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Accounting Policies of Commex Technology Ltd. Company

Mar 31, 2015

1. Corporate Information

Commex Technology Limited (Formerly known as IT People (India) Ltd.) is a Company promoting software products and solutions to the capital and commodities markets and IT Consulting Services and solutions to companies worldwide. The Company is listed at the Bombay Stock Exchange Limited (BSE). Software products includes products, solutions and services division for the financial and capital markets addressing Stock and Commodities Exchange, intermediary Brokerage House, Merchant banking Operation and Financial services in India and Overseas.

Incorporation and Registration

"Commex Technology Limited" was originally incorporated as a Private Limited Company with the name "Global e-Com (India) Private Limited" on 24th January 2000, under Companies Act, 1956, and was issued a certificate of incorporation bearing number 11-123796 of 2000 by the Registrar of Companies Maharashtra. The Company became a Public Limited Company on 8th February 2000 and the name of the Company was changed to "Global e-Com (India) Limited", thereafter, on 11th April 2000 the name of the Company was again changed to "Balwas e-Com India Limited".

The Company subsequently on 28th October 2003 changed its name to "Starmax Info media Limited" and was issued with a fresh certificate of Incorporation consequent upon change of name on its acquisition by "IT People Private Limited".

The Company subsequently on 22nd November, 2004 changed its name to "IT People (India) Limited" and was issued a fresh certificate of Incorporation consequent upon change of name bearing number L72900MH2000PLC123796 by the registrar of Companies, Maharashtra. Further on 14th November, 2011 the name of the Company was again changed to "Commex Technology Limited".

Note No.2

Summary of Significant Accounting Policies

2.1 Method of Consolidation:

For the purpose of consolidation. Accounts of the parent as well as the subsidiaries are considered for the year up to 31-3-2015. Accounts of Orient Information Technology FZ -LLC -UAE & IT Capital Services Private Limited are audited. All inter-company transactions between the group companies are eliminated.

2.2 Translation of financial statements of the Subsidiaries:

Transactions arising in foreign currency are reported at the rates closely approximating to those ruling during the relevant transaction dates. All monetary assets and liabilities in foreign currency as at the date of financial statements are restated at the exchange rates prevalent at the Balance Sheet date. The reporting currency of the Company is Indian Rupees. The reporting currencies of its subsidiaries Orient Information Technology FZ -LLC -UAE is United Arab Emirates Dirhams. The revenue items of the foreign subsidiaries are translated to Indian Rupees using the Simple Average of the quarterly closing rates. Non-monetary items in the Balance Sheet of the foreign subsidiaries are translated at the rates closely approximating those ruling during the relevant transaction dates. The net impact of such change is disclosed under General Reserve on consolidation.

2.3 BASISOF ACCOUNTING

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Companies has prepared these financial statements to comply in all material respects with the Accounting Standards specified under section 133 of the Companies Act 2013 (' the 2013 Act") read with Rule 7 of the Companies (Accounts) Rules 2014. The Financial Statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

All assets and liabilities have been classified as current or non-current as per the Group's normal operating cycle and other criteria set out in the Revised Schedule 111 to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Group has ascertained its operating cycle as up to twelve months for the purpose of current- non-current classification of assets and liabilities.

2.4 USE OF ESTIMATES

The preparation of the financial statements, in conformity with the generally accepted accounting principles, requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainties about these assumptions and estimates could result in the outcomes requiring adjustment to the carrying amount of assets or liabilities in future periods.

2.5 Tangible Fixed Assets

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price, borrowing costs if capitalization criteria met and directly attributable cost of bringing the assets to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an items of fixed assets is added to its book value only of it increases the future benefits from the existing assets beyond its previously assessed standards of performance. All other expenses on existing fixed assets, including day- today repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit & loss for the period during which such expenses are incurred.

2.6 Depreciation on Tangible Fixed Assets

Depreciation on fixed assets is calculated on straight line basis using the rates arrived at based on useful lives estimates by the management. Depreciation for the assets purchased or sold during the period is proportionately charged. The company has used the following rates to provide depreciation on its fixed assets.

* For these class of assets, based on internal assessment and technical evaluation carried out, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule 11 of the Companies Act, 2013.

# The useful lives of these class of assets is as prescribed under Part C of Schedule II of the Companies Act, 2013.

During the period ended 31 March 2015, Management has reassessed the useful lives of fixed assets and have adopted the useful lives as specified. In the view of the management, the said useful lives represents the period over which the management expects to derive economic benefits out of the use of the said assets. As a result of this change in useful lives of fixed assets, the depreciation charge for the period is lower by Rs 32,141/- with a corresponding increase in the written down value of fixed assets and balance of reserves and surplus.

