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Notes to Accounts of Aftek Ltd.

Mar 31, 2015

(a) Nature of Security and terms of repayment for secured borrowings

(i) Bank of India - Jersey Channel Islands

Foreign Currency Term Loan Aggregating to Rs, 3075.31 Lacs (Euro 45 Lacs) Secured by mortgage of Land at Hinjewadi, Pune.Rs, 3075.31 Lacs is repayable in 4 half yearly installment of Rs, 683.4 Lacs for first 3 installment & Last Installment of Rs, 1025.11 Lacs from July 11 to January 2013. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan.

Notes to Financial Statements for the year ended March 31, 2015 ( Rs, in Lacs)

(ii) State Bank of Bikaner & Jaipur

Rupee Term Loan Aggregating to Rs, 4,000 Lacs Secured by mortgage of building owned by subsidiary Mihir Properties Pvt. Ltd. Rs, 4,000 Lacs is repayable in 12 Quarterly installment of Rs, 333.33 Lacs from April, 2012 to January 2015. Company has made default in repayment of Principal and Interest thereon, therefore, Bank has demanded repayment loan.

(b) IDBI Bank Ltd.(Term Loan) :-

The loan is recalled by the Bank by invoking the pledge of shares. However the bank did not recover the total outstanding amount for the reasons not attributable to the company, accordingly the outstanding balance is not accepted by the Company. Pending clearance of dispute the outstanding is continued in books as demanded by the Bank.

1. Disclosure as per Accounting Standard 15 (Revised) - Employee Benefits:

The Company has classified various benefits provided to employees as under:

I Defined Contribution Plans

a Provident Fund

b State Defined Contribution Plans

i. Employers Contribution to Labor Welfare Fund

ii. Employers Contribution to Employee's Pension Scheme 1995

vii Expected Contribution to Gratuity Fund for the next year Rs, Nil lacs (Previous Year: Rs, 4.03 lacs).

viii Details of Present Value of Obligation, Plan Assets and Experience Adjustment are not applicable for the current year.

(ii) Other Significantly influenced Related Parties with whom transactions have taken place during the year After Employees Welfare Trust# Significantly influenced by After employees Gratuity Assurance Scheme Key Management Personnel Elven Technologies Pvt Ltd (Controlled entities)

(iii) Key Management Personnel Mr. Ranjit M Dhuru Mr. Nitin K Shukla Mr. Mukul Dalal Note:-

- Aftek Employees' Welfare Trust (Unregistered) was created for the benefit of employees including Executive Directors. The purpose of the trust inter alia is to purchase/invest in the shares or other securities of After Limited for the benefit of employees. As per the conditions of the trust deed, an interest free loan has been provided by the Company which is to be used for the purchase of equity shares of After Limited. These shares may be allocated to the employees or the amount of profit earned on the sale of these shares may be distributed amongst the employees. During the year the trust has not sold any shares and made payment against loan.

2. Segment Reporting:

Primary Segment Information

The Company is in the business of sale of software services which is viewed by the management as a single primary segment,

i.e. business segment.

3. Foreign Currency Convertible Bonds

The Company had raised in aggregate USD 34.5 million through an issue of 3000 numbers of 1% Foreign Currency Convertible Bonds Due 2010 of USD 10,000 each ("FCCB") in June 2005 followed by 450 numbers of additional FCCB in July 2005 on account of exercise of green shoe option of 15%. The FCCBs bear interest @ 1% per annum with redemption at 128.25% of their principal amount. At the option of the Bondholders, FCCBs were convertible into Equity Shares/Global Depository Receipts ("GDRs") within a period of 5 years from the date of the original issue i.e. June 24, 2005 at the revised conversion price of Rs, 75.20 per share effective from June 25, 2006 (initial conversion price being Rs, 94/- per share) pursuant to the provisions of the Trust Deed executed in respect of the FCCBs.

At the behest of the majority bondholders, the Company had initiated the process of re-setting the conversion price of the FCCBs in line with the applicable pricing guidelines. Approval of Reserve Bank of India for the same was received vide their letter No. FED/CO/ECBD/10308/03.02.775/11-12 dated October 31, 2011. The holders of the FCCBs vide their Written Resolution of 25th July, 2012 have consented, inter alia, to the revision of Conversion Price of FCCBs from Rs, 75.20 to Rs, 13.76 and elongation of maturity period from 25th June, 2010 to 21st December, 2012 as well as waiver of events of defaults and interest payments. Accordingly, the Company has executed a Supplemental Trust Deed on 25th July, 2012 with Bank of New York Mellon, the Trustees for giving effect to the aforesaid amendments.

No FCCBs were converted during the year. 354 FCCBS were outstanding which, if converted into GDRs/Equity Shares at the reset conversion price of Rs, 13.76 would result into issuance of additional 1,12,10,428 numbers of equity shares of Rs, 2/- each.

