Aptech

1.  Estimated amounts of contracts remaining to be executed on capital
 account and not provided for (Net of Advances) Rs.  594,460/- (Previous
 year: Rs. 8,457,076/-).
 
 2.  Contingent Liabilities in respect of:
 
 No.    Particulars                     As at 31.12.07    As at 31.12.06
 
 (a) Counter Guarantees to banks for 
 projects                                  46,097,738       77,867,842
 
 (b) Claims against the Company not 
 acknowledged as debts                    175,390,629      134,364,265
 
 (c) Corporate Guarantee given to the 
 bank/others on behalf of wholly               80,655       23,746,793 
 owned Subsidiary Company
 
 (d) Contract for subscription of shares 
 Subsidiary Company                                 -       50,000,132
 
 3.  a) 3,600,000 convertible warrants were allotted on 28th October,
 2005, to M/s. Aptech Investments at a price of Rs.56/- per Warrant.
 Each warrant was convertible at the sole option of the holder into one
 fully paid equity share of the Company, any time before the expiry of
 18 months from its allotment. These warrants have been fully converted
 to Equity Shares on receipt of the balance monies in Feb’07.
 Consequently, Rs. 36,000,000/- has been added to Equity Share Capital
 and Rs. 165,600,000/- in Securities Premium Account (Refer Schedule 2).
 
 b) 4,712,500 convertible warrants were allotted on 1st October, 2006 to
 the promoter group at a price of Rs.113/ per Warrant on receipt of
 Rs.13/ per warrant amounting to Rs.61,262,500/- as required by SEBI
 Preferential issue guidelines. Each warrant is convertible at the sole
 option of the holder into one fully paid equity share of the Company,
 any time before the expiry of 18 months from its allotment. 2,050,000
 warrants have been converted on receipt of balance amount of Rs.100/-
 per warrant during the year. Hence, Rs.20,500,000/- has been added to
 Equity Share Capital and Rs. 211,150,000/- has been added to Securities
 Premium. Consequently, the balance in warrants stands reduced by Rs.
 26,650,000/. (Refer Schedule 2).
 
 The above proceeds were utilized towards liquidation of borrowings from
 banks, for growth and working capital purposes in the Company as well
 as newly acquired subsidiaries including process automation and towards
 expansion of new own centers in strategic metros.
 
 4.  Pursuant to the provisions of Section 103(4) of the Companies Act,
 1956, the Company has vide order dated 27th April, 2007 of the High
 Court, Bombay received sanction for reduction/utilization of the
 Securities Premium Account to the extent of Rs.388,902,555/- for
 adjusting the debit balance in the Profit & Loss Account of the
 Company. Accordingly said amount has been reduced from the Securities
 Premium account on 29th June, 2007.
 
 5.  During the year, some of the subsidiaries of the Company incurred
 losses and/on have accumulated losses as at the year-end.
 
 a) In case of certain subsidiaries, the Company has investments in the
 equity shares of Rs.133,045,387/- (Previous year Rs.43,000,525/-),
 Loans and Advances of Rs.157,493,168/- (Previous year Rs.
 100,874,059/-) including advances against share application monies Rs.
 NIL (Previous year Rs. 7,045,381/-) as at the year end. The said
 subsidiaries have been set up in recent years. Considering the
 strategic long-term nature of the investment and the business plans of
 the said subsidiaries, in the opinion of the management, the decline in
 the book value of the investments is temporary and the investments,
 loans/advances and debts will be recoverable, requiring no provision.
 
 b) In case of certain other subsidiaries the Company has investments in
 equity shares of Rs. 245,103,427/- (Previous year Rs.  88,866,437/-),
 Loans and Advances of Rs.286,334,384/- (Previous year Rs.
 213,685,040/-) including advance towards share application monies of
 Rs. NIL (Previous year Rs.156,236,990/-) at the year end. Considering
 the future potential and recoverability, the Company has written back
 Rs.11,055,000/-,being the profits earned during the year in one of the
 subsidiary out of the diminution in the value of the investments of
 Rs.66,254,855/- provided in earlier years. The Company is continuing to
 carry balance of Rs.55,199,855/- as provision for diminution in value
 of investments and Rs.160,023,144/- towards Provisions for doubtful
 advances. In the opinion of the management, the balance amounts are
 recoverable, requiring no provision.
 
 6.  The Company cannot sell, transfer, pledge, hypothecate, encumber or
 create any third party interest in shares of Beijing Aptech Beida Jade
 Bird Information Technology Company Limited (China) except as mentioned
 in joint venture agreement dated 16th February, 2000 and the Articles
 of Association of the said company.
 
