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Moneycontrol.com India | Notes to Account > Computers - Software Medium/Small > Notes to Account from Logix Microsystems - BSE: 532341, NSE: LOGIXMICRO
Logix Microsystems
BSE: 532341|NSE: LOGIXMICRO|ISIN: INE848A01014|SECTOR: Computers - Software Medium/Small
Apr 17, 13:27
, 16:01
VOLUME 4,371
Mar 12
Notes to Accounts Year End : Mar '13
1.1 Turnover is stated net of Sales-tax, Cess, Surcharge, Service tax
 and Sales Returns.
 1.2 (a) Contingent Liabilities (to the extent of which not provided
 for)                                                (Amount in Rs.)
 Particulars                       Current Year       Previous Year
 Money for which the company 
 is contingently liable:
 i) Performance Guarantees 
 (STPI - customs duty)                   70,000            499,836
 ii) Claims against the 
 company, not acknowledged 
 as debts :
 a) Claims by vendors, etc                 -             1,383,300
 b) There are certain claims made against the Company by former
 employees, which are a subject matter of arbitration proceedings. In
 the view of the management of the Company these claims are not tenable.
 No provision has been made for such claims pending completion of legal
 proceedings as the amount of claims are currently not ascertainable not
 Quantified Not Quantified
 c) Contingent liability in respect of claim in respect of Service Tax
 on software sales made by the company, the amount of which is not
 quantified. Not Quantified Not Quantified
 iii) Other money for which the company is contingently liable:
 Service Tax not charged on rental income and interest thereon for FY
 2008-09, 2009-10 and partly for FY 2010-11 based on a judgment by
 Honourable Delhi High Court - 3,391,333
 * The company does not envisage any liability on account of a back to
 back arrangement with the suppliers for any such claims.
 1.3 During the financial year 1999-2000, the company had acquired
 100,000 equity shares of Singapore Dollars 1 each in Midrange Software
 Pte. Limited (formerly Logix Microsystems (S) Pte. Ltd.,) Singapore.
 The remittance towards the same has not been made pending requisite
 1.4 During the financial year 2011-12, die Company has made an
 additional investment of Rs. 682.34 Lakhs (USD 15,20,000) in the form
 of equity in its subsidiary Logix Americas Inc., which is the holding
 company for the US subsidiaries. The share allotment against this as
 also portion of previous investments same is pending as at the Balance
 Sheet and reflected as ''Share Application Money
 * pending allotment''. The investment in Logix Americas Inc., has
 in turn been invested bv way ot equity and loans in Homestar Systems
 Inc., I Ioniestar LLC, Izmo CRM and IzmoMedia, the step-down
 subsidiaries ot Logix Americas Inc.
 1.5 The balances in the share refund account and the related bank
 account was pending reconciliation. The unreconciled difference amounts
 to Rs.5.12 lakhs.
 1.6 In accordance with Section 205C of Companies Act, 1956, Share
 Warrant Application money, pending allotment and due to refund
 amounting to Rs.3.30 lakhs remaining unpaid since 29th September 2007
 will be transferred to Investor Education and Protection Fund after the
 completion of 7 years from the date of payment tailing due.
 The above amounts do not include Gratuity and Leave encashment benefits
 as the provisions for these are determined for the Company as a whole,
 and therefore separate amounts for the Directors are not available.
 b) Directors remuneration tor the current year includes a sum of
 Rs.31.96 Lakhs paid to the managing director in accordance with the
 limits approved by the shareholders at the AGM held on 29th September
 2010 but in excess of the limits prescribed under the Companies Act.
 The similar excess remuneration for the previous periods (from FY
 2007-08 onwards) amounts to Rs. 149.42 lacs. The Company had applied
 for the requisite approval trom the Central Government which had not
 been granted, but the management is confident of obtaining the approval
 and is in the process of filing revised application for the same.
 Pending outcome of the same, these amounts continue to be considered as
 an expense.
 1.7 The Company''s Singapore subsidiary , Midrange Software Pte Ltd
 carries an accumulated provision of SGD 270,000 (Previous year: SGD
 216,000), in their books towards director''s remuneration payable in
 respect of services rendered by Mr. Sanjay Soni. As per the
 understanding, the same would be paid to M/s. Logix Microsystems Ltd,
 the holding Company in accordance with Sec 314 (1) (ii) of the
 Companies Act.
 1.8 Current Value of subsidiaries investment
 Investment in Midrange Software Pte. Ltd.,
 The Company has invested an amount of SGD 1,904,915 in Midrange
 Software Pvt Ltd, Singapore. Midrange has incurred losses during recent
 years and has an accumulated loss of SGD 29,604. However, based on the
 management''s perception of the growth prospects and the performance
 of Midrange, in the opinion of the management there is no permanent
 diminution in value of the investment.
 Investment in Logix Americas Inc.
 The Company has invested an amount of USD 32,848,100 in its subsidiary
 Logix Americas Inc till 31st March 2013. which is the holding company
 for the operating companies i.e.Homestar, Izmo CRM and IzmoMedia, the
 subsidiaries of Logix Americas
 Inc. The management had obtained an independent valuation of is
 operating enterprises in the US. Based on the same and further based on
 the management''s view on the prospects in the region, the management
 does not envisage any decline in the value of the investments and
 consider it appropriate to have the carrying value at par in respect of
 its investments in Logix America Inc as well. Investment in Izmo Europe
 BVBA Belgium The Company has invested an amount of ELTRO 1,359,093 in
 its subsidiary Izmo Europe IVBA Belgium till 31st March 2013. Izmo
 Europe BVBA has incurred losses during the recent years and has an
 accumulated loss of EURO 1,597,646. However, based on the
 management''s perception of the growth prospects and the performance
 of Izmo Europe, in the opinion of the management there is no permanent
 diminution in value of the investment.
