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Moneycontrol.com India | Notes to Account > Construction & Contracting - Civil > Notes to Account from Elnet Technologies - BSE: 517477, NSE: ELNET
Elnet Technologies
BSE: 517477|NSE: ELNET|ISIN: INE033C01019|SECTOR: Construction & Contracting - Civil
Apr 17, 17:00
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Mar 12
Notes to Accounts Year End : Mar '13
 Elnet Technologies Limited (ETL) was incorporated in August 1990 as a
 Public Limited Company which is situated in the IT corridor, Rajiv
 Gandhi Salai, Taramani, Chennai.  ETL''s core competence is to develop
 and manage Software Technology Park. ETL has pioneered the concept of
 Software Technology Park in India and also providing infrastructure to
 IT and ITES.
 2.1 Retirement benefits to employees
 (i) Defined Contribution Plan Provident fund
 In respect of defined contributions schemes, contributions to Provident
 Fund and Family Pension they are charged to the statement of Profit and
 Loss as incurred.
 (ii) Defined benefit plan Gratuity
 The Company provides for gratuity, a defined benefit retirement plan
 (the Gratuity Plan) covering eligible employees. The Gratuity
 Plan provides a lump sum payment to vested employees at retirement,
 death, incapacitation or termination of employment, of an amount based
 on the respective employee''s salary and the tenure of employment.
 Vesting occurs upon completion of five years of service.  Liabilities
 with regard to the Gratuity Plan are determined by actuarial valuation
 as of the balance sheet date, based upon which, the company contributes
 all the ascertained liabilities to the Elnet Technologies Ltd
 Employees'' Gratuity Fund Trust (the Trust). Trustees administer
 contributions by means of a group gratuity policy with Life Insurance
 Corporation of India.
 iii Leave encashment
 The employees of the Company are entitled to compensated absence. The
 employees can carry forward a portion of the unutilized accrued
 compensated absence and utilize it in future periods or receive cash
 compensation at retirement or termination of employment for the
 unutilized accrued compensated absence for a maximum of 180 days. The
 Company records an obligation for compensated absences in the period in
 which the employee renders the services that increase this entitlement.
 The Company measures the expected cost of compensated absence as the
 additional amount that the Company expects to pay as a result of the
 unused entitlement that has accumulated at the balance sheet date based
 on actual valuations.
 2.2 Segment wise reporting as per standard AS 17 is not applicable to
 the company
 2.3 Accounting for leases
 During the year 1995-96, the Company has completed the construction of
 its IT Park at Taramani, Chennai and leased out the entire completed
 portion of the premises. The disclosure required for operating leases
 under AS 19 is given below:
 2.4 Deferred Tax Liability /Asset
 As per the Accounting Standard AS 22 issued by the Institute of
 Chartered Accountants of India (ICAI), the Company is required to make
 a provision for deferred tax liability/ asset. During the year an
 amount of Rs. 16,87,353/-has been recognized for deferred tax asset.
 3.1 Wind Mill
 During the financial year the Company sold 13,15,030 units to Tamilnadu
 Electricity Board. (2012 : 10,98,647 units).
 3.2 Disclosures required under Section 22 of the Micro, Small and
 Medium Enterprises Development Act, 2006:
 i) There were no dues to Small Scale Industrial undertakings to whom
 the Company owes any sum which is outstanding for more than 30 days.
 ii) There were no dues either principal or interest remaining unpaid to
 any suppliers under The Micro, Small and Medium Enterprises Development
 Act, 2006, which came into force with effect from 02.10.2006 as at the
 end of the accounting year.  Similarly, no payments have been made to
 the suppliers beyond the appointed day without adding interest, no
 interest is accrued and remaining unpaid during the year.
 3.3 Current Liabilities
 i.  The company continues to hold the amount of Rs. 1,46,503/- (2012:
 Rs. 1,46,503/-) on account of Interest payable on FD made out of
 disputed dividend for the years 2000-01 and 2001-02.
 ii.  There are no amounts due to the Central Government on account of
 Investor Education and Protection Fund as on 31.3.2013. The balance
 amount lying under the Unpaid Dividend Account 2005-2006 declared on
 06-05-2006 for the year 2005-06 falls due on 05.05.2013.
 3.4 Statement of Profit and Loss
 Electricity Expenses have been reduced to the extent of Rs. 72,32,665/-
 (2012 : Rs. 43,94,588/-) for sale of electricity generated from
 windmill. There is no impact on the statement of Profit and Loss.
 3.5 Estimated amount of liability on capital contracts as on 31.03.2013
 not provided for is Rs. 7,50,000. (Previous year Rs. 45,19,886/-)
 3.6 Contingent Liabilities in respect of:
 Claims against the Company not acknowledged as debt
 (i) Claim by Department of Telecommunications
 The Department of Telecommunications (DoT) filed a claim against the
 company for Rs. 20,82,233/- before the Sole Arbitrator in the matter of
 payment towards license fees and interest thereon. The Arbitrator''s
 award was made in June 2005 according to which a sum of Rs. 5,48,288
 and interest there on is payable by the company to DoT. The company
 accepted the award and decided to effect the payment after waiting for
 the appeal period.  However DoT has filed an appeal in the High Court
 of Delhi against the Arbitrator''s award. The Company accordingly
 recognized the total liability at Rs. 10,70,659/-as at 31.3.2013.  The
 difference in claim amounting to Rs. 10,01,574/- is shown under
 claims against the Company not acknowledged as debt.
 (ii) Income Tax demand
 There is a dispute with regard to the treatment of income of the
 company by the Income Tax Department as Income from House
 Property, whereas in the opinion of the Company, the income should
 be treated as Income from Business, which has been confirmed by
 the Income Tax Appellate Tribunal.
 In respect of assessment years 1996-97, 1998-99, 2000-01, 2001-02 and
 2003-04, the Income Tax Department has preferred appeal before the High
 Court of Madras against the orders issued Income Tax Appellate
 Tribunal. The High Court of Madras has ruled the case in favour of the
 Company. However, it is not known whether the department has preferred
 a special Leave petition before the Supreme Court. In the event the
 Supreme Court reverses the Order of the High Court of Madras, there
 will be a contingent liability of Rs. 415.56 lakhs.
 (iii) Service Tax
 The company received show cause notice in 2009-10 from the Office of
 the Commissioner of Service Tax on the applicability of service tax on
 Electricity charges reimbursed from the occupants including generation
 from Generator. As per legal opinion, the company has been advised
 that, it is not liable for service tax on this issue. The company has
 obtained an interim stay from the High Court of Madras on 28.08.2009
 against the show cause notice. The above stay was modified by the High
 Court on 04.07.2012 based on a Supreme Court decision. As per the
 order, 50% of the arrears prior to 30th September 2011 to be paid and
 for the balance 50%, to furnish a solvent surety to the Department.
 The company has filed an application on 4th February 2013 for extension
 of stay. In view of this, there is a contingent liability of Rs. 282.64
 (iv) Lease Rent
 The Company received a communication from ELCOT claiming a sum of Rs.
 9.56 crores towards difference in the computation of Lease Rent for the
 period from 14.02.1991 to 14.01.1999. The Company prima-facie has a
 strong reason that the claim is not tenable and is evaluating various
 options, including legal recourse. Pending any such actions no
 provision has been made.
 Previous year''s figures have been re-grouped / re-classified wherever
 necessary to correspond with the current year''s classification /
Source : Dion Global Solutions Limited
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