Saksoft Ltd. நிறுவனத்தின் கணக்கியல் கொள்கைகள்
Mar 31, 2022
Company Overview and Significant Accounting Policies Note-1: Company Overview
Saksoft Limited(''the Company'') is a Public Limited Company incorporated and domiciled in India listed with National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange (BSE) and has its registered office at Chennai, Tami Nadu, India.
The Company is a leading player in providing digital transformation solutions to help businesses stay relevant in a highly connected, rapidly evolving world. Saksoft is a niche technology specialist that provides a comprehensive suite of business transformation, information management, application development and testing services. Saksoft helps their clients level the playing field by helping them transform their business spaces.
The financial statements were authorized for issue by the Company''s Board of Directors on 26th May 2022.
Note-2: Significant accounting policies
a. Basis of preparation of financial statements
The financial statements in all material aspects have been prepared in accordance with Indian Accounting Standards ("Ind ASâ) notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 as applicable.
b. Basis of measurement
The financial statements have been prepared on historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevantInd AS:
i. Derivative financial instruments;
ii. Certain financial assets and liabilities measured at fair value
iii. Share based payments; and
iv. Defined benefit plans and other long-term employee benefits
c. Use of estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions that affect the reported amounts of revenues and expenses, balances of assets and liabilities, and disclosure of contingent liabilities as at the date of the financial statements. Actual results could differ from those estimates. Accounting estimates could change from period to period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in notes to financial statements. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have most significant effects on the amounts recognized in the financial statements is included in the following notes:
Revenue Recognition
The Company uses the percentage of completion method in accounting for its fixed price contracts. Use of the percentage of completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the estimated total efforts or costs to be expended, as applicable. Provisions for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the estimates at the reporting date.
Income Taxes
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/ recovered for uncertain tax positions.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and its residual value at the end of its life. Useful life and residual value of an asset is determined by the Management at the time an asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
Employee Benefits
The Company''s defined benefit obligation to its employees and net periodic defined benefit cost / income requires the use of certain assumptions, including, among others, estimates of discount rates and expected return on plan assets. Changes in these assumptions may affect the future funding requirements of the plans. Actuarial gains / losses are recognized in Other Comprehensive Income. The sensitivity analysis for changes in estimates is disclosed under relevant Notes.
Other estimates
The Company estimates the probability of the collection of the accounts receivable by analysing historical payment of patterns and customer credit worthiness. Stock compensation expense is determined based on the Company''s estimate of exercise pattern of equity instruments that vests with the employees. Estimates with regard to deferred taxes and provisions are made based on the extent of uncertainty prevalent on the date of financial statements, which may cause material adjustment to the carrying amounts of assets and liabilities.
d. Revenue recognition
The Company derives revenue primarily from software development and related services. Revenue is measured at the fair value of the consideration received or receivable.
Revenue disclosed is net of discounts and Goods and service tax. For software development and related services, the performance obligations are satisfied as and when the services are rendered since the customer generally obtains control of the work as it progresses. The Company has to apply the principles of revenue recognition to each of the distinct performance obligation and transaction price is recognized for each of the performance obligation of the contract.
The Company recognizes revenue when the performance obligations as promised have been satisfied with a transaction price and when where there is no uncertainty as to measurement or collectability of the consideration. Recognition criteria for various types of contracts are as follows:
Time and Material Contracts:
Revenue from time-and-material contracts is recognized based on the time / efforts spent and billed to clients.
Fixed-Price Contracts:
In case of fixed-price contracts, revenue is recognized based on percentage of completion basis. Where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration is recognized as per the percentage-of-completion method. When there is uncertainty as to measurement or ultimate collectability, revenue recognition is postponed until such uncertainty is resolved.
Annual Maintenance Contract:
Revenue from annual maintenance contracts are recognized proportionately over the period in which services are rendered. Sale of products:
Revenue from sale of third party software products and hardware is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on physical or electronic dispatch of goods.
Unbilled revenue represents earnings in excess of efforts billed on software development and service contracts as at the end of the reporting period and is included as part of Other Financial Assets.
Unearned revenues represent billing in excess of revenue recognized on software development and service contracts and is included in Other Current Liabilities until the above revenue recognition criteria is met. Advance payments received from customers for whom no services have been rendered are presented as "Advance from customersâ.
Other Income
Other income primarily comprises of interest, dividend, foreign exchange gain/loss on financial assets / financial liabilities and on translation of other assets and liabilities. Interest income is recognized in the Statement of Profit and Loss using effective interest method at the time of accrual. Dividend income is recognized in the Statement of Profit and Loss when the right to receive payment is established. Foreign currency gain or loss is reported on net basis and includes gain or loss in respect of concluded forward contracts.
e. Property, Plant & Equipment
Property, Plant and Equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditure directly attributable to acquisition until the property, plant and equipment are ready for the intended use.
Property, plant and equipment are depreciated / amortized over their estimated useful lives using straight-line method from the date the assets are ready for the intended use. Assets acquired under finance lease and leasehold improvements are amortized over the lower of estimated useful life or primary lease term.
Depreciation on Computer and Office equipment is provided on straight line method over their respective useful lives as prescribed in Schedule II of the Companies Act 2013. In respect of assets other than these, depreciation is provided over the economic useful life determined by technical evaluation. The useful lives of those assets are as under:
|
Description |
Useful Lives (in years) |
|
Lease hold improvement |
5 |
|
Office Equipment |
5 |
|
Furniture and fixtures |
5 |
|
Vehicles |
5 |
|
Electrical installations |
5 |
|
Computer equipment |
3 |
Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which Management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013
Depreciation methods, useful life and residual value are reviewed at each reporting date.
Individual asset costing Rs.5,000/- or less are depreciated in full in the year of purchase.
Gains or losses on disposal are determined by comparing proceeds with the carrying amount. Cost and related accumulated depreciation are eliminated from the financial statements upon sale of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
Capital work-in-progress includes cost of fixed assets that are not ready for their intended use.
Advances paid towards the acquisition of Property, plant and equipment outstanding at each Balance Sheet Date is classified as capital advances under other non-current assets.
f. intangible assets and amortization
Intangible assets are measured at acquisition cost less accumulated amortization and impairment losses, if any. Intangible assets are amortized over their respective estimated useful lives on a straight line basis from the date they are available for use as follows:
|
Description |
Useful Lives |
|
intellectual property |
36 months |
|
Software Costs |
60 months |
Self-generated intangible assets are generally not capitalized.
The estimated useful life of an intangible asset is based on factors including obsolescence and the level of maintenance expenditure required to obtain the expected future cash flows from the asset.
g. Leases
The Company adopted Ind AS 116 - "Leasesâ from 1st April 2019 using the Modified Retrospective Approach. In accordance with the Modified Retrospective Approach, a Right to Use asset equal to the lease liability in the Balance Sheet immediately before the date of initial application has been recognized on the date of initial application and the comparatives have not been retrospectively adjusted.
A lessee recognizes assets and liabilities for both operating and finance leases with a term of more than twelve months, unless the underlying asset is of low value. Lease liability is recognized as the present value of minimum lease payment (including the escalation clause as per the lease agreement) outstanding as at the date of the Balance Sheet immediately prior to the date of initial application.
The right to asset so recognized are depreciated over the lease term on a straight line basis and the lease payment are made at respective intervals and the present value of lease liability is remeasured at every reporting period and accounted for as interest expense.
Short term leases and low value leases have been exempted from lease accounting. These leases have been accounted by debit to the Statement of the Profit and Loss as and when the lease rentals are paid.
h. impairment Non-financial assets
The Company assesses at each balance sheet date whether there is any indication that a carrying amount of a non-financial asset or a group of non-financial assets may not be recoverable and hence require to be impaired. If any such indication exists, the Company estimates the recoverable amount of these assets. Recoverable amount is the higher of an asset''s fair value adjusted for costs of disposal and the value in use. If such recoverable amount of these assets or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. This reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exits, the recoverable amount is reassessed and the asset is reflected at such reassessed recoverable amount subject to a maximum of carrying value of the asset. Non-financial assets (other than Goodwill) that are already impaired are reviewed for possible reversal of impairment provision at the end of every reporting period.
Financial assets
Receivables: The Company follows ''simplified approach'' for recognition of impairment loss on trade receivables, whereby, it recognizes impairment loss allowances based on life time expected credit loss at each reporting period from its initial recognition.
Other financial assets: For all other financial assets, expected credit losses (ECL) are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case the same is measured at lifetime ECL.
