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Notes to Accounts of Avantel Ltd.

Mar 31, 2023

During the current year, the company has issued 1,21,63,479 Equity Shares of Rs. 10/- each as fully paid-up bonus shares representing a ratio of 3 (three) equity shares for every 1 (one) equity share outstanding on the record date, by capitalization of Capital Reserve, Security Premium, General Reserve and profit and loss account pursuant to a bonus issue approved by the Shareholders in the 32nd Annual General Meeting held on May 30, 2022. Accordingly, as required by IndAS-33 Earnings per Share, the EPS of current and previous years have been restated. There are no shares issued for consideration other than cash and no shares were bought back during the period of 5 years immediately preceding the reporting date.

The Company has one class of share capital, comprising ordinary shares of Rs. 10/- each. Subject to the Company''s Articles of Association and applicable law, the Company''s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

Capital Redemption Reserve:

A Statutory reserve created to the extent of sum equal to the nominal value of the Share Capital extinguished on buyback of Company''s own shares pursuant to Section 69 of the Companies Act, 2013.

Security Premium:

Securities Premium has been created consequent to issue of shares at premium.These reserves can be utilised in accordance with Section 52 of the Companies Act, 2013.

* a) Open Cash Credit from Canara Bank is secured by way of Primary security of hypothecation of Stocks, Book debts and Collateral Security of Plant & Machinery, other fixed assets of the company and Land and Buildings situtated at Plot No. 47, Survey No. !4i,APNC Industrial Park, Gambheeram (V),Visakapatnam and personal guarantee of the Managaing Director of the Company and the rate of interest @11.75% p.a.

b) The Carrying amount of Current and Non-current assets pledged as primary and collateral security for current borrowings are disclosed in Note No.48.

(b) Contract Assets

Company recognized contract assets when it satisfies its obligation by transferring the goods or services to the customer and right to receive the consideration is established which is subject to some conditions to be fulfilled by the company in future before receipt of consideration amount. Such assets are Rs Nil.

During the year company has recognized revenue of Rs. Nil(P.Y. Rs Nil) from the performance obligations satisfied in earlier periods.

The company has made the adjustment of Rs Nil (P.Y.Rs.Nil) in the revenue of Rs.15,426.73 Lakhs ( P.Y. Rs. 10,494.37 Lakhs) recognized during the year on account of discounts, rebates, refunds, credits, price concessions, incentives performance bonuses etc as against the contracted revenue of Rs.15,426.73 Lakhs ( P.Y. Rs. 10,494.37 Lakhs).

(c) Contract Liabilities

Upon execution of contract with the customers, certain amount in the form of EMD, Security Deposit, Margin Money, advance for payment of custom duty etc. received from the customers which is shown as advance received from customers under the heading ‘ ‘Other Financial Liabilities” and “Other Liabilities”. The balances are Rs Nil

(d) Practical expedients

During the year company has entered into sales contracts with its customers where contracts are not executed, same has not been disclosed as practical expedient as the duration of the contract is less than one year or right to receive the consideration established on completion of the performance by the company.

B. Significant judgements in the application of this standard

(i) Revenue is recognized by the company when the company satisfies a performance obligation by transferring a promised good or service to its customers. Asset/goods/services are considered to be transferred when the customer obtains

control of those asset/goods/services. ,—>

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(ii) The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, GST etc.).

(iii) The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Any further adjustment will be made by raising debit/credit notes on the customer.While determining the transaction price effects of variable consideration, constraining estimates of variable consideration, the existence of a significant financing component in the contract, non-cash consideration and consideration payable to a customer is also considered.

C. Assets Recognised from costs to obtain or fulfill a contract with a customer

The costs incurred by the company are fixed in nature with no significant incremental cost to obtain or fulfill a contract with a customer and same is charged to profit and loss as a practical expedient.

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of Rs. 35.02 Lakhs (Previous year Rs. 33.63 Lakhs) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return as specified by GOI to the members. The overall interest earnings and cumulative surplus is more than the statutory interest payment requirement during the year.

b) Leave Encashment: The company accumulates of compensated absences by certain categories of its employees for one year. These employees receive cash in lieu thereof as per the Company''s policy. The company recognises expenditure on payment basis.

c) Gratuity: Gratuity is a funded Defined Benefit Plan payable to the qualifying employees on superannuation. It is managed by a ''Life Assurance Scheme'' of the Life Insurance Corporation of India and the company makes contributions to the Life Insurance Corporation of India (LIC). Company makes annual contribution to the Fund based on the present value of the Defined Benefit obligation and the related current service costs which are measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit (PUC) Actuarial Cost Method.

Fair Value Hierarchy Management considers that,the carrying amount of those financial assets and financial liabilies that are not subsequently measured at fair value in the Financial Statements approximate their transaction value. No financial instruments are recognized andmeasured at fair value for which fair values are determined using the judgments and estimates. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilies. (Level-1 measurements) and lowest priority to unobservable (Level-3 measurements).

The Company does not hold any equity investment and no financial instruments hence the disclosure are nil Financial Risk Management:

The Company''s activities expose to a variety of financial risks viz.,market risk, credit risk and liquidity risk.The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance.The primary market risk to the Company is credit risk and liquidity risk.The Company''s exposure to credit risk is influenced mainly by Government Orders.

