Mar 31, 2015
A) System of Accounting:
The Financial Statements have been prepared under the historical cost
convention, except where impairment is made and on accrual basis in
accordance with accounting principles generally accepted in India,
including the Accounting Standards specified under Section 133 of the
Companies Act, 2013, read with Rule 7 of the Companies (Accounts)
Rules, 2014. Accounting policies have been consistently applied by the
Company and are consistent with those used in the Previous Year.
b) Use of estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expenses. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revision to accounting estimate is recognized in
the period in which the estimates are revised and in any future period
affected.
c) Fixed Assets and Intangible Assets :
Fixed Assets are valued at cost, except for certain Fixed Assets which
have been stated at revalued amounts as determined by approved
independent value, after reducing accumulated depreciation until the
date of the balance sheet. Direct Costs are capitalized until the
assets are ready to use and include financing costs relating to any
specific borrowing attributable to the acquisition of fixed assets.
Intangible assets are recognized, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortization and accumulated impairment losses, if any.
d) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognize a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Overseas Investments are carried at their original rupee cost.
e) Depreciation and Amortization:
With effect from 1st April 2014, depreciation in respect of assets is
provided on the basis of useful lives of assets as prescribed in Part
'C' of Schedule II to the Companies Act, 2013.
Prior to 1st April 2014, Depreciation in respect of assets has been
provided for on Straight Line Method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. Depreciation on revalued fxed
assets has been provided on Straight Line Method over the residual life
of the asset and charged to the Profit and Loss account. Individual
assets cost of which doesn't exceed Rs. 5,000/- each are depreciated in
full in the year of purchase.
Leasehold land is written off over the lease period.
Intangible Assets Computer Software are amortized over a period of
five years based on the technical evaluation of their useful economic
life.
f) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost (arrived on FIFO
basis) or net realizable value, whichever is lower.
g) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are affected. Exchange
differences arising on settlement of all transactions are recognized in
the Profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognized in the Profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS) 11 (Revised) on 'The
Effect of Changes in Foreign Exchange Rates', considering its foreign
branches as non-integral foreign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in 'foreign
currency translation reserve' until the disposal of the net investment
in the said non-integral foreign operations.
h) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue.
i) Employee benefits :
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Company's contribution for the year paid/payable to Defined
contribution retirement benefit schemes are charged to Profit and Loss
Account.
ii) Defined Benefit and Other Long Term Benefit Schemes
Company's liabilities towards Defined benefit schemes and other long
term benefits viz. gratuity and compensated absences expected to occur
after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognized in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognized immediately
to the extent benefits are vested, otherwise it is amortized on
straight-line basis over the remaining average period until the
benefits become vested.
The retirement benefit obligation recognized in the balance sheet
represents the present value of the Defined benefit obligation as
adjusted for unrecognized past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognized undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia/ compensated absences.
j) Revenue recognition:
Revenues from software consultancy services are recognized on specified
terms of contract in case of contract on time basis and in case of
fixed price contract, revenue is recognized using percentage of
completion method of accounting. Revenues from software products
trading are recognized upon acceptance of delivery of such software
products. Unbilled services included in other current assets represents
amount recognized based on services performed in advance of billing in
accordance with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognized only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognized in the statement of Profit and Loss, when
right to receive payment is established.
Interest income is recognized on time proportion basis.
Lease rentals are recognized on straight line basis over the lease
term.
k) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Minimum alternate tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefit in the form of adjustment 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.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets arising
on account of unabsorbed depreciation or carry forward losses are
recognized only to the extent that there is virtual certainty supported
by convincing evidence that sufficient future taxable income will be
available against which such deferred tax assets can be realized. At
each balance sheet date the Company reassesses unrecognized deferred
tax assets, to the extent they become reasonably certain or virtually
certain of realization, as the case may be.
l) Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
m) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the less or are classified as operating
lease. Lease payments under operating leases are recognized as expenses
on accrual basis in accordance with the respective lease agreements.
n) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount.
o) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognized nor
disclosed in the financial statements.
p) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby net Profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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 fows. The cash fows from operating,
investing and financing activities of the Company are segregated.
q) Earnings per share:
In determining earnings per share, the company considers the net Profit
after tax after reducing the preference dividend and tax thereon and
includes the post-tax effect of any extra-ordinary items. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises the
weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
r) Cash and cash equivalents:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprises of cash at banks, cash in hand (including cherubs in hand)
and bank deposits with maturity of less than three months.
