Accounting Policies of Brightcom Group Ltd. Company
Mar 31, 2022
1. Corporate Information:
Brightcom Group Limited, offers digital marketing solutions to businesses, agencies and online publishers worldwide. Brightcom Group Limited connects Advertisers with their Audience across any form of Digital Media, using its massive local presence to deliver appropriate messages to the right audience, through the most relevant Digital channels. Brightcom Group Limited has a global presence, with offices in over 24 countries. Brightcom Group Limited is also a Global Information Technology Implementation and Outsourcing Services Provider with an exceptional track record of providing high quality, on-budget, and on-time solutions to demanding clients specifically in the areas of Digital Media advertising and in the fields of AI, ML, IOT to name a few. Our business knowledge in key verticals helps us provide solutions that are customized to address the specific needs while focusing on maximizing value of Information Technology investments such that clients can achieve their business objectives. We believe in fostering long-term relationships, and partner with our clients in their success. BCG Provides End-to-end Enterprise Solution Offerings and Specializing in ERP Solutions, Microsoft and Open Source Systems development.
2. SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance
These financial statements have been prepared in accordance with Ind AS as notified under the Companies (Indian Accounting Standards)Rules, 2015 read with Section 133 of the Companies Act, 2013 read with rule 3 of companies (Indian accounting standards)Rules,2015("the rules")(as amended from time to time).
b) Basis of preparation
These financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and
services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
c) Use of estimates and judgements
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods are affected.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.
The Company reviews its carrying value of investments carried at amortized cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Valuation of deferred tax assets
The Company reviews the carrying amount of
deferred tax assets at the end of each reporting
period.
Management judgment is required for estimating the possible inflow/outflow of resources, if any, in respect of contingencies/ claims/litigations against the Company/by the Company as it is not possible to predict the outcome of pending matters with accuracy.
Defined Benefit Plans
The present value of the gratuity obligation is determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, rate of increment in salaries and mortality rates. Due to complexities involved in the valuation and
its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All the assumptions are reviewed at each reporting date.
Fair Value measurement of financial instruments
When the fair values of financial assets and financial liabilities on reporting date cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques i.e., the DCF model. The inputs to these models are taken from observable markets.
Intangibles
Internal technical or user team assess the useful lives of Intangible assets. Management believes that assigned useful lives are reasonable.
d) Current Vs Non-current classifications
The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset is treated as current when it satisfies the below mentioned criteria:
i. Expected to be realized or intended to be sold or consumed in normal operating cycle;
ii. Held primarily for the purpose of trading;
iii. Expected to be realized within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current assets.
A liability is classified as current when it satisfies the below mentioned criteria:
i. Expected to settle the liability in normal operating cycle;
ii. Held primarily for the purpose of trading;
iii. Due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as noncurrent. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents.
e) Dividends
Annual dividend distribution to the shareholders is recognized as a liability in the period in which the dividend is approved by the shareholders. Any interim dividend paid is recognized on approval by Board of Directors. Dividend payable and corresponding tax on dividend distribution is recognized directly in equity.
f) Revenue recognition
l) Digital Marketing Services:
i) The Contracts between the Company and its Customers are either time or material contracts or fixed price contracts.
ii) Revenue from fixed price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.
iii) In respect of time and material contract, revenue is recognized in the period in which the services are provided and related costs are incurred.
iv) Revenue from product sale and licensing arrangements are recognized on delivery and installation.
v) Revenue is reported net of discounts, indirect and service taxes.
2) Software Development:
i) Income from software development is accounted for on the basis of Software developed and billed to clients on acceptance and/or on the basis of man days/man hours as per the terms of contract.
ii) Revenue from professional services consist primarily of revenue earned from services performed on a ''time and material'' basis. The related revenue is recognized as and when the services are performed and related costs are incurred.
iii) Revenue from software development services includes revenue from time and material and fixed price contracts are recognized as related services are performed.
iv) Revenue from fixed price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.
v) Revenue is not recognized on the grounds of
prudence, until realized in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.
vi) Revenue is reported net of discounts, indirect and
service taxes.
g)Dividend income is recorded when the right to
receive payment is established.
Interest income is recorded using the effective
interest method.
h) Leases
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii)the Company has the right to direct the use of the asset. At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less(short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised. The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are re-measured with a
corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option
i) Cost recognition
Costs and expenses are recognized as and when incurred and have been classified according to their nature.
The costs of the Company are broadly categorized in employee benefit expenses, depreciation and amortization and other operating expenses. Employee benefit expenses include employee compensation, allowances paid, contribution to various funds and staff welfare expenses. Other operating expenses mainly include fees to external consultants, cost of running its facilities, travel expenses, cost of equipment and software licenses, communication costs, allowances for delinquent receivables and advances and other expenses. Other expenses are an aggregation of costs which are individually not material such as commission and brokerage, recruitment and training, entertainment etc.
j) . Foreign currency transactions
i. Functional and Presentation Currency:
The Company''s functional and presentation currency is Indian National Rupee.
ii. Initial Recognition:
Foreign currency transactions are recorded in the presentation currency, by applying to the foreign currency amounts the exchange rate between the Presentation currency and the foreign currency at the date of the transaction.
iii. Conversion on reporting date:
Foreign currency monetary items are reported using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
iv. Exchange Differences:
Exchange difference arising on the settlement of monetary items or on Presenting monetary items of Company at rates different from those at which they were initially recorded during the year or presented in previous financial statements are recognized as income or as expenses in the year in which they arise.
k) Income taxes
Income tax expense comprises current tax expense and the net change in the deferred tax asset or
liability during the year. Current and deferred tax are recognized in statement of profit and loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity, respectively.
Current income taxes
The current income tax expense includes income taxes payable by the Company, its branches in India and overseas. The current tax payable by the Company in India is Indian income tax payable on worldwide income.
The Current income tax payable by overseas branches of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian income tax liability of the Company''s worldwide income.
Advance taxes and provisions for current income taxes are presented in the Balance sheet after offsetting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying units intends to settle the asset and liability on a net basis.
Deferred income tax is recognized using the Balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized.
l) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
1. Financial Assets.
i) Initial recognition and measurement:
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in statement of profit or loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
ii) Subsequent measurement:
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business whose objective is to hold these assets to collect contractual cash flows and the
contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and selling financial assets.
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in profit or loss.
A financial asset or where applicable, a part of a financial asset is primarily derecognised when: a. The rights to receive cash flows from the asset have expired, or b. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement.
iv. Impairment of financial assets:
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the debt instruments, that are measured at amortised cost e.g., loans, debt securities, deposits and trade receivables.
Expected credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive.
The management uses a provision matrix to determine the impairment loss on the portfolio of trade and other receivables. Provision matrix is based on its historically observed expected credit loss rates over the expected life of the trade receivables and is adjusted for forward looking estimates.
Expected credit loss allowance or reversal recognized during the period is recognized as income or expense, as the case may be, in the statement of profit and loss. In case of balance sheet, it is shown as reduction from the specific financial asset.
