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Accounting Policies of Punjab Communications Ltd. Company
Mar 31, 2025
I Basis of preparation of Financial Statements
a)
The Company has adopted Indian Accounting Standards (the ''Ind AS'') prescribed under section 133 of the
Companies Act, 2013 (the ''Act''), read with the Companies (Indian Accounting Standards) Rules, 2015 and
the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, with effect from 1st April 2017
with 1st April 2016 as the date of transition as per MCA notification dated 16th Feb, 2015 . Accordingly the
financial statements have been prepared in accordance with the said Ind AS & Rules and other recognized
accounting practices & policies to the extent applicable. The company has applied IND AS to items which are
material and made specific disclosure required by an Ind AS if the information is material or when required
by law in accordance with said notification. Accounting policies unless referred to otherwise are consistent
with generally accepted accounting principles. The accounting policies adopted in the preparation of
financial statements are consistent with those of previous year.
b) The Company follows mercantile system of accounting and recognizes all the items of income and
expenditure on accrual basis. Further, certain items of income and expenditure are recognized as and when
they are incurred, ascertained or settled in line with accounting policies which are as under:
i) Additional demand for taxes arising on completion of assessments are accounted for as and when
determined as payable.
ii) Refunds on account of excise duty, custom duty, income tax, VAT and insurance claims are accounted
for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest for delay in execution of the
contracts are provided for as and when settled.
iv) Ex-Gratia payments to employees are accounted for as and when incurred.
v) The claims for price escalation on sales are accounted for on settlement.
II Use of estimates
The preparation of financial statements is in conformity with generally accepted accounting principles in India
(Ind AS) and requires management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the
results of operations during the reporting period. Although these estimates are based upon management''s
best knowledge of current events and actions, actual results could differ from these estimates.
III Property, Plant and Equipment (PPE) & Investment property
Investment properties are measured at cost, less accumulated depreciation and accumulated impairment
losses, if any.
The items of Property Plant & equipment are measured at Cost less any accumulated depreciation and any
accumulated impairment losses. The cost of an item of property, plant and equipment comprises:
(a) its purchase price, including import duties and non -refundable purchase taxes, after deducting trade
discounts and rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be
capable of operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling, removing the item and restoring the site on which
it is located, the obligation for which an enterprise incurs either when the item is acquired or as a
consequence of having used the item during a particular period for purposes other than to produce
inventories during that period.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant
and equipment measured as per the previous GAAP and use that carrying value as the cost of the Property,
Plant and Equipment.
Non Current Asset held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally
through a sale transaction rather than through continuing use and a sale is considered highly probable.
They are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets
are not depreciated or amortised while they are classified as held for sale.
Depreciation
a) The depreciation on property, plant and equipment and Investment property is provided on written
down value (WDV) method at the rates determined after taking into account the prescribed useful
life for respective class of assets which is in line with Schedule II of the Companies Act, 2013. The
property, plant and equipment amounting to Rs. 5000/-or less individually purchased during the
year are depreciated at the rate of 100%. Residual value has been taken as 5% of original cost of
said assets or WDV as on 31.3.2014 whichever is lower except those valued at Rs. 5,000/- or less
individually. The estimated useful lives of assets are as mentioned below:
b) Depreciation also includes amount written off in respect of leasehold properties and assets (if any)
over the respective lease period.
c) Calculation of depreciation on the additions during the year is done on pro-rata basis from the date
of its receipt plus 10 days for installations.
Impairment:
As per IND AS 36, the carrying amount of assets including Property, plant and equipment & Investment
property are reviewed at each Balance Sheet date to assess impairment, if any based on internal / external
factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value being
higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement
of Profit & 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 an improvement in recoverable amount.
IV Intangible Assets
Intangible assets (if any) purchased are measured at cost on the date of acquisition, as applicable, less
accumulated amortisation and accumulated impairment, if any as per IND AS-38.
V Borrowing Costs:
As per IND AS 23 Borrowing Costs directly attributable to the acquisition, construction or production of
qualifying assets are capitalized. Other borrowing costs are charged to the Statement of Profit and Loss in
the period in which they are incurred.
VI Cash and Cash Equivalents
Cash and Cash Equivalents comprises cash at bank, cash in hand and other short term highly liquid
Investments/Fixed Deposits with an original maturity of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value in accordance
with IND AS 7
VII Valuation of Inventories:
a) Inventories are valued at the lower of cost or estimated net realizable value. Inventories are valued
according to FIFO method of valuation.
b) Cost of Work in process includes cost of material plus direct labour.
c) Cost of Finished sub assemblies includes cost of material plus overheads apportioned on the basis of
actual stage of completion as at year end.
d) Finished goods are valued at lower of cost or net realizable value.
e) Goods received after the cut off date (for physical verification as at the year end) and goods for which
the documents are retired are included in goods in transit.
f) Any Shortage/excess in Raw Material detected at the time of physical verification is included in
consumption of goods.
g)
Purchases and inventories are valued at cost excluding eligible GST.
h) Provision for obsolete inventories is reviewed periodically and provided for as per the assessment
of management.
VIII Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and can be reliably measured. Revenue is measured at the fair value of the consideration received or
receivable, which is generally the nominal value of the transaction unless the terms of the contract provide
otherwise. Revenue is recognized net of rebates and discounts and excludes amounts collected on behalf of
government such as goods and services taxes.
Sale of Goods
Revenue from sale of goods is recognized when the company has transferred to the buyer the significant
risks and rewards of ownership of the goods and the company retains neither ownership nor effective
control over the goods sold;
Services
Revenue from services are recognized as and when they are rendered based on agreements/
arrangements with the respective parties and recognized excluding eligible GST (ITC).
Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over
the life of the contract using the proportionate completion method, with contract costs determining the
degree of completion. For AMC contracts, revenue is recognized on completion of specific periods or as
specified as per terms of the contract with the customers.
Interest Income on Bonds will be recognised when it becomes reasonably certain that consideration amount
will be realised.
IX Government Grants
Government Grants are recognized when there is a reasonable assurance that the same will be received and
all attaching conditions will be complied with. Grants related to specific expenses are recognised in profit
or loss in the same period as the relevant expenses. Grants relating to depreciable assets are treated as
deferred income which is recognized in the statement of profit and loss on a systematic and rational basis
over the useful life of the asset in accordance with IND AS 20.
X Transactions in Foreign currency
Foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. At
the balance sheet date, all monetary assets and liabilities denominated in foreign currency are converted
at exchange rate prevailing at the year end. Resultant loss/gain is charged to Statement of Profit and Loss.
When the transaction is settled within the same accounting period as that in which it occurred, all the
exchange difference is recognized in that period as per IND AS 21.
In case of forward foreign exchange contracts where an underlying asset or liability exists, the difference
between the forward rate and the exchange rate at the inception of the contract is recognized as income
or expense over the life of the contract. Exchange rate difference on such a contract are recognized in
the statement of profit and loss account as on Balance sheet. Any profit or loss arising on cancellation or
renewal of forward contract is recognized as income or expense in the year in which such cancellation or
renewal is made.
