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Notes to Accounts of Shyam Telecom Ltd.

Mar 31, 2015

1. The Department of Telecommunications, Ministry of Communication, Government of India, had invited the tenders from the Indian Companies to provide basic telephony services. The Company Shyam Telelink Networks Ltd. (India) (STNL) along with ARM Ltd. and other parties entered into an MOU to jointly participate in the tenders through STNL. The parties entered into an agreement from which ARM Ltd. withdrew and the parties agreed for buying the shares of ARM Ltd. for a consideration of Rs 10 Crores. The same was partly effected but STNL did not pay the balance amount alleging fraud by ARM Ltd. The matter which was under arbitration by a sole arbitrator who was replaced by the Hon'ble Supreme Court of India (which was approached by the Company by way of an SLP), which vide its order dated 29th Aug, 2012 appointed a different Sole arbitrator. The arbitrator vide his order dated 24th Jan, 2014 has directed the company to pay ARM Ltd. Rs 11.50 Crores along with interest of Rs 14.12 Crores totaling Rs. 25.62 Crores on account of payout. The interest shall be payable upto the date of payment. In addition to the above he has further awarded USD 5,00,000 at the conversion rate prevailing on 24.01.2014 plus interest @ 9% p.a. from the date of award till the date of payment and Rs 20 Lakhs payable to ARM Ltd as arbitration Cost. The company has filed an application under section 34 of the Arbitration and Conciliation Act, 1996 against the said order before the Hon'ble Delhi High Court. The Hon'ble Delhi High Court has issued notice in the said application (which has the effect of stay on the award), and the matter is presently sub-judice before the Hon'ble Delhi High Court. As per the legal opinion produced to us by the Company, the company expects to win the case and hence no provision for the liability has been considered in the accounts. The outstanding amount has been included under Contingent Liabilities.

2. As on 31.03.2015, an amount of Rs 3676.90 Lakhs payable to (Aquarius Technology Pte Ltd. Rs 3237.74 and Nisshoiwai Corporation Rs 439.16 Lakhs ) in Foreign Currency remains unsettled for a period exceeding One year.

3. Exceptional items:

(i) Company had in the previous year(s) given advance against share capital and extended long term loans to WOS STI which as on 31-03-2015 amounted to Rs. 15.68 Lacs (US$ 25,050) and Rs. 2108.95lacs (US$33,69,294) respectively. The Subsidiary company had liquidated all assets and had Accumulated losses amounted to Rs 2124.63 lacs(US$ 33,94,344). In the opinion of the management the said loans & advances are not recoverable. The same will be written off after taking necessary approval from RBI however provision for the same is made

(ii) Includes provision for diminution in carrying value of Investment in Spanco Limited and Sistema Shyam Teleservices Limited amounting to Rs. 75.03 Lacs for the year ended 31st March 2015.

4. As per the requirement of Schedule II of the Companies Act 2013 effective from 1st April 2014, the company has charged depreciation based on the useful lives as prescribed under the Schedule. Consequently, the company has adjusted Rs. 78.38 Lacs from retained earning and depreciation charge for the year ended 31st March,2015 is higher by Rs.91.34 Lacs.

5. Discontinuing Operations

The company initiated the process of Discontinuing/outsourcing the manufacturing operations in pursuance to the resolution passed in the meeting of Board of Directors held on 9th Feberuary,2015,thereby vacated the premises by 15th April,2015,disposed off all tangible assets except vehicles,discharged/provided for contarctual obligations of manpower/ worker and resolved to outsource the operations henceforth.Consequently there is only one reportable segment as on 31st march,2015.

6. Related Party Information:

Relationship

a) Subsidiary :

- Shyam Telecom Inc.

b) Key Management Personnel and relative of Key Management personal : Mr. Rajiv Mehrotra , Mr Alok Tondon, Mr. Arun Khanna and Mr. Ajay Khanna.

c) Enterprises over which Key Management Personnel and relatives are able to exercise significant influence:

Shyam Antenna Electronics Ltd., Intercity Cable System Pvt. Ltd, Shyam Communication Systems, Shyam Networks Ltd. (formerly Shyam Telecom Systems Pvt. Ltd.), Shyam Digital Communications Pvt Ltd, Sistema Shyam Teleservices Ltd.,Ubico Networks Pvt.Ltd., RMS Automation Systems Ltd., Spectranet Pvt Ltd., Shyam infratel Pvt ltd, Vihaan Networks Ltd and Think of us Pvt. Ltd.