2.7 Impairment of Tangible and Intangible Assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an assets is required, the company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual's assets, unless the assets does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an assets or CGU exceeds its recoverable amount, the assets is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discounts rate that reflects current market assessment of time value of money & risk specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company's CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of Five (5) Years. For longer periods a long term growth rate is calculated and applied to projects future cash flows after the 5 (Five) Years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit & loss, except for previously revalued tangible fixed assets where the revaluation reserves up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

An assessment is made at each reporting dates as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the assets or CGU recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that would have been determined, net of depreciation had no impairment loss has been recognized for the assets in prior years. Such reversal is recognized in the statement of profit and loss unless the assets is carried at a revalued amount in which case the reversal is treated as a revaluation increase.

2.8 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long term investments.

On initial recognition all investments are matured at cost. The cost comprise purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired by the issue of shares or other securities the acquisition cost is the fair value of the securities issued if an investment is acquired in exchange for another assets the acquisition is determined by reference to the fair value of the assets given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investment are carried in the financial statement at lower cost and fair value determined on an individual's investment basis. Long term investment are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profits loss account.

2.9 Revenue Recognized

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The followings specific recognition criteria must also be met before revenue is recognized Income from services Revenues from contract priced on a time and material basis are recognized when services are rendered and related costs are incurred.

Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contracts using the proportionate completion method, with contract costs determining the degree of completion, foreseeable losses on such contracts are recognized when probable.

Revenues from sale of software licenses are recognized upon delivery where there is no customization required. In case of customization the same is recognized over the life of the contract using the proportionate completion method. Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Revenues are reported net of discounts. The billing of consultants employed outside India, which is borne directly by the overseas clients is excluded from the revenue.

2.10 Foreign currency transaction

The Company has the billing process whereby it bills its overseas clients in INR and the amount is remitted by the overseas clients by converting the equivalent local currency equivalent to the Billing made in INR.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items which are measured in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Nonmonetary items which are measures at fair value or other similar valuation denominated in foreign currency are transferred using the exchange rate at the date when such value was determined.

2.11 Income Taxes

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961, enacted in India and tax laws prevailing in the respective tax jurisdiction where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes reflects the impact of timing difference between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred tax is measured using the tax rates and tax laws enacted or substantially enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing difference only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainly supporting evidence that they can be realized against future taxable profits.

In situation where the company is entitled to a tax holiday under the Income Tax Act 1961 enacted in India or tax laws prevailing in the respective tax jurisdiction where it operates no deferred tax (assets or liabilities) is recognized in respect of timing difference which reverse during the tax holiday period to the extent the company's gross total income is subjected to the deduction during the tax holiday period. Deferred tax in respect of timing difference which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

At each reporting date, the company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes- down the carrying amount of deferred tax assets to the extent that it is no longer reasonably certain or virtually as the case may be that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relates to the same taxable entity and the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an assets only to the extent that there is convincing evidence that the company will pay normal income tax during the specified period I.e. the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an assets in accordance with the Guidance Note on Accounting for credit available of minimum

Complied by: Dion Global Solutions Limited 15th ANNUAL REPORT 2014-2015

COMMEX TECHNOLOGY LIMITED

Notes Forming Parts Of Consolidated Accounts as on 31st March.2015

alternate tax under Income Tax Act 1961. The said assets 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 assets at each reporting date and writes down the assets to extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.12 Earnings Per share.

Basics earnings per share are calculated by dividing the net profit and loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity shares to the extent that they are entitled to participate in dividend related to fully paid equity shares during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issues bonus element in a right shares, split issue and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a correspondence change in resources.

2.13 Employment Benefits

The Company's contribution to provident fund is accounted on accrual basis and is charged to the profit and loss account.

No provision has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company.

2.14 Provisions

A provisions is recognized when the company has present obligation as a results of past events. It is possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the company expects some or all of a provision to be reimbursed for example under Insurance Contract, the re-imbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expenses relating to any provision is presented in the statement of profit and loss net of any reimbursement.

Warranty provisions

Provisions for warranty related costs are recognized when the products is sold or service provided. Provision is based on historical experience. The estimate of such warranty related costs is revised annually.

2.15 Contingent liabilities

A contingent liability possible obligation that arises from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statement.

2.16 Cash & cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprises cash at bank and in hand and short term investments with an original maturity of three months or less.


