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Notes to Accounts of Cybermate Infotek Ltd.

Mar 31, 2015

1. Company Overview

Cybermate is a Mid Sized IT Services company engaged in custom built software development, System Integration Services, Network & Surveillance, building and selling own Products, reselling third party products, business platforms such as analytics, social media, mobile applications, cloud based solutions and outsourced business processes etc. Cybermate has over the year built and sold products for general IT use and domain specific solutions for Health Care, Telecom, Engineering, Energy and Retail.

Cybermate is a public limited company incorporated in India and has its registered and corporate office at Hyderabad, Telangana. The company is listed on BSE Limited.

2. Share Capital

Terms/Rights attached to Equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. In the event of Liquidation of the company, the holder of equity shares will be entitled to receive any of the remaining assets of the company after distribution of all preferential amounts. However, no such preferential amounts exist currently.

The distribution will be in proportion to number of equity shares held by the shareholders.

3. Secured Loans from Housing Finance Company

The company has its own commercial space which was leased out to another I.T. Services Company for 10 years in 2004. The lease rentals were discounted with a housing finance company to augment working capital for the company. The tenant had terminated the lease and vacated the property of the company in 2009. Owing to the Political Conditions in the state the property could not be leased out and there by the account being irregular.

The company approached the lender to restructure the loan but they initiated proceedings under the SARFARESI Act to recover their dues. The company has approached the Debts Recovery Tribunal and appropriate Legal Authorities for relief to protect its property. The amounts due is Rs. 3, 03, 00,175/-

4. Investment Written off

The company is recognising diminution in value of investments in subsidiary by charging off the amounts to revenue in a systematic manner over five years. The amounts represents share application money pending allotment which has arisen on capitalising export receivables.

* CIL Inc : During the year the company has written off an amount of Rs. 1308.47 Lacs representing investment in wholly owned subsidiary as against an amount of Rs. 436.88 lacs in previous year. The Closing balance of Investment in CIL Inc after this write off is Rs. 2.17 Lacs.

* CIL FZE: During the year the company has amortised an amount of Rs. 85.16 lacs. Further the company has transferred an amount of Rs.3568.92 Lacs to Investment in UAE as the amount represents Capital Advances made to aquire Software Product/Licenses in UAE markets. The Closing balance of investment in CIL FZE after the addition is Rs.3816.91 Lacs.

5. Loans and Advances, Inter Corporate Deposits and Book Debts

During the year the year the company has written off an amount of Rs. 2147.52 Lacs as bad debts. The company has reviewed the receivables which include Loans and Advances, Book Debts and other receivables as the same have become unrealisable.

6. Software Product Development Expenses

Software Product Development Expenses were being written off over a period of five years commencing 2006-07. However there was an addition to product development expenses in the year 2008-09 and hence the balance is being written oven off over the extended period.

7. Inventories

Inventories amounting to Rs. 2630.36 Lacs representing expenditure incurred for development, upgrading of features, inclusion of new modules etc. The company has capitalised the expenditure to the products since testing and implementation has resulted in favourable outcome.

The closing balance in Inventories after capitalisation is Rs.NIL.

8. Subsidiary Companies

The statement pursuant to Section 129(3)(I) of the Companies Act 2013 in respect of the subsidiaries is attached.

The Company has two Wholly Owned Subsidiaries viz Cybermate Infotek Limited Inc

at U.S.A and Cybermate Infotek Ltd F.Z.E at U.A.E. The operations of the Subsidiary in

U.S.A. remained dormant since the year 2002.

Cybermate Infotek Limited

Notes to Financial Statements for the Period ended 31st March, 2015

In respect of the Subsidiary at UAE i.e CIL FZE, no operations could be made but advances were Progress amounting to Rs. 3568.92 Lacs were paid to acquire Software Products/Licences for setting up of operation and was accounted in the holding companys books as Capital Work in Progress. Hence in the current year the entire advance is transferred from Capital Work in Progress to Investment in CIL FZE.

8. Segment Reporting

In accordance with the requirement of AS-17 on Segment reporting, the company has determined its business segment as Computer Software Services. During the year the company has also commenced BPO operations. Since all of the company's business is from computer software services, there are no other primary reportable segments. Thus the segment revenue , segment result , total carrying amount of segment liabilities, total cost incurred to acquire segment assets , the total amount of charge for depreciation during the year are all reflected in the financial statements for the year ended 31st March 2015.

There are no secondary reportable segments (Geographical Segments) since most of the turnover is from outside India.

9. The company has overdue receivables in convertible foreign exchange. The Company has not restated these balances at the balance sheet date as per AS-11-The Effects of Changes in Foreign Exchange Rates since the company intends to recognize gain/loss on these receivable only on actual realization since these balances are overdue.

