Mar 31, 2015
A. Basis of accounting and preparation of financial statements
b. The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis except for certain financial
instruments which are measured at fair value. GAAP comprises mandatory
Accounting Standards as prescribe under section 133 of the companies
act 2013(Act) read with rule 7 of the companies (Accounts) rules, 2014,
the provision of the act (to the extent notified) and guidelines issued
by the Securities and Exchange Board of India. Accounting policies have
been consistently applied except where a newly issued accounting
standard is initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy hitherto in use.
c. Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates
and the difference between the actual results and the estimates are
recognized in the periods in which the results are known.
d. Inventories
Inventories are valued at the lower of cost (determined on First in
First out basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
e. Fixed Assets and Depreciation
(i) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Costs directly attributable to the purchase
of fixed assets are capitalized until fixed assets are ready for use.
Capital work-in-progress comprises of the cost of fixed assets that are
not yet ready for their intended use before the balance sheet date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such discarded assets are
disposed off partially or fully, the amounts realized during the year
are credited to the profit and loss account of that year.
(ii) Depreciation:
Depreciation of Tangible Assets is provided on the written down value
method over the useful life of the asset, useful life is same as the
useful life prescribed under part C of schedule II of the companies act
2013.
(iii) Intangible Assets and amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assumptions, has estimated the useful
lives for the intangible assets as follows:
Trademarks 20 years Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
f. Impairment of Assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
g. Investments
Trade investments are the investments made to enhance the company's
business interests. Investments are either classified as current or
noncurrent based ori the management's intention at the time of
purchase. Current investments are carried at the lower of cost and fair
value. Non Current Investments are stated at cost. Provision for
diminution in their value is made only if such a decline is other than
temporary in the opinion of the management.
h. Revenue Recognition
Sale of Goods
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title.
Income from Services
Revenue from services is recognized in the ratio of period expired over
the total agreement period. Revenue from Fixed Price Contracts is
recognized proportionately over the period in which services are
rendered. The consideration received from the customer's in respect of
certain online services for an extended period is accounted for as
revenue in the financial year in which consideration is received. Costs
related to the revenue are also recognized in the same period. Hence
the gross margin is not impacted (i.e. not overstatedor understated).
This method of revenue recognition and cost related to it is being
consistently followed from previous year.
Other Income
Other income is recognized on accrual basis. Dividend income is
recognized when the company's right to receive dividend is established.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the carrying value of the investment.
i. Foreign Currency Transactions
Initial recognition
Transactions in foreign currencies entered into by the company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date Foreign currency monetary items (other than derivative contracts)
of the Company and its net investment in non-integral foreign
operations outstanding at the Balance Sheet date are restated at the
year-end rates.
In the case of integral operations, assets and liabilities (other than
non-monetary items), are translated at the exchange rate prevailing on
the Balance Sheet date. Non-monetary items are carried at historical
cost. Revenue and expenses are translated at the exchange rates on the
date of transaction. Exchange differences arising out of these
translations are charged to the Statement of Profit and Loss.
Treatment of Exchange Difference
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognized as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
"Foreign currency translation reserve" until disposal / recovery of the
net investment.
The exchange differences arising on restatement / settlement of
long-term foreign currency monetary items are capitalized as part of
the depreciable fixed assets to which the monetary item relates and
depreciated over the remaining useful life of such assets or amortized
on settlement / over the maturity period of such items if such items do
not relate to acquisition of depreciable fixed assets. The unamortized
balance is carried in the Balance Sheet as "Foreign currency monetary
item translation difference account" net of the tax effect thereon.
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortized over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
j. Employee Benefits
Employee benefits include provident fund, gratuity fund, compensated
absences and long service awards.
Defined contribution plans
The Company's contributions to provident fund are considered as defined
contribution plans and are charged as an expense as they fall due based
on the amount of contribution required to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund and leave
encashment, 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 the Statement of Profit and Loss in the period in which
they occur. Past service cost is recognized immediately to the extent
that the benefits are already vested and otherwise is amortized on a
straight-line basis over the 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, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
k. Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads
under fixed assets and depreciation thereon is charged to the profit
and loss account.
l. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the loan.
Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset up to the date of
capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
m. Leases
Lease rentals in respect of assets taken on 'Operating Lease' are
charged to the profit & loss Account on straight line basis over the
lease term.
n. Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
o. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred
tax liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets. Deferred tax assets are recognized for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
p. Provision and contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
The disclosure is made for all possible or present obligations that may
but probably will not require outflow of resources as contingent
liability. Contingent liabilities are disclosed in the Notes.
Mar 31, 2014
A. Basis of accounting and preparation of financial statements
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India ("ICAI"), the provisions of the Companies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates all recently issued or
revised accounting standards on an ongoing basis. The company has
prepared its financial statement as per revised Schedule VI notified
under the Compa- nies Act 1956.
b. Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates
and the difference between the actual results and the estimates are
recognized in the periods in which the results are known.
c. Inventories
Inventories are valued at the lower of cost (determined on First in
First out basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
d. Fixed Assets and Depreciation
(i) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Costs directly attributable to the purchase
of fixed assets are capitalized until fixed assets are ready for use.
