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Accounting Policies of Dynacons Systems & Solutions Ltd. Company
Mar 31, 2025
1.2.1. BASIS OF PREPARATION OF STANDALONE FINANCIAL STATEMENTS
a) Statement of compliance
The standalone financial statements of the Company have been prepared and presented in accordance with Indian
Accounting Standards (Ind AS) as per Companies (Indian Accounting Standards) Rules, 2015 and Companies
(Indian Accounting Standard) Amendment Rules, 2016 as notified under section 133 of Companies Act, 2013 (the
"Act") and other relevant provisions of the Act.
The standalone financial statements were approved for issue by the Board of directors on 24th May, 2025.
The standalone financial statements of the Company are prepared in accordance with Indian Accounting Standards
(Ind AS) under the historical cost convention on accrual basis except for certain financial assets and financial
liabilities that have been measured at fair value.
b) Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (INR), which is also the Company''s functional
currency. All amounts have been rounded-off to the nearest lacs unless otherwise indicated.
c) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating
cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained
its operating cycle up to twelve months for the purpose of current - noncurrent classification of assets and liabilities.
e) Use of estimates and judgements
In preparing these standalone financial statements, management has made judgements, estimates and assumptions
that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.
Actual result may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
Judgements
Information about judgments made in applying accounting policies that have the most significant effect on the
amounts recognised in the standalone financial statements is included in the following notes:
Lease classification - Note 1.2.16
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material
adjustment in the subsequent period financial statements is included in the following notes:
¦ Estimation of deferred tax expense and payable - Note 1.2.13
¦ Estimated useful life of property, plant and equipment and Intangible assets - Note 1.2.7
¦ Estimation of defined benefit obligationsâ Note 1.2.12
¦ Impairment of trade receivables- Note 1.2.18
f) Measurement of fair values
The Company''s accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes a
treasury team that has overall responsibility for overseeing all significant fair value measurements, including Level 3
fair values, and reports directly to the Chief Financial Officer.
The treasury team 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 valuation team
assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the
requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Fair values are categorised 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).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as
possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy
as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period
during which the change has occurred.
1.2.2. Revenue Recognition
1.2.2.1. Sale of goods:
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the
consideration which the Company expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which
is usually on dispatch / delivery of goods, based on contracts with the customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price
concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes
collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated
(using the most likely method) based on accumulated experience and underlying schemes and agreements with
customers. Due to the short nature of credit period given to customers, there is no financing component in the
contract.
Contract Assets
Trade Receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the
passage of time is required before payment of the consideration is due).
Contract liabilities
A contract liability is the obligation to transfer goods to a customer for which the Company has received consideration
(or an amount of consideration is due) from the customer. If a customer pays consideration before the Company
transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the
payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs
under the contract.
1.2.2.2. Rendering of Services
Revenue is recognized from rendering of services when the performance obligation is satisfied and the services are
rendered in accordance with the terms and conditions of customer contracts. Revenue is measured based on the
transaction price, which is the consideration, as specified in the contract with the customer. Revenue also excludes
taxes collected from customers.
1.2.2.3. Revenue from time and material and job contracts is recognised on output basis measured by units delivered,
efforts expended, number of transactions processed, etc. and as per terms & conditions under the contract with the
customers.
1.2.2.4. Deferred contract costs are upfront costs incurred for the contract and are amortized on a systematic basis that
is consistent with the transfer to the customer of the goods or services to which the asset relates.
1.2.2.5. Other Income
i) Profit on sale of investments is determined as the difference between the sales price and the carrying value of
the investment upon disposal of investments.
ii) Dividend income is recognised in Statement of Profit and Loss on the date on which the Company''s right to
receive payment is established.
iii) Interest income or expense is recognised using the effective interest method.
The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the
expected life of the financial instrument to:
- the gross carrying amount of the financial asset ;
or
- the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the
asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets
that have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the
effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the
calculation of interest income reverts to the gross basis.
iv) Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent
that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
v) Interest on Refund from Income Tax Department / GST department / Environment agencies are accounted for
on receipt basis.
1.2.3. Expenditure Recognition
Expenses are accounted on the accrual basis and on crystallisation of such expenses. And provisions for all known
losses and liabilities are made.
1.2.4. Recent pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under
Companies (Indian Accounting Standards) Rules as issued from time to time. Management anticipates that all relevant
pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement
given below:
a) Ind AS 116- Leases
The amendments require an entity to recognize lease liability including variable lease payments which are not
linked to index or a rate in a way it does not result into gain on Right of Use asset it retains. The Company has
evaluated the amendment and concluded that there is no impact on its standalone financial statements.
b) Ind AS 117- Insurance contracts
MCA notified Ind AS 117, a comprehensive standard that prescribe, recognition, measurement and disclosure
requirements, to avoid diversities in practice for accounting insurance contracts and it applies to all companies
i.e., to all âinsurance contractsâ regardless of the issuer. The effective date for adoption of this amendment
is annual Company has evaluated the amendment and concluded that there is no impact on its standalone
financial statements.
c) Ind AS 21- The Effects of Changes in Foreign Exchange Rates
Ministry of Corporate Affairs (MCA), via notification dated 7th May 2025, announced amendments to the
Companies (Indian Accounting Standards) Rules, 2015 which come into effect from the date of publication.
The key amendments include the definition of whether a currency is exchangeable, and the process by which
an entity should assess this exchangeability, guidance on how an entity should estimate a spot exchange
rate in cases where a currency is not exchangeable and additional disclosures in cases where an entity has
estimated a spot exchange rate due to a lack of exchangeability. The Company has evaluated the amendment
and concluded that there is no impact on its standalone financial statements.
1.2.5. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with
original maturity of three months or less from the date of acquisition), highly liquid investments that are readily
convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.2.6. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is
adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts
or payments. The cash flows from operating, investing and financing activities of the Company are segregated
based on the available information.
1.2.7. Property, plant and equipment
Buildings and other equipment
Buildings and other equipment (comprising plant and machinery, furniture and fittings, electrical equipment, office
equipment, computers and vehicles) are initially recognized at acquisition cost, including any costs directly attributable
to bringing the assets to the location and condition necessary for them to be capable of operating in the manner
intended by the management. Buildings and other equipment are subsequently measured at cost less accumulated
depreciation and any impairment losses. Cost of property, plant and equipment not ready for the intended use before
reporting date is disclosed as capital work in progress.
Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that
asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of
performance.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between
the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss
within other income or other expenses.
The components of assets are capitalized only if the life of the components vary significantly and whose cost is
significant in relation to the cost of respective asset. The life of components in assets are determined based on
technical assessment and past history of replacement of such components in the assets.
Tangible assets are carried at the cost of acquisition or construction less accumulated depreciation and accumulated
impairment, if any. The cost of tangible assets includes non-refundable taxes, duties, freight and other incidental
expenses related to the acquisition and installation of the respective assets. Assets which are retired from active
use and are held for disposal are stated at the lower of their net book value or net realizable value. Cost of tangible
assets not ready for the intended use as at balance sheet date are disclosed as âcapital work in progressâ.
Impairment testing of intangible assets and property, plant and equipment
For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely
independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment
and some are tested at cash-generating unit level. All individual assets or cash-generating units are tested for
impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset''s (or cash-generating unit''s) carrying amount
exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine
the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines
a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment
testing procedures are directly linked to the Group''s latest approved budget, adjusted as necessary to exclude the
effects of future reorganizations and asset enhancements. Discount factors are determined individually for each
cash generating unit and reflect current market assessments of the time value of money and asset-specific risk
factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash
generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit.
With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss
previously recognized may no longer exist. An impairment loss is reversed if the asset''s or cash-generating unit''s
recoverable amount exceeds its carrying amount.
Depreciation
Depreciation on tangible assets is provided on straight line method and in the manner prescribed in Schedule II to
the Companies Act, 2013, over its useful life specified in the Act, or based on the useful life of the assets as estimated
by Management based on technical evaluation and advice. The residual value is 5% of the acquisition cost which is
considered to be the amount recoverable at the end of the asset''s useful life. The residual values, useful lives and
method of depreciation of property, plant and equipment is reviewed at each financial year end.
Assets costing less than '' 5,000 individually have been fully depreciated in the year of purchase.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each
financial year and the amortisation period is revised to reflect the changed pattern, if any.
1.2.8. Research & Development Expenditure
Revenue expenditure pertaining to research is charged to the standalone statement of profit and loss. Development
costs of products are also charged to the Statement of Profit and Loss unless a product''s technical feasibility has
been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that
can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the
asset ready for its intended use. Property, Plant and equipment utilized for research and development are capitalized
and depreciated in accordance with the policies stated for property, plant and equipment.