10. Related Party Disclosures

I. Parties where Control Exists

(a) Wholly Owned Subsidiaries

Cybermate Infotek Ltd Inc

Cybermate Infotek Ltd LLC

(b) Parties having control (directly or indirectly)

Orchasp Energy (P) Ltd

Orchasp Securities (P) Ltd

CIL Infoserve Ltd

Kanti Rekha Power Ltd

II. Key Management Personnel

Mr.P.C.Pantulu - Managing Director

Mr.K.S.Shiva Kumar - Director

Mr.P.Chandra Sekhar - Director

III. Relatives of Key Management Personnel Mrs.P.Rajeswari, Wife of Mr.P.C.Pantulu Mrs.K.Sirisha, Wife of Mr.P.Chandra Sekhar Mrs.Sirisha Pattapurathi, Daughter of Mr.P.C.Pantulu Mr.Srikrishna Pattapurathi brother of Mr.P.C.Pantulu Mr.Manjush Pattapurathi cousin of Mr.P.Chandra Sekhar

11. Contingent Liabilities

2015 2014 Rs.In Lacs Rs.In Lacs

Income Tax Matters on which the company 814.28 814.28 is in appeal

b Bank Guarantee in favour of Assistant Commissioner of Customs for a CPWB warehouse license.

12. Debtors, Creditors, Loans and Advances are subject to confirmation and reconciliation.

13. Previous year figures have been regrouped and rearranged wherever necessary to conform to this years' classification.




Mar 31, 2014

1. Investment Written off

The company is recognising diminution in value of investments in subsidiary by charging off the amounts to revenue in a systematic manner over five years. The amounts represents share application money pending allotment which has arisen on capitalising export receivables.

2. Inter Corporate Deposits.

The balances lying in Inter corporate Deposits have not been recovered for a long period.

The company has filed a winding up petition and also criminal proceedings on one corporate. The Hon''ble High Court of Andhra Pradesh has ordered for the winding up of the corporate.

The company could not recover any part of its dues so far. The Company is confident that the principal would be recovered and hence has not made any provision for non recovery of these amounts.

3. Miscellaneous Expenses

Miscellaneous Expenses were being written off over a period of five years commencing 2006-07. However there was an addition to Miscellaneous Expenses in the year 2008-09 and hence the balance is being written oven off over the extended period.

4. Subsidiary Companies

The statement pursuant to Section 212(1) (e) of the companies Act 1956 in respect of the subsidiaries is attached. The Company has two Wholly Owned Subsidiaries viz Cybermate Infotek Limited Inc at U.S.A and Cybermate Infotek Ltd F.Z.E at U.A.E. The operations of the Subsidiary in U.S.A. remained dormant since the year 2002. Further, in respect of the subsidiary in UAE no business has been conducted since its inception. In view of the above the preparation and presentation of consolidated financial statements could not be made.

5. Segment Reporting

In accordance with the requirement of AS-17 on Segment reporting, the company has determined its business segment as Computer Software Services. Power Division is yet to commence operations. Since all of the company''s business is from computer software services, there are no other primary reportable segments. Thus the segment revenue , segment result , total carrying amount of segment liabilities, total cost incurred to acquire segment assets , the total amount of charge for depreciation during the year are all reflected in the financial statement of and for the year ended 31st March 2014. There are no secondary reportable segments (Geographical Segments) since most of the turnover is from outside India.

6. The company has overdue receivables in convertible foreign exchange. The Company has not restated these balances at the balance sheet date as per AS-11-The Effects of Changes in Foreign Exchange Rates since the company intends to recognize gain/loss on these receivable only on actual realization since these balances are overdue.

7 : Related Party Disclosures

Parties where Control Exists

(a) Wholly Owned Subsidiaries Cybermate Infotek Ltd Inc Cybermate Infotek Ltd FZE

(b) Parties having control (directly or indirectly) Orchasp Energy (P) Ltd

Orchasp Securities (P) Ltd CIL Infoserve Ltd Kanti Rekha Power Ltd

II. Key Management Personnel

Mr.P.C.Pantulu - Managing Director

Mr.K.S.Shiva Kumar - Director

Mr.P.Chandra Sekhar - Director

III. Relatives of Key Management Personnel Mrs.P.Rajeswari, Wife of P.C.Pantulu Mrs.K.Sirisha, Wife of Mr.P.Chandra Sekhar Mrs.Sirisha Pattapurathi, Daughter of Mr.P.C.Pantulu

8 : Contingent Liabilities

2014 2013 Rs In Lacs Rs In Lacs

Income Tax Matters on which the company is in appeal 814.28 643.94

b Bank Guarantee in favour of Assistant Commissioner of Customs for a CPWB warehouse license.