XI Employee Benefits
a) Short term employee benefits are recognized as an expense on accrual basis.
b) Post Employment Benefits
i) Defined Contribution Plans: The Company''s state governed Provident Fund scheme, Employee
State Insurance scheme etc are defined contribution plans. The contribution paid/payable under the
schemes is recognized during the period in which the employee renders the related service.
ii) Defined Benefit Plans: The Employees'' Gratuity liability is covered under the qualifying Insurance
policy of Life Insurance Corporation of India. The Company''s liability is determined on the basis of
an actuarial valuation using the projected unit credit method as at Balance Sheet date. Expenses are
recognized in the Statement of Profit and Loss or other comprehensive income in the manner laid
down in IND AS 19. In case of funded plans, the fair value of the plan assets is reduced from the gross
obligation under the defined benefit plans, to recognize the obligation on net basis in Balance Sheet.
c) Other Long term Employee benefits:
Accumulated compensated absences/Leave encashment -The Employees'' Leave encashment liability is
also covered under the qualifying Insurance policy of Life Insurance Corporation of India. The obligation for
long term compensated absences/Leave encashment is recognized in the same manner as in the case of
defined benefit plans as mentioned in XI (b) (ii) above.
Long Term service awards which are expected to be availed beyond 12 months from the end of the balance
Sheet date, are treated as other long term employee benefits. The present value of the said liability
determined on each Balance Sheet date for recognizing the same in the books of accounts. Liability towards
Service awards due with in 12 months from the date of Balance Sheet is classified under head Short term
Provisions.
XII Income Tax
Tax expense comprises of current and deferred tax and includes any adjustments related to past periods
in current and / or deferred tax adjustments that may become necessary due to certain developments
or reviews during the relevant period. Current tax is the amount of income taxes payable (recoverable) in
respect of the taxable profit (tax loss) for a period.
Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable
temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods
in respect of: (a) deductible temporary differences; (b) the carry forward of unused tax losses; and (c) the
carry forward of unused tax credits. Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the Balance Sheet date. In accordance with IND AS 12 âIncome Taxes"
the company reviews the carrying amount of a deferred tax asset at the end of each reporting period and
reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient
taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any
such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will
be available.
As the company has a history of recent losses, the company does not recognises deferred tax asset arising
from as there is no convincing evidence that sufficient taxable profit under the normal provisions of the
Income Tax Act, 1961 within the period specified in said Act will be available against which the unused tax
losses or unused tax credits can be utilised by the company.
XIII Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to
equity shareholders by the weighted average number of equity shares outstanding during the year adjusted
for the effects of all dilutive potential equity shares.
Mar 31, 2024
Note 1 SIGNIFICANT ACCOUNTING POLICIES
I Basis of preparation of Financial Statements
a) The Company has adopted Indian Accounting Standards (the ''Ind AS'') prescribed under section 133 of the Companies Act, 2013 (the ''Act''), read with the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, with effect from 1st April 2017 with 1st April 2016 as the date of transition as per MCA notification dated 16th Feb, 2015 . Accordingly the financial statements have been prepared in accordance with the said Ind AS & Rules and other recognized accounting practices & policies to the extent applicable. The company has applied IND AS to items which are material and made specific disclosure required by an Ind AS if the information is material or when required by law in accordance with said notification. Accounting policies unless referred to otherwise are consistent with generally accepted accounting principles. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
b) The Company follows mercantile system of accounting and recognizes all the items of income and expenditure on accrual basis. Further, certain items of income and expenditure are recognized as and when they are incurred, ascertained or settled in line with accounting policies which are as under:
i) Additional demand for taxes arising on completion of assessments are accounted for as and when determined as payable.
ii) Refunds on account of excise duty, custom duty, income tax, VAT and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest for delay in execution of the contracts are provided for as and when settled.
iv) Ex-Gratia payments to employees are accounted for as and when incurred.
v) The claims for price escalation on sales are accounted for on settlement.
Expenditure on warranty and guarantee of satisfactory performance of equipments is accounted for when incurred.
The preparation of financial statements is in conformity with generally accepted accounting principles in India (Ind AS) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
III Property, Plant and Equipment (PPE) & Investment property
Investment properties are measured at cost, less accumulated depreciation and accumulated impairment losses, if any.
The items of Property Plant & equipment are measured at Cost less any accumulated depreciation and any accumulated impairment losses. The cost of an item of property, plant and equipment comprises:
(a) its purchase price, including import duties and non -refundable purchase taxes, after deducting trade discounts and rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located, the obligation for which an enterprise incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment measured as per the previous GAAP and use that carrying value as the cost of the Property, Plant and Equipment.
Non Current Asset held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated or amortised while they are classified as held for sale.
Depreciation
a) The depreciation on property, plant and equipment and Investment property is provided on written down value (WDV) method at the rates determined after taking into account the prescribed useful life for respective class of assets which is in line with Schedule II of the Companies Act, 2013. The property, plant and equipment amounting to Rs. 5000/-or less individually purchased during the year are depreciated at the rate of 100%. Residual value has been taken as 5% of original cost of said assets or WDV as on 31.3.2014 whichever is lower except those valued at Rs. 5,000/- or less individually. The estimated useful lives of assets are as mentioned below:
Asset Class Period (Years)
Building (Other than Factory) 60
Electrical Installations and Equipment 10
Office Equipment (Other than Computers) 5
a) Inventories are valued at the lower of cost or estimated net realizable value. Inventories are valued according to FIFO method of valuation.
b) Cost of Work in process includes cost of material plus direct labour.
Cost of Finished sub assemblies includes cost of material plus overheads apportioned on the basis of actual stage of completion as at year end. d) Finished goods are valued at lower of cost or net realizable value.
Goods received after the cut off date (for physical verification as at the year end) and goods for which the documents are retired are included in goods in transit.
f) Any Shortage/excess in Raw Material detected at the time of physical verification is included in consumption of goods.
g) Purchases and inventories are valued at cost excluding eligible GST.
h) Provision for obsolete inventories is reviewed periodically and provided for as per the assessment of management.
VIII Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, which is generally the nominal value of the transaction unless the terms of the contract provide otherwise. Revenue is recognized net of rebates and discounts and excludes amounts collected on behalf of government such as goods and services taxes.
Revenue from sale of goods is recognized when the company has transferred to the buyer the significant risks and rewards of ownership of the goods and the company retains neither ownership nor effective control over the goods sold;
Revenue from services are recognized as and when they are rendered based on agreements/ arrangements with the respective parties and recognized excluding eligible GST (ITC). Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. For AMC contracts, revenue is recognized on completion of specific periods or as specified as per terms of the contract with the customers.
Interest Income on Bonds will be recognised when it becomes reasonably certain that consideration amount will be realised.
Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Grants related to specific expenses are recognised in profit or loss in the same period as the relevant expenses. Grants relating to depreciable assets are treated as deferred income which is recognized in the statement of profit and loss on a systematic and rational basis over the useful life of the asset in accordance with IND AS 20.
X Transactions in Foreign currency
Foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. At the balance sheet date, all monetary assets and liabilities denominated in foreign currency are converted at exchange rate prevailing at the year end. Resultant loss/gain is charged to Statement of Profit and Loss. When the transaction is settled within the same accounting period as that in which it occurred, all the exchange difference is recognized in that period as per IND AS 21.
