Accounting Policies of Typhoon Financial Services Ltd. Company

Mar 31, 2024

2.1 Material accounting policies

i. Basis of preparation and Statement of compliance

The financial statements of the Company have been prepared in all material aspects in accordance
with Indian Accounting Standards (Ind AS) as per rule 4 of the Companies (Indian Accounting
Standards) Rules, 2015 notified under section 133 of Companies Act, 2013 (‘the Act'') and other
relevant Provisions of the Act and and Presentation and disclosure requirements of Division III of
Schedule III to the Companies Act, 2013 along with guidelines issued by the Reserve Bank of
India (RBI) from time to time.

The financial statements have been prepared on an accrual basis and under the historical cost
basis, except for certain financial assets and liabilities which have been measured at fair value at
the end of each reporting period.

ii. Functional and Presentation Currency

The financial statements are presented in Indian Rupees (‘), which is the functional currency of
the Company and all amounts are rounded to the nearest thousands (‘ ‘000), except when otherwise
indicated.

iii. Approval of Financial Statements

The financial statements are approved for issue by the Company''s Board of Directors on May 18,
2024.

iv. Use of estimates

The preparation of financial statement requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities on the
date of the financial statements and the reported amounts of revenues and expenses during the
period reported. Actual results could differ from those estimates. Any revision to accounting estimates
is recognized in accordance with the requirements of the respective accounting standards.

v. Property, plant and equipments

An item of property, plant and equipments is recognised as an asset if it is probable that future
economic benefits associated with the item will flow to the Company and its cost can be measured
reliably. This recognition principle is applied to the costs incurred initially to acquire an item of
property, plant and equipments and also to costs incurred subsequently to add to, replace part of,
or service any item of property, plant and equipments. All other repair and maintenance costs,
including regular servicing, are recognised in the statement of profit and loss as incurred. When
a replacement occurs, the carrying amount of the replaced part is derecognised. Where an item of
property, plant and equipments comprises components which are significant to the total cost and
having different useful lives, these components are accounted for separately.

Property, plant and equipments are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization
criteria are met and directly attributable cost of bringing the asset to its working condition for the
intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.
Borrowing cost relating to acquisition / construction of Property, Plant and Equipment which takes
substantial period of time to get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use. The present value of the expected
cost for the decommissioning of an asset after its use is included in the cost of the respective asset
if the recognition criteria for a provision are met.

The residual values, useful lives and methods of depreciation of Property, Plant and Equipment
are reviewed at each financial year end and adjusted prospectively, if appropriate.

The gain or loss arising on disposal of an asset is determined as the difference between the sale
proceeds and the carrying amount of the asset, and is recognised in the statement of profit and loss.
Depreciation on property, plant and equipments is calculated on a straight-line basis using the
useful life as prescribed under the Schedule II to the Companies Act, 2013.

vi. Financial Instruments

A financial instrument is defined as any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity. All financial instruments are recognised
on the date when the Company becomes party to the contractual provisions of the financial
instruments along with the certainty of ultimate collection in case of financial assets.

(a) Financial assets

Initial recognition and measurement

All financial assets are initially recognised at fair value. However, trade receivables that do
not contain a significant financing component are measured at transaction price and
investment in subsidiaries, associates and joint ventures are measured at cost less impairment
loss (if any). Transactions costs that are directly attributable to the acquisition or issue of
financial assets (other than financial assets carried at fair value through profit or loss) are
added to or deducted from the fair value measured on the initial recognition of financial
assets. The transaction costs directly attributable to the acquisition of financial assets at fair
value through profit and loss are immediately recognised in the statement of profit and loss.
Purchase and sale of financial assets are recognised using trade date accounting.
Financial assets are initially recognised when the Company becomes party to contractual
obligations. The management determines the classification of an asset at initial recognition
depending on the purpose for which the assets were acquired. The subsequent measurement
of financial assets depends on such classification.

Subsequent measurement

Financial assets carried at amortised cost (AC)

A financial asset is measured at amortised cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual
terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount outstanding.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial
instrument and of allocating interest income or expense over the relevant period. The effective
interest rate is the rate that exactly discounts future cash receipts or payments through the
expected life of the financial instrument, or where appropriate, a shorter period.

