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Accounting Policies of ITI Ltd. Company

Mar 31, 2023

Corporate Information

India''s first Public Sector Unit (PSU) - ITI Ltd was established in 1948. Ever since, as a pioneering venture in the field of telecommunications, it has contributed to 50% of the present national telecom network. With state-of-the-art manufacturing facilities spread across six locations and a countrywide network of marketing/service outlets, the company offers a complete range of telecom products and total solutions covering the whole spectrum of Switching, Transmission, Access and Subscriber Premises equipment.

ITI joined the league of world class vendors of Global System for Mobile (GSM) technology with the inauguration of mobile equipment manufacturing facilities at its Mankapur and Rae Bareli Plants in 2005-06. This ushered in a new era of indigenous mobile equipment production in the country. These two facilities supply more than nine million lines per annum to both domestic as well as export markets.

1) Basis of Preparation

The financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles in India (GAAP), on accrual basis of accounting, except as stated herein. GAAP comprises the mandatory Accounting Standards (IND -AS) [as notified under section 133 of the Companies Act, 2013 read Rule 4 of the Companies (Indian Accounting Standards) Rules, 2015] to the extent applicable, provisions of the Companies Act, 2013, which have been consistently applied except where a new Accounting Standard is initially adopted or revision to an existing Accounting Standard requires a change in the Accounting Policy hitherto in use.

Basis of Measurement:

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which are measured at fair value:

a. Derivative financial instruments, if any

b. Financial assets and liabilities that are qualified to be measured at fair value

c. Defined benefit asset/(liability) recognised at the present value of defined benefit obligation less fair value of plan assets.

2) Use of Estimates

The preparation of the financial statements in conformity with the IndAS requires that the management make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, revenue, expenses and disclosure of contingent liabilities as at the date of financial statements and the reported amounts of revenue and expenses during the reporting period. Although such estimates are made on a reasonable and prudent basis taking into account all the available information, actual results could differ from the estimates and such differences are recognised in the period in which the results are ascertained.

3) Functional and presentation currency

Financial statements are presented in Indian Rupee (INR) which is the functional and presentation currency of the Company and the currency of the primary economic environment in which the entity operates. All financial information presented in Indian rupees has been rounded to the nearest lakhs except share and per share data.

4) Revenue Recognition

The Company recognises revenue from contracts with customers when it satisfies a performance obligation by transferring promised good or service to a customer. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Performance obligation is satisfied over time when the transfer of control of asset (good or service) to a customer is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.

a. Sale of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when significant risks and reward of ownership have been transferred to the customer as per the terms of sale agreement, neither continuing management involvement nor effective control over the goods is retained, recovery of the consideration is probable, and the amount of cost incurred and the revenue can be measured reliably. Timing of transfer of risks and rewards is evaluated based on Inco-terms of the sales agreement.

b. Ex- Works Contract

When specified goods are unconditionally appropriated to the contract after prior Inspection and acceptance, if required.

c. FOR Contracts

In the case of FOR contracts, sale is recognised when goods are handed over to the carrier for transmission to the buyer after prior inspection and acceptance, if stipulated, and in the case of FOR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period. Revenue is recognised even if goods are retained with the Company at the request of the customer.

d. Bill and Hold Sales

For bill-and-hold transactions, revenue is recognised when the customer takes title, provided that:

i. it is probable that delivery will be made;

ii. the item is on hand, identified and ready for delivery to the buyer at the time when the sale is recognised;

iii. the buyer specifically acknowledges the deferred delivery instructions; the usual payment terms ^app^ly

e. Services and Construction contracts

Revenue on time-and-material and unit of work-based contracts, are recognized as the related services are performed. Fixed-price maintenance revenue is recognized rateably either on a straight-line basis when services are performed through an indefinite number of repetitive acts over a specified period or rateably using a percentage-of completion method when the pattern of benefits from the services rendered to the customer and Company''s costs to fulfil the contract is not even through the period of contract because the services are generally discrete in nature and not repetitive. Revenue from other fixed-price, fixed-timeframe contracts, where the performance obligations are satisfied over time is recognized using the percentage-of-completion method. Efforts or costs expended are used to determine progress towards completion as there is a direct relationship between input and productivity. Progress towards completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. When it is probable that contract costs at completion will exceed total contract revenue, the expected loss at completion is recognised immediately as an expense.

Some contracts include multiple performance obligations, such as the supply of systems, equipment etc., and maintenance services. Consideration towards maintenance services is therefore identified and accounted for as a separate performance obligation. Where the contracts include multiple performance obligations, the transaction price will be allocated to each performance obligation based on the stand-alone selling prices. Where these are not directly observable, they are estimated based on expected cost-plus margin.

For other fixed-price contracts, revenue is recognised in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to the work performed. No revenue is recognised if there is significant uncertainty regarding recovery of the consideration due or if the costs incurred or to be incurred cannot be measured reliably.

f. Interest income

Interest income is recognized using the effective interest rate method.

g. Dividend

Dividend income is recognised when the Company''s right to receive dividend is established

h. Rental income

Rental income arising from operating leases is accounted for on a straight-line basis over the lease term unless increases

in rentals are in line with the expected inflation or otherwise justified (Fair Value).

i. Duty Drawbacks

Duty drawback claims on exports are accounted on preferring the claims.

j. Other Income

Other Income not specifically stated above is recognised on accrual basis.

5) Property, plant and equipment, Capital Work-in progress

Property, plant and equipment is stated at historical cost less accumulated depreciation and impairment losses if any. Cost comprises of the purchase price and any attributable cost of bringing the PPE to its working condition for its intended use. Borrowing and other attributable costs relating to acquisition of the PPE which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such PPE are ready to be put to use. PPE are eliminated from the financial statements, either on disposal or when retired from such use. When significant parts of Plant and Equipment are required to be replaced at intervals, the same is recognised as a separate component.

Assets acquired free of cost or received as gift are stated at fair value which is credited to Other Equity at the time of acquisition or receipt less accumulated depreciation and impairment losses.

Capital work-in-progress

Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work-In-Progress.

Income pertaining to construction period such as interest on advance to contractors, sale of tender documents etc., is set off against expenditure during construction.

Expenditure on development of leasehold land is capitalised as Land Development Expenditure and amortised over the lease period or useful, life whichever is lower.

