Sep 30, 2013
1. SIGNIFICANT ACCOUNTING POLICIES
(A) Basis of Preparation
These Financial Statements have been prepared in accordance with the
generally accepted Accounting Principles in India under the Historical
Cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under section 211 (3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and all other relevant provisions
of the Companies Act, 1956. All Assets & 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.
(B) Tangible Assets
Tangible Assets are stated at cost which includes cost of acquisition,
installation, direct costs and borrowing cost incurred upto the date of
commissioning.
(C) Depreciation
(i) Depreciation has been provided at the SLM rates as prescribed by
Schedule XIV of the Companies Act, 1956.
(ii) Depreciation has been provided on Double Shift Basis.
(iii) Depreciation on additions and deletion during the year has been
provided on pro-rata basis with reference to the month of addition and
deletion.
(iv) Land &Site Development has not been depreciated.
(D) Foreign Currency Transactions
(i) Cost of imported material is converted to Indian currency at the
rates prevailing at the time of payment.
(ii) The expenditure in Foreign Currency is accounted at the rates
prevailing on the date of transaction.
(iii) The Export Sales are accounted for at the actual rates prevailing
at the time of bill discounting.
(vi) Balances of Monetary items in Foreign Currency outstanding at the
close of the year are converted in Indian Currency at the appropriate
rates of exchange prevailing on the date of the Balance Sheet.
(v) Exchange rate difference between the prevailing rate on the date of
transaction and on the date of settlement as also on conversion of
monetary items in Current Assets and Current Liabilities at the end of
the year are recognized as income & expenses as the case may be in
Profit & Loss Account.
(E) Inventories
(i) Raw Material, Stores, Spares & Maintenance items, consumable goods
are valued at lower of landed cost and Net Realizable Value. The cost
formula used is FIFO for all items.
(ii) Work in process is valued at cost.
(iii) Finished Goods are valued at Cost or Net Realizable Value
whichever is lower.
(iv) The cost of imported raw material includes custom duties and other
direct expenditure.
Sep 30, 2012
A) basis of preparation of financial statements:-
the financial statements are prepared under the historical cost
convention, on an accrual basis, in accordance with indian generally
accepted accounting principles (gaap) and applicable accounting
standards as notified under the companies(accounting
standards)rule,2006, issued by the central government, in consultation
with national advisory committee on accounting standards ( nacs) and
relevant provisions of the companies act, 1956 and the guidelines
issued by security exchange board of india (sebi). the management
evaluates all recently issued or revised accounting standards on an
ongoing basis. .
b) use of estimates
the preparation of the financial statements in conformity with indian
gaap requires that the management make estimates and assumptions that
affect the reported amount of assets and liabilities, and disclosure of
contingent assets and liabilities as on the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period, where no reliable estimate can be made, a disclosure
is made as contingent liability, actual results could differ from those
estimates.
c) fixed assets
fixed assets are stated at the cost of acquisition and the value of
acquired business assets less accumulated depreciation, direct costs
are capitalized till the assets are ready to be put to use and include
financing costs relating to acquisition, capital work in progress
includes the cost of fixed assets that are not yet ready for their
intended use and the cost of assets not put to use before the balance
sheet date.
the consideration paid for acquisition and takeover of businesses
includes the value of business contracts, customer rights, employees,
technology, knowhow, software and hardware products and other assets in
connection with the acquired businesses and is part of capital
expenditure, this value is based on independent valuation.
d) impairment of assets
as per accounting standard 28, the company assesses at each balance
sheet date whether there is any indication that an asset including good
will is impaired, if any such indication exists, the company estimates
the recoverable amount of the asset, if such recoverable amount of the
asset is less than the carrying amount then carrying amount is reduced
to recoverable amount, the reduction is treated as impairment and
recognized in profit and loss account, if at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost, in respect of goodwill the impairment loss will be
reversed only when it was caused by specific external events and their
effects have been reversed by subsequent events, during the year no
such impairment has occurred.
e) revenue recognition
revenue from software services and projects comprise income from time
and material and fixed price contracts, revenue from time and material
contracts is recognized on the basis of software developed and billable
in accordance with terms of the contracts with the clients, revenue
from fixed price contracts is recognized using percentage of completion
of method calculated as a percentage of the cost of efforts incurred up
to the reporting date to estimated total cost of efforts.
maintenance revenue is recognized over the period of underlying
maintenance contracts.
interest receipt is recognized on accrual basis, dividend is recognized
on receipt basis.
unbilled revenue primarily comprises the revenue recognized in relation
to efforts incurred ontime and material contracts till a mile stone is
reached and on fixed price, fixed time frame contracts and until the
balance sheet date, the valuation of unbilled renevue is recognised at
cost in the financial statement.
