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Notes to Accounts of Proseed India Ltd.

Mar 31, 2015

Overview

Green Fire Agri Commodities Limited ("the Company") was incorporated as Garden Style Private Limited on 11 June 1991. The name of the Company was subsequently changed from Northgate Technologies Limited to Green Fire Agri Commodities Limited on 20 July 2012. The company mainly engaged in Commodities trading business.

1.1 (a) Due to the major fire accident which completely destroyed the physical vouchers upto 10.2.2014 and also affected computers, Furniture and Fixtures, Office Equipments, servers and the steps taken by the Company for recovering the data from the Backup systems. We have conducted limited review of the accounts for the nine months period ending 31.12.2013. We have also conducted Audit for the year ending March 2014, based on data retrieved from the systems including scanned/soft copies and physical records available.

1.1 (b) With respect to balances under Sundry Debtors/Claims Recoverable/Loans & Advances/ Sundry Creditors/Other Liabilities which have not been confirmed by the certain parties.

1.1 (c) Unclaimed Dividend an amount of Rs. 3,12,324/- lying in HDFC Bank for the financial years 2004-05, 2005-06 & 2006-07 is due for transfer to Investor and Education Protection Fund.

1.2 Related party disclosures

i. Entities where control exists

None

ii. Key Management Personnel

D. Prakash Rao – Wholetime Director

T. Naresh Kumar – Director

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, India

Stampede Capital Limited, India

Social Media India Limited

1.3 Details of dues to micro and small enterprises as defined under MSMED Act, 2006

There are no dues to Micro and Small Enterprises specified under the Micro, Small and Medium Enterprises Development Act, 2006 as on 31st March, 2015, to the extent such parties have been identified on the basis of information available with the Company and relied on by the auditors

1.4 Provision for employee benefits

a. Pursuant to the adoption of the Accounting Standard 15 (Revised) – Employee Benefits effective 1st April 2007, the following table sets out the status of the gratuity plan :

Discount rate: The discount rate is based on the gross redemption yield on medium to long term risk free investments.

Expected rate of return on plan assets: 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 factors in the employment market.

Salary escalation rate: The attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

1.5 Differed tax asset/liability :

In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised, which is as required under AS 22 'Accounting for taxes on income'. Accordingly, no deferred tax asset has been recognised as at the year-end.

1.6 Segment reporting

During the current year, the Company is engaged in " Commodities trading" in India Revenue by geographical location of customer

1.7 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.


Mar 31, 2014

1 (a) Due to the major fire accident which completely destroyed the physical vouchers upto 10.2.2014 and also affected computers, Furniture and Fixtures, Office Equipments, servers and the steps taken by the Company for recovering the data from the Backup systems. We have conducted limited review of the accounts for the nine months period ending 31.12.2013. We have also conducted Audit for the year ending March 2014, based on data retrieved from the systems including scanned/ soft copies and physical records available.

2 (b) With respect to balances under Sundry Debtors/ Claims Recoverable/ Loans & Advances/ Sundry Creditors/ Other Liabilities which have not been confirmed by the certain parties.

3 (c) Unclaimed Dividend an amount of Rs. 2,29,216/- lying in HDFC Bank for the financial years 2004-05 & 2005-06 is due for transfer to Investor and Education Protection Fund. The company has already made request to HDFC Bank for transfer of said amount to Investor and Education Protection Fund.

4 Capital Commitments and Contingent liabilities

Particulars For the year ended For the year ended 31 March 2014 31 March 2013

Capital Commitments Nil Nil

Contingent Liabilities

Company extended property to Bank of Baroda against the loan sanctioned to Barret Commodity Traders Private Ltd 18,000,000 18,000,000

5 Differed tax asset/liability :

In view of carry forward of losses under tax laws in the current year, the Company is unable to demonstrate virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised, which is as required under AS 22 ‘Accounting for taxes on income ’. Accordingly, no deferred tax asset has been recognised as at the year-end.

6 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.


Mar 31, 2013

Overview

Green Fire Agri Commodities Limited ("the Company") was incorporated as Garden Style Private Limited on 11 June 1991. The name of the Company was subsequently changed from Northgate Technologies Limited to Green Fire Agri Commodities Limited on 20 July 2012. The company mainly engaged in Commodities trading business.

