Mar 31, 2015
Note No. 1
CORPORATE INFORMATION
QUINTEGRA SOLUTIONS LIMITED (the company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on NSE & BSE. The Company is
primarily engaged in the business of providing IT services and
consulting company delivering services through innovative and
customized solutions.
Note No. 2
BASIS OF PREPARATION
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 2013. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year, except for the change in accounting policy explained
below.
Note No. 3
RELATED PARTY TRANSACTIONS
Disclosure is being made below separately for all the transactions with
related parties as specified under AS-18, 'Related Party Disclosure'
issued pursuant to the Companies (Accounting Standard) Rules, 2006 and
by The Institute of Chartered Accountants of India.
i) The Company has following Related Parties:
a) Subsidiary Companies: Subsidiaries are either liquidated or under
liquidation with appropriate statutory authorities in respective
countries.
b) Directors & Key Management Personnel or Companies in which they are
interested:
Mr V Shankarraman and Mr V Sriraman - Trusted Aerospace Engineering
Private Limited, Anukrith Securities Private Limited
Note No. 4 EARNINGS PER SHARE
Earnings Per Share is calculated as per AS-20 Earnings Per Share issued
pursuant to the Companies (Accounting Standard) Rules, 2006 and by The
Institute of Chartered Accountants of India.
Note No. 5
SEGMENT REPORTING
As per AS-17, 'Segment Reporting' issued pursuant to the companies
(Accounting standard) Rules, 2006, the company operates in single
business segment and from one geographical area (exports are not
considered as seperate geographical area) hence seperate disclosure of
segmental information is not warranted.
Note No. 6
DUE TO SMALL SCALE INDUSTRIES
There are no dues to Small Scale Industries, which are outstanding for
more than 30 days at the Balance Sheet date. Such information regarding
Small Scale Undertaking has been determined to the extent such parties
have been identified on the basis of information available with the
company and relied upon by the Auditors.
Note No. 7
QUANTITATIVE DETAILS
The company is primarily engaged in development and maintenance of
computer software. The production and sale of such software cannot be
expressed in generic unit. Hence it is not possible to give the
quantitative details of sales and certain information.
Note No. 8 GOING CONCERN
The financial statements of the company have been prepared on a going
concern basis, which contemplates the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The Company has reported a net loss of Rs.1.62
Crores (PY 3.24 Crores) for the year ended 31st March 2015. The
management has addressed the criticality of the issue in the company
and has initiated various steps, including but not limited to
settlement of bank debts thorugh OTS, cost reduction measures, closing
down non profitable operations and other significant business
proposals. The management is confident of successfully completing these
initiatives and thereby ensuring profitable business operations into
the foreseeable future.
Mar 31, 2014
Note No. 1
CORPORATE INFORMATION
QUINTEGRA SOLUTIONS LIMITED (the company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on three stock exchanges in
India. The Company is primarily engaged in the business of providing IT
services and consulting company delivering services through innovative
and customized solutions. With headquarters in Chennai - India,
Quintegra operates across the globe. The Company is ISO 9001:2008
certified.
Note No. 2
BASIS OF PREPARATION
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year, except for the change in accounting policy explained
below.
2) The Company did not elect to exercise an irrevocable option to
amortize exchange rate fluctuation on long term foreign currency
monetary asset/ liability over the life of the asset/ liability or by
March 31, 2012, whichever is earlier, subsequent to the amendment to
AS-11 by the Ministry of Corporate affairs.
3) Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the "Foreign Currency Monetary Item
Translation Difference Account" and amortized over the remaining life
of the concerned monetary item.
4) All other exchange differences are recognized as income or as
expenses in the period in which they arise.
Forward exchange contracts are entered into to hedge foreign currency
risk of an existing asset/liability. The premium or discount arising
at the inception of forward exchange contract is amortized and
recognized as an expense/income over the life of the contract. Exchange
differences on such contracts, except the contracts which are long-term
foreign currency monetary items, are recognized in the statement of
profit and loss in the period in which the exchange rates change. Any
profit or loss arising on cancellation or renewal of such forward
exchange contract is also recognized as income or as expense for the
period. Any gain/ loss arising on forward contracts which are long-term
foreign currency monetary items is recognized in accordance with
paragraph 2 and 3. During the year company have not entered into any
forward exchange contracts.
