Home  »  Company  »  MPS Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of MPS Ltd.

Mar 31, 2016

1. Disclosure required under section 22 of the Micro, Small & Medium Enterprises Development Act, 2006:

The information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly, no additional disclosures are required.

2. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

4. During the previous year 2014-15, pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company had fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), net of residual value, where the remaining useful life of the asset was determined to be nil as on 01 April 2014, and had adjusted an amount of '' 168.91 lacs (net of deferred tax of '' 85.83 lacs) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

Note 5. EMPLOYEE BENEFIT PLANS

1.a. Defined contribution plans

The Company makes contributions to Provident Fund , Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised '' 399.52 Lacs (Previous year '' 367.44 Lacs.) for Provident Fund contributions, '' 6.30 Lacs (Previous year '' 6.30 Lacs.) for Superannuation Fund contributions and '' 82.62 Lacs (Previous year '' 70.40 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the Schemes.

Note 6. SEGMENT INFORMATION

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

Note 7. DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENTS WITH THE STOCK EXCHANGES

There are no Loans and advances in the nature of loans given to subsidiaries / companies in which directors are interested.

Note 8. PREVIOUS YEAR''S FIGURES

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


Mar 31, 2015

1.CORPORATE INFORMATION

Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author -to- reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company offers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing offices in United States and United Kingdom.

The Company has a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) as a Limited Liability Company under the laws of the State of Florida in the United States of America.

2. SHARE CAPITAL

(ii) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 / per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all preferential amount. The distribution will be in proportion to number of equity shares held by the shareholders.

3. ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS INRinLacs

Note Particulars As at 31- As at 31 mar-2015 -Mar -2014

25.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

Claims against the Company not acknowledged as debts

(a) Income tax 599.55 853.58

(b) Service tax 564.98 675.56

(c) Employee state insurance(ESI) and Provident fund (PF) vendor payments) 6.59 6.56

(d) Other claims 196.40 256.00

The above amounts are based on the notice of demand / Assessment Orders / claims by the relevant authorities / parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary.

INRinLacs

Commitments As at 31- As at 31 mar-2015 -Mar -2014

(ii) Estimated amount of contracts remaining to be executed on capital account and not provided for Tangible assets 22.34 57.52

22.34 57.52

4. Disclosure required under section 22 of the Micro, Small & Medium Enterprises Development Act, 2006:

The information required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. There are no over dues to parties on account of principal amount and / or interest and accordingly, no additional disclosures are required. No reimbursements are expected.

5. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.

6. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

7.Change in Accounting Policy

a. During the year, the Company changed its accounting policy of providing depreciation on fixed assets effective April 01,2014. Depreciation is now provided on Straight Line basis for all assets which was hitherto providing on Written Down Value basis for some assets and Straight Line basis for others.

The depreciation expense in the Statement of Profit and Loss for the year is higher by '93.65 lacs consequent to the above change in the method of depreciation.

b. Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets (determined after considering the change in the method of depreciation from WDV to SLM), net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1, 2014, and has adjusted an amount of Rs.168.91 lacs (net of deferred tax of Rs.85.83 lacs) against the opening Surplus balance in the Statement of Profit and Loss under Reserves and Surplus.

8. EMPLOYEE BENEFIT PLANS

a. Defined contribution plans

The Company makes contributions to Provident Fund , Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 367.44 Lacs (Previous year INR 329.19 Lacs.) for Provident Fund contributions , INR 6.30 Lacs (Previous year INR 6.30 Lacs.) for Superannuation Fund Contributions and INR 70.40 Lacs (Previous year INR 61.94 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

9. SEGMENT INFORMATION

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

10. RELATED PARTY TRANSACTIONS

In the normal course of business, the Company enters into transactions at arm's length with affiliated companies, its ultimate holding company and key management personnel. The names of related parties of the Company, as required to be disclosed under Accounting Standard 18 "Related Party Disclosures" is as follows:

a. Details of related parties:

Description of relationship Names of related Parties

(i) Holding Company ADI BPO Services Limited

(ii) Subsidiary Company MPS North America LLC

M. Nishith Arora, Chief Executive Officer

(iii) Key Management Mr. Rahul Arora, Director Personnel (KMP) Ms. Yamini Tandon, Director (w.e.f 11-Aug-2014)

Ms. Yamini Tandon, Vice President-Service Delivery ( w.e.f 17-Feb- (IV) Relatives of KMP 2014 till 10-Aug-2014)

(i) Rs. 48.56 Lacs paid as remuneration during the financial year 2014-15 to Mr. Rahul Arora, Whole Time Director. The Company had earlier filed an application on November 8, 2013 before the Central Government (Ministry of Corporate Affairs) , since Mr. Rahul Arora was not a resident in India for a continuous period of 12 months immediately preceding the date of his appointment as a Whole Time Director of the Company. Pursuant to the provisions of Section 196 and 197 read with Clause (e), Part I, Schedule V of the Companies Act 2013, the Company, in continuation, has applied afresh vide its application in Form MR 2 filed on March 11,2015, and the application is currently pending.

