Provisions and contingent liabilities
A provision is required 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. Provisions (excluding retirement benefits and compensated
absences) are not discounted to its present value and are determined
based on best estimate required to settle the obligation at the Balance
Sheet date. These are reviewed at each Balance Sheet date and adjusted
to reflect the current best estimates.
Contingent liabilities are disclosed when there is a possible obligation
arising from past events, the existence of which will be confirmed only by
the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company or a present obligation that
arises from past events where it is either not probable that an outflow of
resources will be required to settle the obligation or a reliable estimate of
the amount cannot be made. Contingent liabilities are not recognized in the
financial statements. A contingent asset is neither recognized nor disclosed
in the financial statements.
The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and
the risks specific to the liability. The increase in the provision due to the
passage of time is recognized as interest expense.
CSR Provisions
The company is not required to make CSR provision for the financial year
under review as per the provisions of the sec 135(5) of the companies act
2013.
(D) Revenue recognition
The Company earns revenue primarily from providing information
technology and consultancy services, including services under contracts for
software development, implementation and other related services, licensing
and sale of its own software, business process services and maintenance
of equipment. The Company also sales the products ancillary to supply of
above services.
The Company recognizes revenue as follows:
Revenue from sale of services is recognized for the work completed in
terms of the contract. Income from maintenance contracts is recognized on
a time proportionate basis.
Revenue from sale of products is recognized when risk and reward are
passed on to the customer which is generally on dispatch of goods.
Revenues is reported net of discounts, indirect and service taxes.
(E) Dividend income is recorded when the right to receive payment is
established. Interest income is recognized using the effective interest
method.
(F) Leases
No assets are taken on lease by the Company.
(G) Cost recognition
Costs and expenses are recognized when incurred and have been
classified according to their nature.
The costs of the Company are broadly categorized in employee benefit
expenses, depreciation and amortization and other operating expenses.
Employee benefit expenses include employee compensation, allowances
paid, contribution to various funds and staff welfare expenses. Other
operating expenses mainly include fees to external consultants, cost
of running its facilities, travel expenses, cost of equipment and software
licenses, communication costs, allowances for delinquent receivables
and advances and other expenses. Other expenses is an aggregation of
costs which are individually not material such commission and brokerage,
recruitment and training, entertainment etc.
(H) Foreign currency
The functional currency of the Company is Indian Rupee (INR).
Income and expenses in foreign currencies are recorded at exchange
rates prevailing on the date of transaction. Foreign currency denominated
monetary assets and liabilities are translated at the exchange rate prevailing
on the Balance Sheet date and exchange gains and losses arising on
settlement and restatement are recognized in the Statement of Profit &
Loss.
Non-monetary assets and liabilities that are measured in terms of historical
cost in foreign currencies are not retranslated.
(I) Income taxes
Income tax expense comprises current tax expense and the net change
in the deferred tax asset or liability during the year. Current and Deferred
taxes are recognized in Statement of Profit & Loss, except when they relate
to items that are recognized in other comprehensive income or directly in
equity, in which case, the current and deferred tax are also recognized in
other comprehensive income or directly in equity, respectively.
Current income taxes
The current income tax expense includes income taxes payable by the
Company and its branches in India and overseas. The current tax payable
by the Company in India is Indian income tax payable on worldwide income.
Advance taxes and provisions for current income taxes are presented in the
Balance Sheet after off-setting advance tax paid and income tax provision
arising in the same jurisdiction and where the relevant tax paying units
intends to settle the asset and liability on a net basis.
Deferred income taxes
Deferred income tax is recognized using the Balance Sheet approach.
Deferred income tax assets and liabilities are recognized for deductible and
taxable temporary differences arising between the tax base of assets and
liabilities and their carrying amount, except when the deferred income tax
arises from the initial recognition of an asset or liability in a transaction that
is not a business combination and affects neither accounting nor taxable
profit or loss at the time of the transaction.
Deferred income tax asset are recognized to the extent that it is probable
that taxable profit will be available against which the deductible temporary
differences and the carry forward of unused tax credits and unused tax
losses can be utilized.
The carrying amount of deferred income tax assets is reviewed at each
reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilized.
Deferred tax assets and liabilities are measured using substantively
enacted tax rates expected to apply to taxable income in the years in which
the temporary differences are expected to be received or settled.
Deferred tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and the relevant entity intends
to settle its current tax assets and liabilities on a net basis.
(J) Financial instruments
Financial assets and liabilities are recognized when the Company becomes
a party to the contractual provisions of the instrument. Financial assets
and liabilities are initially measured at fair value. Transaction costs that
are directly attributable to the acquisition or issue of financial assets and
financial liabilities (other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the fair value
measured on initial recognition of financial asset or financial liability.