Mar 31, 2014

1.1 Method of Consolidation:

For the purpose of consolidation, Accounts of the parent as well as the subsidiaries are considered for the year up to 31-3-2014. Accounts of the Orient Infotech. Ltd U.K., Orient Information Technology Inc. USA are unaudited and compiled by independent, external accounting agencies, as the local rules governing these Companies do not require Audit of these Companies. Accounts of Orient Information Technology FZ -LLC -UAE & Information Technology People WLL-Bahrain, IT Capital Services Private Limited are audited. All inter- company transactions between the group companies are eliminated. The subsidiary of the company at USA, UK, Bahrain & Germany are inactive.

2.2 Translation of financial statements of the Subsidiaries:

Transactions arising in foreign currency are reported at the rates closely approximating to those ruling during the relevant transaction dates. All monetary assets and liabilities in foreign currency as at the date of financial statements are restated at the exchange rates prevalent at the Balance Sheet date. The reporting currency of the Company is Indian Rupees. The reporting currencies of its subsidiaries are -Orient Infotech. Ltd U.K.,-Great Britain Pounds, Orient Information Technology Inc. USA-United States Dollars, Orient Information Technology FZ -LLC -UAE United Arab Emirates Dirhams & Information Technology People WLL Bahrain - Bahraini Dinars. The revenue items of the foreign subsidiaries are translated to Indian Rupees using the Simple Average of the quarterly closing rates. Non-monetary items in the Balance Sheet of the foreign subsidiaries are translated at the rates closely approximating those ruling during the relevant transaction dates. The net impact of such change is disclosed under General Reserve on consolidation.

2.3 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expense and liabilities and disclosures of contingent liabilities, at the end of the reporting Period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could results in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

2.4 Tangible Fixed Assets

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price, borrowing costs if capitalization criteria met and directly attributable cost of bringing the assets to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an items of fixed assets is added to its book value only of it increases the future benefits from the existing assets beyond its previously assessed standards of performance. All other expenses on existing fixed assets, including day- to day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit & loss for the period during which such expenses are incurred.

2.5 Depreciation on Tangible Fixed Assets

Till 31st March 2003 Depreciation on Fixed Assets has been provided on straight- line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is calculated on straight line basis using the rates arrived at based on useful lives estimates by the management or those prescribed under the schedule XIV to the Companies Act 1956, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

Keeping in view the wear and tear and the actual realizable value of the fixed assets, the Company has provided depreciation from 1st April,2004 on Straight Line Method at the higher rates than as prescribed by the Companies Act.

Further the Management has written off the Fixed Assets at the Rates higher than prescribed under the Schedule XIV of the Companies Act, 1956, keeping in view their impairment due to the technological obsolence prevalent in the Information Technology Sector, so as to make adequate provision for Impairment of the said Assets, as per the Accounting treatment prescribed under the Accounting Standard 26 on Impairment of Assets (AS 28) issued by the Institute of Chartered Accountants of India.

2.6 Impairment of Tangible and Intangible Assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an assets is required, the company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individuals assets, unless the assets does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an assets or CGU exceeds its recoverable amount, the assets is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre - tax discounts rate that reflects current market assessment of time value of money & risk specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company''s CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of Five (5) Years. For longer periods a long term growth rate is calculated and applied to projects future cash flows after the 5 (Five) Years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit & loss, except for previously revalued tangible fixed assets where the revaluation reserves up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

An assessment is made at each reporting dates as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the assets or CGU recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that would have been determined, net of depreciation had no impairment loss has been recognized for the assets in prior years. Such reversal is recognized in the statement of profit and loss unless the assets is carried at a revalued amount in which case the reversal is treated as a revaluation increase.

2.7 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long term investments.

On initial recognition all investments are matured at cost. The cost comprise purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired by the issue of shares or other securities the acquisition cost is the fair value of the securities issued if an investment is acquired in exchange for another assets the acquisition is determined by reference to the fair value of the assets given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investment are carried in the financial statement at lower cost and fair value determined on an individuals investment basis. Long term investment are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit & loss account.

2.8 Revenue Recognized

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. The followings specific recognition criteria must also be met before revenue is recognized

Income from services

Revenues from contract priced on a time and material basis are recognized when services are rendered and related costs are incurred.

Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contracts using the proportionate completion method, with contract costs determining the degree of completion, foreseeable losses on such contracts are recognized when probable.

Revenues from sale of software licenses are recognized upon delivery where there is no customization required. In case of customization the same is recognized over the life of the contract using the proportionate completion method.

