Mar 31, 2015
1. Corporate Information
Commex Technology Limited (Formerly known as IT People (India) Ltd.) is
a Company promoting software products and solutions to the capital and
commodities markets and IT Consulting Services and solutions to
companies worldwide. The Company is listed at the Bombay Stock Exchange
Limited (BSE). Software products includes products, solutions and
services division for the financial and capital markets addressing
Stock and Commodities Exchange, intermediary Brokerage House, Merchant
banking Operation and Financial services in India and Overseas.
Incorporation and Registration
"Commex Technology Limited" was originally incorporated as a Private
Limited Company with the name "Global e-Com (India) Private Limited" on
24th January 2000, under Companies Act, 1956, and was issued a
certificate of incorporation bearing number 11-123796 of 2000 by the
Registrar of Companies Maharashtra. The Company became a Public Limited
Company on 8th February 2000 and the name of the Company was changed to
"Global e-Com (India) Limited", thereafter, on 11th April 2000 the name
of the Company was again changed to "Balwas e-Com India Limited".
The Company subsequently on 28th October 2003 changed its name to
"Starmax Info media Limited" and was issued with a fresh certificate of
Incorporation consequent upon change of name on its acquisition by "IT
People Private Limited".
The Company subsequently on 22nd November, 2004 changed its name to "IT
People (India) Limited" and was issued a fresh certificate of
Incorporation consequent upon change of name bearing number
L72900MH2000PLC123796 by the registrar of Companies, Maharashtra.
Further on 14th November, 2011 the name of the Company was again
changed to "Commex Technology Limited".
Note No.2
Summary of Significant Accounting Policies
2.1 Method of Consolidation:
For the purpose of consolidation. Accounts of the parent as well as the
subsidiaries are considered for the year up to 31-3-2015. Accounts of
Orient Information Technology FZ -LLC -UAE & IT Capital Services
Private Limited are audited. All inter-company transactions between the
group companies are eliminated.
2.2 Translation of financial statements of the Subsidiaries:
Transactions arising in foreign currency are reported at the rates
closely approximating to those ruling during the relevant transaction
dates. All monetary assets and liabilities in foreign currency as at
the date of financial statements are restated at the exchange rates
prevalent at the Balance Sheet date. The reporting currency of the
Company is Indian Rupees. The reporting currencies of its subsidiaries
Orient Information Technology FZ -LLC -UAE is United Arab Emirates
Dirhams. The revenue items of the foreign subsidiaries are translated
to Indian Rupees using the Simple Average of the quarterly closing
rates. Non-monetary items in the Balance Sheet of the foreign
subsidiaries are translated at the rates closely approximating those
ruling during the relevant transaction dates. The net impact of such
change is disclosed under General Reserve on consolidation.
2.3 BASISOF ACCOUNTING
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Companies has prepared these financial statements to
comply in all material respects with the Accounting Standards specified
under section 133 of the Companies Act 2013 (' the 2013 Act") read with
Rule 7 of the Companies (Accounts) Rules 2014. The Financial Statements
have been prepared on an accrual basis and under the historical cost
convention. The accounting policies adopted in the preparation of
financial statements are consistent with those of previous year.
All assets and liabilities have been classified as current or
non-current as per the Group's normal operating cycle and other
criteria set out in the Revised Schedule 111 to the Companies Act,
2013. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and
cash equivalents, the Group has ascertained its operating cycle as up
to twelve months for the purpose of current- non-current classification
of assets and liabilities.
2.4 USE OF ESTIMATES
The preparation of the financial statements, in conformity with the
generally accepted accounting principles, requires the management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities on the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on the management's best knowledge
of current events and actions, uncertainties about these assumptions
and estimates could result in the outcomes requiring adjustment to the
carrying amount of assets or liabilities in future periods.
2.5 Tangible Fixed Assets
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises purchase price,
borrowing costs if capitalization criteria met and directly
attributable cost of bringing the assets to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
items of fixed assets is added to its book value only of it increases
the future benefits from the existing assets beyond its previously
assessed standards of performance. All other expenses on existing fixed
assets, including day- today repair and maintenance expenditure and
cost of replacing parts, are changed to the statement of profit & loss
for the period during which such expenses are incurred.
2.6 Depreciation on Tangible Fixed Assets
Depreciation on fixed assets is calculated on straight line basis using
the rates arrived at based on useful lives estimates by the management.
Depreciation for the assets purchased or sold during the period is
proportionately charged. The company has used the following rates to
provide depreciation on its fixed assets.
* For these class of assets, based on internal assessment and technical
evaluation carried out, the management believes that the useful lives
as given above best represent the period over which management expects
to use these assets. Hence, the useful lives for these assets is
different from the useful lives as prescribed under Part C of Schedule
11 of the Companies Act, 2013.
# The useful lives of these class of assets is as prescribed under Part
C of Schedule II of the Companies Act, 2013.
During the period ended 31 March 2015, Management has reassessed the
useful lives of fixed assets and have adopted the useful lives as
specified. In the view of the management, the said useful lives
represents the period over which the management expects to derive
economic benefits out of the use of the said assets. As a result of
this change in useful lives of fixed assets, the depreciation charge
for the period is lower by Rs 32,141/- with a corresponding increase in
the written down value of fixed assets and balance of reserves and
surplus.