Impairment gain or loss recognized in the Statement of Profit and Loss is the difference between loss allowance reassessed on the reporting date and that determined on the immediately preceding reporting date.
i. investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current.
⢠Non-current investments in subsidiaries, associates and joint ventures are stated at cost and any decline other than temporary in the value of these investments is recognized in the Statement of Profit and Loss.
⢠Other non-current investments are stated at their fair value.
⢠Current investments are stated at their fair value.
On disposal of investments, the difference between proceeds and the carrying amount is recognized in the Statement of Profit and Loss.
j. Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities and forecasted cash flows denominated in foreign currencies. The counterparty for these contracts is generally a bank.
Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the Statement of Profit and Loss.
Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective.
To the extent that the hedge is ineffective, changes in fair value are recognized in the statement of profit and loss. If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.
Others
Changes in fair value of foreign currency derivative instruments not designated as cash flow hedges and the ineffective portion of cash flow hedges are recognized in the Statement of Profit and Loss and reported within foreign exchange gains/ (losses).
k. Non-derivative financial instruments INITIAL MESASUREMENT:
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Purchase or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trade) are recognized on trade date.
SUBSEQUENT MEASUREMENT:
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding. Financial assets are subsequently measured at amortized cost using effective interest method, less any impairment losses.
Amortized assets are represented by trade receivables, security deposits, cash and cash equivalents, employee and other advances and eligible current and non-current assets.
They are presented as current assets except for those maturing later than 12 months after the reporting date, which are presented as non-current assets.
Financial assets at fair value through other comprehensive income: (FVTOCI)
Financial assets are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss: (FVTPL)
Any financial assetnot subsequently measured at amortized cost or at fair value through other comprehensive income, is subsequently measured at fair value through profit or loss. Financial assets falling in this category are measured at fair value and all changes are recognized in the Statement of Profit and Loss.
Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination that is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for De-recognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires.
Fair value hierarchy:
The company''s policy on Fair Valuation is stated below.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - The fair value of financial instruments traded in active markets (such as publicly traded securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted market price used for financial assets held by the Group is the current bid price.
Level 2 - The fair valuation of instruments not traded in active markets is determined using valuation techniques. These valuation techniques maximize the use of observable market data and minimize the use of entity specific estimates(All significant inputs to the fair value measurement is observable)
Level 3 -Valuation techniques for one or more significant inputs to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
l. Foreign Currency Translation Functional and Presentation Currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (i.e. the "functional currency). The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian Rupee.
Foreign currency Transactions and Balances
Foreign current Transactions are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of foreign - currency denominated monetary assets and liabilities into the relevant functional currency at exchange rates in effect at the reporting date are recognized in the Statement of Profit and Loss and reported within foreign exchange gains / (losses).
Non-monetary assets and liabilities denominated in foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
m. Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders. Interim dividends are recorded as a liability on the date of declaration by the Company''s Board of Directors.
n. Cash and Cash equivalents
Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage. For the purpose of presentation in the Statement of Cash flows, cash and cash equivalents include cash on hand, deposits held at call with Banks, other short-term, highly liquid investments with original maturities of three months or less and that are readily convertible to known amounts of cash which are subject to an insignificant change in value.
Statement of cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
o. Employee benefits Defined Contribution Plans
The Company pays Provident Fund contributions payable to the recognized provident fund. The contributions are accounted for as defined contribution plans and recognized as employee benefit expense in the Statement of Profit and Loss.
Defined Benefit Plans
The company provides a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company as per the provisions of the Payment of Gratuity Act, 1972. The Company makes contributions to a fund administered and managed by the Saksoft Employees'' Gratuity Trust to fund the gratuity liability.
The liability or asset recognized in the Balance Sheet in respect of a defined gratuity plan is the present value of defined benefit obligation at the end of the reporting period less the fair value of plan assets. Gratuity liability is a defined benefit obligation and is recorded based on actuarial valuation using the projected unit credit method made at the end of the year.
The present value of defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The gratuity liability and net periodic gratuity cost is actuarially determined after considering discount rates, expected long term return on plan assets and increase in compensation levels.
Remeasurement gains or losses arising from Experience Adjustments and changes in actuarial assumptions are recognized in the period they occur, directly in the Other Comprehensive Income. They are included in the statement of changes in equity and in the Balance Sheet. Remeasurements comprising actuarial gains or losses and return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are not reclassified to Statement of Profit or Loss in subsequent periods.
Changes in present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the Statement of Profit and Loss.
Other short term Employee Benefits
As per the employment policy of the Company, employees are required to avail their annual leave by the end of the respective calendar year. At the end of the financial year, the Company accounts for the remaining short term compensated absences. Liability towards leave encashment is recognized in the Statement of Profit and Loss.
Undiscounted liability of performance incentive is recognized during the period when the employee renders the services, based on management estimate.
Share-based payments
Employees of the Company receive remuneration in the form of equity settled instruments, for rendering services over a defined vesting period. Equity instruments granted are measured by reference to the fair value of the instrument at the date of the grant arrived at by using the Black-Scholes Model valuation and recognizes the cost (net of estimated forfeitures) over the vesting period.
The equity instruments generally vest in a graded manner over the vesting period. The stock compensation expense is determined based on company''s estimate of equity instruments that will eventually vest and be exercised. The expenses in respect of the above share based payment schemes is recognized over the vesting period in the Statement of Profit and Loss with a corresponding adjustment to the share based payment reserve, a component of equity.
p. Taxation
income-tax expense comprises current tax (amount of tax for the period determined in accordance with The income Tax law) and deferred tax charge or credit (reflecting the tax effects of temporary differences between tax bases of assets and liabilities and their carrying amounts in the financial statements). Taxes are recognized in the Statement of Profit and Loss except to the extent it relates to items directly recognized in equity or in the Other Comprehensive Income.
Current tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
Deferred Income Tax
Deferred income tax is recognized using the Balance Sheet Approach. The corresponding deferred income tax liabilities or assets are recognized for deductible and taxable temporary differences between tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets are recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax income liabilities are recognized for all taxable temporary differences.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the deferred income tax asset to be utilized.
Deferred income taxes are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on the tax laws enacted or substantively enacted at the reporting date.
q. Earnings per share
Basic earnings per share (''EPS'') amounts are computed by dividing the net profit or loss after tax,for the year, by the weighted average number of shares outstanding during the year.
For the purpose of calculating Diluted earnings per share, amounts are computed by dividing the net profit or loss after tax for the year by the weighted average number of shares outstanding during the year considered for computation of Basic EPS and also adjusted for the effects of all measurable dilutive potential equity shares.
The shares issued to the Saksoft Employees Welfare Trust have been considered as outstanding for Basic EPS purposes. For diluted EPS purpose, the shares, which are not yet eligible for exercise, have also been considered as outstanding to the extent these shares are dilutive.
r. Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred and subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in Statement of Profit and Loss over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after reporting period.
s. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expended in the period in which they are incurred.
t. Segment Reporting
Operating segments are reported in a manner consistent with internal reporting provided by the Chief Operating Decision Maker.
u. Provisions and Contingent liabilities
A provision is recognized when an enterprise has a present legal or constructive 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 the amount can be reliably estimated. Provisions are not discounted to its present value and are determined based on 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 estimate.
A disclosure for contingent liability is made when there is a possible obligation that arises from the past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company and that may, but not probable that an outflow of resources would be required to settle the obligation. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2018
1. Significant accounting policies
a. Basis of preparation of financial statements
The financial statements in all material aspects have been prepared in accordance with Indian Accounting Standards ("Ind AS") notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016 as applicable.
The financial statements for all periods upto the year ended 31st March 2017 were prepared and presented in accordance with the Accounting Standards notified under Section 133 of the Companies Act, 2013(Indian GAAP) read with the Companies (Accounting Standards) Rules 2006 and other relevant provisions of the Act / Rules.
These financial statements are the first financial statements of the Company under Ind AS. Refer Note 22 (l) for an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.
b. Basis of measurement
The financial statements have been prepared on historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:
i. Derivative financial instruments;
ii. Certain financial assets and liabilities measured at fair value
iii. Share based payments; and
iv. Defined benefit plans and other long-term employee benefits
c. Use of estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions that affect the reported amounts of revenues and expenses, balances of assets and liabilities, and disclosure of contingent liabilities as at the date of the financial statements. Actual results could differ from those estimates.Accounting estimates could change from period to period. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in notes to financial statements. In particular, information about significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have most significant effects on the amounts recognized in the financial statements is included in the following notes:
Revenue Recognition
The Company uses the percentage of completion method in accounting for its fixed price contracts. Use of the percentage of completion method requires the Company to estimate the efforts or costs expended to date as a proportion of the estimated total efforts or costs to be expended, as applicable. Provisions for estimated losses, if any, on incomplete contracts are recorded in the period in which such losses become probable based on the estimates at the reporting date.