4. Global Depository Receipts (GDRs)

The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs, 10 each. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs, 10 each were sub-divided into smaller denomination of Rs, 2 each for which the Company had fixed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to five in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

No GDRs (PY No GDRs) were outstanding as at March, 2015.

As stated at Note No. 37, above, 354 numbers of 1% Foreign Currency Convertible Bonds Due 2010 were outstanding as at March, 31, 2014. If these FCCBs are converted into GDRs, it would resulted into issuance of 37,36,809 numbers of GDRs representing 1,12,10,428 numbers of equity shares of Rs, 2/- each at the reset conversion price of Rs, 13.76

5. In view of the on-going slowdown in the European and US markets, there have been delays in receivables. Considering the size and standing of its debtors, the Company has not made any provision at this stage towards amount of Rs, 22,398.36 Lacs outstanding for a period of more than 12 months.

6. The company has given certain capital advances and made some investments totaling to Rs, 6975.20 Lacs against the building under constructions at Hinjewadi, Pune. The said Plot of land is mortgaged to Bank of India -Jersey Channel Islands against the term loan. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan and taken the possession of the land along with the construction in progress. Pending the settlement of the vendors to whom advances are paid, the same is continued to be considered as capital advances. No Contingent liability is considered for the unexecuted Capital Contract.

7. The company has invested on purchases of IPRs for various ongoing projects. Due to the delay in the projects, IPRs are yet to be put to use as on the date of balance sheet amounting to Rs,19910.32 Lacs which includes the software services sold which is called back. The company is of the opinion that with the improved market conditions all the IPRs will be profitably used by the company in the future projects.

8. Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the 'Act') and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act. Management believes that the figures for disclosure will not be significant.

9. In view of the Company's current position, the Managerial Remuneration booked as provisions for the earlier year i.e. 2013-2014 and for the period from 01-04-2014 upto 31-12-2014 has been revised.

10. Previous year's figures have been regrouped or reclassified to conform with the current years' presentation wherever considered necessary.


Mar 31, 2014

1. Corporate information

AFTEK Limited (the "Company") provide a wide range of information technology services including systems, hardware and software, communications and networking, hardware sizing and capacity planning, software management solutions, technology education services and business process outsourcing. The Company''s services portfolio consists of Application Development and Maintenance, Business Intelligence, Enterprise Solutions, Assurance, Engineering and Industrial Services, IT Infrastructure Services, Business Process Outsourcing, Consulting and Asset Leveraged Solutions.

2.(a) Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Rs. 2 per share. Each shareholder is eligible for one vote per shareheld. The equity shareholders are entitled for dividend as may be proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

3. (a) Nature of Security and terms of repayment for secured borrowings

(i) Bank of India - Jersey Channel Islands

Foreign Currency Term Loan Aggregating to Rs. 3075.31 Lacs (Euro 45 Lacs) Secured by mortgage of Land at Hinjewadi, Pune. Rs. 3075.31 Lacs is repayble in 4 half yearly installment of Rs. 683.4 Lacs for first 3 installment & Last Installment of Rs. 1025.11 Lacs from July 11 to January 2013. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan. (also refer Note)

4. (a) IDBI Bank Ltd.(Term Loan) :-

The loan is recalled by the Bank by invoking the pledge of shares. However the bank did not recover the total outstanding amount for the reasons not attributable to the company, accordingly the outstanding balance is not accepted by the Company. Pending clearance of dispute the outstandings is continuted in books as demanded by the Bank.

5. Note:-

# Aftek Employees'' Welfare Trust (Unregistered) was created for the benefit of employees including Executive Directors. The purpose of the trust inter alia is to purchase/invest in the shares or other securities of Aftek Limited for the benefit of employees. As per the conditions of the trust deed, an interest free loan has been provided by the Company which is to be used for the purchase of equity shares of Aftek Limited. These shares may be allocated to the employees or the amount of profit earned on the sale of these shares may be distributed amongst the employees. During the year the trust has not sold any shares and made payment against loan.

6. Capital Commitments & Contingent liabilities not provided for :

Year Ended Year Ended March 31, 2014 March 31, 2013

(a) Capital Commitments:

Estimated amounts of contracts remaining to be executed on capital account (net of advances) and not provided for.(Refer Note no. 40) Nil Nil

(b) Contingent liabilities not provided for :

i Corporate guarantee given to Bank for finance provided to Digihome Solutions Private Limited against which loan outstanding is (Rs. in Lacs) 149.99 previous year (Rs. in Lacs) 79.00} 779.00 779.00

ii Pending assessement of Income tax and Sales tax(Including Interest, if any)

Income Tax matters Amount unascertainable

Sales Tax matters Amount unascertainable

7. Foreign Currency Convertible Bonds

The Company had raised in aggregate USD 34.5 million through an issue of 3000 numbers of 1% Foreign Currency Convertible Bonds Due 2010 of USD 10,000 each ("FCCB") in June 2005 followed by 450 numbers of additional FCCB in July 2005 on account of exercise of green shoe option of 15%. The FCCBs bear interest @ 1% per annum with redemption at 128.25% of their principal amount. At the option of the Bondholders, FCCBs were convertible into Equity Shares/Global Depository Receipts ("GDRs") within a period of 5 years from the date of the original issue i.e. June 24, 2005 at the revised conversion price of Rs. 75.20 per share effective from June 25, 2006 (initial conversion price being Rs. 94/- per share) pursuant to the provisions of the Trust Deed executed in respect of the FCCBs.

