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Accounting Policies of ABM Knowledgeware Ltd. Company

Mar 31, 2017

1. COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES:

1.1 COMPANIES OVERVIEW

ABM KNOWLEDGEWARE LTD. (the ''Company'') is a public limited company domiciled in India and has its registered office in Mumbai, Maharashtra. The Company has its primary listing on the Bombay Stock Exchange (BSE). The Company is one of the few information technology (IT) services companies with exclusive focus on e-governance since, 1998.

SIGNIFICANT ACCOUNTING POLICIES:

1.2 BASIS OF PREPARATION OF FINANCIAL STATEMENTS: -

These financial statements are prepared in accordance with the Indian Generally Accepted Accounting Principles (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) and the guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.3 USE OF ESTIMATES: -

The preparation of the financial statements in conformity with Indian GAAP requires that the Management to makes estimates and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. The Management believes that the estimates used in preparation of financial statements are prudent and reasonable. Estimates and underlying assumptions are reviewed at each Balance Sheet date. The Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the management becomes aware of the changes in circumstances surrounding the estimates. Changes in the estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

1.4 REVENUE RECOGNITION

Revenue is primarily derived from software development, maintenance of software / hardware and related services, business process services, sale of IT and other products. Arrangements with customers for software development and related services are either on a fixed-price or on a time-and-material basis.

I) Services:

The Company recognizes revenue when the significant terms of the arrangement are enforceable, services have been delivered and the collect ability is reasonably assured. The method of recognizing the revenues and costs depends on the nature of the services rendered:

a. Time and material contracts

Revenue on time-and-material contracts are recognized as the related services are performed and revenue from the end of the last billing to the Balance Sheet date is recognized as accrued revenues.

b. Fixed-price contracts:

Revenues from fixed- price contracts, including systems development and integration contracts are recognized using the percentage-of-completion method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. The cost expended (or input) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. If the Company does not have a sufficient basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to the extent of contract cost incurred for which recoverability is probable. When total cost estimates exceed revenues in an arrangement, the estimated losses are recognized in the statement of profit and loss in the period in which such losses become probable based on the current contract estimates.

''''Unbilled revenues'''' represent cost and earnings in excess of billings as at the end of the reporting period. ''''Unearned revenues'''' represent billing in excess of revenue recognized. Advance payments received from customers for which no services have been rendered are presented as ''''Advance from customers''''.

c. Maintenance Contracts:-

Revenue from maintenance contracts is recognized prorata over the period of the contract using the percentage of completion method. When services are performed through an indefinite number of repetitive acts over a specified period of time, revenue is recognized on a straight-line basis over the specified period unless some other method represents better, the stage of completion.

In projects, where a fixed quantum of service or output units is agreed at a fixed price for a fixed term, revenue is recognized with respect to the actual output achieved till date, as a percentage of total contractual output. Any residual service unutilized by the customer is recognized as revenue on completion of the term.

II) Products:

Revenue from sale of products is recognized when the significant risks and rewards of ownership has been transferred in accordance with the sales contract. Revenue from product sales is shown net of excise duty and net of sales tax separately charged and applicable discounts. Revenue from sale of user licenses for software applications is recognized on transfer of the title in the user license.

The Company presents revenue net of indirect taxes in its Statement of Profit and Loss.

1.5 PROVISIONS AND CONTINGENCIES & EVENTS OCCURRING AFTER THE BALANCE SHEET DATE:-

Provisions:-

A provision is recognized when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Contingent Liabilities:-

Contingent liabilities, where existence will be confirmed either by the occurrence or the non-occurrence of one or more uncertain future events, are not recognized in the books of the Company, but are disclosed by way of a note to the Balance Sheet. Contingent liabilities are periodically assessed by the management, and provision is made in the books where it becomes probable that an outflow of future economic benefits will be required for an item previously dealt with, as a contingent liability, in the period in which there is a change in probability.

Contingent Assets:-

Contingent Assets are neither recognized in the books of accounts nor disclosed in any manner in the financial statements.

Events Occurring After The Balance Sheet Date:-

Events occurring after the balance sheet date which do not affect the figures stated in the financial statements would not normally require disclosure in the financial statements although they may be of such significance that they may require a disclosure in the report of the approving authority to enable users of financial statements to make proper evaluations and decisions.

There are events which, although they take place after the balance sheet date, are sometimes reflected in the financial statements because of statutory requirements or because of their special nature. For example, if dividends are declared after the balance sheet date but before the financial statements are approved for issue, the dividends are not recognized as a liability at the balance sheet date because no obligation exists at that time unless a statute requires otherwise. Such dividends are disclosed in the notes.

1.6 FIXED ASSETS :-

Property, Plant and Equipment:-

Property, Plant and Equipment are stated at their cost of acquisition or construction less accumulated depreciation and impairment. The cost of an item of Property, Plant and Equipment is recognized as an asset only if it is probable that the future economic benefits associated with the item will flow to the enterprise and the cost of item can be reliable measured. The cost of property, plant and equipment comprises its purchase price 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, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use. The Company has adopted the provisions of para 46 / 46A of AS 11 The Effects of Changes in Foreign Exchange Rates, accordingly, exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Items such as spare parts, stand-by equipment and servicing equipment are recognized in accordance with this Standard when they meet the definition of property, plant and equipment. Otherwise, such items are classified as inventory.

Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advance under the head Short Term Loans and advance. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these shall flow to the enterprise and the cost of the item can be measured reliably. Repairs and maintenance cost are recognized in the net profit in the Statement of Profit and Loss when incurred. The cost and accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss. Assets to be disposed off are reported at the lower of the Carrying Value or the Fair Value cost to sell.

Intangible Assets:-

Intangible assets are recognized only when it is probable that the future economic benefits that are attributable to the assets will flow to the Company and the cost of the assets can be measured reliably. Intangible assets are stated at cost except for assets acquired under the composite scheme of amalgamation and arrangement which are recorded at fair value, less accumulated amortization and impairment loss, if any.