f) foreign currency transactions (other than fixed assets)
the transactions in foreign currency are recorded in the books by
applying the exchange rate prevailing as at the date of the
transaction, investments in foreign currency are reported using the
exchange rate at the date of transaction.further the gain or loss on
account of fluctuations in exchange rate has been recognized in
theprofit and loss account, in respect of foreign currency transaction
in fixed assets the exchange gain or loss is adjusted in the carrying
amount of fixed asset and accordingly the depreciation is charged, the
consolidated inflows and outflows arising from foreign currency
transactions are disclosed in this report.
g) forward contracts in foreign currency
the company uses forward contracts and options to hedge its exports in
foreign exchange, this reduces the risk or cost to the company and this
cover is not used for speculation or trading purposes.
h) expenditure
expenses are accounted on accrual basis and provisions are made for all
known losses and liabilities, provisions are made for future and
unforeseeable factors, which may affect the ultimate profit on fixed
price, software development and service contracts are charged to
revenue in the same year.
i) depreciation
the depreciation has been provided on the basis of straight line method
adopting the rates and the manner as provided in schedule xiv to the
companies act, 1956 as amended, depreciation is charged on a pro-rata
basis for assets purchased/sold during the year, individual assets
costing less than Rs..5,000/- are depreciated in full in the year of
purchase.
j) investments
investments in subsidiaries are accounted as per accounting standard 13
of accounting for investments issued by the institute of chartered
accountants of india. investments are stated at cost including advisory
and related expenses incurred in connection with the investments, no
provision is made for diminution in the value of investments as they
are long term and strategic in nature.
k) retirement benefits
the company has a scheme of provident fund for its employees,
registered with the regional provident fund commissioner, chennai.
the company''s contribution to provident fund is charged to the profit
and loss account every year, certain senior executives of the company
are also participants in a defined contribution plan of superannuation
plan of helios & matheson it ltd., superannuation trust.
the company makes contribution under this plan to this trust every
month, the company has no further obligation beyond its monthly
contribution.
the gratuity provision is made in terms payment of gratuity act 1972.
the leave encashment provision is made as per the service rules of the
company.
I) taxes on income
provision is made for income tax on an annual basis, under the tax
payable method, based on the tax liability as computed after taking
credit for allowances and exemptions, in case of matters under appeal,
due to disallowances or otherwise, full provision is made when the said
liabilities are accepted by the company, sufficient future taxable
income will be available against which such deferred tax assets can be
realized as per as -22 "accounting for taxes on income" issued by
the institute of chartered accountants of india. deferred tax is
recognized, subject to the consideration of prudence, 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.
deferred tax assets are not recognized on unabsorbed depreciation and
carry forward of losses unless there is virtual certainty that
sufficient future taxable income will be available against which such
deferred tax asset can be realized as per as-22 "accounting for taxes
on income" issued by the institute of chartered accountants of india.
m) cash flow statement
cash flows are reported using the indirect method, whereby net profit
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 flows from regular revenue generating, investing and
financing activities of the company are segregated.
n) leases
lease arrangements where the risks and rewards incidental to ownership
of an asset substantially vest with the lessor, are recognized as
operating leases, lease rentals under operating leases are recognized
in the statement of profit and loss account on a straight line basis.
Sep 30, 2011
The financial statements are prepared under the historical cost
convention, on an accrual basis, in accordance with indian generally
accepted accounting principles (gaap) and applicable accounting
standards as notified under the companies (accounting standards) rule
2006, issued by the central government, in consultation with national
advisory committee on accounting standards (nacs) and relevant
provisions of the companies act, 1956 and the guidelines issued by
security exchange board of india (sebi). the management evaluates all
recently issued or revised accounting standards on an ongoing basis.
use of estimates
the preparation of the financial statements in conformity with indian
gaap requires that the management make estimates and assumptions that
affect the reported amount of assets and liabilities, and disclosure of
contingent assets and liabilities as on the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period, where no reliable estimate can be made, a disclosure
is made as contingent liability, actual results could differ from those
estimates.
fixed assets
fixed assets are stated at the cost of acquisition and the value of
acquired business assets less accumulated depreciation, direct costs
are capitalized till the assets are ready to be put to use and include
financing costs relating to acquisition, capital work in progress
includes the cost of fixed assets that are not yet ready for their
intended use and the cost of assets not put to use before the balance
sheet date.