In case of forward foreign exchange contracts where an underlying asset or liability exists, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Exchange rate difference on such a contract are recognized in the statement of profit and loss account as on Balance sheet. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense in the year in which such cancellation or renewal is made.
XI Employee Benefits
a) Short term employee benefits are recognized as an expense on accrual basis.
b) Post Employment Benefits
i) Defined Contribution Plans: The Company''s state governed Provident Fund scheme, Employee State Insurance scheme etc are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
ii) Defined Benefit Plans: The Employees'' Gratuity liability is covered under the qualifying Insurance policy of Life Insurance Corporation of India. The Company''s liability is determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Expenses are recognized in the Statement of Profit and Loss or other comprehensive income in the manner laid down in IND AS 19. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis in Balance Sheet.
c) Other Long term Employee benefits:
Accumulated compensated absences/Leave encashment -The Employees'' Leave encashment liability is also covered under the qualifying Insurance policy of Life Insurance Corporation of India.
The obligation for long term compensated absences/Leave encashment is recognized in the same manner as in the case of defined benefit plans as mentioned in XI (b) (ii) above.
Long Term service awards which are expected to be availed beyond 12 months from the end of the balance Sheet date, are treated as other long term employee benefits. The present value of the said liability determined on each Balance Sheet date for recognizing the same in the books of accounts. Liability towards Service awards due with in 12 months from the date of Balance Sheet is classified under head Short term Provisions.
Tax expense comprises of current and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period.
Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of: (a) deductible temporary differences; (b) the carry forward of unused tax losses; and (c) the carry forward of unused tax credits. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. In accordance with IND AS 12 âIncome Taxes" the company reviews the carrying amount of a deferred tax asset at the end of each reporting period and reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available.
As the company has a history of recent losses, the company does not recognises deferred tax asset arising from MAT credit as there is no convincing evidence that sufficient taxable profit under the normal provisions of the Income Tax Act, 1961 within the period specified in said Act will be available against which the unused tax losses or unused tax credits can be utilised by the company.
XIII Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year adjusted for the effects of all dilutive potential equity shares.
XIV Provision, Contingent Liabilities and Contingent Assets
a) A provision is recognised when the Company has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made.
b) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that arises from past event but is not recognized because it is not probable that an outflow of resources will be required to settle the obligation or cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
c) A Contingent Asset is not recognised, however it is disclosed where an inflow of economic benefit is probable as per IND AS 37
XV Classification of Current / Non Current Assets
All assets and liabilities are presented as Current or Non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to The Companies Act, 2013 and amendments thereon. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has assumed its operating cycle as 12 months for the purpose of Current / Non current classification of assets and liabilities.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The company recognises a financial asset or a financial liability in its balance sheet when, and only when, it becomes a party to the contractual provisions of the instrument.
Classification: The company has classified Financial assets and Financial liabilities in accordance with definition contained in IND AS 32 Financial Instruments: Presentation
Measurement: Financial assets and financial liabilities which are material are measured at Fair value/Amortised cost (using the effective interest rate method) based on their nature and contractual arrangements entered into, in accordance with Ind AS 109, unless specified otherwise.
Includes Computers & Data Processing units which are part of Plant and machinery and classified under P & M head and their useful life is also taken accordingly.
Depreciation also includes amount written off in respect of leasehold properties and assets (if any) over the respective lease period.
Calculation of depreciation on the additions during the year is done on pro-rata basis from the date of its receipt plus 10 days for installations.
Impairment:
As per IND AS 36, the carrying amount of assets including Property, plant and equipment & Investment property are reviewed at each Balance Sheet date to assess impairment, if any based on internal / external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement of Profit & 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 an improvement in recoverable amount.
IV Intangible Assets
Intangible assets (if any) purchased are measured at cost on the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any as per IND AS-38.
V Borrowing Costs:
As per IND AS 23 Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized. Other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
VI Cash and Cash Equivalents
Cash and Cash Equivalents comprises cash at bank, cash in hand and other short term highly liquid Investments/Fixed Deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value in accordance with IND AS 7
Mar 31, 2023
Note 1 SIGNIFICANT ACCOUNTING POLICIES
I Basis of preparation of Financial Statements
a) The Company has adopted Indian Accounting Standards (the ''Ind AS'') prescribed under section 133 of the Companies Act, 2013 (the ''Act''), read with the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, with effect from 1st April 2017 with 1st April 2016 as the date of transition as per MCA notification dated 16th Feb, 2015 . Accordingly the financial statements have been prepared in accordance with the said Ind AS & Rules and other recognized accounting practices & policies to the extent applicable. The company has applied IND AS to items which are material and made specific disclosure required by an Ind AS if the information is material or when required by law in accordance with said notification. Accounting policies unless referred to otherwise are consistent with generally accepted accounting principles. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
b) The Company follows mercantile system of accounting and recognizes all the items of income and expenditure on accrual basis. Further, certain items of income and expenditure are recognized as and when they are incurred, ascertained or settled in line with accounting policies which are as under:
i) Additional demand for taxes arising on completion of assessments are accounted for as and when determined as payable.
ii) Refunds on account of excise duty, custom duty, income tax, VAT and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest for delay in execution of the contracts are provided for as and when settled.
iv) Ex-Gratia payments to employees are accounted for as and when incurred.
v) The claims for price escalation on sales are accounted for on settlement.
Expenditure on warranty and guarantee of satisfactory performance of equipments is accounted for when incurred.
II Use of estimates
The preparation of financial statements is in conformity with generally accepted accounting principles in India (Ind AS) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
III Property, Plant and Equipment (PPE) & Investment property
Investment properties are measured at cost, less accumulated depreciation and accumulated impairment losses, if any.
â The items of Property Plant & equipment are measured at Cost less any accumulated depriciation and any accumulated impairment losses. The cost of an item of property, plant and equipment comprises" :
(a) its purchase price, including import duties and non -refundable purchase taxes, after deducting trade discounts and rebates.
(b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
(c) the initial estimate of the costs of dismantling, removing the item and restoring the site on which it is located, the obligation for which an enterprise incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period.
On transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment measured as per the previous GAAP and use that carrying value as the cost of the Property, Plant and Equipment.
Non Current Asset held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell. Non-current assets are not depreciated or amortised while they are classified as held for sale.
Depreciation
a) The depreciation on property, plant and equipment and Investment property is provided on written down value (WDV) method at the rates determined after taking into account the prescribed useful life for respective class of assets which is in line with Schedule II of the Companies Act, 2013. The property, plant and equipment amounting to Rs. 5000/-or less individually purchased during the year are depreciated at the rate of 100%. Residual value has been taken as 5% of original cost of said assets or WDV as on 31.3.2014 whichever is lower except those valued at Rs. 5,000/- or less individually. The estimated useful lives of assets are as mentioned below:
Asset Class Period (Years)
Building (Other than Factory) 60
Electrical Installations and Equipment 10
Office Equipment (Other than Computers) 5
VII Valuation of Inventories:
a) Inventories are valued at the lower of cost or estimated net realizable value. Inventories are valued according to FIFO method of valuation.
b) Cost of Work in process includes cost of material plus direct labour.
Cost of Finished sub assemblies includes cost of material plus overheads apportioned on the basis of actual stage of completion as at year end. d) Finished goods are valued at lower of cost or net realizable value.
