The Financial statements have been prepared in accordance with the
requirement of Section 209(3)(b) of the Companies Act, 1956.
a Method of accounting
The financial statements have been prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis except where specified otherwise.
GAAP comprises accounting standards notified by the Central Government
of India u/s 211(3C) of Companies Act, 1956.
The Company has prepared these financial statements as per the format
prescribed by Revised Schedule VI to Companies Act, 1956 (the Schedule)
issued by Ministry of Corporate Affairs. Previous periods figures have
been recast/restated to confirm to the classification required by
Revised Schedule VI.
b Fixed assets.
Fixed Assets are stated at cost of acquisition less accumulated
depreciation and impairment cost, if any.
i. Fixed assets, except Computer and accessories, has been depreciated
on a written down value method at rates prescribed in Schedule XIV to
the Companies Act, 1956.
ii. Depreciation on Computer and accessories (other than those
acquired from Globsyn) has been provided on an accelerated basis
according to which the cost of the said assets would be written off
over a period of 3 years.
iii. Computer and accessories acquired from Globsyn has been written
off over a period of 10 years. d Impairment of assets
The Carrying amounts of assets are reviewed at each Balance Sheet date
for any indication of impairment based on internal/external factors. An
asset is impaired when the carrying amount of the asset exceed the
recoverable amount. The impairment loss recognized in the prior
accounting period is reversed if there has been a change in the
estimate of recoverable amount. Based on management opinion there is no
impairment in the value of assets in the year under report.
Investments, classified as Long Term, are stated at cost of
acquisition, and include brokerage, fees, and incidental expenses.
Provision for diminution in the value of long term investments is made
only if such a decline is other than temporary. But no provision has
been made in the books for diminution in the value of investment of
Sigma Soft Pte Ltd. as the amount is unascertainable.
f Retirement Benefits
i. Short term employee benefits -
All employee benefits payable within twelve months of rendering the
service are classified as short term benefits. Such benefits include
salaries, wages, bonus, short term compensated absences, awards, ex-
gratia, performance pay etc. and the same are recognised in the period
in which the employee renders the related services.
ii Defined contribution plans -
The Company makes contribution to the Government Provident Fund and
Employees State Insurance Scheme and contributions paid/payable under
the scheme is recognised during the period in which the employee
renders the related service.
iii Defined benefits plans -
At present the Company does not have any defined benefit plan. The
gratuity, leave encashment and terminal benefits are accounted as and
when paid. However, Gratuity is provided in the books on accrual basis.
g Foreign Currency Transactions
Income and Expenditure in foreign currency is accounted for at the
prevailing exchange rates as on the day of the transaction. Monetary
items like receivables/payables in foreign currency are reported at the
exchange rate prevailing on the balance sheet date. Gains/Loss arising
due to exchange rate fluctuations on reporting as stated above and/or
on actual realization or remittance is transferred to Profit and Loss
h Income Taxes:
Income taxes are accounted for in accordance with Accounting Standard
(AS-22) Accounting for Taxes on Income. Tax expense comprises current
tax and deferred tax.
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
The Company recognizes deferred tax (subject to consideration of
prudence) based on the tax effect of timing differences, being
differences between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods. The effect on deferred tax assets and liabilities of a change
in tax rates is recognized in the statement of profit and loss using
the tax rates and tax laws that have enacted or subsequently enacted by
the balance sheet date.
i Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities, if any, are not recognized but disclosed by way
of notes to accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
j Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue is reliably
Revenue from sale of software and accessories is recognized when all
the significant risks and rewards of ownership of the goods have been
passed on to the customers, usually on delivery and successful
installation of the software and accessories. The value added tax
collected on such sales is excluded from the revenue.
Revenue from services, other annual maintenance contracts, is
recognized on the basis of percentage completion or after completion of
rendering of services, as specified in individual contracts. Revenue
from annual maintenance contracts are recognized pro-rata over the
period of contract as and when services are rendered. The service tax
collected, if any, is excluded from the revenue.
Other operating revenues are recognized after successful completion of
the specific project. The service tax collected, if any, is excluded
from the revenue.
Dividend income is recognized when the Company''s right to receive the
dividend is established by the reporting date.
Interest income is recognized on accrual basis except in respect of
term deposits with banks, where it is recognized on receipt basis.