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Notes to Accounts of AXISCADES Engineering Technologies Ltd.

Mar 31, 2017

1. Details of security for borrowings

Working capital loans (inclusive of packing credit facility in foreign currency “PCFC”) from a bank are secured by first exclusive charge on current assets, exclusive charge on movable assets and second exclusive equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida, UP Additionally, 10% cash margin in the form of fixed deposits lien to be maintained if PCFC availment exceeds Rs.100 million.

Buyer''s Credit from a bank is secured by exclusive charge on both movable and immovable assets of the Company; first charge on land and building of the Company situated at D-30 Sector 3, Noida, UP

2. Terms of borrowings and rate of interest

Working capital loans consists of packing credit facility in foreign currency and bank overdraft. Packing credit in foreign currency from bank bearing an interest rate of 3% - 5% (31 March 2016: 3% - 5%) are repayable over a maximum tenure of 180 days from the date of respective availment. Bank overdraft bears an interest rate of 12.75 % p.a. (31 March 2016: 12.75 %).

Buyer’s credit bearing an interest rate of 1.39% p.a. has been repaid during the year.

3. Intercorporate deposit from Holding Company

Intercorporate deposits from Jupiter Capital Private Limited for Rs.7,300,000 (31 March 2016: Rs.Nil) carrying rate of interest at 12% per annum repayable on 30 May 2019.

4. Defined contribution plan

The Company makes a contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952 for its Indian employees. This is a defined contribution plan as per AS 15. Contribution made during the year ended 31 March 2017 is Rs.34,268,873 (31 March 2016: Rs.29,422,283).

5. overseas social security

The Company makes a contribution towards social security charges for its employees located at the respective branch offices in respective foreign geographies, that are defined contribution plans. The contributions paid or payable is recognized as an expense in the period in which the employee renders services in respective geographies. Contribution made during the year ended 31 March 2017 is Rs.84,571,167 (31 March 2016: Rs.75,632,645).

The Company has no obligation beyond the contribution made under these plans referred to in (b) and (c) above.

6. The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises, if any, as at 31 March 2017 has been made in the financial statements based on information received and available with the Company. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

7. The Board of Directors approved Intercorporate Deposits (ICD) of Rs.150,000,000 to AXISCADES Aerospace & Technologies Private Limited (ACAT), subsidiary of the Company, at an interest rate of the Company''s maximum borrowing rate plus 1% per annum payable on a quarterly basis and other such terms and conditions that are on arm''s length basis and in the ordinary course of business. The Company had advanced Rs.12,500,000 to ACAT during the year ended 31 March 2017 and the entire amount of ICD has been repaid by ACAT during the year.

8. SCHEME OF AMALGAMATION (SCHEME)

9. The Board of Directors of the Company at its meeting held on 14 August 2015, had approved the acquisition of AXISCADES Aerospace & Technologies Private Limited (“ACAT”), an aerospace, defense and homeland security technologies company by way of a Scheme of Amalgamation of India Aviation Training Institute Private Limited (“IAT”) with ACETL. ACAT is a 100% subsidiary of IAT. The appointed date of the Scheme was 1 April 2016 and was subject to the approval of the majority of the shareholders and creditors of ACETL and IAT, the Hon’ble High Court and the permission and approval of any other statutory or regulatory authorities, as applicable.

10. Consequent to the approval of the Scheme of Amalgamation u/s 391 to 394 of the Companies Act, 1956 for the amalgamation of IAT with the Company, by the Hon’ble High Court of Karnataka on 4 November 2016, and effected on 5 December 2016 (effective date), being the date of filing with the Registrar of Companies, all the assets, liabilities and reserves of IAT were transferred to and vested in the Company with effect from 1 April 2016, the appointed date. These financial statements accordingly have been given effect of the Scheme of Amalgamation.

11. Pursuant to the Scheme, the shareholders of IAT are eligible to receive 10 equity shares of the Company of par value of Rs.5 each fully paid up for every 45 equity shares held in IAT of par value of Rs.10 each fully paid up (‘Swap ratio’), with record date being 20 December 2016 as fixed by the Board of Directors of the Company. The Board of Directors of the Company at its meeting held on 30 December 2016, in terms of the said Scheme of Amalgamation has issued and allotted 10,569,937 new equity shares of the Company to the shareholders of IAT.

