Accounting Policies of Teledata Marine Solutions Ltd. Company

Mar 31, 2010

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention from the books of accounts maintained on accrual basis, in conformity with accounting principles generally accepted in India, and comply with the accounting standards issued by the council of the Institute of Chartered Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956, (the Act).

B. Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets, 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. Actual results could differ from these estimates. Any revision in accounting estimates is recognised prospectively in current and future periods.

C. Revenue Recognition

i) Revenue from software development / software products is recognized on the basis of delivery of the licenses of the required software products specified in the purchase order net off provision for sales taxes and return.

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

D. Fixed Assets

i) Fixed assets are stated at cost less depreciation. All costs relating to the acquisition and installation of fixed assets are capitalised including directly attributable financing costs relating to borrowed funds and costs of bringing the asset to working condition for its intended use.

ii) Software product development expenditure including expenditure on upgrades and new version are capitalized on completion of the product. Cost of Software purchased and procured for product development/customisation is added to software purchase expenditure.

iii) Capital Work in Progress comprises of all directly attributable costs of bringing the assets to their working condition for their intended use and all indirect and incidental expenses.

E. Depreciation / Amortisation

i) Depreciation on fixed assets are provided over the residual life of the asset based on the rates of Depreciation as specified in Schedule XIV of the Companies Act, 1956. Depreciation on other fixed assets is provided on straight line method at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

ii) Depreciation on Building and Ship (owned for a part of the year) is calculated on Straight Line method. Depreciation on other assets are provided on Written down value method.

iii) Softwares are amortised over a period of three years.

F. Borrowing cost

Borrowing costs are recognised as an expense in the year in which they are incurred except those which are directly attributable to acquisition/construction of fixed asset, till the time such assets are ready for use, in which case the borrowing costs are capitalised as part of the cost of asset.

G. Investments

i) Long term Investments are stated at cost. Provision for diminution in value of long term investments is made only if there is a decline, other than temporary in the opinion of the management.

ii) Current Investments are stated at cost or market value whichever is lower.

H. Foreign Currency Transactions

India :

Transactions in foreign currency are recorded at the exchange rate prevailing at the date of the transactions. Monetary items are translated at year-end foreign exchange rates. Resultant exchange difference, arising on payment or conversion of liabilities / assets, is recognised as income or expense, in the year in which they arise.

Overseas Offices:

Revenue transactions in foreign currency from non integrated overseas offices are recorded at the average exchange rate for the year, whereas the asset and liabilities are stated at closing exchange rates except for Investments for which rate prevailing on the date of investment or acquisition is applied for conversion. Resulting exchange difference, on conversion of assets and liabilities and income and expenses are transferred to Foreign Currency Translation Reserve.

I. Employee Benefits

i) "Contribution to defined contribution scheme viz PF, Superannuation are charged to P&L account as incurred. In respect of PF the company does not have any further obligation beyond its monthly contribution. Retirement/Post-retirement benefits namely gratuity etc. are accounted on accrual basis and not funded. Termination benefits are recognized as an expenses as and when it is incurred."

ii) Liability on account of short term employee benefit comprising largely of compensated absences is recognized at undiscounted, accrual basis during the period when the employee renders services.

iii) In respect of Overseas Offices, the retirement benefits are provided as per the prevailing laws of the respective countries.

J. Preliminary Expenditure

The preliminary expenses are written off in the year of incorporation.

K. Taxes on Income

i) Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.

ii) Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets consisting of unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available to realise these assets.

L. Earnings per share

The basic earnings per share is computed by dividing the net profit after tax for the period by the weighted average number of equity shares outstanding during the period. Diluted earnings per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. Impairment

Except otherwise than for Financial Assets, Inventories and Deferred Tax Asset, the Carrying Amounts of all the Assets are reviewed at each balance sheet date to determine any indications of impairment. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value . An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

N. Provision, Contingent Liabilities and Contingent Assets

Contingent liabilities, if any, are disclosed by way of Notes to accounts. Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provision is made in the Accounts in respect of those contingencies which are likely to materialise into liabilities after the year end, till the approval of accounts by the Board of Directors and which have material effect on the position stated in Balance sheet.

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Mar 31, 2009

A. Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention from the books of accounts maintained on accrual basis, in conformity with accounting principles generally accepted in India, and comply with the accounting standards issued by the council of the Institute. of Chartered-Accountants of India and referred to in Section 211 (3C) of the Companies Act, 1956, (the Act).