(ii) Rs.18.49 Lacs paid to Ms. Yamini Tandon, appointed as Whole Time Director of the Company for a period of 5 years with effect from August 11,2014. The Company, pursuant to the provisions of Section 196 and 197 read with Clause (e), Part I, Schedule V of the Companies Act 2013, has applied to Central Government (Ministry of Corporate Affairs) vide its application in Form MR 2 filed on November 6, 2014 since Ms. Yamini Tandon was not a resident in India for a continuous period of 12 months immediately preceding the date of her appointment as a Whole Time Director and the application is currently pending.

11. DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENTS WITH THE STOCK EXCHANGES

There are no Loans and advances in the nature of loans given to subsidiaries / companies in which directors are interested.

12. PREVIOUS YEAR'S FIGURES

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


Mar 31, 2014

1. CORPORATE INFORMATION

1.1 Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author-to-reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company ofers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing ofces in United States and United Kingdom.

During the year, the Company has incorporated a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) on 29 May 2013, as a Limited Liability Company under the laws of the State of Florida in the United States of America.

1. CORPORATE INFORMATION

1.1 Background

MPS Limited ("the Company") is engaged in the business of providing publishing solutions viz., type setting and data digitization services for overseas publishers and supports international publishers through every stage of the author-to-reader publishing process and provides a digital-first strategy for publishers across content production, enhancement and transformation, delivery and customer support. This digital focus spans across STM/academic, higher education, trade and directory markets.

The Company ofers a diverse geographic spread with production facilities registered under the Software Technology Park of India (STPI) scheme in Chennai, New Delhi, Gurgaon and Bengaluru. The Company also operates with other production facilities in Dehradun, Noida and editorial and marketing ofces in United States and United Kingdom.

During the year, the Company has incorporated a wholly owned subsidiary namely MPS North America LLC (MPS NA LLC) on 29 May 2013, as a Limited Liability Company under the laws of the State of Florida in the United States of America.

Note 2 Additional information to the financial statements

As at As at 31-Mar-2014 31-Mar-2013 Note Particulars INR in Lacs INR in Lacs

2.1 Contingent liabilities and commitments (to the extent not provided for)

(i) Contingent liabilities

Claims against the Company not acknowledged as debts

(a) Income Tax

Relating to transfer pricing adjustments and disallowance of export 853.58 766.27 commission and other deductions

(b) Service Tax

Penalty and interest for delayed payments, disallowance of input credit 675.56 520.29 and demand on overseas commission

(c) Employee State Insurance (ESI) and Provident Fund (PF) vendor payments 6.56 6.56

(d) VAT - 6.52

(e) Other Claims 256.00 -

The above amounts are based on the notice of demand/Assessment Orders/claims by the relevant authorities/parties and the Company is contesting these claims. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company''s rights for future appeals before the judiciary No reimbursements are expected.

2.3 There are no micro and small enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31-Mar-2014 (PY - INR Nil). This information has been identified on the basis of information available with the Company. This has been relied upon by the auditors

2.4 Employee benefit plans

2.4.1.a Defined contribution plans

The Company makes contributions to Provident Fund, Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 329.19 Lacs (Previous year INR 276.62 Lacs.) for Provident Fund contributions, INR 6.30 Lacs (Previous year INR 6.00 Lacs.) for Superannuation Fund Contributions and INR 61.94 Lacs (Previous year INR 66.81 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2.4.2.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity (included as part of contribution to provident and other funds in note 24, employees benefit expenses)

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

2.5 Segment information

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting".

3.c The remuneration to Key Management Personnel includes Rs. 48.98 Lacs paid as remuneration to Mr Rahul Arora, Whole Time Director effective from August 12, 2013. An application was made to the Central Government pursuant to Section 269, 310 read with Part A of Schedule XIII since Mr. Rahul Arora was not a resident in India for a continuous period of 12 months immediately preceding the date of his appointment as a Whole Time Director. The Central Government has taken on record the aforesaid application and has informed vide their letter dated January 9, 2014 that the matter will be further examined on receipt of the shareholders'' approval. Accordingly, the above is subject to approval of the shareholders and the Central Government

4 Disclosure as per Clause 32 of the Listing Agreements with the Stock Exchanges

There are no Loans and advances in the nature of loans given to subsidiaries/companies in which directors are interested.

