Mar 31, 2015
(a) Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP) to comply in all material aspects with the Accounting
Standards specified under Section 133 of the Companies Act, 2013 (the
''Act''), read with Rule 7 of the Companies (Accounts) Rules, 2014 (as
amended). These financial statements have been prepared under the
historical cost convention on accrual basis of accounting. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year except as stated in
Note 1(b) below.
(b) Change in accounting policy
Effective 1 April 2014, the Company has retrospectively changed its
method of providing depreciation on furniture & fixtures from the
''Written Down Value'' method to the ''Straight Line'' method, at the rates
prescribed in Schedule II to the Companies Act, 2013. Management
believes that this change will result in more appropriate presentation
of the financial statements of the Company. Accordingly, the Company
has recorded reversal of accumulated depreciation charge of Rs. 70.70
Lakhs in current year.
(c) Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent liabilities as at the date of
financial statements and the reported amounts of revenues and expenses
during the reporting period. Key estimates include estimate of useful
life of fixed assets, unbilled revenue, income taxes, provision for bad
and doubtful debts, estimated gain/loss on foreign exchange contracts
and future obligations under employee retirement benefit plans. Actual
results could differ from those estimates. Any revision to accounting
estimates will be recognised prospectively in the current and future
periods.
(d) Fixed assets, Capital work-in-progress and Depreciation
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
includes inward freight, taxes and expenses incidental to acquisition
and installation, up to the point the asset is ready for its intended
use.
(ii) Depreciation is provided on Building, Plant and Equipment,
Furniture & Fixtures and Office Equipment under the Straight-Line
Method and on other fixed assets, other than Leasehold Building
improvements, under the Written Down Value Method. Depreciation is
provided on a pro-rata basis using the useful lives and in the manner
prescribed under Schedule II of the Companies Act, 2013, which also
represent the useful life of fixed assets.
(iii) Leasehold building improvements are written off over the period
of lease or their estimated useful life, whichever is lower, on a
straight-line basis.
(iv) Assets acquired but not ready for use or assets under construction
are classified under Capital Work in Progress.
(v) Management evaluates at regular intervals, using external and
internal sources, the need for impairment of any asset. Impairment
occurs where the carrying value exceeds the present value of future
cash flows expected to arise from the continuing use of the asset and
its net realisable value on its eventual disposal. Any loss on account
of impairment is expensed as the excess of the carrying amount over the
higher of the asset''s net sales price or present value as determined.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
impairment.
(e) Intangible assets
costs relating to acquisition of computer software are capitalised as
''Intangible assets'' and amortised on a straight line basis over a
period of three years, which is the management''s estimate of the useful
life of such software.
(f) Intangible assets under development
The Company recognizes the cost of developing intellectual property
rights as an intangible asset, which in its opinion would result in
commercial benefits over several financial years.
The initial investment towards development or the cost of creation of
the intellectual property rights is treated as capital expenditure. The
same would be amortized over the commercial life of intellectual
property rights so created.
(g) Borrowing Cost
Borrowing cost attributable to the acquisition or setting-up of
qualifying assets is capitalised 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 or sale. All other borrowing
costs are charged to revenue.
(h) Investments
Investments are classified into long-term investments and current
investments. Long-term investments are carried at cost. Provision for
diminution in the value of long-term investments is not made unless it
is considered other than temporary. Current investments are valued at
lower of cost and net realisable value.
(i) Foreign currency transactions
(i) Initial Recognition - Transactions denominated in foreign
currencies are recorded at the rates of exchange prevailing on the date
of the transaction.
(ii) Conversion - Monetary assets and liabilities denominated in
foreign currency are converted at the rate of exchange prevailing on
the date of the Balance Sheet.
(iii) Exchange Differences - All exchange differences arising on
settlement/conversion of foreign currency transactions are included in
the Statement of Profit and Loss in the year in which they arise.
(iv) Forward Cover - The Company uses foreign exchange forward
contracts and option contracts to hedge its exposure on foreign
currency fluctuations. Any profit or loss arising on cancellation or
renewal of foreign exchange forward contracts/ option contracts is
recognised as income or expense for the year.
(v) Pursuant to the Announcement ''Accounting for Derivatives'' by the
Institute of Chartered Accountants of India, the Company has adopted
Accounting Standard 30, Financial Instruments: Recognition and
Measurement, prescribed by the Institute of Chartered Accountants of
India, with effect from 1 April 2008.
Consequently, outstanding forward contracts have been treated as highly
probable forecast transactions based on historic trends. Accordingly,
gains / losses arising on ''mark to market'' of such open forward
contracts have been accumulated in ''Hedging Reserve Account''. The
Company uses forward contracts as economic hedges and not for trading
or speculative purposes.
