Zicom Security Systems

(Amount in Rupees)
 Particulars                               March 31, 2009 March 31, 2008
 
 1.  Contingent liabilities not provided 
 for in respect of:
 
 a.  Letters of Credit by Bank                 44,080,084    16,632,315
 b.  Guarantees issued by Bank (Gross)         66,855,016    50,030,516
 c.  Corporate Guarantee [Operative Rs. 
 959,750,000 (P. Y. Rs. 200,000,000)]       1,639,750,000   200,000,000
 d.  Estimated amount of contracts remaining 
 to be executed on capital account
 and not provided for (net of advances)               Nil    22,500,000
 e.  Sales Tax Matters                            823,601     1,968,535
 f.  In respect of Borrowing by Employees, 
 where Company is co-applicant                    304,725     1,194,304
 g.  Factoring of Receivables                 131,623,398,  116,712,926 
 h.  Claim Lodged by Customers Not 
 Acknowledged as Debt                             698,990           Nil
 
 2.  Scheme of Arrangement
 
 In the previous year ended on March 31, 2008, the Company, under the
 Scheme of Arrangement, had hived off the Consumer Service Group.
 
 A. Under a Scheme of Arrangement approved by Honable Bombay High Court
 under Sections 391 and 394 read with Sections 78 and 100 of the
 Companies Act, 1956, between the Company and Zicom Retail Products
 Private Limited (formerly known as Zicom Global Security Private
 Limited) the Consumer Service Group (CSG) Business of Company had
 been vested with Zicom Retail Products Private Limited retrospectively
 from April 1, 2007 (the appointed date).
 
 The CSG Business consisted of retailing of various electronic security
 products and services.
 
 All assets and liabilities pertaining to said business have been
 transferred to Zicom Retail Products Private Limited in accordance with
 Scheme of Arrangement.
 
 The said Scheme of Arrangement became effective from January 2, 2008
 upon which:
 
 a.  The CSG Business together with all related assets and liabilities
 were deemed to have been vested and transferred to the Zicom Retail
 Products Private Limited with effect from April 1, 2007.
 
 b.  The Business of the CSG was deemed to have carried out by the
 Company, in trust for the Zicom Retail Products Private Limited upto
 the date of transfer i.e. February 29, 2008.
 
 c.  The said transfer and vesting of the business and its assets were
 deemed to be on a going concern basis. The fixed assets were
 transferred at fair market value as on April 1, 2007.
 
 d.  The accounting treatment and recognition of the above was done in
 accordance with the Scheme of Arrangement.
 
 Accordingly, these financial statements have been prepared after
 excluding results of activities carried out by the Company in trust for
 the Zicom Retail Products Private Limited from April 1, 2007 to
 February 29, 2008 i.e. the date of actual transfer.
 
 B.  Fixed Assets transferred to and vested with the Zicom Retail
 Products Private Limited, pursuant to the Scheme of Arrangement were
 recognized at their fair market values, and the difference of Rupees
 76,002,317/- net of deferred tax liability, between book value and fair
 market value as on April 1, 2007 have been reduced from Securities
 Premium Account in the previous year.
 
 C.  As per the Scheme of Arrangement approved by the Honable Bombay
 High Court, the unrealizable Assets/Debtors pertaining to remaining
 business of the Company, amounting to Rupees 115,983,235/- have been
 reduced from Securities Premium Account in the previous year.
 
 D.  Scheme of Arrangement became effective during the previous year;
 however the title to the assets could not be necessarily transferred as
 at March 31, 2008 and hence same were being held, in trust by the
 Company.
 
 3.  The Company has an Equity Investment of Rs. 4,101 Lacs (Previous
 Year Rs. 2,601 Lacs) in its wholly owned subsidiary Zicom Retail
 Products Private Limited and has also advanced unsecured loan amounting
 to Rs. 1,092 Lacs (Rs. 3,152 Lacs) as on March 31, 2009. Said
 Subsidiary Company has accumulated losses of Rs. 1,793 (including Loss
 of Rs. 255 Lacs in the Current Year). The management is confident of
 generating greater business and improving profitability by the retail
 expansion and creation of Retail Electronic Security Brand. Accordingly
 management considers such diminution to be temporary in nature and
 hence no provision is required for diminution in the value of
 investments and in respect of Unsecured Loan.
 
 4.  Under the Micro, Small and Medium Enterprises Development Act, 2006
 which came into force from October 2, 2006, certain disclosures are
 required to be made relating to Micro, Small & Medium Enterprises. The
 Company is in the process of compiling relevant information from its
 suppliers about their coverage under the said Act. Since the relevant
 information is not readily available, no disclosures have been made in
 the accounts. However, in view of the management, the impact of
 interest, if any, that may be payable in accordance with the provisions
 of this Act is not expected to be material.
 
 5.  Lease:
 
 Disclosure as required by Accounting Standard 19 (AS-19) issued by The
 Institute of Chartered Accountants of India are as follows:
 
 Operating Lease:
 
 The Companys significant leasing arrangements are in respect of office
 premises and residential flats taken on lease. The arrangements are
 generally from 11 month to 36 month. Under these agreements, generally
 refundable interest-free deposits have been given. In respect of above
 arrangements, lease rentals payable are recognised in the Profit and
 Loss Account for the year and included under Rent and Compensation
 (Disclosed under Schedule 12). Total of Minimum lease payment for a
 period:
 
 6.  Segment Reporting: The Company has only one reportable segment
 namely Security Systems and Automation.
 
 7.  Previous Years figures have been regrouped and re-arranged,
 wherever necessary.
 
 8.  Balances of Sundry Debtors, Sundry Creditors, Loans and Advances
 and Others are as per books and subject to confirmations and
 reconciliation, if any.