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Notes to Accounts of Tera Software Ltd.

Mar 31, 2015

1. 548700 Shares are pledged (Previous Year 623700) in favour of Canara Bank as per terms and conditions of their sanction letter.

Working Capital Loans given by Bank of Maharastra are secured by way of hypothecation of Land and Buildings situated at Jubilee hills Hyderabad and Srinagar colony, Computers and Peripherals, Stock in trade, Software in process, book debts and personal guarentee given by the Vice Chairman & Managing Director, Whole-Time Director and Director of the Company.

Working Capital Loan taken from Canara Bank is secured by way of hypothecation on paripassu first charge basis along with Bank of Maharastra and collateral Security of Industrial Land and Buildings situated at Annaram Village, Hyderabad by way of Equitable Mortagage on exclusive charge basis.

2. Commitments and Contingencies:

a. The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is Rs.NIL as at March 31, 2015 (Previous year Rs. 10.25 Lakh).

b. The company has outstanding guarantees of Rs. 1,990.30 Lakhs and Letter of credit Rs 546.79 Lakhs as at 31st March 2015 (previous year Bank Guarantees Rs. 3,635.24 Lakh and Letter of credit Rs NIL).

The company has adopted Accounting Standard (AS) 15 (revised 2005) on Employee Benefits.

3. In the opinion of the board of directors, the Current assets, Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all known liabilities have been adequately made in the accounts.

Tax charged to Profit and Loss account is after considering deferred tax impact for the timing difference between accounting income and taxable income.

4. Segmental Reporting:

The Company's operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information setout in these financial statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainders of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocable" and directly charged against total income.

5. Geographical Segments :

The company has no transactions with parties outside India, so this segment isn't applicable for the company.

6. Related Party Transactions:

a) Name of Related Parties & relationship:

Party Name Relation

Mr. T. Gopichand & Mr.T.Gopichand Key Management Personnel (Vice (HUF) Chairman & Managing Director), Spouse of Mrs. T. Pavana Devi & Brother of T.Bapaiah Chowdary.

Mrs. T. Pavana Devi Director & Spouse of Mr.T. Gopi Chand.

Mr. K. Rama Rao Key Management Personnel (Wholetime Director)

Mr.T.Bapaiah Chowdary Director & Brother to the Vice- Chairman & Managing

Director (Mr.T.Gopichand)

Mr.T.Madhu Mitra Son of Vice Chairman & Managing Director

Mr.T.Girish Son of T.Bapaiah Chowdary

7. Sundry debtors, sundry creditors, other liabilities, loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

8. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31st March 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

9. Figures for the corresponding year ended March 31, 2014, wherever necessary, have been regrouped, recast, rearranged as per the Schedule III of Companies Act, 2013.


Mar 31, 2014

1.a The Term Loan from bank is a Rupee Term Loan taken from Canara Bank which carries interest rate of base rate 3.5% i.e 13.5% p.a. (floating). It is repayable in 30 equal monthly instalments. Equipment procured out of Term Loan are secured by way of Hypothecation of Equipment on Exclusive charge basis and personal guarentee given by the Vice Chairman & Managing Director, Whole-Time Director and Director of the Company.

Collateral Security of Industrial Land and Shed there in Survey Nos. 179,180, 180A & 181,182, 184 & 184A situated at Annaram Village, Jinnaram Mandal, Medak District, and Sy No. 219E of Gagilapur Village, Quthubullapur Mandal, Ranga Reddy District, admeasuring 15 acres 19 guntas of land and 165483 Sft Plinth area of shed.

b. 6,23,700 shares are pledged in favour of Canara Bank as per terms and Conditions of their Sanction Letter.

c. Deposits from Shareholders and others are taken during the financial year 2010-11 carry interest of 11% p.a. and are repayable in 1 year. (Previous year - repayable in 1 year).