Capital work-in-progress comprises of the cost of fixed assets that are
not yet ready for their intended use before the balance sheet date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such dis- carded assets
are disposed off partially or fully, the amounts realized during the
year are credited to the profit and loss account of that year.
(ii) Depreciation:
Depreciation of Fixed Assets is provided on a pro-rata basis on the
written down value method at the rates prescribed under Schedule XIV to
the Companies Act, 1956, on all assets, except for the following:
Leasehold improvements are depreciated over the remaining period of
lease or 10 years whichever is lesser.
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisition.
(iii) Intangible Assets and amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assump- tions, has estimated the
useful lives for the intangible assets as follows:
Trademarks 20 years
Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
e. Impairment of Assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
f. Investments
Trade investments are the investments made to enhance the company''s
business interests. Investments are either clas- sified as current or
noncurrent based on the management''s intention at the time of purchase.
Current investments are carried at the lower of cost and fair value.
Non Current Investments are stated at cost. Provision for diminution in
their value is made only if such a decline is other than temporary in
the opinion of the management.
g. Revenue Recognition
Sale of Goods
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title.
Income from Services
Revenue from services is recognized in the ratio of period expired over
the total agreement period. Revenue from Fixed Price Contracts is
recognized proportionately over the period in which services are
rendered. The consideration received from the customer''s in respect of
certain online services for an extended period is accounted for as
revenue in the financial year in which consideration is received. Costs
related to the revenue are also recognized in the same period. Hence
the gross margin is not impacted (i.e. not overstatedor understated).
This method of revenue recognition and cost related to it is being
consistently followed from previous year.
Other Income
Other income is recognized on accrual basis. Dividend income is
recognized when the company''s right to receive dividend is established.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the carrying value of the investment.
h. Foreign Currency Transactions
Initial recognition
Transactions in foreign currencies entered into by the company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of trans- action.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (other than
non-monetary items), are translated at the exchange rate prevailing on
the Balance Sheet date. Non-monetary items are carried at historical
cost. Revenue and expenses are translated at the exchange rates on the
date of transaction. Exchange differences arising out of these
translations are charged to the Statement of Profit and Loss.
Treatment of Exchange Difference
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognized as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement
/ settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
"Foreign currency translation reserve" until disposal / recovery of the
net investment.
The exchange differences arising on restatement / settlement of
long-term foreign currency monetary items are capital- ized as part of
the depreciable fixed assets to which the monetary item relates and
depreciated over the remaining useful life of such assets or amortized
on settlement / over the maturity period of such items if such items do
not relate to acquisi- tion of depreciable fixed assets. The
unamortized balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon.
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amor- tized over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
i. Employee Benefits
Employee benefits include provident fund, gratuity fund, compensated
absences and long service awards.
Defined contribution plans
The Company''s contributions to provident fund are considered as defined
contribution plans and are charged as an ex- pense as they fall due
based on the amount of contribution required to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund and leave
encashment, 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 the Statement of Profit and Loss in the period in which
they occur. Past service cost is recognized immediately to the extent
that the benefits are already vested and otherwise is amortized on a
straight-line basis over the average period until the benefits become
vested. The retirement benefit obligation recognized in the Bal- ance
Sheet represents the present value of the defined benefit obligation as
adjusted for unrecognized past service cost, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
j. Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads under
fixed assets and depreciation thereon is charged to the profit and loss
account.
k. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset up to the date of
capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
l. Leases
Lease rentals in respect of assets taken on ''Operating Lease'' are
charged to the profit & loss Account on straight line basis over the
lease term.
m. Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares out- standing during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
n. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provi- sions of the Income
Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is mea- sured using the tax rates and the tax
laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognized for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized only if there is virtual certainty
that there will be sufficient future taxable income available to
realize such assets. Deferred tax assets are recognized for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realized. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their reliability.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
o. Provision and contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
The disclosure is made for all possible or present obligations that may
but probably will not require outflow of resources as contingent
liability. Contingent liabilities are disclosed in the Notes.
Mar 31, 2013
A. Basis of accounting and preparation of financial statements
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India ("ICAI"), the provisions of the Companies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates all recently issued or
revised accounting standards on an ongoing basis. The company has
prepared its financial statement as per revised Schedule VI notified
under the Companies Act 1956.
b. Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates
and the difference between the actual results and the estimates are
recognized in the periods in which the results are known. .
c. Inventories
Inventories are valued at the lower of cost (determined on First in
First out basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
d. Fixed Assets and Depreciation
(i) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Costs directly attributable to the purchase
of fixed assets are capitalized until fixed assets are ready for use.
