Mar 31, 2015
1. Basis of preparation
The financial statements of the Company are consistently prepared and
presented under historical cost convention on an accrual basis in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The Company has prepared the financial statements to
comply in all material aspects with the accounting standards notified
under section 133 of the Companies Act, 2013 (the Act), read together
with rule 7 of the Companies (Accounts) Rules, 2014 and the relevant
provisions of the Act. In accordance with first proviso to section
129(1) of the Act and clause 6 of the General Instructions given in
Schedule III to the Act, the terms used in these financial statements
are in accordance with the Accounting Standards as referred to herein.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule III to the Act. Based on the nature of
operations, the Company has ascertained its operating cycle as 12
months for the purpose of current - non-current classification of
assets and liabilities.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year except to the
extent stated in point no. 2 below.
2. Change in Accounting Policy
In the current year, the Company changed, with retrospective effect,
its method of providing depreciation on certain fixed assets from the
Written Down Value (WDV) method at the rates prescribed in Schedule XIV
to the Companies Act, 1956 to the Straight Line (SLM) method at the
rates derived from the useful life stated in Schedule II to the Act.
The above change is in case of all fixed assets except Internet access
devices at customers location. In case of later, depreciation is
provided over 8 years on SLM. Refer note no. 4.10 also.
3. Use of Estimates
The preparation of financial statements in conformity with Indian
Generally Accepted Accounting Principles (GAAP) requires management to
make judgments, estimates and assumptions that affect the reported
amounts of revenue, expenses, assets and liabilities and disclosures
relating to contingent liabilities as at the date of financial
statements and reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, actual
results could differ from these estimates. Differences on account of
revision of estimates, actual results and existing estimates are
recognized in periods in which the results are known /materialized in
accordance with the requirements of the respective accounting standard,
as may be applicable.
4. Fixed Assets
(a) Tangible Assets
(i) The fixed assets are stated at cost less accumulated depreciation
and impairment losses, if any. Cost comprises of purchase price,
non-refundable taxes and all expenses incurred in bringing the assets
to its present location and condition for its intended use and includes
installation and commissioning expenses. The indirect expenditure
incurred during the pre-commencement period is allocated
proportionately over the cost of the relevant assets.
(ii) Internet Access devices on hand at the year-end are included in
Capital Work in Progress. On installation, such devices are
capitalized.
(iii) Gains or losses arising from de-recognition of fixed assets are
measured as the difference between the net disposal proceeds and the
carrying amount of the asset and are recognized in the statement of
profit and loss when the asset is de-recognized.
(b) Intangible Assets
(i) Intangible assets are recognized only if they are separately
identifiable and the Company expects to receive future economic
benefits arising out of them. Such assets are stated at cost less
accumulated amortization and impairment losses.
(ii) The amortization period and the amortization method are reviewed
at least at each financial year-end. If the expected useful life of the
asset is significantly different from previous estimates, the
amortization period is changed accordingly. If there has been a
significant change in the expected pattern of economic benefits from
the asset, the amortization method is changed to reflect the changed
pattern.
(iii) Intangible assets comprises of Cable Television Franchise and
Software's. Cable Television Franchisee represents purchase
consideration of a network that is mainly attributable to acquisition
of subscribers and other rights, permission etc. attached to a network.
5. Depreciation / Amortization
(a) Depreciation is the systematic allocation of the depreciable amount
of an asset over its useful life and is provided on a straight-line
basis over the useful life as prescribed in Schedule II to the Act,
unless otherwise specified.
(b) Depreciable amount for assets is the cost of an asset less its
estimated residual value.
(c) In case of additions or deletions during the year, depreciation is
computed from the month in which such assets are put to use and up to
previous month of sale, disposal or held for sale as the case may be.
In case of impairment, depreciation is provided on the revised carrying
amount over its remaining useful life.
(d) The cost of STBs and Internet Access Devices at customers location
are depreciated on straight-line method over a period of eight years.
(e) Assets costing less than Rs 5,000/- is fully depreciated in the year
of purchase.
(f) The intangible assets are amortized on a straight line basis over
their expected useful lives as follows:
(i) Cable Television Franchise is amortized over a period of twenty
years.
(ii) Software's are amortized over the license period and in absence of
such tenor, over five years.
6. Investments
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
(a) Long Term Investments
Long-term investments in shares are stated at cost. The provision for
diminution in value of such investments is made if such diminution is
considered other than temporary.
(b) Current Investments
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
7. Inventories
Inventories are valued as follows:
Stock-in-trade comprising of access devices are valued at cost on
weighted average method or at net realizable value, whichever is lower.
8. Borrowing Cost
Borrowing Costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of such
assets. 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 recognized as an expense in the period in
which they are incurred.
9. Provisions, Contingent Liabilities And Contingent Assets
(a) A Provision is recognized when the Company has a present obligation
as a result of past event and it is probable that an outflow of
resources would be required to settle the obligation, and in respect of
which a reliable estimate can be made. Provisions are not discounted to
its present value and are determined based on management's estimate for
the amount required to settle the obligation at the balance sheet date.
Provisions are reviewed on each balance sheet date and are adjusted to
effect the current best estimation.
