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Notes to Accounts of Cyient Ltd.

Mar 31, 2016

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Mar 31, 2014

Note (i)

a. The Company has disputed various demands (including draft notice of demand) raised by Income Tax authorities for the assessment years 1997-98 to 2009-10. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 204,461,783 (March 31, 2013 - Rs. 404,555,682). The Company is confident that these appeals will be decided in its favour, based on professional advice.

b. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 20,096,061 (March 31, 2013 - Rs. 20,096,061). The Company is confident that these appeals will be decided in its favour, based on professional advice.

The above does not include show cause notices received by the Company.

c. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2012-13. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 172,263,324 (March 31, 2013 - Rs. 207,375,480). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

Note (ii)

Corporate guarantee given to subsidiary''s bankers to obtain line of credit Rs. 1,043,841,250 (March 31, 2013 – Rs. 443,662,000). The amount outstanding against such guarantee is Rs. Nil (March 31, 2013 - Rs. 397,774)

Note: (i) Balance with banks include deposits amounting to Rs. 54,176,286 (March 31, 2013 – Rs. 238,749,999) and margin monies amounting to Rs. 630,250 (March 31, 2013 – Rs. 630,250) which have an original maturity of more than 12 months.

Balance with banks include margin monies amounting to Rs. 630,250 (March 31, 2013 – Rs. 276,250) which have a maturity of more than 12 months from the Balance Sheet Date.

(ii) Includes deposits placed in lien for credit facilities availed by a wholly owned subsidiary, Infotech Geospatial (India) Private Limited aggregating Rs. 18,531,010 (March 31, 2013 - Rs. 17,026,561) and margin monies amounting Rs. 601,250 (March 31, 2013 - Rs. 601,250).

2. The Board of Directors has recommended the change of name of the Company from Infotech Enterprises Limited to Cyient Limited, which is subject to shareholder approval and other regulatory clearances.

3. Regrouping/Reclassification

(Refer to note No. 40 of the standalone financial statements)

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosures.


Mar 31, 2013

1. Corporate Information

(Refer to Note No. 1 of the annual standalone financial statements)

Infotech Enterprises Limited (''Infotech'' or ''the Company'') is engaged in providing global technology services and solutions specialising in geospatial, engineering design and IT solutions. The Company has its headquarters and development facilities in India and serves a global customer base through its subsidiaries in United States of America (USA), United Kingdom (UK), Germany, Japan and India. Infotech''s range of services include digitisation of drawings and maps, photogrammetry, computer aided design/engineering (CAD/CAE), design and modelling, repair development engineering, reverse engineering application software development, software products development, consulting and implementation. Infotech specialises in software services and solutions for the manufacturing, utilities, telecommunications, transportation & logistics, local government and financial services markets.

Complete Balance Sheet, Statement of Profit and Loss, other statements and notes thereto prepared as per the requirements of Schedule VI to the Companies Act, 1956 are available at the Company''s website at link http://www.infotech-enterprises.com/corporate/investors

2. Segment Information

(Refer to Note No. 31 of the annual standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS 17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

3. Associate Stock Option Plans

(Refer to Note No. 38 of the annual standalone financial statements)

Infotech Employee Stock Offer Scheme 1999 (ESOP Plan)

In 1998-99, the Company set up ESOP plan and allotted 80,900 equity shares of Rs. 10 each at a premium of Rs. 100 per share to the Infotech ESOP trust. The trust on recommendation of management and upon receipt of full consideration transfers the equity shares in the name of the selected employees. The Company modified the ESOP Plan and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03, 2006-07 and 2010-11 respectively.

Associate Stock Option Plans (ASOP Plan)

The company has four ASOP plans - ASOP 2001, ASOP 2002, ASOP 2004 and ASOP 2008. Under each of these schemes, options will be issued to employees at an exercise price which shall not be less than the market price on the date of the grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of the first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of the third year.

4. Contingent Liabilities and Commitments

(Refer to Note No. 23 of the annual standalone financial statements)

Contingent liabilities (Amount in Rs.)