Translation of integral and non-integral foreign operation
The Company classifies all its foreign operations as either "integral
foreign operations" or "non-integral foreign operations."
The financial statements of an integral foreign operation are
translated as if the transactions of the foreign operation have been
those of the company itself.
The assets and liabilities of a non-integral foreign operation are
translated into the reporting currency at the exchange rate prevailing
at the reporting date and their statement of profit and loss are
translated at exchange rates prevailing at the dates of transactions or
weighted average weekly rates, where such rates approximate the
exchange rate at the date of transaction. The exchange differences
arising on translation are accumulated in the foreign currency
translation reserve. On disposal of a non-integral foreign operation,
the accumulated foreign currency translation reserve relating to that
foreign operation is recognized in the statement of profit and loss.
When there is a change in the classification of a foreign operation,
the translation procedures applicable to the revised classification are
applied from the date of the change in the classification.
N. Retirement and other employee benefits
(i) Short term employee benefit obligations are estimated and provided
for.
(ii) Post employment benefits and other long term employee benefits
a) Defined Contribution plans
Retirement benefit in the form of provident fund is a defined
contribution scheme. The contributions to the provident fund are
charged to the statement of profit and loss for the year when the
contributions are due.
The Company has no obligation, other than the contribution payable to
the provident fund.
b) Defined benefit plans and compensated absences The Company operates
defined benefit plans for its employees, viz., gratuity. The costs of
providing benefits under these plans are determined on the basis of
actuarial valuation at each year-end. Separate actuarial valuation is
carried out for each plan using the projected unit credit method.
Actuarial gains and losses for defined benefit plans are recognized in
full in the period in which they occur in the statement of profit and
loss.
Accumulated leave, which is expected to be utilized within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/ losses are immediately taken to the
statement of profit and loss and are not deferred. The Company presents
the entire leave as a current liability in the balance sheet, since it
does not have an unconditional right to defer its settlement for 12
months after the reporting date.
Expenses incurred towards voluntary retirement scheme are charged to
the statement of profit and loss immediately.
Presently Company''s liability towards gratuity, other retirement
benefits and compensated absences are not actuarially determined. In
accordance with the Payment of Gratuity Act, 1972 the company provides
for a lump sum payment to eligible employees, at retirement or
termination of employment based on the last drawn salary and year of
employment with the company. The gratuity fund is managed by SBI
Gratuity Fund. The gratuity obligation is provided for based on
estimates from SBI gratuity fund.
O. Accounting for Taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognized directly in equity is
recognized in equity and not in the statement of profit and loss.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the current
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the reporting date. Deferred income tax
relating to items recognized directly in equity is recognized in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
profits.
In the situations where the Company is entitled to a tax holiday under
the Income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdictions where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the company''s
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate. However, the company restricts
recognition of deferred tax assets to the extent that it has become
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. For recognition of deferred
taxes, the timing differences which originate first are considered to
reverse first.
At each reporting date, the company re-assesses unrecognized deferred
tax assets. It recognizes unrecognized deferred tax asset to the extent
that it has become reasonably certain or virtually certain, as the case
may be, that sufficient future taxable income will be available against
which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
Deferred tax assets and deferred tax liabilities are offset, if a
legally enforceable right exists to set-off current tax assets against
current tax liabilities and the deferred tax assets and deferred taxes
relate to the same taxable entity and the same taxation authority.
Exchange differences arising out of deferred tax assets pertain to
branch profit tax have been recognised in foreign exchange
translational reserve.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year in which the Company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as "MAT Credit Entitlement." The
company reviews the "MAT credit entitlement" asset at each reporting
date and writes down the asset to the extent the company does not have
convincing evidence that it will pay normal tax during the specified
period.
