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Accounting Policies of Ram Info Ltd. Company

Mar 31, 2018

1.1 SIGNIFICANT ACCOUNTING POLICIES:

1.1.1 Basis of Preparation:

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act.

The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101, First-Time Adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP.

The preparation of financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of financial statements and reported amounts of revenues and expenses during the 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 the changes in the 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 accounts.

1.1.2 Revenue Recognition:

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be measured reliably.

a) Income from Services:

Revenues are recognized immediately when the services are provided. The company collects the taxes on behalf of the government and therefore, these are not economic benefits flowing to the company. Hence they are excluded from revenue.

b) Sale of Goods:

Revenues are recognized when the company has transferred all significant risks and rewards of ownership of goods to the buyer.

1.1.3 Property, Plant and Equipment

Transition to Ind AS

On transition to Ind AS, the Company has elected to continue with carrying value of all its property, plant and equipment recognised as at 01st April 2016 measured as per previous GAAP and use that carrying value as the deemed cost of the Property, plant and equipment.

Property, Plant and Equipment are stated at cost less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, intended by the Management. The Company depreciates property, plant and equipment over their useful lives specified in Schedule II of the Companies Act, 2013 using the straight- line method. The useful lives of the assets are as follows:

Subsequent expenditures relating to property, plant and equipment are capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the Statement of Profit and Loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.

1.1.4 Intangible Assets

Intangible Assets are stated at cost less accumulated amortization and impairment, if any. Intangible Assets are amortized over their respective individual estimated useful lives on the straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence demand, competition, and other economic factors (such as stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. Amortization methods and useful lives are reviewed periodically including at each financial year end.

Software product development costs are expensed as incurred unless technical and commercial feasibility of the project demonstrated, future economic benefits are probable, the Company has an intention and ability to complete and use or sell the software and the costs can be reliably measured. The costs which can be capitalized include the cost of material, employee benefit expenses, overhead costs that are directly attributable to preparing the asset for its intended use.

1.1.5 Inventories

Inventories are valued at cost. Costs include all non refundable duties and all charges incurred in bringing the goods to their present location and condition.

1.1.6 Financial Instruments:

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability of another entity.

Initial recognition:

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit and loss) are added to or deducted from the fair value of financial assets and financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition or issue of financial assets and financial liabilities at fair value through profit and loss are recognized immediately in profit or loss.

(a) Financial Assets:

All financial assets, except investment in subsidiaries are recognized at fair value.

The measurement of financial assets depends on their classification, as described below:

(i) At Amortised cost:

A financial asset is measured at the amortised cost if both the following conditions are met:

(A) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

(B) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal interest (SPPI) on the principal amount outstanding.

(ii) At Fair Value through Other Comprehensive Income (FVTOCI):

A financial asset is measured at the FVTOCI if both the following conditions are met:

(A) The objective of the business model is achieved both by collcting contractual cash flows and selling the financial assets, and

(B) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal interest (SPPI) on the principal amount outstanding.

(iii) At Fair Value through Profit or Loss

A Financial asset which is not classified in any of the above categories ((i) and (ii)) is subsequently fair valued through profit or loss.

(b) Financial Liabilities

Financial liabilities are subsequently carried at amortized cost using the effective interest rate method. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to short maturity of these instruments.

(c) Investment in subsidiaries

Investment in subsidiaries is carried at cost in the separate financial statements.

(d) Derecognition of Financial instrument:

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of financial liability) is derecognized from the Company''s Balance sheet when the obligation specified in the contract is discharged or cancelled or expires.

1.1.7 Fair value of financial instruments

For financial assets and liabilities maturing within one year from the Balance Sheet date and which are not carried at fair value, the carrying amounts approximate fair value due to short maturity of these instruments.

1.1.8 Impairment:

(a) Financial assets

The Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss on the financial assets and credit risk exposure. The Company follows ''Simplified Approach'' for recognition of impairment loss allowance on all trade receivables or contractual receivables.

Under the simplified approach the Company does not track changes in credit risk, but it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. If credit risk has not increased significantly, 12 month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used.

ECL impairment loss allowance (or reversal) reognised during the period is recognized as income / (expense) in the statement of profit and loss.

