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Notes to Accounts of Accelya Kale Solutions Ltd.

Jun 30, 2014

1. Background

Accelya Kale Solutions Limited ("Accelya") is a software solutions provider to the global Airline and Travel industry.

Accelya delivers world class software products, managed processes, technology and hosting services. Accelya''s industry solutions are driven by active partnerships with industry bodies and customers, and significant domain knowledge. Its customised approach in deploying these solutions supports clients with best fit solutions to match their requirements.

a. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

During the five year period ended 30th June 2014

The Board of Directors of the Company at its meeting held on 1 February 2012 approved the buyback of its own fully paid up equity shares of Rs. 10 each from the existing owners of equity shares other than Accelya Holding World S. L.U., the promoter at a price not exceeding Rs. 160 per equity share payable in cash, for an aggregate amount not exceeding Rs.129,750,080 which represents 10% of the aggregate paid-up equity capital and free reserves of the Company as on 30 June 2011. As on 2 May 2012, i.e. on the date of closure of the Buy-back offer, the Company has bought back 953,826 Equity Shares on BSE and NSE for a total consideration of Rs. 129,737,172, which represents 99.99% of the buy-back size of Rs. 129,750,080.

Provision for litigation represents provision made for probable liabilities/claim arising out of pending disputes/litigation. Such provisions are generally affected by numerous uncertainties and management considers such uncertainties while making an estimate of these amounts.

Margin money deposits

Margin money deposits represent deposit with banks given to various authorities amounting to Rs. 2,634,708 (2013: Rs. 6,035,862) which are due to mature within 12 months of the reporting date.

2 CONTINGENT LIABILITIES

Year ended Year ended 30 June 2014 30 June 2013

Claims against the Company pertaining to Sales Tax with Asst. Commissioner of Sales Tax, (Appeals) - For F.Y. 2001-02 (disallowance of Software services and maintenance of software) 7,870,739 7,870,739

Contingent liability on account of rejection of refund of cenvat credit by Service 11,217,500 - Tax Department

3 RETIREMENT BENEFITS TO EMPLOYEES

Gratuity

In accordance with Accounting Standards 15 (Revised) on Employee Benefits and applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). LIC administers the plan and determines the contribution required to be paid by the Company.

4 SEGMENTAL REPORTING

In accordance with paragraph 4 of Accounting Standard 17 "Segment Reporting" prescribed in the Companies (Accounting Standards) Rules, 2006, issued by the central government, the Company has presented segmental information only on the basis of the consolidated financial statements (refer note 34 of consolidated financial statements).

5 LEASES

Operating lease

The lease rental for office premises, guest house and godown charged to statement of profit and loss aggregates to Rs.85,876,268 (previous year Rs. 85,355,454).

6 Unbilled revenue include revenue based on percentage of completion Rs. 8,251,980 (previous year Rs. 23,588,707)

7 Amalgamation of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited

During the previous year the Board of Directors of the Company at its meeting held on 10 October , 2012, in-principle, approved the amalgamation of the subsidiaries of Zero Octa UK Limited- a step down subsidiary of Accelya Kale Solutions Limited ("the Company") named Zero Octa Selective Sourcing India Private Limited engaged in rendering information enabled revenue assurance services and Zero Octa Recruitment and Training (India) Private Limited, with the Company. The scheme was approved by the Honourable High Court of Judicature at Bombay vide its order dated 5 July 2013. The scheme inter-alia, provided for the amalgamation of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited with the company effective 1 April 2013 (the appointed date).

The Company had filed the certified copy of order issued by the Honourable High Court of Judicature at Bombay with the Registrar of Companies (ROC), Maharashtra on 22 July 2013.

In line with the Scheme, the merger of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited, the amalgamation has been accounted for under the "Pooling of Interest" method as prescribed in Accounting Standard 14 (AS -14) "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India and as notified under section 211(3)(c) of the Companies Act 1956. There are no differences in the accounting policies followed by the Company and the amalgamated Company.

a) All the assets and liabilities recorded in the books of the Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been transferred to and vested in the books of the Company pursuant to the Scheme at their book values as appearing in the books of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited

b) All reserves and surplus of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been transferred to and vested in the books of the Company in the same form in which they appear in the books of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited.

c) Since Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited were subsidiaries of Zero Octa UK Limited- a step down subsidiary of Accelya Kale Solutions Limited ("the Company"), the investmenst held by by Zero Octa UK Limited in the shares of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been cancelled. The Share capital amounting to Rs. 1,500,000 of Zero Octa Selective Sourcing India Private Limited and share capital and premium amounting to Rs. 698,125 of Zero Octa Recruitment & Training (India) Private Limited have been credited to general reserve.

d) The profit in the statement of profit and loss as of 1 April, 2013 amounting to Rs. 211,833,570 of Zero Octa Selective Sourcing India Private Limited and the loss of Rs. 506,977 of Zero Octa Recruitment & Training (India) Private Limited have been reflected in the statement of profit and loss of the company.

e) The financial results for the year ended 30 June 2013 of the Company, includes the income and expenses of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited from 1 April 2013 to 30 June 2013.

