Accounting Policies of Identixweb Ltd. Company

Mar 31, 2025

1. Company Overview

Identixweb Limited, incorporated on July 28, 2017 is the company carrying on the business of providing
internet/web-based applications, services and solutions, value added products and other business applications.

The Company got listed on the BSE SME Platform on April 03, 2025. Identixweb Limited is engaged in the
development and delivery of Software-as-a-Service (SaaS) products and customized IT solutions, with a primary
focus on e-commerce platforms such as Shopify.

The company has following subsidiaries:

A. Munim ERP Private Limited

2. Basis of Preparation

The Financial statement of the company has been prepared in accordance with the generally accepted accounting
policies in India (Indian GAAP) to comply in all material respects with the accounting standards notified under
section 133 of companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014.

All assets and liabilities have been classified as current and non - current as per the company’s normal operating
cycle and other criteria set out in the schedule III of Companies Act, 2013. Based on the Nature of Services and
their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for
the purpose of current - non-current classification of assets and Liabilities.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous
year, except for the change in accounting policy explained below.

3. Material Accounting Policies

a. Revenue Recognition:

The Company derives revenue from information technology services, maintenance of software/ hardware and
related services, sale of software licenses. These include revenue earned from services rendered on ‘time and
material’ basis, time bound fixed price engagements and fixed price development contracts.

Revenue from fixed price maintenance contracts is recognised based on the right to invoice for services performed
for contracts in which the invoicing is representative of the value being delivered. If invoicing is not consistent with
value delivered, revenue is recognized as the services are performed. When services are performed through an
indefinite number of repetitive acts over a specified period, revenue is recognized on a straight-line basis over the
specified period unless some other method better represents the manner in which services are performed.

b. Accounting for Property, Plant and Equipment:

All items of Property, Plant and Equipment are initially recognized at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses. All items are depreciated as per Written down Value
method over the useful life as prescribed under Schedule II of Companies Act, 2013. Useful lives of assets are in
accordance with Schedule II and no re-estimation has been made.

The cost of an item of property, plant and equipment initially recognized includes its purchase price and any cost
that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of
operating in the manner intended by management. Cost also includes borrowing costs that are directly attributable
to the acquisition, construction or production of a qualifying asset.

Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future
economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably.
All other repairs and maintenance costs are charged to the statement of profit and loss in the reporting period in
which they occur.

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any other
attributable cost of bringing the asset to its working condition for its intended use less GST claimed.

c. Impairment of Assets:

In accordance with AS 28 on ‘Impairment of assets’, the Company assesses at each balance sheet date whether
there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. The recoverable amount is the greater of the net selling price and value in use.
Value in use is the present value of the estimated future cash flows expected to arise from the continuing use of the
asset and from its disposal at the end of its useful life. In assessing the value in use, the estimated future cash flows
are discounted to their present value based on an appropriate discount factor. If such recoverable amount of the
asset or the recoverable amount of the cash generating unit to which the asset belongs is less than it’s carrying
amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss
and is recognized in the statement of profit and loss.

If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed, and the asset is reflected at the recoverable amount subject to a maximum of
depreciable historical cost.

d. Employees Benefit Plan:

a. Provident Fund:

Employees receive benefits from a provident fund, which is a defined benefit plan. The employer and employees
each make periodic contributions to the plan. Provident fund contributions are made to a trust administered by
the Company. The contributions to the trust managed by the Company are accounted for as a defined benefit
plan as the Company is liable for any shortfall, if any with respect to the rate of return based on the government
specified minimum rates of return.

b. Gratuity:

Gratuity is a defined benefit plan. The Company''s liability towards gratuity is determined on the basis of actuarial
valuation carried out at the end of the year using the projected unit credit method. Actuarial assumptions used
for gratuity include discount rate, expected salary escalation and retirement age. Disclosures under AS-15 are
provided in the notes. The actuarial gains and losses are recognized in the Profit and Loss Account in the period
in which they arise.

The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined
benefit obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme
assets. Any asset resulting from this calculation is limited to the present value of available refunds and
reductions in future contributions to the scheme.

e. Cash and Cash equivalent:

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with
an original maturity of three months or less, which are subject to an insignificant risk of changes in value. Cash and
cash equivalents for the purpose of Statement of Cash Flow comprise cash and cheques in hand, bank balances,
demand deposits with banks where the original maturity is three months or less.

Further, proceeds from share applications are considered as part of cash and cash equivalents.

f. Investments, other financial assets and other financial liabilities:

Investments in subsidiaries: The Company accounts for its investment in subsidiaries at cost, less impairment
losses if any. Investments that are readily realizable and intended to be held for not more than a year are classified
as current investments. All other investments are classified as long-term investments. Current investments are
carried at the lower of cost and fair value. Long-term investments are carried at cost and provisions are recorded
to recognize any decline, other than temporary, in the carrying value of each investment.