Home  »  Company  »  VXL Instrument  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of VXL Instruments Ltd.

Mar 31, 2015

A. Leave Salary

The Company has made provision for leave salary on actuarial valuation basis. These being retirement benefits, an obligation to pay these amounts might arise at the time of resignation / superannuation of the employees. There is no reimbursement receivable against these obligations.

b Investments

VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs. 51,69,261/- has accumulated losses in excess of its total paid up capital. Net receivable from VXL Instruments Limited, U.K., as at 31st March 2015 is Rs. 4,96,36,260/- (Rs. 5,89,13,634/-). The subsidiary company has made profit during the current year and has remitted Rs.92,77,374/- (Rs. 76,92,894/-) towards old dues. Considering these facts and future projections, the management is of the opinion that no provision is deemed necessary in respect of the Company's investment in and the amounts due to the Company.

c Retirement Benefit Plans

1 Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs. 22,08,149/- (Rs. 21,45,585/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2 Defined benefit plans

The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the Company's policy for plan asset management

The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company's financial statements as at 31.03.2015.

d Dues to Micro, Small and Medium Enterprises:

Sundry Creditors include Rs. Nil (Rs. Nil) due to Micro, Small and Medium Enterprises. The information is determined based on the information available with the Company. The list of SSIs to whom the amount outstanding for more than 30 days are as under:

e Segment Information

The Company's segment information is as follows:

Primary/Secondary Segment reporting format

The risk return profile of the Company's business is determined based on the geographical area in which it operates. Therefore, Geographical Segments have been identified as Primary Segments Secondary Segments have been identified on the basis of the nature of products manufactured by the Company

Segment assets and liabilities

Fixed assets used in the Company's business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments

f Operating Leases:

The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements. Rent debited to profit and loss account Rs.24,03,993/- (Rs. 30,82,970/-). Contingent rent recognized in the Profit and Loss Account Rs. Nil.

Obligations on long-term, non-cancelable operating leases:

g Confirmation of balance under Sundry Debtors, Loans & Advances, deposits and sundry creditors, other current liabilities are obtained. In the opinion of the management Current assets and Loans & Advances would in the ordinary course of business realise the values stated.

h Effective 1st April 2014, the Company depreciates its fixed assets over the useful life prescribed in Schedule II to the Companies Act 2013 as against the earlier practice of depreciating under the rates prescribed under the Schedule XIV to the Companies Act, 1956. Based on technical evaluation, moulds are depreciated over 3 years which is different from that prescribed in Schedule II of the Act. During the year, the Company has changed the method of depreciation of fixed assets of the Company, from written down value method to straight line method. Consequent to the change, depreciation charge for the year is increased by Rs. 13,86,425/- with consequential effect on reserve. Excess depreciation on account of change in method from written down value method to straight line method of Rs. 74,68,016/- of earlier years is credited to statement of profit & loss account under exceptional items

Sl. No. i: The Honorable High Court of Karnataka has directed the Assistant Provident Commissioner to consider the grievance of the Company for reducing the penalty

Sl. No. ii: Sl. No. b: The Company has filed the appeal before the High Court against the order of Karnataka Appellate Tribunal in respect of disallowances. Similarly Govt. of Karnataka has filed appeal vide STA No. 17/2010 and 122-123/2012 dated 13th July, 2012 of High Court of Karnataka against the relief given to the Company.

Sl. No. iii: In respect of Service Tax pending before the Commissioner / CESTAT the Company's Consultants are of the opinion that the Company has good chances of winning the case since Customs is treating the sticker labels as goods while importing and hence no provision has been made for the same.

Sl. No. iv: Commissioner Appeals has given the Order in favour of the Company but the Department has preferred Appeal before CESTAT

Sl. No. v: Commissioner, Customs has given the Order in favour of the Company but the Department has appealed to CESTAT

i Figures of the previous year have been recast / regrouped / rearranged in confirmity with the presentation of the current year. Figures in bracket relates to the previous year.


Mar 31, 2014

1. a. Terms / Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of an equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of share holders in the Annual General Meeting.