2.7 Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an assets is required, the company
estimates the assets recoverable amount. An assets recoverable amount
is the higher of an assets or cash generating units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individual's assets, unless the assets does not generate cash inflows
that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an assets or CGU exceeds its
recoverable amount, the assets is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discounts rate that reflects current market assessment of
time value of money & risk specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
company's CGU to which the individual assets are allocated. These
budgets and forecast calculations are generally covering a period of
Five (5) Years. For longer periods a long term growth rate is
calculated and applied to projects future cash flows after the 5 (Five)
Years.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit & loss, except
for previously revalued tangible fixed assets where the revaluation
reserves up to the amount of any previous revaluation.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
An assessment is made at each reporting dates as to whether there is
any indication that previously recognized impairment losses may no
longer exist or may have decreased. If such indication exists, the
company estimates the assets or CGU recoverable amount. A previously
recognized impairment loss is reversed only if there has been a change
in the assumptions used to determine the assets recoverable amount
since the last impairment loss was recognized. The reversal is limited
so that would have been determined, net of depreciation had no
impairment loss has been recognized for the assets in prior years. Such
reversal is recognized in the statement of profit and loss unless the
assets is carried at a revalued amount in which case the reversal is
treated as a revaluation increase.
2.8 Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments. All other investments are
classified as long term investments.
On initial recognition all investments are matured at cost. The cost
comprise purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired, or
partly acquired by the issue of shares or other securities the
acquisition cost is the fair value of the securities issued if an
investment is acquired in exchange for another assets the acquisition
is determined by reference to the fair value of the assets given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investment are carried in the financial statement at lower cost
and fair value determined on an individual's investment basis. Long
term investment are carried at cost. However, provision for diminution
in value is made to recognize a decline other than temporary in the
value of the investment. On disposal of an investment, the difference
between its carrying amount and net disposal proceeds is charged or
credited to the statement of profits loss account.
2.9 Revenue Recognized
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The followings specific recognition criteria must
also be met before revenue is recognized Income from services Revenues
from contract priced on a time and material basis are recognized when
services are rendered and related costs are incurred.
Revenues from turnkey contracts, which are generally time bound fixed
price contracts, are recognized over the life of the contracts using
the proportionate completion method, with contract costs determining
the degree of completion, foreseeable losses on such contracts are
recognized when probable.
Revenues from sale of software licenses are recognized upon delivery
where there is no customization required. In case of customization the
same is recognized over the life of the contract using the
proportionate completion method. Revenues from maintenance contracts
are recognized pro-rata over the period of the contract.
Revenues are reported net of discounts. The billing of consultants
employed outside India, which is borne directly by the overseas clients
is excluded from the revenue.
2.10 Foreign currency transaction
The Company has the billing process whereby it bills its overseas
clients in INR and the amount is remitted by the overseas clients by
converting the equivalent local currency equivalent to the Billing made
in INR.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non-monetary items which are
measured in terms of historical cost denominated in foreign currency
are reported using the exchange rate at the date of the transaction.
Nonmonetary items which are measures at fair value or other similar
valuation denominated in foreign currency are transferred using the
exchange rate at the date when such value was determined.
2.11 Income Taxes
Tax expense comprises current and deferred tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961, enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflects the impact of timing difference between
taxable income and accounting income originating during the current
year and reversal of timing difference for the earlier years. Deferred
tax is measured using the tax rates and tax laws enacted or
substantially enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the company
has unabsorbed depreciation or carry forward tax losses all deferred
tax assets are recognized only if there is virtual certainly supporting
evidence that they can be realized against future taxable profits.
In situation where the company is entitled to a tax holiday under the
Income Tax Act 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates no deferred tax (assets
or liabilities) is recognized in respect of timing difference which
reverse during the tax holiday period to the extent the company's gross
total income is subjected to the deduction during the tax holiday
period. Deferred tax in respect of timing difference which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate. However the company restricts recognition
of deferred tax assets to the extent that it has become reasonably
certain or virtually certain as the case may be that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. For recognition of deferred taxes, the timing
differences which originate first are considered to reverse first.
At each reporting date, the company reassesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain or virtually certain as
the case may be that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax assets to the extent that it is no longer reasonably
certain or virtually as the case may be that sufficient future taxable
income will be available against which deferred tax assets can be
realized. Any such write down is reversed to the extent that it becomes
reasonably certain or virtually certain as the case may be that
sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relates to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The company recognizes MAT credit
available as an assets only to the extent that there is convincing
evidence that the company will pay normal income tax during the
specified period I.e. the period for which MAT credit is allowed to be
carried forward. In the year in which the company recognizes MAT credit
as an assets in accordance with the Guidance Note on Accounting for
credit available of minimum
Complied by: Dion Global Solutions Limited 15th ANNUAL REPORT 2014-2015
COMMEX TECHNOLOGY LIMITED
Notes Forming Parts Of Consolidated Accounts as on 31st March.2015
alternate tax under Income Tax Act 1961. The said assets is created by
way of credit to the statement of profit and loss and shown as "MAT
credit Entitlement". The company reviews the MAT credit entitlement
assets at each reporting date and writes down the assets to extent the
company does not have convincing evidence that it will pay normal tax
during the specified period.
2.12 Earnings Per share.
Basics earnings per share are calculated by dividing the net profit and
loss for the period attributable to equity shareholders (after
deducting preference dividend and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity shares to the
extent that they are entitled to participate in dividend related to
fully paid equity shares during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issues bonus element in a right
shares, split issue and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
correspondence change in resources.
2.13 Employment Benefits
The Company's contribution to provident fund is accounted on accrual
basis and is charged to the profit and loss account.
No provision has been considered necessary towards gratuity since none
of the employees have put in the qualified number of years of service
with the Company.
2.14 Provisions
A provisions is recognized when the company has present obligation as a
results of past events. It is possible that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed
for example under Insurance Contract, the re-imbursement is recognized
as a separate asset but only when the reimbursement is virtually
certain. The expenses relating to any provision is presented in the
statement of profit and loss net of any reimbursement.
Warranty provisions
Provisions for warranty related costs are recognized when the products
is sold or service provided. Provision is based on historical
experience. The estimate of such warranty related costs is revised
annually.
2.15 Contingent liabilities
A contingent liability possible obligation that arises from past events
whose existence will be confirmed by the occurrence or non- occurrence
of one or more uncertain future events beyond the control of the
company or a present obligation that is not recognized because it is
not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is liability that cannot be recognized because it
cannot be measured reliably. The company does not recognize a
contingent liability but discloses its existence in the financial
statement.