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Revenues are reported net of discounts. The billing of consultants employed outside India, which is borne directly by the overseas clients is excluded from the revenue.

2.9 Foreign currency transaction

The Company has the billing process whereby it bills its overseas clients in INR and the amount is remitted by the overseas clients by converting the equivalent local currency equivalent to the Billing made in INR.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non monetary items which are measured in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of the transaction. Non monetary items which are measures at fair value or other similar valuation denominated in foreign currency are transferred using the exchange rate at the date when such value was determined.

2.10 Income Taxes

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961, enacted in India and tax laws prevailing in the respective tax jurisdiction where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes reflects the impact of timing difference between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred tax is measured using the tax rates and tax laws enacted or substantially enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing difference only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainly supporting evidence that they can be realized against future taxable profits.

In situation where the company is entitled to a tax holiday under the Income Tax Act 1961 enacted in India or tax laws prevailing in the respective tax jurisdiction where it operates no deferred tax (assets or liabilities) is recognized in respect of timing difference which reverse during the tax holiday period to the extent the company''s gross total income is subjected to the deduction during the tax holiday period. Deferred tax in respect of timing difference which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

At each reporting date, the company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes- down the carrying amount of deferred tax assets to the extent that it is no longer reasonably certain or virtually as the case may be that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relates to the same taxable entity and the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an assets only to the extend that there is convincing evidence that the company will pay normal income tax during the specified period I.e. the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an assets in accordance with the Guidance Note on Accounting for credit available of Warranty provisions minimum alternate tax under Income Tax Act 1961. The said assets 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 assets at each reporting date and writes down the assets to extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.11 Earnings Per share,

Basics earnings per share are calculated by dividing the net profit and loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity shares to the extent that they are entitled to participate in dividend related to fully paid equity shares during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issues bonus element in a right shares, split issue and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a correspondence change in resources.

2.12 Employment Benefits

The Company''s contribution to provident fund is accounted on accrual basis and is charged to the profit and loss account.

No provision has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company,

2.13 Provisions

A provisions is recognized when the company has present obligation as a results of past events. It is possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the company expects some or all of a provision to be reimbursed for example under Insurance Contract, the re-imbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expenses relating to any provision is presented in the statement of profit and loss net of any reimbursement.

Provisions for warranty related costs are recognized when the products is sold or service provided. Provision is based on historical experience. The estimate of such warranty related costs is revised annually.

2.14 Contingent liabilities

A contingent liability possible obligation that arises from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statement.

2.15 Cash & cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprises cash at bank and in hand and short term investments with an original maturity of three months or less.


Mar 31, 2013

1.1 Use of Estimates

The preparation of financial statements in conformity with Indian GAAR requires the management to make judgments estimates and assumptions that affect the reported amounts of revenues expense and liability and disclosure of contingent liability at the end of the reporting period although these estimate are based on the management best knowledge of current events and actions uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

1.2 Tangible Fixed Assets

Fixed assets, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price, borrowing costs if capitalization criteria met and directly attributable cost of bringing the assets to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an items of fixed assets is added to its book value only of it increases the future benefits from the existing assets bye and its previously assessed standards of performance. All other expenses on sting fixed as sets, including day- today repair and maintenance need pedicure and cost of replacing pats, are changed to the statement of profit it loss for the period during which such expenses are incurred.

1.3 Depredation on Tangible Fixed Assets

Till 31 '' March 2003 Depreciation on Fixed Assets has been provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is calculated on straight line basis using the rates arrived at based on useful lives estimates by the management or those prescribed under the schedule XIV to the Companies Act 1956, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

As a result of the above, the Depreciation provision for the year is higher by Rs. 11,26,012/- and consequently the Profit for the year ended is lower by 7 11,26,012/-. This change was made w.e.f, 1st April,2004 in case of the company and hence the Reserves to date of the company are bower by adjustment

Further the Management has written off the Fixed Assets at the Rates higher than prescribed under the Schedule XIV of the Companies Act, 1956, keeping in view their impairment clue to the technological obsolesce prevalent in the Information Technology Sector, so as to make adequate provision for Impairment of the said Assets, as per the Accounting treatment prescribed under the Accounting Standard 26 on Impairment of Assets (AS 28) issued by the Institute of Chartered Accountants of India.

1.4 Impairment of Tangible and intangible Assets

The company assesses at each reporting date whether there is an indication that an asset may be important if any indication exists or when annual important testing for an assets is required the company estimates the assets recoverable amount An assets recoverable amount is the higher of an determined or cash generating units recoverable (CGU) net selling price and its value in use the recoverable amount is determined for a individuals assets unless the does not generate Current investment are carried in the financial statement at lower cost and fair value determined on an individual: Investment baste. Long term investment are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profits loss account.

