Systango Technologies Ltd కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2024

PART- 21B - SIGNIFICANT ACCOUNTING POLICIES & PRACTICES

1 Accounting Convention

1.1 The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, and the relevant provisions of the Companies Act, 2013, as applicable.

1.2 The financial statements have been prepared on the basis of historical cost convention, and on the accounting principle of a going concern.

1.3 The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

2 Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles [GAAP], requires management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and reported amounts of revenues and expenses for the year. Estimates are based on historical experience , where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such difference are dealt within the period in which the results are known / materialize.

3 Property, Plant and Equipment and Intangible Assets

3.1 Property, Plant and Equipment are stated at cost, less accumulated depreciation and impairment, if any. Direct cost are capitalized until such assets are ready for use.

3.2 Tangible Property, Plant and Equipment, that are not yet ready for their intended use, are carried at costs, comprising direct cost, and other incidental/ attributable expenses and reflected under capital work in progress.

3.3 Intangible Assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

4 Investments

Investments are either classified as current or non-current, based on Management''s intention. Current investments are carried at lower of cost and fair value of each investment individually. Non-current investments are carried individually at cost. However, provision for diminution is made to recognize a decline, if any, other than temporary, in the carrying value of the investment.

5 Accounting for taxes on income

5.1 Provision for Income-Tax is made on the basis of the estimated taxable income for the accounting year in accordance with the Income-Tax Act, 1961.

5.2 The deferred tax for timing differences between the book profits and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is a virtual certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

5.3 Specific tax benefits are available to the Company after fulfilling certain conditions. As per section 10AA of the Income Tax Act, 1961 (“IT Act”), a deduction of an amount equal to one hundred percent of the profits and gains derived by an unit located in SEZ for a period of 5 consecutive assessment years beginning from the assessment year relevant to the previous year in which the unit begins to provide services from SEZ is available. Further, an amount equal to fifty percent of the profit and gains is deductible for the next 5 years. The Company has a unit in SEZ and accordingly, is eligible for the aforesaid deduction. However, the aforesaid deductions are not available while computing tax liability of the Company under Minimum Alternative Tax (MAT). Nonetheless, such MAT paid/payable on the book profits of the Company computed in terms of the provisions of IT Act, read with the Companies Act, 2013 would be eligible for credit against tax liability arising under normal provisions of tax post tax holiday period.

6 Depreciation and Amortization

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the Straight Line Method based on useful life and residual value as per the provisions of Schedule II of the Companies Act, 2013 . Intangible Assets are amortized on a Straight Line basis over the estimated useful economic life. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

7 Retirement Benefits

Contributions to defined contribution schemes such as Provident Fund, ESIC and NPS are charged to the Statement of Profit and Loss as incurred. However, for payment of Gratuity and Leave Encashment no provision has been made by the company and the same are accounted for on actual payments basis only.

8 Revenue Recognition

8.1 The company records revenue from services provided on periodical basis in accordance with terms of contract on accrual basis. Items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is not accounted for. Revenue is recognized by excluding all the taxes and cess collectible in respect of such income.

8.2 Interest income is accounted on accrual basis.

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Mar 31, 2023

NOTE - 20 - SIGNIFICANT ACCOUNTING POLICIES & PRACTICES AND OTHER NOTES NOTE - 20A - CORPORATE INFORMATION

The Company was originally incorporated and titled as “Bushcare Overseas Private Limited” on September 17, 2004 under the provisions of the erstwhile Companies Act, 1956 with the Registrar of Companies, Madhya Pradesh and Chattisgarh with CIN:U51109MP2004PTC016959. Pursuant to Special Resolution passed by the shareholders at the Extra Ordinary General Meeting held on August 11, 2006, the name of the Company was changed from “Bushcare Overseas Private Limited” to “Systematix Technocrates Private Limited” and a fresh certificate of incorporation consequent upon change of name was issued by the Registrar of Companies, Madhya Pradesh and Chattisgarh vide letter dated August 18, 2006. Further, pursuant to Special Resolution passed by the shareholders at the Extra OrdinaryGeneral Meeting held on May 05, 2016, the name of the Company was again changed from “Systematix Technocrates Private Limited” to “Systango Technologies Private Limited” and a fresh certificate of incorporation consequent upon change of name was issued by the Registrar of Companies, Gwalior vide letter dated May 18, 2016. Subsequently, pursuant to Special Resolution passed by the Shareholders at the Extra Ordinary General Meeting, held on December 13, 2022 the Company was converted into a Public Limited Company and consequently the name of the Company was changed from “Systango Technologies Private Limited” to “Systango Technologies Limited” vide a fresh certificate of incorporation consequent upon conversion from private company to public company dated December 27, 2022 issued by the Registrar of Companies, Gwalior bearing CIN:U51109MP2004PLC016959. The registered office of the company is situated at 3rd Floor, LHS, STP-1, Crystal IT Park, Ring Road, Indore. The shares of the Company are listed on National Stock Exchange (Emerge Platform) w.e.f. 15th March, 2023. The Company is principally engaged in supplying Software and Development Services.