2.16 Cash & cash equivalents
Cash and cash equivalents for the purpose of cash flow statement
comprises cash at bank and in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2014
1.1 Method of Consolidation:
For the purpose of consolidation, Accounts of the parent as well as the
subsidiaries are considered for the year up to 31-3-2014. Accounts of
the Orient Infotech. Ltd U.K., Orient Information Technology Inc. USA
are unaudited and compiled by independent, external accounting
agencies, as the local rules governing these Companies do not require
Audit of these Companies. Accounts of Orient Information Technology FZ
-LLC -UAE & Information Technology People WLL-Bahrain, IT Capital
Services Private Limited are audited. All inter- company transactions
between the group companies are eliminated. The subsidiary of the
company at USA, UK, Bahrain & Germany are inactive.
2.2 Translation of financial statements of the Subsidiaries:
Transactions arising in foreign currency are reported at the rates
closely approximating to those ruling during the relevant transaction
dates. All monetary assets and liabilities in foreign currency as at
the date of financial statements are restated at the exchange rates
prevalent at the Balance Sheet date. The reporting currency of the
Company is Indian Rupees. The reporting currencies of its subsidiaries
are -Orient Infotech. Ltd U.K.,-Great Britain Pounds, Orient
Information Technology Inc. USA-United States Dollars, Orient
Information Technology FZ -LLC -UAE United Arab Emirates Dirhams &
Information Technology People WLL Bahrain - Bahraini Dinars. The
revenue items of the foreign subsidiaries are translated to Indian
Rupees using the Simple Average of the quarterly closing rates.
Non-monetary items in the Balance Sheet of the foreign subsidiaries are
translated at the rates closely approximating those ruling during the
relevant transaction dates. The net impact of such change is disclosed
under General Reserve on consolidation.
2.3 Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expense and liabilities
and disclosures of contingent liabilities, at the end of the reporting
Period. Although these estimates are based on the managements best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could results in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
2.4 Tangible Fixed Assets
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises purchase price,
borrowing costs if capitalization criteria met and directly
attributable cost of bringing the assets to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
items of fixed assets is added to its book value only of it increases
the future benefits from the existing assets beyond its previously
assessed standards of performance. All other expenses on existing fixed
assets, including day- to day repair and maintenance expenditure and
cost of replacing parts, are changed to the statement of profit & loss
for the period during which such expenses are incurred.
2.5 Depreciation on Tangible Fixed Assets
Till 31st March 2003 Depreciation on Fixed Assets has been provided on
straight- line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is
calculated on straight line basis using the rates arrived at based on
useful lives estimates by the management or those prescribed under the
schedule XIV to the Companies Act 1956, whichever is higher. The
company has used the following rates to provide depreciation on its
fixed assets.
Keeping in view the wear and tear and the actual realizable value of
the fixed assets, the Company has provided depreciation from 1st
April,2004 on Straight Line Method at the higher rates than as
prescribed by the Companies Act.
Further the Management has written off the Fixed Assets at the Rates
higher than prescribed under the Schedule XIV of the Companies Act,
1956, keeping in view their impairment due to the technological
obsolence prevalent in the Information Technology Sector, so as to make
adequate provision for Impairment of the said Assets, as per the
Accounting treatment prescribed under the Accounting Standard 26 on
Impairment of Assets (AS 28) issued by the Institute of Chartered
Accountants of India.
2.6 Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an assets is required, the company
estimates the assets recoverable amount. An assets recoverable amount
is the higher of an assets or cash generating units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individuals assets, unless the assets does not generate cash inflows
that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an assets or CGU exceeds its
recoverable amount, the assets is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre - tax discounts rate that reflects current market assessment of
time value of money & risk specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
company''s CGU to which the individual assets are allocated. These
budgets and forecast calculations are generally covering a period of
Five (5) Years. For longer periods a long term growth rate is
calculated and applied to projects future cash flows after the 5 (Five)
Years.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit & loss, except
for previously revalued tangible fixed assets where the revaluation
reserves up to the amount of any previous revaluation.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
An assessment is made at each reporting dates as to whether there is
any indication that previously recognized impairment losses may no
longer exist or may have decreased. If such indication exists, the
company estimates the assets or CGU recoverable amount. A previously
recognized impairment loss is reversed only if there has been a change
in the assumptions used to determine the assets recoverable amount
since the last impairment loss was recognized. The reversal is limited
so that would have been determined, net of depreciation had no
impairment loss has been recognized for the assets in prior years. Such
reversal is recognized in the statement of profit and loss unless the
assets is carried at a revalued amount in which case the reversal is
treated as a revaluation increase.
2.7 Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments. All other investments are
classified as long term investments.
On initial recognition all investments are matured at cost. The cost
comprise purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired, or
partly acquired by the issue of shares or other securities the
acquisition cost is the fair value of the securities issued if an
investment is acquired in exchange for another assets the acquisition
is determined by reference to the fair value of the assets given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investment are carried in the financial statement at lower cost
and fair value determined on an individuals investment basis. Long term
investment are carried at cost. However, provision for diminution in
value is made to recognize a decline other than temporary in the value
of the investment.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit & loss account.
2.8 Revenue Recognized
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. The followings specific recognition criteria must
also be met before revenue is recognized
Income from services
Revenues from contract priced on a time and material basis are
recognized when services are rendered and related costs are incurred.
Revenues from turnkey contracts, which are generally time bound fixed
price contracts, are recognized over the life of the contracts using
the proportionate completion method, with contract costs determining
the degree of completion, foreseeable losses on such contracts are
recognized when probable.
Revenues from sale of software licenses are recognized upon delivery
where there is no customization required. In case of customization the
same is recognized over the life of the contract using the
proportionate completion method.