Subsequent expenditure on an intangible asset after its purchase/completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its original assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

Depreciation and Amortization-

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. 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. Where cost of a part of the asset is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined by the management. Lease hold assets are amortized over a period of lease.

Depreciation for assets/ sold during a period is proportionately charged. Intangible assets are amortized over their estimated useful lives on straight line method commencing from the date the asset is available to the company for its use.

Depreciation and amortization methods, useful lives and residual values are reviewed periodically, including at each financial year end.

The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization period is revised to reflect the changed pattern, if any.

1.7 IMPAIRMENT:-

The carrying values of assets /cash generating units at each balance sheet date are reviewed for impairment if any indication of impairment exists. If the carrying amount of the assets exceeds the estimated recoverable amount, an impairment is recognized for such excess amount. The impairment loss is recognized as an expense in the Statement of Profit and Loss. 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 discounting factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss.

1.8 INVESTMENTS:-

Trade investments are the investments made to enhance the Company''s business interests. Investments are either classified as current or long term based on Management''s intention. Current investments are carried at the lower of cost and fair value of each investment individually. Long Term investments are carried at cost less provisions recorded to recognize any decline, other than temporary, in the carrying value of each investment. Cost of investments includes acquisition charges such as brokerage, fees and duties.

1.9 GOVERNMENT GRANTS, SUBSIDY AND EXPORT INCENTIVE:-

Government grants and subsidies are recognized only when there is reasonable assurance that the conditions attached to them will be complied with and grants / subsidies will be received. Export benefits are accounted for in the year of exports based on eligibility and when there is no uncertainty in receiving the same.

1.10 OTHER INCOME:-

Profit from sale of investments is recorded on transfer of title from the company and is determined as the difference between the sale price and carrying value of the investment. Interest income is accounted on accrual basis. Dividend income is accounted for, when the right to receive income is established. Any other incomes are recognized when it is earned and right to receive is established.

1.11 INVENTORIES:-

Inventories are valued at the lower of cost and net realizable value after providing for obsolescence and other losses, where considered necessary. Cost is determined by the weighted average cost method. Cost includes all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

1.12 BORROWING COSTS:-

Borrowing costs include interest, amortization of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset are added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use.

1.13 EMPLOYEE BENEFITS:-

Employee benefits include provident fund, employee state insurance scheme, and gratuity fund. Employee benefits such as salaries, performance incentives, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident fund and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense in the Statement of Profit and Loss in the period in which the service is rendered.

Gratuity: The company provides for gratuity, a defined benefit retirement plan (“the Gratuity Plan”) with LIC of India covering eligible employees. In the gratuity plans 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. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method. The Company recognizes the net obligation of the gratuity plan in the Balance Sheet as an asset or liability, respectively in accordance with Accounting Standard (AS) 15, ''Employee Benefits''. The Company''s overall expected long-term rate-of-return on assets has been determined based on consideration of available market information, current provisions of Indian law specifying the instruments in which investments can be made, and historical returns. The discount rate is based on the Government securities yield. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Statement of Profit and Loss in the period in which they arise.

Provident fund: Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary. The company''s contribution is recognized in Profit and loss a/c.

1.14 FOREIGN CURRENCYTRANSACTIONS:-

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or at rates that closely approximate the rate at the date of transaction. Foreign currency monetary items outstanding at the year end (other than derivative contracts) are translated at the exchange rate prevailing as at the balance sheet date. Non-monetary items such as investments are carried at historical cost using the exchange rates on the date of the transaction. Exchange differences arising on settlement or conversion of short-term foreign currency monetary items are recognized in the Statement of Profit and Loss or capital work in progress / fixed assets. Exchange differences relating to long term foreign currency monetary items in so far as they relate to acquisition of a depreciable capital assets is adjusted to the cost of such capital asset and depreciated over the balance useful life of such asset, and in other cases, such differences are accumulated in “Foreign Currency Monetary Translation Difference Account” and amortized in the Statement of Profit and Loss over the balance period of such long term foreign currency monetary items. Premium / discount on forward exchange contracts, which are not intended for trading or speculation purposes, are amortized over the period of the contracts if such contracts relate to monetary items as at the balance sheet date.

1.15 TAXES ON INCOME:-

Income Tax is accounted for in accordance with Accounting Standard 22 on Accounting for taxes on Income read with Income Computation Disclosure Standard. Taxes comprise both current and deferred 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 and other applicable tax laws. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognized 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 recognized for all timing differences. Deferred tax assets are recognized 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 realized. However, if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realize the assets. 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 reliability.

Current and deferred tax relating to items directly recognized in reserves are recognized in reserves and not in the Statement of Profit and Loss.

Tax on distributed profits payable in accordance with the provisions of Section 115O of the Income tax Act, 1961, is, in accordance with the Guidance Note on Accounting for Corporate Dividend Tax, regarded as a tax on distribution of profits and is not considered in determination of the profits for the year.

1.16 EARNINGS PER SHARE:-

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events for bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues, including for changes effected prior to the approval of the financial statements by the Board of Directors.

1.17 LEASES:-

(I) Finance Lease: Assets leased by the Company in its capacity as a lessee, where substantially all the risks and rewards of ownership vest in the Company are classified as finance leases. Such leases are capitalized at the inception of the lease at the lower of the fair value and the present value of the minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year. Where the Company as a lessor leases assets under finance leases, such amounts are recognized as receivables at an amount equal to the net investment in the lease and the finance income is recognized based on a constant rate of return on the outstanding net investment.

Lease under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower.

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

Lease payments under operating leases are recognized as an expense on a straight-line basis in the Statement of Profit and Loss over the lease term.

1.18 RELATED PARTY TRANSACTIONS: -

All the related party transactions entered into by the company in its ordinary course of business and undertaken at an arm''s length basis and the same are entered in to the register maintained as per the provisions of Companies Act, 2013.

1.19 INTERIM REPORTING:-

The Company has follow AS-25 Interim Reporting while preparing Interim Financials Report whenever prepared or as required by the Listing Agreement.