9. Debtors, Creditors, Loans and Advances are subject to confirmation and reconciliation.

10. Previous year figures have been regrouped and rearranged wherever necessary to conform to this years'' classification.


Mar 31, 2013

1. Secured Loans:

(i) State Bank of Travancore:

The term loan availed from the bank is secured by the following :

Primary Security:

Rupee Term Loan from State Bank of Travancore is secured by a first charge on the fixed assets of the Company viz Computers, laptops, regular servers, dot net servers, oracle servers, UPS, Batteries, Windows Operating System, Oracle Software Licence, Communication Equipments, Office Equipment, Furniture and Fixtures etc, existing and proposed to be acquired for the expansion of the project.

Collateral Security:

1. Equitable Mortgage of property of Sri P.C.Pantulu, Managing director of the Company.

2. Personal Guarantee of Mr. P.C.Pantulu, M.D and Mr. P.Chandra Sekhar, Director.

(ii) DHFL (Dewan Housing Finance Corporation Limited)

Rupee Lease Rental Finance from DHFL is primarily secured by the assignment of the Rent receivables, collateral security by first charge on the property of the Company.

2. Prior Period Items:

a) Deferred Taxes

The company has not been compliant with AS22 on Deferred Taxes till the previous accounting period. The company has commenced the compliance with the AS 22 and hence the deferred tax liability upto previous year is included as a prior period adjustment.

b) Subsidy from Govt of Nagaland

The company had received an amount of Rs.10 lakhs as a capital contribution for setting up of a training centre at Dimapur. The amount has been spent towards setting up of infrastructure for the training centre. Hence the carried forward balance is been transferred to revenue as prior period revenue as matching expenses were recognised in profit and loss account earlier.

c) Security Deposit from Trainees

The security deposits received from employees in 2000-01 under a bond were transferrable to revenue in earlier period as the trainees could not satisfy the terms and conditions of the employment bond. They had filed a petition in the High Court of Andhra Pradesh for the refunds. In accordance with the high court order dated 15th March 2010, the company has transferred the amounts to revenue as a prior period income.

3. The Company was inconsistent with requirements of the Accounting Standard 21 issued by the Institute of Chartered Accountants of India as the Overseas Subsidiary is not having any operations hence the Company is not preparing the consolidated Financial Statements.

4. Segment Reporting:

The entire operations of the company relate only to one segment i.e., Computer Segment.

5. Share Application Money Pending Allotment

The promoters of the company have advanced amounts to the company over the years and also have other receivables from the company. The promoters have offered to convert these dues to equity shares at par in the previous accounting period. The company has passed the resolution in the general meeting held on the 30th September 2011. The Company has received the Inprinciple approval of the Stock Exchange on the 30th April 2013 and the shares have been allotted on the 4th May 2013.

6. Investment Written off

The company is recognising diminution in value of investments in subsidiary by charging off the amounts to revenue in a systematic manner over five years. The amounts represents share application money pending allotment which has arisen on capitalising export receivables.

7. Inter Corporate Deposit

The balances lying in Inter corporate Deposit have not been recovered for a long period. The company has filed a winding up petition and also criminal proceedings on the debtor. The Honorable High Court of Andhra Pradesh has ordered for the winding up. The company could not recover any part of its dues so Far.The Company is confident that the principal would be recovered and hence has not made any provision for non recovery of these amounts.

8. Miscellaneous Expenses

Miscellaneous Expenses were being written off over a period of five years commencing 2006-07. However there was an addition to Miscellaneous Expenses in the year 2008-09 and hence the balance is being written oven off over the extended period.

9. Statutory and other Claims against the Company and Appeals

(a) Income Tax

For the assessment year 2009-10, the Assessing Officer has passed an order making additions of Rs. 12.88 crores and raised a tax demand for Rs. 6.43 Crores. The company has preferred an appeal before the CIT (Appeals) against the additions made.

The company has fair chances of winning the case and hence no provision is made toward demand raised.

(b) Bank Guarantees

The Company has issued performance bank guarantee to M/s APGENCo under contractual obligations and has fulfilled the same to their satisfaction. There are no claims against the company. Hence no provisions arise in this regard.The said bank guarantee was fulfilled in the subsequent period.

The company has issued a guarantee to the Assistant Commissioner of Customs for a CPWB warehouse license. There are no claims on the company on account of the same and hence no provision needs to be made.