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract.
Revenues are reported net of discounts. The billing of consultants
employed outside India, which is borne directly by the overseas clients
is excluded from the revenue.
2.9 Foreign currency transaction
The Company has the billing process whereby it bills its overseas
clients in INR and the amount is remitted by the overseas clients by
converting the equivalent local currency equivalent to the Billing made
in INR.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date. Non monetary items which are
measured in terms of historical cost denominated in foreign currency
are reported using the exchange rate at the date of the transaction.
Non monetary items which are measures at fair value or other similar
valuation denominated in foreign currency are transferred using the
exchange rate at the date when such value was determined.
2.10 Income Taxes
Tax expense comprises current and deferred tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961, enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflects the impact of timing difference between
taxable income and accounting income originating during the current
year and reversal of timing difference for the earlier years. Deferred
tax is measured using the tax rates and tax laws enacted or
substantially enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the company
has unabsorbed depreciation or carry forward tax losses all deferred
tax assets are recognized only if there is virtual certainly supporting
evidence that they can be realized against future taxable profits.
In situation where the company is entitled to a tax holiday under the
Income Tax Act 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates no deferred tax (assets
or liabilities) is recognized in respect of timing difference which
reverse during the tax holiday period to the extent the company''s gross
total income is subjected to the deduction during the tax holiday
period. Deferred tax in respect of timing difference which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate. However the company restricts recognition
of deferred tax assets to the extent that it has become reasonably
certain or virtually certain as the case may be that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. For recognition of deferred taxes, the timing
differences which originate first are considered to reverse first.
At each reporting date, the company reassesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain or virtually certain as
the case may be that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax assets to the extent that it is no longer reasonably
certain or virtually as the case may be that sufficient future taxable
income will be available against which deferred tax assets can be
realized. Any such write down is reversed to the extent that it
becomes reasonably certain or virtually certain as the case may be that
sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relates to the same taxable entity and the same taxation authority.
Minimum Alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The company recognizes MAT credit
available as an assets only to the extend that there is convincing
evidence that the company will pay normal income tax during the
specified period I.e. the period for which MAT credit is allowed to be
carried forward. In the year in which the company recognizes MAT credit
as an assets in accordance with the Guidance Note on Accounting for
credit available of Warranty provisions minimum alternate tax under
Income Tax Act 1961. The said assets is created by way of credit to the
statement of profit and loss and shown as "MAT credit Entitlement". The
company reviews the MAT credit entitlement assets at each reporting
date and writes down the assets to extent the company does not have
convincing evidence that it will pay normal tax during the specified
period.
2.11 Earnings Per share,
Basics earnings per share are calculated by dividing the net profit and
loss for the period attributable to equity shareholders (after
deducting preference dividend and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity shares to the
extent that they are entitled to participate in dividend related to
fully paid equity shares during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issues bonus element in a right
shares, split issue and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
correspondence change in resources.
2.12 Employment Benefits
The Company''s contribution to provident fund is accounted on accrual
basis and is charged to the profit and loss account.
No provision has been considered necessary towards gratuity since none
of the employees have put in the qualified number of years of service
with the Company,
2.13 Provisions
A provisions is recognized when the company has present obligation as a
results of past events. It is possible that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed
for example under Insurance Contract, the re-imbursement is recognized
as a separate asset but only when the reimbursement is virtually
certain. The expenses relating to any provision is presented in the
statement of profit and loss net of any reimbursement.
Provisions for warranty related costs are recognized when the products
is sold or service provided. Provision is based on historical
experience. The estimate of such warranty related costs is revised
annually.
2.14 Contingent liabilities
A contingent liability possible obligation that arises from past events
whose existence will be confirmed by the occurrence or non- occurrence
of one or more uncertain future events beyond the control of the
company or a present obligation that is not recognized because it is
not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is liability that cannot be recognized because it
cannot be measured reliably. The company does not recognize a
contingent liability but discloses its existence in the financial
statement.
2.15 Cash & cash equivalents
Cash and cash equivalents for the purpose of cash flow statement
comprises cash at bank and in hand and short term investments with an
original maturity of three months or less.
Mar 31, 2013
1.1 Use of Estimates
The preparation of financial statements in conformity with Indian GAAR
requires the management to make judgments estimates and assumptions
that affect the reported amounts of revenues expense and liability and
disclosure of contingent liability at the end of the reporting period
although these estimate are based on the management best knowledge of
current events and actions uncertainty about these assumptions and
estimates could result in the outcomes requiring a material adjustment
to the carrying amounts of assets or liabilities in future periods.
1.2 Tangible Fixed Assets
Fixed assets, are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises purchase price,
borrowing costs if capitalization criteria met and directly
attributable cost of bringing the assets to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
items of fixed assets is added to its book value only of it increases
the future benefits from the existing assets bye and its previously
assessed standards of performance. All other expenses on sting fixed as
sets, including day- today repair and maintenance need pedicure and
cost of replacing pats, are changed to the statement of profit it
loss for the period during which such expenses are incurred.
1.3 Depredation on Tangible Fixed Assets
Till 31 '' March 2003 Depreciation on Fixed Assets has been provided on
straight-line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is
calculated on straight line basis using the rates arrived at based on
useful lives estimates by the management or those prescribed under the
schedule XIV to the Companies Act 1956, whichever is higher. The
company has used the following rates to provide depreciation on its
fixed assets.
As a result of the above, the Depreciation provision for the year is
higher by Rs. 11,26,012/- and consequently the Profit for the year ended
is lower by 7 11,26,012/-. This change was made w.e.f, 1st April,2004
in case of the company and hence the Reserves to date of the company
are bower by adjustment
Further the Management has written off the Fixed Assets at the Rates
higher than prescribed under the Schedule XIV of the Companies Act,
1956, keeping in view their impairment clue to the technological
obsolesce prevalent in the Information Technology Sector, so as to make
adequate provision for Impairment of the said Assets, as per the
Accounting treatment prescribed under the Accounting Standard 26 on
Impairment of Assets (AS 28) issued by the Institute of Chartered
Accountants of India.
