d) Rights, preferences and restrictions attached to shares
The Company, at present, has one class of equity shares having a par value of '''' 5 per share. Each shareholder is eligible for one vote per share held. The voting rights on Unclaimed Suspense Account shares are frozen till the rightful owner of such shares claims the shares. The Company declares and pays dividend in Indian Rupees. The final dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. 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 preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders. The Board of Directors, in their meeting held on May 27, 2016 proposed a Final Dividend of '''' 0.25 per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting to be held on September 15, 2016. The total dividend appropriation for the year ended March 31, 2016 amounted to '''' 44.21 million and corporate dividend tax of '''' 6.39 million.
As per the records of the Company, including its register of shareholders / members and other declaration received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownership of shares.
1 In the opinion of the Company, the Current Assets, Loans and Advances are approximately of the value stated, if realized in the ordinary course of business. The provision for all known liabilities and for depreciation is adequate and not in excess of the amount reasonably necessary.
2 The Company has received confirmations from few Trade receivables, Other receivables and for majority of loans and advances. Remaining Trade receivables, Other receivables, Trade payables and loans and advances are subject to confirmation and reconciliation and consequent impact if any will be adjusted as and when determined.
3 EMPLOYEE BENEFITS
As per Accounting Standard 15 “Employee Benefits”, the disclosures are as under :
The present value of gratuity obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation of leave benefits (unfunded) is also recognized using the projected unit credit method.
4 RELATED PARTY DISCLOSURES
(i) As per Accounting Standard 18, as notified by the rules the disclosures of Related Parties and transactions during the year as deemed in the Accounting Standard are given below:
(A) Subsidiary Companies
Datamatics Software Services Limited (Merged with DGSL w.e.f. April 1, 2015)
Datamatics Vista Info Systems Limited (Merged with DGSL w.e.f. April 1, 2015)
Cybercom Datamatics Information Solutions Limited Datamatics Global Services Inc.
Datamatics Global Services GmbH
Datamatics Technologies UK Limited
Datamatics Global Technologies Limited
Datamatics Global Technologies AG
Datamatics Infotech Limited
Datamatics Global Services Pty. Limited
Datamatics Global Technologies GmbH (Stepdown Subsidiary)
Cignex Datamatics Corporation (Stepdown Subsidiary)
Cignex Datamatics Technologies Limited (Stepdown Subsidiary)
Cignex Datamatics Inc. USA (Stepdown Subsidiary)
Cignex Datamatics Inc. Michigan (Stepdown Subsidiary)
Cignex Datamatics Pte. Limited (Stepdown Subsidiary)
Cignex Datamatics GmbH (Stepdown Subsidiary)
Datamatics Global Solutions GmbH (Stepdown Subsidiary)
Lumina Datamatics Limited
Datamatics Global Services FZ - LLC
Lumina Datamatics Inc. (Stepdown Subsidiary)
Lumina Datamatics GmbH (Stepdown Subsidiary)
LDR eRetail Limited (Stepdown Subsidiary)
Lumina Datamatics Assessment & Analytics LLC (Stepdown Subsidiary)
LD Publishing and eRetail Limited
Cignex Datamatics UK Limited (Stepdown Subsidiary)
Duo Design LLC (Stepdown Subsidiary)
(B) Key Managerial Personnel
Dr. Lalit S. Kanodia
Mr. Rahul L. Kanodia
Mr. Sameer L. Kanodia
Mr. Vidur V. Bhogilal (till September 21, 2015)
Ms. Divya Kumat
Mr. Siddharth B. Saboo (w.e.f. November 16, 2015)
(C) Relatives of Key Managerial Personnel and Enterprise owned by Key Managerial Personnel
Mrs. Asha L. Kanodia
Mrs. Aneesha Dalmia
Mrs. Priyadarshini Kanodia
Mr. Vidur V. Bhogilal (w.e.f. September 22, 2015)
Datamatics Staffing Services Limited Datamatics Employees Welfare Trust Datamatics Financial Services Limited Amon Technologies Private Limited Datamatics Mangagement Services LLP Anemone Management Consultancy Private Limited Latasha Consultancy Services Private Limited Datascan Services (Partnership Firm)
(D) Holding Company
Delta Infosolutions Private Limited
Related parties are identified by the Management and relied upon by the auditors.
5 The Company''''s significant leasing arrangements are mainly in respect of residential and office premises. The aggregate lease rentals payable on these leasing arrangements are charged as rent under “Other Expenses” in Note 25. These leasing arrangements are for a period not exceeding five years and are in most cases renewable by mutual consent, on mutually agreeable terms.
(a) Future lease payments are determined on the basis of terms of the lease agreement.
(b) At the expiry of term of the agreement, the Company has an option either to return the leased asset or extend the term by giving a notice in writing.
6 EMPLOYEE STOCK OPTION SCHEME
The Datamatics Employees Welfare Trust (Trust) had purchased 1,753,261 shares of Company for granting stock options to the employees. The purchases are financed by loans from the Company. During the year Trust was liquidated and Rs, 48.59 million has been received and shown as extraordinary items. The amount includes Rs, 40.29 million towards profit on sale of investments and balance towards other income net of expenses over the years.
During the year, an amount of Rs, 2.65 million (Rs, 0.68 million) has been expensed out considering the proportionate vesting period, which has been included in Salaries, Wages, Bonus and Allowances and the balance has been disclosed under Reserves and Surplus as reduction from Employee Stock Option Outstanding.
