Accounting Policies of Explicit Finance Ltd. Company

Mar 31, 2024

1. Corporate Information and Significant Accounting Policies

A. General Information

Explicit Finance Limited is a public company incorporated under the provisions of the Companies Act, 2013
and listed with BSE Ltd. The Company is NBFC duly registered with RBI.

B. Basis of preparation of financial statement

I. Compliance with Ind AS

Financial statements have been prepared in accordance with the Indian Accounting Standards (hereafter
referred to as the “Ind AS”) as notified by the Ministry of Corporate Affairs pursuant to Section 133 of
Companies Act, 2013 (the “Act”) read with the Companies (Indian Accounting Standards (Ind AS) Rules,
2015 as amended and other relevant provisions of the Act and rules framed thereunde.

II. Historical cost convention:

The financial statements have been prepared on a historical cost basis.

III. Rounding of amounts:

All the amounts disclosed in the financial statements and notes are presented in Indian Rupees and have been
rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise states.

IV. Current and Non-current classification:

All assets and liabilities have been classifies as current or non-current as per the Company’s normal operating
cycle (twelve months) and other criteria set out in the schedule III to the act.

C. Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.
Cost includes purchase price and expenditures directly attributable to bringing them into working condition
for its intended use.

Depreciation on property, plant and equipments is provided under the written down value method over the
useful lives of assets as prescribed in Schedule II to the Companies Act 2013 (“Act”),and management
believes that useful life of assets are same as those prescribed in Schedule II to the Act. The residual values
are not less than 5% of the Original cost of the asset. The assets residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each reporting period. Gain or losses arising from derecognisation
of property, plant and equipment are measured as difference between the net disposal proceeds and the
carrying amount of the assets and are recognized in the statement of profit and loss when the asset is
derecognised.

D. Inventories:

Inventories are valued at lower of cost or Market value computed on FIFO basis.

E. Revenue Recognition (to change as per last year BS)

1. Recognition of Dividend:- IncomeDividend from investments are recognised in the Statement of Profit and
Loss when the right to receive payment is established._

2. Recognition of Interest Income :-Interest income from a financial asset is recognised when it is
probable that the economic benefits will flow to the Company and the amount of income can be
measured reliably. Interest income is accrued on a time basis, by reference to the principal
outstanding.

3. Other Income :-The Gains / Losses from Sale and Purchase of investments are recognised in the
Statement of Profit and Loss on the trade day and cost of securities is determined on Weighted
Average Cost Method.

F. Employee Benefits

Eligible Employees receive benefit from Provident Fund which is a defined benefit plan both the employees
and the company make monthly contribution to the Provident Fund equally to specified percentage of the
covered employee salary and contribution to Government Administered Fund, however Provident Fund Act
is not applicable to the Company as on date.

G. Income tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax
payable or receivable is the best estimate of the tax amount expected to be paid or received after considering
uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at
the reporting date.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes._

H. Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• the profit attributable to owners of the Company

• by the weighted average number of equity shares outstanding during the financial year, adjusted for
bonus elements in equity shares issued during the year and excluding treasury shares

(ii) Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination
of basic earnings per share to take into account:

• the after income tax effect of interest and other financing costs associated with dilutive potential
equity shares, and

• the weighted average number of additional equity shares that would have been outstanding assuming
the conversion of all dilutive potential equity shares

I.Use of estimates and Judgements

The estimates and judgements used in the preparation of financial statements are continuously evaluated
by the management and are based on historical experience and various other assumptions and factors that
the management believes to be reasonable under existing circumstances. Difference between actual

results and_

and estimates are recognized in the period in which the results are known/materialized. The said estimates
are based on the facts and the events, that existed as at the reporting date, or that date but provide
additional evidence about conditions existing on the reporting date.

I. Impairment of non financial assets:

Assessment is done at each Balance Sheet date to evaluate whether there is any indication that a non
financial asset may be impaired. An asset’s recoverable amount is the higher of an asset’s fair value less
costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or a groups of assets. Where
the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining fair value less costs of disposal,
recent market transactions are taken into account, if no such transactions can be identified, an appropriate
valuation model is used.

II. Depreciation/amortization and useful lives of property, plant and equipment/intangible assets:
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking
into account their estimated residual value. Management reviews the estimated useful lives and residual
values of the assets annually in order to determine the amount of depreciation to be recorded during any
reporting period. The useful lives and residual values are based on the Company’s historical experience
with similar assets and take into account anticipated technological changes. The depreciation for future
periods is adjusted if there are significant changes from previous estimates.