the consideration paid for acquisition and takeover of businesses
includes the value of business contracts, customer rights, employees,
technology, knowhow, software and hardware products and other assets in
connection with the acquired businesses and is part of capital
expenditure, this value is based on independent valuation.
impairment of assets
as per accounting standard 28, the company assesses at each balance
sheet date whether there is any indication that an asset including good
will is impaired, if any such indication exists, the company estimates
the recoverable amount of the asset, if such recoverable amount of the
asset is less than the carrying amount then carrying amount is reduced
to recoverable amount, the reduction is treated as impairment and
recognized in profit and loss account, if at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost, in respect of goodwill the impairment loss will be
reversed only when it was caused by specific external events and their
effects have been reversed by subsequent events, during the year no
such impairment has occurred.
revenue recognition
revenue from software services and projects comprise income from time
and material and fixed price contracts, revenue from time and material
contracts is recognized on the basis of software developed and billable
in accordance with terms of the contracts with the clients, revenue
from fixed price contracts is recognized using percentage of completion
of method calculated as a percentage of the cost of efforts incurred up
to the reporting date to estimated total cost of efforts.
maintenance revenue is recognized over the period of underlying
maintenance contracts.
interest receipt is recognized on accrual basis, dividend is recognized
on receipt basis.
unbilled revenue primarily comprises revenue recognized but not billed
to the client in relation to efforts incurred on time and material and
fixed price contracts till either the balance sheet date or till a mile
stone is reached.
foreign currency transactions (other than fixed assets)
the transactions in foreign currency are recorded in the books by
applying the exchange rate prevailing as at the date of the
transaction, investments in foreign currency are reported using the
exchange rate at the date of transaction, further the gain or loss on
account of fluctuations in exchange rate has been recognized in the
profit and loss account, in respect of foreign currency transaction in
fixed assets the exchange gain or loss is adjusted in the carrying
amount of fixed asset and accordingly the depreciation is charged, the
consolidated inflows and outflows arising from foreign currency
transactions are disclosed in this report.
forward contracts in foreign currency
the company uses forward contracts and options to hedge its exports /
obligations in foreign exchange, this reduces the risk or cost to the
company and this cover is not used for speculation or trading purposes.
expenditure
expenses are accounted on accrual basis and provisions are made for all
known losses and liabilities, provisions are made for future and
unforeseeable factors, which may affect the ultimate profit on fixed
price, software development and service contracts are charged to
revenue in the same year.
depreciation
the depreciation has been provided on the basis of straight line method
adopting the rates and the manner as provided in schedule xiv to the
companies act, 1956 as amended, depreciation is charged on a pro-rata
basis for assets purchased/sold during the year, individual assets
costing less than Rs.5,000 are depreciated in full in the year of
purchase.
investments
investments in subsidiaries are accounted as per accounting standard 13
of accounting for investments issued by the institute of chartered
accountants of india. investments are stated at cost including advisory
and related expenses incurred in connection with the investments, no
provision is made for diminution in the value of investments as they
are long term and strategic in nature.
retirement benefits
the company has a scheme of provident fund for its employees,
registered with the regional provident fund commissioner, chennai.
the company's contribution to provident fund is charged to the profit
and loss account every year, certain senior executives of the company
are also participants in a defined contribution plan of superannuation
plan of helios and matheson IT ltd., superannuation trust, the company
makes contribution under this plan to this trust every month, the
company has no further obligation beyond its monthly contribution.
the gratuity provision is made in terms payment of gratuity act 1972.
the leave encashment provision is made as per the service rules of the
company.
taxes on income
provision is made for income tax on an annual basis, under the tax
payable method, based on the tax liability as computed after taking
credit for allowances and exemptions, in case of matters under appeal,
due to disallowances or otherwise, full provision is made when the said
liabilities are accepted by the company, sufficient future taxable
income will be available against which such deferred tax
assets can be realized as per as -22 'accounting for taxes on
income' issued by the institute of chartered accountants of india.
deferred tax is recognized, subject to the consideration of prudence,
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, deferred tax assets are not
recognized on unabsorbed depreciation and carry forward of losses
unless there is virtual certainty that sufficient future taxable income
will be available against which such deferred tax asset can be realized
as per as-22 'accounting for taxes on income' issued by the
institute of chartered accountants of india.
cash flow statement
cash flows are reported using the indirect method, whereby net profit
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 flows from regular revenue generating, investing and
financing activities of the company are segregated.
quantitative details
the company is engaged in software development, software consultancy
and maintenance of computer software, the production and sale of such
software cannot be expressed in any generic unit, hence, it is not
possible to give the quantitative details of sales and certain
information as required under part ii of schedule vi to the companies
act, 1956.