1.20 PRIOR PERIOD ITEMS AND EXTRAORDINARY AND EXCEPTIONAL ITEMS:-

Prior Period Items are income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods. A separate disclosure along with the nature and amount is made in the financial statement.

Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

1.21 DEBTORS / CREDITORS:

Debtors / Creditors are stated at book value after making provisions for doubtful Debts and are subject to confirmation.

1.22 SEGMENTAL REPORTING:

The Accounting Standard 17 - “Segmental Information”, notified by the Companies (Accounting Standards) Rules, 2006 is not mandatory for Small and Medium Sized Companies and Small and Medium Sized non-corporate entities, thus disclosure of segment-wise information is not required under the said Standard to the Company. Moreover, the Company''s business activities comprises of single business segment i.e. Software and services and a geographical segment i.e India.

1.23 RESEARCH AND DEVELOPMENT EXPENDITURE:

All revenue expenses pertaining to research and development are charged to the Profit and Loss Account in the year in which these are incurred and expenditure of capital nature is capitalized as fixed assets.

1.24 CASH FLOW STATEMENT:-

The cash flow statement are reported using the “indirect method” set out in Accounting Standard 3 “Cash Flow Statements” whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated. Cash and cash equivalents presented in the cash flow statement consist of cash on hand and unencumbered, highly liquid bank balances.

1.25 CASH AND CASH EQUIVALENTS:-

Cash and cash Equivalents comprise cash and cash on deposit with banks and corporations. The company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.


Mar 31, 2015

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention.

B. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires that the management make judgements, estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialized.

C. Inventory

Items of inventory are measured at lower of cost and net realizable value. Cost of inventory comprises of cost of purchases and other cost if any incurred in bringing them to their present location and condition.

D. Tangible Fixed assets

Fixed Assets are carried at historical cost less accumulated depreciation and impairment losses, if any. The cost of the fixed assets includes interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use and other incidental expenses incurred upto that date.

Exchange differences arising on restatement or settlement of Long term foreign currency borrowings relating to capitalization of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond the previously assessed standards of performance.

Projects under which assets are not ready for their intended use are disclosed under Capital Work-in-Progress

E. Intangible Assets:

Intangible Assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those which are subsequently recoverable from the taxing authorities) and any directly attributable expenditure in making the assets ready for its intended use and net of any trade discounts and rebates and net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the intangible assets.

Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its original assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and amortization

Tangible Assets:

Depreciation on Fixed Assets is provided to the extent of depreciable amount on the Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed under Part C of Schedule II to the Companies Act, 2013;.

The estimated useful life of the intangible assets and the amortization period are reviewed at the end of each financial year and the amortization method is revised to reflect the changed pattern.

G. Impairment of Assets

The company assesses at each balance sheet date whether there is any indication that a asset may be impaired. If any such indication exists, the company estimates the recoverable amount of the asset. If such recoverable amount of the asset is less than its carrying cost of asset, the carrying cost is reduced to its recoverable amount. The reduction is treated as impairment loss and is charged to the Profit and Loss Statement. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

H. Revenue recognition

The Company derives revenue primarily from software development, sale and maintenance of software / hardware and related services, business process services, sale of IT and other products.

Services:

The Company recognizes revenue when the significant terms of the arrangement are enforceable, services have been delivered and the collectability is reasonably assured. The method of recognizing the revenues and costs depends on the nature of the services rendered:

A. Time and material contracts

Revenues and costs relating to time and material contracts are recognized as the related services are rendered.

B. Fixed-price contracts

Revenues from fixed-price contracts, including systems development and integration contracts are recognized using the percentage-of-completion method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. The cost expended (or input) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. If the Company does not have a sufficient basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to the extent of contract cost incurred for which recoverability is probable. When total cost estimates exceed revenues in an arrangement, the estimated losses are recognized in the statement of profit and loss in the period in which such losses become probable based on the current contract estimates.

"Unbilled revenues" represent cost and earnings in excess of billings as at the end of the reporting period. "Unearned revenues" if earned any represent billing in excess of revenue recognized. Advance payments received from customers for which no services have been rendered are presented as "Advance from customers"

C. Maintenance Contracts

Revenue from maintenance contracts is recognized ratably over the period of the contract using the percentage of completion method. When services are performed through an indefinite number of repetitive acts over a specified period of time, revenue is recognized on a straight-line basis over the specified period unless some other method better represents the stage of completion.

In certain projects, a fixed quantum of service or output units is agreed at a fixed price for a fixed term. In such contracts, revenue is recognized with respect to the actual output achieved till date as a percentage of total contractual output. Any residual service unutilized by the customer is recognized as revenue on completion of the term.

Products:

Revenue from sale of products is recognised when the significant risks and rewards of ownership has been transferred in accordance with the sales contract. Revenue from product sales is shown net of excise duty and net of sales tax separately charged and applicable discounts.

Other Income:

Interest income is recognized on accrual basis. Dividend income is recognized when the right to receive it is established.

I. Foreign CurrencyTransaction

a. Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and rate on the date of the contract is recognised as exchange difference and the premium paid on forward contracts is recognised over the life of the contract.

c. Non-monetary foreign currency items are carried at cost.

d. In respect of integral foreign operations, all transactions are translated at rates prevailing on the date of transaction or that approximates the actual rate at the date of transaction. Monetary assets and liabilities are restated at the year end rates.

Any income or expense on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Statement, except in case of long term liabilities, where they relate to acquisition of Fixed Assets, in which case they are adjusted to the carrying cost of such assets.

J. Investments

Current investments are carried at lower of cost and quoted/fair value, computed category-wise. Non -Current investments are stated at cost. Provision for diminution in the value of Non Current investments is made only if such a decline is other than temporary.

K. Employee Benefits:

Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the profit and loss account in the period in which the service is rendered.

The Company has a defined benefit retirement plan (the "Gratuity Plan") with LIC of India covering eligible employees. In accordance with the Payment of Gratuities Act, 1972, 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. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the Balance Sheet date, and necessary provision is made in the books of accounts accordingly.

