Mar 31, 2015
I. Basis for preparation of accounts
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
Section 211 (3C) of the Companies Act, 1956 ("the 1956 Act") (which
continue to be applicable in respect of Section 133 of the Companies
Act, 2013 ("the 2013 Act") in terms of the General Circular 15/2013
dated September 13, 2013 of the Ministry of Corporate Affairs) and the
relevant provisions of the 1956 Act/2013 Act, as applicable on accrual
basis following the historical cost conventions.
II. Use of Estimates
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities, revenues and expenses and
disclosures relating to contingent liabilities. The Management believes
that the estimates used in preparation of the financial statements are
prudent and reasonable. Actual results could differ from these
estimates. Any revision to the accounting estimates is recognised
prospectively in the current and future periods. Estimates include
provisions for resurfacing obligations, employee benefit plans,
provision for income taxes and provision for diminution in the value of
investments.
III. Presentation of financial statements
The Balance Sheet and the Statement of Profit and Loss are prepared and
presented in the format prescribed in Schedule III to the Companies
Act, 2013 ("the Act"). The Cash Flow Statement has been prepared and
presented as per the requirements of Accounting Standard (AS) 3 "Cash
Flow Statements". The disclosure requirements with respect to items in
the Balance Sheet and Statement of Profit and Loss, as prescribed in
Schedule III to the Act, are presented by way of notes forming part of
accounts along with the other notes required to be disclosed under the
notified Accounting Standards.
Amounts in the financial statements are presented in Indian Rupees
rounded off to the nearest Rupee. Per share data is presented in Indian
Rupees to two decimals places
IV. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
A. Revenue from Operations
a. Service income
Revenues, in respect of revenue from network products and projects are
recognized on completion of respective works contracts. In respect of
fixed price service activities, revenue is recognized on time and
materials basis. In respect of other contracts, revenue is recognized
on the achievement of the milestones set out in the contracts.
The revenues from Services and Installation Charges are recognized on
completion of respective works contracts. Income from Investments is
recognized when the right to receive the payment is established.
Interest is recognized using the Time-Proportion method, based on the
rates implicit in the transaction.
b. Other Operating Income
a. Other operational revenue represents income earned from activities
incidental to the business and is recognized when the right to receive
the income is established as per the terms of the contract.
B. Other Income
a. Interest income is recognised on a time proportion basis taking
into account the amount outstanding and the applicable rate.
b. Profit/loss on sale of investments is recognised at the time of
actual sale/redemption.
c. Other items of income are accounted for as and when the right to
receive arises.
V. Employee Benefits
(i) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, short term compensated absences etc.
and the expected cost of bonus, ex-gratia are recognized in the period
in which the employee renders the related service.
(ii) Post-Employment Benefits
a) Defined Contribution Plans: The Company's obligation to employee's
provident fund is a defined contribution plan. The contribution
paid/payable is recognized in the period in which the employee renders
the related service.
b) Defined Benefit Plans: The Company's obligation towards gratuity is
a defined benefit plan.
The present value of the obligation under such Defined Benefit Plans is
determined based on actuarial valuation using the Projected Unit Credit
Method, which recognizes each period of service as giving rise to
additional unit of employee benefit entitlement and measures each unit
separately to build up the final obligation.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government securities as at the Balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized in the Statement of Profit
and loss.
(iii) Long Term Employee Benefits
The obligation for long term employee benefits such as long term
compensated absences is recognized in the same manner as in the case of
defined benefit plans as mentioned in (ii) (b) above.
The obligation is measured at the present value of the estimated future
cash flows. The discount rates used for determining the present value
of the obligation under defined benefit plans, is based on the market
yields on Government securities as at the balance sheet date, having
maturity periods approximating to the terms of related obligations.
Actuarial gains and losses are recognized immediately in the statement
of profit and loss.
VI. Fixed Assets Tangible
Fixed assets are stated at original cost net of tax/duty credits
availed, if any, less accumulated depreciation and cumulative
impairment.
Administrative and other general overhead expenses that are
specifically attributable to the construction or acquisition of fixed
assets, for bringing the fixed asset to working condition are allocated
and capitalised as a part of cost of fixed asset.
Intangible
Intangible assets are recognised when it is probable that future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably.
Intangible assets are stated at original cost net of tax/duty credits
availed, if any, less accumulated amortisation and cumulative
impairment.
Administrative and other general overhead expenses that are directly
attributable to development or acquisition of intangible assets are
allocated and capitalized as part of cost of the intangible assets.
Intangible assets not ready for the intended use on the date of the
Balance Sheet are disclosed as "intangible assets under development".
