61 CyberTech Systems and Software Limited BALANCE SHEET AS AT MARCH 31, 2015 NOTE As at As at NO. March 31, 2015 March 31, 2014 EQUITY AND LIABILITIES Shareholders' funds Share capital 2 267,963,430 264,713,430 Reserves and surplus 3 471,702,314 428,242,670 Non-current liabilities Long-term borrowings 4 819,530 45,601,766 Deferred tax liabilities (Net) 5 14,098,005 15,120,703 Other long term liabilities 6 6,451,200 8,889,450 Current Liabilities Short term borrowings 7 54,566,014 7,205,103 Trade payables 8 35,441,562 56,688,240 Other current liabilities 9 22,063,459 25,248,625 Short term provisions 10 80,966,253 87,497,743 TOTAL 954,071,767 939,207,730 ASSETS Non current assets Fixed assets 11 Tangible assets 347,137,086 144,955,692 Intangible assets 4,964,419 4,195,286 Capital work-in-progress 71,234,241 236,056,608 Intangible assets under development 44,106,653 25,784,147 Non current investments 12 153,403,250 106,303,250 Long-term loans and advances 13 2,678,612 3,004,990 Current Assets Current investments 14 89,017,319 172,455,689 Trade receivables 15 193,792,630 169,671,149 Cash and bank balances 16 25,275,295 58,911,077 Short-term loans and advances 17 7,161,030 5,605,646 Other current assets 18 15,301,232 12,264,196 TOTAL 954,071,767 939,207,730 Significant Accounting Policies and Notes to Financial Statements As per our attached report of even date For Lodha & Co. Chartered Accountants A.M. Hariharan Partner Place : Mumbai Dated : May 26, 2015 1 to 39 For and on behalf of the Board of Directors Ramasubramanian Sankaran N .L. Sarda Executive Director & CFO Director Sateesh Wadagbalkar GM & Company Secretary Place : Thane Dated : May 26, 2015 62 20th Annual Report 2014-2015 STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED MARCH 31, 2015 NOTE For the year ended For the year ended NO. March 31, 2015 March 31, 2014 INCOME Revenue from operations 19 396,949,615 406,568,263 Other income 20 43,051,466 52,944,676 440,001,081 459,512,939 EXPENDITURE Cost of hardware/software package for service delivery 6,401,191 23,120,219 Employee benefits expense 21 281,957,112 238,328,114 Finance costs 22 5,760,150 4,760,776 Debrciation and amortisation expense 11 22,999,369 14,481,063 Other expenses 23 74,196,134 72,201,819 391,313,956 352,891,991 Profit before Exceptional Items and Tax 48,687,125 106,620,948 Exceptional Items 37 56,190,650 - Profit before tax 104,877,775 106,620,948 Tax expense Current tax 19,200,000 22,000,000 Deferred tax 2,968,594 (2,263,927) Income tax adjustments for earlier years 997,665 - Profit for the year 81,711,516 86,884,875 Basic Earnings per share of face value of Rs.10 each 3.07 3.28 Diluted Earnings per share of face value of Rs.10 each 3.02 3.28 Significant Accounting Policies and Notes to Financial Statements 1 to 39 As per our attached report of even date For Lodha & Co. For and on behalf of the Board of Directors Chartered Accountants A.M. Hariharan Sateesh Wadagbalkar Ramasubramanian Sankaran N .L. Sarda Partner GM & Company Secretary Executive Director & CFO Director Place : Mumbai Place : Thane Dated : May 26, 2015 Dated : May 26, 2015 63 CyberTech Systems and Software Limited CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015 For the year ended March 31,2015 For the year ended March 31,2014 A. Cash flow from Operating activities Net Profit before tax 104,877,775 106,620,948 Adjustments for : Debrciation and amortisation expense 22,999,369 14,481,063 Unrealised foreign exchange gain (2,933,670) (3,805,990) Loss on assets disposed / discarded (Net) 853,941 1,513,430 Interest income (4,360,804) (2,177,917) Interest expense 5,760,150 4,760,776 Sundry balances written back (Net) (12,649,134) (957,971) Profit on sale of current investments (54,946,973) (17,176,496) Provision for doubtful debts/advances - 900,000 (45,277,121) (2,463,105) Operating profit before Working Capital changes 59,600,654 104,157,843 Adjustments for : Decrease/(Increase) in Trade receivables (26,853,486) (21,083,163) Decrease/(Increase) in Other receivables (4,977,749) (1,499,002) Increase/(Decrease) in Trade & other payables 14,017,306 2,989,074 (17,813,929) (19,593,091) Cash generated from operations Direct taxes (paid) 41,786,725 (21,000,000) 84,564,752 (13,495,280) Net cash generated from operating activities (A) 20,786,725 71,069,472 B. Cash flow from investing activities Purchase of fixed assets (96,502,580) (122,197,264) Sale of fixed assets 336,253 - Purchase of current investments (20,000,000) 2,161,569 Sale of current investments 135,456,740 72,078,318 Investment in Wholly Owned Subsidiary (47,100,000) - Deposits with banks withdrawn/(placed) (2,236,098) 4,643,097 Interest received 1,971,599 1,904,957 Net cash used in investing activities (B) (28,074,086) (41,409,323) 64 20th Annual Report 2014-2015 CASH FLOW STATEMENT FOR THE YEAR ENDED MARCH 31, 2015 For the year ended March 31,2015 For the year ended March 31,2014 C. Cash flow from financing activities : Proceeds from short term borrowings Repayment of long-term borrowings Equity issue (ESOP) proceeds Interest paid Dividend and Dividend Tax paid thereon Net cash generated from / (used in) financing activities (C) 47,360,911 (44,782,236) 5,618,500 (5,755,843) (31,025,851) (6,675,860) 45,601,766 (4,756,056) (30,747,048) (28,584,519) 3,422,802 Net Increase / (Decrease) in cash & cash equivalents (A+B+C) (35,871,880) 33,082,951 Cash & cash equivalents (opening) Cash & cash equivalents (closing) 40,491,296 4,619,416 7,408,345 40,491,296 (35,871,880) 33,082,951 Note 1 The above Cash Flow Statement has been brpared using the Indirect Method brscribed by the Accounting Standard (AS) 3 "Cash