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Accounting Policies of Quest Softech (India) Ltd. Company

Mar 31, 2015

A. Background

The Company was originally incorporated on 27th March, 2000 as Quest Softech (India) Private Limited and subsequently pursuant to section 31/21 read with section 44 of Companies Act, 1956 incorporated on 18th March, 2008 as Quest Softech (India) Limited to carry on business of providing Software and Hardware consultancy and allied services.

b. Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting and in accordance with accounting principles generally accepted in India. The Financial Statements comply in all material aspects with the Accounting Standards notified under the Companies (Accounting Standards) Amendment Rules, 2011 and the relevant provisions of the Companies Act, 2013.

Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company.

The preparation of the financial statements in conformity with generally accepted accounting principles 'GAAP' requires management to make estimates & assumptions that affect the reported amount of assets, liabilities, revenues & expenses and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future years.

All the assets and liabilities have been classified as current or non-current as per the company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing & their realisation in cash & cash equivalents, the company had ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

c. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and the reported income and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differfrom these estimates.

d. Revenue Recognition:

Revenue from Financial Services rendered is recognised as per terms of the Contract.

Other Income

In other cases, income and expenses are recognized when there is no significant uncertainty as to determination and realization and on accrual basis.

e. Fixed Assets & Depreciation

Fixed Assets are stated at cost of acquisition, or construction inclusive of expenses incidental thereto less accumulated depreciation and impairment loss, ifany.

Effective from April 01,2014, the Company has charged Depreciation based on the revised remaining useful life of the Assets as per the requirements of Schedule II of the Companies Act, 2013.

f. Impairment of Assets

Impairment loss is provided to the extent the carrying amount of assets exceeds their recoverable amounts. Recoverable amount is the higher of an asset's net selling price 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 the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

g. Intangible Assets

Intangible assets are stated at cost of acquisition, including any cost attributable for bringing the same to its working condition, less amortization overestimated useful life. Software License is amortized on straight line basis over five years.

h. Investments

Current investments are carried at lower of cost and fair value and long term investments are carried at cost. However, provision is made to recognize decline other than temporary in the carrying amount of long term investments. Unquoted investments in the units of mutual funds in the nature of current investments are valued at the net asset value declared by mutual funds in respect of each particular scheme.

i. Transactions in Foreign Currency

Transactions in Foreign Currency are recorded at the exchange rate prevailing on the dates of transaction. All receivables/payables are translated at year end rate and differences therein are accounted in exchange rate gain/loss account. All Cash/Bank balance (monetary items) in foreign currency are translated at year end rates and difference therein are accounted in exchange rate gain/ loss account.

j. Employee Benefits

Company has only one employee employed during the year under audit. Hence Provident Fund and otheremployee benefits are not applicable.

k. Income Tax

Income tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). Provision for Income Tax is recognised on an annual basis under the taxes payable method, based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future; however where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed as at each balance sheet date for appropriateness of their carrying value at each balance sheet date.

l. Segment Reporting

The Company is engaged in the business of providing Software and Hardware related consultancy services. Accordingly, there are no separate reportable segments, as per the Accounting Standard on 'Segment Reporting' (AS 17) issued by the Institute of Chartered Accountants of India / notified under the Companies (Accounting Standards) Amendment Rules, 2011.

m. Earnings Per Share

The basic earnings per share is computed by dividing the net profit/loss attributable to the equity shareholders for the period by the weighted average number of equity shares outstanding during the reporting period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share, and also the weighted average number of equity shares.

n. Provisions and Contingencies

Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation.

Contingent liabilities are disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nordisclosed.






Mar 31, 2014

A. General Information

The Company was originally incorporated on 27th March,2000 as Quest Softech (India) Private Limited and subsequently pursuant to section 31/21 read with section 44 of Companies Act, 1956 incorporated on 18th March,2008 as Quest Softech (India) Limited to carry on business of providing Software and Hardware, consultancy and allied services.

b. Basis of preparation of Financial statements

The financial statements are prepared under the historical cost convention on accrual basis of accounting and in accordance with accounting principles generally accepted in India. The Financial Statements comply in all material aspects with the Accounting Standards notified under the Companies (Accounting Standards) Amendment Rules, 2011. the relevant provisions of the Companies Act, 1956, read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act,2013

Accounting policies not specifically referred to otherwise are consistent with the generally accepted accounting principles followed by the Company,

All the assets and liabilities have been classified as current or non-current as per the company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing & their realisation in cash & cash equivalents, the company had ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

c. Use of Estimates

The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the financial statements and (he reported income and expenses during the reporting period. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ from these estimates,

d. Revenue Recognition

Revenue from Financial Services rendered is recognised as per terms of the Contract.