(b) Contingent liabilities are disclosed separately by way of note to
financial statements after careful evaluation by the management of the
facts and legal aspects of the matter involved in case of:
(i) a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
(ii) a possible obligation, unless the probability of outflow of
resources is remote.
(c) Contingent Assets are neither recognized nor disclosed.
10. Employee Benefits
(a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the statement of profit & loss of the year in
which the related service is rendered.
(b) Post-employment and other long term employee benefits viz.,
gratuity leave encashment, etc., are covered under Defined Benefit
Plan. The cost of providing benefits is recognized as an expense in the
statement of profit and loss for the year in which the employee has
rendered services. The amount of expense is determined on the basis
actuarial valuation at each year-end by Projected Unit Credit Method.
Actuarial gains and losses in respect of post-employment and other long
term benefits are charged to the statement of profit and loss in the
period in which they occur. The Company presents the entire liability
pertaining to leave encashment as a short term provision in the balance
sheet, since it does not have an unconditional right to defer its
settlement for 12 months after the reporting date.
11. Accounting for Leases
The transactions where the Company conveys or receives right to use an
asset for an agreed period of time for a payment or series of payments
are considered as Lease.
As Lessee - Operating Lease
Lease rentals in respect of assets taken on 'Operating Lease' are
charged to Statement of Profit and Loss over the lease term on
systematic basis, which is more representative of the time pattern of
the Company's benefit.
12. Revenue Recognition
Revenue is recognized on accrual basis to the extent it is probable
that the economic benefits will flow to the Company and the revenue can
be reliably measured.
Income from Services
(a) Subscription income includes subscription from Subscribers / Cable
Operators relating to cable TV, Internet, activation of devices and
from broadcasters relating to the placement of channels. Revenue from
Operations is recognized on accrual basis based on underlying
subscription plan or agreements with the concerned subscribers /
parties.
(b) Revenue from prepaid Internet Service plans, which are active at
the end of accounting period, is recognized on time proportion basis.
In other cases of prepaid Internet Service plans, entire revenue is
recognized in the period of sale.
(c) Subscription Income from Cable TV Operators, is accrued monthly
based on number of connections declared by the said operators to the
Company. In cases where revision of number of connections and / or rate
is under negotiations at the time of recognition of revenue, the
Company recognizes revenue as per invoice raised. Adjustments for the
year, if any, arising on settlement is adjusted against the Revenue.
Other cases are reviewed by the management periodically and provision
for doubtful debts is made wherever ultimate realization is considered
uncertain.
(d) The company collects service tax on behalf of the government and,
therefore, it is not an economic benefit flowing to the company. Hence,
it is excluded from revenue.
Interest Income
Interest income is recognized on a time proportion basis taking into
account the amount outstanding and the applicable interest rate.
Interest income is included under the head "Other Income" in the
statement of profit and loss.
13. Taxation
(a) Provision for Current Tax is made on the basis of taxable profits
computed for the current accounting year in accordance with the Income
Tax Act, 1961.
(b) Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date and is
recognized on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred Tax
assets are recognized on carry forward of unabsorbed depreciation and
tax losses, only if, there is virtual certainty that such deferred tax
assets can be realized against future taxable income. Other deferred
tax assets are recognized only to the extent that there is a reasonable
certainty of realization in future.
14. Earnings per Share (EPS)
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
15. Impairment
The Company assesses at each balance sheet whether there is any
indication that assets may be impaired. If any such indications exist,
the Company estimates the recoverable amount of the assets or the
cash-generating unit and if the same is less than its carrying amount,
the carrying amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognized in the statement of
profit and loss. If at the balance sheet date there is an indication
that if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the assets are reflected at the
recoverable amount.
16. Cash And Cash Equivalents
Cash and cash equivalents comprise cash at bank; cash in hand, demand
deposits with banks and other short-term investments with an original
maturity of three months or less.
17. Measurement of EBITDA
The Company has elected to present earnings before interest, tax,
depreciation and amortization (EBITDA) as a separate line item on the
face of the statement of profit and loss. The Company measures EBITDA
on the basis of profit/ (loss) from continuing operations. In its
measurement, the company does not include depreciation and amortization
expense, finance costs and tax expense.
Mar 31, 2014
1 Method of Accounting & Basis of Preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India, on the basis of
going concern under the historical cost convention and also on accrual
basis. These financial statements comply, in all material aspects, with
the provisions of the Companies Act, 1956 and the Companies Act, 2013
(to the extent applicable) and also accounting standards prescribed by
the Companies (Accounting Standards) Rules, 2006, which continue to be
applicable in respect of Section 133 of the Companies Act, 2013 in
terms of General Circular 15/2013 dated September 13, 2013 of the
Ministry of Corporate Affairs.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956
notified by MCA vide its notification no. 447(E) dated February 28,
2011. Based on the nature of services rendered by the Company and
realization of consideration in cash and cash equivalents, the Company
has ascertained its Operating Cycle as less than 12 months for the
purpose of current - non-current classification of assets and
liabilities.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of financial statements and
reported amounts of revenue and expenses during the reported period.
Such estimates are on a reasonable and prudent basis taking into
account all available information; actual results could differ from
estimates. Differences on account of revision of estimates actual
outcome and existing estimates are recognised prospectively once such
results are known / materialized in accordance with the requirements of
the respective accounting standard, as may be applicable.