(b) Non-Financial assets

Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of fair value less cost to sell and the value-in-use) is determined on an individual basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimated used to determine the recoverable amount. The carrying amount of the asset 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 prior years.

1.1.9 Provision

Provisions are recognized for when the Company has at present, legal or contractual obligation as a result of past events, only if it is probable that an outflow of resources embodying economic outgo or loss will be required and if the amount involved can be measured reliably

1.1.10 Foreign currency transactions

(a) Initial recognition

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.

(b) Conversion:

At the year-end, monetary items denominated in foreign currencies, if any, are converted into rupee equivalents at exchange rates prevailing on the balance sheet date.

(c) Exchange Differences:

All exchange differences arising on settlement and conversion of foreign currency transaction are included in the Statement of Profit and Loss.

1.1.11 Earnings per Equity Share

Basic earnings per equity share are computed by dividing the net profit attributable to the equity holders of the Company by the weighted average number of equity shares outstanding during the period.

Diluted earnings per equity share are computing by dividing the net profit attributable to the equity holders of the Company by the weighted average number orequity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

1.1.12 Taxes on Income

Income tax expenses comprise current and deferred income tax. Income expense is recognized in net profit in the Statement of Profit and Loss. Current income tax for current and prior periods is recognized at the amount expected to be paid to or recovered from tax authorities, using the tax rates and tax laws that have been enacted or substantially enacted by the Balance Sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in financial statements. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized.

1.1.13 Retirement and other employee benefits

(a) Short Term Employee Benefits

The company has an obligation towards leave encashment, a defined benefit retirement plan covering eligible employees. The liability is provided for on the basis of the Company policy and calculations made by the Management at the end of each financial year.

(b) Post Employment Benefits

(i) Defined Benefit Plan

Gratuity being a defined benefit scheme is accrued based on actuarial valuations, carried out by an independent actuary as at the balance sheet date using projected unit credit method. These contributions are covered through Group Gratuity Scheme with Life Insurance Corporation of India and are charged against revenue.

Re-measurements, comprises actuarial gains and losses, the effects of the asset ceiling (excluding net interest) and the return on plan assets (excluding net interest), are recognized immediately in a Balance Sheet with a corresponding debit or credit to retaining earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods. Net interest is calculated by applying the discount rate to the net balance of defined benefit liability or asset.

For the purpose of presentation of defined benefit plans, the allocation between short term and long term provisions has been made as determined by an actuary.

(ii) Defined Contribution Plans

Company''s contribution to Provident Fund and Employees'' State Insurance Fund which are define contribution plans determined under the relevant schemes and/or statutes are charged to Statement of Profit and Loss when incurred.

1.1.14 Cash flow statement

Cash flows are reported using the indirect method, whereby profit for the period adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and items 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.

1.1.15 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 substantial period of time to get ready for intended use. All other borrowing costs are recognised in the Statement of Profit and Loss in the period they occur.

1.1.16 Segment Reporting:

The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

2.0 Notes to the standalone financial statements for the year ended March 31, 2018

2.1 First time adoption of Ind AS

These standalone financial statements of Raminfo Limited for the year ended March 31, 2018 have been prepared in accordance with Ind AS. For the purpose of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101, First-Time Adoption of Indian Accounting Standards with April 1, 2016 as the transition date.

The transition to Ind AS has resulted in changes in the presentation of financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in Note 1 have been applied in preparing the standalone financial statements for the year ended March 31, 2018 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet and Statement of Profit and Loss, is set out in Notes 2.2.1. Exemptions on the first-time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in Note 2.1.1

2.1.1 Exemptions availed on first-time adoption of Ind AS 101

Ind AS allows first-time adopters certain exemptions from retrospective application of certain requirements under the Ind AS. The Company has accordingly applied the following exemptions.

i) Deemed cost of property, plant and equipment:

The Company has elected to continue with the carrying value of all its property, plant and equipments and intangible assets as of April 1, 2016 measured as per previous GAAP and use that carrying value as its deemed cost on transition date.

ii) Estimates

The estimates as at March 31, 2017 are consistent with those made for same dates in accordance with Indian GAAP (After adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation.

Impairment of Financial assets based on risk exposure and application of ECL model.

