ORG Informatics

1.  Contingent liabilities not provided for:
 
 a) Bank Guarantees given in respect of projects undertaken by the
 company and outstanding TRs.  281,684 (Previous Year TRs. 246,517)
 
 b) Counter guarantees given to a bank in respect of various projects
 undertaken by the subsidiary company and outstanding TRs. 55,792
 (Previous year TRs. 21,115).
 
 c) Claims against the Company not acknowledged as debts:
 
 Income Tax Matters - TRs.  29,616 (Previous year TRs. 18,093)
 
 Sales Tax Matters - TRs. Nil (Previous year TRs. 357)
 
 d) The Company had received during earlier years equipment worth TRs.
 7,377 (Previous year TRs 7,377) on loan from eHuset A/S, Denmark for
 its software facilities at Bangalore. The equipment is to be returned
 on completion of specific projects undertaken on behalf of eHuset A/S,
 Denmark. The Company has given a bond for TRs 30,000 (Previous
 yearTRs.30,000) to the customs authorities against the import of the
 aforesaid equipment.
 
 e) Capital Commitment for purchase of Land (net of advances) TRs.
 12,500 (Previous year TRs.12,500).The Company had, in terms of
 Memorandum of Understanding dated 30th day of March, 2007, with a view
 to providing additional space for its expanding activities, decided to
 acquire 2,50,000 square meters of land (at Baroda) at a consideration
 at TRs 25,000 from M/s Ambalal Sarabhai Enterprises Limited (ASEL, one
 of its group Companies). The consideration was to be settled as advance
 TRs. 12,500 and the balance payable on or before execution of the deed
 of conveyance. Meanwhile one of the shareholders of ASEL has filed a
 petition before the Company Law Board under sections 295,397, 398, 399,
 and 406 of the Companies Act, 1956 wherein the company has been made a
 party and had prayed for relief as sought for in the recitals (viz for
 cancellation / setting aside the agreement and / or the arrangement
 referred to above). Pending clearance / finality in the matter, the
 amount paid continues to appear under capital work in progress and the
 balance TRs. 12,500 shown above.
 
 2.  Employee Share -based Payment Plans
 
 - The Company follows the fair value method of accounting as per
 Guidance Note issued by The Institute of Chartered Accountants of India
 on Employee Share-based Payments. As per the said method, the fair
 value of the share is worked out by an independent valuer on the date
 of grant.  Accordingly, the difference between the fair value and the
 exercise price of the option has been treated as Deferred Stock
 Compensation expenses to be amortised over the period of vesting.
 
 - In case of Employee Stock Option Scheme -I, the grant price of the
 option of Rs.10 was greater than the fair value of the options on the
 date of the grant (measured independently by a value), consequently no
 compensation expense was required to be recorded.
 
 3. (i) The shareholders of the Company at its Annual General Meeting
 held on August 20, 2007 and at its Extraordinary General Meeting held
 on November 6, 2007 authorized the Board of Directors of the company to
 create, offer, issue and allot Foreign Currency Convertible Bonds
 (FCCBs) and / or Global Depository Receipts (GDRs) and / or American
 Depository Receipts (ADRs) and/or other Depository Receipts (DRs) and /
 or securities representing equity shares upto an aggregate amount not
 exceeding US $ 35 million or equivalent amount in Indian or any other
 currency.
 
 (ii) Pursuant to the above approval, the Company has issued and
 allotted 160, 2.5% unsecured Foreign Currency Convertible Bonds
 (FCCBs) of the face value of US $ 100,000 each aggregating to US $ 16
 Million.  As per terms of the issue the holder has an option to convert
 the FCCBs into equity shares at an initial conversion price of Rs.
 130.00 per share with a fixed rate of exchange on conversion of Rs.
 39.33 to US $ 1 from the issue date until October 14, 2012. The
 conversion price is subject to certain adjustments.  Further under
 certain conditions the bondholder has the option for early redemption
 in whole but not in part.  Unless previously converted, redeemed or
 purchased and cancelled, the company will redeem the bonds on November
 14, 2012.
 
