Note 1 : Summary of significant accounting policies & other explanatory information :

(a) Corporate Information

Neil Industries Limited ("the Company") is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed in Bombay Stock Exchange. Hie Company is primarily engaged in Loan and Financing.

(b) Basis of Preparation:

The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The financial statements have been prepared on an accrual basis and under the historical cost convention except certain financial assets and liabilities are measured at fair value (refer accounting policy regarding financial instruments).

Accounting policies have been consistently applied to all period presented, unless otherwise stated.

I he financial statements are presented in Indian Rupee (INR) and all values are rounded to the nearest Lakhs, except otherwise indicated

Comparative information has been restated to accord with changes in presentation made in the current year except where otherwise stated.

(c) Summary of Significant Accnuntinu Policies:

(a)(i) Property, Plant and Equipment:

Freehold land is carried at historical cost. All other items of Property, plant and equipment are shown at cost, less accumulated depreciation and impairment, if any. The cost of an item of property , plant and equipment comprises its cost of acquisition inclusive of inward freight, import duties, and other nonrefundable taxes or levies and any cost directly attributable to the acquisition / construction of those items, any trade discounts and rebates are deducted in arriving at the cost of acquisition.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the group and the cost of tlie item can be measured reliably. All other repairs and maintenance are charged to statement of profit or loss during the reporting period in which they are incurred.

Gain or losses arising on disposal of property, plant and equipment are recognised in profit or loss.

(ii) Depreciation and amortisation:

Depreciation has been provided based on useful life assigned to each asset in accordance with Schedule II of the Companies Act, 2013.

Depreciation on property , plant and equipment is provided on the straight-line method, computed on the basis of useful lives mentioned below:

(h) Impairment of non-finuncial assets

At the date of balance sheet, if there are indications of impairment and the earn ing amount of the cash generating unit exceeds its recoverable amount (i.e. the higher of the fair value less costs of disposal and value in use), an impairment loss is recognised. The carrying amount is reduced to the recoverable amount and the reduction is recognised as an impairment loss in the profit or loss. The impairment loss recognised in the prior accounting period is reversed if there has been a change in the estimate of recoverable amount. Post impairment, depreciation is provided on the revised earn ing value of the impaired asset over its remaining useful life.

Reasonable assumptions are made by the management in estimating the value-in-use and fair value less costs of disposal. Management lias considered the indicators required for impairment testing and estimated reliably that there is no impairment loss for the purpose of IndAS 36.

(c) Employees Retirement Benefits:

This being the first year of applicability of gratuity, management is in the process of implementation of the scheme with regard to gratuity from the next year onward.

(d) Revenue recognition:

Sales of goods/services

Revenue is measured at the fair value of the consideration received or receivable.

Interest Income

Interest Income is included in the statement of profit and loss. Interest income is recognised on a time proportion basis taking into account the amount outstanding and the effective interest rate when there is a reasonable certainty as to realisation.

Fixed deposit interest is accounted as per statementAlocumcnts issued by banks inclusive of related tax deducted at source.

Dividend Income

Dividend Income is accounted on receipt basis.

(e) Inventories

Inventories are valued at low er of cost or net realisable value.

(D Taxes on Income:

Provision is made for income tax liability estimated to arise on the results for the y ear at the current rate of Tax in accordance with Income fax Act, 1961.

Current and deferred tax is recognised in profit or loss, excqit 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

Deferred Tax arising on account of depreciation is recognised only to the extent there is a reasonable certainty of realisation.

(g) Provisions, Contingent liabilities and contingent assets:

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at tire end of the reporting period

A contingent liability exists when there is a possible but not probable obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably.

All known Liabilities, wherever material, are provided for and Liabilities, which are disputed, are referred to by way of Notes on Accounts.

(h) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(i) Earnings Per Share:

Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by tlie weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding dining the period is adjusted for events of bonus issue: bonus element in a rights issue to existing shareholders: share split: and reverse share split (consolidation of shares).