3 Fixed assets and intangible assets
(a) Intangible Assets
(i) Intangible assets are recognized only if they are separately
identifiable and the Company expects to receive future economic
benefits arising out of them. Such assets are stated at cost less
accumulated amortisation and impairment, if any. Internally Generated
assets are not recognised in the books of accounts.
(ii) Intangible assets comprises of Cable Television Franchise,
Goodwill and Software''s.
(iii) The aggregate consideration paid to acquire CATV / ISP
Subscribers connected to a network along with Network assets and all
the rights attached thereto are disclosed under the head Cable
Television Franchise. In cases where value for assets acquired along
with Subscribers connected to the network is separately ascertained,
the assets are capitalised under the relevant heads. The consideration
paid for non-compete as per the underlying agreements is included in
Goodwill.
(b) Tangible Assets
(i) The fixed assets are stated at cost less accumulated depreciation
and impairment, if any. Cost comprises of purchase price, non
refundable taxes and all expenses incurred in bringing the assets to
its present location and condition for its intended use and includes
installation and commissioning expenses. The indirect expenditure
incurred during the pre-commencement period is allocated
proportionately over the cost of the relevant assets.
(ii) Cable Modems and Routers lying on hands at the year-end are
included in capital Work in Progress. On installation, such devices are
capitalized or treated as sale based on scheme opted by customers.
(iii) Nature of some of the items included in Capital Work in Progress
is such that the same may be used for repairs and maintenance.
4 Depreciation and amortisation
(a) The intangible assets are amortised on a straight line basis over
their expected useful lives as follows:
(i) Cable Television Franchise is amortised over a period of twenty
years.
(ii) Non Compete Fees included in Goodwill is amortised over the
non-compete period stated in the underline agreement and in absence of
the same, over five years.
(iii) Goodwill arising on transfer of business of subsidiaries is fully
amortised in the same year.
(iv) Goodwill other than mentioned above is amortised over the specific
tenor in the relevant agreement or ten years in the event of specific
tenor in the relevant agreement.
(b) Depreciation on fixed assets is computed on written down value
method, at the rates and manner prescribed in Schedule XIV to the
Companies Act, 1956,other than Structural Fitting which have been
depreciated according to the rental agreement for the period of three
years.
5 Investments
(a) Long-Term Investments:
Long-term investments in shares are stated at cost. The provision for
diminution in value of such investments is made if such diminution is
considered other than temporary.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
(b) Current Investments:
Current investments are recorded at lower of cost or fair value.
6 Inventories
Inventories comprise of spares and maintenance items and STB (Set Top
Boxes), which are valued at lower of cost (net of taxes recoverable)
and net realizable value.
7 Borrowings cost
Borrowing Costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as part of such
assets. 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 recognized as an expense in the period in
which they are incurred.
8 Provisions, contingent liabilities and contingent assets
a) A Provision is recognized when the Company has a present obligation
as a result of past event and it is probable that an outflow of
resources would be required to settle the obligation, and in respect of
which a reliable estimate can be made. Provisions are reviewed on each
balance sheet date and are adjusted to effect the current best
estimation.
b) Contingent liabilities are disclosed separately by way of note to
financial statements after careful evaluation by the management of the
facts and legal aspects of the matter involved in case of
(i) a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
(ii) a possible obligation, unless the probability of outflow of
resources is remote.
c) Contingent Assets are neither recognised, nor disclosed.
9 Employee benefits
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits viz.,
gratuity, leave encashment. etc., are covered under Defined Benefit
Plan. The cost of providing benefits are recognized as an expense in
the statement of profit and toss for the year in which the employee has
rendered services. The amount of expense is determined on the basis
actuarial valuation at each year-end by Projected Unit Credit Method.
Actuarial gains and losses Hi respect of post employment and other long
term benefits are charged to the statement of profit and loss in the
period in which they occur. The Company presents the entire liability
pertaining to leave encashment as a short term provision in the balance
sheet, since it does not have an unconditional right to defer its
settlement for 12 months after the reporting date.
10 Leases
Lease rentals in respect of assets taken on ''Operating Lease'' are
charged to statement of Profit and Loss over the lease term on
systematic basis which is more representative of the time pattern of
the Company''s benefit.
11 Revenue recognition
(a) Income From Services
Income from Operations is recognized on accrual basis based on
agreements / arrangements with the concerned parties.
Revenue from sale.of prepaid Internet Service plans, which are active
at the year end, is recognized on time proportion basis. In other cases
of sale of prepaid Internet Service plans, entire revenue is recognized
in the year of sale.
Subscription Income from Cable TV Operators is accrued monthly based on
number of connections declared by the said operators to the Company. In
cases where revision of number of connections and rate is under
negotiations at the time of recognition of revenue, the Company
recognises revenue as per invoice raised. Adjustments for the year, if
any, arising on settlement is adjusted against the Revenue. Other cases
are reviewed at the year-end and provision for doubtful debts is made
wherever ultimate realization is considered uncertain.The revenue
relating to Digital Addressable System (DAS) is governed by TRAI and
the same is to be recognized in accordance with prescribed regulations.
