Notes to Accounts of Punjab Communications Ltd.

Mar 31, 2025

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.

XVI Financial Instruments

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.

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 Hon''ble 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 Debtor''s and Rs.24.79 lacs being investment
in PDISL has been kept in the accounts of holding company.

2 PCL Telecom Ltd, another subsidiary company, which was ordered to be wound up by the Hon''ble Punjab
and Haryana High Court vide its order dated 20th October 2005, has been dissolved and accordingly written
off in books of accounts.

For and on behalf of the Board of Directors

For Ashwani & Associates.

CHARTERED ACCOUNTANTS Parminder Pal Singh Sandhu, IAS Manjeet Singh Dhillon,ITS (Retd.)

FRN: 000497N Managing Director DIRECTOR

DIN:10298745 DIN: 10903571

CA Arvind Jain

(PARTNER)

M.No: 097549 CA Ramesh Goel Pratima Yadav

CHIEF FINANCIAL OFFICER COMPANY SECRETARY

UDIN: 25097549BMGQJB6264

PLACE: S.A.S. Nagar (Mohali)

DATED: 03.06.2025

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Mar 31, 2024

i ¹ The Company had invested a sum of Rs. 698.74 Lacs (Face Value Rs. 700 Lacs) net of commission amounting to Rs.1.26 lacs in the Bonds of UP Co-operative Spinning Mills Federation Ltd. (UPCSMFL) for a tenure of 18 months, which was duly guaranteed by the UP State Government. The Company approached UPCSMFL for redemption of bonds on due date i.e 20th December, 1999. Upon failure of UPCSMFL to redeem the bonds on due date, the Company invoked the aforesaid Government Guarantee through suit filed on 28th November, 2001 at Lower Court, Chandigarh against UPCSMFL & UP State Govt. for recovery of the aforesaid amount and the Hon''ble Lower Court passed decree in favour of the Company vide its order dated 30th January, 2004.

ii UP State through Special Secretary filed an application under Order 9 Rule 13 for setting aside the above said Decree being ex parte on 2nd September 2004 and also applied for stay of execution at the Lower Court Chandigarh. Stay application of UP State was dismissed on 13th September 2004 and the application under 9/13 was kept pending.

iii UP State Govt, filed the Revision Petition, against the order of dismissal of stay by the lower court, at Hon''ble Punjab & Haryana High Court, Chandigarh. In order to admit their Revision Petition, the Court ordered UP State Govt. to deposit a sum of Rs.735.63 lacs (50% of the Decretal amount). The aforesaid sum of Rs.735.63 lacs was released to the Company against furnishing of Bank Guarantee of equivalent amount on 22nd April, 2006.

iv On 12th March 2010 the application filed by UP State under Order 9 Rule 13 was dismissed by the Lower Court Chandigarh. UP State filed an Appeal in the Court of Add. Dist. Judge Chandigarh and got the stay on 21st July, 2010. The application of UP State for Stay got dismissed on 10th November, 2012. UP State filed Civil Revision against the order of Distt. Judge Chandigarh at Punjab and Haryana High Court Chandigarh. The Civil Revision filed by UP State was dismissed by the Hon''ble Punjab and Haryana High Court on 20th September, 2013.

v UP State Govt. filed appeal against the aforesaid order of the Hon''ble Punjab & Haryana High Court with the Hon''ble Supreme Court through SLP. The Hon''ble Supreme Court vide it''s order dated 19th January,2015 directed the company to refund the aforesaid sum of Rs 735.63 Lacs to the UP State Government. In compliance with the aforesaid orders of the Hon''ble Supreme Court, the company refunded Rs. 735.63 Lacs by allowing the Hon''ble Court to invoke the Bank Guarantee of the equivalent amount submitted to the court earlier.

vi In view of the aforesaid order passed by Hon''ble Supreme Court maintaining that the UP State was not a party defended before the trial court, the company was constrained to file a fresh civil suit against the State of U.P at District Court Chandigarh as on 11th March 2016 for recovery of Rs 68,40,31,048/- in order to preserve its right of huge claim. Later on, after aforesaid invocation of the Bank guarantee of Rs 7,35,63,325/- the company filed a revised claim on 30th October 2018 to the tune of Rs.75,75,94,373/- (Rs 68,40,31,046/- plus Rs 7,35,63,325/-) which is pending. UPCSMFL, is presently under liquidation and the company has filed it''s claim with the Official Liquidator on 23rd May, 2016 at Kanpur and later, on account of invocation of Bank Guarantee, a revised claim was filed on 26th September 2018 to the tune of Rs. 1,10,75,01,023/- with interest as on 28th August, 2018 in order to maintain its valuable rights in future. The revised claim was sent through the authorised representative of the company and was duly acknowledged by the officials of UPCSMFL. It was also sent through the Registered Post which has not been received back thus duly served.

vii In the light of the aforesaid orders of Hon''ble Supreme Court, the decree is not maintainable against the State of U.P, therefore, the Company filed a fresh execution application against the principal debtor i.e UPCSMFL at the Hon''ble Lucknow Court on 30th January, 2016 (as the Decree was issued against both the parties viz., UPCSMFL and the State of UP).

