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Notes to Accounts of Cybertech Systems & Software Ltd.

Mar 31, 2018

‘NOTE Rs.1’ A. CORPORATE INFORMATION:

“Cybertech Systems and Software Limited (the ‘Company’) was incorporated on January 19, 1995. Along with its subsidiary in USA, the Company provides Information Technology services to customers primarily in USA and India with focus on next-generation geospatial, networking and enterprise IT solutions. The Company offers services that span across all major industries including government, education, utilities, public safety & homeland defence, technology, telecom, retail, healthcare, and manufacturing. The Company is focused on delivering its development and support projects on an offshore basis.

The Company is a public limited company incorporated and domiciled in India and has its registered office in Thane, India. The Company has its primary listings on the BSE Limited and National Stock Exchange Limited in India”

b) Rights, preferences and restrictions attached to shares

Equity shares: The Company has only one class of equity shares having a face value of Rs.10 per share. Each shareholder has a right to vote in respect of such share, on every resolution placed before the Company and his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the Company. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after payments to secured and unsecured creditors in proportion to their shareholding.

(a) DUES TO MICRO AND SMALL ENTERPRISES

Disclosure of payable to vendors as defined under the “Micro, Small and Medium Enterprise Development Act, 2006” is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payments made during the year or brought forward from previous years.

i) In the previous years, the Company has received Income Tax refunds of Rs. 1,894.74 Lakhs (including interest amount of Rs. 740.81) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favorable Order from Income Tax Appellate Tribunal. The Income Tax Department has filed an appeal against the said Order with the Hon’ble High Court, Bombay. However the Company has continued the provision of Rs. 1,219.61 (Previous Year Rs. 1,219.61) made in earlier years.

ii) The Company’s pending litigations comprise mainly claims against the Company, proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

2 DISCLOSURE ON RELATED PARTY TRANSACTIONS

A) Names of related parties and description of relationship:

a) Subsidiary :

CyberTech Systems and Software Inc. (USA)- Wholly Owned Subsidiary

b) Key Management Personnel (KMP)

Mr.Ramasubramanian Sankaran - Executive Director Mr.Praveen Agarwal- Chief Financial Officer( From May,10,2017) Ms.Sarita Leelaramani- Company Secretary (From July 1, 2016)

Mr. Sateesh Wadagbalkar (Up to June 30, 2016)

*The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends. The above figures do not include provisions for encashable leave, gratuity and premium paid for group health insurance as separate acturial valuation/ premium paid are not available

Notes:

(i) All related party transactions entered during the year were in ordinary course of the business and are on arm’s length basis.

(ii) No amounts in respect of related parties have been written off / written back during the year, nor has any provision been made for doubtful debts / receivables during the year. (ii) No amounts in respect of related parties have been written off / written back during the year, nor has any provision been made for doubtful debts / receivables during the year.

(iii) Related party relationships have been identified by the management and relied upon by the Auditors.

3 Segment Reporting

The Company is engaged in the business of Software Development Services and its operation are regularly reviewed by Chief Operating Decision Maker for assessment of Company’s performance and resource allocation. Accordingly, the Company has only one business segment in accordance with the IND AS - 108 “Operating Segments”.

4 DISCLOSURE PURSUANT TO IND AS - 19 “EMPLOYEE BENEFITS”

Defined Benefit Plan - Gratuity

In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan (“The Gratuity Plan”) covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date and the Company makes annual contribution to the gratuity fund administered by Life Insurance Corporation of India under Group Gratuity Scheme.

D. Assumptions

With the objective of presenting the plan assets and plan liabilities of the defined benefits plans at their fair value on the balance sheet, assumptions under Ind AS 19 are set by reference to market conditions at the valuation date. The significant actuarial assumptions were as follows

The sensitivity analyses above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period and may not be representative of the actual change. It is based on a change in the key assumption while holding all other assumptions constant. When calculating the sensitivity to the assumption, the same method used to calculate the liability recognised in the balance sheet has been applied. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared with the previous period.

ii) Compensated Absences: The Company permits encashment of compensated absence accumulated by their employees on retirement, separation and during the course of service. The liability in respect of the Company, for outstanding balance of leave at the balance sheet date is determined and provided on the basis of actuarial valuation as on 31st March 2018 performed by an independent actuary. The Company doesn’t maintain any plan assets to fund its obligation towards compensated absences.

5. Leases

COMPANY AS A LESSOR

(A) The Company has leased its vacant premises under non-cancellable lease agreements.

(B) Future minimum lease payment receivables in respect of these leases:

The Company has leased its vacant premises under non-cancellable lease agreements. During the year Rs 624.08 Lakhs (Previous Year Rs. 484.98 Lakhs) has been recognized as rent income in the Statement of Profit and Loss under head “Other Income”

6 CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE

Gross amount required to be spent by the Company as per Section 135 of Companies Act, 2013 during the year is Rs 13.88 Lakhs (Previous year Rs 12.22 Lakhs) and amount actually spent during the year is Rs 14.00 Lakhs (Previous year Rs 12.08 Lakhs), the details of which is as given below:

7 Financial Risk Management

Financial risk management objectives and policies:

The Company’s business activities exposed it to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company’s Management has the overall responsibility for establishing and governing the Company’s risk management framework.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity prices and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including investments and deposits , foreign currency receivables, payables and loans and borrowings.

(A) Market Risk- Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in market interest rates. The Company is having short term borrowings from banks.

Hence, the Company is not significantly exposed to the interest rate risk as working capital facility are, as per contractual terms, primarily of short term in nature.