12. In accordance with Part B of the Scheme, all the assets and liabilities of IAT were transferred to the Company with effect from the appointed date at the respective book values in the financial statements of IAT In accordance with the Pooling of Interests Method outlined in AS-14 “Accounting for Amalgamations” prescribed by the Companies (Accounting Standard) Rules, 2006, the surplus of the net assets acquired over the consideration issued has been credited to Capital Reserve determined as follows:

13. Consequent to the scheme, ACAT has become wholly owned subsidiary of the Company and ceases to be a fellow subsidiary of the Company. On account of which AXISCADES Aerospace Infrastructure Private Limited (‘AAIPL) and Enertec Controls Limited (‘Enertec''), subsidiaries of ACAT, have become step-down subsidiaries of the Company.

14. Consequent to the scheme, the figures for the year ended 31 March 2017 are not comparable with the corresponding figures for the year ended 31 March 2016.

15. SEGMENT REPORTING

The single financial report of the Company would contain the separate financial statements and consolidated financial statements, including segment information, therefore no separate disclosure on segment information is given in these standalone financial statements.

16. related party disclosures

17. Parties where control exists:

Nature of relationship Name of party

Holding Company Jupiter Capital Private Limited (JCPL)

Subsidiary companies AXISCADES, Inc. (formerly known as Axis, Inc.)

AXISCADES UK Limited (formerly known an as Axis EU Europe Limited, a step down subsidiary) Cades Studec Technologies (India) Private Limited

AXISCADES Technology Canada Inc. (formerly known an as Cades Technology Canada Inc.) AXIS Mechanical Engineering Design (Wuxi) Co., Ltd.

AXISCADES GmbH

AXISCADES Aerospace & Technologies Private Limited [refer note 24 (f)]

Enertec Controls Limited, a step down subsidiary [refer note 24 (f)]

AXISCADES Aerospace Infrastructure Private Limited (formerly known as Jupiter Aviation Services Pvt Ltd, a step down subsidiary) [refer note 24 (f)]

18. Name and relationship of related parties where transaction has taken place:

Subsidiary AXISCADES Aerospace & Technologies Private Limited [refer note 24 (f)]

Fellow subsidiary Indian Aero Ventures Private Limited

19. Key management personnel:

Vice Chairman and Executive Director Mr. Sudhakar Gande

Chief Executive Officer and Director Mr. Valmeekanathan S. (resigned as Chief Executive Officer w.e.f. 8 January 2017)

Chief Financial Officer Mr. Kaushik Sarkar

20. disclosure on Specified bank notes (SBNs)

During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated 31 March 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from 8 November 2016 to 30 December 2016, the denomination wise SBNs and other notes as per the notification is given below:

21. TRANSFER PRICING

The Finance Act, 2001 has introduced, with effect from Assessment Year 2002-03 (effective 1 April 2001), detailed Transfer Pricing regulations for computing the taxable income and expenditure from ‘international transactions'' between ‘associated enterprises'' on an ‘arm''s length'' basis. These regulations, inter alia, also require the maintenance of prescribed documents and information including furnishing a report from an Accountant within due date of filing the Return of Income. The Company is in the process of updating the Transfer Pricing documentation for the financial year ended 31 March 2017 following a detailed transfer pricing study conducted for the financial year ended 31 March 2016. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

22. PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification [refer note 24 (g)].


Mar 31, 2016

(b) Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs, 5 per share. Each equity share is entitled to one vote per share. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting shall be payable in Indian rupees. In the event of liquidation of the company, the shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

(a) Details of security for borrowings

Term loan from a bank is secured by exclusive charge on both movable and immovable assets of the Company and by first charge on land and building of the Company situated at D-30 Sector 3, Noida, UP

Working capital loans (inclusive of packing credit facility in foreign currency “PCFC”) from a bank are secured by first exclusive charge on current assets, exclusive charge on movable assets and second exclusive equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida, UP Additionally, 10% cash margin in the form of fixed deposits lien to be maintained if PCFC a ailment exceeds Rs, 100 million.