The Company has a Gratuity Trust for its Employees. Gratuity is provided for, on the basis of actuarial valuation done by an independent actuary as at the year end, using the Projected Unit Credit Method in accordance with Accounting Standards (AS)-15 (revised) on Employee Benefit as issued by The Institute of Chartered Accountants of India (ICAI).

L. Borrowing Cost:

Borrowing costs include exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Profit and Loss Statement in the period for which they are incurred.

M. Provision for Current and Deferred tax:

Income tax is accounted for in accordance with Accounting Standard 22 on Accounting for Taxes on Income. Taxes comprise both current and deferred tax.

Current tax is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the applicable tax rates and tax laws.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized.

Minimum Alternate Tax (MAT) paid in the year is charged to the statement of Profit and Loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during that specified period i.e. the period for which MAT credit is allowed to be carried forward. In the year in which Company recognizes MAT credit as an asset in accordance with the guidance note on accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement". The Company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Tax on distributed profits payable in accordance with the provisions of Section 115O of the Income-tax Act, 1961, is, in accordance with the Guidance Note on Accounting for Corporate Dividend Tax, regarded as a tax on distribution of profits and is not considered in determination of the profits for the year.

N. Earning Per Share

The Company reports Earnings Per Share (EPS) in accordance with Accounting Standard 20 on Earnings Per Share. Basic EPS is computed by dividing the net profit for the year by the weighted average number of Equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit or loss for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

O. Cash and cash equivalents

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

P. Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

Q. Leases

Leases under which Company assumes substantially all the risks and rewards of the ownership are classified as Finance Leases. Such assets acquired are capitalized at fair value of the asset or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments under operating leases are recognized as an expense on a straight line basis in statement of Profit and Loss over the lease term.

R. Segmental Reporting:

The Company's business activity comprises of single business segment i.e. Software and services and a single geographical segment i.e. India.

S. Prior Period Items and Extraordinary and Exceptional Items:

Income or expenses that arise due to error of omission to record them in the period of incurrence are classified as prior period items. A separate disclosure along with the nature and amount is made in the financial statement. Income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the Company are classified as extraordinary items. Specific disclosure of such events/transactions is made in the financial statements. Similarly, any external event beyond the control of the Company, significantly impacting income or expense, is also treated as extraordinary item and disclosed as such.

On certain occasions, the size, type or incidence of an item of income or expense, pertaining to the ordinary activities of the Company, is such that its disclosure improves an understanding of the performance of the Company. Such income or expense is classified as an exceptional item and accordingly disclosed in the notes to accounts.

T. Provision, Contingent Liabilities and Contingent Assets :

- Provisions

Provisions, where measurement requires a substantial degree of estimation, are recognized in the books, only in the event of a present obligation arising from past events, the settlement of which is expected to result in an outflow of resources, embodying economic benefits.

- Contingent Liabilities

Contingent Liabilities, where existence will be confirmed either by the occurrence or the non-occurrence of one or more uncertain future events, are not recognized in the books of the Company, but are disclosed by way of a note to the Balance Sheet. Contingent Liabilities are periodically assessed by the management, and provision is made in the books where it becomes probable that an outflow of Future Economic Benefits will be required for an item previously dealt with, as a contingent liability, in the period in which there is a change in probability.

- Contingent Assets

Contingent Assets are neither recognized in the books of accounts nor disclosed in any manner in the financial statements.

Note 1(iii) The Company has not allotted Equity shares, bonus shares and buy back of shares during 5 years immediately preceding 31st March, 2015.

The Company has no information regarding amount outstanding to Micro, Small and Medium Enterprises.

Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortised carrying value is being depreciated / amortised over the revised / remaining useful lives. The written down value of Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted after considering residual value @ 5%, in the opening balance of the retained earnings as specified in the provisions of act, amounting to Rs. 7,95,482/-


Mar 31, 2014

A. Basis of accounting :

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting Standards notified under the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant Provisions of the Companies Act, 1956.

The financial statements are prepared on accrual basis in accordance with the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956

B. Use of Estimates :

The preparation of financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of Assets and Liabilities (including contingent Liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the period in which the results are known or materialized.

C. Inventories :

Items of inventories are measured at lower of cost and net realizable value. Cost of inventories comprises of cost of purchase and other cost if any incurred in bringing them to their present condition.

D. Tangible Fixed assets :

Fixed Assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of the fixed assets includes interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Exchange differences arising on restatement or settlement of Long term foreign currency borrowings relating to capitalization of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond the previously assessed standards of performance.

E. Intangible Assets :

Intangible Assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those which are subsequently recoverable from the taxing authorities) and any directly attributable expenditure in making the assets ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its original assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and Amortization :

Depreciation on fixed assets other than Rights and Software has been provided on straight line basis at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956.

Rights and Software Products meant for sale is amortized over the period the benefit out of them is expected to accrue, in any case, not exceeding five years.

The estimated useful life of the Intangible assets and the amortization period are reviewed at the end of each financial year and the amortization method is revised to reflect the changed pattern.

G. Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds the recoverable value. An impairment loss if material is charged to the statement of profit and loss in the year in which the asset is impaired. The impairment loss is recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

H. Revenue recognition :

a) Sale of IT Products are recognized when the products are supplied and are recorded net off trade discounts and rebates exclusive of Value Added Tax where applicable.

b) Revenue from services is recognized either on time and material basis or fixed price basis or based on certain measurable criteria as per relevant agreements and it is reasonable to expect ultimate collection. Even in case of additional efforts incurred on contracts, revenue on time and material contracts is recognized as and when services are performed,

c) Revenue on fixed-price contracts is recognized on the percentage of completion method, with contract cost determining the degree of completion.

d) Revenue from other service contracts is recognized based on transactions processed, manpower deployed and terms of contract. Escalation claims are recognized if there is certainty of realization.

e) Income from deputation of personnel is recognized based on terms of agreement and arrangement with the concerned parties, on accrual basis.

