Mar 31, 2014
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial statements of the company have been prepared on accrual
basis, based on going concerned concept, under the historical cost
convention and in accordance with the Generally Accepted Accounting
Principles in India (Indian GAAP) to comply with the Accounting
Standards notified under Section 211 (3C) of the Companies Act, 1956
(which continue to be applicable in respect to Section 133 of the
Companies Act, 2013 in tems of General Circular 15/2013 dated 13
September, 2013 of the Ministry of Corporate Affairs) and the relevant
provisions of the Companies Act, 1956 or the Companies Act, 2013, as
applicable.
The Company has prepared its financial statements in accordance with
Revised Schedule VI as inserted by Notification- S.O. 447(E), dated
28.2.2011 (As amended by Notification No F.NO. 2/6/2008-CL-V, Dated
30.3.2011). However it has necessitated significant changes in the
presentation of and disclosures in financial statements. The Company
has reclassified its previous year figures to confirm to the
classification as per the aforesaid Schedule.
b. USE OF ESTIMATES
The presentation of Financial Statements require estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
results are known / materialized.
c. REVENUE RECOGNITION
(i) Revenue from fixed price service contracts is recognized in
proportion to the degree of completion of service by reference to and
based on milestones/acts performed as specified in the contracts and in
case of time and material service contracts, it is recognized on the
basis of hours completed and material used.
(ii) Revenue from the sale of user licenses for software applications
is recognized on transfer of the title in the user license.
(iii) Revenue from annual maintenance contracts is recognized
proportionately over the period in which services are rendered.
(iv) Revenue from Software Consultancy and Support Services is
recognized based on proportionate completion method as per specific
agreements with the customers.
(v) Interest and other dues are accounted on accrual basis.
(vi) Revenue excludes Value added tax/sales tax and service tax.
(vii) Revenue in excess of billings on service contracts is recorded as
unbilled receivables and is included in Other Current Assets. Billings
in excess of revenue that is recognized on service contracts are
recorded as deferred revenue until the above revenue recognition
criteria are met and are included in current liabilities
d. FIXED ASSETS
Fixed assets are stated at cost inclusive of incidental expenses, less
accumulated depreciation.
Advances paid towards the acquisition of fixed assets outstanding as of
each balance sheet date and the cost of fixed assets not ready for use
before such date are disclosed under capital work in progress.
e. RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit
and Loss account and capital expenditure on development is shown as
addition to fixed assets.
f. STOCK IN TRADE
Stocks of IT Products are valued at lower of Cost or Realisable Value.
Cost is computed on ''Weighted Average Method''.
g. INTANGIBLE ASSETS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to assets will flow to the
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at their acquisition cost.
Computer software which is not an integral part of the related hardware
is classified as an intangible asset and is being amortized over the
estimated useful life.
h. Depreciation of Amortisation
# 5 years for software developed or Software procured for further
enhancement and 3 years for other software
Goodwill generated in the process of amalgamation (purchased method) is
amortised over a period of five years. Goodwill generated in the
process of consolidation is tested for Impairment.
Depreciation on additions/ deletions to fixed assets is provided on
pro-rata basis from/up to the date the asset is put to use/ discarded.
Assets costing Rs 5000 or less are fully depreciated in the year of
acquisition.
Depending on estimated economic useful life of assets in commercial
use, different depreciation rates are charged for the same class of
assets. For example software licenses of one year is depreciated over
the period of one year proportionally
i. INVESTMENTS
Investments are classified into long term investments and current
investments. Investments which are intended to be held for one year or
more are classified as long term investments and investments which are
intended to be held for less than one year are classified as current
investments. Long term investments are accounted at cost and any
decline in the carrying value other than temporary in nature is
provided for. Current investments are valued at cost or market / fair
value, whichever is lower.
j EMPLOYEE BENEFITS
1 Provident fund is a defined contribution scheme and the contributions
as required by the statute are charged to profit and loss account as
incurred.
2 Gratuity liability is a defined obligation and is wholly unfunded.
The company accounts for liability for future gratuity benefits based
on actuarial valuation.
3 The employees of the company are entitled to compensated absences and
leave encashment as per the policy of the company. The liability in
this respect is provided, based on actuarial valuation
4 Actuarial gains and losses comprise experience adjustments and the
effects of changes in the actuarial assumptions and are recognised
immediately in the profit and loss account as income or expenses.
