Notes to Accounts of Deep Industries Ltd.

Mar 31, 2023

Provisions, contingent liabilities and contingent assets Provisions

A provision is recognised when the Company has a present obligation (legal or constructive) 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. When the Company expects some or all of a provision to be
reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when
the reimbursement is virtually certain. The expense relating to a provision is presented in the Statement of Profit and Loss net
of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax
rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.

Contingent liabilities

A contingent liability is a possible obligation that arises from past events and the existence of which will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise.
Contingent liabilities are disclosed by way of note to the financial statements.

Contingent Assets

A contingent asset is a possible asset that arises from past events the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise.

Contingent assets are neither recognised nor disclosed in the financial statements.

m) Retirement and other employee benefits
Provident fund

Retirement benefit in the form of Provident Fund is a defined contribution scheme. The Company has no obligation, other
than the contribution payable to the provident fund. The Company recognises contribution payable to the provident scheme
as an expenditure, when an employee renders the related service. If the contribution payable to the scheme for service
received before the Balance Sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognised
as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for
services received before the Balance Sheet date, then excess is recognised as an asset to the extent that the pre-payment
will lead to, for example, a reduction in future payment or a cash refund.

Gratuity

Gratuity liability is defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit
(PUC) method made at the end of each financial year. The Company contributes to Life Insurance Corporation of India (LIC)
and SBI Life Insurance Company Limited, a funded defined benefit plan for qualifying employees.

The cost of providing benefits under the defined benefit plan is determined using the projected unit credit method.

Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net
interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the
net defined benefit liability), are recognised immediately in the Balance Sheet with a corresponding debit or credit to
retained earnings through OCI in the period in which they occur. Remeasurements are not reclassified to Statement of Profit
and Loss in subsequent periods.

Past service costs are recognised in Statement of Profit and Loss on the earlier of:

- The date of the plan amendment or curtailment, and

- The date that the Company recognises related restructuring costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises
the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:

- Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine
settlements; and

- Net interest expense or income
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 on an undiscounted accrual basis during the year when the employees render the services.
These benefits include performance incentive and compensated absences which are expected to occur within twelve
months after the end of the period in which the employee renders the related services.

Long-term employee benefits

Other long term employee benefits comprise of compensated absences/leaves. Provision for Compensated Absences and
its classifications between current and non-current liabilities are based on independent actuarial valuation. The actuarial
valuation is done as per the projected unit credit method.

n) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

Financial assets

Initial recognition and measurement

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other
comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset''s contractual cash flow characteristics
and the company''s business model for managing them. With the exception of trade receivables that do not contain a
significant financing component or for which the Company has applied the practical expedient, the Company initially
measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss,
transaction costs. Trade receivables that do not contain a significant financing component or for which the Company has
applied the practical expedient are measured at the transaction price determined under Ind AS 115. Refer to the accounting
policies in section “Revenue from contracts with customer”.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise
to cash flows that are ‘solely payments of principal and interest (SPPI)'' on the principal amount outstanding. This assessment

is referred to as the SPPI test and is performed at an instrument level. Financial assets with cash flows that are not SPPI are
classified and measured at fair value through profit or loss, irrespective of the business model.

The Company''s business model for managing financial assets refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows,
selling the financial assets, or both. Financial assets classified and measured at amortised cost are held within a business
model with the objective to hold financial assets in order to collect contractual cash flows while financial assets classified and
measured at fair value through OCI are held within a business model with the objective of both holding to collect contractual
cash flows and selling.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or
convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date that the Company commits
to purchase or sell the asset.

Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

- financial assets at amortised cost

- financial assets at fair value through other comprehensive income (FVTOCI) with recycling of cumulative gains and
losses

- financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition
(equity instruments)

- financial assets at fair value through profit or loss
Financial assets at amortised cost

A ‘financial assets'' is measured at the amortised cost if both the following conditions are met:

a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and
interest (SPPI) on the principal amount outstanding.

This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently
measured at amortised cost using the Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into
account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation
is included in other income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the
Statement of Profit and Loss. This category generally applies to trade receivables, security deposits and other receivables.

