Sep 30, 2011
A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and referred to in Section
211 (3C) of the Companies Act, 1956, (the Act).
B. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Actual
results could differ from these estimates. Any revision in accounting
estimates is recognised prospectively in current and future periods.
C. Revenue Recognition
i) Revenue from software development / software products recognized on
the basis of delivery of the licenses of the required software products
specified in the purchase order. The company also performs time bound
fixed price engagements, under which, revenues are recognized using the
stages of completion method of accounting.
ii) Income and expenditure is accounted on accrual basis.
iii) Dividends are recorded when the right to receive payment is
established.
D. Fixed Assets
i) Fixed assets are stated at cost less depreciation. All costs
relating to the acquisition and installation of fixed assets are
capitalised including directly attributable financing costs relating to
borrowed funds and costs of bringing the asset to working condition for
its intended use.
ii) Software product development expenditure including expenditure on
upgrades and new version are capitalized on completion of the product.
Cost of Software purchased and procured for product
development/customisation is added to software purchase expenditure.
iii) Capital Work in Progress comprises of all directly attributable
costs of bringing the assets to their working condition for their
intended use and all indirect and incidental expenses.
E. Depreciation / Amortisation
Depreciation is provided on straight-line method at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956.
Software product development expenditure is amortised over a period of
three years. Lease hold buildings are amortised over the period of
lease.
F. Borrowing cost
Borrowing costs are recognised as an expense in the period in which
they are incurred except those which are directly attributable to
acquisition/construction of fixed asset, till the time such assets are
ready for use, in which case the borrowing costs are capitalised as
part of the cost of asset.
G. Investments
i) Long term Investments are stated at cost. Provision for diminution
in value of long term investments is made only if there is a decline
other than temporary in the opinion of the management.
ii) Current Investments are stated at cost or market value whichever is
lower.
H. Foreign Currency Transactions
i) India: Transactions in foreign currency are recorded at the exchange
rate prevailing at the date of the transactions. Resultant exchange
difference, arising on payment is recognised as income or expense, in
the period in which they arise.
ii) The foreign exchange gain on reinstatement of Debtors, Creditors
and Advances during the period has not been recognised in the books of
accounts.
iii) Any income and expenses on account of currency exchange difference
either on settlement or on translation is recognised in the profit &
loss account, except in accordance with schedule VI till March 31st
2011 on the amount of payables and receivables related to purchase and
sales.
iv) Overseas Branches: Revenue transactions in foreign currency from
overseas branches are recorded at the average exchange rate for the
period, whereas the asset and liabilities are stated at closing
exchange rates except for Investments for which rate prevailing on the
date of investment or acquisition is applied for conversion. Resulting
exchange difference, on conversion of assets and liabilities and income
and expenses are transferred to Foreign Currency Translation Reserve.
I. Retirement Benefits
i) The Company's Contribution to Provident Fund are charged to Profit
and Loss Account.
ii) The liability for gratuity determined as on the Balance Sheet date,
as per the provisions of Payment of Gratuity Act, is provided for and
this liability is not funded.
iii) In respect of Overseas Branches, the liability for gratuity and
leave encashment is provided as per the prevailing laws of the
respective countries.
J. Taxes on Income
Current income tax expense comprises taxes on income from operations in
India and in foreign jurisdictions. Income tax payable in India is
determined in accordance with the provisions of the Income Tax Act,
1961. Tax expense relating to foreign operations is determined in
accordance with tax laws applicable in countries where such operations
are domiciled. Deferred tax expense or benefit is recognised on timing
differences being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax assets and liabilities are
measured using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Deferred tax assets
consisting of unabsorbed depreciation and carry forward of losses are
recognised only to the extent that there is virtual certainty that
sufficient future taxable income will be available to realise these
assets.
K. Earnings per share
The basic earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share, if
any is computed using the weighted average number of equity shares and
dilutive potential equity share outstanding during the period except
when the results would be anti-dilutive.