the tax year for the company being the year ending 31st, march, the
provision for taxation for the period is the aggregate of the provision
made for the twelve months ended 31st march, 2011 and the provision
based on the figures for the remaining six months up to 30th September,
2011, the ultimate tax liability of which will be determined on the
basis of the figures for the period 1st april, 2011 to 31st march,
2012.
dues to ssi, micro, small and medium enterprises:
sundry creditors includes amount due to ssi, micro, small and medium
enterprises as on 30.09.11 : Rs. nil (nil) with available information
from micro, small and medium enterprises regarding their registration
with central/state government authorities the disclosure as per sec 23
of the micro small medium enterprises development act 2006 is made.
segment reporting
the company is operating in a single segment and the risk and reward is
same for the segment in all the locations and hence segment reporting
is not applicable to the company.
unclaimed dividend
The company transferred Rs.1,47,101/- to the investor education and
protection fund, this is the amount in the dividend payable account for
the year ended 31.03.2004 remaining unclaimed and unpaid for a period
of seven years from the date that they first became due for payment
u/s. 205c of the companies act, 1956.
during the year the subsidiary company m/s. helios and matheson
information technology inc, usa (formerly known as helios and matheson
north America inc) made reverse stock split at 2.5:1 and as a result
the parent company and its subsidiary now hold 17,23,040 shares as
investment.
Sep 30, 2010
Basis of preparation of financial statements:-
the financial statements are prepared under the historical cost
conversion, on an accrual basis, in accordance with indian generally
accepted accounting principles (gaap) and applicable accounting
standards as notified under the companies(accounting standards) rules,
2006, issued by the central government, in consultation with national
advisory committee on accounting standards ( nacs) and relevant
provisions of the companies act, 1956 and the guidelines issued by
security exchange board of india (sebi). the management evaluates all
recently issued or revised accounting standards on an on going basis. .
use of estimates
the preparation of the financial statements in conformity with indian
gaap requires that the management make estimates and assumptions that
affect the reported amount of assets and liabilities, and disclosure of
contingent assets and liabilities as on the date of the financial
statements, and the reported amounts of revenue and expenses during the
reporting period, where no reliable estimate can be made, a disclosure
is made as contingent liability, actual results could differ from those
estimates.
fixed assets
fixed assets are stated at the cost of acquisition and the value of
acquired business assets less accumulated depreciation, direct costs
are capitalized till the assets are ready to put to use and includes
financing costs relating to acquisition, capital work in progress
includes the cost of fixed assets that are not yet ready for their
intended use and the cost of assets not put to use before the balance
sheet.
the consideration paid for acquisition and takeover of businesses
includes the value of business contracts, customer rights, employees,
technology, knowhow, software and hardware products and other assets in
connection with the acquired businesses and is part of capital
expenditure, this value is based on independent valuation.
impairment of assets
as per accounting standard 28, the company assesses at each balance
sheet date whether there is any indication that an asset including good
will is impaired, if any such indication exists, the company estimates
the recoverable amount of the asset, if such recoverable amount of the
asset is less than the carrying amount then carrying amount is reduced
to recoverable amount, the reduction is treated as impairment and
recognized in profit and loss account, if at the balance sheet date
there is an indication that a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost, in respect of goodwill the impairment loss will be
reversed only when it was caused by specific external events and their
effects have been reversed by subsequent events, during the year no
such impairment has occurred.
revenue recognition
revenue from software services and projects comprise income from time
and material and fixed price contracts, revenue from time and material
contracts is recognized on the basis of software developed and billable
in accordance with terms of the contracts with the clients, revenues
from fixed price contracts is recognized using percentage of completion
of method calculated as a percentage of the cost of efforts incurred up
to the reporting date to estimated total cost of efforts.
maintenance revenue is recognized over the period of underlying
maintenance contracts.
interest receipt is recognized on accrual basis, dividend is recognized
on receipt basis.
unbilled revenue primarily comprises the revenue recognized in relation
to efforts incurred up on fixed price, fixed time frame contracts until
the balance sheet date.
foreign currency transactions (other than fixed assets)
the transactions in foreign currency are recorded in the books by
applying the exchange rate prevailing as at the date of the
transaction. investments in foreign currency are reported using the
exchange rate at the date of transaction, fccb liability is stated at
the fixed exchange rate of rs.46.07 as per offer document and not
restated to the closing exchange rate, other foreign currency
transactions are converted at the exchange rate prevailing on the last
working day of the accounting year, further the gain or loss on account
of fluctuations in exchange rate has been recognized in the profit and
loss account, in respect of foreign currency transaction in fixed
assets the exchange gain or loss is adjusted in the carrying amount of
fixed asset and accordingly the depreciation is charged, the
consolidated inflows and outflows arising from foreign currency
transactions are disclosed elsewhere in this report.