(B) Market Risk- Foreign currency risk.

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has foreign currency trade receivables and is therefore exposed to foreign exchange risk. The exchange rates have been volatile in the recent years and may continue to be volatile in the future. Hence the operating results and financials of the Company may be impacted due to volatility of the rupee against foreign currencies.

(C) Credit risk

Credit risk arises from the possibility that the counter party may not be able to settle their obligations as agreed. The Company is exposed to credit risk from its operating activities (trade receivables) and from its financing activities including investments in mutual funds, deposits with banks and financial institutions and debentures and bonds, foreign exchange transactions and financial instruments.

To manage the credit risk from trade receivables, the Company periodically assess financial reliability of customers, taking into account the financial condition, current economic trends, and analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period.

Credit risk from investments is managed by the Company’s treasury in accordance with the board approved policy and limits.

To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:

i) Actual or expected significant adverse changes in business,

ii) Actual or expected significant changes in the operating results of the counterparty,

iii) Financial or economic conditions that are expected to cause a significant change to the counterparty’s ability to meet its obligations,

iv) Significant increase in credit risk on other financial instruments of the same counterparty,

v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees

(D) Liquidity Risk

Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time, or at a reasonable price. The Company’s treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies related such risk are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecasts on the basis of expected cash flows. The Company’s objective is to maintain at all times, optimum levels of liquidity to meet its obligations.

8 Financial instruments

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.

The following methods and assumptions are used to estimate the fair values:

1. Fair value of cash and short-term deposits, trade and other short term receivables, trade payables, other current liabilities, short term loans from banks and other financial institutions approximate their carrying amounts largely due to short term maturities of these instruments.

2. Financial instruments with fixed and variable interest rates are evaluated by the Company based on parameters such as interest rates and individual credit worthiness of the counterparty. Based on this evaluation, allowances are taken to account for expected losses of these receivables. Accordingly, fair value of such instruments is not materially different from their carrying amounts.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly. Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

The Management assessed that fair value of cash and cash equivalents, trade receivables, investments in term deposits, loans, other financial assets (except derivative financial instruments), trade payables, and other financial liabilities (except derivative financial instruments) is considered to be equal to the carrying amount of these items due to their short-term nature.

c. Fair value estimation

For financial instruments measured at fair value in the Balance Sheet, a three level fair value hierarchy is used that reflects the significance of inputs used in the measurements. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and lowest priority to unobservable inputs (Level 3 measurements).

The categories used are as follows:

- Level 1: quoted prices for identical instruments

- Level 2: directly or indirectly observable market inputs, other than Level 1 inputs; and

- Level 3: inputs which are not based on observable market data.

9 Share Warrants

During the previous financial year, the Company has issued 10,00,000 Warrants at a price of Rs. 67 each entitling them for subscription of equivalent number of equity shares of Rs. 10 each (including premium of Rs. 57 each share) in accordance with Chapter VII of SEBI (Issue of Capital & Disclosure Requirements) Regulations, 2009.

Money received against these share warrants represent 25% of the warrants value which entitles the warrant holder, the option to apply for and be allotted equivalent number of equity shares of the face value of Rs. 10 each. The holder of the warrants would need to exercise the option to subscribe to equity shares before the expiry of 18 months from the date of allotment made on October 27, 2016 by paying the balance 75% of the consideration of warrants. In case of non payment of the balance amount before the expiry period, the application money will be forfeited.

10 Employee Share Based payments

(a) Employee option plan

The Company’s Employees’ Stock Option Scheme - 2007, provides for issue of equity option in each financial year up to 5% (Previous Year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in eachof the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous Year 9,264,970 shares). The Shareholders at their meeting held on September 30, 2014 passed a new ESOP plan 2014. Under new ESOP plan, the shareholders has permitted to grant 1,323,567 equity shares to the employees of the Company and to the employees of wholly owned subsidiary viz. CyberTech Systems and Software Inc., USA. The scheme covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

Movement during the period:

The number and weighted average exercise prices (WAEP) of the options granted and movement during the period is as follows:

* Includes NIL options granted to Executive director during the year ended March 31, 2018 (For the year ended March 31, 2017 - 2,00,000)

** Out of 300,000 Options, 250,000 Options granted to the employees of the Company on January 31, 2017 was surrendered during the year. Other 50,000 Options were lapsed on expiry of its tenure.

*** Includes 4,50,000 options granted to Executive director outstanding as at March 31, 2018 (as At March 31, 2017 - 6,50,000)

Weighted average equity share price at the date of exercise of options during the year was Rs. 35.35 (2016-17: Rs. 38.22)

The following table summarises information about oUtstanding stock options:

(b) Fair value of options granted

The fair value at grant date of options granted during the year ended March 31, 2018 was INR 29.65 per option (March 31, 2017: INR 46.67 per option). The fair value at grant date is determined using the BLakhsk Scholes Model which takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The value of the option has been determined by an independent valuer.

11 First-time adoption of Ind AS

The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from 1st April, 2017, with a transition date of 1st April, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31st March, 2018, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS. A. Optional Exemptions

(a) Deemed Cost

Ind AS 101 permits to measure all its property, plant & equipment and Intangible assets at their previous GAAP carrying value i.e. being deemed cost represented by Gross Block reduced by accumulated depreciation on April 01, 2016.

(b) Investment in subsidiaries

The Company has opted para D14 and D15 and accordingly considered the Previous GAAP carrying amount of Investments as deemed cost as at the transition date.