I. Foreign Currency Transaction and translations : Initial recognition:

Transactions in foreign currency entered into by the company and its integral foreign operations are accounted at the rate of exchange prevailing on the date of transaction or at the rates that are closely approximate the rate on the date of transaction.

Measurement of Foreign currency monetary items at the Balance Sheet:

Foreign currency monetary items (other than derivatives contract) of the company and its net investment in non-integral foreign operation outstanding on the date of Balance sheet are restated at the year-end rates.

In the case of integral operations, assets and liabilities (other than non-monetary items) are translated at the exchange rate prevalent on the Balance Sheet date. Non-monetary are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these translations are charges to the statement of prof it and loss.

Treatment of Exchange differences:

Exchange differences arising on settlement/restatement of short term foreign currency monetary assets and liabilities of the company and its integral foreign operations are recognized as income or expense in the statement of profit or loss. The exchange difference on restatement / resettlement of loans to non-integral foreign operations that are considered as net investment in such operations are accumulated in the Foreign currency translation Reserve until disposal or recovery of the net investment.

Exchange differences arising on settlement/restatement of long term foreign currency monetary items are capitalized as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement or over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets. The unamortised balance is carried in the balance sheet as "Foreign Currency monetary item translation difference account" net of the tax effect thereon.

J. Investments:

Long term investments (excluding investment properties), 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 includes acquisition and other charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are classified and depreciated (where applicable) in accordance with the policy stated for Tangible fixed assets. Impairment of investment properties is determined in accordance with the policy stated for impairment of assets.

K. Employee Benefits :

Employee benefits include provident fund, gratuity fund.

Defined contribution plans :

The company''s contribution to provident fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined Benefit plans :

For defined benefit plans in the form of Gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the statement of profit and loss in period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortised on straight line basis over the average period until the benefits become vested. 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 as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reduction in the future contributions to the scheme.

L. Other Income :

Interest income is recognized on accrual basis. Dividend income is recognized when the right to receive it is established.

M. Segmental Reporting :

The company''s business activity comprises of single business segment i.e. Software and services and geographical segment i.e. India.

N. Borrowing Cost :

The borrowing cost attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing cost is charged to the Statement of profit and loss.

O. Provision for Current and Deferred tax :

Provision for Current tax is made taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from the timing difference between taxable and accounting income is accounted using the tax rates and the laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

P. Provision, Contingent Liabilities and Contingent Assets :

Provisions involving Substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2013

A. Basis of accounting :

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting Standards notified under the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant Provisions of the Companies Act, 1956.

The financial statements are prepared on accrual basis in accordance with the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the companies Act, 1956

B. Use of Estimates :

The preparation of financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of Assets and liabilities (including contingent Liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the period in which the results are known or materialized.

C. Inventories :

Items of inventories are measured at lower of cost and net realizable value. Cost of inventories comprises of cost of purchase and other cost if any incurred in bringing them to their present condition.

D. Tangible Fixed assets :

Fixed Assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of the fixed assets includes interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Exchange differences arising on restatement or settlement of Long term foreign currency borrowings relating to capitalization of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond the previously assessed standards of performance.

E. Intangible Assets :

Intangible Assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those which are subsequently recoverable from the taxing authorities) and any directly attributable expenditure in making the assets ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its original assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and amortization :

Depreciation on fixed assets other than Rights and Software has been provided on straight line basis at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956.

Rights and Software Products meant for sale is amortized over the period the benefit out of them is expected to accrue, in any case, not exceeding five years.

The estimated useful life of the Intangible assets and the amortization period are reviewed at the end of each financial year and the amortization method is revised to reflect the changed pattern.

G. Impairment of Assets :

An asset is treated as impaired when the carrying cost of the asset exceeds the recoverable value. An impairment loss if material is charged to the statement of profit and loss in the year in which the asset is impaired. The impairment loss is recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

H. Revenue recognition :

a) Sale of IT Products are recognized when the products are supplied and are recorded net off trade discounts and rebates exclusive of Value Added Tax where applicable.

b) Revenue from services is recognized either on time and material basis or fixed price basis or based on certain measurable criteria as per relevant agreements and it is reasonable to expect ultimate collection. Revenue on time and material contracts is recognized as and when services are performed.

c) Revenue on fixed-price contracts is recognized on the percentage of completion method, with contract cost determining the degree of completion.

d) Revenue from other service contracts is recognized based on transactions processed, manpower deployed and terms of contract. Escalation claim are recognized only if there is certainty of realisation.

e) Income from deputation of personnel is recognized based on terms of agreement and arrangement with the concerned parties, on accrual basis.

I. Foreign Currency Transaction and translations :

Initial recognition :

Transactions in foreign currency entered into by the company and its integral foreign operations are accounted at the rate of exchange prevailing on the date of transaction or at the rates that are closely approximate the rate on the date of transaction.

Measurement of Foreign currency monetary items at the Balance Sheet :

Foreign currency monetary items (other than derivatives contract) of the company and its net investment in non-integral foreign operation outstanding on the date of Balance sheet are restated at the year-end rates.

In the case of integral operations, assets and liabilities (other than non-monetary items) are translated at the exchange rate prevalent on the date Balance Sheet date. Non-monetary are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these translations are charges to the statement of profit and loss.

Treatment of Exchange differences :

Exchange differences arising on settlement/restatement of short term foreign currency monetary assets and liabilities of the company and its integral foreign operations are recognized as income or expense in the statement of profit or loss. The exchange difference on restatement / resettlement of loans to non-integral foreign operations that are considered as net investment in such operations are accumulated in the Foreign currency translation Reserve until disposal or recovery of the net investment.

Exchange differences arising on settlement/restatement of long term foreign currency monetary items are capitalized as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement or over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets. The unamortised balance is carried in the balance sheet as "Foreign Currency monetary item translation difference account" net of the tax effect thereon.

J. Investments :

Long term investments (excluding investment properties), 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 includes acquisition and other charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are classified and depreciated (where applicable) in accordance with the policy stated for Tangible fixed assets. Impairment of investment properties is determined in accordance with the policy stated for impairment of assets.