VII. Depreciation and Amortisation Depreciation
Depreciation on assets have been provided on straight-line basis at the
rates specified in the Schedule II of the Companies Act, 2013.
Depreciation on additions/ deductions is calculated pro-rata from/ to
the month of additions/ deductions. For assets that are
transferred/sold within the group, depreciation is calculated up to the
month preceding the month of transfer/sale within the group.
Depreciation charge for impaired assets is adjusted in future periods
in such a manner that the revised carrying amount of the asset is
allocated over its remaining useful life.
Amortisation
Telecom Software and other intangibles are amortised over a period of
three years.
VIII. INVENTORIES
Stock-in-trade is valued at lower of cost and net realizable value.
Cost is determined on FIFO basis.
IX. FOREIGN EXCHANGE TRANSACTIONS
The following are the transactions in Foreign Exchange
Foreign currency transactions during the year are translated at the
exchange rates prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rate prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the respective revenue accounts.
The operations of the company's overseas branches are considered
integral in nature and the balances/and transactions of the branches
are translated using the aforesaid principle.
X. Leases Operating
Assets acquired on leases where a significant portion of risks and
rewards of ownership are retained by the lessor are classified as
operating leases. Lease rentals are charged to Statement of Profit and
Loss on accrual basis.
Assets leased out under operating leases are capitalised. Rental income
is recognized over the lease term.
Finance
Assets acquired under leases where the Company has substantially all
the risks and rewards of ownership are classified as finance leases.
Such assets are capitalised at the inception of the lease at the lower
of the fair value or the present value of minimum lease payments and a
liability is created for an equivalent amount.
Each lease rental paid is allocated between the liability and the
interest cost, so as to obtain a constant periodic rate of interest on
the outstanding liability for each period.
The lease rentals paid during the year and the future lease obligations
of HP EMI's for agreements in vogue as on March 31,2015 are as follows:
in lakhs)
Lease rentals paid (including HP EMI's) 31st March, 31st March,
2015 2014
Lease rentals paid during the year Nil Nil
Future lease obligations As at 31st As at 31st
March, 2015 March, 2014
Due within 1 year from the
balance sheet date Nil 344.54
Due between 1 and 5 years Nil Nil
Due after 5 years Nil Nil
XI. Impairment of Assets
At each balance sheet date, the carrying amount of assets is tested for
impairment so as to determine:
a. The provision for impairment loss, if any; and
b. The reversal of impairment loss recognised in previous period, if
any,
Impairment loss is recognised, when the carrying amount of an asset
exceeds its recoverable amount. Recoverable amount is determined:
a. in case of an individual asset, at the higher of net selling price
and net value in use;
b. in case of cash generating unit (a group of assets that generates
identified, independent cash flows), at the higher of the cash
generating unit's net selling price and the net value in use.
(Value in use is determined as the present value of estimated future
cash flows from the continuing use of an asset and from its disposal at
the end of its useful life.)
XII. Investments
Investments which are readily realisable and are intended to be held
for not more than one year from the date of acquisition are classified
as current investment. All other investments are classified as long
term investment.
Current Investments are stated at lower of cost and market value. The
determination of carrying amount of such investments is done on the
basis of weighted average cost of each individual investment.
Long term investments are carried at cost, after providing for any
diminution, if other than temporary in nature.
XIII. Cash and bank balances
Cash and bank balances also include fixed deposits, margin money
deposits, earmarked balances with banks and other bank balances which
have restrictions on repatriation. Short term and liquid investments
being not free from more than insignificant risk of change are not
included as part of cash and cash equivalents.
XIV. Borrowing costs
Borrowing costs include interest, commitment charges, amortization of
ancillary costs, amortization of discounts / premium related to
borrowings, finance charges in respect of finance lease and exchange
differences arising from foreign currency borrowings, to the extent
they are regarded as an adjustment to interest cost.
Borrowing costs that are attributable to the acquisition, construction
or production of a qualifying asset are capitalized / inventoried as
part of cost of such asset till such time the asset is ready for its
intended use or sale. A qualifying asset is an asset that necessarily
requires a substantial period of time to get ready for its intended use
or sale. All other borrowing costs are recognised as an expense in the
period in which they are incurred.
In compliance of AS-16 "Borrowing Cost", income earned on temporary
investments, out of funds borrowed which are intermittently surplus but
inextricably linked with the project, is deducted from the related
borrowing costs incurred.
XV. Foreign currency transactions
The reporting currency of the Company is the Indian Rupee.
Foreign currency transactions are recorded on initial recognition in
the reporting currency, using the exchange rate at the date of the
transaction. At each Balance Sheet date, foreign currency monetary
items are reported using the closing rate. Non-monetary items carried
at historical cost denominated in a foreign currency, are reported
using the exchange rate on the date of the transaction.