(c) Designation of previously recognised financial instruments

Paragraph D19B of Ind AS 101 gives an option to an entity to designate investments in equity instruments at FVOCI on the basis of the facts and circumstances at the date of transition to Ind AS.The company has opted to apply this exemption for its investment in equity Investments.

B. Mandatory Exceptions

(a) Estimates

An entity’s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).

(b) ”Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

- Investment in equity instruments carried at FVTPL or FVOCI; and

- Impairment of financial assets based on expected credit loss model.”

(c) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

I. Reconciliation of Balance sheet as at April 1, 2016 and March 31, 2017

II. Reconciliation of Statement of total Comprehensive Income for the period ended March 31, 2017

III. Reconciliation of Equity as at April 1, 2016 and March 31, 2017

IV. Impact on cash flow statement for the period ended March 31, 2017

The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.

IV Impact on cash flow statement for the period ended March 31, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and the Previous GAAP.

Notes to first time adoption Note 1: Proposed Dividend

Under the previous GAAP, dividend proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as subsequent events. Accordingly, provision for proposed dividend including dividend distribution tax was recognised as liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting.

Note 2: Remeasurement of post employment benefit obligations

Under the previous GAAP, cost relating to post employment benefit obligations including actuarial gain/losses were recognised in Profit & Loss. Under Ind AS, actuarial gain/losses on the net defined benefit liability are recognised in other comprehensive income instead of profit & loss.

Note 3: Fair Valuation of Investments

Under previous GAAP, investment in equity instruments were classified into long term and current investments. Long term investments were carried at cost less provision other than temporary in nature. Current investments were carried at lower of cost or fair value. Under Ind AS, these investments are require to be measured at fair value either through OCI (FVTOCI) of Through Profit & loss (FVTPL). The company has opted to fair value these investments through Profit & loss.

Note 4: Share based payments

Ind AS requires the fair value of the share options to be determined using an appropriate pricing model recognised over the vesting period. An additional expense has been recognised in Consolidated Statement of Profit and Loss for the year ended 31st March, 2017. Share options which were granted before and still vesting at 1st April, 2016, have been recognised as a separate component of equity in Equity settled share based payment reserve against retained earnings at 1st April, 2016.

Note 5: Financial liabilities at amortised cost

Under previous GAAP, certain financial liabilities - Deposits received for leased premises were shown at their transaction amount. Under Ind As those are measured at fair value at amortised cost by applying effective interest rate method.

Note 6: Fair Valuation of Foreign exchange forward contracts

Under Ind AS, foreign exchange forward contracts are mark-to-market as at Balance Sheet date and unrealised net gain or loss is recognised in profit and loss statement. Derivative assets and derivative liabilities are presented on gross basis.

Note 7: Trade Receivables

Under Indian GAAP, Company has recognised specific amount towards impairment of Trade receivables on the basis of incurred losses. Under Ind AS, impairment allowance has been recognised based on Expected Credit Loss basis (ECL).

Note 8: Deferred taxes

Under previous GAAP, deferred taxes were recognised based on Profit & loss approach i.e. tax impact on difference between the accounting income and taxable income. Under Ind AS, deferred tax is recognised by following balance sheet approach i.e. tax impact on temporary difference between the carrying value of asset and liabilities in the books and their respective tax base.

12 The Company is yet to receive balance confirmations in respect of certain financial assets and financial liabilities. The Management does not expect any material difference affecting the current year’s financial statements due to the same.

13 The Company has invested Rs.1,534.03 lakhs (Previous Year Rs.1,534.03) in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc., USA, which has accumulated losses of Rs. 1,374.45 (Previous Year 1,457.53) as at the year end. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary.

14 Recent accounting pronouncements IND AS 115 - Revenue from Contracts with Customers

MCA has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 (“amended rules”). As per the amended rules, Ind AS 115 “Revenue from contracts with customers” supersedes Ind AS 11, “Construction contracts” and Ind AS 18, “Revenue” and is applicable for all accounting periods commencing on or after 1 April 2018. Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognised when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018.

Ind AS 21 - Foreign currency transactions and advance consideration:

On March 28, 2018, Ministry of Corporate Affairs (“MCA”) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 effective from April 1, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

15 The financial statements were approved for issue by the Board of Directors on May 09, 2018.

16 The previous year’s figures have been re-grouped / re-classified wherever required to confirm to current period’s classification.


Mar 31, 2016

(b) Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs.10 per share. Each shareholder has a right to vote in respect of such share, on every resolution placed before the Company and his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the Company. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after payments to secured and unsecured creditors in proportion to their shareholding.

d) During the previous five years, the Company has not issued Bonus shares/ bought back shares/issued shares for consideration other than cash.

e) Refer note no. 25 in respect of ESOP.

Notes:

The Company had taken vehicle loans amounting to Rs.800,000 and Rs.750,000 are being be paid in 48 and 47 equal monthly installments of Rs.20,304 and Rs.19,723 each respectively and the final installment will be paid on July 8, 2017 and May 08, 2018 respectively. The loans are secured by hypothecation of the vehicles thus, purchased there against. Interest is paid @10.05% p.a.(Previous Year 10.05%).