6) Intangible Assets, Intangible Asset under Development

a. Cost of software (which is not an integral part of the related hardware) acquired for internal use and resulting in significant future economic benefits, is recognised as an intangible asset when the same is ready for use. Intangible Assets not yet ready for their intended use as at the Balance Sheet date are classified as "Intangible Assets under Development

b. Cost of developmental work which is completed, wherever eligible, is recognized as an Intangible Asset.

c. Cost of developmental work under progress, wherever eligible, is classified as "Intangible Assets under Development".

d. Carrying amount includes amount funded by the Company to external agencies towards developmental project(s) and expenditure incurred by the Company towards material cost, employee cost and other direct expenditure.

7) Research and development expenses:

Research expenditure is charged to the Statement of Profit and Loss. Development costs of products are also charged to the Statement of Profit and Loss unless a product''s technical feasibility has been established, in which case such expenditure is capitalized. Tangible assets used in research and development are capitalized.

Expenditure incurred towards other development activity where the research results or other knowledge is applied for developing new or improved products or processes, are recognised as an Intangible Asset if the recognition criteria specified in Ind AS 38 are met and when the product or process developed is expected to be technically and commercially usable, the company has sufficient resources to complete development and subsequently use or sell the intangible asset, and the product or process is likely to generate future economic benefits.

8) Impairment of Non-financial assets

At the end of each Balance Sheet date, carrying amount of assets are reviewed, if there is any indication of impairment based on internal/ external factors. If the estimated recoverable amount is found to be lower than the carrying amount, then the impairment loss is recognised and assets are written down to the recoverable amount.

9) Depreciation / Amortisation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.

Depreciation on additions and deletions to fixed assets during the year is provided on pro-rata basis as under:

a. Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

b. In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

c. Where cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and depreciated on straight line method over its estimated useful life.

d. The Residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Amortization

Intangible assets are amortized over their respective individual estimated useful lives on a straight-line basis, from the date that they are available for use. Amortization methods and useful lives are reviewed periodically at each financial year end.

In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Incremental depreciation on account of Revaluation is recouped as a credit to the general Reserve, as per the Schedule II of the Companies Act 2013.

Disposal of property, plant and equipment

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of Profit and Loss when the asset is derecognised.

Particulars		(Years)
A.	(a) Building (other than factory buildings)	60
	(b) Factory building	30
	(c) Purely temporary erections	3
	(d) Building with dwelling units each with plinth area not exceeding 80 sqm.	30
B.	Furniture & Fittings	10
C.	Plant & Machinery
	(a) General Rate (on double shift basis)	15
	(b) Special Rate: Servers & Networks	6
	(c) Data Processing Machines including Computers	3
D.	Roads and compound Walls	10
E.	Office Machinery and Equipment	5
F.	Vehicles	8
G.	Assets costing less than '' 5,000/- are depreciated @ 100%
	However, in respect of assets having original cost of '' 50,000/- and above, a residual balance of'' 5/- has been retained in the books.

10) Leases

A lease is classified at the inception date as a finance lease or an operating lease.

Company as a Lessee

Finance leases are capitalised at lower of fair value and the present value of the minimum lease payments on commencement of the lease. Finance charges are recognised as Finance Costs in the Statement of Profit and Loss. A leased asset is depreciated over the useful life of the asset or lease term, whichever is lower.

At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing

rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.

The ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset. ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.

Company as a lessor

Operating lease income is recognised over the lease term on straight line basis, except when the escalations are due to general inflation or otherwise justified. Contingent rents, if any, are recognised as revenue in the period in which they are earned.

11) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale is capitalised as part of the cost of the asset.

General borrowing costs are capitalised to qualifying assets by applying a capitalisation rate, which is the weighted average of the borrowing costs applicable to the general borrowings outstanding, other than specific borrowings, to the expenditure on that asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds, as also exchange differences to the extent regarded as an adjustment to the borrowing costs.

12) Government Grants

Grants from Government are measured at fair value and initially recognized as Deferred Income.

Amount lying under Deferred Income on account of acquisition of Fixed Assets is transferred to the credit of the Statement of Profit and Loss in proportion to the depreciation charged on the respective assets to the extent attributable to Government Grants utilised for the acquisition.

Amount lying under Deferred Income on account of revenue expenses is transferred to the credit of the Statement of Profit and Loss to the extent of expenditure incurred in the ratio of the funding to the total sanctioned cost, limited to the grant received.

13) Investments in joint venture and associates

Company accounts for its interests in associates and joint ventures at cost or in accordance with Ind AS 109 in the standalone financial statements but in the consolidated Financial statements under equity method.

14) Inventories

Raw materials, components and stores purchased for manufacturing/ production activities are valued at lower of cost and net realizable

value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where same items are purchased as also manufactured, manufacturing costs are generally adopted.

Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

Manufactured items in stock and stock-in-trade are valued at lower of cost excluding interest charges, administration overheads & sales overheads and at the net realisable value, after providing for obsolescence, if any.

Precious metals scrap is brought to books at the year end at net realizable value.

15) Work-in-process

a. Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest charges, administration & sales overheads and at the net realisable value, after providing for obsolescence, if any.

b. Work-in-process (Installation) is valued at lower of cost as recorded in the work orders and net realizable value, after providing for obsolescence, if any.

16) Tools and Gauges

Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

Loose tools are charged to revenue at the time of issue.

17) Financial assets (Trade Receivables & Other receivables)

Receivables are initially recognized at fair value, which in most cases approximates the nominal value. If there is any subsequent indication that the assets may be impaired, same is reviewed for impairment.

18) Errors and Estimates

The Company revises its accounting policies, if the change is required due to a change in the Ind AS or if the change provides more relevant and reliable information to the users of the financial statements.

A change in an accounting estimate that results in changes in the carrying amounts of recognised assets or liabilities or to statement of Profit or Loss is applied prospectively in the period(s) of change.

Discovery of errors and results in revisions retrospectively by restating the comparative amounts of assets, liabilities and equity of the earliest prior period in which the error is discovered. Opening balances of the earliest period presented are also restated.

19) Income taxes

Income tax comprises of current and deferred income tax Current income tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. Tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date. Current tax relating to items recognised directly in equity is recognised in equity and not in the Statement of Profit and Loss.

Deferred tax

Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised.

Carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised.

20) Warranty Liability

Warranty liability for contractual obligation in respect of equipment sold to customers is accounted for the basis of an annual technical assessment.

21) Foreign currencies

Transactions in foreign currencies are initially recorded by the Company at their respective currency exchange rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency exchange rate at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the functional currency exchange rate at the dates of the initial transactions.

