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Tamilnadu Telecommunications

BSE: 523419|NSE: TNTELE|ISIN: INE141D01018|SECTOR: Cables - Telephone
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Accounting Policy Year : Mar '15
1.  Basis of Preparation of Financial Statements
 
 Accounts are drawn up on the principle of going concern concept with
 revenues recognized and expenses accounted on accrual basis and in
 accordance with the generally accepted accounting principles and
 standards and in accordance with the provisions of Companies Act, 2013
 (to the extent notified) and the provisions of Companies Act, 1956 (to
 the extent applicable).
 
 2.  Fixed Assets and Depreciation
 
 a.  Fixed Assets are stated at historical cost ( net of CENVAT )
 including applicable taxes, duties, adjustments arising from exchange
 rate variations and other identifiable direct expenses and interest
 upto the date of installation. The cost of assets not put to use,
 before the year end are disclosed under Capital Work-in- progress.
 
 b.  Depreciation on Fixed Assets is provided in accordance with the
 useful lives as specified in Schedule II of the Companies Act, 2013, on
 straight line method, up to the cost of the asset (net of residual
 value). Residual Value is considered at 5% of cost of assets.
 
 c.  Depreciation on fixed assets added or deleted during the year is
 provided from or till the date of such addition or deletion.
 
 3.  Foreign Currency Transactions
 
 a.  Transactions denominated in foreign currencies are normally
 recorded at the exchange rate prevailing on the date of the
 transaction.
 
 b.  Monetary items denominated in foreign currencies at the year end
 are translated at the year end rates.
 
 c.  Any Income or Expenses on account of exchange difference either on
 settlement or on translation is recognized in the Statement of Profit &
 Loss.
 
 d.  The gain or loss on account of Foreign exchange rate fluctuation
 includes such gain / loss passed on by TCIL on imports procured by it
 on behalf of TTL as per extant MOUs.
 
 4.  Valuation of Inventory
 
 a.  Raw materials : at weighted average cost
 
 b.  Work-in-progress : at cost up to the stage of completion or
 realizable value whichever is lower
 
 c.  Finished Goods : at cost or net realizable value whichever is lower
 
 d.  Scrap : at net realizable value
 
 e.  Stores, Tools & Spares : at cost
 
 5.  Revenue Recognition
 
 a.  Sales: Sale is recognized on despatch of goods to customers upon
 inspection and clearance by the clients.  Export sales on FOB basis are
 recognized upon despatch and that of CIF basis upon acceptance of goods
 by clients. Sales shown in the Statement of Profit and Loss exclude
 Excise Duty and Sales Tax.
 
 b.  Other Income and Expenses: On Accrual Basis.
 
 6.  Excise Duty : Excise Duty payment is accounted on the basis of
 payment made in respect of goods cleared and necessary provision is
 made for the excise duty on finished goods, if any at the factory at
 the year end.
 
 7.  Deferred Revenue Expenditure
 
 a.  As per the policy of the company, the preliminary and share issue
 expenses are being amortized over a period of ten years.
 
 b.  Expenses incurred towards Employees'' Voluntary Separation Scheme
 (VSS) are being amortized over a period of five years.
 
 8.  Employees'' Retirement Benefits:
 
 i) Short-term employee benefits:The undiscounted amount of short-term
 employee benefits expected to be paid in exchange for the services
 rendered by employees is recognized during the period when the employee
 renders the service.
 
 ii) Post Employment benefit Plans:Upto the year 2008-09 the Company
 has set up separate Trust for Provident Fund and has been contributing
 towards the same. Contribution towards pension fund is made to PF
 authorities on monthly basis. From 01.04.2009 onwards based on the
 order of the Provident Fund Commissioner-I, withdrawing the relaxation
 under Para 79 of the Employees'' Provident Fund Scheme 1952, the
 Provident Fund contributions are remitted to the PF authorities.
 
 Payments to defined contribution retirement benefit schemes are charged
 as an expense as they fall due.
 
 For defined benefit schemes, the cost of providing benefits is
 determined using the Projected Unit Credit Method, with actuarial
 valuations being carried out at each balance sheet date. Actuarial
 gains and losses are recognized in full in the Profit and Loss account
 for the period in which they occur. Past service cost is recognized
 immediately to the extent that the benefits are already vested, and
 otherwise is amortized on straight-line basis over the average period
 until the benefits become vested.
 
 The retirement benefit obligation recognized in the balance sheet
 represents the present value of the defined obligation as adjusted for
 unrecognized past service cost, and as reduced by the fair value of
 scheme assets. Any asset resulting from this calculation is limited to
 past service cost, plus the present value of available refunds and
 reductions in future contributions to the scheme. For the employees who
 had already left like VSS optees etc., the gratuity and leave
 encashment is provided on actual basis.
 
 9.  Provision for Warranty Period Expenses
 
 Provision is made for warranty period expenses at a percentage on net
 turnover of the year, arrived at based on actual warranty period
 expenses incurred compared with the average net turnover of the
 previous three financial years.
 
 10.  Taxes on Income
 
 a) Taxation comprises of Current Ta x and Deferred Ta x charge or
 credit
 
 b) Provision for Current Taxes is as per the provisions of Ta x Laws
 prevailing in India
 
 c) Deferred Tax charge or credit for the deferred tax assets /
 liabilities are accounted considering reasonable / virtual certainty of
 the company making taxable income in the near future.
 
 11.  Contingent Liabilities
 
 Contingent Liabilities are disclosed after a careful evaluation of the
 facts and legal aspects of the matter involved.
 
 12.  Borrowing Costs
 
 Borrowing costs ( which are not attributable to be acquisition and
 construction of the qualifying asset) are being recognized as an
 expense in the period in which they are incurred.
 
 13.  Accounting for Leases
 
 The lease agreement entered with the lessors are for monthly rental
 hiring basis of Office accommodation for a period of 11 months and with
 subsequent renewal clause on mutual agreement. The lease agreement also
 can be cancelled by either party on giving notice at any time with in a
 prescribed time limit. The lease does not transfer all the risks and
 rewards incidental to ownership. There is no provision to acquire title
 to the asset upon fulfillment of the agreed conditions. The monthly
 lease rents are being recognized as an expense in the period in which
 they are incurred.
 
 14.  Impairment of Assets
 
 An asset is treated as impaired when the carrying cost of the asset
 exceeds its recoverable value. An impairment loss is charged to the
 Statement of Profit and Loss in the year in which an asset is
 identified as impaired. The impairment loss recognized in prior
 accounting period is reversed if there has been a change in the
 estimate of recoverable amount.
Source : Dion Global Solutions Limited
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