| 1. Corporate Information
Net 4 India Limited (the company) is a public company domiciled in
India and incorporated under the provisions of the Companies Act, 1956.
Its shares are listed on BSE & NSE stock exchanges in India. The
Company is India's leading Data Centre, Cloud Hosting and Network
services provider. Net4 focuses on providing services to businesses
(small, medium and large) and its offerings include Data Centre & Cloud
Solutions Enterprise Internet Services, VoIP Solutions, and Enterprise
Messaging & Hosting Solutions and Domain name registration. The company
caters to both domestic and international markets.
Net4 has the distinction of being the first Internet services company
in the World to be ISO 27001 certified, for Information Security
standards adopted at its Data Centers. It is also ISO 9001:2000
certified, a Microsoft Gold Partner and an ICANN & .IN accredited
Domain Name Registrar.
2. All amounts in the financial statements are presented in Rupees
lakhs except share data.
3. Previous year's figures have been regrouped, rearranged and
reclassified, wherever necessary to confirm to current year's
classification.
4. Deferred Tax
Provision for deferred tax for the year ended March 31, 2015 has been
made in accordance with the provisions of Accounting Standard 22 on
Accounting for Taxes on Income, issued by The Institute of Chartered
Accountants of India. The deferred tax charge of Rs. (727.50/-)
(Previous year - Rs. 1312.00/-), for the current year has been
recognized in the Profit & Loss Account and comprises of the following:
5. Provision for Doubtful Debts and Advances
Periodically the company evaluates all customer dues to the company for
collectability. The need for provisions is assessed based on various
factors including collectability of specific dues, risk perceptions of
the industry in which the customer operates, and general economic
factors, which could affect the customer's ability to settle. As at
March 31, 2015, the company has provided Rs. 1315.58 lacks/- and Rs.
NIL/- lacs on account of provision for doubtful debts and doubtful
advances respectively.
The company has written off Rs.1,378.50 lacks (P.Y. Rs. 11,504.09
lacks) as bad debts during the year.
6. Segment Information
The company's operations predominantly relate to providing IP
Communications sales and services. There is thus only one reportable
business segment encompassing a comprehensive range of services,
including software development, packaged software integration,
collocation, web hosting, web development, web mailing solutions,
internet telephony and sales and integration of related networking
equipment.
Secondary segmental reporting is performed on the basis of the
geographical location of customers.
7. Term Deposits aggregating to Rs. 756.95/- lacs (P.Y.Rs. 756.95/-
lacs) have been pledged with Bank as a security towards facilities
availed from Bank.
8. Sundry Creditors, to the extent to which they could be identified
as small scale and ancillary undertakings on the basis of information
available with the Company, do not include amounts greater than Rs. One
Lakh outstanding for more than thirty days.
9. Leases
The Company's leasing arrangements are in respect of operating leases
for premises (residential, office, stores etc). These leasing
arrangements which are not non cancellable range between 11 months and
3
years generally, or longer, and are usually renewable by mutual consent
on mutually agreeable terms. The aggregate lease rentals payable are
shown as Lease Rentals under Note '23'.
10. Employee Benefits
Defined Benefit Plans
In accordance with Accounting Standard 15 (AS 15)-"Employee Benefits
(Revised 2005) , an actuarial valuation has been carried out in respect
of gratuity and compensated absences. The discount rate assumed is 9%.
The retirement age has been considered at 62 years and mortality table
is as per IALM (2006-08) ULTIMATE.
11. Related Party Disclosures as required by Accounting Standard-18:
List of Related Parties and Relationships
i) Holding Companies
None
ii) Subsidiaries of the Company
Domestic
Net 4 Communications Limited Pipetel Communications Private Limited
Net 4 Network Services Limited Overseas Net 4 HK Limited
iii) Entity having Significant Influence
IFCI Factor Limited.
Jiwan Financial Holdings Ltd Net4 Barter Private Limited
iv) Key Management Personnel and relatives of such personnel
Directorsasjit Sawhney*
Amarjit S. Sawhney*
Surya S Chadha
Relative of Director Pawanjot Kaur Sawhney Suzane S Pai
* Details of remuneration paid to directors are given in note 30 above.
v) Entity where relative of Key Management Personnel exercises
significant influence
Sterling Capital Pvt Ltd
12. Contingent Liabilities (to the extent not provided for)
2014-15 2013-14
(a) Claims against the company not 2.56 2.56
acknowledged as debts
(b) Guarantees
Outstanding guarantees and
counter guarantees to 0.68 1.50
various banks, in respect of
the guarantees given by
those banks in favor of
various government
authorities and others NIL 6,102.89
Guarantees to banks against
credit facilities extended to
subsidiary
(c) Others
Disputed Income tax 285.53 265.61
demand for A/Y 09-10,
including interest, though
appeal filed*
Disputed Income tax 30.28 40.28
demand for A/Y 08-09,
including interest, though
appeal filed*
Disputed Income tax
demand for A/Y 10-11,
including interest, through 723.67 723.67
appeal filed*
Disputed Income tax
demand for A/Y 11-12, 271.43 271.43
including interest, through
appeal filed
* Based on past experience, there is a highly fair chance of liability
being quashed.
13. It is not possible to furnish details of the quantities, due to
heterogeneity of the items involved. Also, the Company is primarily
engaged in the provision of services related to internet, which cannot
be expressed in any generic unit. Hence, it is not possible to give the
quantitative details of sales and certain information as required under
revised Schedule VI to the Companies Act, 2013.
14. Note T to '41'form an integral part of the Balance Sheet and
Profit and Loss Account.
a. Term Loan SBI was taken in FY 2011-12 and carries interest @
2.9% SBI Base Rate p.a. The loan is repayable in 62 monthly
installments. Term Loan is secured by hypothecation of entire fixed
assets of the company. It is also secured against property situated at
Site No. 12 and S. Nos. 33, 33/4A, 33/4B, 33/4C, 33/3B1, 33/6B, 34 and
34.7, KCG College Road, Karapakkam, Chennai. Further, the loan has been
secured by personal guarantee of the directors. During the year comapny
has defaulted in repayment from September 2013.
b. Vehicle loan from ICICI Bank is secured by hypothecation of
vehicles. The loan is repayable in monthly installments and carries
interest @ 10%-12% p.a.
c. Unsecured Loan from Banks and Financial Institutions carries
interest @ 7% to 19% p.a.and is repayable in monthly installments.
Deposits from public carry interest @ 11% to 12.5 % and are repayable
on maturity. Inter Corporate deposits from carry interest @ 15% to 17%
and are repayable on maturity.During the year company has defaulted in
repayment from September 2013.
D. Cash Credit from State Bank of India is secured by hypothecation of
entire curent assets and fixed assets of the company. It is also
secured against residential property of situated at Brighton, East
Sussex, London and B-4/39, Safdarjung Enclave New Delhi, Land and
Building at D 25, Sector 3, Noida, Agricultural Land in Gurgaon.
Further, the loan has been secured by personal guarantee of the
directors. The cash credit is repayable on demand and carries interest
@ 2.75% SB! Base rate p.a. During the year comoanv has defaulted in
reoavment from Seotember 2013.
e. Cash Credit from State Bank of Travancore is secured by
hypothecation of entire curent assets of the company and Fixed Deposit
of 25% of sanctioned facilities.The loan has been guaranteed by
corporate guarantee of Net 4 Communications Ltd and personal guarantee
of the directors. The cash credit is repayable on demand and carries
interest @ 2.75% SBT Base rate p.a. During the year company has
defaulted in repayment from September 2013.
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