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Melstar Infotech

BSE: 532307|NSE: MELSTAR|ISIN: INE817A01019|SECTOR: Computers - Software Medium & Small
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Notes to Accounts Year End : Mar '15
Note :
 
 a) Clean Overdraft Facility and Cash Credit Facility is secured by
 equitable mortgage by deposit of title deeds of office premises of the
 Company situated at Andheri(Mumbai) and further secured by
 hypothecation of book debts/ receivables and other current assets of
 the Company.
 
 b) Clean Overdraft Facility and Cash Credit Facility is repayable on
 demand subject to annual review. The rate of interest for Clean
 Overdraft Facility is Base Rate 5.70% and Base Rate 4.70% on Cash
 Credit Facility.
 
 * Amount Written off in respect of Leasehold land for the period of
 lease which has expired.
 
 ** Building was revalued on 1st April, 2005 with reference to the fair
 market value; amount added on revaluation was Rs.76,558,113; the
 revalued amount substituted for historical cost on 1st April 2005 was
 Rs. 126,130,511, based on report issued by approved independent valuer.
 
 Note:
 
 1 Adjustments/ deductions include obsolete fixed assets discarded
 during the year. Cost Rs. 168758/- accumulated depreciation and
 amortization Rs. 168758/- (Previous year Cost Rs.405523/- and
 depreciation and amortization Rs 302100/-)
 
 2 Consequent to enactment of the Companies Act, 2013 and its
 applicability w.e.f. 1st April 2014, the Company has reworked
 depreciation on the basis of the useful lives of assets as prescribed
 in Part ''C'' of schedule II of the Act. As a result depreciation for the
 year ended 31st March, 2015 is lower by Rs.634,536 due to change in the
 useful lives of certain assets.
 
 In case of assets where the remaining useful life as on 1st April 2014
 is Nil, the carrying amount of such assets have been adjusted to the
 opening balance of Retained Earnings after retaining their residual
 value. Accordingly, a sum of Rs. 2,822,670 has been adjusted against
 Opening Reserves.
 
 1.  The Company, considering the erosion/substantial erosion in the
 net worth of its wholly-owned subsidiaries located at U.S.A., U.K. and
 Singapore, had made provision for diminution in the value of
 investments in the said subsidiaries aggregating to Rs. 214,674,767
 (Previous year Rs.214,674,767) and for doubtful loans/advances given to
 said subsidiaries aggregating to Rs.114,306,058 (Previous year
 Rs.114,306,058) and also for doubtful debts being debts due from one of
 the step down subsidiary located at UK and a wholly-owned subsidiary
 located at U.S.A. of Rs.17,167,788(Previous year Rs. 17,167,788).
 
 The two subsidiaries and one step down subsidiary, located at U.K.
 stands dissolved in the earlier year. Pursuant to application made to
 the Regulatory Authority, the name of the subsidiary located at
 Singapore had been Struck Off in the earlier year.
 
 Consequent to such dissolutions/ struck off, the Company is in the
 process of seeking approvals from the Reserve Bank of India (RBI), for
 writing off these amounts from the books of account. The Company would
 make the necessary adjustments as and when approvals from the RBI are
 received. Such adjustments would have no impact on the Profit and Loss
 Account.
 
 2.  In the earlier year, the Company had given Inter Corporate
 Deposits to one party amounting to Rs. 17,854,503 including interest
 accrued thereon. This deposits is due for repayment for more than six
 months. Consequent to liquidation proceedings initiated against the
 said party, the Company has provided Rs.17,854,503 (including interest)
 towards doubtful advances, being Exceptional Item.
 
 3.  Consequent to enactment of the Companies Act, 2013 and its
 applicability w.e.f. 1st April 2014, the Company has reworked
 depreciation on the basis of the useful lives of assets as prescribed
 in Part ''C'' of schedule II of the Act. As a result depreciation for the
 year ended 31st March, 2015 is lower by Rs.634,536 due to change in the
 useful lives of certain assets.
 
 In case of assets where the remaining useful life as on 1st April 2014
 is Nil, the carrying amount of such assets have been adjusted to the
 opening balance of Retained Earnings after retaining their residual
 value. Accordingly, a sum of Rs. 2,822,670 has been adjusted against
 Opening Reserves.
 
 The deferred tax assets, not recognized as at the year end on the basis
 of prudence, would be accounted for in the subsequent year/years
 considering the requirements of the Accounting Standard (AS) 22 on 
 Accounting for Taxes on Income, regarding reasonable/virtual certainty
 and the accounting policy followed by the Company in this respect.
 
 Note: Expenses of Foreign branches Rs. 1,038,339 (Previous year Rs.
 10,326,758 ) have been included in the appropriate heads above.
 
