Mar 31, 2018
a. Significant Accounting Policies:
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all years presented, unless otherwise stated. The presentation of financial statements requires the use of certain accounting estimates. The areas where significant judgments and estimates have been made in preparing the financial statements and their effects are disclosed.
1.1 Property Plant & Equipment:
(a) Initial Measurement & Recognition
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of an item of Property, plant and equipment comprises its purchase price, including import duties and other non-refundable taxes or levies and any directly attributable cost of bringing the assets to its working condition for its intended use with any trade discounts or rebates being deducted in arriving at purchase price. Cost of the assets also includes interest on borrowings attributable to acquisition, if any, of qualifying fixed assets incurred up to the date the asset is ready for its intended use.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of Property, plant and equipment.
Cost of Property, plant and equipment not ready for intended use as on the balance sheet date, is disclosed as capital work in progress. Advances given towards acquisition of property, plant and equipment outstanding at each balance sheet date are disclosed as Capital Advances under Other non-current Assets.
Any gain or loss on disposal of an item of property plant and equipment is recognized in statement of profit and loss.
(b) Subsequent expenditure
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Profit and Loss during the period in which they are incurred.
(c) Depreciation:
Depreciation is provided on the straight-line method based on estimated useful life prescribed under Schedule II to the Companies Act, 2013 Depreciation on assets added/disposed off during the year is provided on pro-rata basis from the date of addition or up to the date of disposal, as applicable.
The residual values, useful lives and method of depreciation of property, plant and equipment reviewed at each financial year end and adjusted prospectively, if appropriate.
1.2 Inventories
Inventories are valued at the lower of cost and net realizable value. Cost is computed on a weighted average basis. Cost of finished goods and work-in-progress include all costs of purchases, conversion costs and other costs incurred in bringing the inventories to their present location and condition. The net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs necessary to make the sale.
1.3 Cash and Cash Equivalents
Cash and cash equivalents are short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
1.4 Financial Instruments:
(A) Financial Assets Recognition and measurement
Financial assets are recognized when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognized at fair value, in case of financial assets which are recognized at fair value through profit and loss (FVTPL), its transaction cost is recognized in the statement of profit and loss. In other cases, the transaction cost is attributed to the acquisition value of the financial asset.
Financial assets are subsequently classified as measured at
- Amortised cost
- Fair value through profit and loss (FVTPL)
- Fair value through other comprehensive income (FVOCI)
(a) Measured at amortised cost: Financial assets that are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows that are solely payments of principal and interest, are subsequently measured at amortised cost using the effective interest rate (âEIRâ) method less impairment, if any. The amortisation of EIR and loss arising from impairment, if any, is recognized in the Statement of Profit and Loss.
(b) Measured at fair value through other comprehensive income: Financial assets that are held within a business model whose objective is achieved by both, selling financial assets and â 1collecting contractual cash flows that are solely payments of principal and interest, are subsequently measured at fair value through other comprehensive income. Fair value movements are recognized in the other comprehensive income (OCI). Interest income measured using the EIR method and impairment losses, if any are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognized in OCI is reclassified from the equity to âother incomeâ in the Statement of Profit and Loss.
(c) Measured at fair value through profit or loss: A financial asset not classified as either amortised cost or FVOCI, is classified as FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized as âother incomeâ in the Statement of Profit and Loss
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
Trade Receivables and Loans:
Trade receivables and loans are initially recognized at fair value. Subsequently, these assets are held at amortised cost, using the effective interest rate (EIR) method net of any expected credit losses. The EIR is the rate that discounts estimated future cash income through the expected life of financial instrument.
Derecognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the contractual rights to receive the cash flows from the asset.
Impairment of Financial Assets
Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category. For financial assets other than trade receivables, as per Ind AS 109, the Company recognises 12 month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. The Companyâs trade receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall. The impairment losses and reversals are recognized in Statement of Profit and Loss, if any.