L. Impairment
Except otherwise than for Financial Assets, Inventories and Deferred
Tax Asset, the Carrying Amounts of all the Assets are reviewed at each
balance sheet date to determine any indications of impairment. An asset
is treated as impaired when the carrying cost of assets exceeds its
recoverable value . An impairment loss is charged to the Profit and
Loss account in the period in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
M. Provision, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are disclosed by way of Notes on
accounts. Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Provision is made in the Accounts in respect of those
contingencies which are likely to materialise into liabilities after
the period end, till the approval of accounts by the Board of Directors
and which have material effect on the position stated in Balance sheet.
Mar 31, 2010
A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and referred to in Section
211 (3C) of the Companies Act, 1956, (the Act).
B. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Actual
results could differ from these estimates. Any revision in accounting
estimates is recognised prospectively in current and future periods.
C. Revenue Recognition
i) Revenue from software development / software products recognized on
the basis of delivery of the licenses of the required software products
specified in the purchase order. The company also performs time bound
fixed price engagements, under which, revenues are recognized using the
stages of completion method of accounting.
ii) Income and expenditure is accounted on accrual basis.
iii) Dividends are recorded when the right to receive payment is
established.
D. Fixed Assets
i) Fixed assets are stated at cost less depreciation. All costs
relating to the acquisition and installation of fixed assets are
capitalised including directly attributable financing costs relating to
borrowed funds and costs of bringing the asset to working condition for
its intended use.
ii) Software product development expenditure including expenditure on
upgrades and new version are capitalized on completion of the product.
Cost of Software purchased and procured for product
development/customisation is added to software purchase expenditure.
iii) Capital Work in Progress comprises of all directly attributable
costs of bringing the assets to their working condition for their
intended use and all indirect and incidental expenses.
E. Depreciation / Amortisation
Depreciation is provided on straight-line method at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956.
Software product development expenditure is amortised over a period of
three years. Lease hold buildings are amortised over the period of
lease.
F. Borrowing cost
Borrowing costs are recognised as an expense in the year in which they
are incurred except those which are directly attributable to
acquisition/construction of fixed asset, till the time such assets are
ready for use, in which case the borrowing costs are capitalised as
part of the cost of asset.
G. Investments
i) Long term Investments are stated at cost. Provision for diminution
in value of long term investments is made only if there is a decline
other than temporary in the opinion of the management.
ii) Current Investments are stated at cost or market value whichever is
lower.
H. Foreign Currency Transactions
i) India: Transactions in foreign currency are recorded at the exchange
rate prevailing at the date of the transactions.
Resultant exchange difference, arising on payment is recognised as
income or expense, in the year in which they arise.
ii) The foreign exchange gain on reinstatement of Debtors, Creditors
and Advances during the year has not been recognised in the books of
accounts.
iii) The Company uses foreign exchange forward contracts to hedge for
some of its exposure to movements in foreign exchange rates. The
premium or discount arising at the inception of such a forward exchange
contract is charged to the profit & Loss Account. Any profit or loss
arising on cancellation or renewal of such a forward exchange contract
is recognized as income or expense for the period.
iv)Any income and expenses on account of currency exchange difference
either on settlement or on translation is recognised in the profit &
loss account, except in accordance with schedule VI till March 31st
2010 on the amount of payables and receivables related to purchase and
sales.
v) Overseas Branches: Revenue transactions in foreign currency from
overseas branches are recorded at the average exchange rate for the
year, whereas the asset and liabilities are stated at closing exchange
rates except for Investments for
which rate prevailing on the date of investment or acquisition is
applied for conversion. Resulting exchange difference, on
conversion of assets and liabilities and income and expenses are
transferred to Foreign Currency Translation Reserve.
I. Forward contracts and options in foreign currencies
i) The company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates relating to
certain firm commitments and forecasted transactions. The use of these
foreign exchange forward contracts and options reduces the risk or cost
to the Company and the Company does not use the foreign exchange
forward contracts or options for trading or speculation purposes.
ii) The Company has planned to adopt Accounting Standard (AS) 30 on
Financial Instruments: Recognition and Measurement from 1st April 2011
from the date the same becomes mandatory which requires the changes in
the fair values of forward contracts and options designated as
effective cash flow hedges to be recognized directly in shareholdersÃ
funds and reclassified into the profit and loss account upon the
occurrence of the hedged transaction and in the absence of a
designation as effective hedge, gain/loss to be recognized in the
profit and loss account.
iii) In the intervening period till 1st April 2011 the losses if any
will be provided in respect of all outstanding derivative contracts at
the balance sheet date marking them to market as a prudent policy in
pursuance of the announcement dated 29th March, 2008 by the Institute
of Chartered Accountants of India for contracts other than those to
which Accounting Standard 11- The effects of Changes in Foreign
Exchange rates apply.
