1.1 Accounting Policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles and mandatory accounting standards issued by the Institute
of Chartered Accountants of India.
1.2 Basis of Accounting
The financial statements are prepared in accordance with the relevant
presentation requirements of the Revised Schedule VI of the Companies
Act, 1956 under the Historical cost convention on the basis of going
concern and accrual unless otherwise stated.
1.3 Revenue recognition
Revenue is primarily derived from Software development, Consulting and
allied services. Arrangements for software development and related
services are either on fixed-price and fixed-timeframe or on a time and
material basis. Revenue from fixed-price and fixed-time frame contracts
where there is no uncertainly as to measurement or collectability of
consideration is recognised based on percentage- completion method.
Where there is uncertainty as to measurement or collectability revenue
recognition is postponed until such uncertainly is resolved. Revenue
from fixed-price maintenance contracts are recognised ratably over the
period in which services are rendered.
1.4 Fixed Assets
Fixed Assets are stated at cost less depreciation. The company
capitalizes all costs incidental to acquisition and installation of
Fixed Assets. Depreciation on fixed assets is provided on WDV method at
the rates prescribed in Schedule XIV of the Companies Act, 1956.
1.5 Preliminary Expenses and Pre Operative Expenses
Preliminary Expenses and Pre Operative Expenses are to be amortized
over a period of ten years from the date of commencement of commercial
1.6 Tax on Income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognized, subject to
the consideration of prudence, 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 are not recognized on unabsorbed
depreciation and carry forward of losses unless there is virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
1.7 Provisions and contingent liabilites
A provision is recognised if as a result of a past event, the group has
a present legal obligation that can be estimated reliably, and it is
probable that an outflow of economic benefits will be required to
settle the obligation, a. Contingent Liabilities are determined on the
basis of available information and are disclosed by way of a note to
1.8 Foreign Exchange Transactions:
For the purpose of Consolidation, Ajel Technologies, Incwas treated as
Integral foreign operation in accordance with the Accounting Strandard
ll-Effects of Changes in Foreign Exchange Rates and transactions in
foreign currency for the items of income and expenses are recorded at
the Average rate of exchange for the period . All the Assets and
Liabilities were recorded at the Closing rate of exchange. Exchange
differences arising there from is transferred to Foreign Currency Loss
and transferred to Profit and Loss Account.
1.9 Earning per Share
Basic earnings per share is computed by dividing the net profit
After tax by the weighted average number of equity shares outstanding
during the period. Diluted Earnings per share is computed by dividing
the net profit after tax by the weighted average number of equity shares
considered for deriving the basic earnings per share and also the
weighted average number of the equity shares that could have been
issued upon conversion of all dilutive potential equity shares.