PART- 20B - SIGNIFICANT ACCOUNTING POLICIES & PRACTICES

1 Accounting Convention

1.1 The financial statements of the Company have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) to complywith the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014, and the relevant provisions of the Companies Act, 2013, as applicable.

1.2 The financial statements have been prepared on the basis of historical cost convention, and on the accounting principle of a going concern.

1.3 The Company follows mercantile system of accounting and recognizes income and expenditure on accrual basis except those with significant uncertainties.

2 Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles [GAAP], requires management to make estimates and assumptions that are considered in the reported amounts of assets and liabilities and disclosures of contingent liabilities on the date of financial statements and reported amounts of revenues and expenses for the year. Estimates are based on historical experience , where applicable and other assumptions that management believes are reasonable under the circumstances. Actual results could vary from these estimates and any such difference are dealt within the period in which the results are known / materialize.

3 Property, Plant and Equipment and Intangible Assets

3.1 Property, Plant and Equipment are stated at cost, less accumulated depreciation and impairment, if any. Direct cost are capitalized until such assets are ready for use.

3.2 Tangible Property, Plant and Equipment, that are not yet ready for their intended use, are carried at costs, comprising direct cost, and other incidental/ attributable expenses and reflected under capital work in progress.

3.3 Intangible Assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

4 Investments

Investments are either classified as current or non-current, based on Management''s intention. Current investments are carried at lower of cost and fair value of each investment individually. Non-current investments are carried individually at cost. However, provision for diminution is made to recognize a decline, if any, other than temporary, in the carrying value of the investment.

5 Accounting for taxes on income

5.1 Provision for Income-Tax is made on the basis of the estimated taxable income for the accounting year in accordance with the Income-Tax Act, 1961.

5.2 The deferred tax for timing differences between the book profits and tax profits for the year is accounted for using the tax rates and laws that have been enacted or substantially enacted as of the balance sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is a virtual certainty that these would be realized in future and are reviewed for the appropriateness of their respective carrying values at each balance sheet date.

5.3 Specific tax benefits are available to the Company after fulfilling certain conditions. As per section 10AA of the Income Tax Act, 1961 (“IT Act”), a deduction of an amount equal to one hundred percent of the profits and gains derived by an unit located in SEZ for a period of 5 consecutive assessment years beginning from the assessment year relevant to the previous year in which the unit begins to provide services from SEZ is available. Further, an amount equal to fifty percent of the profit and gains is deductible for the next 5 years. The Company has a unit in SEZ and accordingly, is eligible for the aforesaid deduction. However, the aforesaid deductions are not available while computing tax liability of the Company under Minimum Alternative Tax (MAT). Nonetheless, such MAT paid/payable on the book profits of the Company computed in terms of the provisions of IT Act, read with the Companies Act, 2013 would be eligible for credit against tax liability arising under normal provisions of tax post tax holiday period.

6 Depreciation and Amortization

Depreciation is recognised so as to write off the cost of assets less their residual values over their useful lives, using the Straight Line Method based on useful life and residual value as per the provisions of Schedule II of the Companies Act, 2013 . Intangible Assets are amortized on a Straight Line basis over the estimated useful economic life. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

7 Retirement Benefits

Contributions to defined contribution schemes such as Provident Fund, ESIC and NPS are charged to the Statement of Profit and Loss as incurred. However, for payment of Gratuity and Leave Encashment no provision has been made by the company and the same are accounted for on actual payments basis only.

8 Revenue Recognition

8.1 The company records revenue from services provided on periodical basis in accordance with terms of contract on accrual basis. Items of revenue are recognized in accordance with the Accounting Standard (AS-9). Accordingly, wherever there are uncertainties in the ascertainment/ realization of income, the same is not accounted for. Revenue is recognized by excluding all the taxes and cess collectible in respect of such income.

8.2 Interest income is accounted on accrual basis.

9 Provisions and Contingent Liabilities

The Company creates a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and reliable estimate can be made of the amount of the obligation. A disclosure for a 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 present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

10 Impairment of Assets

An asset is treated impaired when the carrying cost of assets exceeds its recoverable value. 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 recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

11 Cash Flow Statement

Cash flow statement are reported using the indirect method, whereby profit / (loss) before extra-ordinary items / exceptional items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flow from operating, investing and financing activities of the Company are segregated based on available information.

12 Foreign Currency Transactions and Translations

(a) Transactions in foreign currencies are initially recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.

(b) Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets which are capitalised as cost of assets.