ಕಂಪನಿಯ ಅಕೌಂಟಿಗ್ ಪಾಲಿಸಿ Happy Square Outsourcing Services Ltd.

Mar 31, 2026

SIGNIFICANT ACCOUNTING POLICY AND NOTES TO Till'' STANDALONE SUMMARY STATEMENTS A. BACKGROUND

Happy Square Outsourcing Service Limited (formerly known as "Happy Square Outsourcing Service Private Limited”) was originally incorporated as a private limited company on April 20th, 2017 with CIN: U80904MP2017PTC043153 under the provisions of The Companies Act, 2013. The company has its registered office at 240, Nagpur Road, Madan Mahal, Jabalpur, Madhya Pradesh, India - 482008 and the company name Changed from Splendid Academy Private Limited to I lappy Square Outsourcing Service Private Limited vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 17th January, 2020.

Subsequently, Company was converted into Public Limited Company vide special resolution passed by our shareholders at the Extra Ordinary General Meeting held on 26th June, 2024 and the name of die Company was changed to Happy Square Outsourcing Service Limited (''the Company" or die "Issuer") pursuant to issuance of Fresh Certificate of Incorporation dated 01st August, 2024 Registrar of Companies Gwalior with CIN U80904MP2017PLC043153. '' ''

On July 10, 2025 the company got its shares listed on the SME Platform of NSE i.e., NSE Emerge. Pursuant to this a fresh Certificate of Incorporation dated 15lh April, 2025 Registrar of Companies, Gwalior with CIN: L80904MP2017PLC043153. The company had corrected its NIC code to align with the objects mentioned below, upon which the CIN : L78300MP2017PLC043153 was alloted.

The company is engaged in the business of "Manpower supply, Recruitment and related services

1) To carry on the business of human resources consultancy including providing manpower placement and recruiting, selecting, interviewing, training and employing all types of executives, middle management stalT, junior level staff, workers, labourers who are highly skilled, semi-skilled unskilled, managerial personnel required by various industries and organizations including but not limited to manpower for civil maintenance and all type of civil construction work, IT & computers related Industries, call centres, construction work, factory work, warehouse & logistics work and providing human resources for office management and to provide consultancy and any other services in connection with requirements of persons and manpower supply in India and outside India.

2) To carry on the business, profession ol consultant, suppliers, providers of all types of manpower such as contractual, highly skilled, semi-skilled, skilled, unskilled, trained labour, staff, managerial personnel, security services, house-keeping services, gardening services, provide training to security personnel, guards, industrial labour, manpower in all sectors W''hclhcr private or government.

3) To provide facility management services and implement a tailored solution that best suits as per the client requirements.

B. SIGNIFICANT ACCOUNTING POLICIES

1 Basis of Preparation:

The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules,

2 Use of Estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, income taxes, and die useful lives of Property Plant and Equipments and intangible assets.

3 Revenue Recognition:

Revenue in respect of the Manpower supply, recruitment and related service provided is accounted on accrual basis except where the receipt of income is uncertain.

Interest income is recognized on accrual basis, adopting a time proportion method, taking into account the amount outstanding and tire rate applicable. Dividend income on investments is accounted for when the right to receive the income is established. Export incentives are recognised on accrual basis to die extent the management is certain of the income.

Other Income : Odier items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are consistent with the generally accepted accounting policies.

Dividend Income : Dividend Income is recognised when the owners right to receive payment is established.

4 Property, Plant and Equipment including Intangible Assets:

Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight, ’ \ t'' installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition.

Intangible assets that are acquired by the Company are measured initially at cost. Afler initial recognition, an intangible asset is carried at its cost less any accumulated amortisation and any accumulated impairment loss.

Depreciation is provided under the ’Written Down Value’ method as per the useful life specified in Schedule 11 to the Companies Act, 2013. Residual ‘

values of assets are measured at not more than 5% of their original cost. For assets added or disposed during the year, depreciation is charged on pro rata basis from the date of addition or till the date of disposal.

S Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation based on useful life of assets. Depreciation on new assets acquired during the year is provided from the date of acquisition to the end of the financial year. In respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal.

