1. Post Composite Scheme of Arrangement
Pursuant to the Composite Scheme of Arrangement (the Scheme) under
sections 391 to 394 of the Companies Act, 1956, as approved by the
Honourable High Court of Judicature at Madras vide its Order dated 12th
October 2007, the Company had demerged and transferred its Marine
related business to Teledata Marine Solutions Ltd (TMSL) and its
Technology related business to Teledata Technology Solutions Limited
(TTSL) and merged Sirius Shipping Company Limited (SSCL) with TMSL,
effective from the appointed dated i.e. 1st November, 2006. In view of
the order dated 12th October 2007, the operations from the appointed
date of demerger till the balance sheet date have resulted in payable
to Teledata Marine Solutions Ltd (TMSL) and Teledata Technology
Solutions Ltd (TTSL) of Rs.148.97 Crore and Rs.11.00 Crore
respectively.
2. Secured Loans :
i. The Credit facilities from Bank are secured primarily by current
assets of the Company and further secured by the fixed assets of the
Company.
ii. The Company has offered all its fixed assets other than assets
acquired on Hire Purchase for collateral in respect of the terms loans,
working capital limits, Corporate guarantees given and non funded
limits availed by the Company including those funded and non funded
liabilities demerged to resulting Companies. The Credit facilities of
the Company including fund based and non fund based limits are further
secured by personal guarantees of a Director and a third party,
Corporate guarantees of three Body corporates, collateral of shares
pledged of director/Body corporates, certain land and buildings
belonging to Directors/Body Corporates/third party.
iii. The Banks have taken legal action to recover the dues from the
Company as per the terms of sanction, as the accounts with the Bank
having become Non Performing Assets and over due beyond the time given
by the bank. However the Company having the ability to carry on its
e-Learning projects and being quite confident of its marketing have
given a compromise proposal, for repayment to banks keeping in view of
the future market value of the collateral securities offered by the
Company and future earning potential of its e-Learning Products.
3. Unsecured Loans
Unsecured loan from Director and Body Corporates of Rs.185.57 Crores
are interest free, as explained by the management
4. Deposits in Bank Account :
Deposits in bank accounts as on the date of Balance Sheet are under
lien to Banks as margin for Bank Guarantee, Letter of Credit and
Overdraft of the Company as per the Scheme.
5. Contingent Liabilities: (Rs. Crore)
Particulars 2010-11 2009-10
(18 Months)
i. Bank Guarantee given in
the ordinary course of
business (gross)
2.13 3.78
ii. Advance Capital Commitments
net of advance 5.27 13.02
iii.Corporate Guarantee given
to Bank against loan taken
by whollyowned 205.45 189.54
subsidiary Baytech Inc B.V.I.
iv. Corporate Guarantees given in
favour of the vendors/banks of - 14.86
Esys Technologies Pte. Ltd,
Singapore
v. Corporate Guarantees given
in favour of the banks 231.76 284.76
vi. Claims against the Company
not acknowledged as debt * 1.00 20.04
The Income Tax Authorities have re-opened Company's income tax
assessments, for the Assessment years 1998-99, 1999-2000,
2000-2001,2003-2004 ,2004-2005 , 2006-2007 and 2007-2008. The
Authorities have raised demands aggregating to Rs.99.97 Lakhs on
various matters including the tax holiday benefits availed in respect
of profits arising from the Export oriented activity of the Company
against which Rs.0.08 Crore was paid till date, under protest.
The Management contends that the Company has sufficient grounds to
defend its position and has filed necessary appeals against such
demands . If the claim of the Income Tax authorities prevail the
Company would be required to make a minimum incremental tax provision
aggregating to Rs.99.97 Lakhs. The Company is contesting the demand and
the Management, including its tax advisers, believes that its position
will likely be upheld in the appellate process as it has already won
its case for the assessment year 2003-04. The Company is of the opinion
that the tax provision for operations during the year is sufficient and
the contention of the department is not tenable.
6. The Company has received communication from the Service tax
department, with regard to the liability of service tax, which is being
followed up by the company to confirm the liability on the subject.
7. The company's e-Learning project is in progress, the cost of which
amounting to Rs.7.44 Crores is classified under fixed assets under the
asset side of the Balance sheet.
8. As reflected in the 26AS summary for the Assessment year 2010-2011,
the sum of Rs.3.64 Crores classified as refund of Assessment year
2007-08, which was taken to foreign fluctuation income during the
Financial Year 2009-2010, now during this period is being shown as
prior period adjustment - fluctuation, giving credit to the advances.
The Company is of the opinion that the computation of net profit under
section 349 of the Companies Act, 1956 is not required to be made as no
commission is paid / payable.
9. a. Provision for Taxation:
The Company is eligible for Tax Benefit under section 10B of Income Tax
Act, 1961, accordingly the provision for tax has been computed
considering the deduction allowable under above said section.
The Company follows territorial basis of taxation and provision has
been done in respect of the foreign branches as per law of those
countries. The Company is availing tax exemption under Section 10B of
Income Tax Act, 1961 in respect of its export turnover from India. The
period of 18 months relate to Assessment Year 2011-12 and 2012-13 and
the company adhered to the provision of Income Tax Act, 1961 for
computation of Tax Liability.