2.a Working Capital Loans given by Bank of Maharastra are secured by way of hypothecation of Land and Buildings situated at Jubilee hills Hyderabad and Srinagar colony, Computers and Peripherals, Stock in trade, Software in process, book debts and personal guarentee given by the Vice Chairman & Managing Director, Whole-Time Director and Director of the Company.

b. Working Capital Loan taken from Canara Bank is secured by way of hypothecation on paripassu first charge basis along with Bank of Maharastra and collateral Security of Industrial Land and Buildings situated at Annaram Village, Hyderabad by way of Equitable Mortagage on exclusive charge basis.

c. Deposits from Shareholders are taken during the financial year 2012-13 and carry a interest of 12% p.a. and are repayable in 1 year.

3. Commitments and Contingencies:

a. The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is 10.25 lakh as at March 31, 2014 (Previous year Rs. 83.40 lakh).

b. The company has outstanding guarantees of Rs. 3,635.24 Lakh and Letter of credit NIL Lakh as at 31st March 2014 (previous year Bank Guarantees Rs. 3,185.93 Lakh and Letter of credit Rs 39.06lakh).

c. Few cases relating to vendors are pending in the Courts against which the Company is liable to pay to the Vendor. Contingent liability is Rs. 3,14,695/-(Previous Year Rs.3,14,695/-).

d. Sales tax matters under dispute as per table below:

S. Name of the Statute Nature of the dues Amount (Rs) No.

1 AP VAT Act, 2005 Value Added Tax 339,455

2 AP VAT Act, 2005 Value Added Tax 1,430,252

3 AP VAT Act, 2005 Value Added Tax 1,430,252 4 APGST Act, 1957 Sales Tax 2,860,507

5 APGST Act, 1957 Sales Tax 3,580,063

6 APGST Act, 1957 Sales Tax 1,430,253

7 The Kerala VAT Rules, Value Added Tax 84,16,222 2005 (Appeals), Kerala

8 The Kerala VAT Rules, Value Added Tax 61,50,240 2005

9 The Kerala VAT Rules, Value Added Tax 7,42,446 2005

10 The Kerala VAT Rules, Value Added Tax 8,52,280 2005

11 The Kerala VAT Rules, Value Added Tax 4,66,474 2005

S. Name of the Statute Period to Forum where dispute No. which the is pending amount relates

1 AP VAT Act, 2005 2007-08 High Court of AP

2 AP VAT Act, 2005 2006-07 High Court of AP

3 AP VAT Act, 2005 2005-06 High Court of AP 4 APGST Act, 1957 2004-05 High Court of AP

5 APGST Act, 1957 2003-04 High Court of AP

6 APGST Act, 1957 2002-03 High Court of AP

7 The Kerala VAT Rules, 2005-06 Deputy Commissioner 2005 (Appeals), Kerala

8 The Kerala VAT Rules, 2006-07 Deputy Commissioner 2005 (Appeals), Kerala

9 The Kerala VAT Rules, 2007-08 Deputy Commissioner 2005 (Appeals), Kerala

10 The Kerala VAT Rules, 2008-09 Deputy Commissioner 2005 (Appeals), Kerala

11 The Kerala VAT Rules, 2009-10 Deputy Commissioner 2005 (Appeals), Kerala

4. In the opinion of the board of directors, the Current assets, Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all known liabilities have been adequately made in the accounts.

5. Segmental Reporting:

The Company''s operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information setout in these financial statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainders of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocable" and directly charged against total income.

6. Sundry debtors, sundry creditors, other liabilities, loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

7. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31st March 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

8. Figures for the corresponding year ended March 31, 2014, wherever necessary, have been regrouped, recast, rearranged as per the new Revised Schedule VI.


Mar 31, 2013

1.1 The Term Loan from bank is a Rupee Term Loan taken from Canara Bank which carries interest rate of base rate 3.5% i.e 13.5% p.a. (floating). It is repayable in 30 monthly installments. Equipment procured out of Term Loan are secured by way of Hypothecation of Equipment on Exclusive charge basis and personal guarantee given by the Vice Chairman & Managing Director, Whole time Director and Director of the Company.