Income Taxes
Significant judgements are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions.
Property, plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an assetâs expected useful life and its residual value at the end of its life. Useful life and residual value of an asset is determined by the Management at the time an asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
Employee Benefits
The companyâs defined benefit obligation to its employees and net periodic defined benefit cost / income requires the use of certain assumptions, including, among others, estimates of discount rates and expected return on plan assets. Changes in these assumptions may affect the future funding requirements of the plans.Actuarial gains / losses are recognized in Other Comprehensive Income. The sensitivity analysis for changes in estimates is disclosed under relevant Notes.
Other estimates
The Company estimates the probability of the collection of the accounts receivable by analysing historical payment of patterns and customer credit worthiness. Stock compensation expense is determined based on the companyâs estimate of exercise pattern of equity instruments that vests with the employees.Estimates with regard to deferred taxes and provisions are made based on the extent of uncertainty prevalent on the date of financial statements, which may cause material adjustment to the carrying amounts of assets and liabilities.
d. Revenue recognition
The Company derives revenue primarily from software development and related services. Revenue is measured at the fair value of the consideration received or receivable. Revenue disclosed is net of discounts and excludes Goods and services tax. The Company recognizes revenue when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the entity. The Company recognizes revenue when the significant terms of arrangement are enforceable, services have been rendered and the collectability is reasonably assured. Recognition criteria for various types of contracts are as follows:
Time and Material Contracts:
Revenue from time-and-material contracts is recognized based on the time / efforts spent and billed to clients.
Fixed-Price Contracts:
In case of fixed-price contracts, revenue is recognized based on percentage of completion basis.
Annual Maintenance Contract:
Revenue from annual maintenance contracts are recognized proportionately over the period in which services are rendered.
Sale of products:
Revenue from sale of third party software products and hardware is recognized when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on physical or electronic dispatch of goods.
Unbilled revenue represent earnings in excess of efforts billed on software development and service contracts as at the end of the reporting period and is included as part of Other Financial Assets.
Unearned revenues represent billing in excess of revenue recognized on software development and service contracts and is included in Other Current Liabilities until the above revenue recognition criteria is met. Advance payments received from customers for whom no services have been rendered are presented as "Advance from customers".
Other Income
Other income primarily comprises of interest, dividend, foreign exchange gain/loss on financial assets / financial liabilities and on translation of other assets and liabilities. Interest income is recognized in the Statement of Profit and Loss using effective interest method at the time of accrual. Dividend income is recognized in the Statement of Profit and Loss when the right to receive payment is established. Foreign currency gain or loss is reported on net basis and includes gain or loss in respect of concluded forward contracts.
e. Property, Plant & Equipment
Property, Plant and Equipment are measured at cost less accumulated depreciation and impairment losses, if any. Cost includes expenditure directly attributable to acquisition until the property, plant and equipment are ready for the intended use.
Property, plant and equipment are depreciated / amortized over their estimated useful lives using straight-line method from the date the assets are ready for the intended use. Assets acquired under finance lease and leasehold improvements are amortized over the lower of estimated useful life or primary lease term.
Depreciation on Computer and Office equipment is provided on straight line method over their respective useful lives as prescribed in Schedule II of the Companies Act 2013. In respect of assets other than these, depreciation is provided over the economic useful life determined by technical evaluation. The useful lives of those assets are as under:
Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which Management expects to use these assets. Hence,the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013
Depreciation methods, useful life and residual value are reviewed at each reporting date.
Individual asset costing Rs.5,000/- or less are depreciated in full in the year of purchase.
Gains or losses on disposal are determined by comparing proceeds with the carrying amount. Cost and related accumulated depreciation are eliminated from the financial statements upon sale of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
Capital work-in-progress includes cost of fixed assets that are not ready for their intended use.
Advances paid towards the acquisition of property, plant and equipment out standing at each Balance Sheet Date is classified as capital advances under other non-current assets.
f. Intangible assets and amortization
Intangible assets are measured at acquisition cost less accumulated amortization and impairment losses, if any. Intangible assets are amortized over their respective estimated useful lives on a straight line basis from the date they are available for use as follows:
Self-generated intangible assets are generally not capitalized.
The estimated useful life of an intangible asset is based on factors including obsolescence and the level of maintenance expenditure required to obtain the expected future cash flows from the asset.
g. Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the lower of fair value or present value of the minimum lease payments at the inception of lease term and disclosed as leased assets. Assets under finance lease are depreciated over the economic useful life or lease term, whichever is less.
The lease payments, net of finance charges, are adjusted against borrowings / other financial liabilities and allocated between lease liability and finance charges.
Leases that do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Lease payments are recorded as expense in the Statement of Profit and Loss on a straight line basis over the period of lease.Only those leases which have escalations moe than the expected general inflation are straight lined.
h. Impairment
Non-financial assets
The Company assesses at each balance sheet date whether there is any indication that a carrying amount of a non-financial asset or a group of non-financial assets may not be recoverable and hence require to be impaired. If any such indication exists, the Company estimates the recoverable amount of these assets. Recoverable amount is the higher of an assetâs fair value adjusted for costs of disposal and the value in use. If such recoverable amount of these assets or the recoverable amount of the cash generating unit to which the asset belongs to is less than its carrying amount, the carrying amount is reduced to its recoverable amount. This reduction is treated as an impairment loss and is recognized in the Statement of Profit and Loss. If at the Balance Sheet date, there is an indication that if a previously assessed impairment loss no longer exits, the recoverable amount is reassessed and the asset is reflected at such reassessed recoverable amount subject to a maximum of carrying value of the asset.Non-financial assets (other than Goodwill) that are already impaired are reviewed for possible reversal of impairment provision at the end of every reporting period.
Financial assets
Receivables: The Company follows ''simplified approachâ for recognition of impairment loss on trade receivables, whereby, it recognizes impairment loss allowances based on life time expected credit loss at each reporting period from its initial recognition.
Other financial assets: For all other financial assets, expected credit losses (ECL) are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case the same is measured at lifetime ECL.
Impairment gain or loss recognized in the Statement of Profit and Loss is the difference between loss allowance reassessed on the reporting date and that determined on the immediately preceding reporting date.
i. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as non-current.
- Non-current investments in subsidiaries, associates and joint ventures are stated at cost and any decline other than temporary in the value of these investments is recognized in the Statement of Profit and Loss.
- Other non-current investments are stated at their fair value.
- Current investments are stated at their fair value.
On disposal of investments, the difference between proceeds and the carrying amount is recognized in the Statement of Profit and Loss.
j. Derivative financial instruments
The Company holds derivative financial instruments such as foreign exchange forward contracts to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities and forecasted cash flows denominated in foreign currencies. The counterparty for these contracts is generally a bank.
Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the Statement of Profit and Loss.
Cash flow hedges
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognized in other comprehensive income and presented within equity in the cash flow hedging reserve to the extent that the hedge is effective.
To the extent that the hedge is ineffective, changes in fair value are recognized in the statement of profit and loss. If the hedginginstrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively. The cumulative gain or loss previously recognized in the cash flow hedging reserve is transferred to the Statement of Profit and Loss upon the occurrence of the related forecasted transaction.
Others
Changes in fair value of foreign currency derivative instruments not designated as cash flow hedges and the ineffective portion of cash flow hedges are recognized in the Statement of Profit and Loss and reported within foreign exchange gains/(losses).
k. Non-derivative financial instruments
INITIAL MESASUREMENT:
Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Purchase or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trade) are recognized on trade date.
SUBSEQUENT MEASUREMENT:
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these financial assets are held within a business model whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Financial assets are subsequently measured at amortized cost using effective interest method, less any impairment losses.
Amortized assets are represented by trade receivables, security deposits, cash and cash equivalents, employee and other advances and eligible current and noncurrent assets.
They are presented as current assets except for those maturing later than 12 months after the reporting date, which are presented as non-current assets.
Financial assets at fair value through other comprehensive income: (FVTOCI)
Financial assets are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through profit or loss: (FVTPL)
Any financial asset not subsequently measured at amortized cost or at fair value through other comprehensive income, is subsequently measured at fair value through profit or loss. Financial assets falling in this category are measured at fair value and all changes are recognized in the Statement of Profit and Loss.
Financial liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination that is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for De-recognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized when the obligation specified in the contract is discharged or cancelled or expires.