E Quantitative Details
The Company is engaged in development and maintenance of computer
software. The production and sale of such software cannot be expressed
in any generic unit. Hence it
10. The Company operates non-integral branches in United Arab Emirates
and United States of America whose turnovers are Rs.8.00 Crore
(Previous Year. Rs.59.00 Crore) and Rs. 25.31 Crore (Previous Year.
Rs.Nil) respectively and profits Rs.1.75 Crore (Previous Year. Rs 2.87
Crore) and loss of Rs.1.55 Crore (Previous Year loss of Rs 0.42 Crore)
have been audited by branch auditors.
11. Employee Benefits
The Company has adopted Accounting Standard 15, Employee Benefits
(revised 2005), issued by the Institute of Chartered Accountants of
India [the 'revised AS 15'].
12. Foreign exchange gain / (loss) on account of reinstatement of
Debtors, Creditors and Advances during the period, has not been
recognised in the books of accounts, resulting in non-adoption of AS 11
(Revised) "The effect of Foreign Exchange Fluctuations" issued by ICAI.
13. Accounting for Leases Operating Lease :
Rentals are expensed with reference to lease terms and other
considerations.
14. As per Accounting Standard 18, issued by the Institute of
Chartered Accountants of India, the disclosures of transactions with
the related parties as defined in the Accounting Standard are given
below:
15. Investments /Advance to subsidiaries & Associates
a. The Company has advanced to its wholly owned subsidiary Baytech Inc
BVI of Rs 186.13 Crore towards repayment of loans taken for acquisition
of eSys Technologies Pte Limited. The company has initiated legal
proceedings for the breach of terms of share purchase agreement against
Vikas Goel and eSys Technologies Pte Ltd, Singapore and presently
matter is subjuidice. Considering the above , the Company has not
consolidated results of SPV. The Company is confident of recovering its
Investment.
The Company is yet to receive share certificates for equity shares in
respect of its investment of Rs 110.33 Crore (USD 25 Million) in its
name, which currently has been held fully by Baytech Inc. BVI its
wholly owned Subsidiary. In the opinion of the management the same are
held by Baytech Inc as nominee share holders towards beneficial holding
of company in respect of which necessary declaration has been taken
from Baytech Inc. BVI.
b. The Company has pledged its investments in Baytech Inc and
Rainforest Trading Private limited as collateral security and has given
guarantee for loan taken by Baytech Inc. BVI of Rs 205.39 Crore (P.Y
Rs.189.54 Crore) ie USD 41.98 Million (P.Y USD 41.98 Million) for
acquisition of 38.86% stake in Rainforest Trading Limited. The company
has not considered the accounts of susbisidary company during the
current period because of the ongoing litigation.
c. The Company's Investment in share application of Insoft Systems Pte
Ltd, Singapore of Rs.8.24 Crore are still pending allotment and
approvals from authorities concerned.
d. Pursuant to the Composite Scheme of Arrangement sanctioned by
Honourable High Court of Madras , Vide its order dated 12th October
2007, Agnite Education Limited was entitled to 2,40,000 Equity Shares
of Rs.2 each against its holding of 1,20,000 Equity Share of Sirius
shipping Company Limited of Rs.10 each ( ie. 2 shares of Rs.2 each for
every one share of Rs 10 held). The Shares are yet to be allotted to
the company in view of the litigation which is pending before
Honourable Company Law Board , Southern Region Branch, Chennai.
16. As of the balance sheet date, the Company has net foreign currency
exposure (other than overseas branches) that are not hedged by a
derivative instrument or otherwise amounting to Rs.659.64 Crore
(Previous Year Rs.654.10 Crore) in respect of payables and Rs.1584.49
Crore (Previous Year. Rs.1577.45 Crore) in respect of receivables.
17. Balances in sundry debtors, loans and advances and other current
assets are subject to confirmation. The company had initiated the
process of obtaining of confirmations during the period and partially
obtained confirmations from third parties for the balances at the end
of the period.
18. The Company has marketing agreement with marketing agents in
various countries through whom products are sold. The Company has
initiated legal action against its debtors for recovery of debts,
wherever necessary.
19. The National Stock Exchange of India had suspended the trading in
the shares of the Company with effect from 09th September 2009 due to
non compliances. The Company is taking necessary steps to ensure
compliances.
20. The Loan accounts of the Company with State Bank of India,
Overseas Branch, Chennai and balances with other banks have been
classified as Non Performing Assets (NPA) during the year 2009 and the
Company is taking steps to regularise all the accounts. As the banks
have stopped charging interest on the loan accounts, being classified
as Non Performing Assets (NPA), the Company inturn has not provided for
the same.
21 .In the opinion of the management the plantation is subsisting as on
the date of balance sheet and is of the value stated and no impairment
is deemed necessary. The valuation of the plantation being technical
matter the auditors have relied on the representation of the
management.
22. Segment Reporting
As per Accounting Standard 17 - "Segment Reporting" segment information
has been provided in the Notes to accounts of Consolidated Financial
Statements.
23. The management is currently in the process of identifying
enterprises which have provided goods and services to the company and
which qualify under the definition of Medium and Small Enterprises as
defined under Micro, Small and Medium Enterprises Development Act,
2006. Accordingly, the disclosure in respect of the amounts payable to
such medium and small enterprises as at 30th September, 2011 has not
been made in the financial statements.
24. The previous year figures have been reworked, regrouped,
rearranged and reclassified wherever necessary.
25. The previous year figures are not comparable, as the current
period of audit is for 18 months ended 30th September 2011.
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