At the behest of the majority bondholders, the Company had initiated the process of re-setting the conversion price of the FCCBs in line with the applicable pricing guidelines. Approval of Reserve Bank of India for the same was received vide their letter No. FED/CO/ECBD/10308/03.02.775/11-12 dated October 31, 2011. The holders of the FCCBs vide their Written Resolution of 25th July, 2012 have consented, inter alia, to the revision of Conversion Price of FCCBs from Rs. 75.20 to Rs. 13.76 and elongation of maturity period from 25th June, 2010 to 21st December, 2012 as well as waiver of events of defaults and interest payments. Accordingly, the Company has executed a Supplemental Trust Deed on 25th July, 2012 with Bank of New York Mellon, the Trustees for giving effect to the aforesaid amendments.

No FCCBs were converted during the year. 354 FCCBS were outstanding which, if converted into GDRs/Equity Shares at the reset conversion price of Rs. 13.76 would result into issuance of additional 1,12,10,428 numbers of equity shares of Rs. 2/- each.

8. Global Depository Receipts (GDRs)

The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs. 10 each. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs. 10 each were sub-divided into smaller denomination of Rs. 2 each for which the Company had fixed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to five in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

No GDRs (PY No GDRs) were outstanding as at March, 2014.

As stated at Note No. 37, above, 354 numbers of 1% Foreign Currency Convertible Bonds Due 2010 were outstanding as at March, 31, 2014. If these FCCBs are converted into GDRs, it would resulted into issuance of 37,36,809 numbers of GDRs representing 1,12,10,428 numbers of equity shares of Rs. 2/- each at the reset conversion price of Rs. 13.76

9. In view of the on-going slowdown in the European and US markets, there have been delayis in receivables. Considering the size and standing of its debtors, the Company has not made any provision at this stage towards amount of Rs. 15,727.44 Lacs outstanding for a period of more than 12 months.

10. The company has given certain capital advances and made some investments totalling to Rs. 6975.20 Lacs against the building under constructions at Hinjewadi, Pune. The said Plot of land is mortgaged to Bank of India -Jersey Channel Islands against the term loan. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan and taken the possession of the land alongwith the construction in progress. Pending the settlement of the vendors to whom advances are paid, the same is continued to be considered as capital advances. No Contingent liability is considered for the unexecuted Capital Contract.

11. The company has invested on purchases of IPRs for various ongoing projects. Due to the delay in the projects, IPRs are yet to be put to use as on date of balance sheet amounting to Rs. 19910.32 Lacs. The company is of the opinion that with the improved market conditions all the IPRs will be profitably used by the company in the future projects.

12. During an earlier years, the Company has Sold Inangible Assets as IPR to the then subsidiary M/s Digihome Solutions Ltd. The said IPR has not generated expected revenue since last two years due to slow progress of business arrangement with an existing anchor customer. Management of that company is in process of carrying out an evaluation for impairment. The said management believes that there would not be any significant impairment loss, considering the market potential of the product. Said Management believes that the technology used in the future project is highly advanced and will not become obsolete in the near future. Based on this representation the investment of Digihome Solutions Ltd carried at cost. However, while consoliditating in all the years the said asset was knocked off. Continuing the same method the said investment is shown at nill value in the Consolidated accounts.

13. Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the ''Act'') and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME

The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act. Management believes that the figures for disclosure will not be significant.

14. Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.


Mar 31, 2013

1.1 Corporate information

AFTEK Limited (the "Company") provide a wide range of information technology services including systems, hardware and software, communications and networking, hardware sizing and capacity planning, software management solutions, technology education services and business process outsourcing. The Company''s services portfolio consists of Application Development and Maintenance, Business Intelligence, Enterprise Solutions, Assurance, Engineering and Industrial Services, IT Infrastructure Services, Business Process Outsourcing, Consulting and Asset Leveraged Solutions.

2 Segment Reporting:

Primary Segment Information

The Company is in the business of sale of software services which is viewed by the management as a single primary segment, i.e. business segment.

526 number of FCCBs were converted into 1,66,57,302 number of equity shares of Rs. 02/- each during the year. At the year end, 354 FCCBS were outstanding which, if converted into GDRs/Equity Shares at the reset conversion price of Rs. 13.76 would result into issuance of additional 1,12,10,428 numbers of equity shares of Rs. 2/- each.

