Hypersoft Technologies Ltd. कंपली की लेखा नीति

Mar 31, 2025

Material Accounting Policies:

Revenue from operations

Revenue is recognised when control of goods or services is transferred to the customer, at an
amount that reflects the consideration to which the Company expects to be entitled in exchange
for those goods or services. Revenue is measured net of discounts, rebates, and applicable
indirect taxes, including Goods and Services Tax (GST). GST collected on behalf of the
government is not considered revenue of the Company.

The Company generates revenue primarily from software development services,
implementation projects, and related support services. Revenue recognition is based on the
type of contract:

• Time-and-material contracts: Revenue is recognised as the services are rendered, based on
hours worked and contractual billing rates.

• Fixed-price contracts: Revenue is recognised over time using the percentage-of-completion
method, determined based on the proportion of costs incurred to date relative to the estimated

total costs of the contract. When it is probable that total contract costs will exceed total
contract revenue, the expected loss is recognised immediately in profit or loss.

• Unbilled revenue represents revenue recognised in excess of amounts billed, where the right
to payment is not yet unconditional.

• Unearned revenue represents amounts billed in advance of services being rendered and is
recognised as a liability until the revenue recognition criteria are met.

• Advances from customers are recorded as liabilities until performance obligations are
satisfied and revenue is recognised.

Interest income is recognised using the effective interest method.

Dividend income is recognised when the Company’s right to receive payment is established.
Property, Plant and Equipment and Intangible assets

Property, plant and equipment are stated at the cost of acquisition or construction less
accumulated depreciation and write down for, impairment if any. Direct costs are capitalised
until the assets are ready to be put to use. When significant parts of plant and equipment are
required to be replaced at intervals, the Company depreciates them separately based on their
specific useful lives.

All other repair and maintenance costs are recognised in the statement of profit or loss as
incurred. Property, plant and equipment purchased in foreign currency are recorded at cost,
based on the exchange rate on the date of purchase.

The Company identifies and determines cost of each component/ part of Property, plant and
equipment separately, if the component/ part has a cost which is significant to the total cost of
the Property, plant and equipment and has useful life that is materially different from that of the
remaining asset.

Intangible assets purchased or acquired in business combination, are measured at cost or fair
value as of the date of acquisition, as applicable, less accumulated amortisation and
accumulated impairment, if any. The amortization period and the amortization method are
reviewed at least at each financial year end. Internally developed intangible assets are stated at
cost that can be measured reliably during the development phase and capitalised when it is
probable that future economic benefits that are attributable to the assets will flow to the
Company.

Gains or losses arising from de-recognition of Property, plant and equipment are measured as
the difference between the net disposal proceeds and the carrying amount of Property, plant
and equipment and are recognized in the statement of profit and loss when the Property, plant
and equipment is derecognized.

Cost of assets not ready for use at the balance sheet date are disclosed under capital work-in¬
progress.

Depreciation And Amortisation

Depreciation on Property, plant and equipment is calculated on a straight-line basis using the
rates arrived at, based on the useful lives estimated by the management. Intangible assets are
amortised on a straight- line basis over the estimated useful economic life.

Impairment :

a) Financial Assets (Other Than At Fair Value)

The Company assesses at each date of balance sheet whether a financial asset or a group of
financial assets is impaired. Ind AS 109 (‘Financial Instruments’) requires expected credit losses
to be measured through a loss allowance. The Company recognises lifetime expected losses for
all contract assets and / or all trade receivables that do not constitute a financing transaction.
For all other financial assets, expected credit losses are measured at an amount equal to the
12-month expected credit losses or at an amount equal to the life time expected credit losses if
the credit risk on the financial asset has increased significantly since initial recognition. The
Company provides for impairment upon the occurrence of the triggering event. As per the policy,
The Company provides for impairment of trade receivables (other than intercompany
receivables) outstanding more than 180 days from the date they are due for payment.

b) Non-Financial Assets

Tangible and Intangible Assets

Property, plant and equipment and intangible assets with finite life are evaluated for
recoverability whenever there is any indication that their carrying amounts may not be
recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value
less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset
does not generate cash flows that are largely independent of those from other assets. In such
cases, the recoverable amount is determined for the cash generating unit (CGU) to which the
asset belongs.

If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount,
the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment
loss is recognised in the statement of profit and loss.

Retirement And Other Employee Benefits

Gratuity, which is a defined benefit plan, is accrued based on an independent actuarial
valuation, which is done based on project unit credit method as at the balance sheet date. The
Company recognizes the net obligation of a defined benefit plan in its balance sheet as an asset
or liability. Gains and losses through re-measurements of the net defined benefit liability/(asset)
are recognized in other comprehensive income. In accordance with Ind AS, re-measurement
gains and losses on defined benefit plans recognized in OCI are not to be subsequently
reclassified to statement of profit and loss. As required under Ind AS compliant Schedule III, the
Company transfers it immediately to retained earnings.

The cost of Short-term compensated absences is provided for based on estimates. Long term
compensated absence costs are provided for based on actuarial valuation using the project unit
credit method. The Company presents the entire leave as a current liability in the balance sheet,
since it does not have an unconditional right to defer its settlement for 12 months after the
reporting date.

Contributions payable to recognized provident funds, which are defined contribution schemes,
are charged to the statement of profit and loss.

Foreign Currencies

Foreign currency transactions are recorded at exchange rates prevailing on the date of the
transaction. Foreign currency denominated monetary assets and liabilities are restated into the
functional currency using exchange rates prevailing on the balance sheet date.

Gains and losses arising on settlement and restatement of foreign currency denominated
monetary assets and liabilities are included in the statement of profit and loss.

