Accounting Policies of Methodhub Software Ltd. Company

Mar 31, 2024

1. SIGINIFICANT ACCOUNTING POLCIES

1.1 Basis of Preparation of Financial Statements

The Standalone Financial Statements have been prepared and presented under the historical cost
convention on accrual basis of accounting and in accordance with Generally Accepted Accounting
Principles (GAAP) in India. The Company has prepared these financial statements to comply with all
material respects with the accounting standards notified under section 133 of the Companies Act,
2013. The financial statements have been prepared on an accrual basis and under the historical cost
convention. The accounting policies adopted in the preparation of Standalone financial statements
are consistent with those of adopted in previous year.

1.2 Significant Accounting Policies

The Standalone Financial Statements have been prepared and presented under the historical cost
convention on accrual basis of accounting and in accordance with Generally Accepted Accounting
Principles (GAAP) in India. The Company has prepared these financial statements to comply with all
material respects with the accounting standards notified under section 133 of the Companies Act,
2013. The financial statements have been prepared on an accrual basis and under the historical cost
convention. The accounting policies adopted in the preparation of standalone financial statements
are consistent with those of adopted in previous year.

1.3 Use of Estimates

The preparation of Financial Statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported balances of assets and liabilities and disclosures
relating to contingent liabilities as at the date of the financial statements and reported amounts of
income and expenses during the period. Examples for such estimates include provision against
litigation and regulatory actions, provision of future obligation under employee benefit plans, useful
lives of Property, Plant and Equipment, provision in respect of non-current investments, and provision
for customer claims and recoverability of taxes.

Although these estimates are based upon the management''s best knowledge of current events and
actions, actual results could differ from those estimates. Estimates and underlying assumptions are
reviewed on an ongoing basis. Appropriate changes in estimates are made as the Management
becomes aware of changes in circumstances surrounding the estimates. Any revision to accounting
estimates is recognized prospectively in the current and future periods.

1.4 Inventories

The Company does not hold any inventory.

1.5 Current/Non-Current Classification

All assets and liabilities are classified as current or non-current as per the Company''s normal operating
cycle and other criteria set out in Schedule III to the Companies Act, 2013. Considering the nature of
business activities of the Company, the time between deploying of resources for projects/ contracts
and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as
twelve months for the purpose of current or non-current classification of assets and liabilities.

1.6 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.

a) Revenue from Information Technologies Services is recognised in the period in which services
are rendered and is recognised net of GST. Revenue is recognized upon transfer of control of
contracted services to customers in an amount that reflects the consideration the Company
expects to receive in exchange for those services. Arrangements with customers for
information technology services and Telecom and Tech Infra Services are either on a fixed
price, fixed-time frame contracts or on a time and material basis. Revenue from fixed price,
fixed-time frame contracts where performance obligations are satisfied over a period of time
and where there is no uncertainty as to the measurement or collectability of consideration, is
recognized as per the percentage of completion method. When there is uncertainty as to the
measurement or ultimate collectability, revenue recognition is postponed until such
uncertainty is resolved. Efforts have been used to measure progress towards completion as
there is a direct relationship between input and productivity. In arrangements for Information
Technology Services, Telecom and Tech Infra Services, the Company has applied the guidance
in Ind AS 115. Revenue from Contracts with customers are recognized by applying criteria for
each distinct performance obligation. The arrangements with customers generally meet the
criteria for considering Information Technology and related services as distinct performance
obligations. For allocating the transaction price, the Company has measured the revenue in
respect of each performance obligation of a contract at its relative Consolidated selling price.
Revenues in excess of invoicing are classified as unbilled revenue while invoicing in excess of
revenues are classified as unearned revenues.

b) For Tech infra contracts where the aggregate of contract cost incurred to date plus recognised
profits (or minus recognised losses as the case may be) exceeds the progress billing, the
surplus is shown as contract asset and termed as "Unbilled Revenue." For contracts where
progress billing exceeds the aggregate of contract costs incurred to date plus recognised

profits (or minus recognised losses, as the case may be), the surplus is shown as contract
liability and termed as "Unearned Revenue." Amounts received before the related work is
performed are disclosed in the Balance Sheet as contract liability and termed as "Advances
from customer." The amounts billed on customer for work performed and are unconditionally
due for payment i.e., only passage of time is required before payment falls due, are disclosed
in the Balance Sheet as trade receivables. The amount of retention money held by the
customers pending completion of performance milestone is disclosed as part of
trade receivables. Contract revenues are net of GST.

c) Interest income on Fixed Deposits is recognised on accrual basis.

1.7 Property, Plant and Equipment ("PPE")

Property, Plant and Equipment are stated at cost less accumulated depreciation / amortisation
and impairment losses, if any. The cost of Property Plant and Equipment comprises its cost of
acquisition net of any trade discounts and rebates, any import duties and other taxes (other than
those subsequently recoverable from the tax authorities), any directly attributable expenditure
on making the asset ready for its intended use and other incidental expenses up to the date the
asset is ready for its intended use, Subsequent expenditure on fixed assets after its purchase /
completion is capitalised only if such expenditure results in an increase in the future benefits from
such asset beyond its previously assessed standard of performance.

Advances paid towards the acquisition of property, plant and equipment outstanding at each
balance sheet date are disclosed as "Capital Advances" under Other Non-Current Assets and cost
of property, plant, and equipment not ready to use before such date are disclosed under "Capital
Work- in- Progress."

