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Notes to Accounts of Prism Informatics Ltd.

Mar 31, 2015

1 Background

Prism Informatics (PR1SM1NFO), incorporated in 1983. is engaged in software development. Earlier known as Aakruli Holdings, it got its present name on Nov. 11, 2005. Specializing in web technologies, application development, mobile computing and systems programming, company focus has been on delivering cutting edge software solutions coupled with building client relationships.

1.1 Going Concern

The financial report has been prepared on a going concern basis, which contemplated continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business except in case of following -

(a) JLT- investment and net commitments towards the defecit in the net worth of the Company: The company has 100% subsidiary Prism Software Consultancy DMCC (formerly known as Prism Software Consultancy JLT). The subsidiary has incurred loss of AED 34,63,603 in the current year resulting erosion of its capital. As these business conditions indicate the existence of material uncertainty that may cast significant doubt regarding Prism Software Consultancy DMCC (formerly known as Prism Software Consultancy JLT) ability to continue as going concern. In the Opinion of the management there is a decline, other than temporary, in the carrying amounts of long term investments. Hence reduction in the carrying amount of investment Rs. 7,16,500 has been charged to the profit and loss statement as an exceptional / extraordinary item. The Loan receivable of Rs. 85,03,705 and Interest receivable of Rs 11,64,553 has been provided as doubtful and considered in the exceptional / Extraordinay items.

The Prism India has also provided towards the committments of subsidiary of Rs.3,25.44,001 towards their loans and accounts payable.

(b) Prism Infoglobal, Seychelles- The company had incorporated operations at Seychelles as 100% subsidiary for the strategic business purpose. The Company has not commenced the business as a result the investment in the company Rs 5,495 and loan of Rs. 49,455 has been provided and considered in the exceptional/ extraordinary item.

(c) Prism INC,USA - During the current financial year the company has provided for receivables of Rs. 2,81,87,277 and committment charges of Rs.4,42.54.698 and considered in the exceptional/ extraordinary item.

In case of previous financial year, the Company had step down subsidiary TLC Technologies INC under Prism Inc US. The Prism India holds 100% shareholding in the Prism Inc US and Prism Inc held 51% in the TLC Technologies INC Company. The TLC was incurring losses from the operations resulting in substantial erosion of the capital. Subsequent to the sale of shares of step down subsidiary TLC, the business conditions indicate the existence of material uncertainty that may cast significant doubt regarding Prism Inc's.. ability to continue as going concern. In the Opinion of the management there is a decline, other than temporary, in the carrying amounts of long term investments. Hence reduction in the carrying amount of investment Rs 2,56,23,329 has been charged to the profit and loss statement as an exceptional / extraordinary item. The Accounts receivable from the TLC Technologies Rs 1,68,16,560 has also been provided as doubtful debt and considereed in the exceptional / Extraordinay items.

(d) Prism PTE, Singapore - In the financial year 2013-14 the Company has made provision Rs 3,12,97,902 towards the Prism Pte Ltd for the carrying value of investments for the permanent decline in the investment value which is other than temprary in nature.

2 Amounts due to micro, small and medium enterprises

As at 31 March, 2015, the Company has no outstanding dues to any vendors registered with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006. There have been no delays in settlement of dues to such vendors, warranting any payment of interest as provided in the above Act(2014 : Nil).

3 Leases

Finance Lease :-

The Company does not have any item covered under finance lease which needs disclosure as per Accounting Standard 19 - "Accounting for Leases".

Operating Leases:

The significant leasing arrangements entered into by the Company include the following:

1) Office premises taken on operating lease with lease 36 months and which are renewable on a periodic basis by mutual consent of both parties. There are no restrictions imposed by lease arrangements, such as those concerning dividends and additional debt.