22) Employee benefits

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

b. Post-employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the Statement of Profit and Loss of the year in which the employee has rendered services. Expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques.

c. Actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in Other Comprehensive Income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset), to the net defined liability (asset) at the start of the financial year after taking into account any changes as a result of contribution and benefit payments during the year. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.

d. Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

e. Eligible employees of the Company receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary. The Company remits the contribution to the ITI Employees'' Provident Fund Trust. The trust after making a portion of contribution to the government administered pension fund as per the regulations, invests the remaining funds in specific designated instruments as permitted by appropriate regulations. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government.

23) Provision & Contingent Liabilities

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. Expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities and contingent assets are not recognised in the financial statements. However, contingent liabilities unless the possibility of an outflow of resources embodying economic benefits is remote and contingent assets where an inflow of economic benefits is probable are disclosed in the notes.

Onerous Contracts

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

Provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

24) Fair value measurement

The Company measures certain financial instruments, such as derivatives and other items in its financial statements at fair value at each balance sheet date.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

For purposes of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.

25) Investment property

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

26) Financial Instruments

a. Initial recognition and measurement

All financial assets are recognised initially at fair value. In the case of financial assets not recorded at fair value through the Statement of Profit and Loss, transaction costs that are attributable to the acquisition of the financial asset are included in the cost of the asset.

b. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

i. Debt instruments at amortised cost,

ii. Debt instruments at fair value through other comprehensive income (FVTOCI),

iii. Debt instruments, derivatives and equity instruments at fair value through Profit or Loss (FVTPL),

iv. Equity instruments (other than investments in associates - which is carried at cost) measured at fair value through other comprehensive income (FVTOCI).

Derecognition

A financial asset or part of a financial asset is derecognised when the rights to receive cash flows from the asset has expired.

Embedded derivative

Embedded derivative, if required, is separated from host contract and measured at fair value.

27) Forward Contracts

The Company uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

28) Cash and cash equivalents

Cash comprises of cash on hand and demand deposits. Cash equivalents are short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash, which are subject to an insignificant risk of change in value.

Bank overdrafts, if any, are shown within borrowings in current liabilities on the balance sheet.

29) Impairment of financial assets

In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets with credit risk exposure.

a. Time barred dues from the Government / Government Departments / Government Companies are generally not considered as increase in credit risk of such financial asset.

b. Where dues are disputed in legal proceedings, provision is made if any decision is given against the Company even if the same is taken up on appeal to higher authorities / courts.

c. In case of dues outstanding for a significant period of time, on a case to case basis

ECL impairment loss allowance (or reversal) recognized during the period is recognized as expense/ (income) in the Statement of Profit and Loss. This amount is reflected in a separate line in Profit and Loss Statement as an impairment gain or loss.

30) Financial Liabilities

a. Initial recognition and measurement

Financial liabilities are classified, at initial recognition, at fair value through Profit and Loss as loans, borrowings, payables, or derivatives, as appropriate.

Loans, borrowings and payables, are stated net of transaction costs that are directly attributable.

b. Subsequent measurement

Measurement of financial liabilities depends on their classification, as described below:

i. Financial liabilities at fair value through profit or loss.

ii. Financial liabilities at fair value through Profit or Loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by IndAS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

c. Loans and borrowings

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process.

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

d. T rade and other payables

Liabilities are recognised for amounts to be paid in future for goods or services received, whether billed by the supplier or not.

31) Reclassification of Financial Instruments

The Company determines classification of financial assets and liabilities on initial recognition. After initial recognition, no reclassification is made for financial assets which are equity instruments and financial liabilities. For financial assets which are debt instruments, a reclassification is made only if there is a change in the business model for managing those assets. If the Company reclassifies financial assets, it applies the reclassification prospectively.

32) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

33) Cash dividend and non-cash distribution to equity shareholders

The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company.

34) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. 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.

35) Events after the reporting period

Adjusting events are events that provide further evidence of conditions that existed at the end of the reporting period. The financial statements are adjusted for such events before authorisation for issue.

Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted but disclosed.

Mar 31, 2022

Corporate Information

India''s first Public Sector Unit (PSU) - ITI Ltd was established in 1948. Ever since, as a pioneering venture in the field of telecommunications, it has contributed to 50% of the present national telecom network. With state-of-the-art manufacturing facilities spread across six locations and a countrywide network of marketing/ service outlets, the company offers a complete range of telecom products and total solutions covering the whole spectrum of Switching, Transmission, Access and Subscriber Premises equipment.

1) Basis of Preparation

Basis of Measurement:

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which are measured at fair value:

a. Derivative financial instruments, if any

b. Financial assets and liabilities that are qualified to be measured at fair value

c. Defined benefit asset/(liability) recognised at the present value of defined benefit obligation less fair value of plan assets.

2) Use of Estimates

3) Functional and presentation currency

4) Revenue Recognition

satisfied over time when the transfer of control of asset (good or service) to a customer is done over time and in other cases, performance obligation is satisfied at a point in time. For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to the total estimated cost attributable to the performance obligation.

a. Sale of goods

b. Ex- Works Contract

When specified goods are unconditionally appropriated to the contract after prior Inspection and acceptance, if required.

c. FOR Contracts

d. Bill and Hold Sales

For bill-and-hold transactions, revenue is recognised when the customer takes title, provided that:

i. it is probable that delivery will be made;

ii. the item is on hand, identified and ready for delivery to the buyer at the time when the sale is recognised;

iii. the buyer specifically acknowledges the deferred delivery instructions; the usual payment terms apply

e. Services and Construction contracts

completion is measured as the ratio of costs or efforts incurred to date (representing work performed) to the estimated total costs or efforts. Estimates of transaction price and total costs or efforts are continuously monitored over the term of the contracts and are recognized in net profit in the period when these estimates change or when the estimates are revised. Revenues and the estimated total costs or efforts are subject to revision as the contract progresses. When it is probable that contract costs at completion will exceed total contract revenue, the expected loss at completion is recognised immediately as an expense.

f. Interest income

Interest income is recognized using the effective interest rate method.

g. Dividend

Dividend income is recognised when the Company''s right to receive dividend is established.

h. Rental income

Rental income arising from operating leases is accounted for on a straight-line basis over the lease term unless increases in rentals are in line with the expected inflation or otherwise justified (Fair Value).

i. Duty Drawbacks

Duty drawback claims on exports are accounted on preferring the claims.

j. Other Income

Other Income not specifically stated above is recognised on accrual basis.