B. Use of Estimates

The preparation of financial statements requires the management of the. Company to make estimates and assumptions that affect the reported balances of assets, liabilities arid disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Actual results could differ from. these estimates. Any revision in accounting estimates misrecognised prospectively in current and future periods.

C. Revenue Recognition

i) Revenue from software development / software products is recognized on the basis of delivery of the licenses of the required software products specified in the purchase order net of provision for sales return .

ii) Dividends are recorded when the right to receive payments established.

D. Fixed Assets

i) Fixed assets are stated at cost less depreciation. All costs relating to the acquisition and installation of fixed assets are capitalized including directly attributable financing costs relating to borrowed funds and costs of bringing the asset to working condition for its intended use.

ii) Software product development expenditure including expenditure on upgrades arid new ,version are capitalized on completion of the product. Cost of Software purchased and procured for product development/customization is added to software purchase expenditure.

iii) Capital Work in Progress comprises of all directly attributable costs of bringing the assets to their working condition for their intended use and all indirect and incidental expenses.

E. Depreciation / Amortization s

i) Depreciation on fixed assets are provided over the residual life of the asset based on the rates of Depreciation as specified in Schedule XIV of the Companies Act, 1956. Depreciation on other fixed assets is provided on straight line method at the rates and in the manner specified in Schedule XIV to. the Companies Act, 1956.

ii) Depreciation on Building and Ship (owned for a part of the year) is calculated on Straight Line method. Depreciation on other assets are provided on Written down value method.

iii) Software's are amortized over a period of three years.

F. Borrowing cost .

Borrowing costs are recognized as an expense in the year in which they are incurred except those which are directly attributable to acquisition/construction of fixed asset, till the time such assets are ready for use, in which case the borrowing costs are capitalized as part of the cost of asset.

G. Investments

i) Long term Investments are stated at cost. Provision for diminution in value of long term investments is made only if there is a decline, other than' temporary in the opinion of the management. .

ii) Current Investments are stated at cost or market value whichever is lower.

H. Foreign Currency Transactions

India:

Transactions in' foreign currency are recorded at the exchange rate prevailing at the date of the transactions. Monetary items are translated at year-end foreign exchange. rates. ,-Resultant exchange difference, arising on . payment or conversion of liabilities / assets, is recognized as income or expense, in the year in which they arise.

Overseas Offices: Revenue transactions in foreign currency from non integrated overseas offices are recorded at the .average exchange rate for the year, whereas the asset and liabilities are stated at closing exchange rates except for Investments for which rate prevailing on the date of investment or acquisition is applied for conversion. Resulting exchange difference, on conversion of assets and liabilities and income and expenses are transferred to Foreign Currency Translation Reserve.

I. Employee Benefits

I)Contribution to defined contribution scheme viz PF, Superannuation are charged to P&L account as incurred. In respect of PF the company does not have any further obligation beyond its monthly contribution. Retirement/Post- retirement benefits namely gratuity etc. are accounted on accrual basis and not funded. Termination benefits are recognized as an expenses as and when it is incurred.

ii)Liability on account of short term employee benefit comprising largely of compensated absences is recognized at undiscounted, accrual basis during the period when the employee renders services.

iii) In respect of Overseas Offices, the retirement benefits are provided as per the prevailing laws of the respective countries.

J. Preliminary Expenditure .

The preliminary expenses are written off in the year of incorporation.

K. Taxes on Income

i) Current income tax expense comprises taxes on income from' operations in India and in foreign jurisdictions. Income tax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to foreign operations is determined, in accordance with tax laws applicable in countries where such operations are domiciled.

ii) Deferred tax expense or benefit is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets consisting of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available to realize these assets.

iii) Fringe Benefit Tax is provided in accordance with provisions of Section 115WA of the Income Tax Act,1961 as expenses.

L. Earnings per share

The basic earnings per share is computed by dividing the net profit after tax for the period by the weighted average number of equity shares outstanding during the period. Diluted earnings per share, if any is computed using the weighted average number of equity shares and dilutive potential equity share outstanding during the period except when the results would be anti-dilutive.

M. Impairment

Except otherwise than for Financial Assets, Inventories and Deferred Tax Asset, the Carrying Amounts of all the Assets are reviewed at each balance sheet date to determine any indications of impairment. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value . An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

N. Provision, Contingent Liabilities and Contingent Assets

Contingent liabilities, if any, are disclosed by way of Notes to accounts. Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Provision is made in the Accounts in respect of those contingencies which are likely to materialize into liabilities after the year end, till the approval of accounts by the Board of Directors and which have material effect on the position stated in Balance sheet.