1.2 Summary of significant accounting policies
1.2.1 Basis of Preparation of Accounts
The financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013
Act"), as applicable. The financial statements have been 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.
Accounting policies not specifically referred to otherwise are consistent and in consonance with generally
accepted accounting principles in India.
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 Schedule III 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 Company has determined its operating cycle as twelve months for the purpose of current -
non-current classification of assets and liabilities.
1.2.2 Use of Estimates
The preparation of financial statements requires the management to make estimates and assumptions that
affect the reported amount of assets, liabilities, disclosure of contingent liabilities as at the date of the
financial statements and revenue and expenses during the reporting period. Management believes that
these estimates and assumptions are reasonable and prudent. Appropriate changes in estimates are made as
the Management becomes aware of changes in circumstances surrounding the estimates. However, actual
results could differ from assumptions and estimates. Difference between the actual results and estimates are
recognised in the period in which the results are known / materialized.
1.2.3 Revenue Recognition
Revenue from Operations includes revenue from rendering of software development services and other
revenue incidental to it. Revenue from services is recognised as the service is performed and there is no
uncertainty to expect ultimate collection of its consideration.
1.2.4 Property, Plant & Equipments
All Fixed Assets are recorded at cost including taxes, duties, freight and other incidental expenses incurred
in relation to their acquisition and bringing the asset to its intended use.
1.2.5 Depreciation/Amortisation
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the
useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act,
2013. Individual assets cost of which doesn't exceed Rs. 5,000/- each are depreciated in full in the year of
purchase. Intangible assets including internally developed intangible assets are amortised over the year for
which the company expects the benefits to accrue. Intangible Asset - Software is amortised with a useful life
of 3 years.
1.2.6 Current Tax and Deferred Tax
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.
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 with convincing evidence 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. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the
same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax
assets are reviewed at each Balance Sheet date for their realisability.
|