Management of Market Risk:

Market risks comprises of Price risk and Interest rate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interest rate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligationsThe maximum exposure to the credit risk at the reporting date is primarily from trade receivables.The company operations are with Government and allied companies and hence no issues credit worthiness. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy.

Credit risk exposure

An analysis of age-wise trade receivables at each reporting date is summarized as follows:

Liquidity Risk:

The company''s liquidity needs are monitored on the basis of monthly projections. The principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of cash credit and overdraft facilities to meet the obligations as and when due. Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital facilities to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and commited credit lines.

Note: 42. Capital Management

The objective of the company when managing capital are to

- to safegaurd the companys ability to continue as going concern, So that they can continue to provide returns for the Share holder and benefits for other stake holders.

- maintain optimal capital structure to reduce cost of capital

Note: 46.The disclosure relating to transactions with Micro, Small and Medium Enterprises

Sundry Creditors includes Rs. 264.62/- Lakhs (previous year Rs. NIL Lakhs) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company.This has been relied upon by the auditors.

Note: 47. Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a company, meeting the appicability threshold, needs to spend at least 2% of its average net profit for the immediately preceeding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, healthcare, women empowerment, measures for the benefit of war widows and contributions to incubators has been formed by the company as per the Act. The funds were primarily allocated to a corpus and utilised through the year on these activities which are specified in scheduleVII of the Companies Act, 2013.

The amount of expenditure to be spent on CSR activities and financial details as per the Companies Act, 2013 for the F.Y 2022-23 & 2021-22 are as under:

The Company has considered the possible effects that may result from the pandemic relating to Covid-19 in the preparation of these standalone financial statements including the recoverability of carrying amounts of financial and non-financial assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company has, at the date of approval of these financial statements, used internal and external sources of information including credit reports and related information and economic forecasts and expects that the carrying amount of these assets will be recovered. The impact of Covid-19 on the Company''s financial statements may differ from that estimated as at the date of approval of these standalone financial statements.

The Indian Parliament has approved the Code on Social Security, 2020 which would impact the contributions by the company towards Provident Fund and Gratuity. The Ministry of Labour and Employment has released draft rules for the Code on Social Security, 2020 on November 13, 2020, and has invited suggestions from stakeholders which are under active consideration by the Ministry.The Company will assess the impact and its evaluation once the subject rules are notified and will give appropriate impact in its financial statements in the period in which, the Code becomes effective and the related rules to determine the financial impact are published.

Note: 52. Confirmations

The Company requested its debtors and creditors to confirm the balances as at the end of half year in respect of trade payables, trade receivables and advances directly to the Statutory Auditors.

Note: 53

Previous year''s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year''s presentation.


Mar 31, 2019

The Company has one class of share capital, comprising ordinary shares of Rs. l0/- each. Subject to the Company''s Articles of Association and applicable law, the Company''s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

The Company does not have any holding Company.

Note: 14(b). Nature and purpose of Reserves Capital Redumption Reserve:

A Statutory reserve created to the extent of sum equal to the nominal value of the Share Capital extinguished on buyback of Company''s own shares pursuant to Section 69 of the Companies Act, 2013.

Security Premium:

Securities Premium has been created consequent to issue of shares at premium. These reserves can be utilised in accordance with Section 52 of the Companies Act, 2013.

*Open Cash Credit from Canara Bank is secured by way of hypothecation of Stocks, Book debts, Plant & Machinery and other fixed assets of the company and Collateral Security of Equitable Mortgage of Land and Buildings situtated at Plot No. 47, Survey No. l4l, APIIC Industrial Park, Gambheeram (V), Visakapatnam and personal guarantee of the Managaing Director of the Company and the rate of interest @ll.40% p.a.

Note: 1. Revenue From Operations

Disclosure in respect of Indian Accounting Standard (Ind AS)-l15: “Revenue from Contract with Customers” Transitional Provision

The company has adopted the new Indian Accounting Standard l15 (Revenue from Contract with Customers) retrospectively with cumulative effect of adoption as an adjustment to opening retained earnings as on 0l.04.2018. The company has examined the changes bought in under Ind AS l15 and observed that there has been no impact on the opening retained earnings as at 0l.04.2018.

A. (i) Contract with Customers

(ii) Company has recognized the following revenue during the year from contracts with its customers

(b) Contract Assets

Company recognized contract assets when it satisfies its obligation by transferring the goods or services to the customer and right to receive the consideration is established which is subject to some conditions to be fulfilled by the company in future before receipt of consideration amount. Such assets are Rs Nil.

During the year company has recognized revenue of Rs. Nil(PY Rs Nil) from the performance obligations satisfied in earlier periods.

The company has made the adjustment of Rs Nil (PYRs. Nil) in the revenue of Rs.505,l12,223/- ( PY Rs. 519,722,946/-) recognized during the year on account of discounts, rebates, refunds, credits, price concessions, incentives performance bonuses etc as against the contracted revenue of Rs.505,l12,223/- ( PY Rs.519,722,946/-).

(c) Contract Liabilities

Upon execution of contract with the customers, certain amount in the form of EMD, Security Deposit, Margin Money, advance for payment of custom duty etc. received from the customers which is shown as advance received from customers under the heading “Other Financial Liabilities” and “Other Liabilities”. The balances are Rs Nil

(d) Practical expedients

During the year company has entered into sales contracts with its customers where contracts are not executed, same has not been disclosed as practical expedient as the duration of the contract is of short duration or right to receive the consideration established on completion of the performance by the company.

