Accounting Policies of Allied Digital Services Ltd. Company

Mar 31, 2025

2. MATERIAL ACCOUNTING POLICIES

The material accounting policies applied by the
Company in the preparation of its financial statements
are listed below. These accounting policies have been
applied consistently to all the periods presented in the
standalone financial statements, unless otherwise
stated.

(a) Statement of compliance

The financial statements comply in all material aspects
with the Indian Accounting Standards (“Ind AS”)
as prescribed under section 133 of the Companies
Act 2013 ("the Act”), Companies (Indian Accounting
Standards) Rules, 2015, other relevant provisions of
the Act (including subsequent amendments) and
other accounting principles generally accepted in
India.

(b) Basis of preparation

The financial statements have been prepared under
the historical cost convention and on accrual basis
with the exception of certain assets and liabilities that
are required to be carried at fair value by Ind AS.

Fair value is the price that would be received to sell
an asset or paid to transfer a liability in an orderly
transaction between market participants at the
measurement date.

All assets and liabilities have been classified as
current and non-current as per the Company’s
normal operating cycle which is based on the
nature of businesses and the time elapsed between
deployment of resources and the realization of cash
and cash equivalents. The Company has considered
an operating cycle of 12 months.

The financial statements are presented in Indian
Rupees (“R”), which is the functional and presentation
currency of the Company. All values presented in
Indian Rupees has been rounded off to nearest Rupees
Lakh (R 1 Lakh = R 100,000) without any decimal,
unless otherwise stated. Amounts below rounding off
convention or equal to zero are represented as "0" in
the financial statements.

The Company determines materiality depending
on the nature or magnitude of information, or both.
Information is material if omitting, misstating or
obscuring it could reasonably influence decisions
made by the primary users, on the basis of those
financial statements.

(c) Use of estimates and critical accounting
judgements

The preparation of financial statements in conformity
with Ind AS requires management to make estimates,
judgments and assumptions in the application of
accounting policies that affect the reported amounts
of assets, liabilities, the disclosures of contingent
assets and liabilities at the date of the financial
statements and reported amounts of revenues and
expenses during the period. Application of accounting
policies that require critical accounting estimates
involving complex and subjective judgments and
the use of assumptions in these financial statements
are disclosed in the relevant note. Actual results
may differ from these estimates. The estimation
and judgements are reviewed on an ongoing basis
based on historical experience and other factors,
including expectations of future events that may
have a financial impact on the Company and that are
believed to be reasonable. Changes in estimates are
reflected in the financial statements in the period in
which changes are made and, if material, their effects
are disclosed in the pertaining notes.

(d) Property, plant and equipment

Property, plant and equipment are stated at cost,
less accumulated depreciation and impairment
losses except for freehold land which is carried at
historical cost. The cost comprises purchase price,
including any import duties and other taxes (other
than those subsequently recoverable from the taxing
authorities), any directly attributable expenditure
on making the assets ready for use, as intended by
the Management. The present value of obligatory
decommissioning cost related to assets, if any, are
also included in the initial cost of such assets.

Subsequent costs are included in the asset’s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance
are charged to the Statement of Profit and Loss
during the period in which they are incurred.

The cost and related accumulated depreciation are
eliminated from the financial statements upon sale
or retirement of the asset. Gains or losses arising
on disposal or retirement of property, plant and
equipment are recognized in the Statement of Profit
and Loss.

Depreciation is charged so as to write off the cost
of assets, net off their residual values, over their
estimated useful lives. Depreciation is recorded
using the straight line basis. The management
estimates the useful lives of assets, which are in line
with the useful life prescribed in Schedule II to the
Companies Act, 2013, are as follows:

Depreciation methods, useful lives and residual
values are reviewed at end of each financial year
and adjusted prospectively, if required. Depreciation
commences when the assets are ready for their
intended use. When parts of an item of property, plant
and equipment have different useful lives, they are
accounted for as separate items (major components)
of property, plant and equipment.

Property, plant and equipment which are not ready
for intended use as on the date of balance sheet
are disclosed as "Capital work-in-progress”. Capital
work-in-progress is carried at cost, less accumulated
impairment loss if any. Costs associated with the
commissioning of an asset are capitalized.

(e) Lease and right-of-use assets

The Company determines whether an arrangement
contains a lease by assessing whether the fulfilment
of a transaction is dependent on the use of a specific
asset and whether the transaction conveys the right
to control the use of that asset to the Company in
return for payment.

The Company as a lessee

The Company, as a lessee, recognizes a right-of-use
asset and a lease liability for its leasing arrangements,
if the contract conveys the right to control the use of
an identified asset. The contract conveys the right
to control the use of an identified asset, if it involves
the use of an identified asset and the Company has
substantially all of the economic benefits from use
of the asset and has right to direct the use of the
identified asset. The cost of the right-of use asset shall
comprise of the amount of the initial measurement
of the lease liability adjusted for any lease payments
made at or before the commencement date plus any
initial direct costs incurred. The right-of-use assets is
subsequently measured at cost less any accumulated
depreciation, accumulated impairment losses, if any
and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using
the straight-line method from the commencement
date over the shorter of lease term or useful life of
right-of-use asset.

The Company measures the lease liability at the
present value of the lease payments that are not
paid at the commencement date of the lease. The
lease payments are discounted using the interest
rate implicit in the lease, if that rate can be readily
determined. If that rate cannot be readily determined,
the Company uses incremental borrowing rate.

For short-term and low value leases, the Company
recognizes the lease payments as an operating
expense on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified
as a finance or operating lease. Whenever the terms
of the lease transfer substantially all the risks and
rewards of ownership to the lessee, the contract
is classified as a finance lease. All other leases are
classified as operating leases.

For operating leases, rental income is recognized
in the statement of profit and loss on a straight¬
line basis over the term of the relevant lease. Initial
direct costs incurred in negotiating and arranging an
operating lease are added to the carrying value of the
leased asset and recognized on a straight-line basis
over the lease term.

When assets are leased out under a finance lease,
the present value of minimum lease payments is
recognized as a receivable. The difference between
the gross receivable and the present value of
receivable is recognized as unearned finance income.
Lease income is recognized over the term of the lease
using the net investment method before tax, which
reflects a constant periodic rate of return. Such rate is
the interest rate which is implicit in the lease contract.

(f) Investment properties

Investment properties (held to earn rentals or
for capital appreciation or both) are stated in
the standalone balance sheet at cost, less any
subsequent accumulated depreciation and
subsequent accumulated impairment losses.
Transfer to, or from, investment property is done at
the carrying amount of the property.

Depreciation is calculated on a straight-line basis
over the estimated useful lives of the assets as
follows:

(g) Intangible assets

Intangible assets acquired separately are measured
on initial recognition at cost. The cost of an intangible
asset comprises its purchase price including duties
and taxes and any costs directly attributable to
making the asset ready for their intended use.
Intangible assets acquired in a business combination
are recognized at fair value at the acquisition date.
Subsequently, intangible assets are carried at cost
less any accumulated amortization and impairment
losses, if any. Subsequent expenditure is capitalized
only when it increases the future economic benefits
embodied in the specific asset to which it relates.
All other expenditure is recognized in statement of
profit or loss as incurred.

Intangible assets are amortized over their respective
estimated useful lives on a straight-line basis, from
the date they are available for use. The estimated
useful life of an identifiable intangible asset is based

on the number of factors including the effects of
obsolescence, demand, competition and other
economic factors (such as the stability of the industry
and known technological advances) and the level
of maintenance expenditures required to obtain
the expected future cash flows from the asset. The
estimated useful lives of intangibles are as follows:

The estimated useful life and amortization method
are reviewed at the end of each annual reporting
period, with the effect of any changes in estimate
being accounted for on a prospective basis.

(h) Impairment on non-current assets

At each balance sheet date, the Group reviews the
carrying value of its property, plant and equipment
and intangible assets to determine whether there is
any indication that the carrying value of those assets
may not be recoverable through continuing use. If any
such indication exists, the recoverable amount of the
asset is reviewed in order to determine the extent of
impairment loss, if any. For the purposes of assessing
impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash
inflows which are largely independent of the cash
inflows from other assets or groups of assets (cash¬
generating units).

Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate
that reflects current market assessments of the time
value of money and the risks specific to the asset for
which the estimates of future cash flows have not
been adjusted. An impairment loss is recognized
in the standalone statement of profit and loss as
and when the carrying value of an asset exceeds its
recoverable amount.

Where an impairment loss subsequently reverses, the
carrying value of the asset (or cash generating unit)
is increased to the revised estimate of its recoverable
amount, so that the increased carrying value does
not exceed the carrying value that would have been
determined had no impairment loss been recognized
for the asset (or cash generating unit) in prior years.
A reversal of an impairment loss is recognized in the
statement of profit and loss immediately.

(i) Inventories

Inventory comprising hardware and software are
valued at lower of cost and net realizable value. Costs
comprise cost of purchase and directly attributable
costs incurred in bringing the inventories to their
present location and condition and are net of
rebates and discounts if any. Net realizable value is
the estimated selling price in the ordinary course of
business, less estimated costs of completion and the
estimated costs necessary to make the sale.

(j) Investment in subsidiaries and associates

Investments in subsidiaries and associates are
carried at cost less accumulated impairment losses,
if any. Where an indication of impairment exists, the
carrying amount of the investment is assessed and
written down immediately to its recoverable amount.
The carrying amount of the investment is tested
for impairment as a single asset by comparing its
recoverable amount with its carrying amount, any
impairment loss recognized reduces the carrying
amount of the investment.

On disposal of investments in subsidiaries and
associates, the difference between net disposal
proceeds and the carrying amounts are recognized
in the statement of profit and loss.

(k) Financial instruments

A financial instrument is any contract that gives rise
to a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial
instruments also include derivative contracts such as
foreign exchange forward contracts.

Financial assets and liabilities are recognized when
the Company becomes a party to the contractual
provisions of the instruments. Financial assets and
liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial
liabilities (other than financial assets and financial
liabilities at fair value through profit or loss) are
added to or deducted from the fair value measured
on initial recognition of financial asset or financial
liability. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities
at fair value through profit or loss are recognized in
profit or loss.

Measurement and Recognition of financial
instruments

The Company’s accounting policies and disclosures
require measurement of fair values for the financial
instruments. The Company has an established
control framework with respect to measurement
of fair values. The management regularly reviews
significant unobservable inputs and valuation
adjustments. If third party information, such as
broker quotes or pricing services, is used to measure
fair values, then the management assesses evidence
obtained from third parties to support the conclusion
that such valuations meet the requirements of Ind
AS, including level in the fair value hierarchy in which
such valuations should be classified. When measuring
the fair value of a financial asset or a financial liability,
the Company uses observable market data as far as
possible. Fair values are categorized into different
levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets
for identical assets or liabilities.

Level 2: inputs other than quoted prices included in
Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived
from prices).

Level 3: inputs for the asset or liability that are not
based on observable market data (unobservable
inputs).

If inputs used to measure fair value of an asset or a
liability fall into different levels of fair value hierarchy,
then fair value measurement is categorized in its
entirety in the same level of fair value hierarchy as
the lowest level input that is significant to the entire
measurement. The Company recognizes transfers
between levels of fair value hierarchy at the end of
the reporting period during which the change has
occurred.

Financial assets

Financial assets at amortized cost

Financial assets are subsequently measured at
amortized cost if these financial assets are held
within a business whose objective is to hold these
assets in order to collect contractual cash flows and
contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments

of principal and interest on the principal amount
outstanding.

Financial assets at fair value through other
comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held
within a business model whose objective is achieved
by both collecting contractual cash flows and
selling financial assets and the contractual terms
of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and
interest on the principal amount outstanding.

Financial assets at fair value through profit or
loss (FVTPL)

Financial assets are measured at FVTPL unless they
are measured at amortized cost or at FVTOCI on
initial recognition. The transaction costs directly
attributable to the acquisition of financial assets
and liabilities at fair value through profit or loss are
immediately recognized in the statement of profit
and loss.

Derecognition of financial assets

The Company derecognizes a financial asset when
the rights to receive cash flows from the asset
have expired or it transfers the right to receive the
contractual cash flow on the financial assets in a
transaction in which substantially all the risk and
rewards of ownership of the financial asset are
transferred.

Impairment of financial assets

In accordance with Ind AS 109, the Company
applies the expected credit loss (ECL) model for
measurement and recognition of impairment loss.
The Company follows a ‘simplified approach’ for
recognition of impairment loss allowance on trade
receivable.

The application of a simplified approach does not
require the Company to track changes in credit risk.
Rather, it recognizes impairment loss allowance
based on lifetime ECLs at each reporting date, right
from its initial recognition.

Financial liabilities

All financial liabilities are recognized at fair value
and in case of loans, net of directly attributable cost.
Fees of recurring nature are directly recognized in
the Statement of Profit and Loss as finance cost.
Financial liabilities are carried at amortized cost using
the effective interest method. For trade and other
payables maturing within one year from the balance
sheet date, the carrying amounts approximate fair
value due to the short maturity of these instruments.

The Company derecognizes a financial liability (or
a part of a financial liability) from the Company’s
Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.

Equity instruments

An equity instrument is a contract that evidences
residual interest in the assets of the Company
after deducting all of its liabilities. The Company
is recognized equity instrument at the proceeds
received net off direct issue cost.

Offsetting of financial instruments

the net amount is reported in the Balance Sheet if
there is a currently enforceable legal right to offset
the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle
the liabilities simultaneously.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash and cheque
in hand, bank balances, demand deposits with banks
and other short-term highly liquid investments with
an original maturity of three months or less that are
readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes
in value.

(m) Borrowing costs

General and specific borrowing costs directly
attributable to the acquisition, construction or
production of qualifying assets are added to the
cost of those assets, until such time as the assets are
substantially ready for their intended use or sale. The
Company considers a period of twelve months or
more as a substantial period of time. Qualifying assets
are assets that necessarily take a substantial period of
time to get ready for their intended use or sale.

Transaction cost in respect of long-term borrowings
are amortized over the tenure of respective loans
using effective interest method, unless the impact
of utilizing the straight-line method results in an
immaterial difference. All other borrowing costs are
expensed in the period in which they are incurred.

(n) Foreign currency transactions and
translations

Transactions in currencies other than the entity’s
functional currency are recorded by the Company
using the exchange rates at the date when the
transaction first qualifies for recognition. At the end of
each reporting period, monetary items denominated
in foreign currencies are re-translated at the rates
prevailing at the end of the reporting period.
Non-monetary items carried at fair value that are

denominated in foreign currencies are retranslated
at the rates prevailing on the date when the fair
value was determined. Non-monetary items that
are measured in terms of historical cost in a foreign
currency are not translated.

Exchange differences arising on the re-translation or
settlement of other monetary items are included in
the statement of profit and loss for the period.

(o) Employee share-based payment

Equity settled share-based payments to employees
are measured at the fair value of options at the
grant date. The fair value of options at the grant
date is expensed over the respective vesting period
in which all of the specified vesting conditions are to
be satisfied with a corresponding increase in equity
as "Employee Stock Options Account". The stock
compensation expense is determined based on the
Company’s estimate of options that will eventually
vest. In case of forfeiture of unvested option, portion
of amount already expensed is reversed. In a situation
where the vested options are forfeited or expires
unexercised, the related balance standing to the
credit of the "Employee Stock Options Account"
are transferred to the "Retained Earnings". When
the options are exercised, the Company issues new
equity shares of the Company of R 5/- each fully paid-
up. The proceeds received and the related balances
standing to credit of the Employee Stock Options
Account are credited to share capital (nominal value)
and securities premium account.

(p) Non-current assets or disposal group are
classified as held for sale and discontinued
operations

Non-current assets or disposal group are classified as
held for sale if their carrying amount will be recovered
principally through a sale transaction rather than
through continuing use. This condition is regarded
as met only when the asset or disposal group is
available for immediate sale in its present condition
subject only to terms that are usual and customary
for sales of such asset or disposal group and its sale
is highly probable. Management must be committed
to the sale, which should be expected to qualify for
recognition as a completed sale within one year from
the date of classification. As at each balance sheet
date, the management reviews the appropriateness
of such classification.