Financial liabilities are measured at amortized cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognized by the Company are recognized at the proceeds received net off direct issue cost.
i) Initial recognition and measurement:
At initial recognition, all financial liabilities are recognized at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs.
ii) Subsequent measurement:a. Financial liabilities at fair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial
recognition as at fair value through profit or loss. Gain or losses on liabilities held for trading are recognized in the profit or loss.
b. Financial liabilities at amortized cost:
Amortized cost, in case of financial liabilities with maturity more than one year, is calculated by discounting the future cash flows with effective interest rate.
The effective interest rate amortization is included as finance costs in the Statement of Profit and Loss. Financial liability with maturity of less than one year is shown at transaction value.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any noncash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
m) Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
n) Financial Guarantee Contracts:
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with original or modified terms of a debt instrument.
The Company measures any financial guarantee on initial recognition at their fair value. Subsequently these contracts are measured at the higher of:
a. the amount of the loss allowance determined as per impairment requirements of Ind AS 109, and
b. the amount initially recognized, less where appropriate, cumulative amount of income
recognized in accordance with the principles of Ind AS 18.
o) Fair Value Measurement:
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for such asset or liability, or in the absence of a principal market, in the most advantageous market which is accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a. Level 1 - Quoted (unadjusted market prices) in active markets for identical assets or liabilities.
b. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurements is directly or indirectly observable.
c. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
p) Investment in subsidiaries
Investment in subsidiaries are measured at cost
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q) Property, plant and equipment
Property, plant and equipment are stated at cost net of input tax credits, less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and all attributable cost, to bring the asset to its working condition for its intended use. Borrowing costs relating to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to put to use.
The Company adopted cost model as its accounting policy, in recognition of the property, plant and equipment and recognizes transaction value as the cost.
An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the Statement of Profit and Loss. Property, Plant and Equipment which are found to be not usable or retired from active use or when no further benefits are expected from their use are removed from property, plant and equipment and the carrying amount net of scrap value, if any is charged to Statement of Profit and Loss.
The improvements/modifications carried on the lease hold land/property are recognized as lease hold improvements and are written off over the primary lease period or the life of such improvement whichever is lower.
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|
Type of asset |
Method |
Useful lives |
|
Computer equipment |
Straight line |
3 years |
|
Office equipment''s |
Straight line |
5 years |
|
Furniture and fixtures |
Straight line |
10 years |
|
Electrical installations |
Straight line |
10 years |
|
Vehicles |
Straight line |
8 years |
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortization and accumulated impairment, if any.
Intangible assets consist of rights under licensing agreement and software licences which are
amortized over license period which equates the useful life ranging between 5-6 years on a straight line basis.
s) Impairment of Non-financial assets
i. 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 is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
ii. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset do no longer exist or have decreased.
i. Defined benefit plans
For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance sheet date. Actuarial gains and losses are recognized in full in the other comprehensive income for the period in which they occur. Past service cost both vested and unvested is recognized as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognizes related restructuring costs or termination benefits.
The retirement benefit obligations recognized in the Balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and deductions in future contributions to the scheme.
ii. Defined contribution plans
Employer''s contribution to provident fund/ employee state insurance which is in the nature of defined contribution scheme is expensed off when the contributions to the respective funds are due.
There are no other obligations other than the contribution payable to the fund.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognized as an actuarially determined liability at the present value of the defined benefit obligation at the Balance sheet date.
u) Earnings per share
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years'' presented.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
w) Segment Reporting:
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief operating decision maker ("CODM").
The board of directors of the company has identified the Chairman and Managing Director as the CODM.
x) Provisions:
Provisions are recognized when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable 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 recognized for future operating losses.
Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognized as a separate asset. However, this asset may not exceed the amount of the related provision.
y) Contingencies:
Where it is not probable that an inflow or an outflow of economic resources will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognized in the statement of balance sheet and is disclosed as a contingent asset or contingent liability. Possible outcomes on obligations / rights, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities.
z) Prior period items:
In case prior period adjustments are material in nature the Company prepares the restated financial statement as required under Ind AS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors". Immaterial items pertaining to prior periods are shown under respective items in the Statement of Profit and Loss.
Mar 31, 2018
LYCOS INTERNET LIMITED
Notes forming part of Standalone statements for the year ended 31st March 2018
1. Corporate Information:
Lycos Internet Limited, offers digital marketing solutions to businesses, agencies and online publishers worldwide. Lycos Internet Limited connects Advertisers with their Audience across any form of Digital Media, using its massive local presence to deliver appropriate messages to the right audience, through the most relevant Digital channels. Lycos Internet Limited has a global presence, with offices in over 24 countries.
Lycos Internet Limited is also a Global Information Technology Implementation and Outsourcing Services Provider with an exceptional track record of providing high quality, on-budget, and on-time solutions to demanding clients. Our business knowledge in key verticals helps us provide solutions that are customized to address the specific needs while focusing on maximizing value of Information Technology investments such that clients can achieve their business objectives. We believe in fostering long-term relationships, and partner with our clients in their success. Lycos Provides End-to-end Enterprise Solution Offerings and Specializing in ERP Solutions, Microsoft and Open Source Systems development.
2. SIGNIFICANT ACCOUNTING POLICIES
a. Statement of compliance
These financial statements have been prepared in accordance with Ind AS as notified under the Companies (Indian Accounting Standards)Rules, 2015 read with Section 133 of the Companies Act, 2013 read with rule 3 of companies (Indian accounting standards) Rules,2015("the rules")(as amended).
b. Basis of preparation
These financial statements have been prepared on the historical cost basis, except for certain financial instruments which are measured at fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
c. Use of estimates and judgements
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures relating to contingent liabilities as at the date of the financial statements and the reported amounts of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax assets, provisions and contingent liabilities.
Impairment of investments
The Company reviews its carrying value of investments carried at amortised cost annually, or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for.
Useful lives of property, plant and equipment
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may result in change in depreciation expense in future periods.
Valuation of deferred tax assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period.
Contingencies
Management judgement is required for estimating the possible inflow/outflow of resources, if any, in respect of contingencies/ claims/litigations against the Company/by the Company as it is not possible to predict the outcome of pending matters with accuracy.
Defined Benefit Plans
The present value of the gratuity obligation is determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, rate of increment in salaries and mortality rates. Due to complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All the assumptions are reviewed at each reporting date.
Fair Value measurement of financial instruments
When the fair values of financial assets and financial liabilities on reporting date cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques i.e., the DCF model. The inputs to these models are taken from observable markets.
Intangibles
Internal technical or user team assess the useful lives of Intangible assets. Management believes that assigned useful lives are reasonable.
d. Current Vs Non-current classifications
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it satisfies the below mentioned criteria:
i. Expected to be realised or intended to be sold or consumed in normal operating cycle; ii. Held primarily for the purpose of trading; iii. Expected to be realised within twelve months after the reporting period, or iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period. All other assets are classified as non-current assets.
