Home  »  Company  »  Accelya Kale Solut  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Accelya Kale Solutions Ltd.

Jun 30, 2016

b. 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 shareholders are entitled to receive dividend as declared from time to time. The voting right of an equity shareholder on a poll (not on show of 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. During the year the Company has declared interim dividend and proposed final dividend of '' 15 and Rs. 30 respectively per equity share of Rs. 10 each.

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 shares held.

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

1. 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.

The Company estimates that the balance amount to be contributed to the gratuity fund during the financial year 2016-17 will be Rs. 13,510,382.

Leave encashment

The liability towards compensated absences (annual leave) for the year ended 30 June 2016 based on actuarial valuation carried out using projected unit benefit method resulted in decrease in liability by Rs. 613,705 (30 June 2015: Increase in liability by Rs. 5,579,605)

Provident Fund

The Company makes contributions, determined as a specified percentage of employee salaries, in respect of qualifying employees towards Provident Fund, which is a defined contribution plan. The Company has no obligations other than to make the specified contributions. The contributions are charged to the statement of profit and loss as they accrue. The amount recognized as an expense towards contribution to Provident Fund for the year aggregated to Rs. 32,322,871 (2015: Rs. 28,948,311).

2. 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 33 of consolidated financial statements..

3. LEASES

Operating lease

The lease rental (including hire charges) for office premises, guest house and godown charged to statement of profit and loss aggregates to Rs. 74,091,768 (30 June 2015: Rs. 75,161,267).

4. Unbilled revenue include revenue based on percentage of completion basis Rs. 53,361,664 (previous year Rs. 19,989,099)

5. DERIVATIVE INSTRUMENT

The Company uses forward exchange contracts and cross-currency option to hedge its exposure to movements in foreign exchange rates

6. During the previous year, pursuant to the requirement of the Companies Act, 2013 (the “Act”), the Company revised the depreciation rate for end use computers, based on the estimated useful life as prescribed by the Schedule II to the Act. Accordingly the Company has adjusted the net residual value as at 1 July 2014 aggregating to Rs. 1,016,247 and deferred tax thereon of Rs. 345,422 to retained earnings.

7. Liquidation of Kale Revenue Assurance Services Limited

During the previous year, Kale Revenue Assurance Services Limited (“KRAS”), wholly owned subsidiary of the Company in the United Kingdom, was placed under Members Voluntary Liquidation (“MVL”) with effect from 20 May 2015 vide board resolution passed by the Board of Directors of KRAS on 30 April 2015. The effective date of liquidation was 20 May 2015, the date on which the shareholders of KRAS passed the resolution for voluntary liquidation. All the assets and liabilities of KRAS were transferred to the liquidator approved by the board. The liquidator transferred entire issued capital of Zero Octa UK Ltd. (“ZOUK”) and other assets and liabilities of the company, being the owner of KRAS.

8. During the previous year, the Company received income tax refund for the financial years 2008-09, 2009-10 and 2010-11 amounting to Rs. 31,866,760 of which, interest on income tax refund amounting to Rs. 5,995,211 was accounted in profit and loss account under other income. (refer to note 22)

9. Corporate Social Responsibility

As per the Companies Act, 2013, all companies having net worth of Rs. 500 crores or more, or turnover of Rs. 1,000 crores or more or a net profit of Rs. 5 crores or more during any financial year will be required to constitute a Corporate Social Responsibility (“CSR”) committee of the Board of Directors comprising three or more directors, at least one of whom shall be an independent director. The Company has constituted a committee comprising Mr. Philippe Lesueur, Mr. John Johnston, Mr. Nani Javeri and Ms. Sangeeta Singh as its members. The committee is responsible for formulating and monitoring the CSR policy of the Company.

The company has implemented CSR activities through Catalysts for Social Action (“CSA”) a Not-For-Profit organization dedicated to the cause of child welfare and rehabilitation for children living in orphanages. The total amount spent by the Company through CSA is Rs. 23,800,000 (previous year: Rs. 19,000,000) Amount in Rs.

10. The Company’s management is of the opinion that its international transactions with related parties are at arms length and that the Company is in compliance with the transfer pricing legislation. Based on the above, the Company’s management believes that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expense and that of the provision for tax.

11. Long term contracts

The Company has a process whereby periodically all long term contracts (including derivative contracts) are assessed for material foreseeable losses. At the year end, the Company has reviewed and ensured that adequate provision as required under any law/accounting standards for material foreseeable losses on such long term contracts (including derivative contracts) has been made in the books of account.

