Accounting Policies of Citizen Infoline Ltd. Company

Mar 31, 2024

24 SIGNIFICANT ACCOUNTING POIICIES

• The basis of Preparation of Financial Statements

a) I he financial statements have been prepared under the historical cost convention bv the generally accepted
accounting principles on going concern basis and provisions of the Companies Ad, 2013 as adopted consistently by
Ihe company The accounts are materially Complying with Accounting Standards issued by The Institute of
Chartered Accountants of India

b) The company generally follows a mercantile system of accounting and recognize* significant items of income and
expenditure on accrual basis. However, Municipal Tax is recognized on Cash Basis.

• Disclosure of Accounting Policies

The Accounting Principles and policies, recognized as appropriate for measurement and reporting of the financial
performance and the financial position on Accrual Basis except othei wise disclosed using historical cost i.e. not taking
into account changing money values/impact of inflation, are applied in the preparation of the financial statement and
those which are considered material to the affairs are suitably disclosed The statement on Significant Accounting policy
excludes disclosures regarding Accounting Standards In respect of which there are no material transactions during the
year.

• Valuation of Inventories

The Company operates in the service industry. Therefore, it does not have any inventory.

Current versus non-current classification

The Company presents assets and liabilities In the balance sheet based on current/ non-current classification. An asset
_| is treated as current when it is

«—Expected to be realized or intended tn be sold or consumed in the normal operating cycle
Yo\\ Held primarily for trading

¦‘10W65* V j£.il Expected to be realized within twelve months after the reporting period, or
144047 I SII Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at Jpast twelve
yjkjl months after the reporting period

All other assets are classified as non-current.

A liability is current when

c It is expected to be settled in the norma! operating cycle
o It is held primarily for trading

it 15 due to be settled within twelve months after the reporting period* or

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

Deferred tax assets and liabilities are classified as non-cunent assets arid liabilities

The company classifies an other liabilities as non-current The operating cycle is the time between the acquisition of
assets for processing and their reallration in cash and cash equivalents. The company has identified twelve months as
its operating cycle

¦ Functional and Presentation Currency

These standalone financial statements are presented In Indian rupees, which is the functional currency of the Company
All financial information presented in Indian rupees has been rounded to the nearest rupees, except otherwise
Indicated

• Employee Benefits

II) Short-term employee benefits

Short-term employee benefits are expensed as the related service Is provided A liability is recognized for the
amount expected to be paid il the Company has a present legal or constructive obligation to pay this amount
as a result of past .service provided by the employee and the obligation can be estimated reliably.

|ii) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service Is provided and
the Company will have no legal or constructive obligation to pay (urther amounts. Prepaid contributions a«e
recognized as an asset to the extent that a cash refund or a reduction in future payments Is available

(ii!) Defined benefit plans

The Company''s net obligation in respect of defined benefit plans Is calculated separately for each plan by
estimating the amount of future benefit that employees have earned in the current and prior periods,
discounting that amount and deducting the fair value of any plan assets, fhe calculation of defined benefit
obligations is performed periodically by an independent qualified actuary using the projected unit credit
method. When the calculation results in a potential asset for the Company the recognized asset is limited to
Ihe present value of economic benefits available m the form of any future refunds from the plan or reductions
in future contributions to the plan To calculate the present value of economic benefits, consideration is given
to any applicable minimum funding requirements.

Re-measurement of the net defined benefit liability, which comprise actuarial gains and losses and the return
on plan assets (excluding interest) and the effect of the asset ceiling (If any, excluding interest), are recognized
immediately in other comprehensive income (OCI) Net interest expense (Income) on the net defined liability
(asset) is computed by applying the discount rate, used to measure the net defined liability (asset), Net interest
expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in the benefit that relates to
past service or the gam or loss on curtailment is recognized immediately in Statement of Profit and Loss. The Company
recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs

(ivl Other long-term employee benefits

'' The Company''s net obligation in respect of long-term employee benefits is the amount of future benefit that employees
have earned in return for their service in the current and prior periods. Ihe obligation is measured by a periodical
independent actuarial valuation using the projected unit credit method Re measurement are recognized in Statement
of Profit and Loss in the period in which they arise

¦ Fair value measurement

The Company measures financial assets, at fair value at each balance sheet date 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 The fair value measurement is based on the presumption that the transaction to sell the asset or
transfer the liability takes place either:

o In the principal market for the asset or liability, or

o In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous maiket must be accessible by the Company

The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act In their economic best interest. A fan value
measurement of a non-flnancial asset takes into account a market participant''s ability to generate economic benefits
by using the asset in Its highest and best use or by selling it to another market participant that would use the asset in its
highest and best use

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are
available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of
unobservable Inputs.