During the year, the Company has not declared any dividend.

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 shares held by the equity share holders.

2. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR)

CONTINGENT LIABILITIES

Other money for which Company is contingently liable

a. Employees Provident Fund Contributions under appeal [Net of Rs. 10,69,469/- deposited with the respective authorities ] 3,36,896 14,06,365

b. Central Sales Tax liability under appeal 1,12,61,292 1,56,21,840

c. Service Tax Liability under dispute on the import of software license sticker labels considered as goods by Customs while importing 10,34,66,834 9,22,36,515

d. Education cess on excise duty 3,26,098 3,26,098

e. Disputed Customs Duty 7,70,839 7,70,839

f. Other disputed tax liabilities - 5,95,520

3. Notes:

Sl. No. a : The Honourable High Court of Karnataka has directed the Assistant Provident Commissioner to consider the grievance of the Company for reducing the penalty

Sl. No. b: Financial year 2001-02 to 2004-05:- Karnataka Appellate Tribunal (KAT) has given relief to the Company to the extent of Rs. 30,91,083/- as allowed in the case of Adeshwar Granites Pvt. Ltd by the Honourable High Court (HC) of Karnataka. Ref.: STA No. 17/2010 and 122-123/2012 dated 13th July, 2012 of High Court of Karnataka. Further KAT has directed the Deputy Commissioner to rectify the error in respect of Rs. 23,06,054/-. The Company has filed the appeal before the High Court of Karnataka in respect of the balance.

Sl. No. c: In respect of Service Tax pending before the Commissioner / CESTAT the Company''s Consultants are of the opinion that the Company has good chances of winning the case since Customs is treating the sticker labels as goods while importing and hence no provision has been made for the same.

Sl.No. d: Commissioner Appeals has given the Order in favour of the Company but the Department has preferred Appeal before CESTAT

Sl. No. e: Commissioner, Customs has given the Order in favour of the Company but the Department has appealed to CESTAT

4. a. Leave Salary:

The Company has made provision for leave salary on estimated basis. These being retirement benefits, an obligation to pay these amounts might arise at the time of resignation / superannuation of the employees. There is no reimbursement receivable against these obligations. The provision is made based on actuarial valuation.

b. Investments:

VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs. 51,69,261/- has accumulated losses in excess of its total paid up capital. Net receivable from VXL Instruments Limited, U.K., as at 31st March 2014 is Rs. 5,89,13,634/- (Rs. 6,66,06,528/-). However, the subsidiary Company has made profits during the last four financial years. Further the said Subsidiary has remitted Rs. 76,92,894 {(12 % of the Outstanding). {Rs. 11,93,400/- (2% of the outstanding)} during the year towards old dues. Considering these facts, the management is of the opinion that no provision is deemed necessary in respect of the Company''s investment in and the amounts due to the Company.

c. Retirement Benefit Plans:

1. Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs. 21,45,585/- (Rs. 17,21,240/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

5. Defined benefit plans:

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Assurance Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the Company''s policy for plan asset management

6. a. Segment Information:

The Company''s segment information is as follows:

Primary/Secondary Segment reporting format

The risk return profile of the Company''s business is determined based on the geographical area in which it operates. Therefore, Geographical Segments have been identified as Primary Segments

Secondary Segments have been identified on the basis of the nature of products manufactured by the Company

Segment assets and liabilities

Fixed assets used in the Company''s business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments

b. Operating Leases:

The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements. Rent debited to profit and loss account Rs. 30,82,970/- (Rs. 13,08,994/-). Contingent rent recognized in the Profit and Loss Account Rs. Nil.

c. Confirmation of balance under Sundry Debtors, Loans & Advances, deposits and sundry creditors, other current liabilities are not obtained. In the opinion of the management Current assets and Loans & Advances would in the ordinary course of business realise the values stated. Confirmation of balance has been obtained from Priya Limited which forms over 90% of Sales and Purchases.

d. The revised Schedule VI is applicable to the Company for the year under review. The Company has reclassified previous year figures to conform to the current year''s presentation.


