Mar 31, 2017
a. corporate information
Pentamedia Graphics Limited (PMGL) is a Public Limited Company incorporated in the state of Tamilnadu and listed on the BSE Limited (BSE). The company has been mainly in the following business during the year:
a. Pre & Post production of digital contents for animation & Visual effects for Film, TV & Internet.
b. Consultancy on multimedia & Software
c. Training and maintenance of media & Software products.
significant accounting policies: b. basis of preparation of financial statements
The Financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.
a. revenue recognition
Revenue/Incomes and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred.
(i) Revenue from Multimedia business (for sale of digital content on fixed price basis) is recognized based on milestones reached.
(ii) Revenue in respect of Training and Education services is recognized on rendering of services, only when it is reasonably certain that the ultimate collection will be made. The revenue from fixed time contracts is recognized over the period of contracts. For services rendered through franchisees only the company''s share of revenue is recognized.
(iii) Revenue for services charges is recognized after completion of each stage of service.
(v) Revenue from Software development (on time and material basis) is recognized based on software developed and billed to the clients.
B) USE OF ESTIMATES:
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Differences between actual and estimates are recognized in the period in which the results are known/ materialized.
C) property, plant AND equipment:
(I) Fixed assets are stated at cost including taxes, duties, freight etc related to purchase and installation less accumulated depreciation.
(II) Intangible assets, that are not yet ready for their intended use, are carried at costs, comprising direct cost, other incidental/attributable expenses and reflected under capital work in progress/Intangible assets under development respectively.
(III) Capital work in progress represents capital advances and expenditure incurred during the earlier years pertaining to software development pending capitalization.
(IV) Gains or losses arising from de-recognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets derecognized.
During the year, a land costing Rs. 2.60 Cr was sold for Rs. 8.90 Cr on which a gain of Rs. 6.30 Cr was recognized. Also, a building with carrying amount of Rs.6.82 Cr was sold for Rs. 6.10 Cr on which a loss of Rs. 0.72 Cr was recognized and shown in the Profit and Loss Account under the head Other Income.
(V) Capital Work in Progress of Rs. 7.87 crores has been converted into Computers and Software under the head fixed assets.
D) INTANGIBLE Assets
Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. The intangible assets are recorded at cost and are carried at cost.
During the year the intangible assets under development of Rs. 3.70 crores has been transferred to Computers and Software under the head fixed assets.
E) depreciation
Depreciation on fixed assets is provided on the straight-line method in accordance with the rates specified under Schedule II to the Companies Act, 2013.
F) INVENTORIES
Inventories consist of Digital Content and developed Software which are valued at cost.
G) RETIREMENT BENEFITS TO EMPLOYEES
The Liability for future payment of gratuity has been provided in the accounts. The liability is not funded separately.
H) TAXES ON INCOME
Income Tax
Since MAT Provision is applicable for the year 2016-17, provision is created of Rs. 842,000 Deferred Tax
Deferred tax resulting from timing differences between book and tax profits is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize at Rs. 3,648,000.
(I) CASH AND CASH EQUIVALENTS
The company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.
(J) IMPAIRMENT OF ASSETS
The carrying value of assets at each balance sheet date is reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount exceeds the recoverable amount.
(k) preliminary expenses
Preliminary expenses are amortized over a period of five years commencing from the year at commercial operations and closed during the reporting period.
(L) provisions, contingent liabilities and contingent assets
Provisions are recognized only when the company has present or legal or constructive obligations as a result of past events, for which it is probable that an outflow of economic benefit will be required to settle the transaction and a reliable estimate can be made for the amount of the obligation. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
During the previous year, in the case of Dallah Albaraka, Ireland, a liability of Rs. 51 Crores was arrived through a consent memo which was signed through court to arrive at a settlement of Rs. 51 Crores. Out of this, Rs. 25 Crores is paid during the year 2015-2016 and the balance of Rs. 26 Crores was paid in the current year 2016-2017 which was earlier shown as outstanding in the Balance Sheet as Short Term provision.