12. During the year an audit was conducted by the Service Tax authorities. Subsequent to the year end, Service Tax authorities have observed that certain transactions were chargeable to tax under Reverse Charge Mechanism and Cenvat credit was not eligible for certain transactions. The Company is in the process of evaluating these observations and is in process of submitting its responses to the Service Tax authorities.

13. Other matters

Information with regard to other matters specified in Schedule III to the Act is either nil or not applicable to the Company for the year.


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.


Mar 31, 2010

1. Quantitative Details

The Company is engaged in Computer Software development. The sale of duly produced software is of such nature, which cannot be expressed in generic unit. Therefore, it is not possible to give quantitative details of sales and certain information as required under paragraphs 3, 4C & 4D of Part II, Schedule VI of the Companies Act, 1956.

2. Secured Loans

Working Capital facility sanctioned from State Bank of India, is secured by hypothecation of the book debts of the Company and charge over fixed assets and office premise situated at 1st Floor, Sharada Arcade, Satara Road, Pune.

Vehicle Loans are secured by first charge on vehicle acquired from the proceeds of respective loans.

3. Employees’ Stock Option Plan (ESOP)

The Company did not grant any options during the year under Kale Consultants Limited ESOP Scheme 2003. Out of the options granted till date, a total number of 1,732,230 options have vested till March 31, 2010, including those lapsed (Previous year 1,542,349)

Under Kale Consultants Limited ESOP Scheme 2003, a total number of 1,257,957 options have (Previous year 1,223271 options) lapsed till March 31, 2010 on account of resignation of employees from the Company and on account of not exercising the option within 2 years from the date of grant.

Schedules

Under Kale Consultants Limited ESOP Scheme 2003, during the year 79,236 options were exercised (Previous year 11,141 options) giving rise to 79,236 fully paid up equity shares of Rs. 10/- each. All the 79,236 equity shares have been listed on the National Stock Exchange Limited, Bombay Stock Exchange limited and Pune Stock Exchange Limited.

The Company did not grant any options during the year under Kale Consultants Limited ESOP Scheme 2006. Out of the options granted till date under Kale Consultants Limited ESOP Scheme 2006, a total number of 426,625 options have vested till March 31, 2010, including those lapsed (Previous year NIL).

Under Kale Consultants Limited ESOP Scheme 2006, a total number of 145,000 options have lapsed till March 31, 2010 on account of resignation of employees from the Company (Previous year NIL).

Under Kale Consultants Limited ESOP Scheme 2006, during the year 3,875 options were exercised (Previous year NIL) giving rise to 3,875 fully paid up equity shares of Rs. 10/- each. All the 3,875 equity shares have been listed on the National Stock Exchange Limited, Bombay Stock Exchange limited and Pune Stock Exchange Limited.

4. Preferential Allotment

During the year, the Board of Directors allotted 1,095,000 warrants to the promoters of the Company @ Rs. 44.01 per warrant. In terms of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009, a sum of Rs. 11 per share, being 25% of the price fixed, has been paid by the allottees of warrants before allotment. Out of the above, 369,475 warrants have been converted into 369,475 fully paid equity shares of Rs. 10 each on 30th March, 2010. The balance amount of Rs. 33.01 per equity share has been paid by the allottees before conversion of warrants.

5. Retirement Benefits to Employees

a. 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.

b. Leave Encashment

In accordance with Accounting Standards 15 (Revised) on Employee Benefits, the Company provides for leave salary on the basis of actuarial valuation.

6. Borrowing Costs

During the year, no amount for the interest and other anciliary costs in respect of loan for development of software products has been capitalized as per Accounting Standard 16 regarding Borrowing Costs (Previous year Rs.Nil).

7. Segmental Reporting

The Company has only one division which addresses the Travel and Transportation vertical. This, in context of Accounting Standard 17 (AS17) on segment reporting, is considered to constitute one single segment.

Subsidiaries : Kale Softech Inc., USA

Kale Technologies Limited, UK

Synetairos Technologies Limitd, India

Kale Revenue Assurance Services Limited, UK

Zero Octa UK Limited, UK

Zero Octa Selective Sourcing India Private Limited, India

Zero Octa Recruitment & Training (India) Private Limited, India

Zero Octa Group Limited,UK

Key Management Personnel: Narendra Kale, Chairman

Vipul Jain, Managing Director

8. Leased Assets

1. Assets acquired under finance lease comprise of Computer Hardware. There are no exceptional/restrictive covenants in the lease agreements.