5) Property, plant and equipment, Capital Work-in progress

Assets acquired free of cost or received as gift are stated at fair value which is credited to Other Equity at the time of acquisition or receipt less accumulated depreciation and impairment losses.

Capital work-in-progress

Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work-In-Progress.

Income pertaining to construction period such as interest on advance to contractors, sale of tender documents etc., is set off against expenditure during construction.

Expenditure on development of leasehold land is capitalised as Land Development Expenditure and amortised over the lease period or useful, life whichever is lower.

6) Intangible Assets, Intangible Asset under Development

b. Cost of developmental work which is completed, wherever eligible, is recognized as an Intangible Asset.

c. Cost of developmental work under progress, wherever eligible, is classified as âIntangible Assets under Developmentâ.

7) Research and development expenses:

8) Impairment of Non-financial assets

At the end of each Balance Sheet date, carrying amount of assets are reviewed, if there is any indication of impairment based on internal/external factors. If the estimated recoverable amount is found to be lower than the carrying amount, then the impairment loss is recognised and assets are written down to the recoverable amount.

9) Depreciation /Amortisation

Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets.

Depreciation on additions and deletions to fixed assets during the year is provided on pro-rata basis as under:

b. In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or

destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

d. The Residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Amortization

Disposal of property, plant and equipment

Particulars		(Years)
A.	(a)Building (other than factory buildings)	60
	(b)Factory building	30
	(c)Purely temporary erections	3
	(d)Building with dwelling units each with plinth area not exceeding 80 sqm.	30
B.	Furniture & Fittings	10
C.	Plant & Machinery
	(a) General Rate (on double shift basis)	15
	(b)Special Rate: - Servers & Networks	6
	(c)Data Processing Machines including Computers	3
D.	Roads and compound Walls	10
E.	Office Machinery and Equipment	5
F.	Vehicles	8
G.	Assets costing less than 5,000/- are depreciated @ 100%
	However, in respect of assets having original cost of 50,000/-and above, a residual balance of 5/- has been retained in the books.

10) Leases

A lease is classified at the inception date as a finance lease or an operating lease.

Company as a Lessee

Loss. A leased asset is depreciated over the useful life of the asset or lease term, whichever is lower.

At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related ROU asset if the Company changes its assessment of whether it will exercise an extension or a termination option.

Company as a lessor

11) Borrowing costs

12) Government Grants

Grants from Government are measured at fair value and initially recognized as Deferred Income.

13) Investments in joint venture and associates

14) Inventories

Raw materials, components and stores purchased for manufacturing/ production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where same items are purchased as also manufactured, manufacturing costs are generally adopted.

Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

Precious metals scrap is brought to books at the year end at net realizable value.

15) Work-in-process

b. Work-in-process (Installation) is valued at lower of cost as recorded in the work orders and net realizable value, after providing for obsolescence, if any.

16) Tools and Gauges

Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment. Loose tools are changed to reverse at the time of issue.

17) Financial assets (Trade Receivables & Other receivables)

18) Errors and Estimates

19) Income taxes

Income tax comprises of current and deferred income tax Current income tax

Deferred tax

Deferred tax is provided using the Balance sheet method on temporary differences between the tax bases of assets and liabilities and their carrying

amounts for financial reporting purposes at the reporting date.

20) Warranty Liability

Warranty liability for contractual obligation in respect of equipment sold to customers is accounted for the basis of an annual technical assessment.

21) Foreign currencies

Differences arising on settlement or translation of monetary items are recognised in the Statement of Profit and Loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the functional currency exchange rate at the dates of the initial transactions.

22) Employee benefits

a. Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered.

d. Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

e. Eligible employees of the Company receive benefits from a provident fund, which is a defined contribution plan. Both the eligible employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary. The Company remits the contribution to the ITI Employees'' Provident Fund Trust. The trust after making a portion of contribution to the government-administered pension fund as per the regulations, invests the remaining funds in specific designated instruments as permitted by appropriate regulations. The rate at which the annual interest is payable to the beneficiaries by the trust is being administered by the government.

23) Provision & Contingent Liabilities

Onerous Contracts

Provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.

Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.

24) Fair value measurement

The Company measures certain financial instruments, such as derivatives and other items in its financial statements at fair value at each balance sheet date.

Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).

25) Investment property

26) Financial Instrumentsa. Initial recognition and measurement

of the financial asset are included in the cost of the asset.

b. Subsequent measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

i. Debt instruments at amortised cost,

ii. Debt instruments at fair value through other comprehensive income (FVTOCI),

iii. Debt instruments, derivatives and equity instruments at fair value through Profit or Loss (FVTPL),

iv. Equity instruments (other than investments in associates -which is carried at cost) measured at fair value through other comprehensive income (FVTOCI).

Derecognition

A financial asset or part of a financial asset is derecognised when the rights to receive cash flows from the asset has expired.

Embedded derivative

Embedded derivative, if required, is separated from host contract and measured at fair value.

27) Forward Contracts

28) Cash and cash equivalents

Bank overdrafts, if any, are shown within borrowings in current liabilities on the balance sheet.

29) Impairment of financial assets

In accordance with Ind AS 109, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss on financial assets with credit risk exposure.

a. Time barred dues from the Government / Government Departments / Government Companies are generally not considered as increase in credit risk of such financial asset.

b. Where dues are disputed in legal proceedings, provision is made if any decision is given against the Company even if the same is taken up on appeal to higher authorities / courts.

c. In case of dues outstanding for a significant period of time, on a case to case basis

30) Financial Liabilitiesa. Initial recognition and measurement

Financial liabilities are classified, at initial recognition, at fair value through Profit and Loss as loans, borrowings, payables, or derivatives, as appropriate.

Loans, borrowings and payables, are stated net of transaction costs that are directly attributable.

b. Subsequent measurement

Measurement of financial liabilities depends on their classification, as described below:

i. Financial liabilities at fair value through profit or loss.

Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.

c. Loans and borrowings

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.

d. Trade and other payables

Liabilities are recognised for amounts to be paid in future for goods or services received, whether billed by the supplier or not.

31) Reclassification of Financial Instruments

32) Offsetting of financial instruments

33) Cash dividend and non-cash distribution to equity shareholders

The Company recognises a liability to make cash or non-cash distributions to equity holders when the distribution is authorised and the distribution is no longer at the discretion of the Company.

