Sep 30, 2013
1. CORPORATE INFORMATION
Helios and Matheson Information Technology Ltd (the Company) is a
publicly held Company engaged in the manufacturing and export of Leather
Shoes and Shoe Uppers and company is also engaged in Restaurant activity.
The majority sales of the Company comprises of exports. The Company is
engaged in production of industrial shoe / uppers segment both
internationally and in the domestic market. The Equity Shares of the
ompany are presently listed with the Bombay Stock Exchange Limited (BSE).
(a) Revenue Recognition
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Interest income is recognized
on time proportion basis taking into account the amount outstanding and
rate applicable. Sales within India are exclusive of Sales Tax and
Excise Duty. Cutoff date for accounting Export Sales is based on the
date of bill lading. Export sales are accounted for on FOB Basis.
(b) Employee Benefits
(i) The Company has Defied Contribution Plan for its employee''s
retirement benefits comprising of Provident Fund & Employee''s State
Insurance Fund. The Company and eligible employees make monthly
contribution to the above mentioned funds at a specified percentage of
the covered employee''s salary. The Company recognizes its contribution
as expenses of the year in which the liability is incurred.
(ii) Gratuity Liability under the Payment of Gratuity Act is based on
actuarial valuation carried out at the close of the financial year in
accordance with the scheme administered by Life Insurance Corporation
of India through a Gratuity Trust Fund and contribution payable under
the said scheme are charged to Profit & Loss Account. In absences of
information Company is not in a position to disclose details as per
AS-15 (Employee Benefits) in respect of defined benefit Plan
(Gratuity).
(iii) Earn Leave Accruing to employees as on the last day of Financial
Year on accrual basis.
(iv) Compensation to Employees who have opted for retirement under the
Voluntary Retirement Scheme of the Company is charged to Profit & Loss
Account in the year of exercise of option.
(a) Borrowing Costs
General and specific borrowing costs directly attributable to the
acquisition, construction or production of qualifying assets. Which are
assets that necessarily take a substantial period of time to get ready
for their intended use or sale are added to the cost of those assets
until such time as the assets are substantially ready for their
intended use or sale. All other borrowing costs are recognized in
statement of Profit and Loss in the period in which they are incurred.
(I) Taxation
Income Tax Provision comprises Current Tax and Deferred Tax charge or
credit. Provision for current tax is made on Assessable Income at the
tax rate applicable to the relevant assessment year. The Deferred Tax
Assets and Liability is calculated by applying tax rate and tax laws
that have been enacted or substantively enacted by the Balance Sheet
date. Deferred tax assets arising mainly on account of unabsorbed
depreciation under tax laws are recognized only if there is virtual
certainty of its realization, supported by convincing evidence.
Deferred tax assets on account of other timing differences are
recognized, only to the extent there is a reasonable certainty of its
realization. At each Balance Sheet date, the carrying amount of
deferred assets is reviewed to reassure realization.
(J) Impairment
The carrying amount of Assets are reviewed at each Balance Sheet date
if there is any Indication of Impairment based on Internal as well as
external factors. An Impairment Loss will be recognized wherever
carrying amount of Assets exceeds its estimated Recoverable amount. The
recoverable amount is greater of the assets net selling price and value
in use. In assessing the value in use, the estimated future cash flows
are discounted to the present value at weighted average cost of
capital. After, impairment, depreciation is provided on revised
carrying amount of assets over the remaining useful life. Previously
recognized impairment loss is further provided or reversed depending on
changes in circumstances.
(K) Provisions, Contingent Liabilities & Contingent Assets
The company recognizes a provision where there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A Disclosure for a contingent liability is made when there
is possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent
assets are neither recognized nor disclosed. Provisions, Contingent
Liabilities and Contingent Assets are reviewed at each Balance Sheet
date.
(L) Lease Tra nsaction
For assets taken on operating lease, lease rentals payable are charged
to revenue.
(M) Investments
Investments are valued at cost. Provision for diminution in the value
of long term investments is made. Only if such decline is other than
temporary.
(N) Research & Development
Revenue expenditure pertinent to research &. development is charged to
the Profit & Loss Account in the year in which it is incurred.
(O) Cash & Cash Equivalent
In the Cash Flow Statement, Cash and Cash Equivalents includes cash in
hand, demand deposits with banks, other short-term highly liquid
investments with original maturities of three months or less.
(P) Use of Esti mates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of financial statements and the reported amount
of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
vi. In absence of necessary information with the company relating to
the registration status of suppliers under the Micro, Small and Medium
Enterprises Development Act, 2006, the information required under the
said act could not be complied and disclosed.
(2) Operating Lease
(i) The total of future minimum lease payments under non-cancelable
operating lease for each of the following periods :-
(a) Not later than one year Nil
(b) Laterthan one year and not later than five years Nil
(c) Laterthan Five Years Nil
(ii) Lease payments recognized in the statement of profit & loss for
the year ended on 31st March, 2013 is Rs.45.84 Lacs(48.76) Lacs.
(iii) The Company has not given any sub-lease during the year.
1. CONTINGENT LIABILITIES
Current
Year (Rs.) Previous
Year (Rs.)
Contingent Liabilities NIL NIL
3. Company has accounted Export benefit on account of Duty Credit
Scrip (Focus Product) on the basis of Export Invoices raised during the
year.
4. In the opinion of the management and to the best of their
knowledge and belier the value of realization of advances and other
current assets in the ordinary course of business will not be less than
the amount at which they are stated in the Balance sheet.
5. The debit & credit balances of suppliers are subject to
confirmation and reconciliation.
6. The Company did not have convertible, partly convertible
debentures as on 31st March, 2013.
7. Figure in brackets denotes figures for previous year ended on 31st
March, 2012.
8. Figures for previous year are regrouped and rearranged wherever
necessary.
Sep 30, 2012
L.corporate information;
helios and matheson information technology ltd is a public ltd company
registered in india and incorporated under the provisions of the
companies act,1956. its shares are listed in nse and bse in india and
its subsidiary company helios and matheson information technology inc,
usa is listed in NASDAQ.
helios and matheson information technology ltd along with its
subsidiaries namely helios and matheson information technology inc,
usa, maruthi consulting inc, usa ,the laxmi group inc, usa, helios
matheson inc,usa , helios & matheson(singapore) pte ltd helios &
matheson it (bangalore)ltd, bangalore and jayamaruthi software services
(p) ltd, chennai provide a wide range of information technology and
consultancy services including software management solution, technology
corporate training education services, the company''s full services
portfolio consist of application development and maintenance ,system
integration, independent verification ,managed services, the company
caters to the bfsi (banking financial services and insurance),health
care and technology sectors in india and across the global
(a) rights, preferences and restrictions attaching to various classes
of shares equity
the company has issued only one type of share, ie, equity, the rights
and resrictions are as per the provisions of the companies act and the
articles of association.
note 2
money received against share warrants
share application money received as on September 30,2012 represents the
amount received from the promoters towards preferential allotment of
equity shares as per sebi guidelines.
note 3
advance received towards subscription of redeemable preference shares
this represents advance amount received from the sellers of vMoksha
towards subscription of redeemable preference shares of your company as
provided in the transaction agreements dated may 11, 2005. however, the
sellers tried to renege the agreements and the company initiated
arbitration proceedings, this matteris, therefore, sub-judice.
this is a contra entry - refer to note 14 - arising out of a cash
neutral structure envisioned in the transaction agreements, based on
the legal opinion received, in the opinion of the management, outcome
of the arbitration proceedings is unlikely to have any adverse effect
on the operations of the company.
note 4
advance
the represents the advance paid by our company for investment in 100%
equity of vMoksha entities - 3,31,165 equity share of Rs.. 100 each
(unquoted) as provided in the transaction agreements dated may 11,
2005. however, the sellers tried to renege the agreements and the
company initiated arbitration proceedings, this matter is, therefore,
sub-judice.
this is a contra entry - refer to note 6 - arising out of a cash
neutral structure envisioned in the transaction agreements, based on
the legal opinion received, in the opinion of the management, outcome
of the arbitration proceedings is unlikely to have any adverse effect
on the operations of the company.
5) quantitative details
the company is engaged in software development, software consultancy
and maintenance of computer software, the production and sale of such
software cannot be expressed in any generic unit, hence, it is not
possible to give the quantitative details of sales and certain
information as required under part ii of schedule vi to the companies
act, 1956.
the tax year for the company being the year ending 31st, march, the
provision for taxation for the period is the aggregate of the provision
made for the twelve months ended 31st march, 2012 and the provision
based on the figures for the remaining six months up to 30th September,
2012, the ultimate tax liability of which will be determined on the
basis of the figures for the period 1st april, 2012 to 31st march,
2013.
6) dues to ssi, micro, small and medium enterprises:
sundry creditors includes amount due to ssi, micro, small and medium
enterprises as on 30.09.12: Rs.. nil (nil) with available information
from micro, small and medium enterprises regarding their registration
with central/state government authorities the disclosure as per sec 23
of the micro small medium enterprises development act 2006 is made.
7) segment reporting
the company is operating in a single segment and the risk and reward
are same for the segment in all the locations and hence segment
reporting is not applicable to the company.
the company transferred Rs..3,08,162/- to the investor education and
protection fund, this is the amount the dividend payable account for
the year ended 31.03.2005 remaining unclaimed and unpaid for a period
of seven years from the date that they first became due for payment
u/s. 205c of the companies act, 1956.
8) names of the key management personnel
mr. muralikrishna g.
mr. diwakar sai yerra
9) contingent liability
a. the income tax demand of Rs..1,94,98,583/- on account of section
10a disallowances for the a.y.2006-2007 is contested before the
commissioner of appeals and the company has paid Rs..5,00,000/- and
contested the demand.
b. the income tax demand of Rs..15,94,66,361/-(revised) on account of
section 10 a of the income tax act for the assessment year 2008-09 and
is contested before the commissioner of appeals, the company has
already paid Rs..1,80,00,000/- towards the demand.
c. the income tax demand of Rs..2,47,10,740 on account of section 10 a
of the income tax act for the assessment year 2009-10 and is contested
before the commissioner of appeals and the company has paid
Rs..40,00,000/- against the demand and contested.
d. the company has given corporate guarantee on behalf of its
subsidiary company for Rs..55.34crore for the business requirements of
the subsidiary.
e. the service tax demand of Rs..3,93,720/- on sponsorship services as
the recipient of services is appealed before the commissioner of
central excise (appeals) and the appeal is yet to be taken upand the
company has paid under protest Rs..1,90,000/- towards demand.
10) consequent to the notification issued by the ministry of corporate
affairs on december 29, 2011, the company adopted the option given in
paragraph 46a of the accounting standard-11 "the effects of changes
in foreign exchange rates" . accordingly the exchange difference on
foreign currency denominated long term borrowings and derivative
contracts thereon with banks relating to acquisition of depreciable
capital assets are adjusted in the carrying cost of such assets.
11) during the year ended September 30, 2012, the revised schedule vi
notified under the companies act 1956, has become applicable to the
company, for preparation and presentation of its financial statements,
accordingly, the company has reclassified / regrouped/ amended the
previous year figures in accordance with the requirements applicable in
the current year.
Sep 30, 2011
Contingent liability
a. the case relating to income tax demand of 7.2,38,53,150 excluding
interest relating to earlier years due to certain disallowances is
decided against the company by madras high court, the company has
already paid 7.2,42,77,990 towards the demand, the company has
preferred an appeal before the supreme court.
b. the income tax demand of 7.1,94,98,583 on account of section 10a
disallowances for the a.y.2006-2007 is contested before the
commissioner of appeals.
c. the income tax demand of 7.15,94,66,361 (revised) on account of
section 10 a of the income tax act for the assessment year 2008-09 and
is contested before the commissioner of appeals, the company has
already paid 7.1,25,00,000 towards the demand.
d. the income tax demand of 7.2,47,10,740 on account of section 10 a
of the income tax act for the assessment year 2009-10 and is contested
before the commissioner of appeals.
e. the company has given corporate guarantee on behalf of its
subsidiary company for 7.55.34 crore for the business requirements of
the subsidiary.
f. the service tax demand of 7.3,93,720 on sponsorship services as the
recipient of services is appealed before the commissioner of central
excise (appeals) and the appeal is yet to be taken up.
Fccbs
a. the company bought back fccb bonds for a face value of usd 1.40 mn
(accrued value being usd 1.95 mn) during the year pursuant to the
approval of reserve bank of india. this has resulted in capital receipt
of 7.2,00,93,252 which has been accounted in capital reserves account,
the company paid an amount of 7.10 lakhs to the reserve bank of india
towards compounding fee in compliance of the order ca no 1441/2011
dated march 22, 2011 and obtained approval for the issue and buy back
of fccbs.
b. the company repaid its fccb on maturity for 7.96,39,72,379 which
includes the redemption premium of 7.27,17,58,932 the share premium as
on the date of redemption has been applied to the extent of redemption
premium of fccb as per section 78 (2) of the companies act, 1956.
c. the total deduction of 7.29,18,52,184 of share premium represents
7.27,17,58,932 being the amount of premium paid on redemption of fccb
and 7.2,00,93,252 being the difference between the fccb premium payable
on buy back and the actual premium paid, this amount has been taken to
capital reserve.
mtm
consequent to the notification issued by the ministry of corporate
affairs on december 29, 2011, the company adopted the option given in
paragraph 46a of the accounting standard-11 'the effects of changes
in foreign exchange rates', accordingly the exchange difference (mark
to market) of 7.1,19,01,345 on foreign currency denominated longterm
borrowings and derivative contracts thereon with banks relating to
acquisition of depreciable capital assets are adjusted in the carrying
cost of such assets.
previous year's figures are recast and regrouped wherever necessary
to conform to current year's presentation.
Sep 30, 2010
Segment reporting
the company is operating in a single segment and the risk and reward is
same for the segment in all the location and hence the segment
reporting is not applicable to the company.
current year figures are recast and regrouped wherever necessary to
confirm with current years presentation, the current year figures are
for 12 months as against 18 months in the previous period and hence,
are not directly comparable.
related party disclosure
name of the related party relationship
maruthi consulting inc, usa subsidiary
the laxmi group inc, usa step down subsidiary
helios and matheson it (bangalore)
ltd., bangalore subsidiary
helios and matheson inc , usa subsidiary
helios and matheson inc , north
america subsidiary
jayamaruthi software systems pvt
ltd., subsidiary
helios and matheson it (Singapore)
pte ltd., subsidiary
name of the key management personnel and their remuneration :
mr. g.k. muralikrishna managing director rs.3,00,000
mr. diwakar sai yerra executive director rs.6,28,800
deferred revenue expenditure
deferred revenue expenditure represents fccb issue related expenses of
rs.465.21 lacs and as the benefit is expected to accrue over the life
of the bonds, the balance amount is carried over to balance sheet after
writing off of rs. .98.98 lakhs for the year ended.
contingent liability
a. the case relating to income tax demand of rs. 2,38,53,150 excluding
interest relating to earlier years due to certain disallowances is
decided against the company by madras high court. the company has
already paid rs.2,17,77,990 towards the demand, the company intends to
prefer an appeal before the supreme court.-
b. the income tax demand of rs. 17,84,49,640 on account of certain
disallowance under section section 10 Aof the income tax act for the
assessment year 2008-09 and the same is contested before the
commissioner of appeals.
c. the company has given corporate guarantee on behalf of its
subsidiary company for rs. 55.34 crore for the business requirements of
the subsidiary.
d. the service tax demand of rs.3,93,720 on sponsorship services as
the recipient of services is appealed before the commissioner of
central excise (appeals) and the appeal is yet to be taken up.
e. sebi has alleged violation of certain regulations under prevention
of unfair trade practices and prevention of insider trading regulations
and imposed a penalty of rs. 50 lacs on the company vide its order
dated January 31,2011. the company is preferring an appeal before the
securities appellate tribunal (SAT).
Sep 30, 2009
Current year figures are for 18 months as against 12 months in the
previous year and hence not directly comparable.
related party disclosure
name of the related party relationship
maruthi consulting inc, usa subsidiary
the laxmi group inc, usa subsidiary
helios and matheson IT (bangalore)
ltd., bangalore subsidiary
helios and matheson inc , usa subsidiary
helios and matheson inc , north
america subsidiary
jayamaruthi software systems ltd., subsidiary
helios and matheson IT (Singapore)
pte ltd., subsidiary
name of the key management personnel
name of the related party relationship
g.k. muralikrishna managing director
deferred revenue expenditure
out of the fccb issue related expenses of rs.4.65 crore, benefit of
which is expected to accrue over the life of the bonds, a sum of rs.
3.17 crore has so far been written off, leaving rs. 1.48 crore
outstanding at the end of the year.
contingent liability
a. the case relating to income tax demand of rs. 2,38,53,150 excluding
interest relating to earlier years due to certain disallowances is
being heard by madras high court. the company has paid rs.57,77,990
towards the demand to prove its bonafide. based on the opinion of tax
advisors , the company believes that the demand can not be sustained
and that the company would eventually win the appeal.
b. the company has given corporate guarantee to its subsidiary company
in Singapore for usd 8.41 mn (rs.34.50 crore) for the business
requirements of its subsidiary.
c. the company received service tax demand of rs.3,93,720 on
sponsorship services as the recipient of services from indian school of
business, the company preferred an appeal against the order before the
commissioner of central excise (appeals).
foreign currency convertible bonds (fccb)
the company has funded a significant part of its overseas acquisitions
and capex expenditure through fccb . the company has used this
instrument effectively as it has got the advantages of both a debt and
an equity instrument, as debt, they carry 2.0% coupon rate till
redemption and as equity, they convert at a premium, thereby reducing
the dilution impact to existing shareholders.
apart from coupon rate of 2%, fccbs carry yield to maturity (ytm) which
gets payable only if they are redeemed or repurchased, since payment of
premium is contingent upon certain factors the outcome of which is not
determinable as of now, the management has treated the premium payable
as mentioned in the above table as contingent in nature accordingly
premium of rs.16.54 crore would be accounted and adjusted against share
premium account in the year of redemption or repurchase, as per
accounting standards, there is no need to make a provision for the
premium payable on redemption since it is only contingent on repayment
and is not payable if the fccbs get converted.
accounting year
pursuant to the approval received from the registrar of companies,
chennai, the company extended its accounting year for 2008-09 to cover
a period of 18 months from april 01, 2008 to September 30, 2009.
consequently, in future, the accounting year of the company will be
from 1 st October to 30th September of the following year
in view of the exemption granted under section 212(8) by the government
of india, the audited financial statements and other reports of
subsidiary companies are not enclosed with this report, however, the
statement pursuant to section 212 of the companies act is given
elsewhere in the annual report.
previous years figures have been regrouped/ recast wherever necessary
to confirm with current periods comparison.