(B) Financial Liabilities: Initial recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. Financial liabilities are initially measured at the amortised cost unless at initial recognition, they are classified as fair value through profit and loss. In case of trade payables, they are initially recognized at fair value and subsequently, these liabilities are held at amortised cost, using the effective interest method.
Subsequent measurement
Financial liabilities are subsequently measured at amortised cost using the EIR method. Financial liabilities carried at fair value through profit or loss is measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
Derecognition
A financial liability is derecognized when the obligation specified in the contract is discharged, cancelled or expires.
1.5 Revenue Recognition
Export Sales are recognised on the date of Bill of Lading or other relevant documents, in accordance with the terms and conditions of the sales. Domestic sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as sales tax, value added tax, etc. Revenue includes excise duty as it is paid on production and is a liability of the manufacturer, irrespective of whether the goods are sold or not. Discounts given include rebates, price reductions and other incentives given to customers.
1.6 Other Income
Interest income is recognised/accounted on accrual basis.
Dividend Income on investments is recognised for when the right to receive the dividend is established.
Interest on Investments is recognised on a time proportion basis taking into account the amounts invested and the rate of interest.
1.7 Taxation:
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to a business combination or to an item which is recognised directly in equity or in other comprehensive income.
Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years. Interest income/ expenses and penalties, if any, related to income tax are included in current tax expense.
Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is recognized using the tax rates enacted, or substantively enacted, by the end of the reporting period.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority.
1.8 Provisions and Contingent Liabilities
Provisions are recognized when the Company
(a) has a present obligation (legal or constructive) as a result of a past event,
(b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and
(c) a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
1.9 Employee benefits/ Retirement Benefits:
Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post-employment medical benefits.
SHORT-TERM OBLIGATION:
Short-term employee benefits like salaries, wages, bonus and welfare expenses payable wholly within twelve months of rendering the services are accrued in the year in which the associated services are rendered by the employees and are measured at the amounts expected to be paid when the liabilities are settled.
LONG-TERM OBLIGATION
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.
DEFINED CONTRIBUTION PLANS
Contributions to defined contribution schemes such as employeesâ state insurance, labour welfare fund, superannuation scheme, employee pension scheme etc. are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. Companyâs provident fund contribution, in respect of certain employees, is made to a government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the monthly contributions.
1.10 Impairment Of Non-Financial Assets:
Assessment for impairment is done at each Balance Sheet date as to whether there is any indication that a non-financial asset maybe impaired. If any indication of impairment exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made. Asset/cash generating unit whose carrying value exceeds their recoverable amount are written down to the recoverable amount by recognizing the impairment loss as an expense in the Statement of Profit and Loss. Recoverable amount is higher of an assetâs or cash generating unitâs fair value less cost of disposal and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset or cash generating unit and from its disposal at the end of its useful life.
Assessment is also done at each Balance Sheet date as to whether there is any indication that an impairment loss recognized for an asset in prior accounting periods may no longer exist or may have decreased. An impairment loss recognized for goodwill is not reversed in subsequent periods.
1.11 Earnings Per Share
Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
E. First-time Adoption
These are the companyâs first financial statements prepared in accordance with Ind AS.
The adoption of Ind AS has been carried out in accordance with Ind AS101, First-time Adoption of Indian Accounting Standards. Ind AS 101requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended 31st March, 2018, together with the comparative information as at and for the year ended 31st March, 2017 and the opening Ind AS Balance Sheet as at 1st April, 2016, the date of transition to Ind AS.
In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity). This note explains the adjustments made by the Company in restating its Previous GAAP financial statements, including the Balance Sheet as at 1st April, 2016 and the financial statements as at and for the year ended 31st March, 2017.
Optional Exemptions from Full Retrospective Application
Ind AS 101 allows first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. The Company has elected to apply the following optional exemptions from retrospective application:
Deemed Cost for property, plant and equipment
The Company has elected to measure all its property, plant and equipment at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., 1 April 2016. This exemption is also used for investment property covered by IND AS 40 Investment Property.
