Notes
to the Consolidated Financial Statements
September
30, 2021
(Unaudited)
Note
1 - Organization and Nature of Operations
Duo
World Inc. (hereinafter referred to as “Successor” or “Duo”) a reporting company since September 26, 2016, was
organized under the laws of the state of Nevada on September 19, 2014. Duo Software (Pvt.) Limited (hereinafter referred to as “DSSL”
or “Predecessor”), a Sri Lanka based company, was incorporated on September 22, 2004, in the Democratic Socialist Republic
of Sri Lanka, as a limited liability company. Duo Software (Pte.) Limited (hereinafter referred to as “DSS” or “Predecessor”),
a Singapore based company, was incorporated on June 05, 2007 in the Republic of Singapore as a limited liability company. DSS also includes
its wholly-owned subsidiary, Duo Software India (Private) Limited (India) which was incorporated on August 30, 2007, under the laws of
India. The financial statements of Duo Software India (Private) Limited prepared under realization concept and the Company and is under
the process of Striking off.
On
December 03, 2014, Duo Software (Pvt.) Limited (DSSL) and Duo Software Pte. Limited (DSS) executed a reverse recapitalization with Duo
World Inc. (Duo). See Note 4. Duo (Successor) is a holding company that conducts operations through its wholly owned subsidiaries DSSL
and DSS (Predecessors) in Sri Lanka, Singapore and India. The consolidated entity is referred to as “the Company”. The Company,
having its development center in Colombo, has been in the space of developing products and services for the subscription-based industry.
The Company’s applications (“Facetone”, and “SmoothFlow”) provide solutions in the space of Customer Life
Cycle Management and Work Flow.
Further
the Duo World Inc. has its wholly owned subsidiary which is Duo World Canada Inc, incorporated under the laws of Canada (Canada Business
Corporations Act.) on June 08, 2020. Duo World Canada has not yet started its operations due to the pandemic and the prevailing travel
restrictions and expecting to start its operations in the year 2022.
Note
2 - Basis of Presentation
The
Company has prepared the accompanying consolidated financial statements and accompanying notes in accordance with accounting principles
generally accepted in the United States of America (“ U.S. GAAP”). All amounts in the consolidated financial statements are
stated in U.S. dollars.
We
have recast certain prior period amounts to conform to the current period presentation, with no impact on consolidated net income or
cash flows.
Going
Concern
The
accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. These consolidated financial statements do not include any adjustments
relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be
unable to continue as a going concern.
As
reflected in the accompanying consolidated financial statements, the Company had a net loss of $171,142 and $57,915 for the six months
ended September 30, 2021 and 2020, respectively; net cash provided by operations of $(40,947) and $80,775 for the six months ended September
30, 2021 and 2020, respectively; working capital deficit of $2,933,586 and $2,826,272 as of September 30, 2021 and March 31, 2021, respectively;
outstanding statutory dues towards employee provident fund and employee trust fund of $368,860 and $373,142 as of September 30, 2021
and March 31, 2021, respectively; and a stockholders´ deficit of $3,915,434 and $3,779,098 as of September 30, 2021 and March 31,
2021, respectively.
The
Company has planned to launch Facetone cloud version in the current financial year and expecting revenue from the new product. Further,
the Company was able to reduce its Cost of Sales and operating cost in the current quarter. Considering these trends, the management
is confident that the Company shall generate sufficient profits to offset the operating losses in the recent future.
Note
3 - Summary of Significant Accounting Policies
Basis
of Consolidation
The
accompanying consolidated Financial Statements include the accounts and transactions of DSSL and DSS (Predecessors) and Duo (Successor).
Duo World Inc. is the parent company of its 100% subsidiaries Duo Software (Pvt.) Limited (DSSL) and Duo Software Pte. Limited (DSS).
Duo Software Pte. Limited is the parent company of its 100% subsidiary Duo Software India (Private) Limited (India). All significant
inter-company accounts and transactions have been eliminated in consolidation.
Use
of Estimates and Assumptions
The
preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management
to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Making
estimates and assumptions requires management to exercise significant judgment. It is least reasonably possible that the estimate of
the effect of a condition, situation or set of circumstances that existed at the date of the financial statements, which management considered
in formulating its estimate could change in the near term due to one or more future non-confirming events. Accordingly, the actual results
could differ from those estimates and assumptions. The most significant estimates relate to the timing and amounts of revenue recognition,
the recognition and disclosure of contingent liabilities and the collectability of accounts receivable.
Risks
and Uncertainties
The
Company’s operations are subject to significant risk and uncertainties including financial, operational, competition and potential
risk of business failure. Product revenues are concentrated in the application software industry, which is highly competitive and rapidly
changing. Significant technological changes in the industry or customer requirements, or the emergence of competitive products with new
capabilities or technologies could adversely affect operating results.
