1. ACCOUNTING CONVENTIONS:
The financial statements of the Company are prepared under historical
cost convention and in accordance with applicable accounting standards
issued by the Institute of Chartered Accountants of India, except where
2. REVENUE RECOGNITION:
a) Domestic sales are recognized when the risk and rewards of the
ownership are passed on the customer which is generally on dispatch of
goods. Sales are net of sales tax and sales return.
b) Export sales are recognized at the time of handing over of export
consignment to authorities for clearance.
c) Income from services is distributed over the period of service and
d) Interest is recognized to the extent of actual credit by the bank.
3. FIXED ASSETS AND DEPRECIATION:
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises the purchase price and any directly attributable cost of
brining the asset to its working condition for its intended use.
Expenditure for addition, improvement and renewal are capitalized and
expenditure for repairs and maintenance are charged to Profit and Loss
Account. Depreciation other than on land and capital work in progress
is charged pro-rata on straight-line method, in accordance with the
rates prescribed in Schedule XIV of the Companies Act, 1956 on all
fixed assets. Depreciation on the amount of addition made to fixed
assets due to up-gradation is provided at the rate applied to the
4. INVENTORY VALUATION:
a. Raw materials, components, stores and packing materials are valued
at cost. Cost for this purpose is calculated, on a weighted average
b. Semi-finished goods is valued at estimated cost.
c. Finished goods are valued at cost or market value whichever is
d. The cost of Semi-finished goods and finished goods include cost of
conversion and other cost incurred in bringing the inventories to their
present condition and location.
5. FOREIGN CURRENCY TRANSACTIONS: I. INDIA OPERATIONS :
a. Initial Recognition : Foreign currency transactions are recorded in
the reporting currency, by applying to the foreign currency amount the
exchange rate between the reporting currency and the foreign currency
at the date of the realization.
b. Exchange Differences: Monetary assets and liabilities related to
foreign currency remaining unsettled at the end of the year are
translated at the exchange rate prevailing on the date on which
transaction is recorded. Exchange differences arising on the
settlement of monetary items or on restatement of monetary items at
rates different from those at which they were initially recorded or
reported in previous financial statements, are recognized as income or
as expense in the year in which they arise.
c. Forward Exchange Contract: In respect of forward exchange contracts
entered into by the Company, the difference between the contracted rate
and the rate at date of transaction is recognized as gain or loss over
the period of contract except for difference in respect if liabilities
incurred for acquiring fixed assets from a country outside India in
which case such difference is adjusted in the carrying amount of the
respective fixed assets. Exchange difference on such contracts are
recognized in the statement of profit and loss n the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or as
expenses for the year.
II. FOREIGN BRANCH OFFICE OPERATIONS :
a) The assets and liabilities, both monetary and non-monetary, of the
foreign operation are translated at the exchange rate prevailing on the
balance sheet date.
b) Sales and Cost of material of the foreign operation are translated
by applying monthly average exchange rate, Administrative expenses of
the foreign operation are translated by applying quarterly average
exchange rates; and
c) All resulting exchange differences are accumulated in Foreign
Currency Translation Reserve.
6. FEE FOR TECHNICAL SERVICES:
Fee for technical services are charged to the profit and loss account
over the period of the agreement for technical services.
7. RETIREMENT AND OTHER EMPLOYEE BENEFITS:
a. Defined Contribution Plan : The Company has defined contribution
plan for post employment benefits in the form
of provident fund for all employees which are administrated by Regional
Provident Fund Commissioner. Provident fund is classified as defined
contribution plan as the Company has no further obligation beyond
making the contribution. The Company''s contribution to defined
contribution plans are charged to Profit and Loss Account as and when
b. Defined benefits plan : The Company has defined contribution plan
for post employment benefits in the form of Gratuity. Liability for
defined benefit plan is provided on the basis of valuation, as at the
Balance Sheet date, carried out by an independent actuary.
c. Other employee benefits like leave travel assistance, medical
reimbursement are accounted for on accrual basis.
8. PROVISIONS :
a. The Company does not make provision for doubtful debts and follows
the practice of writing off bad debts as and when determined.
b. A provision is recognized when an enterprise has a present
obligation as a result of past event and it is probable that an outflow
of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not disclosed to
its present value and are determined based on best management estimate
required to settle the obligation at the Balance Sheet date. These are
reviewed at each Balance Sheet date and adjusted to reflect the current
9. PROVISION FOR TAXATION:
Tax expense comprises both current and deferred taxes. Current Income
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act, 1961. Deferred Income Tax
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years. Deferred Tax is measured based on the tax
rates and the tax laws enacted or substantively enacted at the Balance
Sheet date. However as a matter of prudence deferred tax assets have
been recognized only to the extent there is a deferred tax liability.
11 EARNIG PER SHARE (EPS):
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholder (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year. For the purpose of
calculating Diluted Earning Per Share, the net profit or loss for the
year attributable to equity shareholder and the weighted average number
of shares outstanding during he year are adjusted for the effects of
all dilative potential Equity Shares.
12. ALLOCATION OF OVERHEADS AMONG THE UNITS/SEGMENT:
a. Direct Expenses related to the manufacturing units has been
directly accounted for in the respective units and common overheads
have been allocated among units/branches in the ratio of the gross
operating revenue of the respective units/branches.
b. The direct expenses related to services being provided by the
Company have been clubbed with the respective accounting heads of
Schedules 14, 15, 16, & 17.
c. During the year Company has provided CATV Services for Common
Wealth Games, 2010 to Telecommunication Consultants India Ltd and the
revenue generated from them has been included in the Servicing Income.
The expenditures incurred by the Company in rendering/ delivering these
services has been included under different heads in Schedule 14, 15, 16
d. The Company follows the accounting policy of disclosing of freight
and distribution cost as net off.
At each balance sheet date, the management reviews the carrying amounts
of its assets to determine whether there is any indication that those
assets were impaired. If any such indication exists, the recoverable
amount of the assets is estimated in order to determine the extent of
impairment loss. The recoverable amount is higher of net selling price
of an asset and value in use determined by discounting the estimated
future cash flow expected from continuing use assets to their present
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long term investments are carried at
cost. However, provision for diminution in value is made to recognize
a decline other than temporary in the value of such investments.