Details of Security

ii) Bank overdraft is secured by way of exclusive charge on immovable property of the Company at Thane (rental to be credited to Escrow account with the bank). Interest is paid @ base rate margin i.e. ranging from 11.50% p.a. to 13% p.a. (Previous Year 11.50% p.a.to 13% p.a)

ii) Banks overdraft is secured by pledging of mutual fund units in UTI mutual fund..Interest is paid @ base rate margin i.e. ranging from 10.50% p.a. to 12% p.a. (Previous year 10.5% to 12%)

NOTE ''1'' EMPLOYEES STOCK OPTION PLAN (ESOP)

The Company''s Employees'' Stock Option Scheme - 2007, provides for issue of equity option in each financial year up to 5% (Previous Year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in each of the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous Year 9,264,970 shares). The Shareholder at their meeting held on September 30, 2014 passed a new ESOP plan 2014. Under new ESOP plan the shareholders has permitted to grant 1,323,567 equity shares to the employees of the Company and to the employees of wholly owned subsidiary viz. CyberTech Systems and Software Inc., USA. The schemes covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

The Company has elected to use the intrinsic value method to account for the compensation cost of stock options to employees of the Company. Intrinsic value is the amount by which the quoted market price of the underlying share as on the date of grant exceeds the exercise price of the option.

Fair Value methodology for the option:

The fair value of options used to compute net income and earnings per equity share have been estimated on the dates of each grant within the range of Rs.10 to Rs.45 using the Black-Scholes pricing model. The Company estimated the volatility based on the historical share prices. The various assumptions considered in the pricing model for the options granted under ESOP are:

Disclosure in Respect of Material Related Party Transactions during the year

# Payment to Key Managerial Personnel includes remuneration paid to

Ramasubramanian Sankaran Rs.4,391,672 (Previous Year Rs.3,126,331)

Sateesh Wadagbalkar Rs.1,123,658 (Previous Year Rs.943,454)

Notes:

i) Related party relationship is as identified by the Company and relied upon by the Auditors.

ii) No amounts have been written off/back and provided for in respect of the related parties during the year.

iii) Figures in brackets represent previous year figures.

NOTE ''2''

DEFINED BENEFIT PLANS IN RESPECT OF GRATUITY PAYABLE

The present value of obligation is determined based on Actuarial valuation using Projected Unit Credit Method. Change in present value of obligation

LEASES:

(A) The Company has leased its vacant premises under cancellable lease agreements, the income from which is recognized and disclosed as Rent received under Note No. 20.

(B) The Company has taken commercial premises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 23 under the head ''Rent''.

NOTE ''3''

CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(A) Contingent Liabilities:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (excluding interest liability) Rs.28,20,300 (Previous Year Rs.115,840)

ii) Penalties & Interest up to the date of demand of Rs.7,053,526 (Previous Year Rs.58,198,919)

iii) Other Income Tax proceedings in respect of earlier years decided in favour of the Company by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any of Rs.3,769,968 (Previous Year Rs.3,769,968)

iv) In the previous years, the Company has received Income Tax refunds of Rs.189,474,293 (including interest amount of Rs.74,080,633) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favourable Order from Income Tax Appellate Tribunal. The Income Tax Department has filed an appeal against the said Order with the Hon''ble High Court, Bombay. Accordingly, the Company has, however continued the provision of Rs.,961,829 (Previous Year Rs.121,961,829) made in earlier years.

b) Disputed Service Tax Matters Rs. Nil (Previous Year Rs.6,607,614)

The Company''s pending litigations comprise proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed in the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements.

(B) Commitments:

Estimated amount (Net of Advances) of contracts remaining to be executed on capital account and not provided for: Rs. Nil (Previous Year Rs.1,967,426)

NOTE ''4''

Forward Exchange Contracts and Foreign Exchange Cover:

a) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments and forecasted transactions. The Company does not enter in to any such instruments for trading or speculative purposes. The following are the contracts entered into by the Company and outstanding at the year end:

In the opinion of the Board, assets other than Fixed Assets and Non Current Investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE ''5''

The accounts of certain Trade Receivables, Trade Payables and Loans and Advances are subject to formal confirmation/reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current year''s financial statements.

The Company has invested Rs.153,403,250 (Previous Year Rs.153,403,250) in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc., USA, which has incurred losses during the current year as well as in the previous year. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary.

NOTE ''6''

Exceptional items for the previous year include a claim of Rs.56,190,650 received on settlement of dispute in respect of investment and receivable from CyberTech Middle East WLL. The said amount includes writing back of Rs.9,135,258 being provision made for diminution in the value of aforesaid investment and for doubtful receivable in the earlier year.

NOTE ''7''

In the previous year, consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1, 2014, the Company had realigned the remaining useful life of its tangible assets in accordance with the provisions prescribed under Schedule II to the Act. Accordingly, in the case of tangible assets which have completed their useful life, the carrying value (net of residual value) as at April 1, 2014 amounting to Rs.8,310,425 (net of Deferred Tax of Rs.3,991,291) had been adjusted to "Surplus in the Statement of Profit and Loss" and in the case of other tangible assets, the carrying value (net of residual value) is being depreciated over the revised remaining useful lives. Accordingly, the depreciation and amortization expense is higher by Rs.7,230,243 for the year ended 31st March, 2015.

NOTE ''8''

Previous year''s figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year''s classification/ presentation.


Mar 31, 2015

NOTE 1.