Goods received after the cut off date (for physical verification as at the year end) and goods for which the documents are retired are included in goods in transit.
f) Any Shortage/excess in Raw Material detected at the time of physical verification is included in consumption of goods.
g) Purchases and inventories are valued at cost excluding eligible GST.
h) Provision for obsolete inventories is reviewed periodically and provided for as per the assessment of management.
VIII Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, which is generally the nominal value of the transaction unless the terms of the contract provide otherwise. Revenue is recognized net of rebates and discounts and excludes amounts collected on behalf of government such as goods and services taxes.
Sale of Goods
Revenue from sale of goods is recognized when the company has transferred to the buyer the significant risks and rewards of ownership of the goods and the company retains neither ownership nor effective control over the goods sold;
Services
Revenue from services are recognized as and when they are rendered based on agreements/ arrangements with the respective parties and recognized excluding eligible GST (ITC). Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. For AMC contracts, revenue is recognized on completion of specific periods or as specified as per terms of the contract with the customers. Interest Income on Bonds will be recognised when it becomes reasonably certain that consideration amount will be realised.
IX Government Grants
Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Grants related to specific expenses are recognised in profit or loss in the same period as the relevant expenses. Grants relating to depreciable assets are treated as deferred income which is recognized in the statement of profit and loss on a systematic and rational basis over the useful life of the asset in accordance with IND AS 20.
X Transactions in Foreign currency
Foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. At the balance sheet date, all monetary assets and liabilities denominated in foreign currency are converted at exchange rate prevailing at the year end. Resultant loss/gain is charged to Statement of Profit and Loss. When the transaction is settled within the same accounting period as that in which it occurred, all the exchange difference is recognized in that period as per IND AS 21.
In case of forward foreign exchange contracts where an underlying asset or liability exists, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Exchange rate difference on such a contract are recognized in the statement of profit and loss account as on Balance sheet. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense in the year in which such cancellation or renewal is made.
XI Employee Benefits
a) Short term employee benefits are recognized as an expense on accrual basis.
b) Post Employment Benefits
i) Defined Contribution Plans: The Company''s state governed Provident Fund scheme, Employee State Insurance scheme etc are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
ii) Defined Benefit Plans: The Employees'' Gratuity liability is covered under the qualifying Insurance policy of Life Insurance Corporation of India. The Company''s liability is determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Expenses are recognized in the Statement of Profit and Loss or other comprehensive income in the manner laid down in IND AS 19. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis in Balance Sheet.
c) Other Long term Employee benefits:
Accumulated compensated absences/Leave encashment -The Employees'' Leave encashment liability is also covered under the qualifying Insurance policy of Life Insurance Corporation of India.
The obligation for long term compensated absences/Leave encashment is recognized in the same manner as in the case of defined benefit plans as mentioned in XI (b) (ii) above.
Long Term service awards which are expected to be availed beyond 12 months from the end of the balance Sheet date, are treated as other long term employee benefits. The present value of the said liability determined on each Balance Sheet date for recognizing the same in the books of accounts. Liability towards Service awards due with in 12 months from the date of Balance Sheet is classified under head Short term Provisions.
XII Income Tax
Tax expense comprises of current and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (tax loss) for a period.
Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences. Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of: (a) deductible temporary differences; (b) the carry forward of unused tax losses; and (c) the carry forward of unused tax credits. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. In accordance with IND AS 12 âIncome Taxes" the company reviews the carrying amount of a deferred tax asset at the end of each reporting period and reduces the carrying amount of a deferred tax asset to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilised. Any such reduction shall be reversed to the extent that it becomes probable that sufficient taxable profit will be available. As the company has a history of recent losses, the company does not recognises deferred tax asset arising from MAT credit as there is no convincing evidence that sufficient taxable profit under the normal provisions of the Income Tax Act, 1961 within the period specified in said Act will be available against which the unused tax losses or unused tax credits can be utilised by the company.
XIII Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) for the year after tax attributable to equity shareholders by the weighted average number of equity shares outstanding during the year adjusted for the effects of all dilutive potential equity shares.
Includes Computers & Data Processing units which are part of Plant and machinery and classified under P & M head and their useful life is also taken accordingly.
Depreciation also includes amount written off in respect of leasehold properties and assets (if any) over the respective lease period.
Calculation of depreciation on the additions during the year is done on pro-rata basis from the date of its receipt plus 10 days for installations.
Impairment:
As per IND AS 36, the carrying amount of assets including Property, plant and equipment & Investment property are reviewed at each Balance Sheet date to assess impairment, if any based on internal / external factors. An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value being higher of value in use and net selling price. An impairment loss is recognized as an expense in the Statement of Profit & 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 an improvement in recoverable amount.
IV Intangible Assets
Intangible assets (if any) purchased are measured at cost on the date of acquisition, as applicable, less accumulated amortisation and accumulated impairment, if any as per IND AS-38.
V Borrowing Costs:
As per IND AS 23 Borrowing Costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized. Other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
VI Cash and Cash Equivalents
Cash and Cash Equivalents comprises cash at bank, cash in hand and other short term highly liquid Investments/Fixed Deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value in accordance with IND AS 7
Mar 31, 2016
I. Basis of preparation
a) The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and as per the relevant provisions of the section 133 of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on an accrual basis and treating the entity as going concern. Accounting policies unless referred to otherwise are consistent with generally accepted accounting principles. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
b) The Company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis, However certain items of income and expenditure are recognized as and when they are incurred, ascertained or settled, i.e.
i) Additional demand for taxes arising on completion of assessments are accounted for as and when determined as payable.
ii) Refunds on account of excise duty, custom duty, income tax, VAT and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest for delay in execution of the contracts are provided for as and when settled.
iv) Ex-Gratia payments to employees are accounted for as and when incurred.
v) The claims for price escalation on sales are accounted for on settlement.
vi) Expenditure on warranty and guarantee of satisfactory performance of equipments is accounted for when incurred.
II. Use of estimates
The preparation of financial statements is in conformity with generally accepted accounting principles in India (Indian GAAP) and requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.
III. Fixed Assets
Fixed assets are stated at cost of acquisition, net of CENVAT credit, but inclusive of duties, taxes, freight, incidental expenses and erection / commissioning expenses.
IV. Depreciation :
a) The depreciation on fixed assets is provided on written down value (WDV) method at the rates determined after taking into account the prescribed useful life for respective class of assets as given below in order to comply with Schedule II of the Companies Act, 2013. The fixed assets amounting to Rs. 5000/- or less individually purchased during the year are depreciated at the rate of 100%. Residual value has been taken as 5% of original cost of asset or WDV as on 31.3.2014 whichever is lower except those valued at Rs. 5,000/or less individually.
* Includes Computers & Data Processing units which are part of Plant and machinery and classified under P & M head and their useful life is also taken accordingly.
b) Depreciation also includes amount written off in respect of leasehold properties and assets (if any) over the respective lease period.
c) Calculation of depreciation on the additions during the year is done on pro-rata basis from the date of its receipt plus 10 days for installations.
V. Intangible Assets
Technical know-how fees amortized in accordance with the provisions of the Accounting Standard-AS 26 (Intangible Assets) issued by the Institute of Chartered Accountants of India.
