(xiv) Contingencies and Provisions
A provision is recognized when the Company has a present obligation as a result of past event. It is
probable that an outflow of resources embodying economic benefit will be required to settle the
obligation in respect of which a reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on the best estimate of the expenditure 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 estimate.
A contingent liability is disclosed, unless the possibility of an outflow of resources embodying the
economic benefit is remote.
(xv) Taxation
Tax expense comprises of current tax and deferred tax charge or credit. Current tax is measured at the
amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. 1961.
The deferred tax charge or credit is recognized using prevailing enacted or substantively enacted tax
rate. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are
recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are
recognized only to the extent there is reasonable certainty of realization in future. Deferred tax
assets/liabilities are reviewed as at each balance sheet date based on developments during the period
and available case law to re-assess realization/ liabilities.
(xvi) Financial Instruments
The Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument.
a. Financial Assets
(i) Initial recognition and measurement
The Company recognizes financial assets when it becomes a party to the contractual provisions of the
instrument. All financial assets are recognized at fair value on initial recognition, except for trade
receivables which are initially measured at transaction price. Transaction costs that are directly
attributable to the acquisition of financial assets that are not at fair value through profit or loss, are
added to the fair value on initial recognition. Regular way trades of financial assets are accounted for at
trade date.
(ii) Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Financial assets at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose
objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding.
After initial measurement, debt instruments at amortized cost are subsequently measured at amortized
cost using the effective interest rate method, less impairment, if any.
- Financial assets at fair value through other comprehensive income
A financial asset is subsequently measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity
instruments to present the subsequent changes in fair value in other comprehensive income based on
its business model.
- Financial assets at fair value through profit or loss
Financial assets which are not classified in any of the above categories are subsequently fair valued
through profit or loss.
- Investment in Associate
Investment in Associate is carried at cost in the financial statements
De-recognition:
The company derecognizes a financial asset when the contractual rights to the cash flows from the
financial asset expire or it transfers the financial asset and the transfer qualifies for de-recognition under
Ind AS 109.
b. Financial Liabilities
(i) Initial recognition and measurement
The Company’s financial liabilities include trade and other payables, loans and borrowings including
bank overdrafts, financial guarantee contracts and derivative financial instruments. Financial liabilities
are classified, at initial recognition, at fair value through profit and loss or as those measured at
amortized cost.
(ii) Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
-Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities held for trading. The
Company has not designated any financial liabilities upon initial recognition at fair value through profit
and loss.
-Financial liabilities measured at amortized cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized
cost using the effective interest rate method except for those designated in an effective hedging
relationship.
De-recognition
A financial liability (or a part of a financial liability) is derecognized from the company’s balance sheet
when the obligation specified in the contract is discharged or cancelled or expires.
C. Fair Value
The Company determines the fair value of its financial instruments on the basis of the following
hierarchy:
Level 1: The fair value of financial instruments quoted in active markets is based on their quoted
closing price at the balance sheet date. Examples include exchange-traded commodity
derivatives and other financial assets such as investments in equity and debt securities which
are listed in a recognized stock exchange.
Level 2: The fair value of financial instruments that are not traded in an active market is
determined by using valuation techniques using observable market data. Such valuation
techniques include discounted cash flows, standard valuation models based on market
parameters for interest rates, yield curves or foreign exchange rates, dealer quotes for similar
instruments and use of comparable arm’s length transactions. For example, the fair value of
forward exchange contracts, currency swaps and interest rate swaps is determined by
discounting estimated future cash flows using a risk-free interest rate.
Level 3: The fair value of financial instruments that are measured on the basis of entity specific
valuations using inputs that are not based on observable market data (unobservable inputs).
The cost of unquoted investments approximate the fair value because there is a wide range of
possible fair value measurements and the cost represents estimate of fair value within that
range.
