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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.

 
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