(j) Staff benefits
(i) All short term employee benefits are accounted on undiscounted
basis during the accounting period based on services rendered by
employees.
(ii) The Company''s contribution to Provident Fund is remitted to a
trust established for this purpose based on a fixed percentage of the
eligible employees'' salary and charged to Statement of Profit and Loss.
The Company has categorised its Provident Fund as a defined
contribution plan since it has no further obligations beyond these
contributions.
(iii) The Company''s contribution under a defined Superannuation Plan to
the trust established for this purpose based on a specified percentage
of salary of eligible employees is charged to Statement of Profit and
Loss. The Company has categorised Superannuation Plan as a defined
contribution plan since it has no further obligations beyond these
contributions.
(iv) The Company''s liability towards gratuity and compensated absences,
being defined benefit plans is accounted for on the basis of an
independent actuarial valuation using the projected unit credit method,
done at the year end and actuarial gains/losses are charged to the
Statement of Profit and Loss. Gratuity liability is funded by payments
to the trust established for the purpose.
(k) Revenue recognition
(i) Revenue from software development with respect to time and material
contracts is recognised as related costs are incurred and services are
performed in accordance with the terms of specific contracts.
(ii) Revenue from fixed price contracts are recognised based on the
milestones achieved as specified in the contracts and for interim
stages, until the next milestone is achieved, on the basis of
proportionate completion method. Provisions for estimated losses on
incomplete contracts are recorded in the period in which such losses
become probable based on the current estimates.
(iii) Revenue from sale of traded software licenses and traded hardware
is recognised on delivery to the customer.
(iv) Cost and earnings in excess of billings are classified as unbilled
revenue while billings in excess of cost and earnings are classified as
unearned revenue.
(v) Dividend income is recognized when the right to receive the
dividend is established.
(vi) Interest income is recognized on time proportion basis.
(l) Lease rentals
Rent expense is recognised with reference to the terms of lease
agreement and other consideration in respect of operating leases on a
straight line basis. Assets given on operating lease are included under
fixed assets of the Company. Lease income is recognised on straight
line basis over the primary period of lease.
(m) Taxes on Income
The provision for current taxation is computed in accordance with the
relevant tax regulations. Deferred tax is recognised on timing
differences between the accounting and taxable income for the year and
quantified using the tax rates and laws enacted or substantively
enacted as at the Balance Sheet date. Deferred tax assets in respect of
unabsorbed depreciation and carry forward losses under tax laws are
recognised and carried forward to the extent there is virtual certainty
supported by convincing evidence that sufficient future taxable
income will be available against which such deferred tax assets can be
realised in future. Where there is no unabsorbed depreciation and/or
carry forward losses, other deferred tax assets are recognised only to
the extent there is a reasonable certainty of realisation in future.
Such assets are reviewed at each Balance Sheet date to reassess
realisation.
Tax credit is recognized in respect of Minimum Alternate Tax (''MAT'') as
per the provisions of Section 115 JAA of the Income Tax Act, 1961 based
on convincing evidence that the Company will pay normal income tax
within statutory time frame and is reviewed at each Balance Sheet date.
(n) Provisions and contingent liabilities
Provisions are recognised in the financial statements in respect of
present probable obligations, for amounts which can be reliably
estimated.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events, whose existence would be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
Mar 31, 2014
(a) Basis of accounting and preparation of financial statements
The financial statements which have been prepared under the historical
cost convention on the accrual basis of accounting, are in accordance
with the applicable requirements of the Companies Act, 1956 (the ''Act'')
read with General Circular 15/2013 dated 13 September 2013 of the
Ministry of Corporate Affairs in respect of Section 133 of the Companies
Act, 2013 and comply in all material aspects with the Accounting
Standards prescribed by the Central Government, in accordance with the
Companies (Accounting Standards) Rules, 2006, to the extent applicable.
(b) The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
(c) Change in accounting policy
Effective 1 April 2013, the Company has retrospectively changed its
method of providing depreciation on Plant and Equipments and Office
Equipments from the ''Written Down Value'' method to the ''Straight Line''
Method, at the rates prescribed in Schedule XIV to the Companies Act,
1956. Management believes that this change will result in more
appropriate presentation of the financial statements of the Company.
Accordingly, the Company has recognized an additional depreciation
charge of Rs.31.24 lakhs in current year.
(d) Use of estimates
The preparation of the financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent liabilities as at the date of
financial statements and the reported amounts of revenues and expenses
during the reporting period. Key estimates include estimate of useful
life of fixed assets, unbilled revenue, income taxes, provision for bad
and doubtful debts, estimated gain/loss on foreign exchange contracts
and future obligations under employee retirement benefit plans. Actual
results could differ from those estimates. Any revision to accounting
estimates will be recognised prospectively in the current and future
periods.
