Accounting Policies of Tulip Telecom Ltd. Company

Mar 31, 2013

A Basis for preparation of financial statements

The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act. 1956 as adopted consistently by the company. Ail income and expenditures having material bearing on the financial statements are recognised on accrual basis.

The preparation of financial statement in conformity with Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of such expenses include, provisions for doubtful debts and the useful lives of fixed assets. Actual results could differ from those estimates. This has been prepared in accordance with Revised Schedule- VI and previous year figures have been regrouped/reclassified to make them comparable with the current period figures.

B Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis excepts in case of significant uncertainties. The principles of revenue recognition are given below: -

I Revenue from sales is recognised upon the shipment of the products.

II income from annual maintenance and facilities management contracts is accounted for in the ratio of the period expired to the total period of contract and amount received from customers towards unexpired portion of annual maintenance contracts is shown as advances received from customers which is accounted as income in the following financial year(s).

III Revenue from services rendered is recognized as and when the services are performed.

IV Revenue from turnkey projects is recognised as percentage and proportion to work completion.

C Fixed Assets and Depreciation

I. Fixed Assets

Fixed Assets are stated at the cost of acquisition less accumulated depreciation. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location. Any gains or losses on account of exchange difference either on settlement or translation where they relate to the acquisition of fixed assets are adjusted to the carrying cost of such assets.

II. Depreciation

The depreciation on fixed assets is provided using the straight line method as per Schedule-XIV of the Companies Act, 1956, except in the case of following assets, which are depreciated as follows:

These rates are not less than those prescribed under Schedule XIV of the Companies Act, 1956.

D Leases

Lease rentals in respect of operating lease arrangements are recognised as an expense in the profit and loss account.

E Investments

Long-term investment are stated at cost less provision for other than temporary diminution in value. Short-term investments are carried at lower of cost and quoted value/fair value, computed category-wise.

F Miscellaneous Expenses (Preliminary Expenses)

Preliminary Expenses are amortised over a period of 10 years.

G Inventories

Inventories are valued at the lower of cost or net realisable value, after providing for obsolescence, if any. Cost of inventories comprises cost of purchase, freight and other expenses incurred in bringing the inventories to their present location and condition.

H Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

I Cash Flow Statement

Cash flows are reported using the indirect method whereby net profits before tax is adjusted for the effect of transaction of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows for the regular revenue generating, investing and financing activities are segregated.

J Income from Investments

Income from investments, where appropriates, is taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

K Foreign Currency Transactions

I Transaction denominated in foreign exchange are recorded at the exchange rate prevailing at the date of the transaction. Receivable and payables at the year end are translated at the exchange rate prevailing on the balance sheet and differences coming there on are recognised in profit and loss account.

II Monetary items denominated in foreign currencies at the year end and not covered by forward exchange contracts are translated at year end exchange rates and in respect of those covered by forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the Profit and Loss Account over the period of contract.

III Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost such assets.

IV Foreign currency assets and liabilities are translated at the year end rates and resultants gains/losses on foreign exchange transaction other than those relating to fixed assets are recognised in the profit and loss account.

V Non-monetary foreign currency items are carried at cost.

VI During the year 2009-10, the company had exercised the option available in notification issued by Ministry of Corporate Affairs vide GSR 225(E) dated 31st March, 2009 on Accounting Standard (AS) 11 and continues to follow the same in the current reporting period.

L Research and Development

Revenue expenditure on Research and Development is charged off to Profit and Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is shown under the relevant fixed assets and depreciation is provided as given in note no. 1 (c) (ii) above.

M Employee Benefits

I Short Term Employee Benefits

Short-term employee Benefits are recognised in the period during which the services have been rendered.

