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Notes to Accounts of Starcom Information Technology Ltd.

Mar 31, 2015

1) In the opinion of the Board the Current Assets, Loans & Advances are realizable in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet. The provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

2) The Company had paid an amount of Rs. 25,00,00,000 to The Jammu and Kashmir Bank (J & K Bank) towards purchase of "Sigmaplot Software product range and Systat Software product range" (herein referred as "Software,s") which was mortgaged to the J & K Bank by one of its clients, Cranes Software International Limited who had defaulted with the J & K Bank. On the payment of the said amounts, the Company has been assigned the global sales and marketing rights of these Software,s. Also, the Company had incurred various expenditure amounting to Rs. 10,07,48,762/- towards up gradation of these Software,s and bringing them into saleable form. During the year, up gradation of these softwares were completed and these products were ready for commercial exploitation. Hence, the Company has capitalized these amounts as Intangible Assets w.e.f. 31st August, 2014.

3) Related Party disclosures

As required under Accounting Standard 18 "Related Party Disclosure" (AS-18), following are the details of transactions during the year with the related parties of the Company as defend in AS 18:

4) The Company has taken premises on operating lease and entered in to non-cancellable Leave and License Agreements with various parties. An amount of Rs. 2,60,06,647 (P.Y Rs. 2,97,42,784/-) is recognized as lease expense in the Statement of Profit and Loss for the year ended 31st March, 2015. The disclosure required to be made in accordance with Accounting Standard 19 on "Leases" is as under;

5) During the year, the Company has re-negotiated the terms of its office premises taken on lease. Accordingly the lessee has agreed to waive the escalated lease rent and also accepting the original lease rent for the entire duration of the lease.

Liabilities no longer payable written back in Note no. 21 includes:-

i. Rs. 51,18,270 being escalated lease rent accounted in the books.

ii. Rs. 1,01,74,688 being Rent Equalization Reserve created as per Accounting Standard (AS)-19 accounted in the books.

6) Effective from 1st April,2014 the Company has charged depreciation on its fixed assets based on their useful life as stipulated under Schedule II of the Companies Act, 2013. Due to this, the depreciation for the year ended on 31st March, 2015 is lower by Rs. 18,70,677 as compared to the depreciation computed under the provisions of the Companies Act, 1956. Further, based on the transitional provision as provided in Note 7(b) of Schedule II, there is no amount which is required to be adjusted against opening balance of retained earnings.

7) The Company has incurred substantial loss during the year and its accumulated loss as at March 31, 2015 amounts to Rs. 3,77,64,443 as against the equity share capital of Rs. 5,00,06,000. In the current financial year, Company,s profitability was adverse due to two major reasons reduction in sales as compared to previous year and high depreciation and amortization expenses due to capitalization of software modules.

The Board has projected its business plan and the management is of the view that the company would able to generate sufficient cash fows in future and be able to meets its obligation. Also, the management is working on completely revamping the business as well. Thus going concern assumption is valid and no adjustment is required to be made to carrying values or classification of balance sheet accounts.

8) Figures of the previous year have been regrouped, reclassified and/or rearranged wherever necessary.


Mar 31, 2014

Note 1 : Deferred Tax Assets (net)

The major components of deferred tax liability / asset as recongised in the financial statement is as follows:

Note 2 : Accompanying Notes to Accounts

1) In the opinion of the Board the Current Assets, Loans & Advances are realisable in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet. The provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

2) Contingent Liabilities not provided for :- Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. Nil (Previous year Rs. 20,00,00,000/-).

3) Disclosure pursuant to Accounting Standard – 15 ''Employee Benefits'' :

Actuarial assumption:

* The estimates of future salary increases, considered in a actuarial valuation, takes account of infl ation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

4) (a) The Company had paid an amount of Rs. 25,00,00,000/- to The Jammu and Kashmir Bank (J & K Bank) as an advance towards purchase of "Sigmaplot Software product range and Systat Software product range" (herein referred as "Softwares") which was mortgaged to the J & K Bank by one of its clients, Cranes Software International Limited (CSIL) who had defaulted with the J & K Bank. On the payment of the said amounts, the Company has been assigned the global sales and marketing rights of these Softwares. However, due to pending valuation and transfer of ownership rights of these softwares to the Company, the said advance is disclosed under the head Capital Advances in Note no. 13 "Long-Term Loans and Advances".

(b) During the previous year, the Company had entered into a contract with CSIL for upgradation of these softwares at a cost which is to be charged monthly on time basis. During the year, the Company has incurred a cost of Rs.2,58,02,520 (P.Y. Rs.75,49,002/-) on the upgradation of these softwares which is also disclosed under Capital Advances in Note no. 13 "Long- Term Loans and Advances".

5) Related Party disclosures

As required under Accounting Standard 18 "Related Party Disclosure" (AS-18), following are the details of transactions during the year with the related parties of the Company as defi ned in AS 18:

Note: Related Parties are as disclosed by the Management and relied upon by the auditors.

6) Segment Information

The Company is operating in single business i.e Software and Analytical Lab Equipments and as such all business activities revolve around this segment. Hence, there is no separate segment to be reported considering the requirement of segment reporting as per AS-17 pursuant to Companies (Accounting Standards) Rules 2006.