1.2.9. Inventories
Inventories are valued at the lower of the cost and the net realizable value. Net realisable value is the estimated
selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost is
determined on a First in First out basis. A periodic review is made of slow-moving stock and appropriate provisions
are made for anticipated losses, if any.
1.2.10. Investments
Investments that are readily realisable and are intended to be held for not more than one year from the date on
which such investments are made are classified as current investments. All other investments are classified as
long-term investments. Long-term investments other than investment in subsidiaries are valued at fair market value.
Provision is made for diminution in value to recognize a decline, if any, other than that of temporary in nature.
Current investments are valued at lower of cost and fair market value. Gains or losses that arise on disposal of an
investment are measured as the difference between disposal proceeds and the carrying value and are recognised
in the statement of profit and loss.
1.2.11. Foreign Currency transactions
Reporting and presentation currency
The standalone financial statements are presented in Lakhs of Indian Rupees, which is also the functional currency
of the Company.
Foreign currency transactions and balances
i) Initial Recognition: Transactions in foreign currencies are recorded at the exchange rates prevailing on the date
of the transaction.
ii) Conversion: At the year-end, monetary items in foreign currencies are converted into rupee equivalents at the
year end exchange rates.
1.2.12. Retirement Benefits to employees
i. Post-employment benefit plans
Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit
method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses
are recognized in the period of occurrence under Other Comprehensive Income (OCI). Past service cost
is recognized to the extent the benefits are already vested, and otherwise is amortized on a Straight¬
Line method over the average period until the benefits become vested. The retirement benefit obligation
recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted
for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange of services
rendered by employees is recognized during the period when the employee renders the service. These
benefits include performance incentives, paid annual leave, medical allowance, etc.
1.2.13. Income Tax
Tax expense recognized in the statement of profit or loss comprises the sum of deferred tax and current tax not
recognized in other comprehensive income or directly in equity. Calculation of current tax is based on tax rates
in accordance with tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred income taxes are calculated using the liability method on temporary differences between tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes
pertaining to items recognized in other comprehensive income are also disclosed under the same head. Deferred tax
assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference
will be utilized against future taxable income. This is assessed based on the respective entity''s forecast of future
operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any
unused tax loss or credit.
Deferred tax liabilities are generally recognized in full, although Ind AS 12 ''Income Taxes'' specifies limited exemptions.
As a result of these exemptions the Group does not recognize deferred tax liability on temporary differences relating
to goodwill, or to its investments in subsidiaries. Changes in deferred tax assets or liabilities are recognized as a
component of tax income or expense in the statement of profit and loss, except where they relate to items that are
recognized in other comprehensive income (such as the re-measurement of defined benefit plans) or directly in equity,
in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
1.2.14. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until
the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time
to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are
incurred.
Mar 31, 2024
Note 1: Summary of significant accounting policies and other explanatory information1.1 Company Overview
Dynacons Systems & Solutions Ltd. (hereinafter referred to as âDynaconsâ) is a 29 years old IT company with global perspectives with its headquarters at Mumbai and branches all over India. The Company has a large pool of technical resources who are present at more than 250 locations across India. The Company has all the industry leading certifications such as CMMI Level 3, ISO 9001, ISO 20000, ISO 27000 among others.
Dynacons undertakes all activities related to IT infrastructure including infrastructure design and consulting services, turnkey systems integration and set up of large Network and Data Centre infrastructures including supply of associated equipment and software; Hyper Converged Infrastructure (HCI) solutions, Setup of Private and Public Cloud, Software Defined Network (SD WAN) and Software Defined Storage (SDS) solutions, Network Infrastructure design and setup for ISPs, VDI Solutions, onsite and remote facilities management of multi- location infrastructure of domestic clients. The Company has built a strong customer base, variety of talent and a competent service delivery infrastructure.
Dynacons provides all service models such as IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and Saas (Software as a Service). Dynacons'' Enterprise Services offerings include a wide spectrum of Enterprise IT Services including Infrastructure Managed Services, Breakfix Services, Managed Print Services, Cloud Computing, Systems Integration Services, and Applications Development and Maintenance. The Company provides end-to-end technology and technology related services to corporations across industry verticals. The Company has deep domain knowledge across industry sectors and technology expertise across traditional and new age technologies.
The company was incorporated under provisions of Co''s act 1956, having its Registered Office at 78, Ratnajyot Industrial Estate, Irla Lane, Vile parle West, Mumbai 400056 (CIN No L72200MH1995PLC093130). Standalone Financial Statements for the year ended 31st March, 2024 were approved and authorized for issue by Board of Directors on 30th May, 2024
1.2 MATERIAL ACCOUNTING POLICIES:1.2.1. BASIS OF PREPARATION OF STANDALONE FINANCIAL STATEMENTSa) Statement of compliance
The standalone financial statements of the Company have been prepared and presented in accordance with Indian Accounting Standards (Ind AS) as per Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) Amendment Rules, 2016 as notified under section 133 of Companies Act, 2013 (the "Act") and other relevant provisions of the Act.
The standalone financial statements were approved for issue by the Board of directors on 30th May, 2024.
The standalone financial statements of the Company are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial assets and financial liabilities that have been measured at fair value.
b) Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest lacs unless otherwise indicated.
c) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle up to twelve months for the purpose of current - noncurrent classification of assets and liabilities.
The standalone financial statements have been prepared on the historical basis except for the following items:
|
Items |
Measurement Basis |
|
Certain financial assets and liabilities (including |
Fair Value |
|
derivative instruments) |
|
|
Net defined benefit(asset)/ liability |
Fair value of plan assets less present value of defined |
|
benefit obligations |
e) Use of estimates and judgements
In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is included in the following notes:
⢠Lease classification - Note 1.2.16 Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the subsequent period financial statements is included in the following notes:
⢠Estimation of deferred tax expense and payable - Note 1.2.13
⢠Estimated useful life of property, plant and equipment and Intangible assets - Note 1.2.7
⢠Estimation of defined benefit obligationsâ Note 1.2.12
⢠Impairment of trade receivables- Note 1.2.18
The Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes a treasury team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Chief Financial Officer.
The treasury team 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 valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Fair values are categorised 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).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
1.2.2. Revenue Recognition1.2.2.1. Sale of goods:
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is usually on dispatch / delivery of goods, based on contracts with the customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short nature of credit period given to customers, there is no financing component in the contract.
Contract AssetsTrade Receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
A contract liability is the obligation to transfer goods to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
1.2.2.2. Rendering of Services
Revenue is recognized from rendering of services when the performance obligation is satisfied and the services are rendered in accordance with the terms and conditions of customer contracts. Revenue is measured based on the transaction price, which is the consideration, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
1.2.2.3. Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc. and as per terms & conditions under the contract with the customers.
i) Profit on sale of investments is determined as the difference between the sales price and the carrying value of the investment upon disposal of investments.
ii) Dividend income is recognised in Statement of Profit and Loss on the date on which the Company''s right to receive payment is established.
iii) Interest income or expense is recognised using the effective interest method.
The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset ; or
- the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
iv) Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
v) Interest on Refund from Income Tax Department / GST department / Environment agencies are accounted for on receipt basis.
1.2.3. Expenditure Recognition
Expenses are accounted on the accrual basis and on crystallisation of such expenses. And provisions for all known losses and liabilities are made. Provisions are made for future unforeseeable factors, which may affect the ultimate profit on fixed price software development contracts. Expenses on software development on time-and-material basis are accounted for in the year in which it is expended. Expenses incurred for future software projects are carried forward and will be adjusted against revenue, based on the completion method. In case of new products, which are clearly defined and the costs are attributable to the products, such costs are deferred and amortized equally over a period of three to five years based on Management''s evaluation of expected sales volumes and duration of the product life cycle.
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company
1.2.5. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.2.7. Property, plant and equipment Buildings and other equipment
Buildings and other equipment (comprising plant and machinery, furniture and fittings, electrical equipment, office equipment, computers and vehicles) are initially recognized at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the management. Buildings and other equipment are subsequently measured at cost less accumulated depreciation and any impairment losses. Cost of property, plant and equipment not ready for the intended use before reporting date is disclosed as capital work in progress.
Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of performance. Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss within other income or other expenses.
The components of assets are capitalized only if the life of the components vary significantly and whose cost is significant in relation to the cost of respective asset. The life of components in assets are determined based on technical assessment and past history of replacement of such components in the assets.
Tangible assets are carried at the cost of acquisition or construction less accumulated depreciation and accumulated impairment, if any. The cost of tangible assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net realizable value. Cost of tangible assets not ready for the intended use as at balance sheet date are disclosed as âcapital work in progressâ.
