Significant Accounting Policies

1. Company Overview:

Ace Software Exports Limited (ASEL or Company) was incorporated on August 17, 1994 under the provisions of the Companies Act, 1956. ASEL’s shares are listed on Bombay Stock Exchange Ltd., Mumbai. ASEL is mainly engaged in the business of creation of Database

Significant Accounting Policies

The financial statements have been brpared under the historical cost convention in accordance with the Generally Accepted Accounting Principles

in India (Indian GAAP) to comply with the Accounting Standard specified under section 133 of the Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 as applicable.

A) Revenue Recognition:

Revenue from the sale of software is recognized when the rendering of services under a contract is completed.

Dividend income is recognized when right to receive is established.

Profit/Loss on sale of investments is recognized on sale of investments.

Interest on deployment of surplus funds is recognized using the time-proportion method based on interest rates implicit in the transaction.

B) Expenditure:

Expenditure is accounted on accrual basis and provision is made for all known liabilities and losses. The company provides for leave encashment and Bonus in the year of payment.

C) Employee Benefits:

Short Term Employee Benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the statement of profit and loss of the year in which the related service is rendered.

Defined Contribution Plan

Company’s contributions to employee’s benefits fund are charged to statement of Profit & Loss for the year in which contribution for the same becomes due.

Defined Benefit Plan

Incremental expenditure on Gratuity for each year is arrived at as per actuarial valuation and is recognized and charged to The Statement of Profit and Loss in the year in which employee has rendered service.

D) Fixed Assets & Intangible assets:

Fixed assets are capitalized at acquisition cost including directly attributable cost of bringing the assets to their working condition for intended use. Intangible asset which includes software which is capitalized as it is expected to provide future enduring economic benefits to the company. The capitalization cost includes all directly attributable costs to such intangible asset

E) Debrciation:

Debrciation has been provided on Straight Line Method as per the Schedule II to the Companies Act, 2013. As regards addition, debrcation has been provided on pro-rata basis from the date the assets are put to use during the financial year. In respect of asset sold or disposed off during the year, debrcation is provided till the date of sale/disposal of the assets.

F) Investments:

Investments are classified into non current investments and current investments.

Non current investments are carried at cost inclusive of all expenses incidental to their acquisition. A provision for diminution is made to recognize a decline, other than temporary, in the value of long term investments. Current investments are stated at lower of cost or fair market value.

G) Inventories:

Inventories are valued only for final products at the rates contained in customer’s pro-forma invoice, as the sale is assured under a contract.

H) Foreign Currency Transactions:

Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates. Exchange differences arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise.

Premium or discount on forward contracts is amortized over the life of such contract and is recognized as income or expense.

I) Provision for Current & Deferred Tax:

Current Tax: Provision is made for income tax on yearly basis, under the tax-payable method, based on tax liability, as computed after taking credit for allowances and exemptions.

Deferred Tax: Deferred tax liability or assets is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed debrciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available to realize these assets.

J) Impairment of Assets

At each balance sheet date, the management reviews the carrying amount of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is higher of an asset’s net selling price and its value in use. Value in use is the brsent value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of the useful life. The assets were last impaired on 31.03.2008 by decreasing the value of Assets by Rs. 71,00,000.

AS PER OUR REPORT OF EVEN DATE

FOR KALARIA & SAMPAT,

CHARTERED ACCOUNTANTS

[Firm’s Registration No.104570W]

Atul M. Kalaria

PARTNER

Membership No. 41432

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS,

VIKRAM B. SANGHANI

JT.MANAGING DIRECTOR

VIMAL L. KALARIA

DIRECTOR

PRATIK C. DADHANIA

DIRECTORS

Place : RAJKOT,

Dated 29th May, 2015