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

A ‘financial asset'' is classified as at the FVTOCI if both of the following criteria are met:

a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial
assets, and

b) The asset''s contractual cash flows represent Solely Payments of Principal and Interest.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value.
For debt instruments, at fair value through other comprehensive income (OCI), interest income, foreign exchange revaluation
and impairment losses or reversals are recognised in the profit or loss and computed in the same manner as for financial
assets measured at amortised cost. The remaining fair value changes are recognised in OCI. Upon derecognition, the
cumulative fair value changes recognised in OCI is reclassified from the equity to profit or loss

The Company''s debt instruments at fair value through OCI includes investments in quoted debt instruments included under
other non-current financial assets.

Financial assets designated at fair value through OCI (equity instruments)

Upon initial recognition, the Company can elect to classify irrevocably its equity investments as equity instruments designated
at fair value through OCI when they meet the definition of equity under Ind AS 32 Financial Instruments: Presentation and are
not held for trading. The classification is determined on an instrument-by-instrument basis. Equity instruments which are
held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103
applies are classified as at FVTPL.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in
the statement of profit and loss when the right of payment has been established, except when the Company benefits from
such proceeds as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity
instruments designated at fair value through OCI are not subject to impairment assessment.

The Company elected to classify irrevocably its non-listed equity investments under this category.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are carried in the balance sheet at fair value with net changes in fair value
recognised in the statement of profit and loss.

This category includes derivative instruments and listed equity investments which the Company had not irrevocably elected
to classify at fair value through OCI. Dividends on listed equity investments are recognised in the statement of profit and loss
when the right of payment has been established.

Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily
derecognised (i.e. removed from the Company''s balance sheet) when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the
received cash flows in full without material delay to a third party under a ‘pass-through'' arrangement- and either (a) the
Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred
nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case,
the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Company has retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.

Impairment of financial assets

In accordance with Ind AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition
of impairment loss on the following financial assets and credit risk exposure:

a) financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, and
bank balance.

b) Trade receivables.

The Company follows ‘simplified approach'' for recognition of impairment loss allowance on trade receivables which do not
contain a significant financing component. The application of simplified approach does not require the Company to track
changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right
from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of
trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade
receivable and is adjusted for forward looking estimates. At every reporting date, historical observed default rates are
updated and changes in the forward- looking estimates are analysed.

Financial liabilities

Initial recognition and measurement

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and
borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of payables, net of directly attributable transaction
costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and
derivative financial instruments.

Subsequent measurement

For purposes of subsequent measurement, financial liabilities are classified in two categories:

- Financial liabilities at fair value through profit or loss

- Financial liabilities at amortised cost (loans and borrowings)

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities
designated upon initial recognition as at fair value through profit or loss.

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 entered into by the Company that are not designated as hedging
instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held
for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the profit or loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated as such at the initial
date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/
losses attributable to changes in own credit risk are recognized in OCI. These gains/ losses are not subsequently transferred
to Profit and Loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair
value of such liability are recognised in the statement of profit and loss. The Company has not designated any financial
liability as at fair value through profit or loss.

Financial liabilities at amortised cost (Loans and borrowings)

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss. This category
generally applies to borrowings.

Derecognition

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 the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement
of profit and loss.

Reclassification of financial assets

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no
reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which
are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets.
Changes to the business model are expected to be infrequent. The Company''s senior management determines change in
the business model as a result of external or internal changes which are significant to the Company''s operations. Such
changes are evident to external parties. A change in the business model occurs when the Company either begins or ceases
to perform an activity that is significant to its operations. If the Company reclassifies financial assets, it applies the reclassification
prospectively from the reclassification date which is the first day of the immediately next reporting period following the
change in business model. The Company does not restate any previously recognised gains, losses (including impairment
gains or losses) or interest.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently
enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realize the assets
and settle the liabilities simultaneously.

o) Derivative financial instruments

The Company uses derivative financial instruments such as foreign currency forward contracts and option currency contracts
to hedge its foreign currency risks arising from highly probable forecast transactions. The counterparty for these contracts is
generally a bank.

Derivatives not designated as hedging instruments

This category has derivative assets or liabilities which are not designated as hedges.