Capital work-in-progress comprises of the cost of fixed assets that are
not yet ready for their intended use before the balance sheet date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such discarded assets are
disposed off partially or fully, the amounts realized during the year
are credited to the profit and loss account of that year. ''
(ii) Depreciation:
Depreciation of Fixed Assets is provided on a pro-rata basis on the
written down value method at the rates prescribed under Schedule XIV to
the Companies Act, 1956, on all assets, except for the following:
Leasehold improvements are depreciated over the remaining period of
lease or-10 years whichever Is lesser. . :
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisition.
(iii) Intangible Assets and amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assumptions, has estimated the useful
lives for the intangible assets as '' follows:
Trademarks 20years ..
Goodwill 10 years
Trademarks represent the brand Image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of20years. *
e. Impairment of Assets -
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount.
The recoverable amount is the greater of the net selling price and
their value in use. Value in use is arrived at by discounting the
future cash flows to their present value based on an appropriate
discount factor. When there is indication that an impairment loss
recognized for an asset in earlier accounting periods no longer exists
or may have decreased, such reversal of impairment loss is recognized
in the Statement of Profit and Loss, except in case of revalued assets.
f. Investments
Trade investments are the investments made to enhance the company''s
business interests. Investments are either classified as current or
noncurrent based on the management''s intention at the time of purchase.
Current investments are carried at the lower of cost and fair value.
Non Current Investments are stated at cost. Provision for diminution in
their value is made only if such a decline is other than temporary in
the opinion of the management.
g. Revenue Recognition
Sale of Goods
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title.
Income from Services
Revenue from services is recognized in the ratio of period expired over
the total agreement period. Revenue from Fixed Price Contracts is
recognized proportionately over the period in which services are
rendered. The consideration received from the customer''s in respect of
certain online services for an extended period is accounted for as
revenue in the financial year in which consideration is received. Costs
related to the revenue are also recognized in the same period. Hence
the gross margin is not impacted (i.e. not overstated or understated).
This method of revenue recognition and cost related to it is being
consistently followed from previous year.
Other Income . ;
Other income is recognized on accrual basis. Dividend income is
recognized when the company''s right to receive dividend is established.
Profit on sale of investments is recorded on transfer of title from the
company and Is determined as the difference between the sales price and
the carrying value of the Investment.
i. Employee Benefits
Employee benefits include provident fund, gratuity fund, compensated
absences and long service awards. Defined contribution plans
The Company''s contributions to provident fund are considered as defined
contribution plans and are charged as an expense as they fall due based
on the amount of contribution required to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund and leave
encashment, 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 the Statement of Profit and Loss in the period in which
they occur. Past service cost is recognized immediately to the extent
that the benefits are already vested and otherwise is amortized on a
straight-line basis over the 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, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
j. Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads under
fixed assets and depreciation thereon is charged to the profit and loss
account.
k.'' Borrowing Cost
Borrowing costs include interest, amortization, of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to
the. interest cost. Costs in connection with the borrowing of funds to
the extent not directly related to the acquisition of qualifying assets
are charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset up to the date of
capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
I. Leases ''
Lease rentals in respect of assets taken on ''Operating Lease'' are
charged to the profit & loss Account on straight line basis over the
lease term.
m. Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average member of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
n. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal Income tax. Accordingly, MAT
Is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets. Deferred tax assets are recognized for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
o. Provision and contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
The disclosure is made for all possible or present obligations that may
but probably will not require outflow of resources as contingent
liability. Contingent liabilities are disclosed In the Notes.
Mar 31, 2012
A. Basis of accounting and preparation of financial statements
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India ("ICAI"), the provisions of the Companies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. The Management evaluates all recently issued or
revised accounting standards on an ongoing basis.
During the year ended 31 March 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.
b. Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates
and the difference between the actual results and the estimates are
recognized in the periods in which the results are known.
c. Inventories
Inventories are valued at the lower of cost (determined on First in
First out basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
d. Fixed Assets and Depreciation
(i) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Costs directly attributable to the purchase
of fixed assets are capitalized until fixed assets are ready for use.
Capital work-in-progress comprises of the cost of fixed assets that are
not yet ready for their intended use before the balance sheet date.
(ii) Depreciation:
Depreciation of Fixed Assets is provided on a pro-rata basis on the
written down value method at the rates prescribed under Schedule XIV to
the Companies Act, 1956, on all assets, except for the following:
Leasehold improvements are depreciated over the remaining period of
lease or 10 years whichever is lesser.
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisition.
(iii) Intangible Assets and amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assumptions, has estimated the useful
lives for the intangible assets as follows:
Trademarks 20 years
Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
e. Impairment of Assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the
greater of the net selling price and their value in use. Value in use
is arrived at by discounting the future cash flows to their present
value based on an appropriate discount factor. When there is indication
that an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
f. Investments
Trade investments are the investments made to enhance the company''s
business interests. Investments are either classified as current or
noncurrent based on the management''s intention at the time of purchase.
Current investments are carried at the lower of cost and fair value.
Non Current Investments are stated at cost. Provision for diminution in
their value is made only if such a decline is other than temporary in
the opinion of the management.
g. Revenue Recognition
Sale of Goods
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title.