Mar 31, 2013

Change in Accounting Policies

The Company has changed the basis of determining cost from weighted average method to First in First Out method for determining the cost formula for valuation of inventory. Due to the change, the inventory as at March 31, 2013, has been reduced by Rs. 25,97,888/- with consequential effect on profit for the year.

a. Leave Salary

The Company has made provision for leave salary on estimated basis. These being retirement benefits, an obligation to pay these amounts might arise at the time of resignation / superannuation of the employees. There is no reimbursement receivable against these obligations. The provision is made based on actuarial valuation.

b. Investments :

VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs.51,69,261/- has accumulated losses in excess of its total paid up capital. Net receivable from VXL Instruments Limited, U.K., as at 31st March 2013 is Rs. 6,66,06,528/- (Rs. 6,77,99,928). However, the subsidiary Company has made profits during the last four financial years. Further the said Subsidiary has remitted Rs. 11,93,400/- during the FY 2012-13 and Rs. 54,00,960/- during the F.Y. 2013-14 towards old dues. Since October 2010, the Company has received Rs. 2,88,68,806/- against old receivables from customers other than VXL UK. With this the Company has realised almost the entire old receivables from customers other than VXL UK. The Company has also obtained further extension of time of six months from Reserve Bank of India to collect the old receivables. Considering these facts, the management is of the opinion that no provision is deemed necessary in respect of the Company''s investment in and the amounts due to the Company.

c. Retirement Benefit Plans

1. Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs. 17,21,240/- (Rs.11,15,394/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the scheme.

2. Defined benefit plans

The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Assurance Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the Company''s policy for plan asset management

d. Segment Information

The Company''s segment information is as follows:

Primary/Secondary Segment reporting format

The risk return profile of the Company''s business is determined based on the geographical area in which it operates. Therefore, Geographical Segments have been identified as Primary Segments

Secondary Segments have been identified on the basis of the nature of products manufactured by the Company

Segment assets and liabilities

Fixed assets used in the Company''s business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments

e. Disclosure of related parties / related party transactions

a. Parties where control exists

Name of the Related Party Nature of Relationship

i. VXL Instruments Limited (UK) Subsidiary. The Company holds 60% in the nominal value of the equity share capital

b. Other related parties with whom transactions were carried out during the year

Name of the Related Party Nature of Relationship

Sattva eTech Private Limited Company in which a Director is interested

Ksense Technologies Private Limited Company in which a Director is interested

c. Key management personnel and their relatives

Mr. Madireddy V. Nagaraj, Managing Director

Mrs. Shanthi Nagaraj, (Wife of Mr. M. V. Nagaraj)

Mr. M.V. Shetty, Whole-Time Director

Ms. Ridhima Shetty (Daughter of Mr. M. V. Shetty)

Mr. Rishabh Shetty (Son of Mr. M. V. Shetty)

Mrs. Pravina Shetty (Wife of Mr. M. V. Shetty)

Mr. N V Maslekar Director

f. Operating Leases:

The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements. Rent debited to profit and loss account Rs. 13,08,994 (Rs. 14,30,191). Contingent rent recognized in the Profit and Loss Account Rs. Nil.

g. Confirmation of balance under Sundry Debtors, Loans & Advances, deposits and sundry creditors, other current liabilities are not obtained. In the opinion of the management Current assets and Loans & Advances would in the ordinary course of business realise the values stated. Confirmation of balance has been obtained from Priya Limited which forms over 90% of Sales and Purchases

h. The revised Schedule VI is applicable to the Company for the year under review. The Company has reclassified the previous year figures to conform to the current year''s presentation.


Mar 31, 2012

A. Terms / Rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of an equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of share holders in the Annual General Meeting.

During the year, the Company has not declared any dividend.

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 shares held by the equity share holders.

* Term loan from banks is secured by hypothecation of vehicles. The loan is repayable in 60 equated monthly instalments of Rs. 28,970/- each. and 36 equated monthly instalments of Rs. 11,934/- each.

