Estate Investment Trust (SM REIT) and make its presence felt as the first publicly listed managed / coworking office provider. The company would acquire and manage commercial real estate and lease out as Managed / Service Office Spaces, being their core business for more than a decade.

The Company has incorporated step-down subsidiary in the name of EFC REIT Private Limited as investment manager entity which sets up the Small and Medium Real Estate Investment Trusts (SM REIT) and manages assets and investments of the SM REIT and undertakes operational activities of the SM REIT.

3. EFC (I) Limited expands its horizons by establishing a Wholly-owned Subsidiary (‘WOS'), paving the way for potential strategic collaborations / investments in the realm of Commercial Real Estate Projects, IT Park Projects, and beyond.

The Company incorporates a WOS for Potential Strategic partnership and investments in commercial real estate projects, IT Park Projects, etc. in the name of "EFC Estate Private Limited".

4. EFC Limited (MWOS) acquired 51% stake in ‘Bigbox Ventures Private Limited' (Bigbox).

Bigbox is a fast-growing managed workspace company offering workspace as a service to enterprises and start-ups. Bigbox provides occupiers with flexibility, speed, security, and a world-class, contemporary workplace experience, all while enhancing asset value. The company operates over 3,000 workstations across 9 locations in Pune.

5. Ek Design Industries Limited, Unlisted Subsidiary has acquired 100% stake in ‘Degwekar Industries Private Limited'.

Degwekar Industries Private Limited is in the same industry of Ek Design Industries Limited. This acquisition will help to expand market presence and improve our operations. We believe this move will bring significant benefits to our customers and stakeholders.

Except as above there were no material changes and commitments affecting the financial position of the Company occurred between the ends of the financial year to which this financial statement relate on the date of this report.

1. Conversion of Warrants into Equity Shares

The Company has converted all 6,23,000 outstanding warrants into Equity shares in a ratio of 1:1.

2. Raising of funds of Rs. 301.40 Cr. by issuance of Equity Shares on a private placement basis

During the financial year, the Company has raised fund of Rs. 301.40 Cr. by issuance of equity shares.

3. Split of Equity Share in a ratio of 1:5

With a view to enhance the liquidity of Equity Shares and to rationalize the capital structure of the Company, there was sub-division/ split of 1 (one) equity share of Face value Rs. 10/- (Rupees Ten only) into 5 Equity Shares of the face value of Rs. 2/- (Rupee Two only) based on the recommendation of Board of Directors of your Company.

4. The Group ventured into Furniture Manufacturing by incorporating subsidiary called ‘Ek Design Industries Limited'

5. Filed Application with Regulatory Authorities for Merger of Whitehills Interior Limited with EFC (I) Limited

6. Increase in the Authorized Share Capital of the Company:

The Company has increased its authorized share capital to Rs. 15 Cr.

Details of loans, guarantees and investments under the provisions of section 186 of the Companies Act, 2013, are disclosed in Balance Sheet and Notes to Balance Sheet as part of Financial Statements.

The Company is exposed to inherent uncertainties owing to the sectors in which it operates. A key factor in determining a Company's capacity to create sustainable value is the risks that the Company is willing to take (at strategic and operational levels) and its ability to manage them effectively. Many risks exist in a Company's operating environment and they emerge on a regular basis. The Company's Risk Management processes focus on ensuring that these risks are identified on a timely basis and addressed. The Board has a duly constituted Risk Management Committee of Directors.

The Company is well aware of the above risks and as part of business strategy has a robust risk management framework to identify, evaluate and mitigate business risks with timely action. This framework seeks to enable growth, create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage by undertaking effective steps to manage risks.

The Board approved Risk Management policy has been put in place, which is reviewed periodically, to establish appropriate system and procedures to mitigate all risks faced by the Company.

The Risk Management policy of the Company is available on the website at https://www.efclimited.in/policies.html

There is no change in the nature of business carried on by the Company during the year under review.

The Company has Authorized Share Capital of Rs. 15 Cr.

The Company has Paid-up Share Capital of Rs. 9.95 Cr.