VI. Impairment
As mandated by Accounting Standard 28 "Impairment of Assets", the carrying values of assets are reviewed at each Balance Sheet date to determine if there is an indication of any impairment of an asset. If such an indication exists, the assetâs recoverable amount is estimated. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The impairment loss is reversed, if there has been any change in the estimates used to determine the recoverable amount.
VII. Borrowing Costs
Borrowing Costs directly attributable to the acquisition of qualifying assets are capitalized in accordance with Accounting Standard 16 issued by the Institute of Chartered Accountants of India Other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
VIII. Investments :
Long term investments are carried at cost less provision for permanent diminution in value of such investments.
IX. Cash and Cash Equivalents
Cash and Cash Equivalents in the cash flow comprises cash at bank, cash in hand and short term Investments/Fixed Deposits with an original maturity of three months or less.
X. Inventories :
a) Inventories are valued at the lower of cost or estimated net realizable value. Inventories are valued according to FIFO method of valuation.
b) Cost of Work in process includes cost of material plus direct labour.
c) Cost of Finished sub assemblies includes cost of material plus overheads apportioned on the basis of actual stage of completion as at year end.
d) Finished goods are valued at lower of cost or net realizable value.
e) Goods received after the cutoff date (for physical verification as at the yearend) and goods for which the documents are retired are treated as goods in transit.
f) Any Shortage/ excess in Raw Material detected at the time of physical verification is included in consumption of goods.
g) CENVAT on inputs is reduced from purchases. Inventories are valued at net of CENVAT credit.
h) Provision for obsolete inventories is reviewed periodically and provided for as per the assessment of management.
XI. Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and can be reliably measured.
Sale of Goods
Revenue from sale of goods is recognized net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognized gross of excise duty but net of sales tax/value added tax.
Services
Revenue from services are recognized as and when they are rendered based on agreements/arrangements with the respective parties and recognized net of Service Tax.
Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. For AMC contracts, the company follows completed service contract method as a method of accounting and recognizes service revenue in the statement of profit and loss when the rendering of service under a AMC contract is completed or substantially completed in accordance with the provisions of AS-9 âRevenue Recognition".
XII. Government Grants
Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to depreciable assets are treated as deferred income which is recognized in the statement of profit and loss on a systematic and rational basis over the useful life of the asset in accordance with Accounting Standard-12 issued by the Institute of Chartered Accountants of India.
XIII. Transactions in Foreign currency
Foreign currency transactions are recorded at the exchange rate prevailing at the time of transaction. At the balance sheet date, All monetary assets and liabilities denominated in foreign currency are converted at exchange rate prevailing at the year end. Resultant loss/gain is charged to Statement of Profit and Loss. When the transaction is settled within the same accounting period as that in which it occurred, all the exchange difference is recognized in that period.
In case of forward foreign exchange contracts where an underlying asset or liability exists, the difference between the forward rate and the exchange rate at the inception of the contract is recognized as income or expense over the life of the contract. Exchange rate difference on such a contract are recognized in the statement of profit and loss account as on Balance sheet. Any profit or loss arising on cancellation or renewal of forward contract is recognized as income or expense in the year in which such cancellation or renewal is made.
XIV. Employee Benefits
a) Short term employee benefits are recognized as an expense on accrual basis.
b) Post Employment Benefits
i) Defined Contribution Plans: The Company''s state governed Provident Fund scheme, Employee State Insurance scheme etc are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
ii) Defined Benefit Plans: The Employees'' Gratuity liability is covered under the qualifying Insurance policy of Life Insurance Corporation of India. The Company''s liability is determined on the basis of an actuarial valuation using the projected unit credit method as at Balance Sheet date. Expenses are recognized in the Statement of Profit and Loss in the manner laid down in AS-15. In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis in Balance Sheet. For the purpose of presentation of net obligation, the allocation between short term and long term provisions has been done on the basis of AS
15 Valuation certificates received from LIC.
c) Other Long term Employee benefits: Accumulated compensated absences/ Leave encashment -The Employees'' Leave encashment liability is also covered under the qualifying Insurance policy of Life Insurance Corporation of India. The obligation for long term compensated absences/ Leave encashment is recognized in the same manner as in the case of defined benefit plans as mentioned in XIV (b) (ii) above. Long Term service awards which are expected to be availed beyond 12 months from the end of the balance Sheet date, are treated as other long term employee benefits. The present value of the said liability determined as per prescribed method in AS-15 as on Balance Sheet date is recognized in the books of accounts. Liability towards Service awards due within 12 months from the date of Balance Sheet is classified under head Short term Provisions.
XV Income Tax
Tax expense comprises of current and deferred tax and includes any adjustments related to past periods in current and / or deferred tax adjustments that may become necessary due to certain developments or reviews during the relevant period. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961.
Deferred income taxes reflect the impact of current year''s timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.
XVI Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) for the year after tax (including the post tax effect of extraordinary items, if any) attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss) for the year after tax (including the post tax effect of extraordinary items, if any) attributable to equity shareholders by the weighted average number of equity shares outstanding during the year adjusted for the effects of all dilutive potential equity shares.
XVII Provision, Contingent Liabilities and Contingent Assets
a) A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
b) A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation or cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
c) Contingent Assets are neither recognized, nor disclosed.
Provision & Contingent Liabilities are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
XVIII Prior Period Items and Extraordinary Items
Prior Period Items are income or expenses which arise in the current period as a result of errors or omissions in the preparation of the financial statements of one or more prior periods & do not include change in accounting estimates. Extraordinary or Exceptional items are income or expenses that arise from events or transactions that are clearly distinct from the ordinary activities of the enterprise and therefore, are not expected to recur frequently or regularly.
XIX Classification of Current / Non Current Assets
All assets and liabilities are presented as Current or Non-current as per the Company''s normal operating cycle and other criteria set out in Schedule III to The Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has assumed its operating cycle as 12 months for the purpose of Current / Noncurrent classification of assets and liabilities.
Notes: 1. M/s Punjab Digital Industrial Systems Ltd (PDISL), the fully owned subsidiary, has been ordered to be wound up by the order of Honâble Punjab & Haryana High Court vide 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. A provision of Rs. 40.35 lacs towards expenses incurred by the company on their behalf, Rs. 4.55 lacs in Sundry Debtorâs and Rs.24.79 lacs being investment in PDISL has been kept in the accounts of holding company.
2. Complete investment in PCL Telecom Ltd (Subsidiary) and accumulated losses amounting to Rs. 40.65 lacs have been completely written off in the accounts of holding company. Further, the company has been ordered to be wound up by the Honâble Punjab and Haryana High Court vide its order dated 20th October 2005. Accordingly as per the direction of the Honâble Court all records has been handed over to the official liquidator attached to the court.
Mar 31, 2015
I. Basis of preparation
a) The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956, read with General
Circular 15/2013 dated 13thSeptember, 2013 issued by the Ministry of
Corporate Affairs in respect of Sec 133 of Companies Act, 2013. The
financial statements have been prepared under the historical cost
convention on an accrual basis and treating the entity as going
concern. Accounting policies unless referred to otherwise are
consistent with generally accepted accounting principles. The
accounting policies adopted in the preparation of financial statements
are consistent with those of previous year except for change in
accounting policy for depreciation (Refer Note IV below).