Fair value hierarchy:
The companyâs policy on Fair Valuation is stated below.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - The fair value of financial instruments traded in active markets (such as publicly traded securities) is based on quoted (unadjusted) market prices at the end of the reporting period. The quoted market price used for financial assets held by the Company is the current bid price.
Level 2 - The fair valuation of instruments not traded in active markets is determined using valuation techniques. These valuation techniques maximize the use of observable market data and minimize the use of entity specific estimates(All significant inputs to the fair value measurement is observable)
Level 3 -Valuation techniques for one or more significant inputs to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
l. Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (i.e. the "functional currency). The functional currency of the Company is the Indian Rupee. These financial statements are presented in Indian Rupee.
Foreign currency Transactions and Balances
Foreign current Transactions are translated into the respective functional currencies using the exchange rates prevailing at the dates of the respective transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of foreign - currency denominated monetary assets and liabilities into the relevant functional currency at exchange rates in effect at the reporting date are recognized in the Statement of Profit and Loss and reported within foreign exchange gains / (losses).
Non-monetary assets and liabilities denominated in foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
m. Dividends
Final dividends on shares are recorded as a liability on the date of approval by the shareholders.Interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors.
n. Cash and Cash equivalents
Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage. For the purpose of presentation in the Statement of Cash flows, cash and cash equivalents include cash on hand, deposits held at call with Banks, other shortterm, highly liquid investments with original maturities of three months or less and that are readily convertible to known amounts of cash which are subject to an insignificant change in value.
Statement of cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
o. Employee benefits Defined Contribution Plans
The Company pays Provident Fund contributions payable to the recognized provident fund. The contributions are accounted for as defined contribution plans and recognized as employee benefit expense in the Statement of Profit and Loss.
Defined Benefit Plans
The company provides a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company as per the provisions of the Payment of Gratuity Act, 1972. The Company makes contributions to a fund administered and managed by the Saksoft Employeesâ Gratuity Trust to fund the gratuity liability.
The liability or asset recognized in the Balance Sheet in respect of a defined gratuity plan is the present value of defined benefit obligation at the end of the reporting period less the fair value of plan assets. Gratuity liability is a defined benefit obligation and is recorded based on actuarial valuation using the projected unit credit method made at the end of the year.
The present value of defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The gratuity liability and net periodic gratuity cost is actuarially determined after considering discount rates, expected long term return on plan assets and increase in compensation levels.
Remeasurement gains or losses arising from Experience Adjustments and changes in actuarial assumptions are recognized in the period they occur, directly in the Other Comprehensive Income. They are included in the statement of changes in equity and in the Balance Sheet. Remeasurements comprising actuarial gains or losses and return on plan assets (excluding amounts included in net interest on the net defined benefit liability) are not reclassified to Statement of Profit or Loss in subsequent periods.
Changes in present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the Statement of Profit and Loss.
Other short term Employee Benefits
As per the employment policy of the Company, employees are required to avail their annual leave by the end of the respective calendar year. At the end of the financial year, the Company accounts for the remaining short term compensated absences. Liability towards leave encashment is recognized in the Statement of Profit and Loss.
Undiscounted liability of performance incentive is recognized during the period when the employee renders the services, based on management estimate.
Share-based payments
Employees of the Company receive remuneration in the form of equity settled instruments, for rendering services over a defined vesting period. Equity instruments granted are measured by reference to the fair value of the instrument at the date of the grant arrived at by using the Black-Scholes Model valuation and recognizes the cost (net of estimated forfeitures) over the vesting period.
The equity instruments generally vest in a graded manner over the vesting period. The stock compensation expense is determined based on companyâs estimate of equity instruments that will eventually vest and be exercised. The expenses in respect of the above share based payment schemes is recognized over the vesting period in the Statement of Profit and Loss with a corresponding adjustment to the share based payment reserve, a component of equity.
p. Taxation
Income-tax expense comprises current tax (amount of tax for the period determined in accordance with The Income Tax law) and deferred tax charge or credit (reflecting the tax effects of temporary differences between tax bases of assets and liabilities and their carrying amounts in the financial statements). Taxes are recognized in the Statement of Profit and Loss except to the extent it relates to items directly recognized in equity or in the Other Comprehensive Income.
Current tax
Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amount are those that are enacted or substantively enacted by the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis or to realize the asset and liability simultaneously.
Deferred Income Tax
Deferred income tax is recognized using the Balance Sheet Approach. The corresponding deferred income tax liabilities or assets are recognized for deductible and taxable temporary differences between tax bases of assets and liabilities and their carrying amounts in the financial statements.
Deferred income tax assets are recognized only to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax income liabilities are recognized for all taxable temporary differences.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the deferred income tax asset to be utilized.
Deferred income taxes are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on the tax laws enacted or substantively enacted at the reporting date.
q. Earnings per share
Basic earnings per share (''EPSâ) amounts are computed by dividing the net profit or loss after tax,for the year, by the weighted average number of shares outstanding during the year.
For the purpose of calculating Diluted earnings per share, amounts are computed by dividing the net profit or loss after tax for the year by the weighted average number of shares outstanding during the year considered for computation of Basic EPS and also adjusted for the effects of all measurable dilutive potential equity shares.
The shares issued to the Saksoft Employees Welfare Trust have been considered as outstanding for Basic EPS purposes. For diluted EPS purpose, the shares, which are not yet eligible for exercise, have also been considered as outstanding to the extent these shares are dilutive.
r. Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred and subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in Statement of Profit and Loss over the period of the borrowings using the effective interest method.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after reporting period.
s. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
Other borrowing costs are expended in the statement of profit and loss in the period in which they are incurred.
t. Segment Reporting
Operating segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision Maker.
u. Provisions and Contingent liabilities
A provision is recognized when an enterprise has a present legal or constructive 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 the amount can be reliably estimated. Provisions are not discounted to its present value and are determined based on 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 estimate.
A disclosure for contingent liability is made when there is a possible obligation that arises from the past events and the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company and that may, but not probable that an outflow of resources would be required to settle the obligation. Where there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
v. Recent accounting pronouncements
Ind AS 115 - Revenue from contracts with customers
The above Ind AS, notified by the Ministry of Corporate Affairs on 28th March 2018, will be effective from 1st April 2018, and consequently Ind AS 11 -Construction Contracts and Ind AS 18 - Revenue will stand withdrawn from that date. Revenue recognition under the new standard underlines the value of goods or services transferred to a customer that reflects the consideration commensurate with the value of goods and services so exchanged. While stipulating recognition of contract asset/liability under specific circumstances, the standard prescribes for elaborate disclosures including reconciliation between contract price and revenue recognised.
The Company will adopt the standard with effect from 1st April 2018 with cumulative effect of retrospective application recognised as transitional adjustments in retained earnings. However, in the opinion of the management, the effect on adoption of Ind AS 115, if any, is not expected to be material.
Mar 31, 2015
A. Basis of preparation of financial statements
The financial statements are prepared and presented in accordance with
Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises
accounting standards notified by the Central Government of India ,
other pronouncements of the Institute of Chartered Accountants of
India, provisions of the Companies Act, 2013 and guidelines issued by
the Securities and Exchange Board of India (''SEBI'').
b. Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent liabilities as at the date of the financial statements.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
c. Tangible fixed assets, Capital work-in-progress and
depreciation/amortisation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use.
Depreciation on Computer equipments and Office equipments is provided
on the straight line method over the useful life as prescribed in
Schedule II of the Companies Act 2013. In respect of other assets, the
depreciation is provided over the useful life determined by technical
evaluation. The useful lives of those assets are as under:
Description Useful Lives (in years)
Plant and machinery 5
Furniture and fixtures 5
Vehicles 5
Electrical installations 5
Individual assets costing H5,000/- or less are depreciated at 100% in
the year of purchase.
Capital work-in-progress includes the cost of fixed assets that are not
ready for their intended use.
Depreciation on leased assets is charged over the period of lease or
the life of the asset whichever is lower:
d. Intangible assets and amortization
Intangible assets comprising intellectual property rights and software
costs are amortized over a period of 36 and 60 months respectively from
the date of acquisition. Self-generated intellectual property rights /
software assets are generally not capitalized.
e. Leases
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter Lease
payments are apportioned between the finance charges and reduction of
the lease liability based on the implicit rate of return. Finance
charges are charged directly against income.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and are recorded as
expense on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of an asset''s net selling price
and value in use.
If such recoverable amount of the asset or the recoverable amount of
the cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
g. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments.
- Long term investments are stated at cost and any decline other than
temporary in the value of investments is charged to profit and loss
account.