Transition to Ind AS - Reconciliations
The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:
I. Reconciliation of Equity as at 1st April, 2016
II. Reconciliation of Equity as at 31st March, 2017
III. Reconciliation of Total Comprehensive Income for the year ended 31st March, 2017
IV. Adjustments to Statement of Cash Flows
Mar 31, 2015
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates
are made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the asset's net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognises significant terms of income and expenditure on accrual
basis.
i. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
ii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in-progress:
Fixed assets are stated at cost, less accumulated depreciation and
impairments, if any. Direct costs are capitalized until fixed assets
are ready for use. Capital work-in-progress comprises outstanding
advances paid to acquire fixed assets and the cost of fixed assets that
are not yet ready for their intended use at the reporting date.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment. Goodwill comprises the excess of purchase
consideration over the fair value of the net assets of the acquired
enterprise. Goodwill arising on acquisition is not amortized but is
tested for impairment.
e. Depreciation and amortization
Depreciation on fixed assets is provided on the straight-line method
based on useful lives of assets as estimated by the Management.
Depreciation for assets purchased / sold during the period is
proportionately charged. Intangible assets are amortized over their
respective individual estimated useful lives on a straight-line basis,
commencing from the date the asset is available for its use. Leasehold
improvements are written off over the lower of the remaining primary
Period of lease or the life of the asset. Depreciation methods, useful
lives and residual values are reviewed at each reporting date.
Cost of Application Software for internal use are generally charged to
revenue as incurred due to its estimated useful lives being relatively
short, usually less than one year.
f. 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 at the time of purchase.
Current investments are carried at lower of cost and fair value of each
investment individually. Long-term investments are carried at cost less
provisions recorded to recognize any decline, other than temporary, in
the carrying value of each investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses arise. A provision is made for income tax annually
based on the tax liability computed after considering tax allowances
and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. MAT paid
in accordance to the tax laws, which gives rise to future economic
benefits in the form of tax credit against future income tax liability,
is recognized as an asset in the Balance Sheet if there is convincing
evidence that the company will pay normal tax after the tax holiday
period and the resultant asset can be measured reliably. The company
offsets, on a year- on-year basis, the current tax assets and
liabilities, where it has a legally enforceable right and where it
intends to settle such assets and liabilities on a net basis.
ii) Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable /virtual certainty that the asset will be
realised in future. Provision for Income Tax & Deferred Tax
liabilities/Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Foreign Currency Transactions
Revenues are accounted at daily rates. Exchange fluctuations arising on
realization are dealt with in the Profit and Loss Account.
l. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period, unless
issued at a later date. The number of shares and potentially dilutive
equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues, including for changes
effected prior to the approval of the financial statements by the Board
of Directors.
m. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
n. 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.
Mar 31, 2014
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates
are made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the asset''s net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognises significant terms of income and expenditure on accrual
basis.
i. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
ii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in-progress:
Fixed assets are stated at cost, less accumulated depreciation and
impairments, if any. Direct costs are capitalized until fixed assets
are ready for use. Capital work-in-progress comprises outstanding
advances paid to acquire fixed assets and the cost of fixed assets that
are not yet ready for their intended use at the reporting date.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment. Goodwill comprises the excess of purchase
consideration over the fair value of the net assets of the acquired
enterprise. Goodwill arising on acquisition is not amortized but is
tested for impairment.
e. Depreciation and amortization
Depreciation on fixed assets is provided on the straight-line method
based on useful lives of assets as estimated by the Management.
Depreciation for assets purchased / sold during the period is
proportionately charged. Intangible assets are amortized over their
respective individual estimated useful lives on a straight-line basis,
commencing from the date the asset is available for its use. Leasehold
improvements are written off over the lower of the remaining primary
Period of lease or the life of the asset. Depreciation methods, useful
lives and residual values are reviewed at each reporting date.
Cost of Application Software for internal use are generally charged to
revenue as incurred due to its estimated useful lives being relatively
short, usually less than one year.
f. 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 at the time of purchase.