Buyer''s Credit from a bank is secured by exclusive charge on both movable and immovable assets of the Company; first charge on land and building of the Company situated at D-30 Sector 3, Noida, UP

(b) Terms of borrowings and rate of interest

Term loan bearing an interest rate of Bank''s base rate plus 2.50% subject to a minimum of 13%, is repayable from May 2015 over 30 equal monthly installments post a moratorium of 6 months. (31 March 2015: term loans having an interest rate of bank''s base rate plus 2.50% subject to a minimum of 13%, were repayable from May 2015 over 30 equal quarterly installments.)

Working capital loans consists of packing credit facility in foreign currency and bank overdraft. Packing credit in foreign currency from bank bearing an interest rate of 3% - 5% (31 March 2015: 3% - 6%) are repayable over a maximum tenure of 180 days from the date of respective a ailment. Bank overdraft bears an interest rate of 12.75 % p.a.

Buyer''s credit is repayable on 5 August 2016 bearing an interest rate of 1.39% p.a.

(b) Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952 for its Indian employees. This is a defined contribution plan as per AS 15. Contribution made during the year ended 31 March 2016 is Rs, 29,422,283 (31 March 2015: Rs, 24,308,361).

(c) Overseas social security

The Company makes contribution towards social security charges for its employees located at the respective branch offices in respective foreign geographies, which is a defined contribution plan. The contributions paid or payable is recognized as an expense in the period in which the employee renders services in respective geographies. Contribution made during the year ended 31 March 2016 is Rs, 75,632,645 (31 March 2015: Rs, 65,578,045).

* Includes dues to subsidiaries of Rs, 23,500,107 (31 March 2015: Rs, Nil) (Also, refer note 27)

(a) The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2016 has been made in the financial statements based on information received and available with the Company. Further, in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

(a) The Board of Directors approved an ICD of Rs, 150,000,000 to AXISCADES Aerospace & Technologies Private Limited (ACATPL), a fellow subsidiary of the Company, at an interest rate of Company''s maximum borrowing rate plus 1% per annum payable on a quarterly basis and other such terms and conditions that are on arm''s length basis and in the ordinary course of business. The Company has advanced Rs, 137,500,000 to ACATPL during the year ended 31 March 2016. The ICD extended is in the nature of working capital assistance to ACATPL for a period of two years from the effective date of the ICD agreement. This amount may be extended beyond the two years period based on mutual agreement.

*Advances recoverable in cash or kind

As at 31 March 2016, trade receivables include a sum of Rs, 2,370,765 (31 March 2015: Rs, 9,543,335) foreign currency receivables outstanding for more than 365 days. In this regard, the Company has filed for extension with its Authorized Dealer as per the required provisions of Foreign Exchange Management Act,1999.

(a) Fixed deposits given as security:

1. Fixed deposits of a carrying amount Rs, 40,998,265 (31 March 2015: Rs, 32,036,959) have been deposited as margin money at 10% against the Packing credit facility loan availed from a bank.

2. Deposits of a carrying amount Rs, 1,772,994 (31 March 2015: Rs, 718,200) have been deposited as bank guarantee towards lien on various authorities and customers.

(a) The Board of Directors of ACETL at its meeting held on 14 August 2015, has approved the acquisition of AXISCADES Aerospace & Technologies Private Limited (“ACATL’), an aerospace, defense and homeland security technologies company by way of a Scheme of Amalgamation of India Aviation Training Institute Private Limited (“IAT”) with AXISCADES Engineering Technologies Limited (“ACETL’). ACATL is 100% subsidiary of IAT. Shareholders of IAT (holding company of ACATL) will receive 10 (ten) shares in ACETL for every 45 (forty five) shares held by them in IAT. The transaction is proposed to be completed via a Scheme of Amalgamation. The appointed date of the Scheme is 1 April 2016 or any other date as may be directed by the Hon''ble Court of Karnataka and the Scheme is subject to the approval of the requisite shareholders and creditors of ACETL and IAT, the Honourable High Court and the permission and approval of any other statutory or regulatory authorities, as applicable. The Company has filed the draft Scheme of Amalgamation with the Stock Exchanges under clause 24(f) of the Listing Agreement on 2 September 2015. No complaints with this respect have been received from any stakeholder during the specified period and the Report as on 13 October 2015 has been submitted to that effect with the Stock