(e) Fixed assets, Capital work-in-progress and Depreciation
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
includes inward freight, taxes and expenses incidental to acquisition
and installation, up to the point the asset is ready for its intended
use.
(ii) Depreciation is provided on Building, Plant and Equipments and
Office Equipments under the Straight- Line Method and on other fixed
assets, other than Leasehold building improvements, under the Written
Down Value Method. Depreciation is provided on a pro-rata basis at the
rates and in the manner prescribed under Schedule XIV of the Companies
Act, 1956, which also represent the useful life of fixed assets. Assets
costing Rs.5,000/- or less are depreciated in full in the year of
purchase.
(iii) Leasehold building improvements are written of over the period of
lease or their estimated useful life, whichever is earlier, on a
straight-line basis.
(iv) Assets acquired but not ready for use or assets under construction
are classified under Capital Work in Progress.
(v) Management evaluates at regular intervals, using external and
internal sources, the need for impairment of any asset. Impairment
occurs where the carrying value exceeds the present value of future
cash lows expected to arise from the continuing use of the asset and
its net realisable value on its eventual disposal. Any loss on account
of impairment is expensed as the excess of the carrying amount over the
higher of the asset''s net sales price or present value as determined.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
impairment.
(f) Intangible assets
Costs relating to acquisition of computer software are capitalised as
''Intangible assets'' and amortised on a straight line basis over a
period of three years, which is the management''s estimate of the useful
life of such software.
(g) Intangible assets under development
The Company recognizes the cost of developing intellectual property
rights as an intangible asset, which in its opinion would result in
commercial benefits over several financial years.
The initial investment towards development or the cost of creation of
the intellectual property rights is treated as capital expenditure. The
same would be amortized over the commercial life of intellectual
property rights so created.
(h) Borrowing Cost
Borrowing cost attributable to the acquisition or setting-up of
qualifying assets is capitalised 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 or sale. All other borrowing
costs are charged to revenue.
(i) Investments
Investments are classified into long-term investments and current
investments. Long-term investments are carried at cost. Provision for
diminution in the value of long-term investments is not made unless it
is considered other than temporary. Current investments are valued at
lower of cost and net realisable value.
(j) Foreign currency transactions
(i) Initial Recognition - Transactions denominated in foreign
currencies are recorded at the rates of exchange prevailing on the date
of the transaction.
(ii) Conversion - Monetary assets and liabilities denominated in
foreign currency are converted at the rate of exchange prevailing on
the date of the Balance Sheet.
(iii) Exchange Differences - All exchange differences arising on
settlement/conversion of foreign currency transactions are included in
the Statement of Profit and Loss in the year in which they arise.
(iv) Forward Cover - The Company uses foreign exchange forward
contracts and forward option contracts to hedge its exposure to foreign
currency fluctuations. The premium or discount arising at the inception
of forward option contracts and foreign exchange forward contracts is
amortised as expense or income over the life of the contract. Any profit
or loss arising on cancellation or renewal of foreign exchange forward
contracts is recognised as income or expense for the year.
(v) Pursuant to the Announcement ''Accounting for Derivatives'' by the
Institute of Chartered Accountants of India, the Company has adopted
Accounting Standard 30, Financial Instruments: Recognition and
Measurement, prescribed by the Institute of Chartered Accountants of
India, with effect from April 1, 2008. Consequently, outstanding
forward contracts have been treated as highly probable forecast
transactions based on historic trends. Accordingly, gains / losses
arising on ''mark to market'' of such open forward contracts have been
accumulated in ''Hedging Reserve Account''. The Company uses forward
contracts as economic hedges and not for trading or speculative
purposes.
(k) Staff benefits
(i) All short term employee benefits are accounted on undiscounted basis
during the accounting period based on services rendered by employees.
(ii) The Company''s contribution to Provident Fund is remitted to a
trust established for this purpose based on a fixed percentage of the
eligible employees'' salary and charged to Statement of Profit and Loss.
The Company has categorised its Provident Fund as a defined contribution
plan since it has no further obligations beyond these contributions.
(iii) The Company''s contribution under a defined Superannuation Plan to
the trust established for this purpose based on a specified percentage
of salary of eligible employees is charged to Statement of Profit and
Loss. The Company has categorised Superannuation Plan as a defined
contribution plan since it has no further obligations beyond these
contributions.
(iv) The Company''s liability towards gratuity and compensated absences,
being defined benefit plans is accounted for on the basis of an
independent actuarial valuation using the projected unit credit method,
done at the year end and actuarial gains/losses are charged to the
Statement of Profit and Loss. Gratuity liability is funded by payments
to the trust established for the purpose.