[Refer Note no. 4.10]
(b) Interest income
Interest income is recognized on accrual basis.
(c) Sale of Goods
Revenue from sale of Access Devices is recognized when all the
significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
Government and, therefore, these are not economic benefits flowing to
the Company. Hence, they are excluded from revenue.
12 Taxes on income
(a) Provision for Current Tax is made on the basis of taxable profits
computed for the current accounting period (reporting period) in
accordance with the Income Tax Act, 1961.
(b) Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date and is
recognized on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred Tax
assets are recognised on carry forward of unabsorbed depreciation and
tax losses only if there is virtual certainty that such deferred tax
assets can be realized against future taxable income. Other deferred
tax assets are recognised only to the extent that there is a reasonable
certainty of realisation in future.
(c) ''Minimum Alternate Tax (MAT) credit is recognized as an asset in
accordance with the recommendations contained in guidance note issued
by the Institute of Chartered Accountants of India, only when and to
the extent there is convincing evidence that the company will pay
normal income tax during the specified period. The said asset is
created by way of a credit to the profit and loss account and shown as
MAT Credit Entitlement. The Company reviews the same at each balance
sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period. Tax on distributed profits payable in accordance with the
provisions of section 115 O of the Income Tax Act, 1961 is, in
accordance with the Guidance Note on Accounting for Corporate Dividend
Tax, regarded as a tax on distribution of profits and is not considered
in determination of the profits for the year.''
13 Impairments
The Company assesses at each balance sheet whether there is any
indication that assets may be impaired. If any such indications exist,
the Company estimates the recoverable amount of the assets or the
cash-generating unit and if the same is less than its carrying amount,
the carrying amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognised in the profit and
loss account. If at the balance sheet date there is an indication that
if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the assets are reflected at the
recoverable amount.
14 Cash & Cash Equivalent
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank, cash in hand, demand deposits with banks and
other short-term investments with an original maturity of three months
or less.
15 Earnings Per Share
a) Basic earnings per share are calculated by dividing the net profit
or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
b) For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
16 Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2013
1 Method Of Accounting
These financial statements are prepared on accrual basis of accounting,
following historical cost convention, in accordance with the provisions
of the Companies Act, 1956 (''the Act''), accounting principles
generally accepted in India and comply with the accounting standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government, in consultation with the National Advisory
Committee on Accounting Standards, to the extent applicable. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
All assets and liabilities have been classified as current or
non-current as per the Company''s . normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies
Act, 1956 notified by MCA vide its notification no. 447(E) dated
February 28, 2011. Based on the nature of services rendered by the
Company and realization of consideration in cash and cash equivalents,
the Company has ascertained its Operating Cycle as less than12 months
for the purpose of current - non-current classification of assets and
liabilities.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of financial statements and
reported amounts of revenue and expenses during the reported period.
Such estimates are on a reasonable and prudent basis taking into
account all available information; actual results could differ from
estimates. Differences on account of revision of estimates actual
outcome and existing estimates are recognized prospectively once such
results are known / materialized in accordance with the requirements of
the respective accounting standard, as may be applicable.
3 Fixed assets and intangible assets .
(a) Intangible Assets
(i) Intangible assets are recognized only if they are separately
identifiable and the Company expects to receive future economic
benefits arising out of them. Such assets are stated at cost less
accumulated amortization and impairment, if any. Internally Generated
assets are not recognized in the books of accounts.
(ii) Intangible assets comprises of Cable Television Franchise,
Goodwill and Software''s.
(iii) The aggregate consideration paid to acquire CATV / ISP
Subscribers connected to a network along with Network assets and all
the rights attached thereto are disclosed under the head Cable
Television Franchise. In cases where value for assets acquired along
with Subscribers connected to the network is separately ascertained,
the assets are capitalized under the relevant heads. The consideration
paid for non-compete as per the underlying agreements is included in
Goodwill.
(b) Tangible Assets
(i) The fixed assets are stated at cost less accumulated depreciation
and impairment, if any. Cost comprises of purchase price, non
refundable taxes and all expenses incurred in bringing the assets to
its present location and condition for its intended use and includes
installation and commissioning expenses. The indirect expenditure
incurred during the pre-commencement period is allocated
proportionately over the cost of the relevant assets.
(ii) Cable Modems and Routers lying on hands at the year-end are
included in capital Work in Progress. On installation, such devices are
capitalized or treated as sale based on scheme opted by customers.
(iii) Nature of some of the items included in Capital Work in Progress
is such that the same may be used for repairs and maintenance.
4 Depreciation and amortization
a) The intangible assets are amortized on a straight line basis over
their expected useful lives as follows:
(i) Cable Television Franchise is amortized over a period of twenty
years.
(ii) Non Compete Fees included in Goodwill is amortized over the
non-compete period stated in the underline agreement and in absence of
the same, over five years.
(iii) Goodwill arising on transfer of business of subsidiaries is fully
amortized in the same year.
(iv) Goodwill other than mentioned above is amortized over the specific
tenor in the relevant agreement or ten years in the event of specific
tenor in the relevant agreement
b) Depreciation on fixed assets is computed on written down value
method, at the rates and manner prescribed in Schedule XIV to the
Companies Act, 1956,other than Structural Fitting which have been
depreciated according to the rental agreement for the period of three
years.
