NIIT Technologies

1.  CONTINGENT LIABILITIES: -
 
 a) Guarantees issued by banker outstanding at the end of accounting
 year Rs. 55,230,786/- (Previous Year Rs. 112,364,479/-)
 
 b) Guarantees to bank against lines of credit sanctioned to wholly
 owned overseas subsidiaries Rs.846,672,600/- (Previous Year
 Rs.876,643,900/-).
 
 c) Guarantees on behalf of wholly owned overseas subsidiaries Rs.
 579,132,300/- (Previous Year Rs. 508,119,500/-).
 
 d) Claims against the Company not acknowledged as debts Rs.
 57,091,400/- (Previous Year Rs. 270,115,497/-).
 
 2.  Estimated amount of contracts remaining to be executed on capital
 account (net of advances) not provided for Rs. 361,573,980/- (Previous
 Year Rs. 599,263,721/-).
 
 3.  Micro and Small scale business entities :
 
 There are no micro and small scale enterprises, to which the company
 owes dues, as at 31 March 2009. This information as required to be
 disclosed under the Micro, Small and Medium enterprises Development
 Act, 2006 has been determined to the extent such parties have been
 identifIed on the basis of information available with the Company.
 
 4.  a) Working capital limits of .Rs. 10,000 Lacs (Previous Year Rs.
 10,000 Lacs) are secured by a first charge on the
 
 book debts of the company and by a second charge on movable assets of
 the Company. The Company has not utilized the fund based limit as at
 the year-end (previous year Rs. Nil).
 
 b) Vehicle loans from banks are secured by way of hypothecation of the
 vehicles financed.
 
 5.  Interest received are gross of tax deducted at source of Rs.
 4,724,316/- (Previous Year Rs. 1,522,302/-).
 
 6.  Expenses during the year are net of recoveries towards common
 services from domestic subsidiaries amounting to Rs. 11,223,404/-
 (Previous Year Rs. 2,469,813/-).
 
 7.  The Companys domestic subsidiary NIIT GIS Limited has declared
 dividend of which Rs. 305,378,026/- (Previous Year Rs. 381,539,568/-)
 is receivable by the Company in respect of which dividend distribution
 tax would be paid by the subsidiary. In terms of provisions of
 sub-section 1A of section 115 O of the Income Tax Act, dividend
 distribution tax is payable by the Company on the amount being excess
 of dividend proposed by the Company over the dividend receivable by the
 company from its subsidiary.
 
 8.  The profit on sale of investments includes Rs. 153 Lacs (previous
 year Rs. 45 Lacs) proft on sale of units of mutual funds held as
 investment for a period of more than 12 months.
 
 10% of the turnover and costs of the Company respectively. Accordingly,
 no quantitative information relating to software and hardware traded is
 being given.
 
 c) Revenue includes income from software development and related
 services of Rs 4,985,947,149/- (Previous Year Rs. 4,403,553,334/-).
 
 9. RELATED PARTY TRANSACTIONS AS PER ACCOUNTING STANDARD 18:
 
 A.    Related party relationship where control exists:
 Subsidiaries
 
 1.    NIIT GIS Ltd, India 
 2.    NIIT Smart Serve Ltd, India
 3.    NIIT Technologies Ltd, United Kingdom
 4.    NIIT Technologies BV, Netherlands
 5.    NIIT Technologies NV, Belgium
 6.    NIIT Technologies Pte Limited, Singapore
 7.    NIIT Technologies Ltd, Thailand
 8.    NIIT Technologies Pty Ltd, Australia
 9.    NIIT Technologies KK, Japan
 10.   NIIT Technologies AG, Germany
 11.   NIIT Technologies GmbH, Ostterreich
 12.   NIIT Technologies AG, Schweiz
 13.   NIIT Technologies Inc, USA
 14.   NIIT Smart Serve Limited, United Kingdom (Closed on 26 March 2009)
 15.   ROOM Solutions Limited, United Kingdom
 16.   Softech GmbH
 17.   NIIT Technologies FZ LLC ( Incorporated on 23 Dec. 2008)
 18.   NIIT Technologies Limited, Canada
 
 B.  Other related parties with whom the Company has transacted:
 
 a) Parties of whom the Company is an associate and its subsidiaries:
 
 - NIIT Limited, India (Through its subsidiary, Scantech Evaluation
 Services Ltd, India)
 
 - NIIT Middle East LLC Bahrain
 - NIIT USA Inc
 - Evolve Services Limited
 
 b) Key Managerial Personnel
 
 1) Rajendra S Pawar
 2) Vijay K Thadani
 3) Arvind Thakur
 
 c) Parties in which the Key Managerial Personnel of the Company are
 interested:
 