5 The undiscounted amount of short - term employee benefits expected to
be paid in exchange for services rendered by an employee is recognised
during the period when the employee renders the services.
k. TAXES ON INCOME
(i) Current tax is determined as the amount of tax payable in respect
of taxable income for the year.
(ii) Deferred tax is recognised on timing differences, being the
difference between taxable incomes and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods, subject to the consideration of prudence in respect of
deferred tax asset.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are 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 not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
m. IMPAIRMENT OF INTANGIBLE ASSETS
An asset is impaired when the carrying amount of the asset exceeds its
recoverable amount. An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
An impairment loss recognized in prior accounting periods is reversed
if there has been a change in the estimate of the recoverable amount.
n. BORROWING COST
Borrowing costs incurred for the acquisition or developing of
qualifying assets are recognized as part of cost of such assets when it
is considered probable that they will result in future economic
benefits to the company. While other borrowing cost are expensed in
period in which they are incurred
o. CASH FLOW STATEMENTS
Cash Flow is reported using indirect method, whereby net profits before
tax is adjusted for the effects of transactions of a non cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flow from regular revenue generation, investing and
financing activities of the company are segregated.
p. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction. At the year end, all the
monetary assets and liabilities denominated in foreign currency are
restated at the closing exchange rate. Exchange differences resulting
from the settlement of such transactions and from the restatement of
such monetary assets and liabilities are recognized in the Profit and
Loss Account.
q. PREPAID EXPENSE
Prepaid Expenses are recognized only where the amount of prepaid
expense is in excess of Rs 20000/-.
r. PROVISION FOR BAD DEBTS
Provision for Bad and Doubtful debts have been created on case to case
basis after assessing the recoverability aspect
s. INVESTMENTS IN ASSOCIATES
Company has holding of 27.33% in C2l BIZ Solutions Pvt. Ltd. , hence
having significant influence as per AS-23. However as per AS-21 the
company does not required to prepare Consolidated Financial Statement ,
hence investment has been accounted for in accordance with AS-13
(Accounting for Investment)
t. OPERATING CYCLE
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act,1956. Based on
the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current - non current classification of assets and
liabilities.
u. GOVERNMENT GRANT
Grants related to specific Fixed Assets are disclosed as a deduction
from the value of concern Assets. Grants related to revenue are
credited to the statement of profit and loss account. Grants in the
nature of promoter''s contribution are treated as Capital Reserve.
v. SEGMENT ACCOUNTING
The following accounting policies have been followed for segment
reporting:
Segment Revenue includes revenue from operations and other income
directly identifiable with/allocable to the segment. Expenses that are
directly identifiable with / allocable to segment are considered for
determining the segment result. The expenses which relate to the
company as a whole and not allocable to segment are included under
unallocable expenses. Segment assets and liabilities include those
directly identifiable to respective segments. Unallocable corporate
assets & liabilities represent the assets and liabilities related to
company as a whole and not allocable to any segment.
Mar 31, 2013
A. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost
convention, on going concern basis and in terms of the Accounting
Standards notified by Companies (Accounting Standards) Rules, 2006 in
compliance with Section 211(3C) of the Companies Act, 1956. The Company
follows the mercantile system of accounting and recognizes income and
expenditure on accrual basis to the extent measurable and where there
is certainty of ultimate realisation in respect of incomes. Accounting
policies not specifically referred to otherwise are consistent and in
consonance with the generally accepted accounting principles in India.
The Company has prepared its financial statements in accordance with
Schedule VI as inserted by Notification- S.O. 447(E), dated 28.2.2011
(As amended by Notification No F.NO. 2/6/2008-CL-V, Dated 30.3.2011).
The Schedule does not impact recognition and measurement principle
followed for the preparation of financial statement for accounting in
subsidiaries companies. However it has necessitated significant changes
in the presentation of and disclosures in financial statements. The
Company has reclassified its previous year figures to confirm to the
classification as per the aforesaid Schedule.
b. USE OF ESTIMATES
The presentation of Financial Statements require estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
results are known / materialized.
c. REVENUE RECOGNITION
(i) Revenue from fixed price service contracts is recognized in
proportion to the degree of completion of service by reference to and
based on milestones/acts performed as specified in the contracts and in
case of time and material service contracts, it is recognized on the
basis of hours completed and material used.