34) Earnings per share

35) Events after the reporting period

Non-adjusting events are events that are indicative of conditions that arose after the end of the reporting period. Non-adjusting events after the reporting date are not accounted but disclosed.

Mar 31, 2018

1) Basis of Preparation

These are the Companyâs first Ind AS Standalone Financial Statements. The date of transition to Ind AS is April 1^st, 2016. Refer Note 37 for details of First time adoption - mandatory exceptions and optional exemptions availed by the Company.

Reconciliations and descriptions of the effect of the transition has been summarized in note 37

The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which are measured at fair value:

a. Derivative financial instruments, if any

b. Financial assets and liabilities that are qualified to be measured at fair value

c. Defined benefit asset/(liability) recognised at the present value of defined benefit obligation less fair value of plan assets.

2) Use of Estimates

3) Functional and presentation currency

4) Revenue Recognition

a. Sale of goods

b. Ex- Works Contract

When specified goods are unconditionally appropriated to the contract after prior Inspection and acceptance, if required.

c. FOR Contracts

d. Bill and Hold Sales

For bill-and-hold transactions, revenue is recognised when the customer takes title, provided that:

i. it is probable that delivery will be made;

ii. the item is on hand, identified and ready for delivery to the buyer at the time when the sale is recognised;

iii. the buyer specifically acknowledges the deferred delivery instructions; the usual payment terms apply

e. Construction contracts

Contract revenue includes initial amount agreed in the contract and any variations in the contract work, claims and incentive payments, to the extent it is probable that they will result in revenue and can be measured reliably.

Contract revenue is recognised in proportion to the stage of completion of the contract. Stage of completion is assessed based on the ratio of actual costs incurred on the contract up to the reporting date to the estimated total costs expected to complete the contract.

If the outcome cannot be estimated reliably and where it is probable that the costs will be recovered, revenue is recognized to the extent of costs incurred.

When it is probable that contract costs at completion will exceed total contract revenue, the expected loss at completion is recognised immediately as an expense.

f. Price escalations

In case of contracts where additional consideration is to be determined and approved by the customers, such additional revenue is recognised on receipt of confirmation from the customer(s).

Where break up prices of sub units sold are not provided for, the same are estimated.

g. Bundled contracts

In case of a Bundled contract, where separate fee for installation and commissioning or any other separately identifiable component is not stipulated, the Company applies recognition criteria to separately identifiable components (sale of goods, installation, commissioning, etc.) of the transaction and allocates revenue to those separate components based on their relative fair value.

h. Multiple elements

In cases where the installation and commissioning or any other separately identifiable component is stipulated and price for the same agreed separately, the Company applies the recognition criteria to separately identified components (sale of goods and installation and commissioning, etc.) of the transaction, allocates the revenue to those separate components based on the contract.

i. Sales exclude Sales Tax / Value Added Tax (VAT)/Goods and Service Tax (GST)/Service Tax.

Export Sales are treated as sales on issue of Bill of Lading Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

j. Supply of services

Revenue from annual maintenance contracts relating to the year is recognised when the contracts are entered into on time proportion basis. Revenue is recognized at the time of rendering services.

For other fixed-price contracts (including sale of software related services), revenue is recognised in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to the work performed. No revenue is recognised if there is significant uncertainty regarding recovery of the consideration due or if the costs incurred or to be incurred cannot be measured reliably.

k. Interest income

Interest income is recognized using the effective interest rate method.

l. Dividend

Dividend income is recognised when the Companyâs right to receive dividend is established

m. Rental income

n. Duty Drawbacks

Duty drawback claims on exports are accounted on preferring the claims.

o. Other Income

Other Income not specifically stated above is recognised on accrual basis.

Mar 31, 2017

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention modified by accounting for fixed assets acquired free of cost or by gift, at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting. GAAP Comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting Policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the Accounting Policy hitherto in use.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon managementâs best knowledge of current events and actions, actual result could differ from these estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the statement of Profit and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is amortized over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in-Trade are valued at lower of cost excluding interest charges, administration overheads and sales overheads and at the net realisable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest charges, administration overheads and sales overheads or at the net realisable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, âIntangible Assetâ.

7.00 Depreciation

7.01 With effect from April 01, 2015, depreciation is charged on Straight Line Method over the useful lives of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013, as against the old estimate as assessed by the Management.

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15 th of the month depreciation is reckoned in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. With the adoption of Schedule II, the Company starts recouping additional depreciation on account of revaluation as a credit to General Reserve as against the earlier policy of recouping additional depreciation as a credit to Statement of Profit and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under âPrior Period Adjustmentsâ, if the amount involved is Rs. 5.00 lakhs or more in each transaction.

9.00 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Companyâs monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the companyâs premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the Companyâs premises at the customers specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

Revenue Recognition on Construction / Turnkey Contracts

i) Revenue is recognised on percentage completion method. Contract revenue and costs associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities. Rental income is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease. Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

b) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

13.00 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related cost are recognized as income in the Statement of Profit and Loss.

c) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and Loss in the year of receipt.

14.00 Employee Benefits

a) Short-term employee benefits are recognised 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 benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes reflect the impact of current yearâs timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognised for a present obligation as a result of past events if it is probable that an outflow of resources will 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 best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outflow of resources is remote.

20.00 Earnings Per Share:

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.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable business segments. The Company is primarily operating in India which considered as a single Geographical Segment.

Mar 31, 2016

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, in accordance with Indian Generally Accepted Accounting
Principles (GAAP) under the historical cost convention modified by accounting for fixed assets acquired free of cost or by gift,
at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting. GAAP
Comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 (''Act'') read with Rule 7 of
the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities
and Exchange Board of India (SEBI). Accounting Policies have been consistently applied except where a newly issued Accounting
Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the Accounting Policy
hitherto in use.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
liabilities as at the date of financial statements and the results of operations during the reporting period. Although these
estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these
estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated
depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at
the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a Specific project by any agency is initially credited to Grant-in-Aid (Capital) and this
amount is adjusted to the statement of Profit and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalized as Land Development Expenditure and is amortized over a period
of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of
the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of
the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under
the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net
realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the
year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue
and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in- Trade are valued at lower of cost excluding interest charges, administration
overheads and sales overheads and at the net realizable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest
charges, administration overheads and sales overheads or at the net realizable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after
providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a
systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision
for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of
Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once
their technical feasibility is established in accordance with the requirements of Accounting Standard 26, ''Intangible Asset''.