A liability is classified as current when it satisfies the below mentioned criteria:
i. Expected to settle the liability in normal operating cycle;
ii. Held primarily for the purpose of trading;
iii. Due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as noncurrent. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, acceptance and/or on the basis of man days/man hours as per the terms of contract.
ii) Revenue from professional services consist primarily of revenue earned from services performed on a ''time and material'' basis. The related revenue is recognized as and when the services are performed and related costs are incurred.
iii) Revenue from software development services includes revenue from time and material and fixed price contracts are recognized as related services are performed.
iv) Revenue from fixed price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.
v) Revenue is not recognized on the grounds of prudence, until realized in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.
vi) Revenue is reported net of discounts, indirect and service taxes.
e. Dividends
Annual dividend distribution to the shareholders is recognised as a liability in the period in which the dividend is approved by the shareholders. Any interim dividend paid is recognised on approval by Board of Directors. Dividend payable and corresponding tax on dividend distribution is recognised directly in equity.
f. Revenue recognition
1) Digital Marketing Services:
i) The Contracts between the Company and its Customers are either time or material contracts or fixed price contracts.
ii) Revenue from fixed price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.
iii) In respect of time and material contract, revenue is recognized in the period in which the services are provided and related costs are incurred.
iv) Revenue from product sale and licensing arrangements are recognized on delivery and installation.
v) Revenue is reported net of discounts, indirect and service taxes
2) Software Development:
i) Income from software development is accounted for on the basis of Software developed and billed to clients on
g) Dividend income is recorded when the right to receive payment is established. Interest income is recorded using the effective interest method.
h) Leases
Operating Lease:
Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. The company charges Lease rentals in respect of assets taken under operating leases to statement profit and loss account on a straight line basis over the lease term.
Finance Lease:
A Finance lease is a lease that transfers substantially all the risks and rewards incidental to the ownership of an asset to the lessee. Such leases are capitalised at the inception of the lease at lower of the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of interest on the outstanding liability for each year.
i) Cost recognition
Costs and expenses are recognised as and when incurred and have been classified according to their nature.
The costs of the Company are broadly categorized in employee benefit expenses, depreciation and amortisation and other operating expenses. Employee benefit expenses include employee compensation, allowances paid, contribution to various funds and staff welfare expenses. Other operating expenses mainly include fees to external consultants, cost of running its facilities, travel expenses, cost of equipment and software licenses, communication costs, allowances for delinquent receivables and advances and other expenses. Other expenses is an aggregation of costs which are individually not material such as commission and brokerage, recruitment and training, entertainment etc.
j) Foreign currency transactions
i. Functional and Presentation Currency:
The Company''s functional and presentation currency is Indian National Rupee.
ii. Initial Recognition:
Foreign currency transactions are recorded in the presentation currency, by applying to the foreign currency amounts the exchange rate between the Presentation currency and the foreign currency at the date of the transaction.
iii. Conversion on reporting date:
Foreign currency monetary items are reported using the closing rate. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
iv. Exchange Differences:
Exchange difference arising on the settlement of monetary items or on Presenting monetary items of Company at rates different from those at which they were initially recorded during the year or presented in previous financial statements are recognised as income or as expenses in the year in which they arise.
k) Income taxes
Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred tax are recognised in statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively.
Current income taxes
The current income tax expense includes income taxes payable by the Company, its branches in India and overseas. The current tax payable by the Company in India is Indian income tax payable on worldwide income.
The Current income tax payable by overseas branches of the Company is computed in accordance with the tax laws applicable in the jurisdiction in which the respective branch operates. The taxes paid are generally available for set off against the Indian income tax liability of the Company''s worldwide income.
Advance taxes and provisions for current income taxes are presented in the Balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the relevant tax paying units intends to settle the asset and liability on a net basis.
Deferred income taxes
Deferred income tax is recognised using the Balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.
Deferred income tax asset are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured using substantively enacted tax rates expected to apply to taxable income in the years in which the temporary differences are expected to be received or settled.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognised as deferred tax asset in the Balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
I) Financial Instruments
A financial instruments is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
1. Financial Assets.
i) Initial recognition and measurement:
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in statement of profit or loss. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
ii) Subsequent measurement: Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash flows on specified dates that are solely payments of principal and interest on the principal amount outstanding and financial assets.
The management uses a provision matrix to determine the impairment loss on the portfolio of trade and other receivables. Provision matrix is based on its historically observed expected credit loss rates over the expected life of the trade receivables and is adjusted for forward looking estimates.
Expected credit loss allowance or reversal recognised during the period is recognised as income or expense, as the case may be, in the statement of profit and loss. In case of balance sheet, it is shown as reduction from the specific financial asset.
2.Financial liabilities
Financial assets at fair value through profit or loss
Financial assets are measured at fair value through profit or loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognised in profit or loss.
iii. Derecognition:
Afmancial asset or where applicable, a part of a financial asset is primarily derecognised when: a. The rights to receive cash flows from the asset have expired, or b. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement.
iv. Impairment of financial assets:
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the debt instruments, that are measured at amortised cost e.g., loans, debt securities, deposits and trade receivables.
Expected credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive.
Financial liabilities are measured at amortised cost using the effective interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the company after deducting all of its liabilities. Equity instruments recognised by the Company are recognised at the proceeds received net off direct issue cost.
i) Initial recognition and measurement:
At initial recognition, all financial liabilities are recognised at fair value and in the case of loans, borrowings and payables, net of directly attributable transaction costs.
ii) Subsequent measurement:
a) Financial liabilities at fair value through profit or loss:
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Gain or losses on liabilities held for trading are recognised in the profit or loss.
b) Financial liabilities at amortised cost:
Amortised cost, in case of financial liabilities with maturity more than one year, is calculated by discounting the future cash flows with effective interest rate. The effective interest rate amortisation is included as finance costs in the Statement of Profit and Loss. Financial liability with maturity of less than one year is shown at transaction value.
iii. Derecognition:
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
m) Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into known amounts of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
n) Financial Guarantee Contracts:
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with original or modified terms of a debt instrument.
The Company measures any financial guarantee on initial recognition at their fair value.
Subsequently these contracts are measured at the higher of:
a. the amount of the loss allowance determined as per impairment requirements of Ind AS 109, and
b. the amount initially recognised, less where appropriate, cumulative amount of income reconised in accordance with the principles of Ind AS 18.
o) Fair Value Measurement:
The Company measures financial instruments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for such asset or liability, or in the absence of a principal market, in the most advantageous market which is accessible to the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
a. Level 1 - Quoted (unadjusted market prices) in active markets for identical assets or liabilities.
b. Level 2 -Valuation techniques for which the lowest level input that is significant to the fair value measurements is directly or indirectly observable.
c. Level 3-Valuation techniques for which the lowest level in put that is significant to the fair value measurement is unobservable.
p) Investment in subsidiaries
Investment in subsidiaries are measured at cost less impairment.
q) Property, plant and equipment
Property, plant and equipment are stated at cost net of input tax credits, less accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and all attributable cost, to bring the asset to its working condition for its intended use. Borrowing costs relating to acquisition of property, plant and equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to put to use.
The Company adopted cost model as its accounting policy, in recognition of the property, plant and equipment and recognises transaction value as the cost.
An item of Property, Plant and Equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in the Statement of Profit and Loss. Property, Plant and Equipment which are found to be not usable or retired from active use or when no further benefits are expected from their use are removed from property, plant and equipment and the carrying amount net of scrap value, if any is charged to Statement of Profit and Loss.
