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Accounting Policies of Smartlink Holdings Ltd. Company

Mar 31, 2018

NOTES forming part of the financial statements

NOTE 1: BACKGROUND OF THE COMPANY

Smartlink Holdings Limited (formerly known as Smartlink Network Systems Limited ) ("Company") was incorporated on 31st March, 1993. The change in name of the company is effective from 18th April, 2018.

The Company has considered itself as a Non-Banking Financial Institution in terms of provisions of Clause (f) of section 45-I of Reserve Bank of India Act, 1934 ("the Act"). The Company has received the Certificate of Registration as Non-Banking Financial Institution (NBFI) (non-deposit taking) from the Reserve Bank of India ("RBI") dated 2nd May, 2018.

The Company was in the business of developing, manufacturing, marketing, distributing and servicing of networking products. During the previous year the Board of Directors of the Company at its meeting held on 04th August, 2016 approved transfer of "Digisol Brand" Business of the Company related to Selling and Marketing of DIGISOL branded active Networking Products and the Electronic Manufacturing Services Business, ("EMS Business") together with its respective assets and liabilities, as a going concern on a slump sale basis to its wholly owned subsidiaries i.e. M/s Digisol Systems Limited (Digisol) and SynegraEMS Limited (Synegra) respectively. The same was given effect pursuant to entering into a Business Transfer Agreements signed on 24th September, 2016 by the Company with Digisol and Synegra respectively.

Thus pursuant to completion of transfer of Digisol brand business and Electronic Manufacturing Services Business to Digisol and Synegra respectively on 10th October, 2016, the Company''s Income consists mainly of income from investments.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ("the Act"), and the relevant provisions of the Act. The financial statements have been prepared on accrual basis under the historical cost convention except for building acquired through amalgamation, that is carried at revalued amounts.

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known/ materialised.

(c) Depreciation & Amortisation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

MotorVehicle

- 5 years

Plant and equipment

- 8 years

Furniture and Fixture

- 8 years

Leasehold Land is amortised over the duration of the lease.

Intangible assets are amortised over their estimated useful life on straight line method as follows:

Acquired Goodwill

- 5 years

Computer Software (ERP)

- 3 years

Computer Software (Other Softwares)

- 4 years

(d) Revenue recognition

Income from debentures and bonds is accrued over the maturity of the security. Profit/Loss on sale of investments is recognised on the contract date. Dividend income is accounted for when the right to receive the same is established. Revenue (income) is recognized when no significant uncertainty as to determination/ realization exists. Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax. Revenue from services is recognised when the services are rendered. Revenue from maintenance contracts are recognised pro-rata over the period of contract. Interest income is accounted on accrual basis.

(e) Fixed assets

i) Property, plant and equipment

Property, plant and equipment are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortisation and impairment losses, if any.

(f) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected. In case of forward exchange contracts or other financial instruments

that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract. Gains / losses on settlement of transactions arising on cancellation/renewal of forward exchange contracts are recognised as income or expense. At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(g) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''s contribution are treated as Capital reserve.

(h) Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(i) Employee Benefits

Compensation to employees for service rendered is accounted for in accordance with AS-15 on "Employee Benefits". Employee Benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident and other funds, which fall due for payment within a period of 12 months after rendering services, are charged as expense to the Statement of profit and loss in the period in which the service is rendered.

Employee Benefits such as defined benefit plan and other long term employee benefits, such as gratuity and compensated absences which fall due for payment after a period of 12 months from rendering services and after completion of employment are measured by the Project Unit Credit Method, on the basis of actuarial valuations carried out by third party actuaries at each balance sheet date. The company''s obligation recognised in the balance sheet represents the present value of obligations as reduced by the fair value of plan assets, where applicable.

Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

(j) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(k) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April, 2001 are accounted for as in fixed assets accordance with Accounting Standard 19 on "Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(l) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlieryears/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that supported by convincing evidence sufficient future taxable income will be available to realise the same (Refer note 35).