Exchange differences that arise on settlement of monetary items or on
reporting of monetary items at each Balance Sheet date at the closing
rate are:
(a) adjusted in the cost of fixed assets specifically financed by the
borrowings contracted, to which the exchange differences relate.
(b) recognised as income or expense in the period in which they arise.
XVI. Segment accounting
(i) Segment revenue includes sales directly identifiable with /
allocable to the segment.
(ii) Expenses that are directly identifiable with/allocable to the
segments are considered for determining the segment result.
(iii) Expenses which relate to the Company as a whole and not allocable
to segments are included under "unallocable corporate expenditure".
Similarly Income which relate to the Company as a whole and not
allocable to segments is included in "unallocable corporate income".
(iv) Segments assets and liabilities include those directly
identifiable with respective segments. Unallocable corporate assets and
liabilities represent the assets and liabilities that relate to the
Company as a whole and not allocable to any segment.
XVII. Taxes on Income
Tax on income for the current period is determined on the basis of
taxable income and tax credits computed in accordance with the
provisions of the Income-tax Act, 1961 and based on the expected
outcome of assessments/appeals.
Deferred tax is recognized on timing differences between the accounting
income accounted in financial statements and the taxable income for the
year and quantified using the tax rates and laws enacted or
substantively enacted as on the Balance Sheet date.
Deferred tax asset relating to unabsorbed depreciation/business losses
and losses under the head "capital gains" are recognised and carried
forward to the extent there is virtual certainty that sufficient future
taxable income will be available against which such deferred tax asset
can be realised.
Other deferred tax asset are recognised and carried forward to the
extent that there is a reasonable certainty that sufficient future
taxable income will be available against which such deferred tax asset
can be realised.
XVIII. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognized for liabilities that can be measured only by
using a substantial degree of estimation, if
a) the Company has a present obligation as a result of a past event.
b) a probable outflow of resources is expected to settle the
obligation, and
c) the amount of the obligation can be reliably estimated.
Reimbursement expected in respect of expenditure required to settle a
provision is recognized only when it is virtually certain that the
reimbursement will be received.
Contingent Liability is disclosed in the case of:
a) A present obligation arising from a past event, when it is not
probable that an outflow of resources will be required to settle the
obligation
b) a possible obligation when no reliable estimate is possible and
c) A possible obligation arising from a past event unless the
probability of outflow of resources is remote Contingent Assets are
neither recognized, nor disclosed.
Provisions, Contingent Liabilities and Contingent Assets are reviewed
at each Balance sheet date.
XIX. Operating cycle
Operating cycle for the business activities of the company is taken as
twelve months.
XX. Cash flow Statement
Cash flow statement is prepared segregating the cash flows from
operating, investing and financing activities. Cash flow from operating
activities is reported using indirect method. Under indirect method,
the net profit is adjusted for the effects of:
i) Transactions of non-cash nature.
ii) Any deferrals or accruals of past or future operating cash receipts
or payments, and
iii) Items of income or expense associated with investing or financing
cash flows.
Cash and cash equivalents (including bank balances) are reflected as
such in the Cash Flow Statement. Those cash and cash equivalents which
are not available for general use as on date of balance sheet are also
included under this category with a specific disclosure.
XXI. Commitments
Commitments are future liabilities for contractual expenditure. They
are classified and disclosed as follows:
a) Estimated amount of contracts remaining to be executed on capital
account and not provided for;
b) Uncalled liability on shares and other investments partly paid;
c) Funding related commitment to subsidiary, associate and joint
venture companies; and
XXII. Claims
i. Claims against the company are accounted for as and when accepted.
ii. Claims by the company are recognised and accounted for as and when
received.
Mar 31, 2014
1. SYSTEM OF ACCOUNTING
The financial statements are prepared under the historical cost
convention in accordance with Indian Generally Accepted Accounting
Principles (GAAP), and all income and expenditure having a material
bearing on the financial statements are recognized on accrual basis.
The financial statements comply with the applicable mandatory
Accounting Standards.
2. REVENUE RECOGNITION
Revenues, in respect of revenue from network products and projects are
recognized on completion of respective works contracts. In respect of
fixed price service activities, revenue is recognized on time and
materials basis. In respect of other contracts, revenue is recognized
on the achievement of the milestones set out in the contracts.
The revenues from Services and Installation Charges are recognized on
completion of respective works contract/s. Income from Investments is
recognized when the right to receive the payment is established.
Interest is recognized using the Time-Proportion method, based on the
rates implicit in the transaction.