B Significant judgements in the application of this standard

(i) Revenue is recognized by the company when the company satisfies a performance obligation by transferring a promised good or service to its customers. Asset/goods/services are considered to be transferred when the customer obtains control of those asset/goods/services.

(ii) The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (for example, GST etc.).

(iii) The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. Any further adjustment will be made by raising debit/credit notes on the customer. While determining the transaction price effects of variable consideration, constraining estimates of variable consideration, the existence of a significant financing component in the contract, non-cash consideration and consideration payable to a customer is also considered.

C Assets Recognised from costs to obtain or fulfill a contact with a customer

The costs incurred by the company are fixed in nature with no significant incremental cost to obtain or fulfill a contract with a customer and same is charged to profit and loss as a practical expedient.

Current Tax for the previous year represents the Minimum Alternative Tax (MAT) payable by the company on the book profits for the year. However, the company is not recognising the MAT credit entitlement determined under section l15JAA(2A) of the Income Tax Act, l96l during the current year and earlier years as possiblility of paying the Income Tax under the normal provisions of the Income Tax, l96l in future is uncertain because the company claims weighted deduction under section 35(2AB) of the Income Tax Act, l96l.

Note: 2. Employee Benefits

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of Rs.28,24,350/- (Previous year Rs.20,44,277/-) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return as specified by GOI to the members. The overall interest earnings and cumulative surplus is more than the statutory interest payment requirement during the year.

b) Gratuity: Gratuity is a funded Defined Benefit Plan payable to the qualifying employees on separation. It is managed by a Life Assurance Scheme'' of the Life Insurance Corporation of India.

Company makes annual contribution to the Fund based on the present value of the Defined Benefit obligation and the related current service costs which are measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit Method.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as at the year ended March 3l, 20l9 are as follows:

Note: 3. Segmental Reporting :

The entire operations of the company relate to only one segment viz., Electronics & Communication and hence segmental reporting is not given.

Note: 4. Financial Instruments-

Fair Values and Risk Management

a) Financial Instruments by Categories

The following tables show the carrying amounts and fair values of financial assets and financial liabilities by categories. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair Value Hierarchy Management considers that, the carrying amount of those financial assets and financial liabilities that are not subsequently measured at fair value in the Financial Statements approximate their transaction value. No financial instruments are recognized and measured at fair value for which fair values are determined using the judgments and estimates. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilities. (Level-l measurements) and lowest priority to unobservable (Level-3 measurements).

The Company does not hold any equity investment and no financial instruments hence the disclosure are nil

Financial Risk Management:

The Company''s activities expose to a variety of financial risks viz., market risk, credit risk and liquidity risk. The Company''s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk. The Company''s exposure to credit risk is influenced mainly by Government Orders.

Management of Market Risk:

Market risks comprises of Price risk and Interest rate. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interestrate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising from various Currency exposures primarily with respect to the US Dollars (USD), for the imports being made by the Company.

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company operations are with Government and allied companies and hence no issues credit worthiness. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy.

Credit risk exposure

An analysis of age-wise trade receivables at each reporting date is summarized as follows:

Liquidity Risk:

The company''s liquidity needs are monitored on the basis of monthly projections. The principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of cash credit and overdraft facilities to meet the obligaons as and when due. Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital facilities to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and committed credit lines.

Note: 5. Capital Management:

The objective of the company when managing capital are to

- to safeguard the company’s ability to continue as going concern, So that they can continue to provide returns for the Share holder and benefits for other stake holders.

- maintain optimal capital structure to reduce cost of capital has no borrowing outstanding as at the year end. there were no specific debt convents for the non fund based facilities extended by the bank.

Note: 6. The disclosure relating to transactions with Micro, Small and Medium Enterprises

Sundry Creditors includes Rs. 9,36,83l/-(previous year Rs. 82,36,828/-) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

Note: 7. Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013 and rules made there under on CSR Activities, the Company has incurred an amount of Rs l0,63,984/- (20l7-2018 year Rs. 8,0l,875/-) towards Corporate Social Responsibility activities during the Financial Year 2018-19and debited to Statement of Profit and Loss.

Note: 8. Confirmations

The Company requested its debtors and creditors to confirm the balances as at the end of half year in respect of trade payables, trade receivables and advances directly to the Statutory Auditors.

Note: 9.

Previous year''s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year''s presentation.


Mar 31, 2018

The Company has one class of share capital, comprising ordinary shares of Rs. 10/- each. Subject to the Company’s Articles of Association and applicable law, the Company’s ordinary shares confer on the holder the right to receive notice of and vote at general meetings of the Company, the right to receive any surplus assets on a winding-up of the Company, and an entitlement to receive any dividend declared on ordinary shares.

The Company does not have any holding Company.

* Equitabel Martgage of Land and Buildings situtated at Plot No. 47, Survey No. 141, APIIC Industrial Park, Gambheeram (V), Visakapatnam, Collateral Security of land and buildings and hypothecation of Plant and Machinery situated at Madhapur , Hypothecation of Stocks and Book Debts and personal guarantee of Dr. A.Vidya Sagar, Managing Director of the Company. The Loan is payable on monthly instalments @ Rs. 8.5 Lakhs per month upto August 2019 which was repaid during the year 2017-18 and the rate of interest @13.65% p.a.