(m) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(n) Provisions and contingencies

Provision is recognised in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.

As at 31st March, 2018

As at 31st March, 2017

NOTE 3: SHARE CAPITAL

RS

Authorised

35,000,000 Equity Shares of Rs 2/- each

70,000,000

70,000,000

Issued, subscribed and paid-up

22,550,000 (Previous year 30,004,850) Equity Shares of Rs 2/- each, fully paid-up

45,100,000

60,009,700

Less: NIL (Previous year 7, 454, 850) Equity Shares purchased under buyback scheme

14,909,700

45,100,000

45,100,000

Total

45,100,000

45,100,000

a) Terms / rights attached to equity shares

The Company has only one class of Equity shares having a par value of ?2/- per share. Each holder of Equity shares is entitled to one vote per share and each Equity share carries an equal right to dividend and in case of repayment of capital.

b) Reconciliation of the number of shares outstanding

No. of Shares

No. of Shares

Shares outstanding at the beginning of the year

22,550,000

30,004,850

Less: Shares bought-back during the year (refer footnote 1 below)

-

7,454,850

Shares outstanding at the end of the year

22,550,000

22,550,000

Footnote:

1) The Board of Directors of the Company at its meeting held on 29th February, 2016 and the Shareholders of the Company through postal ballot on 14th April, 2016 had approved the proposal of the Company to buy-back up to 7,454,850 fully paid-up equity shares of ?2/- each at a price of ?110/- per share (aggregating up to 24.85% of the fully paid-up equity share capital and free reserves of the Company), payable in cash for an aggregate amount of up to Rs 820,033,500/- from the existing shareholders of the Company under Tender Offer mechanism. The offer was kept open from 6th June, 2016 to 17th June, 2016. The Company has bought back 7,454,850 equity shares, representing 100.00% of issue size and the shares were extinguished on 30th June, 2016.

2) The Board of Directors of the Company at its meeting on held 7th April, 2018 and the shareholders of the Company at the Extraordinary General Meeting held on 4th May, 2018 had approved the proposal to buyback equity shares up to 5,600,000 (aggregating up to 24.83% of the paid-up equity share capital of the Company), payable in cash for an aggregate amount of up to ?672,000,000/-.

c) Details of shareholders holding more than 5% shares in the company.

As at 31st March, 2018

As at 31st March, 2017

No.of Shares

% holding in the class

No. of Shares

% holding in the class

Equity shares of Rs 2/- each fully paid-up

Mr. Kamalaksha R. Naik

1 1 ,488,272

50.95%

1 1 ,488,272

50.95%

Ms. Arati K. Naik

2,255,000

10.00%

2,210,320

9.80%

Mrs. LakshanaA. Sharma

1,664,486

7.38%

1 ,342,859

5.96%

Mrs. SudhaK. Naik

1,127,500

5.00%

1,100,377

4.88%

As at 31st March, 2018

As at 31st March, 2017

Rs.

Rs.

NOTE 4: RESERVES AND SURPLUS

Capital Reserve

State Government subsidy

As per last Balance sheet

2,500,000

2,500,000

Reserve Fund

As per Section 45-1 C of the Reserve Bank of India Act, 1934

22,003,927

-

Securities Premium Account

As per last Balance sheet

278,614,693

278,614,693

Revaluation Reserve

As per last Balance sheet

37,183,524

37,183,524

General Reserve

As per last Balance sheet

556,720,271

556,720,271

Capital Redemption Reserve

As per last Balance sheet

14,909,700

14,909,700

(Previous year 7,454,850) Equity Shares of ?2/- each purchased under

buyback scheme

Surplus in Statement of Profit and Loss

As per last Balance sheet 2,460,881 ,649

3,229,188,441

Add : Profit for the year 110,019,635

51 ,726,708

Less : Amount paid to Shareholders for purchase of shares

under buyback scheme

820,033,500

Less : Appropriations

Dividend 45,100,000

-

Dividend distribution tax 9,181,299

-

Transferred to Reserve fund 22,003,927

-

Closing balance

2,494,616,058

2,460,881,649

Total

3,406,548,173

3,350,809,837

NOTE 5: OTHER LONG-TERM LIABILITIES

Other payables:

Security deposits

-

95,188

Total

-

95,188

NOTE 6: LONG-TERM PROVISIONS

Provision for employee benefits

For Gratuity (Refer note 31)

292,161

-

For Leave encashment

313,859

251,755

Total

606,020

251 ,755

As at 31st March, 2018

As at 31st March, 2017

Rs.

Rs.

NOTE 7: TRADE PAYABLES

Total outstanding dues of micro enterprises and small enterprises (Refer footnote below) Total outstanding dues of creditors other than micro enterprises and small enterprises

9,534,068

11,827,281

Total

9,534,068

11,827,281

Footnote:

The disclosures under the Micro, Small and Medium Enterprises Development Act, 2006 have been made in respect of such vendors to the extent they could be identified as micro and small enterprises on the basis of information available with the Company.

Particulars

Outstanding principal amount and interest as on 31st March 201 8

- Principal Amount

-

-

- Interest due thereon

-

-

Amount of interest paid along with the amounts of payment made beyond the appointed day

_

_

Amount of interest due and payable (where the principal has already been paid but interest has not been paid)

_

1 1 ,354

The amount of interest accrued and remaining unpaid at the end of each accounting year

_

1 1 ,354

The amount of further interest remaining due and payable even in succeeding until such date when the interest dues as above are actually paid for the purpose of disallowance as a deductible expenditure under section 23 of the said Act

NOTE 8: OTHER CURRENT LIABILITIES

Unpaid dividends

2,073,548

1 ,971 ,048

Temporary overdrawn bank balance as per books

-

322,848

Other payables:

Provision for Gratuity (Refer note 31)

14,365

681 ,796

Statutory dues

339,925

6,279,473

Security deposits

1,655,188

264,433

Interest accrued on delayed payments to MSME vendors (Refer Note 7)

-

1 1 ,354

Total

4,083,026

9,530,952

NOTE 9: SHORT-TERM PROVISIONS

Provision for emplovee benefits

For Leave encashment

120,697

144,225

For Income-tax (net of advance tax ?1 20,901 ,433/-, (Previous year Rs 102,921 ,995/-))

4,148,567

1 ,578,005

Total

4,269,264

1 ,722,230


Mar 31, 2017

NOTE 1: BACKGROUND OF THE COMPANY

Smartlink Network Systems Limited (“Company”) was incorporated on 31st March, 1993. The Company was in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

During the year the Board of Directors of the Company at its meeting held on 04th August, 2016 approved transfer of “Digisol Brand” Business of the Company related to Selling and Marketing of DIGISOL branded active Networking Products and the Electronic Manufacturing Services Business, (“EMS Business”) together with its respective assets and liabilities, as a going concern on a slump sale basis to its wholly owned subsidiaries i.e. M/s Digisol Systems Limited (Digisol) and Synegra EMS Limited (Synegra) respectively. The same was given effect pursuant to entering into a Business Transfer Agreements signed on 24th September, 2016 by the Company with Digisol and Synegra respectively.

Thus pursuant to completion of transfer of Digisol brand business and Electronic Manufacturing Services Business to Digisol and Synegra respectively on 10th October, 2016, the Company''s Income consists mainly of income from investments.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013, and the relevant provisions of the Act. The financial statements have been prepared on accrual basis under the historical cost convention except for building acquired through amalgamation, that is carried at revalued amounts.

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the year in which the results are known / materialized.

(c) Inventories

Items of inventory are valued at lower of cost and net realizable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(d) Depreciation & Amortization

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

Motor Vehicle - 5 years

Plant and equipment - 8 years

Furniture and Fixture - 8 years

Leasehold Land is amortized over the duration of the lease.