5 Investments
(a) Long-Term Investments:
Long-term investments in shares are stated at cost The provision for
diminution in value of such investments is made if such diminution is
considered other than temporary.
On initial recognition, all investments are measured at cost The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
(b) Current Investments:
Current investments are recorded at lower of cost or fair value.
6 Inventories
Inventories comprise of spares and maintenance items and STB (Set Top
Boxes), which are valued at lower of cost (net of taxes recoverable)
and net realizable value.
7 Borrowings cost
Borrowing Costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalized as part of such
assets. 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 recognized as an expense in the period in
which they are incurred.
8 Provisions, contingent liabilities and contingent assets
a) A Provision is recognized when the Company has a present obligation
as a result of past event and it is probable that an outflow of
resources would be required to settle the obligation, and in respect of
which a reliable estimate can be made. Provisions are reviewed on each
balance sheet date and are adjusted to effect the current best
estimation.
b) Contingent liabilities are disclosed separately by way of note to
financial statements after careful evaluation by the management of the
facts and legal aspects of the matter involved in case of
(i) a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
(ii) a possible obligation, unless the probability of outflow of
resources is remote.
c) Contingent Assets are neither recognized, nor disclosed.
9 Employee benefits
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits viz.,
gratuity, leave encashment, etc., are covered under Defined Benefit
Plan. The cost of providing benefits are recognized as an expense in
the statement of profit and loss for the year in which the employee has
rendered services. The amount of expense is determined on the basis
actuarial valuation at '' each year-end by Projected Unit Credit Method.
Actuarial gains and losses in respect of post *
employment and other long term benefits are charged to the statement of
profit and loss in the period in which they occur. The Company presents
the entire liability pertaining to leave encashment as a short term
provision in the balance sheet, since it does not have an unconditional
right to defer its settlement for 12 months after the reporting date.
10 Leases
Lease rentals in respect of assets taken on ''Operating Lease'' are
charged to statement of Profit and Loss over the lease term on
systematic basis which is more representative of the time pattern of
the Company''s benefit. *
11 Revenue recognition
(a) Income From Services
Income from Operations is recognized on accrual basis based on
agreements / arrangements with the concerned parties.
Revenue from sale of prepaid Internet Service plans, which are active
at the year end, is recognized on time proportion basis. In other cases
of sale of prepaid Internet Service plans, entire revenue is recognized
in the year of sale.
Subscription Income from Cable TV Operators is accrued monthly based on
number of connections declared by the said operators to the Company, in
cases where revision of number of connections and rate is under
negotiations at the time of recognition of revenue, the Company
recognizes revenue as per invoice raised. Adjustments for the year, if
any, arising on settlement is adjusted against the Revenue. Other cases
are reviewed at the year-end and provision for doubtful debts is made
wherever ultimate realization is considered uncertain.
Interest income is recognized on accrual basis.
(b) Sale of Goods
Revenue from sale of Access Devices is recognized when all the
significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
Government and, therefore, these are not economic benefits flowing to
the Company. Hence, they are excluded from revenue.
12 Taxes on income
a) Provision for Current Tax is made on the basis of taxable profits
computed for the current accounting period (reporting period) in
accordance with the Income Tax Act, 1961.
b) Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date and is
recognized on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred Tax
assets are recognized on carry forward of unabsorbed depreciation and
tax losses only if there is virtual certainty that such deferred tax
assets can be realized against future taxable income. Other deferred
tax assets are recognized only to the extent that there is a reasonable
certainty of realization in future.
c) ''Minimum Alternate Tax (MAT) credit is recognized as an asset in
accordance with the recommendations contained in guidance note issued
by the Institute of Chartered Accountants of India, only when and to
the extent there is convincing evidence that the company will pay
normal income tax during the specified period. The said asset is
created by way of a credit to the profit and loss account and shown as
MAT Credit Entitlement The Company reviews the same at each balance
sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period. Tax on distributed profits payable in accordance with the
provisions of section 115 O of the Income Tax Act, 1961 is, in
accordance with the Guidance Note on Accounting for Corporate Dividend
Tax, regarded as a tax on distribution of profits and is not considered
in determination of the profits for the year.''
13 Impairments
The Company assesses at each balance sheet whether there is any
indication that assets may
- be impaired. If any such indications exist, the Company estimates
the recoverable amount of the assets or the cash-generating unit and if
the same is less than its carrying amount, the carrying amount is
reduced to its recoverable amount The reduction is treated as an
impairment loss and is recognized in the profit and loss account. If at
the balance sheet date there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the assets are reflected at the recoverable amount.
14 Cash & Cash Equivalent
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank, cash in hand, demand deposits with banks and
other short-term investments with an original maturity of three months
or less.