Flow Statements" 2 The brvious year's figures have been regrouped/rearranged wherever necessary. The accompanying notes form an integral part of the financial statements As per our attached report of even date For Lodha & Co. Chartered Accountants For and on behalf of the Board of Directors A. M. Hariharan Partner Place : Mumbai Dated : May 26, 2015 Sateesh Wadagbalkar GM & Company Secretary Place : Thane Dated : May 26, 2015 Ramasubramanian Sankaran N. L. Sarda Executive Director & CFO Director 65 NOTES TO FINANCIAL STATEMENTS AS AT AND FOR THE YEAR ENDED MARCH 31, 2015 Company Overview CyberTech Systems and Software Limited (referred to as the 'Company1) is an Information Technology service provider, delivering its services to customers primarily in the USA, India and Japan with focus on several core software technology applications including SAP's Enterprise Suite and ESRI's Geographical Information Systems ('GIS') as well as Network Planning and Design and Custom Software Application Development. The Company continues to focus on delivering its development and support projects on an offshore basis. NOTE '1' SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements have been brpared in accordance with the Generally Accepted Accounting Principles in India ('Indian GAAP') to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been brpared under the historical cost convention on accrual basis. Use of Estimates The brparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) and Accounting Standards (AS) require the management to make estimates and assumptions that affect the reported income and expenses during the reported period and the reported amounts of assets and liabilities and disclosure of contingent liabilities as of the date of the financial statements. The recognition, measurement, classification or disclosure of an item or information in the financial statements has been made relying on these estimates. Actual results may differ from these estimates. Any revision to the accounting estimates is recognized prospectively. Revenue Recognition Income from software development, consulting and customer support services is recognized as and when rendered in accordance with the terms of the contract. Revenue from fixed price contracts with milestone billings and fixed time frame contracts are recognized as per the proportionate completion method. Unbilled Revenues Revenue recognized over and above the billings on a customer is classified as "unbilled revenue". Fixed Assets and Debrciation / Amortisation Fixed assets are stated at cost of acquisition less accumulated debrciation. Leasehold land is amortised over the balance period of lease since acquisition. Debrciation on tangible fixed assets is provided based on the useful life brscribed under Part C of Schedule II of the Companies Act,2013. Intangible assets are amortised over a period of four years. At each balance sheet date, the Company assesses whether there is any indication that any assets may be impaired. If any such indication exists, the carrying value of such assets is reduced to its recoverable amount and the amount of such impairment loss is charged to Statement of Profit and Loss. If, at the balance sheet date, there is any indication that a brviously assessed impairment loss no longer exists, then such loss is reversed and asset is restated to that effect. Investments Long-term investments are valued at cost. However, provision for diminution in the value of such investments, other than temporary, is made to recognize a decline on individual investment basis. Current investments are stated at the lower of cost and fair value. Foreign Currency Transactions a) Transactions in foreign currency are accounted at the exchange rates brvailing on the date of the transaction. Gains and losses arising out of subsequent fluctuations are accounted for on actual payment / realisation. Gains / losses, if any, at the year end on account of restatement of the monetary assets and liabilities, denominated in foreign currency are dealt with in the Statement of Profit and loss. b) In case of forward exchange contracts, the brmium is amortised over the period of the contract. Any profit or loss arising on the cancellation or renewal of a forward exchange contract is recognized as income or expense for the year. Employee Benefits a) Short-term employee benefits : All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, performance incentives, etc. are recognized at actual amounts due in the period in which the employee renders the related service. b) Post-employment benefits: i) Defined Contribution Plans: Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due. ii) Defined Benefit Plans: The cost of providing defined benefits i.e. gratuity is determined using the Projected Unit Credit Method with actuarial valuations carried out at the balance sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss. iii) Other long-term employee benefits : Other long-term employee benefits viz. leave entitlement are recognised as an expense in the Statement of Profit and Loss as and when they accrue. The Company determines the liability using the Projected Unit Credit Method with actuarial valuations carried out as at the balance sheet date. Actuarial gains and losses in respect of such benefits are charged to the Statement of Profit and Loss. Taxation Provision for current income tax is made on the basis of the estimated taxable income for the current accounting year in accordance with the Income-tax Act, 1961. Minimum Alternate Tax (MAT) credit is recognized and carried forward only if there is a reasonable certainty of