J. Retirement Benefits
i) The Companys Contribution to Provident Fund are charged to Profit
and Loss Account.
ii) The liability for gratuity determined as on the Balance Sheet date,
as per the provisions of Payment of Gratuity Act, is provided for and
this liability is not funded.
iii) In respect of Overseas Branches, the liability for gratuity and
leave encashment is provided as per the prevailing laws of the
respective countries.
K. Taxes on Income
Current income tax expense comprises taxes on income from operations in
India and in foreign jurisdictions. Income tax payable in India is
determined in accordance with the provisions of the Income Tax Act,
1961. Tax expense relating to foreign operations is determined in
accordance with tax laws applicable in countries where such operations
are domiciled.
Deferred tax expense or benefit is recognised on timing differences
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Deferred tax assets
consisting of unabsorbed depreciation and carry forward of losses are
recognised only to the extent that there is virtual certainty that
sufficient future taxable income will be available to realise these
assets.
L. Earnings per share
The basic earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share, if
any is computed using the weighted average number of equity shares and
dilutive potential equity share outstanding during the period except
when the results would be anti-dilutive.
M. Impairment
Except otherwise than for Financial Assets, Inventories and Deferred
Tax Asset, the Carrying Amounts of all the Assets are reviewed at each
balance sheet date to determine any indications of impairment. An asset
is treated as impaired when the carrying cost of assets exceeds its
recoverable value . An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
N. Provision, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are disclosed by way of Notes on
accounts. Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Provision is made in the Accounts in respect of those
contingencies which are likely to materialise into liabilities after
the year end, till the approval of accounts by the Board of Directors
and which have material effect on the position stated in Balance sheet.
Mar 31, 2009
A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention from the books of accounts maintained on accrual basis, in
conformity with accounting principles generally accepted in India, and
comply with the accounting standards issued by the council of the
Institute of Chartered Accountants of India and referred to in Section
211 (3C) of the Companies Act, 1956, (the Act).
B. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets, liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the period. Actual
results could differ from these estimates. Any revision in accounting
estimates is recognised prospectively in current and future periods.
C.Revenue Recognition
i) Revenue from software development/ software products recognized on
the basis of delivery of the licenses of the required software products
specified in the purchase order. The company also performs time bound
fixed price engagements, under which, revenues are recognized using the
stages of completion method of accounting.
ii) Income and expenditure is accounted on accrual basis.
iii) Dividends are recorded when the right to receive payment is
established.
D. Fixed Assets
i) Fixed assets are stated at cost less depreciation. All costs
relating to the acquisition and installation of fixed assets are
capitalised including directly attributable financing costs relating to
borrowed funds and costs of bringing the asset to working condition for
its intended use.
ii) Software product development expenditure including expenditure on
upgrades and new version are capitalized on completion ofthe product.
Cost ofSoftware purchased and procured for product
development/customisation is added to software purchase expenditure.
iii) Capital Work in Progress comprises of all directly attributable
costs of bringing the assets to their working condition for their
intended use and all indirect and incidental expenses.
E. Depreciation / Amortisation
Depreciation is provided on straight-line method at the rates and in
the manner specified in Schedule XIV to the Companies Act, 1956.
Software product development expenditure is amortised over a period of
three years. Lease hold buildings are amortised over the period of
lease.
F. Borrowing cost
Borrowing costs are recognised as an expense in the year in which they
are incurred except those which are directly attributable to
acquisition/construction of fixed asset, till the time such assets are
ready for use, in which case the borrowing costs are capitalised as
part of the cost of asset.
G. Investments
i) Long term Investments are stated at cost. Provision for diminution
in value of long term investments is made only if there is a decline
otherthan temporary in the opinion ofthe management
ii) Current Investments are stated at cost or market value whichever is
lower.