(l) Revenue recognition
(i) Revenue from software development with respect to time and material
contracts is recognised as related costs are incurred and services are
performed in accordance with the terms of specific contracts.
(ii) Revenue from fixed price contracts are recognised based on the
milestones achieved as specified in the contracts and for interim
stages, until the next milestone is achieved, on the basis of
proportionate completion method. Provisions for estimated losses on
incomplete contracts are recorded in the period in which such losses
become probable based on the current estimates.
(iii) Revenue from sale of traded software licenses and traded hardware
is recognised on delivery to the customer.
(iv) Cost and earnings in excess of billings are classified as unbilled
revenue while billings in excess of cost and earnings are classified as
unearned revenue.
(v) Dividend income is recognized when the right to receive the
dividend is established.
(vi) Interest income is recognized on time proportion basis.
(m)Lease rentals
Rent expense is recognised with reference to the terms of lease
agreement and other consideration in respect of operating leases on a
straight line basis. Assets given on operating lease are included under
fixed assets of the Company. Lease income is recognised on straight line
basis over the primary period of lease.
(n) Taxes on Income
The provision for current taxation is computed in accordance with the
relevant tax regulations. Deferred tax is recognised on timing
differences between the accounting and taxable income for the year and
quantified using the tax rates and laws enacted or substantively enacted
as at the Balance Sheet date. Deferred tax assets in respect of
unabsorbed depreciation and carry forward losses under tax laws are
recognised and carried forward to the extent there is virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realised in future. Where there is no unabsorbed depreciation and/ or
carry forward losses, other deferred tax assets are recognised only to
the extent there is a reasonable certainty of realisation in future.
Such assets are reviewed at each Balance Sheet date to reassess
realisation.
Tax credit is recognized in respect of Minimum Alternate Tax (''MAT'') as
per the provisions of Section 115 JAA of the Income Tax Act, 1961 based
on convincing evidence that the Company will pay normal income tax
within statutory time frame and is reviewed at each Balance Sheet date.
(o) Provisions and contingent liabilities
Provisions are recognised in the financial statements in respect of
present probable obligations, for amounts which can be reliably
estimated.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events, whose existence would be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
Mar 31, 2013
(a) Basis of accounting and preparation of fnancial statements
The fnancial statements which have been prepared under the historical
cost convention on the accrual basis of accounting, are in accordance
with the applicable requirements of the Companies Act, 1956 (the ''Act'')
and comply in all material aspects with the Accounting Standards
prescribed by the Central Government, in accordance with the Companies
(Accounting Standards) Rules, 2006, to the extent applicable.
(b) Use of estimates
The preparation of the fnancial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent liabilities as at the date of
fnancial statements and the reported amounts of revenues and expenses
during the reporting period. Key estimates include estimate of useful
life of fxed assets, unbilled revenue, income taxes, provision for bad
and doubtful debts, estimated gain/loss on foreign exchange contracts
and future obligations under employee retirement beneft plans. Actual
results could differ from those estimates. Any revision to accounting
estimates will be recognised prospectively in the current and future
periods.
(c) Fixed assets, Capital work-in-progress and Depreciation
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
includes inward freight, taxes and expenses incidental to acquisition
and installation, up to the point the asset is ready for its intended
use.
(ii) Depreciation is provided on Building under the Straight-Line
Method and on other fxed assets, other than Leasehold building
improvements, under the Written down Value method. Depreciation is
provided on a pro-rata basis at the rates and in the manner prescribed
under Schedule XIV of the Companies Act, 1956, which also represent the
useful life of fxed assets.
(iii) Leasehold building improvements are written off over the period
of lease or their estimated useful life, whichever is earlier, on a
straight-line basis.
(iv) Assets acquired but not ready for use or assets under construction
are classifed under Capital Work in Progress.
(v) Management evaluates at regular intervals, using external and
internal sources, the need for impairment of any asset. Impairment
occurs where the carrying value exceeds the present value of future
cash fows expected to arise from the continuing use of the asset and
its net realisable value on its eventual disposal. Any loss on account
of impairment is expensed as the excess of the carrying amount over the
higher of the asset''s net sales price or present value as determined.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
impairment.
(d) Intangible assets
Costs relating to acquisition of computer software are capitalised as
''Intangible assets'' and amortised on a straight line basis over a
period of three years, which is the management''s estimate of the useful
life of such software.
(e) Intangible assets under development
The company recognizes the cost of developing intellectual property
which in its opinion would result in commercial benefts over several
fnancial years.
The initial investment towards development or the cost of creation of
the intellectual property rights is treated as capital expenditure. The
same would be written/off over the commercial life of intellectual
property so created.
(f) Investments
Investments are classifed into long-term investments and current
investments. Long-term investments are carried at cost. Provision for
diminution in the value of long-term investments is not made unless it
is considered other than temporary. Current investments are valued at
lower of cost and net realisable value.