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis, However certain items of income and expenditure are recognised
as and when they are incurred, ascertained or settled, i.e.
i) Additional demand for taxes arising on completion of assessments are
accounted for as and when paid.
ii) Refunds on account of octroi, excise duty, custom duty, income tax
and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest
for delay in execution of the contracts are provided for as and when
settled.
iv) Ex-gratia payments to employees are accounted for as and when
incurred.
v) The claims for price escalation on sales are accounted for on
settlement.
vi) Expenditure on warranty and guarantee of satisfactory performance
of equipments is accounted for when incurred.
II. Use of estimates
The preparation of financial statements is in conformity with generally
accepted accounting principles in India (Indian GAAP) and requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent
liabilities at the date of the financial statements and the results of
operations during the reporting period. Although these estimates are
based upon management's best knowledge of current events and actions,
actual results could differ from these estimates.
III. Fixed Assets
Fixed assets are stated at cost of acquisition, net of CENVAT credit,
but inclusive of duties, taxes, freight, incidental expenses and
erection / commissioning expenses.
IV. Depreciation :
a) Effective from April 1, 2014, method of depreciation is changed from
Written Down Value to Straight-Line Method taking into account the
prescribed useful life for respective class of assets in order to
comply with the Schedule II of the Companies Act, 2013. Accordingly,
the carrying amount of the assets as on April 1, 2014 has been
depreciated over the remaining revised useful life of the fixed assets.
Where the remaining useful life of an asset is NIL, the carrying amount
of the assets has been charged to Statement of Profit and loss after
retaining their residual value. For the current year, Residual value
has been taken as 5% of original cost of asset or WDV as on 31.3.2014
whichever is lower. Had been there no change in this accounting policy
the depreciation for the year would have been higher by Rs. 9,36,030/-.
Asset Class Period (Years)
Buildings - Factory 30
Building (Other than Factory) 60
Temporary Structure 3
Plant and Equipment* 15
Electrical Installations and
Equipment 10
Furniture and Fixture 10
Vehicles 8
Office Equipment (Other than
Computers) 5
Computers 3
* Includes Computers & Data Processing units which are part of Plant
and machinery and classified under P & E head and their useful life is
also taken accordingly.
b) Depreciation also includes amount written off in respect of
leasehold properties and assets (if any) over the respective lease
period.
c) Calculation of depreciation on the additions during the year is done
on pro-rata basis from the date of its receipt plus 10 days for
installations.
V. Intangible Assets
Technical know-how fees amortized in accordance with the provisions of
the Accounting Standard-AS 26 (Intangible Assets) issued by the
Institute of Chartered Accountants of India.
VI. Impairment
As mandated by Accounting Standard 28 "Impairment of Assets", the
carrying values of assets are reviewed at each Balance Sheet date to
determine if there is an indication of any impairment of an asset. If
such an indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognized wherever the carrying amount of an
asset exceeds its recoverable amount. The impairment loss is reversed,
if there has been any change in the estimates used to determine the
recoverable amount.
VII. Borrowing Costs
Borrowing Costs directly attributable to the acquisition of qualifying
assets are capitalized in accordance with Accounting Standard 16 issued
by the Institute of Chartered Accountants of India Other borrowing
costs are charged to the Statement of Profit and Loss in the period in
which they are incurred.
VIII. Investments :
Long term investments are carried at cost less provision for permanent
diminution in value of such investments.
IX. Cash and Cash Equivalents
Cash and Cash Equivalents in the cash flow comprises cash at bank, cash
in hand and short term Investments/Fixed Deposits with an original
maturity of three months or less.
X. Inventories :
a) Inventories are valued at the lower of cost or estimated net
realisable value. Inventories are valued according to FIFO method of
valuation.
b) Cost of Work in process includes cost of material plus direct
labour.
c) Cost of Finished sub assemblies includes cost of material plus
overheads apportioned on the basis of actual stage of completion as at
year end.
d) Finished goods are valued at lower of cost or net realisable value.
e) Goods received after the cut off date (for physical verification as
at the year end) and goods for which the documents are retired are
treated as goods i n transit.
f) Any Shortage/excess in Raw Material detected at the time of physical
verification is included in consumption of goods.
g) CENVAT on inputs is reduced from purchases. Inventories are valued
at net of CENVAT credit.
h) Provision for obsolete inventories is reviewed periodically and
provided for as per the assessment of management.
XI. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and can be reliably
measured.
Sale of Goods
Revenue from sale of goods is recognised net of rebates and discounts
on transfer of significant risks and rewards of ownership to the buyer.
Sale of goods is recognised gross of excise duty but net of sales
tax/value added tax.
Services
Revenue from services are recognised as and when they are rendered
based on agreements/arrangements with the respective parties and
recognised net of Service Tax.
"Revenues from turnkey contracts, which are generally time bound fixed
price contracts, are recognised over the life of the contract using the
proportionate completion method, with contract costs determining the
degree of completion. For AMC contracts, the company follows completed
service contract method as a method of accounting and recognizes
service revenue in the statement of profit and loss when the rendering
of service under a AMC contract is completed or substantially completed
in accordance with the provisions of AS-9 "Revenue Recognition"
XII. Government Grants
Government Grants are recognised when there is a reasonable assurance
that the same will be received and all attaching conditions will be
complied with. Revenue grants are recognised in the Statement of Profit
and Loss. Capital grants relating to depreciable assets are treated as
deferred income which is recognised in the statement of profit and loss
on a systematic and rational basis over the useful life of the asset in
accordance with Accounting Standard-12 issued by the Institute of
Chartered Accountants of India.
XIII. Transactions in Foreign currency
"Current assets and liabilities in foreign currencies are recorded at
the exchange rate prevailing at the time of transaction and converted
at exchange rate prevailing at the year end. Resultant loss/gain is
charged to Statement of Profit and Loss. When the transaction is
settled within the same accounting period as that in which it occurred,
all the exchange difference is recognised in that period."
XIV. Employee Benefits
a) Short term employee benefits are recognised as an expense on accrual
basis.
b) Post Employment Benefits
i) Defined Contribution Plans: The Company's state governed Provident
Fund scheme, Employee State Insurance scheme etc are defined
contribution plans. The contribution paid/payable under the schemes is
recognised during the period in which the employee renders the related
service.
ii) Defined Benefit Plans: The Employees' Gratuity liability is covered
under the qualifying Insurance policy of Life Insurance Corporation of
India. The Company's liability is determined on the basis of an
actuarial valuation using the projected unit credit method as at
Balance Sheet date. Expenses are recognised in the Statement of Profit
and Loss in the manner laid down in AS-15. In case of funded plans, the
fair value of the plan assets is reduced from the gross obligation
under the defined benefit plans, to recognise the obligation on net
basis in Balance Sheet. For the purpose of presentation of net
obligation, the allocation between short term and long term provisions
has been done on the basis of AS 15 Valuation certificates received
from LIC.
c) Other Long term Employee benefits: Accumulated compensated
absences/Leave encashment -
The Employees' Leave encashment liability is also covered under the
qualifying Insurance policy of Life Insurance Corporation of India. The
obligation for long term compensated absences/Leave encashment is
recognised in the same manner as in the case of defined benefit plans
as mentioned in XIV (b) (ii) above. Long Term service awards which are
expected to be availed beyond 12 months from the end of the balance
Sheet date, are treated as other long term employee benefits. The
present value of the said liability determined as per prescribed method
in AS-15 as on Balance Sheet date is recognized in the books of
accounts. Liability towards Service awards due with in 12 months from
the date of Balance Sheet is classified under head Short term
Provisions.