Current investments are carried at lower of cost and fair value of each
investment individually. Long-term investments are carried at cost less
provisions recorded to recognize any decline, other than temporary, in
the carrying value of each investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses arise. A provision is made for income tax annually
based on the tax liability computed after considering tax allowances
and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. MAT paid
in accordance to the tax laws, which gives rise to future economic
benefits in the form of tax credit against future income tax liability,
is recognized as an asset in the Balance Sheet if there is convincing
evidence that the company will pay normal tax after the tax holiday
period and the resultant asset can be measured reliably. The company
offsets, on a year- on-year basis, the current tax assets and
liabilities, where it has a legally enforceable right and where it
intends to settle such assets and liabilities on a net basis.
ii) Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable /virtual certainty that the asset will be
realised in future. Provision for Income Tax & Deferred Tax
liabilities/Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Foreign Currency Transactions
Revenues are accounted at daily rates. Exchange fluctuations arising on
realization are dealt with in the Profit and Loss Account.
l. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period, unless
issued at a later date. The number of shares and potentially dilutive
equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues, including for changes
effected prior to the approval of the financial statements by the Board
of Directors.
m. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
n. 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.
Mar 31, 2013
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates
are made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the asset''s net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognises significant terms of income and expenditure on accrual
basis.
i. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
ii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in-progress:
Fixed assets are stated at cost, less accumulated depreciation and
impairments, if any. Direct costs are capitalized until fixed assets
are ready for use. Capital work-in-progress comprises outstanding
advances paid to acquire fixed assets and the cost of fixed assets that
are not yet ready for their intended use at the reporting date.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment. Goodwill comprises the excess of purchase
consideration over the fair value of the net assets of the acquired
enterprise. Goodwill arising on acquisition is not amortized but is
tested for impairment.
e. Depreciation and amortization Depreciation on fixed assets is
provided on the straight-line method based on useful lives of assets as
estimated by the Management. Depreciation for assets purchased / sold
during the period is proportionately charged. Intangible assets are
amortized over their respective individual estimated useful lives on a
straight-line basis, commencing from the date the asset is available
for its use. Leasehold improvements are written off over the lower of
the remaining primary Period of lease or the life of the asset.
Depreciation methods, useful lives and residual values are reviewed at
each reporting date. Cost of Application Software for internal use are
generally charged to revenue as incurred due to its estimated useful
lives being relatively short, usually less than one year.
f. 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 at the time of
purchase. Current investments are carried at lower of cost and fair
value of each investment individually. Long-term investments are
carried at cost less provisions recorded to recognize any decline,
other than temporary, in the carrying value of each investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses arise. A provision is made for income tax annually
based on the tax liability computed after considering tax allowances
and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. MAT paid
in accordance to the tax laws, which gives rise to future economic
benefits in the form of tax credit against future income tax liability,
is recognized as an asset in the Balance Sheet if there is convincing
evidence that the company will pay normal tax after the tax holiday
period and the resultant asset can be measured reliably. The company
offsets, on a year-on-year basis, the current tax assets and
liabilities, where it has a legally enforceable right and where it
intends to settle such assets and liabilities on a net basis.
ii)Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable /virtual certainty that the asset will be
realised in future. Provision for Income Tax & Deferred Tax
liabilities/Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Foreign Currency Transactions
Revenues are accounted at daily rates. Exchange fluctuations arising on
realization are dealt with in the Profit and Loss Account.
l. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period, unless
issued at a later date. The number of shares and potentially dilutive
equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues, including for changes
effected prior to the approval of the financial statements by the Board
of Directors.
m. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
n. 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. 20
Income Taxes:
No provisions for current tax is made because brough forward losses has
been set off against current year profit, in terms of the provisions of
the Income Tax Act, 1961.