3. USE OF ESTIMATES
In preparation of financial statements conforming to GAAP requirements
certain estimates and assumptions are essentially required to be made
with respect to items such as provision for doubtful debts, future
obligations under employee retirement benefit plans, income taxes and
the useful life period of Fixed Assets. Due care and diligence have
been exercised by the Management in arriving at such estimates and
assumptions since they may directly affect the reported amounts of
income and expenses during the year as well as the balances of Assets
and Liabilities including those which are contingent in nature as at
the date of reporting of the financial statements.
To comply with GAAP requirements relating to impairment of assets, if
any, the Management periodically determines such impairment using
external and internal resources for such assessment. Loss, if any,
arising out of such impairment is expensed as stipulated under the GAAP
requirements. Contingencies are recorded when a liability is likely to
be incurred and the amount can be reasonably estimated. To this extent
the results may differ from such estimates.
4. FIXED ASSETS
Fixed Assets are stated at cost of acquisition less accumulated
depreciation. All costs relating to the acquisition and installation of
fixed assets are capitalized and include financing costs relating to
borrowed funds attributable to acquisition up to the date the assets
are ready for use.
5. DEPRECIATION
Depreciation is provided on straight-line method at the rates specified
in SCHEDULE XIV to the Companies Act, 1956. Depreciation is provided on
pro-rata basis from the day on which the assets have been put to use
and up to the day on which assets have been disposed off. The software
asset is depreciated at the rates higher than that specified in
schedule XIV based on useful life of assets, which is estimated by the
management as three years. The project assets are depreciated at rates
higher than that specified in schedule XIV based on useful life of
assets, which is estimated by the management as five years.
The management estimate useful life for fixed assets as under;
Asset Estimated useful life of asset
Computer Equipment 5 to 6 years
Plant and Machinery 6 to 21 years
Software Assets 3 years
Furniture and Office equipments 3 to 9 years
IPR / Know-how 3 years
Vehicles and Other assets 9 to 11 years
Project Assets 5 years
6. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and fair value.
Long-term investments are carried at cost less provision made, if any,
for the decline in the value of such investments.
7. INVENTORIES
Stock-in-trade is valued at lower of cost and net realizable value.
Cost is determined on FIFO basis.
8. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions during the year are translated at the
exchange rates prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rates prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the respective revenue accounts.
The operations of the company''s overseas branches are considered
integral in nature and the balances/and transactions of the branches
are translated using the aforesaid principle.
9. PROVISION FOR TAXATION
Provision for Current Income Tax is made in accordance with the
provisions of Income Tax Act, 1961.
Deferred tax assets and liabilities are measured using substantially
enacted tax rates as on the Balance Sheet date. Provision for Deferred
Tax Liability is provided on timing differences. The effect of deferred
tax assets and liabilities of a change in tax rates is recognized in
the income statement.
10. LEASES
The assets purchased under hire purchase agreements are included in the
Fixed Assets block. The value of the asset purchased is capitalized in
the books. A liability for the same amount is created at the time of
entering into the agreement. The payments are made to the HP vendors as
per the EMI''s given in the hire purchase agreements. The finance
charges are debited to the profit & loss statement and the principal
amount is adjusted against the liability created for the vendor. Lease
rental in respect of operating lease arrangements are charged to
expense on a straight line basis over the term of the related lease
agreement.
11. RETIREMENT BENEFITS
Provident Fund:
Employees receive benefits from a provident fund, which is a defined
contribution plan. Both the employee and the Company makes monthly
contributions to the Regional Provident Fund equal to a specified
percentage of the covered employee''s salary. The Company has no further
obligations under the plan beyond its monthly contributions. The
contributions are charged to the Profit and Loss Account of the year
when the contributions to the respective funds are due and there are no
other obligations other than the contribution payable.
Gratuity:
The Company provides for gratuity in accordance with the Payment of
Gratuity Act, 1972, a defined benefit retirement plan (the Plan)
covering all employees. The plan, subject to the provisions of the
above Act, provides a lump sum payment to eligible employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee''s salary and the tenure of
employment. Gratuity liability is accrued and provided for on the basis
of an actuarial valuation on projected unit credit method made at the
end of each financial year. Actuarial gains/losses are immediately
taken to profit and loss account and are not deferred.
12. BORROWING COSTS
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalized as part of the cost of
such assets up-to the date when such assets are ready for intended use.
Other borrowing costs are charged as an expense in the year in which
they are incurred.
13. CASH FLOW STATEMENT
The Cash flow statement is prepared under the indirect method as per
Accounting Standard 3 "Cash Flow Statements".
14. EARNINGS PER SHARE
The company reports basic and diluted earnings per share in accordance
with the Accounting Standards - 20- ''Earnings per Share''.