(j) Financial Instruments:

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. All the financial assets and liabilities are measured initially at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial asset and financial liabilities (other than financial assets and liabilities carried at fair value through profit or loss) are added or deducted from the fair value measured on initial recognition of financial asset or financial liability⁷.

(i) Classification and Measurement

All the financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition of financial asset (other than financial assets carried at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset

Subsequent measurement of a financial assets depends on its classification i.e., financial assets carried at amortised cost or fair value (either through other comprehensive income or through profit or loss). Such classification is determined on the basis of Company's business model for managing the financial assets and the contractual terms of the cash flow s.

The Company's financial assets primarily consists of cash and cash equivalents, trade receivables, loans to employ ees and security deposits etc. which are classified as financial assets carried at amortised cost.

(ii) Amortised cost

Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a financial assets that is subsequently measured at amortised cost is recognised in profit or loss when the asset is derecognised or impaired. Interest income from these financial assets is recognised using the effective interest rate method

(iii) lmpairment of financial assets

ITic Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. For trade receivables, the Company provides for lifetime expected credit losses recognised from initial recognition of the receivables.

(iv) Derecognition of financial assets

A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset or retains the contractual rights to receive the cash flow s of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients.

(k) Cash flow statement

Cash flows are reported using the indirect method, whereby profit/ loss before tax is adjusted for the efi'ects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing flows. Hie cash flows from operating, investing and financing activities of the Company are segregated.

(l) Borrowing Costs

"Borrow ing costs consist of interest and other costs that an entity incurs in connection with the borrow ing of funds including interest expense calculated using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Other income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

Interest expense includes origination costs that are initially recognised as part of the carrying value of the financial liability and amortized over the expected life using the H1R. It also include expenses related to borrowing which are not part of effective interest as not directly related to loan origination."

(m) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker (CODM), The CODM assess the financial performance and position of the company and makes strategic decisions.

(n) Financial Liabilities

The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.

"Financial liabilities at FVTPL”

Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVTPL. Financial liabilities are classified as held for trading, if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109 - ""Financial Instruments""."

"Financial liabilities measured at amortised cost

After initial recognition, interest hearing loans and borrowings are subsequently measured at amortised cost using the KIR method except for those designated in an effective hedging relationship.

Amortised cost is calculated by taking into account any discount or premium and fee or costs that are an integral part of the KIR. The E1R amortisation is included in finance costs in the Statement of Prolit and Loss. Any difference betw een the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrow ings using the EIR method.”

"Trade and other payables

A payable is classified as 'trade payable' if it is in respect of the amount due on account of goods purchased or serv ices received in the normal course of business. These amounts represent liabilities lor goods and services provided to the Company prior to the end of financial year, which are unpaid. They are recognised initially at their fair value and subsequently measured at amortised cost."

"Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and die recognition of a new liability.

The difference between the carrying amount of the financial liability derecognised and die consideration paid and payable is recognised in the Statement of Profit and Loss.”

(o) Significant accounting judgements, estimates and assumptions

"The preparation of financial statements in conformity with the Ind AS requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosure and the disclosure of contingent liabilities, at the end of the reporting period. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which die estimates are revised and future periods are affected. Although these estimates are based on die management's best knowledge of current events and actions, uncertainty about these assumptions and estunates could result in die outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have die most significant effect on the amounts recognised in the financial statements is included in the notes.”

(p) Business Model Assessment

Classification and measurement of financial assets depends on die results of the SPPI and the business model test. The Company determines die business model at a level dial reflects how groups of financial assets are managed togedier to achieve a particular business objective. The Company monitors financial assets measured at mortised cost or fair value dirough odier comprehensive income that are derecognised prior to their maturity to understand die reason for dieir disposal and whether die reasons are consistent vvidi die objective of die business for which the asset was held. Monitoring is part of the Company's continuous assessment of whether die business model for which the remaining financial assets are held continues to be appropriate and if it is not appropriate whether there has been a change in business model, if so. then it will be a prospective change to die classification of those assets.