1.1 Related party disclosures i. Entities where control exists

None

ii. Key Management Personnel

D.V.S. Prakash Rao - Wholetime Director P. Srinivasu - Director

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, India

Stampede Capital Limited, India

Bio Ethanol Agro Industries Limited, India

1.2 Capital Comitments and Contingent liabilities

Particulars For the year ended For the year ended 31 March 2013 31 March 2012

Capital Comitments

Continget Liabilities:

Company extended property to Bank of Baroda against the loan sanctioned to Barrot Commodity Traders Pvt. Ltd. 18,000,000

1.3 Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs. 3,423,200 ( Previous year Rs. 3,464,111) and non cencellable prtion was Rs Nil ( Previous year Nil)

1.4 Previous year figures have been regrouped / reclassified wherever necessary, to confirm to current year classification.


Mar 31, 2012

* 47,089,846 equity Shares of Re.1 each pending allotment pursuant to the Approved Scheme for consideration other than cash (Refer note 2.24.iv) and accordingly, the same has not been considered for reconciliation of the number of equity shares outstanding.

Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date:

During the year beginning from 01 April 2007 to 31 March 2012, the Company had issued 16,514,295 equity shares by way of fully paid bonus shares on 03 September 2007 and 47,089,846 equity Shares of Re.1/- each pending allotment pursuant to the Approved Scheme for consideration other than cash.

* Pursuant to the Approved Scheme, all investment of the Company are transferred to Northgate Com Tech Limited except for the investment in Green Fire Agri Commodities Private Limited, which has been debited to the Statement of profit and loss. (Refer note 2.24)

1.1 Deferred tax asset

Deferred tax is provided on all timing differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. The deferred tax asset / (liability), net as on 31 March 2012 comprises of:

* Pending allotment of equity shares pursuant to the merger, the number of equity shares pending allotment aggregating 47,089,846 have been considered for computing the diluted earnings per share and the same have not been considered for computing the basic earnings per share.

1.2 Note on Scheme of Arrangement and Amalgamation

"The Honorable High Court of Andhra Pradesh has approved the Composite Scheme of Arrangement and Amalgamation between Northgate Technologies Limited ('the Company'), Northgate Com Tech Limited ('Northgate Com'), Green fire Agri Commodities Private Limited ('Green fire'), their respective shareholders and creditors ('the Approved Scheme') on 28 March 2012. The Appointed date of the Approved Scheme is 1 April 2011. Pursuant to the Approved Scheme becoming effective:"

i. the financial statements have been prepared giving effect to the Approved Scheme after making suitable adjustments to align the accounting methods and policies, the effect of which has been considered in the opening balance sheet as on the appointed date, which has been approved by the Board of Directors at their meeting held on 30 May 2012. Accordingly, the financial statement of the Company for the year ended 31 March 2012 have been presented after incorporating the effect of the accounting as proposed in the Approved Scheme. The Approved Scheme is in compliance with the relevant accounting standards notified by the Central Government under Section 211(3C) of the Companies Act,1956.

ii. the internet business of the Company has been demerged into Northgate Com and the commodity business of Green fire is merged with the Company.

iii. one share of Northgate Com would be issued to each shareholder of the Company for one equity share held by him in the Company. Difference between the book value of the net assets, pertaining to the internet business, transferred to Northgate Com is debited to Securities Premium account of the Company, as follows:

v. all the assets and liabilities as on the Appointed Date, recorded in the books of Green fire are transferred to and vested in the Company and is recorded by the Company at their respective book values; Difference between the book value of the net assets, pertaining to the Green Fire, transferred to the Company and face value of the equity shares issued by the Company is debited to accumulated balance in the Statement of profit and loss, as follows:

vi. the face value and the paid up value per equity share (including new equity shares issued to Stampede Holdings Limited) of the Company has been reduced by Rs. 9 without any payments to the holders of such equity shares of the Company. Consequently upon such reorganization of equity share capital of the Company, the face value and the paid up value per share of the Company is Re.1. The reduced amount has been credited to "Capital reorganization account". Balance available in Capital Reorganisation account is adjusted with the debit balance in Statement of Profit and Loss.

vii. the balance available in share premium account, after debiting the deficit arising as per point iii above, is adjusted with debit balance of Statement of Profit and Loss.

viii. the Company will remit the applicable stamp duty within the stipulated time line specified in the court order shares on pending allotment of shares to share holders of Green fire.

ix. movement in Share Premium account, Capital Reorganisation account and Statement of profit and loss is explained, as follows:

1.3 Related party disclosures

i. Entities where control exists None

ii. Key Management Personnel

Venkata S Meenavalli - Chairman and Managing Director P. Srinivasu - Executive Director

K. Bhaskara Reddy - Executive Director (up to 12 November 2010)

iii. Enterprises with whom transactions have taken place

Entities where principal shareholders/management personnel have control or significant influence (either directly or indirectly)

Stampede Holdings Limited, india Stampede Capital Limited, india Bio Ethanol Agro industries Limited, india Northgate investments Pte Limited, Singapore*

Globe7 (UK) Limited, United Kingdom*

Globe7 Pte Limited, Singapore$

Social Media India Limited, India$

Globe7 HK Limited, Honk Kong$

Axill Europe Limited, United Kingdom$

VAR Quant Tech Securities Private Limited, india (Upto11 November 2010)*

Green Fire Agri Commodities Private Limited, india (w.e.f. 20 September 2010)*

* Was a subsidiary till 1 April 2011.

$ Was a step down subsidiary till 1 April 2011.

1.4 Details of dues to micro and small enterprises as defined under MSMED Act, 2006

The Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small Enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allocated after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financial statements based on information received and available with the Company. Further in view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the Act is not expected to be material. The Company has not received any claim for interest from any supplier under the said Act.

Discount rate: The discount rate is based on the gross redemption yield on medium to long term risk free investments.

Expected rate of return on plan assets: 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 factors in the employment market.

Salary escalation rate: The attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

1.5 Contingent liabilities

"The Company issued a corporate guarantee amounting to Rs. Nil (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media india Limited."

1.6 Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. Total rental expense under cancellable operating leases was Rs. 3,464,111 (previous year: Rs. 2,270,934) and under non-cancellable portion was Rs. Nil (previous year: Rs. 2,702,350), which has been disclosed as rent.

1.7 Segment reporting

Pursuant to the Approved Scheme, the internet business of the Company has been demerged into Northgate Com and the commodity business of Green fire is merged with the Company (Refer note 2.24). During the current year, the Company is engaged in " Commodities trading" activity in India. In the previous year, the Company was involved in the business of providing Information Technology services to its sole customer in Singapore. However, in both the years there is one business segment and one geographical segment. Consequently, the requirement for a separate disclosure as required under AS 17 - 'Segment Reporting' is not applicable.

1.8 The Company has the following un-hedged exposure in foreign currency at the year end:

1.9 In view of the aforesaid Scheme of arrangement and amalgamation with effect from 1 April 2011 (refer note 2.24), the figures of the current year are not comparable with those of the previous year.

1.10 Till the year end 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified the previous year figures to confirm to current year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosure made in the financial statement, particularly presentation of balance sheet.


Mar 31, 2011

1. Contingent liabilities

The Company issued a corporate guarantee amounting to Rs. 80,000,000 (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media India limited, a step- down subsidiary.

2. the Board of Directors of the Company at their meeting held on May 19, 2011, considered and approved the Composite Scheme of Arrangement between Northgate Technologies Limited ('NTL' or 'the Company') and Northgate Com Tech Private Limited ('Northgate Com') and Green Fire Agri Commodities Private Limited ('Green Fire') ('Collectively referred to as Group') and their respective shareholders and creditors ('Scheme') under Sections 391-394 read with Sections 100-103 of the Companies act, 1956.

The Scheme is subject to consent, approval of requisite majority of shareholders and creditors of the Company, Northgate Com and green Fire, sanction of the high Court of andhra pradesh and all other regulatory approvals as may be necessary for the implementation of the Scheme.

the salient features of the Scheme are as under:

(a) The Appointed Date of the Scheme is 1 April 2011.

(b) The Scheme involves the demerger of Internet Business Undertaking of the Company into Northgate Com and merger of green Fire into the Company.

(c) Based on an independent valuation and fairness opinion, the Board approved and recommended the Share entitlement ratio as follows:

"1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each of Northgate Com shall be issued and allotted for every 1 (One) Equity Share of Rs. 10 (Rupees Ten) each held in the Company."

"158 (One Hundred ffity eight) fully paid Equity Shares of Rs. 10 (Rupees Ten) each of Northgate shall be issued and allotted for every 1 (One) fully paid Equity Share of Rs. 10 (Rupees Ten) each held in Green Fire (except in respect of shares held by the Company in Green Fire)."