The company has overdue receivables in convertible foreign exchange. The company has not revalued the same at the balance sheet date which is not consistent with the principles laid down in AS 11. The company intends to recognize gain/loss on these receivable only on actual realization.

Micro, Small and Medium Enterprise.

There are no Micro, Small and Medium Enterprise, to whom the Company owes dues, which are outstanding at the Balance Sheet date, computed on unit wise basis.

Dues to S.S.I:

There are no dues to S.S.I units in respect of sundry creditors.

10. Debtors, Creditors, Loans and Advances are subject to confirmation and reconciliation.

11. Previous Year figures have been regrouped wherever necessary.

12. Figures are rounded off to nearest rupee.

13. The accounts for the year are prepared for the period of 12 months from 1st April 2012 to 31st March 2013.


Mar 31, 2012

1. Secured Loans:

(i) State Bank of Travancore:

The term loan availed from the bank is secured by the following :

Primary Security:

Rupee Term Loan from State Bank of Travancore is secured by a first charge on the unencumber fixed assets of the Company viz Computers, laptops, regular servers, dot net servers, oracle servers, UPS, Batteries, Windows Operating System, Oracle Software Licence, Communication Equipments, Office Equipment, Furniture and Fixtures etc, existing and proposed to be acquired for the expansion of the project.

Collateral Security:

1. Equitable Mortgage of property of Sri P.C.Pantulu, Managing director of the Company.

2. Personal Guarantee of Mr. P.C.Pantulu, M.D and Mr. P.Chandra Sekhar, Director.

(ii) DHFL (Dewan Housing Finance Corporation Limited)

Rupee Lease Rental Finance from DHFL is primarily secured by the assignment of the Rent receivables, collateral security by first charge on the property of the Company

(iii) Hire Purchase Loans from M/s ICICI Bank Ltd and M/s Orix Auto Infrastructure Services Ltd

Hire Purchase loans for purchase of Computers are secured by underlying assets acquired under the Hire Purchase Agreement.

2. Prior Period Items:

a) Deferred Taxes

The company has not been compliant with AS22 on Deferred Taxes till the previous accounting period. The company has commenced the compliance with the AS 22 and hence the deferred tax liability upto previous year is included as a prior period adjustment.

b) Subsidy from Govt of Nagaland

The company had received an amount of Rs.10 lakhs as a capital contribution for setting up of a training centre at Dimapur. The amount has been spent towards setting up of infrastructure for the training centre. Hence the carried forward balance is been transferred to revenue as prior period revenue as matching expenses were recognised in profit and loss account earlier.

c) Security Deposit from Trainees

The security deposits received from employees in 2000-01 under a bond were transferrable to revenue in earlier period as the trainees could not satisfy the terms and conditions of the employment bond. They had filed a petition in the High Court ofAndhra Pradesh for the refunds. In accordance with the high court order dated 15th March 2010, the company has transferred the amounts to revenue as a prior period income.

3. The Company was inconsistent with requirements of the Accounting Standard 21 issued by the Institute of Chartered Accountants of India as the Overseas Subsidiary is not having any operations hence the Company is not preparing the consolidated Financial Statements.

4. Segment Reporting:

The entire operations of the company relate only to one segment i.e., Computer Segment.

5. Share Application Money Pending Allotment

The promoters of the company have advanced amounts to the company over the years and also have other receivables from the company. The promoters have offered to convert these dues to equity shares at par in the previous accounting period. The company has passed the resolution in the general meeting held on the 30th September 2011. The company has made an application to the stock exchange for allotment of these shares and the same is pending. Hence the amounts due are transferred to Share Application Money pending allotment in the current period

6. Investment Written off

The company was recognising diminution in value of investments in subsidiary by charging off the amounts to revenue in a systematic manner over five years. The amounts represents share application money pending allotment which has arisen on capitalising export receivables.

7. Inter Corporate Deposit

The balances lying in Inter corporate Deposit have not been recovered for a long period. The company has filed a winding up petition and also criminal proceedings on the debtor. The Honorable High Court of Andhra Pradesh has ordered for the winding up. The company could not recover any part of its dues so Far.The Company is confident that the principal would be recovered and hence has not made any provision for non recovery of these amounts.

8. Miscellaneous Expenses

Miscellaneous Expenses were being written off over a period of five years commencing 2006-07. However there was an addition to Miscellaneous Expenses in the year 2008-09 and hence the balance is being written oven off over the extended period

9. Statutory and other Claims against the Company and Appeals

(a) Income Tax

For the assessment year 2009-10, the Assessing Officer has passed an order making additions of Rs. 12.88 crores and raised a tax demand for Rs. 6.43 Crores. The company has preferred an appeal before the CIT (Appeals) against the additions made.