15. SEGMENT REPORTING
The entire operations of the company related to one segment, i.e.,
network product and related services and hence segment reporting is not
applicable for this year.
16. IMPAIRMENT OF ASSETS
All assets other than inventories and deferred tax asset, are reviewed
for impairment, wherever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Assets whose carrying
value exceeds their recoverable amount are written down to the
recoverable amount.
17. PROVISION AND CONTINGENCIES
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2012
A. SYSTEM OF ACCOUNTING
The financial statements are prepared under the historical cost
convention in accordance with Indian Generally Accepted Accounting
Principles (GAAP), and all income and expenditure having a material
bearing on the financial statements are recognized on accrual basis.
The financial statements comply with the applicable mandatory
Accounting Standards.
B. REVENUE RECOGNITION
Revenues, in respect of revenue from network products and projects are
recognized on completion of respective works contracts. In respect of
fixed price service activities, revenue is recognized on time and
materials basis. In respect of other contracts, revenue is recognized
on the achievement of the milestones set out in the contracts.
The revenues from Services and Installation Charges are recognized on
completion of respective works contract/s.
Income from Investments is recognized when the right to receive the
payment is established.
Interest is recognized using the Time-Proportion method, based on the
rates implicit in the transaction.
C. USE OF ESTIMATES
In preparation of financial statements conforming to GAAP requirements
certain estimates and assumptions are essentially required to be made
with respect to items such as provision for doubtful debts, future
obligations under employee retirement benefit plans, income taxes and
the useful life period of Fixed Assets. Due care and diligence have
been exercised by the Management in arriving at such estimates and
assumptions since they may directly affect the reported amounts of
income and expenses during the year as well as the balances of Assets
and Liabilities including those which are contingent in nature as at
the date of reporting of the financial statements.
To comply with GAAP requirements relating to impairment of assets, if
any, the Management periodically determines such impairment using
external and internal resources for such assessment. Loss, if any,
arising out of such impairment is expensed as stipulated under the GAAP
requirements. Contingencies are recorded when a liability is likely to
be incurred and the amount can be reasonably estimated. To this extent
the results may differ from such estimates.
D. FIXED ASSETS
Fixed Assets are stated at cost of acquisition less accumulated
depreciation. All costs relating to the acquisition and installation of
fixed assets are capitalized and include financing costs relating to
borrowed funds attributable to acquisition up to the date the assets
are ready for use.
E. DEPRECIATION
Depreciation is provided on straight-line method at the rates specified
in SCHEDULE XIV to the Companies Act, 1956.
Depreciation is provided on pro-rata basis from the day on which the
assets have been put to use and up to the day on which assets have been
disposed off.
The software asset is depreciated at the rates higher than that
specified in schedule XIV based on useful life of assets, which is
estimated by the management as three years.
The project assets are depreciated at rates higher than that specified
in schedule XIV based on useful life of assets, which is estimated by
the management as five years.
F. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and fair value.
Long-term investments are carried at cost less provision made, if any,
for the decline in the value of such investments.
G. INVENTORIES
Stock-in-trade is valued at lower of cost and net realizable value.
Cost is determined on FIFO basis.
H. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions during the year are translated at the
exchange rates prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rates prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the respective revenue accounts.
The operations of the company's overseas branches are considered
integral in nature and the balances/ and transactions of the branches
are translated using the aforesaid principle.
I. PROVISION FOR TAXATION
Provision for Current Income Tax is made in accordance with the
provisions of Income Tax Act, 1961.
Deferred tax assets and liabilities are measured using substantially
enacted tax rates as on the Balance Sheet date. Provision for Deferred
Tax Liability is provided on timing differences. The effect of deferred
tax assets and liabilities of a change in tax rates is recognized in
the income statement.
J. LEASES
The assets purchased under hire purchase agreements are included in the
Fixed Assets block. The value of the asset purchased is capitalized in
the books. A liability for the same amount is created at the time of
entering into the agreement. The payments are made to the HP vendors as
per the EMI's given in the hire purchase agreements. The finance
charges are debited to the profit & loss statement and the principal
amount is adjusted against the liability created for the vendor.
Lease rental in respect of operating lease arrangements are charged to
expense on a straight line basis over the term of the related lease
agreement.
K. RETIREMENT BENEFITS Provident Fund:
Employees receive benefits from a provident fund, which is a defined
contribution plan. Both the employee and the Company makes monthly
contributions to the Regional Provident Fund equal to a specified
percentage of the covered employee's salary. The Company has no further
obligations under the plan beyond its monthly contributions. The
contributions are charged to the Profit and Loss Account of the year
when the contributions to the respective funds are due and there are no
other obligations other than the contribution payable.
