AAA Technologies Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

Note 2- Significant Accounting Policies

This note provides a list of the significant accounting
policies adopted in the preparation of these financial
statements. The accounting policies have been
consistently applied by the

Company unless otherwise stated or where a newly
issued accounting standard is initially adopted.

A. Basis of preparation

i. Statement of compliance

These financial statements are prepared in
accordance with Indian Accounting Standards
(hereinafter referred to as “Ind AS”) under the
provisions of the Companies Act, 2013 (hereinafter
referred to as ''the Act'') (to the extent notified).
The Ind AS are prescribed under Section 133
of the Act read with Rule 3 of the Companies
(Indian Accounting Standards) Rules, 2015 and
Companies (Indian Accounting Standards)
Amendment Rules, 2016.

ii. Basis of preparation

The financial statements have been prepared
on historical cost basis except the following
assets and liabilities which have been measured
at fair value amount:

• certain financial assets and liabilities
(including derivative instruments)

• defined benefit plans- plan assets; and

• Equity-settled Share Based Payments

The Financial statements of the Company are
presented in Indian Rupees, which is also its
functional currency.

B. Summary of significant accounting policies

i. Current versus non-current classification

The Company presents assets and liabilities
in the balance sheet based on current /
non-current classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be
sold or consumed in normal operating cycle.

• Held primarily for the purpose of trading.

• Expected to be realized within twelve months
after the reporting date, or

• Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least telve months after the
reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal
operating cycle.

• It is due to be settled within twelve months
after the reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

All other liabilities are classified as noncurrent.

Deferred tax assets and liabilities are classified
as non-current assets and liabilities.

Based on the nature of services offered by
the Company, operating cycle determined
is 12 months for the purpose of current and
non-current classification of assets and liabilities.

The operating cycle is the time between the
acquisition of assets for processing and their
realisation in cash and cash equivalents,

ii. Segment Reporting

The company identifies operating segments
based on the internal reporting provided to the
chief operating decision-maker.

The accounting policies adopted for segment
reporting are in line with the accounting policies
of the Company.

iii. Foreign Currencies

Transaction and balances

Transactions in foreign currencies are initially
recorded by the company in their functional
currency at the exchange rate prevailing on the
date of transaction.

Monetary assets and liabilities denominated in
foreign currencies are translated at the functional
currency using rate of exchange prevailing on the
balance sheet date.

Exchange differences arising on the settlement or
translation of monetary items are recognized in
the statement of profit or loss except where:

• exchange differences on foreign currency
borrowings relating to assets under
construction for future productive use, which
are included in the cost of those assets when
they are regarded as an adjustment to interest
costs on those foreign currency borrowings.

• exchange differences on transactions entered
into in order to hedge certain foreign currency
risks.

• exchange differences on monetary items
receivable from or payable to a foreign
operation for which settlement is neither
planned nor likely to occur (therefore
forming part of the net investment in foreign
operation), which are recognised initially in
other comprehensive income and reclassified
from equity to profit or loss on repayment of
the monetary items.

Non-monetary items that are measured in
terms of historical cost in a foreign currency are
recorded using the exchange rates as at the dates
of the initial transactions. Non-monetary items
measured at fair value in a foreign currency are
translated using the exchange rates on the date
when the fair value was measured. The gain or
loss arising on translation of non-monetary items
measured at fair value is treated in line with the
recognition of the gain or loss on the change in
fair value of the item (i.e. translation differences on
items whose fair value gain or loss is recognised
in OCI or profit or loss are also recognised in OCI
or profit or loss, respectively).

iv. Revenue recognition

The Company derives revenue primarily from
activities in IS Audit, Information Security Audit,
Cyber Security Audit, IT Assurance & Compliance
and IT Governance.

Revenue is recognised on the basis of services
rendered to clients. Revenue is recognized
upon transfer of control of promised services
to customers in an amount that reflects the
consideration we expect to receive in exchange
for those services. Arrangement for services is
either on a fixed price, fixed-timeframe or on a
time basis.

Trade receivable and unbilled revenues are
presented net of impairment in the Balance Sheet.

Professional Fees includes work contracts, if
any. Revenue from sale of services is shown as
including goods and services tax.

Interest Income

Interest income from financial assets is recognized
when it is probable that economic benefits will
flow to the company and the amount of income
can be measured reliably. Interest income is
accrued on a time basis, by reference to the
principal outstanding and at the effective interest
rate applicable.

Dividend Income

Dividend income from investments is recognised
when the shareholder''s right to receive payment
has been established (provided that it is probable
that the economic benefits will flow to the
company and the amount of income can be
measured reliably).

