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Notes to Accounts of AXISCADES Engineering Technologies Ltd.

Mar 31, 2015

1 Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each equity share is entitled to one vote per share. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting shall be payable in Indian rupees. In the event of liquidation of the company, the shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 Details of security for borrowings

Term loan from a Bank is secured by exclusive charge on both moveable and immoveable assets of the company; first charge on land and building of the Company situated at D-30 Sector 3, Noida, UP and by a corporate guarantee from AXISCADES Aerospace & Technologies Private Limited for Rs. 50 million (31 March 2014: Rs. 150 million).

Working capital loans (inclusive of packing credit facility in foreign currency) from a bank are secured by first exclusive charge on current assets, exclusive charge on movable assets and second exclusive equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida, UP and by a corporate guarantee from AXISCADES Aerospace & Technologies Private Limited for Rs. 302.5 million (31 March 2014: Rs. 200 million). Additionaly, 20% cash margin in the form of fixed deposits lien to be maintained if PCFC availment exceeds Rs. 102.5 million.

3 Terms of borrowings and rate of interest

Term loans having an interest rate of Bank's base rate plus 2.50 % subject to a minimum of 13% are repayable from May 2015 over 30 equal monthly instalments post a moratorium of 6 months.(31 March 2014: term loans having an interest rate of bank's base rate plus 2.50% were repayable from March 2014 over 10 equal quarterly instalments.)

Packing credit in foreign currency from bank bearing an interest rate of 3% - 6% (31 March 2014: 3% - 6%) are repayable over maximum tenure of 180 days from the date of respective availment.

Intercorporate deposits carrying an interest rate of 11% (31 March 2014: 11%) per annum has been fully repaid in the current year.

4 Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952. This is a defined contribution plan as per AS 15. Contribution made during the year ended 31 March 2015 is Rs. 24,308,361 (31 March 2014 : Rs. 20,948,824).

5 Overseas social security

The Company makes contribution towards social security charges for its employees located at the respective branch offices in respective foreign geographies, which is a defined contribution plan. The contributions paid or payable is recognised as an expense in the period in which the employee renderssen/ices in respective geographies. Contribution made during the year ended 31 March 2015 is Rs. 65,578,045 (31March2014:C 67,309,10S).

6 Fixed deposits given as security:

i. Fixed deposits of a carrying amount Rs. 32,036,959 (31 March 2014: Rs. 38,775,758 ) have been deposited as margin money at 20% against the packing credit facility loan availed from a bank.

ii. Deposits of a carrying amount Rs. 718,200 (31 March 2014: Rs. 331,075) have been deposited as bank guarantee towards lien on customs department and various customers.

7 RELATED PARTY DISCLOSURES

i. Parties where control exists:

Nature of relationship Name of party

Holding Company Jupiter Capital Private Limited ('JCPL'). Tayana Digital Private Limited (TDPL) ceased to be the intermediate holding company w.e.f. 09 July 2014 and in turn AXISCADES Aerospace & Technologies Private Limited, (ACAT, formerly known as Axis Aerospace & Technologies Limited) also ceased to be the intermediate holding company. ACAT is a subsidiary of JCPL.

Subsidiary Companies Axis Inc. Axis EU Europe Limited (formerly know an as Axis EU Limited, a step down subsidiary) Cades Studec Technologies (India) Private Limited Cades Technology Canada Inc. Axis Mechanical Engineering Design (Wuxi) Co., Ltd.

ii. Name and relationship of related parties where transaction has taken place:

Fellow subsidiary AXISCADES Aerospace & Technologies Private Limited

Fellow subsidiary Enertec Controls Limited

iii. Key management personnel:

CEO and Chairman Mr. S. Ravinarayanan (resigned as CEO w.e.f. 24 February 2014)

CEO and Director Mr. Valmeekanathan S. (appointed w.e.f. 25 February 2014)

CFO and Director Mr. Kaushik Sarkar (appointed w.e.f. 12 September 2014)

Company Secretary Ms. Shweta Agrawal (w.e.f. 1 April 2014)

8 Corporate social responsibility

Pursuant to the provisions of Section 135 of the Act and the Rules made thereunder, the gross amount required to be spent by the Company during the year ended 31 March 2015 amounts to Rs.1,937,000. The Company has paid Rs.1,937,000 to two non-government organizations engaged in the field of development of skills of under-privileged children, enabling them to overcome adversity and flourish in a fast changing world.