7.00 Depreciation

7.01 With effect from April 01, 2015, depreciation is charged on Straight Line Method over the useful lives of the assets as
prescribed under Part C of Schedule II of the Companies Act, 2013, as against the old estimate as assessed by the Management.

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while
no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for
the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned
in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful
life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the
revalued amount. With the adoption of Schedule II, the Company starts recouping additional depreciation on account of
revaluation as a credit to General Reserve as against the earlier policy of recouping additional depreciation as a credit to
Statement of Profit and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period
Adjustments", if the amount involved is Rs, 5.00 lakhs or more in each transaction.

9.00 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Foreign currency
monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated
in a foreign currency are reported using the exchange rate at the date of the transaction.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different
from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as
income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the
company''s premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods
reaching destination within the accounting period, revenue is recognized. Goods ready for dispatch but held in the Company''s
premises at the customerâs Specific request is also recognized as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time
proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during
the year.

Revenue Recognition on Construction / Turnkey Contracts

i) Revenue is recognized on percentage completion method. Contract revenue and costs associated with the contract are recognized
as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date.
Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities. Rental income
is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease.
Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

b) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual
technical assessment.

13.00 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in- Aid(Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related
cost are recognized as income in the Statement of Profit and Loss.

c) Where the grants are for purpose of giving immediate financial support/ compensation for expenses incurred in a previous
accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and
Loss in the year of receipt.

14.00 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 benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are
recognized as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is
recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and
losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which
require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalized as part of
the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based
on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment
loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be
paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes reflect the impact of current year''s timing differences between taxable income and accounting income for
the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will
be available against which such deferred tax assets can be realized.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognized for a present obligation as a result of past events if it is probable that an outfow of resources will
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 best estimate of the amount required to settle the obligation at the Balance Sheet
date. A contingent liability is disclosed, unless the possibility of an outfow of resources is remote.

20.00 Earnings Per Share:

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.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and
rendering other associated / ancillary services and there are no other reportable business segments. The Company is primarily
operating in India which considered as a single Geographical Segment.

Mar 31, 2015

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention modified by accounting for fixed assets acquired free of cost or by gift, at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting. GAAP Comprises mandatory Accounting Standards as prescribed under section 133 of the Companies Act, 2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting Policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the Accounting Policy hitherto in use.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual result could differ from these estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a specifc project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the statement of Proft and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalized as Land Development Expenditure and is amortized over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in- Trade are valued at lower of cost excluding interest charges, administration overheads and sales overheads and at the net realizable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at lower of cost excluding interest charges, administration overheads and sales overheads or at the net realizable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, 'Intangible Asset'.

7.00 Depreciation

7.01 Depreciation is charged on Straight Line Method over the useful lives of the assets as estimated by the Management and the estimated useful lives are disclosed in Note No 13. Company believes that the useful lives as disclosed in Note No 13 best represent the useful lives of those assets based on internal assessment. However, independent technical evaluation by the external valuers is in progress. Hence the useful lives for those assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013. .

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Difference between depreciation on the asset based on revaluation and that on original cost, is transferred from revaluation reserve to the Statement of Proft and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments", if the amount involved is Rs. 5.00 lakhs or more in each transaction.

9.00 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Foreign currency monetary items are reported using the closing rate. Non- monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Company's monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognized. Goods ready for dispatch but held in the Company's premises at the customers specific request is also recognized as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

Revenue Recognition on Construction / Turnkey Contracts

g) Revenue is recognized on percentage completion method. Contract revenue and costs associated with the contract are recognized as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities. Rental income is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease. Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

b) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

13.00 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in- Aid(Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related cost are recognized as income in the Statement of Profit and Loss.

(i) Where the grants are for purpose of giving immediate financial support/ compensation for expenses incurred in a previous accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and Loss in the year of receipt.

14. Employee Benefits

a) Short-term employee benefits are recognized as an expense at the un discounted amount in the Statement of Profit & Loss of the year in which the related service is rendered.

b) Post employment benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognized as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalized as part of the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes reflect the impact of current year's timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognized for a present obligation as a result of past events if it is probable that an outflow of resources will 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 best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outfow of resources is remote.

20.00 Earnings Per Share:

Basic earnings per share are calculated by dividing the net proof or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net proof or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments.

Mar 31, 2014

1.00 Basis of Preparation of Financial Statements

1.01 The Financial Statements have been prepared as a going concern, under the historical cost convention modifed by accounting for fixed assets acquired free of cost or by gift, at the market value at the time of such acquisition and revaluation of certain fixed assets, on accrual basis of accounting, unless otherwise stated, in compliance with all material aspects with the Accounting Standards notifed by Companies (Accounting Standards) rules 2006 (as amended) and all the relevant provisions of the Companies Act, 1956 read with General Circular No. 15/2013 dated 13th September 2013, issued by Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013.

1.02 The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual result could differ from these estimates.

2.00 Fixed Assets

2.01 Fixed Assets are stated at cost of acquisition / installation (net of Modvat / Cenvat credit availed), less accumulated depreciation and impairment losses.

2.02 Fixed Assets acquired free of cost or gifted to ITI are stated at Market Value which is credited to the Capital Reserve, at the time of acquisition less accumulated depreciation and impairment losses.

2.03 Any Capital Grant-in-Aid given for a Specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the statement of Profit and Loss over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is amortized over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital work in progress is stated at the amount expended up to the date of Balance Sheet.

2.06 In the event of revaluation of entire class of fixed assets, if the revalued amount is greater than the carrying amount of the fixed asset, such difference is taken to the revaluation reserve. If the revalued amount is lower than the carrying amount of the fixed asset and if the class of the asset has already been revalued, difference is set off against the amount available under the revaluation reserve for the same class of asset and excess thereof is charged to the statement of Profit and Loss.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing/production activities are valued at lower of cost and net realizable value, after providing for obsolescence, if any. Cost is calculated on weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted.

3.02 Raw materials and production stores with ancillaries and fabricators are valued at lower of cost at the time of such issue and net realizable value, after providing for obsolescence, if any.

3.03 Manufactured items in Stock and Stock-in- Trade are valued at lower of cost excluding interest charges, administration overheads and sales overheads and at the net realisable value, after providing for obsolescence, if any.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verifed quantities at lower of cost excluding interest charges, administration overheads and sales overheads or at the net realisable value, after providing for obsolescence, if any.