*Open Cash Credit from Canara Bank is secured by way of hypothecation of Stocks, Book debts, Plant & Machinery and other fixed assets of the company and Collateral Security of Land & Buildings situated at Plot No.I6, HUDA Techno Enclave, Madhapur, Hyderabad and personal guarantee of the Managaing Director of the Company and the rate of interest @11.85% p.a

Note: 1. First time adoption of Indian Accounting Standards (Ind AS) - Ind AS 101

All companies having that are being listed with stock exchange are required to adopt Ind AS. Accordingly, the company has adopted Ind AS, in accordance with Notification dated February 16, 2015 issued by Ministry of Corporate Affairs, Government of India, with effect from April 01, 2017 with transition date on April 01, 2016.

Transition from IGAAP to Ind AS:

These financial statements, for the year ended March 31, 2018, are the first financial statements prepared by the Company in accordance with Ind AS. For years upto and including the year ended March 31, 2017, the company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013 read together with paragraph 7 of Companies (Accounts) Rules, 2014 and accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) (herein after referred as IGAAP).

The company has prepared Ind AS compliant financial statements for the year ending March 31, 2018. Accordingly, the company has prepared opening Ind AS balance sheet as at April 01, 2016, the company’s date of transition to Ind AS in accordance with requirement of Ind AS 101, “First-time Adoption of Indian Accounting Standards”. The principal adjustments made by the company in restating its IGAAP financial statements, including the balance sheet as at April 01, 2016 and the balance sheet as at and the Statement of Profit & Loss for the year ended March 31, 2017, are explained in detail in the accompanying reconciliation statement and the basic approach adopted is summarized hereunder.

i) All assets and liabilities have been classified into financial assets/liabilities and non-financial assets/liabilities.

ii) In accordance with Ind AS 101, the resulting adjustments are considered as arising from events and transactions entered before the date of transition and recognized directly in the retained earnings at the date of transition to Ind AS.

iii) Ind AS 101 also allows first time adopter certain exemptions from the retrospective application of certain requirements under Ind AS. Accordingly, the company has availed the following exemptions/mandatory exceptions as per Ind AS 101:

a) Deemed Cost for Property, Plant & Equipment and Intangible assets (PPE): The Company has availed exemption under para D7AA of appendix D to Ind AS 101 which permits a first time adopter to continue with the carrying values as per IGAAP for its PPE as at the date of transition to Ind AS.

b) Classification & Fair value measurement of financial assets or financial liabilities at initial recognition:

The financial assets and financial liabilities have been classified on the basis of facts existing as at the date of transition to Ind AS.

Deferred Tax:

The Company recalculated the deferred tax using balance sheet method as defined under Ind-AS. Accordingly, the adjustment to deferred tax asset is Nil as at March 31, 2017 and the adjustment to deferred tax asset is Nil as at April 01, 2016. Consequently, the retained earnings have been adjusted accordingly.

Proposed dividend: Under the IGAAP dividend proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements was considered as adjusting events. Accordingly, provision for proposed dividend including dividend tax was recognized as a liability under provisions. Under Ind AS such dividends including dividend tax are recognized when the same is approved by the share holders in the general meeting. Accordingly, the liability for provision for dividend including dividend tax of Rs. 97,59,779 as at March 31, 2017 (April 1, 2016-Rs. 48,79,890) included under provisions has been reversed with corresponding adjustments to retained earnings. Consequently, the total equity is increased by an equivalent amount.

Prior Period Income/Expenses:

Under previous GAAP Prior period items identified in a particular period were disclosed separately in computing the net profit for that period. Under Ind AS, Prior Period items are recognized by restating the comparative figures for the period to which the error pertains. Where the error pertains to a period prior to the earliest reporting period, adjustments are made to the opening balances of assets, liabilities and equity of the earliest reporting period. As a result, as at March 31, 2017, on account of prior period items, other equity stands decreased by 1,10,412 (increase as at April 1, 2016 by Rs. 39,545) with a corresponding net increase in liabilities by Rs. I,I0,4I2( decreae as at April 1, 2016 Rs. Rs. 39,545).

Retained Earnings:

Retained earnings as at April I, 2016 and as at March 31, 2017 have been adjusted consequent to the above Ind-AS transition adjustments , details are given in annexure below.

As per Ind AS Transition Facilitation Group (ITFG) considered clarifications issused on I on May 5, 2017 the company transferred balance outstanding in the revaluation reserve as on April I 20I6 Rs. I,26,20,582 to retained earnings i.e., surplus in profit and loss accounts.

Excise Duty:

Under the IGAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty is shown separately in the statement of profit and loss as a part of expense. This change has resulted in an increase in total revenue and total expenses for the year ended March 3I, 20I7 by Rs.90,29,990. There is no impact on profit.

Current Tax for the previous year represents the Minimum Alternative Tax (MAT) payable by the company on the book profits for the year. However, the company is not recognising the MAT credit entitlement determined under section II5JAA(2A) of the Income Tax Act, 1961 during the current year and earlier years as possiblility of paying the Income Tax under the normal provisions of the Income Tax, I96I in future is uncertain because the company claims weighted deduction under section 35(2AB) of the Income Tax Act, I96I.