Terms /Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Mar 31, 2014
A) System of Accounting:
The Financial Statements have been prepared under the historical cost
convention, except where impairment is made and on accrual basis in
accordance with accounting principles generally accepted in India and
the provisions of the Companies Act, 1956 read with General Circular
15/2013 dated 13th September 2013, issued by the Ministry of Corporate
Affairs, in respect of section 133 of the Companies Act, 2013.
Accounting policies have been consistently applied by the Company and
are consistent with those used in the Previous Year.
b) Use of estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expenses. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revision to accounting estimate is recognized in
the period in which the estimates are revised and in any future period
affected.
c) Fixed Assets and Intangible Assets :
Fixed Assets are valued at cost, except for certain Fixed Assets which
have been stated at revalued amounts as determined by approved
independent valuer, after reducing accumulated depreciation until the
date of the balance sheet. Direct Costs are capitalised until the
assets are ready to use and include financing costs relating to any
specific borrowing attributable to the acquisition of fixed assets.
Intangible assets are recognised, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortisation and accumulated impairment losses, if any.
d) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognise a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Overseas Investments are carried at their original rupee cost.
e) Depreciation and Amortisation:
Depreciation in respect of assets is provided for on Straight Line
Method at the rates prescribed in Schedule XIV to the Companies Act,
1956. Depreciation on revalued fixed assets is provided on Straight
Line Method over the residual life of the asset and charged to the
Profit and Loss account. Individual assets cost of which doesn''t exceed
Rs. 5,000/- each are depreciated in full in the year of purchase.
Leasehold land is written off over the lease period.
Intangible Assets- Computer Software are amortised over a period of
five years based on the technical evaluation of their useful economic
life.
f) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost (arrived on FIFO
basis) or net realisable value, whichever is lower.
g) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are effected. Exchange
differences arising on settlement of all transactions are recognised in
the profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognised in the profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS) 11 (Revised) on ''The
Effect of Changes in Foreign Exchange Rates'', considering its foreign
branches as non-integral foreign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in ''foreign
currency translation reserve'' until the disposal of the net investment
in the said non-integral foreign operations.
h) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue.
i) Employee benefits :
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Company''s contribution for the year paid/payable to defined
contribution retirement benefit schemes are charged to Profit and Loss
Account.
ii) Defined Benefit and Other Long Term Benefit Schemes
Company''s liabilities towards defined benefit schemes and other long
term benefits viz. gratuity and compensated absences expected to occur
after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognised in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognised immediately
to the extent benefits are vested, otherwise it is amortised on
straight-line basis over the remaining average period until the
benefits become vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia/ compensated absences.
j) Revenue recognition:
Revenues from software consultancy services are recognised on specified
terms of contract in case of contract on time basis and in case of
fixed price contract, revenue is recognized using percentage of
completion method of accounting. Revenues from software products
trading are recognized upon acceptance of delivery of such software
products. Unbilled services included in other current assets represents
amount recognized based on services performed in advance of billing in
accordance with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognised only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognised in the statement of Profit and Loss, when
right to receive payment is established.
Interest income is recognised on time proportion basis.
Lease rentals are recognised on straight line basis over the lease
term.
k) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Minimum alternate tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefit in the form of adjustment 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.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets arising
on account of unabsorbed depreciation or carry forward losses are
recognized only to the extent that there is virtual certainty supported
by convincing evidence that sufficient future taxable income will be
available against which such deferred tax assets can be realized. At
each balance sheet date the Company reassesses unrecognised deferred
tax assets, to the extent they become reasonably certain or virtually
certain of realisation, as the case may be.
l) Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
m) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the lessor are classified as operating
lease. Lease payments under operating leases are recognised as
expenses on accrual basis in accordance with the respective lease
agreements.
n) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount.
o) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognised nor
disclosed in the financial statements.
p) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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 Company are segregated.
q) Earnings per share:
In determining earnings per share, the company considers the net profit
after tax after reducing the preference dividend and tax thereon and
includes the post-tax effect of any extra-ordinary items. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises
the weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
r) Cash and cash equivalents:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprises of cash at banks, cash in hand (including cheques in hand)
and bank deposits with maturity of less than three months.
