1. Significant accounting policies
1.01 Basis of preparation of financial Statements
The Financial Statements of the Group have
been prepared in accordance with Generally
Accepted Accounting Principles in India ('Indian
GAAP') under the historical cost convention on the
accrual basis. The company has prepared these
financial statements to comply in all material
respects with the accounting standards notified
under section 133 of the Companies Act,2013
read with relevant Rules issued thereunder and
other pronouncements of Institute of Chartered
Accountants of India (ICAI).Accounting policies
have been consistently applied except where
a newly issued accounting standard initially
adopted or a revision to an existing accounting
standard requires a change in the accounting
policy hitherto in use.
1.02 Use of Estimates
The Company uses prudent and reasonable
assumptions and estimates in the preparation of
its financial statements, and these are reflected
in the reported amounts of income and expenses
during the year, and the reported balances of
assets and liabilities, and disclosures relating to
contingent liabilities, as at the date of the financial
statements. Due care and diligence have been
exercised by the management in arriving at
such "estimates & assumptions" since they may
directly affect the reported amounts of income
and expenses during the period, as well as the
balances of Assets and Liabilities, including those
which are contingent in nature, as at the date of
reporting of the financial statements.
Accounting estimates could change from period
to period. Actual results could differ from these
estimates. Any revision to accounting estimates
is recognised prospectively in current and future
years and if material, their effects are disclosed in
the notes to the financial statements.
1.03 Current and Non Current Classification
Assets
An asset is classified as current when it satisfies
any of the following criteria:
a. It is expected to be realised in, or is intended
for sale or consumption in, the company's
normal operating cycle;
b. It is held primarily for the purpose of
being traded;
c. It is expected to be realised within 12 months
after the reporting date; or
d. It is cash or cash equivalent unless it is
restricted from being exchanged or used to
settle a liability for at least 12 months after
the reporting date.
Current assets include the current portion of non¬
current financial assets.
All other assets are classified as non-current"
Liabilities
A liability is classified as current when it satisfies
any of the following criteria:
a. It is expected to be settled in the company's
normal operating cycle;
b. It is held primarily for the purpose of
being traded;
c. It is due to be settled within 12 months after
the reporting date;
d. The company does not have an unconditional
right to defer settlement of the liability for
at least 12 months after the reporting date.
Terms of liability that could, at the option of
the counterparty, result in it settlement by
the issue of equity instruments do not affect
its classification.
Current liabilities include current portion of non¬
current financial liabilities.
All other liabilities are classified as non-current."
1.04 Operating cycle
Operating cycle for the business activities
of the company covers the duration of the
specific project/contract/product line/service
including the defect liability period, wherever
applicable and extends up to the realization of
receivables (including retention monies) within
the agreed credit period normally applicable to
the respective lines of business. The operating
cycle identified by the company for Technology
Solution business is a duration of 12 months from
the end of balance sheet date and for Water
Resource Management Solution business the
cycle is greater than 12 months.
1.05 Revenue from operations:
(a) Income and Expenditure are accounted on
going concern basis.
(b) The company's income consists of income
from development of software and
distribution of software, electronic items and
hardware. Customer contracts on software
development are billed based on time and
material content of the work/assignment.
Revenue from distribution of software &
electronic items are billed and accounted
based on delivery.
(c) Export of software products are accounted
based on the export documents that are
available with company. Export of software
has been billed on mile stone basis based
on the exchange rate prevailing on that
respective day as per the CBIC Rate.
(d) All other operational revenue represents
income earned from the activities incidental
to the business and is recognized when the
right to receive the income is established as
per the terms of the contract.
(e) Interest income is accrued at applicable
interest rate. All other income has been
recognized when right to receive payment
is established.
1.06 Property, Plant and Equipment, Intangible
Assets, Capital Work in Progress & Intangible
assets under development
(a) Property, Plant and Equipment are stated
at their original cost of acquisition or
construction less accumulated depreciation/
amortization. Costs include all expenses
incurred to bring the assets to its working
condition for its intended use. Subsequent
improvements thereto including taxes,
duties, freight and other incidental expenses
related to acquisition and installation of
the assets concerned is capitalized if it
increases the future economic benefits
from the existing asset beyond its previously
assessed standard of performance. Interest
on borrowings attributable to qualifying
assets are capitalized and included in the
cost of property, plant and equipment
as appropriate.
(b) Intangible assets are recognized when
it is probable that the future economic
benefits that are attributable to the asset
will flow to the enterprise and the cost
of the asset can be measured reliably.
Intangible assets are stated at original cost
net of tax/duty credits availed, if any, less
accumulated amortization and cumulative
impairment. Cost of the software has not
been bifurcated and shown separately
wherever computer and laptop has been
bought along with the software loaded
into it and under such circumstances, the
computers and laptops has been classified
as tangible assets by the Company. "
I ntangible asset under development - The
company is developing software and the
same have been amortised as per AS26 and
shown under PPE. The details of the same
have been given in Note no 38 attached
financial Statement.
1.07 Depreciation/Amortisation
Depreciable amount for assets is the cost of an
asset, or other amount substituted for cost, less
its estimated residual value. 5% of the cost of
acquisition of the assets has been taken as the
residual value of assets.
