Notes to Accounts of CCS Infotech Ltd.

Mar 31, 2014

1. Long term and Short term loans :

i. Secured loans include Working Capital. Cash Credit Irom State Bank of India outstand of Rs.23,24.86,340/-(Previous Year Rs.21,34,46,850/-) secured by Hypothecation current assets in the form of raw materials, semi finished goods, stores / spar receivables and other current assets,

ii. Secured loans are secured by personal Guarantees of Executive Director and Manag Director of the Company and their personal property.

iii. Secured loans include Term loan- NIL(Previous year Rs.0.39crores) from State Ban! India.

2. Contingent Liabilities:

{Amount in Rupees)

Particulars 2013-14 2012-13

I Guarantee given in the Ordinary course Nil Nil of business (gross)

II Against bills discounted with banks Nil Nil

III Claims against the company not Nil Nil acknowledged as debt

a. Provision for Taxation:

Provision for taxation for the current Year has been made 4,98,138/- (Previous Year Rs. 9,03,085/-)

b. Deferred Tax:

During the year, the Company has reviewed the deferred tax assets/liabilities. The timing differences mainly arising on account of depreciation has given rise to net deferred tax liability. 6,16,593 (Previous Year: NIL).

C, Quantitative Details

Having regard to the nature of item purchased t traded, furnishing of particulars regarding quart' I is not practicable. The consumption values are ascertained on the basis of opening stock p;.:S purchases less closing stock after adjustment of excess and shortage of physical court* unserviceable items etc..

3. As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the I disclosures of transactions with the related parties as defined in the Accounting Standard are given | below:

List of related parties with whom transactions have taken place and relationships:

(As certified by the management)

Subsidiary Companies

Name of the Related Party Nature of Relationship

CCS Infoiech Singapore Pte Ltd Wholly Owned Subsidiary

The Company has derived its entire revenues and expended the costs in this regard for System Integration purposes. The Company has its Systems Integration. FMS, e-governance, BOLT operations in Chennai and other parts of India. The accounting policies adopted for segment reporting are in line with accounting policy of the Company,

4. Income Tax. Excise Duty & Cess

Income Tax

Assessment year 2010-11.

The Company has declared a Taxable income of Rs.50,78,243/- (as per MAT provision) and 3;med a Tax refund of Rs. 1,97,850/-. in the assessment, the assessing officer has apportioned sr-ne expenses in Puducherry manufacturing unit bobks and has raised an additional demand of Rs 17,66,370/- on the Company. Company has preferred an appeal against the order to Commissioner Appeals Assessment Year 2011-12,

The Company has declared a Taxable income of Rs.67,55,778- (as per MAT provision) and : aimed a Tax refund of Rs.10,590/-, In the assessment, the assessing officer has apportioned yome expenses in Puducherry manufacturing unit books and has raised an additional demand of -is 7,76,540/- on the Company. Company has preferred an appeal against the order to I Comission Appeals

5. The Whole time Company Secretary has resigned and the company is in the process of recruiting whole time Company Secretary.

6. The above cash flow statement has been prepared under the Indirect method setout in Accounting Standard revise notified by Companies Accounting Standard rule 5.2006.

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Mar 31, 2010

1. Secured loans:

i. Secured loans include Working Capital Cash Credit from State Bank of India outstanding of Rs.98,573,719/-(Previous Year Rs.102416153) secured by Hypothecation of current assets in the form of raw materials, semi finished goods, stores / spares, receivables and other current ass

ii. Secured Loans include Corporate Loan from State Bank of India outstanding of Rs.Nil (Previous Year Rs.4745040)

iii. Secured loans are secured by personal Guarantees of Executive Director and Managing Director of the Company and their personal property.

2. Contingent Liabilities:

(Amount in Rupees)

Particulars 2009-10 2008-09

7,066,727 5,521,710 I Guarantee given in the ordinary course of business (gross)

II Against bills discounted with banks Nil Claims against the company not acknowledged as III debt Nil

3. a. Provision for Taxation:

Provision for taxation for the current Year has been made for Rs.1,461,614/- (Previous Year Rs.2,870,659).

4. As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

List of related parties with whom transactions have taken place and relationships: (As certified by the management)

Subsidiary Companies

Sl. Name of the Related Party Nature of Relationship

1 CCS Infotech Singapore Pte Ltd Wholly Owned Subsidiary

Associate Companies:

SL. Name of the Related Party Nature of Relationship

1 Gagan Media Pvt Ltd Enterprise managed by relatives of key Management Personnel

2 Aeronet Technologies Pvt Ltd Enterprise managed by relatives of key Management Personnel

Key Management Personnel with Nature of Relationship

Sl. Name of the Related Party Nature of Relationship

1 Mr. H Ratna Kumar Executive Director

2 Mr. M.A Hasan Abdul Kader Managing Director

Relatives of Key Management Personnel with Nature of Relationship

Sl. Name of the Related Party Nature of Relationship

1 Smt Rahmath Mushina Wife of Managing Director

2 Smt Suganya S Wife of Executive Director

5. Balance in Sundry debtors, loans and advances and other current assets are subject to confirmation. The company had initiated the process of obtaining confirmations during the year and partially obtained confirmations from third parties for the balances at the end of the year. In the opinion of the management the balances outstanding are good are recoverable and no provision is foreseen in respect of the same.

6. Segment Reporting (AS-17)

The Company has its manufacturing operations at Pondicherry. The Company has its Systems Integration & Retail operations in Chennai and other parts of India for Computers, Computer Peripherals, Software and consumables. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting system. The accounting policies adopted for segment reporting are in line with accounting policy of the Company.