III. Recoverability of trade receivables:

Judgments are required in assessing the recoverability of overdue trade receivables and determining
whether a provision against those receivables is required. Factors considered include the credit rating of
the counter party, the amount and timing of anticipated future payments and any possible actions that
can be taken to mitigate the risk of non-payment.

---

Mar 31, 2015

1.1 Basis of accounting and preparation of financial statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Inventories

Stock in trade is valued scrip wise, at cost or net realizable value whichever is lower in case of listed shares. Whereas in case of unquoted shares, valuation is at cost. Cost is calculated on the basis of first- in- first- out method.

1.3 Cash & Cash Equivalents

In the cash flow statement, cash and cash equivalents includes cash on hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.

1.4 Tangible Fixed Assets:

Fixed Assets have been stated at historical cost inclusive of incidental expenses, less accumulated depreciation.

1.5 Depreciation:

Depreciation has been provided on Straight line Method on prorata-basis and in some cases to the extent available at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

1.6 Revenue Recognition

Sales are recognized on transfer of significant risks and rewards of the ownership of the goods to the buyer and are reported net of turnover / trade discounts, returns and claims if any. Revenue from services are accounted as and when incurred.

Dividend income on investments is accounted for when the right to receive the payment is established. Interest income is accounted on time proportion basis taking into account the amount outstanding and applicable

1.7 Investments

Long term investments are stated at cost, less provision for diminution in the value other than temporary, if any.

1.8 Employee benefits

The Company does not have any employee to whom gratuity or any retirement benefits are payable.

1.9 Earning per Share:

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

1.10 Taxation

Tax liability is estimated considering the provision of the Income Tax, 1961. Deferred tax is recognized on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. On prudent basis, deferred tax assets are recognized and carried forward to the extent only when there is reasonable certainty that the assets will be adjusted in future.

(b) Detailed note on the terms of the rights, preferences and restrictions relating to each class of shares including restrictions on the distribution of dividends and repayment of capital.

i) The Company has only one class of Equity Shares having a par value of Rs. 10/- per share. Each holder of Equity Share is entitled to one vote per share.

ii) In the event of liquidation of the Company, the holders of Equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity shares held by the shareholders.

(e) Detailed note on Shares reserved to be issued under option and contracts/ commitments for the sale of shares / divestments including the terms and conditions.

The company does not have any such contracts / commitment as on reporting date.

(f) Detailed terms of any securities convertible into shares, e.g. in the case of convertible warrants, debentures, bonds etc.

The Company does not have any securities convertible into shares as on reporting date.

(b) Basis of valuation of Inventories

Inventories are valued at lower of cost or net realizable value on FIFO basis which is in accordance with AS 2 as issued by the ICAI.

(b) Relative of key management personnel and Name of the enterprises having same key management personnel and/ or their relatives as the reporting enterprises with whom the Company has entered into transactions during the

---

Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Inventories

Stock in trade is valued scrip wise, at cost or net realisable value whichever is lower in case of listed shares. Whereas in case of unquoted shares, valuation is at cost. Cost is calculated on the basis of first- in- first- out method.

1.3 Cash & Cash Equivalents

In the cash flow statement, cash and cash equivalents includes cash on hand, demand deposites with banks, other short term highly liquid investments with original maturities of three months or less

1.4 Tangible Fixed Assets:

Fixed Assets have been stated at historical cost inclusive of incidental expenses, less accumulated depreciation.

1.5 Depreciation:

Depreciation has been provided on Straight line Method on prorata-basis and in some cases to the extent available at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

1.6 Revenue Recognition

Sales are recognised on transfer of significant risks and rewards of the ownership of the goods to the buyer and are reported net of turnover / trade discounts, returns and claims if any. Revenue from services are accounted as and when incurred.

Dividend income on investments is accounted for when the right to receive the payment is established.

Interest income is accounted on time proportion basis taking into account the amount outstanding and applicable interest

1.7 Investments

Long term investments are stated at cost, less provision for diminution in the value other than temporary, if any.

1.8 Employee benefits

The Company does not have any employee to whom gratuity or any retirement benefits are payable.

1.9 Earning per Share:

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

1.10 Taxation

Tax liability is estimated considering the provision of the Income Tax, 1961. Deferred tax is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. On prudent basis, deferred tax assets are recognised and carried forward to the extent only when there is reasonable certainty that the assets will be adjusted in future.

---

Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Inventories

Stock in trade is valued scrip wise, at cost or market value whichever is lower in case of listed shares. Whereas in case of unquoted shares, valuation is at cost. Cost is calculated on the basis of first- in- first- out method.