The company has fair chances of winning the case and hence no provision is made toward demand raised

(b) Bank Guarantees

The Company has issued performance bank guarantee to M/s APGENCo under contractual obligations and has fulfilled the same to their satisfaction. There are no claims against the company. Hence no provisions arise in this regard.

The company has issued a guarantee to the Assistant Commissioner of Customs for a CPWB warehouse license. There are no claims on the company on account of the same and hence no provision needs to be made.

The company has overdue receivables in convertible foreign exchange. The company has not revalued the same at the balance sheet date which is not consistent with the principles laid down in AS 11. The company intends to recognize gain/loss on these receivable only on actual realization.

10. Micro, Small and Medium Enterprise.

There are no Micro, Small and Medium Enterprise, to whom the Company owes dues, which are outstanding at the Balance Sheet date, computed on unit wise basis.

Dues to S.S.I:

There are no dues to S.S.I units in respect of sundry creditors.

11. Debtors, Creditors, Loans and Advances are subject to confirmation and reconciliation.

12. Previous Year figures have been regrouped wherever necessary.

13. Figures are rounded off to nearest rupee.

14. The accounts for the year are prepared for the period of 12 months from 1st April 2011 to 31st March 2012.


Mar 31, 2010

(All figures are reported in rupees, except data relating to shares or unless stated Otherwise)

1. Cost of Acquisition of Software

Cost of Acquisition of Licensed versions of Software is charged off in the year of purchase.

2. Secured Loans

(a) Rupee Lease Rental Finance from Dewan Housing Finance Corporation Limited is primary secured by assignment of rent receivables, collateral security by a first charge on the property of the company.

(b) Term ban from IDB1 Bank is secured by a first charge on property i.e land belonging to the Managing Director Mr.P C Pantulu.

3. Empbyee Stock Option Scheme. (ESOP) The compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of options. These options vest with empbyees- over a specified period subject to fulfillment of certain conditions. Upon vesting, empbyees are eligible to apply and secure albtment of Companys shares at a price determined on the date of grant of options.

Amount received from empbyees on exercise of stock option, pending albtment of shares is shown as share application money pending albtment

4. Related Party Transactions

5. Key Management personnel are non-director officers of the company, who have the authority and Responsibility for planning, directing and controlling the activities of the Company. The bans and advances receivable from non-director officers as at 31st March, 2010 are at Rs. NIL.

6. Segment reporting: The entire operations of the company relate only to one segment i.e.. Computer Software.

7. Assets taken on lease comprise computers and peripherals, which are accounted as per the tenor of the hire purchase agreement. The dues against certain assets on hire purchase basis to one company could not be settled as the Hire Purchase Company has suspended its operations.

8. Dues to S.S.I.: There are no dues to S.S.I. units in respect of Sundry Creditors as required to be discbsed in accordance with Section 211 read with part 1 of Schedule VI of the Companies Act, 1956. .

9. Miscellaneous expenses: Miscellaneous expenses not written 6f include expenditure in connection with development of certain software products. The company proposed to charge off the same to revenue over a period of five years commencing from 2006-2007.

10. Investments by the company are in the category of non-trade and unquoted shares. The Wholly Owned Subsidiary in the USA has suspended its operations and hence the management proposes to recognize a dimunition in the value of investment by 15% of the value amounting to Rs. 2,33,10,586/-. During die year the company has capitalized dues from the wholly owned subsidiary at USA amounting to 10,83,87,617/-.

11. Inter corporate Deposits: The recovery of interest on these deposits is very irregular and outstanding for a bng period The auditors have requested the company to make a suitable provision in the books of accounts. However the company has obtained judgment in favour of the company on a suit filed oh Armour Pharmaceuticals Ltd for the recovery of inter corporate deposit and is confident of recovering interest and principal

12. Additional Information Pursuant to the provisions of the Schedule VI tothe Companies Act, 1956.

iv. Contingent Liabilities not provided for

a) Bank Guarantee Rs. Nil Rs. Nil

b) LCs Rs. Nil Rs. Nil

c) Foreign Bills Discount Rs. Nil Rs. Nil

d) Disputed Income Tax Liability Rs. Nil Rs. Nil

vi. Debtors, Creditors, Loans and Advances are subject to confirmation and reconciliation. The Management is confident of recovering dues from debtors which are due for more than 180 days.

viii. Previous years figures have been regrouped wherever necessary.

ix. Figures are rounded off to nearest rupee.

x. The accounts for the year are prepared for the period of 12 months from 1st April 2009 to 31st March 2010.

 
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