* During the FY 2014-15, the amount of deferred income related to Government grant had been recognized in the Statement of Profit and Loss based on the revised useful lives of assets as defined under Schedule II of Companies Act 2013. Also refer Note-20.
* Includes ' 492.65 Lacs (' 493.84 Lacs) due to Vuppalamritha Magnetic Components Pvt Ltd (Now VMC Systems Ltd.) against which ' 322.12 Lacs (' 322.12 Lacs) l ies in the Escrow Account (Refer note 18).
The company had sent balance confirmation letters to all parties requesting them to confirm the balance within 15 days of the receipt of the letter, failing which the balance will be presumed to be correct. The company has no other means of confirming the balances for which no response has been received except presuming them to be correct as per the terms of the letter. The disclosure as required by section 22 of The Micro, Small and medium Enterprises Development Act, 2006 are given below:
* Despite Company’s best efforts, 5 shareholder could not be traced. Therefore an amount of Rs. 27,722/- is still lying in unclaimed buy back account. Also refer Note-16.
** Includes an amount of Rs.10.80 Lacs (Rs. 10.80 Lacs) received from Holding Company - PICTCL and Rs.302 Lacs (Rs.302 Lacs) received by Company through encashment of Bank Guarantee submitted by VMC Systems Limited. Further it also includes an amount of Rs. 22.06 Lacs other than securities on rental properties outstanding for more than three years.
$ Includes an amount of Rs. 163.13 Lacs w.r.t Forward contract. (Also refer Note-18)
# Includes amount of Rs. 735.63 Lacs related to UPCFML, Refer Note-10, 13 and Note-27
*The company had invested Rs. 698.74 Lacs (Face Value 700 Lacs) in the Bonds of UP Co-operative Spinning Mills Federation Ltd (UPCSMFL) duly guaranteed by the UP State Govt. for a tenure of 18 months. The company invoked the government guarantee consequent to the bonds not being redeemed on the due date of redemption viz 20.12.1999. The suit was filed for recovery of Rs 993.44 lacs (Principal of Rs 700 lacs and Interest of Rs 293.44 lacs.) The suit had been decided ex-parte in favour of the company on 31.01.2004. In compliance of the orders of the Hon’ble Punjab and Haryana High Court, Chandigarh, The U.P State Government (Guarantor) had deposited Rs.735.63 lacs and a Govt. guarantee of equivalent amount in the Civil Court, Lucknow . Further an amount of Rs. 735.63 lacs deposited with the Executing Court released to the Company (decree holder) on 24.04.2006 against furnishing bank guarantee of the equivalent amount.
However, On 19.01.2015, the Hon’ble Supreme Court had decided against the ex-parte decree earlier made in favor of the company and directed the Civil Court, Luck now to refund the amount to UP State Government. The execution of the said order is pending at District Court Luck now. In view of the SC Decision, the company has accounted for the same and liability of Rs. 735.63 lacs has been reflected under Note-7. Above mentioned Bank guarantee of Rs. 735.63 lacs can be invoked by the Court anytime. Since the decree was issued against UPCSMFL and State of UP and Hon’ble SC considered that the state of UP was Ex-parte, the company had filed the execution of earlier decree issued in favour of Puncom against the UPCSMFL on 30.01.2016 and also filed a fresh suit against the State of UP through Special Secretary Industrial Development on 11.03.2016.
The Bombay High Court had passed (March 2006) an order for liquidation of UP Cooperative Spinning Mills Federation Limited (UPCSMFL) and the official liquidator has been appointed (August 2006) i.e. Liquidation of the unit is pending. However the Company has not made any provisioning for permanent diminution in the value of Investment as the Investment in bonds is fully guaranteed by the UP State Government."
**Refer Note 30 and Note 31
To comply with the provisions of AS-22, the Company has reviewed and written down the deferred tax asset on unabsorbed depreciation/ losses and other allowances to the extent of the corresponding deferred tax liability as there is no virtual certainty supported by convincing evidence that sufficient future taxable income will be available in near future.
*Prepaid expenses, the period of which extend beyond 12 months from Balance Sheet date have been treated as Noncurrent in accordance with Company’s Accounting policy Note-1 (Point XIX)
"1 Refer Note 10. The company had recognized and received interest income to the extent of Rs. 156.45 lacs (@ 14.90% on Principal) for a tenure of 18 months. In view of the protracted litigation and uncertainty of the amount realizable, pending settlement of the case, the company has provisioned the already recognized interest income of Rs. 152.52 lacs up to 31st March 2001 of which Rs. 115.63 Lacs was provisioned in FY 2014-15 and remaining Rs. 36.89 Lacs in current financial year.The Company has not recognized accrued interest, keeping in view uncertainty involved in the matter of realization of interest due to litigation. This is also in conformity with the Accounting Standard 9-”Revenue Recognition” issued by the Institute of Chartered Accountant of India (ICAI)."
As per provisions of AS-2 "Valuation of Inventories" the stock has been valued at Cost or NRV whichever is less.
* Provision for Back Wages pertains to decision by SC in case of Sh. A.S. Gill in FY 2014-15. Hon’ble Supreme court passed an order dated 24.03.2015 issued on 11.04.2015, directing the company to pay 30% of the back wages for the period 12.3.2003 to 30.04.2006 which was duly provided for and subsequently released as per order of Hon’ble Supreme Court.