EMPLOYEES STOCK OPTION PLAN (ESOP)

The Company,s Employees, Stock Option Scheme - 2007, provides for issue of equity option in each financial year up to 5% (Previous Year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in each of the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous Year 9,264,970 shares). The Shareholder at their meeting held on September 30, 2014 passed a new ESOP plan 2014. Under new ESOP plan the shareholders has permitted to grant 1,323,567 equity shares to the employees of the Company and to the employees of wholly owned subsidiary viz. CyberTech Systems and Software Inc., USA. The schemes covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

Fair Value methodology for the option:

The fair value of options used to compute net income and earnings per equity share have been estimated on the dates of each grant within the range of Rs,10 to Rs,45 using the Black-Scholes pricing model. The Company estimated the volatility based on the historical share prices. The various assumptions considered in the pricing model for the options granted under ESOP are:

Impact of Fair value method on Net Profit and EPS

Had the compensation cost for the Company,s Stock Option Plan outstanding been determined based on the fair value approach, the Company,s net profit income and earnings per share would have been, as indicated below:

NOTE 2.

RELATED PARTY DISCLOSURES

Disclosure in respect of Related Parties pursuant to Accounting Standard 18 is as under:

A. List of Related Parties:

i) Parties where control exists:

Wholly Owned Subsidiary:

CyberTech Systems and Software Inc. USA (CSSI)

Subsidiary:

CyberTech Middle East W.L.L. (Bahrain) (CME) (up to May 19, 2014) ii) Other Parties with whom the Company has entered into transactions during the year:

Key Management Personnel

Dr. Tapan Kumar Mukhopadhyay - Whole time Director (up to August 13, 2013)

Ramasubramanian Sankaran-Executive Director & CFO

Sateesh Wadagbalkar- GM and Company Secretary (w.e.f. April 1, 2014)

Disclosure in Respect of Material Related Party Transactions during the year

# Payment to Key Managerial Personnel includes remuneration paid to Ramasubramanian Sankaran Rs,3,126,331 (Previous Year Rs,2,763,061) Sateesh Wadagbalkar Rs,943,454 (Previous Year NA) Tapan Kumar Mukhopadhyay Rs,Nil (Previous Year Rs,803,101)

Notes:

i) Related party relationship is as identified by the Company and relied upon by the Auditors.

ii) No amounts have been written of/back and provided for in respect of the related parties during the year.

iii) Figures in brackets represent previous year figures.

NOTE 3. LEASES:

(A) The Company has leased its vacant premises under cancellable lease agreements, the income from which is recognized and disclosed as Rent received under Note No. 20.

(B) The Company has taken commercial premises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 23 under the head 'Rent,.

NOTE 4.

CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

(A) Contingent Liabilities:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (including interest upto the date of demand) Rs,115,840 (Previous Year Rs,32,674,547)

ii) Penalties & Interest up to the date of demand of Rs,58,198,919 (Previous Year Rs,58,198,919)

iii) Other Income Tax proceedings in respect of earlier years decided in favour of the Company by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any of Rs,3,769,968 (Previous Year Rs,3,769,968)

iv) In the previous year, the Company has received Income Tax refunds of Rs,189,474,293 (including interest amount of Rs, 74,080,633) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favourable Order from Income Tax Appellate Tribunal. The Income Tax Department has filed an appeal against the said Order with the Hon,ble High Court, Bombay. Accordingly, the Company has, however continued the provision of Rs,121,961,829 (Previous Year Rs,121,961,829) made in earlier years.

b) Disputed Service Tax Matters Rs,6,607,614 (Previous Year Rs,6,607,614)

The Company,s pending litigations proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed in the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements

(B) Commitments:

Estimated amount (Net of Advances) of contracts remaining to be executed on capital account and not provided for: Rs,1,967,426 (Previous Year Rs,17,372,799)

NOTE 5.

Forward Exchange Contracts and Foreign Exchange Cover:

a) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fluctuations relating to certain form commitments and forecasted transactions. The Company does not enter in to any such instruments for trading or speculative purposes. The following are the contracts entered into by the Company and outstanding at the yearend:

NOTE 6.

The Company has invested Rs,153,403,250 (Previous Year Rs,106,303,250) in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc., USA, which has incurred losses during the current year as well as in the previous year. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary.

NOTE 7.

Exceptional items include a claim of Rs,56,190,650 received on settlement of dispute in respect of investment and receivable from CyberTech Middle East WLL. The said amount includes writing back of Rs,9,135,258 being provision made for diminution in the value of aforesaid investment and for doubtful receivable in the earlier year.

NOTE 8.

Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1, 2014, the Company has realigned the remaining useful life of its tangible assets in accordance with the provisions prescribed under Schedule II to the Act. Accordingly, in the case of tangible assets which have completed their useful life, the carrying value (net of residual value) as at April 1, 2014 amounting to Rs,8,310,425 (net of Deferred Tax of Rs,3,991,291) has been adjusted to "Surplus in the Statement of Profit and Loss" and in the case of other tangible assets, the carrying value (net of residual value) is being depreciated over the revised remaining useful lives. Accordingly, the depreciation and amortization expense is higher by Rs,7,230,243 for the year ended 31st March, 2015.

NOTE 9.

Previous year,s figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year,s classification/ presentation.


Mar 31, 2014

Company Overview

CyberTech Systems and Software Limited (referred to as the ''Company'') is an Information Technology service provider, delivering its services to customers primarily in the USA, India and Japan with focus on several core software technology applications including SAP''s Enterprise Suite and ESRI''s Geographical Information Systems(''GIS'') as well as Network Planning and Design and Custom Software Application Development. The Company continues to focus on delivering its development and support projects on an offshore basis.

NOTE ''1''

[Allotment of 4,959 (Previous year 4,959) bonus shares on 3,967 (Previous year 3,967) Equity shares is pending on account of non-establishment of beneficial ownership by NSDL.]