4 Tax on Regular Assessment

During the year the company received a draft assessment order for KY.10-11 according to which there were upward additions made by the Transfer Pricing officer of Rs. l1,01,298 on account of Transfer pricing adjustment. Also, deduction u/s I0AA was reduced for adjustment of Interest on loan from Bank. CCD and others for allocation to SEZ unit of the company by Rs. 20.02,40 7. As per these two adjustment additional tax liability (including interest u/s 234 B but excluding penalty) amounts to Rs.24,3 3,444. As per the draft order, penalty proceeding u/s 271 (1)(o) were initiated separately. However, this liability was not quantified. Hence as on the Balance sheet date, the contingent liability of the company is Rs.24.33,444. Also, demand of Rs.94,374 and Rs.24,738 were pending against the company for F.Y.2009-10 and F.Y.2010-11 respectively.

The company has contested the additions by filing the appeal with DRF and in the opinion of the management the relief will be granted in the favour of the Company.

5 Prior year comparatives

Previous year figures have been appropriately reclassified to conform to the current year's presentations.


Mar 31, 2014

1. Basis or Preparation :

These abridged financial statements have been prepared in accordance with the requirements of Rule 7 A of the Companies (Central Government''s) General Rules and Forms, 1956 and clause 32 of the Listing Agreement.

These abridged financial statements have been prepared on the basis of the complete set of financial statements for the year ended March 31, 2014.

The amounts shown here are as same as shown in the corresponding aggregated heads in the financial statements as per Schedule VI or as nearthereto as possible.

These abridged financial statements have been circulated among the members of the Company in accordance with the provision of Section 136 of the Companies Act, 2013 read with the rules made thereunder.

2. Company as on 31st March, 2014 does not have any contingent liability.

3. Auditors have drawn attention in their auditor''s report without qualifying the report:

a. Accounts receivable of Rs. 76,647,135 and unsecured loan of Rs. 1, 00, 00,000 from Allstate Finance & Leasing Limited are subject to confirmation and reconciliation if any.

b. Unbilled revenue of Rs. 1, 11, 77,817/- has been certified by the management in conformity with the accounting principles generally accepted in India.

c. Losses from the operations of Prism Inc., Wholly Owned Subsidiary of the company and sale of TLC Technologies INC, subsidiary of Prism Inc results in substantial erosion of capital of Prism Inc. as on date of balance sheet. In the opinion of Management these conditions indicate existence of material uncertainty and may cast significant doubt about the ability of Prism Inc. to continue as a going concern. Hence the carrying amount of investment of the Company in Prism Inc. being Rs. 25,623,329 has been impaired and receivables from TLC Technologies Inc Rs. 16,816,560/- has been provided as doubtful debts and the said impairment and doubtful debts is considered in the exceptional/ Extraordinary items.

5. Items constituting 20% or more of the total income or expenditure and such items of significant importance:

1) Cost of Sale and Service amounting Rs. 5, 20, 02,656 constituting 21.89% of total income and 21.56% of total expenditure comprises of following:

a) Cost of License Sales amounting to Rs. 41,216,906 and

b) Cost of technical sub-contractors amounting to Rs. 10,785,750

1) Company has honored its obligation with respect to rep ayment of loans and interest on its due date and there has been no default on the part of Company to honor its commitments.

6) Going Concern :

The financial report has been prepared on a going concern basis, which contemplated continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

i. The Company has step down subsidiary TLC Technologies INC under Prism Inc US. The Prism India holds 100% shareholding in the Prism Inc US and Prism Inc held 51% in the TLC Technologies INC Company. The TLC was incurring losses from the operations resulting in substantial erosion of the capital. Subsequent to the sale of shares of step down subsidiary TLC, the business conditions indicate the existence of material uncertainty that may cast significant doubt regarding Prism Inc''s., ability to continue as going concern. In the Opinion of the management there is a decline, other than temporary, in the carrying amounts of long term investments. Hence reduction in the carrying amount of investment Rs 2, 56, 23,329/- has been charged to the profit and loss statement as an exceptional / extraordinary item. The Accounts receivable from the TLC Technologies Rs 1, 68, 16,560/- has also been provided as doubtful debt and considered in the exceptional / Extraordinary items.

