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Notes to Accounts of Avantel Ltd.

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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