(g) Foreign currency transactions
(i) Initial Recognition - Transactions denominated in foreign
currencies are recorded at the rates of exchange prevailing on the date
of the transaction.
(ii) Conversion - Monetary assets and liabilities denominated in
foreign currency are converted at the rate of exchange prevailing on
the date of the Balance Sheet.
(iii) Exchange Differences - All exchange differences arising on
settlement/conversion of foreign currency transactions are included in
the Statement of Proft and Loss in the year in which they arise.
(iv) Forward Cover - The Company uses foreign exchange forward
contracts and forward option contracts to hedge its exposure to foreign
currency fuctuations. The premium or discount arising at the inception
of forward option contracts and foreign exchange forward contracts is
amortised as expense or income over the life of the contract. Any proft
or loss arising on cancellation or renewal of foreign exchange forward
contracts is recognised as income or expense for the year.
(v) Pursuant to the Announcement ''Accounting for Derivatives'' by the
Institute of Chartered Accountants of India, the Company has adopted
Accounting Standard 30, Financial Instruments: Recognition and
Measurement, prescribed by the Institute of Chartered Accountants of
India, with effect from April 1, 2008. Consequently, outstanding
forward contracts have been treated as highly probable forecast
transactions based on historic trends. Accordingly, gains / losses
arising on ''mark to market'' of such open forward contracts have been
accumulated in ''Hedging Reserve Account''. The Company uses forward
contracts as economic hedges and not for trading or speculative
purposes.
(h) Staf benefts
(i) All short term employee benefts are accounted on undiscounted basis
during the accounting period based on services rendered by employees.
(ii) The Company''s contribution to Provident Fund is remitted to a
trust established for this purpose based on a fxed percentage of the
eligible employees'' salary and charged to Statement of Proft and Loss.
The Company has categorised its Provident Fund as a defned contribution
plan since it has no further obligations beyond these contributions.
(iii) The Company''s contribution under a defned Superannuation Plan to
the trust established for this purpose based on a specifed percentage
of salary of eligible employees is charged to Statement of Proft and
Loss. The Company has categorised Superannuation Plan as a defned
contribution plan since it has no further obligations beyond these
contributions.
(iv) The Company''s liability towards gratuity and compensated absences,
being defned beneft plans is accounted for on the basis of an
independent actuarial valuation using the projected unit credit method,
done at the year end and actuarial gains/losses are charged to the
Statement of Proft and Loss. Gratuity liability is funded by payments
to the trust established for the purpose.
(i) Revenue recognition
(i) Revenue from software development with respect to time and material
contracts is recognised as related costs are incurred and services are
performed in accordance with the terms of specifc contracts.
(ii) Revenue from fxed price contracts are recognised based on the
milestones achieved as specifed in the contracts and for interim
stages, until the next milestone is achieved, on the percentage of
completion basis. Provisions for estimated losses on incomplete
contracts are recorded in the period in which such losses become
probable based on the current contracts.
(iii) Revenue from sale of traded software licenses and traded hardware
is recognised on delivery to the customer.
(iv) Cost and earnings in excess of billings are classifed as unbilled
revenue while billings in excess of cost and earnings are classifed as
unearned revenue.
(v) Dividend income is recognized when the right to receive the
dividend is established.
(vi) Interest income is recognized on time proportion basis.
(j) Lease rentals
Rent expense is recognised with reference to the terms of lease
agreement and other consideration in respect of operating leases on a
straight line basis. Assets given on operating lease are included under
fxed assets of the Company. Lease income is recognised on straight line
basis over the primary period of lease.
(k) Taxes on Income
The provision for current taxation is computed in accordance with the
relevant tax regulations. Deferred tax is recognised on timing
differences between the accounting and taxable income for the year and
quantifed using the tax rates and laws enacted or substantively enacted
as at the Balance Sheet date. Deferred tax assets in respect of
unabsorbed depreciation and carry forward losses under tax laws are
recognised and carried forward to the extent there is virtual certainty
supported by convincing evidence that suffcient future taxable income
will be available against which such deferred tax assets can be
realised in future. Other deferred tax assets are recognised only to
the extent there is a reasonable certainty of realisation in future.
Such assets are reviewed at each Balance Sheet date to reassess
realisation.
Tax credit is recognized in respect of Minimum Alternate Tax (''MAT'') as
per the provisions of Section 115 JAA of the Income Tax Act, 1961 based
on convincing evidence that the Company will pay normal income tax
within statutory time frame and is reviewed at each Balance Sheet date.
(l) Provisions and contingent liabilities
Provisions are recognised in the fnancial statements in respect of
present probable obligations, for amounts which can be reliably
estimated.