II Long Term Employees Benefits

a. Defined Contribution Plans

Contribution to Provident Fund are deposited with the appropriate authorities and charged to the profit and loss account on Accrual basis.

b. Defined Benefit Plans

i. Gratuity

The company provides for the gratuity based on the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard -15, (Revised), "Employee Benefits"

ii. Leave encashment

The company has provided for the liability at the year end on account of unavailed Earned Leave as per the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard - 15, (Revised), "Employee

N Provision for Tax

Tax expense for the year comprising current tax and , deferred tax is included in determining the net profit for the year. Provision is made for Current Tax on the basis of estimated taxable income for the current accounting year in accordance with the provision applicable under Income Tax Act-1961 with respect to that accounting year.

Deferred tax liability on account of timing differences between the book profit and the taxable profits for the year is accounted for using the tax rates as applicable as on the balance sheet date.

Deferred tax assets arising on account of timing differences are recognised to the extent there is virtual certainty that these would be realized in the future.

Deferred Tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date.

O Borrowing Cost

Borrowing Cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

P Earning Per Share

Basic Earnings per share are calculated by dividing the net profit or loss for the year attributable to equity share holders after tax (and including post tax effect of any extra ordinary item) by the weighted average number of equity shares outstanding during the year, the weighted average number of equity shares outstanding during the period are adjusted for the events of number of shares to be issued against Foreign Currency Convertible Bonds issued by the company.

Q Modvat/Cenvat

Modvat/Cenvat claimed on capital assets is credited to assets/ capital work in progress account. Modvat/Cenvat on purchase of raw material and other materials and services are deducted for the cost of such material and services.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.

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Mar 31, 2011

A Basis for preparation of financial statements

The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act. 1956 as adopted consistently by the Company. All Income and expenditures having material bearing on the financial statements are recognised on accrual basis.

The preparation of financial statement in conformity with Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of such expenses include, provisions for doubtful debts and the useful lives of fixed assets. Actual results could differ from those estimates B Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis excepts in case of significant uncertainties.The principles of revenue recognition are given below: -

I Revenue from sales is recognised upon the shipment of the products.

II Income from annual maintenance and facilities management contracts is accounted for in the ratio of the period expired to the total period of contract and amount received from customers towards unexpired portion of annual maintenance contracts is shown as advances received from customers which is accounted as income in the following financial year(s).

III Revenue from services rendered is recognized as and when the services are performed.

IV Revenue from turnkey projects is recognised as percentage and proportion to work completion.

C Fixed Assets and Depreciation

I Fixed Assets

Fixed Assets are stated at the cost of acquisition less accumulated depreciation. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location. Any gains or losses on account of exchange difference either on settlement or translation where they relate to the acquisition of fixed assets are adjusted to the carrying cost of such assets.

II Depreciation

The depreciation on fixed assets is provided using the straight line method as per Schedule-XIV of the Companies Act, 1956, except in the case of following assets, which are depreciated as follows:

Assets Rate of Depreciation/Period of Amortisation

i). Equipment-Tulip Connect

a. Fiber Cable - Tulip Connect 5.28%

b. Plant & Machinery - Tulip Connect 10%

c. Wireless Equipment & Others -Tulip Connect 12.5%

ii). Leasehold Land Over the primary lease period

These rates are not less than those prescribed under Schedule XIV of the Companies Act, 1956.

D. Leases

Lease rentals in respect of operating lease arrangements are recognised as an expense in the profit and loss account.

E Investments

Long-term investment are stated at cost less provision for other than temporary diminution in value. Short-term investments are carried at lower of cost and quoted value/fair value, computed category-wise.

F Miscellaneous Expenses (Preliminary Expenses) Preliminary Expenses are amortised over a period of 10 years.

G Inventories

Inventories are valued at the lower of cost or net realisable value, after providing for obsolescence, if any. Cost of inventories comprises cost of purchase, freight and other expenses incurred in bringing the inventories to their present location and condition.

H Provision, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

I Cash Flow Statement

Cash flows are reported using the indirect method whereby net profits before tax is adjusted for the effect of transaction of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows for the regular revenue generating, investing and financing activities are segregated.

J Income from Investments

Income from investments, where appropriates, is taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

K Foreign Currency Transactions

I Transaction denominated in foreign exchange are recorded at the exchange rate prevailing at the date of the transaction. Receivable and payables at the year end are translated at the exchange rate prevailing on the balance sheet and differences coming there on are recognised in profit and loss account.

