Notes to Accounts

1. Secured Loan from Housing Finance Company

The Company's immovable property was leased out to another IT Services company for 10 years in 2004.The Lease rentals were discounted with a housing finance company to augment working capital for the company . The tenant had terminated the lease and vacated the property of the company in 2009. Owing to Political conditions in the state the property could not be leased out and thereby the account became irregular. The company approached the lender to restructure the loan but they initiated proceedings under SARFARESI Act to recover their dues. The Lender took possession of the property. The company approached the Debts recovery tribunal. However as on the balance sheet date the property continues to be registered in the name of the company and the lender is yet to make his submissions before the debts recovery tribunal.

2. Subsidiary Companies

The Company has two Wholly Owned Subsidiaries viz Cybermate Infotek Limited Inc at U.S.A and Cybermate Infotek Ltd F.Z.E at U.A.E.

Operations of the Subsidiary in U.S.A. remained dormant since the year 2002.

The company has reviewed the operations of the wholly owned Subsidiary at UAE i.e Cybermate Infotek Limited FZE .

The subsidiary was formed in the year 2009, looking at the potential in the middle east markets. Subsequently due to local and international factors resulted in adverse business conditions on account of which the company could not proceed with its plans.

The company waited all along looking for an improvement and it is felt that additional investment at this stage would not make it viable and hence the company has decided to close the operations and write off the carrying amount of the investments in overseas subsidiary of Rs.38,16,91,600/-,

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in Form AOC - 1 is annexed to the Directors' Report as Annexure D pursuant to first proviso to sub-section (3) of section 129 of the Companies Act, 2013 read with Rule 5 of Companies (Accounts) Rules, 2014.

3. Software Products

As at the balance sheet date the company has reviewed the Software Products for their impairment.

On account of improvements in technology some of the products were not yielding revenues for the last three years and it is felt that additional investments in the sand products would not enable to make the products viable and that there is no recoverable amount for these software products and hence the products valued at Rs21,53,51,093/- identified as non cash generating units are written off as Impairment loss.

4. Unamortised Product Development Expenses

Unamortised Product Development expenses of Rs. 1,13,11,572/has been fully written off considering the obsolescence in the technology of the products involved.

5. Segment Reporting

In accordance with the requirement of AS-17 on Segment reporting, the company has determined its business segment as Computer Programming Consultancy and related services. There are no other primary reportable segments. Thus the segment revenue , segment result , total carrying amount of segment liabilities, total cost incurred to acquire segment assets , the total amount of charge for depreciation during the year are all reflected in the financial statement of and for the year ended 31st March 2016.

There are no secondary reportable segments (Geographical Segments).

6. Contingent Liabilities

(a) Income Tax Matters on which the company is in appeal Rs 1550.52 Lacs (Rs. 814.28Lacs)

(b) Bank guarantee in favor of Assistant Commissioner of Customs for a CPWB warehouse License amounting to Rs. 98,000/32. Previous year figures have been regrouped and rearranged wherever necessary to conform to this years' classification.