Exchanges. Further, the Scheme has got the approval from the shareholders and creditors on 25 April 2016 in the Court Convened Meeting and petition to that effect has been filed with the Hon''ble High Court of Karnataka.

(b) Pursuant to the allotment of equity shares as per the Scheme (Also, refer note 3 (a)), the Company has remitted stamp duty expense on the transaction amounting to Rs, Nil during the year March 2016 (31 March 2015: Rs, 22,294,578).

3. SEGMENT REPORTING

The single financial report of the Company would contain the separate financial statements and consolidated financial statements, including segment information, therefore no separate disclosure on segment information is given in these standalone financial statements.

4. RELATED PARTY DISCLOSURES

i. Parties where control exists:

Nature of relationship Name of party

Holding Company Jupiter Capital Private Limited (JCPL)

Subsidiary companies Axis Inc.

AXISCADES UK Limited (formerly known an as Axis EU Europe Limited, a step down subsidiary) Cades Studec Technologies (India) Private Limited

AXISCADES Technology Canada Inc. (formerly known as Cades Technology Canada Inc.)

Axis Mechanical Engineering Design (Wuxi) Co., Ltd.

ii. Name and relationship of other related parties

Fellow subsidiary AXISCADES Aerospace & Technologies Private Limited

iii. Key management personnel:

Vice Chairman and Executive Director Mr. Sudhakar Gande (appointed w.e.f. 14 August 2015)

Chief Executive Officer and Director Mr. Valmeekanathan S.

Chief Financial Officer Mr. Kaushik Sarkar (resigned as Director w.e.f. 25.06.2015)

* During the year ended 31 March 2016, the Company had made an application to the Central Government under Section 196 and 197 read with Schedule V of the Companies Act, 2013 seeking approval to authorize the payment of managerial remuneration in excess of the limits as laid down in Section 197(1) of the Companies Act, 2013 to Mr. Sudhakar Gande, who has been appointed as a Whole Time Director of the Company w.e.f. 14 August 2015. On 2 May 2016, the Central Government in terms of Section 197(3) of the Companies Act, 2013 has approved the remuneration payable to the aforesaid managerial personnel from the date of the appointment and consequently, the Company has recorded managerial remuneration payable as per the terms of appointment for the financial year ended 31 March 2016.

5. DISCLOSURES IN RESPECT OF NON-CANCELLABLE OPERATING LEASES

The lease expenses for cancellable and non-cancellable operating leases during the year ended 31 March 2016 was Rs, 87,495,560 (31 March 2015: Rs, 82,072,820).

The Company''s significant leasing arrangements in respect of operating leases for office premises, which includes both cancellable and non cancellable leases and range between 11 months and 9 years generally and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent under Note 22 to the financial statements.

6. CORPORATE SOCIAL RESPONSIBILITY

Pursuant to the provisions of Section 135 of the Act and the Rules made there under, the gross amount required to be spent by the Company during the year ended 31 March 2016 amounts to Rs, 2,484,000 (31 March 2015: Rs, 1,937,000). The Company has paid Rs, 2,484,000 to three non-government organizations engaged in the field of development of skills of under-privileged children, enabling them to overcome adversity and flourish in a fast changing world.

7. TRANSFER PRICING

The Company is required to use certain specified methods in computing arm''s length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2016 following a detailed transfer pricing study conducted for the financial year ended 31 March 2015. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

8. PREVIOUS YEAR FIGURES

Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Mar 31, 2015

1 Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each equity share is entitled to one vote per share. The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting shall be payable in Indian rupees. In the event of liquidation of the company, the shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 Details of security for borrowings

Term loan from a Bank is secured by exclusive charge on both moveable and immoveable assets of the company; first charge on land and building of the Company situated at D-30 Sector 3, Noida, UP and by a corporate guarantee from AXISCADES Aerospace & Technologies Private Limited for Rs. 50 million (31 March 2014: Rs. 150 million).

