2.1 Summary of Significant Accounting Policies
I. Depreciation on fixed assets
Depreciation is provided using the Straight Line Method according to useful lives of assets as provided in schedule II of the Companies
Act, 2013. Depreciation for assets purchases/sold during period is proportionately charged.
Useful lives of tangible assets (Years)
Office equipment - 5
Motorbus/Car - 8
General furniture and fittings -10
Electric Installation & Equipment -10
Computer & Data processing units - 3
Motor Cycles, Scooters and other mopeds -10
II. Use of estimates
The Preparation of financial statements in conformity with Indian GAAP requires the management to make judgements, 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 and liabilities in future periods.
III. Property Plant and Equipments
A) Tangible Assets
Fixed assets are stated at cost, less accumulated depreciation and impairment losses. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for its intended use.
B) Intangible Asset
Research Asset are recorded as intnagible asset only when company can demonstrate
1) The technical feasibility of completing the intangible asset so that it will be available for use or sale
2) Its intention to complete and its ability and intention to use or sell the asset
3) How asset will generate future economic benefit
4) The availability of resources to complete the asset
5) The ability to measure reliably the expenditure during development
Subsequently, following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to
be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when
development is complete and the asset is available for use.
It is amortized over the period of expected future benefit. Amoritzation is recognised in profit and loss. During the developement
period asset is tested annually for impairment.
C) . Intangible Asset under development
Research costs are expensed as incurred. Devlopment expenditures on an individual projects are recognised as an intangible asset
when the group can demonstrate:
1. The technical feasiblity of completing the intangible assets so that the asset will be available for use or sale
2. Its intension to complete and its ability and intension to use orr sell the asset
3. how the asset will generate future economic benifites
4. The availability of resources to complete the asset
5. The ability to measure reliably the expenditure during devlopment
Subsequent costs related to intangible assets are recognised as a separate asset, as appropriate, only when it is possible that future
economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
Development expenditure incurred till date of recognization of it as intangible assets are presented under head "Intangible Under
Development".
IV. Income taxes
Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax
authorities in accordance with the Income-tax Act,1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where
the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted,
reporting date. Current income tax relating to items recognized in equity and in the statement of profit & loss.
Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws
enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized
in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which
such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all
deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against
future taxable profits.
In the situations where the company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India or tax laws prevailing in
the respective tax jurisdictions where it operates, no deferred tax (asset or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the company's gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in which the
timing differences originate. However, the company restricts recognition of deferred tax assets to the extent that it has become
reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such
deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to
reverse first.
At each reporting date, the company re-assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax asset to the
extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current
tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.
The company is eligible for exemption of 100% tax u/s 80IAC from Assessement year 2023-24 and company has opted the same from
the Assessement year 2023-24 which will be available for three consecutive years. Certificate of eligible business under section 80 IAC is
obatined from Ministry of Commerece & Industry on 10/03/2023 .
V. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the
period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in
dividends relative to a fully paid equity share during the reporting 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, share split, and reverse share split
(consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
Company has issued 72,00,000 shares by way if bonus on January 11, 2024 in ratio of 16 : 1 i.e. 16 bonus shares for every one share
held.
Diluted earnings per share is computed using the weighted-average number of equity and dilutive equivalent shares outstanding
during the period, using the treasury stock method for options and warrants, except where the results would be anti-dilutive. Company
has granted 56,400 equity stock option to the eligible employees of the company.
VI. Segment Reporting
The company is engaged primarily in the business of software services and accordingly there are no separate reportable segments as
per Accounting Standard 17 dealing with Segment Reporting.
VII. 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. The Company earns revenue primarily from providing Cybersecurity services, consulting and risk-based vulnerability
management business solutions. The following specific recognition criteria must also be met before revenue is recognized:
(a) Sale of Services
Revenue is recognised upon transfer of control of promised services related to cybersecurity products of the company to customers
through its SaaS model in an amount that reflects the consideration which the Company expects to receive in exchange for those
services. Revenue from sale is recognized when service is performed, either proportinately or on completion of service measured based
on transaction price. Revenue is postponed to the extent it is service is pending to provide to customers. Amounts disclosed as revenue
are consideration price net of trade allowances, rebates and all types of taxes such as Goods & Service Tax on behalf of the government
and, therefore, these are not economic benefits flowing to the company. Hence, they are excluded from revenue. Revenue from
subsidiaries is recognised based on transaction price which is at arm's length.
(b) Interest Income
Interest Income are recognised on a time proportion basis taking into account the amount outstanding and the interest rate
applicable.
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