Cash and cash equivalents
The Company considers all highly liquid financial instruments, which are
readily convertible into known amounts of cash that are subject to an
insignificant risk of change in value and having original maturities of three
months or less from the date of purchase, to be cash equivalents. Cash and
cash equivalents consist of balances with banks which are unrestricted for
withdrawal and usage.
Financial assets at amortized cost
Financial assets are subsequently measured at amortized cost if these
financial assets are held within a business whose objective is to hold these
assets to collect contractual cash flows and the contractual terms of the
financial assets give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive
income if these financial assets are held within a business whose objective
is achieved by both collecting contractual cash flows on specified dates
that are solely payments of principal and interest on the principal amount
outstanding and selling financial assets.
Financial liabilities
Financial liabilities are measured at amortized cost using the effective
interest method.
Equity instruments
An equity instrument is a contract that evidences residual interest in the
assets of the Company after deducting all of its liabilities. Equity instruments
recognized by the Company are recognized at the proceeds received net off
direct issue cost.
K) Investment in subsidiaries
Investment in subsidiaries are measured at cost less impairment.
L) Property, plant and equipment
Pursuant to Para D5 of Ind AS 101, the company has exercised option to
consider fair value on the date of transition as deemed cost for buildings.
Rest all other assets are accounted as per Ind AS.
Depreciation is provided for property, plant and equipment so as to expense
the cost over their estimated useful lives based on a technical evaluation.
The estimated useful lives and residual value are reviewed at the end of
each reporting period, with the effect of any change in estimate accounted
for on a prospective basis.
specified in Schedule II of the Companies Act, 2013. Individual items of
Fixed Assets added during the year costing upto Rs.5,000 each are fully
depreciated in the first year.
(M) Intangible assets
Intangible assets purchased are measured at cost as of the date of
acquisition, as applicable, less accumulated amortization and accumulated
impairment, if any.
(N) Impairment
Financial assets (other than at fair value)
The Company assesses at each date of Balance Sheet whether a financial
asset or a group of financial assets is impaired. IndAS 109 requires
expected credit losses to be measured through a loss allowance. The
Company recognizes lifetime expected losses for all contract assets and/
or all trade receivables that do not constitute a financing transaction. For all
other financial assets, expected credit losses are measured at an amount
equal to the 12 month expected credit losses or at an amount equal to the
life time expected credit losses if the credit risk on the financial asset has
increased significantly since initial recognition.
Financial assets (other than at fair value)
Tangible and intangible assets
Property, plant and equipment and intangible assets with finite life are
evaluated for recoverability whenever there is any indication that their
carrying amounts may not be recoverable. If any such indication exists, the
recoverable amount (i.e. higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis unless the asset
does not generate cash flows that are largely independent of those from
other assets. In such cases, the recoverable amount is determined for the
cash generating unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (of CGU) is estimated to be less than
its carrying amount, the carrying amount of the asset (of CGU) is reduced to
its recoverable amount. An impairment loss is recognized in the statement
of profit and loss.
(O) Employee benefits
Defined benefit plans
For defined benefit plans, the cost of providing benefits is determined using
the Projected Unit Credit Method, with actuarial valuations being carried out
at each Balance Sheet date. Actuarial gains and losses are recognized in
full in the Statement of Profit & Loss for the period in which they occur. Past
service cost both vested and unvested is recognized as an expense at the
earlier of (a) when the plan amendment or curtailment occurs; and (b) when
the entity recognizes related restructuring costs or termination benefits.
The retirement benefit obligations recognized in the Balance Sheet
represents the present value of the defined obligations reduced by the
fair value of scheme assets. Any asset resulting from this calculation is
limited to the present value of available refunds and reductions in future
contributions to the scheme.
' Defined contribution plans
Contributions to defined contribution plans are recognized as expense
when employees have rendered services entitling them to such benefits.
Compensated absences
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognized as an actuarially determined liability at the
present value of the defined benefit obligation at the Balance Sheet date.
(P) Inventories
In view of nature of business of the company, it does not have any inventory
of stock & spares as on year ended 31st March 2025 hence provision of
clause 3(II) of the order are not applicable.
(R) Borrowing costs:
Borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset are capitalized as part of cost of such
asset till such time as the asset is ready for its intended use or sale. All other
borrowing costs are recognized as an expense in the period in which they
are incurred.
