Mar 31, 2013
I. BASIS OF ACCOUNTING AND PREPERATION OF FINANCIAL STATEMENTS:
The Financial Statements of the Company have been prepared in
accordance with Indian Generally Accepted Accounting Principles (Indian
GAAP) to comply with the Accounting Standards notified under the
Companies (Accounting Standards) Rules, 2006 (as amended) and the
Companies Act, 1956 except for rates of Depreciation as fully described
in Note vi below.
ii. SYSTEM OF ACCOUNTING:
The Financial Statements are prepared on accrual basis under the
historical cost convention. The Accounting Policies adopted in the
preparation of the Financial Statements are consistent with those
followed in the Previous Year.
iii. USE OF ESTIMATES:
The preparation of Financial Statements in conformity with the Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities on the date of financial statements
and reported amounts of revenues and expenses during the period
reported. Actual results could differ from those estimates.
iv. INVENTORIES:
The Company deals mainly in Computer Software Development and allied
services and does not carry any inventory.
v. CASH AND CASH EQUIVALENTS (FOR PURPOSES OF CASH FLOW STATEMENT):
Cash comprises cash on hand, current accounts and demand deposits with
banks. Cash equivalents are short-term balances (with an original
maturity of three months or less from the date of acquisition), highly
liquid investments that are readily convertible into known amounts of
cash and which are subject to insignificant risk of changes in value.
vi. CASH FLOW STATEMENT:
Cash flows are reported using indirect method, whereby net profits
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts
and payments. The cash flows from operating, investing and financing
activities of the Company are segregated based on the available
information.
vii. DEPRECIATION:
Depreciation on fixed assets is provided using the WDV method based on
the useful life as estimated by the management. Depreciation is charged
on pro rata basis for assets purchased / sold during the year.
1. Computers and Software @ 45%
2. Office and Electrical Equipment @ 25%
3. Furniture @ 20%
viii. REVENUE RECOGNITION:
Revenue from consultancy and software development is recognized as per
the terms of specific contracts.
ix. OTHER INCOME:
Interest income and income on sale of any asset are accounted on
accrual basis. Dividend income is accounted for when the right to
receive it is established.
x. FIXED ASSETS:
Fixed assets are carried at cost of acquisition and subsequent
improvement thereto (including taxes, duties, freight and other
incidental expenses relates to acquisition, construction and
installation of asset/s concerned) less accumulated depreciation and
impairment losses, if any. Subsequent expenditure relating to fixed
assets is capitalised only if such expenditure results in an increase
in the future benefits from such asset beyond its previously assessed
standard of performance.
Capital work-in-progress is carried at cost, comprising direct cost and
related incidental expenses.
xi. INVESTMENTS
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments includes acquisition charges such as
brokerage, fees and duties.
xii. EMPLOYEE RETIREMENT BENEFITS:
In respect of provisioning for terminal benefits, like gratuity and
leave salary, the Company had no employee on roll as at the end of the
financial year 31-03-2013 and hence no liability is recognized.
xiii. SEGMENT REPORTING:
The Company operates primarily in India and provides services (ITeS).
Hence, the disclosures under Segment Reporting do not apply to the
Company.
xiv. EARNINGS PER SHARE:
The number of shares used in computing basic earnings per share is the
weighted average number of shares outstanding during the year.
The diluted earnings per share has been computed by dividing the Net
Profit After Tax available for Equity Shareholders by the weighted
average number of equity shares, after giving dilutive effect of the
outstanding Warrants, Stock Options and Convertible bonds for the
respective periods.
xv. INCOME TAXES:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. The Company has recognized Deferred Tax Liability and
necessary provisions are made.
xvi. PROVISIONS AND CONTINGENT LIABILITIES:
The Company creates a provision when there is a present obligation as a
result of an obligating event that probably requires an out flow of
resources and a reliable estimate can be made of the amount of the
litigation.
A disclosure for a contingent liability is made when there is a
possible obligation or a present obligation that may, but probably will
not require an outflow of resources. When there is a possible
obligation or a present obligation in respect of which the likelihood
of outflow of resources is remote no provision or disclosure is made.
The details are furnished in Note No. 24.
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