XV Income Tax
Tax expense comprises of current and deferred tax and includes any
adjustments related to past periods in current and / or deferred tax
adjustments that may become necessary due to certain developments or
reviews during the relevant period. Current income tax is measured at
the amount expected to be paid to the tax authorities in accordance
with the Income-tax Act, 1961.
Deferred income taxes reflect the impact of current year's timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years. Deferred tax is
measured based on the tax rates and the tax laws enacted or
substantively enacted at the Balance Sheet date. Deferred tax assets
are recognised only to the extent that there is reasonable certainty
that sufficient future taxable income will be available against which
such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each Balance
Sheet date. The Company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain that
sufficient future taxable income will be available against which
deferred tax asset can be realised. Any such write-down is reversed to
the extent that it becomes reasonably certain that sufficient future
taxable income will be available.
XVI Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
for the year after tax (including the post tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit / (loss)
for the year after tax (including the post tax effect of extraordinary
items, if any) attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year adjusted
for the effects of all dilutive potential equity shares.
XVII Provision, Contingent Liabilities and Contingent Assets
a) A provision is recognised when the Company has a present obligation
as a result of past events and it is probable that an outflow of
resources will be required to settle the obligation in respect of which
a reliable estimate can be made.
b) A contingent liability is a possible obligation that arises from
past events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation or cannot be measured reliably. The
Company does not recognize a contingent liability but discloses its
existence in the financial statements.
c) Contingent Assets are neither recognised, nor disclosed.
Provision & Contingent Liabilities are reviewed at each Balance Sheet
date and adjusted to reflect the current best estimates.
XVIII Classification of Current / Non Current Assets
All assets and liabilities are presented as Current or Non-current as
per the Company's normal operating cycle and other criteria set out in
Schedule III to The Companies Act, 2013. Based on the nature of
products and the time between the acquisition of assets for processing
and their realisation, the Company has assumed its operating cycle as
12 months for the purpose of Current / Non current classification of
assets and liabilities.
Mar 31, 2014
I. Accounting conventions:
a) The accounts are prepared on historical cost basis treating the
entity as a going concern. Accounting policies unless referred to
otherwise are consistent with generally accepted accounting principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis, except:-
i) Additional demand for taxes arising on completion of assessments are
accounted for as and when paid.
ii) Refunds on account of octroi, excise duty, custom duty, income tax
and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest
for delay in execution of the contracts are provided for as and when
settled.
iv) Ex-gratia payments to employees are accounted for as and when
incurred.
v) The claims for price escalation on sales are accounted for on
settlement.
vi) Expenditure on warranty and guarantee of satisfactory performance
of equipments is accounted for when incurred.
II. Fixed Assets and Depreciation:
i. Fixed Assets:
Fixed assets are stated at cost of acquisition net of CENVAT credit,
but inclusive of duties, taxes, freight, incidental expenses and
erection / commissioning expenses.
ii. Depreciation :
a) Depreciation on fixed assets is provided for on Written Down Value
(WDV) method at the rates specified in Schedule XIV to the Companies
Act, 1956. Changes in historical cost of fixed assets on account of
fluctuations in exchange rate of liabilities for acquisition of fixed
assets are accounted for by the amounts being amortized over the
residual useful life of respective assets.
b) Depreciation also includes amount written off in respect of
leasehold properties and assets over the respective lease period.
c) Calculation of depreciation on the additions during the year is done
on pro-rata basis from the date of its receipt plus 10 days for
installations.
iii. Impairment:
As mandated by Accounting Standard 28 "Impairment of Assets", the
carrying values of assets are reviewed at each reporting date to
determine if there is an indication of any impairment of an asset. If
such an indication exists, the asset's recoverable amount is estimated.
An impairment loss is recognized wherever the carrying amount of an
asset exceeds its recoverable amount. The impairment loss is reversed,
if there has been any change in the estimates used to determine the
recoverable amount.
III. Technical know-how fee:
Technical know-how fees are amortized in accordance with the provisions
of the Accounting Standard-AS 26 (Intangible Assets) issued by the
Institute of Chartered Accountants of India.
IV. Inventories:
a) Inventories are valued at the lower of cost or estimated net
realisable value. Inventories are valued according to FIFO method of
valuation.
b) Cost of Work in process includes cost of material plus direct
labour.
c) Cost of Finished sub assemblies includes cost of material plus
overheads apportioned on the basis of actual stage of completion as at
year end.
d) Finished goods are valued at lower of cost or net realisable value.
e) Goods received after the cut off date (for physical verification as
at the year end) and goods for which the documents are retired are
treated as goods in transit.
f) Any Shortage/ excess in Raw Material detected at the time of
physical verification is included in consumption of goods.
g) CENVAT on inputs is reduced from purchases. Inventories are valued
at net of CENVAT credit.
h) Provision for obsolete inventories is reviewed periodically and
provided for as per the assessment of management.
V. Sales:
Sales are accounted for at the time of dispatch and are inclusive of
excise duty but exclusive of sales tax.
VI. AMC Service Revenue:
The company follows completed service contract method as a method of
accounting and recognizes service revenue in the statement of profit
and loss when the rendering of service under a AMC contract is
completed or substantially completed in accordance with the provisions
of AS-9 "Revenue Recognition"
VII. Investments:
Long term investments are carried at cost less provision for permanent
diminution in value of such investments.
VIII. Transactions in Foreign currency
Current assets and liabilities in foreign currencies are recorded at
the exchange rate prevailing at the time of transaction and converted
at exchange rate prevailing at the year end. Resultant loss/gain is
charged to P&L account.
IX. Retirement benefits
Gratuity, Superannuation and Leave encashment benefits payable to
employees are covered under the Policies of Life Insurance Corporation
of India.
X. Borrowing Costs
Borrowing Costs directly attributable to the acquisition of qualifying
assets are capitalized in accordance with Accounting Standard 16 issued
by the Institute of Chartered Accountants of India.
Mar 31, 2013
I. Accounting conventions:
a) The accounts are prepared on historical cost basis treating the
entity as a going concern. Accounting policies unless referred to
otherwise are consistent with generally accepted accounting principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis, except :-
i) Additional demand for taxes arising on completion of assessments are
accounted for as and when paid.
ii) Refunds on account of octopi, excise duty, custom duty, income tax
and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest
for delay in execution of the contracts are provided for as and when
settled.
iv) Ex-gratia payments to employees are accounted for as and when
incurred.
v) The claims for price escalation on sales are accounted for on
settlement.
vi) Expenditure on warranty and guarantee of satisfactory performance
of equipments is accounted for when incurred.