7 The Company has Rs, 0.89 million (Rs, 3.33 million) as outstanding Loans and Advances (Refer note no. 41 below) and Rs, 670.18 million (Rs, 995.12 million) as investment in three of its 100% Subsidiaries at the year end. The net worth of these subsidiaries has declined. The Company has assured financial support. These investments are for long term and are of strategic nature. As the Management is confident of turning around the subsidiaries in the near future provision for dimuniton in the value, if at all required, is not made.
8 Pursuant to the Scheme of Amalgamation (The Scheme) u/s 391 to 394 of the Companies Act, 1956 read with section 78 and sections 100 to 104 and other applicable provisions of the Companies Act, 2013 for amalgamation of Datamatics Software Services Limited (DSSL) and Datamatics Vista Info Systems Limited (DVISTA) with the Company as sanctioned by Hon''''ble High Court of Bombay on April 22, 2016 and the said order was filed with ROC on May 13, 2016 (effective date), all the assets and liabilities of DSSL and DVISTA were transferred to and vested in the Company, without any consideration and ongoing concern basis, with effect from April 1, 2015 (the appointed date). The Scheme has accordingly given effect to in these financial statements.
The amalgamation has been accounted for under the "Purchase Method" as prescribed under Accounting Standard 14
- "Accounting for Amalgamations" (AS 14) issued by the Institute of Chartered Accountants of India and as notified u/s 133 of the Companies Act 2013 read with Rule 7 of the Companies Accounts Rules 2014. Accordingly and giving effect in compliance of the Scheme all the assets and liabilities of DSSL and DVISTA, were recorded in the books of the Company at their fair value and the form as at appointed date in the books of DSSL and DVISTA.
DSSL and DVISTA being the wholly owned subsidiary and step down wholly owned subsidiary respectively of the Company neither any shares are required to be issued nor any consideration is paid. The Equity share capital, Preference share capital and the carrying value of investment in Equity shares and Preference shares in the books of the Company stands cancelled. Accordingly, the difference of '''' 124.05 million in DVISTA being the deficit between (A) aggregate value of net assets acquired and (B) value of investments cancelled is debited to Goodwill Account and surplus of Rs, 32.08 million in DSSL between (A) aggregate value of net assets acquired and (B) value of investments cancelled is credited to Capital Reserve as under:
# Loan given to subsidiary gets knocked off as per the Scheme of Amalgamation. (Refer Note 40).
* Inter-Corporate Deposits are given as a part of treasury operations of the Company on following terms :
a) All loans are given to unrelated corporate entities.
b) All loans are short term in nature.
c) All the loans are provided for business purposes of respective entities, repayable on demand with prepayment option to the borrower.
9 During the year, Datamatics Global Services GmbH (DGSG), a subsidiary Company along with its subsidiary Datamatics Global Solutions GmbH (DGSOLG) have filed for voluntary winding up / liquidation / de registration procedure on June 15, 2015. This procedure generally takes at least a year. Considering this fact, DGSG along with its subsidiary viz. DGSOLG is currently carrying on its operations prior to closing as contractually / statutorily required. In view of that, appropriate provision for diminution in the value of investments of Rs, 65.66 million has been made which is Exceptional Item.
10 In terms of Section 22 of the Micro, Small and Medium Enterprises Development Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished.
11 As per Companies (Accounting Standards) Rules 2013 issued by the Central Government, in consultation with National Advisory Committee on Accounting Standards (''''NACAS'''') and the relevant provisions of the Companies Act, 2013, to the extent applicable, the carrying value of the asset has been reviewed for impairment of assets and there is no impairment of assets.
12 INTERNATIONAL AND DOMESTIC TRANSFER PRICING
The Management is of the opinion that its international and domestic transactions are at arm''''s length as per the independent accountants report for the year ended March 31, 2015. The Management continues to believe that its international transactions and the specified domestic transactions during the current financial year are at arm''''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expense and that of provision for taxation.
13 CORPORATE SOCIAL RESPONSIBILITY
As per Section 135 of the Companies Act, 2013, a CSR committee has been formed by the Company. The Company is required to spend '''' 6.59 million of which Rs, 1.85 million has been spent on activities specified in Schedule VII of the Companies Act, 2013. The entire amount has been paid during the year.
14 In the year ended March 31, 2015 pursuant to the notification of Schedule II to the Companies Act, 2013, with effect from April 1, 2014, the Company revised the estimated useful life of relevant assets to align the useful life with those specified in Schedule II. Pursuant to the transitional provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of the assets, net of residual value, where the remaining useful life of the asset was determined to be Nil as on April 1, 2014, and adjusted an amount of Rs, 27.40 million (net of deferred tax asset of Rs, 9.27 million) against the opening balance in the Statement of Profit and Loss under Reserves and Surplus.
Consequent to the change in the useful life of the assets, the depreciation expense in the Statement of Profit and Loss for the previous year is higher by Rs, 26.62 million and profit before tax for the year is lower by the like amount.
15 PRIOR PERIOD COMPARATIVE
Previous year figures have been appropriately regrouped / reclassified and rearranged wherever necessary to conform to the current year''''s presentation. Previous year figures do not include the figures of erstwhile DSSL and DVISTA which are amalgamated with the Company with effect from April 1, 2015. Consequently, the comparative figures are not comparable with the figures for the year ended March 31, 2016.(Refer Note 40)
16 Figures in brackets pertains to previous year.