The improvements/modifications carried on the lease hold land/ property are recognised as lease hold improvements and are written off over the primary lease period or the life of such improvement whichever is lower.
The estimated useful lives are as mentioned below:
|
Type of asset |
Method |
Useful lives |
|
Computer equipment |
Straight line |
3 years |
|
Office equipments |
Straight line |
5 years |
|
Furniture and fixtures |
Straight line |
10 years |
|
Electrical installations |
Straight line |
10 years |
|
Vehicles |
Straight line |
8 years |
r) Intangible assets
Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any. Intangible assets consist of rights under licensing agreement and software licences which are amortised over license period which equates the useful life ranging between 5-6 years on a straight line basis.
s) Impairment of Non-financial assets
i)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 is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset''s net selling price and value in use. I n assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
ii.Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the asset are no longer existing or have decreased.
t) Employee benefits
i) Defined benefit plans
For defined benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each Balance sheet date. Actuarial gains and losses are recognised in full in the other comprehensive income for the period in which they occur. Past service cost both vested and unvested is recognised as an expense at the earlier of (a) when the plan amendment or curtailment occurs; and (b) when the entity recognises related restructuring costs or termination benefits. The retirement benefit obligations recognised in the Balance sheet represents the present value of the defined benefit obligations reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to the present value of available refunds and deductions in future contributions to the scheme.
ii) Defined contribution plans
Employer''s contribution to provident fund/employee state insurance which is in the nature of defined contribution scheme is expensed off when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the fund.
iii) Compensated absences
Compensated absences which are not expected to occur with in twelve months after the end of the period in which the employee renders the related services are recognised as an actuarially determined liability at the present value of the defined benefit obligation at the Balance sheet date.
u) Earnings per share
Basic earnings per share are computed by dividing profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the year. The Company did not have any potentially dilutive securities in any of the years presented.
v) Borrowing Costs:
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
w) Segment Reporting:
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief operating decision maker ("CODM").
The board of directors of the company has identified the Chairman and Hanging Director as the CODM.
x) Provisions:
Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable 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 recognised for future operating losses. Any reimbursement that the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.
y) Contingencies:
Where it is not probable that an inflow or an outflow of economic resources will be required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statement of balance sheet and is disclosed as a contingent asset or contingent liability. Possible outcomes on obligations/ rights, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent assets or contingent liabilities.
z) Prior period items:
In case prior period adjustments are material in nature the Company prepares the restated financial statement as required under Ind AS 8 - "Accounting Policies, Changes in Accounting Estimates and Errors". Immaterial items pertaining to prior periods are shown under respective items in the Statement of Profit and Loss.
Mar 31, 2016
Company Overview:
Lycos Internet Limited (Formerly known as Ybrant Digital limited), offers digital marketing solutions to businesses, agencies and online publishers worldwide. Lycos Internet Limited connects Advertisers with their Audience across any form of Digital Media, using its massive local presence to deliver appropriate messages to the right audience, through the most relevant Digital channels. Lycos Internet Limited has a global presence, with offices in over 24 countries.
Lycos Internet Limited is also a Global Information Technology Implementation and Outsourcing Services Provider with an exceptional track record of providing high quality, on-budget, and on-time solutions to demanding clients. Our business knowledge in key verticals helps us provide solutions that are customized to address the specific needs while focusing on maximizing value of Information Technology investments such that clients can achieve their business objectives. We believe in fostering long-term relationships, and partner with our clients in their success. Lycos Provides End-to-end Enterprise Solution Offerings and Specializing in ERP Solutions, Microsoft and Open Source Systems development.
Basis of Preparation:
The financial statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting standards specified under section 133 of the Companies Act,2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (âthe 2013 Actâ), as applicable. The financial statements have been prepared as a going concern on accrual basis under the historical cost convention. The Accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year except for change in the accounting policy for depreciation
Use of Estimates:
The preparation of financial statements is in conformity with generally accepted accounting principles require the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period.
Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates. Significant estimates used by the management in the preparation of these financial statements include estimates of the economic useful lives of fixed assets and provisions for bad and doubtful debts. Any revision to accounting estimates is recognized prospectively.
1. Revenue Recognition :
a) Digital Marketing Services:
i) The Contracts between the Company and its Customers are either time or material contracts or fixed price contracts.
ii) Revenue from fixed price contracts is recognized according to the milestones achieved as specified in the contracts on the proportionate-completion method based on the work completed. Any anticipated losses expected upon the contract completion are recognized immediately. Changes in job performance, conditions and estimated profitability may result in revisions and corresponding revenues and costs are recognized in the period in which such changes are identified. Deferred revenue represents amounts billed in excess of revenue earned for which related services are expected to be performed in the next operating cycle.
iii) In respect of time and material contract, revenue is recognized in the period in which the services are provided.
iv) Revenue from product sale and licensing arrangements are recognized on delivery and installation.
b) Software Development:
i) Income from software development is accounted for on the basis of Software developed and billed to clients on acceptance and/or on the basis of man days/man hours as per the terms of contract.
ii) Revenue from professional services consist primarily of revenue earned from services performed on a ''time and material'' basis. The related revenue is recognized as and when the services are performed.
iii) Revenue from software development services includes revenue from time and material and fixed price contracts are recognized as related services are performed.
iv) Revenue on fixed price contracts is recognized in accordance with percentage of completion and method of account.
v) Revenue is not recognized on the grounds of prudence, until realized in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.
2. Foreign Exchange Transaction :
Realized gains & loss in foreign exchange transactions are recognized in Profit & Loss Account. Transactions in foreign currency will be recorded at the rates of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currency will be translated at the rate of exchange as at Balance Sheet date and resultant gain or loss is recognized in the profit and loss account. Non-Monetary assets and liabilities are translated at the rate prevailing on the date of transaction and foreign exchange fluctuation gain or loss arised on account of translation of non-Monetary items like long term loans and advances are accumulated in a reserve account.
Revenue, expense and cash flow items denominated in foreign currency are translated into the relevant functional currencies using the exchange rate in effect on the date of transaction.
3. Investments :
Investments are either classified as current or long term, based on the managementâs intention at the time of purchase. Current investments are carried at the lower of cost and fair value. Cost for overseas investments comprises the Indian Rupee value of the consideration paid for the investment translated at the exchange rate prevalent at the date of investment. Long term investments are carried at cost and provisions recorded to recognize any decline, other than temporary, in the value of each investment.
4. Fixed Assets :
Tangible assets
Tangible assets are stated at actual cost less accumulated depreciation and accumulated impairment losses. The actual cost capitalized includes material cost, freight, installation cost, duties and taxes, finance charges and other incidental expenses incurred during the construction/installation stage.
Intangible assets
Intangible assets are recorded at consideration paid for acquisition and other direct costs that can be directly attributed, or allocated on a reasonable and consistent basis, to creating, producing and making the asset ready for its intended use.
5. Depreciation and Amortization :
Depreciation is provided on straight line method on pro-rata basis and at the rates and manner specified in the Schedule II of the Companies Act, 2013 and there is no change in the method of Depreciation during the year.
Preliminary Expenses are amortized over the period of 5 years.