Instalments payable within a year Rs. 528,878 (Rs. 371,000)

** Other long term borrowing is repayable after 2 years

CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) CONTINGENT LIABILITIES

Other money for which Company is contingently liable

a. Bills discounted with Banks (secured by letters of credit from buyer's bankers) 13,500,000 85,000,000

b. Employees Provident Fund Contributions under appeal [Out of which Rs. 10,69,469/- has been deposited with the respective authorities and shown under non current assets] 1,406,365 1,406,365

c. Central Sales Tax liability under appeal [Out of which Rs. 43,60,548/- has been deposited with the respective authorities and shown under non current assets] 15,621,840 5,878,406

d. Service Tax Liability under dispute on the import of software license sticker labels considered as goods by Customs while importing 76,682,997 -

e. Education cess on excise duty 326,098 -

f. Other disputed tax liabilities 595,520 595,520

g. The Company has closed the unit manufacturing GVX terminals as the product GVX terminal has been phased out. On this workmen raised certain objection which has been rejected by the Secretary, Department of Labour. Now the matter is before the High Court of Karnataka. Provision has been made for Rs. 19,72,505/- towards settlement amount due to employees of the unit. Additional liability if any, on this account is not ascertainable and will be provided on settlement of the dispute.

a. Leave Salary

The Company has made provision for leave salary on estimated basis. These being retirement benefits, an obligation to pay these amounts might arise at the time of resignation / superannuation of the employees. There is no reimbursement receivable against these obligations. The provision is made based on actuarial valuation.

b. Investments:

VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs. 5,169,261/- has accumulated losses in excess of its total paid up capital. Net receivable from VXL Instruments Limited, U.K., as at 31st March 2012 is Rs. 67,799,928/- (Rs. 67,799,928). In the opinion of the Directors no provision is deemed necessary in respect of the Company's investments in and the amounts due to the company, from the aforesaid investee company, in view of the long term prospects.

c. Retirement Benefit Plans:

1. Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs. 1,115,394/- (Rs. 730,064/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

2. Defined benefit plans

The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance

Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the Company's policy for plan asset management

vi Segment Information

The Company's segment information is as follows:

Primary/Secondary Segment reporting format

The risk return profile of the Company's business is determined based on the geographical area in which it operates. Therefore, Geographical Segments have been identified as Primary Segments.

Secondary Segments have been identified on the basis of the nature of products manufactured by the Company.

d. Segment assets and liabilities

Fixed assets used in the Company's business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments.

e. Operating Leases:

The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements. Rent debited to profit and loss account Rs. 1,430,191 (Rs. 1,269,543). Contingent rent recognized in the Profit and Loss Account Rs. Nil.

f. Confirmation of balance under Sundry Debtors, Loans & Advances, deposits and sundry creditors, other current liabilities are not obtained. In the opinion of the management Current assets and Loans & Advances would in the ordinary course of business realise the values stated. Confirmation of balance has been obtained from Priya Limited which forms over 90% of Sales and Purchases.

g. The revised Schedule VI is applicable to the Company for the year under review. The Company has reclassified the previous year figures to conform to the current year's presentation.


Mar 31, 2011

1. Provisions, Contingent Liabilities & Contingent Assets.

As at As at Particulars 31st March, 2011 31st March, 2010 Rs. Rs.

A Guarantees issued by Bankers 18,590,567 21,824,518

B Liability on account of bills discounted with Banks (Secured by Letters of Credit from buyers' bankers) 8,50,00,000 57,500,000

C Employees' Provident Fund contributions under appeal [Out of which Rs 1,069,469/- has been deposited with respective authority and shown under Current Assets]. 14,06,365 14,06,365

D Central Sales Tax Liability under appeal [Out of which Rs. 4,360,548 /- has been deposited with respective authority and shown under Current Assets]. 5,878,406 3,327,514

E. Other disputed tax liabilities 5,95,520 5,95,520

F. The Company has closed the unit manufacturing CRT Terminals as the product GVX terminal has been phased out. On this, workmen raised certain objection which has been rejected by the Secretary, Department of Labour. Provision has been made for Rs. 19,72,505/- towards settlement amount due to employees of the unit. Additional liability if any, on this account is not ascertainable and will be provided on settlement of the dispute.