H. Foreign Currency Transactions
i) India: Transactions in foreign currency are recorded at the exchange
rate prevailing at the date of the transactions. Resultant exchange
difference, arising on payment is recognised as income or expense, in
the year in which they arise.
ii) The foreign exchange gain on reinstatement of Debtors, Creditors
and Advances during the year has not been recognised in the books of
accounts.
iii) The Company uses foreign exchange forward contracts to hedge for
some of its exposure to movements in foreign exchange rates. The
premium or discount arising at the inception of such a forward exchange
contract is charged to the profit & Loss Account. Any profit or loss
arising on cancellation or renewal of such a forward exchange contract
is recognized as income or expense for the period.
iv) Any income and expenses on account of currency exchange difference
either on settlement or on translation is recognised in the profit &
loss account, except in accordance with schedule VI till March 31st
2009 on amount of payables and receivables related to purchase and
sales.
v) Overseas Branches: Revenue transactions in foreign currency from
overseas branches are recorded at the average exchange rate for the
year, whereas the asset and liabilities are stated at closing exchange
rates except for Investments for which rate prevailing on the date of
investment or acquisition is applied for conversion. Resulting
exchange difference, on conversion of assets and liabilities and income
and expenses are transferred to Foreign Currency Translation Reserve.
I. Forward contracts and options in foreign currencies
i) The company uses foreign exchange forward contracts and options to
hedge its exposure to movements in foreign exchange rates relating to
certain firm commitments and forecasted transactions. The use of these
foreign exchange forward contracts and options reduces the risk or cost
to the Company and the Company does not use theforeign exchange forward
contracts or options fortrading orspeculation purposes.
ii) The Company has planned to adopt Accounting Standard (AS) 30 on
Financial Instruments: Recognition and Measurement from 1st April 2011
from the date the same becomes mandatory which requires the changes in
the fair values of forward contracts and options designated as
effective cash flow hedges to be recognized directly in shareholders
funds and reclassified into the profit and loss account upon the
occurrence of the hedged transaction and in the absence of a
designation as effective hedge, gain/loss to be recognized in the
profit and loss account.
iii) In the intervening period till 1st April 2011 the losses if any
will be provided in respect of all outstanding derivative contracts at
the balance sheet date marking them to market as a prudent policy in
pursuance of the announcement dated 29th March, 2008 by the Institute
of Chartered Accountants of India for contracts other than those to
which Accounting Standard 11- The effects of Changes in Foreign
Exchange rates apply.
J. Retirement Benefits
i) The Companys Contribution to Provident Fund are charged to Profit
and Loss Account.
ii) The liability for gratuity determined as on the Balance Sheet date,
as per the provisions of Payment of Gratuity Act, is provided for and
this liability is not funded.
iii) In respect of Overseas Branches, the liability for gratuity and
leave encashment is provided as per the prevailing laws of the
respective countries.
K. Taxes on Income
Current income tax expense comprises taxes on income from operations in
India and in foreign jurisdictions. Income tax payable in India is
determined in accordance with the provisions of the Income Tax Act,
1961. Tax expense relating to foreign operations is determined in
accordance with tax laws applicable in countries where such operations
are domiciled.
Deferred tax expense or benefit is recognised on timing differences
being the difference between taxable income and accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. Deferred tax assets
consisting of unabsorbed depreciation and carry forward of losses are
recognised only to the extent that there is virtual certainty that
sufficient future taxable income will be available to realise these
assets.
Fringe Benefit Tax is provided in accordance with provisions of Section
115WA of the Income Tax Act,1961 as expenses.
L. Earnings per share
The basic earnings per share is computed by dividing the net profit
after tax for the period by the weighted average number of equity
shares outstanding during the period. Diluted earnings per share, if
any is computed using the weighted average number of equity shares and
dilutive potential equity share outstanding during the period except
when the results would be anti-dilutive.
M. Impairment
Except otherwise than for Financial Assets, Inventories and Deferred
Tax Asset, the Carrying Amounts of all the Assets are reviewed at each
balance sheet date to determine any indications of impairment. An asset
is treated as impaired when the carrying cost of assets exceeds its
recoverable value . An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
N. Provision, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are disclosed by way of Notes on
accounts. Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Provision is made in the Accounts in respect of those
contingencies which are likely to materialise into liabilities after
the year end, till the approval of accounts by the Board of Directors
and which have material effect on the position stated in Balance sheet.
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