(M) SHORT TERM BORROWINGS
Mainly transactions with mayajaal towards services/distribution Rs.48,811,713, amount received franchise Rs.51,657,471, amount received through bank Rs.92,830,816 and amount paid through bank Rs.75,000,000 the balance amount of Rs. 1.78 Crores is shown in the Balance Sheet as Borrowings under Financial Liabilities under the head Current Liabilities.
(N) LONG TERM BORROWINGS:
Since the land and building was sold, the rental advance received from Saravana Bhavan has been adjusted against the consideration received for the sale of land and building.
Mar 31, 2015
B. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) including the Accounting Standards notified under the
relevant provisions of the Companies Act, 2013.
A) REVENUE RECOGNITION
Revenue/Incomes and Costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
(i) Revenue from Multimedia business (for sale of digital content on
fixed price basis) is recognized based on milestones reached.
(ii) Revenue in respect of Training and Education services is
recognized on rendering of services, only when it is reasonably certain
that the ultimate collection will be made. The revenue from fixed time
contracts is recognized over the period of contracts. For services
rendered through franchisees only the company's share of revenue is
recognized.
(iii) Revenue for services charges is recognized after completion of
each stage of service.
(iv) Revenue from Software development (on time and material basis) is
recognized based on software developed and billed to the clients.
B) USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Differences between actual
and estimates are recognized in the period in which the results are
known/materialized.
C) FIXED ASSETS
(i) Fixed assets are stated at cost including taxes, duties, freight
etc related to purchase and installation less accumulated depreciation.
(ii) A part of fixed asset in Furniture and fixtures and Computer were
written off due to expiry of useful life of an asset as per Schedule II
of Companies Act 2013.
(iii) During the year a Land situated at Gujarat costing Rs.13,00,000
was sold and the gain recognized in profit and Loss account.
(iv) Intangible assets, that are not yet ready for their intended use,
are carried at costs, comprising direct cost, other incidental/
attributable expenses and reflected under capital work in
progress/Intangible assets under development respectively.
(v) Capital work in progress represents capital advances and
expenditure incurred during the earlier years pertaining to software
development pending capitalization.
D) INTANGIBLE ASSETS
Intangible assets are recognized only is it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
E) DEPRECIATION
Depreciation on fixed assets is provided on the straight-line method in
accordance with the rates specified under Schedule II to the Companies
Act, 2013. As part of computers original cost or WDV of Rs.2.29 Cr and
Furnitures and fixtures original cost /WDV Rs.1 Lacs have exhausted the
useful life as per the new schedule, hence there value is written off
as depreciation.
F) INVENTORIES
Inventories consist of Digital Content and Software development which
are valued at cost.
G) RETIREMENT BENEFITS TO EMPLOYEES
The Liability for future payment of gratuity has been provided in the
accounts. The liability is not funded separately.
H) TAXES ON INCOME
Income Tax Provision for taxation is not made for the year ended
2014-15 as there is no tax liability for the period.
Deferred Tax
Deferred tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the timing differences are expected to
crystallize.
I) CASH AND CASH EQUIVALENTS
The company considers all highly liquid financial instruments, which
are readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalents.
J) IMPAIRMENT OF ASSETS
The carring value of assets at each balance sheet date are reviewed for
impairment. If any indication of impairment exists, the recoverable
amount of such assets is estimated and impairment is recognized, if the
carrying amount exceeds the recoverable amount.
During the current year some of the assets are impaired and partly
written off and the balance amount is recoverable.
K) PRELIMINARY EXPENSES
Preliminary expenses are amortized over a period of five years
commencing from the year at commercial operations and closed during the
reporting period.
L) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognized only when the company has present or legal or
constructive obligations as a result of past events, for which it is
probable that an outflow of economic benefit will be required to settle
the transaction and a reliable estimate can be made for the amount of
the obligation. Contingent liability is disclosed for (i) Possible
obligations which will be confirmed only by future events not wholly
within the control of the company or (ii) Present obligations arising
from past events where it is not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the
amount of the obligation cannot be made. Contingent assets are not
recognized in the financial statements and it includes the details of
claims against the company.
(i) DAL, Ireland
The company's appeal on Dallah Albaraka(DAL) claim against the
guarantor Pentasoft Technologies Ltd which is being claimed on
Pentamedia Graphics Ltd. is being contested in the High Court of
Madras.