G. The Company has made provision for leave salary on estimated basis. These being retirement benefits, an obligation to pay these amounts might arise at the time of resignation / superannuation of the employees. There is no reimbursement receivable against these obligations. The provision is made based on actuarial valuation.

(Amount in Rs.)

Nature of The carrying Additional provisions Amounts obligation amount at the made during the year incurred and beginning of the charged period against the provision during the period

Leave Salary 2,237,472 – 260,463

Nature of obligation Unused amounts The carrying reversed during amount at the the period end of the period

Leave Salary 103,908 1,873,101 2. The Company holds investments in the following companies as under:

1. VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs. 5,169,261/- has accumulated losses in excess of its total paid up capital. Net receivable from VXL Instruments Limited, U.K., as at 31st March 2011 is Rs. 62,706,509 (Rs. 79,186,388/-). During the year under review the company has received Rs.16,479,879/- towards old receivables. Further, the subsidiary has earned profit during the year under review and also during the previous year. Considering these facts and in view of the long term prospects, in the opinion of the management no provision is deemed necessary in respect of the Company's investments in and the amounts due to the company, from the aforesaid investee company.

2. XLnet Software Systems Limited, a 100% subsidiary, in which the total investment by the company is Rs. 1,500,000/- has been wound up during the year. Amount due from XLnet Software Systems Limited, as at 31st March 2010, classified under Loans and Advances is Rs. 2,437,394/- and classified under sundry debtors is Rs. 13,821/- have been written off during the year.

3. Freehold Land of the Company has been revalued as on 31st March 2011 based on valuation obtained by the Company and the resulting credit of Rs. 79,323,254/- has been credited to revaluation reserve.

4. Retirement Benefit Plans

Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs. 730,064/- (Rs. 826,145/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

The Company makes annual contributions to the Employees' Group Gratuity-cum-Life Assurance Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

The expected return on plan assets is determined considering several applicable factors mainly the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the Company's policy for plan asset management.

5. Other Current liabilities includes dues to Directors Rs. 300,000/- (Rs. 300,000/-)

6. Managerial Remuneration under section 198 of the Companies Act, 1956.

Due to inadequacy of profits, minimum remuneration as per Schedule XIII of the Companies Act has been paid to Whole Time Directors. Consequently, providing of information u/s 349 & 350 of the Companies Act, related to computation of managerial remuneration is not applicable

7. Finance Charges include interest paid on deposit to Managing Director and Whole time Director Rs. 295,827/- (Rs. 538,751/-)

8. Segment Information

The Company's segment information is as follows:

a Primary Segments (Geographical Segments)

Primary/Secondary Segment reporting format

i) The risk return profile of the Company's business is determined based on the geographical area in which it operates. Therefore, Geographical Segments have been identified as Primary Segments

ii) Secondary Segments have been identified on the basis of the nature of products manufactured by the Company

Segment assets and liabilities

Fixed assets used in the Company's business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments

9. Disclosure of related parties / related party transactions

a. Parties where control exists

Name of the Related Party Nature of Relationship

i. XLnet Software Systems Limited Wholly Owned Subsidiary (The Company has been wound up on 08.10.2010).

ii. VXL Instruments Limited (UK) Subsidiary. The Company holds 60% in the nominal value of the equity share capital

b. Other related parties with whom transactions were carried out during the year

Name of the Related Party Nature of Relationship

VXL eTech Limited Associate Company (till 30.10.2009)

c. Key management personnel and their relatives

Mr. M.V. Nagaraj, Managing Director

Mrs. Shanthi Nagaraj, (Wife of Mr. M. V. Nagaraj)

Mr. M.V. Shetty,Whole-Time Director

Ms. Ridhima Shetty (Daughter of Mr. M. V. Shetty)

Mr. Rishab Shetty (Son of Mr. M. V. Shetty)

Mrs. Pravina Shetty (Wife of Mr. M. V. Shetty)

10. Deferred Tax Assets / (Liabilities)

Deferred Tax Asset has been calculated as per the provisions of Accounting Standard (AS) 22 – Accounting for Taxes on Income - issued by the Institute of Chartered Accountants of India. In respect of Deferred Tax Asset of Rs. 100,404,865/-(Rs. 106,267,948 /-) detailed below, the Company's management is confident of earning sufficient profits in the future to be able to set off this amount and hence the Deferred Tax Asset has been recognised and quantified.