Terms /Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity shares is entitled to one vote
per share.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Note :
a) Clean Overdraft Facility and Cash Credit Facility is secured by
equitable mortgage by deposit of title deeds of office premises of the
Company situated at Andheri (Mumbai) and further secured by
hypothecation of receivables and other current assets of the Company.
b) Clean Overdraft Facility and Cash Credit Facility is repayable on
demand subject to annual review. The rate of interest for Clean
Overdraft Facility is Base Rate 3.75% and Base Rate 2.75% on Cash
Credit Facility.
* Leasehold land is amortised over a period of lease.
** Building was revalued on 1st April, 2005 with reference to the fair
market value; amount added on revaluation was Rs. 76,558,113; the
revalued amount substituted for historical cost on 1st April 2005 was
Rs. 126,130,511, based on report issued by approved independent valuer.
Note :
1 Adjustments/ deductions include obsolete fixed assets discarded
during the year. (Cost Rs. 403,523/- accumulated depreciation and
amortisation Rs. 302,100/-) (Previous year Cost Rs. 733,825/- and
depreciation and amortisation Rs 489,291/-)
2 Figures shown in brackets are in respect of Previous Period.
Mar 31, 2013
A) System of Accounting:
The accounts have been prepared on the basis of Going Concern concept
and under the historical cost convention except for certain Fixed
Assets which are revalued. The Company adopts accrual basis in
preparation of its accounts to comply in all material aspects with
applicable accounting principles generally accepted in India, the
Accounting Standards as specified in the Companies (Accounting
Standards) Rules 2006 issued by the Central Government, in consultation
with National Advisory Committee on Accounting Standards (''NACAS'') and
the relevant provisions of the Companies Act, 1956, to the extent
applicable.
b) Use of estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expenses. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revision to accounting estimate is recognized in
the period in which the estimates are revised and in any future period
affected.
c) Fixed Assets and Intangible Assets :
Fixed Assets are valued at cost, except for certain Fixed Assets which
have been stated at revalued amounts as determined by approved
independent value, after reducing accumulated depreciation until the
date of the balance sheet. Direct Costs are capitalized until the
assets are ready to use and include financing costs relating to any
specific borrowing attributable to the acquisition of fixed assets.
Intangible assets are recognized, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortization and accumulated impairment losses, if any.
d) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognize a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Overseas Investments are carried at their original rupee cost.
e) Depreciation and Amortization:
Depreciation in respect of assets is provided for on Straight Line
Method at the rates prescribed in Schedule XIV to the Companies Act,
1956. Depreciation on revalued fixed assets is provided on Straight
Line Method over the residual life of the asset and charged to the
Profit and Loss account. Individual assets cost of which doesn''t
exceed Rs. 5,000/- each are depreciated in full in the year of
purchase.
Leasehold land is written off over the lease period.
Intangible Assets- Computer Software are amortized over a period of
five years based on the technical evaluation of their useful economic
life.
f) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost (arrived on FIFO
basis) or net realizable value, whichever is lower.
g) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are affected. Exchange
differences arising on settlement of all transactions are recognized in
the profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognized in the profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS)
11 (Revised) on ''The Effect of Changes in Foreign Exchange Rates'',
considering its foreign branches as non-integral foreign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in ''foreign
currency translation reserve'' until the disposal of the net
investment in the said non-integral foreign operations.
h) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue.
i) Employee benefits :
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Company''s contribution for the year paid/payable to defined
contribution retirement benefit schemes are charged to Profit and Loss
Account.
ii) Defined Benefit and Other Long Term Benefit Schemes Company''s
liabilities towards defined benefit schemes and other long term
benefits viz. gratuity and compensated absences expected to occur after
twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognized in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognized immediately to
the extent benefits are vested, otherwise it is amortized on
straight-line basis over the remaining average period until the
benefits become vested.