viii Meanwhile, the Board of Directors of the company discussed that pursuant of Supreme Court Order, the litigation in this case is a prolonged one and it was decided that besides the ongoing litigation which the company may carry on, efforts need to be made to settle this case out of the Court at Government Level. Accordingly DO Letters were sent to Chief Secretary State of Uttar Pradesh and to the Secretary, Inter State Council. After a few correspondence through DO Letters at Chief Secretary Level and at Inter State Council Level, the company received communication from UPCSMFL and after necessary formalities, a meeting was conducted between Chairman and MD PUNCOM with the Additional Chief Secretary, State of Uttar Pradesh and the MD UPCSMFL through Video Conferencing as a result of which the State of Uttar Pradesh offered a One Time Settlement Scheme (OTS), whereby they offered an interest @ 4.50% along with the Principle of Rs. 7 Crore. The said proposal of OTS offered by the State of Uttar Pradesh was placed in the Board Meeting of the company held on 12th November 2021, whereby it was suggested that an effort may be made to improve the offer by requesting UPCSMFL to give rate equivalent to borrowings of the company which is in the range of 6% to 7%. Accordingly a Counter Offer was sent to State of Uttar Pradesh as well as to the MD, UPCSMFL which was rejected later. Thereafter, the proposal was sent to Department of Finance, DPED, Govt of Punjab for its concurrence for accepting the OTS offer. Later, the Core Group of Officers on Disinvestment (CGOD) in its meeting called by DPED, decided to place the matter before the Council of Ministers, Government of Punjab, for its final approval.

ix Further to above, U.P. CO-OPERATIVE SPINNING MILLS FEDERATION LTD., vide its letter No. 1143 SMF 2023-24 dated 20th October 2023, offered One Time Settlement(OTS) and sent the calculations to the company for amount payable by them till 31.03.2023, amounting Rs. 22,48,08,356/- ( Rs. 7,00,00,000/- towards Principal amount and Rs. 15,48,08,356/- towards simple interest @ 9.5% per annum for the period 21.12.1999 to 31.03.2023). The offer was approved by the Competant Authority of the Company and required documents were submitted by the company to U.P. CO-OPERATIVE SPINNING MILLS FEDERATION LTD on dated 18th March 2024. Rs. 20 93,27,456/- (after deduction of TDS on interest amounting Rs. 1,54,80,900/- from the Gross settlement of Rs. 22,48,08,356/-) was received by the Company on dated 28th March 2024 in its Current Account maintained with State Bank of India. Accordingly, Investments have been stated at NIL during the financial year 2023-24 and interest amount of Rs. 15,48,08,356/- have been accounted for under Exceptional items - Income during the year. No interest has been provided for the period from 01.04.2023 to 28.03.2024 , amounting to Rs. 65,77,322.

x Till the financial year 2022-23, The company has reflected the value of investment in bonds at cost. Further, the principal amount of bond is fully guaranteed by the UP State Government, but due to the protracted litigation the time of recovery is indeterminable. [Also Refer note 5 and 41(a)]

** Refer Note 36

* Security deposits are shown as Non current Financial Assets for the year ended 31st March, 2024 in line with Schedule III of Companies Act, 2013.

** Refer Note-3 The company, till the financial year 2022-23 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 FY 2015-16.

The Company, till the financial year 2022-23 has not recognized accrued interest, keeping in view uncertainty involved in the matter of realization of interest due to litigation. The same is in conformity with applicable IND AS, which allows

recognition of revenue only when it is probable that the economic benefits associated with the transaction will flow to the entity. ¹

* The Board of Directors of the company has decided to sell one of its buildings to cover the deficient Working Capital Limit and M/s Punjab Pollution Control Board (PPCB) expressed its interest in buying the C-134 building of our company. Then, the

Board in its 206th meeting has decided to send the Offer Letter to PPCB at a round off price of Rs 19.50 Crore. Accordingly, an offer letter dated 25th June, 2021 was sent to PPCB. In furtherance to this, the first installment of 20% i.e. Rs. 3.90 Crore was released by PPCB which was realized by our company on 2nd March, 2022. During the FY 2022-23, the Board approved the final sale agreement with PPCB. Thereafter, the proposal was shared with Department of Finance, DPED, Govt of Punjab. Later, the Core Group of Officers on Disinvestment (CGOD) in its meeting called by DPED, decided to place the matter before the Council of Ministers, Government of Punjab, for its final approval.

During the finacial year 2023-24, according to discussions and agreement between PPCB and the Competant Authority of

the Company, it was decided to return the advance received from PPCB plus interest earned by the Company and same was paid to PPCB on dated 15.12.2023 . Nothng is due to PPCB now. Refer Note 2A, 24A & 42.

*The shareholding of promoter comprises of 8551501 number of shares (demated) of PICTCL, 9700 number of shares (physical) of PSEDPCL (erstwhile name of PICTCL) and 9475 number of shares (demated) of PSIDC (another corporation of

Government of Punjab). 9700 shares have been sold by PSEDPCL in year 2000 but have not been presented or registered for transfer by the buyer in their name till now.

