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Notes to Accounts of Zen Technologies Ltd.

Mar 31, 2015

1. Overdraft facilities from banks are secured by way of pledge of Fixed Deposits and the working capital facilities (Rs. 15 Crore) from Indian bank are secured by equitable mortgage of immovable properties and other fixed assets pari-pasu charge with Technology Development board (TDB).

2. The Company operates in one segment i.e., Training and simulation.

3. The Common expenses incurred at Head Office were allocated between Head Office and Himachal Pradesh unit based on Net turnover.

4. All Fixed deposits were kept with Scheduled banks only.

5. Receivables do not include any amount due and recoverable from directors or other officers of the Company, or Companies under the same management.

6. The balances of Sundry Debtors, Creditors and advances in various personal accounts are subject to reconciliation and conformation with the concerned parties.

7. There are no disclosures required to be made under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 as there are no outstanding amounts remaining unpaid at the end of the year.

8. In respect of Chits of Margadarsi Chit Fund, profit / loss on account of two chits will be accounted at the time of completion of chits.

9. Corporate Social Responsibility (CSR) amount is worked out to Rs. 30,05,500/- at 2% average of preceding 3 financial years profits. Out of this, Company has already spent Rs. 5,11,600/- and the balance of Rs. 24,93,900/- will be spent.

10. None of the pending litigations have any impact on Company's financial position.

11. As per Cost Audit applicability, cost compliance is not applicable for FY 2014-15 as the Company is classified as small enterprise under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006.

12. The company measures EBITDA on the basis of profit/(loss) from continuing operations and the company does not include depreciation and amortization expense, finance costs and tax expense in the measurement of EBITDA.

13. In the opinion of Board of Directors, the current assets, loans and advances are expected to realize approximately the value stated in the ordinary course of business.


Mar 31, 2014

1. CORPORATE INFORMATION

Zen Technologies Limited is a public company incorporated under the provisions of the Companies Act, 1956 having corporate office at B-42, Industrial Estate, Sanathnagar, Hyderabad-500018, India. The Equity Shares of the Company are listed on BSE Limited, Mumbai. The Company is engaged in design, development and manufacture of Training Simulators for Police and Para-military Forces, Armed Forces, Security Forces, Government Departments like Transport, Mining, Infrastructure and Civilian market. The company caters to both domestic and international market. The Company is having two manufacturing units- 1) Hardware Park, Maheswaram Mandal, Andhra Pradesh, India and 2) Nalagarh, Dist Solan, Himachal Pradesh, India.

(in Rs.)

Note Year ended Year ended

Particulars 31 March 2014 31 March 2013

1.2 COMMITMENTS AND CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

I. DISPUTED MATTERS

(a) Appeal filed by the Excise Department before the Customs, Excise 5,171,356 5,171,356 and Service Tax Appellate Tribunal (CESTAT) Bangalore against the decision of adjudication by Commissioner of Customs and Central Excise Hyderabad - II Commissionerate, in favour of the company pertaining to Excise matter in Order No:02/2006-C.Ex

(b) Subsequent demands raised by the excise authority, pending 74,942,371 74,942,371 decision of the case in (a) above, being disputed by the company

80,113,727 80,113,727

Note: The dispute in the matter (a) above was relating to inclusion of customized software in the valuation of simulators supplied by the Company during the period from F.Y 2005-06 to 2010-11 (upto 31.07.2011). The matter was first adjudicated by the Commissioner of Customs and Central Excise Hyderabad - II Commissionerate and decided in favour of the Company. However, the Excise Department has filed an appeal before the Appellate Tribunal challenging the order passed by Commissioner of Customs and Central Excise. The Company, based on discussions with its solicitors and tax advisors, believes that there is a fair chance of winning the case in its favour in the appellate process and hence, no provision has been considered necessary against the same.


Mar 31, 2013

1 CORPORATE INFORMATION

Zen Technologies Limited is a public company incorporated under the provisions of the Companies Act, 1956 having corporate office at B-42, Industrial Estate, Sanathnagar, Hyderabad-500018, India. The Equity Shares of the Company are listed on Bombay Stock Exchange (BSE) in India. The company is engaged in design, development and manufacture of Training Simulators for Police and Para-military Forces, Armed Forces, Security Forces, Government Departments like Transport, Mining, Infrastructure and Civilian market. The company caters to both domestic and international market. The Company is having two manufacturing units- 1) Hardware Park, Maheswaram Mandal, Andhra Pradesh, India and 2) Nalagarh, Dist Solan, Himachal Pradesh, India.