(i) Considering the on-going CIRP with the Resolution Plan as approved by the Committee of Creditors
being submitted for the approval of the adjudicating authority as of date, and in view of the fact that
substantial assets were disposed-off during the earlier years as part of the plant relocation and the
disposal of used Dies, Jigs etc. during the previous year no further impairment in the value of plant and
machinery is considered necessary.
ii) During the earlier financial year, the Company had relocated its manufacturing plant to a new site at
Chakan (20 Km away from its erstwhile Chinchwad plant), to a custom "built to suit”, building and
infrastructure on a ‘10 10 year’ long lease basis.
iii) The installation, erection, commissioning etc. of the above said machines at our Chakan plant was
progressing well, prior to the suspension of operations since March 2020, due to lack of working capital.
a) PAL Credit and Capital Limited, (PALCC) is an associate Company, promoted by Premier Ltd with
shareholding of 27.31%. In order to meet the minimum regulatory compliances and day to day running
of the affair of PALCC, the company had extended funding from time to time totaling to Rs. 385.25
Lakhs to PALCC. The operation of PALCC as an NBFC could not be revived despite best efforts by
Premier due to lack of capital and inability of Premier to provide any further funding. As a result,
PALCC has surrendered its NBFC license to RBI in the earlier years. The company has already
provided for the said amount advanced to PALCC in the earlier years. Company has also provided for
100% diminution of its investment in the equity share of PALCC. In view of above, no interest is
charged on outstanding amount of PALCC.
b) The Company has in its possession the share certificates and the blank transfer forms executed by
Automobiles Peugeot in respect of 8,40,25,000 equity shares of Pal-Peugeot Ltd (under liquidation)
gifted by them in the year 1999. These shares could not be transferred in company’s name as Pal-
Peugeot Ltd was not functioning. The Company has filed a petition before the Hon’ble Bombay High
Court for permission to transfer the said shares in the name of the Company and the petition is pending
for disposal by the Court. Meantime, the Company is holding these shares as ‘holder in due course’.
a) Company’s bankers namely State Bank of India, State Bank of Hyderabad and The Jammu & Kashmir
Bank Ltd had assigned its entire credit facilities extended to the Company in the earlier years to Edelweiss
Asset Reconstruction Company Limited (EARC) with all their rights, title and interests in financial assistances
granted by the abovementioned banks together with all the underlying securities and guarantees in favor of
EARC Trust.
These loans are secured by way of pari-passu charge on Company’s land, plant & machinery and current
assets located at the plant at Chakan or in transit. EARC also holds an exclusive charge on the 41.08 acres of
the Company’s land located at Kalyan/ Dombivali towards the Corporate Loan of Rs.11,800 Lakhs which
forms part of the loans assigned to EARC Trust by SBI. Annual rate of Interest varies from 1.50% to 6.35%
above the base rates of these banks.
b) Hire purchase Loan of Rs.331.46 Lakhs from First leasing Company of India Limited is secured under
the specific Fixed Asset procured against the said Loan. This loan was repayable in variable monthly
installments till October 2016, annual rate of Interest is 2% above SBI base rate. As on 31st March 2023,
principal amount of Rs.331.46 Lakhs and interest of Rs.52.91 Lakhs remain unpaid for a period ranging
between 0-96 months.
c) The Inter Corporate Deposits of Rs. 2,107.99 Lakhs (Previous year Rs.2,107.99 Lakhs) are unsecured
short term Loans repayable within 3 to 6 months with Interest rate varying 14.50% to 22.00% p.a from the date
of availing the same in the earlier years. The above includes Rs. 600 Lakhs (Previous years Rs. 600 Lakhs)
borrowed by the Company for which the promoters had pledged their shares and the said pledge was invoked
by an unsecured financial creditor during the July 2020.
d) As mentioned in note no.1 the Company is under CIRP the order dated 29th January, 2021 of the NCLT,
Mumbai bench imposes moratorium in accordance with Section 14 of the Code, and no further interest is
provided during the CIRP period on the loans outstanding as on the CIRP commencement date.
e) The Company has received a sum of Rs.11.69 lakhs as part of funding from the member of the
Committee of the Creditors (CoC) which is to be utilized for the expenses related to the CIRP process. Interest
@18% has been provided on this funding.