ii. During the previous financial year the Company had 100% subsidiary Prism Informatics Pte Ltd at Singapore. The subsidiary was incurring losses from the operations resulting in substantial erosion of capital as on the balance sheet date. The subsidiary had borrowed Rs 30, 97,325 from Prism India for its working capital requirements. Also, refer Note no 13 (b) for the step down subsidiary of the Prism Pte for closing agreement signed by the company with its ex-owners which may require additional quantification of liability, if any. These conditions indicate the existence of material uncertainty that may cast significant doubt about the subsidiary''s ability to continue as a going concern. In the opinion of the management there is a decline, other than temporary, in the carrying amounts of long term investments. Hence, reduction in the carrying amount of investment Rs 3, 12, 97,902 has been charged to the profit and loss statement as an exceptional / extraordinary item in the previous financial year.

8) Investments:

Long-term investments are stated at cost, and provision for diminution is made when, in the management''s opinion, there is a decline, other than temporary, in the carrying value of such investments. Current investments are carried at lower of cost and fair value.


Mar 31, 2013

1 Background

Prism Informatics (PRISMINFO), incorporated in 1983, is engaged in software development. Earlier known as Aakruti Holdings, it got its present name on Nov. 11, 2005. Specializing in web technologies, application development, mobile computing and systems programming, company focus has been on delivering cutting edge software solutions coupled with building client relationships. It has affiliations with leading companies like Elance, Palm, Handspring, ProSawy, Square Trade and Oracle among others.

1.1 Going Concern

The financial report has been prepared on a going concern basis, which contemplated continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

The Company has 100% subsidiary Prism Informatics Pte Ltd at Singapore. The subsidiary is engaged in the business of rendering IT and IT enabled services. The subsidiary has been incurring losses from the operations resulting in substantial erosion of capital as on the balance sheet date. The subsidiary has borrowed Rs 30,97,325 from Prism India for its working capital requirements. Also, refer Note no 13 (b) for the step down subsidiary of the Prism Pte for closing agreement signed by the company with its ex-owners which may require additional quantification of liability, if any. These conditions indicate the existence of material uncertainty that may cast significant doubt about the subsidiary''s ability to continue as a going concern.

In the opinion of the management there is a decline, other than temporary, in the carrying amounts of long term investments. Hence reduction in the carrying amount of investment Rs 3,12,97,902 has been charged to the profit and loss statement as an exceptional / extraordinary item.

2 Amounts due to micro, small and medium enterprises

As at 31 March, 2013, the Company has no outstanding dues to any vendors registered with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006. There have been no delays in settlement of dues to such vendors, warranting any payment of interest as provided in the above Act (2012: Nil).

3 Leases

Rent expense for all operating leases for the year ended 31st March, 2013 aggregated to Rs. 4,296,479 (2012: Rs.4,907,002)

4 Gratuity Benefits

In accordance with the Payment of Gratuity Act, 1972, Prism Informatics provides for gratuity, a defined retirement plan covering all employees. The plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee''s defined portion of last salary and the years of employment with the Company.

Prism Informatics contributes each year to a gratuity fund based upon actuarial valuations performed by an actuary. The fund is administered by Life Insurance Corporation of India for the purpose.

5 Prior year comparatives

Previous year figures have been appropriately reclassified to conform to the current year''s presentations.


Mar 31, 2012

1 Background

Prism Informatics (PRISMINFO), incorporated in 1983, is engaged in software development. Earlier known as Aakruti Holdings, it got its present name on Nov. 11, 2005. Specializing in web technologies, application development, mobile computing and systems programming, company focus has been on delivering cutting edge software solutions coupled with building client relationships. It has affiliations with leading companies like Elance, Palm, Handspring, ProSavvy, Square Trade and Oracle among others.

* During the current year, the Company has allotted 373,830 equity shares to debenture holders in exchange of 282,242 12% debentures (CCD Series II).

** Further, the Company has allotted 233,715 8% non cumulative compulsorily convertible preference shares series III of Rs. 100 each to Mr Saurabh Dani, Promoter of the Company and 30,000 8% non cumulative compulsorily convertible preference shares series III of Rs. 100 each to Bankim Dani.