As at As at Particuiars March 31, 2013 March 31, 2012

Claims against the Company not acknowledged as debt (Refer Note (i) below) 632,027,223 593,743,144

Guarantees (Refer Note (ii) below) 443,662,000 426,680,000

Notes:

i. a. The Company has disputed various demands (including draft notice of demand) raised by Income Tax authorities for the assessment years 1997-98 to 2009-10. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs. 404,555,682 (March 31, 2012 - Rs. 409,671,422). The Company is confident that these appeals will be decided in its favour, based on professional advice.

b. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 20,096,061 (March 31, 2012 - Rs. 20,096,061). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

c. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2006-07 to 2011-12. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs. 207,375,480 (March 31, 2012 - Rs. 163,975,661). The Company is confident that these appeals will be decided in its favour, based on professional advice. The above does not include show cause notices received by the Company.

ii. Corporate guarantee given to subsidiary''s bankers to obtain line of credit Rs. 443,662,000 (March 31, 2012 - Rs. 426,680,000). The amount outstanding against such guarantee is Rs. 397,774 (March 31, 2012 - Rs. 3,759,677).

5. Amalgamation:

(Refer to Note No. 29 of the annual standalone financial statements)

During the year ended March 31, 2011, TTM Institute of Information Technology Private Limited, a wholly owned subsidiary of Infotech Enterprises Limited ("the Company") was amalgamated with the Company w.e.f. April 1, 2011 pursuant to Scheme of Amalgamation approved by the Honourable High Court of Judicature, Andhra Pradesh vide its order dated March 21, 2011 and filed with the Registrar of Companies on May 12, 2011. Consequently all the Assets, Liabilities and Reserves stand taken over by the Company retrospectively from April 1, 2011 and accounted under "Pooling of Interest" method as per the Accounting Standard-14 "Accounting for Amalgamation". As TTM Institute of Information Technology Private Limited was a wholly owned subsidiary of the Company, no additional shares were issued to effect the Amalgamation.

6. Regrouping/Reclassification

(Refer to note No. 41 of the annual standalone financial statements)

Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/ disclosures.


Mar 31, 2011

Related Party Transactions

(Refer to Note No. 12 of Schedule 15 of the annual standalone financial statements.)

List of related parties on which the Company is able to exercise the control.

a) Subsidiaries

Name of the Subsidiary Companies

Infotech Enterprises Europe Limited, UK. (IEEL)

Infotech Enterprises Benelux B.V Netherlands - A subsidiary of IEEL

Mapcentric Consulting Limited, UK - A subsidiary of IEEL

Dataview Solutions Limited, UK - A subsidiary of IEEL

Infotech Enterprises America Inc., USA (IEAI)

Infotech Software Solutions Canada Inc., Canada - A subsidiary of IEAI

Infotech Enterprises Electronic Design services Inc., - A subsidiary of IEAI

Daxcon Engineering Services Inc., USA - A subsidiary of IEAI *

Wellsco Inc., USA - A Subsidiary of IEAI (w.e.f. August 9, 2010)

Infotech Enterprises GmbH, Germany (IEG)

Infotech Enterprises AB, Sweden - A subsidiary of IEG (w.e.f April 8, 2010)

Infotech Geospatial (India) Limited, India

TTM Institute of Information Technology Private Limited, India

Infotech Enterprises Japan KK, Japan

Infotech Enterprises Information Technology Services Private Limited, India

*Merged with IEAI w.e.f 1st January, 2011

b) Associate

Name of the Associate Company

Infotech Aerospace Services Inc. , Puerto Rico, USA

c) Joint Venture

Name of the Joint Venture Company

Infotech HAL Limited, India

d) Key Management Personnel

Name Designation

B.V.R. Mohan Reddy Chairman and Managing Director

B. Sucharitha Whole Time Director

S.A. Lakshminarayanan Chief Operating Officer - N&CE

K. Ashok Kumar Chief Technology Officer

Sundar Viswanathan Chief Financial Officer (w.e.f. April 5, 2010)