Terms/rights attached to equity shares

The Company has only one class of equity shares having a face value of Rs. 10 per share. Each shareholder has a right to vote in respect of such share, on every resolution placed before the Company and his voting right on a poll shall be in proportion to his share of the paid-up equity capital of the Company. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after payments to secured and unsecured creditors in proportion to their shareholding.

During the previous five years, the Company has not issued Bonus shares/ bought back shares/issued shares for consideration other than cash.

Details of Security

Bank borrowing is secured by way of exclusive charge on immovable property of the Company at Thane, and rental to be credited to Escrow account with the bank. Interest payable @ base rate margin i.e. ranging from 12.75% p.a. to 13% p.a. (Previous Year 12.75% p.a.)

The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

NOTE ''2'' EMPLOYEES STOCK OPTION PLAN (ESOP)

The Company''s Employees'' Stock Option Scheme- 2007, provides for issue of equity option in each financial year up to 5% (Previous year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in each of the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous year 9,264,970 shares). The scheme covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

The Company has elected to use the intrinsic value method to account for the compensation cost of stock options to employees of the Company, Intrinsic value is the amount by which the quoted market price of the underlying share as on the date of grant exceeds the exercise price of the option.

Disclosure in Respect of Material Related Party Transactions during the year

# Payment to Key Managerial Personnel includes remuneration paid to Tapan Kumar Mukhopadhyay Rs. 803,101 (Previous Year Rs. 1,600,537) Ramasubramanian Sankaran Rs. 2,763,061 (Previous Year Rs. 1,694,573)

Notes:

i) Related party relationship is as identified by the Company and relied upon by the Auditors.

ii) a) No amounts have been written off/back and provided for in respect of the related parties during the year.

b) Provision of Rs. 1,476,405 made towards doubtful debts and provision of Rs. 7,658,853 made towards diminution in the value of investment, in the financial 2011-12 year in respect of Bahrain subsidiary.

iii) Figures in brackets represent previous year figures.

NOTE ''3''

LEASES:

(A) The Company has leased its vacant premises under cancellable lease agreements, the income from which is recognised and disclosed as Rent received under Note No. 20.

(B) The Company has taken commercial premises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 23 under the head ''Rent''.

NOTE ''4''

Contingent Liabilities and commitments (to the extent not provided for) in respect of:

(A) Contingent Liabilities:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (including interest upto the date of demand) Rs. 32,674,547 (Previous year Rs. 30,224,097)

ii) Penalties & Interest upto the date of demand of Rs. 58,198,919 (Previous year Rs. 58,198,919)

iii) Other Income Tax proceedings in respect of earlier years decided in favour of the Company by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any : Rs. 3,769,968 (Previous year Rs. 3,769,968)

iv) During the previous year, the Company has received Income Tax refunds of Rs. 189,474,293 (including interest amount of Rs. 74,080,633) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favourable Order from Income Tax Appellate Tribunal. The Income Tax Department has filed an appeal against the said Order with the Hon''ble High Court, Mumbai. Accordingly, the Company has, however continued the provision of Rs. 121,961,829 lakhs made in earlier years. The Company has accounted for the aforesaid interest on income tax refund.

b) Disputed Service Tax Matters Rs. 6,607,614 (Previous year Rs. 6,607,614)

(B) Commitments:

Estimated amount (Net of Advances) of contracts remaining to be executed on capital account and not provided for: Rs. 17,372,799 (Previous year Rs. 80,517,630)

NOTE ''5''

In the opinion of the Board, assets other than Fixed Assets and Non Current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

NOTE ''6''

The accounts of certain Banks, Trade Receivables, Trade Payables and Loans and Advances are subject to formal confirmation/ reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current year''s financial statements.

NOTE ''7''

The Company has invested Rs. 106,303,250 in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc.,USA, which has incurred losses during the current year as well as in the previous year. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary.

NOTE ''8''

Subsequent to the year end, the Company has received US $ 9.68 lacs pursuant to the arbitration settlement with the local partner of Bahrain subsidiary. As per the award terms, the Company inter alia is also to transfer it''s holding to the local partner once legal and other statutory formalities in respect of which are in the process of being complied with. Acordingly, necessary accounting impact will be given as and when necessary formalities are complied with.

NOTE ''9''

Previous year''s figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year''s classification/ presentation.


Mar 31, 2013

Company Overview

CyberTech Systems and Software Limited (referred to as the ''Company'') is an Information Technology service provider, delivering its services to customers primarily in the USA, India and Japan with focus on several core software technology applications including SAP''s Enterprise Suite and ESRI''s Geospatial and Mapping solutions as well as Network Planning and Design and Custom Software Application Development. The Company continues to focus on delivering its development and support projects on an ofshore basis.

Note ''1''

Employees Stock Option Plan (ESOP)

The Company''s Employees'' Stock Option Scheme- 2007, provides for issue of equity option in each fnancial year up to 5% (Previous year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in each of the fnancial years to the subsequent fnancial years for grant, in aggregate not exceeding 9,264,970 shares (Previous year 9,264,970 shares). The scheme covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/ employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

Note ''2'' Leases:

(A) The Company has leased its vacant premises under cancellable lease agreements, the income from which is recognised and disclosed as Rent received under Note No. 19.

(B) The Company has taken commercial premises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 22 under the head ''Rent''.