II. Fixed Assets and Depreciation :
i. Fixed Assets :
Fixed assets are stated at cost of acquisition net of CENVAT credit,
but inclusive of duties, taxes, freight, incidental expenses and
erection / commissioning expenses.
ii. Depreciation :
a) Depreciation on fixed assets is provided for on Written Down Value
(WDV) method at the rates specified in Schedule XIV to the Companies
Act, 1956. Changes in historical cost of fixed assets on account of
fluctuations in exchange rate of liabilities for acquisition of fixed
assets are accounted for by the amounts being amortized over the
residual useful life of respective assets.
b) Depreciation also includes amount written off in respect of
leasehold properties and assets over the respective lease period.
c) Calculation of depreciation on the additions during the year is done
on pro-rata basis from the date of its receipt plus 10 days for
installations.
iii. Impairment :
As mandated by Accounting Standard 28 "Impairment of Assets", the
carrying values of assets are reviewed at each reporting date to
determine if there is an indication of any impairment of an asset. If
such an indication exists, the asset''s recoverable amount is estimated.
An impairment loss is recognized wherever the carrying amount of an
asset exceeds its recoverable amount. The impairment loss is reversed,
if there has been any change in the estimates used to determine the
recoverable amount.
III. Technical know-how fee :
Technical know-how fees are amortized in accordance with the provisions
of the Accounting Standard-AS 26 (Intangible Assets) issued by the
Institute of Chartered Accountants of India.
IV. Inventories :
a) Inventories are valued at the lower of cost or estimated net
realizable value. Inventories are valued according to FIFO method of
valuation.
b) Cost of Work in process includes cost of material plus direct
labour.
c) Cost of Finished sub assemblies includes cost of material plus
overheads apportioned on the basis of actual stage of completion as at
year end.
d) Finished goods are valued at lower of cost or net realizable value.
e) Goods received after the cutoff date (for physical verification as
at the yearend) and goods for which the documents are retired are
treated as goods in transit.
f) Any Shortage/ excess in Raw Material detected at the time of
physical verification is included in consumption of goods.
g) CENVAT on inputs is reduced from purchases. Inventories are valued
at net of CENVAT credit.
h) Provision for obsolete inventories is reviewed periodically and
provided for as per the assessment of management.
V. Sales :
Sales are accounted for at the time of dispatch and are inclusive of
excise duty but exclusive of sales tax.
VI. Investments :
Long term investments are carried at cost less provision for permanent
diminution in value of such investments.
VII. Transactions in Foreign currency
Current assets and liabilities in foreign currencies are recorded at
the exchange rate prevailing at the time of transaction and converted
at exchange rate prevailing at the year end. Resultant loss/gain is
charged to P&L account.
VIII. Retirement benefits
Gratuity, Superannuation and Leave encashment benefits payable to
employees are covered under the Policies of Life Insurance Corporation
of India.
IX. Borrowing Costs
Borrowing Costs directly attributable to the acquisition of qualifying
assets are capitalized in accordance with Accounting Standard 16 issued
by the Institute of Chartered Accountants of India.
Mar 31, 2010
I. Accounting conventions:
a) The accounts are prepared on historical cost basis treating the
entity as a going concern. Accounting policies unless referred to
otherwise are consistent with generally accepted accounting principles.
b) The Company generally follows mercantile system of accounting and
recognises significant items of income and expenditure on accrual
basis, except.-
i) Additional demand for taxes arising on completion of assessments are
accounted for as and when raised.
ii) Refunds on account of octroi, excise duty, custom duty, income tax
and insurance claims are accounted for on settlement.
iii) Customer claims, recoveries, liquidated damages and penal interest
for delay in execution of the contracts are provided for as and when
settled.
iv) Ex-gratia payments to employees are accounted for as and when
incurred.
v) The claims for price escalation on sales are accounted for on
settlement.
vi) Expenditure on warranty and guarantee of satisfactory performance
of equipments is accounted for when incurred.
II. Fixed Assets and Depreciation:
i. Fixed Assets:
Fixed assets are stated at cost of acquisition net of CENVAT credit,
but inclusive of duties, taxes, freight, incidental expenses and
erection / commissioning expenses.
ii. Depreciation:
a) Depreciation on fixed assets is provided for on Written Down
Value(WDV) method at the rates specified in Schedule XIV to the
Companies Act, 1956. Changes in historical cost of fixed assets on
account of fluctuations in exchange rate of liabilities for acquisition
of fixed assets are accounted for by the amounts being amortised over
the residual useful life of respective assets.
b) Depreciation also includes amount written off in respect of
leasehold properties and assets over the respective lease period.
c) Calculation of depreciation on the additions during the year is done
on pro-rata basis from the date of its receipt plus 10 days for
installations.
iii. Impairment:
As mandated by Accounting Standard 28 "Impairment of Assets", the
carrying values of assets are reviewed at each reporting date to
determine if there is an indication of any impairment of an asset. If
such an indication exists, the assets recoverable amount is estimated.
An impairment loss is recognised wherever the carrying amount of an
asset exceeds its recoverable amount. The impairment loss is reversed,
if there has been any change in the estimates used to determine the
recoverable amount.
III. Technical know-howfee:
Technical know-how fees are amortized in accordance with the provisions
of the Accounting Standard- AS 26 (Intangible Assets) issued by the
Institute of Chartered Accountants of India.
IV. Inventories:
a) Inventories are valued at the lower of cost or estimated net
realisable value. Inventories are valued according to FIFO method of
valuation.
b) Cost of Work in process includes cost of material plus direct
labour.
c) Cost of Finished sub assemblies includes cost of material plus over
heads apportioned on the basis of actual stage of completion as at year
end.
d) Finished goods are valued at lower of cost or net realisable value.
e) Goods received after the cut off date (for physical verification as
at the year end) and goods for which the documents are retired are
treated as goods in transit.
f) Any Shortage/excess in Raw Material detected at the time of physical
verification is included in consumption of goods.
g) CENVATon inputs is reduced from purchases; inventories are valued at
net of CENVAT credit.
V. Sales:
Sales are accounted for at the time of despatch and are inclusive of
excise duty but exclusive of sales tax.
VI. Investments:
Long term investments are carried at cost less provision for permanent
diminution in value of such investments. Current investments are
carried at lower of cost and fair value.
VII. Transactions in Foreign currency
Current assets and liabilities in foreign currencies are recorded at
the exchange rate prevailing at the time of transaction and converted
at exchange rate prevailing at the year end. Resultant loss/gain is
charged to P&L account.
VIII. Retirement benefits
Gratuity, Superannuation and Leave encashment benefits payable to
employees are covered underthe Policies of Life Insurance Corporation
of India.
IX. Borrowing Costs
Borrowing Costs are treated in accordance with Accounting Standard 16
issued by the Institute of Chartered Accountants of India.
(figures in brackets denote previous year figures)
A. (Rs. In Lacs)
1. Contingent liabilities not provided for in the accounts .-
a) Bank guarantees and Letter of credits * 3070.79 (3230.41)
b) Claims against company, not acknowledged as debts,
-by Sales Tax authorities" 05.04 (5.04)
-by Excise & Custom authorities 31.90 (32.82)
- by other parties 38.82 (39.36)
c) Court cases 83.07 (240.63)
d) PSEB Demand"* 27.96 (27.96)
e) Interest on Employees Security deposits payable 0.93 (0.89) after
completion of 5 years of service
*Includes expired guarantees for Rs. 21.86 Lacs (171.02) 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 appeal which has been admitted by the
competant authority.
*** Company received a Demand Notice from PSEB Mohali which is being
contested through the Lessee as per Lease Agreement.
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