 (iii) Redemption premium payable on unsecured Foreign Currency
 Convertible Bonds (FCCBs) is provided as under
 
                                             (TRs.) 
 
 Opening Balance                                NIL
 Add: Provision for the year *               11,896
 Closing Balance                             11,896
 
 * From the date of issue of bonds till March 31, 2008.
 
 (iv) The company has, in terms of provisions of Section 117C of the
 Companies Act, 1956, created a Foreign Currency Convertible Bond
 Redemption Reserve Account and transferred TRs. 31,976 to the said
 account during the year.
 
 4. Pursuant to the approval of the Board of Directors and Shareholders
 vide meeting held on 27.08.2007 and 06.11.2007 respectively, the
 company had acquired 61500 shares in Belgium Satellite Service Company
 (BSS) in Belgium. Further the company had, remitted to the said Belgium
 Company, out of the funds raised through FCCBs during the year, a sum
 of TRs 591,796 for acquiring running business and assets. The amount
 advanced is to be settled by issue of shares by the company which is
 pending to the extent of TRs 588,256.  Pending issue / allotment of
 shares, the amount has been disclosed under Share Application Money.
 
 5.  Pursuant to the approval of Board of Directors at their board
 meeting held on December 22, 2006, the Company during the year 2006-07
 acquired 100% shareholding in M/s Unified Technologies (Pvt) Ltd for a
 consideration of TRs. 490,000. The agreed consideration was to be
 settled as under:
 
 a) TRs 161,700 to be paid in cash by the company;
 
 b) TRs. 161,700 to be settled by allotment of 893,370 equity shares of
 face value of Rs. 10 each of the company at a premium of Rs. 171 per
 share;
 
 c) The balance consideration of TRs. 166,600 was to be paid by the
 company based on future earn outs of Unified Technologies (Pvt) Limited
 as mentioned in the Shareholding purchase agreement between the
 shareholders of Unified Technologies Private Limited and ORG
 Informatics Limited. Pending achievement of the specified milestone,
 the amount of TRs 166,600 continues to be shown as a liability.
 
 6.  a) Balance with banks includes TRs 482.63 (US$ 12,074.83) in
 Standard Chartered Bank, Afghanistan for which certificate of
 confirmation from the bankers remains to be received.
 
 b) Inventories include slow moving / non moving stores and spares items
 valued at TRs 25,560 (Previous Year TRs 25,560) which have not moved
 over the past one year. No provision for fall in the value has been
 considered necessary as the management is of the view that keeping in
 view the market demands and the needs of the customers, in this type of
 the business, it has to carry certain inventory which moves slowly.
 
 7.  a) The Company was awarded a large order in respect of Convergent
 Billing Project of MTNL by Bharat Electronics Ltd. ( BEL) in March 2006
 consisting of Supplies and Services which, inter - alia, included
 Installation and Commissioning, Facility Management, Print Bureau and
 AMC.
 
 The company had, during 2006-07, completed the entire Supply portion of
 the said order. However, there were certain delays in execution of the
 Order for reasons beyond the control of the company. In terms of the
 purchase order, in the event of any delay in the supply of material to
 MTNL, liquidated damages (LD) to the extent of 12% could be imposed by
 BEL on the Company, on the total supply value, if MTNL imposes LD on
 BEL. In order to ensure that the company does not get exposed to such
 Liquidated Damages, the Company has entered into back to back
 agreements for liquidated damages with its vendors for the said
 supplies and in terms thereof withheld payments amounting to TRs
 2,28,180 to such vendors.
 
 As at the year end the company has a balance of receivables from BEL
 amounting to TRs 5,17,852.  BEL has however confirmed a balance of TRs
 40,906 as payable to the company. The difference of TRs 4,76,946
 remaining unconfirmed has arisen on account of LD provisionally
 withheld by BEL amounting to TRs 2,51,736 and TRs. 2,25,210 on account
 of outstanding invoices for supply and services not accounted for by
 BEL.
 