Note ''3''

Contingent Liabilities and commitments (to the extent not provided for) in respect of:

(A) Contingent Liabilities:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (including interest upto the date of demand) Rs. 30,224,097 (Previous year Rs. 30,224,097)

ii) Penalties & Interest upto the date of demand of Rs. 58,198,919 (Previous year Rs. 58,198,919)

iii) Other Income Tax proceedings in respect of earlier years decided in favour of the Company by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any : Rs. 3,769,968 (Previous year Rs. 3,769,968)

iv) During the current year, the Company has received Income Tax refunds of Rs. 189,474,293 (including interest amount of Rs. 74,080,633) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favourable Order from Income Tax Appellate Tribunal. The Income Tax Department has fled an appeal against the said Order with the Hon''ble High Court, Mumbai. Accordingly, the Company has, however continued the provision of Rs. 121,961,829 lakhs made in earlier years. The Company has accounted for the aforesaid interest on income tax refund.

b) Disputed Service Tax Matters Rs. 6,607,614 (Previous year Rs. 6,607,614)

(B) Commitments:

Estimated amount (Net of Advances) of contracts remaining to be executed on capital account and not provided for: Rs. 80,517,630 (Previous year Rs. 19,839,521)

Note ''4''

Forward Exchange Contracts and Foreign Exchange Cover:

a) The Company uses Forward Exchange Contracts to hedge its risks associated with foreign currency fuctuations relating to certain frm commitments and forecasted transactions. The Company does not enter in to any such instruments for trading or speculative purposes. The following are the contracts entered into by the Company and outstanding at the year end:

Note ''5''

In the opinion of the Board, assets other than Fixed Assets and Non Current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

Note ''6''

The accounts of certain Banks, Trade Receivables, Trade Payables and Loans and Advances are subject to formal confrmation/ reconciliation and adjustments, if any. The Management does not expect any material diference afecting the current year''s fnancial statements.

Note ''7''

The Company has invested Rs.106,303,250 in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc.,USA, which has incurred losses incurred during the current year as well as in the previous year. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary.

Note ''8''

Previous year''s fgures have been re-grouped/re-arranged, wherever necessary, to conform to the current year''s classifcation/ presentation.


Mar 31, 2012

Company Overview

CyberTech Systems and Software Limited (referred to as the 'Company') is an Information Technology service provider, delivering its services to customers primarily in the USA, India and Middle East with focus on several core software technology applications including SAP's Enterprise Suite and ESRI's Geographical Information Systems('GIS') as well as Network Planning and Design and Custom Software Application Development. The Company continues to focus on delivering its development and support projects on an offshore basis.

NOTE '1' SHARE CAPITAL

(a) Terms/rights attached to equity shares

The Company has issued one class of equity shares having a face value of Rs. 10 per share. Each shareholder has right to vote in respect of such share, on every resolution placed before the Company and his voting right on a poll shall be in proportion to his share of the paid -up equity capital of the Company. In the event of liquidation, the equity shareholders are entitled to receive the remaining assets of the Company after payments to secured and unsecured creditors, in proportion to their shareholding.

Note '2'

Employees Stock Option Plan (ESOP)

The Company's Employees' Stock Option Scheme-2007, provides for issue of equity option in each financial year up to 5% (Previous year 5%) of the outstanding fully paid-up equity capital of the Company as on March 31, 2007 on to eligible employees, and the carry forward of un-allotted options in each of the financial years to the subsequent financial years for grant, in aggregate not exceeding 9,264,970 shares (Previous year 9,264,970 shares). The scheme covers directors and the employees of the subsidiaries, apart from the employees and directors of the Company except directors/employees belonging to promoter group. The options vest in a phased manner over four years with 25% of the grants vesting at the end of each year from the date of grant and the same can be exercised within seven years from the date of the grant at the market price as on the date of the grant. One option is equal to one equity share.

Note '3'

RELATED PARTY DISCLOSURES

Disclosure in respect of Related Parties pursuant to Accounting Standard 18 is as under:

A. List of Related Parties:

i) Parties where control exists:

Wholly Owned Subsidiary:

CyberTech Systems and Software Inc. USA (CSSI)

Subsidiary:

CyberTech Middle East W.L.L.(Bahrain) (CME)

ii) Other Parties with whom the Company has entered into transactions during the year:

Key Management Personnel

Dr. Tapan Kumar Mukhopadhyay - Wholetime Director (w.e.f. March 15, 2011)

Mr. Radhakrishna Pingali - Wholetime Director (October 11, 2010 to February 11, 2011)

Mr. C N Rao - Executive Director (upto October 8, 2010)

Notes:

i) Related party relationship is as identified by the Company and relied upon by the Auditors.

ii) * No amounts have been written of/back and provided for in respect of the related parties during the year except provision of Rs. 1,476,405 towards doubtful debts and provision for diminution in the value of investments Rs. 7,658,853 in respect of Bahrain Subsidiary.

iii) Figures in brackets represent previous year figures.

Note '4' Leases:

(A) With an objective to use Company's idle resources and to strengthen the cash flows, the Company earns income by leasing its vacant premises. The income from which is recognised and disclosed as Rent received under Note No. 18.

(B) The Company has taken commercial premises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 21 under the head 'Rent'.