6. Taxation :
The current charge for income tax is calculated in accordance with the relevant tax regulations applicable to the Company. Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between the profit offered for income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives rise to future economic benefits in the form of adjustments of future income tax liability, is considered as an asset if there is convincing evidence that the company will pay normal tax after the tax holiday period. Accordingly, it is recognized as an asset in the balance sheet when it is probable that the future economic benefit associated with it will flow to the company and asset can be measured reliably.
7. Earnings Per Share:
The earnings considered in ascertaining the companies earning per share comprise net profit after tax and includes the post-tax effect of any extra-ordinary/exceptional item is considered. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.
The no. of shares used in computing diluted earnings per share comprises the weighted average no. of shares considered for deriving basic earnings per share and also the weighted average no. of equity shares that could have been issued on the conversion of all dilutive potential equity shares.
8. Gratuity and Leave Encashment :
In accordance with the Payment of Gratuity Act, 1972, the company provides for gratuity, a defined benefit retirement plan covering eligible employees of the company. The Gratuity provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of the employment with the group. The company has a made a provision for gratuity to its employees on the basis of independent actuarial valuation, in accordance with AS-15. The actuarial liability is determined with reference to employees at the end of each financial year.
The provision for Leave Encashment is calculated as per accrual method.
9. Borrowing Cost :
Borrowing cost relating to acquisition/ construction of qualifying assets are capitalized until the time all substantial activities necessary to prepare the qualifying assets for their intended use are complete. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use/sale. Borrowing cost that is attributable to the projects is charged to the respective projects. All other borrowing costs, not eligible for inventorisation/capitalisation, are charged to revenue.
10. Cash Flow Statement :
The Company has prepared Cash Flow Statement as per the AS-3.
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, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the group are segregated.
11. Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if
a) The Company has a present obligation as a result of a past event;
b) A probable outflow of resources is expected to settle the obligation; and
c) The amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.
Contingent Liability is disclosed in the case of:
a) A present obligation arising from a past event, when it is not probable that an outflow of resources will be required to settle the obligation;
b) A possible obligation, unless the probability of outflow of resources is remote. Contingent Assets are neither recognized nor disclosed.
12. Impairment of Assets:
Management periodically assesses using external and internal sources whether there is an indication that an asset may be impaired. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. The impairment loss to be expensed is determined as the excess of the carrying amount over the higher of the assetâs net sale price or present value as determined above.
13. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as given in Para 23 and 26 as required by AS-18.
14. Lease Rentals Operating Lease:
Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. The company charges Lease rentals in respect of assets taken under operating leases to profit and loss account on a straight line basis over the lease term.
Finance Lease:
A Finance lease is a lease that transfers substantially all the risks and rewards incidental to the ownership of an asset.
15. Claims:
Claims made by the company are recognized to the extent the Company deems them recoverable. Claims against the Company, including liquidated damages, are recognized only on acceptance basis. Claims which are contingent in nature are not recognized in the books but are disclosed separately in the Notes to accounts. Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
Company Overview:
Lycos Internet Limited (Formerly known as Ybrant Digital limited),
offers digital marketing solutions to businesses, agencies and online
publishers worldwide. Lycos Internet Limited connects Advertisers with
their Audience across any form of Digital Media, using its massive
local presence to deliver appropriate messages to the right audience,
through the most relevant Digital channels. Lycos Internet Limited has
a global presence, with offices in over 24 countries.
Lycos Internet Limited is also a Global Information Technology
Implementation and Outsourcing Services Provider with an exceptional
track record of providing high quality, on-budget, and on-time
solutions to demanding clients. Our business knowledge in key verticals
helps us provide solutions that are customized to address the specific
needs while focusing on maximizing value of Information Technology
investments such that clients can achieve their business objectives. We
believe in fostering long-term relationships, and partner with our
clients in their success. Lycos Provides End-to-end Enterprise Solution
Offerings and Specializing in ERP Solutions, Microsoft and Open Source
Systems development.
Basis of Preparation:
The financial statements of the company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting standards specified under
section 133of the Companies Act,2013, read with Rule 7 of the Companies
(Accounts) Rules, 2014 and the relevant provisions of the Companies
Act, 2013 ("the 2013 Act"), as applicable. The financial statements
have been prepared as a going concern on accrual basis under the
historical cost convention. The Accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year except for change in the accounting
policy for depreciation
Use of Estimates:
The preparation of financial statements is in conformity with generally
accepted accounting principles require the management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the result of operations during the reporting
period.
Although these estimates are based upon management's best knowledge of
current events and actions, actual results could differ from these
estimates. Significant estimates used by the management in the
preparation of these financial statements include estimates of the
economic useful lives of fixed assets and provisions for bad and
doubtful debts. Any revision to accounting estimates is recognized
prospectively.
1. Revenue Recognition :
a) Digital Marketing Services:
I) The Contracts between the Company and its Customers are either time
or material contracts or fixed price contracts.
ii) Revenue from fixed price contracts is recognized according to the
milestones achieved as specified in the contracts on the
proportionate-completion method based on the work completed. Any
anticipated losses expected upon the contract completion are recognized
immediately. Changes in job performance, conditions and estimated
profitability may result in revisions and corresponding revenues and
costs are recognized in the period in which such changes are
identified. Deferred revenue represents amounts billed in excess of
revenue earned for which related services are expected to be performed
in the next operating cycle.
iii) In respect of time and material contract, revenue is recognized in
the period in which the services are provided.
iv) Revenue from product sale and licensing arrangements are recognized
on delivery and installation.
b) Software Development:
i) Income from software development is accounted for on the basis of
Software developed and billed to clients on acceptance and/or on the
basis of man days/man hours as per the terms of contract.
ii) Revenue from professional services consist primarily of revenue
earned from services performed on a 'time and material' basis. The
related revenue is recognized as and when the services are performed.
iii) Revenue from software development services includes revenue from
time and material and fixed price contracts are recognized as related
services are performed.
iv) Revenue on fixed price contracts is recognized in accordance with
percentage of completion and method of account.
v) Revenue is not recognized on the grounds of prudence, until realized
in respect of liquidated damages, delayed payments as recovery of the
amounts are not certain.
2. Foreign Exchange Transaction :
Realized gains & loss in foreign exchange transactions are recognized
in Profit & Loss Account.
Transactions in foreign currency will be recorded at the rates of
exchange prevailing on the date of the transaction. Monetary assets and
liabilities denominated in foreign currency will be translated at the
rate of exchange as at Balance Sheet date and resultant gain or loss is
recognized in the profit and loss account. Non- Monetaryassets and
liabilities are translated at the rate prevailing on the date of
transaction and foreign exchange fluctuation gain or loss arised on
account of translation of non-Monetaryitems like long term loans and
advances are accumulated in a reserve account.
Revenue, expense and cash flow items denominated in foreign currency
are translated into the relevant functional currencies using the
exchange rate in effect on the date of transaction.
3. Investments :
Investments are either classified as current or long term, based on the
management's intention at the time of purchase. Current investments are
carried at the lower of cost and fair value. Cost for overseas
investments comprises the Indian Rupee value of the consideration paid
for the investment translated at the exchange rate prevalent at the
date of investment. Long term investments are carried at cost and
provisions recorded to recognize any decline, other than temporary, in
the value of each investment.