9. Taxes

Provision for current taxes and Wealth Tax has been made in the books of accounts. As on the balance sheet date the timing difference between book and taxable profit has resulted in a deferred tax asset.

10. Intangible Assets

The details of Intangible assets as required to be disclosed as per Accounting Standard 26 (AS26) are reflected in Schedule 4 of the Financial Statements. The Intangible Assets comprise of acquired and internally generated software products described as “Acquired Products” and "Owned Products" respectively. The addition to the internally generated software products is towards enhancing and upgrading the products with respect to their capabilities and features to cater to the needs of the market.

11. Impairment of Assets

The Company has assessed its assets in accordance with Accounting Standards on Impairment of Assets (AS28). As a result of this assessment, on a conservative basis the Company has decided to reduce the carrying amount of certain Software Assets by an amount of Rs.18,694,933 (Previous Year Rs. Nil). This amount has been shown under the head ‘Depreciation & Impairment’ in the Profit And Loss account.

12. Contingent Liabilities

Contingent Liabilities not provided for include:

a. Bank Guarantees to the tune of Rs.31,016,470 as at March 31, 2010 in favour of various parties (Previous year Rs. 18,686,388).

b. Bank Guarantee of GBP 1.2 mn on behalf of its subsidiary Company viz., Kale Revenue Assurance Services Limited in respect of payment obligation towards acquisition of Zero Octa.

c. The company had filed following cases under Central Sales Tax Act, 1956 and Bombay Sales Tax Act, 1959 with Asst. Commissioner of Sales Tax, (Appeals), Pune with respect to a) Demand of Rs.656,580 pertaining to Year 1997-98 for disallowance of overseas sales and services, b) Demand of Rs. 191,587 relating to disallowance of software services for the year 1998-99 c) Demand of Rs. 137,760 relating to disallowance of set off for the year 1999-00. Further the company had filed appeals with Deputy Commissioner of Sales Tax (Appeals), Pune with respect to a) Rs.1,360,683 relating to software services disallowed and Rs.27,126 relating to disallowance of set off for the year 2000-01 b) Rs. 7,870,739 relating to disallowance of Software services and maintenance of software for the year 2001-02.

13. Provisions, Contingent Assets & Liabilities

In respect of provisions, contingent assets and contingent liabilities as required by Accounting Standard 29, the carrying amount at the beginning towards provision for employee dues, statutory dues and expenses were Rs. 40,051,888 The additional provision made for the year was Rs.52,758,734 payments made during the year were Rs.25,817,931 and Rs.2,303,373 was written back during the year. The carrying amount at the end of the year was Rs. 64,689,317.

The Company is following accrual method of accounting in respect of liabilities and provisions. The provisions, have been made on actual basis wherever information is available and in other cases the same is estimated on the basis of past records.

The expected timing of any resulting outflow and economic benefits depends on contractual terms, obligation and such other factors depending on case to case basis.

The management expects no reimbursements.

The company does not expect any estimated financial effect resulting into liability, contingent or otherwise.

14. Subsidiaries

1. During the year, the Company invested a sum of Rs. 51,415,000 in its wholly owned subsidiary, viz. Kale Revenue Assurance Services Limited towards allotment of 650,000 shares.

2. During the year the subsidiary Kale Technologies Limited has applied for a strike off. Accordingly an amount of Rs. 10,509,675 has been transferred to the parent Company which has been treated as advances.

15. Disclosure under Micro Small and Medium Enterprises Development Act, 2006

The company has compiled the following information based on the data available with the Company.

a. Principal amount remaining unpaid to Micro and Small Enterprise suppliers, as on March 31, 2010: Nil.

b. Amount of interest paid: Nil.

c. Amount of interest due and remaining unpaid as on March 31, 2010: Nil.

d. Amount of interest accrued and remaining unpaid as on March 31, 2010: Nil.

e. Amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under this Act: Nil.

As at March 31, 2010, no supplier has intimated the Company about its status as micro or small enterprises or its registration with the appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006.

16. Others

1. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs. 9,620,431 (Previous year Rs.7,045,297)

2. Profits/(Losses) of subsidiary companies are not dealt with in the books of accounts of the Company.

3. In the opinion of the Board, the current assets, loans and advances have been stated at a value realisable in the ordinary course of business.

4. In respect of UK branch of the Company the accounts of the branch are incorporated on transaction basis as per the authenticated information / statements and records submitted by the UK branch.

5. Previous Year figures have been regrouped and rearranged wherever necessary.

Find IFSC