Note: Related party relationship is as identified by the Company and relied upon by the auditors.

7. Some of the personal accounts are subject to adjustments / reconciliation / confirmation .

8. In the opinion of Board of Directors Fixed Assets, Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all liabilities have been made in the Accounts, which has been relied upon by the auditors.

9. In compliance with the accounting standards 15 (revised 2005) "Employee Benefits" The company has got the employee benefits evaluated from actuarial valuer.

The Company has calculated the various benefits provided to employees as under:

A. Provident Fund & Other fund

During the year the Company has recognized Rs 32.88 Lacs (previous Year Rs. 49.99 lacs) towards contribution to PF in the Statement of Profit and Loss .

B. State Plans

Employer's contribution to Employee State insurance and to welfare fund During the year the Company has recognised Rs. 2.98 lacs (Previous year Rs.3.67 Lacs)towards contribution to ESI and Rs 0.11 Lacs (previous Year Rs.0.21 Lacs) towards welfare fund, in the Statement of Profit and Loss.

C. Defined Benefit Plans

The actuarial valuation carried out is based on following assumption:

a) Leave Encashment

b) Contribution to Gratuity Fund - Employee's Gratuity Fund.

10. Previous year figures have been regrouped/reclassified wherever considered necessary.


Mar 31, 2014

NOTE - 1 TRADE PAYABLES

The Company has not received any intimation from "suppliers" regarding their status under the Micro, small and Medium Enterprises Development Act, 2006 and hence disclosure, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been furnished.

CURRENT YEAR PREVIOUS YEAR 2 Contingent liabilities : (Rs In Lacs) (Rs In Lacs)

-Income Tax 74.41 39.71

-Excise Duty 80.87 -

-Claims of ARM Ltd * 2,892.74 -

* The Department of Telecommunications, Ministry of Communication, Government of India, had invited the tenders from the Indian Companies to provide basic telephony services. The Company Shyam Telelink Networks Ltd. (India) (STNL) along with ARM Ltd. and other parties entered into an MOU to jointly participate in the tenders through STNL. The parties entered into an agreement from which ARM Ltd. withdrew and the parties agreed for buying the shares of ARM Ltd. for a consideration of Rs 10 Crores. The same was partly effected but STNL did not pay the balance amount alleging fraud by ARM Ltd. The matter which was under arbitration by a sole arbitrator who was replaced by the Hon''ble Supreme Court of India (which was approached by the Company by way of an SLP), which vide its order dated 29th Aug, 2012 appointed a different Sole arbitrator.

The arbitrator vide his order dated 24th Jan, 2014 has directed the company to pay ARM Ltd. Rs 11.50 Crores along with interest of Rs 14.12 Crores totaling Rs. 25.62 Crores on account of payout. The interest shall be payable upto the date of payment. In addition to the above he has further awarded USD 5,00,000 at the conversion rate prevailing on 24.01,2014 plus interest @ 9% p.a. from the date of award till the date of payment and Rs 20 Lakhs payable to ARM Ltd as arbitration Cost. The company has filed an application under section 34 of the Arbitration and Conciliation Act, 1996 against the said order before the Hon''ble Delhi High Court. The Hon''ble Delhi High Court has issued notice in the said application (which has the effect of stay on the award), and the matter is presently sub-judice before the Hon''ble Delhi High Court. As per the legal opinion produced to us by the Company, the company expects to win the case and hence no provision for the liability has been considered in the accounts. The outstanding amount has been included under Contingent Liabilities.

3 As on 31.03.2014, an amount of Rs 3530.52 Lakhs payable to (Aquarius Technology Pte Ltd. Rs 3108.84 and Nisshoiwai Corporation Rs 421.68 Lakhs ) in Foreign Currency remains unsettled for a period exceeding One year.

4 A loan amounting to Rs 2090.25 Lakhs extended to Shyam Telecom Inc, USA remains outstanding as on date . The said wholly owned subsidiary has incurred substantial losses.However management is of the opinion that amount shall be recovered, hence no provision is considered necessary.

5 Research & Development:

Research and Development expenses, clubed in respective head of expenses amounting to Rs. Nil in Current year(Previous Year Rs. 69.86 lacs).