1.5 Revenue Recognized

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliable measured. The followings specific recognition criteria must also be met before revenue is recognized

Income From Services

Revenues from contract priced on a time and material basis are recognized when services are rendered and related costs are Incurred-

Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contracts using the proportionate completion method, with contract costs determining the degree of completion, foreseeable losses on such contract* are recognized when probable.

Re venues from sale of software licenses are recognized upon delivery where there is no customization required. In case of customization the same is recognized over the life of the- contract using the proportionate completion method.

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Revenues are reported net of discounts

1.6 Foreign Currency Transact! on

The Company has the billing process whereby It bills its overseas clients in 1NR and the amount is remitted by the overseas clients by connate ting the equivalent local currency equivalent to the Billing made in INR.

Conversion

Foreign currency monetary items are re translated using the exchange rate prevailing at tried reporting date Non monetary items which are measured in terms Of historical cost denominated in lording currency are reported using the exchange rate at the date of the transaction. Non monetary items which are measures at fair value or other similar valuation denominated in foreign currency are transferred using the exchange rate at the date when such value was determined.

Income Taxes

Tax expense comprises current and deferred tax current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the income Tax Act,1961 enacted in India mad tax laws prevailing in the respective tax jurisdiction where the company operates operates the tax rates and reporting date current income tax relating to times recognized directly in equity is recognized in equity and the statement of profit and loss.

Deferred income taxes reflects the impact of timing difference between taxable income and accounting income originating during the current year and reversal of timing different for the earlier years deferred tax is measured using the tax rates and tax laws enacted or substantially enacted at the equity and not in statement of profit and loss.

Deferred tax liabilities are recognized for mall taxable timing differences deferred tax assets are recognized for deductible timing difference only to the extent that there is reasonable certainty that sufficient future income will be available against which such deferred tax assets can be realized in situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognize only if there is virtual certainly supporting evidence that they can be realized against future taxable profit.

In situation where the company is entitled to a tax holiday under the income Tax Act,1961 enacted in India or tax laws prevailing in the respective tax jurisdiction where it operates no deferred tax assets or liabilities is recognized in respect of timing difference which reveres during the tax holiday period Deferred tax in respect of timing difference which reverse after the tax holiday period is recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized for recognition of deferred taxes the timing difference which originate first are considered to reverse first.

At each reporting date the company reassesses unrecognized deferred tax assets it recognizes deferred tax assets to the extent that it has become reasonably certain or virtually as the case may be that sufficient future taxable income will be available against which deferred tax assets can be realized any such write down is reversed to the extant that it become reasonably certain to virtually certain as the case may be that sufficient future taxable in come will be available.

Minimum ternate Tax CM AT) partial a year is charged to the statement that(here is convincing The company recognizes MAT credit specified period 1.0,he period of evidence that the company will pay normal in which the company recognizes MAT which MAT credit is allowed to but on Accounting for credit available of credit as assets in accordance with three created by way of credit to the

1.7 Earnings Per share.

Basics earnings per share are calculated abuses) by the weighted eighty shareholders (after average unbar of equity threes out sun (participate in dividend related to as a fraction of an equity s ha res to the extents y hake average number of equity shares fully assisted for events such as bonus issues bonus element in a right (consolidation of share, that have changed the number of equity .hares outstanding, without a correspondence change In resources,

1.8 Employment Benefits

The Company''s to provident fund is accounted on accrual and is charged to the copes has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company.

1.9 Provisions

provisions is recognized when they reflect the current best estimates.

Where the company expects some all of a the reimbursement is net of any reimbursement. Warranty Provisions annually.

1.10 Contingent Liabilities

A contingent liability possible obligation that arises from past events whose existent with.

1.11 Cash & Cash Equivalents


Mar 31, 2012

1.1 Change in Accounting policies

During the year ended 31 March 2012, the revised Schedule VI notified under the companies act 1956, has become applicable to the company, for preparation & presentation of its financial statements. The adoption of revised schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. the company has also reclassified the previous year figure in accordance in the current year.