(ii) Revenue from the sale of user licenses for software applications
is recognized on transfer of the title in the user license.
(iii) Revenue from annual maintenance contracts is recognized
proportionately over the period in which services are rendered.
(iv) Revenue from Software Consultancy and Support Services is
recognized based on proportionate completion method as per specific
agreements with the customers.
(v) Interest and other dues are accounted on accrual basis.
(vi) Revenue excludes Value added tax/sales tax and service tax.
(vii) Revenue in excess of billings on service contracts is recorded as
unbilled receivables and is included in trade accounts receivable.
Billings in excess of revenue that is recognized on service contracts
are recorded as deferred revenue until the above revenue recognition
criteria are met and are included in current liabilities.
d. FIXED ASSETS
Fixed assets are stated at cost inclusive of incidental expenses, less
accumulated depreciation.
Advances paid towards the acquisition of fixed assets outstanding as of
each balance sheet date and the cost of fixed assets not ready for use
before such date are disclosed under capital work in progress.
e. RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit
and Loss account and capital expenditure on development is shown as
addition to fixed assets.
f. STOCK IN TRADE
Stocks of IT Products are valued at lower of Cost or Realisable Value.
Cost is computed on ''Weighted Average Method`.
g. INTANGIBLE ASSETS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to assets will flow to the
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at their acquisition cost.
Computer software which is not an integral part of the related hardware
is classified as an intangible asset and is being amortized over the
estimated useful life.
h. DEPRECIATION/ AMORTISATION
Depreciation on fixed assets (other than Intangible) is provided on
straight line method as per the following rates:
Goodwill generated in the process of amalgamation (purchased method) is
amortised over a period of five years.
Goodwill generated in the process of consolidation is tested for
Impairment.
Depreciation on additions/ deletions to fixed assets is provided on
pro-rata basis from/up to the date the asset is put to use/ discarded.
Assets costing Rs 5000 or less are fully depreciated in the year of
acquisition.
Depending on estimated economic useful life of assets in commercial
use, different depreciation rates are charged for the same class of
assets.
i. INVESTMENTS
Investments are classified into long term investments and current
investments. Investments which are intended to be held for one year or
more are classified as long term investments and investments which are
intended to be held for less than one year are classified as current
investments. Long term investments are accounted at cost and any
decline in the carrying value other than temporary in nature is
provided for. Current investments are valued at cost or market / fair
value, whichever is lower.
j EMPLOYEE BENEFITS
1. Provident fund is a defined contribution scheme and the
contributions as required by the statute are charged to profit and loss
account as incurred.
2. Gratuity liability is a defined obligation and is wholly unfunded.
The company accounts for liability for future gratuity benefits based
on actuarial valuation.
3. The employees of the company are entitled to compensated absences
and leave encashment as per the policy of the company. The liability in
this respect is provided, based on actuarial valuation.
4. Actuarial gains and losses comprise experience adjustments and the
effects of changes in the actuarial assumptions and are recognised
immediately in the profit and loss account as income or expenses.
5. The undiscounted amount of short  term employee benefits expected
to be paid in exchange for services rendered by an employee is
recognised during the period when the employee renders the services.
k. TAXES ON INCOME
(i) Current tax is determined as the amount of tax payable in respect
of taxable income for the year.
(ii) Deferred tax is recognised on timing differences, being the
difference between taxable incomes and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods, subject to the consideration of prudence in respect of
deferred tax asset.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions
involving substantial degree of estimation in measurement are
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 not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
m. IMPAIRMENT OF FIXED ASSETS
An asset is impaired when the carrying amount of the asset exceeds its
recoverable amount. An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
An impairment loss recognized in prior accounting periods is reversed
if there has been a change in the estimate of the recoverable amount.
n. BORROWING COST
Borrowing costs incurred for the acquisition or developing of
qualifying assets are recognized as part if cost of such assets when it
is considered probable that they will result in future economic
benefits to the company. While other borrowing cost are expensed in
period in which they are incurred.
o. CASH FLOW STATEMENTS
Cash Flow is reported using indirect method, whereby net profits before
tax is adjusted for the effects of transactions of a non cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flow from regular revenue generation, investing and
financing activities of the company are segregated.
p. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction. At the year end, all the
monetary assets and liabilities denominated in foreign currency are
restated at the closing exchange rate. Exchange differences resulting
from the settlement of such transactions and from the restatement of
such monetary assets and liabilities are recognized in the Profit and
Loss Account.
q. PREPAID EXPENSE
Prepaid Expenses are recognized only where the amount of prepaid is in
excess of Rs. 20000 /-. r. PROVISION FOR BAD DEBTS
Provision for Bad and Doubtful debts have been created on case to case
basis after assessing the recoverability aspect.
s. INVESTMENTS IN ASSOCIATES
Company has holding of 27.48% in C2L BIZ Solutions Pvt. Ltd., hence
having significant influence as per AS-23. However as per AS-21 the
company does not required to prepare Consolidated Financial Statement,
hence investment has been accounted for in accordance with AS-13
(Accounting for Investment).
t. OPERATING CYCLE
All assets and liabilities have been classified as current or
non-current as per the Company`s normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act,1956. Based on
the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current  non current classification of assets and
liabilities.
Mar 31, 2012
A. BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost
convention, on going concern basis and in terms of the Accounting
Standards notified by Companies (Accounting Standards) Rules, 2006 in
compliance with Section 211(3C) of the Companies Act, 1956. The Company
follows the mercantile system of accounting and recognizes income and
expenditure on accrual basis to the extent measurable and where there
is certainty of ultimate realisation in respect of incomes. Accounting
policies not specifically referred to otherwise are consistent and in
consonance with the generally accepted accounting principles in India.
The Company has prepared its financial statements in accordance with
Schedule VI as inserted by Notification- S.O. 447(E), dated 28.2.201 1
(As amended by Notification No F.NO. 2/6/2008-CL-V, Dated 30.3.201 1).
The Schedule does not impact recognition and measurement principle
followed for the preparation of financial statement for accounting in
subsidiaries companies. However it has necessitated significant changes
in the presentation of and disclosures in financial statements. The
Company has reclassified its previous year figures to confirm to the
classification as per the aforesaid Schedule.
b. USE OF ESTIMATES
The presentation of Financial Statements require estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
results are known / materialized.
c. REVENUE RECOGNITION
(i) Revenue from fixed price service contracts is recognized in
proportion to the degree of completion of service by reference to and
based on milestones/acts performed as specified in the contracts and in
case of time and material service contracts, it is recognized on the
basis of hours completed and material used.
(ii) Revenue from the sale of user licenses for software applications
is recognized on transfer of the title in the user license.
(iii) Revenue from annual maintenance contracts is recognized
proportionately over the period in which services are rendered.
(iv) Revenue from Software Consultancy and Support Services is
recognized based on proportionate completion method as per specific
agreements with the customers.
(v) Interest and other dues are accounted on accrual basis.
(vi) Revenue excludes Value added tax/sales tax and service tax.
(vii) Revenue in excess of billings on service contracts is recorded as
unbilled receivables and is included in trade accounts receivable.
Billings in excess of revenue that is recognized on service contracts
are recorded as deferred revenue until the above revenue recognition
criteria are met and are included in current liabilities.
d. FIXED ASSETS
Fixed assets are stated at cost inclusive of incidental expenses, less
accumulated depreciation.
Advances paid towards the acquisition of fixed assets outstanding as of
each balance sheet date and the cost of fixed assets not ready for use
before such date are disclosed under capital work in progress.
e. RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit
and Loss account and capital expenditure on development is shown as
addition to fixed assets.
f. STOCK IN TRADE
Stocks of IT Products are valued at lower of Cost or Realisable Value.
Cost is computed on 'Weighted Average Method'.
g. INTANGIBLE ASSETS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to assets will flow to the
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at their acquisition cost. Computer
software which is not an integral part of the related hardware is
classified as an intangible asset and is being amortized over the
estimated useful life.
h. DEPRECIATION/ AMORTISATION
Depreciation on fixed assets (other than Intangible) is provided on
straight line method as per the following rates:
Goodwill generated in the process of amalgamation (purchased method) is
amortised over a period of five years. Goodwill generated in the
process of consolidation is tested for Impairment.
Depreciation on additions/ deletions to fixed assets is provided on
pro-rata basis from/up to the date the asset is put to use/ discarded.
Assets costing Rs. 5,000 or less are fully depreciated in the year of
acquisition.
