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Moneycontrol.com India | Notes to Account > Computers - Hardware > Notes to Account from MRO-TEK - BSE: 532376, NSE: MRO-TEK

MRO-TEK

BSE: 532376  |  NSE: MRO-TEK  |  ISIN: INE398B01018  |  Computers - Hardware

Explore MRO-TEK connections « Mar 08
Notes to Accounts Year End : Mar '09
1.  The Board of Directors of the company, at their meeting held on 25
 February 2009, approved a Share Buy Back scheme under which, a quantity
 not exceeding 22,00,000 equity shares will be bought from open market
 through Stock Exchange mechanism for & up to a maximum limit of
 Rs.5,00,00,000, which will be financed out of free reserves of the
 Company. Having complied with all the Statutory formalities relating
 thereto, the Company has bought 72,000 equity shares at a cost of
 Rs.13,58,390 up to 31.3.2009. Since the said quantity is yet to be
 extinguished, the aforesaid Buy Back Value of Rs.13,58,390 is shown
 separately under the Schedule 2 of Reserves & Surplus.
 
 2.  Deferred Tax
 
 During the year, the Company has accounted for Rs.47,09,547 (Rs.(-)
 33,43,448) towards Deferred Tax liability and has considered the same
 as charge to the Profit & Loss account as stipulated under Accounting
 Standard- 22, on Accounting for Taxes on Income, issued by the
 Institute of Chartered Accountants of India.
 
 3.  Inventories
 
 Finished Goods includes Rs. 60,70,324 (Rs. 68,74,553), being value of
 material at prospective customers premises for demonstration purposes
 and Rs. 2,03,835 (Rs. 59,052), being value of material at suppliers
 premises for rectification purposes.
 
 4.  Customs Duty Refundable amounting to Rs.l,17,36,152 (Previous Year-
 Rs Nil) reflected in Schedule 10 pertains to Special Additional
 (Customs) Duty paid on goods imported on which, pursuant to relevant
 guidelines, the Company is eligible for refund on eventual sale of the
 said goods, and includes Rs.27,58,860 refund of which is awaiting such
 sale of relevant goods and/or filing of relevant documents for claiming
 said refund.
 
 5.  Disclosure under Micro, Small and Medium Enterprises Development
 (MSMED) Act, 2006 Dues in respect, Micro and Small enterprises who have
 duly registered themselves under the relevant Act, and furnished the
 statutorily required proof thereof, are being regularly met as per
 agreed terms and, as such, there remains no liability towards interest.
 Principal amount/s remaining payable in respect of such parties, as at
 31 March 2009, amount to Rs. 18,95,220.
 
 6.  Certain balances representing debtors and creditors, are subject to
 reconciliation & receipt of confirmations from parties, pursuant to
 confirmation requests sent by the company.
 
 7.  Repairs & Maintenance expenses reflected in Schedule 16 includes
 Repairs to Building - Rs.47,79,183 (Rs.44,88,942) and Repairs to
 Machinery - Rs.10,53,740 (Rs.7,29,491).
 
 8.  No provision has been made for post-sales support expenses, as the
 company is of the opinion that such expenses are not material, based on
 past experience.
 
 9.  The tax liability computed under normal provisions of Income Tax
 Act, is lesser than tax liability computed under Minimum Alternate Tax
 (MAT) basis. The provision for Taxation for the year amounting to
 Rs.29,91,000 (previous year- Rs.5,51,00,000 under normal provision of
 Income Tax) has been made under the aforesaid MAT basis, in compliance
 with relevant provisions under the Income Tax Act, 1961 in addition to
 which an amount of Rs.23,60,000 (Rs.48,14,351) has been provided, being
 liability pertaining to prior years.
 
 10.  Prior period Income includes, AMC Income related to prior years
 Rs.83,024 (Rs.4,83,385), reimbursement of Advertisement & Publicity
 expenses of Rs.2,66,316 (NIL) and Credits no longer required- Rs.
 1,08,988 (Rs.3,97,655) and is net of, prior period expenses
 comprising reversal of Income Tax for earlier years - Rs.2,16,806
 (Rs.NIL), Rates & Taxes - Rs.NIL (Rs.52,500).
 
 11.  Other income includes Rs.65,000 (Rs.5,80,355) being Lease
 rentals received and Rs. 1,45,04,000 (Rs.43,51,200) being Dividend
 received from RAD-MRO Manufacturing Private Limited (related party)
 which is of non-recurring in nature.
 