Income from Services
Revenue from services is recognized in the ratio of period expired over
the total agreement period.
Revenue from Fixed Price Contracts is recognized proportionately over
the period in which services are rendered. The consideration received
from the customer''s in respect of certain online services for an
extended period is accounted for as revenue in the financial year in
which consideration is received. Costs related to the revenue are also
recognized in the same period. Hence the gross margin is not impacted
(i.e. not overstated or understated). This method of revenue
recognition and cost related to it is being consistently followed from
previous year.
Other Income
Other income is recognized on accrual basis. Dividend income is
recognized when the company''s right to receive dividend is established.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the carrying value of the investment.
h. Foreign Currency Transactions
Initial recognition
Transactions in foreign currencies entered into by the company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (other than
non-monetary items), are translated at the exchange rate prevailing on
the Balance Sheet date. Non-monetary items are carried at historical
cost. Revenue and expenses are translated at the exchange rates on the
date of transaction. Exchange differences arising out of these
translations are charged to the Statement of Profit and Loss.
Treatment of Exchange Difference
Exchange differences arising on settlement / restatement of short-term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognized as income or expense in the
Statement of Profit and Loss. The exchange differences on restatement /
settlement of loans to non-integral foreign operations that are
considered as net investment in such operations are accumulated in a
"Foreign currency translation reserve" until disposal / recovery of the
net investment. The exchange differences arising on restatement /
settlement of long-term foreign currency monetary items are capitalized
as part of the depreciable fixed assets to which the monetary item
relates and depreciated over the remaining useful life of such assets
or amortized on settlement / over the maturity period of such items if
such items do not relate to acquisition of depreciable fixed assets.
The unamortized balance is carried in the Balance Sheet as "Foreign
currency monetary item translation difference account" net of the tax
effect thereon.
Accounting of forward contracts
Premium / discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortized over the
period of the contracts if such contracts relate to monetary items as
at the Balance Sheet date.
i. Employee Benefits
Employee benefits include provident fund, gratuity fund, compensated
absences and long service awards.
Defined contribution plans
The Company''s contributions to provident fund are considered as defined
contribution plans and are charged as an expense as they fall due based
on the amount of contribution required to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund and leave
encashment, 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 the Statement of Profit and Loss in the period in which
they occur. Past service cost is recognized immediately to the extent
that the benefits are already vested and otherwise is amortized on a
straight-line basis over the 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, as reduced by the fair
value of scheme assets. Any asset resulting from this calculation is
limited to past service cost, plus the present value of available
refunds and reductions in future contributions to the schemes.
j. Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads under
fixed assets and depreciation thereon is charged to the profit and loss
account.
k. Borrowing Cost
Borrowing costs include interest, amortization of ancillary costs
incurred and exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest cost. Costs in connection with the borrowing of funds to the
extent not directly related to the acquisition of qualifying assets are
charged to the Statement of Profit and Loss over the tenure of the
loan. Borrowing costs, allocated to and utilized for qualifying assets,
pertaining to the period from commencement of activities relating to
construction / development of the qualifying asset up to the date of
capitalization of such asset is added to the cost of the assets.
Capitalization of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods when active
development activity on the qualifying assets is interrupted.
l. Leases
Lease rentals in respect of assets taken on ''Operating Lease'' are
charged to the profit & loss Account on straight line basis over the
lease term.
m. Earnings per Share
Basic earnings per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
n. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred
tax liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets. Deferred tax assets are recognized for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
o. Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
p. Provision and contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates.
The disclosure is made for all possible or present obligations that may
but probably will not require outflow of resources as contingent
liability. Contingent liabilities are disclosed in the Notes.
Mar 31, 2011
(i) Basis of Accounting
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India ("ICAI"), the provisions of the Companies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
The Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. Examples of such estimates include provisions for doubtful
debts, future obligations under employee retirement benefit plans,
income taxes and the useful lives of fixed assets and intangible
assets.
The management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Profit and
Loss Account in the year in which the asset is identified as impaired.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates.
(iii) Fixed Assets and Depreciation
a) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation. Costs
directly attributable to the purchase of fixed assets are capitalized
until fixed assets are ready for use. Capital work-in- progress
comprises of advances paid to acquire fixed assets, and the cost of
fixed assets that are not yet ready for their intended use before the
balance sheet date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such discarded assets are
disposed off partially or fully, the amounts realized during the year
are credited to the profit and loss account of that year.
b) Depriciation:
Depreciation of Fixed Assets is provided on a pro-rata basis on the
written down value method at the rates prescribed under Schedule XIV to
the Companies Act, 1956, on all assets, except for the following:
Leasehold improvements are depreciated over the remaining period of
lease or 10 years whichever is lesser.