P. Employee stock compensation cost
In accordance with the SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines,1999 and the Guidance Note on
Accounting for Employee Share-based Payments, the cost of equity-
settled transactions is measured using the intrinsic value method and
recognized, together with a corresponding increase in the "Stock
options outstanding account" in reserves. The cumulative expense
recognized for equity- settled transactions at each repor ting date
until the vesting date reflects the extent to which the vesting period
has expired and the company''s best estimate of the number of equity
instruments that will ultimately vest.
The expense or credit recognized in the statement of profit and loss
for a period represents the movement in cumulative expense recognized
as at the beginning and end of that period and is recognized in
employee benefits expense.
Where the terms of an equity-settled transaction award are modified,
the minimum expense recognized is the expense as if the terms had not
been modified, if the original terms of the award are met. An
additional expense is recognized for any modification that increases
the total intrinsic value of the share-based payment transaction, or is
otherwise beneficial to the employee as measured at the date of
modification.
Q. Segment reporting
The Segment reporting of the company has been prepared in accordance
with the AS 17 "Segment Reporting" issued pursuant to the Companies
(Accounting Standard) Rules, 2006 and by The Institute of Chartered
Accountants of India.
The Company''s operation was focused on BFSI, QASS, Other emerging
verticals. Accordingly, these three business divisions comprise a
significant portion of the primary basis for the segmental information
set out in these financial statements.
Secondary Segmental reporting is reported on the basis of the
Geographical location of the customers. Geographical revenues are
segregated based on the location of the customer who is invoiced or in
relation to which the revenue is otherwise recognized.
R Earnings Per Share (EPS)
Basic EPS
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
Diluted EPS
The number of equity shares used in computing diluted earnings per
share comprises the weighted average equity shares considered for
deriving basic earnings per share, and also the weighted average number
of equity shares that could have been issued on the conversion of all
dilutive potential equity shares. Dilutive potential equity shares are
deemed converted as of the beginning of the period, unless issued at a
later date. The number of equity shares and potentially dilutive equity
shares are adjusted for any stock splits and bonus shares issued if
any.
S. Provisions
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed
the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any
provision is presented in the statement of profit and loss net of any
reimbursement.
T. Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably.
The Company does not recognize a contingent liability but discloses its
existence in the financial statements.
U. Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short- term investments with an
original maturity of three months or less.
Cash flows are reported using the indirect method, whereby net profits
before tax is adjusted for the effects of transactions of a non-cash
nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from regular revenue generating, investing and
financing activities of the Company are segregated.
V. Financial instruments
In accordance with the ICAI announcement, derivative contracts, other
than foreign currency forward contracts covered under AS 11, are marked
to market on a portfolio basis, and the net loss, if any, after
considering the offsetting effect of gain on the underlying hedged
item, is charged to the statement of profit and loss. Net gain, if any,
after considering the offsetting effect of loss on the underlying
hedged item, is ignored.
The Company does not have any risk management policy with respect to
risk of foreign exchange fluctuations and is not a party to the
contractual provisions of the instrument.
Presently the company do not hold any derivative instruments
W. Amalgamation accounting
The Company treats an amalgamation in the nature of merger if it
satisfies all the following criteria:
i. All the assets and liabilities of the transferor company become,
after amalgamation, the assets and liabilities of the transferee
company.
ii. Shareholders holding not less than 90% of the face value of the
equity shares of the transferor company (other than the equity shares
already held therein, immediately before the amalgamation, by the
transferee company or its subsidiaries or their nominees) become equity
shareholders of the transferee company.
iii. The consideration for amalgamation receivable by those equity
shareholders of the transferor company who agree to become shareholders
of the transferee company is discharged by the transferee company
wholly by the issue of equity shares, except that cash may be paid in
respect of any fractional shares.
iv. The business of the transferor company is intended to be carried
on, after the amalgamation, by the transferee company.
v. The transferee company does not intend to make any adjustment to the
book values of the assets and liabilities of the transferor company,
except to ensure uniformity of accounting policies.
All other amalgamations are in the nature of purchase.
