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Persistent Systems

BSE: 533179|NSE: PERSISTENT|ISIN: INE262H01013|SECTOR: Computers - Software
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« Mar 15
Notes to Accounts Year End : Mar '16
1.  Nature of operations
 
 Persistent Systems Limited (the Company) is a public Company
 domiciled in India and incorporated under the provisions of the
 Companies Act, 1956 (the Act). The shares of the Company are listed
 on Bombay Stock Exchange and National Stock Exchange. The Company is a
 global company specializing in software products, services and
 technology innovation.  The Company offers complete product life cycle
 services.
 
 2.  Basis of preparation
 
 The financial statements of the Company have been prepared in
 accordance with generally accepted accounting principles in India
 (Indian GAAP) to comply in all material respects with the Accounting
 Standards specified under section 133 of the Companies Act, 2013 and
 the relevant provisions of the Companies Act, 2013. These financial
 statements are prepared on an accrual basis and under the historical
 cost convention except financial instruments which have been measured
 at fair value. The accounting policies are consistently applied by the
 Company during the year and are consistent with those used in previous
 year.
 
 
 3. Gratuity plan:
 
 The Company has a defined benefit gratuity plan. Each employee is
 eligible for gratuity on completion of minimum five years of service at
 15 days basic salary (last drawn basic salary) for each completed year
 of service. The scheme is funded with an insurance Company in the form
 of a qualifying insurance policy.
 
 The following tables summarize the components of net benefit expense
 recognized in the statement of profit and loss and the funded status
 and amounts recognized in the Balance Sheet for the respective plans.
 
 4. Operating leases
 
 The Company has taken equipment and office premises on lease under
 cancellable operating lease arrangements. Further, the Company has also
 taken certain office premises under non-cancellable operating lease
 agreement for a period of 3 – 15 years. The escalations during
 non-cancellable lease period have been accounted for on a straight line
 basis. There are no restrictions imposed by the lease agreements. There
 are no subleases. The Company has an option to renew the lease
 agreements at the end of the lease period.
 
 5. Employees stock option plans (ESOP)
 
 Certain information in this note relating to number of shares, options
 and per share/option price has been disclosed in full and is not
 rounded off as stated in note 42.
 
 a) Details of Employee stock option plans
 
 The Company has framed various share-based payment schemes for its
 employees. The details of various equity- settled employee stock option
 plan (''ESOP'') schemes adopted by the Board of Directors are as follows:
 
 The vesting period and conditions of the above ESOP schemes is as
 follows:
 
 All the above ESOP schemes have service condition, which require the
 employee to complete a specified period of service, as a vesting
 condition. The vesting pattern of various schemes has been provided
 below:
 
 b) Details of activity of the ESOP schemes
 
 Movement for the year ended March 31, 2016 and March 31, 2015
 
 c) Details of exercise price for stock options outstanding at the end
 of the year
 
 d) Effect of the employee share-based payment plans on the statement of
 profit and loss and on its financial position
 
 Compensation expense arising from equity-settled employee share based
 payment plans for the year ended March 31, 2016 amounted to Rs. 17.81
 million (Previous year Rs. 31.71). The liability for employee stock
 options outstanding as at March 31, 2016 is Rs. 71.34 million (Previous
 year Rs. 55.65 million).
 
 e) Details of stock options granted during the year
 
 The weighted average fair value of the stock options granted during the
 current year is Rs. 583.66 (Previous year Rs. 632.22). The Binomial
 tree valuation model has been used for computing the weighted average
 fair value for stock options granted considering the following inputs:
 
 f) Impact on the reported net profit and earnings per share by applying
 the fair value based method
 
 Since the Company uses intrinsic value method as required by the
 Guidance Note on Accounting for Employee Share-based Payments issued by
 Institute of Chartered Accountants of India, the impact on reported net
 profit and Earnings per Share by applying the fair value method is set
 out as follows:
 
 6. Contingent liabilities
 
 The Company does not have any contingent liability as on March 31, 2016
 (Previous year Rs. Nil)
 
 As on March 31, 2016, the pending litigations in respect of direct
 taxes amount to Rs. 126.58 million and in respect of indirect taxes
 amount to Rs. 28.02 million. Based on the advice obtained and judgments
 in favour of the Company at the first appellate authority in the
 earlier years, the company''s management does not expect any outflow in
 respect of these litigations.
 