1.3 Cash & Cash Equivalents

In the cash flow statement, cash and cash equivalents includes cash on hand, demand deposites with banks, other short term highly liquid investments with original maturities of three months or less.

1.4 Tangible Fixed Assets:

Fixed Assets have been stated at historical cost inclusive of incidental expenses, less accumulated depreciation.

1.5 Depreciation:

Depreciation has been provided on Straight line Method on prorata-basis and in some cases to the extent available at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

1.6 Revenue Recognition

Sales are recognised on transfer of significant risks and rewards of the ownership of the goods to the buyer and are reported net of turnover / trade discounts, returns and claims if any. Revenue from services are accounted as and when incurred.

Dividend income on investments is accounted for when the right to receive the payment is established.

Interest income is accounted on time proportion basis taking into account the amount outstanding and applicable interest

1.7 Investments

Long term investments are stated at cost, less provision for diminution in the value other than temporary, if any.

1.8 Employee benefits

The Company does not have any employee to whom gratuity or any retirement benefits are payable.

1.9 Earning per Share:

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

1.10 Taxation

Tax liability is estimated considering the provision of the Income Tax, 1961. Deferred tax is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. On prudent basis, deferred tax assets are recognised and carried forward to the extent only when there is reasonable certainty that the assets will be adjusted in future.

---

Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements.

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Inventories

Stock in trade is valued scrip wise, at cost or market value whichever is lower in case of listed shares. Whereas in case of unquoted shares, valuation is at cost. Cost is calculated on the basis of first- in- first- out method.

1.3 Cash & Cash Equivalents

In the cash flow statement, cash and cash equivalents includes cash on hand, demand deposites with banks, other short term highly liquid investments with original maturities of three month's or less.

1.4 Depreciation:

Depreciation has been provided on Straight line Method on prorata-basis and in some cases to the extent available at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956.

1.5 Revenue Recognition

Sales are recognised on transfer of significant risks and rewards of the ownership of the goods to the buyer and are reported net of turnover / trade discounts, returns and claims if any. Revenue from services are accounted as and when incurred Dividend income on investments is accounted for when the right to receive the payment is established

Interest income is accounted an time proportion basis talcing into account the amount outstanding and applicable interest

1.6 Tangible Fixed Assets:

Fixed Assets have been stated at historical cost inclusive of incidental expenses, less accumulated depreciation.

1.7 Investments

Long term investments stated at cost, less provision for diminution in the value other than temporary, if any.

1.8 Employee benefits

The Company does not have any employee to whom gratuity or any retirement benefits arc payable.

1.9 Earning per Share:

Basic earning per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

1.10 Taxation

Tax liability is estimated considering the provision of the Income Tax, 1961. Deferred tax is recognised on. timing differences:-being the difference between taxable, income and accounting income that originate in one period and are capable of reversal in one of more subsequent periods. On prudent basis, deferred tax assets are recognised and carried forward to the extent only when there is reasonable certainty that the assets will be adjusted in future.

---

Mar 31, 2010

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

The financial statements are prepared as per historical cost convention and in accordance with the generally accepted accounting principle in India, the provisions of the Companies Act, 1956 and the applicable accounting standards issued by the ICAI.

2. INVESTMENTS

Long Term Investments are carried at cost. No provision is made for diminution in value of such investments where, in opinion of the board, such diminution is temporary.

3. CLOSING STOCK OF SHARES

Closing Stock of shares has been valued at lower of cost or market value in case of quoted shares. Whereas unquoted shares are valued at cost. Stock in trade has been taken, valued and certified by the management.

4. REVENUE RECOGNITION

Income and Expenditure are generally recognized on accrual basis.

5. FIXED ASSETS

Fixed Assets have been stated at historical cost inclusive of incidental expenses, less accumulated depreciation.

6. DEPRECIATION / AMORTISATION

Depreciation has been provided on SLM method on pro rata basis at the rates and in the manner prescribed in schedule XIV to the Companies Act, 1956

7. EMPLOYEE BENEFITS

Gratuity / Retirement Benefits are accounted for on payment basis.

8. TAXATION

Tax expenses for a year comprise of current tax and deferred tax. Current tax is measured after taking into consideration, the deductions and exemptions admissible under the provision of Income Tax Act, 1961 and in accordance with Accounting Standard 22 on "Accounting for Taxes on Income", issued by ICAI.

Deferred Tax assets or liabilities are recognized for further tax consequence attributable to timing difference between taxable income and accounting income that are measured at relevant enacted tax rates. At each Balance Sheet-date the company reassesses unrecognized deferred tax assets, to the extent they become reasonably certain or virtually certain of realization, as the case may be.