Working capital loans (inclusive of packing credit facility in foreign currency) from a bank are secured by first exclusive charge on current assets, exclusive charge on movable assets and second exclusive equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida, UP and by a corporate guarantee from AXISCADES Aerospace & Technologies Private Limited for Rs. 302.5 million (31 March 2014: Rs. 200 million). Additionaly, 20% cash margin in the form of fixed deposits lien to be maintained if PCFC availment exceeds Rs. 102.5 million.

3 Terms of borrowings and rate of interest

Term loans having an interest rate of Bank's base rate plus 2.50 % subject to a minimum of 13% are repayable from May 2015 over 30 equal monthly instalments post a moratorium of 6 months.(31 March 2014: term loans having an interest rate of bank's base rate plus 2.50% were repayable from March 2014 over 10 equal quarterly instalments.)

Packing credit in foreign currency from bank bearing an interest rate of 3% - 6% (31 March 2014: 3% - 6%) are repayable over maximum tenure of 180 days from the date of respective availment.

Intercorporate deposits carrying an interest rate of 11% (31 March 2014: 11%) per annum has been fully repaid in the current year.

4 Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952. This is a defined contribution plan as per AS 15. Contribution made during the year ended 31 March 2015 is Rs. 24,308,361 (31 March 2014 : Rs. 20,948,824).

5 Overseas social security

The Company makes contribution towards social security charges for its employees located at the respective branch offices in respective foreign geographies, which is a defined contribution plan. The contributions paid or payable is recognised as an expense in the period in which the employee renderssen/ices in respective geographies. Contribution made during the year ended 31 March 2015 is Rs. 65,578,045 (31March2014:C 67,309,10S).

6 Fixed deposits given as security:

i. Fixed deposits of a carrying amount Rs. 32,036,959 (31 March 2014: Rs. 38,775,758 ) have been deposited as margin money at 20% against the packing credit facility loan availed from a bank.

ii. Deposits of a carrying amount Rs. 718,200 (31 March 2014: Rs. 331,075) have been deposited as bank guarantee towards lien on customs department and various customers.

7 RELATED PARTY DISCLOSURES

i. Parties where control exists:

Nature of relationship Name of party

Holding Company Jupiter Capital Private Limited ('JCPL'). Tayana Digital Private Limited (TDPL) ceased to be the intermediate holding company w.e.f. 09 July 2014 and in turn AXISCADES Aerospace & Technologies Private Limited, (ACAT, formerly known as Axis Aerospace & Technologies Limited) also ceased to be the intermediate holding company. ACAT is a subsidiary of JCPL.

Subsidiary Companies Axis Inc. Axis EU Europe Limited (formerly know an as Axis EU Limited, a step down subsidiary) Cades Studec Technologies (India) Private Limited Cades Technology Canada Inc. Axis Mechanical Engineering Design (Wuxi) Co., Ltd.

ii. Name and relationship of related parties where transaction has taken place:

Fellow subsidiary AXISCADES Aerospace & Technologies Private Limited

Fellow subsidiary Enertec Controls Limited

iii. Key management personnel:

CEO and Chairman Mr. S. Ravinarayanan (resigned as CEO w.e.f. 24 February 2014)

CEO and Director Mr. Valmeekanathan S. (appointed w.e.f. 25 February 2014)

CFO and Director Mr. Kaushik Sarkar (appointed w.e.f. 12 September 2014)

Company Secretary Ms. Shweta Agrawal (w.e.f. 1 April 2014)

8 Corporate social responsibility

Pursuant to the provisions of Section 135 of the Act and the Rules made thereunder, the gross amount required to be spent by the Company during the year ended 31 March 2015 amounts to Rs.1,937,000. The Company has paid Rs.1,937,000 to two non-government organizations engaged in the field of development of skills of under-privileged children, enabling them to overcome adversity and flourish in a fast changing world.

