1. SIGNIFICANT ACCOUNTING POLICIES: Basis of brparation of Financial Statements The accompanying financial statements are brpared and brsented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under historical cost convention on the accrual basis. GAAP comprises mandatory Accounting Standards issued by the Institute of Chartered Accountants of India, the provisions of the Companies Act, 2013 and guidelines issued by the Securities and Exchange Board of India. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to existing accounting standard requires the change in the accounting policy hitherto in use. Management evaluates all relevant issues or revised accounting standards on an ongoing basis. Revenue Recognition * Revenue from sale of computer hardware is recognized on dispatch of the products from the company for delivery to the customers. Revenue from product sale is shown net of Sales Tax separately charged and discounts as applicable. * Revenue from IT Services consists of earnings from services performed on a 'time and material' basis and fixed price contracts. The related revenue is recognized as and when the services are performed and delivered. * Revenue from Annual Maintenance Contracts (AMCs') is recognized on accrual basis as per the Contracts / Agreements entered with the Clients. * Other income is recognized on accrual basis. Translation of Foreign Currency Transactions Transactions in foreign currency are recorded at exchange rate brvailing on the date of transaction. Gain/Loss of foreign exchange on settlement of transaction arising on receipt of the amounts receivable, are recognized as income or expense for the period. In all other cases gain or loss is accounted for on the realizable value as on last day of the financial year. Expenditure All expenditure and costs are recognized on accrual basis and due provision is made for all the known losses and liabilities. Fixed Assets, Work in progress and Debrciation * Fixed Assets are stated at cost of acquisition and any cost attributable for bringing the asset to the condition for its intended use less Debrciation for the financial year. * Interest arising on acquisition of fixed assets on hire purchase is charged to profit and loss account. * As on the date of the Balance Sheet, the cost of fixed Assets purchased and not ready for use are shown under Capital Work-In Progress. * Debrciation Fixed assets are stated at cost less debrciation. Cost of acquisition is inclusive of freight, taxes and installation. Debrciation on assets is provided, pro-rata for the period of use, by the Straight Line Method (SLM) at the rates brscribed in Schedule II of the Companies Act, 2013. Investments Investments are intended to be held for long term and are valued at cost of acquisition. Investments are carried at cost and provision is made to recognize any decline, other than temporary, in the value of such investments. The market value of the Investments is not available as it is not a quoted share. Inventories Inventories are valued at lower of cost or net realizable value. Cost of hardware and software purchased for resale are considered using the first-in-first-out method. Employee Benefits Contributions to Provident Fund, Employees State Insurance are charged as incurred on accrual basis. The liability for retirement benefits of employees will be accounted for on accrual basis. Income Tax Income taxes are accounted for in accordance with AS-22, namely "Accounting for taxes on Income" issued by ICAI. Taxes comprise both current and deferred tax. Current tax is measured at the amount expected to be paid / recovered from the revenue authorities, using the applicable tax rates and laws. The tax effect of the timing differences that result between taxable income and accounting income and are capable of reversal in one or more subsequent periods are recorded as a deferred tax asset or deferred tax liability. Deferred tax assets and liabilities are recognized for future tax consequences attributable to timing differences. They are measured using the substantively enacted tax rates and tax regulations. The carrying amount of deferred tax assets at each balance sheet date is reduced to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which the deferred tax asset can be realized. Tax on distributed profits payable in accordance with the provisions of section 115O of the Income Tax Act, 1961 is in accordance with the Guidance Note on "Accounting for Corporate Dividend Tax" regarded as a tax on distribution of profits and is not considered in Determination of profits for the year. Cash Flow Statement Cash flows are reported using Indirect Method in accordance with AS-3, namely "Cash Flow Statement" issued by ICAI and as per the Clause 32 of the Listing Agreement where by net profit before tax is adjusted for the effects of the transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular business operations, investment activities and financing activities are classified under the cash flow. Note No. 2 Segment Reporting The Company has identified three reportable segments viz.Software Development Service, Hardware Sales & Services and Trading of Metals & Minerals . Segments have been identified and reported taking into account nature of products and services. The accounting policies adopted for segment reporting are in line with accounting policy of the company with following additional policies for segment reporting. a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable" b) Segment assets and Segment liabilities rebrsent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable". Note No. : 3 Contingent Liabilities (a) The liability towards bank guarantees of Rs.89,81,600/- issued to various parities by the company in the course of ordinary business is partly covered against fixed deposits with the banks which are held by the bankers as the security. 4 Note: Capital Commitments There are no capital commitments identified by the management for the current financial year. There are no contracts remaining to be executed on capital account and not provided for, during the current financial year. 5 In the opinion of the Board, current assets, loans and advances are stated at a value, which could be realized in the ordinary course of business. The provision for all known liabilities made is adequate and not in excess of the amount reasonably necessary. The Company sold the investments worth Rs. 53.80 lakhs for a value of Rs. 1.10 Lakhs and the loss on the same is classified as exceptional item. 6 Some of the balances in Sundry Debtors, Sundry Creditors, Advances and Deposits are subject to confirmation, reconciliations and adjustments if any, which in the opinion of the management will not be significant. 7 These financial statements have been brpared in the format brscribed by the Schedule III to the Companies Act, 2013 8 The figures of the brvious year are re-grouped / re-classified wherever necessary to make them comparable with that of the current year. As per my audit report of even For G.V &Co., Chartered Accountants Sd/- Grandhi Vittal Proprietor Membership No. 206462 Firm Regn No. 012875S for and on behalf of the Board of Directors V. Atchyuta Rama Managing Director Raju V. Rajam Raju Executive Director G. Siva Chief Financial Officer Shilpa Kotagiri Company Secretary Place : Hyderabad Date : 29.05.2015 |