Intangible assets are amortized over their estimated useful life on straight line method as follows:

Acquired Goodwill - 5 years

Computer Software (ERP) - 3 years

Computer Software (Other Software’s) - 4 years

(e) Revenue recognition

Income from debentures and bonds is accrued over the maturity of the security.

Profit / Loss on sale of investments is recognized on the contract date.

Dividend income is accounted for when the right to receive the same is established.

Revenue (income) is recognized when no significant uncertainty as to determination / realization exists.

Revenue from sale of products is recognized net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognized when the services are rendered. Revenue from maintenance contracts are recognized pro-rata over the period of contract. Interest income is accounted on accrual basis.

(f) Fixed assets

i) Property, plant and equipment

Tangible assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortization and impairment losses, if any.

(g) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are affected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortized as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognized as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(h) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''s contribution are treated as Capital reserve.

(i) Investments

Long-term (non-current) investments are carried at cost. However when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(j) Employee Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules and when services are rendered by the employees.

ii. The Smartlink Group Gratuity Trust has taken a Group Gratuity cum Life Assurance policy from the Life Insurance Corporation of India (LIC). Provision is made in respect of difference between the actuarially determined gratuity liability and the fund available with LIC at the year end.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(k) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(l) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on “Leases”, (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(m) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax rates and the provisions of the Income Tax Act,1961 and other applicable tax laws.

Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognized if there is virtual certainty that supported by convincing evidence sufficient future taxable income will be available to realize the same (Refer note 38 below).

(n) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on “Impairment of Assets”. An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(o) Provisions and contingencies

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.


Mar 31, 2016

NOTE 1: BACKGROUND OF THE COMPANY

Smart link Network Systems Limited (“Company”) was originally incorporated on 31st March, 1993. The Company is in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

NOTE 2: SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards prescribed under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (“the 2013 Act”) / Companies Act, 1956 (“the 1956 Act”), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except for building acquired through amalgamation, that is carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognized in the year in which the results are known/materialized.

(c) Inventories

Items of inventory are valued at lower of cost and net realizable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(d) Depreciation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value. Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

Motor Vehicle - 5 years

Plant and Machinery - 8 years Furniture and Fixture - 8 years.

Leasehold Land is amortized over the duration of the lease.

Intangible assets are amortized over their estimated useful life on straight line method as follows:

Acquired Goodwill - 5 years

Computer Software - 3 years

(e) Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination / realization exists.

Revenue from sale of products is recognized net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognized when the services are rendered. Revenue from maintenance contracts are recognized pro-rata over the period of contract. Interest income is accounted on accrual basis.

Dividend income is accounted for when the right to receive the same is established.

(f) Fixed assets

i) Tangible assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortization.

(g) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are affected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortized as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognized as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(h) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''s contribution are treated as Capital reserve.

(i) Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(j) Employee Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules and when services are rendered by the employees.

ii. The Smart link Group Gratuity Trust has taken a Group Gratuity cum Life Assurance policy from the Life Insurance Corporation of India (LIC).

Provision is made in respect of difference between the actuarially determined gratuity liability and the fund available with LIC at the year end.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(k) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(l) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 01st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on “Leases”, (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(m) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognized if there is virtual certainty that supported by convincing evidence sufficient future taxable income will be available to realise the same (Refer note 30 below)

(n) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on “Impairment of Assets”.

An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(o) Provisions and contingencies

Provision is recognized in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.

a) Terms / rights attached to equity shares

The Company has only one class of Equity shares having a par value of Rs, 2/- per share. Each holder of Equity shares is entitled to one vote per share and each Equity share carries an equal right to dividend and in case of repayment of capital.

c) The Board of Directors of the Company at its meeting on 29th February, 2016 and the Shareholder of the Company through postal ballot on 14th April, 2016 has approved the proposal to buyback equity shares up to 7,454,850 (aggregating up to 24.85% of the paid-up equity share capital of the Company), payable in cash for an aggregate amount of up to Rs, 820,033,500/-.