 - Naya Bazar Novelties Pvt. Ltd., India
 
 d) Joint Venture:
 
 - Adecco NIIT Technologies Private Limited, India
 
 notes:
 
 1.  Figures in parenthesis represent previous years fIgure.
 
 2.  Transactions in purchase of Fixed Assets for the year with;
 
 NIIT Smart Serve Limited Rs. 92.54 Lacs (Previous year Rs.100.57 Lacs)
 NIIT Limited Rs. 19.63 Lacs (Previous year Rs. 1.50 Lacs)
 
 3.  Includes transactions in purchase of goods for the year with; NIIT
 GIS Ltd Rs. Nil (Previous year Rs.10.90 Lacs)
 
 4.  Includes transactions in Sale of Fixed Assets for the year with;
 NIIT Limited Rs. 75.07 Lacs (Previous year Rs. 3.02 Lacs)
 
 5 Includes transactions in Rendering of Services for the year mainly
 with;
 
 *NIIT Technologies Inc USA Rs. 29,744.51 Lacs (Previous year
 Rs.21,133.21 Lacs) *NIIT Technologies Ltd, UK Rs. 10,650.96 Lacs
 (Previous year Rs. 9,570.17 Lacs) NIIT Limited Rs. 87.73 Lacs (Previous
 year Rs.188.84 Lacs) * Includes revenue from revision in rates based on
 independent transfer pricing study.
 
 6 Includes transactions in Receiving of Services for the year mainly
 with; NIIT (Thailand) Ltd Rs. 16.74 Lacs (Previous year Rs.15.80 Lacs)
 NIIT Limited Rs. 39.13 Lacs (Previous year Rs. 51.71 Lacs)
 NIIT Middle East Rs. 34.42 Lacs (Previous year Rs. 390.36 Lacs) NIIT
 Technologies Ltd. Canada Rs. 115.13 Lacs (Previous year Rs. Nil)
 
 7 Includes transactions in recovery of expenses by the company for the
 year mainly with; NIIT GIS Ltd Rs. 119.21 Lacs (Previous year Rs. Nil)
 
 NIIT Smart Serve Limited Rs. 83.59 Lacs (Previous year Rs. Nil)
 NIIT Technologies Ltd, UK Rs.136.91 Lacs (Previous year Rs. 279.68
 Lacs)
 NIIT Limited Rs. 25.02 Lacs (Previous year Rs.189.45 Lacs)
 NIIT Technologies Inc Rs. 186.53 Lacs (Previous year Rs. 477.26 Lacs)
 
 8 Includes transactions in recovery of expenses from the Company for
 the year mainly with; NIIT Smart Serve Limited Rs. 72.69 Lacs (Previous
 year Rs. 58.49 Lacs)
 
 NIIT Limited Rs. 90.22 Lacs (Previous year Rs. 72.21 Lacs) NIIT USA Inc
 Rs. 101.56 Lacs (Previous year Rs. 80.65 Lacs)
 
 9 Includes transactions in Investments made for the year mainly with;
 NIIT Technologies FZ LLC Rs. 136.08 Lacs (Previous year Rs. Nil)
 
 10 Transactions in Loans Given for the year with;
 
 Softech GmbH Rs. 63.90 Lacs (Previous year Rs. 257.60 Lacs)
 
 11 Transactions in loans given received back for the year with; Softech
 GmbH Rs.128.76 Lacs (Previous year Rs. Nil)
 
 12 Transactions in interest received for in the year with;
 
 NIIT Technologies AG, Germany Rs. Nil (Previous year Rs. 12.81 Lacs)
 Softech GmbH Rs. 22.16 Lacs (Previous year Rs.1.66 Lacs)
 
 13 Remuneration of:
 
 Mr. R S Pawar – Rs. 39.39 Lacs (Previous year Rs.110.52 Lacs) Mr.
 Arvind Thakur – Rs.142.07 Lacs (Previous year Rs.146.73 Lacs) Mr. Vijay
 K Thadani – Rs. 8.60 Lacs (Previous year Rs. 7.96 Lacs)
 
 14 Includes transactions in other income for the year mainly with; NIIT
 GIS Limited Rs. 36.06 Lacs (Previous year Rs. 35.26 Lacs) NIIT Smart
 Serve Ltd Rs. 23.87 Lacs (Previous year Rs. 40.75 Lacs) NIIT
 Technologies Ltd, UK Rs. 41.97 Lacs (Previous year Rs. 50.32 Lacs) NIIT
 Technologies Inc USA Rs. 37.95 Lacs (Previous Rs. 71.20 Lacs)
 
 15 Includes transactions in other expenses for the year mainly with;
 NIIT Ltd Rs. Nil (Previous year Rs.105.13 Lacs)
 
 16. The dominant source of risk and returns of the enterprise is
 considered to be the business in which it operates viz – software
 solutions. Being a single business segment Company, no primary segment
 information is being provided. The secondary segment information as per
 Accounting Standard 17 Segment Reporting in relation to the
 geographies is as follows:
 
 9.  LEASES
 
 All operating leases entered into by the Company are cancelable on
 giving a notice of 1 to 3 months. Aggregate expenditure in respect of
 operating lease amounts to Rs. 181,023,298/-(Previous year Rs.
 208,098,109/-).
 