Mar 31, 2012
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates
are made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the asset's net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognises significant terms of income and expenditure on accrual
basis.
i. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
ii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in-progress:
Fixed assets are stated at cost, less accumulated depreciation and
impairments, if any. Direct costs are capitalized until fixed assets
are ready for use. Capital work-in-progress comprises outstanding
advances paid to acquire fixed assets and the cost of fixed assets that
are not yet ready for their intended use at the reporting date.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment. Goodwill comprises the excess of purchase
consideration over the fair value of the net assets of the acquired
enterprise. Goodwill arising on acquisition is not amortized but is
tested for impairment.
e. Depreciation and amortization
Depreciation on fixed assets is provided on the straight-line method
based on useful lives of assets as estimated by the Management.
Depreciation for assets purchased / sold during the period is
proportionately charged. Intangible assets are amortized over their
respective individual estimated useful lives on a straight- line basis,
commencing from the date the asset is available for its use. Leasehold
improvements are written off over the lower of the remaining primary
Period of lease or the life of the asset. Depreciation methods, useful
lives and residual values are reviewed at each reporting date.
Cost of Application Software for internal use are generally charged to
revenue as incurred due to its estimated useful lives being relatively
short, usually less than one year.
f. 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 at the time of purchase.
Current investments are carried at lower of cost and fair value of each
investment individually. Long-term investments are carried at cost less
provisions recorded to recognize any decline, other than temporary, in
the carrying value of each investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses arise. A provision is made for income tax annually
based on the tax liability computed after considering tax allowances
and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. MAT paid
in accordance to the tax laws, which gives rise to future economic
benefits in the form of tax credit against future income tax liability,
is recognized as an asset in the Balance Sheet if there is convincing
evidence that the company will pay normal tax after the tax holiday
period and the resultant asset can be measured reliably. The company
offsets, on a year-on-year basis, the current tax assets and
liabilities, where it has a legally enforceable right and where it
intends to settle such assets and liabilities on a net basis.
ii)Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable / virtual certainty that the asset will be
realised in future. Provision for Income Tax & Deferred Tax
liabilities/Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Foreign Currency Transactions
Revenues are accounted at daily rates. Exchange fluctuations arising on
realization are dealt with in the Profit and Loss Account.
l. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period, unless
issued at a later date. The number of shares and potentially dilutive
equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues, including for changes
effected prior to the approval of the financial statements by the Board
of Directors.
m. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
n. 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.
Mar 31, 2011
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the asset's net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognizes significant terms of income and expenditure on accrual
basis.
i. Revenue is primarily derived from software development and related
services, licensing of software products and business process
management. Arrangements with clients are either on a fixed-price,
fixed-timeframe or on a time-and-material basis. Revenue on time-and-
material contracts is recognized as the related services are performed.
Revenue from fixed- price, fixed-timeframe contracts, where there is no
uncertainty as to measurement or collectability of consideration, is
recognized based upon the percentage-of-completion.
Parle Software Ltd. When there is uncertainty as to measurement or
ultimate collectability, revenue recognition is postponed until such
uncertainty is resolved. Provision for estimated losses, if any, on
uncompleted contracts are recorded in the period in which such losses
become probable based on the current estimates. Revenue from the sale
of user licenses for software applications is recognized on transfer of
the title in the user license. Revenue from client training, support
and other services arising out of the sale of software products is
recognized as the related services are performed.
ii. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
iii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in-progress: Fixed assets are stated at cost, less accumulated
depreciation and impairments, if any. Direct costs are capitalized
until fixed assets are ready for use. Capital work-in-progress
comprises outstanding advances paid to acquire fixed assets and the
cost of fixed assets that are not yet ready for their intended use at
the reporting date. Intangible assets are recorded at the consideration
paid for acquisition of such assets and are carried at cost less
accumulated amortization and impairment. Goodwill comprises the excess
of purchase consideration over the fair value of the net assets of the
acquired enterprise. Goodwill arising on acquisition is not amortized
but is tested for impairment.
e. Depreciation and Amortization
Depreciation on fixed assets is provided on the straight-line method
based on useful lives of assets as estimated by the Management.