(d) Consequent to the demerger of the Internet business of Northgate into Northgate Com, the shares of the Northgate Com will be listed on the National Stock exchange of India limited.

(e) Consequent to the merger of Green Fire into NTL, the name of NTL will be changed to "Green Fire Agri Commodities limited" and the face value and the paid-up value of the shares of the Company together with the new shares issued and allotted on merger will be reduced by rs. 9 without payment to the holders of such equity shares of Northgate. the shares of the Northgate will continue to list on National Stock exchange of India limited.

3. Employee stock option scheme

the Company has instituted the following employee stock option plans for all eligible employees, in pursuance to the respective special resolution approved by the shareholders. all the plan options shall be administered by the compensation committee, which shall determine the employees eligible for receiving options, the number of options to be granted, the exercise price, the vesting period and the exercise period. the vesting period is determined for the options issued on the date of the grant.

18. Notes to Accounts (continued)

The exercise price of the options granted under the ESOP plans, is defned as the closing market price of the underlying equity share, preceding the date of grant of options on the stock exchange having the highest trading volume of such shares.

In the case of termination of employment, all non-vested options would stand cancelled. options that have vested but have not been exercised can be exercised within the time prescribed under each option agreement approved by the compensation committee, which shall not be beyond the initial exercise period, failing which they would stand cancelled.

at the annual general Meeting held on 1 august 2007, the members of the Company approved for issue of fully paid-up bonus shares in the ratio of 1:1 i.e. one additional equity share, fully paid-up for each existing equity share held by the members, by capitalizing a part of the share premium account. the record date for such issue was 3 September 2007 and the shares were allotted on 5 September 2007. Based on the guidelines issued by Securities exchange Board of India, the effect of this corporate action has been applied to all the outstanding options as at the date of the approval.

4. Deferred tax

In view of carry forward of losses under tax laws in the current period, the Company is unable to demonstrate virtual certainty as required by the Explanation in AS 22 'Accounting for taxes on income'. Accordingly, no deferred tax asset has been recognized as at the year-end as there is no virtual certainty supported by convincing evidence that suffcient future taxable income will be available against which such deferred tax asset can be realized.

5. Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. total rental expense under cancellable operating leases was Rs. 2,270,934 (previous year: Rs. 1,856,500) and under non-cancellable portion was Rs.2,702,350 (previous year: Rs. 4,764,960), which has been disclosed as rent.

the managerial personnel are covered by the personal accident insurance policy and mediclaim insurance policy taken by the Company along with other employees of the Company. the proportionate premium paid towards insurance policies pertaining to the managerial personnel has not been included in the aforementioned disclosures as separate amounts are not available for Directors. Further the above figures do not include provision for gratuity and compensated absences payable to the Managing Director as the same are actuarially determined for the Company as a whole.

10. Details of investments purchased and sold

Sold

During the current year, the Company has sold 100% shares of VAR Quant Tech Securities Private Limited with the approval of the Board of Directors as on 11 November 2010.

- Share application money pending allotment 26,020,590

11. Segment information

the Company is in the business of providing Information technology Services to its step down subsidiary. the Company does not make any distinction amongst the services rendered or the geographical areas to which services are rendered and accordingly, there is only one business and geographical segment.

Pursuant to the Accounting Standard Interpretation (ASI) 20 (Revised) – Disclosure of Segment Information issued by the ICAI, no segment disclosure has been made in these financial statements, as the Company has only one geographical and business segment.

12. Related parties

A) Entities where control exists None

B) Entities with whom transactions have taken place during the year

Subsidiaries

i. Northgate Investments pte limited, Singapore

ii. VAR Quant Tech Securities Private Limited, India

iii. Globe7(UK) Limited, United Kingdom

iv. Green Fire Agri Commodities Private Limited, India (Formally PNM Commodities Private Limited)

Step down subsidiaries

i. globe7 pte limited, Singapore ii. Social Media India limited, India iii. globe7 hK limited, honk Kong iv. axill europe limited, united Kingdom

C) Key Managerial Personnel (KMP)

i. Venkata S Meenavalli - Chairman and Managing Director

ii. P. Srinivasu - Executive Director (w.e.f. 30 September 2010)

iii. D.VS.S.lakshminarayana - Director

iv. K. Bhaskara Reddy - Executive Director (up to June 19, 2010)

Discount rate: the discount rate is based on the gross redemption yield on medium to long term risk free investments.