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisition.
c) Intangible Assets and Amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assumptions, has estimated the useful
lives for the intangible assets as follows:
Trademarks 20 years
Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
Investments
Trade investments are the investments made to enhance the company's
business interests. Investments are either classified as current or
long-term based on the management's intention (iv) at the time of
purchase. Current investments are carried at the lower of cost and fair
value. Long Term Investments are stated at cost. Provision for
diminution in their value is made only if such a decline is other than
temporary in the opinion of the management.
Revenue Recognition
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title. Revenue from services (v) is recognized in
the ratio of period expired over the total agreement period. Revenue
from Fixed Price Contracts is recognized proportionately over the
period in which services are rendered.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the then carrying value of the investment. Lease rentals are recognized
using the time-proportion method, based on rates implicit in the
transaction. Dividend income is recognized when the company's right to
receive dividend is established.
(vi) Foreign Currency Transactions
Investments in foreign entities are recorded at the exchange rates
prevailing on the date of making theinvestments.
Expenditure in foreign currency is accounted at the exchange rate
prevalent when such expenditure is incurred. Exchange differences are
recorded when the amount actually received on sales or actually paid
when expenditure is incurred, is converted into Indian Rupees. The
exchange differences arising on foreign currency transactions are
recognized as income or expense in the period in which they arise
except in respect of liabilities for acquisition of fixed assets, where
such exchange difference is adjusted in the carrying cost of the
respective fixed asset.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting gain or loss
is also recorded in the profit and loss account.
(vii) Inventories
Inventory is valued at lower of cost (determined on First in First out
basis) and estimated net realizable value. Cost is inclusive of all
purchase costs and other costs incurred in bringing the inventories to
their present location and conditions.
(viii) Retirement Benefits
All employees of the Company are entitled to receive benefits under the
Provident Fund, which is a defined contribution plan. Both the employee
and the employer make monthly contributions to the plan at a
predetermined rate (presently 12.0%) of the employees' basic salary.
These contributions are made to the fund administered and managed by
the Government of India. In addition, some employees of the Company are
covered under the employees' state insurance schemes, which are also
defined contribution schemes recognized and administered by the
Government of India.
The Company's contributions to both these schemes are expensed in the
Profit and Loss Account. The Company has no further obligations under
these plans beyond its monthly contributions.
Gratuity has been provided in the Profit and Loss Account as per the
provisions of the Payment of Gratuity Act, 1972. Provisions for
gratuity is based on independent Actuarial Valuation Certificate.
Provision for Leave encashment is made on the basis of unutilized leave
due to employees at the end of the year.
(ix) Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads under
fixed assets and depreciation thereon is charged to the profit and loss
account.
(x) Borrowing Cost
Interest and other costs in connection with the borrowing of funds to
the extent related/attributed to the acquisition/construction of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
(xi) Leases
Lease rentals in respect of assets taken on 'Operating Lease' are
charged to the profit & loss Account on straight line basis over the
lease term.
(xii) Earning per Share
Basic earning per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
(xiii) Taxation
Tax expense for the year comprises of current tax and deferred tax.
Income tax is computed using the tax effect accounting method, where
tax is accrued in the same period the related revenue and expense
arises. Provision is made for income tax annually based on the tax
liability computed, after considering tax allowances and exemptions.
The differences that result between the profit considered for income
taxes and the profit as per the financial statements are identified,
and thereafter a deferred tax asset or deferred tax liability is
recorded for timing differences, namely the differences that originate
in one accounting period and reverse in another, based on the tax
effect of the aggregate amount being considered. The tax effect is
calculated on the accumulated timing differences at the end of an
accounting period based on prevailing enacted or substantially enacted
regulations. Deferred tax assets are recognized only if there is
reasonable certainty that they will be realized and are reviewed for
the appropriateness of the respective carrying values at each balance
sheet date. The income tax provision for the interim period is made
based on the best estimate of the annual average tax rate expected to
be applicable for the full fiscal year.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
(xv) Contingent Liabilities
Depending on the facts of each case, and after evaluation of relevant
legal aspects, the Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a relevant estimate of the amount of
obligation can be made. The disclosure is made for all possible or
present obligations that may but probably will not require outflow of
resources as contingent liability in the financial statement.
Mar 31, 2010
(i) Basis of Accounting
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles ("GAAP") under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India ("ICAI"), the provisions of the Compa- nies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
The Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make esti- mates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. Examples of such estimates include provisions for doubtful
debts, future obligations under employee retirement beneft plans,
income taxes and the useful lives of fxed assets and intangible assets.
The management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An asset is treated as impaired when the carrying cost of asset exceeds
its recoverable value. An impairment loss is charged to the Profit and
Loss Account in the year in which the asset is identifed as impaired.
Where no reliable estimate can be made; a disclosure is made as
contingent liability. Actual results could differ from those estimates.