Depreciation for assets purchased / sold during the period is
proportionately charged. Intangible assets are amortized over their
respective individual estimated useful lives on a straight-line basis,
commencing from the date the asset is available for its use. Leasehold
improvements are written off over the lower of the remaining primary
Period of lease or the life of the asset. Depreciation methods, useful
lives and residual values are reviewed at each reporting date.
Cost of Application Software for internal use are generally charged to
revenue as incurred due to its estimated useful lives being relatively
short, usually less than one year.
f. 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 at the time of purchase.
Current investments are carried at lower of cost and fair value of each
investment individually. Long-term investments are carried at cost less
provisions recorded to recognize any decline, other than temporary, in
the carrying value of each investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses
arise. A provision is made for income tax annually based on the tax
liability computed after considering tax allowances and exemptions.
Provisions are recorded when it is estimated that a liability due to
disallowances or other matters is probable. MAT paid in accordance to
the tax laws, which gives rise to future economic benefits in the form
of tax credit against future income tax liability, is recognized as an
asset in the Balance Sheet if there is convincing evidence that the
company will pay normal tax after the tax holiday period and the
resultant asset can be measured reliably. The company offsets, on a
year-on-year basis, the current tax assets and liabilities, where it
has a legally enforceable right and where it intends to settle such
assets and liabilities on a net basis.
ii)Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable /virtual certainty that the asset will be
realized in future. Provision for Income Tax includes provision for
current Tax & Deferred Tax liabilities/ Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Foreign Currency Transactions
Revenues are accounted at daily rates. Exchange fluctuations arising on
realization are dealt with in the Profit and Loss Account.
l. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period, unless
issued at a later date. The number of shares and potentially dilutive
equity shares are adjusted retrospectively for all periods presented
for any share splits and bonus shares issues, including for changes
effected prior to the approval of the financial statements by the Board
of Directors.
m. Cash and Cash Equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
n. 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.
Jul 31, 2010
A. Basis of Preparation of financial statement:
The financial statements are prepared in accordance with Indian GAAP
under the historical cost convention on the accrual basis. GAAP
comprises mandatory accounting standards prescribed by the Companies
(Accounting Standards) Rules, 2006 and guidelines issued by SEBI.
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.
b. Use of Estimates:
The preparation of financial statements is in conformity with the GAAP
requires the management to make estimates and assumptions that affect
the reported balances of assets and liabilities and the disclosures
relating to contingent liabilities as at the date of financial
statements and the reported amounts of income and expenses during the
reporting period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
statements.
The Management periodically assesses using, external and internal
sources, whether there is an indication that an asset may be impaired.
An impairment loss is recognized wherever the carrying value of an
asset exceeds its recoverable amount. The recoverable amount is the
higher of the assets net selling price and value in use, which means
the present value of future cash flows expected to arise from the
continuing use of the asset and its eventual disposal. An impairment
loss for an asset other than goodwill is reversed if, and only if, the
reversal can be related objectively to an event occurring after the
impairment loss was recognized. The carrying amount of an asset other
than goodwill is increased to its revised recoverable amount, provided
that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortization or depreciation)
had no impairment loss been recognized for the asset in previous years.
c. Revenue Recognition:
The company generally follows mercantile system of accounting and
recognises significant terms of income and expenditure on accrual
basis.
i. Revenue is primarily derived from software development and related
services, licensing of software products and business process
management. Arrangements with clients are either on a fixed-price,
fixed-timeframe or on a time-and-material basis. Revenue on
time-and-material contracts is recognized as the related services are
performed. Revenue from fixed-price, fixed-timeframe contracts, where
there is no uncertainty as to measurement or collectability of
consideration, is recognized based upon the percentage-of-completion.
When there is uncertainty as to measurement or ultimate collectability,
revenue recognition is postponed until such uncertainty is resolved.