6 Exceptional items:

The company in financial year 1994-95 rejected "Digital Micro Radio Equipment" supplied by M/s Bharat Electronics Limited on ground of defects in the equipments supplied and non adherence to delivery schedule. On appeal by the Bharat Electronic Limited for recovery of interest on the unpaid amount the company had deposited Rs 339.75 lacs in the High Court of Delhi in the year ended 31.03.2012 which was charged to revenue as exception Item. On final disposal of appeal by Bharat Electronics Limited the Honable High Court directed to deposit of Rs 118.31 lacs as amount of interest which has also been charged to revenue during the previous year ended 31.03.2013 as exceptional item

7 Related Party Information:

Relationship

a) Subsidiary :

- Shyam Telecom Inc.

b) Key Management Personnel and relative of Key Management personal :

Mr. Rajiv Mehrotra , Mr. Alok Tondon,Mr. Arun Khanna and Mr. Ajay Khanna and Relative of Key Management personal : Mr. K.N. Mehrotra

c) Enterprises over which Key Management Personnel and relatives are able to exercise significant influence:

Shyam Antenna Electronics Ltd., Intercity Cable System Pvt. Ltd., Shyam Communication Systems, Shyam Basic Infrastructures Projects Pvt. Ltd., Shyam Networks Ltd., (formerly Shyam Telecom Systems Pvt. Ltd.), A.T. Invofin India Pvt. Ltd., Cell cap Invofin India Pvt Ltd, Intell Invofin India Pvt Ltd., Shyam Digital Communications Pvt Ltd., Sistema Shyam Teleservices Ltd.,Ubico Networks Pvt.Ltd., RMS Automation Systems Ltd., Spectranet Pvt Ltd., Shyam infratel Pvt ltd., Vihaan Networks Ltd. and Think of us.

Note; Related party relationship is as identified by the Company and relied upon by the auditors.

8 SEGMENT INFORMATION

The Company''s operations predominantly relate to providing Telecommunication products , Trading and respective related Services. The company has considered business segment as the primary segment for disclosure. The segments have been identified taking into account the nature of the products, the deferring risk and returns, the organisation structure and internal reporting system . The company caters mainly to the needs of the domestic market and export turnover is not significant in context of the total turnover, hence there is no reportable geographical segment . The Telecom products & Services segment comprise of manufacturing, trading and services in the related area. Trading services segment includes the Trading in Telecom Products. Investments are primarly in the companies which are dealing in IT and telecommunication sectors.

Revenue & expenditure which relates to enterprises as a whole and are not attributable to segments are included in unallocable expenditure (Net of unallocable income ). Assets used in the Company''s business or liabilities contracted have not been identified to any of the reportable segment , as all the assets and services are used interchangeably between segments, The Company believes that it is currently not practicable to provide segment disclosure relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

9 Some of the personal accounts are subject to adjustments / reconciliation / confirmation.

10 In the opinion of management ,the diminution in the value of investment is temporary in nature.

11 In the opinion of Board of Directors Fixed Assets, Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all liabilities have been made in the Accounts, which has been relied upon by the auditors.

12 In compliance with the accounting standards 15 (revised 2005) "Employee Benefits" The company has got the employee benefits evaluated from actuarial valuer.

The Company has calculated the various benefits provided to employees as under:

A. Provident Fund & Other fund

During the year the Company has recognized Rs 49.99 Lacs (previous Year Rs. 49.63 lacs) towards contribution to PF in the Statement of Profit and Loss.

B. State Plans

Employer''s contribution to Employee State insurance and to welfare fund

During the year the Company has recognised Rs. 3.67 lacs (Previous year Rs.4.92 Lacs)towards contribution to ESI and Rs 0.21 Lacs (previous Year Rs. . 0.23 Lacs) towards welfare fund, in the Statement of Profit and Loss.

C. Defined Benefit Plans

The actuarial valuation carried out is based on following assumption:

a) Leave Encashment

b) Contribution to Gratuity Fund - Employee''s Gratuity Fund.

13 Previous year figures have been regrouped/reclassified wherever considered necessary.


Mar 31, 2013

CURRENT YEAR PREVIOUS YEAR (Rs. In Lacs) (Rs. In Lacs)

1 Contingent liabilities :

-Income Tax 39.71 75.00

2 Commitments:

Letter of Credits issued by the Banks (Agst. which Goods have not been despatched) 2,484.89

3 Research & Development:

Research and Development expenses, clubed in respective head of expenses amounting to Rs. 69.86 Lacs in Current year(Previous Year Rs. 204.55 lacs).