The retirement benefit obligation recognized in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognized past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognized undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia/ compensated absences.
j) Revenue recognition:
Revenues from software consultancy services are recognized on specified
terms of contract in case of contract on time basis and in case of
fixed price contract, revenue is recognized using percentage of
completion method of accounting. Revenues from software products
trading are recognized upon acceptance of delivery of such software
products. Unbilled services included in other current assets represents
amount recognized based on services performed in advance of billing in
accordance with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognized only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognized in the statement of Profit and Loss, when
right to receive payment is established.
Interest income is recognized on time proportion basis.
Lease rentals are recognized on straight line basis over the lease
term. k) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Minimum alternate tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefit in the form of adjustment 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.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets
arising on account of unabsorbed depreciation or carry forward losses
are recognized only to the extent that there is virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. At each balance sheet date the Company reassesses
unrecognized deferred tax assets, to the extent they become reasonably
certain or virtually certain of realization, as the case may be.
l) Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
m) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the less or are classified as operating
lease. Lease payments under operating leases are recognized as expenses
on accrual basis in accordance with the respective lease agreements.
n) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount.
o) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognized nor
disclosed in the financial statements.
p) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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 Company are segregated.
q) Earnings per share:
In determining earnings per share, the company considers the net profit
after tax after reducing the preference dividend and tax thereon and
includes the post-tax effect of any extra-ordinary items. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises the
weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
r) Cash and cash equivalents:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprises of cash at banks, cash in hand (including cheques in hand)
and bank deposits with maturity of less than three months.
Mar 31, 2012
A) System of Accounting:
The accounts have been prepared on the basis of Going Concern concept
and under the historical cost convention except for certain Fixed
Assets which are revalued. The Company adopts accrual basis in
preparation of its accounts to comply in all material aspects with
applicable accounting principles generally accepted in India, the
Accounting Standards as specified in the Companies (Accounting
Standards) Rules 2006 issued by the Central Government, in consultation
with National Advisory Committee on Accounting Standards ('NACAS') and
the relevant provisions of the Companies Act, 1956, to the extent
applicable.
b) Use of estimates:
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgments, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expenses. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revision to accounting estimate is recognized in
the period in which the estimates are revised and in any future period
affected.
c) Presentation and disclosure of financial statement:
During the year ended March 31, 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year.
d) Fixed Assets and Intangible Assets :
Fixed Assets are valued at cost, except for certain Fixed Assets which
have been stated at revalued amounts as determined by approved
independent valuer, after reducing accumulated depreciation until the
date of the balance sheet. Direct Costs are capitalized until the
assets are ready to use and include financing costs relating to any
specific borrowing attributable to the acquisition of fixed assets.
Intangible assets are recognized, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortization and accumulated impairment losses, if any.
e) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognize a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Overseas Investments are carried at their original rupee cost.
f) Depreciation and Amortization:
Depreciation in respect of assets is provided for on Straight Line
Method at the rates prescribed in Schedule XIV to the Companies Act,
1956. Depreciation on revalued fixed assets is provided on Straight
Line Method over the residual life of the asset and charged to the
Profit and Loss account. Individual assets cost of which doesn't
exceed Rs. 5,000/- each are depreciated in full in the year of
purchase.
Leasehold land is written off over the lease period.
Intangible Assets- Computer Software are amortised over a period of
five years based on the technical evaluation of their useful economic
life.
g) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost (arrived on FIFO
basis) or net realizable value, whichever is lower.
h) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are affected. Exchange
differences arising on settlement of all transactions are recognized in
the profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognized in the profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS) 11 (Revised) on
'The Effect of Changes in Foreign Exchange Rates, considering its
foreign branches as non-integral foreign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in 'foreign
currency translation reserve' until the disposal of the net
investment in the said non-integral foreign operations.
i) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue. j) Employee benefits
:
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Company's contribution for the year paid/payable to defined
contribution retirement benefit schemes are charged to Profit and Loss
Account.
ii) Defined Benefit and Other Long Term Benefit Schemes
Company's liabilities towards defined benefit schemes and other long
term benefits viz. gratuity and compensated absences expected to occur
after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognized in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognized immediately to
the extent benefits are vested, otherwise it is amortized on
straight-line basis over the remaining average period until the
benefits become vested.