(ii) Work-in-process (Installation) is valued at lower of cost as recorded in the Work Orders and net realizable value, after providing for obsolescence, if any.

3.05 Precious metals scrap is valued at net realizable value and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalized at cost and then amortized over production on a systematic basis, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Investments

Current Investments are carried at lower of cost and fair market value. Long term investments are carried at cost and provision for diminution in the value of such long term investments, other than temporary in nature, is made.

6.00 Intangible Assets

6.01 Expenses incurred during research phase till the establishment of commercial feasibility is charged off to Statement of Profit and Loss.

6.02 Expenditure on development of new products / technologies, development of software are capitalized individually at cost once their technical feasibility is established in accordance with the requirements of Accounting Standard 26, ''Intangible Asset''.

7.00 Depreciation

7.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

7.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

7.03 Intangible assets are amortized and charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno commercial assessment.

7.04 In the case of depreciable assets which have been revalued, depreciation is calculated on straight line method on the revalued amount. Difference between depreciation on the asset based on revaluation and that on original cost, is transferred from revaluation reserve to the Statement of Profit and Loss.

8.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments", if the amount involved is Rs. 5.00 lakhs or more in each transaction.

9.0 Foreign currency transactions

9.01 Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Foreign currency monetary items are reported using the closing rate. Non- monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

9.02 Exchange differences arising on the settlement of monetary items or on reporting Company''s monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or expenses in the year in which they arise.

10.00 Revenue Recognition

a) Sales include Excise Duty & Service Tax and excludes Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company''s premises to the customer. In the case of FoR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the Company''s premises at the customers Specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Revenue from installation and commissioning services is recognized on completion of installation and commissioning.

g) Revenue from annual maintenance contracts relating to the year is recognized when the contracts are entered into on a time proportionate basis.

h) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

Revenue Recognition on Construction / Turnkey Contracts

g) Revenue is recognised on percentage completion method. Contract revenue and costs associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

11.00 Other Income

a) Insurance and Customs Duty claims are accounted as and when claims are accepted by the respective authorities.

b) Rental income is accounted on the basis of lease agreements entered with the parties to whom premises of the company are given under lease.

c) Interest income is recognized on a time proportionate basis taking into account the amount outstanding and the rate applicable.

d) Dividend is accounted when the right to receive dividend is established by the Balance Sheet Date.

12.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

13.0 Government Grants

a) Government grants relating to Revenue are initially credited to Grant-in-Aid(Revenue).

b) Where the grants are intended to compensate cost/s incurred in an accounting year, an amount of grant to the extent of related cost are recognized as income in the Statement of Profit and Loss.

c) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost/s, these are recognized as Extraordinary income in the Statement of Profit and Loss in the year of receipt.

14.0 Employee benefits

a) Short-term employee benefits are recognised 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 benefit viz. gratuity and other long term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the Statement of Profit & Loss of the year in which the employee has rendered services. Expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to the Statement of Profit & Loss.

c) Expenditure related to voluntary retirement scheme (VRS) is written off in the year of incidence.

15.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition/production or construction of inventories or fixed assets which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the inventory or fixed assets valuation respectively.

16.00 Impairment of Assets

At the end of each Balance sheet date, the carrying amount of assets are reviewed, if there is any indication of impairment based on internal / external factors. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

17.00 Current Tax and Deferred Tax

a) Tax expense comprises of current income and deferred income tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

b) Deferred income taxes refect the impact of current year''s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

c) Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognised only to the extent that there is virtual certainty that suffcient future taxable income will be available against which such deferred tax assets can be realised.

18.00 Trade Receivables

Provision for Doubtful Trade Receivables is made on a case to case basis, on detailed review.

19.00 Provisions / Contingencies:

A provision is recognised for a present obligation as a result of past events if it is probable that an outflow of resources will 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 best estimate of the amount required to settle the obligation at the Balance Sheet date. A contingent liability is disclosed, unless the possibility of an outflow of resources is remote.

20.00 Earnings Per Share:

Basic earnings per share are calculated by dividing the net Profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

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.

21.00 Segment Reporting:

The Company has primarily engaged in business of manufacturing, trading and servicing of telecommunication equipments and rendering other associated / ancillary services and there are no other reportable segments.

Mar 31, 2012

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the Profit and Loss Account over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores with Ancillaries and Fabricators are valued at cost as at the time of issue to the Ancillaries and Fabricators.

3.03 Manufactured items in Stock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recorded in the Work Orders.

3.05 Precious metals scrap is valued and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset .

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of For destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the company's premises at the customers specific request is also recognized as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts 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.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2010 will be deferred, which will be written off in equal installments by 31st March 2011, including the year of incidence. Such expenditure incurred after 31st March 2010 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognized for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.

Mar 31, 2011

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant-in-Aid (Capital) and this amount is adjusted to the Profit and LossAccount over the useful lifeof the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores withAncillaries and Fabricators are valued at cost as at the time of issue to theAncillaries and Fabricators.

3.03 Manufactured itemsinStock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recordedinthe Work Orders.

3.05 Precious metals scrap is valued and brought to booksatthe year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset .

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the CompaniesAct,1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years basedontechno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the company's premises to the customer. In the case of FOR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the company's premises at the customers specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of anannual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts 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.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2010 will be deferred, which will be written off in equal installments by 31st March 2011, including the year of incidence. Such expenditure incurred after 31st March 2010 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to get ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognized for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.

Mar 31, 2010

1.0 Basis of Preparation of Financial Statements.

The Financial Statements have been prepared as a going concern, under the historical cost convention, on accrual basis of accounting in accordance with the provisions of the Companies Act 1956 and comply with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India to the extent applicable.

2.00 Fixed Assets

2.01 Fixed Assets are recorded at cost net of MODVAT relief wherever availed.

2.02 Fixed Assets acquired free of cost or gifted to ITI are recorded at Market Value at the time of acquisition and the amount is credited to Capital Reserve.

2.03 Any Capital Grant-in-Aid given for a specific project by any agency is initially credited to Grant- in-Aid (Capital) and this amount is adjusted to the Profit and Loss Account over the useful life of the assets.

2.04 Expenditure on development of leasehold land is capitalised as Land Development Expenditure and is written off over a period of 5 years, commencing from the year in which such expenditure is incurred.

