SIGNIFICANT ACCOUNTING POLICY
A. BACKGROUND
The Company was originally incorporated as "Meta Infotech Private Limited" on December 17th, 1998
under the provisions of the Companies Act, 1956 with the Registrar of Companies, Mumbai, Maharashtra.
Subsequently, the Company was converted into a Public Limited Company and consequently the name of
our Company was changed from "META INFOTECH PRIVATE LIMITED" to "META INFOTECH LIMITED" vide a
fresh certificate of incorporation consequent upon conversion from private company to public company dated
September 02, 2024 issued by the Registrar of Companies, CPC, bearing CIN U72100MH1998PLC117495.
Company is currently engaged in Trading into Cybersecurity Software products/licenses and rendering of
various services connected with Cybersecurity Software products/licenses i.e. Implementation, Support,
AMC etc.
B. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
1. BASIS OF PREPARATION OF FINANCIAL SATEMENTS
The financial statements of the company have been prepared and presented in accordance with
the Generally Accepted Accounting Principles (GAAP). GAAP comprises the Accounting Standards
notified u/s 133 read with Section 469 of the Companies Act, 2013. The accounting policies have been
framed, keeping in view the fundamental accounting assumptions of Going Concern, Consistency and
Accrual, as also basic considerations of Prudence, Substance over form, and Materiality. These have
been applied consistently, except where a newly issued accounting standard is initially adopted or a
revision in the existing accounting standards require a revision in the accounting policy so far in use.
The need for such a revision is evaluated on an ongoing basis.
The Financial Statements have been prepared on a going concern basis, in as much as the management
neither intends to liquidate the company nor to cease operations. Accordingly, assets, liabilities,
income and expenses are recorded on a Going Concern basis. Based on the nature of products and
services, and the time between the acquisition of assets and realization in cash or cash equivalents,
the company has ascertained its operating cycle as 12 months for the purposes of current and non¬
current classification of assets and liabilities
2. uSE OF Estimates
The preparation of financial statements required the management to make estimates and assumptions
that affect the reported balance of assets and liabilities, revenues and expenses including of warranty
claims and disclosures relating to contingent liabilities. The Management believes that the estimates
used in the preparation of financial statements are prudent and reasonable. Future results could
differ from these estimates. Any revision of accounting estimates is recognized prospectively in the
current and future periods. Significant estimates used by the management in the preparation of these
financial statements include estimates of the economic useful life of plant and equipment, provision
for expenses, etc.
3. property, plant and equipment
Property, Plant & Equipment are stated at historical cost less accumulated depreciation and impairment
losses. Cost includes purchase price and all other attributable cost to bring the assets to its working
condition for the intended use. Property, Plant & Equipment have been recorded in the books of the
Company at WDV as per Companies Act, 2013.
Subsequent expenditures related to Property, Plant & Equipment are added to its book value only if
they increase the future benefits from the existing asset beyond its previously assessed standard of
performance.
Assets are capitalized as capital work-in-progress till it is not ready for the intended use. At the point
when an asset is operating at management's intended use, the cost of asset is transferred to the
appropriate category of property, plant and equipment and depreciation commences.
4. INTANGIBLE ASSETS
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 accumulated amortization and any
accumulated impairment loss.
Subsequent expenditure, if any, is capitalized only when it increases the future economic benefits
embodied in the specific asset to which it relates.
The residual values, useful lives and method of amortization of intangible assets are reviewed at each
financial year end and adjusted if appropriate.
An intangible asset is derecognized upon disposal or when no future economic benefits are expected
to arise from the continued use of the asset. Any gain or loss arising on the disposal of an intangible
asset is determined as the difference between the sales proceeds and the carrying amount of the
asset and is recognized in statement of profit and loss.
4. DEPRECIATION
Depreciation is provided on a Written Down Value Method ('WDV') over the estimated useful lives of the
property, plant and equipment as estimated by the Management and is recognised in the statement of
profit and loss.
Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (upto) the date on which
asset is ready for use (disposed of).
The Management has estimated the useful lives for property, plant and equipment which is similar to
the life specified in Schedule II of Companies Act, 2013
The residual values, useful lives and methods of depreciation of property, plant and equipment are
reviewed at each financial year end and adjusted prospectively if appropriate. An asset's carrying
amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
5. BORROWING COSTS
Borrowing cost includes interest and amortization of ancillary costs incurred in connection with the
arrangement of borrowings. Borrowing costs directly attributable to the acquisition, construction or
production of a qualifying asset that necessarily takes a substantial period of time to get ready for
its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing
costs are expensed in the period they occur.
6. IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An
impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified
as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a
change in the estimate of amount.
7. investments
Investments, which are 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 long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and
directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of cost and fair value determined
on an individual investment basis.
Long-term investments are carried at cost. However, provision for diminution in value is made to
recognize a decline other than temporary nature in value of investment.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds
is charged or credited to the statement of profit and loss.
8. iNVENTORiES
Company's Inventory item includes software licenses, which is recorded at cost or net realizable value
whichever is lower. Cost of inventories comprises of cost of purchase, and other incidental cost for the
purchases. Cost is calculated on purchase price based on specific identification method.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale. The comparison of cost and
net realisable value is made on an item-by-item basis.
9. REVENUE RECOGNiTiON
i) Revenue is recognized to the extent that is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured.
ii) Revenue from sale of software products/licenses are recognized when the significant risk and
rewards are transferred as per the terms of sale/customers purchase Order. Revenues are
recorded at invoice value excluding of taxes.
iii) Revenue from services is recognized pro-rata over the period of the contract as and when services
are rendered when no significant uncertainty exists regarding the amount of the consideration
that will be derived from rendering the service. The revenue is recognized excluding of taxes.
Interest income is accounted on a time proportion basis taking into account the amount outstanding
and the rate applicable except interest on income tax.
Profit/loss on sale of investments is recognized at the time of actual sale/redemption.
Dividend income is accounted for when right to receive is established.
10. EMPLOYEE BENEFiTS
i) Company's contribution to Provident Fund and other Funds for the year is accounted on accrual
basis and charged to the Statement of Profit & Loss for the year.
ii) Retirement benefits in the form of Gratuity are considered as defined benefit obligations and are
provided on the basis of the actuarial valuation
iii) The company does not allow carry forward of earned leave and the same needs to be encashed
within the financial year.
11. segment accounting
Business Segment
(a) The business segment has been considered as the primary segment.
(b) The Company's primary business segments are reflected based on principal business activities,
the nature of service, the differing risks and returns, the organization structure and the internal
financial reporting system.
(c) The Company's primary business includes Trading into Software products/licenses and rendering
of services providing IT solutions and accordingly segment disclosure has been disclosed in
notes to Restated Financial Statements.
Geographical segment is not considered as reportable segment due to insignificant portion of revenue
from Export and there is no variation in risk and returns basis of geography of its customer.
12. accounting for taxes on income
Tax expense comprises of 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.
The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
(i) 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.
(ii) 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.
The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes-
down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain
or virtually certain, as the case may be, that sufficient future taxable income will be available against
which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be
available.
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