11. The Company is engaged in the manufacture and export of data processing units. The quantitative details of turnover, comsumption and stocks and the information as required under paragraphs 3, 4C, and 4D of Part II of Schedule VI of the Companies Act, 1956 is furnished to the extent applicable to the Company.

Consequent to the Central Government giving a general exemption to manufacturing companies from disclosure of break up of turnover and raw material consumption and stocks under para 3 (i) (a) and 3 (ii) (a), the same are not disclosed

12. Operating Leases : The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements. Rent debited to profit and loss account Rs. 1,269,543 (Rs. 1,263,432).

Contingent rent recognized in the Profit and Loss Account Rs. Nil.

13. Securities for Loans:

Working Capital from a Bank is secured by hypothecation of Inventories, receivables, Book-Debts and other Current Assets, Equitable Mortgage of Factory Land and Building and immovable property of the company and Charge on un-encumbered Plant and Machinery and personal guarantee of some of the Directors.

Hire Purchase Finance from a bank for purchase of vehicle is secured by hypothecation of vehicle. Installments payable within a year Rs. 371,267/-(Rs. 331,589/-)

14. Lien on Term Deposit: Out of Rs. 16,480,207/- term deposit Rs. 15,000,000/- is under lien for Bank Guarantee and Letter of Credit

15. Previous year's figures have been recast and regrouped wherever necessary to make comparable with those of the current year. Figures in bracket relate to previous year


Mar 31, 2010

1. Provisions, Contingent Liabilities & Contingent Assets.

As at As at Particulars 31st March,2010 31st March,2009 Rs. Rs.

A Guarantees issued by Bankers 21,824,518 16,456,347

B Liability on account of bills discounted with Banks. (Secured by Letters of Credit from buyers bankers) 57,500,000 63,500,000

C Employees Provident Fund contributions under appeal [Out of which Rs 1,069,469/- has been deposited with respective authority and shown under Current Assets]. 2,138,938 2,138,938

D Central Sales Tax Liability under appeal (VAT Audit 2005-06) 3,327,514 Nil

E. The Company has informed the Govt. of Karnataka of its intention to close the unit, manufacturing CRT Terminals as the product GVX terminal has been phased out. The matter is before the Labour Department/ Labour Court. Contingent liability, if any, on this has not been quantified.

F. The Company has made provision for leave salary on estimated basis. These being retirement benefits, an

obligation to pay these amounts might arise at the time of resignation / superannuation of the employees.

There is no reimbursement receivable against these obligations. The provision is made based on actuarial valuation.

(Amount in Rs. )

Nature of obligation The carrying Additional provisions Amounts amount at the incurred beginning of made during the year and the charged period against the provi sion during the period

Leave Salary 19,10,122 4,76,180 1,48,830

Nature of obligation Unused amounts The carrying reversed during amount at the the period end of the period

Leave Salary Nil 22,37,472

2. The Company holds investments in the following companies as under:

1. VXL Instruments Limited, U.K., a subsidiary in which the Company has 60% share holding amounting to Rs. 5,169,261/- has accumulated losses in excess of its total paid up capital. Net receivables from VXL Instruments Limited, U.K., as at 31st March 2010 is Rs.79,186,388/- (79,225,266/-). In the opinion of the Directors no provision is deemed necessary in respect of the Company’s investments in and the amounts due to the company, from the aforesaid investee company, in view of the long term prospects. Since these bills are outstanding for a substantial period, the same have been stated at the exchange rate prevailing at the time of Billing.