^Includes Rs.477.96 Lacs (Rs.477.96 Lacs) due to VMC Systems Ltd (earlier Vuppalamritha Magnetic Components Pvt Ltd) against which Rs.322.12 Lacs (Rs.322.12 Lacs) lies in the Escrow Account (Refer Note 13).

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. Also refer note 41 (d).

Note : 35 Contingent liabilities not provided for in the accounts :- a) Claims against company, not acknowledged as debts, - by Sales Tax Authorities
- by Excise & Custom Authorities	-
b) Court cases *	3,736.11	3,644.34
c) PSPCL Demand **	27.96	27.96
d) Bank Guarantees (Refer Note 38)	1,433.66	1,518.91
Total	5,197.73	5,191.21

* Includes C-Dot Case. Refer Note-37. Further, financial impact of certain cases cannot be determined as it entirely depends

on the discretion of the adjudging authorities.

** Company received a Demand Notice from PSPCL Mohali which is being contested through a Lessee as per Lease

Agreement.

Note : 36 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 had 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 (Rs. 4.55 Lacs) against balance appearing in Sundry Debtors had also been made. Also Refer Note-3

Note : 37 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 Hon''ble High Court-Delhi. The application for setting aside the award has already been admitted by Delhi High Court and accordingly Interest & Arbitration cost liability of Rs. 260.85 Lacs (Rs.235.45 Lacs) on account of non payment of award amount has been shown as contingent liability, pending appeal in the Hon''ble High Court, Delhi. Refer Note -35.

C-DOT had also filed another claim of Rs. 24.88 Lacs against the Company under the agreement for transfer of AN-RAX technology which was dismissed by sole arbitrator appointed by Hon''ble Delhi High Court thru its award dated 7.12.2018 as not maintainable.

Note : 38 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. This is in accordance with the requirements of IND AS 37 “Provisions, Contingent Liabilities and Contingent Assets".

** Includes Gratuity, Leave encashment & LTA and Ex-gratia paid on VRS

During the Financial year 2023-24, Salary to CS includes Rs. 39.61 lacs paid to Mr. Madhur Bain Singh as he opted for VRS on 02.04.2023

Note : 40 Financial Risk Management

The Company''s business activities are exposed to a variety of financial risks, namely liquidity risk, market risks and credit risk. The Company has constituted a Risk Management Committee, which is responsible for developing and monitoring the Company''s risk management policies. The Company''s risk management policies are established to identify and analyse the risks faced by the Company, to set and monitor appropriate risk limits and controls, periodically review the changes in market conditions and reflect the changes in the policy accordingly. The key risks and mitigating actions are also placed before the Risk Management Committee of the Company.

(a) Liquidity risk:Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. The Company''s principal sources of liquidity are cash flows generated from operations and other income generated from rented properties and interest on fixed deposits.

The company is subject to liquidity risk to pay trade payables, short term borrowings and other financial

liabilities & statutory remittances total amounting to Rs. 5266.92 lacs (Rs. 5186.95 lacs). Further, provision for doubtful debts as on 31.03.2024 stands at Rs. 130.59 lacs (Rs.130.59 lacs).

(b) Market Risk: Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices.

(c) Interest rate risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has invested in fixed deposits which will fetch a fixed rate of interest, hence, the income and operating cash flows are substantially independent of changes in market interest rates.

(d) Foreign currency risk: Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company has very limited foreign currency exposure which are mainly due to nominal imports of raw materials and equipment.

(e) Price Risk: The Company has not invested in any financial instruments which are subject to price risk.

(f) Credit risk Credit risk is the risk of financial loss to the Company if a customer or counter-party fails to meet its contractual obligations, The Company is exposed to credit risk from its operating activities (primarily for trade receivables) and from its investing activities, including deposits with banks.

Trade receivables: Trade receivables are non-interest bearing and outstanding customer receivables and these are regularly monitored. Major portion of customer base of the company is Government Organizations, thereby reducing the risk of not meeting contractual obligations by the customer.

Other financial assets: Credit risk from balances with banks is managed by Company''s in accordance with the board approved policy. Investment of surplus funds are made only with approved financial institutions who meet the minimum threshold requirements under the counter party risk assessment process in which certain criterias are evaluated at the time of making investments.

The following methods / assumptions were used to estimate the fair values:

(a) The Company has reflected the value of the investment in Bonds at Cost as the same has been decreed in favour of the company and fully guaranteed by the UP State Government but due to protracted litigation the time of recovery is indeterminable.

(b) Loans and advances include loans to employees on which the Company charges interest at the rate 10 percent p.a, therefore their carrying values are not expected to be significantly different from their fair values. Further, Security deposits (interest-free) lying with government departments agencies and other parties have been shown at its carrying value due to non determination of any fixed period with regard to receipts against such security deposits.

(c) The fair values of other financial assets are assessed by the management to be same as their carrying value and is not expected to be significantly different if estimated by using Present value techniques.