The retirement benefit obligation recognized in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognized past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognized undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia/ compensated absences.
k) Revenue recognition:
Revenues from software consultancy services are recognized on specified
terms of contract in case of contract on time basis and in case of
fixed price contract, revenue is recognized using percentage of
completion method of accounting. Revenues from software products
trading are recognized upon acceptance of delivery of such software
products. Unbilled services included in other current assets represents
amount recognized based on services performed in advance of billing in
accordance with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognized only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognized in the statement of Profit and Loss, when
right to receive payment is established.
Interest income is recognized on time proportion basis.
Lease rentals are recognized on straight line basis over the lease
term. l) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Minimum alternate tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefit in the form of adjustment 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.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets
arising on account of unabsorbed depreciation or carry forward losses
are recognized only to the extent that there is virtual certainty
supported by convincing evidence that sufficient future taxable income
will be available against which such deferred tax assets can be
realized. At each balance sheet date the Company reassesses
unrecognized deferred tax assets, to the extent they become reasonably
certain or virtually certain of realization, as the case may be. m)
Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
n) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the less or are classified as operating
lease. Lease payments under operating leases are recognized as expenses
on accrual basis in accordance with the respective lease agreements.
o) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognized in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount. p) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognized nor
disclosed in the financial statements. q) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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 Company are segregated. r)
Earnings per share:
In determining earnings per share, the company considers the net profit
after tax after reducing the preference dividend and tax thereon and
includes the post-tax effect of any extra-ordinary items. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises the
weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
s) Cash and cash equivalents:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprises of cash at banks, cash in hand (including cheques in hand)
and bank deposits with maturity of less than three months.
Mar 31, 2011
A) System of Accounting:
The accounts have been prepared on the basis of Going Concern concept
and under the historical cost convention except for certain Fixed
Assets which are revalued. The Company adopts accrual basis in
preparation of its accounts to comply in all material aspects with
applicable accounting principles generally accepted in India, the
Accounting Standards as specifi ed in the Companies (Accounting
Standards) Rules 2006 issued by the Central Government, in consultation
with National Advisory Committee on Accounting Standards (ÃNACAS') and
the relevant provisions of the Companies Act, 1956, to the extent
applicable.
b) Use of estimates :
The preparation of financial statements in accordance with the
generally accepted accounting principles requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities,
income and expenses. Estimates and underlying assumptions are reviewed
on an ongoing basis. Revision to accounting estimate is recognized in
the period in which the estimates are revised and in any future period
affected.
c) Fixed Assets and Intangible Assets :
Fixed Assets are valued at cost, except for certain Fixed Assets which
have been stated at revalued amounts as determined by approved
independent valuer, after reducing accumulated depreciation until the
date of the balance sheet. Direct Costs are capitalised until the
assets are ready to use and include financing costs relating to any
specific borrowing attributable to the acquisition of fixed assets.
The advances given for acquiring fixed assets are shown under Capital
Work in Progress.
Intangible assets are recognised, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortisation and accumulated impairment losses, if any.
d) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognise a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
Overseas Investments are carried at their original rupee cost.
e) Depreciation and Amortisation:
Depreciation in respect of assets is provided for on Straight Line
Method at the rates prescribed in Schedule XIV to the Companies Act,
1956. Depreciation on revalued fixed assets is provided on Straight
Line Method over the residual life of the asset and charged to the
Profit and Loss account.
Individual assets cost of which doesn't exceed Rs. 5,000/- each are
depreciated in full in the year of purchase.
Leasehold land is written off over the lease period.