Non-current assets or disposal group classified
as held for sale are measured at the lower of their
carrying amount and fair value less costs to sell. Once
the assets are classified as "Held for sale”, those are not
subjected to depreciation till disposal. An impairment
loss is recognized for any initial or subsequent write¬

down of the asset or disposal group to fair value less
costs to sell. A gain is recognized for any subsequent
increases in fair value less costs to sell of an asset or
disposal group, but not in excess of any cumulative
impairment loss previously recognized. A gain or loss
not previously recognized by the date of the sale of
the non-current asset or disposal group is recognized
at the date of derecognition.

Non-current assets classified as held for sale and the
assets of a disposal group classified as held for sale
are presented separately from the other assets in the
balance sheet.

A discontinued operation is a component of the
entity that has been disposed off or is classified as
held for sale and that represents a separate major
line of business or geographical area of operations, is
part of a single coordinated plan to dispose of such a
line of business or area of operations, or is a subsidiary
acquired exclusively with a view to resale. The results
of discontinued operations are presented separately
in the statement of profit and loss.

(q) Income taxes

Income tax comprises current income tax and
deferred income tax. Income tax expenses is
recognized in the statement of profit and loss, except
when they relate to items that are recognized in other
comprehensive income or directly in equity, in which
case, the current and deferred tax are also recognized
in other comprehensive income or directly in equity,
respectively.

Current income tax

The tax currently payable is based on taxable profit
for the year. Taxable profit differs from ‘profit before
tax’ as reported in the statement of profit and loss
because of items of income or expense that are
taxable or deductible in other years and items that
are never taxable or deductible. The tax rates and
tax laws used to compute the current income tax
amount are those that are enacted or substantively
enacted by the reporting date and applicable for the
period.

Deferred income tax

Deferred income tax is recognized using the balance
sheet approach. Deferred income tax assets and
liabilities are recognized for deductible and taxable
temporary difference arising between the tax base
of assets and liabilities and their carrying amount
in financial statements, except when the deferred
income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that
is not a business combination and affects neither

accounting nor taxable profits or loss at the time of the
transaction. Deferred income tax asset is recognized
to the extent that it is probable that taxable profit will
be available against which the deductible temporary
difference, and the carry forward of unused tax credits
and unused tax losses can be utilized.

Deferred income tax liabilities are recognized for all
taxable temporary difference. The carrying amount
of deferred income tax assets is reviewed at each
reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income
tax asset to be utilized. Deferred income tax assets
and liabilities are measured at the tax rates that are
expected to apply in the period when the asset is
realized or the liability is settled, based on tax rates
(and tax laws) that have been enacted or substantively
enacted at the reporting date.

Minimum alternative tax

Minimum Alternative Tax (MAT) is recognized as an
asset only when and to the extent there is convincing
evidence that the Company will pay normal income
tax during the specified period. In the year in which
the MAT credit becomes eligible to be recognized
as an asset, the said asset is created by way of credit
to the statement of profit and loss and included in
deferred tax assets. The Company reviews the same
at each balance sheet date and writes down the
carrying amount of MAT entitlement to the extent
there is no longer convincing evidence to the effect
that the Company will pay normal income tax during
the specified period.

(r) Employee benefits

The Company participates in various employee
benefit plans. Post-employment benefits are
classified as either defined contribution plans or
defined benefit plans.

Defined contribution plans

Contributions under defined contribution plans are
recognized as an expense for the period in which
the employee has rendered the service. Payments
made to retirement benefit schemes are dealt with
as payments to defined contribution schemes where
the Company’s obligations under the schemes are
equivalent to those arising in a defined contribution
retirement benefit scheme.

Defined benefit plans

For defined benefit retirement schemes, the cost of
providing benefits is determined using the Projected
Unit Credit Method, with actuarial valuation being

carried out at each year-end balance sheet date. Re¬
measurement gains and losses of the net defined
benefit liability/(asset) are recognized immediately in
other comprehensive income. The service cost and
net interest on the net defined benefit liability/(asset)
are recognized as an expense within employee costs.

Past service cost is recognized as an expense when
the plan amendment or curtailment occurs or
when any related restructuring costs or termination
benefits are recognized, whichever is earlier.

The retirement benefit obligations recognized in the
balance sheet represents the present value of the
defined benefit obligations as reduced by the fair
value of plan assets.

Other long-term employee benefits

Liabilities recognized in respect of other long¬
term employee benefits such as annual leave and
sick leave are measured at the present value of the
estimated future cash outflows expected to be made
by the Company in respect of services provided
by employees up to the reporting date using the
projected unit credit method with actuarial valuation
being carried out at each year end balance sheet date.
Actuarial gains and losses arising from experience
adjustments and changes in actuarial assumptions
are charged or credited to the statement of profit and
loss in the period in which they arise.

(s) Revenue recognition

The Company derives revenue primarily from IT
Infrastructure Services, Enterprise Application
& Integrated Solutions and related services. The
Company recognizes revenue when the significant
terms of the arrangement are enforceable, services
have been delivered and collectability is reasonably
assured.

Revenue on time-and-material contracts is
recognized as the related services are performed
and revenue from the end of the last invoicing to the
reporting date is recognized as unbilled revenue.
Revenue from fixed-price, fixed-timeframe
contracts, where the performance obligations
are satisfied over time and where there is no
uncertainty as to measurement or collectability
of consideration, is recognized as per the
percentage-of-completion method. When there
is uncertainty as to the measurement or ultimate
collectability, revenue recognition is postponed
until such uncertainty is resolved. Efforts or costs
expended have been used to measure progress
towards completion as there is a direct relationship
between input and productivity. Maintenance

revenue is recognized ratably over the term of the
underlying maintenance arrangement. Revenues
in excess of invoicing are classified as contract
assets (which we refer to as unbilled revenue).

In arrangements for IT and ITeS related services and
maintenance services, the Company has applied the
guidance in Ind AS 115, Revenue from Contracts
with Customers, by applying the revenue recognition
criteria for each distinct performance obligation. The
arrangements with customers generally meet the
criteria for considering IT and ITeS related services as
distinct performance obligations. For allocating the
transaction price, the Company has measured the
revenue in respect of each performance obligation
of a contract at its relative standalone selling price.
The price that is regularly charged for an item when
sold separately is the best evidence of its standalone
selling price. In cases where the Company is unable to
determine the standalone selling price, the Company
uses the expected cost plus margin approach in
estimating the standalone selling price. For IT and
ITeS and related services, the performance obligations
are satisfied as and when the services are rendered
since the customer generally obtains control of the
work as it progresses. Revenue from licenses where
the customer obtains a "right to use” the licenses is
available to the customer. Revenue from licenses
where the customer obtains a "right to access” is
recognized over the access period. The Company has
applied the principles under Ind AS 115 to account
for revenues from these performance obligations.
When implementation services are provided in
conjunction with the licensing arrangement and the
license and implementation have been identified
as two separate performance obligations, the
transaction price for such contracts are allocated to
each performance obligation of the contract based on
their relative standalone selling prices. In the absence
of standalone selling price for implementation,
the performance obligation is estimated using the
expected cost plus margin approach. Where the
license is required to be substantially customized
as part of the implementation service, the entire
arrangement fee for license and implementation is
considered to be a single performance obligation
and the revenue is recognized using the percentage
of completion method as the implementation is
performed. Deferred contract costs are incremental
costs of obtaining a contract which are recognized as
assets and amortized over the term of the contract.

Contract modifications are accounted for when
additions, deletions or changes are approved
either to the contract scope or contract price. The
accounting for modifications of contracts involves
assessing whether the services added to an existing

contract are distinct and whether the pricing is at
the standalone selling price. Services added that are
not distinct are accounted for on a cumulative catch¬
up basis, while those that are distinct are accounted
for prospectively, either as a separate contract, if
the additional services are priced at the standalone
selling price, or as a termination of the existing
contract and creation of a new contract if not priced
at the standalone selling price.

The Company presents revenues net of indirect taxes
in its statement of profit and loss.

Trade receivables and contract balances

The Company classifies the right to consideration in
exchange for deliverables as either a receivable or as
unbilled revenue.

A receivable is a right to consideration that is
unconditional upon passage of time. Revenue for
fixed-price maintenance contracts is recognized on
a straight-line basis over the period of the contract.
Revenues in excess of billings is recorded as unbilled
revenue and is classified as a financial asset for these
cases as right to consideration is unconditional upon
passage of time.