 *Excludes Service Tax
 
 4.  Additional information pursuant to the provisions of paragraph
 5(ii)(d) part II of the revised schedule VI to the Companies Act, 1956.
 (To the extent applicable)
 
 5.  Related parties disclosures
 
 1) Names of related parties and description of relationship:
 
 i.  Subsidiaries and step down subsidiary Melstar Inc.
 
 Melstar Limited (Dissolved on 19th May, 2010)
 
 Linkhand Support Limited (Dissolved on 12th August, 2008)
 
 Melstar UK Limited (Dissolved on 26th April, 2011)
 
 Melstar Singapore Pte. Limited (Struck Off as on 05th October, 2010)
 
 ii.  Key Management Personnel with whom Mr. P. V. R. Murthy
 (Non-Executive Director) (Up to 24th October, 2013)
 
 the transactions have taken place during
 
 Mr. Richard D''Souza (Chief Executive Officer and Manager) (Up to 22nd
 May,2013) &
 
 the year (Managing Director) (Up to 09th December, 2013)
 
 Mr. Vijay Mishra (Managing Director) (w.e.f.13th November, 2013)
 
 Mr. Anil S. Korpe (Chief Financial Officer)
 
 Mr. Vijaykumar H. Modi (Company Secretary)
 
 iii.  Enterprises Over which Key Birla Edutech Limited(Up to 25th June,
 2013)
 
 Management Personnel and / or their
 
 Birla Power Solutions Limited (Up to 14th August, 2013)
 
 relatives have significant influence with
 
 Birla Global Corporate Limited whom the transactions have taken place
 during the year
 
 ** Interest bearing loan @7% p.a. up to March 31,2005, interest free
 thereafter and repayable by March 31, 2007 as per revised repayment
 schedule, as approved by the Board of Directors and intimated to
 Reserve Bank of India as per Foreign Exchange Management Act, 1999
 (FEMA).
 
 # Amounts outstanding as at March 31, 2015 stand fully provided for
 towards doubtful recoveries.
 
 Note: There are no investments by the loaners in the shares of the
 parent company and /or subsidiary companies.
 
 6. The Company has presented the data relating to its segments based
 on its consolidated financial statements, which are presented in the
 same annual report. Accordingly in terms of provisions of Accounting
 Standard (AS) 17 on ''Segment Reporting'', no disclosures related to
 segments are presented in its stand-alone financial statements.
 
 * Of these, Rs. 42,787,667 (previous year Rs. 42,787,667) has been
 provided towards doubtful recoveries.  ** Fully provided towards
 doubtful recoveries (previous year Rs.71,954,100).  Note: Figures in
 Brackets indicate previous year figures.
 
 8.  Post Employment Benefit Plans
 
 (i) Defined contribution plans
 
 The Company makes contributions towards provident fund to a Defined
 contribution retirement benefit plan for qualifying employees. The
 Provident Fund plan is operated by Regional Provident Fund
 Commissioner. Under the plan, the Company is required to contribute a
 specified percentage of payroll cost to the retirement benefit plan to
 fund the benefits.
 
 The Company recognized Rs. 5,486,908 (Previous year Rs. 5,164,474) for
 provident fund contributions in the Profit and loss account. The
 contributions payable to these plans by the Company are at rates
 specified in the rules of the schemes.
 
 (ii) Defined benefit plan
 
 The Company has Defined benefit plan for qualifying employees in
 respect of Gratuity benefits. The scheme provides for payment to vested
 employees as under:
 
 On Normal retirement/early retirement/withdrawal/resignation:
 
 As per the provisions of Payment of Gratuity Act, 1972 with vesting
 period of 5 years of service.
 
 On death in service:
 
 As per the provisions of Payment of Gratuity Act, 1972 without any
 vesting period.
 
 The most recent actuarial valuation of the present value of Defined
 benefit obligation for gratuity was carried out at March 31, 2015 by an
 actuary. The present value of the Defined benefit obligations and the
 related current service cost and past service cost, were measured using
 the Projected Unit Credit Method.
 
 The liability towards short-term compensated absences is Rs. 1,626,427
 (Previous year Rs. 1,343,503) is provided on actual basis.
 
 Note:
 
 Provision towards compensated absences made on the basis of actuarial
 valuation as per Accounting Standard 15 (Revised). Actuarial value
 liability is Rs.771,437 (Previous year Rs.418,711 ) based upon the
 following assumptions:
 
 9.  Trade receivables, trade payables, short term loans and advances,
 other current assets and other current liabilities are subject to
 confirmation and reconciliation if any.
 
 10.  Previous year''s figures have been regrouped wherever necessary, to
 correspond with the figures of the current year. Amounts and other
 disclosures for the preceding year are included as integral part of the
 current year financial statements and are to be read in relation to the
 amounts and other disclosures relating to the current year. Figures
 have been rounded off to the nearest rupee.
Source : Dion Global Solutions Limited
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