Intangible Assets - Computer Software are amortised over a period of
five years based on the technical evaluation of their useful economic
life.
f) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost (arrived on FIFO
basis) or net realisable value, whichever is lower.
g) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are effected. Exchange
differences arising on settlement of all transactions are recognised in
the profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognised in the profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS) 11 (Revised) on ÃThe
Effect of Changes in Foreign Exchange Rates', considering its foreign
branches as non-integral foreign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in Ãforeign
currency translation reserve' until the disposal of the net investment
in the said non-integral foreign operations.
h) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue.
i) Employee benefits :
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Company's contribution for the year paid/payable to Defined
contribution retirement Benefit schemes are charged to Profit and
Loss Account.
ii) Defined Benefit and Other Long Term Benefit Schemes
Company's liabilities towards Defined Benefit schemes and other long
term Benefits viz. gratuity and compensated absences expected to occur
after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognised in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognised immediately
to the extent Benefits are vested, otherwise it is amortised on
straight-line basis over the remaining average period until the benefi
ts become vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia/ compensated absences.
j) Revenue recognition:
Revenues from software consultancy services are recognised on specifi
ed terms of contract in case of contract on time basis and in case
of fixed price contract, revenue is recognized using percentage of
completion method of accounting.
Unbilled services included in loans and advances represents amount
recognized based on services performed in advance
of billing in accordance with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognised only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognised in the statement of Profit and Loss,
when right to receive payment is established.
Interest income is recognised on time proportion basis.
Lease rentals are recognised on straight line basis over the lease
term.
k) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year.
Minimum alternate tax (MAT) paid in accordance with the tax laws, which
gives rise to future economic benefit in the form of adjustment 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.
Deferred tax is recognized, subject to consideration of prudence, on
timing differences, being the difference between taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets
arising on account of unabsorbed depreciation or carry forward losses
are recognized only to the extent that there is virtual certainty
supported by convincing evidence that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. At each balance sheet date the Company reassesses
unrecognised deferred tax assets, to the extent they become
reasonably certain or virtually certain of realisation, as
the case may be.
l) Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
m) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the lessor are classified as operating
lease. Lease payments under operating leases are recognised as expenses
on accrual basis in accordance with the respective lease agreements.
n) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount.
o) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognised nor
disclosed in the financial statements.
p) Cash Flow Statement:
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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 Company are segregated.
q) Earnings per share:
In determining earnings per share, the company considers the net profit
after tax after reducing the preference dividend and tax thereon and
includes the post-tax effect of any extra-ordinary items. The number of
shares used in computing basic earnings per share is the weighted
average number of shares outstanding during the period. The number of
shares used in computing diluted earnings per share comprises the
weighted average number of shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares.
r) Cash and cash equivalents:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprises of cash at banks, cash in hand (including cheques in hand)
and bank deposits.
Mar 31, 2010
A) Basis of preparation of financial statements :
The accompanying financial statements have been prepared under the
historical cost convention (except for certain fixed assets which have
been revalued), in accordance with generally accepted accounting
principles and the provisions of the Companies Act, 1956 and the
applicable accounting standards.
b) Use of estimates :
The preparation of financial statements in conformity with the
generally accepted accounting principles requires, estimates and
assumptions to be made that affect the reported amounts of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Differences between the actual results and estimates are recognised in
the period in which the results are known/ materi- alised.
c) Fixed Assets :
Fixed assets are stated at cost of acquisition or construction or at
revalued amounts less accumulated depreciation, amor- tization and
impairment losses, if any.
d) Intangible Assets:
Intangible assets are recognised, only if it is probable that the
future economic benefits that are attributable to the assets will flow
to the enterprise and the cost of the assets can be measured reliably.
The intangible assets are recorded at cost and are carried at cost less
accumulated amortisation and accumulated impairment losses, if any.
e) Investments:
Long Term Investments are stated at cost, which include cost of
acquisition and related expenses. Provision is made to recognise a
decline, other than temporary, in the value of investments. Current
investments are stated at cost or fair value whichever is lower.
f) Depreciation and Amortisation:
Depreciation in respect of assets acquired upto March 31, 1995 is
provided for on written down value method at the rates prescribed in
Schedule XIV to the Companies Act, 1956. In respect of assets acquired
after 31st March, 1995 depreciation is provided for on Straight Line
Method at the rates prescribed in Schedule XIV to the Companies Act,
1956. Depreciation on revalued fixed assets is provided on Straight
Line Method over the residual life of the asset and charged to the
Profit and Loss account.
Leasehold land is written off over the lease period.