Note '5'

Contingent Liabilities and commitments (to the extent not provided for) in respect of:

(A) Contingent Liabilities:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (including interest upto the date of demand) Rs. 30,224,097 (Previous year Rs. 30,224,097)

ii) Penalties & Interest upto the date of demand of Rs. 58,198,919 (Previous year Rs. 58,198,919);

iii) Other Income Tax proceedings in respect of earlier years decided in the Company's favour by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any : Rs. 3,769,968 (Previous year Rs. 3,769,968)

b) Disputed Service Tax Matters Rs. 6,607,614 (Previous year Rs. 6,607,614)

(B) Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 19,839,521 (Previous year Nil)

Note '6'

During the Year the Company has received a favourable order from Income Tax Appellate Tribunal (ITAT ) in respect of AY1997-98 to AY 1999-00 wherein exemption u/s 10B of the Income Tax Act 1961 has been allowed for the Income from Business Operations. However, the order giving effect to the ITAT Order is not yet received and also considering the chances of Income Tax Department fling higher appeals with the High Court, the Company has not reversed the provision for taxation of approximately Rs. 12.20 Crores and also not recognised the interest receivable on the said amount.

Note '7'

In the opinion of the Board, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

Note '8'

The accounts of certain Banks, Trade Receivables, Trade Payables and Loans and Advances, are subject to formal confirmation/reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current year's financial statements.

Note '9'

In the current year, financial statements have been prepared as per Revised Schedule VI. Previous year's figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year's classification/presentation.


Mar 31, 2011

1. Contingent Liabilities not provided for in respect of:

a) Disputed Income Tax Matters:

i) Regular demand under assessment (including interest upto the date of demand) Rs. 30,224,097 (Previous year Rs. Nil)

ii) Penalties & Interest of Rs. 58,198,919; (Previous year Rs. 58,198,919)

iii) Other Income Tax proceedings in respect of earlier years decided in the Company's favour by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any : Rs. 3,769,968 (Previous year Rs. Nil)

b) Disputed Service Tax Matters Rs. 6,607,614 (Previous year Rs. 6,607,614)

2. Segment Reporting

Pursuant to Accounting Standard 17 on "Segment Reporting" issued by the Companies (Accounting Standard) Rules, 2006, the Company has only one reportable segment viz. Software Services & Development.

3. (a) In the opinion of the Management, Current Assets, Loans and Advances (including Capital Advances) have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary.

(b) The accounts of certain Sundry Debtors, Sundry Creditors and Advances are subject to confirmation/reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current year's financial statements.

4. Disclosure in respect of Related Parties pursuant to Accounting Standard 18 is as under:

A. List of Related Parties:

i) Parties where control exists:

Wholly Owned Subsidiary:

CyberTech Systems and Software Inc. USA (CSSI)

Subsidiary:

CyberTech Middle East W.L.L.(Bahrain) (CME)

ii) Other Parties with whom the Company has entered into transactions during the year:

Key Management Personnel:

C N Rao-Executive Director (upto October 8, 2010)

Radhakrishna Pingali-Wholetime Director (October 11, 2010 to February 11, 2011)

Tapan Kumar Mukhopadhyay-Wholetime Director (w.e.f March 15, 2011)

5. The Company has invested in its subsidiary viz. CyberTech Systems and Software Inc. & Cybertech Middle East, W.L.L aggregating to Rs. 113,962,103 (Previous year Rs. 80,223,353). However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of these investments, and therefore no provisioning has been considered necessary.

6. Interest free loans given to employees of the Company and outstanding as at the year-end Rs. NIL (Previous year Rs. 25,000) in the ordinary course of Company's business. Maximum balance due at any time during the year was Rs. 25,000 (Previous Year Rs. 120,500). These employees do not hold any equity shares of the Company.

7. Previous year's figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year's classification/presentation.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of:

a) Disputed Income Tax Matters (include penalties of Rs.58,198,919; Previous year Rs. 57,843,742) Rs. 58,198,919 (Previous year Rs. 61,009,311)

b) Disputed Service Tax Matters Rs.6,607,614 (Previous year Rs.6,607,614)

c) Guarantee provided by the Company in respect of loan granted to a subsidiary by a bank-Rs NIL (Previous Year Rs. 27,500,000)

2. Segment Reporting

Pursuant to Accounting Standard 17 on "Segment Reporting" issued by the Companies (Accounting Standard) Rules, 2006, the Company has only one reportable segment viz. Software Services & Development.

3. (a) In the opinion of the Management, Current Assets, Loans and Advances (including Capital Advances) have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for depreciation and all known liabilities is adequate and not in excess of the amount reasonably necessary. (b) The accounts of certain Sundry Debtors, Sundry Creditors, Advances are subject to confirmation/reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current years financial statements.

4. Related Party Transactions

A. List of Related Parties:

i) Parties where control exists:

Wholly Owned Subsidiaries

CyberTech Systems and Software Inc. USA (CSSI)

Subsidiary

CyberTech Middle East W.L.L., Bahrain (CME)

ii) Other Parties with whom the Company has entered into transactions during the year:

Key Management Personnel

Mr. C N Rao-Executive Director

5. The Company has not received any intimation from the suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence, disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been given.

6. The company has invested in its subsidiary viz. CyberTech Middle East W.L.L.(Bahrain). Rs. 7,658,853 (Previous Year: 2,345,785). However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment. No provisioning has been considered necessary.

7. Interest free loans given to employees of the Company and outstanding as at the year-end Rs.25,000 (Previous year Rs. 120,500) in the ordinary course of Companys business. Maximum balance due at any time during the year was Rs.120,500 (Previous Year Rs.749,693). These employees do not hold any equity shares of the Company.

8. Previous years figures have been re-grouped/re-arranged, wherever necessary, to conform to the current years classification/presentation.

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