(iii) Fixed Assets and Depreciation
a) Tangible Assets:
Fixed assets are stated at cost, less accumulated depreciation. Costs
directly attributable to the pur- chase of fxed assets are capitalized
until fxed assets are ready for use. Capital work-in-progress comprises
of advances paid to acquire fxed assets, and the cost of fxed assets
that are not yet ready for their intended use before the balance sheet
date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such discarded assets are
disposed off partially or fully, the amounts realized during the year
are credited to the Profit and loss account of that year.
b) Depreciation:
Depreciation of Fixed Assets is provided on a pro-rata basis on the
written down value method at the rates prescribed under Schedule XIV to
the Companies Act, 1956, on all assets, except for the fol- lowing:
Leasehold improvements are depreciated over the remaining period of
lease or 10 years whichever is lesser.
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisi- tion.
c) Intangible Assets and amortization:
Intangible assets are amortized over their respective individual
estimated useful lives on a straight line basis, commencing from the
date the asset is available to the company for its use. Management,
using reasonable and supportable assumptions, has estimated the useful
lives for the intangible as- sets as follows:
Trademarks 20 years
Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchan-
dise Act of 1999, the company can retain the ownership and registration
of the trademarks perpetually by renewing the registration at the end
of every ten years, leading to the view that the useful life of its
trade- marks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
(iv) Investments
Trade investments are the investments made to enhance the companys
business interests. Investments are either classifed as current or
long-term based on the managements intention at the time of purchase.
Current investments are carried at the lower of cost and fair value.
Long Term Investments are stated at cost. Provision for diminution in
their value is made only if such a decline is other than temporary in
the opinion of the management.
(v) Revenue Recognition
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software prod- ucts is recognized when the sale is
completed with the passing of title. Revenue from services is recog-
nized in the ratio of period expired over the total agreement period.
Revenue from Fixed Price Contracts is recognized proportionately over
the period in which services are rendered.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the then carrying value of the investment. Lease rentals are rec-
ognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the companys right
to receive dividend is established.
(vi) Foreign Currency Transactions
Investments in foreign entities are recorded at the exchange rates
prevailing on the date of making the investments.
Expenditure in foreign currency is accounted at the exchange rate
prevalent when such expenditure is incurred. Exchange differences are
recorded when the amount actually received on sales or actually paid
when expenditure is incurred, is converted into Indian Rupees. The
exchange differences arising on for- eign currency transactions are
recognized as income or expense in the period in which they arise
except in respect of liabilities for acquisition of fxed assets, where
such exchange difference is adjusted in the carrying cost of the
respective fxed asset.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting gain or loss
is also recorded in the Profit and loss account.
(vii) Inventories
Inventory is valued at lower of cost (determined on First in First out
basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
(viii) Retirement Benefts
All employees of the Company are entitled to receive benefts under the
Provident Fund, which is a defned contribution plan. Both the employee
and the employer make monthly contributions to the plan at a prede-
termined rate (presently 12.0%) of the employees basic salary. These
contributions are made to the fund administered and managed by the
Government of India. In addition, some employees of the Company are
covered under the employees state insurance schemes, which are also
defned contribution schemes recognized and administered by the
Government of India.
The Companys contributions to both these schemes are expensed in the
Profit and Loss Account. The Company has no further obligations under
these plans beyond its monthly contributions.
Gratuity has been provided in the Profit and Loss Account as per the
provisions of the Payment of Gratuity Act, 1972. A lump sum payment is
made to employees on retirement, death, incapacitation or termination
of employment, of an amount based on the respective employees salary
and the tenure of employment. Provision for Leave encashment is made
on the basis of unutilized leave due to employees at the end of the
year.
(ix) Research and development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure is included in the respective heads under
fxed assets and depreciation thereon is charged to the Profit and loss
account.
(x) Borrowing Cost
Interest and other costs in connection with the borrowing of funds to
the extent related/attributed to the ac- quisition/construction of
qualifying fxed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
(xi) Leases
Lease rentals in respect of assets taken on ÃOperating Lease are
charged to the Profit & loss Account on straight line basis over the
lease term.
(xii) Earning per Share
Basic earning per share (EPS) is calculated by dividing the net Profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
(xiii) Taxation
Tax expense for the year comprises of current tax and deferred tax.
Income tax is computed using the tax effect accounting method, where
tax is accrued in the same period the related revenue and expense
arises. Provision is made for income tax annually based on the tax li-
ability computed, after considering tax allowances and exemptions.
The differences that result between the Profit considered for income
taxes and the Profit as per the fnan- cial statements are identifed, and
thereafter a deferred tax asset or deferred tax liability is recorded
for timing differences, namely the differences that originate in one
accounting period and reverse in another, based on the tax effect of
the aggregate amount being considered. The tax effect is calculated on
the accu- mulated timing differences at the end of an accounting period
based on prevailing enacted or substantially enacted regulations.
Deferred tax assets are recognized only if there is reasonable
certainty that they will be realized and are reviewed for the
appropriateness of the respective carrying values at each balance sheet
date. The income tax provision for the interim period is made based on
the best estimate of the an- nual average tax rate expected to be
applicable for the full fscal year.