All assets and liabilities for which fan value is measured or disclosed in tho financial statements are categorized within
the fair value hierarchy, described as follows, based on the lowest (pvel input that is significant to the fair value
measurement as a whole:

O Level 1 Quoted (unad|usted) market prices In active markets far identical assets or liabilities

Level 2 Valuation techniques for which the lowest level input that Is significant to the fair value measurement
is directly or indirectly observable

Level 3 Valuation techniques for which the lowest level Input that is significant to the fair value measurement

is Unobservable

Tor assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines
whether transfers have occurred beiween levels in the hierarchy by re assessing categorization (based on the lowest
level input that is significant to the fair value measurement as a whole) at the end of each reporting period

The Company management determines the policies and procedures for recurring and non-recurring fair value
measurement Involvement of external valuers Is decided upon annually by Company management The management
decodes after discussion with external valuers about valuation technique and Inputs to use tor each case.

At each reporting date, the Company''s management analyses the movements in the values of assets and liabilities which
are required to be re measured or re-assessed as per the Company’s accounting policies, For this analysis, the Company
verifies the major inputs applied in the latest valuation by agreeing on the information in the valuation computation to
contracts and other relevant documents.

The Company, in conjunrtion with the Company''s external valuers, also compares The change in the fair value of each
asset and liability with relevant external sources to determine whether the change is reasonable For fair value
disclosures, the Company has determined classes of assets and liabilities by the nature characteristics and risks of the
asset or liability and the level of the fair value hierarchy as explained above

• Revenue recognition

Revenue is recognized to the exienr it . probable that the economic benefits will How to the Company and that the
revenue can be reliably measured, regardless of when the payment is being made Revenue is measured at the fair value
of the consideration received or receivable, taking into account contractually defined terms of payment and excluding
taxes or duties collected on behalf of the government. The Company assesses its revenue arrangements against specific
^^^^niteria, t.e., whether it has exposure to the significant risks and rewards associated with the sale of goods or the
4 °* *^erVlte5'' ^lodetfir,nm<‘ ^,s acting as a principal or as an agent.

RevMoxft recognized, net of trade discounts, goods and service tax or other taxes, as applicable

WiltW&i''* \ <*Yl

(tj Sale of goods

Revenue from sale of goods is recognized m the statement of profit and loss when the significant risks and rewards in
respect of ownership of goods have been transferred to the buyer as per the terms of the respective sales order and
the Company neither continuing managerial Involvement to the degree usually associated with ownership nor effective
control over the goods sold. Revenue from the sale of goods is measured at the fair value of the consideration received
or receivable, net of returns and allnwances and discounts.

(ii) Interest Income

For all financial assets measured either at amortized cost, interest income is recorded using the effective interest rate
(EIR) FIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the
financial instrument ora shorter period, where appropriate, to the gross carrying amount of the financial asset or the
amortized cost ol a financial liability. When calculating the effective interest rate, the group estimates the expected
cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension, call
and similar options) but does not consider the expected credit losses. Interest income ts included in other Income in the
statement ol profit and loss

(ill) Dividend Income

Dividend income from investments is recognized when the right to receive the payment Is established which is generally
when shareholders approve the dividend

• Property, Plant and Equipment & Depreciation

(I) Recognition and Measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment
losses if any. The cost of an item of property, plant and equipment comprises Its purchase price, including
import duties and non refundable purchase taxes, after deducting trade discounts and rebates. Any costs are
directly attributable to bringing the asset to the location and condition necessary for It to be capable of
operating in the manner intended hy management - the initial estimate of the costs of dismantling and
removing the item and restoring the Site on which it Is located, the obligation for which the Company incurs
either when the item is acquired or as a consequence of having used the item during a particular period lor
purposes other than to produce inventones during that period • Income and expenses related to the Incidental
operations, not necessary to bring the item to the location and condition necessary for it to be capable of
operating in the manner intended by management, are recognized in Statement of Profit and Loss If significant
parts of an item of pioperty, plant and equipment have different useful lives, then ihey are accounted for as
separate items (major components) of property, plant and equipment Any gain or loss on disposal ot an item
of property, plant and equipment is recognized in Statement of Profit and loss. Capital work-in-progress in
respect ot assets which are not ready for their intended use are carried at cost, composing of direct costs,
related Incidental expenses and attributable interest

(i) Subsequent Expenditure

Subsequent expenditure is capitalized only if it Is probable that the future economic benefits associated with
the expenditure will flow to the Company.