Gratuity:
The Company provides for gratuity in accordance with the Payment of
Gratuity Act, 1972, a defined benefit retirement plan (the Plan)
covering all employees. The plan, subject to the provisions of the
above Act, provides a lump sum payment to eligible employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee's salary and the tenure of
employment. Gratuity liability is accrued and provided for on the
basis of an actuarial valuation on projected unit credit method made at
the end of each financial year. Actuarial gains/losses are immediately
taken to profit and loss account and are not deferred.
L. BORROWING COSTS
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalized as part of the cost of
such assets up-to the date when such assets are ready for intended use.
Other borrowing costs are charged as an expense in the year in which
they are incurred.
M. CASH FLOW STATEMENT
The Cash flow statement is prepared under the indirect method as per
Accounting Standard 3 "Cash Flow Statements".
N. EARNINGS PER SHARE
The company reports basic and diluted earnings per share in accordance
with the Accounting Standards - 20-'Earnings per Share'.
O. SEGMENT REPORTING
The entire operations of the company related to one segment, i.e.,
network product and related services and hence segment reporting is not
applicable for this year.
P. IMPAIRMENT OF ASSETS
All assets other than inventories and deferred tax asset, are reviewed
for impairment, wherever events
or changes in circumstances indicate that the carrying amount may not
be recoverable. Assets whose carrying value exceeds their recoverable
amount are written down to the recoverable amount.
Q. PROVISION AND CONTINGENCIES
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2011
1. SYSTEM OF ACCOUNTING
The financial statements are prepared under the historical cost
convention in accordance with Indian Generally Accepted Accounting
Principles (GAAP), and all income and expenditure having a material
bearing on the financial statements are recognized on accrual basis.The
financial statements comply with the applicable mandatory Accounting
Standards.
2. REVENUE RECOGNITION
Revenues, in respect of revenue from network products and projects are
recognized on completion of respective works contracts. In respect of
fixed price service activities, revenue is recognized on time and
materials basis. In respect of other contracts, revenue is recognized
on the achievement of the milestones set out in the contracts.
The revenues from Services and Installation Charges are recognized on
completion of respective works contract/s.
Income from Investments is recognized on receipt basis.
Interest is recognized using the Time-Proportion method, based on the
rates implicit in the transaction.
3. USE OF ESTIMATES
In preparation of financial statements conforming to GAAP requirements
certain estimates and assumptions are essentially required to be made
with respect to items such as provision for doubtful debts, future
obligations under employee retirement benefit plans, income taxes and
the useful life period of Fixed Assets. Due care and diligence have
been exercised by the Management in arriving at such estimates and
assumptions since they may directly affect the reported amounts of
income and expenses during the year as well as the balances of Assets
and Liabilities including those which are contingent in nature as at
the date of reporting of the financial statements.
To comply with GAAP requirements relating to impairment of assets, if
any, the Management periodically determines such impairment using
external and internal resources for such assessment. Loss, if any,
arising out of such impairment is expensed as stipulated under the GAAP
requirements. Contingencies are recorded when a liability is likely to
be incurred and the amount can be reasonably estimated. To this extent
the results may differ from such estimates.
4. FIXED ASSETS
Fixed Assets are stated at cost of acquisition less accumulated
depreciation. All costs relating to the acquisition and installation of
fixed assets are capitalized and include financing costs relating to
borrowed funds attributable to acquisition up to the date the assets
are ready for use.
5. DEPRECIATION
Depreciation is provided on straight-line method at the rates specified
in SCHEDULE XIV to the Companies Act, 1956.
Depreciation is provided on pro-rata basis from the day on which the
assets have been put to use and up to the day on which assets have been
disposed off.
The software asset is depreciated at the rates higher than that
specified in schedule XIV based on useful life of assets, which is
estimated by the management as three years.
The project assets are depreciated at rates higher than that specified
in schedule XIV based on useful life of assets, which is estimated by
the management as five years.
The management estimate useful life for fixed assets as under;
Asset Estimated useful life of asset
Computer Equipment 5 to 6 years
Plant and Machinery 6 to 21 years
Software Assets 3 years
Furniture and Office equipments 3 to 9 years
IPR / Know-how 3 years
Vehicles and Other assets 9 to 11 years
Project Assets 5 years
6. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and fair value.
Long-term investments are carried at cost less provision made, if any,
for the decline in the value of such investments.
7. INVENTORIES
Stock-in-trade is valued at lower of cost and net realizable value.
Cost is determined on Weighted Average Method basis.
8. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions during the year are translated at the
exchange rates prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rates prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the respective revenue accounts.
The operations of the company's overseas branches are considered
integral in nature and the balances/and transactions of the branches
are translated using the aforesaid principle.