Mar 31, 2014
B. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared to comply in all material aspects
with all the applicable accounting principles in India, the applicable
Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
A) REVENUE RECOGNITION
Revenue/Incomes and Costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
- Revenue from Multimedia business (for sale of digital content on
fixed price basis) is recognized based on milestones reached.
- Revenue in respect of Training and Education services is recognized
on rendering of services, only when it is reasonably certain that the
ultimate collection will be made. The revenue from fixed time contracts
is recognized over the period of contracts. For services rendered
through franchisees only the company''s share of revenue is recognized.
- Revenue from sales is recognized after despatch of goods to
customers.
- Revenue for services charges is recognized after completion of each
stage of service.
- Revenue from software development (on time and material basis) is
recognized based on software developed and billed to the clients.
Overseas sales & services represent sales to the overseas customer for
multimedia and other software development services done.
B) USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenue
and expenses during the reporting period. Differences between actual
and estimates are recognized in the period in which the results are
known/materialized.
C) FIXED ASSETS
i Fixed assets are stated at cost including taxes, duties, freight etc
related to purchase and installation less accumulated depreciation.
ii Capital work in progress represents capital advances and expenditure
incurred during the period of software development pending
capitalization
D) INTANGIBLE ASSESTS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
E) DEPRECIATION
Depreciation on fixed assets other than computers is provided on the
straight-line method in accordance with the rates specified under
schedule XIV to the Companies Act, 1956. As the computers have
exhausted the useful life, their value is written off as depreciation.
F) INVENTORIES
Raw Materials are valued at cost. Finished goods are valued at lower of
cost or net realizable value.
G) RETIREMENT BENEFITS TO EMPLOYEES
The liability for future payment of gratuity has been provided in the
accounts. The liability is not funded separately.
H) TAXES ON INCOME Income Tax
Provision for taxation is not made for the year ended 31.03.2014 as
there is no tax liability for the period.
Deferred Tax
Deferred tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the diming differences are expected to
crystallize.
I) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid financial instruments, which
are readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalents.
J) IMPAIRMENT OF ASSETS
The company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amounts. The reduction is treated as an impairment loss and is
recongized in the profit and loss account.
If at the balance sheet date, there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciated historical cost.
K) PRELIMINARY EXPENSES
Preliminary expenses are amortized over a period of five years
commencing from the year at commercial operations.
L) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognized only when the Company has present or legal or
constructive obligations as a result of past events, for which it is
probable that an outflow of economic benefit will be required to settle
the transaction and a reliable estimate can be made for the amount of
the obligation. Contingent liability is disclosed for (i) Possible
obligations which will be confirmed only by future events not wholly
within the control of the company or (ii) Present obligations arising
from past events where it is not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the
amount of the obligation cannot be made. Contingent assets are not
recognized in the financial statements.
Mar 31, 2013
A) REVENUE RECOGNITION
- Revenue from Multimedia business (for sale of digital content on fi
xed price basis) is recognized based on milestones reached.
- Revenue in respect of Training and Education services is recognized
on rendering of services, only when it is reasonably certain that the
ultimate collection will be made. The revenue from fi xed time
contracts is recognized over the period of contracts. For services
rendered through franchisees only the companyÂs share of revenue is
recognized.
- Revenue from sales is recognized after despatch of goods to
customers.
- Revenue for services charges is recognized after completion of each
stage of service.
- Revenue from software development (on time and material basis) is
recognized based on software developed and billed to the clients.
Overseas sales & services represent sales to the overseas customer for
multimedia and other software development services done.
B) USE OF ESTIMATES:
The preparation of fi nancial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the fi nancial statements and the reported amounts of revenue
and expenses during the reporting period. Differences between actual
and estimates are recognized in the period in which the results are
known/materialized.