Although the Company believes that these derivatives constitute hedges from an economic perspective, they may not qualify
for hedge accounting under Ind AS 109. Any derivative that is either not designated a hedge, or is so designated but is
ineffective, is recognized on balance sheet and measured initially at fair value. Subsequent to initial recognition, derivatives
are re-measured at fair value, with changes in fair value being recognized in the statement of profit and loss. Derivatives are
carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

p) Cash & Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original
maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as
defined above, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.

q) Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss attributable to equity holders 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 period is adjusted for events such as bonus issue, bonus element in a rights issue, that have changed
the number of equity shares outstanding, without a corresponding change in resources.

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

r) Dividend

The Company recognises a liability to pay dividend to equity holders of the parent when the distribution is authorised, and
the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised
when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

s) Investment in subsidiaries, joint ventures and associates

Equity investments in subsidiaries, joint ventures and associates are shown at cost less impairment, if any. The Company
tests these investments for impairment in accordance with the policy applicable to ‘Impairment of non-financial assets''.
Where the carrying amount of an investment or CGU to which the investment relates is greater than its estimated recoverable
amount, it is written down immediately to its recoverable amount and the difference is recognized in the Statement of Profit
and Loss.

2.2 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Company accounting policies, the management of the Company is required to make judgements,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future
periods if the revision affects both current and future periods.

The following are the areas of estimation uncertainty and critical judgements that the management has made in the process of
applying the Company''s accounting policies and that have the most significant effect on the amounts recognised in the financial
statements:

Useful lives of Intangible assets

The intangible assets are amortised over the estimated useful life. The estimated useful life and amortisation method are
reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective
basis.

Useful lives of depreciable tangible assets

Management reviews the useful lives of depreciable assets at each reporting date. As at March 31,2023 management assessed
that the useful lives represent the expected utility of the assets to the Company.

Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined
using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments
in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension
increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly
sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

Impairment of non-financial assets

Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the
higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on

available data from binding sales transactions, conducted at arm''s length, for similar assets or observable market prices less
incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived
from the budget for determined period and do not include restructuring activities that the Company is not yet committed to or
significant future investments that will enhance the asset''s performance of the CGU being tested. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows, the growth rate used for
extrapolation purposes and the impact of general economic environment (including competitors).

2.3 Other Notes

a) Other Statutory Information

(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the
Company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 and rules made
thereunder.

(ii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory
period.

(iii) The Company have not traded or invested in Crypto currency or Virtual Currency during the financial year.

(iv) The Company have not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) with the understanding that the Intermediary shall:

a) directly or indirectly lend or invest in other person or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(v) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other person or entities identified in any manner whatsoever by or on behalf of
the Company (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries

(vi) The Company have not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party)
with the understanding (whether recorded in writing or otherwise) that the Company shall:

a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party (Ultimate Beneficiaries) or

b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

b) Regulatory Updates :

i) Standards notified but not yet effective

The amendments to standards that are issued, but not yet effective, up to the date of issuance of the Company''s
financial statements are disclosed below. The Company intends to adopt these standards, if applicable, as and when
they become effective. The Ministry of Corporate affairs (MCA) has notified certain amendments to Ind AS, through
Companies (Indian Accounting Standards) Amendment Rules, 2023 on 31st March, 2023. The amendments have
been made in the following standards:

Ind AS 1: Presentation of Financial Statements is amended to replace the term “significant accounting policies” with
“material accounting policy information” and providing guidance relating to immaterial transactions, disclosure of entity
specific transactions and more

Ind AS 8: Accounting Policies, Changes in Accounting Estimates and Errors to include the definition of accounting
estimates as “monetary amounts in financial statements that are subject to measurement uncertainty.”

Ind AS 12: Income Taxes relating to initial recognition exemption of deferred tax related to assets and liabilities arising
from a single transaction.

Other Amendments in Ind AS 102 - Share based Payments, Ind AS 103 - Business Combinations, Ind AS 109 -
Financial Instruments, Ind AS 115 - Revenue from Contracts with Customers which are mainly editorial in nature in
order to provide better clarification of the respective Ind AS''s.

These amendments shall come into force with effect from April 01,2023. The Company is assessing the potential effect
of the amendments on its financial statements. The Company will adopt these amendments, if applicable, from applicability
date.