- Current investments are stated at the lower of cost and fair value.
h. Foreign currency transactions
Transactions in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transaction.
Monetary assets and liabilities denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
differences arising on foreign currency transactions are recognised in
the profit and loss account.
In accordance with the announcement of "Accounting for Derivatives"
made by the Institute of Chartered Accountants of India (''ICAI'') on 29
March 2008, derivatives are marked to market and the changes in the
value of such derivatives, to the extent they reflect a loss, are
recognized in profit or loss account
i. Revenue recognition
Revenue from software services comprises revenue from time and material
and fixed price contracts.
Revenue from time-and-material contracts is recognized based on the
time / efforts spent and billed to clients.
In case of fixed-price contracts, revenue is recognized based on the
milestones achieved as specified in the contracts on percentage of
completion basis.
Revenue from annual maintenance contracts are recognized
proportionately over the period in which services are rendered.
Dividend income is recognized when the Company''s right to receive
dividend is established.
Interest income is recognized on the time proportionate method.
j. Employee benefits Provident Fund
Contributions payable to the recognized provident fund which is a
defined contribution scheme are charged to the profit and loss account.
Gratuity
Gratuity liability is a defined benefit obligation and is recorded
based on actuarial valuation on projected unit credit method made at
the end of the year. The gratuity liability and net periodic gratuity
cost is actuarially determined after considering discount rates,
expected long term return on plan assets and increase in compensation
levels. All actuarial gain/loss are immediately recorded to the profit
and loss account and are not deferred. The Company makes contributions
to a fund administered and managed by the Saksoft Employees'' Gratuity
Trust to fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company employees are required to
avail their annual leave by the end of the respective calendar year and
leave is not allowed to be encashed. At the end of the financial year
the Company accounts for the remaining short term compensated absences.
k. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the
period). The deferred tax charge or credit and the corresponding
deferred tax liabilities or assets are recognised using the tax rates
that have been enacted or substantively enacted by the balance sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realised in the future;
however; where there is unabsorbed depreciation or carried forward loss
under taxation laws, deferred tax assets are recognised only if there
is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
written down or written-up to reflect the amount that is reasonably/
virtually certain (as the case may be) to be realised. Current tax and
deferred tax assets and liabilities are offset to the extent to which
the Company has a legally enforceable right to set off and they relate
to taxes on income levied by the same governing taxation laws.
l. Earnings per share
Basic earnings per share (''EPS'') amounts are computed by dividing the
net profit or loss for the year attributable to equity shareholders by
the weighted average number of shares outstanding during the year:
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all measurable dilutive potential equity
shares.
The shares issued to the Saksoft Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
options have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilutive.
m. Employees stock option schemes
The Company uses the intrinsic value method of accounting for its
employee share based compensation plan and other share based
arrangements. Under this method compensation expense is recorded over
the vesting period of the option, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contingent liabilities and Contingent assets
A provision is recognised when an enterprise has a present obligation
as a result of past event; 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 are not discounted to its
present value and are determined based on 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
estimate.
A disclosure for contingent liability is made when there is a possible
obligation or a present obligation that may but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2014
A. Basis of preparation of financial statements
The financial statements are prepared and presented in accordance with
Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises
accounting standards notified by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of
the Institute of Chartered Accountants of India, provisions of the
Companies Act, 1956 and guidelines issued by the Securities and
Exchange Board of India (''SEBI'').
b. Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent liabilities as at the date of the financial statements.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
c. Tangible fixed assets, Capital work-in-progress and
depreciation/amortisation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use.
Depreciation is provided on the straight line method at rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 or
based on the estimated useful life of the assets whichever is higher as
follows:
Description Rate of depreciation
Plant and machinery 20%
Computer equipments 20%
Furniture and fixtures 20%
Office equipments 20%
Vehicles 20%
Electrical installations 20%
Individual assets costing Rs 5,000/- or less are depreciated at 100% in
the year of purchase.
Capital work-in-progress includes the cost of fixed assets that are not
ready for their intended use.
Depreciation on leased assets is charged over the period of lease or
the life of the asset whichever is lower
d. Intangible assets and amortization
Intangible assets comprising intellectual property rights and software
costs are amortized over a period of 36 and 60 months respectively from
the date of acquisition. Self-generated intellectual property rights /
software assets are generally not capitalized.
e. Leases
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter. Lease
payments are apportioned between the finance charges and reduction of
the lease liability based on the implicit rate of return. Finance
charges are charged directly against income.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and are recorded as
expense on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset.
Recoverable amount is the higher of an assets net selling price and
value in use. If such recoverable amount of the asset or the
recoverable amount of the cash generating unit to which the asset
belongs is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the Profit and Loss Account. If at
the balance sheet date there is an indication that if a previously
assessed impairment loss no longer exits, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount subject
to a maximum of depreciated historical cost.
g. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments.
* Long term investments are stated at cost and any decline other than
temporary in the value of investments is charged to profit and loss
account.
* Current investments are stated at the lower of cost and fair value.
h. Foreign currency transactions
Transactions in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transaction.
Monetary assets and liabilities denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
differences arising on foreign currency transactions are recognised in
the profit and loss account.
In accordance with the announcement of "Accounting for Derivatives"
made by the Institute of Chartered Accountants of India (''ICAI'') on 29
March 2008, derivatives are marked to market and the changes in the
value of such derivatives, to the extent they reflect a loss, are
recognized in profit or loss account.
i. Revenue recognition
Revenue from software services comprises revenue from time and material
and fixed price contracts.
Revenue from time-and-material contracts is recognized based on the
time / efforts spent and billed to clients.
In case of fixed-price contracts, revenue is recognized based on the
milestones achieved as specified in the contracts on percentage of
completion basis.
Revenue from annual maintenance contracts are recognized
proportionately over the period in which services are rendered.
Dividend income is recognized when the Company''s right to receive
dividend is established.
Interest income is recognized on the time proportionate method.
j. Employee benefits
Provident Fund
Contributions payable to the recognized provident fund which is a
defined contribution scheme are charged to the profit and loss account.
Gratuity
Gratuity liability is a defined benefit obligation and is recorded
based on actuarial valuation on projected unit credit method made at
the end of the year. The gratuity liability and net periodic gratuity
cost is actuarially determined after considering discount rates,
expected long term return on plan assets and increase in compensation
levels. All actuarial gain/loss are immediately recorded to the profit
and loss account and are not deferred. The Company makes contributions
to a fund administered and managed by the Saksoft Employees'' Gratuity
Trust to fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company, employees are required to
avail their annual leave by the end of the respective calendar year and
leave is not allowed to be encashed. At the end of the financial year,
the Company accounts for the remaining short term compensated absences.
k. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income- tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in the future; however, where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual
certainty of realisation of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
Current tax and deferred tax assets and liabilities are offset to the
extent to which the Company has a legally enforceable right to set off
and they relate to taxes on income levied by the same governing
taxation laws.
l. Earnings Per Share
Basic Earnings Per Share (''EPS'') amounts are computed by dividing the
net profit or loss for the year attributable to equity shareholders by
the weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all measurable dilutive potential equity
shares.
The shares issued to the Saksoft Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
options have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilutive.
m. Employees stock option schemes
The Company uses the intrinsic value method of accounting for its
employee share based compensation plan and other share based
arrangements. Under this method compensation expense is recorded over
the vesting period of the option, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contingent liabilities and Contingent assets
A provision is recognised when an enterprise has a present obligation
as a result of past event; 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 are not discounted to its
present value and are determined based on 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
estimate.
A disclosure for contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outflow
of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2013
A. Basis of preparaton of fnancial statements
The fnancial statements are prepared and presented in accordance with
Indian Generally Accepted Accountng Principles (GAAP) under the
historical cost conventon on the accrual basis. GAAP comprises
accountng standards notfed by the Central Government of India under
Secton 211 (3C) of the Companies Act, 1956, other pronouncements of the
Insttute of Chartered Accountants of India, provisions of the Companies
Act, 1956 and guidelines issued by the Securites and Exchange Board of
the India (''SEBI'').
b. Use of estmates
The preparaton of the fnancial statements in conformity with GAAP
requires management to make estmates and assumptons that afect the
reported amounts of revenues and expenses during the reportng period,
reported balances of assets and liabilites, and disclosure of contngent
liabilites as at the date of the fnancial statements. Actual results
could difer from those estmates. Any revision to accountng estmates is
recognized prospectvely in current and future periods.
c. Tangible fxed assets, Capital work-in-progress and
depreciaton/amortsaton
Fixed assets are carried at cost of acquisiton less accumulated
depreciaton. Cost comprises the purchase price and any atributable cost
of bringing the asset to its working conditon for its intended use.