Also, during the year under review, the Company had neither issued any equity shares with differential rights as to dividend, voting rights or otherwise nor had issued sweat equity shares to its directors or employees

As on March 31, 2024, there were no outstanding share warrants of the Company

The Board composition, as on March 31, 2024, was as under:

There were no changes which took place on the Board of the Company during the year.

Other details of the Directors on the Board such as:

I. thenumberofotherDirectorships,CommitteeChairmanships/ Memberships held by the Directors in other Companies;

II. names of other Equity Listed Companies (in any), where the Directors of the Company hold directorships, along with the category of such Directorships, are disclosed in the ‘Corporate Governance Report' of the Company for the year under review, which forms part of the Annual Report separately

Further, details with respect to the meetings of the Board, its committees and remuneration of Directors etc. are disclosed in the ‘Corporate Governance Report' of the Company for the year under review, which forms part of the Annual Report separately.

The Auditors has not reported any frauds under sub-section (12) of section 143 other than those which are reportable to the central government.

Your Company has not accepted any fixed deposits within the meaning of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 and, as such, no amount of principal or interest on public deposits was outstanding as of the Balance Sheet date.

During the year, no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

The Company has in place adequate internal financial controls with reference to Financial Statements. It has laid down certain guidelines, policies, processes and structures which are commensurate with the nature, size, complexity of operations and the business processes followed by the Company. These controls enable and ensure the systematic and efficient conduct of the Company's business, protection of assets, prevention and detection of frauds and errors and the accuracy and completeness of the accounting and financial records.

The Company has in place a gender neutral Anti-Sexual Harassment Policy which aims to provide an environment, which is free of discrimination, intimidation and abuse. The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year, no complaints were received from employees in this regard.

No application made or no any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year.

There are no proceedings pending under the Insolvency and Bankruptcy Code, 2016 and that there is no instance of onetime settlement with any Bank or Financial Institution, during the year under review.

The Company has not entered into any related party transaction as provided in sub-section (1) of section 188 of the Companies Act, 2013 which is not in its ordinary course of business or not on arm's length basis.

Hence, in accordance of proviso four of sub-section (1) of section 188 of the Companies Act, 2013, the sub-section (1) of section 188 of the Companies Act, 2013 is not applicable to our Company.

The Board of Directors of the Company, keeping in view the current financial position, has decided not to recommend any dividend for the Financial Year 2023-24.

In terms of Section 92(3) of the Act and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the Company's website under the web link https://www.efclimited.in/annual-return.html

Disclosure pursuant to Rule 5 (2) of Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 during the year.

Details pertaining to remuneration as required under section 197(12) of the Companies Act, 2013 read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

The percentage increase in remuneration of each Director, Chief Financial Officer and Company Secretary during the financial year 2023-24, ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year 2023-24 and the comparison of remuneration of each Key Managerial Personnel (KMP) against the performance of the Company are as under:

(a) The median remuneration of employees of the Company during the financial year was Rs. 2,26,766 per year.

(b) There were 17 permanent employees on the rolls of Company as on March 31, 2024;

At the 38th (Thirty-Eight) Annual General Meeting (‘AGM'), held on September 30, 2022, M/s. Mehra Goel & Co., Chartered Accountants, were appointed as Statutory Auditors of the Company to hold office for their first term of 5 (five) consecutive years commencing from the conclusion of 38th (Thirty-Eight) AGM till the conclusion of 43rd (Forty Third) AGM of the Company to be held in the financial year 2027.

The Statutory Auditor has not made any qualification, reservation or adverse remark or disclaimer in its report.

Mr. Chirag Sachapara, Proprietor of M/s. Sachapara & Associates., Practicing Company Secretaries was appointed to conduct the Secretarial Audit of the Company for the Financial Year 2023-24, as required under Section 204 of the Act and Rules framed thereunder. The Secretarial Audit Report for the Financial Year 2023-24 forms part of this report as Annexure-1.

Point-wise explanation or comment on qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in its report is as follows:

The Secretarial Audit report of the Material Subsidiary Company i.e. EFC Limited is annexed herewith as Annexure-2 to the Report. Point-wise explanation or comment on qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor in its report is as follows:

The Company has received the necessary declaration from each Independent Director under Section 149(7) of the Act, that he/ she meets the criteria of independence laid down in Section 149(6) of the Act and under the Listing Regulations.