Collateral Security of Industrial Land and Shed there in Survey Nos. 179,180, 180A & 181,182, 184 & 184A situated at Annaram Village, Jinnaram Mandal, Medak District, and Sy No. 219E of Gagilapur Village, Quthubullapur Mandal, Ranga Reddy District, admeasuring 15 acres 19 guntas of land and 165483 Sft Plinth area of shed.

1.2 5,48,700 shares are pledged in favour of Canara Bank as per terms and Conditions of their Sanction Letter

1.3 Deposits from Shareholders & Others are taken during the finandal year 2010-11 carry interest of 11% p.a. and are repayable in 1 years (Previous year - repayble in 2 years)

**Lease term ranges between 3-5 years

**Finance lease obligations are secured against the leased assets.

2.1 Working Capital Loans given by Bank of Maharastra are secured by way of hypothecation of Land and Buildings situated at Jubilee hills Hyderabad and Srinagar colony, Computers and Peripherals, Stock in trade, Software in process, book debts and personal guarentee given by the Vice Chairman & Managing Director, Whole time Director and Director of the Company.

2.2 Working Capital Loan taken from Canara Bank is secured by way of hypothecation on paripassu first charge basis along with Bank of Maharastra and collateral Security of Industrial Land and Buildings situated at Annaram Village, Hyderabad by way of Equitable Mortagage on exclusive charge basis.

2.3 Deposits from Shareholders & Others are taken during the finandal year 2011-12 and carry a interest of 11% p.a. and are repayable in 1 year (previous year repayable in 2 years).

*Based on the information available with the company, on which auditors relied upon.

- Total Assets acquired under Project Division are transferable to the respective Customers at the end of the tenure of the project. "After deducting impairment loss of Rs 110.01 lakh.

- Pertaining to CENVAT Credit of Rs 137.41 lakh on capital goods availed during the current Financial Year 2012-13.

1. Total provision made during the year is Rs NIL lakh (Previous year Rs 272.32 lakh), Provision written back of Rs NIL lakh (Previous year Rs 32.02 lakh).

2. Total provision made during the year is Rs 0.43 lakh (Previous year Rs 45.68 lakh), Provision written back of Rs 0.78 lakh (Previous year Rs 11.39 lakh).

3. Include Foreign Exchange Loss of Rs NIL lakh (Previous year Rs 48.95 lakh).

3. Commitments and Contingencies:

a. The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is 83.40 lakh as at March 31, 2013 (Previous year Rs.NIL lakh).

b. The company has outstanding guarantees of Rs. 3,185.93 Lakh and Letter of credit 39.06 Lakh as at 31st March, 2013 (previous year Bank Guarantees Rs. 6,849.20 Lakh and Letter of credit Rs nil).

c. Few cases relating to vendors are pending in the Courts against which the Company is liable to pay to the Vendor. Contingent liability is Rs 3,14,695/- (Previous Year Rs.3,14,695/-) .

d. The company had received an advance ruling in respect of applicability of AP VAT on Digitization of Registered documents. The Company has challenged the same in the Sales Tax Appellate Tribunal. Based on the above advance ruling the Liability works out to be Rs.13,35,723 (Previous Year Rs.57,37,753/-).

4. In the opinion of the board of directors, the Current assets, Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all known liabilities have been adequately made in the accounts.

5. Deferred Tax

Tax charged to Profit and Loss account is after considering deferred tax impact for the timing difference between accounting income and taxable income.

The deferred tax liability as at 31st March, 2013 comprise of the following:

6. Segmental Reporting:

The Company''s operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information set out in these finandal statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainders of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not superficially allocable to septic segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallowable" and directly charged against total income.

7. Sundry debtors, Sundry creditors, Other liabilities, Loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

8. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31st March 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

9. Impairment of Assets: During the year the company has not impaired any asset (Previous year Rs.110.01 lakh).

10. Figures for the corresponding year ended March 31, 2012, wherever necessary, have been regrouped, recast, rearranged as per the new Revised Schedule VI.


Mar 31, 2012

1.1 The Term Loan from bank is a Rupee Term Loan taken from Canara Bank during the financial year 2011 -12 which carries interest rate of base rate 3.5% i.e 13.5% p.a. (floating). It is repayable in 30 equal monthly installments. Equipment procured out of Term Loan are secured by way of Hypothecation of Equipment on Exclusive charge basis and personal guarantee given by the Vice Chairman & Managing Director, Executive Director and Director of the Company.