The estimates used by the Company to present this amounts in accordance with Ind AS reflect conditions as of March 31, 2017.

iii) Derecognition of financial assets and financial liabilities:

The Company has applied the derecognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after transition date.

2.2 Reconciliation

The following reconciliations provide the effect of transition to Ind AS from IGAAP in accordance with Ind AS 101.

Equity as at 1stApril, 2016 and 31st March, 2017

Net profit for the year ended 31st March, 2017


Mar 31, 2015

2.1 Accounting conventions:

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are prepared on historical cost basis, as a going concern, in accordance with Generally Accepted Accounting Principles in India, provisions of the Companies Act, 2013 & Accounting Standards notified by the Central Government under the Companies (Accounting Standards) Rules, 2006.

2.2 Use of estimates:

The presentations of financial statements are in conformity with the Generally Accepted Accounting Principles which require estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognised in the year in which the results are known / materialized.

2.3 Revenue recognition:

Revenue is recognized upon rendering the services to customers as per the invoice raised on milestone basis as per the contracts, in cases of customized application development projects; on completion of installation and acceptance by customer incase of software products and on time and material basis for onsite projects.

2.4 Fixed assets:

Fixed assets are stated at cost of acquisition/purchase price inclusive of duties, taxes, incidental expenses, erection/commissioning expenses etc. up to the date the asset is ready for its intended use.

2.5 Depreciation:

2.5.1 Depreciation on fixed assets is provided on Straight Line Method at the following useful life specified in Schedule II of the Companies Act, 2013

Category Useful Life considered by company (years)

Office Equipment 5

Furniture & Fixtures 10

Computer Systems - other than servers 3

Computer Systems - Servers 6

Electrical Installations 10

Vehicles 6

Building 3

2.5.2 Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal

2.6 Impairment of assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.7 Foreign currency transactions:

2.7.1 Foreign currency transactions are generally recorded on the basis of exchange rates prevailing on the date of their occurrence. Net exchange gain or loss resulting in respect of Foreign Exchange transactions settled during the periodis recognised in the statement of Profit & Loss.

2.7.2 Foreign currency assets and liabilities (other than those covered by forward contracts) as on the Balance Sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange differences arising thereon, is adjusted to the cost of fixed assets or charged to the Profit and Loss Account, as the case may be.

2.7.3 In case of transactions covered by forward contracts, the differences between the contract rate and exchange rate prevailing on the date of the transaction is adjusted to the cost of assets or recognized as income or expenses over the life of the contract, as the case may be.

2.8 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

2.9 Taxes on income:

2.9.1 Current year charge:

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of Income-tax Act, 1961. However, where the tax is computed in accordance with the provision of Section 115JB of the Income-tax Act, 1961, as Minimum Alternate Tax (MAT), it is charged off to the Profit & Loss Account of the relevant year.

2.9.2 Deferred tax:

Deferred income tax is recognized on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. The tax effect is calculated on the accumulated timing differences at the year end based on tax rates and laws, enacted or substantially enacted as on the Balance Sheet date.

2.10 Provisions, contingent liabilities and contingent assets:

2.10.1 Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

2.11 Cash Flow Statement:

2.11.1 Cash flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the Company are segregated.

2.12 Employees Retirement benefits:

2.12.1 Contribution to provident fund is made as per provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 and charged to Profit and Loss Account.

2.12.2 The company has an obligation towards Gratuity, a defined benefit retirement plan covering eligible employees. The liability is provided for on the basis of actuarial valuation made at the end of each financial year.

2.12.3 The company has an obligation towards leave encashment, a defined benefit retirement plan covering eligible employees. The liability is provided for on the basis of actuarial valuation made at the end of each financial year.

2.13 Intangible Assets:

2.13.1 Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any, Intangible assets are amortised over a period of 4 years.

2.13.2 Intangible assets, that are self-generated, are accounted for at cost and amortised over a period of 4 years.

2.14 Earnings Per Share:

2.14.1 Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basis earning per share and also the weightged average number of equity shares, which may be issued on the conversion of all dilutive potential shares, unless the results would be anti-dilutive.