5 Previous Year''s figures

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


Mar 31, 2013

1. CORPORATE INFORMATION

1.1 Background

MPS Limited, (the Company) is engaged in the business of providing publishing solutions viz., typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi, Gurgaon and Dehradun. The Company also operates through its branch in United States of America. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing, editorial services, software development, maintenance and support to global publishers.

On 11-October-2011, ADI BPO Services Limited entered into a Share Purchase Agreement with HM Publishers Holdings Limited, the erstwhile Holding Company and purchased its entire shareholding in the Company, comprising 10,339,980 equity shares representing 61.46% of the issued, subscribed and paid up equity capital of the Company. As at 31-March-2013, ADI BPO Services Limited, the holding company held 12,616,996 equity shares representing 75% of the issued, subscribed and paid up equity capital of the Company.

2.1 Employee benefit plans

2.1.a Defined contribution plans

The Company makes contributions to Provident Fund, Superannuation Fund and Employee State Insurance (ESI) Scheme for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised INR 276.62 Lacs (15 months period ended 31 March, 2012 INR 379.44 Lacs.) for Provident Fund contributions, INR 6.00 Lacs (15 months period ended 31 March, 2012 INR 7.76 Lacs.) for Superannuation Fund Contributions and INR 66.81 Lacs (15 months period ended 31 March, 2012 INR 102.46 Lacs) for ESI in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2.1.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees:

i. Gratuity

The following table sets out the funded status of the defined benefit schemes and the amount recognised in the financial statements:

3.1 Segment information

The Company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 -''''Segment Reporting".

The Company''s operations are managed on a worldwide basis from India and they operate in four principal geographical areas viz., India, Europe, United States of America and Rest of the World. The secondary segment is identified to these geographical locations. Details of secondary segment by geographical locations are given below:

4 Subsequent to the year end, the Company has entered into a Membership Interest Purchase Agreement on May 10, 2013 with M/s Element LLC ("Element") and its members, for acquiring 100% ownership of Element , a Limited Liability Company located in Florida, USA for an aggregate consideration of approximately INR 1000 lacs. The proposed transaction is subject to fulfillment of certain terms and conditions as per the said Agreement.

5 Previous Year''s figures

The Board of Directors of the Company, at their meeting held on 15-November-2011, approved the change in the Company''s financial year from December to March. Accordingly, the financial statements for the previous period of 15 months are from 1-January-2011 to 31-March-2012. Hence, the figures for the current financial year of 12 months are not comparable with those of previous period.

As stated above since the Company''s financial statements for the previous period were prepared for the 15 month period from 1-January-2011 to 31-March-2012 and the Revised Schedule VI became effective from 1 April, 2011, the financial statements for the current year have been prepared under Revised Schedule VI for the first time. This has significantly impacted the disclosure and presentation made in the financial statements. Previous period''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

I. BACKGROUND

i. MPS Limited, (the Company) is engaged in the business of providing publishing solutions viz., typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing, editorial services, software development, maintenance and support to global publishers.

ii. On 11-October-2011, HM Publishers Holdings Limited, the erstwhile holding Company, entered into a Share Purchase Agreement (SPA) with ADI BPO Services Limited (known as ADI BPO Services Private Limited upto 8-May-2012), a domestic Company, to sell its entire shareholding in the Company, comprising 10,339,980 equity shares representing 61.46% of the issued, subscribed and paid up equity capital of the Company. Following this agreement, the execution of the stake sale was concluded as an open-market block deal transaction on the National Stock Exchange and in terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and subsequent amendments thereto, open offer proceedings were initiated by ADI BPO Services Limited with a Public Announcement on 14-October- 2011 which were completed on 6-January-2012. Subsequent to the closure of the open offer proceedings, ADI BPO Services Limited has become the Holding Company with 76.27% shareholding.

iii. Consequent to the Scheme of amalgamation of the wholly owned subsidiaries of the Company, MPS Technologies Limited and MPS Content Services Inc., USA and its wholly owned subsidiary MPS Content Services India Private Limited, with the Company, with an appointed date of 31-December-2010, sanctioned by the Honourable High Court of Madras vide its order dated 29- June-2011, all the assets, liabilities and reserves as on 31-December-2010 of the said erstwhile subsidiaries (Transferor Companies) were recorded in the books of the Company at the respective values appearing in the books of the Transferor Companies without revaluation. The excess of the value of Investment in the books of the Company over the value of share capital and reserves of the Transferor Companies of Rs1,326.58 Lacs was adjusted against the reserves of the Company in accordance with the Scheme of Amalgamation. Accordingly an amount of Rs500 Lacs was adjusted against the General Reserves and the balance of Rs826.58 lacs against the surplus in Profit and Loss Account as on 31-December-2010.