Impairment testing of intangible assets and property, plant and equipment
For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset''s (or cash-generating unit''s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group''s latest approved budget, adjusted as necessary to exclude the effects of future reorganizations and asset enhancements. Discount factors are determined individually for each cash generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment loss is reversed if the asset''s or cash-generating unit''s recoverable amount exceeds its carrying amount.
Depreciation on tangible assets is provided on straight line method and in the manner prescribed in Schedule II to the Companies Act, 2013, over its useful life specified in the Act, or based on the useful life of the assets as estimated by Management based on technical evaluation and advice. The residual value is 5% of the acquisition cost which is considered to be the amount recoverable at the end of the asset''s useful life. The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end.
The Management''s estimates of the useful life of various categories of fixed assets where estimates of useful life are lower than the useful life specified in Part C of Schedule II to the Companies Act, 2013 are as under:
|
Type of asset |
Estimated useful life (Years) |
|
Plant and equipment |
|
|
- Computers - Desktops / Laptops |
6 |
|
- Computers - Servers / Storages |
3 |
|
- Computers - Others |
2 |
|
Furniture and fixtures |
10 |
|
Vehicles |
8 |
|
Office equipment |
5 |
|
Intangible assets |
6 |
Assets costing less than Rs. 5,000 individually have been fully depreciated in the year of purchase.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.
1.2.8. Research & Development Expenditure
Revenue expenditure pertaining to research is charged to the standalone statement of profit and loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technical feasibility has been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Property, Plant and equipment utilized for research and development are capitalized and depreciated in accordance with the policies stated for property, plant and equipment
Inventories are valued at the lower of the cost and the net realizable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost is determined on a First in First out basis. A periodic review is made of slow-moving stock and appropriate provisions are made for anticipated losses, if any.
Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long-term investments other than investment in subsidiaries are valued at fair market value. Provision is made for diminution in value to recognize a decline, if any, other than that of temporary in nature. Current investments are valued at lower of cost and fair market value. Gains or losses that arise on disposal of an investment are measured as the difference between disposal proceeds and the carrying value and are recognised in the statement of profit and loss.
1.2.11. Foreign Currency transactions Reporting and presentation currency
The standalone financial statements are presented in Lakhs of Indian Rupees, which is also the functional currency of the Company.
Foreign currency transactions and balances
i) Initial Recognition: Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
ii) Conversion: At the year-end, monetary items in foreign currencies are converted into rupee equivalents at the year end exchange rates.
1.2.12. Retirement Benefits to employeesi. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.
For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses are recognized in the period of occurrence under Other Comprehensive Income (OCI). Past service cost is recognized to the extent the benefits are already vested, and otherwise is amortized on a Straight-Line method over the average period until the benefits become vested. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short-term employee benefits expected to be paid in exchange of services rendered by employees is recognized during the period when the employee renders the service. These benefits include performance incentives, paid annual leave, medical allowance, etc.
Tax expense recognized in the statement of profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes pertaining to items recognized in other comprehensive income are also disclosed under the same head. Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. This is assessed based on the respective entity''s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.
Deferred tax liabilities are generally recognized in full, although Ind AS 12 ''Income Taxes'' specifies limited exemptions. As a result of these exemptions the Group does not recognize deferred tax liability on temporary differences relating to goodwill, or to its investments in subsidiaries. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in the statement of profit and loss, except where they relate to items that are recognized in other comprehensive income (such as the re-measurement of defined benefit plans) or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
1.2.15. Provisions (other than employee benefits) and contingencies
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the note 31.7 Contingent assets are not recognised in the financial statements.
A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable cost of meeting its obligations under the contract.
The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company''s lease asset primarily consist of lease for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases.
For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or using the incremental borrowing rates. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present value of minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principle component in the lease rentals is adjusted against the lease liability and interest component is charged to profit and loss account.
Financial assets (other than trade receivables) and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit and loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Trade receivables are recognized at their transaction price as the same do not contain significant financing component.
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement financial assets are classified and measured based on the entity''s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset at:
a. Amortized cost
b. Fair Value Through Other Comprehensive Income (FVTOCI) or
c. Fair Value Through Profit and Loss (FVTPL)
All financial assets are reviewed for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a Company of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.
Financial assets at amortized Cost
Financial assets at amortized Cost Includes assets that are held within a business model where the objective is to hold the financial assets to collect contractual cash flows and the contractual terms gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
These assets are measured subsequently at amortized cost using the effective interest method. The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition.
Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)
Includes assets that are held within a business model where the objective is both collecting contractual cash flows and selling financial assets along with the contractual terms giving rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, the Company, based on its assessment, makes an irrevocable election to present in other comprehensive income the changes in the fair value of an investment in an equity instrument that is not held for trading. These selections are made on an instrument-by- instrument (i.e., share-by-share) basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, impairment gains or losses and foreign exchange gains and losses, are recognized in other comprehensive income. There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. The dividends from such instruments are recognized in statement of profit and loss.
The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists. The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. The loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of the financial asset in the balance sheet.
Financial assets at Fair Value Through Profit and Loss (FVTPL)
Financial assets at FVTPL include financial assets that are designated at FVTPL upon initial recognition and financial assets that are not measured at amortized cost or at fair value through other comprehensive income. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply. Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.
The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. The loss allowance shall be recognized in profit and loss.
1.2.18. Impairmenta) Impairment of financial instruments
The Company recognises loss allowances for expected credit losses on:
Financial assets measured at amortised cost;
At each reporting date, the Company assesses whether financial assets are carried at amortised cost. A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forwardlooking information.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).
Presentation of allowance for expected credit losses in the balance sheet
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
b) Impairment of non-financial assets
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cashgenerating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, 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 CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the standalone statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
1.2.19. Share based payment transactions:Employee Stock Option Plans (âESOPsâ):
The fair value of options determined at the grant date is recognized as an employee expense on a straight line basis (on the basis of multiple vesting of options granted), with a corresponding increase in other equity under âEmployee Stock Options Outstanding accountâ, over the vesting period of the grant, where the employee becomes entitled to the options. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the âEmployee Stock Options Outstanding accountâ.
Stock Options are granted to eligible employees in accordance with âDynacons - Employees Stock Option Plan 2020â (ESOP 2020), as approved by the Shareholders in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 which was amended by the Board of Directors of the Company to align with the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
Under Ind AS 102 on Share based Payment, the cost of stock options is recognised based on the fair value of stock options as on the grant date.
Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). In this scenario, the number of equity shares outstanding increases without an increase in resources due to which the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2023
Note 1: Summary of significant accounting policies and other explanatory information1.1 Company Overview
Dynacons Systems & Solutions Ltd. (hereinafter referred to as âDynaconsâ) is a 28 years old IT company with global perspectives with its headquarters at Mumbai and branches all over India. The Company has a large pool of technical resources who are present at more than 250 locations across India. The Company has all the industry leading certifications such as CMMI Level 3, ISO 9001, ISO 20000, ISO 27000 among others.
Dynacons undertakes all activities related to IT infrastructure including infrastructure design and consulting services, turnkey systems integration and set up of large Network and Data Centre infrastructures including supply of associated equipment and software; Hyper Converged Infrastructure (HCI) solutions, Setup of Private and Public Cloud, Software Defined Network (SD WAN) and Software Defined Storage (SDS) solutions, Network Infrastructure design and setup for ISPs, VDI Solutions, onsite and remote facilities management of multi- location infrastructure of domestic clients. The Company has built a strong customer base, variety of talent and a competent service delivery infrastructure.
Dynacons provides all service models such as IaaS (Infrastructure as a Service), PaaS (Platform as a Service) and Saas (Software as a Service). Dynacons'' Enterprise Services offerings include a wide spectrum of Enterprise IT Services including Infrastructure Managed Services, Breakfix Services, Managed Print Services, Cloud Computing, Systems Integration Services, and Applications Development and Maintenance. The Company provides end-to-end technology and technology related services to corporations across industry verticals. The Company has deep domain knowledge across industry sectors and technology expertise across traditional and new age technologies.
The company was incorporated under provisions of Co''s act 1956, having its Registered Office at 78, Ratnajyot Industrial Estate, Irla Lane, Vile parle West, Mumbai 400056 (CIN No L72200MH1995PLC093130). Standalone Financial Statements for the year ended 31st March, 2023 were approved and authorized for issue by Board of Directors on 26th May, 2023.