Revenue recognition for fixed-price development
contracts is based on the percentage-of-completion
method. Invoicing to the clients is based on milestones
as defined in the contract. This would result in
the timing of revenue recognition being different
from the timing of billing the customers. Unbilled
revenue for fixed-price development contracts is
classified as non-financial asset as the contractual
right to consideration is dependent on completion of
contractual milestones.

Trade receivable and unbilled revenues are presented
net of impairment in the balance sheet.

Performance Obligations and Remaining
Performance Obligations

The remaining performance obligation disclosure
provides the aggregate amount of the transaction
price yet to be recognized as at the end of the
reporting period and an explanation as to when the
Company expects to recognize these amounts in
revenue. Applying the practical expedient as given in
Ind AS 115, the Company has not disclosed the
remaining performance obligation related disclosures
for contracts where the revenue recognized
corresponds directly with the value to the customer of
the entity’s performance completed to date, typically
those contracts where invoicing is on time-and-
material basis. Remaining performance obligation
estimates are subject to change and are affected

by several factors, including terminations, changes
in the scope of contracts, periodic revalidations,
adjustment for revenue that has not materialized and
adjustments for currency.

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Mar 31, 2024

2) MATERIAL ACCOUNTING POLICIES

Basis of preparation and presentation

a) Statement of compliance

These standalone financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and amendments issued thereafter.

b) Basis of measurement

The financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:

1. Derivative financial instruments;

2. Certain financial assets and liabilities measured at fair value;

3. Share based payment transactions; and

4. Defined benefit and other long-term employee benefits.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements are presented in Indian Rupee (INR), the functional currency of the Company. All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakh as per the requirement of Schedule III, unless otherwise stated.

c) Use of estimates and judgment

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses and the disclosures of contingent assets and liabilities at the date of the financial statements. The application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed under “Summary of material accounting policies”. Accounting estimates can change from period to period. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

Summary of material accounting policies

(i) Functional and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which these entities operate (i.e. the “functional currency”). The financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the Company.

(ii) Foreign currency transactions and balances are translated into the functional currency of the Company, using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated

in foreign currencies, are recognized in the statement of profit and loss and reported within foreign exchange gains/(losses). Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

(iii) Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled. Revenue, expense and cash-flow items denominated in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on the date of the transaction.

(iv) Investment in subsidiaries: Investment in subsidiaries is measured at cost.

(v) Impairment of investment in subsidiaries:

The Company reviews its carrying value of investments carried at cost (net of impairment, if any) annually or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted for in the statement of profit and loss.

(vi) Current v/s Non-current classification:

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset/liability is current when it is:

• Expected to be realised/settled or intended to be sold or consumed in normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realised/settled within twelve months after the reporting period; or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period

All other assets/liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

(vii) Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign exchange forward contracts.

Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and liabilities are initially measured at fair value.

Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss.

Measurement and Recognition of financial instruments

The Company''s accounting policies and disclosures require measurement of fair values for the financial instruments. The Company has an established control framework with respect to measurement of fair values. The management regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses evidence obtained from third parties to support the conclusion that such valuations meet the requirements of Ind AS, including level in the fair value hierarchy in which such valuations should be classified. When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far

as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If inputs used to measure fair value of an asset or a liability fall into different levels of fair value hierarchy, then fair value measurement is categorized in its entirety in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of fair value hierarchy at the end of the reporting period during which the change has occurred.

(A) Financial Assets:

(a) Financial assets at amortised cost

Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(b) Financial assets at fair value through other comprehensive income (FVTOCI)

A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

(c) Financial assets at fair value through profit or loss (FVTPL)

Financial assets are measured at FVTPL unless they are measured at amortised cost or at FVTOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in the statement of profit and loss.

(d) Derecognition

The Company derecognizes a financial assetwhen the rights to receive cash flows from the asset have expired or it transfers the right to receive the contractual cash flow on the financial assets in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred.

(B) Financial Liabilities:

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost. Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.

The Company derecognizes a financial liability (or a part of a financial liability) from the Company''s Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.

(C) Equity instruments:

An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. The Company is recognised equity instrument at the proceeds received net off direct issue cost.

(D) Offsetting of financial instruments:

Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.

(viii) Property, plant and equipment

a) Recognition and measurement: Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures directly attributable to the acquisition of the asset.

b) Depreciation: The Company depreciates property, plant and equipment over the estimated useful life on a straightline basis from the date the assets are ready for intended use. Assets acquired under finance lease if any and leasehold improvements are amortized over the lower of estimated useful life and lease term. The estimated useful lives for the current and comparative period of significant items of property, plant and equipment are as follows:

Depreciation methods, useful lives and residual values are reviewed at each reporting date. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be

measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Amounts paid towards the acquisition of property, plant and equipment outstanding as of each reporting date and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work-in-progress (if any).

c) Impairment: Property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of Profit and Loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated depreciation) had no impairment loss been recognized for the asset in prior years.

(ix) Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of

an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. The estimated useful lives of intangibles are as follows:

(x) Impairment

In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss. The Company follows a ''simplified approach'' for recognition of impairment loss allowance on trade receivable.

The application of a simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

(xi) Inventories

Inventory comprising hardware and software are valued at lower of cost and net realizable value. Costs comprise cost of purchase and directly attributable costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

(xii) Cash and Cash Equivalents:

Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where original maturity is three months or less.

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Mar 31, 2018

1) Significant Accounting Policies

Basis of preparation and presentation

a) Statement of compliance

These financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 as applicable.

For all the periods upto the year ended March 31, 2016, the Company had earlier prepared and presented its financial statements in accordance with accounting standards notified under section 133 of the Companies Act, 2013 (Indian GAAP). Reconciliations and description of the effect of the transition to Ind AS from Indian GAAP is given in Note 38.

b) Basis of measurement

The financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:

1. Derivative financial instruments;

2. Certain financial assets and liabilities measured at fair value (refer accounting policy on financial instruments);

3. Share based payment transactions and

4. Defined benefit and other long-term employee benefits

c) Use of estimates and judgment

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on a periodic basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

Summary of significant accounting policies

(i) Functional and presentation currency Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which these entities operate (i.e. the “functional currency”). The financial statements are presented in Indian Rupee, the national currency of India, which is the functional currency of the Company.

(ii) Foreign currency transactions and balances are translated into the functional currency of the company,using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at the exchange rates prevailing at reporting date of monetary assets and liabilities denominated in foreign currencies, are recognized in the statement of profit and loss and reported within foreign exchange gains/ (losses). Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.

(iii) Investment in subsidiaries: Investment in subsidiaries is measured at cost. Dividend income from subsidiaries (if any) is recognised when its right to receive the dividend is established.

(iv) Financial instruments: All financial instruments are recognised initially at fair value. Transaction costs that are attributable to the acquisition of the financial asset (other than financial assets recorded at fair value through profit or loss) are included in the fair value of the financial assets. Purchase or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place are recognised on trade date. While, loans and borrowings and payables are recognised net of directly attributable transaction costs. For the purpose of subsequent measurement, financial instruments of the Company are classified in the following categories: non-derivative financial assets comprising amortised cost, debt instruments at fair value through other comprehensive income (FVTOCI), equity instruments at FVTOCI or fair value through profit and loss account (FVTPL), non derivative financial liabilities at amortised cost or FVTPL and derivative financial instruments (under the category of financial assets or financial liabilities) at FVTPL. The classification of financial instruments depends on the objective of the business model for which it is held. Management determines the classification of its financial instruments at initial recognition.

(v) Debt instruments at FVTOCI

A debt instrument shall be measured at fair value through other comprehensive income if both of the following conditions are met:

(a) the objective of the business model is achieved by both collecting contractual cash flows and selling financial assets and

(b) the asset’s contractual cash flow represent Solely Payments of Principal and Interest(SPPI)

Debt instruments included within FVTOCI category are measured initially as well as at each reporting period at fair value plus transaction costs. Fair value movements are recognised in other comprehensive income (OCI). However, the Company recognises interest income, impairment losses & reversals and foreign exchange gain/(loss) in statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from equity to profit and loss. Interest earned is recognised under the effective interest rate (EIR) model.