Depending on estimated economic useful life of assets in commercial
use, different depreciation rates are charged for the same class of
assets.
i. INVESTMENTS
Investments are classified into long term investments and current
investments. Investments which are intended to be held for one year or
more are classified as long term investments and investments which are
intended to be held for less than one year are classified as current
investments. Long term investments are accounted at cost and any
decline in the carrying value other than temporary in nature is
provided for. Current investments are valued at cost or market / fair
value, whichever is lower.
j EMPLOYEE BENEFITS
1 Provident fund is a defined contribution scheme and the contributions
as required by the statute are charged to profit and loss account as
incurred.
2 Gratuity liability is a defined obligation and is wholly unfunded.
The company accounts for liability for future gratuity benefits based
on actuarial valuation.
3 The employees of the company are entitled to compensated absences and
leave encashment as per the policy of the company. The liability in
this respect is provided, based on actuarial valuation
4 Actuarial gains and losses comprise experience adjustments and the
effects of changes in the actuarial assumptions and are recognised
immediately in the profit and loss account as income or expenses.
5 The undiscounted amount of short - term employee benefits expected to
be paid in exchange for services rendered by an employee is recognised
during the period when the employee renders the services.
k. TAXES ON INCOME
(i) Current tax is determined as the amount of tax payable in respect
of taxable income for the year.
(ii) Deferred tax is recognised on timing differences, being the
difference between taxable incomes and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods, subject to the consideration of prudence in respect of
deferred tax asset.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are 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 not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
m. IMPAIRMENT OF FIXED ASSETS
An asset is impaired when the carrying amount of the asset exceeds its
recoverable amount. An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
An impairment loss recognized in prior accounting periods is reversed
if there has been a change in the estimate of the recoverable amount.
n. BORROWING COST
Borrowing costs incurred for the acquisition of qualifying assets are
recognized as part if cost of such assets when it is considered
probable that they will result in future economic benefits to the
company. While other borrowing cost are expensed in period in which
they are incurred
o. CASH FLOW STATEMENTS
Cash Flow is reported using indirect method, whereby net profits before
tax is adjusted for the effects of transactions of a non cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flow from regular revenue generation, investing and
financing activities of the company are segregated.
p. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction. At the year end, all the
monetary assets and liabilities denominated in foreign currency are
restated at the closing exchange rate. Exchange differences resulting
from the settlement of such transactions and from the restatement of
such monetary assets and liabilities are recognized in the Profit and
Loss Account.
q. PREPAID EXPENSE
Prepaid Expenses are recognized only where the amount of prepaid is in
excess of Rs. 20,000 /-
r. PROVISION FOR BAD DEBTS
Provision for Bad and Doubtful debts have been created on case to cases
basis after assessing the recoverability aspect s. INVESTMENTS IN
ASSOCIATES
Company has holding of 28.7% in C2L BIZ Solutions Pvt. Ltd. , hence
having significant influence as per AS-23. However as per AS-21 the
company does not required to prepare consolidated financial statement ,
hence investment has been accounted for in accordance with AS-13
(Accounting for Investment)
t. OPERATING CYCLE
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act,1956. Based on
the nature of products and the time between the acquisition of assets
for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current - non current classification of assets and
liabilities.
u. The financial statement of the company has been prepared based on
going concern on the basis of commitment provided by the promoter
shareholders.
Mar 31, 2011
A. BASIS OF ACCOUNTING
The financial statements are prepared under historical cost convention
in accordance with the generally accepted accounting principles, the
applicable Accounting Standards notified under Companies (Accounting
Standards) Rules, 2006 and the relevant provisions of the Companies
Act, 1956.
b. USE OF ESTIMATES
The presentation of Financial Statements require estimates and
assumptions to be made that effect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
results are known / materialized.
c. REVENUE RECOGNITION
1. Revenue from fixed price service contracts is recognized in
proportion to the degree of completion of service by reference to and
based on milestones/acts performed as specified in the contracts and in
case of time and material service contracts, it is recognized on the
basis of hours completed and material used.
2. Revenue from the sale of user licenses for software applications is
recognized on transfer of the title in the user license.
3. Revenue from annual maintenance contracts is recognized
proportionately over the period in which services are rendered.
4. Revenue from Software Consultancy and Support Services is
recognized based on proportionate completion method as per specific
agreements with the customers.
