Note 1 : SIGNIFICANT ACCOUNTING POLICIES
1. Corporate Information
Overview and Significant Accounting policies: CAPRICORN SYSTEMS GLOBAL SOLUTIONS LIMITED is a limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956 on 16/03/1985 and registered with register of Companies, Hyderabad with CIN No. L52510TG1985PC043347. The company engages in the business of Information Technology enabled services other related activities.The Equity Shares of the Company are listed on the Bombay Stock Exchange.
Significant Accounting policies:
Statement of compliance
Standalone Financial Statements have been prepared in accordance with the Generally Accepted Accounting Principles in India including Indian Accounting Standards (Ind AS) prescribed under the Section 133 of the Companies Act, 2013 read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended and relevant provisions of the Companies Act, 2013Accordingly, the Company has prepared these Standalone Financial Statements which comprise the Balance Sheet as at 31 March, 2025, the Statement of Profit and Loss for the year ended 31 March 2025, the Statement of Cash Flows for the year ended 31 March 2025 and the Statement of Changes in Equity for the year ended as on that date, and accounting policies and other explanatory information (together hereinafter referred to as 'Standalone Financial Statements' or 'financial statements').These financial statements are approved for issue by the Board of Directors on 29th May 2025.
Basis of preparation of Financial Statements
The separate financial statements of the company are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis as per the provisions of the Companies Act, 2013.Exceptions if any are given with suitable disclosure in the Financial statements wherever we come across.
The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies(Indian Accounting Standards) Rules, 2015 and relevant amendment rules issued thereafter.
Accounting policies have been consistently applied except where a newly issued accountingstandard is initially adopted or a revision to an existing accounting standard requires a changein theaccounting policy hitherto in use.
Use of estimate
The preparation of the financial statements in conformity with Ind AS requires the Management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Actual results could differ from those estimates.
This note provides an overview of the areas where there is a higher degree of judgment or complexity. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation.
A summary of the significant accounting policies applied in the preparation of the financial statements are as given below. These accounting policies have been applied consistently to all the periods presented in the financial statements.
(a) Revenue Recognition
Revenue from Software Development is recognized based on Software Developed and billed asper the terms of specific contracts. Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is recognised based on actual service provided vis-a-vis proportion of
the total services to be provided at the end of the year. Income from dividend if any, isaccounted on cash basis.
(b) Interest income
Interest income is recognized on a time proportion basis considering the amount outstandingand the applicable interest rate. Interest income is included under the head "other income" in thestatement of profit and loss.
(c) Income taxes:
The income tax expense or credit for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current tax
The tax currently payable is based on taxable profit for the year. The Company's current tax is calculated using tax rates and laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Financial Statements and the corresponding tax bases used in the computation of taxable profit.
Minimum Alternate Tax (MAT)
Deferred tax assets include Minimum Alternative Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability.
Current and deferred tax expense is recognised in the Statement of Profit and Loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
(d) Provisions:
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
(e) Employee benefits:
Employee benefits include salaries, wages, contribution to provident fund, gratuity, leave encashment towards un-availed leave and other terminal benefits.
Short-term employee benefits
Wages and salaries, including non-monetary benefits that are expected to be settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
Post-employment benefits:
Defined contribution plan Employee Benefit under defined contribution plans comprises of Contributory provident fund, Post Retirement benefit scheme, Employee pension scheme, composite social security scheme etc. is recognized based on the undiscounted amount of obligations of the Company to contribute
to the plan.The same is paid to a fund administered by Central Government.Contributions are charged to the Profit and Loss Account in the year in which they accrue.
Other long-term employee benefits
Other long-term employee benefit comprises of leave encashment towards un-availed leave and compensated absences, these are recognized based on the present value of defined obligation, which is computed using the projected unit credit method, carried out at the end of each annual reporting period. These are accounted either as current employee cost or included in cost of assets as permitted in the period in which they occur.