 7.  The Company and Asian Institute of Communication & Research (AICAR)
 have formed a strategic alliance to together create premier educational
 institute of world-class quality. The AICAR Business School will be a
 world-class Residential Institute offering Graduate Students and
 Corporate the opportunity to enhance skills in the research and
 development of management and communication practices of a standard
 unparalleled in most other institutes.
 
 Two-year full time Post Graduate Diploma in Management offered by AICAR
 Business School is approved by All India Council of Technical
 Education, New Delhi and is affiliated to the Directorate of Technical
 Education Board, Government of Maharashtra.
 
 AICAR offers various general & industry specific Management Development
 Programs (MDPs). Its infrastructure is also used for Aptech’s “Train
 The Trainers” requirements.
 
 AICAR Business School was setup in 2002 on a 33 acres of land at
 foothills of Matheran. It’s Wi-Fi enabled campus has air-condi- tioned
 classrooms, well stocked library, Computer Lab, spacious cafeteria,
 Gymnasium, swimming pool, and a 240 bed modern hostel.
 
 The institute plans to offer a full range of Management and Technology
 programs and acquire status of a University.
 
 The Company has granted as advance of Rs. 43,100,000/- at an interest
 rate of 8% per annum during the year to AICAR.
 
 8.  During the earlier years, the Company had formed Aptech Education
 Society in Chattisgarh, which established a private university viz.
 Aptech University.
 
 The Company being the sponsor had advanced interest free unsecured
 loans/advances to the society which were fully provided for in the
 earlier years.
 
 The Aptech University was rendered null and void by the Supreme Court
 vide its order dated 11th February, 2005 since the manner in which the
 private universities were created by the state of Chattisgarh was not
 strictly in accordance with the technicalities of passing the law
 through state legislature. Although, appropriate legal steps, on behalf
 of Society, had been taken, the Company considering the nature of the
 issue had decided not to pursue the matter. The students earlier
 enrolled in the Aptech University have been either transferred to other
 reputed Universities or have been otherwise settled by way of repayment
 of the fees earlier paid. The society is in the process of being
 dissolved.
 
 During the year, a net amount of Rs. NIL (Previous year Rs. 828,000/-)
 recovered from the Society has been reflected as excep- tional item in
 the Profit and loss account.
 
 9.  Aptech Training and Education Trust was setup for promoting a
 college in the state of Tamilnadu. The required clearances were not
 obtained/received from the Government and the connected agencies and as
 a result, the college could not commence its functioning. The advances
 made by the Company to the trust for setting up the infrastructure in
 the college of Rs. 9,123,807/-, are fully provided for in the books of
 account.
 
 10.  Sundry Debtors and Sundry Creditors and some bank balances are
 subject to confirmation & reconciliation.
 
 11.  The debtors are net of Rs. 128,345,769/- (Previous year Rs.
 174,597,751/-) being the amounts payable to franchisees/vendors for
 services rendered to Institutional Clients, since as per the contract
 terms the same are payable only after the recovery from Institutional
 clients.
 
 12.  During the year, an institutional project being executed by the
 Company, has held back Rs.11,706,819/- (Previous year Rs.
 75,161,110/-) aggregating to Rs.148,355,251/- (Previous year
 Rs.136,648,432/-) out of the dues receivable by the Company towards
 certain alleged non-fulfillment of the Contract terms without giving
 the requisite details for many of the items. The Company is in
 correspondence with the client to obtain details and resolve the
 difference.
 
 Pending the final outcome of such discussions, the Company has
 recovered an amount of Rs. 98,03,000/- (Previous year Rs.  9,138,137/-)
 aggregating to Rs.18,941,137/-, has provided as rebate/provision for
 doubtful debts in the previous years of Rs.62,000,000/- and the balance
 of Rs.67,414,114/- (Previous year Rs.41,022,973/-) has been reflected
 under Contingent Li- abilities as stated in note 2 above.
 
 Further the Company has to recover since long Rs. 45,825,927/-
 (Previous year Rs. 45,825,927/-) from another institutional project
 client [net of Rs. 41,307,817/- (Previous year Rs.45,250,208/-) payable
 to Business Partner only on recovery from the project client ]. As a
 measure of caution, the Company had provided Rs. 8,700,000/- in the
 earlier years. The balance is considered recoverable by the management.
 
 13. As per the requirement of Section 22 of the Micro, Small and Medium
 Enterprises Development Act, 2006 the Company is still in the process
 of obtaining the details suppliers covered by the Act and hence, the
 disclosure required under the said Act are not given.
 
 14.  The Deferred Tax Asset, on unabsorbed losses and depreciation,
 computed in accordance with AS-22 “Accounting for Taxes on Income”, has
 not been recognized in the books as a matter of prudence.