Based on the annual confirmations received from the Independent Directors, in terms of Regulation 25(9) of the Listing Regulations, the Board is of the opinion that the Independent Directors fulfil the criteria of Independence as specified under Section 149(6) of the Act read with Regulation 16(1)(b) of the Listing Regulations and are Independent of the management.

Further, the Board members are satisfied with regard to integrity, expertise, experience and proficiency of the Independent Directors of the Company

The Board has adopted the Nomination and Remuneration Policy of the Company pursuant to the provisions of Section 178(3) of the Act and the Listing Regulations. The Policy includes laying down criteria for identifying persons who are qualified to become Directors, Key Managerial Personnel (‘KMP'), Senior Management Personnel and Other Employees of the Company, laying down criteria to carry out evaluation of every Director's performance, determining the composition and level of remuneration, including reward linked with the performance, which is reasonable and sufficient to attract, retain and motivate Directors, KMPs, Senior Management Personnel and Other Employees to work towards the long term growth and success of the Company.

The Nomination and Remuneration Policy of the Company is available on the Company's website under the web link: www.efclimited.in

Your Company has no activity requiring conservation of energy or technology absorption; hence particulars of statement under Section 134 (m) of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 for conservation of energy and technology absorption are not applicable to your Company.

With regard to foreign exchange earnings and outgo for the current year 2023-24 the position is as under:

The prerequisite in terms of Section 135 of the Companies Act, 2013 of corporate social responsibility does not apply to the Company.

As on the end of financial year, details of subsidiaries, joint ventures and associate companies is as follows:

A separate statement containing the salient features of financial statements of subsidiaries/joint venture/associate companies of the Company in the prescribed Form AOC – 1 in compliance with Section 129 (3) and other applicable provisions, if any, of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014 forms part of this Annual Report.

The said Form also highlights the financial performance of each of the subsidiaries included in the Consolidated Financial Statements (CFS) of the Company pursuant to Rule 8(1) of the Companies (Accounts) Rules, 2014.

In accordance with Section 136 of the Act, the financial statements of the subsidiary and associate companies are available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the Annual General Meeting of the Company i. Any member desirous of obtaining a copy of the said financial statements may write to the Company Secretary at the Registered Office of the Company.

The financial statements including the CFS, and all other documents required to be attached to this report have been uploaded on the website of the Company at https://www. efclimited.in/investor-relation.html

In the opinion of the Board all the Independent Directors including Independent Directors appointed during the year, if any, are person of integrity and has expertise and experience in relevant field. Further, all the independent directors has cleared proficiency self-assessment test conducted by the Indian Institute of Corporate Affairs.

The Board of Directors of the Company has initiated and put in place evaluation of performance of the board, its committees and individual directors. The result of the evaluation is satisfactory and adequate and meets the requirement of the Company.

The Company is not required to maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013.

Composition of Audit Committee under section 177 of the Companies Act, 2013 is as follows:

In accordance with the provisions of sub-section (5) of section 134 of the Companies Act, 2013 the Board hereby state that-

(a) in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

(b) the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company at the end of the financial year and of the profit and loss of the company for that period;

(c) the directors had taken proper and sufficient care for the maintenance of adequate counting records in accordance with the provisions of this Act for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(d) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

(f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

Corporate Governance Report pursuant to Part C of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure-3.

Compliance Certificate by Chief Financial Officer pursuant to regulation17(8)andPartBofScheduleIIofSecuritiesandExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure-4.

The Company has received confirmations from all the Board of Directors as well as Senior Management Executives regarding compliance of the Code of Conduct during the year under review. A declaration by the Chief Financial Officer affirming compliance of Board Members and Senior Management Personnel to the Code is attached to this report as Annexure-5.

Compliance Certificate regarding compliance of conditions of Corporate Governance by Practicing Company Secretary pursuant to Part E of Schedule V of Securities and Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached to this report as Annexure-6.

Management Discussion and Analysis pursuant to Part B of Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is part of the Annual Report.