# Refer Note 13 of the Financial Statements.
*Includes Bank guarantees for Rs. 735.63 Lacs (Rs. 735.63 lacs) deposited with Executing Court, Luck now against amount released in favour of the company. (Also Refer Note 7, 10, 13 & 27)
*Includes expired guarantees for Rs. 73.17 Lacs (Rs. 68.01 lacs) against which neither any claims have been lodged nor reversed by issuing banks pending returning of original guarantee by beneficiary.
** The Company has filed appeals which have been admitted by the competent authority.
*** Company received a Demand Notice from PSPCL Mohali which is being contested through the Lessee as per Lease Agreement.
# Includes C-Dot Case. Refer Note 34.
NOTE : 1. Punjab Digital Industrial Systems Ltd (PDISL), the fully-owned subsidiary, has been ordered to be wound up by the Hon’ble Punjab & Haryana High Court vide their order dated 20/02/2009. The Company has filed its statement of affairs with the Official Liquidator appointed by the said court and all books of accounts/records and store items have been handed over to him. The loss on account of permanent diminution in investment in equity shares of Rs.24.79 lacs in PDISL has been provided for. Full provision amounting to Rs 40.35 lacs against amount recoverable of Rs 40.35 lacs (Rs.40.35 lacs) and Rs. 4.55 Lacs against balance appearing in Sundry Debtors at Rs 4.55 lacs (Rs 4.55 lacs) has also been made.
NOTE : 2. PCL Telecom Ltd, another subsidiary company, is in the process of being winding up. The Board of Directors of PUNCOM at their 81st meeting held on 29.01.1997 decided to bear all statutory expenditure incurred in connection with the winding up of PCL Telecom Ltd. Further, the company has been ordered to be wound up by the Hon’ble Punjab and Haryana High Court vide its order dated 20th October 2005.
NOTE : 3. The company has reviewed the inventories at the year end and consequently provided for ' 0.88 Lacs (' 17.29 lacs) and ' 1.99 Lacs (' 3.92 lacs) in current financial year for non moving items of obsolete and slow moving inventories of Raw material and finished sub-assemblies respectively. An amount of ' 0.72 lacs (' 3.46 lacs) in respect of doubtful debts and advances has been provided for during the year. The provision as on 31st March 2016 is considered adequate.
NOTE : 4. Trade receivables, Trade payables and other current liabilities include the amounts receivables and payables outstanding for a period of more than three years. Management has decided to carry forward the same keeping in view the nature of the contracts and projects agreed with the parties and customers.
NOTE : 5. C-DOT had filed claim of Rs.197.20 lacs against the company under the agreement for transfer of Max- XL technology with Indian Council of Arbitration, New Delhi (ICA) . The award was passed by ICA for an amount of Rs. 226.17 lacs (Claim of Rs.182.15 lacs plus Interest of Rs.29.54 lacs till date of award and Arbitration fee of Rs. 14.47 lacs) in favour of C-Dot. The said award passed by ICA is being contested by the company before the Delhi High Court. The application for setting aside the award has already been admitted by Delhi High Court and accordingly Interest & Arbitration cost liability of Rs.57.62 lacs (Rs. 17.75 lacs) on account of nonpayment of award amount has been shown as contingent liability, pending appeal in the Hon’ble High Court, Delhi.
C-DOT has also filed another claim of Rs. 24.88 lacs against the Company under the agreement for transfer of AN-RAX technology which is pending before sole arbitrator appointed by Hon’ble Delhi High Court. This claim is also being contested by the company.
NOTE : 6. The company has been giving performance guarantees against equipments supplied to various customers and has not incurred any material expenditure on replacement of any part or equipment except for expenditure on travelling of service engineers which is accounted for as and when incurred. Keeping in view the past pattern and the concept of materiality, no provision has been created or disclosure has been made, except contingent liabilities already disclosed at Note 29. This is in accordance with the requirements of AS 29 "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India.
NOTE : 7 In the absence of virtual certainty regarding there being sufficient taxable income under the normal provisions of the Income Tax Act, 1961 within the period specified under section 115JAA of the said Act, the Minimum Alternate Tax paid in the earlier years has not been recognized as an asset. This is in accordance with the Guidance Note issued by the Institute of Chartered Accountants of India on the matter.
NOTE : 8. Related party transactions
RELATION Name of Party / Person
Holding Company Punjab Information & Communication Technology
__Corporation Limited (PICTCL)_
Key Management Personnel (CEO)__Sh. Vikas Pratap, IAS_
Key Management Personnel (E.D) Sh. A. K. Pathak
Key Management Personnel (CFO)__Sh. J. S Bhatia_
Key Management Personnel (CS) Sh. Madhur Bain Singh
* Except for loan to KMPs given in the ordinary course of business and as per service rules of the Company as already being disclosed separately under Note-12. Also refer disclosure under Note-7 regarding security deposit amount Rs.10.80 lacs (Rs. 10.80 lacs) outstanding of Holding Company.
Note : 9. The previous Year figures have been regrouped/re-classified wherever necessary to conform with the current presentation as per Schedule III of the Companies Act, 2013. The figures have been rounded off to the nearest Rupee.
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