Depreciation on tangible assets is provided on
written down value method over the estimated
useful life of the assets using the indicative
useful life as prescribed under Schedule II to the
Companies Act, 2013. The Company has used the
following useful life to provide depreciation on
property, plant and equipment:
Intangible assets are amortised over the
estimated period of economic benefits on a
straight line basis, commencing from the date
the assets are available to the Company for
its use.
1.08 Impairment of Assets
The Company periodically assesses whether
there is any indication that an asset may be
impaired. If any indication exists, the Company
estimates the recoverable amount of the asset
and if such recoverable of the asset is less than
carrying cost of the asset, then the carrying
amount is reduced to its recoverable amount.
The deduction is treated as an impairment loss
and is recognised in profit and loss account.
If at the balance sheet date there is an indication
that if a previously assessed impairment loss
no longer exits, the recoverable amount is
reassessed and the asset is reflected at the
recoverable amount subject to maximum of
depreciable historical cost. An impairment loss
is reversed only to the extent that the carrying
amount of asset does not exceed the net book
value that would have been determined; if no
impairment loss had been recognised.
Due consideration is given at the balance sheet
date to determine whether there is any indication
of impairment of the company's assets as
defined in Accounting Standard 28 - "Impairment
of Assets" issued by the Institute of Chartered
Accountants of India and the management is of
the opinion that none of the property, plant and
equipment were impaired as at the date of the
Balance sheet.
1.09 Inventories
Inventories are valued after providing for
obsolescence. Raw Materials and finished
(traded) goods are valued at lower of cost and
net realizable value, on first-in, first-out basis. Work
in progress were also assessed at the end of the
year and valued based on the cost associated
to that respective WIP. In the financial statement,
work in progress at the end of the year includes
the direct expenses for the future water resource
management services.
Stock as at the end of year has been valued as
per FIFO excluding GST and other taxes.
1.10 Investments
Non - current Investments are valued at cost.
Provision for diminution in the value is made to
recognize a decline, other than temporary, in the
value of long-term investments.
Current investments are valued at cost or market
value, whichever is less.
Investments classified as long term investments
should be carried in the financial statements
at cost. However, provision for diminution shall
be made to recognise a decline, other than
temporary, in the value of the investments, such
reduction being determined and made for each
investment individually.
1.11 Employee Benefits
Defined benefit plans
The company has recognized the gratuity
payable in the books of accounts based on the
Certificates of Actuarial Valuation received from
the Acturial Valuer.
(i) Short term employee benefit:
Employee benefits payable wholly within
twelve months of receiving employee
services are classified as short-term
employee benefits. The benefits like salaries,
wages, short term compensated absences
etc. and incentives if any, are recognized in
the period in which the employee renders
the related service.
Defined contribution plan
Contributions made by the Company towards
Employees Provident Fund have been charged to
the revenue account.
1.12 Borrowing Costs
Borrowing Costs that are attributable and
exclusively relating to the acquisition, construction
of the qualifying assets are capitalized as part
of cost of such assets up to the date the assets
are ready for its intended use. All other borrowing
costs are recognized as an expense in the year in
which they are incurred.
1.13 Segment Reporting
The accounting policies adopted for segment
reporting are in conformity with the accounting
policies adopted for the Company. Further,
inter-segment revenue have been accounted
for based on the transaction price agreed to
between segments which is primarily market
based. 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. The Company
has identified "Technology Solutions" and "Water
resource Management solutions" as the primary
reportable segment. The detailed report on the
segments were disclosed separately in Note No
42 attached Financial statement.
1.14 Foreign Currency transactions
Transactions in foreign currency are recognized
at the rates of exchange prevailing on the dates
of the transactions as per the CBIC rates.
Exchange differences arising on foreign
exchange transactions settled during the year
are recognised in profit and loss for the year.
All other monetary assets and liabilities
denominated in foreign currency are restated at
the rates ruling at the year end and all exchange
gains/ losses arising there from are adjusted to
the Profit and Losses Account.
Exchange differences arising on long-term foreign
currency monetary items related to acquisition of
fixed asset are capitalized and depreciated over
the remaining useful life of the asset.
1.15 Earnings per share
The basic earnings per share is computed by
dividing the net profit/loss after tax available to
equity shareholders for the year by the weighted
average number of equity shares outstanding
during the year.
1.16 Income tax
Tax expense compromises of both current and
deferred taxes, Provision for current taxes is made
at the current tax rates. Based on the assessable
income after considering tax allowances and
exemptions it terms with the applicable Income
Computation Disclosure Standards (ICDS).
Deferred income taxes reflects the current year
timing differences between taxable income and
accounting income for the year and reversal
of timing differences of earlier years. Deferred
taxes is measured based on the tax rates and
the tax laws enacted or substantially enacted
at the balance sheet date. Deferred tax assets
are recognized only to the extent that there is
reasonable certainty that sufficient future taxable
income will be available against which such
deferred tax asset can be realized. Unrecognized
deferred tax asset of earlier years are reassessed
and recognized to the extent that it has become
reasonable certain that future taxable income
will be available against which such deferred tax
asset can be realised.
1.17 Leases
Assets acquired under Leases, where the
Company has substantially all the risks and
rewards of ownership, are classified as finance
leases. Such leases are capitalized at the
inception of the lease at lower of the fair value or
the present value of the minimum lease payments
and a liability is created for an equivalent
amount. Each lease rental paid is allocated
between the liability and the interest cost, so as
to obtain a constant periodic rate of interest on
the outstanding liability for each period.
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