Financial assets at fair value through other comprehensive income (FVOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial assets and the
contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest (SPPI) on the principal amount outstanding.

Debt instruments included within the FVTOCI category are measured initially as well as at
each reporting date at fair value. Fair value movements are recognised in the Other
Comprehensive Income (OCI) and on derecognition, cumulative gain or loss previously
recognised in OCI is reclassified to Statement of Profit and Loss. For equity instruments, the
Company may make an irrevocable election to present subsequent changes in the fair value
in OCI. If the Company decides to classify an equity instrument as at FVTOCI, then all fair
value changes on the instrument, excluding dividends, are recognised in the OCI. There is
no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of
investment.

Financial assets at fair value through profit or loss (FVPL)

A financial asset which is not classified in any of the above categories are measured at
FVPL.

Investments in credit impaired financial assets are initially recognized at cost. Subsequently,
these investments in credit impaired financial assets are measured at fair value through
profit or Loss.

Reclassification

When and only when the business model is changed, the Company shall reclassify all
affected financial assets prospectively from the reclassification date as subsequently measured
at amortised cost, fair value through other comprehensive income or fair value through profit
or loss without restating the previously recognised gains, losses or interest and in terms of
the reclassification principles laid down in the Ind AS relating to Financial Instruments.

(b) Financial liabilities
Initial recognition

All financial liabilities are recognised initially at fair value adjusted for incremental transaction
costs that are directly attributable to the financial liabilities except in the case of financial
liabilities recorded at FVTPL where the transaction costs are charged to profit or loss. Fees
of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.
Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. For
trade and other payables maturing within one year from the balance sheet date, the carrying
amounts approximate fair value due to the short maturity of these instruments.

(c) Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of the
Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs.

(d) Derecognition of financial assets and liabilities

The Company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire or it transfers the financial asset and the transfer qualifies for
derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is
derecognized from the Company''s Balance Sheet when the obligation specified in the contract
is discharged or cancelled or expires.

vii. Impairment

(a) Financial assets

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss'' (ECL) model, for
evaluating impairment of Financial Assets other than those measured at Fair value (other
than Debt instruments measured at FVTOCI).

The Company assesses at each date of balance sheet whether a financial asset or a group
of financial assets such as investments, loans, advances, etc are impaired.

Expected Credit Losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default
events on the financial instrument that are possible within 12 months after the reporting
date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible

default events over the life of the financial instrument).

For all trade receivables that do not constitute a significant financing transaction, the Company
applies simplified approach which recognises life time expected credit losses at the time of
initial recognition of receivables by using a provision matrix. The Company uses historical
default rates to determine impairment loss on the portfolio of trade receivables. At every
reporting date these historical default rates are reviewed and changes in the forward-looking
estimates are analysed.

For financial assets whose credit risk has not significantly increased since initial recognition,
loss allowance equal to twelve months expected credit losses is recognised. Loss allowance
equal to the lifetime expected credit losses is recognised if the credit risk on the financial
instruments has significantly increased since initial recognition.

(b) Non-financial assets

The Company assesses, at each reporting date, whether there is an indication that an asset
may be impaired. If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of
disposal and its value in use. Recoverable amount is determined for an individual asset,
unless the asset does not generate cash inflows that are largely independent of those from
other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable
amount.

The impairment loss recognised in prior accounting period is reversed if there has been a
change in the estimate of recoverable amount.

viii. Revenue recognition

Revenue from contracts with customers is recognized when control of the goods or services are
transferred to the customer at an amount that reflects the consideration to which the Company
expects to be entitled in exchange for transferring distinct goods or services. Revenue towards
satisfaction of a performance obligation is measured at the amount of transaction price (net of
variable consideration) allocated to that performance obligation. The transaction price of goods
sold and services rendered is net of variable consideration on account of various discounts and
schemes offered by the Company as part of the contract. Revenue also excludes taxes collected
from customers. Consideration is generally due upon satisfaction of performance obligations and
a receivable is recognised when it becomes unconditional. Consideration is determined based
on the most likely amount. The Company is generally the principal as it typically controls the
goods or services before transferring them to the customer.