C) FIXED ASSETS
i Fixed assets are stated at cost including taxes, duties, freight etc
related to purchase and installation less accumulated depreciation.
ii Capital work in progress represents capital advances and expenditure
incurred during the period of software development pending
capitalization
D) INTANGIBLE ASSESTS
Intangible assets are recognized only if it is probable that the future
economic benefi ts that are attributable to the asset will fl ow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
E) DEPRECIATION
Depreciation on fi xed assets other than computers is provided on the
straight-line method in accordance with the rates specifi ed under
schedule XIV to the Companies Act, 1956. As the computers have
exhausted the useful life, their value is written off as depreciation.
F) INVENTORIES
Raw Materials are valued at cost. Finished goods are valued at lower of
cost or net realizable value.
G) INVESTMENTS
Long term investments are stated at cost, except where there is a
diminution in value (other than temporary), in which case the carrying
value is reduced to recognize the decline.
H) RETIREMENT BENEFITS TO EMPLOYEES
The liability for future payment of gratuity has been provided in the
accounts. The liability is not funded separately.
I) BORROWING COSTS
Borrowing Costs attributable to acquisition of assets, are capitalized
as part of the cost of such assets. Other borrowing costs are charged
to revenue.
J) FOREIGN CURRENCY TRANSACTIONS
Transaction in foreign currency is recorded at the rate of exchange
prevailing on the date of transaction. Current assets and liabilities
are translated at the year end closing rates. Exchange difference in
respect of foreign currency liabilities incurred for acquiring fi xed
assets is added to the cost of respective fi xed assets.
K) TAXES ON INCOME
Provision for current tax is made on the basis of Minimum Alternative
Tax is provided in accordance with the provisions of Income Tax Act,
1961.
Deferred tax resulting from timing differences between book and tax
profi ts is accounted for under the liability method, at the current
rate of tax, to the extent that the diming differences are expected to
crystallize.
L) IMPAIRMENT OF ASSETS
The company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amounts. The reduction is treated as an impairment loss and is
recongized in the profi t and loss account. If at the balance sheet
date, there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is refl ected at the recoverable amount subject to a maximum of
depreciated historical cost.
M) PRELIMINARY EXPENSES
Preliminary expenses are amortized over a period of fi ve years
commencing from the year at commercial operations.
N) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognized only when the Company has present or legal or
constructive obligations as a result of past events, for which it is
probable that an outfl ow of economic benefi t will be required to
settle the transaction and a reliable estimate can be made for the
amount of the obligation. Contingent liability is disclosed for (i)
Possible obligations which will be confi rmed only by future events not
wholly within the control of the company or (ii) Present obligations
arising from past events where it is not probable that an outfl ow of
resources will be required to settle the obligation or a reliable
estimate of the amount of the obligation cannot be made. Contingent
assets are not recognized in the fi nancial statements.
Mar 31, 2012
A. CORPORATE INFORMATION
Pentamedia Graphics Limited (PMGL), a Public Limited Company
incorporated in the State of Tamilnadu and listed on the Bombay Stock
Exchange (BSE). The company has been mainly in the following business
during the year:
a. Pre & Post production of digital contents for animation& visual
effects for Film, TV &Internet
b. Consultancy on multimedia & software
c. Training and maintenance of media & software products.
B. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared to comply in all material aspects
with all the applicable accounting principles in India, the applicable
Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956. The accounting
policies adopted in the preparation of the financial statements are
consistent with those followed in the previous year.
A) REVENUE RECOGNITION
- Revenue from Multimedia business (for sale of digital content on
fixed price basis) is recognized based on milestones reached.
- Revenue in respect of Training and Education services is recognized
on rendering of services, only when it is reasonably certain that the
ultimate collection will be made. The revenue from fixed time contracts
is recognized over the period of contracts. For services rendered
through franchisees only the company's share of revenue is
recognized.
- Revenue from sales is recognized after despatch of goods to
customers.
- Revenue for services charges is recognized after completion of each
stage of service.
- Revenue from software development (on time and material basis) is
recognized based on software developed and billed to the clients.
Overseas sales & services represent sales to the overseas customer for
multimedia and other software development services done.
B) FIXED ASSETS
i) Fixed assets are stated at cost including taxes, duties, freight etc
related to purchase and installation less accumulated depreciation.
ii) Capital work in progress represents capital advances and
expenditure incurred during the period of software development pending
capitalization
C) INTANGIBLE ASSESTS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
D) DEPRECIATION
Depreciation on fixed assets other than computers is provided on the
straight-line method in accordance with the rates specified under
schedule XIV to the Companies Act, 1956. As the computers have
exhausted the useful life, their value is written off as depreciation.