The Company accounts for all amalgamations in the nature of merger
using the pooling of interest method. The application of this method
requires the company to recognize any non-cash element of the
consideration at fair value. The company recognizes assets, liabilities
and reserves, whether capital or revenue, of the transferor company at
their existing carrying amounts and in the same form as at the date of
the amalgamation. The balance in the statement of profit and loss of
the transferor company is transferred to the general reserve. The
difference between the amount recorded as share capital issued, plus
any additional consideration in the form of cash or other assets, and
the amount of share capital of the transferor company is adjusted in
reserves.
An amalgamation in the nature of purchase is accounted for using the
purchase method. The cost of an acquisition/ amalgamation is measured
as the aggregate of the consideration transferred, measured at fair
value. Other aspects of accounting are as below:
The assets and liabilities of the transferor company are recognized at
their fair values at the date of amalgamation.
The reserves, whether capital or revenue, of the transferor company,
except statutory reserves, are not recognized. Any excess
consideration over the value of the net assets of the transferor
company acquired is recognized as goodwill. If the amount of the
consideration is lower than the value of the net assets acquired, the
difference is treated as capital reserve. The goodwill arising on
amalgamation is amortized to the statement of profit and loss on a
systematic basis over its useful life not exceeding five years.
Presently no amalgamation have been entered into by the company
X. Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
d 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.
The company declares and pays dividends in Indian rupees. The dividend
proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing
Annual General Meeting.
During the year ended 31 March 2014, the amount of per share dividend
recognized as distributions to equity shareholders was Nil (31 March
2013: Nil).
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
Details of bonus issue, buy back etc., during the last 5 years:
There are no equity shares allotted without any consideration
(including bonus shares) during the last 5 years and no shares have
been bought back by the company during the said period
g Shares reserved for issue under options:
Since all the unexercised options granted under Employees Stock Option
Scheme  2006 have since been lapsed during the year ended 31.03.2013,
the disclosure as required under Clause 12 of the SEBI (Employee Stock
Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 is
not applicable.
Details of Security
The various fund based facilities availed from State Bank of India is
secured primarily by the first charge on the current assets of the
company and collaterally secured by immovable properties situated at
Chennai and Kodaikanal belonging to the Company, hypothecation of
movable assets belonging to the company. The facilities are further
collaterally secured by personal guarantee of the Mr.Shankar Raman V
and pledge of 20 Lac Shares of the company in the name of Mr.Shankar
Raman V which was invoked by SBI during the year 2011-12.
The Non-Fund based facility is secured primarily by the counter
guarantee from the company and extension of the charge on the current
assets of the company apart from the collateral security and personal
guarantee mentioned above.
The Company defaulted in payment of its interest and principal portion
of its various credit facilities availed from the State Bank of India
during the year and the unpaid interest provided for in the books
amounts to Rs.65.71 Crores (PY 49.44 Crores).
Loans and advances from related parties refers to the loan acquired
from Trusted Aerospace Engineering Limited and Interest free unsecured
Loan due to director.
*The immovable property of one of the directors Mr. V Shankaraman which
was given as security for the above mentioned bank loan has been taken
over under SERFASI and the sale consideration of Rs. 40 Lakhs have been
adjusted towards the bank liability during the year. The said amount
stands to the credit of Mr. V Shankaraman in the books as interest free
unsecured loan.
Moreover the possession of company''s office building has been taken
over by SBI.
Capital commitments & Investment in Subsidiary
1 During the year 2012-13 the subsidiary of the company namely
Quintegra Solutons (M) Sdn Bhd, Malaysia filed application with the
respective authorities for liquidation and hence the investment made in
it amounting to Rs.76.13 Lakh provided for in the books.
2 The wholly owned subsidiary ''Pingho Associates Corporation (the
Company) incorporated in USA ceased its business operation during
2009-10 and filed a voluntary chapter 11 bankruptcy protection petition
to reorganize its business with US bankruptcy court, Eastern District
of Virginia, USA. Hence the whole investment along with inter company
receivables have been provided for during the year 2010-11 amounting to
Rs.76.88 Crores.