K. Employee Benefits :

Employee benefits include provident fund, gratuity fund, compensated absences.

Defined contribution plans :

The company''s contribution to provident fund are considered as defined contribution plans and are charges as an expense as they fall due based on the amount of contribution required to be made.

Defined Benefit plans :

For defined benefit plans in the form of Gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the statement of profit and loss in period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortised on straight line basis over the average period until the benefits become vested. 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 as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reduction in the future contributions to the scheme.

Short term employee benefits :

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the services. These benefits include compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the services; the cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when the employees render the services that increase their entitlement of future compensated absences

(b) in case of non-accumulated compensated absences, when the absences occur

Long term employee benefits :

Compensated absences which are not expected to occur within twelve months after the end of the period in which he employee renders the related services are recognized as a liability at the present value of the defined benefit obligation as at the balance sheet date.

L. Other Income :

Interest income is recognized on accrual basis. Dividend income is recognized when the right to receive it is established.

M. Segmental Reporting :

The company''s business activity comprises of single business segment i.e. Software and services and geographical segment i.e. India.

N. Borrowing Cost :

The borrowing cost attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing cost is charged to the Statement of profit and loss.

O. Provision for Current and Deferred tax:

Provision for Current tax is made taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from the timing difference between taxable and accounting income is accounted using the tax rates and the laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

P. Provision, Contingent Liabilities and Contingent Assets :

Provisions involving Substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2012

A. Basis of accounting

The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the accounting Standards notified under the Companies (Accounting Standards) Rules 2006 (as amended) and the relevant Provisions of the Companies Act, 1956.

The financial statements are prepared on accrual basis in accordance with the historical cost convention in accordance with the generally accepted accounting principles in India and the provisions of the companies Act, 1956

B. Use of Estimates

The preparation of financial statements in conformity with the Indian GAAP requires the management to make estimates and assumptions considered in the reported amounts of Assets and liabilities (including contingent Liabilities) and the reported income and expenses during the year. The management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the period in which the results are known or materialized.

C. Cash and Cash Equivalents:

Cash comprises of cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition) , highly liquid investments that are readily convertible in to know amounts of Cash and which are subject to insignificant risk of changes in Value.

D. Tangible Fixed assets

Fixed Assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of the fixed assets includes interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.

Exchange differences arising on restatement or settlement of Long term foreign currency borrowings relating to capitalization of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond the previously assessed standards of performance.

E. Intangible Assets:

Intangible Assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those which are subsequently recoverable from the taxing authorities) and any directly attributable expenditure in making the assets ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase/ completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its original assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

F. Depreciation and amortization

Depreciation on fixed assets other than Rights and Software has been provided on straight line basis at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956.

Rights and Software Products meant for sale is amortized over the period the benefit out of them is expected to accrue, in any case, not exceeding five years.

The estimated useful life of the Intangible assets and the amortization period are reviewed at the end of each financial year and the amortization method is revised to reflect the changed pattern.

G. Impairment of Assets

An asset is treated as impaired when the carrying cost of the asset exceeds the recoverable value. An impairment loss if material is charged to the statement of profit and loss in the year in which the asset is impaired. The impairment loss is recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

H. Revenue recognition

a) Sale of IT Products are recognized when the products are supplied and are recorded net off trade Discounts and rebates exclusive of Value Added Tax where applicable.

b) Revenue from services is recognized either on time and material basis or fixed price basis or based on certain measurable criteria as per relevant agreements. Revenue on time and material contracts is recognized as and when services are performed.

c) Revenue on fixed-price contracts is recognized on the percentage of completion method, with contract cost determining the degree of completion

d) Revenue from other service contracts is recognized based on transactions processed, manpower deployed and terms of contract. Escalation claim are recognized only if there is certainty of realisation.

e) Income from deputation of personnel is recognized based on terms of agreement and arrangement with the concerned parties, on accrual basis.

I. Foreign Currency Transaction and translations:

Initial recognition:

Transactions in foreign currency entered into by the company and its integral foreign operations are accounted at the rate of exchange prevailing on the date of transaction or at the rates that are closely approximate the rate on the date of transaction.

Measurement of Foreign currency monetary items at the Balance Sheet:

Foreign currency monetary items (other than derivatives contract) of the company and its net investment in non-integral foreign operation outstanding on the date of Balance sheet are restated at the year-end rates.

In the case of integral operations, assets and liabilities (other than non-monetary items) are translated at the exchange rate prevalent on the date Balance Sheet date. Non-monetary are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these translations are charges to the statement of profit and loss.

Treatment of Exchange differences:

Exchange differences arising on settlement/restatement of short term foreign currency monetary assets and liabilities of the company and its integral foreign operations are recognized as income or expense in the statement of profit or loss. The exchange difference on restatement / resettlement of loans to non-integral foreign operations that are considered as net investment in such operations are accumulated in the Foreign currency translation Reserve until disposal or recovery of the net investment.

Exchange differences arising on settlement/restatement of long term foreign currency monetary items are capitalized as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement or over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets. The unamortised balance is carried in the balance sheet as "Foreign Currency monetary item translation difference account" net of the tax effect thereon.

J. Investments

Long term investments (excluding investment properties), 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 includes acquisition and other charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are classified and depreciated (where applicable) in accordance with the policy stated for Tangible fixed assets. Impairment of investment properties is determined in accordance with the policy stated for impairment of assets.

K. Employee Benefits :

Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post-employment benefits.

Defined contribution plans:

The company's contribution to provident fund are considered as defined contribution plans and arte charges as an expense as they fall due based on the amount of contribution required to be made.

Defined Benefit plans:

For defined benefit plans in the form of Gratuity fund, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in the statement of profit and loss in period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortised on straight line basis over the average period until the benefits become vested. 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 as reduced by the fair value of the scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reduction in the future contributions to the scheme.