 Considering the circumstances under which the supplies got delayed, the
 company feels confident of obtaining a waiver of the said provisional
 liquidated damages from BEL and consequently the said dues are
 considered good and recoverable.
 
 b) The company has to receive a sum of TRs.26,827 (Previous year
 TRs.22,675) from a company under the same management for supplies made
 in the earlier years which are overdue. However, keeping in view the
 long term relationship with the said company, the above referred amount
 has been considered good of recovery by the management.
 
 c) Sundry Debtors (other than those mentioned in (a) & (b) above)
 exceeding six months includes TRs.  23,339 which are coming for over
 three years. The Management is of the view that the amounts will be
 realized in due course of time and steps in this direction have already
 been taken. Accordingly no provision for non recovery of these amounts,
 if any, is considered necessary at this stage.
 
 8.  Advances recoverable in cash or kind or for value to be received
 include TRs 5,473 pertaining to CENVAT recoverable not adjusted during
 the financial year 2007- 08. The management is of the view that amount
 will be available for set off in 2008-09 and hence good of recovery.
 
 9.  Plant and Machinery includes a server costing TRs 8,622 (having a
 WDV as on 31.03.08 TRs. 6,842) which has been dismantled during the
 year. No impairment loss, however, is presently considered since the
 management is exploring an alternative usage for the said machine.
 
 10.  In compliance with Accounting Standard 22 - Accounting for Taxes
 on Income, the company has recognized deferred tax charge for the year,
 amounting to TRs.  7,179 (Previous year TRs. 14,118) in the profit and
 loss account.
 
 The breakup of deferred tax asset / liability into major components as
 at the year end based on tax effect of timing differences is as under:
 
 11.  Earning per Share (AS - 20):
 
 The basic earnings per share is computed by dividing the net profit
 attributable to equity shareholders for the year by the weighted
 average number of equity shares outstanding during the year. Diluted
 earnings per share are computed using the weighted average number of
 equity shares and also the weighted average number of equity shares
 that could have been issued on the conversion of all dilutive potential
 equity shares. The dilutive potential equity shares are adjusted for
 the proceeds receivable, had the shares been actually issued at fair
 value.
 
 12.  Operating Leases (AS -19)
 
 The company has entered into cancelable lease transactions during the
 current financial year mainly for leasing of office premises and
 company leased accommodation for its employees for period up to three
 years (with the option to extend for a further period of six
 years).Terms of lease includes terms of renewal, increase in rents in
 future periods and terms of cancellation.  The Operating lease payments
 recognized in the Profit and Loss account amounts to TRs.4,280 (
 Previous Year TRs. 4,590).
 
 13. There were no dues payable to Small Scale Industrial Undertakings
 as at March 31, 2008. This has been determined on the basis of
 information available with the company and relied upon by auditors. The
 company has not received any intimation from the suppliers regarding
 their status under the Micro, Small and Medium Enterprise Development
 Act, 2006 and therefore no such disclosure under the said Act is
 considered necessary.
 
 14.  In respect of amounts as mentioned under Section 205C of the
 Companies Act, 1956, there were no dues required to be credited to the
 Investor Education and Protection Fund as on March 31, 2008.
 
 15.  Till last year, Guarantee Commission / Letter of Credit opening
 charges were charged off when paid, without any carry forward. In the
 current year however, it has been decided to apportion such charges
 over the period of Guarantee / Letter of Credit. This change in the
 basis of accounting for Bank Charges has resulted in a reduced charge
 of TRs 1,778 in that account with resultant impact in the Profit for
 the year.
 
 16.  Balances standing to the debit / credit in the Parties Account are
 as per the books only. Confirmations have been asked for from parties
 but these have been responded to in a few cases only.
 
 17. Previous years figures have been regrouped / rearranged, wherever
 necessary, to conform to current years classification.