 10.  EMPLOYEE STOCK OPTION PLAN:
 
 (i) The Company established NIIT Technologies Stock Option Plan 2005
 (ESOP 2005) in the year 2005-06 and the same was approved at the Annual
 General Meeting of the Company on 29th July 2004. The plan was set up
 so as to offer and grant for the benefIt of employees of the Company
 and its subsidiaries, who are eligible under Securities Exchange Board
 of India (SEBI) Guidelines (excluding promoters), options of the
 Company in aggregate up to 3,850,000 options under ESOP 2005, in one or
 more tranches, and on such terms and conditions as may be fixed or
 determined by the Board in accordance with the provisions of law or
 guidelines issued by the relevant authorities in this regard. As per
 the plan each option is exercisable for one equity share of face value
 of Rs. 10 each fully paid up on payment to the Company for such shares
 at a price to be determined in accordance with ESOP 2005. SEBI has
 issued the Employees Stock Option scheme and Employee Stock Purchase
 Scheme Guideline, 1999 which is applicable to the above ESOP 2005.
 
 notes:
 
 1.  Pre Bonus figures converted into post bonus.
 
 2.  During the year, the Compensations/ Remuneration Committee at its
 meeting held on July 28, 2008 has approved issue of 477,750 options
 (Grant-IV) out of the option under ESOP 2005, to Senior Managerial
 Personnel of the Company / Subsidiaries.
 
 The assumptions used by the independent valuer for determination of
 fair value as per the Black & Scholes model is as follows:
 
 a) Market price considered is the latest available closing price, prior
 to the date of the grant.
 
 b) Exercise price is the price payable by the employees for exercising
 the option.
 
 c) As the life of the option is greater than one year there is
 considerable difficulty in estimating the amount and time of future
 dividend payouts with certainty, hence future dividend payout have not
 been incorporated in the valuation analysis.
 
 d) Volatility - Variance in the stock price is considered as 10% (for
 Grant I) , 51.13% (for Grant III) and 65.62% (for Grant IV) is based on
 historical volatility in the share price movement of the Company and
 four other comparable companies.
 
 e) Average life of the options is considered to be 2.5 Years (for all
 the Grants).
 
 f) Risk less interest rate has been assumed at 7% (Grant I) and 7.93 %
 (Grant III) and 9.24% (Grant IV) based on long term Government bonds of
 ten year residual maturity.
 
 11.  During the year, the Company granted a loan of Rs. 2,000 Lacs
 (total loan outstanding as on March 31, 2009- Rs. 2,000 Lacs) at 12%
 p.a. to NIITian Welfare Trust ( The Trust ) which has been formed for
 the purpose of providing welfare benefits to the employees of the
 Company and that of NIIT Limited and their subsidiaries. The trust has
 primarily invested the amount borrowed in equity shares of the Company
 and that of NIIT Limited. Based on the closing price of shares as at
 25th May 2009, there is a surplus of Rs.1,398 Lacs in the Trust.
 
 12.  Rent expenses are net of input service tax credit of Rs. 170 Lacs,
 recognized during the year relating to previous year.
 
 13.  The Company invested a total of Rs. 5,000 Lacs from financial year
 2002-03 till 2006-07 in the equity share capital in NIIT SmartServe
 Limited (NSS) , a wholly owned subsidiary involved in Business
 Process Management.  As at 31 March 2009, the net worth of NSS is Rs.
 1,583 Lacs. NSS is strategically important as its capability allows the
 Company to offer a complete end to end IT solution to its Client
 enhancing the scope of offerings. Though NSS has made net profit during
 the year yet taking cognizance of present economic environment as a
 prudent and conservative measure a provision amounting to Rs. 2,500
 Lacs (included in expeditures-other than for the quarter and year ended
 31 March 2009) has been charged to the profit and loss account of the
 Company towards the notional diminution in the value of the investment
 based on valuation carried out by the management.
 
 14.  Previous year figures have been regrouped / recast wherever
 necessary to conform to current years classifcation.