2.1 Overdraft facilities from banks are secured by way of pledge of Fixed Deposits.

2.2 The Company operates in one segment i.e., Training and Simulation.

2.3 The Common expenses incurred at Head Office were allocated between Head Office and Himachal Pradesh unit based on Net Turnover.

2.4 All Fixed deposits were kept with Scheduled Banks only.

2.5 The unclaimed dividend amount for all the earlier financial years as on 31 March 2013 is Rs. 9,81,785.00, details of which are given below:

2.6 Receivables do not include any amount due and recoverable from Directors'' or other Officers'' of the Company, or Companies under the same management.

2.7 The balances of Sundry Debtors, Creditors and advances in various personal accounts are subject to reconciliation and conformation with the concerned parties.

2.8 There are no disclosures required to be made under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 as there are no outstanding amounts remaining unpaid at the end of the year.

2.9 The company measures EBITDA on the basis of profit/(loss) from continuing operations and the company does not include depreciation and amortization expense, finance costs and tax expense in the measurement of EBITDA.

2.10 In the opinion of Board of Directors, the current assets, loans and advances are expected to realize approximately the value stated in the ordinary course of business.


Mar 31, 2012

A. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 each. Each holder of equity share 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 sharesholders was Rs.6.50 (previous year : Rs.1.50)

Note:1 Term loan facility from Indian Bank is secured by equitable mortgage of Company's immovable properties and hypothecation of other fixed assets with respective loan agreements. The term loan was utilised for the purpose of constructing factory premises at Hardware Park in Maheswaram Mandal, Hyderabad. The loan carries interest @13% p.a. The loan is guaranteed by personal guarantee of the Managing Director of the Company.

Note:2 The company has availed term loan from Technology Development Board (TDB), Ministry of Science and Technology, Govt of India as a part-finance for design, development and commercialization of Zen Driving Training Simulator for Overseas market. The loan carries interest @5% p.a and is repayable in 9 half yearly installments commencing from 01-04-2012. The loan is secured by equitable mortgage of immovable properties and other fixed assets pari-passi charge with Indian Bank. The loan is also guaranteed by corporate own guarantee and pledging of company's equity shares of 3,11,140 nos owned by the Managing Director of the company.

Note: The company operates Employees Gratuity Scheme for its employees. Under the scheme of gratuity, every employee who has completed minimum 5 years of service gets gratuity on departure @ 15 days last month's drawn basic salary for each completed year of service. The gratuity scheme is funded with Life Insurance Corportaion of India in the form of Group Gratuity Scheme (GGS). The provision is estimated by an independent consulting actuary as per requirements of (AS) 15 (Revised 2005) as prescribed under The Companies (Accounting Standard) Rules, 2006.

Note: As the items of raw material purchased and consumed are dissimilar in nature, type and numerous in quantity, it is not posible to give details under different heads as required under para 5(II) and para 5(III) of the general instructions for preparation of the statement of profit and loss as per the Revised Schedule VI of the Companies Act, 1956.

Note: As the items of finished goods produced or under production are heterogeneous in nature, model, type and specification, it is not posible to give details under different heads as required under para 5(II) and para 5(III) of the general instructions for preparation of the statement of profit and loss as per the Revised Schedule VI of the Companies Act, 1956.

Note: Tax expense comprises current and deferred tax. The current tax represents the Minimum Alternate Tax (MAT) payable by the company on the book profits for the year. Current tax expense is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 and the tax rates and tax laws used to compute the tax amount are prevailing at the reporting date. 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.

The dispute in the matter (a) above was relating to inclusion of customized software in the valuation of simulators supplied by the company during the period from F.Y 2005-06 to 2010-11 (upto 31- 07-2011). The matter was first adjudicated by the Commissioner of Customs and Central Excise, Hyderabad - II Commissionerate and decided in favour of the company. However, the Excise Department has filed an appeal before the Appellate Tribunal challenging the order passed by Commissioner of Customs and Central Excise. The Company, based on discussions with its solicitors and tax advisors, believes that there is a fair chance of winning the case in its favour in the appellate process and hence, no provision has been considered necessary against the same.

NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2012

1 CORPORATE INFORMATION

Zen Technologies Limited is a public company incorporated under the provisions of the Companies Act, 1956 having corporate office at B-42, Industrial Estate, Sanathnagar, Hyderabad-500018, India. The Equity Shares of the Company are listed on Bombay Stock Exchange (BSE) in India. The company is engaged in design, development and manufacture of PC based Training Simulators for Police and Para-military Forces, Armed Forces, Other Security Forces, Government Departments (like Transport) and Civilian market etc., The company caters to both domestic and international market. The Company is having two manufacturing units located in India: 1) Hardware Park, Maheswaram Mandal, Andhra Pradesh and 2) Nalagarh District Solan, Himachal Pradesh.

2.1 Overdraft facilities from banks are secured by way of pledge of Fixed Deposits.

2.2 The Company operates in one segment i.e., Training simulation.

2.3 The Common expenses incurred at the Head Office were allocated between Head Office and Himachal Pradesh unit based on Net turnover.

2.4 The advances totaling to Rs. 155.30 lakhs given to Autostart Driving School Pvt Ltd has been written-off as unrecoverable.

2.5 The advances totaling to Rs. 405.05 lakhs given to wholly owned subsidiary Version 2 Games Limited has been written-off as unrecoverable.

2.6 Sundry debtors totaling to Rs. 254.56 lakhs including the amount due from the wholly owned subsidiary Version 2 Games Limited Rs. 134.10 lakhs has been written-off as unrecoverable.

2.7 The advances totaling to Rs. 72.60 lakhs given to wholly owned subsidiary Zen Technologies FZE, UAE has been written-off as unrecoverable.

2.8 A provision has been made for an amount of Rs. 216.01 lakhs being doubtful of recovery from Hercules Manufacturing Nigeria Limited against sale of customized software.

2.9 A provision has been made for an amount of Rs. 32.50 lakhs on the sale of Tanks made to Ministry of Defence for installation, training and maintenance.

2.10 All Fixed deposits were kept with Scheduled banks only.

2.11 The unclaimed dividend amount for all earlier financial years as on 31 March 2012 is Rs. 8,00,093, details of which are given below:

2.12 Receivables do not include any amount due and recoverable from Directors' or other officers' of the Company, or Companies under the same management.

2.13 The balances of Sundry Debtors, Sundry Creditors and advances in various personal accounts are subject to reconciliation and confirmation with the concerned parties.

2.14 There are no disclosures required to be made under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 as there are no outstanding amounts remaining unpaid at the end of the year.

2.15 The company measures EBITDA on the basis of profit/(loss) from continuing operations and the company does not include depreciation and amortization expense, finance costs and tax expense in the measurement of EBITDA.

2.16 In the opinion of Board of Directors, the current assets, loans and advances are expected to realize approximately the value stated in the ordinary course of business.


Mar 31, 2011

1. Contingent Liabilities:

Particulars 2010-11 2009-10

Contingent Liabilities in respect of Bank Guarantees Rs.500 lakhs Rs.533.17 lakhs

2. There are no disclosures required to be made under the Micro, Small and Medium Enterprises Development (MSEMED) Act, 2006 as there is no outstanding amount remaining unpaid at the end of the year.

3. Related party transactions

As per Accounting Standard - 18 on Related Party disclosures issued by the Institute of Chartered Accountants of India the disclosure of transactions with the Related Party as defined in the Accounting Standard are given below:

i) List of Related Parties and Nature of Relationship:

Key Management Personnel

1 Mr Ashok Atluri

2 Mr Ravi Kumar Midathala

Relative of Key Management Personnel

3 Mr Kishore Dutt Atluri

4. The balances of Sundry Debtors, Creditors and advances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

5. In the opinion of Board of Directors, the current assets, loans and advances are expected to realize approximately the value stated in the ordinary course of business.


Mar 31, 2010

1. Contingent Liabilities:

Particulars 2009-10 2008-09

Contingent Liabilities in respect of Bank Guarantees Rs.533.17 lakhs Rs.135.56 lakhs

2 Previous years figures are regrouped and rearranged wherever necessary. vii Figures have been rounded off to the nearest rupee.

3. List of SSI Units to whom amount is due for more than 30 days as on 31st March, 2010 is Rs.NIL (Previous year Rs. NIL/-)

4. The balances of Sundry Debtors, Creditors and advances in various personal accounts are subject to confirmation by and reconciliation with the concerned parties.

5. In the opinion of Board of Directors, the current assets, loans and advances are expected to realize approximately the value stated in the ordinary course of business.

 
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