3 Global Depository Receipts (GDRs)

The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs. 10 each. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs. 10 each were sub-divided into smaller denomination of Rs. 2 each for which the Company had fixed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to five in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

No GDRs (PY No GDRs) were outstanding as at March, 2013.

As stated at Note No. 37, above, 354 numbers of 1% Foreign Currency Convertible Bonds Due 2010 were outstanding as at March, 31, 2013. If these FCCBs are converted into GDRs, it would resulted into issuance of 37,36,809 numbers of GDRs representing 1,12,10,428 numbers of equity shares of Rs. 2/- each at the reset conversion price of Rs. 13.76

4 In view of the on-going slowdown in the European and US markets, there have been delayis in receivables. Considering the size and standing of its debtors, the Company has not made any provision at this stage towards amount of Rs. 9065.08 Lacs outstanding for a period of more than 12 months.

5 The company has given certain capital advances amounting to Rs. 41.49 crores against the building under constructions at Hinjewadi, Pune. The said Plot of land is mortgaged to Bank of India -Jersey Channel Islands against the term loan. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan and taken the possession of the land alongwith the construction in progress. Pending the settlement of the vendors to whom advances are paid, the same is continued to be considered as capital advances. No Contingent liability is considered for the unexecuted Capital Contract.

6 The company has invested on purchases of IPRs for various ongoing projects. Due to the delay in the projects, some IPRs are not taken by the company against the money already paid, and some IPRs are yet to be put to use as on the date of balance sheet. The company is of the opinion that with the improved market conditions all the IPRs will be profitably used by the company in the future projects.

7 Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the ''Act'') and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME

The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act. Management believes that the figures for disclosure will not be significant.

8 The company has formulated a sheme of Financial restructuring to deal with current recession in the software industry, and the costs incurred on the product development and foreign curreny losses. Accordingly as per the scheme of arrangement Under section 100 to 103 read with section 78 of the Companies Act, 1956, The Hon''ble High Court of Judicature at Bombay, vide its Order dated 13th August, 2010 has sanctioned the scheme approved by members by the Special Resolution passed at the Extra-ordinary General Meeting held on 08th June, 2010 for utilization of Rs. 215.00 crores out of the balance standing to the credit of the Securities Premium Account for allocating and/or earmarking to adjust product development expenditure incurred/to be incurred, diminution in value of investments if any and loss arising on account of foreign exchange fluctuations. Accordingly, the resolution has been given effect to in the accounts

9. Previous year''s figures have been regrouped or reclassified to conform with the current years'' presentation wherever considered necessary.


Mar 31, 2012

1.1 Corporate information

AFTEK Limited (the "Company") provide a wide range of information technology services including systems, hardware and software, communications and networking, hardware sizing and capacity planning, software management solutions, technology education services and business process outsourcing. The Company's services portfolio consists of Application Development and Maintenance, Business Intelligence, Enterprise Solutions, Assurance, Engineering and Industrial Services, IT Infrastructure Services, Business Process Outsourcing, Consulting and Asset Leveraged Solutions.

2 Disclosure as per Accounting Standard 15 (Revised) - Employee Benefits:

The Company has classified various benefits provided to employees as under:

I Defined Contribution Plans

a Provident Fund

b State Defined Contribution Plans

i. Employers' Contribution to Labour Welfare Fund

ii. Employers' Contribution to Employee's Pension Scheme 1995

3 Segment Reporting:

Primary Segment Information

The Company is in the business of sale of software services which is viewed by the management as a single primary segment, i.e. business segment.

4 Foreign Currency Convertible Bonds

The Company had raised in aggregate USD 34.5 million through an issue of 3000 numbers of 1% Foreign Currency Convertible Bonds Due 2010 of USD 10,000 each ("FCCB") in June 2005 followed by 450 numbers of additional FCCB in July 2005 on account of exercise of green shoe option of 15%. The FCCBs bear interest @ 1% per annum with redemption at 128.25% of their principal amount. At the option of the Bondholders, FCCBs were convertible into Equity Shares/Global Depository Receipts ("GDRs") within a period of 5 years from the date of the original issue i.e. June 24, 2005 at the revised conversion price of Rs. 75.20 per share effective from June 25, 2006 (initial conversion price being Rs. 94/ - per share) pursuant to the provisions of the Trust Deed executed in respect of the FCCBs. At the year end, 880 FCCBs were outstanding which, if converted into GDR/Equity shares at the reset Conversion Price of Rs. 75.20 per share, would have resulted into issuance of additional 5,099,202 numbers of equity shares of Rs. 2 each.

