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Accounting Policies of CTIL Ltd. Company

Mar 31, 2014

1. Basis of preparation

The financial statements have been prepared to comply with the Accounting Standards Notified by Companies (Accounting Standards) Rules,2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention on an accrual basis.

The accounting policies have been consistently applied by the Company and are Consistent with those used in the previous year.

2. Revenue Recognition

Revenue is primarily derived from software development and related services and from the licensing of software products. Arrangements with clients for software development and related services are either on a fixed-price, fixed-timeframe or on a time-and-material basis.

3. Fixed Assets

Fixed assets are stated at cost of acquisition or construction. Cost comprises of the purchase price and other attributable expenses including cost of borrowings till the date of capitalization of the asset acquired / commissioned.

All the expenditure incurred on establishing / setting up of new projects / substantial expansion of existing facilities / creation of new assets is capitalized. Such expenditure to be capitalized includes borrowing / finance costs, direct and indirect expenditure incurred on such assets up to the time they are completed.

4. Depreciation

Depreciation on fixed assets has been provided on the straight line method and at the rates and in manner specified in Schedule xiv to the Companies Act, 1956.

5. Investments

Long term investments are stated at cost. The diminution in the market value of such investments is not recognized unless it is considered permanent in nature. Current investments are valued at the cost or market value whichever is lower.

6. Borrowing

Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are included to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are charged to revenue. Borrowing costs consist of interest and other costs that the company incurs in connection with borrowing of funds.

7. Accounting for Leases

Rentals in respect of leased premises are charged to profit and loss account.

8. Taxes on Income

a. Current Tax

Provision for current tax is made for the amount of tax payable in respect of taxable income for the year computed under the provision of the income Tax Act.1961.

b. Deferred Tax

Deferred tax is recognized on timing difference being the difference between taxable income and accounting income that originate in one period and are capable of being reversed in the subsequent period / s, subject to the consideration of prudence.

9. Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the yearend are translated at the year-end rates, the resultant gain or loss will be recognized in the profit and loss account. Any gain or loss arising on account of exchange difference on settlement of transaction is recognized in the profit and loss account.

10. Provisions, Contingent Liabilities and Contingent Assets

Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are disclosed when the Company has possible obligation or a present obligation and it is probable that a cash outflow will not be required to settle the obligation. Contingent Assets are neither recognized nor disclosed in the financial statements.

11. Use of Estimates

The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets, liabilities, revenues and expenses. The estimates used in preparation and presentation of financial statements are prudent and in reasonable. Actual results could differ from estimates. Any revision of accounting estimates is recognized prospectively in the current and future periods.

12. Impairment

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An impairment loss will be recognized if the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of asset''s net selling price and value in use. In assessing the value in use the estimated future economic benefits are discounted to the present value at the weighted average cost of capital.


Mar 31, 2012

A) Basis for preparation of financial statements:

The financial statements have been prepared under the historical cost convention and in accordance with the applicable Accounting Standards prescribed in the companies (Accounting Standards) Rules, 2006 and relevant presentational requirements of the companies Act, 1956 as adopted consistently by the company.

Accounting policies not specifically referred to otherwise are in consonance with prudent accounting principles.

b) Revenue Recognition:

All incomes, revenues, expenses, assets and liabilities having material bearing on the financial statements are recognized on accrual basis, unless otherwise stated.

The preparation of financial statements in conformity with generally accepted accounting principles requires that the management of the company makes estimates and assumptions that effect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities as of the date of financial statements.

c) Inventories:

Stock in process is valued at cost of Execution.

d) Fixed Assets:

Fixed assets are stated at cost of acquisition (inclusive of duties, taxes and incidental expenses related to acquisition) less depreciation.

e) Depreciation:

Depreciation is charged in respect of all assets on pro-rata basis by Written Down Value method at the rates specified and in the manner prescribed under schedule XIV of the Companies Act, 1956. Where the cost of the Assets does not exceed Rs. 5,000, depreciation is provided at hundred percent rate in the year of purchase.

f) Retirement Benefits:

a) Retirement benefits will be provided on cash basis .

b) Liability towards Gratuity is not provided. Leave encashment is not applicable to the company as per the terms and conditions of employment

g) Foreign currency transactions and translation:

All transactions in foreign currencies are recorded on the basis of the exchange rates prevailing as on the date of the transaction. Fluctuation Gain or Loss on realization / payment is charged off / credited to profit and loss account. The amounts receivable in foreign currencies at the year-end are translated at the rate of exchange prevailing on that date and the net resultant gain/loss is dealt with in the profit and loss account.

h) Taxation

Provision for Taxation, the aggregate of Income Tax Liability on the profits for the year chargeable to tax and Deferred Tax resulting from timing differences between Book and Tax Profits, if any, is considered in accordance with the Accounting Standard - 22 (AS-22), Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.


Mar 31, 2010

1. Basis for preparation of financial statements:

Financial statements are prepared under the historical cost convention on a going concern basis, with generally accepted accounting principles and relevant requirements of the Companies Act, 1956.

2. Revenue Recognition:

The revenue in respect of Brand License fee is accounted on execution of agreement. Revenue for software development is recognized on the basis of. chargeable time or achievement of prescribed milestone as relevant to each contract. Revenue from sale of software products and courseware materials is recognized when sale has been completed with the passing of title or licenses or raising invoices as the case may be.

Expenses are accounted on accrual basis except for retirement benefits such as gratuity and leave encashment and necessary provisions are made for all known losses and liabilities.

3. Inventories:

There are no inventories during the current financial year

4. Fixed Assets:

Fixed assets are stated at cost of acquisition (inclusive of duties, taxes and incidental expenses related to acquisition) less depreciation.

5. Depreciation:

Depreciation is charged in respect of all assets on pro-rata basis by Written Down Value Method at the rate specified and in the manner prescribed under schedule XIV of the Companies Act,1956. Where the cost of the Assets does not exceed Rs.5,000, depreciation is provided at hundred percent rate in the year of purchase.

6. Retirement Benefits: *

a) Retirement benefits will be provided on cash basis.

b) Liability towards Gratuity is not provided. Leave encashment is not applicable to the company as per the terms and conditions of employment

7. Foreign currency transactions and translation:

All transactions in foreign currencies are recorded on the basis of the exchange rates prevailing as on the date of the transaction. Fluctuation Gain or Loss on realization / payment is charged off / credited to profit and loss account. The amounts receivable in foreign currencies at the year-end are translated at the rate of exchange prevailing on that date and the net resultant gain/loss is dealt with in the profit and loss account.

8. Taxation:

Provision for Taxation, the aggregate of Income Tax Liability on the profits for the year chargeable to tax and Deferred Tax resulting from timing differences between Book and Tax Profits, if any, is considered in accordance with the Accounting Standard- 22(AS-22), Accounting for taxes on income, issued by the Institute of Chartered Accountants of India.

 
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