Concentrations
of Credit Risk
Financial
instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents
and accounts receivable. The Company maintains cash and cash equivalents with various high quality financial institutions and we monitor
the credit ratings of those institutions. The Company’s sales are primarily to the companies located in Sri Lanka, Singapore Indonesia
and India. The Company performs ongoing credit evaluations of our customers, and the risk with respect to trade receivables is further
mitigated by the diversity, both by geography and by industry, of the customer base. Accounts receivable are due principally from the
companies understated contract terms.
Provisions
A
provision is recognized when the company has present obligations because of past event and when it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligations and reliable estimate can be made of amount of the obligation.
Provisions are not discounted at their present value and are determined based on the best estimate required to settle the obligation
at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Accounts
Receivable and Provision for Doubtful Accounts
The
Company recognizes accounts receivable in connection with the products sold and services provided and has strong policies and procedures
for the collection receivables from its clients. However, there are inevitably occasions when the receivables due to the Company cannot
be collected and, therefore, have to be written off as bad debts. While the debt collection process is being pursued, an assessment is
made of the likelihood of the receivable being collectable. A provision is therefore, made against the outstanding receivable to reflect
that component that may not become collectable. The Company is in the practice of provisioning for doubtful debts based on the period
outstanding as per the following:
Schedule of Provision for Doubtful Debts Based on Period Outstanding
|
Trade receivables outstanding:
|
|
Provision
|
|
|
Over 24 months
|
|
|
100
|
%
|
|
Over 18 months
|
|
|
50
|
%
|
|
Over 15 months
|
|
|
25
|
%
|
|
Over 12 months
|
|
|
10
|
%
|
|
Over 9 months
|
|
|
5
|
%
|
Cash
Equivalents
The
Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of September
30, 2021, and March 31, 2021, there were no cash equivalents.
Foreign
Currency Translation
The
functional currencies of the Company’s foreign subsidiaries are their local currencies. For financial reporting purposes, these
currencies have been converted into United States Dollars ($) and/or USD as the reporting currency. All assets and liabilities denominated
in foreign functional currencies are converted into U.S. dollars at the closing exchange rate on the balance sheet date and equity balances
are converted at historical rates. Revenues, costs and expenses in foreign functional currencies are converted at the average rate of
exchange during the period. Conversion adjustments arising from the use of different exchange rates from period to period are included
as a component of shareholders’ deficit as “accumulated other comprehensive income (loss).” Gains and losses resulting
from foreign currency transactions are included in the statement of operations and comprehensive income /(loss) as other income (expense).
Property
and Equipment
Fixed
assets (including leasehold improvements) are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed
utilizing the straight-line method over the estimated useful lives of the related assets. The estimated salvage value is considered as
NIL. Amortization of leasehold improvements is computed utilizing the straight-line method over the estimated benefit period of the related
assets, which may not exceed 15 years, or the lease term, if shorter. Repairs and maintenance expenditures, which are not considered
improvements and do not extend the useful life of the property and equipment, are expensed as incurred. In case of sale or disposal of
an asset, the cost and related accumulated depreciation are removed from the consolidated financial statements.
Useful
lives of the fixed assets are as follows:
Schedule of Estimated Useful Lives of Fixed Assets
|
Furniture & fittings
|
|
|
5 years
|
|
|
Improvements to lease hold assets
|
|
|
Lease term
|
|
|
Office equipment
|
|
|
5 years
|
|
|
Computer equipment (Data processing equipment)
|
|
|
3 years
|
|
|
Website development
|
|
|
4 years
|
|
Impairment
of Long-Lived Assets
The
Company reviews long-lived assets, such as property, plant, and equipment for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison
of the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying
amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized by the amount by which the carrying amount
of the asset exceeds the fair value of the asset. Assets to be disposed of by sale would be separately presented in the balance sheet
and reported at the lower of the carrying amount or fair value less costs to sell, and are no longer depreciated. The assets and liabilities
of a group classified as held for sale would be presented separately in the appropriate asset and liability sections of the balance sheet.
Fair
Value Measurements and Fair Value of Financial Instruments
The
Company measures assets and liabilities at fair value based on an expected exit price as defined by the authoritative guidance on fair
value measurements, which represents the amount that would be received on the sale of an asset or paid to transfer a liability, as the
case may be, in an orderly transaction between market participants. As such, fair value may be based on assumptions that market participants
would use in pricing an asset or liability.
The
estimated fair value of certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and
accrued expenses are carried at historical cost basis, which approximates their fair values because of the short-term nature of these
instruments.
Post
Retirement Benefit Plan
The
Company has gratuity as post-employment plan for all the eligible employees. The recognition for the gratuity plan is as below,
The
expected postretirement benefit obligation (“EPBO”) is the actuarial present value (“APV”) as of a specific date
of the benefits expected to be paid to the employee, beneficiaries, and covered dependents.
Measurement
of the EPBO is based on the following:
1.
Expected amount and timing of future benefits
2.