Insurance claims

Insurance claims are accounted for based on
claims admitted / expected to be admitted and to
the extent that there is no uncertainty in receiving
the claims.

v. Property, Plant and Equipment

Land and buildings held for use in the production
or supply of goods or services, or for administrative
purposes, are stated in the balance sheet
at cost less accumulated depreciation and
accumulated impairment losses. Freehold land is
not depreciated.

All items of property, plant and equipment are
initially recorded at cost. Such cost includes the
cost of replaced part of the property, plant and
equipment and borrowing costs that are directly
attributable to the acquisition, construction or
production of a qualifying property, plant and
equipment. The cost of an item of property, plant
and equipment is recognized as an asset if, and

only if, it is probable that future economic benefits
associated with the item will flow to the company
and the cost of the item can be measured reliably.
The property, plant and equipment are stated
in the balance sheet at cost less accumulated
depreciation and accumulated impairment
losses.

Depreciation is recognised to write off the cost of
assets (other than freehold land) less their residual
values over the useful lives, using the written down
value method (“WDV”). The useful lives are taken
as per schedule II of Companies Act, 2013.

The carrying values of property, plant and
equipment are reviewed for impairment when
events or changes in circumstances indicate that
the carrying value may not be recoverable.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from
the continued use of the asset. Any gain or loss
arising on disposal or retirement of an item of
property, plant and equipment is determined as
the difference between sale proceeds and the
carrying amount of the asset and is recognised
in profit or loss.

vi. Intangible Asset

Intangible assets purchased are measured at
cost as of the date of acquisition, as applicable,
less accumulated amortisation and accumulated
impairment, if any.

vii. Taxation

Income tax expense comprises current tax
expense and the net change in the deferred tax
asset or liability during the year. Current and
deferred taxes are recognized statement of profit
and loss except to the extent that it relates to
items recognized directly in other comprehensive
income or equity, in which case it is recognized
in other comprehensive income or equity
respectively.

Current taxes

Current income tax is recognized at the amount
expected to be paid to or recovered from the tax
authorities, using the tax rates and tax laws that
have been enacted or substantively enacted by
the balance sheet date. The Company offsets, on
a year to year basis, the current tax assets and
liabilities, where it has legally enforceable right to
do so and where it intends to settle such assets
and liabilities on a net basis.

Deferred taxes

Deferred tax is recognized on 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 and are accounted for using the balance
sheet liability method.

Deferred tax liabilities are generally recognized
for all taxable temporary differences, and
deferred tax assets are generally recognized
for all deductible temporary differences to the
extent that it is probable that taxable profits will
be available against which those deductible
temporary differences can be utilized. Such
assets and liabilities are not recognized if the
temporary difference arises from goodwill or from
the initial recognition (other than in a business
combination) of other assets and liabilities in a
transaction that affects neither the taxable profit
nor the accounting profit.

Deferred tax relating to items recognised outside
the profit and loss is recognised either in other
comprehensive income or in equity.

The carrying amount of deferred tax assets
is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation
authority and the Company intends to settle its current
tax assets and liabilities on a net basis.

viii. Fair Value Measurement

Fair value is the price that would be received
to sell an asset or paid to settle a liability in an
orderly transaction between market participants
at the measurement date, regardless of whether
that price is directly observable or estimated
using another valuation technique

ix. Impairment of Non-Financial Assets

At the end of each reporting period, the company
reviews the carrying amounts of its tangible and
intangible assets to determine whether there is
any indication that those assets have suffered an
impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in
order to determine the extent of impairment loss
(if any).

When it is not possible to estimate the
recoverable amount of an individual asset, the

company estimates the recoverable amount
of the cash-generating unit to which the asset
belongs. When a reasonable and consistent basis
of allocation can be identified, corporate assets
are also allocated to individual cash generating
units, or otherwise they are allocated to the
smallest group of cash-generating units for which
a reasonable and consistent allocation basis can
be identified.

Intangible assets with indefinite useful lives and
intangible assets not yet available for use are
tested for impairment at least annually, and
whenever there is an indication that the asset
may be impaired.

Recoverable amount is the higher of fair value less
costs of disposal and value in use. In assessing
value in use, the estimated future cash flows
are discounted to their present value using a
pre-tax discount rate that reflects current market
assessments of the time value of money and the
risks specific to the asset for which the estimates
of future cash flows have not been adjusted. If the
recoverable amount of an asset (or cash generating
unit) is estimated to be less than it is carrying
amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized in the
profit or loss.

