2. Material Accounting Policies
2.1 Status of Compliance:
The financial statements of the Company have been
prepared in accordance with Indian Accounting
Standards (ind AS) prescribed under Section 133 of
the Companies Act 2013, read with Companies
(Indian Accounting Standard) Rules, 2015 as
amended from time to time.
The financial statements have been prepared on
accrual and going concern basis. The accounting
policies are applied consistently to all the periods
presented in the financial statements except where
a newly issued Ind AS is initially adopted or a revision
to an existing accounting standard required a
change in the accounting policy hitherto in use.
The Board of Directors approved the financial
statements for the year ended March 31, 2025 and
authorised for issue on May 23,2025. The financial
statements once approved by the Board of directors
needs to be adopted by the shareholders at the
onnual general meeting of the Company.
The Board of directors can withdraw and re-issue
the financial statements so adopted only in
specific cases such as non-compliance with the
applicable accounting standards, with the
approval of Tribunal, after following the
appropriate procedure as per Companies Act,
2013.
2.2 Basis of preparation
The financial statements have been prepared
under the historical cost convention on accrual
basis except for the following assets and liabilities
which have been measured at fair value or
revalued amount:
- Financial instruments
- Defined benefit plans and other long-term
employee benefits
- Share based payments
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date, regardless of whether
that price is directly observable or estimated
using another valuation technique. In estimating
the fair value of an asset or a liability, the
Company takes into account the characteristics
of the asset or liability, if market participants
would take those characteristics into account
when pricing the asset or liability at the
measurement date. Fair value for measurement
and/or disclosure purposes in these financial
statements is determined on such a basis, except
for leasing transactions that are within the scope
of Ind AS 116 - Leases, and measurements that
hove some similarities to fair value but are not fair
value, such as net realisable value in Ind AS 2 -
Inventories or value in use in Ind AS 36 -
Impairment of Assets.
2.3. Functional and Presentation
currency
These financial statements are presented in
Indian National Rupee ('?'), which is the
Company's functional currency. All amounts have
been rounded to the nearest lakhs (if 00,000),
except when otherwise indicated.
2.4 Summary of material accounting
policies
The material accounting policies applied by the
Company in the preparation of its financial
statements are listed below. Such accounting
policies have been applied consistently to all the
periods presented in these financial statements,
unless otherwise indicated.
A. Current and non-current classification
The Company segregates assets and liabilities
into current and non-current categories for
presentation in the balance sheet after
considering its normal operating cycle and other
criteria set out in Ind AS 1, "Presentation of
Financial Statements". For this purpose, current
assets and liabilities include the current portion of
non-current assets and liabilities respectively.
Deferred tax assets and liabilities are always
classified as non-current.
The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents. Based
on the time involved between the acquisition of
assets for processing and their realization in cash
and cash equivalents, the Company has
identified twelve months as its operating cycle far
determining current and non-current
classification of assets and liabilities in the
balance sheet
B. Revenue from contract with customers
Sale of software/hardware (customised
bundled solution) and software services
Revenue on time-and-material contracts
arerecognized as the related services are
performed and revenue from the end of the last
billing to the balance sheet date, which has not
been billed, is recognized as unbilled revenues.
Revenue from fixed-price, fixed-time frame
contracts, where there is no uncertainty as to
measurement or collectability of consideration, is
recognized as per the percentage-of-completion
method. When there is uncertainty as to
measurement or ultimate collectability, revenue
recognition is postponed until such uncertainty is
resolved. Efforts or costs expended have been
used to measure progress towards completion as
there is a direct relationship between input and
productivity. Maintenance revenue is recognized
rateably over the term of the underlying
maintenance arrangement
Advances received for services and products are
reported as client deposits until all conditions for
revenue recognition are met
Sale from services
Revenue from value added services are
recognized as per arrangement with the
customers at the end of each month/period in
which the services are rendered.
Interest income
Interest income from a financial asset is
recognised when it is probable that the economic
benefits will flow to the Company and the amount
of income can be measured reliably. Interest
income is accrued on a time basis, by reference
to the principal outstanding and at the effective
interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts
through the expected life of the financial asset to
that asset's net carrying amount on initial
recognition.
Dividends
Revenue is recognised when the Company's right
to receive the payment is established, which is
generally when shareholders approve the
dividend.
Rental income
Rental income arising from operating leases on
investment properties and leasehold
improvements is accounted for on a straight-line
basis over the lease terms unless the payments
by the lessee are structured to increase in line
with expected general inflation to compensate for
the lessor's expected inflationary cost increases.
Rental income is included in other income in the
statement of profit or loss.
C. Taxes
Tax expense comprises current tax expense and
deferred tax.