9 Appointment of Chief Financial Officer

After the Balance sheet date, the Company's application seeking approval from the Central Government for the remuneration to the Executive Director and Chief Financial Officer (CFO) of the Company has been viewed negatively in light of the provisions of Section 203 of the Act.

The Management has been advised by an expert opinion that appointment of the CFO is compliant with Section 203 and they have supported their view with prevailing corporate practice as well. Further, the Management has also been advised to resubmit the application to the Policy Wing of the Ministry of Corporate Affairs for re-examination and if found in order, to view the application positively.

Based on the expert's opinion, Management is of the view that aforesaid denial of the permission does not have any financial implications and accordingly the Management has taken requisite steps as advised. Meanwhile, the Company shall maintain status quo till final disposal of the aforesaid application.

10 Transfer pricing

The Company is required to use certain specified methods in computing arm's length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2015 following a detailed transfer pricing study conducted for the financial year ended 31 March 2014. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

11 PREVIOUS YEAR FIGURES

Previous year's figures have been regrouped / reclassified wherever necessary, to conform to current year's classification.




Mar 31, 2014

1. SEGMENT REPORTING

The single financial report of the Company would contain consolidated financial statements, including segment information, and the separate financial statements. Therefore, no separate disclosure on segment information is given in these financial statements.

2 RELATED PARTY DISCLOSURES

i. Parties where control exists :

Nature of relationship Name of party

Holding Company

Tayana Digital Private Limited (demerged from Tayana Software Solutions Private Limited), which is a subsidiary of Axis Aerospace & Technologies Limited. (''AATL'', formerly known as Jupiter Strategic Technologies Private Limited''). AATPL, a venture funded by Jupiter Capital Private Limited (''JCPL''), is a subsidiary of the JCPL.

Entity under common control Subsidiar y companies

Enertec Controls Limited

Axis Inc., U.S.A.

Axis E.U. Limited (Step down subsidiary)

Cades Studec Technologies(India) Private Limited

Cades Technology Canada Inc.

Axis Mechanical Engineering Design (Wuxi) Co., Ltd.

Cades Digitech Private Limited (Also, refer note 2)

ii. Key management personnel :

Chairman and CEO CEO

Mr. S. Ravinarayanan (resigned as CEO on 24 February 2014) Mr. Valmeekanathan S. (appointed on 25 February 2014)

iii. Transactions with related parties:

3. TRANSFER PRICING

The Company is required to use certain specified methods in computing arm''s length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2014 following a detailed transfer pricing study conducted for the financial year ended 31 March 2013. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the ef ect of the transfer pricing implications, if any.

4. PREVIOUS YEAR FIGURES

Pursuant to the Scheme (Refer note 2), the figures of the current year are not strictly comparable to those of the previous year. Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Mar 31, 2013

1 DISCLOSURES IN RESPECT OF NON-CANCELLABLE OPERATING LEASES

The lease expenses for cancellable and non-cancellable operating leases during the year ended 31 March 2013 was Rs. 35,478,675 (31 March 2012 : Rs. 32,108,640)

2 HEDGING AND DERIVATIVES

Pursuant to the adoption of AS 30 with effect from 1 April 2011, the loss on fair valuation on forward contracts, which qualify as effective cashflow hedges amounting to Rs. NIL (31 March 2012 - 7,163,655) has been recognised in the hedge reserve account. The impact of the adoption of AS 30 did not have any material impact on the opening reserves of the Company. There are no forward contracts outstanding as at 31 March 2013.