1.4 Impairment of Tangible and intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be important if any indication exists or
when annual important testing for an assets is required the company
estimates the assets recoverable amount An assets recoverable amount is
the higher of an determined or cash generating units recoverable (CGU)
net selling price and its value in use the recoverable amount is
determined for a individuals assets unless the does not generate
Current investment are carried in the financial statement at lower
cost and fair value determined on an individual: Investment baste. Long
term investment are carried at cost. However, provision for diminution
in value is made to recognize a decline other than temporary in the
value of the investment.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profits loss account.
1.5 Revenue Recognized
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliable measured. The followings specific recognition criteria must
also be met before revenue is recognized
Income From Services
Revenues from contract priced on a time and material basis are
recognized when services are rendered and related costs are Incurred-
Revenues from turnkey contracts, which are generally time bound fixed
price contracts, are recognized over the life of the contracts using
the proportionate completion method, with contract costs determining
the degree of completion, foreseeable losses on such contract* are
recognized when probable.
Re venues from sale of software licenses are recognized upon delivery
where there is no customization required. In case of customization the
same is recognized over the life of the- contract using the
proportionate completion method.
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract.
Revenues are reported net of discounts
1.6 Foreign Currency Transact! on
The Company has the billing process whereby It bills its overseas
clients in 1NR and the amount is remitted by the overseas clients by
connate ting the equivalent local currency equivalent to the Billing
made in INR.
Conversion
Foreign currency monetary items are re translated using the exchange
rate prevailing at tried reporting date Non monetary items which are
measured in terms Of historical cost denominated in lording currency
are reported using the exchange rate at the date of the transaction.
Non monetary items which are measures at fair value or other similar
valuation denominated in foreign currency are transferred using the
exchange rate at the date when such value was determined.
Income Taxes
Tax expense comprises current and deferred tax current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the income Tax Act,1961 enacted in India mad tax laws
prevailing in the respective tax jurisdiction where the company
operates operates the tax rates and reporting date current income tax
relating to times recognized directly in equity is recognized in equity
and the statement of profit and loss.
Deferred income taxes reflects the impact of timing difference between
taxable income and accounting income originating during the current year
and reversal of timing different for the earlier years deferred tax is
measured using the tax rates and tax laws enacted or substantially
enacted at the equity and not in statement of profit and loss.
Deferred tax liabilities are recognized for mall taxable timing
differences deferred tax assets are recognized for deductible timing
difference only to the extent that there is reasonable certainty that
sufficient future income will be available against which such deferred
tax assets can be realized in situations where the company has
unabsorbed depreciation or carry forward tax losses all deferred tax
assets are recognize only if there is virtual certainly supporting
evidence that they can be realized against future taxable profit.
In situation where the company is entitled to a tax holiday under the
income Tax Act,1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates no deferred tax assets or
liabilities is recognized in respect of timing difference which reveres
during the tax holiday period Deferred tax in respect of timing
difference which reverse after the tax holiday period is recognition of
deferred tax assets to the extent that it has become reasonably certain
or virtually certain as the case may be that sufficient future taxable
income will be available against which such deferred tax assets can be
realized for recognition of deferred taxes the timing difference which
originate first are considered to reverse first.
At each reporting date the company reassesses unrecognized deferred tax
assets it recognizes deferred tax assets to the extent that it has
become reasonably certain or virtually as the case may be that
sufficient future taxable income will be available against which
deferred tax assets can be realized any such write down is reversed to
the extant that it become reasonably certain to virtually certain as the
case may be that sufficient future taxable in come will be available.
Minimum ternate Tax CM AT) partial a year is charged to the statement
that(here is convincing The company recognizes MAT credit specified
period 1.0,he period of evidence that the company will pay normal in
which the company recognizes MAT which MAT credit is allowed to but on
Accounting for credit available of credit as assets in accordance with
three created by way of credit to the
1.7 Earnings Per share.
Basics earnings per share are calculated abuses) by the weighted
eighty shareholders (after average unbar of equity threes out sun
(participate in dividend related to as a fraction of an equity s ha
res to the extents y hake average number of equity shares fully
assisted for events such as bonus issues bonus element in a right
(consolidation of share, that have changed the number of equity .hares
outstanding, without a correspondence change In resources,
1.8 Employment Benefits
The Company''s to provident fund is accounted on accrual and is charged
to the copes has been considered necessary towards gratuity since
none of the employees have put in the qualified number of years of
service with the Company.
1.9 Provisions
provisions is recognized when they reflect the current best estimates.
Where the company expects some all of a the reimbursement is net of
any reimbursement. Warranty Provisions annually.
1.10 Contingent Liabilities
A contingent liability possible obligation that arises from past events
whose existent with.
1.11 Cash & Cash Equivalents
Mar 31, 2012
1.1 Change in Accounting policies
During the year ended 31 March 2012, the revised Schedule VI notified
under the companies act 1956, has become applicable to the company, for
preparation & presentation of its financial statements. The adoption of
revised schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. the
company has also reclassified the previous year figure in accordance in
the current year.
2.2 Use of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expense and liabilities
and disclosures of contingent liabilities, at the end of the reporting
Period. Although these estimates are based on the managements best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could results in the outcomes requiring a
material adjustment to the carrying amounts of assets or liabilities in
future periods.
2.3 Tangible Fixed Assets
Fixed assets, are stetted at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises purchase price,
borrowing costs if capitalization criteria met and directly
attributable cost of bringing the assets to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price. Subsequent expenditure related to an
items of fixed assets is added to its book value only of it increases
the future benefits from the existing assets beyond its previously
assessed standards of performance. All other expenses on existing fixed
assets, including day- to day repair and maintenance expenditure and
cost of replacing parts, are changed to the statement of profit & loss
for the period during which such expenses are incurred.