Interest income

Interest income is accrued on a time proportion basis, by reference to the principal outstanding
and the effective interest rate applicable.

Dividends

Revenue is recognised when the Company''s right to receive the payment is established, which is
generally when shareholders approve the dividend.

Income from investment in credit impaired financial assets

Amount realized on resolution / realization of credit impaired financial assets is credited to
respective assets till the value of that asset become nil. Amount realized from resolution subsequent
to that is credited to the statement of profit or loss. Similarly, if the total amount realized from
resolution is less than its cost, the short fall is treated as loss and debited to the statement of profit
or loss.

ix. Borrowing costs

Borrowing costs directly attributable to acquisition/ construction of qualifying assets are capitalised
until the time all substantial activities necessary to prepare the qualifying assets for their intended
use are complete. A qualifying asset is one that necessarily takes substantial period of time to get
ready for its intended use/ sale. All other borrowing costs not eligible for inventorisation/
capitalisation are charged to statement of profit and loss.

x. Employee benefits

Short Term Employee Benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for
the services rendered by employees are recognised as an expense during the period when the
employees render the services

xi. Taxes

The tax expense for the period comprises of current and deferred tax. Tax is recognised in
Statement of Profit and Loss, except to the extent that it relates to items recognised in the
comprehensive income or in equity. In which case, the tax is also recognised in other
comprehensive income or equity.

The income tax expense or credit for the period is the tax payable on the current period''s taxable
income based on the applicable income tax rate for each jurisdiction adjusted by changes in
deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period.

Deferred income tax is provided in full, using the Balance sheet approach, on temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements.

Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for all deductible temporary differences and unused tax
losses only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses. Significant management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon the likely timing and the level of future
taxable profits together with future tax planning strategies.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to
offset and intends either to settle on a net basis, or to realise the asset and settle the liability
simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively. The carrying amount of Deferred
tax liabilities and assets are reviewed at the end of each reporting period.

xii. Segment reporting

Segment wise reporting as defined in Indian Accounting Standards (Ind AS - 108) is not required,
since the entire operation of the Company related to only one segment.

xiii. Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable
to equity shareholders of the Company by the weighted average number of equity shares
outstanding during the period. The weighted average number of equity shares outstanding during
the year is adjusted for events of bonus issue. The Company did not have any potentially dilutive
securities in any of the years'' presented.

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Mar 31, 2014

A. Basis of preparation : The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects 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 an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b. Use of estimates : The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

c. Tangible fixed assets : Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

d. Depreciation on tangible fixed assets : Depreciation on fixed assets is calculated on a straight-line basis using the rates as prescribed under the Schedule XIV to the Companies Act, 1956.

e. Advances : Advances are classified under four categories i.e.,

(i) standard assets,

(ii) sub-standard assets,

(iii) doubtful assets,

(iv) Loss assets in accordance with the RBI guidelines.

Provisions on standard assets is made as stipulated in RBI guidelines.

f. Impairment of assets : Carrying amount of assets is reviewed at Balance Sheet date, if there is indication of impairment, based on the internal and external factors. The assets are treated as impaired when the carrying amount of asset exceeds its recoverable amount. An impairment loss, if any, is charged to Profit and Loss account in the year in which the asset is identified as impaired. Reversal of impairment loss recognized in prior year, is recorded when there is an indication that impairment loss recognized for the assets no longer exists or has decreased.

g. Investments : Long-term investments are carried at cost. h. Inventories : Inventories are valued at cost.

i. Revenue recognition : Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

Interest

Interest Income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "other income" in the statement of profit and loss.

j. Retirement and other employee benefits

All employee benefits are in short term in nature and are expensed as and when they accrues.

k. Income taxes

Income taxes comprise current tax, deferred tax and earlier year tax. Current taxes are accrued for on the basis of tax payable to tax authorities in accordance with The Income Tax Act 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

l. Earnings per share

Basic earnings per share are 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. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

m. Provisions

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

n. Contingent liabilities

The company does not recognize a contingent liability but discloses its existence in the financial statements.