II Monetary items denominated in foreign currencies at the year ended and not covered by forward exchange contracts are translated at year end exchange rates and in respect of those covered by forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the Profit and Loss Account over the period of contract.

III Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost such assets.

IV Foreign currency assets and liabilities are translated at the year end rates and resultants gains/losses on foreign exchange transaction other than those relating to fixed assets are recognised in the profit and loss account.

V Non-monetary foreign currency items are carried at cost.

VI During the year, the Company has exercised the option available in notification issued by Ministry of Corporate Affairs vide GSR 225(E) dated 31 st March, 2009 on Accounting Standard (AS) 11. Henceforth, as on 30th June, 2010, the Company has added Rs. 1891.20 lacs to fixed assets on account of fluctuation in rate of foreign currency long term assets and liabilities by crediting Rs. 752.47 lacs to General Reserve for foreign exchange loss pertaining to period from 7th December, 2006 to 31st March, 2010 and Rs. 1,138.72 lacs of foreign exchange loss pertaining to period 1st April, 2010 to 30th June, 2010. Had the option not been exercised, net profit would have been lower by Rs. 228.73 lacs for the year 2010-11. Other Income includes Rs. 4,384.08 lacs in year 2009-10, which are related to gain on foreign exchange pertaining to aforementioned long term foreign currency assets and liabilities.

L Research and Development

Revenue expenditure on Research and Development is charged off to Profit and Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is shown under the relevant fixed assets and depreciation is provided as given in note no. 1 ( c ) (ii) above.

M Employee Benefits

Short Term Employee Benefits

Short-term employee Benefits are recognised in the period during which the services have been rendered.

II Long Term Employees Benefits

a. Defined Contribution Plans

Contribution to Provident Fund are deposited with the appropriate authorities and charged to the profit and loss account on Accrual basis.

b Defined Benefit Plans

1 Gratuity

The Company provides for the gratuity based on the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard - 15, (Revised), "Employee Benefits"

ii Leave encashment

The Company has provided for the liability at the year end on account of unavailed Earned Leave as per the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard -15, (Revised)," Employee Benefits"

N Provision for Tax

Tax expense for the year comprising current tax and, deferred tax is included in determining the net profit for the year.

Provision is made for Current Tax on the basis of estimated taxable income for the current accounting year in accordance with the provision applicable under IncomeTaxAct-1961 with respect to that accounting year. Deferred tax liability on account of timing differences between the book profit and the taxable profits for the year is accounted for using the tax rates as applicable as on the balance sheet date.

Deferred tax assets arising on account of timing differences are recognised to the extent there is virtual certainty that these would be realized in the future.

Deferred Tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date.

0 Borrowing Cost

Borrowing Cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

P Earning Per Share

Basic Earnings per share are calculated by dividing the net profit or loss for the year attributable to equity share holders after tax (and including post tax effect of any extra ordinary item) by the weighted average number of equity shares outstanding during the year, the weighted average number of equity shares outstanding during the period are adjusted for the events of number of shares to be issued against Foreign Currency Convertible Bonds issued by the Company.

Q Modvat/Cenvat

Modvat/Cenvat claimed on capital assets is credited to assets/ capital work in progress account. Modvat/Cenvat on purchase of raw material and other materials and services are deducted for the cost of such material and services.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.

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Mar 31, 2010

A. Basis for preparation of financial statements

The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act. 1956 as adopted consistently by the company. All Income and Expenditures having material bearing on the financial statements are recognised on accrual basis.

The preparation of financial statement in conformity with Accounting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Examples of such expenses include, provisions for doubtful debts and the useful lives of fixed assets. Actual results could differ from those estimates.

b. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis excepts in case of significant uncertainties. The principles of revenue recognition are given below:- i) Revenue from sales is recognised upon the shipment of the products.

ii) Income from annual maintenance and facilities management contracts is accounted for in the ratio of the period expired to the total period of contract and amount received from customers towards unexpired portion of annual maintenance contracts is shown as advances received from customers which is accounted as income in the following financial year(s).

iii) Revenue from services rendered is recognized as and when the services are performed.

iv) Revenue from turnkey projects is recognised as percentage and proportion to work completion.