15 Earnings Per Share
a) Basic earnings per share are calculated by dividing the net profit
or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
b) For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
16 Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2012
1 Method Of Accounting
These financial statements are prepared on accrual basis of accounting,
following historical cost convention, in accordance with the provisions
of the Companies Act, 1956 ('the Act'), accounting principles
generally accepted in India and comply with the accounting standards
prescribed in the Companies (Accounting Standards) Rules, 2006 issued
by the Central Government, in consultation with the National Advisory
Committee on Accounting Standards, to the extent applicable. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956
notified by MCA vide its notification no. 447(E) dated February 28,
2011. Based on the nature of services rendered by the Company and
realization of consideration in cash and cash equivalents, the Company
has ascertained its Operating Cycle as less than 12 months for the
purpose of current - non-current classification of assets and
liabilities.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of financial statements and
reported amounts of revenue and expenses during the reported period.
Such estimates are on a reasonable and prudent basis taking into
account all available information; actual results could differ from
estimates. Differences on account of revision of estimates actual
outcome and existing estimates are recognised prospectively once such
results are known / materialized in accordance with the requirements of
the respective accounting standard, as may be applicable.
3 Fixed assets and intangible assets Intangible Assets
- Intangible assets are recognized only if they are separately
identifiable and the Company expects to receive future economic
benefits arising out of them. Such assets are stated at cost less
accumulated amortisation and impairment, if any. Internally Generated
assets are not recognised in the books of accounts.
- Intangible assets comprises of Cable Television Franchise, Goodwill
and. Software's.
- The aggregate consideration paid to acquire CATV/ ISP Subscribers
connected to a network along with Network assets and all the rights
attached thereto are disclosed under the head Cable Television
Franchise. In cases where value for assets acquired along with
Subscribers connected to the network is separately ascertained, the
assets are capitalised under the relevant heads. The consideration paid
for non-compete as per the underlying agreements is included in
Goodwill.
Tangible Assets
- The fixed assets are stated at cost less accumulated depreciation
and impairment, if any. Cost comprises of purchase price, non
refundable taxes and all expenses incurred in bringing the assets to
its present location and condition for its intended use and includes
installation and commissioning expenses. The indirect expenditure
incurred during the pre- commencement period is allocated
proportionately over the cost of the relevant assets.
- Cable Modems and Routers lying on hands at the year-end are
included in capital Work in Progress. On installation, such devices are
capitalized or treated as sale based on scheme opted by customers.
- Nature of some of the items included in Capital Work in Progress is
such that the same may be used for repairs and maintenance.
4 Depreciation and amortisation
a) The intangible assets are amortised on a straight line basis over
their expected useful lives as follows:
(i) Cable Television Franchise is amortised over a period of twenty
years.
(ii) Non Compete Fees included in Goodwill is amortised over the
non-compete period stated in the underline agreement and in absence of
the same, over five years.
(iii) Goodwill arising on transfer of business of subsidiaries is fully
amortised in the same year.
(iv) Goodwill other than mentioned above is amortised over the specific
tenor in the relevant agreement or ten years in the event of specific
tenor in the relevant agreement.
b) Depreciation on fixed assets is computed on written down value
method, at the rates and manner prescribed in Schedule XIV to the
Companies Act, 1956,other than Structural Fitting which have been
depreciated according to the rental agreement for the period of three
years.
5 Investments
Long-Term Investments:
Long-term investments in shares are stated at cost. The provision for
diminution in value of such investments is made if such diminution is
considered other than temporary.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current Investments:
Current investments are recorded at lower of cost or fair value.
6 Inventories
Inventories comprise of spares and maintenance items and STB (Set Top
Boxes), which are valued at lower of cost (net of taxes recoverable)
and net realizable value.
7 Borrowings cost
Borrowing Costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as part of such
assets. 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 recognized as an expense in the period in
which they are incurred.
8 Provisions, contingent liabilities and contingent assets
a) A Provision is recognized when the Company has a present obligation
as a result of past event and it is probabie that an outflow of
resources would be required to settle the obligation, and in respect of
which a reliable estimate can be made. Provisions are reviewed on each
balance sheet date and are adjusted to effect the current best
estimation.
b) Contingent liabilities are disclosed separately by way of note to
financial statements after careful evaluation by the management of the
facts and legal aspects of the matter involved in case of
- a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
- a possible obligation, unless the probability of outflow of
resources is remote.
c) Contingent Assets are neither recognised, nor disclosed.
9 Employee benefits
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits viz.,
gratuity, leave encashment, etc., are covered under Defined Benefit
Plan. The cost of providing benefits are recognized as an expense in
the statement of profit and loss for the year in which the employee has
rendered services. The amount of expense is determined on the basis
actuarial valuation at each year- end by Projected Unit Credit Method.
Actuarial gains and losses in respect of post employment and other long
term benefits are charged to the statement of profit and loss in the
period in which they occur. The Company presents the entire liability
pertaining to leave encashment as a short term provision in the balance
sheet, since it does not have an unconditional right to defer its
settlement for 12 months after the reporting date.
10 Leases
Lease rentals in respect of assets taken on 'Operating Lease' are
charged to statement of Profit and Loss over the lease term on
systematic basis which is more representative of the time pattern of
the Company's benefit.
11 Revenue recognition INCOME FROM SERVICES
Income from Operations is recognized on accrual basis based on
agreements / arrangements with the concerned parties.
Revenue from sale of prepaid Internet Service plans, which are active
at the year end, is recognized on time proportion basis. In other cases
of sale of prepaid Internet Service plans, entire revenue is recognized
in the year of sale.