Compulsorily Convertible Preference Shares Series II & Series III of Rs. 100 each are expected to be converted into equity shares by 6 August, 2012 & 15 July 2013 respectively.

** Preference shares application money is been allotted 2,15,643 2% non cumulative compulsorily convertible Preference Shares series IV of Rs.100 each on 30th April, 2012. The date of conversion in equity is 29th October, 2013 or date earlier to this subject to necessary approval.

* The Company has availed bank overdraft facility from Saraswat Co-operative Bank Limited. Bank overdraft facility is secured against fixed Deposit of Rs. 125 Lacs and pledge of 5,00,000 Shares of Re. 1/- each of Prism Informatics Limited held by Idhasoft Limited as collateral securities. Further personal guarantee and corporate guarantee are also given by Alok Pathak, managing director and Idhasoft Limited respectively.

** The loan facility was guaranteed by Anor Technologies Private Limited by creating pledge on 12,500,000 shares of Prism Informatics Limited held by Anor Technologies Private Limited.

2 Amounts due to micro, small and medium enterprises

As at 31 March, 2012, the Company has no outstanding dues to any vendors registered with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006. There have been no delays in settlement of dues to such vendors, warranting any payment of interest as provided in the above Act (201 1 : Nil).

3 Capital commitments and contingent liabilities

The Company has entered into asset purchase agreement dated Feb 2,2010 entered with Finasys Consultants Pvt Ltd. As per the agreement, the Company is require to pay earn out based on achievement of certain parameters. The performance parameters for the period April 1,2010 to March 31,2011 have been achieved by the Company. However, the earn out of Rs 44,78,024 to be payable on the achievement of these parameters have not been accounted to the extent of Rs 3,452,759 due to uncertainties in the collection of certain receivables.

4 Gratuity Benefits

In accordance with the Payment of Gratuity Act, 1972, Prism Informatics provides for gratuity, a defined retirement plan covering all employees. The plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employee's defined portion of last salary and the years of employment with the Company.

Prism Informatics contributes each year to a gratuity fund based upon actuarial valuations performed by an actuary. The fund is administered by Life Insurance Corporation of India for the purpose.

5 Subsequent event note

Subsequent to the balance sheet date, Prism Informant is Ltd. has acquired 11,750,000 equity shares of Re 1 of Idhasoft Limited on 15 May 2012. After purchase of such number of shares, Prism Informatics Ltd holds more than 20% interest in the voting power of Idhasoft Limited. As a result, Idhasoft limited has become the associate of Prism Informatis Ltd with effect from 15 May 2012.

6 Prior year comparatives

Previous year figures have been appropriately reclassified to conform to the current year's presentations.


Mar 31, 2011

1. Background

Prism Informatics (PRISMINFO), incorporated in 1983, is engaged in software development. Earlier known as Aakruti Holdings, it got its present name on Nov. 11, 2005. Specializing in web technologies, application development, mobile computing and systems programming, company focus has been on delivering cutting edge software solutions coupled with building client relationships. It has affiliations with leading companies like Elance, Palm, Handspring, ProSavvy, Square Trade and Oracle among others.

2. Share capital

The company has split its equity shares face value from Rs. 10 each to Re. 1 each on 7th January, 2011. Before split up in value of equity share, the compulsorily convertible preference shares have been converted into 664816 equity share of Rs. 10 each. And Compulsorily Convertible Debentures have been converted into 144604 equity shares of Rs.10 each.

*Compulsorily Convertible Preference Shares Series II of Rs. 100 each are expected to get converted into equity shares by 6th August, 2012.