Current tax
Current tax assets and liabilities are measured at
the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those
that are enacted at the reporting date.
Current tax, relating to items recognised outside
the statement of profit or loss, is recognised
directly either in other comprehensive income or
in equity in correlation to the underlying
transaction. Management periodically evaluates
positions taken in the tax returns with respect to
situations in which applicable tax regulations are
subject to interpretation and establishes
provisions where appropriate.
Current tax assets is offset against current tax
liabilities if, and only if, a legally enforceable right
exists to set off the recognised amounts and
there is an intention either to settle on a net basis,
or to realise the asset and settle the liability
simultaneously.
Deferred Tax
Deferred tax is provided using the balance sheet
approach on temporary differences between the
tax base of assets and liabilities and their carrying
amounts for financial reporting purposes at the
reporting date.
Deferred tax liabilities are recognised for all
taxable temporary differences, except
- When the deferred tax liability arises from the
initial recognition of goodwill or an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss and does not give rise to equal
taxable and deductible temporary differences
- In respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, when
the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future.
Deferred tax assets are recognised for all
deductible temporary differences, the carry
forward of unused tax credits and any unused tax
losses. Deferred tax assets are recognised to the
extent that it is probable that taxable profit will be
available against which the deductible temporary
differences, and the carry forward of unused tax
credits and unused tax losses can be utilised. The
carrying value af deferred tax assets is reviewed
at the end of each reporting period and reduced
to the extent that it is no longer probable that
sufficient taxable profits will be available to allow
all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
year when the asset Is realised or the liability is
settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at
the reporting date.
Deferred tax, relating to items recognised outside
the statement of profit or loss, is recognised
directly either in other comprehensive income or
in equity in correlation to the underlying
transaction.
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 tox relate to the same taxable
entity and the some taxation authority.
D. Property, plant and equipment (PPE)
Items of property, plant and equipment ore
stated at cost, net of accumulated depreciation
and accumulated impairment losses, if any. Costs
directly attributable to acquisition are capitalized
until the property, plant and equipment are ready
for use, os intended by management.
Depreciation is calculated on cost of PPE less their
estimated residual values over their estimated
useful lives using straight line method and is
recognized in Statement of Profit ond loss. The
estimated useful lives of items of PPE are os
follows:
The Company, based on assessment made,
depreciates certain items of property, plant and
equipment over estimated useful lives which ore
different from the useful life prescribed in
Schedule II to the Companies Act, 2013. The
management believes that these estimated
useful lives are realistic and reflect fair
approximation of the period over which the
assets are likely to be used.
An item of property, plant and equipment and
any significant part initially recognised is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on derecognition
of the asset (calculated os the difference
between the net disposal proceeds and the
carrying amount of the asset) is included in the
income statement when the asset is
derecognised. The cost ond related accumulated
depreciation are eliminated from the financial
statements upon sale or retirement of the asset
and the resultant gains or losses are recognized
in the statement of profit and loss. Assets to be
disposed off are reported at the lower of the
carrying value or the fair value less cost to sell.
The residual values, useful lives and methods of
depreciation of property, plant and equipment
are reviewed at each financial year end and
adjusted prospectively, if appropriate.
E. Investment properties
Investment property comprises land or a building
or part of a building or both that is held to earn
rentals or for capital appreciation or both.
Property held under a lease is classified as
investment property when it is held to earn rentals
or for capital appreciation or both. It does not
include property held use in the production or
supply of goods or services or for administrative
purposes, nor it includes property held for sale in
the ordinary course of business.
More specifically, investment property includes
land held for long-term capita! appreciation as
well os land held for a currently undetermined
future use. Investment property also includes (a)
building owned by the Company and leased out
under operating lease(s) and (b) a vacant
building that is being held to be leased out under
an operating lease (or leases)
Investment properties are measured initially at
cost, including transaction costs. Subsequent to
initial recognition, investment properties are
stated at cost less accumulated depreciation
and accumulated impairment loss, if any.
The cost includes the cost of replacing parts and
borrowing costs for long-term construction
projects if the recognition criteria are met When
significant parts of the investment property are
required to be replaced at intervals, the Company
depreciates them separately based on their
specific useful lives. All other repair and
maintenance costs ore recognised in profit or
loss as incurred.
The Company depreciates building component
of investment property over 60 years from the
dote of original purchase. Furniture & fixture and
office equipment, which form part of investment
property are depreciated at useful life mentioned
in pora D.
The Company depreciates building (on leasehold
land) component of investment property over the
leasehold period of land.
Investment properties are derecognised either
when they have been disposed off or when they
are permanently withdrawn from use and no
future economic benefit is expected from their
disposal. The difference between the net disposal
proceeds and the carrying amount of the asset is
recognised in statement of profit and loss in the
period of derecognition.