8 Dividend distribution tax credit

Dividend distribution tax credit amounting to Rs. 22,660,138 represents the dividend distribution tax on dividend received from foreign subsidiary companies which is set-off against the dividend distribution tax paid on the interim dividend for the year ended 30 June, 2014 under the provisions of Income Tax Act, 1961.

9 Prior period comparatives

Previous year''s figures have regrouped / reclassified to conform to current year''s presentation as set out in table below:


Jun 30, 2013

1. Background

Accelya Kale Solutions Limited ("Accelya") is a software solutions provider to the global Airline and Travel industry.

Accelya delivers world class software products, managed process, technology and hosting services. Accelya''s Industry Solutions are driven by active partnerships with industry bodies and customers, and significant domain knowledge. Its customised approach in deploying these solutions supports clients with best fit solutions to match their requirements.

2 EXCEPTIONAL ITEMS

In the previous year ended 30th June 2012 the Company sold its entire shareholding in Synetairos Technologies Limited, a subsidiary of the Company, on 1 July 2011, to Saksoft Limited as per the Share Purchase Agreement dated 1 July 2011, which resulted in a gain of Rs.7,770,692.

3 CONTINGENT LIABILITIES

Claims against the Company pertaining to Sales Tax with Asst. Commissioner of Sales Tax, (Appeals) - For F.Y. 2001-02 (disallowance of Software services and maintenance of software) 7,870,739 7,870,739

4 RETIREMENT BENEFITS TO EMPLOYEES Gratuity

In accordance with Accounting Standards 15 (Revised) on Employee Benefits and applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). LIC administers the plan and determines the contribution required to be paid by the Company.

5 SEGMENTAL REPORTING

In accordance with paragraph 4 of Accounting Standard 17 "Segment Reporting" prescribed in the Companies (Accounting Standards) Rules, 2006, issued by the central government, the Company has presented segmental information only on the basis of the consolidated financial statements (refer note 35 of consolidated financial statements).

6 LEASES Finance lease

Assets acquired under finance lease comprise of computer hardware. There are no exceptional/restrictive covenants in the lease agreements.

The minimum lease payment outstanding and their present value at the balance sheet date that have been capitalized are as follows :

7 Unbilled revenue include revenue based on percentage of completion basis Rs. 23,588,707/- (previous year Rs. 131,959,202/-)

8 Amalgamation of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited

The Board of Directors of the Company at its meeting held on 10th October , 2012, in-principle, approved the amalgamation of the subsidiaries of Zero Octa UK Limited- a step down subsidiary of Accelya Kale Solutions Limited ("the Company") named Zero Octa Selective Sourcing India Private Limited engaged in rendering information enabled revenue assurance services and Zero Octa Recruitment and Training (India) Private Limited, with the Company. The scheme was approved by the Honourable High Court of Judicature at Bombay vide its order dated 5th July 2013. The scheme inter-alia, provided for the amalgamation of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited with the company effective 1st April 2013 (the appointed date).

The Company has filed the certified copy of order issued by the Honourable High Court of Judicature at Bombay with the Registrar of Companies (ROC), Maharashtra on 22nd July 2013.

In line with the Scheme, the merger of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited, the amalgamation has been accounted for under the "Pooling of Interest"method as prescribed in Accounting Standard 14 (AS -14) "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India and as notified under section 211(3)(c) of the Companies Act 1956. There are no differences in the accounting policies followed by the Company and the amalgamated Company.

a) All the assets and liabilities recorded in the books of the Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been transferred to and vested in the books of the Company pursuant to the Scheme at their book values as appearing in the books of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited

b) All reserves and surplus of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been transferred to and vested in the books of the Company in the same form in which they appear in the books of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited.