4. Fixed Assets :
Tangible assets
Tangible assets are stated at actual cost less accumulated depreciation
and accumulated impairment losses. The actual cost capitalized includes
material cost, freight, installation cost, duties and taxes, finance
charges and other incidental expenses incurred during the
construction/installation stage.
Intangible assets
Intangible assets are recorded at consideration paid for acquisition
and other direct costs that can be directly attributed, or allocated on
a reasonable and consistent basis, to creating, producing and making
the asset ready for its intended use.
5. Depreciation and Amortization :
Depreciation is provided on straight line method on pro-rata basis and
at the rates and manner specified in the Schedule II of the Companies
Act, 2013 and there is no change in the method of Depreciation during
the year.
Preliminary Expenses are amortized over the period of 5 years.
6. Taxation :
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Deferred tax asset
and liability is recognized for future tax consequences attributable to
the timing differencesthat result between the profit offered for income
tax and the profit as per the financial statements. Deferred tax asset
& liability are measured as per the tax rates/laws that have been
enacted or substantively enacted by the Balance Sheet date.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustments of
future income tax liability, is considered as an asset if there is
convincing evidence that the company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
balance sheet when it is probable that the future economic benefit
associated with it will flow to the company and asset can be measured
reliably.
7. Earnings Per Share:
The earnings considered in ascertaining the companies earning per share
comprise netprofit after taxand includes the post tax effect of any
extra-ordinary/exceptional item is considered. The number of shares
used in computing basic earnings per share is the weighted average
number of shares outstanding during the year.
The no. of shares used in computing diluted earnings per share
comprises the weighted average no. of shares considered for deriving
basic earnings per share and also the weighted average no. of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
8. Gratuity and Leave Encashment :
In accordance with the Payment of Gratuity Act,1972, the company
provides for gratuity, a defined benefit retirement plan covering
eligible employees of the company. The Gratuity provides a lump-sum
payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee's salary and the tenure of the employment with the group. The
company has a made a provision for gratuity to its employees on the
basis of independent actuarial valuation, in accordance with AS-15. The
actuarial liability is determined with reference to employees at the
end of each financial year.
The provision for Leave Encashment is calculated as per accrual method.
9. Borrowing Cost :
Borrowing cost relating to acquisition/ construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use/sale. Borrowing cost
that is attributable to the projects is charged to the respective
projects. All other borrowing costs, not eligible for
inventorisation/capitalisation, are charged to revenue
10. Cash Flow Statement :
The Company has prepared Cash Flow Statement as per the AS-3. 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,
any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the group are segregated.
11. Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a) The Company has a present obligation as a result of a past event;
b) A probable outflow of resources is expected to settle the
obligation; and
c) The amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognized only when it is virtually certain that the
reimbursement will be received
Contingent Liability is disclosed in the case of:
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation;
b) A possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized nor
disclosed.
12. Impairment of Assets:
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
asset and its eventual disposal. The impairment loss to be expensed is
determined as the excess of the carrying amount over the higher of the
asset's net sale price or present value as determined above.
13. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as given
in Para 23 and 26 as required by AS-18
14. Lease Rentals
Operating Lease:
Leases where the lessor retains substantially all the risks and rewards
of ownership are classified as operating leases. The company charges
Lease rentals in respect of assets taken under operating leases to
profit and loss account on a straight line basis over the lease term.
Finance Lease:
A Finance lease is a lease that transfers substantially all the risks
and rewards incidental to the ownership of an asset.
15. Claims:
Claims made by the company are recognized to the extent the Company
deems them recoverable. Claims against the Company, including
liquidated damages, are recognized only on acceptance basis. Claims
which are contingent in nature are not recognized in the books but are
disclosed separately in the Notes to accounts. Contingent assets are
neither recognized nor disclosed in the financial statements.
Mar 31, 2014
Company Overview
Ybrant Digital Limited, offers digital marketing solutions to
businesses, agencies and online publishers worldwide. Ybrant Digital
connects Advertisers with their Audience across any form of Digital
Media, using its massive local presence to deliver appropriate messages
to the right audience, through the most relevant Digital channels.
Ybrant Digital has a global presence, with offices in over 20
countries.
Ybrant Digital Limited is also a Global Information Technology
Implementation and Outsourcing Services Provider with an exceptional
track record of providing high quality, on-budget, and on-time
solutions to demanding clients. Our business knowledge in key verticals
helps us provide solutions that are customized to address the specific
needs while focusing on maximizing value of Information Technology
investments such that clients can achieve their business objectives. We
believe in fostering long-term relationships, and partner with our
clients in their success. Ybrant Provides End-to-end Enterprise
Solution Offerings and Specialising in ERP Solutions, Microsoft and
Open Source Systems development.
Basis of Preparation:
The financial statements have been prepared to comply in all material
respects with the accounting standards notified by Companies Accounting
Standards Rules, 2006 and the relevant provisions of the Companies Act,
1956 (''the Act''). The financial statements have been prepared under
historical cost convention on an accrual basis in accordance with
accounting principles generally accepted in India. The accounting
policies have been consistently applied by the Company and are
consistent with those used in the previous year:
Use of Estimates:
The preparation of financial statements is in conformity with generally
accepted accounting principles require the management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the result of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Significant estimates used by the management in
the preparation of these financial statements include estimates of the
economic useful lives of fixed assets and provisions for bad and
doubtful debts. Any revision to accounting estimates is recognized
prospectively.
1. Revenue Recognition :
a) Software Development:
i) Income from software development is accounted for on the basis of
Software developed and billed to clients on acceptance and/or on the
basis of man days/man hours as per the terms of contract.
ii) Revenue from professional services consist primarily of revenue
earned from services performed on a ''time and material'' basis. The
related revenue is recognised as and when the services are performed.
iii) Revenue from software development services includes revenue from
time and material and fixed price contracts are recognised as related
services are performed.
iv) Revenue on fixed price contracts is recognised in accordance with
percentage of completion and method of account.
v) Revenue is not recognised on the grounds of prudence, until realised
in respect of liquidated damages, delayed payments as recovery of the
amounts are not certain.
b) Digital Marketing Services:
i) The Contracts between the Company and its Customers are either time
or material contracts or fixed price contracts.
ii) Revenue from fixed price contracts is recognized according to the
milestones achieved as specified in the contracts on the propor-
tionate-completion method based on the work completed. Any anticipated
losses expected upon the contract completion are recognized
immediately. Changes in job performance, conditions and estimated
profitability may result in revisions and correspond- ing revenues and
costs are recognized in the period in which such changes are
identified. Deferred revenue represents amounts billed in excess of
revenue earned for which related services are expected to be performed
in the next operating cycle.
iii) In respect of time and material contract, revenue is recognized in
the period in which the services are provided.
iv) Revenue from product sale and licensing arrangements are recognized
on delivery and installation.
2. Foreign Exchange Transaction :
Realised gains & loss in foreign exchange transactions are recognised
in Profit & Loss Account.
Transactions in foreign currency will be recorded at the rates of
exchange prevailing on the date of the transaction. Monitory assets and
liabilities denominated in foreign currency will be translated at the
rate of exchange as at Balance Sheet date and resultant gain or loss is
recognized in the profit and loss account. Non monitory assets and
liabilities are translated at the rate prevailing on the date of
transaction and foreign exchange fluctuation gain or loss arised on
account of translation of non monitory items like long term loans and
advances are accumulated in a reserve account (FCMITDA).