(d) The carrying value of these financial assets and financial liabilities approximate their fair value mainly due to the short-term maturities (I.e within 1 year) of these instruments.

(e) The Company has used Level-3 inputs from Fair value hierarchy (key input: interest rate applicable to loans and advances to employees i.e 10 percent p.a) for measurement of Loans & advances to employees (Festival advance) at Fair value through Profit & loss using Present value technique (effective interest rate method)

(f) The Company has used Level-3 of fair value hierarchy and used Present Value Technique to measure the fair value of security deposits wherein part of deposits recognized in the future cash flows are classified under deferred income which has been further divided into Current & Non-Current. The discount rate used by the company is 9 percent per annum.

The investment properties consist of industrial properties which are used to generate rental income. These are accounted for at Written down value in books of accounts. During the FY 20-21, an owner occupied PPE (Land & building) had been transferred/classified into Investment property. Total fair Value of the properties was Rs. 8052.55 lacs as at 31st March, 2022. These market valuations were performed by an accredited independent registered valuer during FY 21-22. The fair value is categorized in Level 1 fair value hierarchy. Also refer Note-1 (III) & Note 2A & Note 14A. However, the Fair Value of building C-134 (Non current Asset held for sale) was Rs 1893 lacs as at 31st March, 2022.

Reason for variances

* This is on account of Receipt of Rs. 20.93 Crores net OTS amount from UP Coperative Spinning mills Federation Limited ** No debt on the Company.

*** Due to interest of Rs. 15.48 crore received under OTS from UP Coperative Spinning mills Federation Limited **** Reduction in Inventory due to old Inventory used during the year.

$ Refer Note no 3 & Note no 4

# Better payment realisation from customers during the year Note : 44 Capital Management

Equity includes all capital and reserves of the Company that are managed as capital. The primary objective of the Company''s Capital Management is to maximize the shareholder value by maintaining an efficient capital structure and safeguard Company''s ability to continue as a going concern. The Company maintains the optimal capital structure so as to reduce the cost of capital.

The capital structure of the Company is based on management''s judgment of its strategic and day-to-day needs with a focus on total equity so as to maintain investors'', creditors'' and market''s confidence. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

Note : 45 The previous Year figures have been regrouped/re-classified & re-arranged wherever necessary to conform with the current presentation as per Schedule III of the Companies Act, 2013 (and amendments thereon) and applicable IND AS. The amounts shown under Balance Sheet, Statement of Profit & Loss, Cash Flow Statement, Statement of Changes in Equity and accompanying notes, etc. have been rounded off to rupees in lakhs (unless otherwise stated). Due to rounding off, the numbers presented throughout the document may not add up precisely to the totals and percentages may not precisely reflect the absolute figures.

Note : 46 The company has been selected for disinvestment by Cabinet Committee on Disinvestment, Government of Punjab. During the FY 2019-20, the Directorate of Public Enterprises and Disinvestment, Government of Punjab had appointed M/s Resurgent India Limited, Gurgaon (Haryana) as Transaction Advisor for Puncom Disinvestment. During FY 20-21, the Government of Punjab has closed the submission of “Expression of Interest" (EOI) by eligible bidders on 1st February, 2021 vide Corrigendum-5. Further, as part of the disinvestment, the company was under the process of due diligence activity. For this purpose, DPED has approved the site visit from the period 21/06/2021 onwards till 12/07/2021 i.e. within a three week period to carry out the due diligence. Accordingly, the due diligence was conducted during this given period. Subsequent to site visit, certain queries were raised to Puncom, which has been addressed. Thereafter, certain queries have been raised with the Director, Industries and Commerce, which as per our knowledge, is being replied. However, during FY 2022-23, the services of Transaction Advisor, M/s Resurgent India Limited have been dispensed with by the Directorate of Public Enterprises and Disinvestment, Government of Punjab and other modalities regarding the same be worked our as per the agreement and its clauses.

Note : 47 Disclosure on Additional Regulatory Information- In view of disclosure requirements of Schedule III of the

Companies Act, 2013, the company hereby declares that:

a) During the year, the company has been sanctioned working capital limits including non fund based limits from banks against 100% margin in excess of five crores on the basis of security of FDRs and is not declared as a wilful defaulter by any bank or financial Institution or any other lender. As the limits are against 100% margin, bank have not initiated on filing of charges & thus no charges or satisfaction thereof is required to be registered with ROC by the company. During the year, the company has availed the bank guarantee and overdrafts limits/ LC against the pledged FDRs to the tune of Rs. 1433.66 lacs (Rs. 1518.91 Lacs).

b) The title deeds of all the immovable properties of the company are held in the name of the company only and no proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder.

c) During the year, the company has not revalued its Property, Plant and Equipment and Intangible asset under rule 2 of the Companies (Registered Valuers and Valuation) Rules, 2017.

d) No amount of Loan or Advances in the nature of loans is granted to any promoter, director, KMPs and the related parties (as defined under Companies Act, 2013,) either severally or jointly with any other person.

e) The Company has not traded or invested in Crypto currency or Virtual Currency during the year.

f) During the tax assessments under the Income Tax Act, 1961, no transaction has been surrendered or disclosed as income for not being recorded in the books of accounts.

g) The Company does not meet the criteria for the applicability of provisions of Corporate Social Responsibility (CSR) as per section 135 of the Companies Act, 2013, being a loss making company.

h) As per books of accounts, the Company has following transactions with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956;

i) The restrictions related to number of layers as prescribed under Companies (Restriction on number of Layers) Rules, 2017 do not apply to our company, being a government company.

j) The Company has not directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries, during the year.