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

Attrition rate: the attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

14. During the year, the Company raised an amount of rs. 287,000,000 by issue of 14,000,000 equity shares through Qualifed Institutional Placements (QIP) with a face value of Rs.10 per share at a premium of Rs 10.50 per share. The expenses amounting to Rs.11,635,856 relating to the QIP have been deducted from the share premium received.

15. Disclosure as per Clause 32 of the Listing Agreement

During the year ended 31 March 2011, no loans and advances in the nature of loans were given to any subsidiary Company.

16. Amounts payable to micro, small and medium enterprises

The Ministry of Micro, Small and Medium Enterprises has issued an office Memorandum dated 26 August 2008 which recommends that the Micro and Small enterprises should mention in their correspondence with its customers the Entrepreneurs Memorandum Number as allotted after filing of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2011 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said act is not expected to be material. the Company has not received any claim for interest from any supplier under the said act.

Year Ended Year Ended

Particulars 31 March 2011 31 March 2010

the principal amount and the interest due thereon remainingunpaid to any supplier as at the end of each accounting year Nil Nil

the amount of interest paid by the Company along with theamounts of the payment made to the supplier beyond the appointed day during the year Nil Nil

the amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specifed under this Act Nil Nil

the amount of interest accrued and remaining unpaid at the end of the year Nil Nil

the amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprises Nil Nil

17. Quantitative details

the Company is engaged in the business of providing "Information technology Services". these activities are not capable of being expressed in any generic form. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of part II of Schedule VI to the Companies act, 1956 have not been disclosed.

19. Transfer pricing

the Company has established a comprehensive system of maintenance of information and documents as required by the transfer pricing legislation under sections 92-92F of the Income-tax act. Since the law required existence of such information and documentation to be contemporaneous in nature, the Company is in the process of updating the documentation for the international transactions entered into with the associated enterprise during the financial year and expects such records to be in existence latest by 30 September 2011, as required by law. The Management is of the opinion that its international transactions are at arm's length so that the aforesaid legislation will not have any impact on the financial statements, particularly on the amount of tax expenses and that of provision for taxation.

20. Previous year figures

Previous year figures have been regrouped / reclassified wherever necessary, to conform to current year classification.


Mar 31, 2010

1. Contingent Liabilities

The Company has issued a corporate guarantee amounting to Rs. 80,000,000 (previous year: Rs. 80,000,000) in favour of Bank of Baroda for the cash credit facility extended by the bank to Social Media India limited, a step-down subsidiary.

The exercise price of the options granted under the 2004 ESOP Plan, is defined as the average of the weekly high and low of the closing price of the underlying equity shares, during the six months preceding the date of grant, on the stock exchange having the highest trading volume of such shares, or closing price on the same stock exchange on the date of grant whichever is lower.

The exercise price of the options granted under the other ESOP plans, is defined as the closing market price of the underlying equity share, preceding the date of grant of options on the stock exchange having the highest trading volume of such shares.

In the case of termination of employment, all non-vested options would stand cancelled. options that have vested but have not been exercised can be exercised within the time prescribed under each option agreement approved by the compensation committee, which shall not be beyond the initial exercise period, failing which they would stand cancelled.

At the annual general Meeting held on 1 august 2007, the members of the Company approved for issue of fully paid-up bonus shares in the ratio of 1:1 i.e. one additional equity share, fully paid-up for each existing equity share held by the members, by capitalizing a part of the share premium account. the record date for such issue was 3 September 2007 and the shares were allotted on 5 September 2007. Based on the guidelines issued by Securities exchange Board of India, the effect of this corporate action has been applied to all the outstanding options as at the date of the approval.

On 18 October 2008, the Compensation Committee of the Board of Directors decided to cancel all the unexercised stock options outstanding as on that date, under the 2004 ESOP plan and the 2005 ESOP plan, resulting out of the significant fall in the stock market price of the Company’s shares, which was detrimental to the interest of option holders.

Accordingly 188,000 and 802,300 number of options under the 2004 ESOP plan and the 2005 plan, respectively have been cancelled which includes 188,000 number of vested options. the cancellation of vested options, the cost for which has been recognized in the previous periods, has been recorded as a credit to the previous year stock compensation expense amounting to rs.1,801,980, in accordance with the guidelines issued by Securities exchange Board of India.