Expected future costs
3.
Extent of cost sharing
The
EPBO includes an assumed salary progression for a pay-related plan. Future compensation levels represent the best estimate after considering
the individual employees involved, general price levels, seniority, productivity, promotions, indirect effects, and the like.
The
Accumulated postretirement benefit obligation (“APBO”) is the APV as of a specific date of all future benefits attributable
to service by an employee to that date. It represents the portion of the EPBO earned to date. After full eligibility is attained, the
APBO equals the EPBO. The APBO also includes an assumed salary progression for a pay-related plan.
Revenue
Recognition, Deferred & Accrued Revenue
The
Company recognizes revenue from the sale of software licenses and related services. The Company revenue recognition policy follows guidance
from Accounting Standards Codification (ASC) 606, Revenue from contract with customers. Revenue is recognized when the Company transferred
promised goods and services to the customer and in the amount that reflect the consideration to which the company expected to be entitled
in exchange for those goods and services.
The
following five steps are followed in recognizing revenue from contracts:
|
|
●
|
Identify
the Contract(s) with the customer;
|
|
|
●
|
Identify
the performance obligation of the contract;
|
|
|
●
|
Determine
the transaction price;
|
|
|
●
|
Allocate
the transaction price to the performance obligations in the contract and;
|
|
|
●
|
Recognize
revenue when or as the company satisfies a performance obligation.
|
The
consideration for the transaction [performance obligation(s)] is determined as per the agreement, contract or invoice for the services
and products.
Facetone
‘Facetone’
is a communication and collaboration platform, which provides users the capability of operating and running a high performance contact
center operation efficiently while saving cost and maximizing revenue opportunities. In-built Facetone CRM feature provides the opportunity
for contact centers to deliver a superior customer experience and build a better relationship by linking customers and data in real time.
Smoothflow
Smoothflow
automates customer engagements, including building ChatBots, VoiceBots and IoTBots to deliver an Omni channel customer service experience.
The product uses the power of artificial intelligence to keep improving the conversational flow and user experience.
Revenue
is recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration we
expect to receive in exchange for those products or services. We enter into contracts that can include various combinations of products
and services, which are generally capable of being distinct and accounted for as separate performance obligations. Revenue is recognized
net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities.
Nature
of Products and Services
Licenses
for on premise software– The Company sells a perpetual nonexclusive license to the customer and enables the customer to install
and use the software and its documentation. Price per customer varies based on the selection of the products licensed, the number of
site installations and the number of authorized users. The products offered on this basis are “Duo Subscribe” and “Facetone-enterprise.”
The Company charges an implementation fee on key milestone basis for on premise customers upon completion of performance obligation.
Enterprise
software solutions– The Company distributes its software product ‘Facetone- hosted version” with third party telecommunication
companies. It is a revenue model where the telecommunication provider hosts the Company’s software applications and makes them
available to its customers over the Internet for a monthly subscription fee. The Company charges telecommunication providers a monthly
license fee calculated according to number of licenses sold.
Cloud
services- The Company sells its product Smoothflow as a “SAAS” product (Software-as-a-Service) and services are provided
on a monthly subscription model.
AMC
Services- The Company offers annual maintenance programs on its licenses that provide for technical support and updates to the Company’s
software products. Initial annual maintenance fees are bundled with license fees in the initial licensing period and recognized when
the performance obligation of license fee is met. Revenue is recognized ratably, or daily, over the term of the maintenance period, which
is typically one year.
For
the six months ended September 30, 2021 and 2020, the Company received only cash as consideration for sale of licenses and related services
rendered.
For
the six months ended September 30, 2021 and 2020, the Company had following concentrations of revenues with customers:
Schedule of Concentrations of Revenue
|
Customer
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
A
|
|
|
32.14
|
%
|
|
|
3.04
|
%
|
|
B
|
|
|
25.98
|
%
|
|
|
4.00
|
%
|
|
C
|
|
|
24.83
|
%
|
|
|
2.19
|
%
|
|
D
|
|
|
10.13
|
%
|
|
|
2.55
|
%
|
|
E
|
|
|
0.00
|
%
|
|
|
83.40
|
%
|
|
F
|
|
|
0.00
|
%
|
|
|
3.15
|
%
|
|
Other misc. customers
|
|
|
6.92
|
%
|
|
|
1.67
|
%
|
|
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
For
the six months ended September 30, 2021 and 2020, the company had following sales by products:
Schedule of Sales by Products
|
Product
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
Facetone
|
|
$
|
47,596
|
|
|
$
|
28,274
|
|
|
Software hosting and reselling
|
|
|
7,109
|
|
|
|
8,563
|
|
|
DuoSubscribe
|
|
|
-
|
|
|
|
237,133
|
|
|
|
|
$
|
54,705
|
|
|
$
|
273,970
|
|
Significant
Judgments
The
Company’s contract with customers includes multiple Software products and services to deliver and in the most of the contract the
price of the separately identifiable features are stated separately. In the event the price of the multiple product and services are
not mentioned in the agreement the Company allocate transaction price estimating the standalone selling price of the promised Products
and the services. The determination of standalone selling price for each performance obligation requires judgments. The Company determines
standalone selling price for performance obligations based on overall pricing strategies, which consider market in which the company
operates, historical data analysis, number of users of the product or services, size of the customer and the market price of the hardware
used.