At the behest of the majority bondholders, the Company had initiated the process of re-setting the conversion price of the FCCBs in line with the applicable pricing guidelines. Approval of Reserve Bank of India for the same was received vide their letter No. FED/CO/ECBD/10308/03.02.775/11-12 dated October 31, 2011. The holders of the FCCBs vide their Written Resolution of 25th July, 2012 have consented, inter alia, to the revision of Conversion Price of FCCBs from Rs. 75.20 to Rs. 13.76 and elongation of maturity period from 25th June, 2010 to 21st December, 2012 as well as waiver of events of defaults and interest payments. Accordingly, the Company has executed a Supplemental Trust Deed on 25th July, 2012 with Bank of New York Mellon, the Trustees for giving effect to the aforesaid amendments.

Accordingly, all the outstanding 880 numbers of FCCBs, if converted into GDRs/Equity Shares at the reset conversion price of Rs. 13.76 would result into issuance of additional 2,78,67,733 numbers of equity shares of Rs. 2/-each.

5 Global Depository Receipts (GDRs)

The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs. 10 each. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs. 10 each were sub-divided into smaller denomination of Rs. 2 each for which the Company had fixed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to five in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

No GDRs (PY No GDRs) were outstanding as at March, 2012.

As stated at Note No. 37, above, 880 numbers of 1% Foreign Currency Convertible Bonds Due 2010 were outstanding as at March, 31, 2012. In the event these FCCB were converted into GDRs, it would have resulted into issuance of 1,699,734 numbers of GDRs representing 5,099,202 numbers of equity shares at the then existing conversion price of Rs. 75.20. As detailed at Note No. 37,above, all the outstanding 880 numbers of FCCBs, if converted into GDRs/Equity Shares at the reset conversion price of Rs. 13.76 would result into issuance of 92,89,244 numbers of GDRs, representing 2,78,67,733 numbers of equity shares of Rs. 2/-each.

6 In view of the on-going slowdown in the European and US markets, there have been delays in receivables.The company is consistantly providing for the unrecovered debtors outststanding more than one year, if any, as bad debts.

7 The company has given certain capital advances amounting to Rs. 41.49 crores against the building under constructions at Hinjewadi, Pune. The said Plot of land is mortgaged to Bank of India -Jersey Channel Islands against the term loan. However since the Company has made default in repayment of Principal and Interest thereon, Bank has demanded repayment total loan and taken the possession of the land alongwith the construction in progress. Pending the settlement of the vendors to whom advances are paid, the same is continued to be considered as capital advances. No Contingent liability is considered for the unexecuted Capital Contract.

8 The company has invested on purchases of IPRs for various ongoing projects. Due to the delay in the projects, some IPRs are not taken by the company against the money already paid, and some IPRs are yet to be put to use as on the date of balance sheet. The company is of the opinion that with the improved market conditions all the IPRs will be profitably used by the company in the future projects.

9 Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the 'Act') and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME

The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act. Management believes that the figures for disclosure will not be significant.

10 The company has formulated a sheme of Financial restructuring to deal with current recession in the software industry, and the costs incurred on the product development and foreign curreny losses. Accordingly as per the scheme of arrangement Under section 100 to 103 read with section 78 of the Companies Act, 1956, The Hon'ble High Court of Judicature at Bombay, vide its Order dated 13th August, 2010 has sanctioned the scheme approved by members by the Special Resolution passed at the Extra-ordinary General Meeting held on 08th June, 2010 for utilization of Rs. 215.00 crores out of the balance standing to the credit of the Securities Premium Account for allocating and/or earmarking to adjust product development expenditure incurred/to be incurred,diminution in value of investments if any and loss arising on account of foreign exchange fluctuations. Accordingly, the resolution has been given effect to in the accounts of the Company to the tune of aggregating an amount of Rs. 196.80 crores in the financial year 2010-11 and balance Rs. 18.20 crores during the current year.


Mar 31, 2011

1. Contingent liabilities not provided for :

Particulars As at As at

March 31, 2011 March 31, 2010 Rs. '000 Rs. '000

(i) Corporate guarantee given to Bank for finance provided to Digihome Solutions Private Limited against which loan outstanding is (Rs.'000) 7,900 previous year (Rs.'000) 11,441} 77,900 77,900

(ii) Disputed Service Ta x Liability on fees and charges paid for Borrowings in the form of Foreign Currency Convertible Bonds and External Commercial Borrowings 4,667 4,667

(iii) Pending assessment of Income tax and Sales tax(Including Interest, if any) Amount unascertainable

Total 82,567 82,567

(ii) Raw Material Consumed Quantities in respect of raw materials and consumable are not ascertainable due to multiplicity and diverse nature of items and value of each such items are less than 10% of the total value

2. Staff Benefits cost in accordance with Accounting Standard 15 (Revised)

(i) Defined Contribution Plan: The amount of contribution to provident fund recognized as expenses during the year is (Rs.'000 ) 2,917{Previous Year (Rs.'000 ) 4,948}

(ii) The Company had been recognizing, accruing and accounting the Retirement Benefits as per the erstwhile Accounting Standard -15 on "Retirement Benefits" till March 31, 2007. The Company has adopted revised AS -15 w.e.f. April 01, 2007.

3. Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the 'Act') and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME

The Company is making efforts to get the confirmations from the suppliers as regards their status under the Act. Management believes that the figures for disclosure will not be significant.

The agreements are executed for a period of 11 to 60 months with a cancellable period at the beginning of the agreement ranging from 0 to 24 months and having a renewable clause.

4 . Foreign Currency Convertible Bonds

The Company had raised USD 34.5 million through an issue of 3000 numbers of 1% Foreign Currency Convertible Bonds Due 2010 of USD 10,000 each ("FCCB") in June 2005 followed by 450 numbers of additional FCCB in July 2005 on account of exercise of green shoe option of 15%. These FCCB are listed at Luxembourg Stock Exchange. The FCCB bear interest @ 1% per annum with redemption at 128.25% of their principal amount. At the option of the Bondholders, FCCB are convertible into Shares/Global Depository Receipts ("GDR") within a period of 5 years from the date of the original issue i.e. June 24, 2005 at the revised conversion price of Rs 75.20 per share effective from June 25, 2006 (initial conversion price being Rs. 94/- per share) pursuant to the provisions of the Trust Deed executed in respect of the FCCB. At the year end, 880 FCCB were outstanding which, if converted into GDR/Equity shares at the reset Conversion Price of Rs 75.20 per share, would result into issuance of additional 5,099,202 numbers of equity shares of Rs. 2 each. However the company is in the process of resetting the conversion price as per current pricing guidelines. The same is currently pending before the Reserve Bank of India, Mumbai.

5 Segment Information

Primary Segment Information

The Company is in the business of sale of software services which is viewed by the management as a single primary segment, i.e. business segment.

Secondary Segment Information - Geographical

6. Unhedged Foreign Currency Exposure:

Particulars of Unhedged Foreign Currency exposure as at Balance Sheet date in ('000s)

Advance to Creditors Rs. 744,531 (USD 16,757) (PY: Rs. 575 ; USD 13).

Creditors Rs.5 (USD 0.12) (PY: Nil)

Export Debtors Rs.1,349,211 (USD 22,474; EURO 5,621) (PY: Rs. 1,442,642 ; USD 23,920; EURO 6,129)

Foreign Currency Bank Account Rs. 699,894 (USD 15577; EURO 125 ) (PY:Rs. 2,345,345; USD 47,099; EURO 3,858)

Term Loan Rs. 285,750 (EURO 4,500) (PY: Rs.273,780; EURO 4,500)

Unsecured Loan Rs. 403,161 (USD 8,995) (PY: Rs. 416,826; USD 9,206)

Loans and Advances to Subsidiaries Rs. 78,729 (USD 124; CHF 1,523) (PY: Rs. 35,769; USD 124; CHF 723)

7. At the beginning of the year, the Company had outstanding Interest Free Deposits with Body Corporates aggregating (Rs '000) 80,639. (Previous year (Rs '000) 80,639.) These deposits were given prior to 2003 to Company's various business associates for the business development. During the current year, no amount has been received. In respect of balance receivables of Rs 80,639, the management is taking appropriate steps for recovery of these dues. Consequently no provision is considered necessary at this stage.

8 The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs.10 each. These GDRs are listed on Luxembourg Stock Exchange. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs.10 each were sub-divided into smaller denomination of Rs.2 each for which the Company had fixed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to five in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

No GDRs (PY('000) 100, representing ('000) 300 equity shares) were outstanding as at March, 2011.

As stated at para 11 above, 880 numbers of 1% Foreign Currency Convertible Bonds Due 2010 was outstanding as at March, 31, 2011. In the event these FCCB are converted into GDR, it would result into issuance of 1,699,734 numbers of GDRs representing 5,099,202 numbers of equity shares at the existing conversion price. However, at the behest of majority bondholders, the company is in the process of resetting the conversion price as per applicable pricing guidelines. The same is currently pending before the Reserve bank of India, mumbai.

9 The Company has an investment (net of provision) of (Rs '000) 29,597 (Previous year (Rs '000) 29,597) in Opdex Inc (Opdex), a wholly owned subsidiary and it has also granted loans and advances of (Rs '000) 5,508 (Previous year (Rs '000) 5565) to Opdex, whose accumulated losses substantially exceed its paid up capital. The management has initiated series of steps to revive the business of Opdex, including providing additional funds and deputing a senior employee to head the operations of Opdex. The management believes that Company's investment in Opdex is strategic and diminution in value, if any, is only temporary. In view of the foregoing, the management believes that provision made is sufficient and no further loss is anticipated on diminution in the value of said investment. Management also believes that dues from Opdex are fully recoverable.