1

In accordance with IND AS 12 “Income 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 utilized. Any such reduction will be reversed to the extent that it becomes probable that sufficient taxable profit will be available. Also refer Point XII of Note-1.

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Mar 31, 2023

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.

XVI Financial Instruments

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.

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 Hon''ble 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 Debtor''s and Rs.24.79 lacs being investment in PDISL has been kept in the accounts of holding company.

2 PCL Telecom Ltd, another subsidiary company, which was ordered to be wound up by the Hon''ble Punjab and Haryana High Court vide its order dated 20th October 2005, has been dissolved and accordingly written off in books of accounts.

For and on behalf of the Board of Directors

MOHINDER PAL, IAS V.P. CHANDAN

SR. VC & MD DIRECTOR

DIN:02975536 DIN:00225793

CA RAMESH GOEL PRATIMA YADAV

CHIEF FINANCIAL OFFICER COMPANY SECRETARY

PLACE : S.A.S. NAGAR (Mohali)

DATE : 30^th May, 2023

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Mar 31, 2016

* 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.

---

Mar 31, 2015

- As per the provisions of Para 17 of AS 22-Accounting for Taxes on Income, Where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax asset should be recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised.

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.

- The company had invested Rs 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. The U.P State Government (Guarantor) has deposited Rs.735.63 lacs and a Govt. guarantee of equivalent amount in the Civil Court, Lucknow in compliance of the orders of the Hon'ble Punjab and Haryana High Court, Chandigarh. 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. The Bombay High Court has 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 finalization.

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. The company had further recognized interest income of Rs. 152.52 lacs upto 31st March 2001 of which Rs. 115.63 Lacs is yet to be recovered. On 19.01.2015, the Hon'ble Supreme Court had decided against the ex-parte decree earlier made in favor of the company. Accordingly, in view of the protracted litigation and uncertainty of the amount realizable, pending settlement of the case, accrued interest standing at the beginning of the year amounting to Rs. 115.63 Lacs has been provisioned by the Company to comply with the applicable Accounting Standards.

The Company has not recognized accrued interest amounting to Rs.968.43 lacs up to 12.07.2005 viz. the date of deposit of Rs.735.63 lacs by the U.P. Govt., and for the period subsequent thereto, 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). "

The company had sent balance confirmation letters to all parties requesting them to confirm the balance within 15 days, 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.

(Figures in brackets denote previous year figures)

(Rs. In Lacs) NOTE : 2 Contingent liabilities not provided for in the accounts :-

a) Bank guarantees and Letter of credits * 2471.29 (2477.34)

b) Claims against company, not acknowledged as debts, - by Sales Tax authorities** 31.62 (14.85)

- by Excise & Custom authorities 30.20 (30.20)

- by other parties — (2.01)

c) Court cases 2009.85 (1979.29)

d) PSPCL Demand *** 27.96 (27.96)

*Includes Bank guarantees for Rs. 735.63 Lacs (735.63 lacs) deposited with Executing Court, Lucknow against amount released in favour of the company. (Also Refer Note 13)

*Also Includes expired guarantees for Rs.68.01 Lacs (190.75 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.

NOTE : 3 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 : 4 PCL Telecom Ltd, another subsidiary company, is in the process of being wound 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.

NOTE : 5 The Company is primarily engaged in the business of telecom products and its spares. As the basic nature of these activities is governed by same set of risks and returns, the sales have been grouped as single segment in the accounts as per Accounting Standard 17 "Segment Reporting" issued by ICAI.

NOTE : 6 The company has reviewed the inventories at the year end and consequently provided for Rs. 17.29 lacs (Rs. Nil lacs) and Rs. 3.92 lacs (Rs. 4.94 lacs) but written back Rs. Nil lacs (Rs. 4.53 lacs) and Rs. Nil (Rs. Nil) in current financial year for non moving items of obsolete and slow moving inventories of Raw material and finished sub-assembles respectively. An amount of Rs. 3.46 lacs (Rs. 22.74 lacs ) in respect of doubtful debts and advances has been provided for during the year. The provision as on 31st March 2015 is considered adequate.

NOTE : 7 Current Liabilities includes payables outstanding for more than three years. Management decided to carry forward the same.