 7.  Research and development expenditure
 
 The particulars of expenditure incurred on in-house research and
 development are as follows:
 
 8.  The Company has incurred an expenditure ofRs. 62.02 million during
 the financial year 2015-16 (Previous year Rs. 51.96 million) on
 Corporate Social Responsibility in accordance with section 135(5) of
 the Companies Act, 2013
 
 9.  Details of dues to micro and small enterprises as defined under
 MSMED Act, 2006
 
 There are no defaults and overdue amounts payable to suppliers, who
 have intimated about their status as Micro and Small Enterprises as per
 the provisions of Micro, Small and Medium Enterprises Development Act,
 2006 (MSMED Act, 2006).
 
 10.  Loans and advances in the nature of loans given to subsidiaries
 and associates and firms / companies in which directors are interested
 
 a) Advance to Persistent Systems, Inc.
 
 - Balance as at March 31, 2016 Rs. 24.60 million (Previous year: Rs.
 7.77 million).
 
 - Maximum amount outstanding during the year Rs. 32.45 million
 (Previous year: Rs. 16.50 million).
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 b) Advance to Persistent Systems Pte. Ltd
 
 - Balance as at March 31, 2016 Rs. 0.21 million (Previous year: Rs.
 Nil)
 
 - Maximum amount outstanding during the year Rs. 0.27 million (Previous
 year: Rs. 0.57 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand.  This amount is utilized for meeting business
 requirements.
 
 c) Advance to Persistent Telecom Solutions Inc.
 
 - Balance as at March 31, 2016 Rs. Nil (Previous year: Rs. 0.43
 million)
 
 - Maximum amount outstanding during the year Rs. 1.49 million (Previous
 year: Rs. 0.43 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 d) Advance to Persistent Systems Malaysia Sdn. Bhd.
 
 - Balance as at March 31, 2016 Rs. 1.23 million (Previous year: Rs.
 Nil)
 
 - Maximum amount outstanding during the year Rs. 1.23 million (Previous
 year: Rs. 20.14 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 e) Loan to Persistent Systems, Inc.
 
 - Balance as at March 31, 2016 Rs. Nil (Previous year: Rs. 312.40
 million)
 
 - Maximum amount outstanding during the year Rs. 330.65 million
 (Previous year: Rs. 389.61 million)
 
 - Principle and interest is receivable at the end of 3 years @ LIBOR  
 3.5% p.a. This amount is utilized for meeting business requirements.
 
 f) Advance to Persistent Systems France SAS
 
 - Balance as at March 31, 2016 Rs. 0.82 million (Previous year: Rs.
 0.04 million)
 
 - Maximum amount outstanding during the year Rs. 0.82 million (Previous
 year: Rs. 0.67 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 g) Advance to CloudSquads Inc.
 
 - Balance as at March 31, 2016 Rs. Nil (Previous year: Rs. 0.01
 million)
 
 - Maximum amount outstanding during the year Rs. 0.01 million (Previous
 year: Rs. 0.03 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 h) Loan to Klisma e-Services Private Limited
 
 - Balance as at March 31, 2016 Rs. 27.43 million (Previous year: Rs.
 27.43 million)
 
 - Maximum amount outstanding during the year Rs. 27.43 million
 (Previous year: Rs. 27.43 million)
 
 - Principle is receivable at the end of twelve months and interest is
 receivable quarterly @ 12 % p.a. This amount is utilized for meeting
 business requirements. The outstanding balance has been fully provided
 for.
 
 i) Advance to Klisma e-Services Private Limited
 
 - Balance as at March 31, 2016 Rs. 0.81 million (Previous year: Rs.
 0.75 million)
 
 - Maximum amount outstanding during the year Rs. 0.81 million (Previous
 year: Rs. 0.75 million)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements. The outstanding balance has been fully provided for.
 
 j) Advance to Aepona Limited
 
 - Balance as at March 31, 2016 Rs. 0.38 million (Previous year: Rs.
 Nil)
 
 - Maximum amount outstanding during the year Rs. 0.38 million (Previous
 year: Rs. Nil)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 k) Advance to Aepona Software (Private) Limited
 
 - Balance as at March 31, 2016 Rs. 0.10 million (Previous year: Rs.
 Nil)
 
 - Maximum amount outstanding during the year Rs. 0.10 million (Previous
 year: Rs. Nil)
 
 - There is no repayment schedule in respect of this advance. It is
 repayable on demand. This amount is utilized for meeting business
 requirements.
 
 11.  The financial statements are presented in Rs. million and decimal
 thereof except for per share information or as otherwise stated.
 
 12.  Previous year''s figures have been regrouped where necessary to
 conform to current year''s classification.
Source : Dion Global Solutions Limited
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