7. Income Tax, Excise Duty & Cess

Income Tax

Assessment Year 2003-2004

The Company has declared a taxable income of Rs.56.43 Lakhs (as per MAT provisions) and paid the tax amounting to Rs. 505859/-. In the assessment, an additional demand of Rs. 15.67 Lakhs was raised against which an appeal had been made by the Company. Company has paid the amount and preferred an appeal with the Appellate Tribunal. The Appellate Orders are in the favour of the Company and the appeal has been remitted back for consideration. Again the Assessing officer has passed an order in favour of the department.

Assessment Year 2005-06

The Company has declared a Taxable income of Rs. 24958342/- (as per MAT provision) and paid a Tax of Rs.2175684/-. In the assessment, Tax was arrived at Rs.2206081/-. Against this assessment the company filed a rectification petition u/s 154 of the Income Tax act. The orders are awaited.

Assessment Year 2007-08

The Company has declared a Taxable income of Rs.27966979/- (as per MAT provision) and paid a Tax of Rs.7401039/-. In the assessment, the assessing officer has apportioned some expenses in Pondicherry manufacturing unit books and has raised an additional demand of Rs.702730/- on the Company. Company has preferred an appeal against the order to Commissioner Appeals.

Excise Duty

The Company has paid a sum of Rs. 1750000/- during the Assessment year 2002-2003 under protest and the Excise Authorities had collected a sum of Rs.650000/- from the customers directly, without even informing the Company. The customers have informed the same and adjusted against the claims payable to the Company. In addition to that, show cause notice had been issued by the Department on various issues. The Honourable Tribunal has allowed the appeals and the company has received an order in its favour. The company has received a sum of Rs. 17500000/- as refund and the balance payment of Rs.650000/- was transferred to Consumer Welfare account. The Company has filed an appeal with the Commissioner of Excise (Appeals) in this regard and orders were passed in favour of the company and the company has received Rs.600000/- as refund.

The Department has issued a show cause notice to the Company for Rs.208488/- and the same is confirmed by the Assistant Commissioner in his order and the company has preferred an appeal before The Commissioner of Central Excise (Appeals).

8. The Whole time Company Secretary has resigned and the company is in the process of recruiting whole time Company Secretary.

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Mar 31, 2009

1. Secured loans:

i. Secured loans include Working Capital Cash Credit from State Bank of India outstanding of Rs.102416153/-(Previous Year Rs.56992537) secured by Hypothecation of current assets in the form of raw materials, semi finished goods, stores / spares, receivables and other current ass

ii. Secured Loans include Corporate Loan from State Bank of India outstanding of Rs.4745040/- (Previous Year Rs.5074806)

iii. Secured loans are secured by personal Guarantees of Executive Director and Managing Director of the Company and their personal property.

2. Contingent Liabilities:

(Amount in Rupees)

Particulars 2008-09 2007-08

Guarantee given in the ordinary course of

i business (gross) 5.521,710 6,809,209

ii Against bills discounted with banks Nil Nil

iii Claims against the company not acknowledged as Nil Nil debt

3. a. Provision for Taxation;

Provision for taxation for the current Year has been made for Rs.2,647,249/- (Previous Year Rs.2,231,320).

b. Deferred Tax:

During the year, the Company has reviewed the deferred tax assets/liabilities. The timing differences mainly arising on account of depreciation has given rise to net deferred tax liability. Rs.50.06 Lakhs. (Previous Year Rs.50.16 Lakhs).

C. Quantitative Details

Having regard to the nature of item purchased / traded, furnishing of particulars regarding quantity is not practicable. The consumption values are ascertained on the basis of opening stock plus purchases less closing stock after adjustment of excess and shortage of physical count, unserviceable items etc,

4 Balance in Sundry debtors, loans and advances and other current assets are subject to confirmation. The company had initiated the process of obtaining confirmations during the year and partially obtained confirmations from third parties for the balances at the end of the year. In the opinion of the management the balances outstanding are good are recoverable and no provision is foreseen in respect of the same.

5, Segment Reporting (AS-17)

The Company has its manufacturing operations at Pondicherry, The Company has its Systems Integration & Retail operations in Chennai and other parts of India for Computers, Computer Peripherals, Software and consumables. Segments have been identified and reported taking into account nature of products and services, the differing risks and returns and the internal business reporting system. The accounting policies adopted for segment reporting are in line with accounting policy of the Company.

6. Income Tax, Excise Duty & Cess Income Tax

Assessment Year 2003-2004

The Company has declared a taxable income of Rs.56.43 Lakhs (as per MAT provisions) and paid the tax amounting to Rs. 505859/-. In the assessment, an additional demand of Rs.15.67 Lakhs was raised against which an appeal had been made by the Company. The Appellate Orders are in our favour and the appeal has been remitted back for consideration.

Assessment Year 2005-06

The Company has declared a Taxable income of Rs. 24958342/- (as per MAT provision) and paid a Tax of Rs.2175684/-, In the assessment, Tax was arrived at Rs.2206081/- Against this assessment the company fifed a rectification petition u/s 154 of the Income Tax act. The orders are awaited.

Excise Duty

The Company has paid a sum of Rs. 1750000/- during the Assessment year 2002-2003 under protest and the Excise Authorities had collected a sum of Rs.650000/- from the customers directly, without even informing the Company. The customers have informed the same and adjusted against the claims payable to the Company. In addition to that, show cause notice had been issued by the Department on various issues. The Honourable Tribunal has allowed the appeals and the company has received an order in its favour. The company has received a sum of Rs. 17500000/- as refund and the balance payment of Rs.650000/- has been transferred to Consumer Welfare account- The Company has filed an appeal with the Commissioner of Excise (Appeals) in this regard and orders are awaited.

7. The Whole time Company Secretary has resigned and the company is in the process of recruiting Whole time Company Secretary.