The Company’s financial statements are presented in INR. The Company determines the
functional currency as INR on the basis of primary economic environment in which the entity
operates.

Income Taxes

Income tax expense comprises current tax expense and the net change in the deferred tax asset
or liability during the year. Current and deferred tax are 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.

Current Income Tax

Current income tax for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the taxable income for that period.
The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance sheet date.

Deferred Income Tax

Deferred income tax is recognised using the balance sheet approach. Deferred tax is recognized
on temporary differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes, except when the deferred
income tax arises from the initial recognition of goodwill or an asset or liability in a transaction
that is not a business combination and affects neither accounting nor taxable profit or loss at
the time of the transaction.

Deferred income tax assets are recognized for all deductible temporary differences, carry
forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary differences, and the carry
forward of unused tax credits and unused tax losses can be utilized.

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

Deferred income taxes are not provided on the undistributed earnings of branches where it is
expected that the earnings of the branch will not be distributed in the foreseeable future.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply in the period when the asset is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the balance sheet date.

Effective Apr 2018, the Company has adopted Ind-AS. Due to the various constraints the
Management could not determine the Differed tax effects at the end of previous reporting
period. However, during the current reporting period the Company has evaluated the effect of
deferred taxes and made necessary adjustments to the statement of Profit & Loss and to the
Balance Sheet. Refer Note No 6.2 of the Financial statements.

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. Accordingly, MAT is recognized as deferred tax asset in the
balance sheet when the asset can be measured reliably and it is probable that the future
economic benefit associated with the asset will be realized.

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Mar 31, 2024

Note 1: MATERIAL ACCOUNTING POLICIES
A: CORPORATE INFORMATION

The accompanying financial statements comprise the financial statements of HYPERSOFT
Technologies Limited (the Company). The Company is a public Company domiciled in India and
is incorporated under the provisions of the Companies Act applicable in India. The registered
office of the Company is located at Hyderabad, Telangana, India.

B. BASIS OF ACCOUNTING:

The financial statements are prepared and presented in accordance with Generally Accepted
Accounting Principles in India (GAAP), mainly comprising the mandatory Accounting
Standards(IND AS) as notified under section 133 of the Companies Act, 2013 read with the
Companies(Indian Accounting Standards) Rules, 2015 to the extent applicable and the provisions
of the Companies Act, 2013.

Balance Sheet , Statement of Profit and Loss, Cash Flow Statement and Statement of Changes in
Equity are prepared in conformity with Accounting Standards as prescribed under Section 133 of
the Companies Act, 2013 (‘Act’) , the provisions of the Act (to the extent notified) and guide
lines issued by the Securities and Exchange Board of India (SEBI).

Accounting policies have been consistently applied except where a newly issued Accounting
Standard is initially adopted or a revision to an existing Accounting Standard requires a change
in accounting policy hitherto in use.

The company generally follows mercantile system of Accounting and recognizes significant
items of income and expenditure on accrual basis.

C. USE OF ESTIMATES:

The preparation of Financial Statements in conformity with GAAP requires estimates and
assumptions (including revisions if any) that affect the reported amount of assets and liabilities,
disclosure of contingent liability on the date of financial statements and the reported amount of
Revenue and expenses during the reporting period. Differences between the actual results and
estimates are recognized in the period in which the results are known/materialized.

This note provides an overview of the areas that involve a higher degree of judgment or
complexity, and of items which are more likely to be materially adjusted due to estimates and
assumptions turning out to be different than those originally assessed. Detailed information about
each of these estimates and judgments is included in the relevant notes together with information
about the basis of calculation for each affected line item in the financial statements.

Critical Estimates and judgments

The areas involving critical estimates or judgments are:

• Estimation of current tax expense and payable

• Estimation of defined benefit obligation

• Estimation of useful life of Property, Plant and Equipment

• Impairment of trade receivables

D. BASIS OF MEASUREMENT

The financial statements have been prepared on a historical cost basis except for certain assets
and liabilities which have been measured at fair value as per applicable IND AS accounting
standards.

The Financial Statements are presented in Indian Rupees (INR), except when otherwise
indicated, which is the functional currency of the Company.

E. REVENUE RECOGNITION:

The Company derives revenues primarily from business IT services comprising of software
development and related products.

Revenue is recognised upon transfer of control of promised products or services to
customers in an amount that reflects the consideration we expect to receive in exchange for
those products or services.

Interest income is accrued on a time basis, by reference to the principal outstanding and the
applicable effective interest rate.

F. PROPERTY, PLANT & EQUIPMENT:

Property, Plant & Equipment are disclosed at historical cost of acquisition.

G. DEPRECIATION:

During the year, depreciation is provided on the straight line method and based on the useful
life and in the manner specified in schedule II of the Companies Act, 2013.

H. PRIOR PERIOD / PREPAID EXPENSES:

Expenditure less than Rs.10,000/- are not classified into Prior Period Expenditure or Prepaid
Expenses in view of the fact that they are not material in nature.

I. FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign currencies are accounted at functional currency, at the exchange rate
prevailing on the date of transactions. Gains / losses arising out of the fluctuations in the
exchange rate between functional currency and foreign currency are recognized in the Statement
of Profit & Loss in the period in which they arise.

The fluctuations between foreign currency and functional currency relating to monetary items at
the year ending are accounted as gains / losses in the Statement of Profit & Loss

J) INCOME TAX

Tax expense comprises of current and deferred 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.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at
the end of the reporting period. The management periodically evaluates positions taken in tax returns with
respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the financial statements.
However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill.
Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither accounting
profit nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the end of the reporting period and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax
assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax
assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either
to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity.