Home  »  Company  »  Moschip Semicond.Tec  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Moschip Semiconductor Technology Ltd.

Mar 31, 2013

Company overview

MosChip Semiconductor Technology Limited ("MosChip" or "the Company") is a fabless semiconductor company engaged in providing customized application specific integrated circuits (ASICs), System on Chip (SOC) and Software technology services to its clients across the globe. MosChip has its headquarters in Hyderabad, India

1.1.1 Contingent Liabilities:

(Amount in Rupees) As at 31 March

Particulars 2013 2012

Estimated amount of unexecuted capital contracts not provided Nil Nil

Outstanding Bank Guarantee given by bankers 9,075,000 585,301

Outstanding Bank Guarantee on account of Bond executed by the Company to Government of India towards execution of Govt. contract 90,514,145 5,500,000

1.1.2 Accounting for taxes on income

During the period under review, the Company carried its operations in India through its 100% Export Oriented Unit, registered with the Software Technology Parks of India (STPI), Hyderabad. The operations of the STPI Unit and overseas branch have resulted in a net loss for the year ended 31 March 2013. Hence, no provision has been made in the books of account for the tax liability for the year as well as for the deferred taxes as per the Accounting Standard – 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

1.1.3 Short Term Borrowings

During the period the Company has obtained unsecured loans from a Director of an amount Rs.6.63 crores and the outstanding as on 31.03.2013 is Rs. 5.87 crores at varying interest rates payable. The provision for the same has been made in these accounts in the financial year ending 31st March 2013.

1.1.4 Employee Stock Option Plans

As per the Employee Stock Option Scheme and Employee Stock Purchase Guidelines, 1999 issued by the Securities and Exchange Board of India, the excess of the market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the options is to be recognized and amortized on a straight-line basis over the vesting period. The Company has established nine schemes i.c, Employee Stock Option Plan,

MosChip Stock Option Plan 2001, MosChip Stock Option Plan 2002, MosChip Stock Option Plan 2004, MosChip Stock Option Plan 2005 (MI), MosChip Stock Option Plan 2005 (WOS), MosChip Stock Option Plan 2008, MosChip Stock Option Plan 2008(ALR) and MosChip Stock Option Plan 2008(Director) with 600,000 equity shares, 300,000 equity shares, 700,000 equity shares, 1,000,000 equity shares, 500,000 equity shares, 500,000 equity shares, 3,000,000 equity shares, 1,000,000 equity shares and 1,000,000 equity shares respectively. Of these the Employee Stock Options Plan was established when the Company was unlisted and consequently, the Employee Stock Option Scheme and Employee Stock Purchase Guidelines, 1999 are not applicable to the options granted under this Plan.

1.1.5 Earnings per Share

The Company reports basic and diluted earnings per equity share in accordance with AS-20, "Earnings per Share".

Basic earning per equity share has been computed by dividing net loss after tax by the weighted average number of equity shares outstanding during the applicable periods. Diluted earnings per equity share has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the applicable periods. The reconciliation between basic and diluted earnings per equity share is as follows:

1.1.6 Segment Reporting

The Company recognizes ASIC design as its only primary segment since its operations during the year consists of ASIC design and sale/license of related intellectual property developed by it. Accordingly revenues from sale/ license of software (designs/intellectual property) comprise the primary basis of segmental information set out in these Financial Statements. Secondary segmental reporting is performed on the basis of the geographical location of customers

1.1.7 Gratuity Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following table summarizes the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans:

1.1.8 Extraordinary Items

The extraordinary item consists of diminution in value of Rs. 62,361,897 in the carrying cost of investment in MosChip USA which is 100% subsidiary of MosChip India. This diminution loss was due to changes in underlying business conditions of MosChip USA. The charge on account of diminution has been determined on the basis of the MosChip USA''s Net Worth as on 31.03.2013.

1.1.9 Investments

During the year Moschip Semiconductor Technology Limited has further invested in its 100% wholly owned Subsidiary in Singapore named Moschip Semiconductor Technology PTE Limited an amount of Rs.974,584 (SGD 22,500).

1.1.10 Dues to Micro and Small Enterprises (SME):

In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, (SME Act) the outstanding payable to Micro and Small enterprises, as defined under the SME Act, are required to be disclosed in the prescribed format. However, such Enterprises are required to be registered under the SME Act.

There are no dues to any small scale industrial undertakings and micro, small & medium enterprises which are outstanding for more than 30 days or 45 days respectively at the Balance Sheet date. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

1.1.11 Regrouping/ Reclassification

The figures for previous year have been regrouped / reclassified wherever necessary.


Mar 31, 2012

Company overview

MosChip Semiconductor Technology Limited ("MosChip" or "the Company") is a fabless semiconductor company engaged in the business of developing application specific integrated circuits (ASICs) and System on Chip (SOC) technologies. The Company also sale application specific integrated circuits (ASICs). The Company specializes in the areas of computer peripherals, data communications and consumer electronics. The development/design process is carried out at its design centre located in Hyderabad. The Company also provides Software Services to its clients across the globe. MosChip has its headquarters in Hyderabad, India

1.1.1 Contingent Liabilities:

(Amount in Rupees)

As at 31 March Particulars 2012 2011

Estimated amount of unexecuted capital contracts not provided Nil Nil

Outstanding Bank Guarantee given by bankers 585,301 585,301

Outstanding Bank Guarantee on account of Bond executed by the Company to Government of India towards exemption of customs duty 5,500,000 8,025,000

1.1.2 Forfeited Share Warrants

In FY 2009-10 the company allotted 250,000 convertible warrants at a price of Rs.12.50 each and received 25% as upfront payment of Rs. 781,250. Due to non payment of the balance amount within the stipulated time, the aforesaid 250,000 warrants stood lapsed and upfront payment received against these warrants was forfeited and credited to Capital Reserve Account.