Provision for estimated losses, if any, on uncompleted contracts are
recorded in the period in which such losses become probable based on
the current estimates. Revenue from the sale of user licenses for
software applications is recognized on transfer of the title in the
user license. Revenue from client training, support and other services
arising out of the sale of software products is recognized as the
related services are performed.
ii. Revenue from sale of finished properties / buildings / Land are
recognized on transfer of property and once significant risks and
rewards of ownership have been transferred to the buyer. Similarly,
revenue from sale of Transferable Development Rights (TDR) is
recognized on transfer of the rights to the buyer. Revenue recognition
is postponed to the extent of significant uncertainty.
iii. Profit on sale of investments is recorded on transfer of title by
the company and is determined as the difference between the sale price
and carrying value of the investment. Lease rentals are recognized
ratably on a straight-line basis over the lease term. Interest is
recognized using the time-proportion method, based on rates implicit in
the transaction. Dividend income is recognized when the right to
receive dividend is established.
d. Fixed assets, including goodwill, intangible assets and capital
work-in- progress:
Fixed assets are stated at cost, less accumulated depreciation and
impairments, if any. Direct costs are capitalized until fixed assets
are ready for use. Capital work-in- progress comprises outstanding
advances paid to acquire fixed assets and the cost of fixed assets that
are not yet ready for their intended use at the reporting date.
Intangible assets are recorded at the consideration paid for
acquisition of such assets and are carried at cost less accumulated
amortization and impairment. Goodwill comprises the excess of purchase
consideration over the fair value of the net assets of the acquired
enterprise. Goodwill arising on acquisition is not amortized but is
tested for impairment.
e. Depreciation and amortization
Depreciation on fixed assets is provided on the straight-line method
based on useful lives of assets as estimated by the Management.
Depreciation for assets purchased / sold during the period is
proportionately charged. Intangible assets are amortized over their
respective individual estimated useful lives on a straight-line basis,
commencing from the date the asset is available for its use. Leasehold
improvements are written off over the lower of the remaining primary
Period of lease or the life of the asset. Depreciation methods, useful
lives and residual values are reviewed at each reporting date.
Cost of Application Software for internal use are generally charged to
revenue as incurred due to its estimated useful lives being relatively
short, usually less than one year.
f. Investments:
Trade investments are the investments made to enhance the companys
business interests. Investments are either classified as current or
long term based on the Managements intention at the time of purchase.
Current investments are carried at
lower of cost and fair value of each investment individually. Long-term
investments are carried at cost less provisions recorded to recognize
any decline, other than temporary, in the carrying value of each
investment.
g. 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.
h. Income Taxes:
i) Income taxes are accrued at the same period in which the related
revenue and expenses arise. A provision is made for income tax annually
based on the tax liability computed after considering tax allowances
and exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. MAT paid
in accordance to the tax laws, which gives rise to future economic
benefits in the form of tax credit against future income tax liability,
is recognized as an asset in the Balance Sheet if there is convincing
evidence that the company will pay normal tax after the tax holiday
period and the resultant asset can be measured reliably. The company
offsets, on a year-on-year basis, the current tax assets and
liabilities, where it has a legally enforceable right and where it
intends to settle such assets and liabilities on a net basis.
ii)Deferred tax resulting from "timing differences" between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax asset is recognised and carried forward only to the extent
that there is a reasonable /virtual certainty that the asset will be
realised in future. Provision for Income Tax includes provision for
current Tax & Deferred Tax liabilities/ Assets.
i. Provision and Contingent Liabilities:
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
j. Research and development:
Research costs are expensed as incurred. Software product development
costs are expensed as incurred unless technical and commercial
feasibility of the project is demonstrated, future economic benefits
are probable, the Company has an intention and ability to complete and
use or sell the software and that these costs can be measured reliably.
k. Earning Per Share:
Basic earnings per share are computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the net
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for the proceeds receivable had
the shares been actually issued at fair value, which is the average
market value of the outstanding shares. Dilutive potential equity
shares are deemed converted as at the beginning of the period,
unless issued at a later date. The number of shares and potentially
dilutive equity shares are adjusted retrospectively for all periods
presented for any share splits and bonus shares issues, including for
changes effected prior to the approval of the financial statements by
the Board of Directors.
l. Cash and cash equivalents
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
cash equivalents.
m. Cash flow statement
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, 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.