Collateral Security of Land and Building by way of Equitable Mortgage on exclusive charge basis.

1.2 5,33,500 shares are pledged in favour of Canara Bank as per terms and Conditions of their Sanction Letter

1.3 Term Loan from Bank of Maharastra are Secured by way of 1) Hypothecation of Land situated at Jubilee hills, Hyderabad, Computers and Peripherals, Furniture & Fixtures, Stock in trade, receivables, Outstanding monies and 2) Personal guarantee given by the Vice Chairman & Managing Director, Executive Director and Director of the Company

1.4 Deposits from Shareholders taken during the financial year 2010-11 carry interest of 11% p.a. and are repayable in 2 years.

2.1 Working Capital Loans given by Bank of Maharastra are secured by way of hypothecation of Land situated at Jubilee hills Hyderabad, Computers and Peripherals, Stock in trade, Software in process, book debts and personal guarantee given by the Vice Chairman & Managing Director, Executive Director and Director of the Company.

2.2 Working Capital Loan taken from Canara Bank is secured by way of hypothecation on paripassu first charge basis along with Bank of Maharastra

2.3 Collateral Security of Land and Building by way of Equitable Mortgage on exclusive charge basis.

3. Commitments and Contingencies:

a. The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is Nil as at March 31,2012 (Previous year Rs. 8.10 lakh).

b. The company has outstanding guarantees of Rs. 6,849.20 lakh as at 31 st March 2012 (previous year Rs.4,000.14 Lakh).

c. Few cases relating to vendors are pending in the Courts against which the Company is liable to pay to the vendor, contingent liability is Rs. 3.15 lakh (previous year Rs. 3.15 lakh).

d. The company had received an advance ruling in respect of applicability of AP VAT on Digitization of Registered documents. The Company has challenged the same in the Sales Tax Appellate Tribunal. Based on the above advance ruling the Liability works out to be Rs. 57.38 lakh (Previous Year Rs.51.51 lakh).

4. In the opinion of the board of directors, the Current assets. Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all known liabilities have been adequately made in the accounts.

5. Segmental Reporting:

The Company's operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information setout in these financial statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments are categorized based on items that are individually identifiable to that segment, while the remainder of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocable" and directly charged against total income.

a) Geographical Segment

The company has no transactions with parties outside India, so this segment isnt applicable for the company.

6. Sundry debtors, sundry creditors, other liabilities, loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

7. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31st March 2012.This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

8. Impairment of Assets: During the year the company has impaired an amount of Rs. 110.01 lakh from the assets purchased for the Bhamasha Financial Empowerment Scheme(BFES) project.

9. Figures for the corresponding year ended March 31,2011, wherever necessary, have been regrouped, recast, rearranged as per the new Revised Schedule VI.


Mar 31, 2011

1. Secured Loans:

a. Term Loans taken from Bank of Maharashtra are secured by way of hypothecation of Land situated at Jubilee Hills, Hyderabad, Computers and Peripherals, Furniture & Fixtures, Stock in trade, receivables, outstanding monies and personal guarantee given by the Vice-Chairman & Managing Director, Executive Director and Director of the Company.

b. Loans taken from Bank for Vehicles Purchased are secured by specific charge on Vehicles for which the loan is availed.

c. Term Loans taken from Finance Companies are secured by hypothecation/mortgage of assets purchased by company from above companies.

d. Working Capital loans and bank guarantees given by Bank of Maharastra are secured by way of hypothecation of Land situated at Jubilee Hills, Hyderabad, Computers and peripherals, stock in trade, software in process, book debts and lien on company's term deposits worth Rs.605.16 Lakh (previous year Rs.508.46 Lakh) with the bank and personal guarantee given by the Vice Chairman & Managing Director, Executive Director and Director of the Company.

e. FINANCE LEASE:

(ii) General description of Lease terms:

a) Lease rentals are charged on the basis of agreed terms.

b) Assets are taken on lease over a period of 3 to 5 years.

f. OPERATING LEASE

Future minimum lease rentals payable on 31.03.2011 as per the agreement

Lease payments recognized in the statement of Profit and Loss Account for the year ended 31st March,2011 is Rs.15,559,696.