VIII. The contribution expected to be made by the Company during the financial year 2016-17 is Rs, 2,000,000/-.

IX. The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with Life Insurance Corporation of India. The details of investments made by them are not available.

B The disclosure as required under AS-15 regarding the CompanyRs,s defined contribution plans is as follows : i) Contribution to provident fund Rs, 4,551,157/- (previous year Rs, 5,170,288/-).


Mar 31, 2015

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956 Act"), as applicable. The financial statements have been prepared on accrual basis under the historical cost convention except for building acquired through amalgamation, that is carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known / materialised.

(c) Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(d) Depreciation

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the following categories of assets, in whose case the life of the assets has been assessed as under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.:

Motor Vehicle - 5 years

Plant and Machinery - 8 years

Furniture and Fixture - 8 years

Leasehold Land is amortised over the duration of the lease.

Intangible assets are amortised over their estimated useful life on straight line method as follows:

Acquired Goodwill - 5 years

Computer Software - 3 years

(e) Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination / realization exists.

Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognised when the services are rendered. Revenue from maintenance contracts are recognised pro-rata over the period of contract. Interest income is accounted on accrual basis.

Dividend income is accounted for when the right to receive the same is established.

(f) Fixed assets

i) Tangible assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortisation.

(g) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(h) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter's contribution are treated as Capital reserve.

(i) Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(j) Employee Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules and when services are rendered by the employees.

ii. The Smartlink Group Gratuity Trust has taken a Group Gratuity cum Life Assurance policy from the Life Insurance Corporation of India (LIC).

Provision is made in respect of difference between the actuarially determined gratuity liability and the fund available with LIC at the year-end.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(k) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(l) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on "Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(m) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws.

Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that supported by convincing evidence sufficient future taxable income will be available to realise the same (Refer note 31 below).

(n) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets".

An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(o) Provisions and contingencies

Provision is recognised in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.


Mar 31, 2014

NOTE 1 : BACKGROUND OF THE COMPANY Smartlink Network Systems Limited ("Company") was originally incorporated on 31st March, 1993. The Company is in the business of developing, manufacturing, marketing, distributing and servicing of networking products.

(a) Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standard notified under Section 211 (3C) of the Companies Act, 1956 ("the 1956 Act") (which continue to be applicable in respect of Section133 of the Companies Act, 2013 ("the 2013 Act") in term of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the 1956 Act / 2013 Act, as applicable.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known/ materialised.

(c) Fixed assets

i) Tangible assets: Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any

ii) Intangible assets: Intangible assets are stated at cost less accumulated amortisation. Computer software is amortised over a period of four years, which is as estimated by management (except ERP software which is amortised over a period of three years). Goodwill arising on amalgamation is amortised over a period of five years.

(d) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on "Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(e) Depreciation

i) Cost of leasehold land / premises and structural improvements are amortized over the period of lease.

ii) Depreciation on Buildings is provided on the straight line basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii) Depreciation on the following assets is provided over their useful life which is as estimated by management:

(f) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value.

The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(g) Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(h) Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(i) Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination / realization exists.

Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognised when the services are rendered.

Interest income is accounted on accrual basis.

Dividend income is accounted for when the right to receive the same is established.

(j) Employee Benefits

i) Provident fund liability is determined on the basis of contribution as required under the statute / rules and when services are rendered by the employees.

ii) The Smartlink Group Gratuity Trust has taken a Group Gratuity cum Life Assurance policy from the Life Insurance Corporation of India (LIC). Provision is made in respect of difference between the actuarially determined gratuity liability and the fund available with LIC at the year end.

iii) Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(k) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract. Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense. At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(l) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(m)Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''s contribution are treated as Capital reserve.

(n) Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act,1961. Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same (Refer note 32 below).