Contract
Balances
When
the timing of revenue recognition differs from the timing of invoicing for contract with customers, differed revenue and accrued
revenue/ unbilled accounts receivables are recognized by the Company. Revenue under Software Implementation contracts are invoiced
on stages of completion as stipulates in the agreement and the revenue recognized when the performance obligations are met and
customer sign the user acceptance test (UAT). The Company invoices software license fee and royalty fee at the end of the period
according to the customer agreement and accrued revenue/ unbilled revenue is recognized for the relevant period. The maintenance fee
is invoiced beginning of the period and the Company recognizes as deferred revenue in the financial statements and is ratably
recognized over a period of service.
The
allowance for doubtful accounts reflects our best estimate of probable losses inherent in the accounts receivable balance. We determine
the allowance based on known troubled accounts, historical experience, and other currently available evidence.
Refer
Note- 5 for “Accounts receivables and Provision for doubtful debts”
Segment
Information
The
Company has determined that its Chief Executive Officer is its Chief Operating Decision Maker. The Company’s executive reviews
financial information presented on a consolidated basis for the purposes of assessing the performance and making decisions on how to
allocate resources. Accordingly, the Company has determined that it operates in a single reportable segment.
Deferred
Revenue - Deferred revenue represents advance payments for software licenses, services, and maintenance billed in advance of
the time revenue is recognized. As at September 30, 2021 and March 31, 2021 the Company recognized deferred revenue $21,567 and $2,898,
respectively.
Accrued
Revenue/Unbilled Accounts Receivable - Accrued revenue/Unbilled accounts receivable primarily occur due to the timing of the
respective billings, which occur subsequent to the end of each reporting period. As at September 30, 2021 and March 31, 2021, unbilled
/accrued revenues were $1,036 and $1,076 respectively.
The
Company had no contract liabilities and assets recognized for cost to fulfill a requirement of a customer as at September 30, 2021.
Cost
of Revenue
Cost
of revenue mainly includes purchases, product implementation costs, amortization of product development, developer support and implementation,
and consultancy fees related to the products offered by the Company. The aggregate cost related to the software implementations, including
support and consulting services pertaining to the revenue recognized during the reporting period, is recognized as cost of revenue.
Product
research and development
Product
research and development expenses consist primarily of salary and benefits for the Company’s development and technical support
staff, contractors’ fees and other costs associated with the enhancements of existing products and services and development of
new products and services. Costs incurred for software development prior to technological feasibility are expensed as product research
and development costs in the period incurred. Once the point of technological feasibility is reached, which is generally upon the completion
of a working prototype that has no critical bugs and is a release candidate; development costs are capitalized until the product is ready
for general release and are classified within “Intangibles assets” in the accompanying consolidated balance sheets. The Company
amortizes capitalized software development costs using the greater of the ratio of the products’ current gross revenues to the
total of current gross revenues and expected gross revenues or on a straight-line basis over the estimated economic life of the related
product, which is typically four years.
During
the six months ended September 30, 2020, product research and development cost of $9,050, was capitalized as “Intangible assets”
and no capitalization reported in the six months ended September 30, 2021.
Advertising
Costs
The
Company expenses advertising costs as incurred. No advertising expenses were incurred during the six months ended September 30, 2021
and 2020.
Income
Taxes
The
Company accounts for income taxes using the asset and liability method. Under the asset and liability method, deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying
amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax
rates is recognized in income in the period that includes the enactment date. Deferred tax assets and liabilities are not recognized
in the current financials due to recurring tax losses and the uncertainty of the realization of the tax allowances. Withholding
taxes deducted from the source of income from foreign operations are debited to profit and loss account due to non-refundable
status.
Comprehensive
Income
The
Comprehensive Income Topic of the FASB Accounting Standards Codification establishes standards for reporting and presentation of comprehensive
income and its components in a full set of financial statements. Comprehensive income from April 1, 2015 through September 30, 2021,
includes only foreign currency conversion gains (losses), and is presented in the Company’s consolidated statements of comprehensive
income.