(S) Foreign currency transactions:
Functional and presentation currency: The standalone financial
statements are presented in Indian Rupees, which is also the functional
currency of the Company. Foreign currency transactions and balances:
Foreign currency transactions are translated into the functional currency
of the Company, using the exchange rates prevailing at the dates of
the transactions, duly approximated. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the
measurement of monetary items denominated in foreign currency at year-
end exchange rates are recognized as other income in statement of profit
and loss. Non-monetary items are not re-translated at yearend and are
measured at historical cost (translated using the exchange rates at the
transaction date), except for non-monetary items measured at fair value
which are translated using the exchange rates at the date when fair value
was determined
(T) Earnings per share
Basic earnings per share are computed by dividing profit or loss attributable
to equity shareholders of the Company by the weighted average number of
equity shares outstanding during the year. The Company did not have any
potentially dilutive securities in any of the years’ presented.
Diluted earnings per share are computed by dividing net profit net profit
attributable to the equity holders of the Company by the weighted average
number of equity shares considered for deriving basic earnings per share
and also the weighted average number of equity shares that could have
been issued upon conversion of all dilutive potential equity shares unless
the results would be anti - dilutive. The dilutive potential equity shares are
adjusted for the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the outstanding equity
shares). Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date. Dilutive potential
equity shares are determined independently for each period presented.
Contributed equity:
Equity shares are classified as equity. Incremental costs directly attributable
to the issue of new shares or options are shown in equity as a deduction,
net of tax, from the proceeds
(U) Exceptional Items
Certain occasions, the size, type or incidence of an item of income or
expense, pertaining to the ordinary activities of the company is such that its
disclosure improves the understanding of the performance of the company,
such income or expense is classified as an exceptional item and accordingly,
disclosed in the notes accompanying to the financial statements.
26.(a) Contingent Liability (in the current year as well as in previous year)
On Account of Custom Duty:
The Company has received a Show Cause Notice from Director of Revenue Intelligence demanding Rs. 2,15,40,551 u/s 28 of Custom Act 1962 on account of
Custom Duty on import of OPK from Microsoft during the period of Apr2006 - Mar2007.
Status:
The proceedings are pending before Commissioner of Customs, Delhi. On the basis of the legal opinion obtained, the matter has merits in favor of the Company.
The Company has deposited Rs. 50 lakhs as pre-deposit under protest.
26. (b) In respect of R&T activities undertaken by the Company in earlier years, the Company has been advised that the Company has good, valid and substantial defence
in Suit No.1494 of 1997 filed by State Bank of India in the City Civil Court in Ahmedabad against the Company and IDBI (issuer of Incentive warrants) for the
recovery of Rs.5,03,38,289/- with interest @21.50% p.a. This case was dismissed in the year 2009 by the said Court. SBI has filed condonation of delay application
in the year 2010 which has been granted by the court and is being perused in the said Court at Ahmedabad. In view of the this the Company has not made any
provision in respect of this litigation against the Company.
27. i. Pursuant to Para D5 of Ind AS 101, the company has exercised option to consider fair value on the date of transition as deemed cost for buildings. Rest all other
assets are accounted as per Ind AS.
e) Unrecognized temporary differences
The Company has not recognized deferred tax liability associated with fair value gains on equity share measured at OCI as based on Management projection of
future taxable income and existing plan it is not probable that such difference will reverse in the foreseeable future.
32 EMPLOYEE BENEFIT OBLIGATIONS
Funded Scheme
a) Defined Benefit Plans:
Gratuity
The Company operates a gratuity plan through the ‘PCS TECHNOLOGY LIMITED Employees Gratuity Trust’. Every Employee is entitled to a benefit equivalent to
fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The
same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
Level 2:
The fair value of financial instruments that are not traded in an active market (for example over-the-counter derivatives) is determined using valuation
techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2.
Level 3:
If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
b) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
i) the use of quoted market prices or dealer quotes for similar instruments
ii) the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves.
iii) the fair value of forward foreign exchange contracts are determined using forward exchange rates at the Balance Sheet date
iv) the fair value of foreign currency option contracts is determined using the Black Scholes valuation model.
v) the fair value of the remaining financial instruments is determined using discounted cash flow analysis.
All of the resulting fair value estimates are included in level 1 and 2.
Note: Previous year figures are shown in brackets
41.2 Details of Investment by the Loanee in the shares of the company:
None of the Loanee have made investments in the shares of the company.
42. Figures for the previous year have been regrouped/ rearranged wherever necessary.
As per my report of even date attached For and on behalf of the Board of Directors
For Vinod K Mehta & Co
Chartered Accountants
(FRN-111508W)
Divyesh V Mehta A. K. Patni H. C. Tandon
(Partner) Vice Chairman Independent Director
Membership No. 044293 DIN:00014194 DIN:00037611
Place:Mumbai M. P. Jain Bhaskar Patel Sandeep Patel
Date:27-05-2025 Chief Financial Officer CEO Company Secretary
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