Comment on the Accounting Notes of HCL & Mind Tree.

Significant Accounting Policies

a) Basis of Preparation
Comments on Notes
Back Ground

Mind Tree
Headquartered in
Bangalore. Delivering
business solutions through
global software
development.

Basis of Preparation

The financial statements have been

prepared under the historical cost
convention on an accrual and going
concern basis except for certain
financial instruments
which are measured at fair value
Both companies prepares estimates
as per the GAAP in India
Cost less accumulated depreciation

HCL
Incorporated in India.
Delivering Wide range of
software services , BPO &
IT/ Infrastructure services

Accounting Policies

Use of Estimates
Fixed Assets &
Depreciation

The financial statements have been

prepared under the historical cost
convention on an accrual and going
concern basis except for certain
financial instruments
which are measured at fair value

Cost less accumulated depreciation

Depreciation is provided on straightline method over the useful life .

However both companies have
adopted their own estimation of
useful life which is lower than the
useful life prescribed in the
companies act.

Intangible Assets

Acquired intangible assets are

capitalized at acquition price.
Internally generated assets are
capitalized with cost that can be
measured reliably.

Research & Development

R & D accounting is not specifically

mentioned in the notes

Leases

Cost of leasehold land is amortized

over the period of lease. Leasehold
other assets are amortized over the
period of lease or useful life
whichever is lower.

Research cost considered as

expense and development cost is
recognized as an intangible asset.
Intangible asset is amortized over
the period of expected future sales of
the related project.
Same

Investments

Revenue Recognition

Foreign currency
Translation

Taxation

EPS

Employee Stock Option

Provision & Contingent

Liabilites

Non current Investments are carried

at cost less other than temporary
diminution in value. Current
investments are carried at lower of
cost & fair value.
Profit/Loss on sale of investment is
determined as the difference of sale
price & carrying value of investment.
In Fixed price contract revenue is
recognized using the proportionate
completion method..

Forex transactions are recorded

using the exchange rate prevailing
on the date of the respective
transactions. Exchange difference on
forex transactions which are settled
during the year are recognized in P &
L account.
Current Tax is determined in
accordance with the tax regulations
applicable to the company . Deferred
tax is recognized for the future tax
con sequences attributable to timing
differences that result between the
profit offered for income tax and
profit as per the Financial
statements.
Profit considered for EPS is the net
profit after tax plus post tax effect of
any extra ordinary item. No of
shares used for computing EPS is
the weighted averae number of
equity shares outstanding during the
year.
Calculated using Intrinsic value
method and the cost so computed is
amortized over the vesting or service
period.
Provision created as result of
present obligation arising out of past
event. Contingent liability is made
when there is a possible obligation.nj

Separate method adopted by

company all type of services like
software service , IT infractruusture
service / bpo service has been
prescribed in detailed manner.

Samr