NOTE : 8 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 liability of Rs.17.75 Lacs on account of non payment 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 : 9 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 traveling 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 28. 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 : 10 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 : 11 The previous year figures have been regrouped/re-classified/re-stated 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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Mar 31, 2014

The Unfunded Gratuity liability Rs 14.41 Lacs and Leave encashment liability Rs. 91.55 Lacs is transferred from General reserve to Provision for Employee Benefits- Leave encashment and Gratuity respectively to comply with the provisions of AS-15 "Employee Benefits"

Includes Rs. 917.21 Lacs (Rs. 1461.71 Lacs) due to Vuppalamritha magnetic Components Pvt Ltd against which Rs. 748.71 Lacs (Rs. 731 Lacs) lies in the Escrow Account (Refer note 16).

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 details of dues of small scale industries to whom the company owes any sum for more than 30 days are Rs. 22763/- to M/s Techno Crafts Mohali; Rs. 106050/- to M/s Goyal Enterprises, Chandigarh.

The disclosure as required by section 22 of The Micro, Small and medium Enterprises Development Act, 2006 are given below:

The company had invested Rs. 700 lacs in the Bonds of UP Co-operative Spinning Mills 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 company had recognized income to the extent of Rs. 156.45 lacs (@ 14.90% on Principal) for a period of 18 months. The suit has been decided ex-parte in favour of the company on 31.01.2004. The U.P. State Government (Guarantor) has deposited Rs. 735.63 lacs and a Govt. guarantee of equivalent amount in the Civil Court, Lucknow in compliance of the orders of the Hon'ble Punjab and Haryana High Court, Chandigarh. The matter is subjudice and the Company has not recognized the accrued interest amounting to Rs. 968.43 lacs up to 12.07.2005 viz. the date of deposit of Rs. 735.63 lacs by the U.P. Govt., and for the period subsequent thereto, keeping in view the uncertainty involved in the matter of realization of interest. This is in conformity with the Accounting Standard 9-Revenue Recognition issued by the Institute of Chartered Accountant of India.

Further an amount of Rs. 735.63 lacs deposited with the Executing Court has been released to the Company (decree holder) on 24.04.2006 against furnishing bank guarantee of the equivalent amount.

FDRs worth Rs. 0.25 Lacs (Rs. 0.25 lacs) are lying with the Commercial Tax Department, Raipur, Chattisgarh.

As per the provisions of Para 17 of AS 22-Accounting for Taxes on Income, Where an enterprise has unabsorbed depreciation or carry forward of losses under tax laws, deferred tax asset should be recognised only to the extent that there is virtual certainity supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realised. To comply with the provisions of AS-22., the Company has reviewed and written down the deferred tax asset on unabsorbed depreciation/losses to the extent of the corresponding deferred tax liability on the difference between the book balance and the written down value of fixed assets under Income Tax as there is no virtual certainity supported by convincing evidence that sufficient future taxable income will be available in near future."

The company had sent balance confirmation letters to all parties requesting them to confirm the balance within 15 days, 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.

(figures in brackets denote previous year figures)

(Rs In Lacs)

NOTE : 2 Contingent liabilities not provided for in the accounts :-

a) Bank guarantees and Letter of credits 2477.34 (2494.37)

b) Claims against company, not acknowledged as debts,

- by Sales Tax authorities 14.85 (14.85)

- by Excise & Custom authorities 30.20 (30.20)

- by other parties 2.01 (2.00)

c) Court cases 1979.29 (1827.47)

d) PSPCL Demand 27.96 (27.96)

e) Interest on Employees Security deposits payable 0.74 (0.63) after completion of 5 years of service

includes expired guarantees for Rs. 190.75 Lacs (Rs. 112.90 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 competent authority.

*** Company received a Demand Notice from PSPCL Mohali which is being contested through the Lessee as per Lease Agreement.

NOTE : 3 Estimated amount of contracts remaining to be executed on capital account Nil (Nil).

NOTE : 4 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. 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 : 5 PCL Telecom Ltd, another subsidiary company, is in the process of being wound 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,

NOTE : 6 The Company is primarily engaged in the business of telecom products and its spares. As the basic nature of these activities is governed by same set of risks and returns, the sales have been grouped as single segment in the accounts as per Accounting Standard 17 "Segment Reporting" issued by ICAI .

(Depreciation on segment a- Rs. 51.43 lacs (Rs. 59.50 lacs), segment b - Rs. Nil (Rs. Nil ),segment c Rs. 0.75 lacs (Rs. 0.80 lacs), total Rs. 52.18 lacs (Rs.60.13 lacs). Segment assets acquired for expected use during more than one period- Rs. 4.14 lacs (Rs. 13.61 lacs) in respect of segment a, others segments- Rs. Nil.

NOTE : 7 The provision against excise demand consisting of excise duty, penalty and interest was created consequent to the decision of Commissioner of Central Excise on withdrawal of the modvat credit relating to earlier years. The said case was decided by CESTAT in favour of the company in previous year. No intimation regarding filing of further appeal by department has been received till the date of signing the balance sheet, therefore, the same was reversed in previous year.

NOTE : 8 The company has reviewed the inventories at the year end and consequently provided for Rs. Nil lacs (Rs. Nil lacs) and Rs. 4.94 lacs (Rs. Nil lacs) but written back Rs. 4.53 lacs (Rs. Nil lacs) and Rs. Nil lacs (Rs. Nil lacs) in current financial year for non moving items of obsolete and slow moving inventories of Raw material and finished sub-assembles respectively. An amount of Rs. 22.74 lacs (Rs. 0.72 lacs ) in respect of doubtful debts and advances has been provided for during the year. The provision as on 31st March 2014 is considered adequate.