	The estimated useful lives of assets arc as follows: Useful life of Property, Plant and Equipments
	Asset Classification	Kate of Depreciation
	Plant and Machinery	18.10%
	Computers and Accessories	63.16%
	Office Equipment	45.07%
	Furniture and Fittings	25.89%
	Software	25.00%

6 Impairment of Assets:

The canying amounts of assets arc reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Net selling price is the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

7 Foreign Currency Transactions:

Domestic Operation:

I. Initial Recognition :

A foreign currency transactions are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

II. Measurement:

Foreign currency monetary items arc reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency arc reported using the exchange rates that existed when the values were determined.

III. Treatment of Foreign Exchange :

Exchange differences arising on settlement/rcstalement of foreign currency monetary assets and liabilities of the Company arc recognised as income or expenses in the Statement of Profit and Loss

8 Employee Benefits:

Post-Employment Benefits:

Defined Benefit Plan:

Short-term employee Benefits

Benefits such as salaries, wages and performance incentives are charged to the statement of profit and loss at the actual amounts due in the period in which the employee renders the related service.

Defined Contribution Plans

Payments made to defined contribution plans such as provident and pension fund are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees.

Defined Benefit Plans

All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet dale, made by independent actuary using the projected unit credit method. Actuarial gains anJ losses are recognised immediately in the statement of profit and loss. The fair value of the plan assets is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on net basis

Other Long-term Employee Benefits

Ollier long-term employee benefits include leave encashment. Leave encashment is recognised as an expense in the statement of profit and loss as and when it accrues on actuarial basis. '' h- / , (f

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9 Taxes ou Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated below:

A. Current Tax:

Provision for current lax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting income computed for the current accounting year using the tax rates and lax laws that have been enacted or substantially enacted bv the balance sheet date.

Deferred tax assets are recognised and carried forward to die extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

10 Provisions

A provision is recognized when there exists a present obligation as a result of past events and 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 arc not discounted to present value and arc determined based on best estimates required to settle die obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

11 Contingent liabilities:

A contingent liability is a possible obligation dial arises from past events whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outdow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably, the Company does not recognize a contingent liability but discloses its existence in the financial statements.

12 Earnings Per Share:

In determining earnings per share, the Company considers the net profit afier tax attributable to equity shareholders. Tlie number of shares used in computing basic earnings per share is die weighted average number of equity shares outstanding during the year. The number of equity shares used in computing diluted earnings per share comprises weighted average number of equity shares considered for deriving basic earnings per share and also weighted average number of equity shares w hich could have been issued on die conversion of all dilutive potential equity shares.

	Particulars	As at period cudcd March 31.2026	As at period ended March 31. 2025
	Profit afier Tax (in Lakhs)	598.38	594.48
	The Weighted Average Share Outstanding (Nos.)	10,717,577	8,410,000
	Basic & Diluted Earnings per share (Rs.)	5.58	7.07
	Share Face Value per Share (Rs.)	10	10

13 Cash and Cash Equivalents:

Cash and cash equivalents comprise Cash-in-hand. Current Accounts, Fixed Deposits with banks. Cash equivalents arc short-term balances (with an original maturity of three months or less from die date of acquisition), highly liquid investments that arc readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value. Other Bank Balances are short-term balance (with original maturity is more than three mondis but less than twelve months).

14 Cash Flow Statement:

Cash flows are reported using indirect method, whereby net profit/loss before tax is adjusted for die effects 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 cash flows. The cash Hows from operating, investing and financing activities of die Company are segregated.

15 Investments:

Investments, which arc readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as Non current investments.

Non Current investments are carried at acquisition cost and investments intended to be held for less than one year are classified as current investments and are carried at lower of cost and market value. Non-Current Investments which have attained die stage of permanent diminution in dieir value are revalued at their current value ,

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Mar 31, 2025

1 Basis of Preparation:

The Financial Statements have been prepared in accordance with Indian Generally Accepted Accounting Principles (IGAAP) under historical cost
convention on the accrual basis. GAAP comprises mandatory accounting standards prescribed by the Companies (Accounting Standards) Rules,
2021.

