Notes forming parts of Annual Accounts for the year ended June 30th 2015 NOTES - 1 CORPORATE INFORMATION SILVERLINE TECHNOLOGIES LIMITED ("SILVERLINE" OR the "Company") is engaged in consulting and Information Technology ("IT") services. It focuses providing business consulting, systems integration application development and product engineering services. The company has development centre at "SEEPZ" Mumbai. The SEEPZ development center is to deliver its software development services. This facility operate mainly as an export unit. SEEPZ is SEZ and such the regulations as per the Government of India apply, and are required to export substantial part of their software development services. The Company has been historically exporting a significant part of its software development services. SIGNIFICANT ACCOUNTING POLICIES & BASIS OF ACCOUNTING The financial statements are brpared on the basis of Historical cost convention in accordance with the Indian generally accepted Principles (GAAP), applicable Accounting Standard issued by the institute of Chartered Accountants of India (ICAI) and the provisions of the Company act 2013. USE OF ESTIMATES The brparation of financial statements in conformity with GAAP require Management to make estimates and assumptions that effects the reported amount of assets and liabilities disclosure of contingent assets & Liabilities at the date of financial Statements and the reported amounts of revenue & Expenses during the reporting periods. Examples of such estimates include estimates of useful life of assets and future obligations under employee retirement benefit plans. Actual results could be differ from those estimates and difference between the actual results and estimates are recognized in period in which the result known/materialized. REVENUE RECOGNITION Revenue from software development of fixed price contract is recognized according to the milestones achieved as specified in contracts on the basis of works completion method. With respect to time and materials contracts revenue is recognized proportionately over the period in which services are rendered. Interest is recognized using the time proportion method, based on rates Implicit in the transaction. Dividend income is recognized when the Company's right to receive dividend is established. FIXED ASSETS, CAPITAL WORKS IN PROGRESS AND DEbrCIATION Fixed assets are stated at the cost of acquisition including taxes, duties, freight, exchange gains/losses and other incidental expenses including interest related to acquisition and installation. Capital work in progress includes the cost of fixed assets and amount advanced towards capital projects under development. IMPAIRMENT OF ASSETS Management evaluates at regular intervals, Using External & Internal source whether there is any impairment of any assets. Impairment Occurs where the Carrying Value exceeds the brsent value of future cash flows expected to arise from the continuing use of the asset and its eventual disposal. Any loss on account of Impairment is expensed as the excess of the carrying amount over the higher of the asset's net sales price or brsent value as determined. BORROWING COST Borrowing cost include interest, amortization of ancillary cost incurred. The cost of borrowing are capitalized as a part of the cost of the qualifying assets when it is possible that they will result in future economic benefits and the cost can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are uncured. INVESTMENTS Investments in overseas subsidy companies or others, are stated at cost(inclusive of expenses on acquisition) and classified as long term strategic investment. Provision for diminution in the value is made, if other than temporary. SHARE ISSUE EXPENSES Expenses incurred on issue of Shares are adjusted to Security Premium Account. SOFTWARE DEVELOPMENT EXPENSES Cost of software that is embedded in the hardware is capitalized purchase of softwares for development is charged to Profit & Loss Account. EMPLOYEE BENEFITS The Company has no outstanding liability towards the employee benefits like gratuity etc. as on date. The company is deducting provident fund from the salary as brscribed under the Act and which is recognized in the balance sheet. The employee benefits of short term nature are recognized as expenses as and when accrued. TAXATION Income Tax is computed in accordance with Accounting Standard 22, "Accounting for Taxation on Income" issued by the ICAI. Provision for current income tax and fringe benefit tax is made in accordance with the provisions of Income tax Act, 1961. The difference between taxable income and net profit or loss before tax for the year as per the financial statements, is identified and the tax effect of the deferred tax asset or deferred tax liability is recorded for timing differences, i.e., differences that originate in one accounting period and reversed in another. Deferred tax assets are recognized only if there is reasonable certainty that they will be realized and are reviewed for the appropriateness of their respective carrying values at each Balance Sheet date. DEFERRED REVENUE EXPENDITURE Deferred Revenue Expenditure is written equally over a period of five years by debiting the profit and loss account. EARNINGS PER SHARE (EPS) The earnings considered in ascertaining the Company's earnings per share comprise the net profit after tax (and include post tax effect of any extraordinary items.) The number of shares used in computing basic earnings per share is the weighed average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises of the weighted average number of shares outstanding during the period. The number of shares used in computing diluted earnings per share comprises of the weighted average shares considered for deriving basic earning per share, and also the weighted average number of equity shares which could have been issued on conversion of all dilative potential equity shares. SEGMENT REPORTING The company provides combrhensive range of information technology services compromising software development, system solutions, application software system maintenance software to its customers across the industry. Accordingly, the company has identified IT service as single business segment, which constitutes the primary basis of segmental reporting, set out in financial statements. Secondary segments are reported on the basis of geographical location of the customers. RELATED PARTY TRANSACTIONS Related party transactions are transfer of resources or obligations between related parties, regardless of whether a price is charged. Parties are considered to be related, if one party has the ability, directly or indirectly, to control the other party of exercise significant influence over the other party in making financial or operating decisions. Parties are considered to be related if they are subject to common control or common significant influence. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not provided for in the books but are disclosed by way of notes in the financial statements. Contingent Assets are neither recognized nor disclosed in the financial statements. NOTE -2Balances of the Unsecured Loans, Sundry Creditors, Sundry Debtors and Loans and Advances are subject to confirmation and reconciliation, if any. NOTE 21 - SEGMENT REPORTING Providing of information technology services is the Company's only signal business segment, hence the disclosure of segment wise information as required by Accounting Standard (AS) 17 on "Segment Reporting" is not applicable . NOTE 22- CONTINGENT LIABILITIES AND COMMITMENTS Claims against the Company /disputed liabilities not acknowledged as debts: (As per the rebrsentation made by the Management) Disputed Income tax liabilities of Rs. 15206 lakhs in respect of Assessment years 2001-02; 2002-03; 2003-04, 2011-12 and 2012-13 The Company has disputed against the same with appropriate authorities and it has not provided for the same in view of it was legally advised. NOTE - 23 Figures of the brvious year have been regrouped/recast or reclassified wherever considered necessary. The accompanying notes are intergral part of the financial statements As per our report of even date attached For P C Surana & Co. Chartered Accountants [Reg No. 110631W] For SILVERLINE TECHNOLOGIES LIMITED CIN:L99999MH1992PLC066360 P C Surana Partner M. No.: 017136 Ravi Subramanian [DIN 02151804] Chairman Mohan Subramanian [DIN 01555249] Wholetime Director Mumbai, 24th November,2015 |