Bhanu Cherukuri Chief Strategy Officer

A. Ramaswami Chief Information Officer (w.e.f. October 21, 2010)



e) Relative of Chairman & Managing Director and Whole Time Director

Name of Relative Designation

Krishna Bodanapu President - Engineering B. Ashok Reddy President - Global Human Resources & Corporate Affairs

5. Quantitative details

(Refer to Note No. 17 of Schedule 15 of the annual standalone financial statements)

The Company is engaged in the development of Computer Software and Services. The production and sale of such software and services cannot be expressed in any generic unit. Hence, it is not possible to give the quantitative details of sales and the information as required under Paragraphs 3 and 4C of Part II of Schedule VI to the Companies Act, 1956.

6. Segmental Information

(Refer to Note No.11 of Schedule 15 of the annual standalone financial statements)

Segment information has been presented in the Consolidated Financial Statements as permitted by Accounting Standard (AS 17) on Segment Reporting as notified under the Companies (Accounting Standards) Rules, 2006.

7. Stock Option Plans

(Refer to Note No.2 of Schedule 15 of the annual standalone financial statements)

Infotech Employee Stock Offer Scheme 1999 (ESOP Plan)

In 1998-99, the Company set up ESOP plan and allotted 80,900 equity shares of Rs 10 each at a premium of ` 100 per share to the Infotech ESOP trust. The trust on recommendation of management and upon receipt of full consideration transfers the equity shares in the name of the selected employees. The Company modified the ESOP Plan and adjusted the number of options and exercise price on account of bonus issue and stock split cum bonus issue during 2002-03 and 2006-07 respectively.

As this scheme is established prior to the SEBI Guidelines on the stock options, there is no cost relating to the grant of options under this scheme.

Associate Stock Option Plans (ASOP Plan)

The company currently has three ASOP plans - ASOP 2002, ASOP 2004 and ASOP 2008. Under each of these schemes, options will be issued to employees at an exercise price which shall not be less than the market price on the date of the grant. These options vest over a period ranging from one to three years from the date of grant, starting with 10% at the end of the first year, 15% at the end of one and half years, 20% after two years, 25% at the end of two and half years and 30% at the end of the third year.

8. Contingent Liabilities and Commitments

(Refer to Note No. 18 of Schedule 15 of the annual standalone financial statements.)

a. Estimated amount of contracts remaining to be executed on capital accounts not provided for, net of advances Rs 140,645,654 (31.03.2010 - Rs 45,325,045).

b. The Company has outstanding counter guarantees of Rs 78,030,894 as on March 31, 2011, to banks, in respect of guarantees given by the said banks in favour of various agencies (31.03.2010 - Rs 70,043,183).

c. Corporate guarantee given to subsidiary's bankers to obtain line of credit Rs 141,184,000 (31.03.2010 - Rs 376,842,480)

d. The Company has disputed various demands raised by Income Tax authorities for the assessment years 1997-98 to 2007-08. The orders are pending at various stages of appeals. The aggregate amount of disputed tax not provided for is Rs 178,022,384 (31.03.2010 - Rs 161,954,153). The Company is confident that these appeals will be decided in its favour, based on professional advice.

e. The Company has disputed various demands raised by the Sales Tax authorities for the financial years 2004-05 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs 20,221,861 (31.03.2010 - Rs 16,344,575). The Company is confident that these appeals will be decided in its favour, based on professional advice.

f. The Company has disputed various demands raised by the Service Tax authorities for the financial years 2005-06 to 2009-10. The Company has filed appeals, which are pending with the appropriate authorities. The aggregate amount of disputed tax not provided for is Rs 139,763,613 (31.03.2010 - Rs Nil). The Company is confident that these appeals will be decided in its favour, based on professional advice.

g. The company has offered the Fixed Deposits of Rs 13,130,423 with Oriental Bank of Commerce as lien for the overdraft facility of Rs 10,000,000 availed by its subsidiary, Infotech Geospatial (India) Limited.

2. Regrouping/Reclassification

The figures for previous year have been regrouped /reclassified wherever necessary, to conform to the current year figures.

 
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