2.4 Depreciation on Tangible Fixed Assets
Till 31st March 2003 Depreciation on Fixed Assets has been provided on
straight-line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.Depreciation on fixed assets is
calculated on straight line basis using the rates arrived at based on
useful lives estimates by the management or those prescribed under the
schedule XIV to the companies act 1956, whichever is higher. The
company has used the following rates to provide depreciation on its
fixed assets.
As a result of the above, the Depreciation provision for the year is
higher by Rs.31,44,437/- and consequently the Profit for the year ended
is lower by Rs.31,44,437/-. This change was made w.e.f. 1st April,2004 in
case of the company and hence the Reserves to date of the company are
lower by Rs.9,30,59,128/- Further the Management has written off the
Fixed Assets at the Rates higher than prescribed under the Schedule XIV
of the Companies Act, 1956, keeping in view their impairment due to the
technological obsolence prevalent in the Information Technology Sector,
so as to make adequate provision for Impairment of the said Assets, as
per the Accounting treatment prescribed under the Accounting Standard
26 on Impairment of Assets (AS 28) issued by the Institute of Chartered
Accountants of India.
2.5 Impairment of Tangible and Intangible Assets
The company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an assets is required, the company
estimates the assets recoverable amount. An assets recoverable amount
is the higher of an assets or cash generating units (CGU) net selling
price and its value in use. The recoverable amount is determined for an
individuals assets, unless the assets does not generate cash inflows
that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an assets or CGU exceeds its
recoverable amount, the assets is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre - tax discounts rate that reflects current market assessment of
time value of money & risk specific to the asset. In determining net
selling price, recent market transactions are taken into account, if
available. If no such transactions can be identified, an appropriate
valuation model is used.
The company bases its impairment calculation on detailed budgets and
forecast calculations which are prepared separately for each of the
company's CGU to which the individual assets are allocated. These
budgets and forecast calculations are generally covering a period of
Five (5) Years. For longer periods a long term growth rate is
calculated and applied to projects future cash flows after the 5 (Five)
Years.
Impairment losses of continuing operations, including impairment on
inventories, are recognized in the statement of profit & loss, except
for previously revalued tangible fixed assets where the revaluation
reserves up to the amount of any previous revaluation.
After impairment, depreciation is provided on the revised carrying
amount of the assets over its remaining useful life.
An assessment is made at each reporting dates as to whether there is
any indication that previously recognized impairment losses may no
longer exist or may have decreased. If such indication exists, the
company estimates the assets or CGU recoverable amount. A previously
recognized impairment loss is reversed only if there has been a change
in the assumptions used to determine the assets recoverable amount
since the last impairment loss was recognized. The reversal is limited
so that would have been determined, net of depreciation had no
impairment loss has been recognized for the assets in prior years. Such
reversal is recognized in the statement of profit and loss unless the
assets is carried at a revalued amount in which case the reversal is
treated as a revaluation increase.
2.6 Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments. All other investments are
classified as long term investments.
On initial recognition all investments are matured at cost. The cost
comprise purchase price and directly attributable acquisition charges
such as brokerage, fees and duties. If an investment is acquired, or
partly acquired by the issue of shares or other securities the
acquisition cost is the fair value of the securities issued if an
investment is acquired in exchange for another assets the acquisition
is determined by reference to the fair value of the assets given up or
by reference to the fair value of the investment acquired, whichever is
more clearly evident.
Current investment are carried in the financial statement at lower cost
and fair value determined on an individuals investment basis. Long term
investment are carried at cost. However, provision for diminution in
value is made to recognize a decline other than temporary in the value
of the investment.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit & loss account.
2.7 Revenue Recognized
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliable measured. The followings specific recognition criteria must
also be met before revenue is recognized
Income from services
Revenues from contract priced on a time and material basis are
recognized when services are rendered and related costs are incurred.
Revenues from turnkey contracts, which are generally time bound fixed
price contracts, are recognized over the life of the contracts using
the proportionate completion method, with contract costs determining
the degree of completion, foreseeable losses on such contracts are
recognized when probable.
Revenues from sale of software licenses are recognized upon delivery
where there is no customization required. In case of customization the
same is recognized over the life of the contract using the
proportionate completion method.
Revenues from maintenance contracts are recognized pro-rata over the
period of the contract.
Revenues are reported net of discounts
2.8 Foreign currency transaction
The Company has the billing process whereby it bills its overseas
clients in INR and the amount is remitted by the overseas clients by
converting the equivalent local currency equivalent to the Billing made
in INR.
Conversion
Foreign currency monetary items are retranslated using the exchange
rate prevailing at the reporting date Non monetary items which are
measured in terms of historical cost denominated in foreign currency
are reported using the exchange rate at the of the transaction. Non
monetary items which are measures at fair value or other similar
valuation denominated in foreign currency are transferred using the
exchange rate at the date when such value was determined.
2.9 Income Taxes
Tax expense comprises current and deferred tax. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the income tax act, 1961, enacted in India and tax laws
prevailing in the respective tax jurisdiction where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflects the impact of timing difference between
taxable income and accounting income originating during the current
year and reversal of timing difference for the earlier years. Deferred
tax is measured using the tax rates and tax rates and tax laws enacted
or substantially enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
difference only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the company
has unabsorbed depreciation or carry forward tax losses all deferred
tax assets are recognized only if there is virtual certainly supporting
evidence that they can be realized against future taxable profits.
In situation where the company is entitled to a tax holiday under the
income tax act 1961 enacted in India or tax laws prevailing in the
respective tax jurisdiction where it operates no deferred tax (assets
or liabilities) is recognized in respect of timing difference which
reverse during the tax holiday period to the extent the company's gross
total income is subjected to the deduction during the tax holiday
period. Deferred tax in respect of timing difference which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate. However the company restricts recognition
of deferred tax assets to the extent that it has become reasonably
certain or virtually certain as the case may be that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. For recognition of deferred taxes, the timing
differences which originate first are considered to reverse first.