The Profit and Loss Account for the 15 months ended 31-March-2012 accordingly includes the operations of the erstwhile subsidiaries while the same are not included in the Previous Year and hence are not comparable.

The Board of Directors of the Company, at their meeting held on 15-November-2011, approved the change in the Company's financial year from December to March. Accordingly, the financial statements are presented for the period from 1-January- 2011 to 31-March-2012. Hence, the figures for the current financial period are not comparable with those of the previous year. Previous year figures have been regrouped/reclassified wherever necessary to conform to current period's classification.

1. Issued, Subscribed and Paid-up Share Capital

Of the 1,68,22,668, equity shares (PY - 1,68,22,668 shares), 1,68,19,852 shares (PY - 1,68,19,852 shares) were allotted as fully paid up pursuant to contracts without payments being received in cash which includes 1,63,52,636 shares (PY - 1,63,52,636 shares) issued as Bonus Shares.

Of the above, 1,28,31,496 shares (PY - 1,03,39,980 shares) are held by ADI BPO Services Limited (PY - H M Publishers Holdings Ltd, United Kingdom), the Holding Company.

2. Secured Loan

(a) Working Capital Demand Loan / Cash credits availed by erstwhile subsidiary amounting to RsNil (PY - Rs371.66 Lacs) are secured by a guarantee given by HM Publishers Holdings Limited.

(b) Working Capital Demand Loan / Cash credits availed amounting to RsNil (PY - Rs600 lacs) are secured by inventories and book debts of the Company.

3. There are no micro and small enterprises, to whom the Company owes dues , which are outstanding for more than 45 days during the year and also as at 31-March-2012 (PY - RsNil). This information and that given in "Current Liabilities" in Schedule 10 has been identified on the basis of information available with the Company. This has been relied upon by the auditors.

The above amounts are based on the notice of demand / Assessment Orders by the relevant authorities and the Company is contesting these claims with the respective authorities. Outflows, if any, arising out of these claims would depend on the outcome of the decisions of the appellate authorities and the Company's rights for future appeals before the judiciary. No reimbursements are expected.

(b) The Company has received orders from service tax authorities disallowing input credit of service tax aggregating to Rs687.59 Lacs for the period June 2006 to December 2010. The Company has filed/is in the process of filing appeals against such orders. Based on legal opinion, the Company is of the view that the disallowance is not sustainable.

The Company has filed appeals against the service tax demand of Rs72 Lacs on overseas commission for the period from 18-April-2006 to 31-December-2006. The Company has been advised that in the event of the demand being upheld by the Appellate Authority, the Company being an exporter of services, is eligible to avail the tax as input credit.

Notes :

(i) The discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.

(ii) The estimate of future salary increases considered, takes into account the inflation , seniority, promotion, increments and other relevant factors.

(iii) The entire Plan Assets are managed by the Life Insurance Corporation of India (LIC). The details with respect to the composition of investments in the fair value of Plan Assets have not been disclosed in the absence of the necessary information.

(iv) The details of experience adjustments arising on account of plan assets and liabilities for the years 2007 to 2010 as required by Accounting Standard (AS) - 15 (Revised) "Employee Benefits" are not available in valuation report.

(v) The Company's best estimate, as soon as it can reasonably be determined of contributions expected to be paid to the plan during the annual period beginning after the balance sheet date RsNil.(PY - Rs89 Lacs)

The above disclosure excludes the figures of the overseas branch, as it is governed by the laws prevailing in the United States of America.

4. Segment Reporting:

The company operates in one business segment of providing publishing solutions viz., typesetting and data digitization services and is considered to constitute a single segment in the context of primary segment reporting as prescribed by Accounting Standard 17 - "Segment Reporting.

Notes

1. Related party relationships are as identified by the Company on the basis of information available and relied upon by the auditors.