1.2 SIGNIFICANT ACCOUNTING POLICIES:1.2.1. BASIS OF PREPARATION OF STANDALONE FINANCIAL STATEMENTSa) Statement of compliance
The standalone financial statements of the Company have been prepared and presented in accordance with Indian Accounting Standards (Ind AS) as per Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) Amendment Rules, 2016 as notified under section 133 of Companies Act, 2013 (the "Act") and other relevant provisions of the Act.
The standalone financial statements were approved for issue by the Board of directors on 26th May, 2023.
The standalone financial statements of the Company are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on accrual basis except for certain financial assets and financial liabilities that have been measured at fair value.
b) Functional and presentation currency
The standalone financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest lacs unless otherwise indicated.
c) Current and non-current classification
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to the Act. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle up to twelve months for the purpose of current - noncurrent classification of assets and liabilities.
d) Basis of measurement
The standalone financial statements have been prepared on the historical basis except for the following items:
|
Items |
Measurement Basis |
|
Certain financial assets and liabilities (including derivative instruments) |
Fair Value |
|
Net defined benefit(asset)/ liability |
Fair value of plan assets less present value of defined benefit obligations |
e) Use of estimates and judgements
In preparing these standalone financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual result may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Information about judgments made in applying accounting policies that have the most significant effect on the amounts recognised in the standalone financial statements is included in the following notes:
¦ Lease classification - Note 1.2.17 Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the subsequent period financial statements is included in the following notes:
¦ Estimation of deferred tax expense and payable - Note 1.2.14
¦ Estimated useful life of property, plant and equipment and Intangible assets - Note 1.2.8
¦ Estimation of defined benefit obligations-- Note 1.2.13
¦ Impairment of trade receivables- Note 1.2.19
The Company''s accounting policies and disclosures require the measurement of fair values, for both financial and nonfinancial assets and liabilities.
The Company has an established control framework with respect to the measurement of fair values. This includes a treasury team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Chief Financial Officer.
The treasury team 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 valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of Ind AS, including the level in the fair value hierarchy in which the valuations should be classified.
Fair values are categorised 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).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
1.2.2. Revenue Recognition1.2.2.1. Sale of goods:
Revenue is recognised upon transfer of control of promised goods to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those goods.
Revenue from the sale of goods is recognised at the point in time when control is transferred to the customer which is usually on dispatch / delivery of goods, based on contracts with the customers.
Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts, price concessions, incentives, and returns, if any, as specified in the contracts with the customers. Revenue excludes taxes collected from customers on behalf of the government. Accruals for discounts/incentives and returns are estimated (using the most likely method) based on accumulated experience and underlying schemes and agreements with customers. Due to the short nature of credit period given to customers, there is no financing component in the contract.
Contract AssetsTrade Receivables
A receivable represents the Company''s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due).
A contract liability is the obligation to transfer goods to a customer for which the Company has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Company performs under the contract.
1.2.2.2. Rendering of Services
Revenue is recognized from rendering of services when the performance obligation is satisfied and the services are rendered in accordance with the terms and conditions of customer contracts. Revenue is measured based on the transaction price, which is the consideration, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
1.2.2.3. Revenue from time and material and job contracts is recognised on output basis measured by units delivered, efforts expended, number of transactions processed, etc. and as per terms & conditions under the contract with the customers.
i) Profit on sale of investments is determined as the difference between the sales price and the carrying value of the investment upon disposal of investments.
ii) Dividend income is recognised in profit or loss on the date on which the Company''s right to receive payment is established.
iii) Interest income or expense is recognised using the effective interest method.
The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset ; or
- the amortised cost of the financial liability
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that
have become credit- impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
iv) Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
v) Interest on Refund from Income Tax Department / GST department / Environment agencies are accounted for on receipt basis.
1.2.3. Expenditure Recognition
Expenses are accounted on the accrual basis and on crystallisation of such expenses. And provisions for all known losses and liabilities are made. Provisions are made for future unforeseeable factors, which may affect the ultimate profit on fixed price software development contracts. Expenses on software development on time-and-material basis are accounted for in the year in which it is expended. Expenses incurred for future software projects are carried forward and will be adjusted against revenue, based on the completion method. In case of new products, which are clearly defined and the costs are attributable to the products, such costs are deferred and amortized equally over a period of three to five years based on Management''s evaluation of expected sales volumes and duration of the product life cycle.
1.2.4. Changes in significant accounting policies
Ministry of Corporate Affairs (âMCAâ) notifies new accounting standards. There is no such notification which would have been applicable from 01 April,2021. Accordingly no new accounting standards are adopted by the company during the current year.
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
Ind AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Group does not expect this amendment to have any significant impact in its financial statements.
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Group is evaluating the impact, if any, in its financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Group does not expect this amendment to have any significant impact in its financial statements.
1.2.6. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.2.8. Property, plant and equipment Buildings and other equipment
Buildings and other equipment (comprising plant and machinery, furniture and fittings, electrical equipment, office equipment, computers and vehicles) are initially recognized at acquisition cost, including any costs directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by the management. Buildings and other equipment are subsequently measured at cost less accumulated depreciation and any impairment losses. Cost of property, plant and equipment not ready for the intended use before reporting date is disclosed as capital work in progress.
Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of performance.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognized in the statement of profit and loss within other income or other expenses.
The components of assets are capitalized only if the life of the components vary significantly and whose cost is significant in relation to the cost of respective asset. The life of components in assets are determined based on technical assessment and past history of replacement of such components in the assets.
Tangible assets are carried at the cost of acquisition or construction less accumulated depreciation and accumulated impairment, if any. The cost of tangible assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net realizable value. Cost of tangible assets not ready for the intended use as at balance sheet date are disclosed as âcapital work in progressâ.
Impairment testing of intangible assets and property, plant and equipment
For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill (if any) is allocated to those cash-generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Group at which management monitors goodwill. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the asset''s (or cash-generating unit''s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the Group''s latest approved budget, adjusted as necessary to exclude the effects of future reorganizations and asset enhancements. Discount factors are determined individually for each cash generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment loss is reversed if the asset''s or cash-generating unit''s recoverable amount exceeds its carrying amount.
Depreciation on tangible assets is provided on straight line method and in the manner prescribed in Schedule II to the Companies Act, 2013, over its useful life specified in the Act, or based on the useful life of the assets as estimated by Management based on technical evaluation and advice. The residual value is 5% of the acquisition cost which is considered to be the amount recoverable at the end of the asset''s useful life. The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end.
The Management''s estimates of the useful life of various categories of fixed assets where estimates of useful life are lower than the useful life specified in Part C of Schedule II to the Companies Act, 2013 are as under:
|
Type of asset |
Estimated useful life (Years) |
|
Building |
20 |
|
Plant and equipment |
|
|
- Computers - Desktops / Laptops |
6 |
|
- Computers - Servers / Storages |
3 |
|
- Computers - Others |
2 |
|
Furniture and fixtures |
10 |
|
Vehicles |
8 |
|
Office equipment |
5 |
|
Intangible assets |
6 |
Assets costing less than Rs. 5,000 individually have been fully depreciated in the year of purchase.
The estimated useful life of the intangible assets and the amortisation period are reviewed at the end of each financial year and the amortisation period is revised to reflect the changed pattern, if any.
1.2.9. Research & Development Expenditure
Revenue expenditure pertaining to research is charged to the standalone statement of profit and loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technical feasibility has been established, in which case such expenditure is capitalized. The amount capitalized comprises expenditure that can be directly attributed or allocated on a reasonable and consistent basis to creating, producing and making the asset ready for its intended use. Property, Plant and equipment utilized for research and development are capitalized and depreciated in accordance with the policies stated for property, plant and equipment
Inventories are valued at the lower of the cost and the net realizable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost is determined on a First in First out basis. A periodic review is made of slow-moving stock and appropriate provisions are made for anticipated losses, if any.
Investments that are readily realizable and are intended to be held for not more than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments. Long-term investments other than investment in subsidiaries are valued at fair market value. Provision is made for diminution in value to recognize a decline, if any, other than that of temporary in nature. Current investments are valued at lower of cost and fair market value. Gains or losses that arise on disposal of an investment are measured as the difference between disposal proceeds and the carrying value and are recognised in the statement of profit and loss.
1.2.12. Foreign Currency transactions Reporting and presentation currency
The standalone financial statements are presented in Lakhs of Indian Rupees, which is also the functional currency of the Company.
Foreign currency transactions and balances
i) Initial Recognition: Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction.
ii) Conversion: At the year-end, monetary items in foreign currencies are converted into rupee equivalents at the year end exchange rates.
1.2.13. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged as an expense as they fall due.