At each reporting date, the company reassesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain or virtually certain as
the case may be that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The company writes- down the carrying amount of
deferred tax assets to the extent that it is no longer reasonably
certain or virtually as the case may be that sufficient future taxable
income will be available against which deferred tax assets can be
realized. Any such write down is reversed to the extent that it becomes
reasonably certain or virtually certain as the case may be that
sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset if a
legally enforceable right exists to set off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relates to the same taxable entity and the same taxation authority.
Minimum alternate Tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The company recognizes MAT credit
available as an assets only to the extend that there is convincing
evidence that the company will pay normal income tax during the
specified period I.e. the period for which MAT credit is allowed to be
carried forward. In the year in which the company recognizes MAT credit
as an assets in accordance with the Guidance Note on Accounting for
credit available of minimum alternate tax under income tax act 1961.
the said assets is created by way of credit to the statement of profit
and loss and shown as "MAT credit Entitlement". The company reviews the
MAT credit entitlement assets at each reporting date and writes down
the assets to extent the company does not have convincing evidence that
it will pay normal tax during the specified period.
2.10 Earnings Per share.
Basics earnings per share are calculated by dividing the net profit and
loss for the period attributable to equity shareholders (after
deducting preference dividend and attributable taxes) by the weighted
age number of equity shares outstanding during the period. Partly paid
equity shares are treated as a fraction of an equity shares to the
extent that they are entitled to participate in dividend related to
fully paid equity shares during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issues bonus element in a right
shares, split issue and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
correspondence change in resources.
2.11 Employment Benefits
The Company's contribution to provident fund is accounted on accrual
basis and is charged to the profit and loss account.
No provision has been considered necessary towards gratuity since none
of the employees have put in the qualified number of years of service
with the Company.
2.12 Provisions provisions is recognized when the company has present
obligation as a results of past events. It is possible that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Provisions are not discounted to their present value and
are determined based on the best estimate required to settle the
obligation at the reporting date. These estimates are reviewed at each
reporting date and adjusted to reflect the current best estimates.
Where the company expects some or all of a provision to be reimbursed
for example under Insurance Contract, the re-imbursement is recognized
as a separate asset but only when the reimbursement is virtually
certain. The expenses relating to any provision is presented in the
statement of profit and loss net of any reimbursement.
Warranty provisions
Provisions for warranty related costs are recognized when the products
is sold or service provided. Provision is based on historical
experience. The estimate of such warranty related costs is revised
annually.
2.13 Contingent liabilities
A contingent liability possible obligation that arises from past events
whose existence will be confirmed by the occurrence or non- occurrence
of one or more uncertain future events beyond the control of the
company or a present obligation that is not recognized because it is
not probable that an outflow of resources will be required to settle
the obligation. A contingent liability also arises in extremely rare
cases where there is liability that cannot be recognized because it
cannot be measured reliably. The company does not recognize a
contingent liability but discloses its existence in the financial
statement.
2.14 Cash & cash equivalents
Cash and cash equivalents for the purpose of cash flow statement
comprises cash at bank and in hand and short term investments with an
original maturity of three months or less.
2.15 Measurement of EBITDA
As permitted by the guidance notes on the revised schedule vi to the
companies act 1956. the company has elected to present earnings before
interest tax depreciation and amortization as per a separate line item
on the face of the statement of profit and loss. The company measures
EBITDA on the basis of profit/(Loss) from continuing operations. In its
measurement the company does not include depreciation and amortization
expenses finance costs and tax expenses.
Mar 31, 2011
A. Basis of Accounting & Recognition of Income & Expenditure.
1. The Financial Statements are prepared under the historical cost
convention in accordance with the generally accepted Accounting
principles and the provisions of the Companies Act, 1956.
2. The Company follows mercantile system of accounting and recognizes
significant items of income and expenditure on accrual basis.
B. Fixed Assets
1. Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and other attributable costs.
2. Till 31st March 2003 Depreciation on Fixed Assets has been provided
on straight-line method at the rates and in the manner prescribed in
Schedule XIV to the Companies Act, 1956.
3. Keeping in view the wear and tear and the actual realizable value
of the fixed assets, the Company has provided depreciation from 1st
April,2004 on Straight Line Method at the higher rates than as
prescribed by the Companies Act. The depreciation as per Act and as per
books in respect of the fixed assets is as under.
As a result of the above, the Depreciation provision for the year is
higher by Rs.29,27,519/- and consequently the Profit for the year ended
is lower by ^.29,27,519/-. This change was made w.e.f. 1st April,2004
in case of the company and hence the Reserves to date of the company
are lower by ^.8,99,14,691/-
Further the Management has written off the Fixed Assets at the Rates
higher than prescribed under the Schedule XIV of the Companies Act,
1956, keeping in view their impairment due to the technological
obsolance prevalent in the Information Technology Sector, so as to make
adequate provision for Impairment of the said Assets, as per the
Accounting treatment prescribed under the Accounting Standard 26 on
Impairment of Assets (AS 28) issued by the Institute of Chartered
Accountants of India.
C. Sundry Debtors and Advances
Specific debts and advances identified as irrecoverable or doubtful are
written-off or provided for respectively.
D. Revenue Recognition
i. Income from Information Technology Solutions Services is recognized
on dispatch/ delivery of the concerned goods/services.
ii. Other income is accounted on accrual basis, except in respect of
income, which is not certain to realize.
E. Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction. Monetary assets and liabilities
denominated in foreign currency are translated at the rates of exchange
at the balance sheet date and resultant gain or loss is recognized in
the profit and loss account.