(o) Provisions and contingencies

Provision is recognised in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.

a) Terms / rights attached to equity shares

The Company has only one class of Equity shares having a par value of Rs. 2/- per share. Each holder of Equity shares is entitled to one vote per share and each Equity share carries an equal right to dividend and in case of repayment of capital.

VI. The assumptions of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment.

VIII. The contribution expected to be made by the Company during the financial year 2014-15 have not been ascertained.

IX. The plan assets are managed by the Gratuity trust formed by the Company. The management of funds is entrusted with Life Insurance Corporation of India. The details of investments made by them are not available.

B The disclosure as required under AS-15 regarding the Company''s defined contribution plans is as follows :

i) Contribution to provident fund Rs. 5,431,967/- (previous year Rs. 7,389,162/-).


Mar 31, 2013

A. Basis of accounting and preparation of financial statements

The financial statements have been prepared to comply with generally accepted accounting principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956.

b. Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known / materialised.

c. Fixed assets

i. Tangible assets: Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any

ii. Intangible assets: Intangible assets are stated at cost less accumulated amortisation. Computer software is amortised over a period of four years, which is as estimated by management (except ERP software which is amortised over a period of three years). Goodwill arising on amalgamation is amortised over a period of five years.

d. Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on " Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

e. Depreciation

i. Cost of leasehold land/ premises and structural improvements are amortized over the period of lease.

ii. Depreciation on Buildings is provided on the straight line basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii. Depreciation on the following assets is provided over their useful life which is as estimated by management:

f. Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

g. Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

h. Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

i. Raw materials, components, stores and spares - on weighted average basis.

ii. Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges, i. Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination/ realization exists.

Revenue from sale of products is recognised net of returns and trade discounts, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods. Sales include excise duty but exclude sales tax and value added tax.

Revenue from services is recognized when the services are rendered.

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive the same is established.

j. Employee Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules.

ii. Contribution to gratuity fund payable to the Trust formed for this purpose is charged to revenue in accordance with the scheme framed by the Life Insurance Corporation of India. Provision is made for the difference between the liability as per the actuarial valuation obtained at the end of the year and the fund balance with the Life Insurance Corporation of India.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

k. Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract. Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense. At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange.

Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

I. Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

m. Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter''s contribution are treated as Capital reserve.

n. Taxes on income

Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act,1961. Deferred income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same (Refer note 32 below).

o. Provisions and contingencies

Provision is recognised in the accounts when there is a present obligation as a result of past event/s and it is probable that an outflow of resources will be required to settle the obligation. Contingent liabilities, if any are disclosed in the notes to the financial statements.


Mar 31, 2012

(a) Basis of accounting and preparation of financial statements

The financial statements have been prepared to comply in all material aspect with applicable principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared in the format prescribed by the Revised Schedule VI to the Companies Act, 1956.

(b) Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known / materialised.

(c) Fixed assets

i. Tangible assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any.

ii. Intangible assets

Intangible assets are stated at cost less accumulated amortisation. Computer software is amortised over a period of four years, which is as estimated by management (except ERP software which is amortised over a period of three years). Goodwill arising on amalgamation is amortised over a period of five years.

(d) Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after 1st April 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on "Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

(e) Depreciation

i. Cost of leasehold land / premises and structural improvements are amortized over the period of lease.

ii. Depreciation on Buildings is provided on the straight line basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii. Depreciation on the following assets is provided over their useful life which is as estimated by management:

Asset Description Useful life

Motor vehicles 5 years

Computer Software tools 5 years

Computers & Computer software 4 years

Plant and machinery 8 years

Electrical installations 10 years

Furniture, fittings and office equipment 8 years Air conditioners 10 years

Moulds 1 year

(f) Impairment of assets

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "Impairment of Assets". An impairment loss is charged to the Statement of Profit and Loss in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

(g) Investments

Long-term (non-current) investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline. Current investments are carried at lower of cost and fair value.

(h) Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

i. Raw materials, components, stores and spares - on weighted average basis.

ii. Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

(i) Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination / realization exists.

