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Shaping the future of software driven business
Unconsolidated Financials •
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If it is probable that the criteria for the discount will not be met, or if the amount thereof cannot be estimated reliably,
then discount is not recognized until the payment is probable and the amount can be estimated reliably. The company
recognizes changes in the estimated amount of obligations for discounts in the period in which the change occurs.
Unbilled revenue represents revenue recognized in relation to work done until the balance sheet date for which billing has
not taken place.
Unearned revenue represents the billing in respect of contracts for which the revenue is not recognized.
The Company collects Goods and Service Tax, value added taxes (VAT) on behalf of the government and, therefore, these
are not economic benefits flowing to the Company. Hence, they are excluded from revenue.
(ii) Interest
Interest income is recognized on a time proportion basis taking into account the carrying amount and the effective interest
rate. Interest income is included under the head ‘Other income’ in the statement of profit and loss.
(iii) Dividend
Dividend income is recognized when the Company’s right to receive dividend is established. Dividend income is included
under the head ‘Other income’ in the statement of profit and loss.
(i) Government grants
Government grants are recognised at fair value when there is reasonable assurance that the Company will comply with the
conditions attaching to them and the grants will be received. Grants related to purchase of assets are treated as deferred
income and allocated to income statement over the useful lives of the related assets while grants related to expenses are
deducted in reporting the related expenses in the income statement
(j) Foreign currency translation
Foreign currency transactions and balances
Initial recognition
Foreign currency transactions are recorded in the functional currency of the Company, by applying to the foreign currency
amount the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Conversion
Foreign currency monetary items are reported using the exchange rate prevailing at the reporting date. Non-monetary
items, which are measured in terms of historical cost denominated in a foreign currency are reported using the exchange
rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation
denominated in a foreign currency are reported using the exchange rates at the date when the values were determined.
Exchange differences
Exchange differences arising on conversion / settlement of foreign currency monetary items and on foreign currency
liabilities relating to Property, Plant and Equipment acquisition are recognized as income or expenses in the period in
which they arise.
Translation of foreign operations
The Company presents the financial statements in INR which is the functional currency of the Company.
The assets and liabilities of a foreign operation are translated into the reporting currency (INR) at the exchange rate
prevailing at the reporting date.
(k) Retirement and other employee benefits
(i) Provident fund
Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible employees make
a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the
specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident
fund are charged to the statement of profit and loss for the year when the contributions are due. The Company has no
obligation, other than the contribution payable to the provident fund.
Notes forming part of financial statements (Contd.)