2 Use of Estimates:

The preparation of the financial statements in conformity with Generally Accepted Accounting Principles requires the Management to make estimates
and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent assets and liabilities as at the date of
the financial statements and the reported amounts of income and expenses during the year. Examples of such estimates include provisions for
doubtful debts, income taxes, and the useful lives of Property Plant and Equipments and intangible assets.

3 Revenue Recognition:

Revenue in respect of the Manpower supply, recruitment and related service provided is accounted on accrual basis except where the receipt of
income is uncertain.

Interest income is recognized on accrual basis, adopting a time proportion method, taking into account the amount outstanding and the rate
applicable. Dividend income on investments is accounted for when the right to receive the income is established. Export incentives are recognised on
accrual basis to the extent the management is certain of the income.

Other Income : Other items of income and expenditure are recognized on accrual basis and as a going concern basis, and the accounting policies are
consistent with the generally accepted accounting policies.

Dividend Income : Dividend Income is recognised when the owners right to receive payment is established.

4 Property, Plant and Equipment including Intangible Assets:

Property Plant and Equipments are stated at cost, less accumulated depreciation. Cost includes cost of acquisition including material cost, freight,
installation cost, duties and taxes, and other incidental expenses, incurred up to the installation stage, related to such acquisition.

Intangible assets that are acquired by the Company are measured initially at cost. After initial recognition, an intangible asset is carried at its cost less
any accumulated amortisation and any accumulated impairment loss.

Depreciation is provided under the ''Written Down Value'' method as per the useful life specified in Schedule II to the Companies Act, 2013. Residual
values of assets are measured at not more than 5% of their original cost. For assets added or disposed during the year, depreciation is charged on pro¬
rata basis from the date of addition or till the date of disposal.

5 Depreciation & Amortisation:

The Company has applied the estimated useful lives as specified in Schedule II of the Companies Act 2013 and calculated the depreciation based on
useful life of assets. Depreciation on new assets acquired during the year is provided from the date of acquisition to the end of the financial year. In
respect of the assets sold during the year, depreciation is provided from the beginning of the year till the date of its disposal.

6 Impairment of Assets:

The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal / external factors. An
impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the
asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset. Net selling price is the amount
obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal.

7 Foreign Currency Transactions:

Domestic Operation:

I. Initial Recognition :

A foreign currency transactions are recorded, on initial recognition in the reporting currency, by applying to the foreign currency amount the exchange
rate between the reporting currency and the foreign currency at the date of the transaction.

II. Measurement:

Foreign currency monetary items are reported using the closing rate.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of
the transaction

Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates
that existed when the values were determined.

III. Treatment of Foreign Exchange :

Exchange differences arising on settlement/restatement of foreign currency monetary assets and liabilities of the Company are recognised as income
or expenses in the Statement of Profit and Loss

8 Employee Benefits:

Post-Employment Benefits:

Defined Benefit Plan:

Short-term employee Benefits

Benefits such as salaries, wages and performance incentives are charged to the statement of profit and loss at the actual amounts due in the period in
which the employee renders the related service.

Defined Contribution Plans

Payments made to defined contribution plans such as provident and pension fund are charged as an expense based on the amount of contribution
required to be made as and when services are rendered by the employees.

Defined Benefit Plans

All defined benefit plans obligations are determined based on valuations, as at the Balance Sheet date, made by independent actuary using the
projected unit credit method. Actuarial gains and losses are recognised immediately in the statement of profit and loss. The fair value of the plan
assets is reduced from the gross obligation under the defined benefit plan, to recognise the obligation on net basis.

Other Long-term Employee Benefits

Other long-term employee benefits include leave encashment. Leave encashment is recognised as an expense in the statement of profit and loss as
and when it accrues on actuarial basis.

9 Taxes on Income:

Income Tax expense is accounted for in accordance with AS-22 "Accounting for Taxes on Income" for both Current Tax and Deferred Tax stated
below:

A. Current Tax:

Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

B. Deferred Tax:

Deferred tax is recognised, subject to the consideration of prudence, as the tax effect of timing difference between the taxable income and accounting
income computed for the current accounting year using the tax rates and tax laws that have been enacted or substantially enacted by the balance sheet
date.

Deferred tax assets are recognised and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation
and carried forward losses, that sufficient future taxable income will be available against which such deferred tax assets can be realised.