For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses are recognized in the period of occurrence under Other Comprehensive Income (OCI). Past service cost is recognized to the extent the benefits are already vested, and otherwise is amortized on a Straight-Line method over the average period until the benefits become vested. The retirement benefit obligation recognized in the balance sheet represents the present value of the defined benefit obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange of services rendered by employees is recognized during the period when the employee renders the service. These benefits include performance incentives, paid annual leave, medical allowance, etc.
Tax expense recognized in the statement of profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity. Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes pertaining to items recognized in other comprehensive income are also disclosed under the same head. Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. This is assessed based on the respective entity''s forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. Deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
Deferred tax liabilities are generally recognized in full, although Ind AS 12 ''Income Taxes'' specifies limited exemptions. As a result of these exemptions the Group does not recognize deferred tax liability on temporary differences relating to goodwill, or to its investments in subsidiaries. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in the statement of profit and loss, except where they relate to items that are recognized in other comprehensive income (such as the re-measurement of defined benefit plans) or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively.
Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily takes substantial period of time to get ready for its intended use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
1.2.16. Provisions (other than employee benefits) and contingencies
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the note 31.7 Contingent assets are not recognised in the financial statements.
A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable cost of meeting its obligations under the contract.
The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company''s lease asset primarily consist of lease for buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases.
For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or using the incremental borrowing rates. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present value of minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability. The principle component in the lease rentals is adjusted against the lease liability and interest component is charged to profit and loss account.
Financial assets (other than trade receivables) and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit and loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Trade receivables are recognized at their transaction price as the same do not contain significant financing component.
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement financial assets are classified and measured based on the entity''s business model for managing the financial asset and the contractual cash flow characteristics of the financial asset at:
a. Amortized cost
b. Fair Value Through Other Comprehensive Income (FVTOCI) or
c. Fair Value Through Profit and Loss (FVTPL)
All financial assets are reviewed for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a Company of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.
Financial assets at amortized Cost
Financial assets at amortized Cost Includes assets that are held within a business model where the objective is to hold the financial assets to collect contractual cash flows and the contractual terms gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
These assets are measured subsequently at amortized cost using the effective interest method. The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition.
Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)
Includes assets that are held within a business model where the objective is both collecting contractual cash flows and selling financial assets along with the contractual terms giving rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, the Company, based on its assessment, makes an irrevocable election to present in other comprehensive income the changes in the fair value of an investment in an equity instrument that is not held for trading. These selections are made on an instrument-by- instrument (i.e., share-by-share) basis. If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, impairment gains or losses and foreign exchange gains and losses, are recognized in other comprehensive income. There is no recycling of the amounts from OCI to profit or loss, even on sale of investment. The dividends from such instruments are recognized in statement of profit and loss.
The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists. The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. The loss allowance shall be recognized in other comprehensive income and shall not reduce the carrying amount of the financial asset in the balance sheet.
Financial assets at Fair Value Through Profit and Loss (FVTPL)
Financial assets at FVTPL include financial assets that are designated at FVTPL upon initial recognition and financial assets that are not measured at amortized cost or at fair value through other comprehensive income. All derivative financial instruments fall into this category, except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply. Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists.
The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. The loss allowance shall be recognized in profit and loss.
a) Impairment of financial instruments
The Company recognises loss allowances for expected credit losses on:
Financial assets measured at amortised cost;
At each reporting date, the Company assesses whether financial assets are carried at amortised cost. A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the following, which are measured as 12 month expected credit losses:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses.
12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).
When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forwardlooking information.
Measurement of expected credit losses
Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive).
Presentation of allowance for expected credit losses in the balance sheet
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.
Write-off
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Company determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off.
b) Impairment of non-financial assets
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are grouped together into cashgenerating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, 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 CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the standalone statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or group of CGUs) on a pro rata basis.
1.2.20. Share based payment transactions:
Employee Stock Option Plans (âESOPsâ):
The fair value of options determined at the grant date is recognized as an employee expense on a straight line basis (on the basis of multiple vesting of options granted), with a corresponding increase in other equity under âEmployee Stock Options Outstanding accountâ, over the vesting period of the grant, where the employee becomes entitled to the options. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the âEmployee Stock Options Outstanding accountâ.
Stock Options are granted to eligible employees in accordance with âDynacons - Employees Stock Option Plan 2020â
(ESOP 2020), as approved by the Shareholders in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 which was amended by the Board of Directors of the Compnay to align with the provisions of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.
Under Ind AS 102 on Share based Payment, the cost of stock options is recognised based on the fair value of stock options as on the grant date.
Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). In this scenario, the number of equity shares outstanding increases without an increase in resources due to which the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2018
Summary of significant accounting policies and other explanatory information
1. SIGNIFICANT ACCOUNTING POLICIES :
1.1. BASIS OF PREPARATION
(i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act 2013 (the Act) |Companies (Indian Accounting Standards) Rules. 2015] and other relevant provisions of the Act.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
a) certain financial assets and liabilities that are measured at fair value:
b) assets held for sale - measured at fair value less cost to sell;
c) defined benefit plans - plan assets measured al lair value;
The financial statements are presented in INR and all values are rounded to the nearest Lakhs (INR 00,000), except when otherwise indicated
1.2. Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable by the Company for goods supplied and services provided, excluding discounts, VAT, GST and other applicable taxes and are recognized upon the performance of service or transfer of risk to the customer
Revenue is recognized when The amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company, the costs incurred or lo be incurred can be measured reliably, and when the criteria different activities has been met. These activity-specific recognition criteria are based on the goods or services provided to the customer and the contract conditions In each case, and are as described below.
Sale of goods:
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer which coincides with dispatch or delivery of goods to customers as per terms of agreement with customers Sales include excise duty, where applicable but exclude other taxes and is net of rebates and discounts.
Software Development:
Revenue from software development on time-and-material basis is recognized based on software developed and billed to clients as per the terms of specific contracts. In The case of fixed-price contracts, revenue is recognized based on the completion method.
Annual Maintenance Contract:
Revenue from Annual Maintenance Contracts and services is recognized over the life of the contracts. Other Income
Interest income is accounted on accrual basis Dividend income is accounted when the right lo receive it is established.
Sale of scrap:
Revenue from sale of scrap is recognized as and when scrap is sold.
1.3. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all known losses and liabilities are made. Provisions are made for future unforeseeable factors, which may affect the ultimate profit on fixed price software development contracts. Expenses on software development on time-and-material basis are accounted for in the year in which it is expended. Expenses incurred for future software projecls are carried forward and will be adjusted against revenue, based on the completion method. In case of new products, which are clearly defined and the costs are attributable to the products, such costs are deferred and amortized equally over a period of three to five years based on Managementâs evaluation of expected sales volumes and duration of the product life cycle.
1.4. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances, (with original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.5. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.6. Properly, plant and equipment Buildings and other equipment
Buildings and other equipment (comprising plant and machinery, furniture and fittings, electrical equipment, office equipment, computers and vehicles) are Initially recognized at acquisition cost, including any costs direclly attributable to banging the assets to the location and condition necessary for them to be capable of operating in the manner intended by the management Buildings and other equipment are subsequently measured at cost less accumulated depreciation and any impairment losses. Cost of property, plant and equipment not ready for the intended use before reporting date is disclosed as capital work in progress.
Subsequent expenditure incurred on an item of property, plant and equipment is added to the book value of that asset only if this increases the future benefits from the existing asset beyond its previously assessed standard of performance.
Gains or losses arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of The assets and are recognized in The statement of profit and loss within other income or other expenses
The components of assets are capitalized only if The life of the components vary significantly and whose cost is significant in relation to the cost of respective asset. The life of components in assets are determined based on technical assessment and past history of replacement of such components in the assets.
Tangible assets are carried al the cost of acquisition or construction less accumulated depreciation and accumulated impairment, if any. The cost of tangible assets includes non-refundable taxes, duties, freight and other incidental expenses related to the acquisition and installation of the respective assets. Assets which are retired from active use and are held for disposal are staled at The lower of their net book value or net realizable value Cost of tangible assets not ready for the intended use as at balance sheet date are disclosed as âcapital work in progress â.
Impairment testing of intangible assets and property, plant and equipment
For the purpose of impairment assessment, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill (if any) is allocated lo those cash-generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Group at which management monitors goodwill. All individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognized for the amount by which the assetâs {or cash-generating unitâs) carrying amount exceeds its recoverable amount, which is 1he higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment telling procedures are directly linked to The Groupâs latest approved budget, adjusted as necessary to exclude the effects ol future reorganizations and asset enhancement Discount factors are determined individually for each cash generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.
Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash generating unit. Any remaining impairment loss is charged pro rata to the otter assets in the cash-generating unit. With the exception of goodwill, all assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist An impairment loss is reversed if the assetâs or cash-gene rating unitâs recoverable amount exceeds its carrying amount.