(j) Employees Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute / rules.

ii. Contribution to gratuity fund payable to the Trust formed for this purpose is charged to revenue in accordance with the scheme framed by the Life Insurance Corporation of India. Provision is made for the difference between the liability as per the actuarial valuation obtained at the end of the year and the fund balance with the Life Insurance Corporation of India.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

(k) Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange. Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

(l) Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

(m) Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Statement of Profit and Loss. Grants in the nature of promoter's contribution are treated as Capital reserve.

(n) Taxes on income

Current Income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred Income-tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same (Refer note 31 below).

(o) Contingent Liability

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an out flow of resources embodying economic benefits will be required to settle the obligation.


Mar 31, 2011

Basis of preparation of financial statements

The accounts have been prepared to comply in all material aspect with applicable principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956.

Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known/materialised.

Fixed assets

i) Tangible assets Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any

ii) Intangible assets Intangible assets are stated at cost less accumulated amortisation. Computer software is amortised over a period of four years, which is as estimated by management (except ERP software which is amortised over a period of three years). Goodwill arising on amalgamation is amortised over a period of five years. Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after April 1, 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on " Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

Depreciation

i. Cost of leasehold land/premises and structural improvements are amortized over the period of lease.

ii. Depreciation on Buildings is provided on the straight line basis at the rates and in the manner specified in Schedule XIV to the Companies Act, 1956.

iii. Depreciation on the following assets is provided over their useful life which is as estimated by management:

Asset Description Useful life

Motor vehicles 5 years Computer Software tools 5 years

Computers & Computer software 4 years

Plant and machinery 8 years

Electrical installations 10 years

Furniture, fittings and office equipment 8 years

Air conditioners 10 years

Moulds 1 year

Impairment loss

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on “Impairment of Assets”. An impairment loss is charged to the Profit and Loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

Investments

Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

(i) Raw materials, components, stores and spares - on weighted average basis.

(ii) Work-in-progress and finished goods - on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination/realization exists.

Employees Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute/rules.

ii. Contribution to gratuity fund payable to the Trust formed for this purpose is charged to revenue in accordance with the scheme framed by the Life Insurance Corporation of India. Provision is made for the difference between the liability as per the actuarial valuation obtained at the end of the year and the fund balance with the Life Insurance Corporation of India.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract. Gains/losses on settlement of transactions arising on cancellation/renewal of forward exchange contracts are recognised as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange. Exchange difference arising thereon and on realization/payments of foreign exchange are accounted as income or expenses in the relevant year.

Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Profit and Loss account. Grants in the nature of promoter's contribution are treated as Capital reserve.

Taxes on income

Current Income tax is measured at the amount expected to be paid to the tax authorities in accordance with Indian Income-tax Act, 1961.

Deferred Income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years/period. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future income will be available except that deferred tax assets in case there are unabsorbed depreciation and losses are recognised if there is virtual certainty that sufficient future taxable income will be available to realise the same (refer note 9 below)

Contingent Liability

These, if any, are disclosed in the notes on accounts. Provision is made in the accounts if it becomes probable that an out flow of resources embodying economic benefits will be required to settle the obligation.


Mar 31, 2010

Basis of preparation of financial statements

The accounts have been prepared to comply in all material aspect with applicable principles in India, the Accounting Standards notified in the Companies (Accounting Standards) Rules 2006 and the relevant provisions of the Companies Act, 1956.

Use of estimates

The preparation of financial statements, in conformity with the generally accepted accounting principles, requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported year. Differences between the actual results and estimates are recognised in the year in which the results are known/materialised.

Fixed assets

i) Tangible assets

Tangible fixed assets are carried at cost of acquisition or construction less accumulated depreciation and impairment loss, if any

ii) Intangible assets

Intangible assets are stated at cost less accumulated amortisation. Computer software is amortised over a period of four years, which is as estimated by management (except ERP software which is amortised over a period of three years). Goodwill arising on amalgamation is amortised over a period of five years.