1.1.3 Accounting for taxes on income

During the period under review, the Company carried its operations in India through its 100% Export Oriented Unit, registered with the Software Technology Parks of India (STPI), Hyderabad. The operations of the STPI Unit and overseas branch have resulted in a net loss for the year ended 31 March 2012. Hence, no provision has been made in the books of account for the tax liability for the year as well as for the deferred taxes as per the Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

1.1.4 Employee Stock Option Plans

As per the Employee Stock Option Scheme and Employee Stock Purchase Guidelines, 1999 issued by the Securities and Exchange Board of India, the excess of the market price of the underlying equity shares as of the date of the grant of the options over the exercise price of the options is to be recognized and amortized on a straight-line basis over the vesting period.

The Company has established nine schemes i.c, Employee Stock Option Plan, MosChip Stock Option Plan 2001, MosChip Stock Option Plan 2002, MosChip Stock Option Plan 2004, MosChip Stock Option Plan 2005 (MI), MosChip Stock Option Plan 2005 (WOS), MosChip Stock Option Plan 2008, MosChip Stock Option Plan 2008(ALR) and MosChip Stock Option Plan 2008(Director) with 600,000 equity shares, 300,000 equity shares, 700,000 equity shares, 1,000,000 equity shares, 500,000 equity shares, 500,000 equity shares, 3,000,000 equity shares, 1,000,000 equity shares and 1,000,000 equity shares respectively. Of these the Employee Stock Options Plan was established when the Company was unlisted and consequently, the Employee Stock Option Scheme and Employee Stock Purchase Guidelines, 1999 are not applicable to the options granted under this Plan.

1.1.5 Earnings per Share

The Company reports basic and diluted earnings per equity share in accordance with AS-20, "Earnings per Share".

Basic earning per equity share has been computed by dividing net loss after tax by the weighted average number of equity shares outstanding during the applicable periods. Diluted earnings per equity share has been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the applicable periods. The reconciliation between basic and diluted earnings per equity share is as follows:

1.1.6 Segment Reporting

The Company recognizes ASIC design as its only primary segment since its operations during the year consists of ASIC design and sale/license of related intellectual property developed by it. Accordingly revenues from sale/ license of software (designs/intellectual property) comprise the primary basis of segmental information set out in these Financial Statements. Secondary segmental reporting is performed on the basis of the geographical location of customers

1.1.7 Gratuity Plan

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following table summarizes the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the respective plans:

The principal assumptions used in determining gratuity and other post employment benefit obligations for the company's plan are as follows:

Discount Rate - 8.65%

Expected rate of return on assets - 7.50%

The fund is administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Above figures have been adopted as per actuarial valuation done by Thanawala Consultancy Services.

The defined benefit obligation of compensated absence (leave encashment) in respect of the employees of the company as at 31st March 2012 is Rs.1,377,651.

1.1.8 Extraordinary Items

The extraordinary Item consists of diminution in value of Rs. 303,647,300 in the carrying cost of investment in MosChip USA which is 100% subsidiary of MosChip India This diminution loss was due to changes in underlying business conditions of MosChip USA. The charge on account of diminution has been determined on the basis of the MosChip USA's Net Worth as on 31st March 2012.

1.1.9 Discontinuing Operations

Revenue on discontinuing operation consist of Rs.45,070,000 towards sale of MosChip India's I/O division Intellectual Property Rights.

1.1.10 Investments

During the year MosChip Semiconductor Technology Limited has incorporated a 100% wholly owned Subsidiary in Singapore named MosChip Semiconductor Technology PTE Limited with an initial investment of Rs.39 (One Singapore Dollar) and further Invested an amount of Rs. 13,08,330 (SGD 32,500) for which allotment is pending at the end of the financial year 31st March 2012.

Company has eroded the value of investment in wholly owned subsidiary MosChip Semiconductor Technology, USA in view of significant accumulated losses incurred by the Subsidiary & in the absence of certainty of recovery of such Losses in visible time, the Company has written off its investment to the extent of Rs.303,647,300.

1.1.11 Dues to Micro and Small Enterprises (SME):

In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, (SME Act) the outstanding payable to Micro and Small enterprises, as defined under the SME Act, are required to be disclosed in the prescribed format. However, such Enterprises are required to be registered under the SME Act.

There are no dues to any small scale industrial undertakings and micro, small & medium enterprises which are outstanding for more than 30 days or 45 days respectively at the Balance Sheet date. This information has been determined to the extent such parties have been identified on the basis of information available with the company.

1.1.13 Regrouping/ Reclassification

The figures for previous year have been regrouped / reclassified wherever necessary.

 
Subscribe now to get personal finance updates in your inbox!