Depreciaton is provided on the straight line method at rates of
depreciaton prescribed in Schedule XIV to the Companies Act, 1956 or
based on the estmated useful life of the assets whichever is higher as
follows:
Individual assets costng Rs 5,000/- or less are depreciated at 100% in
the year of purchase. Capital work-in-progress includes the cost of
fxed assets that are not ready for their intended use. Depreciaton on
leased assets is charged over the period of lease or the life of the
asset whichever is lower.
d. Intangible assets and amortzaton
Intangible assets comprising intellectual property rights and sofware
costs are amortzed over a period of 36 and 60 months respectvely from
the date of acquisiton. Self-generated intellectual property rights /
sofware assets are generally not capitalized.
e. Leases
Finance leases, which efectvely transfer to the Company substantally
all the risks and benefts incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the incepton of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter. Lease
payments are apportoned between the fnance charges and reducton of the
lease liability based on the implicit rate of return. Finance charges
are charged directly against income.
Leases that do not transfer substantally all the risks and rewards of
ownership are classifed as operatng leases and are recorded as expense
on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indicaton that an asset may be impaired. If any such indicaton exits,
the Company estmates the recoverable amount of the asset. Recoverable
amount is the higher of an assets net selling price and value in use.
If such recoverable amount of the asset or the recoverable amount of
the cash generatng unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reducton is treated as an impairment loss and is
recognized in the Proft and Loss Account. If at the balance sheet date
there is an indicaton that if a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the asset is
refected at the recoverable amount subject to a maximum of depreciated
historical cost.
g. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classifed as current investments. All other
investments are classifed as long term investments.
- Long term investments are stated at cost and any decline other than
temporary in the value of investments is charged to proft and loss
account.
- Current investments are stated at the lower of cost and fair value.
h. Foreign currency transactons
Transactons in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transacton.
Monetary assets and liabilites denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
diferences arising on foreign currency transactons are recognised in
the proft and loss account.
In accordance with the announcement of "Accountng for Derivatves" made
by the Insttute of Chartered Accountants of India (''ICAI'') on 29 March
2008, derivatves are marked to market and the changes in the value of
such derivatves, to the extent they refect a loss, are recognized in
proft or loss account.
i. Revenue recogniton
Revenue from sofware services comprises revenue from tme and material
and fxed price contracts. Revenue from tme-and-material contracts is
recognized based on the tme / eforts spent and billed to clients.
In case of fxed-price contracts, revenue is recognized based on the
milestones achieved as specifed in the contracts on percentage of
completon basis.
Revenue from annual maintenance contracts are recognized proportonately
over the period in which services are rendered.
Dividend income is recognized when the Company''s right to receive
dividend is established.
Interest income is recognized on the tme proportonate method.
j. Employee benefts
Provident Fund
Contributons payable to the recognized provident fund which is a defned
contributon scheme are charged to the proft and loss account.
Gratuity
Gratuity liability is a defned beneft obligaton and is recorded based
on actuarial valuaton on projected unit credit method made at the end
of the year. The gratuity liability and net periodic gratuity cost is
actuarially determined afer considering discount rates, expected long
term return on plan assets and increase in compensaton levels. All
actuarial gain/loss are immediately recorded to the proft and loss
account and are not deferred. The Company makes contributons to a fund
administered and managed by the Saksof Employees'' Gratuity Trust to
fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company, employees are required to
avail their annual leave by the end of the respectve calendar year and
leave is not allowed to be encashed. At the end of the fnancial year,
the Company accounts for the remaining short term compensated absences.
k. Taxaton
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income- tax law) and deferred
tax charge or credit (refectng the tax efects of tming diferences
between accountng income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilites or assets are recognised using the tax rates that have been
enacted or substantvely enacted by the balance sheet date. Deferred tax
assets are recognised only to the extent there is reasonable certainty
that the assets can be realised in the future; however, where there is
unabsorbed depreciaton or carried forward loss under taxaton laws,
deferred tax assets are recognised only if there is a virtual certainty
of realisaton of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
writen down or writen-up to refect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
Current tax and deferred tax assets and liabilites are ofset to the
extent to which the Company has a legally enforceable right to set of
and they relate to taxes on income levied by the same governing taxaton
laws.
l. Earnings per share
Basic earnings per share (''EPS'') amounts are computed by dividing the
net proft or loss for the year atributable to equity shareholders by
the weighted average number of shares outstanding during the year.
For the purpose of calculatng diluted earnings per share, the net proft
or loss for the year atributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the efects of all measurable dilutve potental equity
shares.
The shares issued to the Saksof Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
optons have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilutve.
m. Employees stock opton schemes
The Company uses the intrinsic value method of accountng for its
employee share based compensaton plan and other share based
arrangements. Under this method compensaton expense is recorded over
the vestng period of the opton, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contngent liabilites and Contngent assets
A provision is recognised when an enterprise has a present obligaton as
a result of past event; it is probable that an outlow of resources will
be required to setle the obligaton, in respect of which a reliable
estmate can be made. Provisions are not discounted to its present value
and are determined based on best estmate required to setle the
obligaton at the balance sheet date. These are reviewed at each balance
sheet date and adjusted to refect the current best estmate.
A disclosure for contngent liability is made when there is a possible
obligaton or a present obligaton that may, but probably will not,
require an outlow of resources. Where there is a possible obligaton or
a present obligaton in respect of which the likelihood of outlow of
resources is remote, no provision or disclosure is made.
Contngent assets are neither recognised nor disclosed in the fnancial
statements.
Mar 31, 2012
A. Basis of preparation of financial statements
The financial statements are prepared and presented in accordance with
Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises
accounting standards notified by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of the
Institute of Chartered Accountants of India, provisions of the Companies
Act, 1956 and guidelines issued by the Securitas and Exchange Board of
India ('SEBI').
b. Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of contingent
liabilities as at the date of the financial statements. Actual results
could differ from those estimates. Any revision to accounting estimates is
recognized prospectively in current and future periods.
c. Tangible fixed assets, Capital work-in-progress and
depreciation/amortisation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. Cost comprises the purchase price and any attributable cost
of bringing the asset to its working condition for its intended use.
Depreciation is provided on the straight line method at rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 or
based on the estimated useful life of the assets whichever is higher as
follows:
Individual assets costing Rs 5,000/- or less are depreciated at 100% in
the year of purchase. Capital work-in-progress includes the cost of
fxed assets that are not ready for their intended use. Depreciation on
leased assets is charged over the period of lease or the life of the
asset whichever is lower.
d. Intangible assets and amortzaton
Intangible assets comprising intellectual property rights and software
costs are amortzed over a period of 36 and 60 months respectively from
the date of acquisition. Self-generated intellectual property rights /
software assets are generally not capitalized.
e. Leases
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter. Lease
payments are apportioned between the finance charges and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged directly against income.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and are recorded as expense
on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. Recoverable
amount is the higher of an assets net selling price and value in use.
If such recoverable amount of the asset or the recoverable amount of
the cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciated
historical cost.
g. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments.
- Long term investments are stated at cost and any decline other than
temporary in the value of investments is charged to profit and loss
account.
- Current investments are stated at the lower of cost and fair value.
h. Foreign currency transactions
Transactions in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transaction.
Monetary assets and liabilities denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
differences arising on foreign currency transactions are recognised in
the profit and loss account.
In accordance with the announcement of "Accounting for Derivatives" made
by the Institute of Chartered Accountants of India ('ICAI') on 29 March
2008, derivatives are marked to market and the changes in the value of
such derivatives, to the extent they reflect a loss, are recognized in
profit or loss account.
i. Revenue recognition
Revenue from software services comprises revenue from time and material
and fixed price contracts. Revenue from time-and-material contracts is
recognized based on the time / efforts spent and billed to clients.
In case of fixed-price contracts, revenue is recognized based on the
milestones achieved as specified in the contracts on percentage of
completion basis.
Revenue from annual maintenance contracts are recognized proportionately
over the period in which services are rendered.
Dividend income is recognized when the Company's right to receive
dividend is established.
Interest income is recognized on the time proportionate method
j. Employee benefits
Provident Fund
Contributions payable to the recognized provident fund which is a defend
contribution scheme are charged to the profit and loss account.