(il) Depredation

fhe depreciable amount for assets is the cost of an asset or other amount substituted for cost, less its estimated
residual value. Depreciation on property, plant and equipment of the Company has been provided on the
straight-line method as per the useful life prescribed in Schedule II to the Act, except In respect of the following
categories of assets, in whose case the life of the assets has been assessed as undei based on independent
technical evaluation and management''s assessment thereof, taking into account the nature of the asset, the
estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated
technological changes, manufacturers warranties and maintenance support, etc.

Useful life is taken as per Schedule II of Comoanies Act, 2013

Depreciation method, useful life and residual values are reviewed at each financial year end and adjusted if
appropriate Depreciation on additions (disposals) is provided on a pro rata basis, Le, from (up to) the date on
which asset is ready for use (disposed of)

• Intangible Assets

(I) Recognition and Measurement:

Intangible assets are carried at cost less accumulated amortization and impairment tosses if any The cost of an
intangible asset comprises of its 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 Expenditure on research and development eligible for capitalization are carried
as Intangible assets under development where such assets 3re not yet ready for their Intended use

(ii) Subsequent Expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with
the expenditure will flow to the Company

(Hi) Amortization

Intangible assets are amortized over their estimated useful life on Straight Line Method

Ihe estimated useful lives of intangible assets and the amortization period are reviewed at the end of each

financial year, and the amortization method is revised to reflect the changed pattern if any

• Non-current assets held for sale

Assets are classified as held for sale and stated at the lower of carrying amount and fair value fewer costs to
sell if the asset is available for Immediate sale and Its sale is highly probable Such assets or group of assets arp
presented separately in the Balance Sheet as “Assets Classified as Held for Sale". Once classified as held for
sale, Intangible assets and property, plant and equipment are no longer amortized or depredated.

• Impairment of assets

The carrying values of assets/cash generating units at each balance sheet date are reviewed for impairment if
any Indication of Impairment exists. The following intangible assets are tested for impairment each financial
year even if there is no Indication that the asset Is impaired;

I) an intangible- asset that Is not yet available for use: and

II) an intangible asset that Is having an indefinite useful life

If the carrying amount of the assets exceeds the estimated recoverable amount, an impairment Is recognized
for such excess amount The impairment loss is recognized as an expense in the Statement of Profit and toss
unless the asset is carried at revalued amount, in which case any impairment loss of the revalued asset is
treated as a revaluation decrease to the extent a revaluation reserve is available for that asset. The recoverable
amount Is the greater of the net selling price and their value in use. The value in use is arrived at by discounting
the future cash flows to their present value based on an appropriate discount factor When there is indication
that an impairment loss recognized tor an asset (other than a revalued asset) in earlier accounting periods no
longer exists or may have decreased, such reversal of Impairment loss is recognized In the Statement of Profit
and Loss, to the extent the amount was previously charged to the Statement of Profit and loss. In the case of
revalued assets, such reversal Is not recognized.

• foreign Currency Transactions

Transactions In foreign currency are recorded at the approximate exchange rate prevailing on the date of
transactions, foreign currency monetary assets and monetary liabilities not covered by forwarding exchange
contracts are translated at year end exchange rates and profit and loss so determined and realized exchange
gains/losses are recognized in purchase proceed of Imports. During the year the there b nil Foreign Exchange
Fluctuations.

''Vb''W‘vc r n men! Grants and Subsidies

Wf?N IgH The company recognizes the Government giants only wnen there is reasonable assurance that
st)J ''T I til a) The enterprise will comply with the conditions attached to them and

b) The grant will be received,

During the year, the company has not received any grani/subsldy.

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Mar 31, 2015

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and comply with the Companies (accounting Standard) Rules 2006, the relevant provision of the Companies Act 2013.

b) The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis. Considering the matching concept, the company recognizes its revenue from information service business on receipt basis.

AS -1 - Disclosure of Accounting Policies

The Accounting Principles and policies recognized as appropriate for measurement and reporting of the financial performance and the financial position on mercantile system and recognize items of income and expenditure on accrual basis. The statement on Significant Accounting policy excludes disclosures regarding Accounting Standards in respect of which there are no material transactions during year.

AS - 3 - Cash Flow Statement

Cash flow statement, as per AS - 3 is annexed with financial statements.

