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Notes to Accounts of Punjab Communications Ltd.

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.


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.


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.

 
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