Note No. 2
CONTINGENT LIABILITY & COMMITMENTS
The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Forum where dispute
S.No. Statute is pending
1 U/s 269UC and 269UL(2) Income Tax Act, 1961 City Civil Court
Statute *Assessed/ Reassessed Assessment Year
Demand (Rs.Lakhs)
U/s 269UC and 269UL(2) Income
Tax Act, 1961 5.00 # 2002-03
# Of the above demand Rs.2 Lacs have been paid.
The Company has given a Bank guarantee to the tune of Rs.7.75 Lacs
favoring "The Commissioner of Customs, Chennai" towards purchase of
duty exempted Capital goods.
The Company has been convicted by the trail court, Chennai to pay fine
of Rs.2.5 Lacs for each (against which Rs.2 Lacs paid) of the offences
u/ s 269UC and 269UL(2) read with 276 AB of Income Tax, 1961. The
Company has gone on appeal against the same with Principal Sessions
Judge, City Civil Court, Chennai.
Note No. 3
RELATED PARTY TRANSACTIONS
Disclosure is being made below separately for all the transactions with
related parties as specified under AS 18 Â Related Party Disclosure
issued pursuant to the Companies (Accounting Standard) Rules, 2006 and
by The Institute of Chartered Accountants of India.
(i) The Company has following Related Parties:
a) Subsidiary Companies: viz Quintegra Solutions (M) Sdn Bhd, Quintegra
Solutions GmbH and PAC Inc. which are now under dilution.
b) Directors & Key Management Personnel or Companies in which they are
interested: Mr V Shankarraman and Mr V Sriraman - Trusted Aerospace
Engineering Limited
Note No. 4
SEGMENT REPORTING
The Segment reporting of the company has been prepared in accordance
with the AS 17 "Segment Reporting" issued pursuant to the Companies
(Accounting Standard) Rules, 2006 and by The Institute of Chartered
Accountants of India.
The Company''s operation was focused on Banking Financial Service
Institutions (BFSI), Quality Assurance Software Services (QASS) and
Other emerging verticals. Accordingly, these three business divisions
comprise a significant portion of the primary basis for the segmental
information set out in these financial statements.
Secondary Segmental reporting is reported on the basis of the
Geographical location of the customers. Geographical revenues are
segregated based on the location of the customer who is invoiced or in
relation to which the revenue is otherwise recognized.
Note No. 5
DUE TO SMALL SCALE INDUSTRIES
There are no dues to Small Scale Industries, which are outstanding for
more than 30 days at the Balance Sheet date. Such information regarding
Small Scale Undertaking has been determined to the extent such parties
have been identified on the basis of information available with the
company and relied upon by the Auditors.
Note No. 6
L. QUANTITATIVE DETAILS
The Company is primarily engaged in development and maintenance of
computer software. The production and sale of such software cannot be
expressed in generic unit. Hence it is not possible to give the
quantitative details of sales and certain information as required under
paragraphs 5 (viii)(c) of general instructions for the preparation of
statement of Profit and Loss as per revised Schedule VI to the
Companies Act, 1956.
Note No. 7
M. GOING CONCERN
The financial statements of the company have been prepared on a going
concern basis, which contemplates the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The Company has reported a net loss of Rs.3.24
Crores (PY 15.38 Crores) for the year ended 31st March 2014. The
management has addressed the criticality of the issue in the Company
and has initiated various steps, including but not limited to
negotiating the terms of the existing debt with the bankers of the
Company and opting for one time settlement and other significant
business proposals. The management is confident of successfully
completing these initiatives and thereby ensuring profitable business
operations into the foreseeable future.
Mar 31, 2013
CORPORATE INFORMATION
QUINTEGRA SOLUTIONS LIMITED (the company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on three stock exchanges in
India. The Company is primarily engaged in the business of providing IT
services and consulting company delivering services through innovative
and customized solutions. With headquarters in Chennai - India,
Quintegra operates across the globe. The Company is ISO 9001:2008
certified.
