a. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended March 31, 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the Company, for
preparation and presentation of its financial statements. The adoption
of revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
The Company has also reclassified the previous year figures in
accordance with the requirements applicable in the current year.
b. Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c. Tangible fixed assets
Fixed assets are stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. The . cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for
the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
Subsequent expenditure related to an item of fixed asset is added to
its book value only if it increases the future benefits from the
existing asset beyond its previously assessed standard of performance.
All other expenses on existing fixed assets, including day-to-day
repair and maintenance expenditure and cost of replacing parts, are
charged to the statement of profit and loss for the period during which
such expenses are incurred.
d. Depreciation on tangible fixed assets
Depreciation on fixed assets is calculated on a straight-line basis
using the rates prescribed under the Schedule XIV to the Companies Act,
1956. The Company has used the following rates to provide depreciation
on its fixed assets.
Buildings - 1.63%
Plant and equipment - 10.34%
Furniture and fixtures - 6.33%
Vehicles - 9.50%
Office Equipments - 16.21%
e. Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet date,
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of asset exceeds
the recoverable amount. An impairment loss is charged to the profit and
loss account in the year in which asset is identified as impaired.
f. Government grants and subsidies
Grants and subsidies from the government are recognized when there is
reasonable assurance that (i) the Company will comply with the
conditions attached to them, and (ii) the grant/subsidy will be
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long- term investments. Investments in subsidiaries are
classified as long-term investments and are stated at cost, i. Employee
As per the practice consistently followed, leave encashment is
accounted for as and when paid. In view of the management, most of the
employees have already utilized balance of leave in their account
therefore there is no material amount of leave encashment payable at
the year end. Since, none of the employees have put in specified period
of service; no provision for gratuity is made.
The Company makes provident fund contribution to defined contribution
plans. These comprise defined contribution to Employees Provident Fund
and are reported as expenses during the period under which the
qualifying employee performs the service.
j. Revenue Recognition
Revenues from Business Process Outsourcing (BPO) / Information
Technology Enabled Services are recognized as the related services are
rendered and recorded at relevant exchange rate prevailing on the date
of transaction. Revenue from Infrastructure activities are recognized
when the related work completed, k. Taxes on Income
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year in which the Company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as MAT Credit Entitlement.
The Company reviews the MAT credit entitlement asset at each
reporting date and writes down the asset to the extent the Company does
not have convincing evidence that it will pay normal tax during the
I. Foreign Currency Transactions
Income and Expenses in foreign currencies are converted at exchange
rates prevailing on the date of transaction. Foreign currency monetary
assets and liabilities are translated at the exchange rate prevailing
on the balance sheet date. Exchange difference gain/(loss) is
recognized in the profit and loss account. Premium or discount on
forward exchange contracts are amortized and recognized in the profit
and loss account.
m. Borrowing Cost
Borrowing cost that are attributable to the acquisition or construction
of qualifying assets are capitalized as part of the cost of such
assets. A qualifying assets is one that necessarily takes substantial
period of time to get ready for intended use. All other borrowing costs
are charged to Revenue,
n. Service Tax
Service Tax is recognized on the basis of both, payments made in
respect of service taken from professional and others and service
rendered by the company for BPO related service, where applicable.
o. Segment reporting
Identification of segments
The Company''s operating businesses are organized and managed separately
according to the nature of business and services provided, with each
segment representing a strategic business unit.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items include general corporate income and expense items
which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
p. Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares, q.
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation, r.
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability.
s. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short- term investments with an
original maturity of three months or less.