2. Commitments and Contingencies:

a. The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is Rs.8.10 lakh as at March 31, 2011 (Previous year Rs.12.90 Lakh).

b. The company has outstanding guarantees of Rs. 4000.14 Lakh as at 31st March 2011 (previous year Rs. 2259.37 Lakh).

c. Few cases relating to vendors are pending in the Courts against which the Company is liable to pay to Vendar. Contingent liability is Rs. 3.15 Lakh (Previous year Rs. 3.15 Lakh)

d. During the year, the company had received an advance ruling in respect of applicability of AP VAT on Digitization of Registered documents. They challenged the same in the A.P High Court. Based on the above advance ruling the Liability works out to Rs.5,151,143/-.

3. Quantitative details:

The company does trading of various kinds of computer items. It is not practicable to give quantitative details of sales and purchases for trading business. And also the company is engaged in the development and maintenance of computer software. The production and sale of such software can not be expressed in any generic unit. Hence, it is not practicable 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.

4. Employee Benefits:

The company has adopted Accounting Standard (AS) 15 (revised 2005) on Employee Benefits.

a. The company has recognized, in the profit and loss account for the year ended 31 st March 2011, below mentioned defined contribution plans.

5. Managerial Remunerations:

Managerial Remuneration paid to Vice Chairman & Managing Director, Whole Time Director, Executive Directors and Directors.

6. In the opinion of the Management the Current assets, Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all known liabilities have been adequately made in the accounts.

7. C) Foreing Currency outflow in respect of advance given for Professional Service of Rs.613,212/-.

8 Segmental Reporting:

The Company's operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information setout in these financial statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocable" and directly charged against total income.

b) Geographical Segment

The company has no transactions with parties outside India, so this segment isn't applicable for the company.

9. Related Party Transactions:

a) Name of Related Parties & relationship:

Party Name Relation

Mr. T. Gopi Chand & Mr.T.Gopichand (HUF) Key Management Personnel (Vice Chairman & Managing Director), Spouse of Mrs. T. Pavana Devi & Brother of T.Bapaiah Chowdary.

Mrs. T. Pavana Devi Director & Spouse of Mr.T. Gopi Chand.

Mr. N.V.V.Prasad Key Management Personnel (Executive Director)

Mr.T.Bapaiah Chowdary Brother to the Vice-Chairman

Mr.T.Hanuman Chowdary Director

10. Sundry debtors, sundry creditors, other liabilities, loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

11. Deferred Tax

Tax charged to Profit and Loss account is after considering deferred tax impact for the timing difference between accounting income and taxable income.

12. Prior period items, material items, non-recurring and extraordinary items are disclosed separately. Prior period items (net) which include prior period income Nil and prior period expenses Nil (Previous year prior period income Rs. 18,840 and prior period expenses Rs.8,19,354)

13. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31 st March 2011. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

14. Paise have been rounded off to the nearest rupee.

15. Figures for the corresponding year ended March 31, 2010, wherever necessary, have been regrouped, recast, rearranged to conform to those of the current year.

16. There is no other additional information pursuant to the provisions of Part II Schedule VI of the Companies Act, 1956.


Mar 31, 2010

1. Assets acquired under leases where the company has substantially transferred all the risk and rewards of ownership are classified as finance lease. Such assets are capitalized at the inception of the lease at the lower of fair value or present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.

b) Operating Lease:

1. Rentals are expensed with reference to the Lease terms and other considerations.

2. Sales:

Sales are stated at net of returns and exclusive of sales tax. 1. Secured Loans:

a) Term Loans taken from Bank of Maharashtra are secured by way of hypothecation of Land situated at Jubilee Hills in Hyderabad, Computers and Peripherals, Furniture & Fixtures, Stock in trade, receivables, outstanding ¦ monies and personal guarantee given by the Vice-Chairman & Managing Director, Executive Director and a Director of the Company.