C. Fixed assets and Depreciation

i) Fixed assets

Fixed Assets are stated at the cost of acquisition less accumulated depreciation. Cost includes all identifiable expenditure incurred to bring the assets to its present condition and location. Any gains or losses on account of exchange difference either on settlement or translation where they relate to the acquisition of fixed assets are adjusted to the carrying cost of such assets.

D. Leases

Lease rentals in respect of operating lease arrangements are recognised as an expense in the profit and loss account.

e. Investments

Long-term investment are stated at cost less provision for other than temporary diminution in value. Short-term investments are carried at lower of cost and quoted value/fair value, computed category-wise.

F. Miscellaneous expenses (Preliminary expenses)

Preliminary Expenses are amortised over a period of 10 years.

g. Inventories

Inventories are valued at the lower of cost or net realisable value, after providing for obsolescence, if any. Cost of inventories comprises cost of purchase, freight and other expenses incurred in bringing the inventories to their present location and condition.

H. Provision, Contingent liabilities and Contingent assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognised but are disclosed in the notes. Contingent assets are neither recognised nor disclosed in the financial statements.

i. Cash Flow statement

Cash flows are reported using the indirect method whereby net profits before tax is adjusted for the effect of transaction of non- cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows for the regular revenue generating, investing and financing activities are segregated.

J. Income from Investments

Income from investments, where appropriates, is taken into revenue in full on declaration or receipt and tax deducted at source thereon is treated as advance tax.

k. Foreign Currency Transactions

i) Transaction denominated in foreign exchange are recorded at the exchange rate prevailing at the date of the transaction. Receivable and payables at the year end are translated at the exchange rate prevailing on the balance sheet and differences coming there on are recognised in profit and loss account.

ii) Monetary items denominated in foreign currencies at the year ended and not covered by forward exchange contracts are translated at year end exchange rates and in respect of those covered by forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the Profit and Loss Account over the period of contract.

iii) Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost such assets.

iv) Foreign currency assets and liabilities are translated at the year end rates and resultants gains/losses on foreign exchange transaction other than those relating to fixed assets are recognised in the profit and loss account.

v) Non-monetary foreign currency items are carried at cost.

l. Research and Development

Revenue expenditure on Research and Development is charged off to Profit and Loss Account in the year in which it is incurred.

Capital expenditure on Research and Development is shown under the relevant fixed assets and depreciation is provided as given in note no. 1 (c) (ii) above.

m. Employee Benefits

i) Short Term Employee Benefits

Short-term Employee Benefits are recognised in the period during which the services have been rendered.

ii) Long Term Employees Benefits

a) Defined Contribution Plans

Contribution to Provident Fund are deposited with the appropriate authorities and charged to the profit and loss account on Accrual basis.

b) Defined Benefit Plans

i) Gratuity

The company provides for the gratuity based on the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard - 15, (Revised), “Employee Benefits”

ii) Leave encashment

The company has provided for the liability at the year end on account of unavailed Earned Leave as per the Actuarial valuation as per the Projected Unit Credit Method in accordance with Accounting Standard - 15, (Revised), “Employee Benefits”

n. Provision for Tax

Tax expense for the year comprising current, deferred and fringe benefit tax is included in determining the net profit for the year.

Provision is made for Current Tax on the basis of estimated taxable income for the current accounting year in accordance with the provision applicable under Income Tax Act- 1961 with respect to that accounting year.

Deferred tax liability on account of timing differences between the book profit and the taxable profits for the year is accounted for using the tax rates as applicable as on the balance sheet date.

Deferred tax assets arising on account of timing differences are recognised to the extent there is virtual certainty that these would be realized in the future.