2. No amount has been written back during the year in respect of dues to related parties.

5. Leases

The company has entered into cancellable and non-cancellable operating leases for office premises. Lease rentals recognized in respect of such operating leases in the statement of Profit and Loss Account is Rs1,044.55 Lacs ( PY - Rs780.17 Lacs)


Dec 31, 2010

A. Background

MPS Limited, (the Company) is engaged in the business of providing typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. In March, 2009, the Company had set up a Unit at Noida which is located in a Special Economic Zone notified area. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing Services relating to typesetting of books and journals, composing of Yellow Page Advertisements and catalogues, data coding, conversion, indexing, editing, copy editing and editorial services to global publishers.

MPS Limited had two direct subsidiaries MPS Technologies Limited and MPS Content Services Inc. USA (formerly ICC Macmillan Inc. USA) MPS Content Services India Private Limited (formerly ICC India Private Limited) was a subsidiary of MPS Content Services Inc. USA.

The Board of Directors of the Company, at its meeting held on 10th January 2011, approved a Scheme of Amalgamation pursuant to Sections 391 to 394 of the Companies Act, 1956 and Oregon Business Corporation Act, USA involving the Amalgamation of the wholly owned subsidiaries of the Company, MPS Technologies Ltd. and MPS Content Services Inc. USA and its wholly owned subsidiary MPS Content Services India Private Limited with the parent company, MPS Limited (the Company), with effect from 31 December 2010, (Appointed Date'). This Scheme has been sanctioned by the Honourable High Court of Madras vide its order dated 15th June 2011.

On an application made by the Company, the Registrar of Companies (ROC) vide its letter dated 6th June 2011 has granted extension of time for holding the Annual General Meeting for a period of three months upto 30th September, 2011.

Consequent to the sanction of the above scheme:

1. All the assets, liabilities and reserves of MPS Technologies Limited, MPS Content Services Inc. USA and its subsidiary MPS Content Services India Private Limited (Transferor Companies) have been recorded in the books of the Company at the respective values appearing in the books of the Transferor Companies without revaluation.

2. The excess of the value of Investment in the books of the parent company over the value of share capital and reserves of the erstwhile subsidiaries of Rs. 1326.58 Lacs has to be adjusted against the reserves of the Transferee Company in accordance with the Scheme of Amalgamation. Accordingly an amount of Rs. 500 Lacs has been adjusted against the General Reserves and the balance has been adjusted against the surplus in Profit and Loss Account.

3. Contingent Liability: (a) Disputed Demands

Name of the Statute Nature of Dues Rs. In Lacs

Income Tax Act, 1961 Income Tax 5.21 (PY - 5.21) demands of erstwhile subsidiaries

Income Tax Act, 1961 IncomeTax 529.81 (PY - Nil) demands

Income Tax Act, 1961 IncomeTax 73.70 (PY - Nil) demands

Income Tax Act, 1961 IncomeTax 1.56 (PY -1.56) demands of erstwhile subsidiaries

Section 66A of Finance Act Service Tax 227.77 (PY - 227.77) demands

Section 66A of Finance Act Service Tax 99.99 (PY - Nil) demands

Section 66A of Finance Act Service Tax 39.54 (PY - Nil) demands

Section 66A of Finance Act Service Tax 5.29 (PY - Nil) demands

Section 66A of Finance Act Service Tax 9.66 (PY-Nil) demands

Name of the Period Forum where dispute is pending Statute

Income Tax Act, Asst Year 2005-06 Income Tax Appellate Tribunal, 1961 Chennai

Income Tax Act, Asst Year 2007-08 Deputy Commissioner of Income 1961 Tax, Chennai

Income Tax Act, Asst Year 2007-08 Deputy Commissioner of Income 1961 Tax, Chennai Income Tax Act, Asst Year 2007-08 Commissioner of Income Tax 1961 (Appeals), Chennai

Section 66A of July 2003 to Customs and Excise Service Finance Act Dec 2006 Tax Appellate Tribunal, Bengaluru

Section 66A of Oct 2007 to Customs and Excise Service Finance Act Sept 2008 Tax Appellate Tribunal, Bengaluru

Section 66A of Jan 2007 to Commissioner of Service Tax, Finance Act Sep 2007 Bengaluru

Section 66A of Aug 2007 to Commissioner of Service Tax, Finance Act Sept 2007 Bengaluru

Section 66A of Oct 2007 to Commissioner of Service Tax, Finance Act Dec 2007 Bengaluru

(b) No provision has been considered for Service Tax amounting to Rs.227.77 Lacs on overseas commission paid for the period from 1 July, 2003 to 31 December, 2006, as the demands raised by the Authorities for this period is being contested by the Company. The Service Tax for the period from January, 2007 to December, 2010 together with interest amounting to Rs.291.85 Lacs and has been fully remitted. Interest on delayed remittance of Service Tax Rs.52.36 Lacs has been provided for.