When an impairment loss subsequently
reverses, the carrying amount of the asset (or
a cash-generating unit) is increased to the
revised estimate of its recoverable amount, but
so that the increased carrying amount does not
exceed the carrying amount that would have
been determined had no impairment loss been
recognised for the asset (or cash-generating
unit) in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss.

x. Borrowing Costs

Borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets that
necessarily takes a substantial period to get ready
for their intended use or sale are added to the cost
of those assets, until such time as the assets are
substantially ready for their intended use or sale. All
other borrowing costs are recognised in statement of
profit and loss in the period in which they are incurred.

xi. Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Incremental costs
directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of
tax, from the proceeds.

xii. Dividends

Provision is made for any dividend declared,
being appropriately authorized and no longer at
the discretion of the Company, on or before the
end of the reporting period but not distributed at
the end of the reporting period.

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Mar 31, 2024

Note 2- Significant Accounting Policies

This note provides a list of the significant accounting policies adopted in the preparation of these financial statements. The accounting policies have been consistently applied by the Company unless otherwise stated or where a newly issued accounting standard is initially adopted.

A. Basis of preparation

i. Statement of compliance

These financial statements are prepared in accordance with Indian Accounting Standards (hereinafter referred to as "Ind AS") under the provisions of the Companies Act, 2013 (hereinafter referred to as ''the Act'') (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

ii. Basis of preparation

The financial statements have been prepared on historical cost basis except the following assets and liabilities which have been measured at fair value amount:

• Certain financial assets and liabilities (including derivative instruments)

• Defined benefit plans- plan assets; and

• Equity-settled Share Based Payments

The Financial statements of the Company are presented in Indian Rupees, which is also its functional currency.

B. Summary of significant accounting policies

i. Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current /non-current classification.

An asset is treated as current when it is:

• Expected to be realized or intended to be sold or consumed in normal operating cycle.

• Held primarily for the purpose of trading.

• Expected to be realized within twelve months after the reporting date, or

• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle.

• It is due to be settled within twelve months after the reporting period, or

• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as noncurrent.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

Based on the nature of services offered by the Company, operating cycle determined is 12 months for the purpose of current and non-current classification of assets and liabilities.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents,

ii. Segment Reporting

The company identifies operating segments based on the internal reporting provided to the chief operating decision-maker.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company.

iii. Foreign Currencies

Transaction and balances

Transactions in foreign currencies are initially recorded by the company in their functional currency at the exchange rate prevailing on the date of transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency using rate of exchange prevailing on the balance sheet date.

Exchange differences arising on the settlement or translation of monetary items are recognized in the statement of profit or loss except where:

• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.

• Exchange differences on transactions entered into in order to hedge certain foreign currency risks.

• Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates on the date when the fair value was measured. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).

iv. Revenue recognition

The Company derives revenue primarily from activities in IS Audit, Information Security Audit, Cyber Security Audit, IT Assurance & Compliance and IT Governance.

Revenue is recognized on the basis of services rendered to clients. Revenue is recognized upon transfer of control of promised services to customers in an amount that reflects the consideration we expect to receive in exchange for those services. Arrangement for services is either on a fixed price, fixed-timeframe or on a time basis.

Trade receivable and unbilled revenues are presented net of impairment in the Balance Sheet. Professional Fees includes work contracts, if any. Revenue from sale of services is shown as including goods and services tax.

Interest Income

Interest income from financial assets is recognized when it is probable that economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.

Dividend Income

Dividend income from investments is recognised when the shareholder''s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).

Insurance claims

Insurance claims are accounted for based on claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

v. Property, Plant and Equipment

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.

All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replaced part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably. The property, plant and equipment are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is recognized to write off the cost of assets (other than freehold land) less their residual values over the useful lives, using the written down value method ("WDV"). The useful lives are taken as per schedule II of Companies Act, 2013.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between sale proceeds and the carrying amount of the asset and is recognized in profit or loss.

vi. Intangible Asset

Intangible assets purchased are measured at cost as of the date of acquisition, as applicable, less accumulated amortization and accumulated impairment, if any.

vii. Taxation

Income tax expense comprises current tax expense and the net change in the deferred tax asset or liability during the year. Current and deferred taxes are recognized statement of profit and loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity respectively.

Current taxes

Current income tax is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The Company offsets, on a year to year basis, the current tax assets and liabilities, where it has legally enforceable right to do so and where it intends to settle such assets and liabilities on a net basis.

Deferred taxes

Deferred tax is recognized on 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 and are accounted for using the balance sheet liability method.

Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax relating to items recognized outside the profit and loss is recognized either in other comprehensive income or in equity.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

viii. Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to settle a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique

ix. Impairment of Non-Financial Assets

At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have

suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (if any).

When it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than it is carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized in the profit or loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

x. Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets that necessarily takes a substantial period to get ready for their intended use or sale are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognized in statement of profit and loss in the period in which they are incurred.

xi. Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

xii. Dividends

Provision is made for any dividend declared, being appropriately authorized and no longer at the discretion of the Company, on or before the end of the reporting period but not distributed at the end of the reporting period.