Jun 30, 2010
A) Basis of preparation of Financial Statements:
i) The financial statements of the subsidiaries used in the consolidation are drawn up to March 31,2010 whereas that of the parent company is for a period of 15 months namely June 30,2010.
ii) The financial statements have been prepared under the historical cost convention and on the accrual basis of accounting. The accounts of the Parent Company and the Indian subsidiary have been prepared in accordance with the Accounting Standards issued by the Institute of Chartered Accountants of India, and those of the foreign subsidiaries have been prepared in accordance with the local laws and the applicable Accounting Standards/generally accepted accounting practices.
iii) The preparation of financial statements are in conformity with the generally accepted accounting principles require, estimates and assumptions to be made that affect the reported amounts of assets and liabilities on that date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual results and estimated are recognized in the period in which the results are known / materialized.
b) Principles of consolidation:
i) The financial statements of the Parent Company and its Subsidiaries have been consolidated on a line to line basis by adding together the book value of like items of assets, liabilities, income and expenses, after fully eliminating intra-group balances, intra-group transactions and the unrealized profits.
ii) The financial statements of the Parent Company and its Subsidiaries have been consolidated using uniform accounting policies for like transactions and other events in similar circumstances.
iii) The excess of the cost to the Parent Company of its investments in the subsidiaries over and above the share of equity in the respective subsidiary, on the acquisition date, is recognized in the financial statements as Goodwill and carries forward accounts.
c) Fixed Assets:
Fixed assets are recorded at cost of acquisition or construction. These are stated at historical cost.
Goodwill arising on consolidation is carried forward and the same will be tested for impairment in the year in which the Accounting Standard "Impairment of Assets" (AS 28) becomes mandatory.
Long Term Investments are stated at cost, which includes cost of acquisition and related expenses.
Depreciation is provided for on Straight Line Method at the rates prescribed in schedule XIV to the Companies Act, 1956.
Work in Progress:
Work in progress is valued at cost or net realizable value, whichever is lower. Costs include direct labour and direct overheads but exclude interest and finance charges and administration, selling and distribution expenses, which are allocated on the basis of technical man-hours, based on the timesheets submitted.
g) Foreign Currency Transactions:
Transactions in foreign currency are recorded at the original rates of exchange in force at the time transactions are effected. Exchange differences arising on settlement of transaction are recognized in the profit and loss account.
h) Revenue recognition:
IT Enabled Services revenue is recognized on the basis of chargeable time or achievement of prescribed milestones for billing as provided in the contracts or as and when the services are rendered. Revenue is recognized only when it is reasonably certain that the ultimate collection will be made.
i) Income tax are accounted for in accordance with Accounting Standard 22 (AS 22) on
"Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India. Tax expense comprises both current and deferred tax. Current tax is measured at the amount expected to be paid to / recovered from the tax authorities using the applicable tax rates. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences between taxable income and accounting income that are capable of reversing in one or more subsequent periods and are measured using the relevant enacted tax rate.