c) Since Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited were subsidiaries of Zero Octa UK Limited- a step down subsidiary of Accelya Kale Solutions Limited ("the Company") , the investmenst held by by Zero Octa UK Limited in the shares of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited have been cancelled. The Share capital amounting to Rs. 1.5 million of Zero Octa Selective Sourcing India Private Limitedand and share capital and premium amounting to Rs.0.7 million of Zero Octa Recruitment & Training (India) Private Limited have been credited to general reserve.

d) The profit in the statement of profit and loss as of 1st April, 2013 amounting to Rs.211.83 million of Zero Octa Selective Sourcing India Private Limited and the loss of Rs.0.5 million of Zero Octa Recruitment & Training (India) Private Limited have been reflected in the statement of profit and loss of the company.

e) The financial results for the year ended 30 June 2013 of the Company, includes the income and expenses of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited from 1st April 2013 to 30th June 2013.

f) During the year, as Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited carried on their existing business in trust for and on behalf of the Company, all vouchers, documents for the period from 1 April 2013 till the date of filing the order are in the name of Zero Octa Selective Sourcing India Private Limited and Zero Octa Recruitment & Training (India) Private Limited. The title deeds, licenses, agreements, loan documents, etc. are in the process of being transferred in the name of the Company.


Jun 30, 2012

1. Background

Accelya Kale Solutions Limited (formerly known as Kale consultants Limited) ("Accelya") is a software solutions provider to the global Airline and Travel industry.

Accelya delivers world class software products, managed process, technology and hosting services. Accelya's Industry Solutions are driven by active partnerships with industry bodies and customers, and significant domain knowledge. Its customised approach in deploying these solutions supports clients with best fit solutions to match their requirements.

a. Terms/ right, preference and restriction attached to equity shares

The company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the company's residual assets. The equity shares are entitled to receive dividend as declared from time to time. The voting right of an equity shareholder on a poll (not on show on hands) is in proportion to its share of the paid-up equity capital of the company. Voting right cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

On winding up of the company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity held.

c. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

During the five year period ended 30th June 2012

The Board of Directors of the Company at its meeting held on 1 February 2012 approved the buyback of its own fully paid up equity shares of ' 10/- each from the existing owners of equity shares other than Accelya Holding World S. L., the promoter at a price not exceeding ' 160 per equity share payable in cash, for an aggregate amount not exceeding ' 129,750,080 which represents 10% of the aggregate paid-up equity capital and free reserves of the Company as on 30 June 2011. As on 2 May 2012, i.e. on the date of closure of the Buy-back offer, the Company has bought back 953,826 Equity Shares on BSE and NSE for a total consideration of ' 129,737,172 which represents 99.99% of the buy- back size of ' 129,750,080.

d. Employee stock option

Terms attached to stock option granted to employee are described in note 35 regarding employee based payments.

2 EXCEPTIONAL ITEMS

1 The Company has sold its entire shareholding in Synetairos Technologies Limited, a subsidiary of the Company on 1 July 2011 to Saksoft Limited as per the Share Purchase Agreement dated 1 July 2011, which has resulted into a gain of ' 7,770,692.

2 During the period ended June'11 Kale Technologies Limited, UK, a subsidiary was wound up. The resultant gain of ' 10,509,605/- representing the surplus over investment made by the company has been recorded as a gain on disposal of investments under the head "Exceptional Item".

3 During the period ended June'11 the board of directors of the company, at its meeting held on 6 September 2010, authorised a resolution approving the sale of the logistics business of the company to Kale Logistics solution Private Limited, as a going concern, on a slump sale basis, with effect from 1 October 2010. The loss on account of this sale amounting to ' 44,654,807/- has been included in the profit and loss account under the head "Exceptional Item';

3 EMPLOYEE'S STOCK OPTION PLAN (ESOP)_

The company provides share-based payment schemes to its employee. During the year ended 30 June 2012, an employee stock option plan (ESOP) was not in existence. The relevant details of the scheme and the grant for the previous year are as below:

4 RETIREMENT BENEFITS TO EMPLOYEES Gratuity

In accordance with Accounting Standards 15 (Revised) on Employee Benefits and applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan). The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). LIC administers the plan and determines the contribution required to be paid by the Company.

5 SEGMENTAL REPORTING

In accordance with paragraph 4 of Accounting Standard 17 "Segment Reporting" prescribed in the Companies (Accounting Standards) Rules, 2006, issued by the central government, the Company has presented segmental information only on the basis of the consolidated financial statements (refer note 35 of consolidated financial statements).

6 LEASES Finance lease

Assets acquired under finance lease comprise of computer hardware. There are no exceptional/restrictive covenants in the lease agreements.

 
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