Note No. 2
BASIS OF PREPARATION
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
Note No. 3
SEGMENT REPORTING
The Segment reporting of the company has been prepared in accordance
with the AS 17 "Segment Reporting" issued pursuant to the Companies
(Accounting Standard) Rules, 2006 and by The Institute of Chartered
Accountants of India.
The Company''s operation was focused on BFSI, QASS, Other emerging
verticals. Accordingly, these three business divisions comprise a
significant portion of the primary basis for the segmental information
set out in these financial statements.
Secondary Segmental reporting is reported on the basis of the
Geographical location of the customers. Geographical revenues are
segregated based on the location of the customer who is invoiced or in
relation to which the revenue is otherwise recognized.
Note No. 4
DUE TO SMALL SCALE INDUSTRIES
There are no dues to Small Scale Industries, which are outstanding for
more than 30 days at the Balance Sheet date. Such information regarding
Small Scale Undertaking has been determined to the extent such parties
have been identified on the basis of information available with the
company and relied upon by the Auditors.
Note No. 5 QUANTITATIVE DETAILS
The Company is primarily engaged in the development and maintenance of
computer software. The production and sale of such software cannot be
expressed in generic unit. Hence it is not possible to give the
quantitative details of sales and certain information as required under
paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act,
1956.
Note No. 6
GOING CONCERN
The financial statements of the Company have been prepared on a going
concern basis, which contemplates the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The company has reported a net loss of Rs.15.38
Crores (PY Rs.39.33 Crores) for the year ended 31st March 2013. The
management has addressed the criticality of the issue in the company
and has initiated various steps, including but not limited to
negotiating the terms of the existing debt with the bankers of the
company and opting for one time settlement and other significant
business proposals. The management is confident of successfully
completing these initiatives and thereby commences profitable business
operations into the foreseeable future.
Mar 31, 2012
Note No. 1 CORPORATE INFORMATION
QUINTEGRA SOLUTIONS LIMITED (the company) is a public limited company
domiciled in India and incorporated under the provisions of the
Companies Act, 1956. Its shares are listed on three stock exchanges in
India. The Company is primarily engaged in the business of providing IT
services and consulting company delivering services through innovative
and customized solutions. With headquarters in Chennai - India,
Quintegra operates across the globe. The Company is ISO 9001:2008
certified.
Note No. 2 BASIS OF PREPARATION
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
a 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. The company declares and pays dividends in Indian rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended 31 March 2012, the amount of per share dividend
recognized as distributions to equity shareholders was Nil (31 March
2011: Nil).
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive remaining assets of the company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
*The company accumulates huge losses as on 31st March 2012. Even though
there is virtual certainty in making profit in the future years in the
view of management, as a matter of prudence the deferred tax assets are
not recognized in the books of account and liability provided for in
the earlier years have not been reversed.
Details of Security
The various fund based facilities availed from State Bank of India is
secured primarily by the first charge on the current assets of the
company and collaterally secured by immovable properties situated at
Chennai and Kodaikanal belonging to the company, hypothecation of
movable assets belonging to the company. The facilities are further
collaterally secured by personal guarantee of the Mr. Shankarraman V
and pledge of 20 Lac Shares of the company in the name of Mr.
Shankarraman V which is invoked by SBI during the year.
The Non-Fund based facility is secured primarily by the counter
guarantee from the company and extension of the charge on the current
assets of the company apart from the collateral security and personal
guarantee mentioned above.
The company defaulted in payment of its interest and principal portion
of its various credit facilities availed from the State Bank of India
during the year and the unpaid interest provided for in the books
amounts to Rs.34.6 Crores.
Loans and advances from related parties refers to the loan acquired
from Trusted Aerospace Engineering Limited which is identified as
related party as per Accounting Standard - 18.
* Statutory Payable includes Professional Tax, TDS and interest on the
same) Provisions for interest on taxes due is not provided for since
the excess provisions created in earlier years are sufficient to cover
the same.