Depreciation
Depreciation on tangible assets is provided on straight line method and in the manner presented in Schedule II to the Companies Act, 2013. over its useful life specified in the Act, or based on the useful life of the assets as estimated by Management based on technical evaluation and advice The residual value is 5% of The acquisition cost which is considered to be the amount recoverable at the end of The assetâs useful life The residual values, useful lives and method of depreciation of property, plant and equipment is reviewed at each financial year end.
The Managementâs estimates of the useful life of various categories of fixed assets where estimates oi useful life are lower than the useful life specified in Part C of Schedule II to the Companies Act, 2013 are asunder:
1.7. Research & Development Expenditure
Revenue expenditure incurred an research is charged to revenue in the year it is incurred. Assets used for research are included in Fixed Assets. Development Expenditure are capitalized only if future economic benefits are expected to flow.
1.8. Inventories
Inventories are valued at the lower of the cost and the net realizable value. Cost of finished goods includes excise duty, wherever applicable. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale. Cost is determined on a First in First out basis A periodic review is made of slow-moving stock and appropriate provisions are made for anticipated losses, if any.
1.9. Investments
Investments that are readily realizable and are intended to be held for not mare than one year from the date on which such investments are made are classified as current investments. All other investments are classified as long-term investments Long-term investments other than investment in subsidiaries are valued at fair market value. Provision is made for diminution in value to recognize a decline, if any, other than that of temporary in nature Current investments are valued al lower of cost and fair market value. Gains or losses that arise on disposal of an investment are measured as the difference between disposal proceeds and the carrying value and are recognised in the statement of profit and loss.
1.10. Foreign Currency transactions Reporting and presentation currency
The standalone financial statements are presented in Lakhs of Indian Rupees, which is also the functional currency of the Company.
Foreign currency transactions and balances
i) Initial Recognition: Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction
ii) Conversion: At the year-end. monetary items in foreign currencies are converted into rupee equivalents at the year end exchange rates
iii) Exchange Differences: All exchange differences arising on settlement and conversions of foreign currency transactions are included in Other Comprehensive Income
1.11. Retirement Benefits to employees
i. Post-employment benefit plans
Defined contribution plan
Payment lo defined contribution retirement benefit schemes are charged as an expense as they fall due. Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is determined using Projected Unit Credit method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains/losses are recognized in the period of occurrence under Other Comprehensive Income (OCI) Past service cost is recognized lo the extent the benefits are already vested, and otherwise is amortized on a Straight-Line method over the average period until the benefits become vested The retirement benefit obligation recognized in the balance sheet represents The present value of the defined benefit obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be paid in exchange of services rendered by employees is recognized during The period when the employee renders the service. These benefits include performance incentives, paid annual leave, medical allowance, etc.
1.12. Income Tax
Tax expense recognized in The statement of profit or loss comprises the sum of deferred tax and current tax not recognized in other comprehensive income or directly in equity Calculation of current tax is based on tax rates in accordance with tax laws that have been enacted or substantively enacted by The end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at reporting date. Deferred taxes pertaining to items recognized in other comprehensive income are also disclosed under the same head Deferred tax assets are recognized to the extent that it is probable that the underlying tax loss or deductible temporary difference will be utilized against future taxable income. This is assessed based on the respective entityâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit Deferred tax is not provided on the initial recognition of goodwill, or on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit.
Deferred tax liabilities are generally recognized in full, although Ind AS 12 âIncome Taxesâ specifies limited exemptions. As a result of these exemptions the Group does not recognize deferred tax liability on temporary differences relating to goodwill, or lo its investments in subsidiaries. Changes in deferred tax assets or liabilities are recognized as a component of tax income or expense in the statement of profit and loss, except where they relate to items that are recognized in other comprehensive income (such as The re-measurement of defined benefit plans) or directly in equity, in which case the related deferred tax is also recognized in other comprehensive income or equity, respectively
1.13. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalised for the period until the asset is ready for its intended use. A qualifying asset is an asset that necessarily lakes substantial period of time to get ready for its intended use Other borrowing costs are recognised as an expense in the period in which they are incurred
1.14. Provisions and contingencies
A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate car be made. Provisions (excluding retirement benefits) are not discounted lo their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in The note 25.1 - Contingent assets are not recognised in The financial statements
1.15. Leases Operating Lease
Leases where the lessor effectively retains substantially ail the risks and rewards of ownership of the leased asset are classified as operating leases. Operating lease charges are recognized as an expense in the profit and loss account on a straight-line basis over the lease term
Finance Lease
Leases under which the company assumes substantially all the risks and rewards of ownership are classified as finance leases. The lower of fair value of asset and present value of minimum lease rentals is capitalized as fixed assets with corresponding amount shown as lease liability The principle component in the lease rentals is adjusted against the lease liability and interest component is charged to profit and loss account
1.16. Financial Instruments
Financial assets (other than trade receivables) and financial liabilities are recognized when the Company becomes a partly to the contractual provisions of the financial instrument and are measured initially at fair value adjusted for transaction costs, except for those carried at fair value through profit and loss which are measured initially at fair value. Subsequent measurement of financial assets and financial liabilities are described below. Trade receivables are recognized at their transaction price as the same do not contain significant financing component
Classification and subsequent measurement of financial assets
For the purpose of subsequent measurement financial assets are classified and measured based on the entityâs business model for managing the financial asset and the contractual cash flow characteristics of the financial asset al:
a. Amortized cost
b. Fair Value Through Other Comprehensive Income (FVTOCI) or
c. Fair Value Through Profit and Loss (FVTPL)
All financial assets are reviewed for impairment at least at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below.
Financial assets at amortized Cost Includes assets that are held within a business model where the objective is to hold the financial assets to collect contractual cash flows and the contractual terms gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
These assets are measured subsequently al amortized cost using the effective interest method The loss allowance at each reporting period Is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition.
Financial assets at Fair Value Through Other Comprehensive Income (FVTOCI)
Includes assets that are held within a business model where the objective is both collecting contractual cash flows and selling financial assets along with The contractual terms giving rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, the Company, based on its assessment, makes an Irrevocable election to present in other comprehensive income the changes in the fair value of an investment in an equity instrument that is no1 held for trading. These selections are made on an instrument-by- instrument (i.e .. share-by-share) basis If The Company decides to classify an equity instrument as at FVTOCI. Then all fair value changes on the instrument, excluding dividends, impairment gains or losses and foreign exchange gains and losses, are recognized in other comprehensive income. There is no recycling of The amounts from OCI to profit or loss, even on sale of investment The dividends from such Instruments are recognized in statement of profit and loss.
The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists. The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a Financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition The loss allowance shall he recognized in other comprehensive income and shall not reduce The carrying amount of the financial asset in the balance sheet
Financial assets at Fair Value Through Profit and Loss (FVTPL)
Financial assets at FVTPL include financial assets that are designated at FVTPL upon initial recognition and financial assets that are not measured at amortized cost or at fair value through other comprehensive income. All derivative financial instruments fall into this category except for those designated and effective as hedging instruments, for which the hedge accounting requirements apply Assets in this category are measured at fair value with gains or losses recognized in profit or loss. The fair value of financial assets in this category are determined by reference to active market transactions or using a valuation technique where no active market exists
The loss allowance at each reporting period is evaluated based on the expected credit losses for next 12 months and credit risk exposure. The Company shall also measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. The loss allowance shall be recognized in profit and loss.
1.17. Earnings per share
Basic earnings per equity share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares). In this scenario, the number of equity shares outstanding increases without an increase in resources due to which the number of equity shares outstanding before the event is adjusted for the proportionate change in the number of equity shares outstanding as if the event had occurred at the beginning of the earliest period reported
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2015
Company Overview
Dynacons Systems & Solutions Ltd. is an IT solutions company with
global perspectives and is engaged in providing a comprehensive range
of end-to-end solutions to customers. Dynacons has the technical
expertise and the service delivery infrastructure to serve Customers at
a level of quality consistent with their expectations. Dynacons helps
in the selection of the right technology and application that will
yield the greatest return and build a business case for implementation
based on lower Total cost of ownership and higher performance.
1. Basis of accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013 read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), as applicable. The financial statements have been prepared on
accrual basis under the historical cost convention. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known/materialse.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognised based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognised based on the completion
method. Revenue from the sale of software products is recognised when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made. Provisions are made for future
unforeseeable factors, which may affect the ultimate profit on fixed
price software development contracts. Expenses on software development
on time-and-material basis are accounted for in the year in which it is
expended. Expenses incurred for future software projects are carried
forward and will be adjusted against revenue, based on the completion
method. In case of new products, which are clearly defined and the
costs are attributable to the products, such costs are deferred and
amortized equally over a period of three to five years based on
Management's evaluation of expected sales volumes and duration of the
product life cycle.