Subscription Income from Cable TV Operators is accrued monthly based on
number of connections declared by the said operators to the Company. In
cases where revision of number of connections and rate is under
negotiations at the time of recognition of revenue, the Company
recognises revenue as per invoice raised. Adjustments for the year, if
any, arising on settlement is adjusted against the Revenue. Other cases
are reviewed at the year-end and provision for doubtful debts is made
wherever ultimate realization is considered uncertain.
Interest income is recognized on accrual basis.
SALE OF GOODS
Revenue from sale of Access Devices is recognized when all the
significant risks and rewards of ownership of the goods have been
passed to the buyer, usually on delivery of the goods. The Company
collects sales taxes and value added taxes (VAT) on behalf of the
Government and, therefore, these are not economic benefits flowing to
the Company. Hence, they are excluded from revenue.
12 Taxes on income
a) Provision for Current Tax is made on the basis of taxable profits
computed for the current accounting period (reporting period) in
accordance with the Income Tax Act, 1961.
b) Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date and is
recognized on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods.
Deferred Tax assets are recognised on carry forward of unabsorbed
depreciation and tax losses only if there is virtual certainty that
such deferred tax assets can be realized against future taxable income.
Other deferred tax assets are recognised only to the extent that there
is a reasonable certainty of realisation in future.
c) 'Minimum Alternate Tax (MAT) credit is recognized as an asset in
accordance with the recommendations contained in guidance note issued
by the Institute of Chartered Accountants of India, only when and to
the extent there is convincing evidence that the company will pay
normal income tax during the specified period. The said asset is
created byway of a credit to the profit and loss account and shown as
MAT Credit Entitlement. The Company reviews the same at each balance
sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period. Tax on distributed profits payable in accordance with the
provisions of section 115 Oof the Income Tax Act, 1961 is, in
accordance with the Guidance Note on Accounting for Corporate Dividend
Tax, regarded as a tax on
- distribution of profits and is not considered in determination of
the profits for the year.'
13 Impairments
The Company assesses at each balance sheet whether there is any
indication that assets may be impaired. If any such indications exist,
the Company estimates the recoverable amount of the assets or the
cash-generating unit and if the same is less than its carrying amount,
the carrying amount is reduced to its recoverable amount. The reduction
is treated as an impairment loss and is recognised in the profit and
loss account. If at the balance sheet date there is an indication that
if a previously assessed impairment loss no longer exists, the
recoverable amount is reassessed and the assets are reflected at the
recoverable amount.
14 Cash & Cash Equivalent
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank, cash in hand, demand deposits with banks and
other short-term investments with an original maturity of three months
or less.
15 Earning Per Share
a) Basic earnings per share are calculated by dividing the net profit
or loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. Partly
paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a
fully paid equity share during the reporting period. The weighted
average number of equity shares outstanding during the period is
adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
b) For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
16 Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from continuing
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2010
1) METHOD OF ACCOUNTING:
These financial statements are prepared on accrual basis of accounting,
following historical cost convention, in accordance with the provisions
of the Companies Act, 1956 (the Act), accounting principles generally
accepted in India and comply with the accounting standards prescribed
in the Companies (Accounting Standards) Rules, 2006 issued by the
Central Government, in consultation with the National Advisory
Committee on Accounting Standards, to the extent applicable. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
2) USE OF ESTIMATES:
The preparation of the financial statements in conformity with Indian
GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities, disclosure of
contingent liabilities as at the date of financial statements and
reported amounts of revenue and expenses during the reported period.
Such estimates are on a reasonable and prudent basis taking into
account all available information; actual results could differ from
estimates. Differences on account of revision of estimates actual
outcome and existing estimates are recognised prospectively once "such
results are known / materialized in accordance with the requirements of
the respective accounting standard, as may be applicable.
3) FIXED ASSETS
a) Intangible Assets
Intangible assets are recognized if they are separately identifiable
and the Company controls the future economic benefits arising out of
them. All other expenses on intangible items are charged to the profit
and loss account. Internally generated brands, customer lists and items
similar in substance are not capitalized. Intangible assets are stated
at cost less accumulated amortization less impairment.
Intangible assets include Cable Television Franchisee and Goodwill. The
aggregate consideration paid to acquire Subscribers connected to a
network along with Network assets and all the rights attached thereto
are disclosed under the head Cable Television Franchisee. In cases
where value for assets acquired along with Subscribers connected to the
network are separately ascertained, the assets are capitalised under
the relevant heads. The consideration paid for non-compete as per the
underlying agreements are included in Goodwill.
b) Tangible Assets
The fixed assets are stated at cost less accumulated depreciation and
impairment if any. Cost comprises of all expenses incurred in bringing
the assets to its present location including installation and
commissioning expenses. The indirect expenditure incurred during pre-
commencement period is allocated proportionately over the cost of the
relevant assets.
Cable Modems and Routers lying on hand at the year-end are included in
Capital Work in Progress. On installation, such devices are capitalized
or treated as sale based on scheme opted by the customers.
Nature of some of the items included in Capital Work in Progress is
such that the same may be used for repairs and maintenance.
4) DEPRECIATION AMORTISATION
a) The intangible assets are amortized on a straight line basis over
their expected useful lives as follows:
(i) Cable Television Franchise is amortized over a period of twenty
years.