Gratuity
Gratuity liability is a defend benefit obligation and is recorded based
on actuarial valuation on projected unit credit method made at the end
of the year. The gratuity liability and net periodic gratuity cost is
actuarially determined after considering discount rates, expected long
term return on plan assets and increase in compensation levels. All
actuarial gain/loss are immediately recorded to the profit and loss
account and are not deferred. The Company makes contributions to a fund
administered and managed by the Saksoft Employees' Gratuity Trust to
fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company, employees are required to
avail their annual leave by the end of the respective calendar year and
leave is not allowed to be encashed. At the end of the financial year,
the Company accounts for the remaining short term compensated absences.
k. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income- tax law) and deferred
tax charge or credit (reflecting the tax effects of taming differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred tax
assets are recognised only to the extent there is reasonable certainty
that the assets can be realised in the future; however, where there is
unabsorbed depreciation or carried forward loss under taxation laws,
deferred tax assets are recognised only if there is a virtual certainty
of realisaton of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
written down or written-up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
Current tax and deferred tax assets and liabilities are offset to the
extent to which the Company has a legally enforceable right to set of
and they relate to taxes on income levied by the same governing taxation
laws.
l. Earnings per share
Basic earnings per share ('EPS') amounts are computed by dividing the
net profit or loss for the year attributable to equity shareholders by
the weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net profit
or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all measurable dilute potential equity
shares.
The shares issued to the Saksoft Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
options have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilute.
m. Employees stock option schemes
The Company uses the intrinsic value method of accounting for its
employee share based compensation plan and other share based
arrangements. Under this method compensation expense is recorded over
the vesting period of the option, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contingent liabilities and Contingent assets
A provision is recognised when an enterprise has a present obligation as
a result of past event; 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 are not discounted to its present value
and are determined based on 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 estimate.
A disclosure for contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation or
a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Contingent assets are neither recognized nor disclosed in the financial
statements.
h. Employee Stock option plans ('ESOP')
ESOP 2006 Plan
The ESOP 2006 Plan was introduced by the Company in 2006 under which
the Company grants options from time to time to employees of the Company
and its subsidiaries. This Plan was approved by the Board of Directors
in January 2006 and by the shareholders in February 2006. The Plan
issued in accordance with Securitas and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999, is administered by the Saksoft Employees Welfare Trust
('the Trust') through the compensation committee. The Trust purchased the
shares of the Company using the proceeds of loans obtained from the
Company and administers the allotment of shares to employees and other
related maters. The eligible employees exercise the options under the
terms of the Plan at an exercise price, which equals the fair value on
the date of the grant, until which the shares are held by the Trust.
The Company has allotted 582,460 equity shares of Rs.10 each to the
Trust to give effect to the ESOP Plan. As at the balance sheet date, the
employees have exercised 27,500 options under this Plan and accordingly,
554,960 equity shares of Rs 10 each represent shares held by the Trust.
j. Dues to Micro and small enterprises
The Company has imitated the process of obtaining confirmation from
suppliers who have registered under the Micro, Small and Medium
Enterprises Development Act, 2006. Based on the information available
with the company there is no amount outstanding as on 31.03.2012. There
are no overdue principle amounts and therefore no interest is paid or
payable.
k. Prior year comparatives have been regrouped / reclassified, wherever
necessary, to conform to the current year's presentation.
Mar 31, 2011
A. Basis of preparation of financial statements
The financial statements are prepared and presented in accordance with
Indian Generally Accepted Accounting Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises
accounting standards notified by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of
the Institute of Chartered Accountants of India, provisions of the
Companies Act, 1956 and guidelines issued by the Securities and
Exchange Board of India ('SEBI').
b. Use of estimates
The preparation of the financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of revenues and expenses during the reporting period,
reported balances of assets and liabilities, and disclosure of
contingent liabilities as at the date of the financial statements.
Actual results could differ from those estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
c. Tangible fixed assets, Capital work-in-progress and
depreciation/amortisation
Fixed assets are carried at cost of acquisition less accumulated
depreciation. Cost comprises the purchase price and any attributable
cost of bringing the asset to its working condition for its intended
use.
Depreciation is provided on the straight line method at rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 or
based on the estimated useful life of the assets whichever is higher as
follows:
Description Rate of depreciation
Plant and machinery 20%
Computer equipments 20%
Furniture and fixtures 20%
Office equipments 20%
Vehicles 20%
Electrical installations 20%
Individual assets costing Rs 5,000/- or less are depreciated at 100% in
the year of purchase.
Capital work-in-progress includes the cost of fixed assets that are not
ready for their intended use and advances paid to acquire fixed assets.
Depreciation on leased assets is charged over the period of lease or
the life of the asset whichever is lower.
d. Intangible assets and amortization
Intangible assets comprising intellectual property rights and software
costs are amortized over a period of 36 and 60 months respectively from
the date of acquisition.
e. Leases
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter. Lease
payments are apportioned between the finance charges and reduction of
the lease liability based on the implicit rate of return. Finance
charges are charged directly against income.
Leases that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and are recorded as
expense on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estimates the recoverable amount of the asset. Recoverable
amount is the higher of an assets net selling price and value in use.
If such recoverable amount of the asset or the recoverable amount of
the cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the Profit and Loss Account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the asset is
refected at the recoverable amount subject to a maximum of depreciated
historical cost.
g. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments.
- Long term investments are stated at cost and any decline other than
temporary in the value of investments is charged to profit and loss
account.
- Current investments are stated at the lower of cost and fair value.
h. Foreign currency transactions
Transactions in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transaction.
Monetary assets and liabilities denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
differences arising on foreign currency transactions are recognised in
the profit and loss account.
In accordance with the announcement of "Accounting for Derivatives"
made by the Institute of Chartered Accountants of India ("ICAI") on 29
March 2008, derivatives are marked to market and the changes in the
value of such derivatives, to the extent they refect a loss or
recognized in profit or loss account.
i. Revenue recognition
Revenue from software services comprises revenue from time and material
and fixed price contracts.
Revenue from time-and-material contracts is recognized based on the
time / efforts spent and billed to clients.
In case of fixed-price contracts, revenue is recognized based on the
milestones achieved as specified in the contracts on percentage of
completion basis.
Revenue from annual maintenance contracts are recognized
proportionately over the period in which services are rendered.
Dividend income is recognized when the Company's right to receive
dividend is established. Interest income is recognized on the time
proportionate method.
j. Employee benefits
Provident Fund
Contributions payable to the recognized provident fund which is a
defned contribution scheme are charged to the profit and loss account.
Gratuity
Gratuity liability is a defned benefit obligation and is recorded based
on actuarial valuation on projected unit credit method made at the end
of the year. The gratuity liability and net periodic gratuity cost is
actuarially determined after considering discount rates, expected long
term return on plan assets and increase in compensation levels. All
actuarial gain/loss are immediately recorded to the profit and loss
account and are not deferred. The Company makes contributions to a fund
administered and managed by the Saksoft Employees' Gratuity Trust to
fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company, employees are required to
avail their annual leave by the end of the respective calendar year and
leave is not allowed to be encashed. At the end of the financial year,
the Company accounts for the remaining short term compensated absences.
k. Taxation
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in the future; however, where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognised only if there is a virtual
certainty of realisation of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
written down or written-up to refect the amount that is reasonably/
virtually certain (as the case may be) to be realised. Current tax and
deferred tax assets and liabilities are offset to the extent to which
the Company has a legally enforceable right to set of and they relate
to taxes on income levied by the same governing taxation laws.
l. Earnings per share
Basic earnings per share ('EPS') amounts are computed by dividing the
net profit or loss for the year attributable to equity shareholders by
the weighted average number of shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all measurable dilutive potential equity
shares.
The shares issued to the Saksoft Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
options have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilutive.
m. Employees stock option schemes
The Company uses the intrinsic value method of accounting for its
employee share based compensation plan and other share based
arrangements. Under this method compensation expense is recorded over
the vesting period of the option, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contingent liabilities and Contingent assets
A provision is recognised when an enterprise has a present obligation
as a result of past event; 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 are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to refect the current best
estimate.
A disclosure for contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outlfow of resources. Where there is a possible obligation
or a present obligation in respect of which the likelihood of outlfow
of resources is remote, no provision or disclosure is made.
Contingent assets are neither recognised nor disclosed in the financial
statements.
