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Notes to Accounts of Zenith Infotech Ltd.

Sep 30, 2013

1 Abridged Accounts

The abridged financial statements, which comprise the abridged Balance Sheet as at 30th September, 2013, the Statement of abridged Profit and Loss account, Cash Flow Statement for the year then ended and related Notes, are derived from the audited financial statements of the Company for the year ended 30th September, 2013.

2 Fixed Assets

(Note 9 of un-abridged Accounts)

a) Opening balance of Land includes, inter-alia, Rs.923.22 lakhs towards revaluation during the year 2011-12

b) Opening balance of Buildings include, inter-alia, Rs.3727.14 lakhs and Rs.2024.56 lakhs towards revaluation during the years 2008-09 and 2011-12 respectively.

3 Depreciation

(Note 24 of un-abridged Accounts)

During the current year, depreciation on Computers (Hardware & Software) has been charged @16% by WDV method as against the rate of 40% prescribed in Schedule XIV to the Companies Act, 1956. Thus, the short provision on account of depreciation during the current year amounts to Rs. 1608.99 lakhs.

5 Contingent liabilities (not provided for) (Note 29 of un-abridged Accounts)

2012-13 2011-12 Rs.in Lakhs Rs.in Lakhs

a) Bank guarantees 1.25 2.74

b) Estimated amount of contracts to be executed on Capital Account and not provided for 10.00 15.00

c) Claims against the Company, not acknowledged as debt:

Municipal property tax, Mumbai 14.14 14.14

Others 10.71 10.71

6 Foreign Currency Convertible Bonds (FCCB) (Note 34 of un-abridged Accounts) (a) The FCCBs of US$ 26.92 million matured on 21.9.2011. The Company has not met the payment obligations of the said FCCB principal and interest accrued thereon. There is dispute of the amount claimed.

(b) The FCCB of US$ 50 million matured on 18.8.2012. The Company has not met the payment obligations of the said FCCB principal and interest accrued thereon. There is dispute of the amount claimed. The coupon interest due thereon from 1.10.2011 to 18.8.2012 amounting to Rs.1896.26 lakhs, which was not provided in the previous year Accounts has now been provided in the Accounts for the current year, appearing as an Exceptional Item in the Profit and Loss Account.

(c) A suit for recovery of disputed amount due on the said Bonds has been filed by the Trustees for Bondholders in the Bombay High Court. The Company is defending the disputed claims. The said Trustees have also filed a winding up petition in the Bombay High Court, which is also being disputed.


Sep 30, 2012

1 Abridged Accounts

The abridged financial statements, which comprise the abridged Balance Sheet as at 30th September, 2012, the Statement of abridged Profit and Loss account, Cash Flow Statement for the year then ended and related Notes, are derived from the audited financial statements of the Company for the year ended 30th September, 2012.

2 Reserves & Surplus

Additions to Revaluation Reserve Rs.2947.78 lakhs, represents appreciation on revaluation of Land and Building

3 Fixed Assets

a) Additions to Land Rs.923.22 lakhs, represents appreciation on revaluation during the current year

b) Additions to Buildings include, inter-alia Rs.2024.56 lakhs towards appreciation on revaluation during the current year

4 Depreciation

During the current year, depreciation on Computers (Hardware & Software) has been charged @16% by WDV method as against the rate of 40% prescribed in Schedule XIV to the Companies Act, 1956. Thus, the short provision on account of depreciation during the current year amounts to Rs.1773.38 lakhs.

5 Contingent liabilities (not provided for)

2011-12 2010-11 (12 months) (18 months) Rs.in Lakhs Rs.in Lakhs

a) Bank guarantees 2.74 21.41

b) Estimated amount of contracts to be executed on Capital Account and not provided for 15.00 20.00

c) Unexpired Letters of Credit NIL 6790.97 Claims against the Company, not acknowledged as debt:

Municipal property tax, Mumbai 14.14 14.14

Others 10.71 10.71

6 Foreign Currency Convertible Bonds (FCCB)

a) The FCCBs of US$ 26.92 million matured on 21.9.2011. The Company has not met the payment obligations of the said FCCB principal and interest accrued thereon. There is a dispute of the amount claimed.

b) The FCCB of US$ 50 million (due 2012) matured on 18.8.2012. The coupon interest due thereon from 1.10.2011 to 18.8.2012 amounting to Rs.1896.26 lakhs has not been provided. The Company has not met the payment obligations of the said FCCB principal and the said interest. There is a dispute of the amount claimed.

c) A suit for recovery of disputed amount due on Bonds has been filed by the Trustees in the Bombay High Court. The Company is defending the disputed claim.