Capital commitments & Investment in Subsidiary
1 The wholly owned subsidiary ÃPingho Associates Corporation (the
Company) incorporated in USA ceased its business operation during
2009-10 and filed a voluntary chapter 11 bankruptcy protection petition
to reorganize its business with US Bankruptcy Court, Eastern District
of Virginia, USA. Hence the whole investment along with inter company
receivables have been provided for during the year 2010-11 amounting to
Rs.76.88 Crores.
2 During the year the subsidiaries of the company namely Quintegra
Solutions Limited, UK & Quintegra Solutions Ireland Limited were
liquidated and hence the investment made in them amounting to Rs.125
written off in the books.
* Dues towards relinquishment of rights over the property were written
off during the year since recoverability is uncertain.
During the year the company provided for diminution in the value of its
subsidiaries namely Quintegra Solutions Gmbh, Germany, Quintegra
Solutions Limited, UK, Quintegra Solutions Ireland Limited considering
their inability to perform / generate revenue. The above subsidiaries
initiated the steps for their liquidation with respective authorities
and few of them have been completed.
This includes the interest towards loan defaulted, provided for in the
books and it remains unpaid. The accumulated interest due on defaulted
loan as on 31st March 2012 amounts to Rs.34.6 Crores.
Note No. 3
CONTINGENT LIABILITY & COMMITMENTS
The following Income Tax dues have not been deposited on account of
dispute as detailed under._
~~7, 7 Forum where dispute |*Assessed/ Reassessed " ~
SNo Statute is pending Demand (Rs.Lakhs) Assessment Year
1 U/s 269UC and 269UL(2) Income Tax Act, 1961 City Civil Court 5.00#
2002-03
# Of the above demand Rs.2 Lacs have been paid.
The company has given a Bank guarantee to the tune of Rs.7.75 Lacs
favoring ÃThe Commissioner of Customs, Chennaià towards purchase of
duty exempted Capital goods.
The company has been convicted by the trail court, Chennai to pay fine
of Rs.2.5 Lacs for each (against which Rs.2 Lacs paid) of the offences
u/s 269UC and 269UL(2) read with 276 AB of Income Tax, 1961. The
company went on appeal against the same with Principal Sessions Judge,
City Civil Court, Chennai.
Note No. 4
RELATED PARTY TRANSACTIONS
Disclosure is being made below separately for all the transactions with
related parties as specified under AS 18 - Related Party Disclosure
issued pursuant to the Companies (Accounting Standard) Rules, 2006 and
by The Institute of Chartered Accountants of India.
(i) The Company has transactions with the following related parties:
Subsidiary companies: Quintegra Solutions Limited U.K, Quintegra
Solutions (M) Sdn Bhd, Quintegra Solutions GmbH, Quintegra Solutions
Ireland Limited and PAC Inc.,
Directors & Key Management Personnel or Companies in which they are
interested:
Mr V Shankarraman and Mr V Sriraman - Trusted Aerospace Engineering
Limited
Note No. 5
DUE TO SMALL SCALE INDUSTRIES
There are no dues to Small Scale Industries, which are outstanding for
more than 30 days at the Balance Sheet date. Such information regarding
Small Scale Undertaking has been determined to the extent such parties
have been identified on the basis of information available with the
company and relied upon by the Auditors.
Note No. 6
QUANTITATIVE DETAILS
The company is primarily engaged in the development and maintenance of
computer software. The production and sale of such software cannot be
expressed in generic unit. Hence it is not possible to give the
quantitative details of sales and certain information as required under
paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act,
1956.
Note No. 7 GOING CONCERN
The financial statements of the company have been prepared on a going
concern basis, which contemplates the realization of assets and
discharge of liabilities in the normal course of business for the
foreseeable future. The company has reported a net loss of Rs.39.33
Crores (PY 108.87 Crores) for the year ended 31st March 2012. The
management has addressed the criticality of the issue in the company
and has initiated various steps, including but not limited to
negotiating the terms of the existing debt with the bankers of the
company and opting for one time settlement and other significant
business proposals. The management is confident of successfully
completing these initiatives and thereby commences profitable business
operations into the foreseeable future.