Note: 2. Employee Benefits

a) Provident Fund: Company pays fixed contribution to provident fund at predetermined rates to the government authorities. The contribution of 20,44,277 (Previous year 17,13,5 14) including administrative charges is recognized as expense and is charged in the Statement of Profit and Loss. The obligation of the Company is to make such fixed contribution and to ensure a minimum rate of return as specified by GOI to the members. The overall interest earnings and cumulative surplus is more than the statutory interest payment requirement during the year.

b) Gratuity: Gratuity is a funded Defined Benefit Plan payable to the qualifying employees on separation. It is managed by a Life Assurance Scheme’ of the Life Insurance Corporation of India.

Company makes annual contribution to the Fund based on the present value of the Defined Benefit obligation and the related current service costs which are measured on actuarial valuation carried out as on Balance Sheet date. The liability has been assessed using Projected Unit Credit Method.

Reconciliation of opening and closing balances of the present value of the defined benefit obligation as at the year ended March 3I, 20I8 are as follows:

Note: 3. Related Party Disclosures:

List of Related Parties Parties with whom the company has entered into transactions during the year/where control exists. A . Key Management Personnel

i) Dr. Abburi Vidyasagar Chairman & Manging Director

ii) Mrs. Abburi Sarada Wholetime Director & CFO

iii) Mr. Subramanaiya Balakrishnan Non Executive Director

iv) Mr. Raghu Prasad Pidikiti Non Executive Director

v) Mr. Yalamanchili Kishore Independent Director

vi) Mr. Naveen Nandigam Independent Director vii Mr. Eluru Bala Venkata Ramana Gupta Independent Director viii) Mr. Myneni Narayana Rao Independent Director

B. Relative of Key Management Personnel NIL

Note: 4. Dividend:

The Board of Directors have recommended a dividend at Rs. 4/- per share of Rs. I0/- amounting to Rs. I,95,5I,6I3/- for the year 20I7-I8 Including dividend distribution tax.

Note: 5. Segmental Reporting :

The entire operations of the company relate to only one segment viz., Electronics & Communication and hence segmental reporting is not given.

Note: 6. Financial Instruments- Fair Values and Risk Management

a) Financial Instruments by Categories

The following tables show the carrying amounts and fair values of financial assets and financial liabilities by categories. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Fair Value Hierarchy Management considers that,the carrying amount of those financial assets and financial liabilies that are not subsequently measured at fair value in the Financial Statements approximate their transaction value. No financial instruments are recognized andmeasured at fair value for which fair values are determined using the judgments and estimates. The fair value of Financial Instruments referred below has been classified into three categories depending on the inputs used in the valuation technique. The hierarchy gives the highest priority to quoted prices in active market for identical assets or liabilies. (Level-Imeasurements) and lowest priority to unobservable (Level-3 measurements).

The Company does not hold any equity investment and no financial instruments hence the disclosure are nil

Financial Risk Management:

The Company’s activities expose to a variety of financial risks viz.,market risk, credit risk and liquidity risk. The Company’s focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial performance. The primary market risk to the Company is credit risk and liquidity risk. The Company’s exposure to credit risk is influenced mainly by Government Orders.

Management of Market Risk:

Market risks comprises of Price risk and Intere strate risk. The Company does not designate any fixed rate financial assets as fair value through Profit and Loss nor at fair value through OCI. Therefore, the Company is not exposed to any interestrate risk. Similarly, the Company does not have any Financial Instrument which is exposed to change in price.

Foreign Currency Risks:

The Company is exposed to foreign exchange risk arising from various Currency exposures primarily with respect to the US Dollars (USD), for the imports being made by the Company.

The Company exposure to foreign currency risk as at the end of the reporting period expressed in INR as on March 3I, 20I7 is as follows:

Credit Risk:

Credit risk is the risk of financial loss to the Company if a customer fails to meet its contractual obligations. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables. The company operations are with Government and allied companies and hence no issues credit worthiness. The company considers that, all the financial assets that are not impaired and past due as on each reporting dates under review are considered credit worthy.

Liquidity Risk:

The company’s liquidity needs are monitored on the basis of monthly projections. The principal sources of liquidity are cash and cash equivalents, cash generated from operations and availability of cash credit and overdraft facilities to meet the obligaons as and when due. Short term liquidity requirements consist mainly of sundry creditors, expenses payable and employee dues during the normal course of business. The company maintains sufficient balance in cash and cash equivalents and working capital facilities to meet the short term liquidity requirements.

The company assesses long term liquidity requirements on a periodical basis and manages them through internal accruals and commited credit lines.

The following table shows the maturity analysis of the Companies Financial Liabilities based on contractually agreed, undiscounted cash flows as at the balance sheet date.

Note: 7. The disclosure relating to transactions with Micro, Small and Medium Enterprises

Sundry Creditors includes Rs. 82,36,828/-(previous year Rs. 40,67,358/-) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

Note: 8. Corporate Social Responsibility (CSR)

As per Section I35 of the Companies Act, 20I3 and rules made there under on CSR Activities, the Company has incurred an amount of Rs. 8,0I,875/- (20I6-20I7 year Rs. I0,78,7I4/-) towards Corporate Social Responsibility activities during the Financial Year 20I7-I8 and debited to Statement of Profit and Loss.