Changes
in Accumulated Other Comprehensive Income (Loss) by Component during the periods ending on September 30, 2021 and March 31, 2021 were
as follows:
Schedule of Accumulated Other Comprehensive Income (Loss)
|
Foreign Currency Translation gains (losses)
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2021
|
|
$
|
548,539
|
|
|
Translation rate gain (loss)
|
|
|
(7,087
|
)
|
|
Balance, June 30, 2021
|
|
$
|
541,452
|
|
|
Translation rate gain (loss)
|
|
|
26,428
|
|
|
Balance, September 30, 2021
|
|
|
567,881
|
|
Leases
Lessor
There
are no significant changes in recognizing the Lessor under ASC 842 compared to the previous model. Changes were made to the accounting
guidance of lessor and lessee, and the key aspects of the introduced model are to align the recognition criteria with new revenue
recognition standard ASC 606. Under the new guidance, contract consideration is allocated to its lease components and non-lease components
(such as maintenance). For the Company as a lessor, non-lease components of the contract will be accounted under ASC Topic 606, Revenue
from Contracts with Customers, unless the Company elects a lessor practical expedient to not separate the non-lease components from the
associated lease component. The amendments in ASU 2018-11 also provide lessors with a practical expedient, by class of underlying asset,
to not separate non-lease components from the associated lease component. To elect the practical expedient, the timing and pattern of
transfer of the lease and non-lease components must be the same and the lease component must meet the criteria to be classified as an
operating lease. If these criteria’s are met, the single component can be accounted either ASC 842 or ASC 606, depending on the
predominant component(s). The lessor practical expedient to not separate non-lease components from the associated component must be elected
for all existing and new leases.
As
lessor, the Company expects that post-adoption substantially all existing leases will have no change in the timing of revenue recognition
until their expiration or termination. The Company expects to elect the lessor’s practical expedient to not separate non-lease
components such as maintenance from the associated lease for all existing and new leases and to account for the combined component as
a single lease component. The timing of revenue recognition is expected to be the same for the majority of the Company’s new leases
as compared to similar existing leases; however, certain categories of new leases could have different revenue recognition patterns as
compared to similar existing leases.
For
the leases that are accounted as operating leases, income is recognized on a straight-line basis over the term of the lease contract.
Generally, when a lease is more than 180 days delinquent (where more than three monthly payments are owed), the lease is classified as
being on nonaccrual and the Company has to stops recognizing leasing income on that date. Payments received from leases in nonaccrual
status generally reduce the lease receivable. Leases on nonaccrual status remain classified as such until there is sustained payment
performance that, in the Company’s judgment, would indicate that all contractual amounts will be collected in full.
Lessee
The
Company adopted ASU 2016-02 effective April 1, 2019 using the modified retrospective approach. The new standard establishes a right-of-use
model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with
a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification
of expense recognition in the income statement. In connection with the adoption, the Company will elect to utilize the modified retrospective
presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC 840. In addition,
the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements
to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company will adopt
a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e.
leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component
for certain classes of assets.
The
Company categorizes leases at their inception as either operating or capital leases. On certain lease agreements, the Company may receive
rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without considering the deferred payment
terms, such as rent holidays, that defer the commencement date of required payments.
Recent
Accounting Pronouncements
The
Company has reviewed the recent accounting pronouncements and believes that they will not have material impact on the Company’s
financial position and results of operations.
Note
4 – Reverse Recapitalization
Duo
(Successor) merged with DSSL (Predecessors) on December 3, 2014, and merged with DSS (Predecessors) on December 3, 2014 (Predecessors),
and DSSL and DSS became the surviving corporations, in a transaction treated as a reverse recapitalization. Duo did not have any material
operations and majority-voting control was transferred to DSSL.
In
the recapitalization, Duo issued 28,000,000 shares of common stock, 5,000,000 series “A” preferred shares and $310,000 in
cash in exchange for all of DSSL’s 5,000,000 issued and outstanding shares of common stock. Duo also issued 2,000,000 shares
of
common stock in exchange for all of DSS’s 10,000 issued and outstanding shares of common stock. The transaction resulted in DSSL’s
shareholder and DSS’s shareholder acquiring approximately 100% control.
The
transaction also required a recapitalization of DSSL and DSS. Since DSSL and DSS acquired a controlling voting interest, they were deemed
the accounting acquirer, while Duo was deemed the legal acquirer. The historical financial statements of the Company are those of combined
financial statements of DSSL & DSS and of the consolidated entities from the date of recapitalization and subsequent.
Since
the transaction is considered a reverse recapitalization, the presentation of pro-forma financial information was not required. All share
and per share amounts have been retroactively restated to the earliest periods presented to reflect the transaction.
