l(b) Material Accounting Policies
1 Basis of preparation
The financial statements of the Company are prepared on
going concern basis in accordance with Generally Accepted
Accounting Principles in India (Indian GAAP) and comply with
in all material respects with the Accounting Standards
specified under Section 133 of the Companies Act, 2013, read
with Rule 7 of the Companies (Accounts) Rules, 2014, the
Companies (Accounting Standards) Amendment Rules, 2016
and the relevant provisions of the Companies Act, 2013.
The financial statements have been prepared on accrual basis
and under the historical cost convention. The accounting
policies adopted in the preparation of these financial
statements are consistent with those of previous years.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle
and other criteria set out in the Schedule III to the Act. The
Company considers twelve months to be its normal operating
cycle.
Rounding of amounts
These financial statements are presented in Indian Rupees
(INR)/(RS), which is also its functional currency and all values
are rounded to the nearest lakh as per the requirements of
schedule III (except per share data), unless otherwise stated '0'
(zero) denotes amount less than 500.
2 Presentation of financial statements
The Company presents its Balance sheet, the Statement of
profit and loss and disclosures in the format prescribed in
Schedule III to the Companies Act, 2013 ("the Act”). The
disclosure requirements with respect to items in the Balance
Sheet and Statement of Profit and Loss are as prescribed in
division (i) of Schedule III to the Act, presented by way of notes
forming part of financial statements along with the other notes
required to be disclosed under the notified Accounting
Standards and the Listing Agreement.
3 Use of estimates
The preparation of financial statements requires the
management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, as of the date of
the financial statements and the reported amount of revenue
and expenses for the year. Actual results could differ from
these estimates. Any revision to estimates is recognised in the
period in which the results are known/materalized.
4 Property, plant and equipment
Property, Plant and Equipment are stated at cost, net of
accumulated depreciation and impairment losses, if any. Cost
include all expenses incurred to bring the assets to its present
location and condition.
Intangible assets
Intangible assets comprising of software licenses are stated at
cost of acquisition including any cost attributable for bringing
the asset to its working condition, less accumulated
amortisation
5 Depreciation / Amortisation on property, plant and equipment
and intangible assets:
Depreciation on property, plant and equipment is provided on
Straight line method (SLM) method on useful lives, specified in
Schedule II of the Companies Act, 2013 except in respect of
Leased Computer and data processing unit wherein useful life
is estimated to be 6 years on the basis of management
assessment and past experience.
Depreciation is provided on pro-rata basis on the assets
acquired, sold or disposed-off during the year.
Intangible assets are amortized on a straight line basis over
the economic useful life estimated by the management.
6 Impairment of Property, plant and equipment and intangible
assets
At each Balance Sheet date, the Company reviews the carrying
amount of assets to determine whether there is an indication
that those assets have suffered impairment loss. If any such
indication exists, the recoverable amount of assets is
estimated in order to determine the extent of impairment loss.
The recoverable amount is higher of the net selling price and
value in use, determined by discounting the estimated future
cash flows expected from the continuing use of the asset to
their present value.
7 Revenue recognition
Revenue is recognized on accrual basis to the extent it is
probable that the economic benefits will flow to the Company
and the revenue can be reliably measured.
(a) Revenue from leasing of computers and data processing
units is recognized over the period of the contract provided
the consideration is reliably determinable and no
significant uncertainty exists regarding the collection. The
amount recognised as revenue is net of applicable taxes
as they are rendered, based on agreement/ arrangement
with the concerned parties.
(b) Revenue from sale of goods i.e. computers and accessories
is recognized when the significant risks and rewards of
ownership of the goods are transferred to the customer
and is stated net of taxes and sales returns.
(c) Revenue from implementation, installation and service
charges is recognised based on agreements/
arrangements with concerned parties.
(d) Interest income is recognized on a time proportion basis
taking into account amount outstanding and the
applicable interest rate.
(e) Unearned finance income is recognised over the lease
term using the effective interest method.
8 Inventories
Stock is valued at cost or net realizable value (NRV) whichever is
lower. The cost is computed by applying weighted average cost
price.
9 Investments
Long Term Investments i.e. (Non-Current investments) are stated at
cost. Provision for diminution in the value of Long-Term Investments
is made only if such decline is other than temporary. Current
investments are valued at cost or net realisable value, whichever is
lower.
10 Borrowing costs
(a) Borrowing costs attributable to the acquisition or construction of
qualifying assets till the time such assets are ready for intended
use, are capitalised as part of the cost of the assets. All other
borrowing costs are expensed in the period they occur.
(b) Ancillary costs incurred in connection with the arrangement of
borrowings are amortised over the tenure of such borrowings.
11 Leases
(a) Operating Lease
Operating leases, where the lessor effectively retains
substantially all the risks and benefits of ownership of the leased
item, are classified as operating leases. Operating lease
payments are recognized as an expense in the statement of
profit and loss on a straight-line basis over the lease term
(b) Finance Lease
Where the company is lessor
Leases in which the company transfers substantially all the risks
and benefits of ownership of the asset are classified as finance
leases. Assets given under finance lease are recognized as a
receivable at an amount equal to the net investment in the
lease. After initial recognition, the Company apportions lease
rentals between the principal repayment and interest income
so as to achieve a constant periodic rate of return on the net
investment outstanding in respect of the finance lease. The
interest income is recognized in the statement of profit and loss.
Leases in which the company does not transfer substantially all
the risks and benefits of ownership of the asset are classified as
operating leases. Assets subject to operating leases are
included in fixed assets. Lease income on an operating lease is
recognized in the statement of profit and loss on a straight-line
basis over the lease term. Costs, including depreciation, are
recognized as expenses in the statement of profit and loss.
12 Retirement and other employee benefits
(a) Short-term employee benefits are expensed at the
undiscounted amount in the Statement of Profit and Loss in the
year the employee renders the service.
(b) Post employment and other long term employee benefits are
recognized as an expense in the statement of profit and loss at
the present value of the amount payable determined using
actuarial valuation techniques in the year the employee renders
the service. Actuarial gains and losses are charged to the
Statement of Profit and Loss.
(c) Payment to defined contribution are recognised as an expense
in the Statement of Profit and Loss, when due.
13 Accounting for taxes on income
(a) Current Tax is determined as the amount of tax payable in
respect of taxable income as per the provisions of the
Income Tax Act, 1961.
(b) Deferred tax resulting from "timing difference” between
taxable and accounting income is accounted for using the
tax rates and laws that are enacted or substantively
enacted on the balance sheet date.
14 Earnings Per Share
Basic earnings per share is computed and disclosed using the
weighted average number of equity shares outstanding
during the year. Dilutive earnings per share is computed and
disclosed using the weighted average number of equity and
dilutive equity equivalent shares outstanding during the year,
except when the results would be anti-dilutive.
15 Segment Reporting
The Company identifies primary segments based on the
nature of risks and returns, the organization structure and the
internal reporting system as per Accounting Standard 17 "
Segment Reporting".
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