Assets taken on Lease (Hire Purchase)

Assets taken on finance lease (including on hire purchase) on or after April 1, 2001 are accounted for as fixed assets in accordance with Accounting Standard 19 on "Leases", (AS 19). Accordingly, the assets have been accounted at fair value. Lease payments are apportioned between finance charge and reduction of outstanding liability.

Depreciation

i. Cost of leasehold land/ premises and structural

improvements are amortized over the period of lease.

ii. Depreciation on Buildings is provided on the

straight line basis at the rates and in the

manner specified in Schedule XIV to the Companies Act, 1956.

iii. Depreciation on the following assets is provided over their useful life which is as estimated by management:

Impairment loss

At the end of each accounting period, the Company determines whether a provision should be made for impairment loss on fixed assets by considering the indications that an impairment loss may have occurred in accordance with Accounting Standard 28 on "impairment of Assets". An impairment loss is charged to the Profit and Loss account in the period in which, an asset is identified as impaired, when the carrying value of the asset exceeds its recoverable value. The impairment loss recognised in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

Investments

Current investments are carried at lower of cost and fair value. Long term investments are carried at cost. However, when there is a decline, other than temporary, the carrying amount is reduced to recognize the decline.

Inventories

Items of inventory are valued at lower of cost and net realisable value, on the following basis:

(i) Raw materials, components, stores and spares-on weighted average basis.

Significant Accounting Policies And Notes On Accounts

(ii) Work-in-process and finished goods-on the basis of absorption costing comprising of direct costs and overheads other than financial charges.

Revenue recognition

Revenue (income) is recognized when no significant uncertainty as to determination/ realization exists.

Employees Benefits

i. Provident fund liability is determined on the basis of contribution as required under the statute/ rules.

ii. Contribution to gratuity fund payable to the Trust formed for this purpose is charged to revenue in accordance with the scheme framed by the Life Insurance Corporation of India. Provision is made for the difference between the liability as per the actuarial valuation obtained at the end of the year and the fund balance with the Life Insurance Corporation of India.

iii. Provision for Leave encashment is made on actuarial valuation done as at the year-end.

Foreign currency transactions

Transactions in foreign currencies are recorded at the original rates of exchange in force at the time the transactions are effected.

In case of forward exchange contracts or other financial instruments that is in substance a forward exchange contract, other than for trading or speculation purposes, the premium or discount arising at the inception of the contract is amortised as expense or income over the life of contract.

Gains / losses on settlement of transactions arising on cancellation / renewal of forward exchange contracts are recognised as income or expense.

At the year-end, monetary items denominated in foreign currency and the relevant foreign exchange contracts are reported using the closing rate of exchange. Exchange difference arising thereon and on realization / payments of foreign exchange are accounted as income or expenses in the relevant year.

Borrowing costs

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. All other borrowing costs are charged to revenue.

Government grants

Grants relating to specific fixed assets are disclosed as a deduction from the value of the concerned assets. Grants related to revenue are credited to the Profit and Loss account. Grants in the nature of promoters contribution are treated as Capital reserve.

Taxes on income

Tax expense comprises of current tax, deferred tax and fringe benefits tax. Current tax is measured at the amount expected to be paid to/ recovered from the tax authorities, using the applicable tax rates. Deferred tax assets and liabilities are recognised for future tax consequences attributable to timing differences between taxable income and accounting income that are capable of reversal in one or more subsequent years and are measured using relevant enacted tax rates. The carrying amount of deferred tax assets at each Balance sheet date is reduced to the extent that it is no longer virtually certain that sufficient future taxable income will be available against which the deferred tax asset can be realized. Fringe benefits tax is recognized in accordance with the relevant provisions of the Income-tax Act, 1961 and the Guidance Note on Fringe Benefits Tax issued by the Institute of Chartered Accountants of India.

Contingent Liability

These, if any, are disclosed in the notes on accounts. Provision is made- in the accounts if it becomes probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

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