(ii) Non Compete Fees included in Goodwill is amortized over the
non-compete period or ten
years in the event of absence of specific tenor in the relevant
agreement. (iii) Goodwill arising on transfer of business of
subsidiaries is fully amortized in the same year.
(iv) Goodwill other than mentioned above is amortized over the specific
tenor in the relevant agreement or ten years in the event of specific
tenor in the relevant agreement.
b) Depreciation on fixed assets is computed on written down value
method, at the rates and manner prescribed in Schedule XIV to the
Companies Act, 1956, other than Structural Fitting which have been
depreciated according to the rental agreement for the period of three
years.
5) INVESTMENTS
a. Long-Term Investments:
Long-term investments in shares are stated at cost. The provision for
diminution in value of such investments is made if such diminution is
considered other than temporary.
b. Current Investments:
Current investments are recorded at lower of cost or fair value.
6) INVENTORIES
Inventories comprise of Spare and maintenance items and Stock of STB
(Set Top Boxes) which are valued at lower of cost or net realizable
value.
7) PROVISIONS. CONTINGENT LIABILITIES & CONTINGENT ASSETS
a) A Provision is recognized when the Company has a present obligation
as a result of past event and it is probable that an outflow of
resources would be required to settle the obligation, and in respect of
which a reliable estimate can be made. Provisions are reviewed on each
balance sheet date and are adjusted to effect the current best
estimation.
b) Contingent liabilities are disclosed separately by way of note to
financial statements after careful evaluation by the management of the
facts and legal aspects of the matter involved in case of
i. a present obligation arising from the past event, when it is not
probable that an outflow of resources will be required to settle the
obligation.
ii. a possible obligation, unless the probability of outflow of
resources is remote.
c) Contingent Assets are neither recognised, nor disclosed.
8) RETIREMENT BENEFITS
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the profit and loss account for the year in which the
employee has rendered services. The expense
is recognized at the present value of the amount payable determined
using actuarial valuation techniques. Actuarial gains and losses in
respect of post employment and other long term benefits are charged to
the profit and loss account.
9) TAXATION
a) Provision for Current Tax is made on the basis of taxable profits
computed for the current accounting period (reporting period) in
accordance with the Income Tax Act, 1961
b) Deferred Tax is calculated at the tax rates and laws that have been
enacted or substantively enacted as of the Balance Sheet date and is
recognized on timing difference that originate in one period and are
capable of reversal in one or more subsequent periods. Deferred Tax
assets are recognized on carry forward of unabsorbed depreciation and
tax losses only if there is virtual certainty that such deferred tax
assets can be realized against future taxable income. Other deferred
tax assets are recognized only to the extent that there is a reasonable
certainty of realisation in future.
c) Provision for Fringe Benefit Tax is made in accordance with the
Income Tax Act, 1961.
10) REVENUE RECOGNITION:
Income from Operations is recognized on accrual basis based on
agreements / arrangements with the concerned parties.
Revenue from sale of prepaid Internet Service plans is recognized on
time proportion basis, in those cases where such plans are active at
the year end. In all other cases, entire revenue is recognized in the
year of sale.
Subscription Income from Cable TV Operators is accrued monthly based on
number of connections declared by the said operators to the Company. In
cases where revision of number of connections and rate is under
negotiations at the time of recognition of revenue, the Company
recognizes revenue as per invoice raised. Adjustments for the year, if
any, arising on settlement is adjusted against the Revenue. Other cases
are reviewed at the year-end and provision for doubtful debts is made
wherever ultimate realization is considered uncertain.
Interest income is recognized on accrual basis.
111 ACCOUNTING FOR LEASES
Rentals in respect of agreements in the nature of operating leases as
defined in Accounting Standard 19 on "Leases" are treated as revenue.
12) IMPAIRMENT
The Company assesses at each balance sheet whether there is any
indication that an asset may be impaired, If any such indications
exist, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amount. The reduction is treated as an impairment loss and is
recognised in the profit and loss account. If at the balance sheet date
there is an indication that if a previously assessed impairment loss no
longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount.
13) FOREIGN EXCHANGE TRANSACTIONS:
a) Foreign currency transactions are recorded at the exchange rate
prevailing at the date of
transactions. Exchange difference arising on settlement of transactions
is recognized as income or expense in the year in which they arise
except for transactions covered under (c) below.
b) Monetary assets and liabilities related to foreign currency
transactions remaining unsettled at the end of the year are restated at
the year-end rate and difference in translations and realized gains /
(losses) on foreign currency transactions are recognized in the profit
& loss account except for transactions covered under (c) below.
c) Exchange differences on settlement / conversion other than in
respect of long term monetary items, in respect of accounting period
commencing on or after 07lh December, 2006 are recognised in the profit
and loss account. The exchange difference in respect of long-term
monetary items arising in respect of accounting period commencing on or
after 07lh December, 2006 to the extent they relate to the acquisition
of depreciable capital assets are added to or deductedfrom the cost of
the assets and are depreciated over the balance life of the assets.
14) BORROWING COST:
Borrowing Costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as part of such
assets. 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 recognized as an expense in the period in
which they are incurred.