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Accounting Policies of Tamil Nadu Telecommunications Ltd. Company

Mar 31, 2015

1. Basis of Preparation of Financial Statements

Accounts are drawn up on the principle of going concern concept with revenues recognized and expenses accounted on accrual basis and in accordance with the generally accepted accounting principles and standards and in accordance with the provisions of Companies Act, 2013 (to the extent notified) and the provisions of Companies Act, 1956 (to the extent applicable).

2. Fixed Assets and Depreciation

a. Fixed Assets are stated at historical cost ( net of CENVAT ) including applicable taxes, duties, adjustments arising from exchange rate variations and other identifiable direct expenses and interest upto the date of installation. The cost of assets not put to use, before the year end are disclosed under Capital Work-in- progress.

b. Depreciation on Fixed Assets is provided in accordance with the useful lives as specified in Schedule II of the Companies Act, 2013, on straight line method, up to the cost of the asset (net of residual value). Residual Value is considered at 5% of cost of assets.

c. Depreciation on fixed assets added or deleted during the year is provided from or till the date of such addition or deletion.

3. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are translated at the year end rates.

c. Any Income or Expenses on account of exchange difference either on settlement or on translation is recognized in the Statement of Profit & Loss.

d. The gain or loss on account of Foreign exchange rate fluctuation includes such gain / loss passed on by TCIL on imports procured by it on behalf of TTL as per extant MOUs.

4. Valuation of Inventory

a. Raw materials : at weighted average cost

b. Work-in-progress : at cost up to the stage of completion or realizable value whichever is lower

c. Finished Goods : at cost or net realizable value whichever is lower

d. Scrap : at net realizable value

e. Stores, Tools & Spares : at cost

5. Revenue Recognition

a. Sales: Sale is recognized on despatch of goods to customers upon inspection and clearance by the clients. Export sales on FOB basis are recognized upon despatch and that of CIF basis upon acceptance of goods by clients. Sales shown in the Statement of Profit and Loss exclude Excise Duty and Sales Tax.

b. Other Income and Expenses: On Accrual Basis.

6. Excise Duty : Excise Duty payment is accounted on the basis of payment made in respect of goods cleared and necessary provision is made for the excise duty on finished goods, if any at the factory at the year end.

7. Deferred Revenue Expenditure

a. As per the policy of the company, the preliminary and share issue expenses are being amortized over a period of ten years.

b. Expenses incurred towards Employees' Voluntary Separation Scheme (VSS) are being amortized over a period of five years.

8. Employees' Retirement Benefits:

i) Short-term employee benefits:The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

ii) Post –Employment benefit Plans:Upto the year 2008-09 the Company has set up separate Trust for Provident Fund and has been contributing towards the same. Contribution towards pension fund is made to PF authorities on monthly basis. From 01.04.2009 onwards based on the order of the Provident Fund Commissioner-I, withdrawing the relaxation under Para 79 of the Employees' Provident Fund Scheme 1952, the Provident Fund contributions are remitted to the PF authorities.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. For the employees who had already left like VSS optees etc., the gratuity and leave encashment is provided on actual basis.

9. Provision for Warranty Period Expenses

Provision is made for warranty period expenses at a percentage on net turnover of the year, arrived at based on actual warranty period expenses incurred compared with the average net turnover of the previous three financial years.

10. Taxes on Income

a) Taxation comprises of Current Ta x and Deferred Ta x charge or credit

b) Provision for Current Taxes is as per the provisions of Ta x Laws prevailing in India

c) Deferred Tax charge or credit for the deferred tax assets / liabilities are accounted considering reasonable / virtual certainty of the company making taxable income in the near future.

11. Contingent Liabilities

Contingent Liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

12. Borrowing Costs

Borrowing costs ( which are not attributable to be acquisition and construction of the qualifying asset) are being recognized as an expense in the period in which they are incurred.

13. Accounting for Leases

The lease agreement entered with the lessors are for monthly rental hiring basis of Office accommodation for a period of 11 months and with subsequent renewal clause on mutual agreement. The lease agreement also can be cancelled by either party on giving notice at any time with in a prescribed time limit. The lease does not transfer all the risks and rewards incidental to ownership. There is no provision to acquire title to the asset upon fulfillment of the agreed conditions. The monthly lease rents are being recognized as an expense in the period in which they are incurred.

14. Impairment of Assets

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


Mar 31, 2014

1. Basis of Preparation of Financial Statements

Accounts are drawn up on the principle of going concern concept with revenues recognized and expenses accounted on accrual basis and in accordance with the generally accepted accounting principles and standards and in accordance with the provisions of Companies Act, 1956.

2. Fixed Assets and Depreciation

a. Fixed Assets are stated at historical cost ( net of CENVAT ) including applicable taxes, duties, adjustments arising from exchange rate variations and other identifiable direct expenses and interest upto the date of installation. The cost of assets not put to use, before the year end are disclosed under Capital Work-in-progress.

b. Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956.

c. Depreciation on fixed assets added or deleted during the year is provided from or till the date of such addition or deletion.

3. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are translated at the year end rates.

c. Any Income or Expenses on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account.

d. The gain or loss on account of Foreign exchange rate fluctuation includes such gain / loss passed on by TCIL on imports procured by it on behalf of TTL as per extant MOUs.

4. Valuation of Inventory

a. Raw materials : at weighted average cost

b. Work-in-progress : at cost up to the stage of completion or realizable value whichever is lower.

c. Finished Goods : at cost or net realizable value whichever is lower

d. Scrap : at net realizable value

e. Stores, Tools & Spares : at cost

5. Revenue Recognition

a. Sales: Sale is recognized on despatch of goods to customers upon inspection and clearance by the clients. Export sales on FOBbasis are recognized upon despatch and that of CIF basis upon acceptance of goods by clients. Sales shown in the Profit and Loss Account exclude Excise Duty and Sales Tax.

b. Other Income and Expenses: On Accrual Basis.

6. Excise Duty

Excise Duty payment is accountedon the basis of payment made in respect of goods cleared and necessary provision is made for the excise duty on finished goods, if any at the factory at the year end.

7. Deferred Revenue Expenditure

a. As per the policy of the company, the preliminary and share issue expenses are being amortized over a period often years.

b. Expenses incurred towards Employees'' Voluntary Separation Scheme (VSS) are being amortized over a period of five years.

8. Employees'' Retirement Benefits:

i) Short-term employee benefits:

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

ii) Post -Employment benefit Plans:

Upto the year 2008-09 the Company has set up separate Trustfor Provident Fund and has been contributing towards the same. Contribution towards pension fund is made to PF authorities on monthly basis. From 01.04.2009 onwards based on the order ofthe Provident Fund Commissioner-1, withdrawing the relaxation under Para 79 of the Employees'' Provident Fund Scheme 1952, the Provident Fund contributions are remitted to the PF authorities.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the presentvalue of available refunds and reductions in future contributions to the scheme. For the employees who had already left like VSS optees etc., the gratuity and leave encashment is provided on actual basis.

9. Provision for Warranty Period Expenses:

Provision is made for warranty period expenses at a percentage on net turnover of the year, arrived at based on actual warranty period expenses incurred compared with the average net turnover of the previous three financial years.

10. a) Taxation comprises ofCurrent Tax and Deferred Tax charge or credit

b) Provision for Current Taxes is as per the provisions of Tax Laws prevailing in India

c) Deferred Tax charge or credit for the deferred tax assets / liabilities are accounted considering reasonable / virtual certainty of the company making taxable income in the near future.

11. Contingent Liabilities

Contingent Liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

12. Borrowing Costs

Borrowing costs are being recognized as an expense in the period in which they are incurred.

13. Accounting for Leases

The lease agreement entered with the lessors are for monthly rental hiring basis of Office accommodation for a period of 11 months and with subsequent renewal clause on mutual agreement. The lease agreement also can be cancelled by either party on giving notice at any time with in a prescribed time limit. The lease doesn''t transfer all the risks and rewards incident to ownership. There is no provision to acquire title to the asset upon fulfillment of the agreed conditions. The monthly lease rents are being recognized as an expense in the period in which they are incurred.

14. Impairment of Assets:

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


Mar 31, 2013

1. Basis of Preparation of Financial Statements

Accounts are drawn up on the principle of going concern concept with revenues recognized and expenses accounted on accrual basis and in accordance with the generally accepted accounting principles and standards and in accordance with the provisions of Companies Act, 1956.

2. Fixed Assets and Depreciation

a. Fixed Assets are stated at historical cost ( net of CENVAT ) including applicable taxes, duties, adjustments arising from exchange rate variations and other identifiable direct expenses and interest up to the date of installation. The cost of assets not put to use, before the yearend are disclosed under Capital Work-in- . progress.

b. Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner ''prescribed under Schedule XIV of the Companies Act, 1956.

c. Depreciation on fixed assets added or deleted during the year is provided from or till the date of such addition or deletion.

4. Valuation of Inventory

a. Raw materials : at weighted average cost

b. Work-in-progress : at cost up to the stage of completion or realizable value whichever is lower.

c. Finished Goods : at cost or net realizable value whichever is lower d. Scrap : at net realizable value

e. Stores, Tools & Spares : at cost ''

5. Revenue Recognition

a. Sales: Sale is recognized on dispatch of goods to customers upon inspection and clearance by the clients. Export sales on FOB basis are recognized upon dispatch and that of CIF basis upon acceptance of goods -by clients. Sales shown in the Profit and Loss Account exclude Excise Duty and Sales Tax.

b. Other Income and Expenses: On Accrual Basis.

6. Excise Duty

Excise Duty payment is accounted on the basis of payment made in respect of goods cleared and necessary provision is made for the excise duty on finished goods, if any at the factory at the year end.

7. Deferred Revenue Expenditure

a. As per the policy of the company, the preliminary and share issue expenses are being amortized over a period of ten years.

b. Expenses incurred towards Employees'' Voluntary Separation Scheme (VSS) are being amortized over a period of five years.