9. PROVISION FOR TAXATION
Provision for Current Income Tax is made in accordance with the
provisions of Income Tax Act, 1961.
Deferred tax assets and liabilities are measured using substantially
enacted tax rates as on the Balance Sheet date. Provision for Deferred
Tax Liability is provided on timing differences. The effect of deferred
tax assets and liabilities of a change in tax rates is recognized in
the income statement.
10. LEASES
The assets purchased under hire purchase agreements are included in the
Fixed Assets block. The value of the asset purchased is capitalized in
the books. A liability for the same amount is created at the time of
entering into
agreement. The payments are made to the HP vendors as per the EMI's
given in the hire purchase agreements. The finance charges are debited
to the profit & loss statement and the principal amount is adjusted
against the liability created for the vendor.
Lease rental in respect of operating lease arrangements are charged to
expense on a straight line basis over the term of the related lease
agreement.
11. RETIREMENT BENEFITS
Provident Fund:
Employees receive benefits from a provident fund, which is a defined
contribution plan. Both the employee and the Company makes monthly
contributions to the Regional Provident Fund equal to a specified
percentage of the covered employee's salary. The Company has no further
obligations under the plan beyond its monthly contributions. The
contributions are charged to the Profit and Loss Account of the year
when the contributions to the respective funds are due and there are no
other obligations other than the contribution payable.
Gratuity:
The Company provides for gratuity in accordance with the Payment of
Gratuity Act, 1972, a defined benefit retirement plan (the Plan)
covering all employees. The plan, subject to the provisions of the
above Act, provides a lump sum payment to eligible employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee's salary and the tenure of
employment. Gratuity liability is accrued and provided for on the basis
of an actuarial valuation on projected unit credit method made at the
end of each financial year. Actuarial gains/losses are immediately
taken to profit and loss account and are not deferred.
12. BORROWING COSTS
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalized as part of the cost of
such assets up-to the date when such assets are ready for intended use.
Other borrowing costs are charged as an expense in the year in which
they are incurred.
13. CASH FLOW STATEMENT
The Cash flow statement is prepared under the indirect method as per
Accounting Standard 3 "Cash Flow Statements".
14. EARNINGS PER SHARE
The company reports basic and diluted earnings per share in accordance
with the Accounting Standards à 20- ÃEarnings per Share'.
15. SEGMENT REPORTING
The entire operations of the company related to one segment, i.e.,
network product and related services and hence segment reporting is not
applicable for this year.
16. IMPAIRMENT OF ASSETS
All assets other than inventories and deferred tax asset, are reviewed
for impairment, wherever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Assets whose carrying
value exceeds their recoverable amount are written down to the
recoverable amount.
17. PROVISION AND CONTINGENCIES
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Mar 31, 2010
1. SYSTEM OF ACCOUNTING
The financial statements are prepared under the historical cost
convention in accordance with Indian Generally Accepted Accounting
Principles (GAAP), and all income and expenditure having a material
bearing on the financial statements are recognized on accrual basis.
The financial statements comply with the applicable mandatory
Accounting Standards.
2. REVENUE RECOGNITION
Revenues, in respect of revenue from network products and projects are
recognized on completion of respective works contracts. In respect of
fixed price service activities, revenue is recognized on time and
materials basis. In respect of other contracts, revenue is recognized
on the achievement of the milestones set out in the contracts.
The revenues from Services and Installation Charges are recognized on
completion of respective works contract/s.
Income from Investments is recognized when the right to receive the
payment is established.
Interest is recognized using the Time-Proportion method, based on the
rates implicit in the transaction.
3. USE OF ESTIMATES
In preparation of financial statements conforming to GAAP requirements
certain estimates and assumptions are essentially required to be made
with respect to items such as provision for doubtful debts, future
obligations under employee retirement benefit plans, income taxes and
the useful life period of Fixed Assets. Due care and diligence have
been exercised by the Management in arriving at such estimates and
assumptions since they may directly affect the reported amounts of
income and expenses during the year as well as the balances of Assets
and Liabilities including those which are contingent in nature as at
the date of reporting of the financial statements.
To comply with GAAP requirements relating to impairment of assets, if
any, the Management periodically determines such impairment using
external and internal resources for such assessment. Loss, if any,
arising out of such impairment is expensed as stipulated under the GAAP
requirements. Contingencies are recorded when a liability is likely to
be incurred and the amount can be reasonably estimated. To this extent
the results may differ from such estimates.
4. FIXED ASSETS
Fixed Assets are stated at cost of acquisition less accumulated
depreciation. All costs relating to the acquisition and installation of
fixed assets are capitalized and include financing costs relating to
borrowed funds attributable to acquisition up to the date the assets
are ready for use.