forward contracts in foreign currency
the company uses forward contracts and auctions to hedge its exports in
foreign exchange, this reduces the risk or cost to the company and this
cover is not used for speculation or trading purposes.
expenditure
expenses are accounted on accrual basis and provisions are made for all
known losses and liabilities, provisions are made for future and
unforeseeable factors, which may affect the ultimate profit on fixed
price, software development and service expenses are charged to revenue
in the same year.
depreciation
the depreciation has been provided on the basis of straight line method
adopting the rates and the manner as provided in schedule xiv to the
companies act, 1956 as amended, depreciation is charged on a pro-rata
basis for assets purchased/sold during the year, individual costing
less than rs. 5,000/ - are depreciated in full in the year of purchase.
investments
investments in subsidiaries are accounted as per accounting standard 13
of accounting for investments issued by the institute of chartered
accountants of india. investments are stated at cost including advisory
and related expenses incurred in connection with the investments, no
provision is made for diminishing in the value of investments as they
are long term and strategic in nature.
sundry debtors
sundry debtors amount to rs 75.02 crore as of September 2010 as
compared to rs. 75.27 crore as of September 2009. the debtors are
considered good and realizable, the debtors are -118 days of sales of
September 2010 as against 133 days of sales as of September 2009.
Asignificant part of this receivable is since realized.
retirement benefits
the company has a scheme of provident fund for its employees,
registered with the regional provident fund commissioner, chennai.
the companies contribution to provident fund are charged to the profit
and loss account every year, certain senior executives of the company
are also participants in a defined contribution plan of superannuation
plan of helios & matheson it ltd., superannuation trust. the company
makes contribution under this plan to this trust every month, the
company has no further obligation beyond its monthly contribution.
taxes on income
provision is made for income tax on an annual basis, under the tax
payable method, based on the tax liability as computed after taking
credit for allowances and exemptions, in case of matters under appeal,
due to disallowances or otherwise, full provision is made when the said
liabilities are accepted by the company, sufficient future taxable
income will be available against which such deferred tax assets can be
realized as per as -22 "accounting for taxes on income" issued by the
institute of chartered accountants of india.
deferred tax is recognized, subject to the consideration of prudence,
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.
deferred tax assets are not recognized on unabsorbed depreciation and
carry forward of losses unless there is virtual certainty that
sufficient future taxable income will be available against which such
deferred tax asset can be realized as per as-22 "accounting for taxes
on income" issued by the institute of chartered accountants of india.
cash flow statement
cash flows are reported using the indirect method, whereby net profit
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 flows from regular revenue generating, investing and
financing activities of the company are segregated.
preferential allotment of warrants:
the company allotted 8,00,000 equity shares to the promoters upon
exercise of option by them, consequent to this allotment share capital
and share premium were increased by rs.80,00,000 and rs.4,39,68,000
respectively during the year, the balance 49,00,000 warrants were
forfeited as the holders of the warrants did not exercise their rights
to convert the warrants in to equity shares, the forfeited amount of
rs. 3,18,30,400 was credited to capital reserves account as per sebi
preferential guidelines. the forfeited application money has been used
for the business requirements of the company, all the preferential
warrants that have been forfeited on account of non exercise of option
by the holders of the warrants were duly cancelled and extinguished,
the company does not have any warrant pending conversion.
secured loans
secured loans from the banks are secured by hypothecation of fixed and
current assets of the company and guaranteed by the managing director
and the promoters of the company.
unbilled revenue
unbilled revenue is revenue recognized in the books as per percentage
completion of work done but not invoiced to customer since it is not
due for billing as per payment schedule in the contract entered in to
with the customer.
cash and bank balance:-
the cash and bank balance is rs. 73,24,32,154 (37,51,25,122) which
includes balances of rs.5,35,99,436 (1,28,88,171 ) in foreign currency.
quantitative details
the company is engaged in software development .software consultancy
and maintenance of computer software, the production of sale of such
software can not be expressed in any generic unit, hence, it is not
possible to give the quantitative details of sales and certain
information as required under part ii of schedule vi to the companies
act, 1956.
dues to ssi, micro, small and medium enterprises:
sundry creditors includes amount due to ssi, micro, small and medium
enterprises as on 30.09.2010 : rs. nil (nil) with available information
from micro, small and medium enterprises regarding their registration
with central/state government authorities the disclosure as per sec 23
of the micro small medium enterprises development act 2006 is made.