(xiv) Cash Flow Statement
Cash fows are reported using the indirect method, whereby Profit before
tax is adjusted for the effects of transactions of a non-cash nature
and any deferrals or accruals of past or future cash receipts or pay-
ments. The cash fows from regular revenue generating, fnancing, and
investing activities of the company are segregated.
(xv) Contingent Liabilities
Depending on the facts of each case, and after evaluation of relevant
legal aspects, the Company makes a provision when there is a present
obligation as a result of a past event where the outfow of economic
resources is probable and a relevant estimate of the amount of
obligation can be made. The disclosure is made for all possible or
present obligations that may but probably will not require outfow of
resources as contingent liability in the financial statement.
Mar 31, 2009
(i) Basis of Accounting
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting principles (ÃGAAPÃ) under the historical
cost convention on an accrual basis. GAAP comprises mandatory
Accounting Standards issued by the Institute of Chartered Accountants
of India (ÃICAIÃ), the provisions of the Companies Act, 1956, and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use.
The Management evaluates all recently issued or revised accounting
standards on an ongoing basis.
(ii) Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and disclosures
relating to contingent assets and liabilities as at the date of the
financial statements and reported amounts of income and expenses during
the period. Examples of such estimates include provisions for doubtful
debts, future obligations under employee retirement benefit plans,
income taxes and the useful lives of fixed assets and intangible
assets.
The 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
assetÃs net sales price or present value as determined above.
Contingencies are recorded when it is probable that a liability will be
incurred, and the amount can be reasonably estimated. Where no reliable
estimate can be made; a disclosure is made as contingent liability.
Actual results could differ from those estimates.
(iii) Fixed Assets and Depreciation
a) Tangible Assets: Fixed assets are stated at cost, less accumulated
depreciation. Costs directly attributable to the purchase of fixed
assets are capitalized until fixed assets are ready for use. Capital
work-in-progress comprises of advances paid to acquire fixed assets,
and the cost of fixed assets that are not yet ready for their intended
use before the balance sheet date.
All assets discarded/ dismantled are written off assuming that the
scrap value for the same is Nil. If and when such discarded assets are
disposed off partially or fully, the amounts realized during the year
are credited to the profit and loss account of that year.
b) Depreciation: Depreciation of Fixed Assets is provided on a pro-rata
basis on the written down value method at the rates prescribed under
Schedule XIV to the Companies Act, 1956, on all assets, except for the
following:
Leasehold improvements are depreciated over the remaining period of
lease or 10 years whichever is lesser.
Individual low cost assets (acquired for less than Rs.5,000/-) are
depreciated within a year of acquisition.
c) Intangible Assets and amortization: Intangible assets are amortized
over their respective individual estimated useful lives on a straight
line basis, commencing from the date the asset is available to the
company for its use. Management, using reasonable and supportable
assumptions, has estimated the useful lives for the intangible assets
as follows:
Hosting platform 8 years
Technology 8 years
Trademarks 20 years
Goodwill 10 years
Trademarks represent the brand image of the company and constitute an
asset with no limited useful life. Based on advice received by the
management and as per the provisions of the Trade Marks and Merchandise
Act of 1999, the company can retain the ownership and registration of
the trademarks perpetually by renewing the registration at the end of
every ten years, leading to the view that the useful life of its
trademarks are unlimited.
However, as a matter of abandon precaution, the cost of the Trademarks
is being amortized over a period of 20 years.
(iv) Investment
Trade investments are the investments made to enhance the companyÃs
business interests. Investments are either classified as current or
long-term based on the managementÃs intention at the time of purchase.
Current investments are carried at the lower of cost and fair value.
Long Term Investments are stated at cost. Provision for diminution in
their value is made only if such a decline is other than temporary in
the opinion of the management.
(v) Revenue Recognition
The Company recognizes revenue on accrual basis. Revenue from the sale
of hardware/software products is recognized when the sale is completed
with the passing of title. Revenue from services is recognized in the
ratio of period expired over the total agreement period. Revenue from
Fixed Price Contracts is recognized proportionately over the period in
which services are rendered.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sales price and
the then carrying value of the investment. Lease rentals are recognized
using the time-proportion method, based on rates implicit in the
transaction. Dividend income is recognized when the companyÃs right to
receive dividend is established.
(vi) Foreign Currency Transactions
Investments in foreign entities are recorded at the exchange rates
prevailing on the date of making the investments.
Expenditure in foreign currency is accounted at the exchange rate
prevalent when such expenditure is incurred. Exchange differences are
recorded when the amount actually received on sales or actually paid
when expenditure is incurred, is converted into Indian Rupees. The
exchange differences arising on foreign currency transactions are
recognized as income or expense in the period in which they arise
except in respect of liabilities for acquisition of fixed assets, where
such exchange difference is adjusted in the carrying cost of the
respective fixed asset.
Monetary current assets and monetary current liabilities that are
denominated in foreign currency are translated at the exchange rate
prevalent at the date of the balance sheet. The resulting gain or loss
is also recorded in the profit and loss account.
(vii) Inventories
Inventory is valued at lower of cost (determined on First in First out
basis) and estimated net realizable value.