b) Loans taken from Bank for Vehicles Purchased are secured by specific charge on Vehicles for which the loan is availed.

c) Term Loans taken from Finance Companies are secured by hypothecation/mortgage of assets purchased by company from above companies.

d) Working Capital loans and bank guarantees given by Bank of Maharastra are secured by way of hypothecation of Land situated at Jubilee Hills in Hyderabad, Computers and peripherals, stock in trade, software in process, book debts and lien on companys term deposits worth Rs.508.46 Lakh (previous year Rs. 425.00 Lakh) with the bank and personal guarantee given by the Vice Chairman & Managing Director, Executive Director and a Director of the Company.

2. Commitments and Contingencies:

a) The estimated amount of contracts remaining to be executed on capital account, and not provided for (net of advances) is Rs12.90 lakhs as at March 31,2010 (Previous year Rs.15.63 lakhs).

b) The company has outstanding guarantees of Rs. 2,259.37 Lakh as at 31s March 2010 (previous year Rs. 2294.63 Lakh).

c) Few cases relating to vendors are pending in the Courts against which the Company is liable to pay to the Vendor. Continqent liability is Rs. 314,695/-.

3. Quantitative details:

The company does trading of various kinds of computer items. It is not practicable to give quantitative details of sales and purchases for trading business. And also the company is engaged in the development and maintenance of computer software. The production and sale of such software can not be expressed in any generic unit. Hence, it is not practicable 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.

4. Employee Benefits:

The company has adopted Accounting Standard (AS) 15 (revised 2005) on Employee Benefits.

6. In the opinion of the board of directors the Current assets, Loans & Advances are expected to realize approximately the values stated in the accounts in the ordinary course of business, and provisions for all1
7. Segmental Reporting:

The Companys operations predominantly relate to providing Integrated Solutions, Technical Division, Projects Division and Software Development Services to customers globally operating. Accordingly, the primary basis of segmental information setout in these financial statements, and secondary segmental reporting is performed on the basis of the geographical location.

Income & Direct expenses in relation to segments is categorized based on items that are individually identifiable to that segment, while the remainder of the costs are allocated on the bases of available information. Certain expenses, which form a significant component of total expenses, are not specifically allocable to specific segments. The Company believes that it is not practicable to provide segmental disclosures relating to those costs and expenses, and accordingly these expenses are separately disclosed as "unallocable" and directly charged against total income.

a) Geographical Segment

The company has no transactions with parties outside India, so this segment isnt applicable for the company.

8. Related Party Transactions:

a) Name of Related Parties & relationship:



Party Name Relation

Mr. T. Gopichand & Key Management Personnel (Vice Chairman & Managing Director) & Spouse of

Mr.T.Gopichand (HUF) Mrs.T. Pavana Devi.

Mrs.T. Pavana Devi Director & Spouse of Mr.T. Gopichand.

Mr. N.V.V.Prasad Key Management Personnel (Executive Director)

Mr.T.Bapaiah Chowdary Brother to the Vice Chairman and Managing Director

9. Sundry debtors, sundry creditors, other liabilities, loans and advances, advances from customers etc. are subject to confirmation and reconciliation. Necessary adjustments, if any will be made when the accounts are reconciled and settled. However the management is fairly confident that the company will not face any undue risk due to this factor.

10. Prior period items, material items, non-recurring and extraordinary items are disclosed separately. Prior period items (net) include prior period income Rs.18,840 and prior period expenses Rs.819,354/- (Previous year prior period income Rs.347,937and prior period expenses Rs.132,897)

11. Micro and Small Scale business entities:

There are no micro and small scale enterprises to which the company owes dues, as at 31st March 2010.This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

12. Paise have been rounded off to the nearest rupee.

13. Figures for the corresponding year ended March 31,2009, wherever necessary, have been regrouped, recast, rearranged to conform to those of the current year.

14. There is no other additional information pursuant to the provisions of Part II Schedule VI of the Companies Act, 1956. As per our report of even date attached

 
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