Other Income

In other cases, income is recognized when there is no significant uncertainty as to determination and realization.

e. Fixed Assets

Fixed Assets are stated at cost of acquisition, or construction inclusive of exp incidental thereto less accumulated depreciation and impairment loss, if any.

f. Depreciation

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and ir manner prescribed in Schedule XIV to the Companies Act, 1956.Depreciation on assets whose cost individually does not exceed upto 5,000/- is f provided in the year of purchase.

g. Impairment Loss

Impairment loss is provided to the extent the carrying amount of assets exceeds th recoverable amounts. Recoverable amount is the higher of an asset's net selling price at its value in use. Value in use is the present value of estimated future cash Hows expected arise from the continuing use of the asset and from its disposal at the end of its useful lift Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal.

h. Intangible Assets

Intangible assets are stated at cost of acquisition, including any cost attributable for bringing the same to its working condition, less amortization over estimated useful life. Software License is amortized on straight line basis over five years.

i. Investments

Current investments are carried at lower of cost and fair value and long term investments are carried at cost. However, provision is made to recognize decline other than temporary in the carrying amount of long term investments. Unquoted investments in the units of mutual funds in the nature of current investments are valued at the net asset value declared by mutual funds in respect of each particular scheme.

j. Employee Benefits

Company has only one employee employed during the year under audit. Hence Provident Fund and other employee benefits are not applicable

k. Income Tax

Taxes on income are accounted for in accordance with Accounting Standard (AS)-22"Accounting for taxes on income", notified under the Companies (Accounting Standards) Amendment Rules, 2011. Income tax comprises both current and deferred tax.

Current tax is measured on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.

The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred lax asset or deferred tax liability. They are measured using substantially enacted tax rates and tax regulations as of the Balance Sheet date.

In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized, only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. Deferred tax assets on account of other timing differences are recognized only to the extent there is a reasonable certainty of its realization.

l. Segment Reporting:

The Company is engaged in the business of providing Software and Hardware related consultancy services. Accordingly, there are no separate reportable segments, as per the Accounting Standard on 'Segment Reporting' (AS 17) issued by the Institute of Chartered Accountants of India / notified under the Companies (Accounting Standards) Amendment Rules, 2011.

m. Provisions and Contingencies

Provisions are recognized when the Company has a legal and constructive obligation as a result of a past event, for which it is probable that cash outflow will be required and a reliable estimate can be made of the amount of the obligation.

Contingent liabilities are disclosed when the Company has a possible or present obligation where it is not probable that an outflow of resources will be required to settle it. Contingent assets are neither recognized nor disclosed.


Mar 31, 2010

1. Basis of Accounting

The financial statements have been prepared on accrual basis following the historical cost convention in accordance with the Accounting Standards referred to in section 211 (3C) and other requirements of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements require estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the results and estimates are recognized in the period in which the results are known / materialized.

3. Revenue Recognition

(i) Revenue from sale of products is recognized when the risk and reward of ownership of the product is passed on to the customers, which is generally on delivery / installation of software products. Sales are stated as net of Sales tax.

(ii) Revenue in respect of other income is recognized when no significant uncertainty as to its determination or realization exists.

4 Fixed Assets

Fixed Assets are stated at cost, which comprises of purchase consideration and other directly attributable cost of bringing the assets to its working condition for the intended use.

5. Depreciation

Depreciation on fixed assets is provided on straight-line method over useful life of assets at the rates and in the manner as prescribed in Schedule XIV to the Companies Act, 1956. Subsequent upgrades of hardware are entirely charged off to revenue in the year of purchase.

6. Inventories

Cost of inventories comprises all costs of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. Inventories are valued at Cost or Net Realizable Value, whichever is less.

7. Accounting for Taxes on Income and Deferred Tax

Deferred tax resulting from timing differences between accounting and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax assets are recognized and carried forward only if there is a virtual/ reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each balance sheet date. Where there is Unabsorbed Depreciation or carry forward loss under tax laws, Deferred Tax Asset are recognized only if there is virtual certainty of realization of Assets.

8. Foreign Exchange Transactions

Transactions in foreign currency are generally recorded at the exchange rate prevailing on the date of transaction. Monitory items denominated in foreign currency and outstanding at the Balance Sheet date are translated at the exchange rate ruling at that date. Exchange differences on foreign exchange transactions are recognized in the profit and loss account.

9. Impairment of Assets

The Company assesses at each balance sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such assets is reduced to its recoverable amount and the amount of such impairment loss is charged to profit and loss account. If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.

10. Provisions and Contingencies

The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires outflow of resources, which can be reliably estimated. Disclosures for a contingent liability is made, without a provision in books, when there is an obligation that may, but probably will not, require outflow of resources.

11. Investments

Investments are classified into long-term investments and current investments based on the management''s intention at the time of purchase. Long-term investments are carried at cost and provision is made to recognize any decline, other than temporary, in the value of such investments, determined separately for each investment. Current investments are carried at the lower of the cost and fair value and provision is made to recognize any decline in the carrying value. The comparison of cost and fair value is done separately in respect of each category of investments.

12. Accounting of Employee Benefits

The Company has for its employees in India, benefits such as Gratuity and Provident Fund. The Company''s contribution to the provident fund along with the employee share of provident fund deducted from the salary is paid into Employee Provident Fund of Government of India. The Company''s contribution to EPF is charged to revenue.

 
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