5. DEPRECIATION
Depreciation is provided on straight-line method at the rates specified
in SCHEDULE XIV to the Companies Act, 1956.
Depreciation is provided on pro-rata basis from the day on which the
assets have been put to use and up to the day on which assets have been
disposed off.
The software asset is depreciated at rates higher than that specified
in schedule XIV based on useful life of assets, which is estimated as
three years by the management.
The project assets are depreciated at rates higher than that specified
in schedule XIV based on useful life of assets, which is estimated as
five years by the management.
The management estimate useful life for fixed assets as under;
Asset Estimated useful life of asset
Computer Equipment 5 to 6 years
Plant and Machinery 6 to 21 years
Software Assets 3 years
Furniture and Office equipments 3 to 9 years
IPR / Know-how 3 years
Vehicles and Other assets 9 to 11 years
Project Assets 5 years
6. INVESTMENTS
Investments are classified into current and long-term investments.
Current investments are stated at the lower of cost and fair value.
Long-term investments are carried at cost less provision made, if any,
for the decline in the value of such investments.
7. INVENTORIES
Stock-in-trade is valued at lower of cost and net realizable value.
Cost is determined on FIFO basis.
8. FOREIGN CURRENCY TRANSACTIONS
Foreign currency transactions during the year are translated at the
exchange rates prevailing on the respective date of transactions.
Assets and Liabilities outstanding in foreign currency as on the date
of the Balance Sheet are translated at exchange rates prevailing as on
the last day of the relevant financial year. Differences rising out of
such translations are charged to the respective revenue accounts.
The operations of the companys overseas branches are considered
integral in nature and the balances/and transactions of the branches
are translated using the aforesaid principle.
9. PROVISION FOR TAXATION
Provision for Current Income Tax is made in accordance with the
provisions of Income Tax Act, 1961.
Deferred tax assets and liabilities are measured using substantially
enacted tax rates as on the Balance Sheet date. Provision for Deferred
Tax Liability is provided on timing differences. The effect of deferred
tax assets and liabilities of a change in tax rates is recognized in
the income statement.
10. LEASES
The assets purchased under hire purchase agreements are included in the
Fixed Assets block. The value of the asset purchased is capitalized in
the books. A liability for the same amount is created at the time of
entering into the agreement. The payments are made to the HP vendors
as per the EMIs given in the hire purchase agreements. The finance
charges are debited to the profit & loss statement and the principal
amount is adjusted against the liability created for the vendor.
Lease rental in respect of operating lease arrangements are charged to
expense on a straight line basis over the term of the related lease
agreement.
11.RETIREMENT BENEFITS
Provident Fund:
Employees receive benefits from a provident fund, which is a defined
contribution plan. Both the employee and the Company make monthly
contributions to the Regional Provident Fund equal to a specified
percentage of the covered employees salary. The Company has no further
obligations under the plan beyond its monthly contributions. The
contributions are charged to the Profit and Loss Account of the year
when the contributions to the respective funds are due and there are no
other obligations other than the contribution payable.
Gratuity:
The Company provides for gratuity in accordance with the Payment of
Gratuity Act, 1972, a defined benefit retirement plan (the Plan)
covering all employees. The plan, subject to the provisions of the
above Act, provides a lump sum payment to eligible employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employees salary and the tenure of
employment. Gratuity liability is accrued and provided for on the basis
of an actuarial valuation on projected unit credit method made at the
end of each financial year. Actuarial gains/losses are immediately
taken to profit and loss account and are not deferred.
12.BORROWING COSTS
Borrowing costs attributable to the acquisition, construction or
production of qualifying assets are capitalized as part of the cost of
such assets up-to the date when such assets are ready for intended use.
Other borrowing costs are charged as an expense in the year in which
they are incurred.
13.CASH FLOW STATEMENT
The Cash flow statement is prepared under the indirect method as per
Accounting Standard 3 "Cash Flow Statements".
14.EARIMIIUGS PER SHARE
The company reports basic and diluted earnings per share in accordance
with the Accounting Standards - 20Earnings per Share.
15.SEGMENT REPORTING
The entire operations of the company related to one segment, i.e.,
network product and related services and hence segment reporting is not
applicable for this year.
16.IMPAIRMENT OF ASSETS
All assets other than inventories and deferred tax asset, are reviewed
for impairment, wherever events or changes in circumstances indicate
that the carrying amount may not be recoverable. Assets whose carrying
value exceeds their recoverable amount are written down to the
recoverable amount.
17.PROVISION AND CONTINGENCIES
The company creates a provision when there is present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that probably will not require an
outflow of resources or where a reliable estimate of the obligation
cannot be made.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article