Mar 31, 2010
A Contingent Liability & Commitments
- The following Income Tax dues have not been deposited on account of
dispute as detailed under.
Rs. In Lacs
Statute *Assessed/Reassessed Assessment Forum where
Demand Year dispute is pending
Income Tax 16.24 2002-03 ITAT
Act, 1961 6.53 2004-05 Not appealed
49.31 2007-08 CIT (Appeals)
- The above figures are net of taxes paid on self assessment. Against
the above assessed/Reassessed demand Rs. 1,51,65,000 has been paid
towards various assessment years.
- The company has given a Bank guarantee to the tune of Rs. 7.75 Lacs
favouring "The Commissioner of Customs, Chennai" towards purchase of
duty exempted Capital goods.
- The company has been convicted by the trail court, Chennai to pay
fine of Rs. 2.5 Lacs (against which Rs. 2 lacs paid) for each of the
offences u/s 269UC and 269UL(2) read with 276 AB of Income Tax, 1961.
The company went on appeal against the same with Principal Sessions
Judge, City Civil Court, Chennai.
B Secured Loans / Borrowings
The various fund based facilities availed from State Bank of India is
secured primarily by the first charge on the current assets of the
company and collaterally secured by immovable properties situated at
Chennai and Kodaikanal belonging to the company, hypothecation of
movable assets belonging to the company. The facilities are further
collaterally secured by pledge of 20 Lac Shares of the company in the
name of Chairman and personal guarantee of the Chairman.
The Non-Fund based facility is secured primarily by the counter
guarantee from the company and extension of the charge on the current
assets of the company apart from the collateral security and personal
guarantee mentioned above.
The company defaulted in payment of its interest and principal portion
of its various credit facilities availed from the State Bank of India
during the year and the unpaid interest provided for in the books
amounts to Rs.12.39 Crores.
C Segment reporting
The Segment reporting of the company has been prepared in accordance
with the AS 17 "Segment Reporting" issued pursuant to the Companies
(Accounting Standard) Rules, 2006 and by The Institute of Chartered
Accountants of India.
The Companys operation was focused on BFSI, QASS, Other emerging
verticals. Accordingly, these three business divisions comprise a
significant portion of the primary basis for the segmental information
set out in these financial statements.
Secondary Segmental reporting is reported on the basis of the
Geographical location of the customers. Geographical revenues are
segregated based on the location of the customer who is invoiced or in
relation to which the revenue is otherwise recognized.
D Related party transactions
Disclosure is being made below separately for all the transactions with
related parties as specified under AS 18 - Related Party Disclosure
issued pursuant to the Companies (Accounting Standard) Rules, 2006 and
by The Institute of Chartered Accountants of India.
(i) The Company has transactions with the following related parties:
Subsidiary companies: Quintegra Solutions Limited U.K, Quintegra
Solutions (M) Sdn Bhd, Quintegra Solutions Gmbh, Quintegra Solutions
Ireland Limited and PAC Inc.,
E Due to Small Scale Industries
There are no dues to Small Scale Industries, which are outstanding for
more than 30 days at the Balance Sheet date. Such information regarding
Small Scale Undertaking has been determined to the extent such parties
have been identified on the basis of information available with the
company and relied upon by the Auditors.
F Taxes on income
The company accumulates huge losses as on 31 st March 2010. Even though
there is virtual certainty in making profit in the future years in the
view of management, as a matter of prudence the deferred tax assets are
not recognized in the books of account and liability provided for in
the earlier years have not been reversed.
Provisions for interest on taxes due is not provided for since the
excess provisions created in earlier years are sufficient to cover the
same.
G Quantitative details
The company is primarily engaged in the development and maintenance of
computer software. The production and sale of such software cannot be
expressed in generic unit. Hence it is not possible to give the
quantitative details of sales and certain information as required under
paragraphs 3, 4C and 4D of part II of Schedule VI to the Companies Act,
1956.