Contingent liabilities are disclosed in respect of possible obligations
that arise from past events, whose existence would be confrmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
Mar 31, 2012
(a) Basis of accounting and preparation of financial statements
The financial statements which have been prepared under the historical
cost convention on the accrual basis of accounting, are in accordance
with the applicable requirements of the Companies Act, 1956 (the 'Act')
and comply in all material aspects with the Accounting Standards
prescribed by the Central Government, in accordance with the Companies
(Accounting Standards) Rules, 2006, to the extent applicable.
(b) Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, disclosure of contingent liabilities as at the date of
financial statements and the reported amounts of revenues and expenses
during the reporting period. Key estimates include estimate of useful
life of fixed assets, unbilled revenue, income taxes, estimated
gain/loss on foreign exchange contracts and future obligations under
employee retirement benefit plans. Actual results could differ from
those estimates. Any revision to accounting estimates will be
recognised prospectively in the current and future periods.
(c) Fixed Assets, Capital Work-in-Progress and Depreciation
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
includes inward freight, taxes and expenses incidental to acquisition
and installation, up to the point the asset is ready for its intended
use.
(ii) Depreciation is provided on Building under the Straight-Line
Method and on other fixed assets, other than Leasehold building
improvements, under the Written down Value method. Depreciation is
provided on a pro-rata basis at the rates and in the manner prescribed
under Schedule XIV of the Companies Act, 1956, which also represent the
useful life of fixed assets.
(iii) Leasehold building improvements are written off over the period
of lease or their estimated useful life, whichever is earlier, on a
straight-line basis.
(iv) Assets acquired but not ready for use or assets under construction
are classified under capital work-in-progress.
(v) Management evaluates at regular intervals, using external and
internal sources, the need for impairment of any asset. Impairment
occurs where the carrying value exceeds the present value of future
cash flows expected to arise from the continuing use of the asset and
its net realisable value on its eventual disposal. Any loss on account
of impairment is expensed as the excess of the carrying amount over the
higher of the asset's net sales price or present value as determined.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However, the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
impairment.
(d) Intangible Assets
Costs relating to acquisition of computer software are capitalised as
'Intangible Assets' and amortised on a straight line basis over a
period of three years, which is the management's estimate of the useful
life of such software.
(e) Investments
Investments are classified into long-term investments and current
investments. Long-term investments are carried at cost. Provision for
diminution in the value of long-term investments is not made unless it
is considered other than temporary. Current investments are valued at
lower of cost and net realisable value.
(f) Foreign Currency Transactions
(i) Initial Recognition - Transactions denominated in foreign
currencies are recorded at the rates of exchange prevailing on the date
of the transaction.
(ii) Conversion - Monetary assets and liabilities denominated in
foreign currency are converted at the rate of exchange prevailing on
the date of the Balance Sheet.
(iii) Exchange Differences - All exchange differences arising on
settlement/conversion of foreign currency transactions are included in
the Statement of Profit and Loss in the year in which they arise.
(iv) Forward Cover - The Company uses foreign exchange forward
contracts and forward option contracts to hedge its exposure to foreign
currency fluctuations. The premium or discount arising at the inception
of forward option contracts and foreign exchange forward contracts is
amortised as expense or income over the life of the contract. Any
profit or loss arising on cancellation or renewal of foreign exchange
forward contracts is recognised as income or expense for the year.
(v) Pursuant to the Announcement 'Accounting for Derivatives' by the
Institute of Chartered Accountants of India, the Company has adopted
Accounting Standard 30, Financial Instruments: Recognition and
Measurement, prescribed by the Institute of Chartered Accountants of
India, with effect from April 1, 2008. Consequently, outstanding
forward contracts have been treated as highly probable forecast
transactions based on historic trends. Accordingly, gains / losses
arising on 'mark to market' of such open forward contracts have been
accumulated in 'Hedging Reserve Account'. The Company uses forward
contracts as economic hedges and not for trading or speculative
purposes.
(g) Staff benefits
(i) All short term employee benefits are accounted on undiscounted
basis during the accounting period based on services rendered by
employees.
(ii) The Company's contribution to Provident Fund is remitted to a
trust established for this purpose based on a fixed percentage of the
eligible employees' salary and charged to Statement of Profit and Loss.
The Company has categorised its Provident Fund as a defined
contribution plan since it has no further obligations beyond these
contributions.
(iii) The Company's contribution under a defined Superannuation Plan to
the trust established for this purpose based on a specified percentage
of salary of eligible employees is charged to Statement of Profit and
Loss. The Company has categorised Superannuation Plan as a defined
contribution plan since it has no further obligations beyond these
contributions.