AS -4 - Contingencies and Events occurring after Balance sheet date.

Sr. Particulars Amount No. Rs.

1 Contingent Liabilities Nil

2 Liabilities Disputed under Income Tax Nil

3 Estimated Amount of Contracts remaining to be executed on Capital accounts and not provided for Nil

4 Material Events occurring after Balance sheet date are taken into cognizance. There have been no material changes or events since the date of balance sheet affecting financial statements as on the Balance sheet date. Further, the dates of Balance sheet, no events or circumstances have occurred, though properly excluded from the accounts, are of such importance that they should be disclosed through any medium.

AS - 5 - Net Profit and Loss for the period, extra ordinary items and change in accounting policy.

1 Net Profit for the period

All items of income and expense in the period are included for determination of net profit of the year unless specifically mentioned elsewhere in the financial statements or required by an Accounting Standard. Prior period items, extra ordinary items and changes in accounting policy are disclosed only if those have material impact on the affairs of the company.

2 Prior Period items: All material items of Income/ Expenditure pertaining to prior period and expenses to subsequent period are accounted separately. During the year, the company has debited deferred tax Rs.1,111,131 for earlier years, against opening balance of profit & loss account. The company has made error in calculations in the preceding periods. The same has been corrected by debit to Opening balance of surplus account.

3 Extra ordinary Items : Nil

4 Accounting Policies

The company has consistently followed accounting polices and there are no material changes in accounting policy of the company from that followed in previous year.

AS - 6 - Depreciation Accounting

a) The Gross Block of fixed assets is stated at cost or acquisition or construction including any cost attributable to bringing the assets to their working condition for their intended use.

b) Depreciation on fixed assets is provided on 'Straight Line Basis' at the rate prescribed in Schedule II to the Companies Act. 2013.

c) Write Offs of Fixed Assets

The Company had depreciated fixed assets at rates specified under Schedule XIV of Companies Act. 1956 till 31 March 2014. However, Schedule II of Companies Act. 2013 requires company to depreciate its assets over its useful-life with effect from 1 April 2014. Accordingly, the company has calculated useful lives of all assets as on 1 April 2014 and depreciated their written down value on their remaining useful lives. However, the written down values of assets, whose useful life has become Nil as on 1 April 2014, are required to be adjusted towards reserves and surplus. The Company has adjusted Rs. 32,14,399/-towards reserves and surplus of the company. The change in rate of depreciation or useful life of an asset is change in accounting estimate and is therefore applied prospectively with effect from 1 April 2014.

AS -10 - Accounting of Fixed Assets

Fixed Assets reflected in the financial statements are stated at their cost of acquisition including taxes, duties (Net of Refunds) and other identifiable direct charges incurred upto date the asset is put to use less accumulated depreciation where charged.

AS -13 - Accounting for Investments:-

The investments of the company are classified in to investments held for maturity and investment held other than for maturity. The company values its investments held for maturity at cost price ignoring any changes in the market price of the same. However, if change in value is on permanent basis, the same is recognized as profit or loss in profit and loss account. While investment held for other than maturity is valued at Market price by recognizing the same in profit and loss account.

AS -14 - Accounting of Amalgamation

In 2009 the company has amalgamated Citizen Communication Limited by issuing the fully paid of shares of the company as purchase consideration. The amalgamation was in nature of merger. All the assets and liability acquired is shown at book value. However, the difference arise on amalgamation is not adjusted from profit and loss account or reserves of the company. The company has shown them as Goodwill on Asset side amounting to Rs. 1 crore. This has resulted to overstatement of reserves of the company by Rs. 1 crore.

AS - 15 - Accounting for retirement benefits

Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the related service is rendered.

The eligible employees of the Company are entitled to receive benefits under the Provident Fund, a defined contribution plan in which both the employees and the Company make monthly contributions at a specified percentage of the covered employees' salary (currently 12% of employees' salary). The contributions as specified under the law are paid to the Regional Provident Fund Commissioner and the Central Provident Fund under the Pension scheme. The Company recognizes such contributions as expense of the year in which the liability is incurred.

The Company provides for the encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave for availment as well as encashment subject to the rules. As per the regular past practice followed by the employees, the company does not create provisions for leave encashment but recognizes the same on actual payment basis.

AS - 17 - Segment Reporting

The Company operates six segments viz Ahmedabad, Rajkot, Surat. Baroda. Mumbai and Pune division on the basis of Geographical Critena. The company has preferred to give segment reporting based on statewide classifications of its divisions.