Cost is inclusive of all purchase costs and other costs incurred in
bringing the inventories to their present location and conditions.
(viii) Retirement Benefits
All employees of the Company are entitled to receive benefits under the
Provident Fund, which is a defined contribution plan. Both the employee
and the employer make monthly contributions to the plan at a
predetermined rate (presently 12.0%) of the employees basic salary.
These contributions are made to the fund administered and managed by
the Government of India. In addition, some employees of the Company are
covered under the employees state insurance schemes, which are also
defined contribution schemes recognized and administered by the
Government of India.
The Companys contributions to both these schemes are expensed in the
Profit and Loss Account. The Company has no further obligations under
these plans beyond its monthly contributions.
Gratuity has been provided in the Profit and Loss Account as per the
provisions of the Payment of Gratuity Act, 1972. A lump sum payment is
made to employees on retirement, death, incapacitation or termination
of employment, of an amount based on the respective employeeÃs salary
and the tenure of employment. Provision for Leave encashment is made
on the basis of unutilized leave due to employees at the end of the
year.
(ix) Research and Development
Revenue expenditure incurred on research and development is expensed as
incurred. Capital expenditure incurred on research and development is
depreciated over the estimated useful lives of the related assets,
where management ascertains that costs incurred will be more than
covered by resultant gains over a specific period of time.
(x) Borrowing Cost
Interest and other costs in connection with the borrowing of funds to
the extent related/attributed to the acquisition/construction of
qualifying fixed assets are capitalized upto the date when such assets
are ready for its intended use and other borrowing costs are charged to
Profit & Loss Account.
(xi) Leases
Lease rentals in respect of assets taken on ÃOperating Leaseà are
charged to the profit & loss Account on straight line basis over the
lease term.
(xii) Earning Per Share
Basic earning per share (EPS) is calculated by dividing the net profit
after tax for the year (including the post-tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue and share split.
(xiii) Taxation
Tax expense for the year comprises of current tax, deferred tax and
fringe benefit tax. Income tax is computed using the tax effect
accounting method, where tax is accrued in the same period the related
revenue and expense arises. Provision is made for income tax annually
based on the tax liability computed, after considering tax allowances
and exemptions.
The differences that result between the profit considered for income
taxes and the profit as per the financial statements are identified,
and thereafter a deferred tax asset or deferred tax liability is
recorded for timing differences, namely the differences that originate
in one accounting period and reverse in another, based on the tax
effect of the aggregate amount being considered. The tax effect is
calculated on the accumulated timing differences at the end of an
accounting period based on prevailing enacted or substantially enacted
regulations. Deferred tax assets are recognized only if there is
reasonable certainty that they will be realized and are reviewed for
the appropriateness of the respective carrying values at each balance
sheet date. The income tax provision for the interim period is made
based on the best estimate of the annual average tax rate expected to
be applicable for the full fiscal year. Consequent to the introduction
of Fringe Benefit Tax (FBT) effective April 1, 2005, the Company has
made provision for FBT in accordance with applicable Income-tax laws.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, financing,
and investing activities of the company are segregated.
(xv) Contingent Liabilities
Depending on the facts of each case, and after evaluation of relevant
legal aspects, the Company makes a provision when there is a present
obligation as a result of a past event where the outflow of economic
resources is probable and a relevant estimate of the amount of
obligation can be made. The disclosure is made for all possible or
present obligations that may but probably will not require outflow of
resources as contingent liability in the financial statement.
Mar 31, 2000
1. Accounting; Conventions
The accounts have been prepared under the historical cost convention.
2. Fixed Assets
Fixed Assets are stated at cost less depredation.
3. Depreciation
a) On Assets for own use
Depreciation on assets for own use is provided on written down value
method at the rates prescribed in Schedule XIV of the Companies Act,
1956.
4. Investments
a) Shares, Debentures, Units, Warrants and Securities are accounted
under Investments on trade dates.
b) The cost of Investment includes brokerage and stamp duty.
5. Valuation of Investments
Investments are valued at cost Provision for diminution, if any, in the
value of investment is made to recognise a decline, other than
temporary. The said diminution is determined for each investment
individually.
Determination of Market value of Investment is determined as under-
Quoted scrips are taken at year end closing market rates prevailing at
the principal exchange where they are trade.
ii) The rights entitlements of Shares/Debentures are taken at the year
end closing market rates applicable for relevant Shares/Debentures less
uncalled liability, if any.
iii) Unqoted shares are taken at cost or break-up value of the share as
per the last audited Balance Sheet of the company concerned, whichever
is lower.
iv) Government Securities are taken on the basis of average of the
indicative rates as certified by the independent dealers in such
securities.
6. Income
a) Profit or Losses from Investments are recognised on trade date on
cost price basis.
7. Taxation
Provision for Income-Tax and Wealth-Tax is made after considering
exemptions and deductions available at the rates applicable under the
Income-Tax Act, 1961 and Wealth-Tax Act. 1957.
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