(vi) Equity instruments at FVTOCI

All equity instruments are measured at fair value. Equity instruments held for trading is classified as FVTPL. For all other equity instruments, the Company may make an irrevocable election to present subsequent changes in the fair value in OCI. The Company makes such election on an instrument-by-instrument basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividend are recognised in OCI which is not subsequently recycled to statement of profit and loss.

(vii) Financial assets at FVTPL

FVTPL is a residual category for financial assets. Any financial asset which does not meet the criteria for categorization as at amortised cost or as FVTOCI, is classified as FVTPL.

In addition the Company may elect to designate the financial asset, which otherwise meets amortised cost or FVTOCI criteria, as FVTPL if doing so eliminates or significantly reduces a measurement or recognition inconsistency. The Company has not designated any financial asset as FVTPL.

Financial assets included within the FVTPL category are measured at fair values with all changes in the statement of profit and loss.

a) Non-derivative financial liabilities

(i) Financial liabilities at amortised cost: Financial liabilities at amortised cost represented by borrowings, trade and other payables are initially recognized at fair value, and subsequently carried at amortized cost using the effective interest rate method.

(ii) Financial liabilities at FVTPL: Financial liabilities at FVTPL represented by contingent consideration are measured at fair value with all changes recognised in the statement of profit and loss.

b) Derivative financial instruments:

Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in statement of profit and loss.

(v) Property, plant and equipment

a) Recognition and measurement: Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditures directly attributable to the acquisition of the asset.

b) Depreciation: The Company depreciates property, plant and equipment over the estimated useful life on a straight-line basis from the date the assets are ready for intended use. Assets acquired under finance lease if any and leasehold improvements are amortized over the lower of estimated useful life and lease term. The estimated useful lives for the current and comparative period of significant items of property, plant and equipment are as follows

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the cost of the item can be measured reliably. Repairs and maintenance costs are recognized in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss. Amounts paid towards the acquisition of property, plant and equipment outstanding as of each reporting date and the cost of property, plant and equipment not ready for intended use before such date are disclosed under capital work- in-progress( if any).

(vi) Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment. Intangible assets are amortized over their respective estimated useful lives on a straight-line basis, from the date that they are available for use. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition and other economic factors (such as the stability of the industry and known technological advances) and the level of maintenance expenditures required to obtain the expected future cash flows from the asset. The estimated useful lives of intangibles are as follows:

(vii) Leases

Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception ofthe lease, whichever is lower. Lease payments under operating leases are recognised as an expense on a straight line basis in the statement of profit and loss over the lease term except where the lease payments are structured to increase in line with expected general inflation.

(viii) Impairment Financial assets

In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss. The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivable.

The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

(ix) Employee benefits

The Company participates in various employee benefit plans. Post-employment benefits are classified as either defined contribution plans or definedbenefit plans. Under a defined contribution plan, the Company’s only obligation is to pay a fixed amount with no obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits. The related actuarial and investment risks fall on the employee. The expenditure for defined contribution plans is recognized as expense during the period when the employee provides service. Under a definedbenefit plan, it is the Company’s obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Company. The present value ofthe definedbenefit obligations is calculated using the projected unit credit method.

(x) Share based payments

Employees of the Company receive remuneration in the form of equity settled instruments, for rendering services over a defined vesting period. Equity instruments granted are measured by reference to the fair value of the instrument at the date of grant. The expense is recognized in the statement of profit and loss with a corresponding increase to the share based payment reserve, a component of equity. The equity instruments generally vest in a graded manner over the vesting period. The fair value determined at the grant date is expensed over the vesting period of the respective tranches of such grants (accelerated amortization). The stock compensation expense is determined based on the Company’s estimate of equity instruments that will eventually vest. The fair value of the amount payable to the employees in respect of phantom stocks, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date based on the fair value of the phantom stock options plan. Any changes in the liability are recognized in statement of profit and loss.

(xi) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When some or all ofthe economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset, if it is virtually certain that reimbursement will be received and the amount ofthe receivable can be measured reliably.

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. Provisions for onerous contracts are measured at the present value of lower of the expected net cost of fulfilling the contract and the expected cost of terminating the contract.

(xii) Revenue

The Company derives revenue primarily from IT Infrastructure Services, Enterprise Application & Integrated Solutions and related services. The Company recognizes revenue when the significant terms of the arrangement are enforceable, services have been delivered and the collectability is reasonably assured. The method for recognizing revenues and costs depends on the nature ofthe services rendered:

a) Fixed-price contracts

Revenues from fixed-price contracts are recognized using the “percentage-of-completion” method. Percentage of completion is determined based on project costs incurred to date as a percentage of total estimated project costs required to complete the project. The cost expended (or input) method has been used to measure progress towards completion as there is a direct relationship between input and productivity. If the Company does not have a sufficient basis to measure the progress of completion or to estimate the total contract revenues and costs, revenue is recognized only to the extent of contract cost incurred for which recoverability is probable. When total cost estimates exceed revenues in an arrangement, the estimated losses are recognized in the statement of profit and loss in the period in which such losses become probable based on the current contract estimates. ‘Unbilled revenues’ represent cost and earnings in excess of billings as at the end ofthe reporting period. ‘Unearned revenues’ represent billing in excess of revenue recognized. Advance payments received from customers for which no services are rendered are presented as ‘Advance from customers’.

b) Maintenance contracts

Revenue from maintenance contracts is recognized ratably over the period of the contract using the “percentage-of-completion” method. When services are performed through an indefinite number of repetitive acts over a specified period of time, revenue is recognized on a straight line basis over the specified period or under some other method that better represents the stage of completion. In arrangements for soft ware development and related services and maintenance services, the Company has applied the guidance in Ind AS 18, Revenue, by applying the revenue recognition criteria for each separately identifiable component of a single transaction. The arrangements generally meet the criteria for considering soft ware development and related services as separately identifiable components. For allocating the consideration, the Company has measured the revenue in respect of each separable component of a transaction at its fair value, in accordance with principles given in Ind AS 18. The Company accounts for volume discounts and pricing incentives to customers by reducing the amount of revenue recognized at the time of sale. Revenues are shown net of sales tax, value added tax, service tax and GST as applicable discounts and allowances. The Company accrues the estimated cost of post contract support services at the time when the revenue is recognized. The accruals are based on the Company’s historical experience of material usage and service delivery costs.

(xiii) Income tax

Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.

a) Current income tax

Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company off sets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.

b) Deferred income tax

Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary difference arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction. Deferred income tax asset is recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary difference, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred income tax liabilities are recognized for all taxable temporary difference. The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

(xiv) Earnings per share

Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed by dividing the net profitafter tax by the weighted average number of equity shares considered for deriving basic EPS and also weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares, as appropriate.

Recent Indian Accounting Standards (Ind AS)

Ministry of Corporate Affairs (“MCA”) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Group has not applied as they are effective for annual periods beginning on orafter April 1, 2018:

Ind AS115 Revenue from Contracts with Customers

Ind AS 21 The Effect of Changes in Foreign Exchange Rates

Ind AS 115 - Revenue from Contracts with Customers

Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 - Revenue, Ind AS11- Construction Contracts when it becomes effective.

The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligation in contract Step 3: Determine the transaction price

Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer.

The Group has completed its evaluation of the possible impact of Ind AS 115 and will adopt the standard with all related amendments to all contracts with customers retrospectively with the cumulative effect of initially applying the standard recognised at the date of initial application. Under this transition method, cumulative effect of initially applying Ind AS 115 is recognised as an adjustment to the opening balance of retained earnings of the annual reporting period. The standard is applied retrospectively only to contracts that are not completed contracts at the date of initial application. The Group does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis.

Ind AS 21 - The Effect of Changes in Foreign Exchange Rates

The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Group is evaluating the impact of this amendment on its financial statements.

Non Current Loans & Advances

In respect of other loans and advances as appearing above, the Company has not produced the confirmation for the same. The management is of the opinion that these loan and advances are good and recoverable.

In respect of confirmation for other Loan and Advances, the Company has not produced the same from the parties at the time of signing of the Balance sheet. Due to the absence of these confirmations the need to make provision for the doubtful debts has not been ascertain and provided for by the company .