 1.9 List of Related Parties
 a) Enterprises Controlled by the Company
 Midrange Software Pte Ltd, Singapore '' Wholly Owned Subsidiary
 (formerly Logix Microsystems (S) Pte. Ltd. Singapore)
 Logix Americas Inc., LISA Wholly Owned Subsidiary
 Izmo Europe BVBA Wholly Owned Subsidiary
 Homestar Systems Inc. LISA 98% held by M/s. Logix Americas Inc., USA
 Homestar LLC., LISA Wholly Owned Subsidiary of M/s. Homestar Systems
 Inc., LISA
 Carazoo Online Solutions Pvt Ltd.  Subsidiary of M/s. Logix
 Microsystems Ltd ( 49% of Equity Shares)
 h ) Key Management Personnel Mr. Sanjav Soni Mr. Tej Soni
 c) Enterprises in which Key Management personnel/their relatives have a
 significant influence Aries Gases Private Limited Deep Heritage
 Deep Oxygen Private Limited, India   Deep Investment Advisory
 Bangalore Private Limited Si2 Microsystems Pvt Ltd., India Digipro
 Systems Private Limited
 Digipro Design Automation & Marketing Pvt Ltd., *
 Deep Engineers & Consultants SL Business Center Carazoo Online
 Solutions Pvt Ltd.
 1.10 During the current financial year, the global recession continued
 to impact businesses across geographies. In addition to this, US auto
 industry in particular, experienced a severe downturn resulting in
 bankruptcy and closure of several automobile dealers who happened to be
 the clients of Homestar Systems Inc. In this backdrop, the Company was
 approached by its subsidiary Homestar Systems Inc to offer a special
 rebate considering the exceptional circumstances observed in the US
 automobile industry due to the recessionary trend. Consequent to
 commercial negotiations, it has been accepted mutually to offer an
 overall rebate of Rs. 389.97 Lakhs (USD 714,228). This is non recurring
 and largely exceptional in nature and accordingly, reflected as such.
 In terms of the Guidance note on accounting for credit available in
 respect of Minimum Alternative Tax(MAT) under the Income Tax Act 1961,
 issued by the ICAI, the excess of MAT over normal current tax payable
 has been recognized as an asset by way of credit to the profit & loss
 account as MAT credit entitlement. The MAT credit charge ot Rs.15.36
 lakhs as appearing in the statement of Profit and Loss is after netting
 off Rs.21.53 lakhs, written off subsequent to the completion of Tax
 Assessment for FY 2006-07 and as per the Assessment order issued by the
 Tax Authorities.
 1.11 Segment Reporting Primary Segments
 Based on the guiding principles in Accounting Standard on Segment
 Reporting issued by the Institute of Chartered Accountants of India,
 classification by geographic segment are the primary reportable
 segments, comprising of:
 Segmental Capital Employed: Assets and Liabilities contracted have not
 been identified to any of the reportable segments, as the assets are
 used interchangeably between segments and it is not practicable to
 reasonably allocate the liabilities to individual segments. Accordingly
 no disclosure relating to segments assets and liabilities are made.  24
 1.12 Defined Benefit Plans
 a.  Gratuity
 b.  Leave Encashment
 The disclosure as per the revised AS-15 are as follows:
 (b) The fair value of the plan assets is NIL since employee benefits
 plans are wholly unfunded as on March 31,2013
 (f) The discount rate is based on the market yield available on
 Government bonds at the accounting date with a term that matches the
 (g) The estimates of future salary increase considered in the actuarial
 valuation takes into account factors like inflation, seniority,
 promotion and other relevant factors.
 (h) the employees are assumed to retire at the age of 60 years
 (i) The mortality rate considered are as per the published rates in the
 LIC (1994-96) mortality tables.
 1.13 Transfer Pricing
 The company derives a significant portion of its revenue (Rs. 1450.03
 lakhs) from services, rendered to its subsidiary M/s. Homestar LLC,USA,
 M/s.Homestar Systems Inc &M/s Midrange Software Pte Ltd., Singapore.
 The revenue in this regard is recognized on the basis of a services
 agreement with the subsidiary or Purchase Orders raised by the
 The Company has carried out a Transfer pricing study during the
 previous year based on which the Company''s management is of the
 opinion that these international transactions are at arm''s length and
 believes that the transfer pricing legislation will not have any impact
 on the Financial statements for the year ended March 2013, particularly
 on their amount of tax expense and that of the provision for taxation.
 1.14 Balances of Sundry Debtors, Loans & Advances are subject to
 reconciliation and confirmation.
 1.15 Reversal of interest receivable as doubtful : This includes ICD
 related receivable of Rs.230.04 lacs which is secured against pledge of
 shares, which as at the Balance Sheet date had a market value of Rs.
 29.94 lacs which was lower than the outstanding balance. The management
 is of the view that interest is no longer receivable accordingly
 provision towards possible non-recovery has been made in respect of the
 1.16 All figures have been rounded-off to the nearest Rupee. Previous
 Year''s figures have been re-grouped/reclassified wherever necessary
 to conform to the current year presentation.
Source : Dion Global Solutions Limited
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