E) INVENTORIES
Raw Materials are valued at cost. Finished goods are valued at lower of
cost or net realizable value.
F) INVESTMENTS
Long term investments are stated at cost, except where there is a
diminution in value (other than temporary), in which case the carrying
value is reduced to recognize the decline.
G) RETIREMENT BENEFITS TO EMPLOYEES
The liability for future payment of gratuity has been provided in the
accounts. The liability is not funded separately.
H) BORROWING COSTS
Borrowing Costs attributable to acquisition of assets, are capitalized
as part of the cost of such assets. Other borrowing costs are charged
to revenue.
I) FOREIGN CURRENCY TRANSACTIONS
Transaction in foreign currency is recorded at the rate of exchange
prevailing on the date of transaction. Current assets and liabilities
are translated at the year end closing rates. Exchange difference in
respect of foreign currency liabilities incurred for acquiring fixed
assets is added to the cost of respective fixed assets.
J) TAXES ON INCOME
Provision for current tax is made on the basis of Minimum Alternate Tax
provided in accordance with the provisions of Income Tax Act, 1961.
Deferred tax resulting from timing differences between book and tax
profits is accounted for under the liability method, at the current
rate of tax, to the extent that the diming differences are expected to
crystallize.
K) CASH AND CASH EQUIVALENTS
The Company considers all highly liquid financial instruments, which
are readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalents.
L) IMPAIRMENT OF ASSETS
The company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount of the asset. If
such recoverable amount of the asset or the recoverable amount of the
cash generating unit to which the asset belongs is less than its
carrying amount, the carrying amount is reduced to its recoverable
amounts. The reduction is treated as an impairment loss and is
recongized in the profit and loss account. If at the balance sheet
date, there is an indication that if a previously assessed impairment
loss no longer exists, the recoverable amount is reassessed and the
asset is reflected at the recoverable amount subject to a maximum of
depreciated historical cost.
M) PRELIMINARY EXPENSES
Preliminary expenses are amortized over a period of five years
commencing from the year in which it was incurred.
N) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions are recognized only when the Company has present or legal or
constructive obligations as a result of past events, for which it is
probable that an outflow of economic benefit will be required to settle
the transaction and a reliable estimate can be made for the amount of
the obligation. Contingent liability is disclosed for (i) Possible
obligations which will be confirmed only by future events not wholly
within the control of the company or (ii) Present obligations arising
from past events where it is not probable that an outflow of resources
will be required to settle the obligation or a reliable estimate of the
amount of the obligation cannot be made. Contingent assets are not
recognized in the financial statements.
Mar 31, 2011
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared to comply in all material aspects
with all the applicable accounting principles in India, the applicable
Accounting Standards notified u/s 211 (3C) of the Companies Act, 1956
and the relevant provisions of the Companies Act, 1956.
a) REVENUE RECOGNITION
- Revenue from Multimedia business (for sale of digital content on
fixed price basis) is recognized based on milestones reached.
- Revenue in respect of Training and Education services is recognized
on rendering of services, only when it is reasonably certain that the
ultimate collection will be made. The revenue from fixed time contracts
is recognized over the period of contracts. For services rendered
through franchisees only the company's share of revenue is recognized.
- Revenue from sales is recognized after dispatch of goods to
customers.
- Revenue for service charges is recognized after completion of each
stage of service.
- Revenue from sofiware development (on time and material basis) is
recognized based on software developed and billed to the clients.