2.15 Segment Reporting:

The accounting policies adopted for segment reporting are in conformity with the accounting policies adopted for the company. Further,

2.15.1 Inter segment revenue has been accounted for based on the transaction price agreed to between segments which is primarily market based.

2.15.2 Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses, which relate to the company as a whole and are not allocable to segments on a reasonable basis, have been included under "Un- allocated corporate expenses net of un-allocatged income".


Mar 31, 2014

1.1 Accounting conventions:

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are prepared on historical cost basis, as a going concern, in accordance with Generally Accepted Accounting Principles in India, provisions of the Companies Act, 1956 & Accounting Standards notified by the Central Government under the Companies (Accounting Standards) Rules, 2006.

1.2 Use of estimates:

The presentations of financial statements are in conformity with the Generally Accepted Accounting Principles which require estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognised in the year in which the results are known / materialized.

1.3 Revenue recognition:

Revenue is recognized upon rendering the services to customers as per the invoice raised on milestone basis as per the contracts, in cases of customized application development projects; on completion of installation and acceptance by customer incase of software products and on time and material basis for onsite projects.

1.4 Fixed assets:

Fixed assets are stated at cost of acquisition/purchase price inclusive of duties, taxes, incidental expenses, erection/ commissioning expenses etc. up to the date the asset is ready for its intended use.

1.5.0 Depreciation:

1.5.1 Depreciation on fixed assets is provided on Straight Line Method at the following rates specified in Schedule xiii of the Companies Act, 1956

Category Rate %

Office Equipment 4.75

Furniture & Fixtures 6.33

Computer Systems 16.21

Electrical Installations 4.75

Vehicles 9.50

1.5.2 Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the date of addition/disposal

1.5.3 Depreciation on assets costing up to 5,000/- is provided in full in the year of acquisition

1.6.0 Impairment of assets:

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.7.0 Foreign currency transactions:

1.7.1 Foreign currency transactions are generally recorded on the basis of exchange rates prevailing on the date of their occurrence.

1.7.2 Foreign currency assets and liabilities (other than those covered by forward contracts) as on the Balance Sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange differences arising thereon, is adjusted to the cost of fixed assets or charged to the Profit and Loss Account, as the case may be.

1.7.3 In case of transactions covered by forward contracts, the differences between the contract rate and exchange rate prevailing on the date of the transaction is adjusted to the cost of assets or recognized as income or expenses over the life of the contract, as the case may be.

1.8.0 Borrowing costs:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.9.0 Taxes on income:

1.9.1 Current year charge:

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of Income-tax Act, 1961. However, where the tax is computed in accordance with the provision of Section 115JB of the Income-tax Act, 1961, as Minimum Alternate Tax (MAT), it is charged off to the Profit & Loss Account of the relevant year.

1.9.2 Deferred tax:

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such tax assets can be realized. Since generation of sufficient future taxable income is uncertain, no deferred tax assest has been recognised in the books.

1.10.0 Provisions, contingent liabilities and contingent assets:

1.10.1 Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

1.11.0 Cash flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the Company are segregated


Mar 31, 2013

1.1 Accounting conventions

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are prepared on historical cost basis, as a going concern, in accordance with Generally Accepted Accounting Principles in India, provisions of the Companies Act, 1956 & Accounting Standards notified by the Central Government under the Companies (Accounting Standards) Rules, 2006.

1.2 Use of estimates

The presentations of financial statements are in conformity with the Generally Accepted Accounting Principles which require estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

1.3 Revenue recognition

Revenue is recognized upon rendering the services to customers as per the invoice raised on milestone basis as per the contracts, in cases of customized application development projects; on completion of installation and acceptance by customer incase of software products and on time and material basis for onsite projects.

1.4 Fixed assets

Fixed assets are stated at cost of acquisition/purchase price inclusive of duties, taxes, incidental expenses, erection/commissioning expenses etc. up to the date the asset is ready for its intended use.

1.5.2 Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the date of addition disposal

1.5.3 Depreciation on assets costing up to 5,000/- is provided in full in the year of acquisition

1.6.0 Impairment of assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Statement of profit & loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

1.7.0 Foreign currency transactions

1.7.1 Foreign currency transactions are generally recorded on the basis of exchange rates prevailing on the date of their occurrence.

