The Company was formed in the year 1940 as National Radio & Engineering
Co Ltd. The Company became NELCO Limited in 1999. In 1969, the
Company was pre-dominantly the manufacturer of audio-visual appliances
like Television, calculator, Servo Voltage Stabilizers and such other
office equipment. In late 90''s the Company entered in Automation
business (SCADA, Traction & Drives), which was divested in 2010. In
1995 the Company first installed VSAT captive hub and in 2003 the
Company enter into public domain.
Nelco is today focused in offering solutions in the areas of Integrated
Security & Surveillance, VSAT connectivity. Managed Services, Satcom
Projects and Meteorological Solutions.
The Company offers a range of innovative and customized solutions for
businesses and government institutions under one roof.
(i) The company has issued only one class of equity shares having a
par value of Rs. 10 /- per share. Each holder of equity shares is
entitled to one vote per share. The company declares and pays dividend
in Indian Rupees. The dividend proposed by Board of Directors is
subject to the approval of shareholders in the ensuing Annual General
Meeting. In the event of liquidation of the company, the holder of
equity shares will be entitled to receive remaining assets of the
company after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the share holders.
1. (i) In an earlier year the Company had transferred the Traction
electronics. Supervisory Control and Data Acquisition (SCADA) and
Industrial drives businesses (together referred to as Businesses)to
Crompton Greaves Limited (CGL).
(ii) However, at the request of CGL, the company continued with certain
operations of the Businesses, pending assignment of certain contracts
by customers to CGL. Consequently Sales, Income from Service rendered,
Raw material consumed and sub-contracting expenses in respect of these
contracts during the previous year were included under the respective
heads in the financial statements, as under:
(iii) The Company entered into a final settlement agreement with CGL
considering all claims and differences that CGL had on account of all
the associated risks and liabilities of the transferred Businesses
under the Original Agreement and the effect of these were given effect
to in the financial statements for the year ended September 30, 2011.
Further during the year, the Company has received Rs. 26,789 (Rs
000''s) on account of recovery of liquidated damages in respect of
(iv) Consequent to the reasons stated in note 25 (i), (ii) and (iii)
above, figures for current year are not comparable with the previous
2 In respect of equipments given on operating leases, no refundable
deposits are taken and the lease rentals recognised in the Statement of
Profit and Loss for the period included under Income from Services
Rendered under Income from Operations aggregate to Rs. 34,301 (''000)
(Previous Year: Rs. 30,885 (''000)).
3 Contingent Liabilities (Rupees. ''000)
a) Guarantees issued by the company on behalf of
its subsidiary (amount of loan outstanding
against this guarantee is Rs. 11,600 (000''s)
(Previous year: Rs. Nil) 120,000 140,000
b) Claims against the company not acknowledged as
debt comprises of:
i) Excise duty, sales tax and service tax claims
disputed by the company 41,629 41,629
relating to issues of applicability and
ii) Other matters (excluding claims where amounts
are not ascertainable) 2,928 4,506
Future cash outflows in respect of above matters
are determinable only on receipt of judgments/
decisions [sending at various forums / authorities
The Company makes contribution towards provident fund and
superannuation fund to a defined contribution retirement benefit plan
for qualifying employees. The provident fund is administered by the
Trust formed by the Company. The Company is required to contribute a
specified percentage of salary to the retirement benefit schemes to
fund the benefit.
The Rules of the Company''s provident fund administered by a Trust
require that if the Board of Trustees are unable to pay interest at the
rate declared by Central Government under para 60 of the Employees''
Provident Fund Scheme, 1952 then the shortfall shall be made good by
the Company. Having regard to the assets of the fund and the return on
the investments, the Company does not expect any shortfall in the
III. Long Term Employee Benefit - Compensated Absences
Provision for Compensated Absences has been made on the basis of
actuarial valuation report as at the Balance Sheet date. The charge for
the year of Rs.4,522 (''000) (Previous Year: Rs. 5,326 (''000)) has
been made in the Statement of Profit and Loss.
4 Disclosures as required by Accounting Standard-29 - Provisions,
Contingent Liabilities and Contingent Assets notified by the
Companies (Accounting Standards) Rules, 2006 as at year end are as
Provision for Warranty relates to warranty provision made in respect of
sale of certain products, the estimated cost of which is accrued at the
time of sale. The products are generally covered under free warranty
period ranging from one to three years.
a. The consumption in value has been ascertained on the basis of
opening stock plus purchases less closing stock and includes adjustment
in respect of write-off of obsolete raw materials and components.
5 Related Party Disclosure:
I. Holding Company - The Tata Power Company Limited
II. Related Parties where control exists
a. Subsidiary - Tatanet Services Limited
III. Other parties with whom transactions have taken place during the
year a. Associate - Nelito Systems Limited
IV. Key Management Personnel
a. Mr. K. A. Mahashur - Executive Director - up to June 11,2012
b. Mr. RJ. Nath - Manager
- Executive Director w.e.f June 13, 2012
6 The tax year for the company being the year ending 31st March, the
provision for taxation for the period is the aggregate of the provision
made for the six months ended 31st March, 2012 and the provision based
on the figures for the remaining six months up to 30th September, 2012,
the ultimate tax liability of which will be determined on the basis of
the figures for the period 1st April, 2011 to 31st March, 2012.
7 The Revised Schedule VI has become effective from I April, 201 I for
the preparation of financial statements. This has significantly
impacted the disclosure and presentation made in the financial
statements. Previous year''s figures have been regrouped /
reclassified wherever necessary to correspond with the current year''s
classification / disclosure.