9 Appointment of Chief Financial Officer

After the Balance sheet date, the Company's application seeking approval from the Central Government for the remuneration to the Executive Director and Chief Financial Officer (CFO) of the Company has been viewed negatively in light of the provisions of Section 203 of the Act.

The Management has been advised by an expert opinion that appointment of the CFO is compliant with Section 203 and they have supported their view with prevailing corporate practice as well. Further, the Management has also been advised to resubmit the application to the Policy Wing of the Ministry of Corporate Affairs for re-examination and if found in order, to view the application positively.

Based on the expert's opinion, Management is of the view that aforesaid denial of the permission does not have any financial implications and accordingly the Management has taken requisite steps as advised. Meanwhile, the Company shall maintain status quo till final disposal of the aforesaid application.

10 Transfer pricing

The Company is required to use certain specified methods in computing arm's length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2015 following a detailed transfer pricing study conducted for the financial year ended 31 March 2014. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

11 PREVIOUS YEAR FIGURES

Previous year's figures have been regrouped / reclassified wherever necessary, to conform to current year's classification.


Mar 31, 2014

1. SEGMENT REPORTING

The single financial report of the Company would contain consolidated financial statements, including segment information, and the separate financial statements. Therefore, no separate disclosure on segment information is given in these financial statements.

2 RELATED PARTY DISCLOSURES

i. Parties where control exists :

Nature of relationship Name of party

Holding Company

Tayana Digital Private Limited (demerged from Tayana Software Solutions Private Limited), which is a subsidiary of Axis Aerospace & Technologies Limited. (''AATL'', formerly known as Jupiter Strategic Technologies Private Limited''). AATPL, a venture funded by Jupiter Capital Private Limited (''JCPL''), is a subsidiary of the JCPL.

Entity under common control Subsidiar y companies

Enertec Controls Limited

Axis Inc., U.S.A.

Axis E.U. Limited (Step down subsidiary)

Cades Studec Technologies(India) Private Limited

Cades Technology Canada Inc.

Axis Mechanical Engineering Design (Wuxi) Co., Ltd.

Cades Digitech Private Limited (Also, refer note 2)

ii. Key management personnel :

Chairman and CEO CEO

Mr. S. Ravinarayanan (resigned as CEO on 24 February 2014) Mr. Valmeekanathan S. (appointed on 25 February 2014)

iii. Transactions with related parties:

3. TRANSFER PRICING

The Company is required to use certain specified methods in computing arm''s length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2014 following a detailed transfer pricing study conducted for the financial year ended 31 March 2013. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the ef ect of the transfer pricing implications, if any.

4. PREVIOUS YEAR FIGURES

Pursuant to the Scheme (Refer note 2), the figures of the current year are not strictly comparable to those of the previous year. Previous year''s figures have been regrouped / reclassified wherever necessary, to conform to current year''s classification.


Mar 31, 2013

1 DISCLOSURES IN RESPECT OF NON-CANCELLABLE OPERATING LEASES

The lease expenses for cancellable and non-cancellable operating leases during the year ended 31 March 2013 was Rs. 35,478,675 (31 March 2012 : Rs. 32,108,640)

2 HEDGING AND DERIVATIVES

Pursuant to the adoption of AS 30 with effect from 1 April 2011, the loss on fair valuation on forward contracts, which qualify as effective cashflow hedges amounting to Rs. NIL (31 March 2012 - 7,163,655) has been recognised in the hedge reserve account. The impact of the adoption of AS 30 did not have any material impact on the opening reserves of the Company. There are no forward contracts outstanding as at 31 March 2013.

3 Transfer pricing

The Company is required to use certain specified methods in computing arm''s length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions / class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2013 following a detailed transfer pricing study conducted for the financial year ended 31 March 2012. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

4 The Board of Directors (''the Board'') of the Company at their meeting held on 23 January 2013 have approved a Scheme of Arrangement for the merger of Cades Digitech Private Limited, a subsidiary of Axis-IT&T Limited (''the Company'') with itself, subject to requisite majority of the shareholders'' and creditors of Axis-IT&T Limited and Cades Digitech Private Limited and such other statutory and regulatory approvals. The requisite steps for these activities are under process as at 31 March 2013.