(iv) The Company's liability towards gratuity and compensated absences,
being defined benefit plans is accounted for on the basis of an
independent actuarial valuation using the projected unit credit method,
done at the year end and actuarial gains/losses are charged to the
Statement of Profit and Loss. Gratuity liability is funded by payments
to the trust established for the purpose.
(h) Revenue recognition
(i) Revenue from software development with respect to time and material
contracts is recognised as related costs are incurred and services are
performed in accordance with the terms of specific contracts.
(ii) Revenue from fixed price contracts are recognised based on the
milestones achieved as specified in the contracts and for interim
stages, until the next milestone is achieved, on the percentage of
completion basis.
(iii) Revenue from sale of traded software licenses and traded hardware
is recognised on delivery to the customer.
(iv) Cost and earnings in excess of billings are classified as unbilled
revenue while billings in excess of cost and earnings are classified as
unearned revenue.
(v) Dividend income is recognized when the right to receive the
dividend is established.
(vi) Interest income is recognized on time proportion basis.
(i) Lease Rentals
Rent expense is recognised with reference to the terms of lease
agreement and other consideration in respect of operating leases on a
straight line basis. Assets given on operating lease are included under
fixed assets of the Company. Lease income is recognised on straight
line basis over the primary period of lease.
(j) Taxes on Income
The provision for current taxation is computed in accordance with the
relevant tax regulations. Deferred tax is recognised on timing
differences between the accounting and taxable income for the year and
quantified using the tax rates and laws enacted or substantively
enacted as at the Balance Sheet date. Deferred tax assets in respect of
unabsorbed depreciation and carry forward losses under tax laws are
recognised and carried forward to the extent there is virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realised in future. Other deferred tax assets are recognised only to
the extent there is a reasonable certainty of realisation in future.
Such assets are reviewed at each Balance Sheet date to reassess
realisation.
Tax credit is recognized in respect of Minimum Alternate Tax ('MAT') as
per the provisions of Section 115 JAA of the Income Tax Act, 1961 based
on convincing evidence that the Company will pay normal income tax
within statutory time frame and is reviewed at each Balance Sheet date.
(k) Provisions and Contingent Liabilities
Provisions are recognised in the financial statements in respect of
present probable obligations, for amounts which can be reliably
estimated.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events, whose existence would be confirmed by the
occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Company.
Mar 31, 2010
A)Basis of accounting and preparation of financial statements The
financial statements which have been prepared under the historical cost
convention on the accrual basis of accounting,are in accordance with
the applicable requirements of the Companies Act,1956 (theAct)and
comply in all material aspects with the Accounting Standards prescribed
by the Central Government,in accordance with the Companies (Accounting
Standards)Rules,2006,to the extent applicable.
b)Use of estimates
The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities,disclosure of contingent liabilities as at the date of
financial statements and the reported amounts of revenues and expenses
during the reporting period.Key estimates include estimate of useful
life of fixed assets,unbilled revenue,income taxes,estimated gain/loss
on foreign exchange contracts and future obligations under employee
retirement benefit plans.Actual results could differ from those
estimates.Any revision to accounting estimates will be recognised
prospectively in the current and future periods.
c)Fixed Assets,Capital Work-in-Progress and Depreciation
i)Fixed assets are stated at cost less accumulated depreciation.Cost
includes inward freight,taxes and expenses incidental to acquisition
and installation,up to the point the asset is ready for its intended
use. ii)Depreciation is provided on Building under the Straight Line
Method and on other fixed assets,other than Leasehold building
improvements,under the Written Down Value method.Depreciation is
provided on a pro-rata basis at the rates and in the manner prescribed
under Schedule XIV of the Companies Act,1956,which also represent the
useful life of fixed assets.
iii)Leasehold building improvements are written off over the period of
lease or their estimated useful life, whichever is earlier,on a
straight line basis.
iv)Capital Advances in respect of Capital Work in progress or assets
acquired but not ready for use are classified under Capital Work in
Progress.
v)Management evaluates at regular intervals,using external and internal
sources,the need for impairment of any asset.Impairment occurs where
the carrying value exceeds the present value of future cash flows
expected to arise from the continuing use of the asset and its net
realisable value on its eventual disposal.Any loss on account of
impairment is expensed as the excess of the carrying amount over the
higher of the assets net sales price or present value as determined.