2.2 Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expense and liabilities and disclosures of contingent liabilities, at the end of the reporting Period. Although these estimates are based on the managements best knowledge of current events and actions, uncertainty about these assumptions and estimates could results in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

2.3 Tangible Fixed Assets

Fixed assets, are stetted at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises purchase price, borrowing costs if capitalization criteria met and directly attributable cost of bringing the assets to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an items of fixed assets is added to its book value only of it increases the future benefits from the existing assets beyond its previously assessed standards of performance. All other expenses on existing fixed assets, including day- to day repair and maintenance expenditure and cost of replacing parts, are changed to the statement of profit & loss for the period during which such expenses are incurred.

2.4 Depreciation on Tangible Fixed Assets

Till 31st March 2003 Depreciation on Fixed Assets has been provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is calculated on straight line basis using the rates arrived at based on useful lives estimates by the management or those prescribed under the schedule XIV to the companies act 1956, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

As a result of the above, the Depreciation provision for the year is higher by Rs.31,44,437/- and consequently the Profit for the year ended is lower by Rs.31,44,437/-. This change was made w.e.f. 1st April,2004 in case of the company and hence the Reserves to date of the company are lower by Rs.9,30,59,128/- Further the Management has written off the Fixed Assets at the Rates higher than prescribed under the Schedule XIV of the Companies Act, 1956, keeping in view their impairment due to the technological obsolence prevalent in the Information Technology Sector, so as to make adequate provision for Impairment of the said Assets, as per the Accounting treatment prescribed under the Accounting Standard 26 on Impairment of Assets (AS 28) issued by the Institute of Chartered Accountants of India.

2.5 Impairment of Tangible and Intangible Assets

The company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an assets is required, the company estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cash generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individuals assets, unless the assets does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an assets or CGU exceeds its recoverable amount, the assets is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre - tax discounts rate that reflects current market assessment of time value of money & risk specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the company's CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of Five (5) Years. For longer periods a long term growth rate is calculated and applied to projects future cash flows after the 5 (Five) Years.

Impairment losses of continuing operations, including impairment on inventories, are recognized in the statement of profit & loss, except for previously revalued tangible fixed assets where the revaluation reserves up to the amount of any previous revaluation.

After impairment, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

An assessment is made at each reporting dates as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the company estimates the assets or CGU recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognized. The reversal is limited so that would have been determined, net of depreciation had no impairment loss has been recognized for the assets in prior years. Such reversal is recognized in the statement of profit and loss unless the assets is carried at a revalued amount in which case the reversal is treated as a revaluation increase.

2.6 Investments

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long term investments.

On initial recognition all investments are matured at cost. The cost comprise purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired by the issue of shares or other securities the acquisition cost is the fair value of the securities issued if an investment is acquired in exchange for another assets the acquisition is determined by reference to the fair value of the assets given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.

Current investment are carried in the financial statement at lower cost and fair value determined on an individuals investment basis. Long term investment are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investment.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit & loss account.

2.7 Revenue Recognized

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliable measured. The followings specific recognition criteria must also be met before revenue is recognized

Income from services

Revenues from contract priced on a time and material basis are recognized when services are rendered and related costs are incurred.

Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contracts using the proportionate completion method, with contract costs determining the degree of completion, foreseeable losses on such contracts are recognized when probable.

Revenues from sale of software licenses are recognized upon delivery where there is no customization required. In case of customization the same is recognized over the life of the contract using the proportionate completion method.

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

Revenues are reported net of discounts

2.8 Foreign currency transaction

The Company has the billing process whereby it bills its overseas clients in INR and the amount is remitted by the overseas clients by converting the equivalent local currency equivalent to the Billing made in INR.

Conversion

Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date Non monetary items which are measured in terms of historical cost denominated in foreign currency are reported using the exchange rate at the of the transaction. Non monetary items which are measures at fair value or other similar valuation denominated in foreign currency are transferred using the exchange rate at the date when such value was determined.

2.9 Income Taxes

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the income tax act, 1961, enacted in India and tax laws prevailing in the respective tax jurisdiction where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred income taxes reflects the impact of timing difference between taxable income and accounting income originating during the current year and reversal of timing difference for the earlier years. Deferred tax is measured using the tax rates and tax rates and tax laws enacted or substantially enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing difference only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses all deferred tax assets are recognized only if there is virtual certainly supporting evidence that they can be realized against future taxable profits.

In situation where the company is entitled to a tax holiday under the income tax act 1961 enacted in India or tax laws prevailing in the respective tax jurisdiction where it operates no deferred tax (assets or liabilities) is recognized in respect of timing difference which reverse during the tax holiday period to the extent the company's gross total income is subjected to the deduction during the tax holiday period. Deferred tax in respect of timing difference which reverse after the tax holiday period is recognized in the year in which the timing differences originate. However the company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first.