5 PREVIOUS YEAR FIGURES

Previous year figures have been regrouped or reclassified wherever considered necessary to conform to current year classification.


Mar 31, 2012

1 SHARE CAPITAL

a. Terms and rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 5 per share. Each equity share is entitled to one vote per share.

The dividend, if any, proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting shall be payable in Indian rupees. In the event of liquidation of the company, the shareholders will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2 BORROWINGS

(a) Details of security for borrowings

Working capital borrowings (inclusive of packing credit facility in foreign currency) from bank are secured by first exclusive charge on current assets and equitable mortgage on land and building of the Company situated at D-30, Sector 3, Noida and by a corporate guarantee from Axis Aerospace & Technologies Limited.

Loan from a body corporate is secured by demand promissory note for the loan together with interest thereon.

(b) Terms of repayment of borrowings

Packing credit in foreign currency from bank bearing an interest rate of 3% - 5% are repayable over maximum tenure of 180 days from the date of respective availment.

Loan from a body corporate bearing an interest rate of 8% to 10% are repayable over a maximum tenure of three years from the date of availment.

3 EMPLOYEE BENEFIT OBLIGATION

b) Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952. This is a defined contribution plan as per AS 15. Contribution made during they earended 31 March 2012 is Rs. 80,04,781 (31 March 2011 : Rs. 49,92,640).

4 TRADE PAYABLES

a) The management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises, as defined under Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA). Accordingly, the disclosure in respect of the amounts payable to such enterprises as at 31 March 2012 has been made in the financials statements based on information received and available with the Company. Further in the view of the management, the impact of interest, if any, that may be payable in accordance with the provisions of the MSMEDA is not expected to be material.

5 CONTINGENT LIABILITIES AND COMMITMENTS

Year ended Year ended 31 March 2012 31 March 2011 Rs. Rs.

Estimated amount of contracts remaining to be executed on and not provided for 518,939 - Corporate guarantee provided to YES Bank Limited for loans availed by CADES Digitech Private Limited, a subsidiary. 150,000,000 150,000,000

Order passed against the Company by a consumer forum, Lucknow, against which the Company has filed a revised petition - 225,600

Counter guarantee provided to YES Bank Limited against guarantee availed by Axis Aerospace & Technologies Limited. 825,000,000 -

975,518,939 150,225,600

6 RELATED PARTY DISCLOSURES

i. Parties where control exists :

Nature of relationship Name of party

Holding company information The Company is a subsidiary of Tayana Digital Private Limited (demerged from Tayana Software Solutions Private Limited) which is a subsidiary of Axis Aerospace & Technologies Limited. ('AATL', formerly known as Jupiter Strategic Technologies Private Limited'). AATPL, a venture funded by Jupiter Capital Private Limited ('JCPL'), is a subsidiary of the JCPL.

ii. Name and relationship of related parties where transaction has taken place:

Subsidiary Companies Axis Inc., U.S.A. Axis E.U. Limited Cades Digitech Private Limited Cades Technology Canada Inc

iii. Key Management Personnel:

Chairman and CEO Mr. S Ravinarayanan

7 Transfer pricing

The Company is required to use certain specified methods in computing arm's length price of international transactions between the associated enterprises and maintain prescribed information and documents relating to such transactions. The appropriate method to be adopted will depend on the nature of transactions/class of transactions, class of associated persons, functions performed and other factors, which have been prescribed. The Company is in the process of updating the Transfer Pricing documentation for the financial year ending 31 March 2012 following a detailed transfer pricing study conducted for the financial year ended 31 March 2011. In the opinion of the management, the same would not have an impact on these financial statements. Accordingly, these financial statements do not include the effect of the transfer pricing implications, if any.