(c) As on 31 December, 2010, the Company has appealed against the disallowance of Service Tax claim of Rs.190.54 Lacs. Subsequent to the year end, the company has appealed against disallowance of Rs. 7.99 Lacs. In the opinion of the management, the disallowance is not sustainable.

4. Subsequent to the year end, the Beverly facility of MPS Content Services Inc., erstwhile subsidiary of the Company, has been closed down and the company has incurred an amount of Rs. 48.76 Lacs (equivalent of USD 107,294) towards severance pay to employees and termination costs for early vacation of the premises.

5. Employee Benefits:

The entire Plan Assets are managed by the Life Insurance Corporation of India (LIC). The details with respect to the composition of investments in the fair value of Plan Assets have not been disclosed in the absence of the necessary information.

The above disclosure excludes the figures of the overseas branch, as it is governed by the laws prevailing in the United States of America.

6. Segment Reporting:

Business Segment

The Company operates in one business segment, the business of typesetting and data digitization services for overseas publishers. All assets, liabilities, revenue and expenses are related to this segment.

Notes:

1. Geographical Segments

The Company's operations are managed on a worldwide basis from India, although, they operate in four principal geographical areas of the world, namely India, Europe, United States of America and Rest of the world and the revenues are segregated based on the geographical location of the customer.

2. Segmental Assets includes all operating assets used by respective segment and consists principally of operating cash, debtors, inventories and fixed assets net of allowances and provisions. Segmental Liabilities include all operating liabilities and consist primarily of creditors and accrued liabilities. Segment assets and liabilities do not include income tax assets and liabilities.

7. Related Party Disclosure

Information relating to related party transactions (As identified by the management and relied upon by the Auditors)

1. Parties where control exists;

1.1. Ultimate Holding Company : Georg Von Holtzbrinck GmbH & Co K.G.

1.2. Holding Company : H M Publishers Holdings Ltd.

1.3. Subsidiary Companies* : MPS Technologies Ltd. MPS Content Services Inc. USA MPS Content Service India Pvt. Ltd.

"Until 31st December 2010 (Refer Note I of Schedule 19)

2. Group Companies / Entities with whom the Company had transactions during the year:

Macmillan Publishers Limited, UK Macmillan Iberia SAU

Macmillan Academic Publishing Inc. Macmillan Education, SA

Macmillan Publishers China Limited Ediciones Castillo Group Macmillan, Mexico

Macmillan Publishers Australia Proprietary Limited Gill & Macmillan Publishers (Ireland)

Macmillan Hellas (Greece) Macmillan Publishers Holdings LLC

Holtzbrinck Publishers Holdings Limited Macmillan Education Limited

Nature America Inc. Macmillan Publishers India Limited

Kingfisher Publications Limited Bookworxs GmbH

HGV Hanseatische Gasellschaft Euroscript GmbH

Macmillan Poland

8. No provision has been made for Minimum Alternate Tax (MAT), as the Company has obtained legal opinion to the effect that the income accrued or arising at a unit in the SEZ, does not fall within the ambit of Section 115JB of the Income Tax Act, 1961.

Current tax is determined in respect of taxable income for the Calendar year ended 31st December, 2010. The ultimate current Tax liability will be determined on the basis of taxable income for the Financial year 1st April, 2010 to 31st March, 2011.

9. Pursuant to the announcement by the Institute of Chartered Accountants of India (ICAI) in respect of 'Accounting for Derivatives' though the Company has opted not to follow the recognition and measurement principles relating to derivatives as specified in Accounting Standard - 30, 'Financial Instruments, Recognition and Measurement', keeping in view the principle of prudence as enunciated in AS 1. Disclosure of Accounting Policies, the entity has not considered, by way of prudence, the net gains in respect of all outstanding derivative contracts at the balance sheet date.

The value of forward contracts entered into hedge the foreign currency risk of firm commitments/highly probable transactions as at 31st December, 2010 is USD 10,100,000, Euro 450,000 and GBP 2,000,000 (Previous year - USD 11,500,000 & Euro 2,575,000).

The remeasurement of the fair value as at the balance sheet date has resulted in mark to market net gains of Rs.174.99 Lacs (Previous year - net gain of Rs. 217.07 Lacs) relating to undesignated forward contracts. The gains have not been recognised in the Profit and Loss account as a matter of prudence.