At each reporting date, the company reassesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date. The company writes- down the carrying amount of deferred tax assets to the extent that it is no longer reasonably certain or virtually as the case may be that sufficient future taxable income will be available against which deferred tax assets can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain as the case may be that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relates to the same taxable entity and the same taxation authority.

Minimum alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as an assets only to the extend that there is convincing evidence that the company will pay normal income tax during the specified period I.e. the period for which MAT credit is allowed to be carried forward. In the year in which the company recognizes MAT credit as an assets in accordance with the Guidance Note on Accounting for credit available of minimum alternate tax under income tax act 1961. the said assets 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 assets at each reporting date and writes down the assets to extent the company does not have convincing evidence that it will pay normal tax during the specified period.

2.10 Earnings Per share.

Basics earnings per share are calculated by dividing the net profit and loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted age number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity shares to the extent that they are entitled to participate in dividend related to fully paid equity shares during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issues bonus element in a right shares, split issue and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a correspondence change in resources.

2.11 Employment Benefits

The Company's contribution to provident fund is accounted on accrual basis and is charged to the profit and loss account.

No provision has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company.

2.12 Provisions provisions is recognized when the company has present obligation as a results of past events. It is possible that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the company expects some or all of a provision to be reimbursed for example under Insurance Contract, the re-imbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expenses relating to any provision is presented in the statement of profit and loss net of any reimbursement.

Warranty provisions

Provisions for warranty related costs are recognized when the products is sold or service provided. Provision is based on historical experience. The estimate of such warranty related costs is revised annually.

2.13 Contingent liabilities

A contingent liability possible obligation that arises from past events whose existence will be confirmed by the occurrence or non- occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is liability that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the financial statement.

2.14 Cash & cash equivalents

Cash and cash equivalents for the purpose of cash flow statement comprises cash at bank and in hand and short term investments with an original maturity of three months or less.

2.15 Measurement of EBITDA

As permitted by the guidance notes on the revised schedule vi to the companies act 1956. the company has elected to present earnings before interest tax depreciation and amortization as per a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/(Loss) from continuing operations. In its measurement the company does not include depreciation and amortization expenses finance costs and tax expenses.


Mar 31, 2011

A. Basis of Accounting & Recognition of Income & Expenditure.

1. The Financial Statements are prepared under the historical cost convention in accordance with the generally accepted Accounting principles and the provisions of the Companies Act, 1956.

2. The Company follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

B. Fixed Assets

1. Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and other attributable costs.

2. Till 31st March 2003 Depreciation on Fixed Assets has been provided on straight-line method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

3. Keeping in view the wear and tear and the actual realizable value of the fixed assets, the Company has provided depreciation from 1st April,2004 on Straight Line Method at the higher rates than as prescribed by the Companies Act. The depreciation as per Act and as per books in respect of the fixed assets is as under.

As a result of the above, the Depreciation provision for the year is higher by Rs.29,27,519/- and consequently the Profit for the year ended is lower by ^.29,27,519/-. This change was made w.e.f. 1st April,2004 in case of the company and hence the Reserves to date of the company are lower by ^.8,99,14,691/-

Further the Management has written off the Fixed Assets at the Rates higher than prescribed under the Schedule XIV of the Companies Act, 1956, keeping in view their impairment due to the technological obsolance prevalent in the Information Technology Sector, so as to make adequate provision for Impairment of the said Assets, as per the Accounting treatment prescribed under the Accounting Standard 26 on Impairment of Assets (AS 28) issued by the Institute of Chartered Accountants of India.

C. Sundry Debtors and Advances

Specific debts and advances identified as irrecoverable or doubtful are written-off or provided for respectively.

D. Revenue Recognition

i. Income from Information Technology Solutions Services is recognized on dispatch/ delivery of the concerned goods/services.

ii. Other income is accounted on accrual basis, except in respect of income, which is not certain to realize.

E. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the balance sheet date and resultant gain or loss is recognized in the profit and loss account.

F. Miscellaneous expenditure/Amortization

Miscellaneous Expenditure are fully written off during the year, which does not result into creation of any asset, in accordance with the Accounting Standard 26 (AS 26) issued by the Institute of Chartered Accountants of India.

G. Employment benefits

i. The Company's contribution to provident fund is accounted on accrual basis and is charged to the profit and loss account.

ii. No provision has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company.

H. Provision for Deferred Tax

Deferred tax assets and liabilities are recognized, subject to consideration of prudence, on timing difference, being the difference between taxable income and accounting income, that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbed depreciation/ carry forward of losses under tax laws are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized in terms of Para 17 of the Accounting Standard 22 issued by the Institute of Chartered Accountants of India.