The residual values, useful lives and methods of
depreciation of investment properties are
reviewed at each financial year end and
adjusted prospectively, if appropriate.
F. Intangible assets
Intangible assets (software) acquired separately
are measured on initial recognition at cost.
Following initial recognition, intangible assets are
carried at cost less any accumulated
amortization and accumulated impairment
losses. Internally generated intangibles, excluding
capitalized development costs, ore not
capitalized and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.
Software (inhouse Developed) product
development costs are capitalized as incurred if
technical and commercial feasibility of the
project is demonstrated, future economic
benefits are probable, the Company has an
intention and ability to complete and use or sell
the software and the costs can be measured
reliably. The costs which can be capitalized
include material cost, employee benefits and
other overhead cost that are directly attributable
to preparing the asset for its intended use.
Intangible assets are amortised over the useful
economic life and assessed for impairment
whenever there is an indication that the
intangible asset may be impaired. The
amortisation period and the amortisation
method for an intangible asset ore reviewed at
least at the end of each reporting period.
Changes in the expected useful life or the
expected pattern of consumption of future
economic benefits embodied in the asset are
considered to modify the amortisation period or
method, as appropriate, and are treated as
changes in accounting estimates.
The amortisation expense on intangible assets is
recognised in the statement of profit and loss.
Intangible assets are amortised using the Straight
Line Method over their estimated useful lives as
follows:
Gains or losses arising from Derecognition of an
intangible asset are meosured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognized
in the statement of profit or loss when the asset is
derecognised.
G. Investment in subsidiaries and
associates
Investment in subsidiaries and associates are
measured usually at cost. Subsequent to initial
recognition, investment in subsidiaries, associates
and joint ventures are stated at cost less
impairment loss, if any.
Investment in subsidiaries and associates ore
derecognized when they are sold or transferred.
The difference between the net proceeds on sales
and the carrying amount af the asset is
recognized in statement of profit and loss in the
year of derecognition.
H. Borrowing costs
Borrowing costs consist af interest and other
costs that an entity incurs in connection with the
borrowing of funds. Borrowing cost also includes
exchange differences to the extent regarded as
an adjustment to the borrowing costs. All
borrowing costs ore expensed in the period In
which they occur.
I. Leases
The Company assesses if a contract is or
contains a lease at inception of the contract. A
contract is, or contains, a (ease if the contract
conveys the right to control the use of an
identified asset for a period time in exchange for
consideration.
Company as a lessee
The Company recognises a right-of-use asset
and a corresponding lease liability with respect to
all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases
with a lease term of 12 months or less). For these
leases, the Company recognises the lease
payments as an operating expense on a straight¬
line basis over the lease term, unless another
systematic basis is more representative of the
time pattern in which economic benefits from the
leosed assets are consumed. Contingent and
variable rentals are recognized as expense in the
periods in which they are incurred.
Right - of - use Assets
The Company recognises right-of-use assets at
the commencement date of the lease (i.e., the
date the underlying asset is available for use).
Right-of-use assets are measured at cost, less
any accumulated depreciation and impairment
losses, and adjusted for any remeasurement of
lease liabilities. The cost of right-of-use assets
includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease
payments made at or before the
commencement date less any lease incentives
received. Right-of-use assets are depreciated on
a straight-line basis over the shorter of the lease
term and the estimated useful lives of the assets,
as follows:
- Building 3 years
Lease Liabilities
At the commencement date of the lease, the
Company recognises lease liabilities measured at
the present value of lease payments to be made
over the lease term.
In calculating the present value of lease
payments, the Company uses its incremental
borrowing rate at the lease commencement date
because the interest rate implicit in the lease is
not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion of
Interest and reduced for the lease payments
made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification,
a change in the lease term, a change in the lease
payments (e.g., changes to future payments
resulting from a change in an index or rate used
to determine such lease payments) or a change
in the assessment of an option to purchase the
underlying asset.
J. Impairment of non-financial assets
Impairment loss, if any, is provided to the extent,
the carrying amount of assets or cash generating
units exceed their recoverable amount.
Recoverable amount is higher of an asset's net
selling price and its value in use. Value in use is
the present value of estimated future cash flows
expected to arise from the continuing use of an
asset or cash generating unit and from its
disposal at the end of its useful life. Impairment
losses recognised in prior years are reversed
when there is an indication that the impairment
losses recognised no longer exist or have
decreased. Such reversols are recognised as an
increase in carrying amounts of assets to the
extent that it does not exceed the carrying
amounts that would have been determined (net
of amortization or depreciation) had no
impairment loss been recognised in previous
years.
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