3. Related party transactions

(a) Names of related parties and nature of relationship where control exists

Sr. No. Category of related parties Names

1 Subsidiaries

1.Prism Europe AG, Switzerland

2Prism informatics Schweiz GmbH,Switzerland

3.Prism informatics Deutschland GmbH,Germany

4. Prism Informatics (Thailand) Co. Ltd., Thailand [Previously known as Nexus System Resources Ltd]

5. TLC Technologies Inc.

6. Information Management Technologies Limited

7. Prism Informatics Inc, Delaware

8. Prism Informatics Pte, Limited, Singapore

2 Key management personnel

1) Alok Pathak

2) Dr. Nirmal Jain

3) Dr. Ajay Sharma

4) Mohan Natarajan

3 Parties with substantial interest

1) Finasys Consultants Pvt Ltd

1) Idhasoft Limited

4. Amounts due to micro, small and medium enterprises

As at 31 March, 2011, the Company has no outstanding dues to any vendors registered with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006. There have been no delays in settlement of dues to such vendors, warranting any payment of interest as provided in the above Act (2010 : Nil).

5. Leases

Rent expense for all operating leases for the year ended 31 March 2011 aggregated to Rs. 6,567,538 (2010:Rs.243,000)

6. Supplementary statutory information

(a) Provisions for gratuity and leave encashment in respect of Directors are not included above, as actuarial valuation is done on an overall Company basis.

(b) Computation of net profit in accordance with Section 349 of the Companies Act, 1956 has not been disclosed, as commission by way of percentage of profits is not payable for the year to the Directors.

(c) Sitting fees paid to non-executive director not included above aggregated Rs. NIL (2010: NIL).

7. Prior year comparatives

Previous year figures have been appropriately reclassified to conform to the current years presentations.


Mar 31, 2010

1. BACKGROUND

Prism Informatics Limited (PRISMINFO), incorporated in 1983, is engaged in software development. Earlierknown as Aakruti Holdings, it got its present name on Nov. 11,2005. Specializing in web technologies, application development, mobile computing and systems programming, company focus has been on delivering cutting edge software solutions coupled with building client relationships. It has affiliations with leading companies like Elance, Palm, Handspring, ProSavvy, Square Trade and Oracle among others.

2. RELATED PARTY TRANSACTIONS

(a) Names of related parties and nature of relationship where control exists

Category of related parties

1 Subsidiaries

Names

l.Nastek Solutions Pvt Limited, India

2.Prism Informatics Europe AG

3.Sumits Schweiz GmbH

4.Sumits Deutschland GmbH

S.Prism Informatics INC, USA

S.Prism Informatics Pte, Singapore

7. Nexus System Resources Co. Ltd, Thailand

Category of related parties

2.Key management personnel

Names

1) Alok Pathak

2) Or. Nirmal Jain

3) Dr. AjaySharma

Category of related parties

3.Parties with substantial interest

Names

1) Idhasoft Ltd (Relative of key management personnel)

2) Finasys Consultants Pvt Ltd (acquisition of assets from the above Co)

4. AMOUNTS DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES

As at 31 March, 2010, the Company has no outstanding dues to any vendors registered with appropriate authority under the Micro, Small and Medium Enterprises Development Act, 2006. There have been no delays in settlement of dues to such vendors, warranting any payment of interest as provided in the above Act (2009: Nil).

5. Leases

Rent expense for all operating leases for the year ended 31 March 2010 aggregated to Rs. 243,000 (2009:Rs.NIL)

a) Provisions for gratuity and leave encashment in respect of Directors are not included above, as actuarial valuation is done on an overall Company basis.

b) Computation of net profit in accordance with Section 349 of the Companies Act, 1956 has not been disclosed, as commission byway of percentage of profits is not payable for the year to the Directors.

c) Sitting fees paid to non-executive director not included above aggregated NIL (2009: NIL).

6. Employee Benefit Plans

In accordance with The Payment of Grauity Act, 1972, the company has made provision for defined retirement plan covering all employees. The plan provides lump sum payment to vested employees at retirement or termination of employment based on the respective employees defined portion of last salary and the years of employment with the company, the contribution is made based upon actuarial valuation performed by an actuary, the company has provided Rs. 277,333ascurrent year contribution, the contribution shall be paid to a fund administered by Life Insurance corporation of India

7.Prior year comparatives

Previous year figures have been appropriately reclassified to conform to the current years presentations.


Mar 31, 2009

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