Mar 31, 2010

A. Basis of Accounting & Recognition of Income & Expenditure.

1. The Financial Statements are prepared under the historical cost convention in accordance with the generally accepted Accounting principles and the provisions of the Companies Act, 1956.

2. The Company follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis.

B. Fixed Assets

1 Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and other attributable costs.

2. Till 31st March 2003 Depreciation on Fixed Assets has been provided on straight-line

method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

As a result of the above, the Depreciation provision for the year is lower by RS.26,84,847/- and consequently the Profit for the year ended is higher by RS.26,84,847/-. This change was made w.e.f. 1st April,2004 in case of the company and hence the Reserves to date of the company are lower by RS.8,69,87,172/-

Further the Management has written off the Fixed Assets at the Rates higher than prescribed under the Schedule XIV of the Companies Act, 1956, keeping in view their impairment due to the technological obsolance prevalent in the Information Technology Sector, so as to make adequate provision for Impairment of the said Assets, as per the Accounting treatment prescribed under the Accounting Standard 26 on Impairment of Assets (AS 28) issued by the Institute of Chartered Accountants of India.

C. Sundry Debtors and Advances

Specific debts and advances identified as irrecoverable or doubtful are written-off or provided for respectively.

D. Revenue Recognition

i. Income from Information Technology Solutions Services is recognized on dispatch/delivery of the concerned goods/services.

ii. Other income is accounted on accrual basis, except in respect of income, which is not certain to realize.

E. Foreign Exchange Transactions

Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currency are translated at the rates of exchange at the balance sheet date and resultant gain or loss is recognized in the profit and loss account.

F. Miscellaneous expenditure/Amortization

Merger & Acquisition and GDR issue expenses are fully written off during the year, which does not result into creation of any asset, in accordance with the Accounting Standard 26 (AS 26) issued by the Institute of Chartered Accountants of India..

G. Employment benefits

i. The Companys contribution to provident fund is accounted on accrual basis and is charged to the profit and loss account.

ii. No provision has been considered necessary towards gratuity since none of the employees have put in the qualified number of years of service with the Company.

H. Provision for Deferred Tax

Deferred tax assets and liabilities are recognized, subject to consideration of prudence, on timing difference, being the difference between taxable income and accounting income, that originated in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets arising on account of unabsorbed depreciation/carry forward of losses under tax laws are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized in terms of Para 17 of the Accounting Standard 22 issued by the Institute of Chartered Accountants of India.


Mar 31, 2009

1 Use of estimates:

The consolidated financial statements include the accounts of the Company and its Subsidiaries. The preparation of such statements requires the management to make estimates and assumptions that affect the reported amounts of Assets and Liabilities, Revenues and Expenditures and disclosure of contingent liabilities. Although these estimates are based on the Managements best knowledge of current events and the actions the Company undertake, in future, actual results ultimately may differ from such estimates.

2 Method of Consolidation:

For the purpose of consolidation, Accounts of the parent as well as the subsidiaries are considered for the year up to 31-3-2009. Accounts of the Orient Infotech. Ltd U.K., Orient Information Technology Inc. USA are unaudited and compiled by independent, external accounting agencies, as the local rules governing these Companies do not require Audit of these Companies. Accounts of Orient Information Technology FZ -LLC -UAE & Information Technology People WLL-Bahrain are audited. All inter-company transactions between the group companies are eliminated. The subsidiary of the company .at Germany is defunct and therefore the detail in respect thereof is not reported.

3 Translation of financial statements of the Subsidiaries:

Transactions arising in foreign currency are reported at the rates closely approximating to those ruling during the relevant transaction dates. All monetary assets and liabilities in foreign currency as at the date of financial statements are restated at the exchange rates prevalent at the Balance Sheet date. The reporting currency of the Company is Indian Rupees. The reporting currencies of its subsidiaries are -Orient Infotech. Ltd U.K.,-Great Britain Pounds, Orient Information Technology Inc. USA-United States Dollars, Orient Information Technology FZ -LLC -UAE United Arab Emirates Dirhams & Information Technology People WLL Bahrain - Bahraini Dinars. The revenue items of the foreign subsidiaries are translated to Indian Rupees using the Simple Average of the quarterly closing rates. Non-monetary items in the Balance Sheet of the foreign subsidiaries are translated at the rates closely approximating those ruling during 1he relevant transaction dates. The net impact of such change is disclosed under General Reserve on consolidation.