Revenue, expense and cash flow items denominated in foreign cur-
rencies are translated into the relevant functional currencies using
the exchange rate in effect on the date of transaction.
3. Investments :
Investments are either classified as current or long term, based on the
management''s intention at the time of purchase. Current investments are
carried at the lower of cost and fair value. Cost for overseas
investments comprises the Indian Rupee value of the consideration paid
for the investment translated at the exchange rate prevalent at the
date of investment. Long term investments are carried at cost and
provisions recorded to recognize any decline, other than temporary, in
the value of each investment.
4. Fixed Assets :
Tangible assets
Tangible assets are stated at actual cost less accumulated
depreciation. The actual cost capitalized includes material cost,
freight, installation cost, duties and taxes, finance charges and other
incidental expenses incurred during the construction/installation
stage.
Intangible assets
Intangible assets are recorded at consideration paid for acquisition
and other direct costs that can be directly attributed, or allocated on
a reasonable and consistent basis, to creating, producing and making
the asset ready for its intended use.
5. Depreciation and Amortization :
Depreciation is provided on straight line method on prorata basis and
at the rates and manner specified in the Schedule XIV of the Companies
Act, 1956 and there is no change in the method of Depreciation during
the year. Individual assets acquired for less than Rs. 5,000 are
entirely depreciated in the year of acquisition. Preliminary Expenses
are amortised over the period of 5 years.
6. Taxation :
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Deferred tax asset
and liability is recognised for future tax consequences attributable to
the timing differences that result between the profit offered for
income tax and the profit as per the financial statements. Deferred tax
asset & liability are measured as per the tax rates/laws that have been
enacted or substantively enacted by the Balance Sheet date.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustments of
future income tax liability, is considered as an asset if there is
convincing evidence that the company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
balance sheet when it is probable that the future economic benefit
associated with it will flow to the company and asset can be measured
reliably.
7. Earnings Per Share:
The earnings considered in ascertaining the companies earning per share
comprise net profit after tax and includes the post tax effect of any
extra-ordinary/exceptional item is considered. The number of shares
used in computing basic earnings per share is the weighted average
number of shares outstanding during the year.
The no. of shares used in computing diluted earnings per share
comprises the weighted average no. of shares considered for deriving
basic earnings per share and also the weighted average no. of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
8. Gratuity and Leave Encashment :
In accordance with the Payment of Gratuity Act, 1972, the company
provides for gratuity, a defined benefit retirement plan covering
eligible employees of the company. The Gratuity provides a lump-sum
payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of the employment with the group. The
company has a made a provision for gratuity to its employees on the
basis of independent actuarial valuation, in accordance with AS-15.
The actuarial liability is determined with reference to employees at
the end of each financial year.
The provision for Leave Encashment is calculated as per accrual method.
9. Borrowing Cost :
Borrowing cost relating to acquisition/ construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete. A qualifying asset is one that necessarily takes substantial
period of time to get ready for its intended use/sale. Borrowing cost
that is attributable to the projects is charged to the respective
projects. All other borrowing costs, not eligible for inventorisation/
capitalisation, are charged to revenue.
10. Cash Flow Statement :
The Company has prepared Cash Flow Statement as per the AS-3. 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,
any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the group are segregated.
11. Provisions, Contingent Liabilities and Contingent Assets :
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a) The Company has a present obligation as a result of a past event;
b) A probable outflow of resources is expected to settle the
obligation; and
c) The amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognized only when it is virtually certain that the
reimbursement will be received.
Contingent Liability is disclosed in the case of:
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation;
b) A possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized nor
disclosed.
12. Impairment of Assets:
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
asset and its eventual disposal. The impairment loss to be expensed is
determined as the excess of the carrying amount over the higher of the
asset''s net sale price or present value as determined above.
13. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as given
in Para 23 and 26 as required by AS-18.
14. Lease Rentals
Operating Lease :
Leases where the lessor retains substantially all the risks and rewards
of ownership are classified as operating leases. The company charges
Lease rentals in respect of assets taken under operating leases to
profit and loss account on a straight line basis over the lease term.
Finance Lease:
A Finance lease is a lease that transfers substantially all the risks
and rewards incidental to the ownership of an asset.
15. Claims:
Claims made by the company are recognized to the extent the Company
deems them recoverable. Claims against the Company, including
liquidated damages, are recognized only on acceptance basis. Claims
which are contingent in nature are not recognized in the books but are
disclosed separately in the Notes to accounts. Contingent assets are
neither recognized nor disclosed in the financial statements.
Mar 31, 2013
1. Revenue Recognition :
a) Software Development:
(i) Income from software development is accounted for on the basis of
Software developed and billed to clients on acceptance and/or on the
basis of man days/man hours as per the terms of contract.
(ii) Revenue from professional services consist primarily of revenue
earned from services performed on a ''time and material'' basis. The
related revenue is recognised as and when the sen-ices are performed.
(iii) Revenue from software development services includes revenue from
time and material and fixed price contracts are recognised as related
services are performed.
(iv) Revenue on fixed price contracts is recognised in accordance with
percentage of completion and method of account.
(v) Revenue is not recognised on the grounds of prudence, until
realised in respect of liquidated damages, delayed payments as
recover)- of the amounts are not certain.
b) Digital Marketing Services:
(i) The Contracts between the Company and its Customers are cither time
or material contracts or fixed price contracts.
(ii) Revenue from fixed price contracts is recognized according to the
milestones achieved as specified in the contracts on the
proportionate-completion method based on the work completed. Any
anticipated losses expected upon the contract completion are recognized
immediately. Changes in job performance, conditions and estimated
profitability mav result in revisions and corresponding revenues and
costs are recognized in the period in which such changes are
identified. Deferred revenue represents amounts billed in excess of
revenue earned for which related services are expected to be performed
in the next operating cycle.
(m) In respect of time and material contract, revenue is recognized in
the period in which the services are provided.
(iv)
Revenue from product sale and licensing arrangements arc recognized on
deliver)'' and installation.
2. Foreign Exchange Transaction :
Realised gains & loss in foreign exchange transactions are recognised
in Profit & Loss Account.
Transactions in foreign currency will be recorded at the rates of
exchange prevailing on the date of the transaction. Monitory assets and
liabilities denominated in foreign currency will be translated at the
rate of exchange as at Balance Sheet date and resultant gain or loss is
recognized in the profit and loss account. Non monitor)'' assets and
liabilities are translated at the rate prevailing on the date of
transaction and foreign exchange fluctuation gain or loss ariscd on
account of translation of non monitory items like long term loans and
advances arc accumulated in a reserve account (FCMITDA).
Revenue, expense and cash flow items denominated in foreign currencies
are translated into the relevant functional currencies using the
exchange rate in effect on the date of transaction.
3. Investments :
Investments arc cither classified as current or long term, based on the
management''s intention at the time of purchase. Current investments are
carried at the lower of cost and fair value. Cost for overseas
investments comprises the Indian Rupee value of the consideration paid
for the investment translated at the exchange rate prevalent at the
date of investment. Long term investments are carried at cost and
provisions recorded to recognize any decline, other than temporary, in
the value of each investment.