5. Interest and other dues are accounted on accrual basis.
6. Revenue excludes Value added tax/sales tax and service tax.
7. Revenue in excess of billings on service contracts is recorded as
unbilled receivables and is included in trade accounts receivable.
Billings in excess of revenue that is recognized on service contracts
are recorded as deferred revenue until the above revenue recognition
criteria are met and are included in current liabilities.
d. FIXED ASSETS
Fixed assets are stated at cost inclusive of incidental expenses, less
accumulated depreciation. Advances paid towards the acquisition of
fixed assets outstanding as of each balance sheet date and the cost of
fixed assets not ready for use before such date are disclosed under
capital work in progress.
e. RESEARCH AND DEVELOPMENT
Revenue expenditure on research and development is charged to Profit
and Loss account and capital expenditure on development is shown as
addition to fixed assets.
f. STOCK IN TRADE
Stocks of IT Products are valued at lower of Cost or Realisable Value.
Cost is computed on 'Weighted Average Method'.
g. INTANGIBLE ASSETS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to assets will flow to the
enterprise and the cost of the assets can be measured reliably. The
intangible assets are recorded at their acquisition cost.
Computer software which is not an integral part of the related hardware
is classified as an intangible asset and is being
amortized over the estimated useful life.
h. DEPRECIATION/ AMORTISATION
Goodwill generated in the process of amalgamation (purchased method) is
amortised over a period of five years. Goodwill generated in the
process of consolidation is tested for Impairment.
Depreciation on additions/ deletions to fixed assets is provided on
pro-rata basis from/up to the date the asset is put to use/ discarded.
Assets costing Rs. 5000 or less are fully depreciated in the year of
acquisition.
Depending on estimated economic useful life of assets in commercial
use, different depreciation rates are charged for the same class of
assets.
i. INVESTMENTS
Investments are classified into long term investments and current
investments. Investments which are intended to be held for one year or
more are classified as long term investments and investments which are
intended to be held for less than one year are classified as current
investments. Long term investments are accounted at cost and any
decline in the carrying value other than temporary in nature is
provided for. Current investments are valued at cost or market / fair
value, whichever is lower.
j. EMPLOYEE BENEFITS
i) Provident fund is a defined contribution scheme and the
contributions as required by the statute are charged to profit and loss
account as incurred.
ii) Gratuity liability is a defined obligation and is wholly unfunded.
The company accounts for liability for future gratuity benefits based
on actuarial valuation.
iii) The employees of the company are entitled to compensated absences
and leave encashment as per the policy of the company. The liability in
this respect is provided, based on actuarial valuation
iv) Actuarial gains and losses comprise experience adjustments and the
effects of changes in the actuarial assumptions and are recognised
immediately in the profit and loss account as income or expenses.
v) The undiscounted amount of short à term employee benefits expected
to be paid in exchange for services rendered by an employee is
recognised during the period when the employee renders the services.
k. TAXES ON INCOME
i) Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
ii) Deferred tax is recognised on timing differences, being the
difference between taxable incomes and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods, subject to the consideration of prudence in respect of
deferred tax asset.
l. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are 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 not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
m. IMPAIRMENT OF FIXED ASSETS
An asset is impaired when the carrying amount of the asset exceeds its
recoverable amount. An impairment loss is charged to the Profit and
Loss account in the year in which an asset is identified as impaired.
An impairment loss recognized in prior accounting periods is reversed
if there has been a change in the estimate of the recoverable amount.
n. BORROWING COST
Borrowing costs incurred for the acquisition of qualifying assets are
recognized as part if cost of such assets when it is considered
probable that they will result in future economic benefits to the
company. While other borrowing cost are expensed in period in which
they are incurred
o. CASH FLOW STATEMENTS
Cash Flow is reported using indirect method, whereby net profits before
tax is adjusted for the effects of transactions of a non cash nature
and any deferrals or accruals of past or future cash receipts or
payments. The cash flow from regular revenue generation, investing and
financing activities of the company are segregated.
p. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the transaction. At the year end, all the
monetary assets and liabilities denominated in foreign currency are
restated at the closing exchange rate. Exchange differences resulting
from the settlement of such transactions and from the restatement of
such monetary assets and liabilities are recognized in the Profit and
Loss Account.
q. PREPAID EXPENSE
Prepaid Expenses are recognized only where the amount of prepaid is in
excess of Rs. 20000 /-
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