1.7.2 Foreign currency assets and liabilities (other than those covered by forward contracts) as on the Balance Sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange differences arising thereon, is adjusted to the cost of fixed assets or charged to the Profit and Loss Account, as the case may be.

1.7.3 In case of transactions covered by forward contracts, the differences between the contract rate and exchange rate prevailing on the date of the transaction is adjusted to the cost of assets or recognized as income or expenses over the life of the contract, as the case may be.

1.8.0 Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

1.9.0 Taxes on income:

1.9.1 Current year charge

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of Income-tax Act, 1961. However, where the tax is computed in accordance with the provision of Section 115JB of the Income-tax Act, 1961, as Minimum Alternate Tax (MAT), it is charged off to the Profit & Loss Account of the relevant year.

1.9.2 Deferred tax

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such tax assets can be realized. Since generation of sufficient future taxable income is uncertain, no deferred tax assest has been recognized in the books.

1.10.0 Provisions, contingent liabilities and contingent assets

1.10.1 Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material, and whose future outcome cannot be ascertained with reasonable certainty, are treated as contingent, and disclosed by way of notes to the accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

1.11.0 Cash flows are reported using the indirect method, whereby a profit before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, financing and investing activities of the Company are segregated


Mar 31, 2012

1.1 Accounting conventions:

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis. The accounts are prepared on historical cost basis' as a going concern' in accordance with Generally Accepted Accounting Principles in India' provisions of the Companies Act' 1956 & Accounting Standards notified by the Central Government under the Companies (Accounting Standards) Rules' 2006.

1.2 Use of estimates:

The presentations of financial statements in conformity with the Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reportable amount of assets and liabilities on the date of financial statements and the reportable amount of revenue and expenses during the reporting period. Differences between the actual results and estimates are recognised in the year in which the results are known / materialized.

1.3 Revenue recognition:

Revenue is recognized upon rendering the services to customers as per the invoice raised on milestone basis as per the contracts' in cases of customized application development projects; on completion of installation and acceptance by customer incase of software products and on time and material basis for onsite projects.

2.0 SECURED LOANS:

The loans outstanding to Canara Bank is secured by first charge on company’s fixed assets excluding vehicles and electrical installations' hypothecation of book debts and also guaranteed by personal guarantees of three Directors

The balance of Rs.61.55 lacs is outstanding as on 31.03.2012 on cash credit and term loan put together. The company has applied to the bank for restructure of the loan dues with installment facility to repay the balance over a period of 24 months and awaiting approval.

2.1 Fixed assets:

Fixed assets are stated at cost of acquisition/purchase price inclusive of duties' taxes' incidental expenses' erection/commissioning expenses etc. up to the date the asset is ready for its intended use.

2.2 Depreciation:

2.2.1 Depreciation on fixed assets is provided on Straight Line Method at the following rates specified in Schedule XIV of the Companies Act' 1956:

2.2.2 Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the date of addition/ disposal.

2.2.3 Depreciation on assets costing up to Rs. 5'000/- is provided in full in the year of acquisition

3.0 IMPAIRMENT OF ASSETS:

The Company has assessed at end of 31.03.2012 for the impairment value of all the fixed assets and have estimated the recoverable amount of each asset and accordingly the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the profit and loss account.

4.0 FOREIGN CURRENCY TRANSACTIONS:

4.1 Foreign currency transactions are generally recorded on the basis of exchange rates prevailing on the date of their occurrence.

4.2 Foreign currency assets and liabilities (other than those covered by forward contracts) as on the Balance Sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange differences arising thereon' is adjusted to the cost of fixed assets or charged to the Profit and Loss Account' as the case may be.

4.3 In case of transactions covered by forward contracts' the differences between the contract rate and exchange rate prevailing on the date of the transaction is adjusted to the cost of assets or recognized as income or expenses over the life of the contract' as the case may be.

5.0 BORROWING COSTS:

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of assets. Qualifying Asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

6.0 TAXES ON INCOME:

6.1 Current year charge:

Provision for taxation is ascertained on the basis of assessable profits computed in accordance with the provisions of Income-tax Act' 1961. However' where the tax is computed in accordance with the provision of Section 115JB of the Income-tax Act' 1961' as Minimum Alternate Tax (MAT)' it is charged off to the Profit & Loss Account of the relevant year.

