NOTES FORMING PART OF THE FINANCIAL STATEMENT

SIGNIFICANT ACCOUNTING POLICIES.

Basis of Preparation:

These financial statements are brpared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis. GAAP comprises mandatory accounting standards as brscribed under Section 133 of the Companies Act, 2013 ('the Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines 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 the accounting policy hitherto in use.

Use of Estimates:

The brparation of financial statements is in conformity with generally accepted accounting principles require the management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the result of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Significant estimates used by the management in the brparation of these financial statements include estimates of the economic useful life of Fixed Assets and Provisions for Bad and Doubtful Debts. Any revision to accounting estimates is recognized prospectively.

Revenue Recognition (AS-9):

i) Income from testing services is accounted for on the basis of testing services provided and billed to clients on acceptance and / or on the basis of man days / man hours as per the terms of contract.

ii) Revenue from testing services consist primarily of revenue earned from services performed on a 'time and material' basis. The related revenue is recognized as and when the services are performed.

iii) Revenue from testing services includes revenue from time and material and fixed piece contracts are recognized as related services are performed.

iv) Revenue on fixed price contracts is recognized in accordance with percentage of completion and method of account.

v) Revenue is not recognized on the grounds of prudence, until realised in respect of liquidated damages, delayed payments as recovery of the amounts are not certain.

Fixed Assets (AS-10):

i) Fixed Assets are stated at cost less accumulated debrciation. Cost of acquisition of fixed assets is inclusive of freight duties, taxes and incidental expenses thereto.

ii) The cost and the accumulated debrciation for fixed assets retired from active use are removed from the stated values. Assets fully debrciated are removed from the Gross Block and accumulated debrciation.

Debrciation and Amortization (AS-6):

i) Debrciation on fixed assets is provided on the Straight Line Method. Effective 1st April 2014, the company debrciates its fixed assets over the useful life in the manner brscribed in Schedule II of the Companies Act 2013, as against earlier practice of debrciating at the rates brscribed in Schedule XIV of the Companies Act 1956. Debrciation on additions/deletions to fixed assets is provided on a pro-rata basis from/up to the date the asset is put to use/discarded.

ii) Preliminary Expenses are amortised over the period of 10 years.

iii) Public Issue Expenses are amortized over the period of 10 years.

Taxation:

Deferred tax asset and liability is recognized for future tax consequences attributable to the timing differences that result between profit offered for Income tax and the profit as per the financial statements. Deferred tax asset & liability are measured as per the tax rates/laws that have been enacted or substantively enacted by the Balance Sheet date.

Earnings per Share (AS-20):

The earning considered in ascertaining the companies earning per share comprise net profit after tax. The number of shares used in computing basic earning per share is the weighed average number of shares outstanding during the year. Detailed calculations of EPS are shown in the notes to accounts.

Retirement Benefits: a) Gratuity

A defined benefit retirement plan ('the Gratuity Plan") is provided to all employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provided a lump sum amount to vested employees at retirement, death, incapacitation or termination of employment,  of an amount based on the respective employee's salary land the tenure of employment. Liabilities with regard to the Gratuity plan are determined by actuarial valuation using the projected unit credit method, as of the balance sheet date.

b) Provident Fund

Eligible employees receive benefits from a Provident Fund, which is a defined contribution plan. Aggregate contributions along with interest thereon, are Paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Government administered Provident Fund. The Company has no obligation beyond its contribution.

Foreign Exchange Transaction (AS-11):

i) Realised gains & loss in foreign exchange transactions are recognized in Profit & Loss Account.

ii) Transactions in foreign currency will be recorded at the rates of exchange brvailing on the date of the transaction. Current assets and liabilities denominated in foreign currency will be translated at the rate of exchange as at Balance Sheet date.

Borrowing Costs (AS-16):

Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of cost of such asset. Other borrowing costs are treated as a period cost and are expensed in the year of occurrence.

Cash Flow Statement (AS-3):

Cash Flow statement has been brpared by following the Indirect Method and in accordance with the provisions of AS 3.

NOTE 1 I Previous year's figures have been regrouped wherever necessary.

NOTE 2 I The figures have been rounded off to the nearest rupee.

SIGNATURES

As per our report of even date

For P. Murali & Co.,

Chartered Accountants Firm Regn. No. 007257S

FINANCIAL STATEMENTS

For and on behalf of the Board

CIGNITI TECHNOLOGIES LIMITED

P. Murali Mohana Rao

Partner M.No. 023412

C.V. Subramanyam

Managing Director DIN: 00071378

K. Ch Subba Rao

Director

DIN: 01685123

A Naga Vasudha  

Company secretary

Dated: 30.05.2015

Place: Hyderabad