The amount of expenditure to be spent on CSR activities and financial details as per the Companies Act, 20I3 for the F.Y 20I7-I8 are as under:

Note: 9. Confirmations

The Company requested its debtors and creditors to confirm the balances as at the end of half year in respect of trade payables, trade receivables and advances directly to the Statutory Auditors.

Note: 10.

Previous year’s figures have been regrouped/reclassified/recasted wherever necessary to confirm to the current year’s presentation.


Mar 31, 2015

1. LONG-TERM BORROWINGS

Term loan from Canara Bank

(Equitable Mortgage of Land and buildings stuated at Plot No.47, Survey No.141, APIIC Industrial Park, Gambheeram (V), Visakhapatnam, Collateral Security of land and buildings and Hypothecation of Plant and Machinery Situated at Madhapur, Hypothecation of Stocks and Book Debts and Personal Guarantee of Dr. A. Vidyasagar, Managing Director of the Company). The Loan is Payable on monthly instalments @ Rs. 8.5 Lakhs per month upto August 2019 and the rate of interest @13.95% p.a.

2. CURRENT TAX

Current Tax for the previous year represents the Minimum Alternative Tax (MAT) payable by the Company on the book profits for the year. However, the Company is not recognizing the MAT credit entitlement determined under section 115JAA(2A) of the Income Tax Act, 1961 during the current year and earlier years as possibility of paying the Income Tax under the normal provisions of the Income Tax Act, 1961 in future is uncertain because the Company claims weighted deduction under section 35(2AB) of the Income Tax Act, 1961.

3. Employee Retirement Benefits:

Gratuity:

The Company has established a trust viz. Avantel Employees Group Gratuity Trust vide the trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the Company and the premium payable thereof are provided by contributions made by the Company to the trust, specifically, for insuring the gratuity benefits. The scheme provided for death- cum-retirement gratuity to the eligible employees of the Company as defined in the rules of the scheme. The accrued liability of the Company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

Defined Contribution Plans:

In respect of defined contribution plans (Provident Fund), an amount of Rs. 16,61,060/- (Previous Year- Rs. 9,87,170/-) has been recognized in the Profit & Loss Account during the period.

4. RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18: a) List of Related Parties

Parties with whom the Company has entered into transactions during the year/where control exists

i) Key Management Personnel

Dr. Abburi Vidyasagar Mrs. Abburi Sarada

Note: Related party relationships have been identified by the management and relied upon by the auditors.

5. Sundry Creditors includes Rs. 29,47,392/-(previous year 92,11,625/-) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6. In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

7. Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.

8. Previous year figures are regrouped/recast/reclassified where ever necessary.

9. The Board of Directors of the Company in its meeting held on 29th April, 2015, considered and approved the audited financial statements for the financial year 2014-15. Subsequently in the Board Meeting held on 29th July, 2015, the Board of Directors of the Company reconsidered the audited financial statements for the financial year 2014-15 and approved the audited financial statements for the financial year 2014-15 by recommending a dividend of Rs. 1.50 (Rupee One and Fifty Paisa only) per equity share of Rs. 10/- (Rupees Te n only) each. The financial statements approved by the Board of Directors in its meeting held on 29th April, 2015 and the reconsidered Financial statements approved by the Board of Directors in its meeting held on 29th July, 2015, remain unchanged except for the dividend and corporate dividend tax thereon reflected in the reconsidered statements for the financial year 2014-15.


Mar 31, 2014

Corporate Information:

Avantel Limited is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed in one stock exchange in India. The company is engaged in manufacturing of Telecom Products and rendering related customer support/other services. The company caters to both domestic and international markets. The company is having in-house Research & Development (R & D) facility at Visakhapatnam.

2.1 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

Contingent liabilities 31st march 2014 31st march 2013 rs rs

Claims against the company not acknowledged as debt Guarantees 56,301,978 56,695,193

Total 56,301,978 56,695,193

2.2 Employee Retirement Benefits:

Gratuity:

The Company has established a trust viz. Avantel Employees Group Gratuity Trust vide the trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the company and the premium payable thereof are provided by contributions made by the company to the trust, specifi cally, for insuring the gratuity benefits. The scheme provided for death- cum-retirement gratuity to the eligible employees of the company as defi ned in the rules of the scheme. The accrued liability of the company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

2.3 Sundry Creditors includes Rs.92,11,625/-(previous year 10,64,296/-) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

2.4 In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

2.5 Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confi rmation.


Mar 31, 2013

Corporate Information:

Avantel Limited is a public limited company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed in one stock exchange in India. The company is engaged in manufacturing of Telecom Products and rendering related customer support/other services. The company caters to both domestic and international markets. The company is having in-house Research & Development (R & D) facility at Hyderabad.

1.1 CURRENT TAX

Current Tax represents the Minimum Alternative Tax (MAT) payable by the company on the book profits for the year. However, the company is not recognising the MAT credit entitlement determined under section 115JAA(2A) of the Income Tax Act, 1961 during the current year and earlier years as possiblility of paying the Income Tax under the normal provisions of the Income Tax, 1961 in future is uncertain because the company claims weighted deduction under section 35(2AB) of the Income Tax Act, 1961.