Short term employee benefits:

The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the services. These benefits include compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the services; the cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when the employees render the services that increase their entitlement of future compensated absences

(b) in case of non-accumulated compensated absences, when the absences occur

Long term employee benefits:

Compensated absences which are not expected to occur within twelve months after the end of the period in which he employee renders the related services are recognized as a liability at the present value of the defined benefit obligation as at the balance sheet date.

L. Other Income:

Interest income is recognized on accrual basis. Dividend income is recognized when the right to receive it is established.

M. Segmental Reporting:

The company's business activity comprises of single business segment i.e. Software and services and geographical segment i.e. India.

N. Borrowing Cost:

The borrowing cost attributable to the acquisition or construction of qualifying assets is capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing cost is charged to the Statement of profit and loss.

O. Provision for Current and Deferred tax:

Provision for Current tax is made taking into consideration benefits admissible under the provisions of the Income tax Act, 1961. Deferred tax resulting from the timing difference between taxable and accounting income is accounted using the tax rates and the laws that are enacted or substantively enacted as on the balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

P. Provision, Contingent Liabilities and Contingent Assets

Provisions involving Substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2011

The financial statements have been prepared in accordance with applicable accounting standards. A summary of the important accounting principles that have been applied consistently is set out below:

1. Basis of accounting

The financial statements are prepared on accrual basis in accordance with the historical cost convention.

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

3. Fixed assets

Tangible: Fixed assets are recorded at cost. Cost is purchase cost together with all incidental expenses of acquisition and other related costs.

Intangible: Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost beyond one year are recognized as software products.

4. Depreciation

Depreciation on fixed assets other than Rights and Software has been provided on straight line basis at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956.Rights and Software Products meant for sale is amortized over the period the benefit out of them is expected to accrue, in any case, not exceeding five years.

5. Revenue recognition

a) Sale of IT Products are recognized when the products are supplied and are recorded net off trade discounts and rebates exclusive of Value Added Tax where applicable.

b) Revenue from services is recognized either on time and material basis or fixed price basis or based on certain measurable criteria as per relevant agreements. Revenue on time and material contracts is recognized as and when services are performed.

c) Revenue on fixed-price contracts is recognized on the percentage of completion method, with contract cost determining the degree of completion.

d) Revenue from other service contracts is recognized based on transactions processed, manpower deployed and terms of contract. Escalation claim are recognized only if there is certainty of realisation.

e) Income from deputation of personnel is recognized based on terms of agreement & arrangement with the concerned parties, on accrual basis.

f) Interest / dividend income is recognized on accrual basis.

g) Transactions in foreign currency are normally accounted for at the rate prevailing on the date of transactions. Monetory assets and liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of Balance sheet. The exchange differences on settlement/conversion are adjusted to Profit & Loss Account.

6. Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful recovery or write offs as considered necessary by the management.

7. Employee Benefits:

Employee benefits are provided in the books as per AS -15(revised ) in the following manner:

a) Provident Fund and Pension Contribution as a percentage of Salary / wages in a defined contribution scheme are charged to Profit & Loss Account.

b) Gratuity is a defined benefit obligation . The liability is provided for on the basis of actuarial valuation made at the end of each Financial year. The actuarial valuation is made on projected unit credit method.

c) Long term compensated absences are provided for on actuarial valuation basis. The actuarial valuation is made on projected unit credit method.

d) Actuarial gains or losses in respect of such benefits are charged to Profit & Loss Account.

8. Provision for tax is made for Current and Deferred Tax. Current taxes are provided on the estimated taxable income using the applicable current tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods, are recognized using the current tax rates and tax laws that have been enacted.

9. Investments

Current investments are stated at lower of fair value or cost. Long Term investments are stated at cost. Cost includes incidental expenses incurred in acquisition. The decline in value of long term investments if any other than of temporary nature is provided in profit & loss ale.

10. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if material, is charged for when the 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 recoverable amount.

11. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2010

The financial statements have been prepared in accordance with applicable accounting standards. A summary of the important accounting principles that have been applied consistently is set out below:

1. Basis of accounting

The financial statements are prepared on accrual basis in accordance with the historical cost convention.

2. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

3. Fixed assets

Tangible: Fixed assets are recorded at cost. Cost is purchase cost together with all incidental expenses of acquisition and other related costs.

Intangible: Costs that are directly associated with identifiable and unique software products controlled by the Company, whether developed in-house or acquired, and have probable economic benefits exceeding the cost beyond one year are recognized as software products.

4. Depreciation

Depreciation on fixed assets other than Rights and Software has been provided on straight line basis at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956.Rights and Software Products meant for sale is amortized over the period the benefit out of them is expected to accrue, in any case, not exceeding five years.

5. Revenue recognition

a) Sale of IT Products are recognized when the products are supplied and are recorded net off trade discounts and rebates exclusive of Value Added Tax where applicable.

b) Revenue from services is recognized either on time and material basis or fixed price basis or based on certain measurable criteria as per relevant agreements. Revenue on time and material contracts is recognized as and when services are performed. Revenue on fixed-price contracts is recognized on the percentage of completion method, with contract cost determining the degree of completion. Revenue from other service contracts is recognized based on transactions processed, manpower deployed and terms of contract. Escalation claim are recognized only if there is certainty of realisation.

c) Income from deputation of personnel is recognized based on terms of agreement & arrangement with the concerned parties, on accrual basis.

d) Interest / dividend income is recognized on accrual basis.

e) Transactions in foreign currency are normally accounted for at the rate prevailing on the date of transactions. Monetory assets and liabilities denominated in foreign currency are translated at the exchange rate prevalent at the date of Balance sheet. The exchange differences on settlement/conversion are adjusted to Profit & Loss Account.

6. Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful recovery or write offs as considered necessary by the management.