 12.  Proposed dividend for the year is Rs. 1,88,47,862.  No Income-tax
 is deductable on the same.
 
 13.  Loss from Foreign Exchange fluctuation reflected, as required
 under AS 11, in the Profit & Loss Account amounting to Rs.4,75,59,647
 (Gain Rs.87,04,775) denotes the variance between rates at which various
 imports & exports have been recorded, and the actual amount
 paid/received in settlement of the respective import/export invoices
 (based on the exchange rate/s prevailing on the actual date/s of
 inward/outward remittance) and includes net gain of Rs 5,163,
 attributable to Capital Assets which is absorbed in these accounts.
 
 14. Contingent liabilities on account of
 
                                   2008-2009    2007-2008
                                       Rs.         Rs.
 
 Counter Guarantees to
 Bank (to the extent of live
 guarantees issued by bank)     1,89,15,306   2,59,43,325
 
 Letters of Credit              3,10,53,501   8,02,57,362
 
 Capital Commitments                    NIL     75,00,000
 
 Sales tax liability in lieu of
 FormC yet to be received      1,32,92,746   1,63,74,847
 
 15. Employee Stock Option Plan
 
 Under the MRO-TEK Employee Stock Option Scheme 2005, the Compensation
 Committee of the Board had granted, on 24 October 2007, ie., during the
 financial year 2007-08, Stock Options equivalent to 5,50,000 equity
 shares (of Rs. 5 each), to the eligible employees, at an exercise price
 of Rs.20 per share (inclusive of premium of Rs.15 per share) to be
 vested in October 2008, each such option to be exercised for one equity
 share of Rs.5 each, fully paid-up, on payment to the Company of the
 aforesaid exercise amount on or after vesting, but within the
 exercise period of three months from the vesting date - ie on or
 before 23 January 2009.
 
 The excess of fair market value (i.e the closing price of Companys
 shares on the stock exchange where there is the highest trading volume
 on the day prior to date of grant) over the exercise price, computed at
 Rs.23.20 per share, in accordance with the applicable Guidelines, and
 accounting norms, on said 5,50,000 shares, totally amounting to Rs.
 1,27,60,000, was recognized to be written-off over the twelve month
 period of vesting, out of which an amount of Rs 55,98,000 was
 written-off in Accounting Year 2007-08, and the balance of Rs.71,62,000
 was absorbed in the current year, during the period April to October
 2008.
 
 Against the same, as none of Employees opted for any portion of options
 so granted until the lapse of exercise period which ended on 23
 January 2009, ostensibly due to the unpredictable and unsatisfactory
 (stock) market conditions then prevailing, the whole of the options
 totalling 550,000 became unexercised portion and are held, and kept
 available, for future grant/s under the Scheme, as per provisions
 contained in CI 4(b) of the ESOP Scheme of the Company.
 
 Consequently, the entire amount of Rs. 1,27,60,000 absorbed in accounts
 until October 2008, has been written back and credited to Profit and
 Loss account during the year 2008 - 09.
 
 16. Cash & Cash equivalent reflected in Cash Flow Statement includes
 Fixed Deposits amounting to Rs. 31,00,03,000 held by the Company with
 maturity period beyond three months.
 
 17.  Segment Reporting
 
 Based on the guiding principles given in Accounting Standard on
 Segment Reporting(AS 17) issued by the Institute of Chartered
 Accountants of India, the Companys primary business segment is related
 to Access & Networking Solutions. This business segment of the
 Company incorporates product groups viz., Last Mile Access, ISDN based
 products, Layer 3 Switches and others which mainly have similar risks
 and returns. Since all the products stated above fall in the same
 segment of Access & Networking Solutions, there remains a single
 segment to which the whole activity pertains to.
 
 The secondary segment for the Company is based on location of
 customers/export destinations.
 
 The segment revenue in the geographical segments for disclosure are as
 follows:
 
 a) Revenue within India includes sales to customers located within
 India and earnings in India.
 
 b) Revenue outside India includes sales to customers located outside
 India and earnings outside India.
 
 18. Figures for the year have been rounded-off to the nearest rupee
 and, those in the brackets, wherever given, correspond to respective
 figures for the previous year. Figures of previous year have been
 regrouped & reclassified, wherever necessary.
Source : Religare Technova

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