5. Other Income
Interest income is accounted on accrual basis. Dividend income is
accounted when the right to receive it is established.
6. Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances, (with original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
7. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
8. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalised at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in-Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which are
not in active use and scrapped, due to technological obsolence or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
9. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
10. Depreciation
In respect of fixed assets (other than freehold land and capital
work-in-progress) acquired during the year, depreciation/amortisation
is charged on a straight line basis so as to write off the cost of the
assets over the useful lives and for the assets acquired prior to 1
April, 2014, the carrying amount as on 1 April, 2014 is depreciated
over the remaining useful life based on an evaluation:
Assets costing less than Rs. 5,000 individually have been fully
depreciated in the year of purchase.
The estimated useful life of the intangible assets and the amortisation
period are reviewed at the end of each financial year and the
amortisation period is revised to reflect the changed pattern, if any.
11. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
12. Investments
Trade investments are the investments made to enhance the company's
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognise any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
13. Foreign Currency transactions
Sales and Expenditure in foreign currency are accounted at the exchange
rate prevalent as of the date of the respective transactions. The
exchange differences, if any, arising on foreign currency transactions
are recognized as income or expense in the year in which they arise.
Current Assets and Current Liabilities denominated in foreign currency
are translated at the exchange rate prevalent as at the date of the
Balance Sheet. The resulting difference is also recorded in the Profit
and Loss Account.
14. Retirement Benefits to employees
i. Post-employment benefit plans
Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
15. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
16. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in
the period in which they are incurred.
17. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the note 25.1. Contingent assets are not recognised in
the financial statements.
18. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.
19. Operating Cycle
Based on the nature of products / activities of the Company and the
normal time between acquisition of assets and their realization in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
20. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
21. Leases
Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
22. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 'Earnings per share'. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
Mar 31, 2014
1. Basis of accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
Sec 211(3C) of the Companies Act, 1956(" the 1956 Act") (which
continues to be applicable in respect of Section 133 of the Companies
Act ,2013 ("the Companies Act") in terms of General Circular 15/2013
dated 13 September 2013 of the Ministry of Corporate Affairs and the
relevant provisions of the Companies Act, 1956/2013 Act, as applicable.
The financial statements have been prepared on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known/materialse.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognised based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognised based on the completion
method. Revenue from the sale of software products is recognised when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made. Provisions are made for future
unforeseeable factors, which may affect the ultimate profit on fixed
price software development contracts. Expenses on software development
on time-and-material basis are accounted for in the year in which it is
expended. Expenses incurred for future software projects are carried
forward and will be adjusted against revenue, based on the completion
method. In case of new products, which are clearly defined and the
costs are attributable to the products, such costs are deferred and
amortized equally over a period of three to five years based on
Management''s evaluation of expected sales volumes and duration of the
product life cycle.
5. Other Income
Interest income is accounted on accrual basis. Dividend income is
accounted when the right to receive it is established.
6. Cash and Cash equivalents(for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances, (with original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
7. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
8. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalised at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in-Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which are
not in active use and scrapped, due to technological obsolence or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
9. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
10. Depreciation
Depreciation on Fixed Assets is provided using the straight-line method
at the rates provided and in the manners specified in Schedule XIV of
the Companies Act, 1956. Depreciation on assets purchased/sold during
the year has been provided on pro rata basis. Individual assets
costing less than Rs. 5,000/- are depreciated in full in the year of
purchase. Intangible assets are amortized on a straight-line basis over
their respective individual estimated useful lives, generally not
exceeding ten years.
11. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
12. Investments
Trade investments are the investments made to enhance the company''s
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognise any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
13. Foreign Currency transactions
Sales and Expenditure in foreign currency are accounted at the exchange
rate prevalent as of the date of the respective transactions. The
exchange differences, if any, arising on foreign currency transactions
are recognized as income or expense in the year in which they arise.
Current Assets and Current Liabilities denominated in foreign currency
are translated at the exchange rate prevalent as at the date of the
Balance Sheet. The resulting difference is also recorded in the Profit
and Loss Account.
14. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
15. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
16. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in the
period in which they are incurred.
17. Provisions and contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
balance sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the note 25.1. Contingent assets are not recognised in
the financial statements.
18. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising the credits.
19. Operating Cycle
Based on the nature of products / activities of the Company and the
normal time between acquisition of assets and their realization in cash
or cash equivalents, the Company has determined its operating cycle as
12 months for the purpose of classification of its assets and
liabilities as current and non-current.
20. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset''s net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
21. Leases Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
22. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 ''Earnings per share''. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
Mar 31, 2013
1. Basis of accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known/materialize.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognized based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognized based on the completion
method. Revenue from the sale of software products is recognized when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made. Provisions are made for future
unforeseeable factors, which may affect the ultimate profit on fixed
price software development contracts. Expenses on software development
on time-and-material basis are accounted for in the year in which it is
expended. Expenses incurred for future software projects are carried
forward and will be adjusted against revenue, based on the completion
method. In case of new products, which are clearly defined and the
costs are attributable to the products, such costs are deferred and
amortized equally over a period of three to five years based on
Management''s evaluation of expected sales volumes and duration of the
product life cycle.
5. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalized at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in-Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which are
not in active use and scrapped, due to technological obsolesce or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
6. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
7. Depreciation
Depreciation on Fixed Assets is provided using the straight-line method
at the rates provided and in the manners specified in Schedule XIV of
the Companies Act, 1956. Depreciation on assets purchased/sold during
the year has been provided on pro rata basis. Individual assets costing
less than 5,000/- are depreciated in full in the year of purchase.
Intangible assets are amortized on a straight-line basis over their
respective individual estimated useful lives, generally not exceeding
ten years.
8. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
9. Investments
Trade investments are the investments made to enhance the company''s
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognize any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
10. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
11. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
12. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalized for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended
use. Other borrowing costs are recognized as an expense in the period
in which they are incurred.
13. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset''s net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
14. Leases Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
15. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 ''Earnings per share''. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
Mar 31, 2012
1. Basis of accounting
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
2. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known/materialise.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognised based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognised based on the completion
method. Revenue from the sale of software products is recognised when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made.
Provisions are made for future unforeseeable factors, which may affect
the ultimate profit on fixed price software development contracts.
Expenses on software development on time-and-material basis are
accounted for in the year in which it is expended. Expenses incurred
for future software projects are carried forward and will be adjusted
against revenue, based on the completion method. In case of new
products, which are clearly defined and the costs are attributable to
the products, such costs are deferred and amortized equally over a
period of three to five years based on Management's evaluation of
expected sales volumes and duration of the product life cycle.
5. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalised at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in-Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which
are not in active use and scrapped, due to technological obsolesce or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
6. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
7. Depreciation
Depreciation on Fixed Assets is provided using the straight-line method
at the rates provided and in the manners specified in Schedule XIV of
the Companies Act, 1956. Depreciation on assets purchased/sold during
the year has been provided on pro rata basis. Individual assets costing
less than Rs. 5,000/- are depreciated in full in the year of purchase.
Intangible assets are amortized on a straight-line basis over their
respective individual estimated useful lives, generally not exceeding
ten years.
8. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
9. Investments
Trade investments are the investments made to enhance the company's
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognise any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
10. Foreign Currency transactions
Sales and Expenditure in foreign currency are accounted at the exchange
rate prevalent as of the date of the respective transactions. The
exchange differences, if any, arising on foreign currency transactions
are recognized as income or expense in the year in which they arise.
Current Assets and Current Liabilities denominated in foreign currency
are translated at the exchange rate prevalent as at the date of the
Balance Sheet. The resulting difference is also recorded in the Profit
and Loss Account.
11. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
12. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
13. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in the
period in which they are incurred.
14. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
15. Leases
Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
16. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 'Earnings per share'. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
Mar 31, 2011
1. Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention in accordance with the Generally Accepted Accounting
Principles, provisions 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 period. Example of
such estimates include provision for doubtful debts, provision for
income tax, accounting for contract costs expected to be incurred to
complete software development and the useful lives of fixed assets and
intangible assets. Contingencies are recorded when it is probable that
a liability will be incurred and the amount can be reasonably
estimated. Actual results could differ from such estimates.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognised based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognised based on the completion
method. Revenue from the sale of software products is recognised when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made. Provisions are made for future
unforeseeable factors, which may affect the ultimate profit on fixed
price software development contracts. Expenses on software development
on time-and-material basis are accounted for in the year in which it is
expended. Expenses incurred for future software projects are carried
forward and will be adjusted against revenue, based on the completion
method. In case of new products, which are clearly defined and the
costs are attributable to the products, such costs are deferred and
amortized equally over a period of three to five years based on
Management's evaluation of expected sales volumes and duration of the
product life cycle.
5. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
6. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalised at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in- Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which are
not in active use and scrapped, due to technological obsolence or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
7. Depreciation
Depreciation on Fixed Assets is provided using the straight-line method
at the rates provided and in the manners specified in
Schedule XIV of the Companies Act, 1956. Depreciation on assets
purchased/sold during the year has been provided on pro rata basis.
Individual assets costing less than Rs. 5,000/- are depreciated in full
in the year of purchase. Intangible assets are amortized on a
straight-line basis over their respective individual estimated useful
lives, generally not exceeding ten years.
8. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
9. Investments
Trade investments are the investments made to enhance the company's
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognise any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
10. Foreign Currency transactions
Sales and Expenditure in foreign currency are accounted at the exchange
rate prevalent as of the date of the respective transactions. The
exchange differences, if any, arising on foreign currency transactions
are recognized as income or expense in the year in which they arise.
Current Assets and Current Liabilities denominated in foreign currency
are translated at the exchange rate prevalent as at the date of the
Balance Sheet. The resulting difference is also recorded in the Profit
and Loss Account.
11. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
12. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
13. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in the
period in which they are incurred.
14. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an asset's net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
15. Leases
Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
16. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 'Earnings per share'. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
Mar 31, 2010
1. Basis of preparation of financial statements
The financial statements are prepared under the historical cost
convention in accordance with the Generally Accepted Accounting
Principles, provisions of the Companies Act, 1956 and comply with the
accounting standards prescribed by the Companies (Accounting Standards)
Rules 2006, as adopted consistently by the company.
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 period. Example of
such estimates include provision for doubtful debts, provision for
income tax, accounting for contract costs expected to be incurred to
complete software development and the useful lives of fixed assets and
intangible assets. Contingencies are recorded when it is probable that
a liability will be incurred and the amount can be reasonably
estimated. Actual results could differ from such estimates.
3. Revenue Recognition
Revenue relating to equipment supplied is recognized on delivery to the
customers and acknowledgement thereof, in accordance with the terms of
the individual contracts. Revenue from software development on
time-and-material basis is recognised based on software developed and
billed to clients as per the terms of specific contracts. In the case
of fixed-price contracts, revenue is recognised based on the completion
method. Revenue from the sale of software products is recognised when
the sale has been completed and the title has been passed to the
client. Revenue from Annual Maintenance Contracts and services is
recognized over the life of the contracts.
4. Expenditure Recognition
Expenses are accounted on the accrual basis and provisions for all
known losses and liabilities are made. Provisions are made for future
unforeseeable factors, which may affect the ultimate profit on fixed
price software development contracts. Expenses on software development
on time-and-material basis are accounted for in the year in which it is
expended. Expenses incurred for future software projects are carried
forward and will be adjusted against revenue, based on the completion
method. In case of new products, which are clearly defined and the
costs are attributable to the products, such costs are deferred and
amortized equally over a period of three to five years based on
Managements evaluation of expected sales volumes and duration of the
product life cycle.
5. Research & Development Expenditure
Revenue expenditure incurred on research is charged to revenue in the
year it is incurred. Assets used for research are included in Fixed
Assets. Development Expenditure are capitalized only if future economic
benefits are expected to flow.
6. Fixed Assets & Intangible Assets
Fixed Assets are stated at their cost less accumulated depreciation.
Fixed assets are capitalised at the cost of acquisition including all
expenses directly attributable to bringing the asset to its working
condition for intended use. Capital Work-in- Progress comprises the
costs of fixed assets that are not ready for the intended use at the
Balance Sheet date and includes advances paid to acquire fixed assets.
No depreciation has been calculated on the same. Fixed Assets which are
not in active use and scrapped, due to technological obsolence or
otherwise, are written off. Intangible Assets are recorded at the
consideration paid for their acquisition. Cost of an internally
generated asset comprises all expenditure that can be directly
attributed, or allocated on a reasonable and consistent basis to
creating, producing and making the asset ready for its intended use.
7. Depreciation
Depreciation on Fixed Assets is provided using the straight-line method
at the rates provided and in the manners specified in
Schedule XIV of the Companies Act, 1956. Depreciation on assets
purchased/sold during the year has been provided on pro rata basis.
Individual assets costing less than Rs. 5,000/- are depreciated in full
in the year of purchase. Intangible assets are amortized on a
straight-line basis over their respective individual estimated useful
lives, generally not exceeding ten years.
8. Inventories
Inventories are valued at the lower of the cost and the net realizable
value. A periodic review is made of slow-moving stock and appropriate
provisions are made for anticipated losses, if any. Cost is determined
using the first-in first-out method.
9. Investments
Trade investments are the investments made to enhance the companys
business interests. Investments being long term in nature are carried
at cost, and provision is made to recognise any decline, other than
temporary, in the value of such investment. Earnings from investments
are accounted for on an accrual basis.
10. Foreign Currency transactions
Sales and Expenditure in foreign currency are accounted at the exchange
rate prevalent as of the date of the respective transactions. The
exchange differences, if any, arising on foreign currency transactions
are recognized as income or expense in the year in which they arise.
Current Assets and Current Liabilities denominated in foreign currency
are translated at the exchange rate prevalent as at the date of the
Balance Sheet. The resulting difference is also recorded in the Profit
and Loss Account.
11. Retirement Benefits to employees
i. Post-employment benefit plans Defined contribution plan
Payment to defined contribution retirement benefit schemes are charged
as an expense as they fall due.
Defined Benefit plan
For defined benefit schemes, the cost of providing benefits is
determined using Projected Unit Credit method, with actuarial
valuations being carried out at each balance sheet date. Actuarial
gains and losses are recognized in full in the profit & loss account
for the period in which they occur. Past service cost is recognized to
the extent the benefits are already vested, and otherwise is amortized
on a Straight-Line method over the average period until the benefits
become vested. The retirement benefit obligation recognized in the
balance sheet represents the present value of the defined benefit
obligations as adjusted for unrecognized past service cost.
ii. Short-term employee benefits
The undiscounted amount of short term employee benefits expected to be
paid in exchange of services rendered by employees is recognized during
the period when the employee renders the service. These benefits
include performance incentives, paid annual leave, medical allowance,
etc.
12. Income Tax
The tax expense for the year comprises of Current Tax and Deferred Tax.
Current Taxes are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are recognized for the future tax consequences of timing differences,
subject to the consideration of prudence. Deferred tax assets and
liabilities are measured using the tax rates enacted or substantively
enacted by the balance sheet date.
13. Borrowing Costs
Borrowing Costs that are directly attributable to the acquisition of
qualifying assets are capitalised for the period until the asset is
ready for its intended use. A qualifying asset is an asset that
necessarily takes substantial period of time to get ready for its
intended use. Other borrowing costs are recognised as an expense in the
period in which they are incurred.
14. Impairment
At each Balance Sheet date, the company reviews the carrying amounts of
its fixed assets to determine whether there is any indication that
those assets suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment loss. Recoverable amount is the
higher of an assets net selling price and the value in use. In
assessing the value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are
discounted to the present value using a pre-discount rate that reflects
the current market assessments of time value of money and the risks
specific to the asset. Reversal of impairment loss is recognized
immediately as income in the profit and loss account.
15. Leases
Operating Lease
Leases where the lessor effectively retains substantially all the risks
and rewards of ownership of the leased asset are classified as
operating leases. Operating lease charges are recognized as an expense
in the profit and loss account on a straight-line basis over the lease
term.
Finance Lease
Leases under which the company assumes substantially all the risks and
rewards of ownership are classified as finance leases. The lower of
fair value of asset and present value of minimum lease rentals is
capitalized as fixed assets with corresponding amount shown as lease
liability. The principle component in the lease rentals is adjusted
against the lease liability and interest component is charged to profit
and loss account.
16. Earnings per share
The Company reports basic and diluted earnings per equity share in
accordance with Accounting Standard 20 Earnings per share. Basic
earnings per equity share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the net
profit for the year by the weighted average number of equity shares
during the year as adjusted to the effects of all dilutive potential
equity shares, except where results are anti dilutive.
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Dynacons Systems & Solutions Ltd. Company Details
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Dynacons Systems & Solutions Ltd. Key Financial Ratios
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Dynacons Systems & Solutions Ltd. Results
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Dynacons Systems & Solutions Ltd. Reports
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Dynacons Systems & Solutions Ltd. Corporate Announcements
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Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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