2.05 Capital Expenditure on R & D is treated as Fixed Assets.

2.06 To assess fair value of a tangible fixed asset revaluation of the tangible fixed asset is done. Such fair value of tangible fixed asset is appraised by professionally qualified valuers. The difference between the carrying amount of tangible fixed asset and revalued amount pertaining to the tangible asset is credited to a revaluation reserve in the Balance sheet.

3.00 Inventories

3.01 Raw materials, components and stores purchased for manufacturing / production activities are valued at weighted average rate as at the end of the year. Where the same items are both purchased and manufactured, manufacturing costs are generally adopted for valuation.

3.02 Raw materials and production stores with Ancillaries and Fabricators are valued at cost as at the time of issue to the Ancillaries and Fabricators.

3.03 Manufactured items in Stock and Stock-in-Trade are valued at cost excluding Interest Charges, Administration Overheads and Sales overheads or at the net realisable value whichever is less.

3.04 Work-in-process

(i) Work-in-process (production) is valued on the basis of physically verified quantities at cost excluding interest charges, administration overheads and sales overheads or at the net realisable value whichever is less.

(ii) Work-in-process (Installation) is valued at cost as recorded in the Work Orders.

3.05 Precious metals scrap is valued and brought to books at the year end.

4.00 Tools and Gauges

4.01 Expenditure on special purpose tools and fixtures is initially capitalised for amortisation on production, based on technical assessment.

4.02 Loose tools are charged to revenue at the time of issue.

5.00 Intangible Assets

5.01 Expenditure on training personnel, foreign technicians fee and expenses, technical know how, documentation etc. specific to the product / projects are recognised as intangible asset.

5.02 Expenditure on development of new products / technologies, development of software where enduring benefits are expected is recognised as intangible asset.

5.03 Intangible assets are recorded at cost initially.

6.00 Depreciation

6.01 Depreciation is charged on Straight Line Method in accordance with the useful life of the asset as assessed by the Management. However the rates of depreciation adopted in the books are not less than the rates specified in Schedule-XIV of the Companies Act, 1956.

6.02 Depreciation on additions and deletions to fixed assets during a year is provided on pro rata basis as follows:

(a) Depreciation is reckoned in full for the month of addition for the assets commissioned on or before 15th day of a month while no depreciation is reckoned for the month of addition for the assets commissioned after 15th of the month.

(b) In respect of assets sold, discarded, damaged or destroyed on or before 15th day of a month no depreciation is reckoned for the month of deletion while for the assets sold, discarded, damaged or destroyed after 15th of the month depreciation is reckoned in full for the month of deletion.

6.03 Depreciation on intangible assets are charged to revenue based on the economic benefits drawn by the company over the useful life not exceeding ten years based on techno-commercial assessment.

6.04 In the case of depreciable assets which have been revalued depreciation is calculated on straight line method on the revalued amount. The difference between depreciation on the asset based on revaluation and that on original cost is transferred from revaluation reserve to the Profit and Loss account

7.00 Prior period items

Adjustments arising due to errors or omissions in the financial statements of earlier years are accounted under "Prior Period Adjustments" if the amount involved is Rs. Five Lakhs or more in each transaction.

8.00 Rate of Foreign Exchange

Current Assets / Liabilities / Long term Liabilities towards imported fixed assets, equipments and components are initially accounted at the rate of exchange ruling on the date of transaction and outstanding liabilities on the Balance Sheet date are updated at the rate of exchange ruling on the date of Balance Sheet. The conversion difference is charged off in the Profit and Loss Account.

9.00 Recognition of Revenue

a) Sales include Excise Duty and exclude Sales , Tax.

b) Revenue from sale of goods is recognized based on valid sales contract.

c) Revenue from customer accepted sale of goods/other sale of goods is recognized on the date of dispatch of goods from the companys premises to the customer. In the case of FOR destination contracts, if there is a reasonable expectation of the goods reaching destination within the accounting period, revenue is recognised. Goods ready for dispatch but held in the companys premises at the customers specific request is also recognised as sale of goods.

d) Where prices are not established, sales are set up provisionally at prices likely to be realized.

e) Export sales are treated as sales on issue of Bill of Lading.

f) Provision is made separately for likely disallowance by customers including Liquidated Damages for contracts executed during the year.

10.00 Warranty Liability

Warranty liability for contractual obligation in respect of equipments sold to customers is accounted on the basis of an annual technical assessment.

11.00 Government Grants

(i) Government grants relating to Revenue are initially credited to Grant-in-Aid (Revenue).

(ii) Where the grants are intended to compensate cost incurred in an accounting year an amount of grant to the extent of related cost are recognized as income in the Profit and Loss Account.

(iii) Where the grants are for purpose of giving immediate financial support/compensation for expenses incurred in a previous accounting period, with no further related cost, these are recognized as income in the Profit & Loss Account in the year of receipt.

12.00 Recognition of Revenue on Construction / Turnkey Contracts

Revenue is recognised on percentage completion method. The accounting of contract revenue and contract cost associated with the contract are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the reporting date. Expected loss on the contract is fully accounted.

13.00 Employee Benefits

i) Short-term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

ii) Post employment benefit viz. gratuity and other long-term employee benefits viz. Privilege Leave, Sick Leave and LLTC are recognised as an expense in the profit and loss account of the year in which the employee has rendered services. The expense is recognised at the present value of the amounts 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.

iii) VRS

(a) Where grant is received for VRS, expenditure related to VRS is fully charged to the Profit & Loss account in the year of incidence. Equivalent amount of grant is credited to Profit & Loss account.

(b) Where no grant is received for VRS, the expenditure related to VRS incurred up to 31st March 2009 will be deferred, which will be written off in equal installments by 31st March 2010, including the year ofincidence. Such expenditure incurred after 31st March 2009 will be written off in the year of incidence.

14.00 Borrowing Cost

Borrowing cost, that is directly attributable to the acquisition / production or construction of fixed assets or inventories which require a substantial period to jet ready for its intended use or to bring them to saleable condition is capitalised as part of the cost of the fixed assets or inventory valuation respectively.

15.00 Impairment of Assets

At the end of each Balance sheet date the carrying amount of assets are assessed as to whether there is any indication of impairment. If the estimated recoverable amount is found lesser than the carrying amount, then the impairment loss is recognized and assets are written down to the recoverable amount.

16.00 Deferred Tax

Deferred tax is recognised for all timing differences, subject to the consideration of prudence in respect of deferred tax assets.

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