4. Leases

The Company leases office facilities under cancellable and non-cancellable operating lease agreements. The Company intends to renew such leases in the normal course of its business. total rental expense under cancellable operating leases was Rs. 1,856,500 (previous year: Rs. 2,585,509) and under non-cancellable portion was Rs. 4,764,960 (previous year: Rs. 7,102,241), which has been disclosed as rent.

the managerial personnel are covered by the personal accident insurance policy and mediclaim insurance policy taken by the Company along with other employees of the Company. the proportionate premium paid towards insurance policies pertaining to the managerial personnel has not been included in the aforementioned disclosures as separate amounts are not available for Directors. Further the above figures do not include provision for gratuity and compensated absences payable to the Managing Director as the same are actuarially determined for the Company as a whole.

In the previous year ended 31 March 2009, the Company had paid an amount of Rs. 1,622,500 to the Chairman and Managing Director in excess of the limits prescribed in Schedule XIII of the Companies act, 1956, without obtaining the prior approval of the Central government, as contemplated. however, the Company has recovered this amount by way of a cheque from the Chairman and Managing Director which has been disclosed as Cheque on hand as at 31 March 2009 and has been subsequently realized in April 2009. however, in the current year, the remuneration paid is within the limits prescribed in Schedule XIII of the Companies act, 1956.

5. Segment Information

The Company is in the business of providing Information technology Services to its step down subsidiary. the Company does not make any distinction amongst the services rendered or the geographical areas to which services are rendered and accordingly, there is only one business and geographical segment.

Pursuant to the Accounting Standard Interpretation (ASI) 20 (Revised) – Disclosure of Segment Information issued by the ICAI, no segment disclosure has been made in these financial statements, as the Company has only one geographical and business segment.

6. Related Parties

A) Parties where control exists

S.

No. Name of the party Relationship

1. Northgate Investments Pte limited, Singapore Subsidiary company

2. Var Quant tech Securities private limited, India NSubsidiary company

3. Globe 7 pte limited, Singapore Step down subsidiary company

4. Social Media India limited, India Step down subsidiary company

5. Globe 7 HK limited, hong Kong Step down subsidiary company

6. Axill Europe limited, united Kingdom Step down subsidiary company



B) Other Related Parties

S.

No. Name of the party Relationship

1. Stampede holdings private limited, India Enterprises in which Chairman and Managing

Director is a Director

2. Brilliant Securities Limited, India Enterprises signifcantly infuenced by key

management personnel

3. KBR holdings private limited,India Enterprises owned by key management

personnel and their relatives

4. PNM Commodities Private Limited Enterprises signifcantly influenced by key

management personnel

5. Bio Ethanol India Limited Enterprises signifcantly infuenced by key

management personnel

E) Non Executive Directors and Independent Directors on the board of the Company

S.

No. Name of the Personnel Relationship

1. P. Parthasarathi Independent Director

2. T. Naresh Kumar Independent Director

3. P. Srinivasu Additional Director

4. K. Sujith Kumar Additional Director

5. Y. ramesh Independent Director

7. Gratuity

In accordance with applicable India laws, the Company provides gratuity, a defined benefit, covering certain categories of employees. the gratuity plan provides a lump sum payment to vested employees at retirement or termination of employment. the amount of payment is based on the respective employee’s last drawn salary and the years of employment with the company.

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

Discount rate: the discount rate is based on the gross redemption yield on medium to long term risk free investments.

Salary escalation: 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 factors in the employment market.

Attrition rate: the attrition rate is the expected employee turnover for the future periods, adjusted to the current economic environment.

8. Amounts payable to micro, small and medium enterprises

The management has initiated the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium enterprises Development act, 2006. Further, the Ministry of Micro, Small and Medium Enterprises has issued an Office Memorandum dated 26 August 2008 which recommends that the Micro and Small enterprises should mention in their correspondence with its customers the entrepreneurs Memorandum Number as allotted after fling of the Memorandum. Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2010 has been made in the financial statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the said act is not expected to be material. the Company has not received any claim for interest from any supplier under the said act.

9. Quantitative details

the Company is engaged in the business of providing "Information technology Services". these activities are not capable of being expressed in any generic form. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of part II of Schedule VI to the Companies act, 1956 have not been disclosed.

10. Previous year figures

Previous year figures have been regrouped / reclassifed wherever necessary, to conform to current year classification.