4 Exceptional items:

The company in financial year 1994-95 rejected "Digital Micro Radio Equipment" supplied by M/s Bharat Electronics Limited on ground of defects in the equipments supplied and non adherence to delivery schedule. On appeal by the Bharat Electronic Limited for recovery of interest on the unpaid amount the company had deposited Rs.339.75 lacs in the High Court of Delhi in the previous year ended 31.03.2012 which was charged to revenue as exception Item. On final disposal of appeal by Bharat Electronics Limited the Honable High Court directed to deposit of Rs.118.31 lacs as amount of interest which has also been charged to revenue during the year as exceptional item.

5 Related Party Information: Relationship

a) Subsidiary :

- Shyam Telecom Inc.

b) Key Management Personnel and relative of Key Management personal : Mr. Rajiv Mehrotra, Mr Alok Tondon, Mr. Arun Khanna and Mr. Ajay Khanna Relative of Key Management personal : Mr. K.N. Mehrotra.

c) Enterprises over which Key Management Personnel and relatives are able to exercise significant influence:

Shyam Antenna Electronics Ltd., Intercity Cable System Pvt. Ltd, Shyam Communication Systems, Shyam Basic Infrastructures Projects Pvt. Ltd., Shyam Networks Ltd. (formerly Shyam Telecom Systems Pvt. Ltd.), A.T. Invofin India Pvt. Ltd., Cell cap Invofin India Pvt Ltd, Intell Invofin India Pvt Ltd, Shyam Digital Communications Pvt Ltd, Sistema Shyam Teleservices Ltd.,Ubico Networks Pvt.Ltd., RMS Automation Systems Ltd., Spectranet Pvt Ltd., Shyam infratel Pvt ltd and Vihaan Networks Ltd.

Note; Related party relationship is as identified by the Company and relied upon by the auditors.

6 SEGMENT INFORMATION

The Company''s operations predominantly relate to providing Telecommunication products, Trading and respective related Services. The company has considered business segment as the primary segment for disclosure. The segments have been identified taking into account the nature of the products, the deferring risk and returns, the organisation structure and internal reporting system. The company caters mainly to the needs of the domestic market and export turnover is not significant in context of the total turnover, hence there is no reportable geographical segment. The Telecom products & Services segment comprise of manufacturing, trading and services in the related area. Trading services segment includes the Trading in Telecom Products. Investments are primarly in the companies which are dealing in IT and telecommunication sectors.

Revenue & expenditure which relates to enterprises as a whole and are not attributable to segments are included in unallocable expenditure (Net of unallocable income). Assets used in the Company''s business or liabilities contracted have not been identified to any of the reportable segment, as all the assets and services are used interchangeably between segments, The Company believes that it is currently not practicable to provide segment disclosure relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

7 Some of the personal accounts are subject to adjustments / reconciliation / confirmation .

8 In the opinion of Board of Directors Fixed Assets, Current Assets, Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all liabilities have been made in the Accounts, which has been relied upon by the auditors.

9 In compliance with the accounting standards 15 (revised 2005) "Employee Benefits" The company has got the employee benefits evaluated from actuarial valuer.

The Company has calculated the various benefits provided to employees as under:

A. Provident Fund & Other fund

During the year the Company has recognized Rs.49.63 Lacs (previous Year Rs. 64.47 lacs) towards contribution to PF in the Statement of Profit and Loss.

B. State Plans

Employer''s contribution to Employee State insurance and to welfare fund

During the year the Company has recognised Rs. 4.92 lacs (Previous year Rs. 6.71 Lacs)towards contribution to ESI and Rs. 0.23 Lacs (previous Year Rs. 0.16 Lacs) towards welfare fund, in the Statement of Profit and Loss.

C. Defined Benefit Plans

The actuarial valuation carried out is based on following assumption:

a) Leave Encashment

b) Contribution to Gratuity Fund - Employee''s Gratuity Fund.