(f) Property, plant and equipment:
The cost of property, plant and equipment comprises its purchase price net of any tradediscounts and rebates, any import duties and other taxes (other than those subsequentlyrecoverable from the tax authorities), any directly attributable expenditure on making theasset ready for its intended use, including relevant borrowing costs for qualifying assets andany expected costs of decommissioning. Expenditure incurred after the property, plant andequipment have been put into operation, such as repairs and maintenance, are charged tothe Statement of Profit and Loss in the year in which the costs are incurred.
Property, plant and equipment except freehold land held for use in the production, supply oradministrative purposes, are stated in the balance sheet at cost less accumulated depreciationand accumulated impairment losses, if any.
Depreciation and useful life
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, lessits residual values over their useful lives, using straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013. Depreciation is recognised to write off the cost of assets (otherthan freehold land and properties under construction).
Derecognition
An item of PPE is de-recognised upon disposal or when no future economic benefits are expectedto arise from the continued use of the asset. Any gain or loss arising on the disposal or retirementof an item of property, plant and equipment is determined as the difference between the salesproceeds and the carrying amount of the asset and is recognised in Statement of Profit and Loss.
(g) Intangible assets:
Useful life and amortisation Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and impairment losses. Amortisation is recognised on a straight-line basis over the useful lives of the asset from the date of capitalisation. Intangible assets withindefinite useful lives that are acquired separately are carried at cost less accumulatedimpairment losses.
Intangible assets acquired in a business combination viz. Goodwill, Patents, Copyrights and Brands that do not have definite useful life are not amortised. If events or changes in circumstances indicate that they might be impaired, they are tested for impairment.
Derecognition
Intangible assets are derecognised on disposal, or when no future economic benefits are expectedfrom use or disposal. Gains or losses arising from derecognition of an intangible asset aredetermined as the difference between the net disposal proceeds and the carrying amount The Company has elected to continue with carrying value of all its intangible assets recognised ason transition date, measured as per the previous GAAP and use that carrying value as its deemedcost as of transition date.
(h) Impairment
At the end of each reporting year, the Company reviews the carrying amounts of its tangibleand intangible assets to determine whether there is any indication that those assets havesuffered an impairment loss. If
any such indication exists, the recoverable amount of theasset is estimated in order to determine the extent of the impairment loss (if any). An impairment loss is recognised immediately in the Statementof Profit and Loss.
(i) Work in progress
Particulars As at 31st,March, 2025 As at 31st March, 2024
Capital Work-in-Progress (Rupees in hundreds) 83,500.00 83,500.00
The capital work-in-progress ageing schedule for the years ended March 31,2025 and March 31,2024 is as follows :
Particulars Amount in capital-work-in progress for a period of
Less than 1 year 1-2 years 2-3 years More than 3 Years
Projects in progress (Rupees in Lakhs) - - - 83,500.00
Capital Work-in-Progress includes advances for capital items, capital items under erection and pre- operative expenses pending allocation on the assets to be commissioned.
Completion schedule : Whose completion is over due or has exceeded its cost compared to original plan. No such CWIP for the current reporting period - NIL (previous reporting period).
(j) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably.
(k) Foreign exchange translation
The functional currency of the Company is Indian Rupees which represents the currency ofthe primary economic environment in which it operates. Foreign currency transactions are translated into the functional currency using the exchangerates at the dates of the transactions. Foreign exchange gains and losses resulting fromthe settlement of such transactions are generally recognised in profit or loss. Monetarybalances arising from the transactions denominated in foreign currency are translated tofunctional currency using the exchange rate as on the reporting date. Any gains or loss onsuch translation, are generally recognised in profit or loss. Exchange differences on monetary items are recognised in Statement of Profit and Loss in the year in which they arise.
(l) Cash and cash equivalents
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to insignificant risk of changes in value.
(m) Earnings Per Share:
Basic earnings per shareis calculated by dividing the net profit or loss after tax for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed by dividing the profit or loss after tax after considering the effect of interest and other financing costs or income (net of attributable taxes) associated with dilutive potential equity shares by the weighted average number of equity shares.
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