10. The financial statements of 2010 includes the operating results of the erstwhile subsidiaries consequent to Amalgamation, which do not form part of the operating results of previous year. Hence the figures for the current year are not comparable with those of the previous year. Previous year figures have been regrouped / reclassified wherever necessary to conform to current year's presentation.


Dec 31, 2009

Background

MPS Limited, formerly known as Macmillan India Limited (the Company) is engaged in the business of providing typesetting and data digitization services for overseas publishers. The Company has a 100% Export Oriented Unit in Bengaluru, and units registered under the Software Technology Park of India (STPI) scheme that are located in Chennai, Delhi and Gurgaon. In March, 2009, the Company has set up an Unit at Noida which is located in a Special Economic Zone notified area. The Company also operates through its branches in United States of America and United Kingdom. The Company provides Publishing services relating to typesetting of books and journals, composing of Yellow Page Ads and catalogues, data coding, conversion, indexing, editing, copy editing and editorial services to global publishers.

MPS Limited has two direct subsidiaries MPS Technologies Limited and MPS Content Services Inc, USA (formerly ICC Macmillan Inc, USA). MPS Content Services India Private Limited (formerly ICC India Private Limited) is a subsidiary of MPS Content Services Inc, USA.

With effect from 25th June 2009, the Company has changed its name to "MPS Limited" and the necessary statutory approvals have been obtained for change of name.

The Indian Subsidiary ICC India Private Ltd has changed its name to MPS Content Services India Pvt. Ltd. and Foreign Subsidiary in USA had changed its name from ICC Macmillan Inc to MPS Content Services Inc.

MPS Mobile Inc, a subsidiary of MPS Content Service Inc (formerly ICC Macmillan Inc, USA) which was formed during the year was dissolved on 28th December 2009 since the company did not commence business.

2. In the year 2006 MPS Limited acquired MPS Content Services Inc, USA and its subsidiary MPS Content Services India Private Limited for a consideration of Rs. 1,562.74 lacs. In accordance with the terms of the Share Purchase agreement an amount of Rs. 24.22 lacs (equivalent USD 50,000) was retained in the books of MPS Content Services Inc from the consideration payable to the individual promoters as security for any breach of warranties or for any claim against MPS Limited (the purchaser) relating to the labour dispute and the transfer pricing assessments. During the year the final settlement was made to the promoters after reducing an amount of Rs. 9.79 lacs (equivalent of USD 21,002) towards claims relating to the labour dispute of MPS Content Services India Private Limited and an amount of Rs. 0.88 lacs (equivalent of USD 1 887) towards advances taken by one of the promoters. Accordingly, this amount of Rs. 9.79 lacs is reduced from the carrying value of investments.

3. Contingent Liability

a. Disputed Demands:

Name of Nature of Rupees Period Forum where dispute the Statute Dues (in lacs) is pending

Income Tax Act, Income Tax 5.21 Asst Year 2003-04 Income Tax Appellate 1961 Demands (PY - Nil) of Subsi- diary Tribunal Chennai

Income Tax Act, Income Tax 24.36 Asst Year 2005-06 Commissioner of Income Tax 1961 Demands (PY - 24.36) (Appeals), Chennai

Income Tax Act, Income Tax 147.28 Asst Year 2006-07 Commissioner of Income Tax 1961 Demands (PY - Nil) (Appeals), Chennai

Section 66A of Service Tax demands 227.77 July, 2003 to Customs and Excise Service Tax Finance Act (Refer note b) (PY - 227.77) Dec,2006 Appellate Tribunal, Bengaluru

b. No provision has been considered for service tax amounting to Rs. 227.77 lacs on overseas commission paid for the period from 1st July, 2003 to 31st December, 2006, as the demands raised by the Authorities for this period is being contested by the company. The service tax for the period from January 2007 to December 2008 together with interest amounts to Rs. 281.15 lacs out of which Rs. 154.46 lacs has been remitted. However, interest on delayed remittance of service tax Rs. 62.70 lacs has been provided for.

4. There are no amounts due to Micro, Small and Medium Enterprises as identified by the management and relied upon by the auditors.

5. The net worth of MPS Content Services Inc., USA, a subsidiary, has been eroded and its subsidiary MPS Content Services India Private Limited has not carried on operations during 2009 since its principal infrastructure (namely production activities, fixed assets, employees etc) has been transferred to the Company. However, the Company (MPS) has committed to extend continued financial and operational support to MPS Content Services Inc, USA and to MPS Content Services India Private Limited for the foreseeable future. Accordingly both the subsidiaries are considered as going concerns and the investments Rs. 3,320.47 lacs, receivables Rs. 257.28 lacs and advances Rs. 649.14 lacs relating to MPS Content Services Inc, USA are considered good and recoverable.