NOTE : 9 Current Liabilities includes payables outstanding for more than three years. Management decided to carry forward the same.

NOTE : 10 C-DOT has 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. C-DOT has also filed another claim of Rs. 24.88 Lacs against the company under the separate agreement for transfer of AN-RAX technology which is pending before sole arbitrator appointed by Delhi High Court. Both the claims are being contested by the company.

NOTE : 11 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 traveling 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 27. This is in keeping with the requirements of AS 29 "Provisions, Contingent Liabilities and Contingent Assets" issued by the Institute of Chartered Accountants of India.

NOTE : 12 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.

e) i) M/s Punjab Digital Industrial Systems Ltd (PDISL), the fully owned subsidiary, has been ordered to be wound up by the order of Hon'ble 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. A provision of Rs. 40.35 lacs towards expenses incurred by the company on their behalf, Rs. 4.55 Lacs in Sundry Debtor's and Rs. 24.79 lacs being investment in PDISL has been kept in the accounts of holding company.

ii) 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 Hon'ble Punjab and Haryana High Court vide its order dated 20th October, 2005. Accordingly as per the direction of the Hon'ble Court all records has been handed over to the official liquidator attached to the court.

---

Mar 31, 2013

NOTE 1 : Contingent liabilities not provided for in the accounts :

(Rs.in Lacs) (Rs.in Lacs)

a) Bank guarantees and Letter of credits * 2494.37 2584.47

b) Claims against company, not acknowledged as debts,

-by Sales Tax authorities** 14.85 14.85

-by Excise & Custom authorities 30.20 30.20

- by other parties 2.00 38.29

c) Court cases 1827.47 1667.04

d) PSPCL Demand *** 27.96 27.96

e) Interest on Employees Security deposits payable 0.63 0.66 after completion of 5 years of service

* Includes expired guarantees for Rs. 112.90 Lacs (276.70 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 competent authority.

*** Company received a Demand Notice from PSPCL Mohali which is being contested through the Lessee as per Lease Agreement.

NOTE 2 : Estimated amount of contracts remaining to be executed on capital account Nil (Nil).

NOTE 3 : 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. 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 C 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 4 : PCL Telecom Ltd, another subsidiary company, is in the process of being wound 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,

NOTE 5 : The Company is primarily engaged in the business of telecom products and its spares. As the basic nature of these activities is governed by same set of risks and returns, the sales have been grouped as single segment in the accounts as per Accounting Standard 17 "Segment Reporting" issued by ICAI.

(Depreciation on segment a- Rs. 59.33 lacs (Rs. 68.27 lacs), segment b - Rs. Nil C Nil ), segment c Rs. 0.80 lacs C 0.84 lacs), total Rs. 60.13 lacs C 69.11 lacs). Segment assets acquired for expected use during more than one period- Rs. 13.61 lacs (Rs. 15.49 lacs) in respect of segment a, others segments- Rs. Nil. Total amount of non-cash expense, other than depreciation, included in segment expense pertains to amounts written off and the same has been shown separately in profit and loss account of the year and belongs entirely to segment (a).

NOTE 6 : The provision against excise demand Rs. 271.48 lacs consisting of excise duty Rs. 64.50 lacs C 64.50 lacs), penalty of Rs. 64.50 lacs C 64.50 lacs) and interest upto the year Rs. 142.48 lacs (Rs. 132.67 lacs) was created consequent to the decision of Commissioner of Central Excise on withdrawal of the modvat credit relating to earlier years. The said case has been decided by CESTAT in favour of the company. No intimation regarding filing of further appeal by department has been received till the date of signing the balance sheet, therefore, the same has been reversed in current year.

NOTE 7 : The company has reviewed the inventories at the year end and consequently provided for Rs. 9.68 lacs (Rs. Nil lacs) and Rs. 1.18 lacs (Rs. Nil lacs) but written back Rs. Nil (Rs. 2.16 lacs) and Rs. Nil lacs (t 4.18 lacs) in current financial year for non moving items of obsolete and slow moving inventories of Raw material and finished sub- assembles respectively. An amount of Rs. 0.72 lacs (Rs. 23.05 lacs ) in respect of doubtful debts and advances has been provided for during the year. The provision remaining as on 31st March 2013 is considered adequate.

NOTE 8 : 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 traveling 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 25. 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 9 : 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 year under audit and 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.

e) i) M/s Punjab Digital Industrial Systems Ltd (PDISL), the fully owned subsidiary, has been ordered to be wound up by the order of Hon''ble 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. A provision of Rs. 40.35 lacs towards expenses incurred by the company on their behalf, Rs. 4.55 Lacs in Sundry Debtor''s and Rs. 24.79 lacs being investment in PDISL has been kept in the accounts of holding company.

ii) 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 hon''ble Punjab and Haryana High Court vide its order dated 20th October, 2005. Accordingly as per the direction of the Hon''ble Court all records has been handed over to the official liquidator attached to the court.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account Nil (Nil)

2. The company has transferred unpaid dividend amounting to Rs. 5.72 Lacs (4.33) Lacs to Investor Education & Protection Fund during the year as per section 205C of Company Act. 1956.

