1.1 Corporate Information
Tridhya Tech Limited (the company) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 2013. The company is engaged in the Information technology business.
1.2 Summary of Significant Accounting Policies
1.2.1 Basis of Preparation of Accounts
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles in India.
All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non-current classification of assets and liabilities.
1.2.2 Use of Estimates
The preparation of financial statements requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, disclosure of contingent liabilities as at the date of the financial statements and revenue and expenses during the reporting period. Management believes that these estimates and assumptions are reasonable and prudent. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates. However, actual results could differ from assumptions and estimates. Difference between the actual results and estimates are recognised in the period in which the results are known / materialized.
1.2.3 Revenue Recognition
Revenue from Operations includes revenue from rendering of software development services and other revenue incidental to it. Revenue from services is recognised as the service is performed and there is no uncertainty to expect ultimate collection of its consideration. The performance of service is measured using percentage completion method.
1.2.4 Property, Plant & Equipments
All Fixed Assets are recorded at cost including taxes, duties, freight and other incidental expenses incurred in relation to their acquisition and bringing the asset to its intended use.
1.2.5 Depreciation/Amortisation
Depreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act, 2013. Individual assets cost of which doesn't exceed Rs. 5,000/- each are depreciated in full in the year of purchase. Intangible assets including internally developed intangible assets are amortised over the year for which the company expects the benefits to accrue. Intangible Asset - Software is amortised with a useful life of 3 years.
1.2.6 Current Tax and Deferred Tax
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income-tax Act, 1961.
Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty with convincing evidence that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.
1.2.7 Provisions, Contingent Liabilities and Contingent Assets
Provision involving substantial degree of estimation in measurement is recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
1.2.8 Cash and Cash Equivalents
Cash and cash equivalents comprise cash and deposit with banks. Cash equivalents are short-term balances (with an original maturity of 3 months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.2.9 Impairment of Assets
An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. Recoverable amount is the higher of an asset's net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Net selling price is the amount obtainable from sale of the asset in an arm's length transaction between knowledgeable, willing parties, less the costs of disposal. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of the recoverable value.
1.2.10 Earning per Share
Basic earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity share outstanding during the year. Diluted earning per share is computed by dividing the profit/ (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
1.2.11 Foreign Currency Transactions
(a) Initial Recognition
The Foreign Currency Transaction are recorded initially by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(b) Subsequent Recognition on Balance Sheet Date
(i) Foreign Currency Monetary Items are be reported using the closing rates.
(ii) Non-monetary Items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
(iii) Non-monetary items which are carried at fair value are reported using the exchange rates that existed when the values were determined.
(c) Recognition of Exchange Difference
Exchange differences arising on the settlement of monetary items during the year or on reporting an enterprise's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses during the year.
1.2.12 Retirement Benefits to Employees - Gratuity
The Company provides for gratuity, a defined benefit retirement plan ('the Gratuity Plan') covering eligible employees. The Gratuity Plan provides a payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount as per the as per the Payment of Gratuity, 1972.
Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company recognizes the obligation of the gratuity plan in the Balance Sheet as a liability in accordance with Accounting Standard (AS) 15, 'Employee Benefits'. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Statement of Profit and Loss in the period in which they arise.
1.2.13 Operating Lease
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss, on a straight-line basis over the lease term.
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