Deferred Tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date.

o. Borrowing Cost

Borrowing Cost that are attributable to the acquisition or construction of qualifying assets are capitalized as part of cost of such assets. A qualified asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

P. Earning Per share

Basic Earnings per share are calculated by dividing the net profit or loss for the year attributable to equity share holders after tax (and including post tax effect of any extra ordinary item) by the weighted average number of equity shares outstanding during the year, the weighted average number of equity shares outstanding during the period are adjusted for the events of number of shares to be issued against Foreign Currency Convertible Bonds issued by the company.

Q. Modvat/Cenvat

Modvat/Cenvat claimed on capital assets is credited to assets/ capital work in progress account. Modvat/Cenvat on purchase of raw material and other materials and services are deducted for the cost of such material and services.

The policies not specifically mentioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.

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Mar 31, 2001

A Basis for prepration of financial statements

The financial statements have been prepared under the historical cost convention, in accordance with Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act. 1956 as adopted consistently by the company. All Income and expenditures having material bearing on the financialstatements are recognised on accrual basis.

The prepration of financial statement in conformity with Accouting Standards requires management to make estimates and assumptions that affect the reported amounts of assets and liablities at the date of financial statements, and the reported amounts of revenures and expenses during the reporting period. Examples of such expenses include, estimates of expected contract costs to be incurred to complete software development, provisions for doubtful debts and the useful lives of fixed assets. Actual results could differ from those estimates

B Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis excepts in case of significant uncertainities. The priniciples of revenue recognition are given below: -

I Revenue from sales is recognised upon the shipmnet of the products.

II Income form annual manitenance contracts is accounted for in the ratio of the period expired to the total period of contract and amount received from custmoers towards unexpired protion of annual maintenance contracts is shown as advances received from customers which is accounted as income in the following financial year(s).

III Revenue from services rendered is recognized as and when the services are performed.

IV Income from trunkey projects is recongnised as percentage and proportion to work completion and balance has been included in the closing stock.

C Fixed Assets and Depreciation

I Fixed Assets

Fixed Assets are stated at the cost of acquistation less accumulated depreciation. Cost includes all identifiable expenditure incuured to bring the assets to its present condition and location. Any gains or losses on account of exchange difference either on settlement or trnslation where they relate to the acquisition of fixed assets are adjusted to the carrying caost of such assets.

II Depreciation

The depreciation on fixed assets is provided using the straight line method as per Schedule-XIV of the Companies Act, 1956.

D Miscellaneous Expenses (Preliminary Expenses)

The expenditures incurred on formation of company and addition to authorised capital are amortised over a period of 10 years.

E Inventories

Inventories are valued at the lower of cost (determined on first in first out basis) or net realisable value.

F Foreign Currency Transactions

I Transaction denominated in foreign exchange are recorded at the exchange rate prevailing at the time of the transaction

II Monetary items denominated in foreign currencies at the year ended and not covered by forward exchange contracts are translated at year end and in resepect of those covered by forward exchange contracts, the difference between the contract rate and the spot rate on the date of transaction is charged to the Profit and Loss Account over the period of contract.

III Non-monetary foreign currency items are carried at cost.

IV Any gain or losses on account of exchange difference either on settlement or on translation is recognised in the Profit and Loss Account except in cases where they relate to the acquisition of fixed assets in which case they are adjusted to the carrying cost such assets.

G Research and Developmnet

Revenue expenditure on Research and Development is charged off to Profit and Loss Account in the year in which it is incurred.

Capital expenditure on Research and Development is shown under the relevant fixed assets and depreciation is provided as given in note no. 1 ( c ) (ii) above.

H Retirement benefits

I Provident Fund and Family Pension

Contribution to Provident fund and Family Pension fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis.

II Gratutiy

In respect of gratuity, it will provided for at he time of acutal paymnet.

III Leave encashment

It will be provided for at the time of leave encashment paymenton actual basis.

I Income Tax

Provision in made for Income Tax, under tax-payable method, based on the tax liability as comnputed after taking credit for allowances and exemptions.

The policies not spcifically mentiioned above are in agreement with the Accounting Standards issued by the Institute of Chartered Accountants of India.