6.2 Deferred tax:

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty' except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty' that sufficient future taxable income will be available against which such tax assets can be realized. Since losses are very high and the recovery of the same are doubtful' no provision has been made in the books.

6.3 Provisions' contingent liabilities and contingent assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Liabilities which are material' and whose future outcome cannot be ascertained with reasonable certainty' are treated as contingent' and disclosed by way of notes to the accounts. Contingent Assets are neither recognized nor disclosed in the financial statement.

As per the proposed plan of capital restructure' liabilities and provisions no longer required have been written back. The total of the write back for the year ending 31.03.2012 is Rs.4'06'85'665/-.

6.4 Cash flows are reported using the indirect method' whereby a profit before tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating' financing and investing activities of the Company are segregated


Mar 31, 2010

1.1 COST CONVENTION

The Accounts have been prepared under the historical cost convention.

1.2 REVENUE RECOGNITION

All incomes and expenditure are accounted on accrual basis.

1.3 SECURED LOANS

Overdraft facilities from Canara Bank is secured by first charge on Companys Fixed Assets excluding Vehicles and Electrical installations, hypothecation of book debts, equitable mortgage of the property (office space) owned by the Company and also guaranteed by personal guarantee of three directors.

Canara Bank has issued a notice of symbolic possession for the immovable property secured on 30.04.2010 due to the account becoming non performing assets (NPA) and made a claim for Rs.1,49,94,365.08 (excluding contingent liability Rs.47,43,200 for bank guarantees). The management intends to file an appeal to Debt Recovery Tribunal.

Term Loan from Canara Bank is secured by hypothecation of assets (Computers and equipments etc.,) pertaining to "PASS Project of APSRTC "at Visakhapatnam and also guaranteed by personal guarantee of three directors.

1.4 FIXED ASSETS

Fixed Assets have been valued at cost less depreciation.

1.5 DEPRECIATION

Depreciation is provided on straight line method in accordance with the rates prescribed under Schedule XIV of the Companies Act, 1956.

1.6 INVESTMENTS:

Investment in subsidiary is long term in nature and is stated at cost. Business circumstances indicate impairment in the value as the management is of the opinion that there has been decline in value. However the same has not been effected in this year.

1.7 INVENTORIES

Inventories are valued at lower of cost and net realisable value. Cost is determined on First in First out basis.

1.8 FOREIGN EXCHANGE TRANSACTIONS

Earnings in foreign currency are accounted at the rates prevailing on the day of the transaction. Differences in realisation is accounted as fluctuations in foreign currency. Sales made at overseas office and collections deposited in overseas bank accounts and also the expenditure incurred and disbursements made out of the said bank accounts of the overseas office are accounted at a rate that approximates the average monthly rate. However, current assets and current liabilities pertaining to the overseas office are translated at the exchange rate prevalent at the date of the balance sheet and the resultant difference is accounted in the profit and loss account. Fixed assets purchased at overseas office are recorded at cost, based on the exchange rate as of the date of purchase. The charge for depreciation is determined as per the companys accounting policy.

1.9 LEASES:

Leases, where the lessor retains substantially all the risks and rewards incidental to the ownership are classified as operating leases. Operating lease payments are recognised as an expense in Profit & Loss account on straight Line basis over the lease term.

1.10 RETIREMENT BENEFITS:

a) Contribution to Provident Fund is recognised as an expenditure on accrual basis.

b) The company has an obligation towards Gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees on retirement, death while in employment or on termination of employment in an amount equivalent to 15 days salary payable for each completed year of service. Vesting occurs upon completion of five years of service. The Gratuity plans of the entity is an unfunded plan. The company accounts for the liability for future Gratuity benefits on the basis of n independent actuarial valuation.

c) Leave encashment is not categorised as a retirement benefit as the company is in the practice of paying the leave encashment benefit every year.

1.11 DEFERRED TAXES

Deferred tax assets are recognized and carried forward to the extent that there is a reasonable certainty, except arising from unabsorbed depreciation and carry forward losses which are recognized to the extent that there is virtual certainty, that sufficient future taxable income will be available against which such tax assets can be realized.

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