7) The Company had during the previous year taken an office premises under cancellable operating lease agreements that are renewable at the option of both the lessor and lessee. An amount of Rs. 2,97,42,824 (P.Y. Rs. 2,35,47,658) is recognised as lease expense in the Statement of Profit and Loss for the year ended 31st March, 2014. The future guaranteed lease payments under non cancellable portion of cancellable lease are as follows.


Mar 31, 2013

1. In the opinion of the Board the Current Assets, Loans & Advances are realisable in the ordinary course of business atleast equal to the amount at which they are stated in the Balance Sheet. The provision for all known liabilities is adequate and not in excess of amount reasonably necessary.

2. Contingent Liabilities not provided for :- Estimated amount of contracts remaining to be executed on capital account (net of advances) not provided for Rs. 20,00,00,000/- (Previous year Rs. Nil).

3. Since the Company did not have any employees who has completed atleast 6 months of service at the year end, no provision and disclosure for Retirement Benefts as required AS-15 is made.

4. (a) During the year, the Company had made an offer to The Jammu and Kashmir Bank (J & K Bank) to purchase ''Sigmaplot Software product range and Systat Software product range'' for a total consideration of Rs. 25,00,00,000 which is presently mortgaged to the J & K Bank by one of its clients, Cranes Software International Limited (CSIL) who had defaulted with the J & K Bank. In terms of the Offer, the consideration to be paid by the Company is in 5 equal instalments of Rs. 5,00,00,000 each upto December, 2013, to the J & K Bank towards the outstanding dues of CSIL. In January, 2013 the Company has paid Rs. 5,00,00,000 towards the frst instalment and the same is disclosed under the head Capital Advances in Note no. 11 ''Long-Term Loans and Advances''. Post Balance Sheet date another instalment of Rs. 5,00,00,000 was paid in April, 2013.

On payment of full amount of consideration of Rs. 25,00,00,000 J & K Bank shall transfer the ownership rights of the above softwares to the Company and the same will be capitalised upon the said transfer.

(b) The Company has also entered into a contract with CSIL for upgradation of these two softwares at a cost which is to be charged monthly on time basis. As on 31st March, 2013, the Company has incurred a cost of Rs. 75,49,002 on the upgradation of these softwares which is also disclosed under Capital Advances in Note no. 11.

5. The name of the Company has been changed from Jatia Finance Limited to Starcom Information Technology Limited and the fresh certifcate of incorporation dated 10th December, 2008 has been received from the Registrar of Companies, Mumbai.

6. Segment Information

In accordance with the requirements of Accounting Standard 17 ''Segment Reporting'', the Company''s business consists of one reportable business segment i.e. ''Software Development Services'', hence no separate disclosures pertaining to attributable revenues, Profts, Assets, Liabilities, Capital Employed are given.

7. The Company has during the year taken an offce premises under cancellable operating lease agreements that are renewable at the option of both the lessor and lessee. An amount of Rs. 2,35,47,658/- (P.Y. Rs. Nil) is recognised as lease expense in the Statement of Proft and Loss for the year ended 31st March, 2013. The future guaranteed lease payments under non cancellable portion of cancellable lease are as follows:-

8. Figures of the previous year have been regrouped, reclassifed and/or rearranged wherever necessary.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account not provided for net of Advances Rs.200 Lakhs. (Previous year Nil)

2. Some of the Sundry creditors and Loans ft Advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustments.

3. The Company has not made provision for Gratuity during the year as no employee have completed six month period of service.

4. As on 31.03.2010, there are no dues to Micro, Small and Medium Enterprises suppliers defined under "The Micro Small and Medium Enterprises Development Act, 2006".

5. The Company had made an application to the Reserve Bank of India (RBI) for deregistering the Company from Non-Banking Finance Company (NBFC). The said application has been approved by the Reserve Bank of India (RBI) vide order dated September 04, 2009.

6. In the opinion of Board of Directors, the Current Assets, Loans and Advances are approximately of the value stated as realisable in the ordinary course of business and the provisions of all known liabilities are adequate and not in excess of amount reasonably necessary.

7. The name of the Company has been changed from Jatia Finance Limited to Starcom Information Technology Limited and the fresh certificate of incorporation dated 10th December, 2008 has been received from the Registrar of Companies, Mumbai

ii) Expenditure, earning and remittance in foreign currency: Nil

8. Related Party Disclosures

Related party disclosures as required by the Accounting Standard -18 on "Related Party Disclosures" Notified by the Companies (Accounting Standard) Rules, 2006 are given below:

i) For the year ended 31st March 2010,

(a) Key Management Personnel

Name of Person Category

Mr. Mahesh Saraf Managing Director

During the year, the Company has not entered into transaction with any related party.

ii) For the year ended 31st March 2009,

(a) Key Management Personnel

Name of Person Category

Mr. Mahesh Saraf Managing Director

Mr. Anil Raika Whole Time Director *

Resigned w.e.f 24th January, 2009

(b) Associates

M/s. Impex Developers Limited Associate Concern

9. Segment Information

The segment wise details as per Accounting Standard 17 "Segment Reporting" as notified by the Companies (Accounting Standard) Rules, 2006 is not applicable as there are no separate reportable segments

10. Deferred Taxes

There are no items attributable to the timing difference between taxable income and accounting income hence no deferred tax liabilities (assets) as required by Accounting Standard (AS) - 22 as notified by the Companies (Accounting Standard) Rules, 2006 has been recognized during the year.

11. Previous year figures have been regrouped, reclassified and rearranged wherever necessary

 
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