8. Employees'' Retirement Benefits:

i) Short-term employee benefits: ''

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service. ,

ii) Post -Employment benefit Plans:

Up to the year 2008-09 the Company has set up separate Trust for Provident Fund and has been contributing '' towards the same. Contribution towards pension fund is made to PF authorities on monthly basis. From 01.04.2009 onwards based on the order of the Provident Fund Commissioner-I, withdrawing the relaxation under Para 79 of the Employees'' Provident Fund Scheme 1952, the Provident Fund contributions are remitted to the PF authorities.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight-line basis over the average period until the benefits become vested.

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. For the employees who had already left like VSS opted etc., the gratuity and leave encashment is provided on actual basis.

9. Provision for Warranty Period Expenses: ''

Provision is made for warranty period expenses at a percentage of net turnover of the year, arrived at based on actual warranty period expenses incurred compared with the average net turnover of the previous three financial years.

10. a) Taxation comprises of Current Tax and Deferred Tax charge or credit

b) Provision for Current Taxes is as per the provisions of Tax Laws prevailing in India

c) Deferred Tax charge or credit for the deferred tax assets / liabilities are accounted considering reasonable / virtual certainty of the company making taxable income in the near future.

11. Contingent Liabilities . Contingent Liabilities are disclosed after a careful evaluation of the facts and legal aspects of the matter involved.

12. Borrowing Costs

Borrowing costs are being recognized as an expense in the period in which they are incurred.''

13. Accounting for Leases

The lease agreement entered with the lassoers are for monthly rental hiring basis of Office accommodation for a period of 11 months and with subsequent renewal clause on mutual agreement. The lease agreement also can be cancelled by either party on giving notice at any time with in a prescribed time limit. The lease doesn''t transfer all the risks and rewards incident to ownership. There is no provision to acquire title to the asset upon fulfillment of the agreed conditions. The monthly lease rents are being recognized as anexpen.se in the period in which they are incurred. , ''

14. Impairment of Assets:

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


Mar 31, 2011

1. Basis of Preparation of Financial Statements

Accounts are drawn up on the principle of going concern concept with revenues recognized and expenses accounted on accrual basis and in accordance with the generally accepted accounting principles and standards and in accordance with the provisions of Companies Act, 1956.

2. Fixed Assets and Depreciation

a. Fixed Assets are stated at historical cost ( net of CENVAT ) including applicable taxes, duties, adjustments arising from exchange rate variations and other identifiable direct expenses and interest upto the date of installation. The cost of assets not put to use, before the year end are disclosed under Capital Work-in- progress.

b. Depreciation on Fixed Assets is provided on straight line method at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956.

c. Depreciation on fixed assets added or deleted during the year is provided from or till the date of such addition or deletion.

3. Foreign Currency Transactions

a. Transactions denominated in foreign currencies are normally recorded at the exchange rate prevailing on the date of the transaction.

b. Monetary items denominated in foreign currencies at the year end are translated at the year end rates.

c. Any Income or Expenses on account of exchange difference either on settlement or on translation is recognized in the Profit and Loss account.

d. The gain or loss on account of Foreign exchange rate fluctuation includes such gain / loss passed on by TCIL on imports procured by it on behalf of TTL as per extant MOUs.

4. Valuation of Inventory

a. Raw materials : at weighted average cost

b. Work-in-progress : at cost up to the stage of completion or realizable value whichever is lower.

c. Finished Goods : at cost or net realizable value whichever is lower

d. Scrap : at net realizable value

e. Stores, Tools & Spares : at cost

5. Revenue Recognition

a. Sales: Sale is recognized on despatch of goods to customers upon inspection and clearance by the clients. Export sales on FOB basis are recognized upon despatch and that of CIF basis upon acceptance of goods by clients. Sales shown in the Profit and Loss Account exclude Excise Duty and Sales Tax.

b. Other Income and Expenses: On Accrual Basis.

6. Excise Duty

Excise Duty payment is accounted on the basis of payment made in respect of goods cleared and necessary provision is made for the excise duty on finished goods, if any at the factory at the year end.

7. Deferred Revenue Expenditure

a. As per the policy of the company, the preliminary and share issue expenses are being amortized over a period of ten years.

b. Expenses incurred towards Employees' Voluntary Separation Scheme (VSS) are being amortized over a period of five years.

8. Employees' Retirement Benefits:

i) Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders the service.

ii) Post -Employment benefit Plans

Into the year 2008-09 the Company has set up separate Trust for Provident Fund and has been contributing towards the same. Contribution towards pension fund is made to PF authorities on monthly basis. From 01.04.2009 onwards cased on the order of the Provident Fund Commissioner-I, withdrawing the relaxation under Para 79 of the Employees' Provident Fund Scheme 1952, the Provident Fund contributions are remitted to the PF authorities.

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

For defined benefit schemes, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses are recognized in full in the Profit and Loss account for the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested, and otherwise is amortized on straight-line basis over the average period until the benefits become vested

The retirement benefit obligation recognized in the balance sheet represents the present value of the defined obligation as adjusted for unrecognized past service cost, and as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the scheme. For the employees who had already left like VSS optees etc., the gratuity and leave encashment is provided on actual basis.

 
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