a) Basis of Preparation of Financial Statement The Company generally
follows mercantile system of accounting unless otherwise stated and
recognizes income and expenditure on accrual basis except those with
significant uncertainties. The accounts have been prepared in
accordance with historical cost convention method.
b) Fixed Assets and Depreciation Fixed assets comprising both tangible
and intangible items at cost less depreciation. The Company
capitializes all costs relating to acquisition of fixed assets. Cost
of Software expected to be used on long-term basis is capitalized.
Depreciation (including amortization) on fixed assets is provided using
straight-line method(SLM) at the rates prescribed in schedule XIV of
the Companies Act 1956, other than Computer & Computer Software and
Laptops provided to students which are also depreciated under SLM over
a period of 3 years and 2 years respectively.
Further individual assets costing less than Rupees Five Thousands are
depreciated in full in the year of purchase.
Depreciation on additions and deletions to fixed assets is provided on
a pro-rata basis.
c) Investments Long-term investments are valued at their acquisition
cost. Any declining in the value of the said investment, other than a
temporary decline, is recognized and charged to the statement of Profit
d) Revenue Recognition Revenue from software services and consultancy
is recognized as follows:
- The revenue from time and material contracts is recognized on the basis
of the time spent and materials consumed as per the terms of the
- In case of fixed price contracts revenue is recognized on percentage
completion basis based on milestones defined in the contract.
Foreseeable losses, if any, on contract completion is provided for.
Revenue from training is recognized over the period of the course
program. Revenue from operations is accounted of net of Service Tax.
e) Use of estimates The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management''s best knowledge of current events and
actions, actual results could differ from these estimates.
f) Current & Non Current assets and liabilities An asset or liability
is classified as current when it satisfies any of the following
i) It is expected to be realized/ settled, or is intended for sale or
consumption, in the Company''s normal operating cycle:
ii) It is held primarily for the purpose of being traded:
iii) It is expected to be realized/due to be settled within twelve
months after the reporting date: or
iv) It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date of
v) The Company does not have an unconditional right to defer settlement
of the liability for at least twelve months after the reporting date.
g) Foreign Currency Transactions Transactions in foreign currency are
accounted for at the rates prevailing on the date of the transaction.
Monetary assets and liabilities in foreign currencies at the year-end
are restated at the exchange rates prevailing on that date. Gain/Loss
arising out of exchange fluctuation on settlement or such restatement
are accounted for in the Statement of Profit and Loss, except to the
extent these relate to acquisition of fixed assets, in which case these
are adjusted to the carrying value of the related fixed assets.
h) Leases Operating Leases - Rentals are expensed with reference to
lease terms and other considerations.
i) Employee Benefits
(i) Contribution to employee provident fund is charged to revenue on a
(ii) Liability for retrial, gratuity and un-availed earned leave is
provided for based on an independent actuarial valuation report as per
the requirements of Accounting Standard - 15(revised) on Employee
(iii) Employee benefits of short-term nature are recognized as expense
as and when it accrues. Long term employee benefits(e.g. long-service
leave) and past employments benefits (e.g. gratuity), both funded and
unfunded, are recognized as expense based on actuarial valuation.
Current Tax in respect of taxable income of the year is provided for
based on application tax rates and laws.
Deferred tax is recognized subject to the considerations of prudence in
respect of deferred tax asset, 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 and is measured using tax rates and laws that have been enacted
or substantively enacted by the Balance Sheet date. Deferred tax
assets/liabilities are reviewed at each Balance sheet date.
k) Borrowing Cost Borrowing cost attributable to the acquisition and
contribution of qualifying assets are added to the cost up to date when
such assets are read for their intended use. Other borrowings cost are
recognized as expenses in the period in which these are incurred .
l) Contingencies Contingencies, which can be reasonably ascertained,
are provided for it, in the opinion of the company, there is a
probability that the future outcome may be materially adverse to the
m) Prior Period and Extra Ordinary Items and Changes in Accounting
Policies Prior Period and Extra Ordinary items and changes in
Accounting Policies having material impact on the financial affairs of
the Company are disclosed.