Intangible Assetsà Computer Software are amortised over a period of
five years based on the technical evaluation of their useful economic
life.
g) Inventories:
Software Finished Goods (Traded) :
Software Finished Goods (Traded) are valued at cost or net realisable
value, whichever is lower.
h) Foreign Currency Transactions/Translation:
Transactions in foreign currency are recorded at the original rates of
exchange in force at the time transactions are effected. Exchange
differences arising on settlement of all transactions are recognised in
the profit and loss account.
Monetary items denominated in foreign currency are reported using the
exchange rates prevailing at the date of balance sheet and the
resulting net exchange difference is recognised in the profit and loss
account.
Foreign Branches:
The translation of financial statements of Foreign Branches is done as
under in accordance with Accounting Standard (AS) 11 (Revised) on ÃThe
Effect of Changes in Foreign Exchange Rates, considering its foreign
branches as non-integral for- eign operations:
i. All the items of income and expenses during the year are translated
at an average rate.
ii. All the monetary and non-monetary assets and liabilities are
translated at closing rate.
iii. The resulting exchange difference is accumulated in Ãforeign
currency translation reserve until the disposal of the net investment
in the said non-integral foreign operations.
i) Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalised as part of the cost
of such assets. A qualifying asset is one that necessarily takes a
substantial period of time to get ready for its intended use or sale.
All other borrowing costs are charged to revenue.
j) Employee benefits :
a) Post Employment Benefits and Other Long Term Benefits.
i) Defined Contribution Scheme
Companys contribution for the year paid/payable to defined
contribution retirement benefit schemes are charged to Profit and Loss
Account.
ii) Defined Benefit and Other Long Term Benefit Schemes
Companys liabilities towards defined benefit schemes and other long
term benefits viz. gratuity and compensated absences expected to occur
after twelve months, are determined using the Projected Unit Credit
Method. Actuarial valuations under the Projected Unit Credit Method are
carried out at the balance sheet date. Actuarial gains and losses are
recognised in the Profit and Loss account in the period of occurrence
of such gains and losses. Past service cost is recognised immediately
to the extent benefits are vested, otherwise it is amortised on
straight-line basis over the remaining average period until the
benefits become vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service cost.
b) Short-term employee benefits
Short-term employee benefits expected to be paid in exchange for the
services rendered by employees are recognised undiscounted during the
period employee renders services. Such benefits include bonus/
ex-gratia.
k) Revenue recognition:
Revenues from software consultancy services are recognised on specified
terms of contract in case of contract on time basis and in case of fixed
price contract, revenue is recognized using percentage of completion
method of accounting.
Unbilled services included in loans and advances represents amount
recognized based on services performed in advance of billing in accordance
with contract terms.
Amount received in advance of services performed are recorded as
unearned income.
Revenues outside India include value added tax wherever applicable.
Revenues in India exclude service tax charged.
Revenue is recognised only when it is reasonably certain that the
ultimate collection will be made.
Dividend Income is recognised in the statement of Profit and Loss, when
right to receive payment is established.
Interest income is recognized on time proportion basis.
l) Taxes on Income:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year. Deferred tax is recognized, subject to
consideration of prudence, on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets arising on account of unabsorbed depreciation or
carry forward losses are recognized only to the extent that there is
virtual certainty supported by convincing evidence that sufficient
future taxable income will be available against which such deferred tax
assets can be realized. At each balance sheet date the Company
reassesses unrecognised deferred tax assets, to the extent they become
reasonably certain or virtually certain of realisation, as the case may
be.
m) Fringe Benefit Tax:
Fringe Benefit Tax was recognized in accordance with the relevant
provisions of the Income Tax Act, 1961 and the Guidance note on Fringe
Benefit Tax issued by the Institute of Chartered Accountants of India
(ICAI).
n) Operating Leases:
Assets taken on lease under which all risks and rewards of ownership
are effectively retained by the lessor are classified as operating
lease. Lease payments under operating leases are recognised as expenses
on accrual basis in accordance with the respective lease agreements.
o) Impairment of assets:
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
and Loss account in the year in which an asset is identified as
impaired. The impairment loss recognised in prior accounting periods is
reversed if there has been a change in the estimate of the recoverable
amount.
p) Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
Notes to Accounts. Contingent Assets are neither recognised nor
disclosed in the financial statements.
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