3 Transfer pricing

The Company is required to use certain specified methods in computing arm''s length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2013 following a detailed transfer pricing study conducted for the financial year ended 31 March 2012. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

4 The Board of Directors (''the Board'') of the Company at their meeting held on 23 January 2013 have approved a Scheme of Arrangement for the merger of Cades Digitech Private Limited, a subsidiary of Axis-IT&T Limited (''the Company'') with itself, subject to requisite majority of the shareholders'' and creditors of Axis-IT&T Limited and Cades Digitech Private Limited and such other statutory and regulatory approvals. The requisite steps for these activities are under process as at 31 March 2013.

5 PREVIOUS YEAR FIGURES

Previous year figures have been regrouped or reclassified wherever considered necessary to conform to current year classification.


Mar 31, 2012

1 SHARE CAPITAL

a. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each equity share is entitled to one vote per share.

The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting shall be payable in Indian rupees. In the event of liquidation of the company, the shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 BORROWINGS

(a) Details of security for borrowings

Working capital borrowings (inclusive of packing credit facility in foreign currency) from bank are secured by first exclusive charge on current assets and equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida and by a corporate guarantee from Axis Aerospace & Technologies Limited.

Loan from a body corporate is secured by demand promissory note for the loan together with interest thereon.

(b) Terms of repayment of borrowings

Packing credit in foreign currency from bank bearing an interest rate of 3% - 5% are repayable over maximum tenure of 180 days from the date of respective availment.

Loan from a body corporate bearing an interest rate of 8% to 10% are repayable over a maximum tenure of three years from the date of availment.

3 EMPLOYEE BENEFIT OBLIGATION

b) Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952. This is a defined contribution plan as per AS 15. Contribution made during they earended 31 March 2012 is Rs. 80,04,781 (31 March 2011 : Rs. 49,92,640).

4 TRADE PAYABLES

a) The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financials statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

5 CONTINGENT LIABILITIES AND COMMITMENTS

Year ended Year ended 31 March 2012 31 March 2011 Rs. Rs.

Estimated amount of contracts remaining to be executed on and not provided for 518,939 - Corporate guarantee provided to YES Bank Limited for loans availed by CADES Digitech Private Limited, a subsidiary. 150,000,000 150,000,000

Order passed against the Company by a consumer forum, Lucknow, against which the Company has filed a revised petition - 225,600

Counter guarantee provided to YES Bank Limited against guarantee availed by Axis Aerospace & Technologies Limited. 825,000,000 -

975,518,939 150,225,600

6 RELATED PARTY DISCLOSURES

i. Parties where control exists :

Nature of relationship Name of party

Holding company information The Company is a subsidiary of Tayana Digital Private Limited (demerged from Tayana Software Solutions Private Limited) which is a subsidiary of Axis Aerospace & Technologies Limited. ('AATL', formerly known as Jupiter Strategic Technologies Private Limited'). AATPL, a venture funded by Jupiter Capital Private Limited ('JCPL'), is a subsidiary of the JCPL.

ii. Name and relationship of related parties where transaction has taken place:

Subsidiary Companies Axis Inc., U.S.A. Axis E.U. Limited Cades Digitech Private Limited Cades Technology Canada Inc

iii. Key Management Personnel:

Chairman and CEO Mr. S Ravinarayanan

7 Transfer pricing

The Company is required to use certain specified methods in computing arm's length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2012 following a detailed transfer pricing study conducted for the financial year ended 31 March 2011. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

8 The Board of Directors ('the Board') of the Company at their meeting held on 12 September 2011 have approved a Scheme of Arrangement for the merger of Cades Digitech Private Limited, a subsidiary of Axis-IT&T Limited ('the Company'), Tayana Digital Private Limited (parent of the Company) and other entities into Axis Aerospace & Technologies Limited ('AAT') subject to necessary approvals. The Board has also approved a Scheme of Arrangement for the subsequent merger of the Company into AAT subject to necessary approvals. The requisite steps for these activities are under process as at 31 March 2012.

9 PREVIOUS YEAR FIGURES

The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act,1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.

 
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