After impairment,depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognised impairment loss is increased or reversed
depending on changes in circumstances. However,the carrying value
after reversal is not increased beyond the carrying value that would
have prevailed by charging usual depreciation if there was no
impairment.
d)Intangible Assets
Costs relating to acquisition of computer software are capitalised
asIntangible Assetsand amortised on a straight line basis over a
period of three years,which is the managements estimate of the useful
life of such software.
e)Investments
Investments are classified into long-term investments and current
investments.Long-term investments are carried at cost.Provision for
diminution in the value of long-term investments is not provided for
unless it is considered other than temporary.Current investments are
valued at lower of cost and net realisable value.
f)Foreign Currency Transactions
i)Initial Recognition -Transactions denominated in foreign currencies
are recorded at the rates of exchange prevailing on the date of the
transaction.
ii)Conversion -Monetary assets and liabilities denominated in foreign
currency are converted at the rate of exchange prevailing on the date
of the Balance Sheet.
iii)Exchange Differences -All exchange differences arising on
settlement/conversion of foreign currency transactions are included in
the Profit and Loss Account in the year in which they arise.
iv)Forward Cover -The Company uses foreign exchange forward contracts
and forward option contracts to hedge its exposure to foreign currency
fluctuations.The premium or discount arising at the inception of
forward option contracts is amortised as expense or income over the
life of the contract.Any profit or loss arising on cancellation or
renewal of foreign exchange forward contracts is recognised as income
or expense for the year.Forward contracts,which are outstanding as at
the year end and which represent hedges against recoverable balances in
foreign exchange as at the Balance Sheet date are marked to market and
the gains / losses arising on the same are recognised in the Profit and
Loss Account.
v)Pursuant to the Announcement Accounting for Derivativesby the
Institute of Chartered Accountants of India,the Company has adopted
Accounting Standard 30,Financial Instruments:Recognition and
Measurement, prescribed by the Institute of Chartered Accountants of
India,with effect from April 1,2008.,Consequently, outstanding forward
contracts for which there are no underlying account balances have been
treated as highly probable forecast transactions based on historic
trends.Accordingly,gains /losses arising on mark to marketof such
open forward contracts have been accumulated in Hedging Reserve
Account.The Company uses forward contracts as economic hedges and not
for trading or speculative purposes.
g)Staff benefits
i)All short term employee benefits are accounted on undiscounted basis
during the accounting period based on services rendered by employees.
ii)The Companys contribution to Provident Fund is remitted to a trust
established for this purpose based on a fixed percentage of the
eligible employeessalary and charged to Profit and Loss Account.The
Company has categorised its Provident Fund as a defined contribution
plan since it has no further obligations beyond these contributions.
iii)The Companys contribution under a defined Superannuation Plan to
the trust established for this purpose based on a specified percentage
of salary of eligible employees is charged to Profit and Loss
Account.The Company has categorised Superannuation Plan as a defined
contribution plan since it has no further obligations beyond these
contributions.
iv)The Companys liability towards gratuity and compensated
absences,being defined benefit plans is accounted for on the basis of
an independent actuarial valuation done at the year end and actuarial
gains/losses are charged to the Profit and Loss Account.Gratuity
liability is funded by payments to the trust established for the
purpose.
h)Revenue recognition
i)Revenue from software development with respect to time and material
contracts is recognised as related costs are incurred and services are
performed in accordance with the terms of specific contracts.
ii)Revenue from fixed price contracts are recognised based on the
milestones achieved as specified in the contracts and for interim
stages,until the next milestone is achieved,on the percentage of
completion basis.
iii Revenue from sale of traded software licenses and traded hardware
is recognised on delivery to the customer.
iv Cost and earnings in excess of billings are classified as unbilled
revenue while billings in excess of cost and earnings is classified as
unearned revenue.
v)Dividend income is recognized when the right to receive the dividend
is established,
vi)Interest income is recognized on time proportion basis.
i)Lease Rentals
Rent expense is recognised with reference to the terms of lease
agreement and other consideration in respect of operating leases on a
straight line basis.Assets given on operating lease are included under
fixed assets of the Company.Lease income is recognised on straight line
basis over the primary period of lease.
j)Taxes on Income
The provision for current taxation is computed in accordance with the
relevant tax regulations.Deferred tax is recognised on timing
differences between the accounting and taxable income for the year and
quantified using the tax rates and laws enacted or substantively
enacted as at the Balance Sheet date.Deferred tax assets in respect of
unabsorbed depreciation and carry forward losses under tax laws are
recognised and carried forward to the extent there is virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realised in future.Other deferred tax assets are recognised only to the
extent there is a reasonable certainty of realisation in future.Such
assets are reviewed at each Balance Sheet date to reassess realisation.
Tax credit is recognized in respect of Minimum Alternate Tax (MAT)as
per the provisions of Section 115 JAA of the Income Tax Act,1961 based
on convincing evidence that the Company will pay normal income tax
within statutory time frame and is reviewed at each Balance Sheet date.
k)Provisions and contingent liabilities
Provisions are recognised in the financial statements in respect of
present probable obligations,for amounts which can be reliably
estimated.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events,whose existence would be confirmed by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company.