10 Financial restructuring

a) The company has formulated a scheme of Financial restructuring to deal with current recession in the software industry, and the costs incurred on the product development and foreign currency losses. Accordingly as per the scheme of arrangement Under section 100 to 103 read with section 78 of the Companies Act, 1956, The Hon'ble High Court of Judicature at Bombay, vide its Order dated 13th August, 2010 has sanctioned the scheme approved by members by the Special Resolution passed at the Extra-ordinary General Meeting held on 08th June, 2010 for utilization of Rs.215.00 crores out of the balance standing to the credit of the Securities Premium Account for allocating and/or earmarking to adjust product development expenditure incurred/to be incurred, diminution in value of investments if any and loss arising on account of foreign exchange fluctuations. Accordingly, the resolution has been given effect to in the accounts of the Company to the tune of aggregating an amount of Rs.196.80 crores.

11 Previous years' figures are regrouped and re arranged to make them comparable.

12 Schedules - A to S form an integral part of the financial statements accounts and has been duly authenticated.

Signatures to Schedules A to S


Mar 31, 2010

1. Capital commitment :

2. Contingent liabilities not provided for :

As at As at

Particulars March 31, 2010 March 31, 2009 Rs. 000 Rs. 000

(i) Corporate guarantee given to Bank for fi nance provided to Digihome Solutions 77,900 80,000

Private Limited against which loan outstan ding is (Rs.000) 11,441 Previous year (Rs.000) 19,597}

(ii) Disputed Service Tax Liability on fees and charges paid for Borrowings in 4,667 4,667 the form of Foreign Currency Convertible Bonds and External Commercial Borrowings

(iii) Pending assessement of Income tax and Sales tax Amount Unascertaiable

Total 82,5671 84,667

3. Additional information pursuant to paragraphs 3, 4B and 4D of Part II of Schedule VI to the Companies Act, 1956, as applicable

(i) Particulars in respect of Manufactured Products

(ii) Raw Material Consumed Quantities in respect of raw materials and consumable are not ascertainable due to multiplicity and diverse nature of items and value of each such items are less than 10% of the total value

(iii) Value of imported and indigenous raw materials and consumables consumed and percentage of each to total consumption:

(iv) Value of imports on C.I.F basis:

(v) Expenditure in foreign currency (on accrual basis):

(vi) Earnings in foreign currency (on accrual basis):

(vii) Auditors remuneration (including service tax):

(viii) The amount remitted during the year in foreign currencies on account of dividend are as follows:

(ix) Managerial remuneration:

4. Earnings per share (EPS):

5. Related party disclosures:

6. Staff Benefi ts cost in accordance with Accounting Standard 15 (Revised)

(i) Defi ned Contribution Plan: The amount of contribution to provident fund recognized as expenses during the year is (Rs.000) 4,948{Previous Year (Rs.000 ) 7,744}

7. Deferred Taxes

8. Dues to Micro, Small and Medium Enterprises (MSME)

The Company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium Enterprises Development Act, 2006 (the Act) and hence disclosure regarding following has not been provided.

a) Amount due and outstanding to MSME suppliers as at the end of the accounting year.

b) Interest paid during the year to MSME

c) Interest payable at the end of the accounting year.

d) Interest accrued and unpaid at the end of the accounting year to MSME

The Company is making efforts to get the confi rmations from the suppliers as regards their status under the Act. Management believes that the fi gures for disclosure will not be signifi cant.

9 Employee Stock Option Scheme

10. Leases

The Company has signifi cant leasing arrangements in respect of operating leases for premises and utilities. Operating lease rental charged to revenue amount to (Rs.000) 22,597{Previous year: (Rs.000) 37,406}. The future minimum lease rental payments under non cancellable agreements entered on or after April 01, 2001 are as follows:

11. Foreign Currency Convertible Bonds

The Company had raised USD 34.5 million through an issue of 3000 numbers of 1% Foreign Currency Convertible Bonds Due 2010 of USD 10,000 each ("FCCB") in June 2005 followed by 450 numbers of additional FCCB in July 2005 on account of exercise of green shoe option of 15%. These FCCB are listed at Luxembourg Stock Exchange. The FCCB bear interest @ 1% per annum with redemption at 128.25% of their principal amount. At the option of the Bondholders, FCCB are convertible into Shares/ Global Depository Receipts ("GDR") within a period of 5 years from the date of the original issue i.e. June 24, 2005 at the revised conversion price of Rs 75.20 per share effective from June 25, 2006 (initial conversion price being Rs. 94/- per share) pursuant to the provisions of the Trust Deed executed in respect of the FCCB. At the year end, 880 FCCB were outstanding, if converted into GDR/Equity shares at the reset Conversion Price of Rs 75.20 per share, would result into issuance of additional 5,099,202 numbers of equity shares of Rs. 2 each. However, at the behest of majority bondholders, the company is in the process of resetting the conversion price as per applicable pricing guidelines.