10 Previous year figures have been regrouped / reclassified wherever considered necessary


Mar 31, 2012

CURRENT YEAR PREVIOUS YEAR (Rs. In Lacs) (Rs. In Lacs)

1. Contingent liabilities :

- Claim against the company not acknowledged as debt - 108.13

- Income Tax 75.00 -

2. Commitments:

Letter of Credits issued by the Banks (Agst. which Goods have not been despatched) 2,484.89 2,338.89

3. Research & Development:

Research and Development expenses, clubed in respective head of expenses amounting to Rs. 204.55 lacs in Current year, Previous year Rs. 363.49 Lacs including Rs. 204.91 Lacs transferred from Work in progress have been charged to revenue as no future economic benefit was expected to flow to the company on use.

4. Exceptional items:

The company in financial year 1994-95 rejected "Digital Micro Radio Equipment" supplied by M/s. Bharat Electronics Limited on ground of defects in the equipments supplied and non adherence to delivery schedule. However, the High Court of Delhi passed order against the company and company deposited the ordered amount of Rs 339.75 Lacs with the High court of Delhi. Amount deposited has been charged to revenue as Exceptional item.

5. Related Party Information: Relationship

a) Subsidiary :

- Shyam Telecom Inc.

b) Key Management Personnel and relative of Key Management personal :

Mr. Rajiv Mehrotra, Mr Alok Tondon, Mr. Arun Khanna and Mr. Ajay Khanna and Relative of Key Management personal : Mr, K.N. Mehrotra

c) Enterprises over which Key Management Personnel and relatives are able to exercise significant influence:

Shyam Antenna Electronics Ltd., Intercity Cable System Pvt. Ltd, Shyam Communication Systems, Shyam Basic Infrastructures Projects Pvt. Ltd., Shyam Networks Ltd. (formerly Shyam Telecom Systems Pvt. Ltd.), A.T. Invofin India Pvt. Ltd., Cell cap Invofin India Pvt Ltd, Intell Invofin India Pvt Ltd, Shyam Digital Communications Pvt Ltd, Sistema Shyam Teleservices Ltd.,Ubico Networks Pvt.Ltd., RMS Automation Systems Ltd., Spectranet Pvt Ltd., Shyam infratel Pvt ltd and Vihaan Networks Ltd.

Note; Related party relationship is as identified by the Company and relied upon by the Auditors.

6. SEGMENT INFORMATION

The Company's operations predominantly relate to providing Telecommunication products, Trading and respective related Services. The company has considered business segment as the primary segment for disclosure. The segments have been identified taking into account the nature of the products, the deferring risk and returns, the organisation structure and internal reporting system, The company caters mainly to the needs of the domestic market and export turnover is not significant in context of the total turnover, hence there is no reportable geographical segment. The Telecom products & Services segment comprise of manufacturing, trading and services in the related area. Trading services segment includes the Trading in Telecom Products. Investments are primarily in the companies which are dealing in IT and telecommunication sectors.

Revenue & expenditure which relates to enterprises as a whole and are not attributable to segments are included in unallocable expenditure (Net of unallocable income), Assets used in the Company's business or liabilities contracted have not been identified to any of the reportable segment, as all the assets and services are used interchangeably between segments, The Company believes that it is currently not practicable to provide segment disclosure relating to total assets and liabilities since a meaningful segregation of the available data is onerous.

7. Some of the personal accounts are subject to adjustments/reconciliation/confirmation.

8. In the opinion of Board of Directors Fixed Assets, Current Assets Loans and Advances have a value on realisation in ordinary course of business at least equal to the amount at which they are stated in the Balance Sheet and provision for all liabilities have been made in the Accounts, which has been relied upon by the auditors.

36. In compliance with the accounting standards 15 (revised 2005) "Employee Benefits" The company has got the employee benefits evaluated from actuarial valuer.

The Company has calculated the various benefits provided to employees as under:

A. Provident Fund & Other fund

During the year the Company has recognized Rs. 64.47 Lacs (previous Year Rs. 58.45 lacs) towards contribution to PF in the Statement of Profit and Loss.

B. State Plans

Employer's contribution to Employee State insurance and to welfare fund During the year the Company has recognised Rs. 6.71 lacs (Previous year Rs. 6.39 Lacs)towards contribution to ESI and Rs. 0.16 Lacs (previous Year Rs. 0.18 Lacs) towards welfare fund, in the Statement of Profit and Loss.

9. Previous year figures have been regrouped/reclassified wherever considered necessary.

 
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