1.8 Depreciation and Amortisation

Depreciation on Property, Plant and Equipment has been provided on the straight- line method
as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the
following categories of assets, in whose case the life of the assets has been assessed as under
based on technical advice, taking into account the nature of the asset, the estimated usage of the
asset, the operating conditions of the asset, past history of replacement, anticipated technological
changes, manufacturers warranties and maintenance support etc.

1.9 Cash and Cash Equivalents ( for the purposes of Cash Flow Statement)

Cash and Cash Equivalents comprises of cash on hand, demand and fixed deposits with banks, short -
term balances (with an original maturity of twelve months or less from the date of acquisition), highly
liquid investments that are really convertible into known amounts of cash and which are subject to
insignificant risk of change in value.

1.10 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before tax is adjusted for
the effects of transactions of non - cash nature and any deferrals or accruals of past or future cash
receipts or payments. The cash flows from operating, investing, and financing activities of the
Company are segregated based on the available information.

1.11 Exceptional and Extraordinary items

Exceptional Items:

Exceptional items are transactions which due to their size or incidence are separately disclosed to
enable a full understanding of the Company''s financial performance. Items which may be considered
exceptional are significant restructuring charges, gains, or losses on disposal of investments of
subsidiaries, write down of inventories and significant disposal of fixed assets.

Extraordinary items:

Extraordinary items are income or expenses that arise from events or transactions that are clearly
distinct from the ordinary activities of the enterprise and, therefore, are not expected to recur
frequently or regularly.

1.12 Foreign currency transactions

Initial recognition

Transactions in foreign currencies entered into by the Company are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely approximate the rate at the date of
the transaction.

Measurement at the balance sheet date

Foreign currency monetary items (other than derivative contracts) of the Company, outstanding at
the balance sheet date are restated at the year-end rates. Non-monetary items of the Company are
carried at historical cost.

Treatment of exchange differences

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

1.13 Investments

Long-term investments are carried individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are carried individually, at the lower
of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees, and
duties.

1.14 Employee Benefits

Employee benefits include provident fund, employee state insurance scheme, gratuity fund and
compensated absences.

a. Defined contribution plan

The Company makes contributions to Provident Fund, Employee State Insurance, etc. for eligible
employees, which is a defined contribution plan, and contribution paid or payable is recognized as
an expense in the period in which it falls due.

The Company has no further obligations beyond its contributions. Employer Contributions made
to a post-retirement benefits plan, e.g., Provident Fund, Employee State Insurance, etc, which is a
defined contribution scheme, are charged to the statement of profit and loss in the year in which
the services are rendered by the employees.

b. Defined benefits

The Company provides for gratuity, a defined benefit retirement plan (''the Gratuity Plan'') covering
eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at
retirement, death, incapacitation or termination of employment, of an amount based on the
respective employee''s salary and the tenure of employment with the Company. Liability for the
Gratuity Plan is determined by actuarial valuation, performed by an independent actuary, at each
Balance Sheet date using the projected unit credit method. As these liabilities are relatively long
term in nature, the actuarial assumptions take in account the requirements of the relevant GAAP
coupled with a long-term view of the underlying variables/trends, wherever required.

c. Short Term Employee benefits

Short term employee benefits are recognised as an expense as per the Company''s scheme based
on expected obligations on an undiscounted basis.

1.15 Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest
with the lessor are recognised as operating leases. Lease rentals under operating leases are recognised
in the Statement of Profit and Loss on a straight-line basis over the lease term.

1.16 Earnings per Share

There are no potential equity shares and hence the basic and diluted earnings per share are same.
Basic earnings per share is computed by dividing the net profit or loss after tax for the year attributable
to the equity shareholders by the weighted average number of equity shares outstanding during the
year.

1.17 Taxation

Current Tax

Current tax is the amount of tax payable on the taxable income for the year as determined in
accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961.

Deferred Tax

Deferred tax is recognised on timing differences, being the differences between the taxable income
and the accounting income that originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or
substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed
depreciation and carry forward losses only to the extent that reasonable certainty exists that sufficient
future taxable income will be available against which these can be realised. Deferred tax assets and
liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and
the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each
balance sheet date for their realisability.

1.18 Impairment of Assets

The carrying values of assets / cash generating units at each balance sheet date are reviewed for
impairment if any indication of impairment exists. The following intangible assets are tested for
impairment each financial year even if there is no indication that the asset is impaired:

(a) an intangible asset that is not yet available for use; and (b) an intangible asset that is amortised
over a period exceeding ten years from the date when the asset is available for use.

(b) If the carrying amount of the assets exceed the estimated recoverable amount, an impairment
is recognised for such excess amount. The impairment loss is recognised as an expense in the
Statement of Profit and Loss, unless the asset is carried at revalued amount, in which case any
impairment loss of the revalued asset is treated as a revaluation decrease to the extent a
revaluation reserve is available for that asset.

(c) The recoverable amount is the greater of the net selling price and their value in use. Value in
use is arrived at by discounting the future cash flows to their present value based on an
appropriate discount factor.

(d) When there is indication that an impairment loss recognised for an asset (other than a
revalued asset) in earlier accounting periods no longer exists or may have decreased, such
reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the
amount was previously charged to the Statement of Profit and Loss.