A Background
 
 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
 these Businesses.
 
 (iv) Consequent to the reasons stated in note 25 (i), (ii) and (iii)
 above, figures for current year are not comparable with the previous
 year.
 
 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)
 
                                                     2011-12    2010-11
 
 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
 classification
 
 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
 
 Provident Fund:
 
 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
 foreseeable future.
 
 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
 follows:
 
 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.
 
 Notes:
 
 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.