Overseas sales & services represent sales to the overseas customer for
multimedia and other software development services done.
b) FIXED ASSETS
i Fixed assets are stated at cost including taxes, duties, freight etc
related to purchase and installation less accumulated depreciation.
ii Capital Work in Progress
Capital work in progress represents capital advances and expenditure
incurred during the period of software development pending
capitalization
c) INTANGIBLE ASSESTS
Intangible assets are recognized only if it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
d) DEPRECIATION
Depreciation on fixed assets other than computers is provided on the
straight-line method in accordance with the rates specified under
schedule XIV to the Companies Act, 1956. As the com- puters have
exhausted the useful life, major portion of their value is written of
as depreciation.
e) INVENTORIES
Raw Materials are valued at cost. Finished goods are valued at lower of
cost or net realizable value.
f) INVESTMENTS
Long term investments are valued at cost as per the present market
conditions and as per valuation done by the valuer. Increase / Decrease
in value is provided for, where the management is of the opinion that
the diminution is permanent in nature.
g) RETIREMENT BENEFITS TO EMPLOYEES
As the numbers of permanent employees have been reduced to a bare
minimum, the management is of the opinion that retirement benefit can
be met as and when the liability arises. As such no provision for
gratuity is created for the employees.
h) BORROWING COSTS
Borrowing Costs attributable to acquisition of assets, are capitalized
as part of the cost of such assets. Other borrowing costs are charged
to revenue.
i) FOREIGN CURRENCY TRANSACTIONS
Transaction in foreign currency is recorded at the rate of exchange
prevailing on the date of transaction. Current assets and liabilities
are not translated at the year end closing rates. Exchange difference
in respect of foreign currency liabilities incurred for acquiring fixed
assets is added to the cost of respective fixed assets.
j) TAXES ON INCOME
Provision for current tax is made on the basis of minimum alternative
Tax is provided in accordance with the provisions of Income Tax Act,
1961.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and law that
have been substantively enacted as of the balance sheet date. Daferred
tax liability for difference in depreciation Rs. 9,91,499/- has been
created
k) IMPAIRMENT OF ASSETS
The company has not provided for impairment of any assets, this is in
contravention of Accounting Standard 28.
l) PRELIMINARY EXPENSES
Preliminary expenses consequent to the merger of Pentasoft Technologies
Limited Company are amortized over a period of five years commencing
from the current year.
B. NOTES ON ACCOUNTS
1(a) Secured Loans:
i) The secured loans availed from Bank of India, Oriental Bank of
Commerce, HSBC by Pentamedia Graphics Limited and Corporation Bank,
United Western Bank by Pentasoft Technologies Limited (Pentasoft
Technologies Ltd merged with Pentamedia Graphics Ltd w.e.f 01.10.2008
as per Hon'ble High Court of Madras order dated. 03.08.2009), have been
settled and the petitions before Debt Recovery Tribunal(DRT) have been
disposed of "as setled".
ii) The following bank dues are pending before DRT for disposal:
a) Rs. 24.97 crores to Axis Bank (UTI Bank) by Pentamedia Graphics
Limited
b) Rs. 14. 85 crores to Axis Bank (UTI Bank) by Pentasoft Technologies
Limited
c) Rs. 10.80 crores to Dhanalakshmi Bank by Pentasoft Technologies
Limited
iii) UPS Capital Business is claiming an amount of Rs. 19.85 crores in
respect of Pentamedia Graphics Ltd. The company petition is pending
with High Court of Madras for orders.
The above amount due to Banks/Institutions does not include any
interest that may accrue on the principal amount due from 01.04.2005.
1(b) Claim against the company not acknowledged as Liability:
According to the information and explanation given to us there are no
dues of income tax, wealth tax, sales tax, custom duty, excise duty and
cess which have not been deposited on account of any dispute except
in the following cases.
Income Tax:
i. The Company has fled a writ petition no. 2357/2010 in High Court of
Madras for a refund of Rs. 62 crores against the Income Tax demands of
Rs. 112.51 crores as mentioned in their notice dated 05.02.2009 and has
obtained stay till the disposal of all issues mentioned in the above
writ petition from the High Court of Madras vide order dated 15.07.2010
and the court has instructed the Income-Tax department to furnish the
details from the AY 1995-96 to 2006-07.
ii. The Company has also obtained the order dated 11.01.2010 from the
High Court of Madras, directing the Income Tax Department to process
the revised returns fled by the company as per the modified composite
scheme of amalgamation and arrangement between Pentamedia Graphics
Limited and its subsidiaries as on 01.01.2004. The response from the
Income Tax Department is awaited.
iii. Regarding Pentasoft, the Company has fled a writ petition no.