1.2 CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

a) Contingent liabilities Claims against the company not acknowledged as debt

(i) Guarantees 56,695,193 17,245,815

(ii) Letter of Credit 2,815,911

Sub Total 56,695,193 20,061,726

b) Commitments amount of contracts unexecuted on capital account 23,000,000

Sub Total 23,000,000

Total 56,695,193 43,061,726

1.3 EMPLOYEE RETIREMENT BENEFITS:

Gratuity:

The Company has established a trust viz. Avantel Employees Group Gratuity Trust vide the trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the company and the premium payable thereof are provided by contributions made by the company to the trust, specifically, for insuring the gratuity benefits. The scheme provided for death-cum-retirement gratuity to the eligible employees of the company as defined in the rules of the scheme. The accrued liability of the company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

1.4 RELATED PARTY DISCLOSURE AS PER ACCOUNTING STANDARD - 18: a) List of Related Parties

Parties with whom the company has entered into transactions during the year/where control exists

i) Key Management Personnel

Dr. Abburi Vidya Sagar Mr. N. Divakar

ii) Relative of Key Management Personnel

Mrs. Abburi Sarada

1.5 M/s. APIIC Limited has allotted 3763.59 Sq. Mts (0.93 Acres) of land situated at Industrial park, Gambheeram, Visakhapatnam to the Company for a total sale consideration of Rs. 89,38,526/- vide Agreement for Sale dated 26th May, 2010 for construction of factory buildings. The Company has completed the civil works and commenced commercial production from 14.02.2013. The sale deed for transfering the ownership in favour of the compay is yet to be executed.

1.6 Sundry Creditors includes Rs. 10,64,296/- (previous year 39,60,243/-) due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

1.7 In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.8 Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.


Mar 31, 2012

The Financial Statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956. Previous year figures have been recast / restated to confirm to the classification of the current year. Amounts in the financial statements are presented in Rupees. All the figures have been rounded to nearest rupee.

a) Terms/rights attached to equity Shares.

The company has only one class of equity shares having a par value of Rs 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

For the year ended 31st March, 2012, an amount of Rs 2.00 per equity share was recommended by the board as dividend to the shareholders of the Company. (31st March, 201 I: Rs 1.50).

As the items of raw materials procured and consumed and items of finished goods produced are heterogeneous in nature, type and quality and numerous in quantity, it is not possible to given full details of material consumed, raw materials purchased and closing stock of inventory as required under para 5 (ii) & 5 (iii) of the general instructions for preparation of the statement of profit and loss as per the revised schedule VI of the Companies Act, 1956.

1.1. CURRENT TAX

Current Tax represents the Minimum Alternative Tax (MAT) payable by the company on the book profits of for the year. However, the company is not recognising the MAT credit entitlement determined under section I I5JAA(2A) of the Income Tax Act, 1961 during the current year and earlier years as possiblility of paying the Income Tax under the normal provisions of the Income Tax Act, 1961 in future is uncertain because the company claims weighted deduction under section 35(2AB) of the Income Tax Act, 1961.

1.2. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for)

a) Contingent liabilities

Claims against the company not acknowledged as debt

(i) Guarantees 17,245,815 17,146,888

(ii) Letter of Credit 2,815,911 -

Sub Total 20,061,726 17,146,888

b) Commitments

Estimated amount of contracts unexecuted on capital account 23,000,000 41,01 1,560

Sub Total 23,000,000 41,01 1,560

Total (a b) 43,061,726 58,158,448

1.3. EMPLOYEE RETIREMENT BENEFITS:

Gratuity:

The Company has established a trust viz. Avantel Employees Group Gratuity Trust vide the trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the company and the premium payable thereof are provided by contributions made by the company to the trust, specifically, for insuring the gratuity benefits. The scheme provided for death-cum-retirement gratuity to the eligible employees of the company as defined in the rules of the scheme. The accrued liability of the company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

1.4. M/s. APIIC Limited has allotted 3763.59 Sq .Mts (0.93 Acres) of land situated at Industrial park, Gambheeram, Visakhapatnam to the Company for a total sale consideration of 7 89,38,526/- vide Agreement for Sale dated 26th May, 2010 for setting up of a factory for Design, Development and Manufacture of its products. As per the terms and conditions of the sanction, ownership of the land will be transferred in favour of the Company only after implementation of the unit.

1.5. Sundry Creditors includes Rs NIL due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

1.6 In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

1.7 Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.


Mar 31, 2011

As at As at 31.03.2011 31.03.2010

1. Contingent Liabilities not Provided for:

a. In respect of Guarantees issued by bankers 1,71,46,888 1,10,56,308

b. Letter of Credits NIL 34,10,232

2. Capital Commitments:

Estimated value of contracts remaining to be executed on capital account to the extent not provided for Rs.4,10,11,560/- ( previous year : Nil.)

3. Depreciation on Fixed Assets:

Capital Expenditure incurred on leasehold building will be amortized over a period of 5 years i.e the tenure of the lease.

The Fixed Assets Costing Rs. 5,000/- or less acquired during the year were depreciated at 100%. Depreciation has been provided on addition to fixed assets on pro-rata basis for the period for which the assets are put to use.

4. Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.

5. In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet

6. Gratuity: The Company has established a Trust viz. Avantel Employees Group Gratuity Trust vide the trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the company and the premium payable thereof are provided by contributions made by the company to the Trust, specifically, for insuring the gratuity benefits. The scheme provided for death-cum-retirement gratuity to the eligible employees of the company as defined in the rules of the scheme. The accrued liability of the company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

Defined contribution plans:

In respect of defined contribution plans (Provident Fund), an amount of Rs. 7,68,030/- (PY Rs. 7,47,912/-) has been recognized in the Profit & Loss Account during the period.