6. The Board of Directors of the Company at their meeting held on December 21, 2009 have approved the proposal for the Company to acquire the shares of MPS Content Services India Private Limited from MPS Content Services Inc, USA, whereby MPS Content Services India Private Limited will become a subsidiary of MPS Limited and cease to be a subsidiary of MPS Content Services Inc, USA.

7. In the meeting held on 25th February 2009, the remuneration of the Managing Director has been revised effective from 1st February, 2009. The revision has been approved by shareholders at the Annual General Meeting held on 23rd June 2009. An application seeking Central Governments approval has been filed to comply with provisions of Section 309 read with Schedule XIII of the Companies Act, 1956. The approval of the Central Government is awaited.

8. Segment Reporting

Based on a reconsideration of nature of risks, rewards and other relevant factors, the Exports of Information Processing and E-Business which were hitherto considered as individual reportable segments have been combined in to a single reportable segment namely Publishing Services. Consequently, the figures for the previous year has been recasted to make it comparable with the current year.

9. Related Party Disclosure

Information relating to related party transactions (As identified by the management and relied upon by auditors)

1. Parties where control exists

1.1 Ultimate Holding Company Georg Von Holtzbrinck Gmbh & Co K.G.

1.2 Holding Company H M Publishers Holdings Ltd

2. Subsidiary Companies: MPS Technologies Ltd

MPS Content Services Inc., USA

MPS Content Services India Private Limited

MPS Mobile Inc., (dissolved w.e.f. 28.12.2009)

3. Fellow Subsidiaries with whom the company had transactions during the year

Macmillan Publishers Holdings LLC Ediciones Castillo Grupo Macmillan, HGV Hanseatische Gasellschaft Mexico

Macmillan Academic Inc Gill & Macmillan Publishers Bookworxs Gmbh

Macmillan Publishers Australia Macmillan Publishers China Ltd Holtzbrinck-USA Proprietary Limited

Macmillan Greece Macmillan Publishers Limited Macmillan Publish- ers India Limited

Macmillan Iberia SAU Macmillan Education Limited Frank Brothers & Co (Publishers) Limited

Macmillan SA Kingfisher Publica- tions Limited

4. Key Management personnel Mr. Rajiv K Seth, Managing Director

10. Pursuant to the announcement by the Institute of Chartered Accountants of India (ICAI) in respect of Accounting for Derivatives though the Company has opted not to follow the recognition and measurement principles relating to derivatives as specified in Accounting Standard-30, Financial Instruments, Recognition and Measurement, issued by the ICAI for the year ended 31s t December 2009, keeping in view the principle of prudence as enunciated in AS 1, Disclosure of Accounting Policies, the entity has not considered by way of prudence, the net gains in respect of all outstanding derivative contracts at the balance sheet date.

The value of forward contracts entered into to hedge the foreign currency risk of firm commitments/highly probable transactions as at 31st December 2009 is USD 11,500,000 and Euro 2,575,000 (Previous year USD 1,200,000, Euro 1,500,000 and GBP 600,000).

The remeasurement of the fair value as at the balance sheet date has resulted in mark to market net gains of Rs. 217.07 lacs (Previous year mark to market losses of Rs. 262.10 lacs) relating to undesignated forward contracts. The gains have not been recognised in the profit and loss account as a matter of prudence.

11. Current tax is determined in respect of taxable income for the calendar year ended December 31, 2009. The ultimate current tax liability will be determined on the basis of taxable income for the year April 01, 2009 to March 31, 2010.

Pursuant to amendment in Finance Act, 2009, Fringe Benefit Tax has been abolished with effect from April 1, 2009 and hence no provision is considered for the period April 1, 2009 to December 31, 2009.

12. The Company will initiate a review of the transactions with overseas associates to ascertain compliance with transfer pricing requirements under the Income Tax Act, 1961 during the year ending March 31, 2010. Therefore, adjustments, if any, arising out of such study, have not been made in the attached financial statements.

13. The financial statements of 2008 included the operating results of the Publishing Business upto 12th May 2008 which do not form part of the operating results for the current year consequent to the demerger. Hence the figures for the current year are not comparable with those of the previous year. Previous year figures have been regrouped/ reclassified wherever necessary to conform to the current year classification.

 
Subscribe now to get personal finance updates in your inbox!