7. Employee Benefits:

Employee benefits are provided in the books as per AS -15(revised ) in the following manner:

a) Provident Fund and Pension Contribution as a percentage of Salary / wages in a defined contribution scheme are charged to Profit & Loss Account.

b) Gratuity is a defined benefit obligation . The liability is provided for on the basis of actuarial valuation made at the end of each Financial year. The actuarial valuation is made on projected unit credit method.

c) Long term compensated absences are provided for on actuarial valuation basis. The actuarial valuation is made on projected unit credit method.

d) Actuarial gains or losses in respect of such benefits are charged to Profit & Loss Account.

8. Provision for tax is made for Current and Deferred Tax. Current taxes are provided on the estimated taxable income using the applicable current tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods, are recognized using the current tax rates and tax laws that have been enacted.

9. Investments

Current investments are stated at lower of fair value or cost. Long Term investments are stated at cost. Cost includes incidental expenses incurred in acquisition. The decline in value of long term investments if any other than of temporary nature is provided in profit & loss a/c.

10. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if material, is charged for when the 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 recoverable amount.

11. Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.


Mar 31, 2003

Principal accounting policies:

The financial statements have been prepared in accordance with applicable accounting standards. A summary of the important accounting principles which have applied consistently is set out below :

1. Basis of accounting

The financial statements are prepared on accrual basis in accordance with the historical cost convention.

2. Fixed assets

Fixed assets are recorded at cost. Cost is purchase cost together with all incidental expenses of acquisition and other related costs.

3. Depreciation

Own assets

Depreciation on fixed assets except on office premises has been provided on straight line bases at the rates and in the manner prescribed under schedule XIV to the Companies Act 1956. Office premises have been depreciated on written down value basis on applicable rate under the said Act.

4. Revenue recognition

a) Sale of I T Products are recognised when the products are supplied and are recorded net off trade discounts and rebates but inclusive of sales tax where applicable. Sale of I T Products and Material Cost of I T Products includes Turnover executed on behalf of principals where the invoicing is done directly by the principals and the sale proceeds are received by the company from the customers.

b) Income from software related services, consultancy and advisory services rendered are booked based on agreements and arrangements with the concerned parties under percentage on completion method.

c) Income from deputation personnel is recognised based on terms of agreement & arrangement with the concerned parties, on accrual basis.

d) Interest income is recognised on accrual basis.

e) Transaction in foreign currency are accounted for at the rate prevailing on the date of transactions. The exchange difference on settlement/conversion are adjusted to Profit & Loss Account in the case of revenue items.

5. Miscellaneous expenses including Public Issue expenditure is being written off during a period of 10 years. Expenses, which have been identified or accrued subsequently if any are charged off fully to Profit and Loss account.

6. Goodwill arising in accordance of accounting principles relating to Amalgamation is amortized within a period of 10 years from the date of completion of merger formalities.

7. Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful recovery.

8. Stock in trade is valued at the lower of cost or net realisable value whichever is lower. Contract work in progress is valued at cost.

9. Provision is made in respect of Leave Encashment liability for employees. Contribution to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to the profit and loss account as incurred. The Company has opted for Gratuity Policy from LIC and the contribution made towards the same is charged to the Profit and Loss Account.

10. Provision for tax is made for both current and deferred taxes. Current taxes are provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods, are recognised using the tax rates and tax laws that have been enacted.


Mar 31, 2001

Principal accounting policies :

The financial statements have been prepared in accordance with applicable accounting standards. A summary of the important accounting principles which have applied consistently is set out below :

1. Basis of accounting

The financial statements are prepared on accrual basis in accordance with the historical cost convention.

2. Fixed assets

Fixed assets are recorded at cost. Cost is purchase cost together with all incidental expenses of acquisition and other related costs.

3. Depreciation

Own assets

Depreciation on fixed assets except on office premises has been provided on straight line basis at the rate and in the manner prescribed under schedule XIV to the Companies Act 1956. Office premises have been depreciated on written down value basis on applicable rate under the said Act.

Leased assets :

For Leased Assets the Company charges depreciation in accordance with the guidelines issued by the Institute of Chartered Accountants of India. The differential depreciation between the amount chargeable as per Companies Act under Schedule XIV and the amounts as per said guidelines is being reflected under the Lease Adjustment Account under Fixed Assets (Net Block). A matching annual charge representing capital recovery of leased asset is made to the Profit & Loss Account as Lease Equalisation.

4. Investments :

Investments are recorded at cost. Incidental expenses incurred while purchasing investments are added to the cost of investments. Wherever investments are made on cum dividend basis, dividend receipts are reduced from the cost of the investment.

5. Revenue recognition :

a) Sale of I T Products are recognised when the products are supplied and are recorded net of trade discounts and rebates but inclusive of sales tax where applicable.

b) Income from software related services, consultancy and advisory services rendered are booked based on agreements and arrangements with the concerned parties under percentage on completion method except in respect of one contract taken over from amalgamating company, which will be recognised under completed contract method.

c) Income from deputation of personnel is recognised based on terms of agreement & arrangement with the concerned parties, on accrual basis.

d) Dividend income on investments is accounted on declaration.

e) In respect of lease rentals, the income is accrued as per the terms of the agreement entered into with the lessee.

f) Interest income and other investment income are recognised on accrual basis, subject to prudential norms issued by The Reserve Bank of India from time to time, as applicable to this company being a non-banking financial company.

g) Transaction in foreign currency are accounted for at the rate prevaling on the date of transactions. The exchange differnce on settlement/conversion are adjusted to Profit & Loss Account in the case of revenue items.

6. Miscellaneous expenses including Public Issue expenditure is being written off during a period of 10 years. Expenses, which have been identified or accrued subsequently if any are charged off fully to Profit and Loss account.

7. Goodwill arising in accordance of accounting principles relating to Amalgamation is amortized with in a period of 10 years from the date of completion of merger formalities.

8. Sundry Debtors and Loans and Advances are stated after making adequate provisions for doubtful recovery.

9. Stock in trade are valued at the lower of cost or net realisable value whichever is lower. Contract work in progress is valued at cost.

10. Provision is made in respect of Leave Encashment liability for employees. Contribution to defined contribution schemes such as Provident Fund and Family Pension Fund are charged to the profit and loss account as incurred

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