3. In the opinion of the Board of directors, the current assets and loans and advances have a value on realisation at least equal to the value stated in the foregoing balance sheet. Adequate provision has been made for all known liabilities and is not in excess of the amount considered reasonably necessary.

4. Loans and Advances includes amount due from Directors at the year end Rs. Nil (Nil) and maximum amount outstanding at any time during the year from Directors was Rs. Nil lacs (Rs. Nil lacs).

5. Punjab Digital Industrial Systems Ltd (PDISL), the fully-owned subsidiary, has been ordered to be wound up by the Honble 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. 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.

6. The Board of Directors of the company at their 81st meeting held on 29.01.1997 decided to bear all statutory expenditure in respect of its subsidiary company namely PCL Telecom Ltd, which presently is under winding up process. The Administration and Other Expenses include Rs. Nil (Nil) lacs towards the demand raised on PCL Telecom Ltd by Employees State Insurance Corporation and Rs. Nil (Nil) lacs for winding-up and other expenses.

7. The company had sent balance confirmations letters to all parties requesting them to confirm the balance within 15 days, 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.

8. Previous years figures have been regrouped, rearranged and recasted, wherever thought necessary, in order to make them look comparable with the current years figures.

9. Sales includes goods despatched amounting to Rs. 27.79 lacs (Rs. 32.37 lacs) in respect of which the customer has taken delivery in the next accounting year and acknowledged accordingly.

10. The details of dues of small scale industries to whom the company owes any sum for more than 30 days are Rs.1035/- to M/s Alfa Electronics, Pune; Rs.14663/- to M/s Fastners and industrial Corporation, Bangalore; Rs.2447/- to M/s Oswin Industries, Panchkula; Rs. 17599/- to M/s Techno Crafts Mohali; Rs.5267/- to M/s Goyal Enterprises, Chandigarh; Rs.4559/- to M/s New Age Metal, Mohali; Rs.5586/- to M/s Hindustan Enterprises, Allahabad; and Rs.2442/- to M/s Paramount Electronics, Bangalore.

11. The company had invested Rs.700 lacs in the Bonds of UP Co-operative Spinning MiHs 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 company had recognised income to the extent of Rs.156.45 lacs (@ 14.90% on Principal for a period of 18 months). The suit has been decided ex-parte in favour of the company on 31.01.2004. The U.P State Government (Guarantor) has deposited Rsi735.63 lacs and a Govt, guarantee of equivalent amount in the Civil Court, Lucknow in compliance of the orders of the Honble Punjab and Haryana High Court, Chandigarh. The matter is subjudice and the Company has not recognized the accrued interest amounting to Rs.968.43 lacs up to 12.07.2005 viz. the date of deposit of Rs.735.63 lacs by the U.P. Govt., and for the period subsequent thereto, keeping in view the uncertainty involved in the matter of realization of interest. This is in conformity with the Accounting Standard 9-Revenue Recognition issued by the Institute of Chartered Accountant of India.

Further an amount of Rs.735.63 lacs deposited with the Executing Court has been released to the Company (decree holder) on 24.04.2006 against furnishing bank guarantee of the equivalent amount.

12. Outstandings from subsidiary have been separately disclosed in the respective schedules to the Balance Sheet.

13. The provision against excise demand Rs.268.94 lacs (Rs.258.04 lacs) consisting of excise duty Rs.64.50 lacs (Rs.64.50 lacs), penalty of Rs.64.50 lacs (Rs.64.50 lacs) and interest upto the year Rs.149.94 lacs (Rs.139.04 lacs) has been made consequent to the decision of Commissioner of Central Excise on withdrawal of the modvat credit relating to earlier years. The company is contesting the demand with the Central Excise Tribunal. Rs.10 Lacs has already been paid as duty under protest.

14. The company has provided for Rs. Nil lacs (Rs.73.43 lacs) and Rs.15.75 lacs (Rs.145.48 lacs) after review of non-moving items in respect of obsolete and slow moving inventories of Raw material and Finished Sub Assemblies respectively after studying the future requirement. An amount of Rs.0.47 lacs (Rs.8.28 lacs) in respect of doubtful debts and advances has been provided for during the year. The provision made is considered adequate.

15. 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 traveling 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 1. This is in keeping with the requirment of AS 29 "Provisions, Contingent Liablities and ContingentAssets" issued by the Institute of Chartered Accountants of India.

16. There are some current liabilities that have been outstanding for more than three years and for which the concerned parties have not filed claims with the company for payment.

17. In the absence of convincing evidence 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 year under audit and earlier years has not been recognized as an asset. This is in keeping with the Guidance Note issued by the ICAI on the matter.

Additional information/quantitative details pursuant to paragraphs 3 and 4 of part II Schedule VI of the Companies Act 1956.