2. XLnet Software Systems Limited, a 100% subsidiary, in which the total investment by the company is Rs. 1,500,000 has accumulated losses in excess of its paid up capital and has temporarily discontinued business since 2004. Amount due from XLnet Software Systems Limited, as at 31st March 2010, classified under Loans and Advances is Rs. 24,37,394 (Rs. 24,37,394) and classified under sundry debtors is Rs. 13,821 (Rs. 13,821). The Company has made provision for investment in and amounts due from the Company.

a. Apart from the receivable referred in to clause 2 (1) above Sundry Debtors includes Rs. 17,088 (Rs. 7,690,622/-) overdue for long period. In the opinion of the management they are recoverable and hence no provision is made for the same.

b. Confirmation of balance of certain parties under Sundry Debtors, Loans & Advances, Deposits and Sundry Creditors, Other Current Liabilities are not obtained. In the opinion of the management Current assets and Loans & Advances would in the ordinary course of business realise the values stated. Confirmation of balance has been obtained from Priya Ltd which forms over 90% of sales & purchases.

3. Freehold Land of the Company has been revalued as on 26th February 2008 based on valuation obtained by the Company and the resulting credit of Rs. 211,438,226 has been credited to revaluation reserve.

4. Retirement Benefit Plans

Defined contribution plans

The Company makes Provident Fund contributions to defined contribution retirement benefit plans for qualifying employees. Under the scheme, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits.

The Company recognised Rs.826,145 (Rs. 681,613/-) for provident fund contributions in the profit and loss account. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

Defined benefit plans

The Company makes annual contributions to the Employees’ Group Gratuity-cum-Life Assurance Scheme Master Policy of the Life Insurance Corporation of India, a defined benefit plan for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of five years of service. The present value of the defined benefit obligation and the related current service cost were measured using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date.

5. Finance Charges include interest paid on deposit to Managing Director and Whole Time Director Rs. 5,38,751/-. (Rs. 9,96,595/-)

6. Segment Information

The Companys segment information is as follows:

Segment assets and liabilities

Fixed assets used in the Company’s business and liabilities contracted have not been identified to any of the reportable segments as the fixed assets and services are used interchangeably between segments

7. Disclosure of related parties / related party transactions

a. Parties where control exists

Name of the Related Party Nature of Relationship

i. XLnet Software Systems Limited Wholly Owned Subsidiary

ii. VXL Instruments Limited (UK) Subsidiary. The Company holds 60% in the nominal value of the equity share capital

b. Other related parties with whom transactions were carried out during the year

Name of the Related Party Nature of Relationship

VXL eTech Limited Associate Company

c. Key management personnel and their relatives

Mr. M.V. Nagaraj, Managing Director

Mrs. Shanthi Nagaraj, (Wife of Mr. M V Nagaraj)

Mr. M.V. Shetty, Wholetime Director

Ms. Ridhima Shetty (Daughter of Mr. M V Shetty)

Mr. Rishab Shetty (Son of Mr. M V Shetty)

Mrs. Pravina Shetty (Wife of Mr. M. V. Shetty)

8. Operating Leases: The Company has taken various residential / commercial premises under cancelable operating leases. These lease agreements are normally renewed on expiry. Rent debited to profit and loss account Rs. 12,63,432 (Rs. 12,62,016).

The lease agreements provide an option to the Company to renew the lease period at the end of the period. There are no exceptional / restrictive covenants in the lease agreements.

Contingent rent recognized in the Profit and Loss Account Rs. Nil

9. Securities for Loans:

Working Capital from a Bank is secured by hypothecation of Inventories, Receivables, Book-Debts and other Current Assets, Equitable Mortgage of Factory Land and Building and immovable property of the company and Charge on un-encumbered Plant and Machinery and personal guarantee of some of the Directors.

Installments due within a year Rs. Nil Lakhs (Rs. 165.00 Lakhs).

Hire Purchase Finance from a bank for purchase of vehicle is secured by hypothecation of vehicle.

Installments payable within a year Rs. 331,589 (Rs.Nil)

10. Lien on Term Deposit: Out of Rs. 20,289,233/- term deposit Rs. 18,865,901/- is under lien for Bank Guarantee and Letter of Credit

11. Previous years figures have been recast and regrouped wherever necessary to make comparable with those of the current year. Figures in Bracket relate to previous year.

Find IFSC