4. Fixed Assets :
Tangible assets
Tangible assets are stated at actual cost less accumulated
depreciation. The actual cost capitalized includes material cost,
freight, installation cost, duties and taxes, finance charges and other
incidental expenses incurred during the construction/installation
stage.
Intangible assets
Intangible assets arc recorded at consideration paid for acquisition
and other direct costs that can be directly attributed, or allocated on
a reasonable and consistent basis, to creating, producing and making
the asset ready for its intended use.
5. Depreciation and Amortization :
Depreciation is provided on straight line method on pro-rata basis and
at the rates and manner specified in the Schedule XIV of the Companies
Act, 1956 and there is no change in the method of Depreciation during
the year. Individual assets acquired for less than Rs. 5,000 are
entirely depreciated in the year of acquisition.
6. Taxation:
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company.
with the relevant tax regulations applicable to the Company. Deferred
tax asset and liability is recognised for future tax consequences
attributable to the timing differences that result between the profit
offered for income tax and the profit as per the financial statements.
Deferred tax asset & liability arc measured as per die tax rates/laws
that have been enacted or substantively enacted by the Balance Sheet
date.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefits in the form of adjustments of
future income tax liability, is considered as an asset if there is
convincing evidence that the company will pay normal tax after the tax
holiday period. Accordingly, it is recognized as an asset in the
balance sheet when it is probable that the future economic benefit
associated with it will flow to the company and asset can be measured
reliably.
7.
Earnings Per Share:
The earnings considered in ascertaining the companies earning per share
comprise net profit after tax and includes the post tax effect of any
extra-ordinary/exceptional item is considered. The number of shares
used in computing basic earnings per share is the weighted average
number of shares outstanding during rhc year.
The no. of shares used in computing diluted earnings per share
comprises the weighted average no. of shares considered for deriving
basic earnings per share and also the weighted average no. of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
8.
Gratuity and Leave Encashment:
In accordance with the Payment of Gratuity Act, 1972, the company
provides for gratuity, a defined benefit retirement plan covering
eligible employees of the company. The Gratuity provides a lump-sum
payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of the employment with the group. The
company has a made a provision for gratuity to its employees on the
basis of independent actuarial valuation, in accordance with AS-15. The
actuarial liability is determined with reference to employees at the
end of each financial year.
The provision for Leave Encashment is calculated as per accrual method.
9.
Borrowing Cost:
Borrowing cost relating to acquisition/ construction of qualifying
assets are capitalized until the time all substantial activities
necessary to prepare the qualifying assets for their intended use are
complete.. A qualifying asset is one diat necessarily takes substantial
period of time to get ready for its intended use/sale. Borrowing cost
that is attributable to the projects is charged to the respective
projects. All other borrowing costs,
10. Cash Flow Statement:
The Company has prepared Cash Flow Statement as per the AS-3. 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,
any deferrals or accruals of past or future operating cash receipts or
payments and item of income or expenses associated with investing or
financing cash flows. The cash flows from operating, investing and
financing activities of the group are segregated.
11. Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a) The Company has a present obligation as a result of a past event;
b) A probable outflow of resources is expected to settle the
obligation; and
c) The amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognized only when it is virtually certain that the
reimbursement will be received.
Contingent Liability is disclosed in the case of:
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation;
b) A possible obligation, unless the probability of outflow of
resources is remote. Contingent Assets are neither recognized nor
disclosed.
12. Impairment of Assets:
Management periodically assesses using external and internal sources
whether there is an indication that an asset may be impaired.
Impairment occurs where the earning value exceeds the present value of
future cash flows expected to arise from the continuing use of the
asset and its eventual disposal. The impairment loss to be expensed is
determined as the excess of the carrying amount over the higher of the
asset''s net sale price or present value as determined above.
13. Related Party Disclosures :
The Company furnishes the details of Related Party Disclosures as given
in Para 23 and 26 as required by AS-18.
14. Lease Rentals Operating Lease :
Leases where the lessor retains substantially all the risks and rewards
of ownership arc classified as operating leases. The company charges
Ixase rentals in respect of assets taken under operating leases to
profit and loss account on a straight line basis over the lease term.
15. Finance Lease:
A Finance lease is a lease that transfers substantially all the risks
and rewards incidental to the ownership of an asset.
16. Claims:
Claims made by the company are recognized to the extent the Company
deems them recoverable. Claims against the Company, including
liquidated damages, are recognized only on acceptance basis. Claims
which arc contingent in nature arc not recognized in the books but are
disclosed separately in the Notes to accounts. Contingent assets are
neither recognized nor disclosed in the financial statements.
Operating Lease:
The company has taken its office premises on lease under operating
lease agreement that is renewable on a periodic basis at the option of
the both the lessor and the lessee. Rental expenses under those leases
were Rs.5,88,21,733/- and for the previous year Rs. 1,89,53,128/-.
Mar 31, 2010
General :
(i) These accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
(ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
Revenue Recognition :
(i) Income from software development is accounted for on the basis of
Software developed and billed to clients on acceptance and/or on the
basis of man days/man hours as per the terms of contract.
(ii) Revenue from professional services consist primarily of revenue
earned from services performed on a time and material basis. The
related revenue is recognised as and when the services are performed.
(iii) Revenue from software development services includes revenue from
time and material and fixed price contracts are recognised as related
services are performed.
(iv) Revenue on fixed price contracts is recognised in accordance with
percentage of completion and method of account.
(v) Revenue is not recognised on the grounds of prudence, until
realised in respect of liquidated damages, delayed payments as recovery
of the amounts are not certain.
Foreign Exchange Transaction :
(i) Realised gains & loss in foreign exchange transactions are
recognised in Profit & Loss Account.
(ii) Transactions in foreign currency will be recorded at the rates of
exchange prevailing on the date of the transaction. Current assets and
liabilities denominated in foreign currency will be translated at the
rate of exchange as at Balance Sheet date.
Investments :
Investments are stated at cost i.e. cost of acquisition, inclusive of
expenses incidental to acquisition wherever applicable.
Fixed Assets :
(i) Fixed assets are stated at cost less accumulated depreciation. Cost
of acquisition of fixed assets is inclusive of freight, duties, taxes
and incidental expenses thereto.
Depreciation and Amortisation :
(i) Depreciation is provided on straight line method on pro-rata basis
and at the rates and manner specified in the Schedule XIV of the
Companies Act, 1956.
(ii) Preliminary Expenses are amortised over the period of 5 years.
Taxation :
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company. Deferred tax asset
and liability is recognised for future tax consequences attributable to
the timing differences that result between the profit offered for
income tax and the profit as per the financial statements. Deferred tax
asset & liability are measured as per the tax rates/laws that have been
enacted or substantively enacted by the Balance Sheet date.
Earning Per Share:
The earning considered in ascertaining the companies earning per share
comprise net profit after tax. The number of shares used in computing
basic earning per share is the weighted average number of shares
outstanding during the year.
Gratuity and Leave Encashment :
The provision for Gratuity and leave Encashment is calculated as per
accrual method and included in current liability & provision.
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