Note
5 – Accounts Receivable
Following
is a summary of accounts receivable as at September 30, 2021 and March 31, 2021:
Schedule of Accounts Receivables
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
Accounts receivable – Trade
|
|
$
|
212,776
|
|
|
$
|
213,452
|
|
|
Less: Provision for doubtful debts
|
|
|
(128,581
|
)
|
|
|
(77,580
|
)
|
|
Accounts receivable
|
|
$
|
84,195
|
|
|
$
|
135,872
|
|
As
at September 30, 2021 and March 31, 2021, the Company had following concentrations of accounts receivables with customers:
Schedule of Concentrations of Accounts Receivables
|
Customer
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
A
|
|
|
93.54
|
%
|
|
|
89.64
|
%
|
|
B
|
|
|
3.71
|
%
|
|
|
3.46
|
%
|
|
C
|
|
|
1.56
|
%
|
|
|
3.02
|
%
|
|
Other receivables
|
|
|
1.20
|
%
|
|
|
3.88
|
%
|
|
Concentrations of accounts
receivable
|
|
|
100.00
|
%
|
|
|
100.00
|
%
|
Note
6 – Prepaid Expenses and Other Current Assets
Following
is a summary of prepaid expenses and other current assets as at September 30, 2021 and March 31, 2021:
Schedule of Prepaid Expenses and Other Current Assets
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
David E. Wise IOLTA account
|
|
$
|
49,250
|
|
|
$
|
-
|
|
|
Dial Desk Pvt Ltd
|
|
|
29,364
|
|
|
|
-
|
|
|
Security deposits
|
|
|
14,069
|
|
|
|
17,509
|
|
|
Supplier advance
|
|
|
5,410
|
|
|
|
5,411
|
|
|
Prepayments
|
|
|
2,031
|
|
|
|
1,646
|
|
|
Other receivables
|
|
|
784
|
|
|
|
157
|
|
|
Prepaid expenses and
other current assets
|
|
$
|
100,909
|
|
|
$
|
24,723
|
|
Note
7– Property and Equipment
Following
table illustrates net book value of property and equipment as at September 30, 2021 and March 31, 2021:
Schedule of Property and Equipment
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
Office equipment
|
|
$
|
1,590
|
|
|
$
|
1,597
|
|
|
Furniture & fittings
|
|
|
106,701
|
|
|
|
107,177
|
|
|
Computer equipment (data processing equipment)
|
|
|
81,387
|
|
|
|
81,749
|
|
|
Improvements to lease hold assets
|
|
|
16,433
|
|
|
|
16,506
|
|
|
Website development
|
|
|
22,767
|
|
|
|
21,432
|
|
|
Fixed assets gross
|
|
|
228,879
|
|
|
|
229,891
|
|
|
Accumulated depreciation and amortization
|
|
|
(222,037
|
)
|
|
|
(220,918
|
)
|
|
Net fixed assets
|
|
$
|
6,842
|
|
|
$
|
8,974
|
|
Depreciation
and amortization expense for the six months ended September 30, 2021 and 2020 was $2,076 and $3,799, respectively.
Note
8 – Intangible assets
Intangible
assets comprise of capitalization of certain costs pertaining to products development which meets the criteria as set forth above under
Note 3. Following table illustrates the movement in intangible assets as at September 30, 2021 and March 31, 2021:
Schedule of Intangible Assets
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
Opening balance
|
|
$
|
428,070
|
|
|
$
|
644,586
|
|
|
Add: Costs capitalized during the year
|
|
|
-
|
|
|
|
12,657
|
|
|
Less: Amount written-off
|
|
|
(30,584
|
)
|
|
|
(206,433
|
)
|
|
Translational gain/ (loss)
|
|
|
(2,129
|
)
|
|
|
(22,740
|
)
|
|
Net Intangible Assets
|
|
$
|
395,358
|
|
|
$
|
428,070
|
|
Note
9 – Accounts Payable
Following
is a summary of accounts payable as at September 30, 2021 and March 31, 2021:
Schedule
of Accounts Payable
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
Accounts payable- employees
|
|
$
|
250,063
|
|
|
$
|
247,111
|
|
|
Supplier payable
|
|
|
121,755
|
|
|
|
113,051
|
|
|
Promissory notes
|
|
|
65,000
|
|
|
|
-
|
|
|
Canagey Capital (Pvt) Ltd
|
|
|
64,772
|
|
|
|
65,061
|
|
|
Other supplier payable
|
|
|
61,092
|
|
|
|
61,364
|
|
|
EPSI Computers (Pvt) Ltd
|
|
|
29,462
|
|
|
|
29,593
|
|
|
Due to Guha Takurta
|
|
|
13,869
|
|
|
|
25,207
|
|
|
Rent Deposit
|
|
|
378
|
|
|
|
380
|
|
|
Accounts payable current
|
|
$
|
606,392
|
|
|
$
|
541,766
|
|
On
July 14, 2021, the Company has issued promissory notes for the sum of $65,000
to Geneva Roth Remark Holdings Inc., a New York
corporation. The said promissory notes bear an interest rate of 10%
per annum and default interest of 22%
on any unpaid capital or interest which is not paid when due on July 14, 2022.
Conversion
right on promissory notes: The holder has right to convert the outstanding amount in to Common shares at any time during the period beginning
on the date which is one hundred eighty (180) days following the date of issue and ending either on the maturity date or the date of
the payment of the default amount.