Mar 31, 2010
A. Basis of preparation of financial statements
The financial statements are prepared and presented in accordance with
Indian Generally Accepted Accountng Principles (GAAP) under the
historical cost convention on the accrual basis. GAAP comprises
accountng standards notfed by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of the
Insttute of Chartered Accountants of India, provisions of the Companies
Act, 1956 and guidelines issued by the Securites and Exchange Board of
the India (ÃSEBI).
b. Use of estmates
The preparation of the financial statements in conformity with GAAP
requires management to make estmates and assumptons that afect the
reported amounts of revenues and expenses during the reportng period,
reported balances of assets and liabilites, and disclosure of contngent
liabilites as at the date of the financial statements. Actual results
could difer from those estmates. Any revision to accountng estmates is
recognized prospectvely in current and future periods.
c. Tangible fxed assets, Capital work-in-progress and
depreciaton/amortsaton Fixed assets are carried at cost of acquisition
less accumulated depreciaton. Cost comprises the purchase price and any
atributable cost of bringing the asset to its working condition for its
intended use.
Depreciation is provided on the straight line method at rates of
depreciation prescribed in Schedule XIV to the Companies Act, 1956 or
based on the estmated useful life of the assets whichever is higher as
follows:
Description Rate of depreciaton
Plant and machinery 20%
Computer equipments 20%
Furniture and fxtures 20%
office equipments 20%
Vehicles 20%
Electrical installatons 20%
Individual assets costng Rs 5,000/- or less are depreciated at 100% in
the year of purchase.
Capital work-in-progress includes the cost of fxed assets that are not
ready for their intended use and advances paid to acquire fxed assets.
Depreciation on leased assets is charged over the period of lease or the
life of the asset whichever is lower.
2. Signifcant accountng policies (contnued)
d. Intangible assets and amortzaton
Intangible assets comprising intellectual property rights and sofware
costs are amortsed over a period of 36 and 60 months respectvely from
the date of acquisiton.
e. Leases
Finance leases, which effectvely transfer to the Company substantally
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the lower of the fair value and present value of the
minimum lease payments at the inception of the lease term and disclosed
as leased assets. If there is reasonable certainty that the lessee will
obtain ownership by the end of the lease term, the period of expected
use is the useful life of the asset; otherwise the asset is depreciated
over the lease term or its useful life, whichever is shorter. Lease
payments are apportoned between the fnance charges and reduction of the
lease liability based on the implicit rate of return. Finance charges
are charged directly against income.
Leases that do not transfer substantally all the risks and rewards of
ownership are classifed as operatng leases and are recorded as expense
on a straight line basis over the lease term.
f. Impairment of assets
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired. If any such indication exits,
the Company estmates the recoverable amount of the asset. Recoverable
amount is the higher of an assets net selling price and value in use.
If such recoverable amount of the asset or the recoverable amount of
the cash generatng unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognized in the profit and Loss Account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exits, the recoverable amount is reassessed and the asset is
reffected at the recoverable amount subject to a maximum of depreciated
historical cost.
g. Investiments
Investiments that are readily realizable and intended to be held for not
more than a year are classifed as current investiments. All other
investiments are classifed as long term investiments.
- Long term investiments are stated at cost and any decline other than
temporary in the value of investiments is charged to profit and loss
account.
- Current investiments are stated at the lower of cost and fair value.
h. Foreign currency transactons
Transactons in foreign currencies are recorded at exchange rates that
approximate the rate prevailing on the dates of the transacton.
Monetary assets and liabilites denominated in foreign currency are
translated at rates of exchange on the balance sheet date. Exchange
diferences arising on foreign currency transactons are recognised in
the profit and loss account.
i. Revenue recogniton
Revenue from sofware services comprises revenue from time and material
and fxed price contracts.
Revenue from time-and-material contracts is recognized based on the time
/ eforts spent and billed to clients.
In case of fxed-price contracts, revenue is recognized based on the
milestones achieved as specifed in the contracts on percentage of
completion basis.
Revenue from annual maintenance contracts are recognized proportonately
over the period in which services are rendered.
Dividend income is recognized when the Companys right to receive
dividend is established.
Interest income is recognized on the time proportonate method.
j. Employee benefits
Provident Fund
Contributons payable to the recognized provident fund which is a defned
contribution scheme are charged to the profit and loss account.
Gratuity
Gratuity liability is a defned benefit obligation and is recorded based
on actuarial valuation on projected unit credit method made at the end
of the year. The gratuity liability and net periodic gratuity cost is
actuarially determined afer considering discount rates, expected long
term return on plan assets and increase in compensation levels. All
actuarial gain/loss are immediately recorded to the profit and loss
account and are not deferred. The Company makes contributons to a fund
administered and managed by the Saksof Employees Gratuity Trust to
fund the gratuity liability.
Compensated Absences
As per the employment policy of the Company, employees are required to
encash their annual leave by the end of the respectve calendar year and
leave is not allowed to be encashed. At the end of the financial year,
the Company accounts for the remaining short term compensated absences.
k. Taxaton
Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reffectng the tax effects of tming diferences
between accountng income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilites or assets are recognised using the tax rates that have been
enacted or substantvely enacted by the balance sheet date. Deferred tax
assets are recognised only to the extent there is reasonable certainty
that the assets can be realised in the future; however, where there is
unabsorbed depreciation or carried forward loss under taxation laws,
deferred tax assets are recognised only if there is a virtual certainty
of realisation of such assets.
Deferred tax assets are reviewed as at each balance sheet date and
writen down or writen-up to reffect the amount that is
reasonably/virtually certain (as the case may be) to be realised.
Current tax and deferred tax assets and liabilites are ofset to the
extent to which the Company has a legally enforceable right to set of
and they relate to taxes on income levied by the same governing taxaton
laws.
l. Earnings per share
Basic earnings per share (ÃEPS) amounts are computed by dividing the
net profit or loss for the year atributable to equity shareholders by
the weighted average number of shares outstanding during the year.
For the purpose of calculatng diluted earnings per share, the net profit
or loss for the year atributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all measurable dilutve potental equity
shares.
The shares issued to the Saksof Employees Welfare Trust have been
considered as outstanding for basic EPS purposes, to the extent the
optons have been exercised by the employees. For diluted EPS purpose,
the shares, which are not yet eligible for exercise, have also been
considered as outstanding to the extent these shares are dilutve.
m. Employees stock option schemes
The Company uses the intrinsic value method of accountng for its
employee share based compensation plan and other share based
arrangements. Under this method compensation expense is recorded over
the vestng period of the opton, if the fair market value of the
underlying stock on the date of the grant exceeds the exercise price.
n. Provisions, Contngent liabilites and Contngent assets
A provision is recognised when an enterprise has a present obligation as
a result of past event; it is probable that an outlow of resources will
be required to setle the obligaton, in respect of which a reliable
estmate can be made. Provisions are not discounted to its present value
and are determined based on best estmate required to setle the
obligation at the balance sheet date. These are reviewed at each balance
sheet date and adjusted to reffect the current best estmate.
A disclosure for contngent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outlow of resources. Where there is a possible obligation or
a present obligation in respect of which the likelihood of outlow of
resources is remote, no provision or disclosure is made.
Contngent assets are neither recognised nor disclosed in the financial
statements.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
Saksoft Ltd. குறித்த கூடுதல் தகவல்களை
-
Saksoft Ltd. டூல்ஸ்
- பல்க் டீல்ஸ்
- பிளாக் டீல்ஸ்
-
Saksoft Ltd. நிறுவன தகவல்கள்
- நிறுவன சுயவிவரம்
- நிறுவன வரலாறு
- நிர்வாக குழு
- மூலதன வடிவம்
- புராடெக்ட் மிக்ஸ்
- வங்கியாளர்/தணிக்கையாளர்/பதிவாளர்
-
நிறுவன வரலாறு
- மும்பை பங்குச் சந்தையில் விலை வரலாறு
- என்எஸ்இ விலை வரலாறு
-
Saksoft Ltd. முக்கிய நிதியில் விகிதங்கள்
- விகிதங்கள்
-
Saksoft Ltd. முடிவுகள்
- காலாண்டு முடிவுகள்
- அரையாண்டு முடிவுகள்
- 9 மாத முடிவுகள்
- வருடாந்திர முடிவுகள்
-
Saksoft Ltd. நிதியியல் தகவல்கள்
- தணிக்கை முடிவுகள்
- பணப்பாய்வு
- இருப்பு நிலைக்குறிப்பு
-
Saksoft Ltd. அறிக்கை
- கணக்கியல் கோட்பாடுகள்
- தணிக்கையாளர்கள் அறிக்கை
- இயக்குநர்கள் அறிக்கை
- கணக்கு குறிப்புகள்
-
Saksoft Ltd. கார்ப்பரேட் அறிவிப்புகள்
- புத்தக முடிவு
- ஈவுத்தொகை
- நிர்வாகக் குழுக் கூட்டங்கள்