Current Loans & Advances :

In respect of confirmation for Loan and Advances the Company has not produced the same from the parties at the time of signing ofthe Balance sheet. Due to the absence of these confirmation the need to make provision for the doubtful debts has not been ascertained and provided for by the company. However, the management is of the opinion that all the Loan and Advances as appearing in the Balance Sheet are good and recoverable.

Note 1 Inventories are valued at lower of cost and net realizable value

Note 2 The value ofthe Inventory as on 31^st March 2018 includes certain slow moving items which has not been provided for during the valuation of the same.

Note 3 The valuation of the inventory is as certified by the management.

Note (i) In respect of confirmation for Sundry Debtors, the Company has not produced the same till the signing of the Balance sheet.

Due to the absence of these confirmation the need to make provision for the doubtful debts has not been ascertained and provided for by the company. The ageing of the debtors as reported in the balance sheet could also not be verified by the Auditors and has been considered as certified by the management of the company. However, the management is of the opinion that all the Sundry Debtors , as appearing in the Balance sheet are good and recoverable.

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Mar 31, 2016

- 40,18,801 Equity Shares of face value '' 5 per share allotted during the year at a premium of ''10 per share to the promoters of the company. (P.Y. Nil)

(c) Rights, Preferences and restrictions related to equity shares

The company has only one class of equity shares having par value of '' 5 per share. Each holder of equity shares is entitled to one vote per share.

The Company Stock Options Plans which are summarized as under:

(i) Stock Option Scheme (2010)

The Company by a Special Resolution passed at Annual General Meeting held on 29th September 2010 approved the Employee Stock Option Scheme under section 79A of the Companies Act 1956 to be read along with SEBI (Employee Stock Option and Employee Stock Purchase Scheme) Guidelines, 1999 whereby 30,00,000 options convertible into Equity Shares of '' 5/- each to be granted to eligible employees of the Company. This stock option scheme is titled as ''”ESOP 2010”. Out of the same 4,87,500 options have been granted during the financial year 2012-13. Of these 1,87,500 options have lapsed as the employees holding the staid number of grants have left the organization during FY 2015-16.

(e) Issue of Shares other than Cash

Details of Shares allotted as fully paid up by way of bonus shares.

The Company allotted 13,22,300 equity shares of '' 10 each as fully paid-up bonus shares by capitalization of reserves in 1999-2000.

The Company allotted 71,05,605 equity shares of '' 10 each as fully paid-up bonus shares by capitalization of reserves in 2006-2007.

(f) Buy- Back of Equity Shares

The Board of Directors of the Company in their meeting held on February 18, 2011 had resolved to buyback (“Buyback”) its fully paid-up equity shares of the face value of Rs, 5/- each (Equity Shares) from the existing Equity Share owners of the Company, other than Promoters of the Company. This Buy back was to be made from the stock exchange in accordance with the provisions of Sections 77A, 77AA, 77B and other applicable provisions of the Companies Act, 1956 (“the Act”) and Securities and Exchange Board of India (Buy Back of Securities) Regulation, 1998 (“the Regulation”) and the relevant provisions of Memorandum of Association and Articles of Association of the Company. The maximum price at which this buy back was to be executed was not to exceed Rs, 140/- per Equity Share (“Maximum Buyback Price”) payable in cash, and the maximum amount allocated for the Total Buy Back was Rs, 2,800 Lakhs (“Offer size”). The Date of Opening of the buyback was April 25, 2011 and last Date for the Buyback was February 17, 2012. No buy back of shares was made by the Company during the year under consideration.

During the financial year 2011-2012 , the Company has bought back 5,97,075 Equity Shares for a Total Consideration of Rs, 324.87 Lakhs. The Bought back shares have been duly extinguished by the Company.

* Carrying amount of Fixed Assets whose remaining useful life as at 01^st April 2014 was NIL, is adjusted net of tax Rs, 433.50 lakh in FY 2014-15 (FY 2015-16: Rs, Nil) as per schedule II of companies Act 2013.

** Sundry Debtors amounting to Rs, 229.42 crores outstanding for over 5 years, considered bad and doubtful by the management, have been written off.

(i) Details of Security Offered to Banks for Working Capital Facilities

Following securities have been offered to various banks with the first charge with State Bank of India and pari pasu charged with Standard Charttered Bank and Barclays Bank

(a) Mortgage of Gala no 4, Bldg No 3, Sector III, MIDC Mahape, Navi Mumbai

(b) Mortgage of Gala no 3, Bldg No 3, Sector III, MIDC Mahape, Navi Mumbai

(c ) Mortgage of Gala no 301,302,305,306.307,308, Bldg No 3, Sector III, MIDC Mahape, Navi Mumbai

(d) Mortgage of Building No.4, Sector 1, MBP, MIDC, Mahape, Navi Mumbai

(e) Mortgage of office at Earnest House, 13 Floor, Nariman Point, Mumbai

(f) Hypothecation Charge on Current Assets

(g) Personal Guarantee of directors Mr. Prakash D Shah and Mr. Nitin D Shah

(h) Mortgage of Gala no 7, Bldg No 3, Plot No MBP 2, Mahape, Navi Mumbai

(i) Hypothecation Charge on Movable assets except Vehicles

The Company has not received any instruction from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures if any, relating to amounts unpaid as at the year end, together with interest payable, as required under the said Act, have not been given.

Of the above, Rs, 182.03 lakh Related to Provident Fund and Rs, 14.11 lakh Related to ESIC pertains to Financial Years 2013-14 and 2014-15 which has not been paid by the company.

On account of the severe Financial crunch faced by the Company, regular delays have been noted in making the payment towards the Contributions payable by the Company on account of Employee Benefits and Profession Tax.

Note 1:

1) Transfer of Capital Work in Progress to the respective Heads of Assets (if any) during the year under consideration is as per the representations made and certified by the Management.

2) Intellectual Property Right (IPR) are in process of being developed further but as represented by the Management the amount capitalized by them during the year under consideration represents the Employee Cost attributable to the development of these IPR.. As per the representation made by the Management these IPR''s in its current form can be put to use or sold to its customers. The management has informed that the active utility life of this IPR is 10 years from the date it was first put to use This is the fourth year of the utilization of these IPR''s.

During the year under review, it was represented that the Company is in process of developing 6 Intellectual Property Rights

(IPR) the details of which are as under:

1. ADITAS :- This is a large software product, now being extensively deployed to all our customers worldwide. This is an ITSM (IT service Management) platform that orchestrates IT service management for all kinds of devices and applications within the enterprise. This platform competes with world leaders such as BMC Remedy, Service Now and IBM. Tivoli. It is available as on-premise as well as cloud model. This platform has mobile applications, dashboards and multiple integration points and scales to automation of business processes. This is a cornerstone of Allied now, and is the center of our offerings. It went through three phases of development in two years, and further roadmap is planned for one more year at minimum.

2. WOTS :- This is a work order tracking system. The solution provides end to end logistics management and discrete assembly of products in warehouses. This solution was developed for US customers, and now has great potential to sell for customers who are into warehousing and order fulfillment. It integrates seamlessly with SAP

3. YOUNIFY :- Younify is developed as an internet portal, one of the most unique kind of portal development capabilities that we have. It showcases our powerful content management and web site development capabilities. This internet integrates all our internal HR processes and is used by all employees in India. We have extended the portal to community portals, which is one of the unique in the world, and adds great value to facility management products.

4. SFA :- This is a comprehensive sales force automation tool. Which starts from lead management to deal closure. It has mobile application too to track workforce and their day to day activities. The key feature is also that it integrates with vouvher management, and timesheet to track sales force performance and their travel costs. Commission management is under development.

5. Mobile Workforce Management :- A unique workforce management application useful for field force across the globe. This application runs on android and can run also on apple devices. The application also has central command center with GPS tracking for tracking, interaction with field force and intelligent work scheduling.

6. AWS :- Automobile warranty system is one of kind application, which tracks all interaction between the end customer, dealer and the manufacturer. Two customers in the US are already using this application. Very few vendors have such a focused application on parts warranty management. This application can be easily leveraged for other parts management industry apart from automobile warranty.

It has been represented by the Company that once these IPR''s have been developed and put to use they are likely to yield considerable revenue. As these IPR''s are in the state of development and have not contributed to the earnings of the company the same have been capitalized under the head of IPR. The useful life of these IPR''s as represented before us is that of 10 years.