Conversion
price: The conversion price shall equal the variable conversion price. The “variable conversion price” shall mean 65% of
the market price (representing a discount rate of 35%). “Market price” means the lowest trading price for the common stock
during the twenty (20) trading day period ending on the latest complete trading day prior to the conversion date. The Company has made
necessary provisions in the financials.
Note
10 – Short-term borrowings
Following
is a summary of short-term borrowings as at September 30, 2021 and March 31, 2021:
Schedule of Short-term Borrowings
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
PAN Asia Bank – short term overdraft
|
|
$
|
383,341
|
|
|
$
|
372,291
|
|
|
PAN Asia Bank – loan
|
|
|
49,950
|
|
|
|
56,214
|
|
|
OCBC- SGD- short term overdraft
|
|
|
216
|
|
|
|
-
|
|
|
Commercial Bank
|
|
|
-
|
|
|
|
2,488
|
|
|
|
|
$
|
433,506
|
|
|
$
|
430,993
|
|
Bank
overdraft facility, obtained from Pan Asia Banking Corporation PLC, contains an interest rate of 9% per annum for $105,793, 11.25% per
annum for the next $110,327, 12.75% per annum for the next $149,118 and 28% per annum for above $365,239.
Note
11 – Due to Related Parties
Due
to Related Parties – Short term
From
time to time, the Company receives advances from related parties such as management, directors or principal shareholders in the normal
course of business. Loans and advances received from related parties are unsecured and non-interest bearing. Balances outstanding to
these persons for less than 12 months are presented under current liabilities in the accompanying consolidated financial statements.
As of September 30, 2021, and March 31, 2021, the Company owed directors $1,110,494 and $1,063,397, respectively.
Due
to Related Parties – Long term
Balances
outstanding to related parties for more than 12 months are presented under long-term liabilities in the accompanying consolidated financial
statements. As of September 30, 2021, and March 31, 2021, the Company owed directors $1,346,436 and $1,345,915, respectively.
Note
12 – Taxes Payables
Taxes
payable comprised of items listed below as at September 31, 2021 and March 31, 2021:
Schedule of Taxes Payables
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
PAYE
|
|
$
|
161,825
|
|
|
$
|
162,546
|
|
|
WHT payable
|
|
|
3,358
|
|
|
|
3,373
|
|
|
Stamp duty payable
|
|
|
3
|
|
|
|
5
|
|
|
|
|
$
|
165,186
|
|
|
$
|
165,924
|
|
Note
13 – Accruals and Other Payables
Following
is a summary of accruals and other payables as at September 30, 2021 and March 31, 2021:
Schedule of Accruals and Other Payables
|
|
|
September 30,
2021
|
|
|
March 31,
2021
|
|
|
Accruals
|
|
$
|
49,916
|
|
|
$
|
60,242
|
|
|
Audit fee payable
|
|
|
17,853
|
|
|
|
2,375
|
|
|
Other payables
|
|
|
17,000
|
|
|
|
17,000
|
|
|
Accrued interest
|
|
|
11,221
|
|
|
|
8,763
|
|
|
Accruals and other payables
|
|
$
|
95,990
|
|
|
$
|
88,380
|
|
Note
14 – Cost of Revenue
Following
is the summary of cost of revenue for the six months ending September 30, 2021 and 2020:
Schedule of Cost of Revenue
|
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
Product development cost written off
|
|
$
|
30,584
|
|
|
$
|
36,981
|
|
|
Support services
|
|
|
14,481
|
|
|
|
29,246
|
|
|
Implementation cost
|
|
|
-
|
|
|
|
9,154
|
|
|
Purchases/ hosted servers
|
|
|
5,069
|
|
|
|
4,840
|
|
|
Consultancy, contract basis employee cost
|
|
|
785
|
|
|
|
955
|
|
|
Other external services
|
|
|
120
|
|
|
|
1,445
|
|
|
Cost of revenue
|
|
$
|
51,039
|
|
|
$
|
82,621
|
|
Note
15 – General and Administrative Expenses
Following
is the summary of general and administrative expenses for the six months ending September 30, 2021 and 2020:
Schedule of General and Administrative Expenses
|
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
|
|
|
|
|
|
|
|
Consulting fee
|
|
$
|
27,452
|
|
|
$
|
6,571
|
|
|
Legal fees
|
|
|
12,000
|
|
|
|
9,199
|
|
|
Other professional services
|
|
|
6,290
|
|
|
|
2,886
|
|
|
Audit fee
|
|
|
5,317
|
|
|
|
5,225
|
|
|
Office rent
|
|
|
3,843
|
|
|
|
774
|
|
|
Internet charges
|
|
|
1,910
|
|
|
|
2,346
|
|
|
Telephone charges
|
|
|
1,830
|
|
|
|
2,331
|
|
|
Penalties/ late payment charges