7 Accounting Standards

Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 have been followed wherever applicable. The monetory items denominated in foreign currency have not been restated (AS 11).

8 Accounting Period '' The financial statements for the current year are for a period of 12 months ending 30th September, 2012 as against the preceding period of 18 months from 1st April, 2010 to 30th September, 2011.


Sep 30, 2011

1. Accounting Period

Pursuant to the approval by the Registrar of Companies, Mumbai the accounting period of the company has been extended from 12 months ending 31st March, 2011 to 18 months ending 30th September, 2011 referred to as 'period' elsewhere. The figures of the previous year comprise of 12 months.

2. Contingent Liabilities (not provided for)

Particulars Current Period Previous Year (Rs. in lakhs) (Rs. In lakhs)

a) Bank Guarantees 21.41 72.23

b) Estimated amount of contracts to be executed on Capital Account and not provided for 20.00 13.50

c) Unexpired Letters of Credit 6790.97 NIL

d) Claims against the Company, not acknowledged as debts:

Municipal Property tax, Mumbai 14.14 NIL

Others 10.71 27.21

3. Accounting Standards

Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 have been followed wherever applicable. The monetary items denominated in foreign currency have not been restated as required by AS 11.

4. Exceptional items

Exceptional items Rs.30.33 crores shown in the Profit and Loss account comprise of:

a) Exceptional income Rs.45.79 crores:

During Sep 2011 the company sold its MS Division to Zenith RMM LLC for a gross consideration of US$ 54.71 million received by the company and its wholly owned subsidiary.

The gains arising out of this transaction aggregating to Rs.103.93 crores, has been accounted for as an Exceptional Income and is allocated between the company (Rs.45.79 crores) and its W.O.S. (Rs.58.14 crores) in the ratio of the cash consideration of the respective entities.

b) Exceptional expense Rs.76.12 crores:

This represents for ex loss on account of restatement of long term liabilities.

5. The gross consideration of US$ 54.71 million includes US$ 6 million deposited in an Asset Purchase Escrow account in the joint names of the company and Zenith RMM LLC to cover liabilities against the representations, warranties and indemnification provisions of the sale Agreement. The Escrow account balance has been treated as Deposit under Loans & Advances.


Mar 31, 2010

1. Contingent Liabilities not provided for:

2009-10 2008-09

Rs Lakhs Rs Lakhs

a) Bank Guarantees 72.23 221.75

b) Estimated amount of contracts to be executed on Capital Account and not provided for 13.50 85.00

c) Claims against the company Not acknowledged as debts 27.21 10.71

2. Disclosure under the Micro, Small and Medium Enterprises Act 2006

For compliance with MSMED Act, 2006 , requisite information was sought from the vendors. As per information available with The Company, the amounts payable under MSMED Act, 2006 is Nil.

3. During the current year, the Company has allotted 445935 equity shares of Rs.10 each fully paid, pursuant to the option exercised by the bondholders of FCCB, for converting the bonds into equity shares, at the agreed rates of conversion and foreign exchange.

4. Related Party Disclosure

a) List of Related Parties:

Subsidiaries

(i) Zenith Infotech (S) Pte Ltd

(ii) Zenith Infotech FZE

Joint Venture

(iii) Managed Data Center Services Ltd

Others

(iv) Zenith Computers Limited

(v) Zenith Technologies Pvt Ltd

(vi) Zenith Controls and Systems Pvt Ltd

(vii) Zenith Software Ltd

(viii)VU Technologies Pvt Ltd

(ix) Free Systems Technology Labs Pvt Ltd

5. Accounting Standards

Accounting Standards as prescribed under Section 211(3C) of the Companies Act, 1956 have been followed wherever applicable.

6. In the opinion of the Board, the Current Assets, Loans and Advances are approximately of the value, if realised, during the ordinary course of business.

7. Income Tax Assessments have been completed upto Assessment Year 2007-08.

8. Sales Tax Assessments have been completed upto accounting year Year 2007-08.

9. The amounts in the Balance Sheet and Profit and Loss Account are rounded off to the nearest rupees in Lakhs.

10. The figures of Previous Years have been regrouped and reclassified wherever necessary.

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