it being set off against regular tax payable within the stipulated statutory period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed debrciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain, as the case may be, to be realized. Borrowing Costs Borrowing costs directly attributable to acquisition, construction and production of qualifying assets are capitalised as a part of the cost of such asset upto the date of completion. Other borrowing costs are charged to the Statement of Profit and Loss. Provisions, Contingent Liabilities and Contingent Assets A provision is made based on reliable estimate when it is possible that an outflow of resources embodying economic benefit will be required to settle an obligation. Contingent liabilities, unless the possibility of outflow of resources embodying economic benefit is remote, are disclosed by way of notes to accounts. Contingent assets are not recognized or disclosed in the financial statements. NOTE '2' LEASES: (A) The Company has leased its vacant brmises under cancellable lease agreements, the income from which is recognised and disclosed as Rent received under Note No. 20. (B) The Company has taken commercial brmises on lease basis, the agreements for which are mutually renewable/cancellable. The rental expenses in respect of operating lease are charged as rent under Note No. 23 under the head 'Rent' NOTE '3' CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED FOR) (A) Contingent Liabilities: a) Disputed Income Tax Matters: i) Regular demand under assessment (including interest upto the date of demand) Rs.115,840 (Previous Year Rs.32,674,547) ii) Penalties & Interest upto the date of demand of Rs.58,198,919 (Previous Year Rs.58,198,919) iii) Other Income Tax proceedings in respect of earlier years decided in favour of the Company by the Appellate Authorities against which the Department is in further appeals excluding further interest liability, if any of Rs.3,769,968 (Previous Year Rs.3,769,968) iv) In the brvious year, the Company has received Income Tax refunds of Rs.189,474,293 (including interest amount of Rs. 74,080,633) towards Assessment years 1997-98, 1998-99 and 1999-00, pursuant to the favourable Order from Income Tax Appellate Tribunal. The Income Tax Department has filed an appeal against the said Order with the Hon'ble High Court, Bombay. Accordingly, the Company has, however continued the provision of Rs.121,961,829 (Previous Year Rs.121,961,829) made in earlier years. b) Disputed Service Tax Matters Rs.6,607,614 (Previous Year Rs.6,607,614) The Company's pending litigations proceedings pending with Tax and other Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed in the contingent liabilities, wherever applicable, in its financial statements. The Company does not reasonably expect the outcome of these proceedings to have a material impact on its financial statements (B) Commitments: Estimated amount (Net of Advances) of contracts remaining to be executed on capital account and not provided for: Rs.1,967,426 (Previous Year Rs.17,372,799) NOTE '4' In the opinion of the Board, assets other than Fixed Assets and Non Current investments have a value on realisation in the ordinary course of business atleast equal to the amount at which they are stated. Provision for debrciation and all known liabilities is adequate and not in excess of the amount reasonably necessary. NOTE '5' The accounts of certain Banks, Trade Receivables, Trade Payables and Loans and Advances are subject to formal confirmation/ reconciliation and adjustments, if any. The Management does not expect any material difference affecting the current year's financial statements. NOTE '6' The Company has invested Rs.153,403,250 (Previous Year Rs.106,303,250) in its Wholly Owned Subsidiary viz. CyberTech Systems and Software Inc., USA, which has incurred losses during the current year as well as in the brvious year. However, being a long term and strategic investment, there is a reasonable certainty that there will be no diminution in the value of this investment, and therefore, no provisioning has been considered necessary. NOTE '7' Exceptional items include a claim of Rs.56,190,650 received on settlement of dispute in respect of investment and receivable from CyberTech Middle East WLL. The said amount includes writing back of Rs.9,135,258 being provision made for diminution in the value of aforesaid investment and for doubtful receivable in the earlier year. NOTE '8' Consequent to the enactment of the Companies Act, 2013 (the Act) and its applicability for accounting periods commencing from April 1, 2014, the Company has realigned the remaining useful life of its tangible assets in accordance with the provisions brscribed under Schedule II to the Act. Accordingly, in the case of tangible assets which have completed their useful life, the carrying value (net of residual value) as at April 1, 2014 amounting to Rs.8,310,425 (net of Deferred Tax of Rs.3,991,291) has been adjusted to "Surplus in the Statement of Profit and Loss" and in the case of other tangible assets, the carrying value (net of residual value) is being debrciated over the revised remaining useful lives. Accordingly, the debrciation and amortization expense is higher by Rs.7,230,243 for the year ended 31st March, 2015. NOTE '9' Previous year's figures have been re-grouped/re-arranged, wherever necessary, to conform to the current year's classification/ brsentation. For and on behalf of the Board of Directors Sateesh Wadagbalkar GM & Company Secretary Ramasubramanian Executive Director & CFO Sankaran N. L. SardaDirector Place : Thane Dated : May 26, 2015 |