7. The Company operations relate to manufacture of telecom products and rendering related customer support/ other services. During the year, Sales includes Rs.92.91 Lakhs earned from rendering customer support / other services.

8. In terms of Accounting Standard (AS-22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is net deferred tax asset as on 31-03-2010. Based on general prudence, the Company has not recognized the said deferred tax while preparing the accounts for the current year.

9. Sundry Creditors includes Rs. NIL due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

10. Secured Loans : Open Cash Credit and other working capital facilities from Canara Bank are secured by Hypothecation against first charge on Stocks and Books Debts of the Company and Collateral Security of land and Buildings situated at Plot No. 16, HUDA Techno Enclave, Madhapur and hypothecation of Plant and Machinery and other fixed assets of the Company and personal Guarantee of the Managing Director of the Company.

11. M/s. APIIC Limited has allotted 3763.59 Sq .Mts (0.93 Acres) of land situated at Industrial park, Gambheeram, Visakhapatnam to the Company for a total sale consideration of Rs. 89,38,526/- vide Agreement for Sale dated 26th May, 2010 for setting up of a factory for Design, Development and Manufacture of its products. As per the terms and conditions of the sanction, ownership of the land will be transferred in favour of the Company only after implementation of the unit.

12. Additional information required by Para 3,4C and 4B of part II of Schedule VI to the Companies Act, 1956.

a) CAPACITY & PRODUCTION:

1. Licensed Capacity : Not Applicable

2. Installed Capacity : Since the plant can be used for manufacturing of various electronic products it is not practicable to specify the installed capacities in relation to various products.

f) As the material consumed and items produced heterogeneous in nature, type and quality and numerous in quantity, it is not possible to give quantitative details of actual production, material consumption and closing stock-in-trade.

13. Related Party Disclosure as per Accounting Standard (AS)-18:

A) List of Related Parties

Parties with whom the company has entered into transactions during the year/where control exists

1. Key Management Personnel Dr. A.Vidyasagar Mr. N.Divakar

2. Relative of Key Management Personnel Mrs. A.Sarada

14. Previous year figures have been rearranged and regrouped wherever necessary to facilitate the comparison.

15. Figures have been rounded off to nearest rupee.


Mar 31, 2010

1. Contingent Liabilities not Provided for:

As at As at

31.03.2010 31.03.2009

a. Estimated amount of contracts remaining to be executed on capital account and not Provided for NIL 2,64,000

b. In respect of Guarantees issued by bankers 1,10,56,308 1,65,31,585

c. Letter of Credits 34,10,232 NIL

2. Depreciation on Fixed Assets:

The Fixed Assets are depreciated on estimated useful life of assets on the following basis.

Buildings - 20 Years

Computers - 3 Years

Furniture & Fixtures - 5 Years

Plant & Machinery - 4 Years

Vehicles - 4 Years

Capital Expenditure incurred on leasehold building will be amortized over a period of 5 years i.e the tenure of the lease.

The Fixed Assets Costing Rs. 5,000/- or less acquired during the year were depreciated at 100%. Depreciation has been provided on addition to fixed assets on pro-rata basis for the period for which the assets are put to use.

3. Pursuant to the Board of Directors approval for buy back of equity shares under section 77A of the Companies Act, 1956, the Company has bought back 4,46,243 equity shares of Rs.10/ each through open market transactions for an aggregate amount of Rs.2,18,87,403 by utilizing Share premium account. The Capital Redemption Reserve has been created out of the amount transferred from General Reserve for Rs.44,62,430 being the nominal value of shares bought back in terms of Section 77AA of the Companies Act, 1956.

4. Balances of Sundry Debtors, Sundry Creditors, and Loans and Advances are subject to confirmation.

5. In the opinion of the Board of Directors and to the best of their knowledge and belief, the value on realization of Current Assets, Loans and Advances in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

6. Gratuity: The Company has established a Trust viz. Avantel Employees Group Gratuity Trust vide the Trust deed dated 28th day of January 2002. The Trust has entered into a scheme of insurance with the Life Insurance Corporation of India to cover gratuity liability payable by the company and the premium payable thereof are provided by contributions made by the company to the Trust, specifically, for insuring the gratuity benefits. The scheme provided for death-cum-retirement gratuity to the eligible employees of the company as defined in the rules of the scheme. The accrued liability of the company in respect of gratuity payable is covered in the manner aforesaid. Effective April 1, 2007, the Company has adopted the Accounting Standard 15 (Revised 2005) on "Employee Benefits" issued by the Institute of Chartered Accountants of India.

7. The Company operations relate to manufacture of telecom products and rendering related customer support/ other services. During the year, Sales includes Rs.1.06 crores earned from rendering customer support / other services.

8. In terms of Accounting Standard (AS-22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is net deferred tax asset as on 31-03-2010. Based on general prudence, the Company has not recognized the said deferred tax while preparing the accounts for the current year.

9. Sundry Creditors includes Rs. NIL due to Small Scale & Ancillary undertakings. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days at the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

10. Previous year figures have been rearranged and regrouped wherever necessary to facilitate the comparison.

11. Figures have been rounded off to nearest rupee.

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