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Mar 31, 2015

1) Corporate information

Allied Digital Services Limited (referred to as "ADSL" or the "Company") is renowned as a leading Global IT Transformation Architect, having its operations pan India, USA, Australia, Europe and Middle east Asia with an impeccable track record for designing, developing, deploying and delivering end-to-end IT infrastructure services. It provides wide range of information technology and consultancy services including Infrastructure Services, End user IT Support, IT asset life cycle, enterprise applications and integrated solutions.

The Company's registered office is in Mumbai and has presence in pan India, and it has Subsidiary companies in USA, Singapore and Australia.

a) Basis of preparation

The financial statements have been prepared in accordance with the Generally Accounting Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on accrual basis. These financial statements have been prepared to comply with the in all material aspects with the Accounting Standards issued by the Institute of Chartered Accountants of India and referred to Sec 129 & 133 of the Companies Act, 2013, of India. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) Principles of Consolidation

The financial statements of the subsidiary companies used for the publishing of the consolidated results are drawn up to the same reporting date as of the Company.

The consolidated financial statements have been prepared on the following basis:

i. The financial statements of the Company and its subsidiary companies have been combined on the line by line basis by adding together like item of assets, liabilities, income and expenses. Inter-Company balances and transactions and unrealized profits or losses have been fully eliminated.

ii. The excess of cost to the Parent Company of its investments in subsidiary companies over its share of the equity of the subsidiary companies at the dates on which the investment in subsidiary companies are made, is recognized as 'Goodwill' being an asset in the consolidated financial statements. Alternatively, where the share of equity in the subsidiary companies as on the date of investment is in excess of cost of investment of the Company, it is recognized as 'Capital Reserve' and shown under the head 'Reserves and Surplus', in the consolidated financial statements.

iii. Minority interest in the net assets of the consolidated subsidiaries consists of the amount of the equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiary companies and further movements in their share in the equity, subsequent to the dates of investments.

iv. Interest in a jointly controlled entity is reported using proportionate consolidation.

c) Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred to complete software development and the useful lives of depreciable fixed assets.

d) Tangible fixed assets

Fixed assets are stated at cost less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and condition. Subsequent expenditure related to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond its previously assessed standard of performance.

e) Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its development cost/purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

f) Depreciation and amortization

Depreciation has been provided based on estimated useful life assigned to each asset in accordance with Schedule II of the Companies Act, 2013:

Depreciation is charged only from the date the asset concerned is put to use by the Company.

Intangible assets are amortized over the estimate useful life.

The depreciation has been charged using straight line Method over the estimated life of assets of three to seven years in case of Allied Digital Services LLC.

a) Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on pro-rata basis over the period of the lease.

b) Impairment

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 treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in the prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

c) Investments

Investments, which are readily realisable 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 current investments. All other investments are classified as long-term investments.

Investments are recorded at cost on the date of purchase, which includes acquisition charges such as brokerage, stamp duty, taxes, etc. Current Investments are tested at lower of cost and net realisable value. Long term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in the value.

Profit or Loss on sale of Investments is determined on specific identification basis.

d) Employee benefits

(i) Post-retirement benefit plans

Payments to the defined retirement benefit schemes are recognized as expenses when employees have rendered services entitling them to contributions.

In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for "Accounting for Employees Benefit", the Company with effect from April 1, 2006 provides for gratuity for its eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for the period in which they occur.

(ii) Employees defined contribution plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. This contribution is made to the Government's Provident Fund.

e) Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured.

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Revenues from maintenance contracts are recognised on pro-rata basis over the period of the contract.

Service revenue is considered on acceptance of the contract and is accrued over the period of the contract, net of all taxes, local levies and other discounts & rebates.

Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.

Revenue from sale of software licenses are recognized upon delivery where there is no customization required. In case of sale of customized software the same is recognized on the basis of achieving the various milestones attached with the customization, net of all taxes, local levies and other discounts & rebates.

Interest income is accounted on time proportion basis taking into account the amount outstanding and the applicable interest rate. Dividends income is accounted when the right to receive it is established.

f) Taxation

Tax expense comprises of current and deferred tax.

Provision for current tax is made on the basis of estimated taxable income of the current accounting year in accordance with the Income Tax Act, 1961.

Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and the liability on a net basis.

The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognised to the extent there is reasonable certainty that these would be realised in future.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain, that sufficient future taxable income will be available.

In case of unabsorbed losses and unabsorbed depreciation, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profit. At each Balance Sheet date the Company reassesses the unrecognised deferred tax assets.

Minimum Alternate Tax (MAT) credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in Guidance Note issued by the ICAI, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal Income Tax during the specified period.

g) Foreign Currency Transactions

The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue / expenditure.

Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year end are recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.

h) Employee Stock Option Scheme

In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securities and Exchange Board of India ("SEBI"), the Company is following the Intrinsic Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day prior to the date of issue of the shares over the price at which they are issued is recognised as employee compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option.

However, during the year there were no Options exercised and vested hence no expenses have been provided on account of Employee Stock Options Cost (Previous Year: Nil).

i) Inventories

Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out basis. Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost less provision for obsolescence.

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Mar 31, 2014

A) Basis of preparation

The financial statements have been prepared in accordance with the Generally Accounting Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on accrual basis. These financial statements have been prepared to comply with the in all material aspects with the accounting standards under section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred to complete software development and the useful lives of depreciable fixed assets.

c) Tangible fixed assets

Fixed assets are stated at cost less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and condition. Subsequent expenditure related to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond its previously assessed standard of performance.

d) Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its development cost/purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

e) depreciation and amortization

Depreciation other than on capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:

Type of Asset Method Rate

Leasehold Land Straight line 1.63%

Freehold & Leasehold Buildings Straight line 1.63%

Furniture and Fixtures Straight line 6.33%

Computers and IT Equipment''s Straight line 16.21%

Motor Vehicles Straight line 9.5%

Office Equipment''s Straight line 4.75%

Civil and Plumbing Work Straight line 1.63%

Depreciation is charged only from the date the asset concerned is put to use by the Company. Fixed Assets individually costing Rs. 5,000/- or less have been fully depreciated in the year of purchase.

Intangible assets are amortize over the estimate useful life.

f) Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on pro-rata basis over the period of the lease.

g) Impairment

At each Balance Sheet date, the management reviews the carrying amounts 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 re-estimated in order to determine the extent of impairment loss. Any deviation in the value of such asset is recognized in the Profit and Loss Account. Recoverable amount is the higher of an asset''s net selling price and value in use.

h) Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments comprising investments in mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

Profit or Loss on sale of Investments is determined on specific identification basis.

i) Employee benefits

(i) post-retirement benefit plans

Payments to the defined retirement benefit schemes are recognized as expenses when employees have rendered services entitling them to contributions.

In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for "Accounting for Employees Benefit", the Company with effect from April 1, 2006 provides for gratuity for its eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for the period in which they occur.

(ii) Employees defined contribution plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. This contribution is made to the Government''s Provident Fund.

j) Revenue recognition

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Revenues from maintenance contracts are recognised on pro-rata basis over the period of the contract.

Service revenue is considered on acceptance of the contract and is accrued over the period of the contract, net of all taxes, local levies and other discounts & rebates.

Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.

Revenue from sale of software licenses are recognized upon delivery where there is no customization required. In case of sale of customized software the same is recognized on the basis of achieving the various milestones attached with the customization, net of all taxes, local levies and other discounts & rebates.

Interest income is accounted on accrual basis. Dividends income is accounted when the right to receive it is established.

k) Taxation

Current income tax expense comprises taxes on income from operations in India.

Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversal in the subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws prevailing as on the date of the Balance Sheet.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised to the extent that there is virtual certainty that sufficient taxable income will be available in future to realise such assets.

Provisions for income taxes are presented in the balance sheet after offsetting Advance Taxes paid and TDS deductions for the respective assessment years.

The Company offsets deferred tax assets and deferred tax liabilities, if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

MAT credit is recognized as an asset only when and to the extent there are adequate and satisfying reasons that the Company will pay normal income tax during the specified period. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent that there is no satisfying reason to the effect that the Company will pay normal income tax during the specified period.

l) Foreign Currency Transactions

The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue / expenditure.

Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year end are recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.

m) Employee stock Option scheme

In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securities and Exchange Board of India ("SEBI"), the Company is following the Intrinsic Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day prior to the date of issue of the shares over the price at which they are issued is recognised as employee compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option.

However, during the year there were no Options vested below the Fair Market Value of the Shares hence no expenses have been provided on account of Employee Stock Options Cost (Previous Year: Nil).

n) Inventories

Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out basis. Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost less provision for obsolescence.

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Mar 31, 2012

A) Basis of preparation

The financial statements have been prepared in accordance with the Generally Accounting Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on accrual basis. These financial statements have been prepared to comply with the in all material aspects with the accounting standards under section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

b) Use of estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred to complete software development and the useful lives of depreciable fixed assets.

c) Tangible fixed assets

Fixed assets are stated at cost less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and condition. Subsequent expenditure related to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such assets beyond its previously assessed standard of performance.

d) Intangible assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its development cost/purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

e) Depreciation and amortization

Depreciation other than on capital work-in-progress is charged so as to write-off the cost of assets, on the following basis:

Depreciation is charged only from the date the asset concerned is put to use by the Company. Fixed Assets individually costing Rs. 5,000/- or less have been fully depreciated in the year of purchase.

Intangible assets are amortize over the estimate useful life

f) Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognized as operating leases. Lease rentals under operating leases are recognized in the profit and loss account on pro-rata basis over the period of the lease.

g) Impairment

At each Balance Sheet date, the management reviews the carrying amounts 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 re-estimated in order to determine the extent of impairment loss. Any deviation in the value of such asset is recognized in the Profit and Loss Account. Recoverable amount is the higher of an asset's net selling price and value in use.

h) Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments comprising investments in mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

Profit or Loss on sale of Investments is determined on specific identification basis.

i) Employee benefits

(i) Post-retirement benefit plans

Payments to the defined retirement benefit schemes are recognized as expenses when employees have rendered services entitling them to contributions.

In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for "Accounting for Employees Benefit", the Company with effect from April 1, 2006 provides for gratuity for its eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for the period in which they occur.

(ii) Employees defined contribution plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. This contribution is made to the Government's Provident Fund.

j) Revenue recognition

Revenues from contracts priced on a time and material basis are recognized when services are rendered and related costs are incurred.

Revenues from maintenance contracts are recognized on pro-rata basis over the period of the contract. Service revenue is considered on acceptance of the contract and is accrued over the period of the contract, net of all taxes, local levies and other discounts & rebates.

Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.

Revenue from sale of software licenses are recognized upon delivery where there is no customization required. In case of sale of customized software the same is recognized on the basis of achieving the various milestones attached with the customization, net of all taxes, local levies and other discounts & rebates.

Interest income is accounted on accrual basis. Dividends income is accounted when the right to receive it is established. k) Taxation

Current income tax expense comprises taxes on income from operations in India.

Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit 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 the subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws prevailing as on the date of the Balance Sheet.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognized to the extent that there is virtual certainty that sufficient taxable income will be available in future to realize such assets.

Provisions for income taxes are presented in the balance sheet after offsetting Advance Taxes paid and TDS deductions for the respective assessment years.

The Company offsets deferred tax assets and deferred tax liabilities, if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

MAT credit is recognized as an asset only when and to the extent there are adequate and satisfying reasons that the Company will pay normal income tax during the specified period. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent that there is no satisfying reason to the effect that the Company will pay normal income tax during the specified period.

l) Foreign Currency Transactions

The transactions in foreign currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue / expenditure.

Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year end are recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.

m) Employee Stock Option Scheme

In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securities and Exchange Board of India ("SEBI"), the Company is following the Intrinsic Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day prior to the date of issue of the shares over the price at which they are issued is recognised as employee compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option. However, during the year there were no Options vested below the Fair Market Value of the Shares hence no expenses have been provided on account of Employee Stock Options Cost (Previous Year: Nil).

n) Inventories

Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out basis. Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost less provision for obsolescence.

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Mar 31, 2010

1) Basis of Preparation

The financial statements are prepared under the historical cost convention and as per the requirements of the Companies Act, 1956.

2) Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the year. Examples of such estimates include provisions for doubtful debts, employee benefits, provision for income taxes, accounting for contract costs expected to be incurred to complete software development and the useful lives of depreciable fixed assets.

3) Fixed Assets

Fixed assets are stated at cost, less accumulated depreciation. Costs include all expenses incurred to bring the assets to its present location and condition. Financing cost related to acquisition of Fixed Assets are also included to the extent they relate to the period till such assets are ready to put to use.

5) Leases

Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are recognised as operating leases. Lease rentals under operating leases are recognised in the profit and loss account on pro-rata basis over the period of the lease.

6) Impairment

At each Balance Sheet date, the management reviews the carrying amounts 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 re-estimated in order to determine the extent of impairment loss. Any deviation in the value of such asset is recognized in the Profit and Loss Account. Recoverable amount is the higher of an asset’s net selling price and value in use.

7) Investments

Long-term investments are stated at cost, less provision for other than temporary diminution in value. Current investments comprising investments in mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

Profit or Loss on sale of Investment is determined on the specific identification basis.

8) Employee Benefits

(i) Post Retirement Benefit Plans

Payments to the defined retirement benefit schemes are recognized as expenses when employees have rendered services entitling them to contributions.

In accordance to the applicable Indian Laws and as per the Accounting Standard 15 (Revised) for "Accounting for Employees Benefit", the Company with effect from April 1, 2006 provides for gratuity for its eligible employees. The Actuarial Gains or Losses are charged to the Profit and Loss Account for the period in which they occur.

(ii) Employees Defined Contribution Plans

The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. This contribution is made to the Government’s Provident Fund.

9) Revenue Recognition

Revenues from contracts priced on a time and material basis are recognised when services are rendered and related costs are incurred.

Sales in case of supply of goods are recognized when the goods are invoiced or dispatched to the customers and are recorded exclusive of VAT, CST, other local levies and other discounts and rebates.

Revenue from sale of software licenses are recognized upon delivery where there is no customization required. In case of sale of customized software the same is recognized on the basis of achieving the various milestones attached with the customization, net of all taxes, local levies and other discounts & rebates.

Service revenue is considered on acceptance of the contract and is accrued over the period of the contract, net of all taxes, local levies and other discounts & rebates.

Dividends are recorded when the right to receive payment is established.

Interest income is recognised on time proportion basis.

10) Taxation

Current income tax expense comprises taxes on income from operations in India.

Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax expense or benefit is recognised on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in the subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws prevailing as on the date of the Balance Sheet.

In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised to the extent that there is virtual certainty that sufficient taxable income will be available in future to realise such assets.

Provisions for income taxes are presented in the balance sheet after offsetting Advance Taxes paid and TDS deductions for the respective assessment years.

The Company offsets deferred tax assets and deferred tax liabilities, if it has a legally enforceable right and these relate to taxes on income levied by the same governing taxation laws.

11) Foreign Currency Transactions

The transactions in Foreign Currencies on revenue accounts are stated at the rate of exchange prevailing on the date of transaction. The difference on account of fluctuation in the rate of exchange prevailing on the date of transaction and the date of realization is treated as revenue / expenditure.

Differences on translation of Current Assets and Current Liabilities remaining unsettled at the year end are recognized in the Profit and Loss Account except those relating to acquisition of fixed assets which are adjusted in the cost of the assets.

12) Employee Stock Option Scheme

In accordance with the Employee Stock Option Scheme and Employee Stock Purchase Scheme Guidelines, 1999 issued by the Securities and Exchange Board of India (“SEBI”), the Company is following the Intrinsic Value Method of ESOP cost whereby the excess of Fair Market Value of the shares of the Company one day prior to the date of issue of the shares over the price at which they are issued is recognised as employee compensation cost. This cost is amortized on straight-line basis over the period of vesting of the Option.

However, during the year, there were no Options vested below the Fair Market Value of the Shares hence no expenses have been provided on account of Employee Stock Options Cost (Previous Year: Nil).

13) Inventories

Inventories are carried at lower of cost and net realizable value. Cost is determined on a first in first out basis. Purchased goods in transit are carried at cost. Stores and spare parts are carried at cost less provision for obsolescence.