25120/2009 in High Court of Madras for a refund of Rs. 18 crores
against the Income Tax demands of Rs. 89.97 crores as mentioned in
their notice dated 19.01.2009 and obtained a absolute stay from the
High Court of Madras vide order dated 18.12.2009.
Mar 31, 2010
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared to comply in all material
aspects, with all the applicable accounting principles in India, the
applicable Accounting Standards notified u/s 211 (3C) of the Companies
Act, 1956 and the relevant provisions of the Companies Act, 1956.
a) SCHEME OF AMALGAMATION
Consequent to the merger of Pentasoft Technologies Limited with the
company as per the order of Honble High Court of Madras dated 3rd
August 2009 (w.e.f. 01.10.2008) after the approval of the shareholders,
creditors, court held EGM dated on 11lh February 2009 and 24(f)
approved by Bombay Stork Exchange Limited dated 25th November 2008, the
company issued 38511595 equity shares of Rs. 1/- each to the
shareholders of Pentasoft Technologies Limited and 128760443 equity
shares of Rs. 1/- each to the agreed secured creditors of Pentasoft
Technologies Limited on 18th September 2009. These shares were listed
in Bombay Stock Exchange on 6th February 2010.
b) REVENUE RECOGNITION
- Revenue from Multimedia business (for sale of digital content on
fixed price basis) is recog- nized based on milestones reached.
- Revenue in respect of Training and Education services is recognized
on rendering of services, only when it is reasonably certain that the
ultimate collection will be made. The revenue from fixed time contracts
is recognized over the period of contracts. For services rendered
through franchisees only the companys share of revenue is recognized.
- Revenue from sales is recognized after dispatch of goods to
customers.
- Revenue for services charges is recognized after completion of each
stage of service.
Revenue from software development (on time and material basis) is
recognized based on software developed and bill to the clients
Overseas sales & services represent sales to the overseas customer for
multimedia and other software development services done.
c) FIXED ASSETS
i Fixed assets are stated at cost including taxes, duties, freight etc
related to purchase and installation less accumulated depreciation.
ii Capital Work In Progress
Capital work in progress represents capital advances and expenditure
incurred during the period of software development pending
capitalisation.
d) INTANGIBLE ASSESTS:
Intangible assets are recognised only if it is probable that the future
economic benefits that are attributable to the asset will flow to the
enterprise and the cost of the asset can be measured reliably. The
intangible assets are recorded at cost and are carried at cost.
e) DEPRECIATION
Depreciation on fixed assets other than computers is provided on the
straight-line method in accordance with the rates specified under
schedule XIV to the Companies Act, 1956. As the computers have
exhausted the useful life, their value is written off as depreciation.
No depreciation is pro- vided on addition to computers made at the end
of the financial year as the same not put to use.
f) INVENTORIES
Raw Materials are valued at cost. Finished goods are valued at lower of
cost or net realizable value.
g) INVESTMENTS
Long term investments are valued at cost. Diminution in value is
provided for, only where the management is of the opinion that the
diminution is permanent in nature.
h) RETIREMENT BENEFITS TO EMPLOYEES
As the numbers of permanent employees have been reduced to a bare
minimum, the management is of the opinion that retirement benefit can
be met as and when the liability arises.
i) BORROWING COSTS
Borrowing Costs attributable to acquisition of assets, are capitalized
as part of the cost of such assets. Other borrowing costs are charged
to revenue.
j) FOREIGN CURRENCY TRANSACTIONS
Transaction in foreign currency is recorded at the rate of exchange
prevailing on the date of transaction. Current assets and liabilities
are translated at theyear end closing rates. Exchange difference in
respect of foreign currency liabilities incurred for acquiring fixed
assets is added to the cost of respective fixed assets.
k) TAXES ON INCOME
Provision for current tax is made on the basis of Minimum Alternative
Tax in accordance with the provi- sions of Income Tax Act, 1961.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for, using the tax rates and law that
have been substantively enacted as of the balance sheet date.
l) IMPAIRMENT OF ASSETS
The company has not provided for impairment of any assets, this is in
contravention of Accounting Standard 28.
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