12 Segment Information

13. Unhedged Foreign Currency Exposure:

14. At the beginning of the year, the Company had outstanding Interest Free Deposits with Body Corporates aggregating (Rs 000) 108139. (Previous year (Rs 000) 138139.) These deposits were given prior to 2003 to Companys various business associates for the business development. During the current year, an amount of (Rs 000) 27,500 (Previous year (Rs 000) 30000) has been received. In respect of balance receivables of Rs 80,639, the management is taking appropriate steps for recovery of these dues. Consequently no provision is considered necessary at this stage.

15 The Company had issued 1,333,100 Global Depository Receipts (GDRs) on February 07, 2003 at a price of USD 11.25, per GDR with each GDR representing 3 equity shares of Rs.10 each. These GDRs are listed on Luxembourg Stock Exchange. Pursuant to Special Resolution passed at the Annual General Meeting held on December 29, 2003, equity shares of Rs.10 each were sub-divided into smaller denomination of Rs.2 each for which the Company had fi xed January 29, 2004 as the Record Date. Corresponding increase was made to the number of GDRs from one to fi ve in order to maintain the GDR to Equity proportion of 1:3.

Further, pursuant to the Special Resolution passed at the Annual General Meeting held on December 28, 2004, bonus shares in the proportion of one equity share for every two equity shares held on the record date of January 28, 2005 were allotted on January 31, 2005 resulting in increase in the number of GDRs.

100,000 numbers of GDRs representing 300,000 equity shares were outstanding as at March 31, 2010.

As stated above, 880 numbers of 1% Foreign Currency Convertible Bonds Due 2010 was outstanding as at March, 31, 2010. In the event these FCCB are converted into GDR, it would result into issuance of 1,699,734 numbers of GDRs representing 5,099,202 numbers of equity shares at the exisiting coversion price. However, at the behest of majority bondholders, the company is in the process of resetting the conversion price as per applicable pricing guidelines.

16 During an earlier years, the Company had developed a software (project) costing (Rs 000) 163,358,(Previous year (Rs 000) 163358) which was pending completion of fi nal testing on live data and has been classifi ed under Capital-Work-In-Progress. This project has been delayed since past three years due to slow progress of business arrangement with an existing anchor customer. In view of the positive economic scenario management expect that the said project will go commercial in the near furture, and believes that there would not be any signifi cant impairment loss considering market protential of the product.

17 The Company has an investment (net of provision) of (Rs 000) 29,597 (Previous year (Rs 000) 29597.)in Opdex Inc (Opdex), a wholly owned subsidiary and it has also granted loans and advances of (Rs 000) 5,565 (Previous year (Rs 000) 6009) to Opdex, whose accumulated losses substantially exceed its paid up capital. The management has initiated series of steps to revive the business of Opdex, including providing additional funds and deputing a senior employee to head the operations of Opdex. The management believes that Companys investment in Opdex is strategic and diminution in value, if any, is only temporary. In view of the foregoing, the management believes that provision made is suffi cient and no further loss is anticipated on diminution in the value of said investment. Management also believes that dues from Opdex are fully recoverable.

18 Financial restucturing

In the course of its operations, the Company has incurred and will continue to incur signifi cant expenditure towards development of new product and creating Intellectual Property Rights. With the weakening of the global markets, the Company is also focusing on internally developing IT related software and hardware, towards which signifi cant expenditure will be incurred. Since the products developed are unique and are still in trial phase, the management of the Company believes that while certain projects will still be commercially viable, there could be some portion of the expenditure which may result in development of products which may not be commercially viable. The Company generally capitalizes the expenditure incurred on development of products and the same is amortized over a period of time. The Company has also made strategic investments in operating subsidiary companies and has also advanced loans to certain subsidiaries. Due to slump in the software industry, the accumulated losses of the subsidiary companies have substantially exceeded and as a result the value of investment in these subsidiaries has declined.

The Company has presence in the international markets and in the light of present global scenario and slump in the software industry, the Company has / and may continue to suffer foreign exchange losses

In view of the aforesaid, Members of the Company, at an Extra-ordinary General Meeting held on 08th June, 2010, had approved by means of a special resolution, the proposal to utilize a sum of Rs.215 Crores (Rupees Two Hundred & Fifteen Crores only) standing to the credit of the Securities Premium Account of the Company by allocating and /or earmarking to adjust product development expenditure incurred and / or to be incurred, diminution in value of investments, if any and loss arising on account of foreign exchange fl uctuations. The Honble High Court at Judicature at Bombay, vide Order dated 13th August, 2010 has sanctioned the aforesaid resolution.

19 Previous years figures are regrouped and re arranged to make them comparable

20 Schedules - A to S form an integral part of the fi nancial statements accounts and has been duly authenticated.

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