|
|
|
1,262
|
|
|
|
7,603
|
|
|
Transfer agent fees
|
|
|
1,150
|
|
|
|
750
|
|
|
OTC market fee
|
|
|
1,086
|
|
|
|
6,498
|
|
|
Software rentals
|
|
|
467
|
|
|
|
363
|
|
|
Electricity charges
|
|
|
436
|
|
|
|
828
|
|
|
Professional fees
|
|
|
411
|
|
|
|
3,346
|
|
|
Secretarial fees
|
|
|
368
|
|
|
|
325
|
|
|
Other expenses
|
|
|
344
|
|
|
|
290
|
|
|
Computer maintenance
|
|
|
291
|
|
|
|
293
|
|
|
Office maintenance
|
|
|
266
|
|
|
|
513
|
|
|
Stamp duty expenses
|
|
|
197
|
|
|
|
126
|
|
|
Filling fee and subscription
|
|
|
196
|
|
|
|
854
|
|
|
Staff welfare
|
|
|
144
|
|
|
|
233
|
|
|
Vehicle allowance
|
|
|
133
|
|
|
|
4,867
|
|
|
Courier and postage
|
|
|
38
|
|
|
|
164
|
|
|
Printing and stationery
|
|
|
29
|
|
|
|
77
|
|
|
Directors remuneration
|
|
|
-
|
|
|
|
63,432
|
|
|
EPF
|
|
|
-
|
|
|
|
4,458
|
|
|
ETF
|
|
|
-
|
|
|
|
1,114
|
|
|
Lease expense
|
|
|
-
|
|
|
|
6,129
|
|
|
Investor relations
|
|
|
-
|
|
|
|
329
|
|
|
Travelling
|
|
|
-
|
|
|
|
250
|
|
|
General and administrative
expenses
|
|
$
|
65,462
|
|
|
$
|
132,173
|
|
Note
16 – Selling and Distribution Expenses
Following
is the summery of selling and distribution expenses for the six months ending September 30, 2021 and 2020:
Schedule of Selling and Distribution Expenses
|
|
|
September 30,
2021
|
|
|
September 30,
2020
|
|
|
Vehicle running expense
|
|
$
|
187
|
|
|
|
-
|
|
|
Vehicle hire charges
|
|
|
-
|
|
|
|
2,596
|
|
|
Marketing expenses
|
|
|
-
|
|
|
|
77
|
|
|
Selling and distribution
expenses
|
|
$
|
187
|
|
|
$
|
2,673
|
|
Note
17 - Equity
As
at September 30, 2021, the Company had 400,000,000 authorized common shares having a par value of $0.001. The common shares have been
designated with the following rights:
|
|
●
|
Voting
rights: Common shareholders can attend at annual general meeting to cast vote or
use a proxy.
|
|
|
●
|
Right
to elect board of directors: Common shareholders control the Company through their
right to elect the company’s board of directors; however, the holder of our preferred
stock has super-majority voting rights and has power to elect all of the Company’s
board of directors.
|
|
|
●
|
Right
to share income and assets: Common shareholders have the right to share company’s
earnings equally on a per-share basis in the form of dividend. Similarly, in the event of
liquidation, shareholders have claim on assets that remain after meeting the obligation to
accrued taxes, accrued salary and wages, creditors including bondholders (if any) and preferred
shareholders. Thus, common shareholders are residual claimants of the company’s income
and assets.
|
During
the six months ended September 30, 2021, the Company has not issued common shares:
As
at September 30, 2021, the Company had 10,000,000 authorized series “A” preferred shares having a par value of $0.001 per
share.
The
preferred shares have been designated with the following conversion rights:
|
|
●
|
One
preferred share will convert into ten (10) common shares no earlier than 24 months and 1
day after the issuance.
|
Note
18 - Commitments and Contingencies
The
Company consults with legal counsel on matters related to litigation and other experts both within and outside the Company with respect
to matters in the ordinary course of business. The Company does not have any contingent liabilities in respect of legal claims arising
in the ordinary course of business.
Guarantees
and security deposits provided by the company existed on the balance sheet date are as follows:
Schedule of Guarantee Provided by Existed Company
|
Date
|
|
Description
|
|
Amount
|
|
|
7/31/2014
|
|
Guarantee for SLT
|
|
$
|
428
|
|
|
8/10/2015
|
|
Guarantee for LOLC
|
|
|
1,209
|
|
|
7/18/2018
|
|
Guarantee for Amana bank
|
|
|
480
|
|
|
10/9/2018
|
|
Rent deposit for office space
|
|
|
8,312
|
|
|
10/14/2019
|
|
Security deposit for CEB
|
|
|
756
|
|
|
10/21/2019
|
|
Security deposit for CEB
|
|
|
302
|
|
|
11/18/2020
|
|
Guarantee for HDFC bank
|
|
|
126
|
|
|
|
|
|
|
$
|
11,613
|
|
Note
19 - General
Figures
have been rounded off to the nearest dollar and the comparative figures have been re-arranged / reclassified, wherever necessary, to
facilitate comparison.