8 The Board of Directors ('the Board') of the Company at their meeting held on 12 September 2011 have approved a Scheme of Arrangement for the merger of Cades Digitech Private Limited, a subsidiary of Axis-IT&T Limited ('the Company'), Tayana Digital Private Limited (parent of the Company) and other entities into Axis Aerospace & Technologies Limited ('AAT') subject to necessary approvals. The Board has also approved a Scheme of Arrangement for the subsequent merger of the Company into AAT subject to necessary approvals. The requisite steps for these activities are under process as at 31 March 2012.

9 PREVIOUS YEAR FIGURES

The financial statements for the year ended 31 March 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act,1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification.


Mar 31, 2011

1) Background and Operational outlook

Axis-IT&T Limited is a pure play Engineering Design Services ("EDS") Company that delivers design based solutions to global engineering majors. Axis-IT&T Limited is organized into two divisions – EDS and Software Development Services. The Company has made profit after tax of Rs. 62,267,727 during the year ended 31 March 2011 and its accumulated losses are Rs. 141,408,896. These accumulated losses represent erosion of more than fifty percent of net worth of the Company. The Company is projecting better performance in forthcoming years on the basis of increase in number of contracts with existing and new customers and cost control measures. There is no impact on the carrying/ recoverable value of the assets and liabilities and so no adjustments have been recorded for these assets and liabilities thereon in the financial statements. Accordingly, these financial statements have been prepared on a going concern basis.

2) Earnings /(Loss) Per Share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares will be treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

The weighted average numbers of equity shares outstanding during the period will be adjusted for events of bonus issue, bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares).

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period will be adjusted for the effects of all dilutive potential equity shares.

3) Operating and finance leases

Operating Leases

The Company has entered into cancellable and non-cancellable operating lease agreements for its Business Centers and Corporate Office premises. These leases expire over the period extending up to 30 November 2012 and are further renewable at the mutual consent of the Company and the lessor.

The lease expenses for cancellable and non-cancellable operating leases during the year ended 31 March 2011 was ¹ 23,967,867 (31 March 2010 - Rs. Nil)

c) Defined contribution plan

The Company makes contribution of statutory provident fund as per Employees Provident Fund and Miscellaneous Provision Act, 1952. This is a defined contribution plan as per AS 15. Contribution made during the year ended 31 March 2011 is Rs. 4,992,640 (31 March 2010 - Rs. 3,337,401)

4) Miscellaneous expenditure

Public issue expenses are amortised over a period of five years on pro-rata basis. However, if the equity offering is not probable or the offering is aborted, such costs will be expensed off in the year during which the offering is aborted or considered not probable.

5) Other notes

a) As at 31 March, 2011 debtors include a sum of Rs. 1,089,339 (31 March 2010: Rs. 1,811,027) receivable outstanding for more than 365 days. In this regard the Company is in the process of determining the appropriate course of action to ensure compliance with the requirements of Reserve Bank of India (RBI) Regulation and the Foreign Exchange Management Act, 1999.

6) Related party disclosures

Natureofrelationship Nameofparty

i. Parties where control exists : Holding company information

The Company is a subsidiary of Tayana Digital Private Limited (demergedfrom Tayana Software Solutions Private Limited) which is a subsidiary of Axis Aerospace & Technologies Private Limited. (AATPL, formerly known as Jupiter Strategic Technologies Private Limited). AATPL, a venture funded by Jupiter Capital Private Limited (JCPL), is a subsidiary of JCPL.

Subsidiary companies

Axis Inc., U.S.A.

Axis E.U. Limited

Cades Digitech Private Limited

Cades Technology Canada Inc

ii. Key Management Personnel : Chairman and CEO

Mr. S Ravi Narayanan

7) Additional disclosures under Schedule VI

The Company is engaged in the business of rendering engineering design services. The production and sale of such services is not capable of being expressed in any generic unit. Consequently, the quantitative details of sales and the particulars required under paragraph 3, 4C and 4D of Part II of Schedule VI to the Companies Act, 1956 have not been disclosed.

8) Prior year comparatives

Previous year figures have been regrouped or reclassified wherever considered necessary to conform to current year classification.

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