F. Miscellaneous expenditure/Amortization
Miscellaneous Expenditure are fully written off during the year, which
does not result into creation of any asset, in accordance with the
Accounting Standard 26 (AS 26) issued by the Institute of Chartered
Accountants of India.
G. Employment benefits
i. The Company's contribution to provident fund is accounted on accrual
basis and is charged to the profit and loss account.
ii. No provision has been considered necessary towards gratuity since
none of the employees have put in the qualified number of years of
service with the Company.
H. Provision for Deferred Tax
Deferred tax assets and liabilities are recognized, subject to
consideration of prudence, on timing difference, being the difference
between taxable income and accounting income, that originated in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets arising on account of unabsorbed depreciation/
carry forward of losses under tax laws are recognized only to the
extent that there is virtual certainty supported by convincing evidence
that sufficient future taxable income will be available against which
such deferred tax asset can be realized in terms of Para 17 of the
Accounting Standard 22 issued by the Institute of Chartered Accountants
of India.
Mar 31, 2010
A. Basis of Accounting & Recognition of Income & Expenditure.
1. The Financial Statements are prepared under the historical cost
convention in accordance with the generally accepted Accounting
principles and the provisions of the Companies Act, 1956.
2. The Company follows mercantile system of accounting and recognizes
significant items of income and expenditure on accrual basis.
B. Fixed Assets
1 Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and other attributable costs.
2. Till 31st March 2003 Depreciation on Fixed Assets has been provided
on straight-line
method at the rates and in the manner prescribed in Schedule XIV to the
Companies Act, 1956.
As a result of the above, the Depreciation provision for the year is
lower by RS.26,84,847/- and consequently the Profit for the year ended
is higher by RS.26,84,847/-. This change was made w.e.f. 1st April,2004
in case of the company and hence the Reserves to date of the company
are lower by RS.8,69,87,172/-
Further the Management has written off the Fixed Assets at the Rates
higher than prescribed under the Schedule XIV of the Companies Act,
1956, keeping in view their impairment due to the technological
obsolance prevalent in the Information Technology Sector, so as to make
adequate provision for Impairment of the said Assets, as per the
Accounting treatment prescribed under the Accounting Standard 26 on
Impairment of Assets (AS 28) issued by the Institute of Chartered
Accountants of India.
C. Sundry Debtors and Advances
Specific debts and advances identified as irrecoverable or doubtful are
written-off or provided for respectively.
D. Revenue Recognition
i. Income from Information Technology Solutions Services is recognized
on dispatch/delivery of the concerned goods/services.
ii. Other income is accounted on accrual basis, except in respect of
income, which is not certain to realize.
E. Foreign Exchange Transactions
Transactions in foreign currencies are recorded at the exchange rate
prevailing on the date of transaction. Monetary assets and liabilities
denominated in foreign currency are translated at the rates of exchange
at the balance sheet date and resultant gain or loss is recognized in
the profit and loss account.
F. Miscellaneous expenditure/Amortization
Merger & Acquisition and GDR issue expenses are fully written off
during the year, which does not result into creation of any asset, in
accordance with the Accounting Standard 26 (AS 26) issued by the
Institute of Chartered Accountants of India..
G. Employment benefits
i. The Companys contribution to provident fund is accounted on accrual
basis and is charged to the profit and loss account.
ii. No provision has been considered necessary towards gratuity since
none of the employees have put in the qualified number of years of
service with the Company.
H. Provision for Deferred Tax
Deferred tax assets and liabilities are recognized, subject to
consideration of prudence, on timing difference, being the difference
between taxable income and accounting income, that originated in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets arising on account of unabsorbed depreciation/carry
forward of losses under tax laws are recognized only to the extent that
there is virtual certainty supported by convincing evidence that
sufficient future taxable income will be available against which such
deferred tax asset can be realized in terms of Para 17 of the
Accounting Standard 22 issued by the Institute of Chartered Accountants
of India.
Mar 31, 2009
1 Use of estimates:
The consolidated financial statements include the accounts of the
Company and its Subsidiaries. The preparation of such statements
requires the management to make estimates and assumptions that affect
the reported amounts of Assets and Liabilities, Revenues and
Expenditures and disclosure of contingent liabilities. Although these
estimates are based on the Managements best knowledge of current
events and the actions the Company undertake, in future, actual results
ultimately may differ from such estimates.
2 Method of Consolidation:
For the purpose of consolidation, Accounts of the parent as well as the
subsidiaries are considered for the year up to 31-3-2009. Accounts of
the Orient Infotech. Ltd U.K., Orient Information Technology Inc. USA
are unaudited and compiled by independent, external accounting
agencies, as the local rules governing these Companies do not require
Audit of these Companies. Accounts of Orient Information Technology FZ
-LLC -UAE & Information Technology People WLL-Bahrain are audited. All
inter-company transactions between the group companies are eliminated.
The subsidiary of the company .at Germany is defunct and therefore the
detail in respect thereof is not reported.
3 Translation of financial statements of the Subsidiaries:
Transactions arising in foreign currency are reported at the rates
closely approximating to those ruling during the relevant transaction
dates. All monetary assets and liabilities in foreign currency as at
the date of financial statements are restated at the exchange rates
prevalent at the Balance Sheet date. The reporting currency of the
Company is Indian Rupees. The reporting currencies of its subsidiaries
are -Orient Infotech. Ltd U.K.,-Great Britain Pounds, Orient
Information Technology Inc. USA-United States Dollars, Orient
Information Technology FZ -LLC -UAE United Arab Emirates Dirhams &
Information Technology People WLL Bahrain - Bahraini Dinars. The
revenue items of the foreign subsidiaries are translated to Indian
Rupees using the Simple Average of the quarterly closing rates.
Non-monetary items in the Balance Sheet of the foreign subsidiaries are
translated at the rates closely approximating those ruling during 1he
relevant transaction dates. The net impact of such change is disclosed
under General Reserve on consolidation.