(25) Deferred tax Assets/(Liability)
a) The Company had recognized a net deferred tax asset of Rs.4,585.15 Lakhs till March, 2015. Upon
reassessment of the prevailing business situation, tax position and land sale during the earlier years, deferred
tax asset of Rs.4,585.15 Lakhs, recognized in the earlier years, stands fully reversed in the earlier years.
b) Further the Company has not recognized Deferred Tax Assets, as recognition of Deferred Tax Assets did
not meet the requirement of virtual certainty as envisaged in Ind-As 12 "Income Taxes”.
c) During the earlier year, the Company exercised the option of reduced corporate income-tax rate from
34.94% to 25.17% as permitted under section 115BAA of the Income-tax Act, 1961 as per the amendment
notified in the official Gazette dated 12 December 2019.
(26) Contingent Liability (Not Provided For) & Commitments:
a) Liabilities disputed in appeals Viz. Service Tax Rs.73.92 lakhs; Excise Rs.10 lakhs; Sales Tax
Rs.7514.77 lakhs (against which Rs.274 lakhs paid under protest) and FEMA Rs.65.49 lakhs.
b) Company had suspended its operation effective 03.03.2020 and the workmen union appealed
before the industrial court, Pune followed by an appeal before the Hon’ble Bombay High Court
against non-payment of wages arising out of the said suspension of operations. The Honable
Bombay High Court ordered the notice dated 03.03.2020 as illegal and hence quashed and it aside.
In consonance of the ongoing CIRP, further clarified that the rights of the parties to recover charges
shall be subject to the decision of the Tribunal under the provisions of the IBC. The Company had
admitted claims for non-essential workmen wages and dues at 50% of their monthly wages till CIRP
commencement date. Accordingly, the balance amount due as payable would be contingent upon
the outcome of the petition of the union under hearing before the nClT.
Further, the workmen union had also filed another application for the same matter before the NCLT,
Mumbai which is pending for hearing. However, the workmen in their application filed before the
NCLT, Mumbai have claimed full wages even for the CIRP period. Since, the Company is under
CIRP, quantifying the amount of payment contingent on the order of the NCLT, Mumbai bench is
not possible.
c) The amount of Rs. 3718.73 lakhs paid to the Government of Maharashtra "under protest”
towards "Unearned Income” on sale / compulsory acquisition of land. The Company’s appeal in this
regard is pending before the Government of Maharashtra. This amount forms part of "Loans &
Advances” and is considered as a contingent liability.
d) Guarantees issued by bank amounting to Rs.71.26 lakhs (previous year Rs.71.26 lakhs)
e) Interest on Inter Corporate Deposits amounting to Rs.363.48 lakhs that has not been provided in
the books pertaining to the pre-CIRP period.
f) Corporate Guarantee liability of Rs.759.23 lakhs in connection with the car loan availed by certain
employees from Corporation Bank, TJSB.
g) Corporate Guarantee liability of Rs.682.18 lakhs towards lease rental ‘lock in period’ for Chakan
plant as per the lease agreement terms with Global Icon Projects LLP, Pune.
h) The Income Tax Dept had issued notices for reopening the assessments for three assessment
years i.e. AY 2013-14, AY 2014-15 and AY 2017-18. The company informed the Tax department
that since the company is under CIRP it moratorium under section 13(1)(a) read with section 14 of
IBC. Subsequently the Tax authorities completed the re-assessment and determined demands of
Rs.118,97,26,581 for assessment year 2013-14 and Rs.1,44,32,220 for assessment year 2017-18.
However, no provision for this liability has been made in these financial statements. The company
has already filed appeal before CIT Appeals against this demand, which is still pending
adjudication.
i) Estimated amount of contracts remaining to be executed on capital account (net of advances) is
Rs.Nil (Previous Year Rs. NIL).
(27) Employee Benefit
As the Company is undergoing CIRP as per the NCLT order as detailed in note no.1, and the
employees may have already filed their claims to the Resolution Professional, no further defined
contribution plans are applicable to the Company.
In line with note no. 26 dealing with the workmen union matter before the industrial court / Bombay
High Court, and depending on the final outcome of the court hearing, they might be either reduction
or addition to the amount of benefits due to these employees.
(28) Segment Reporting
The Company is engaged in only one segment i.e Engineering.
Information about geographical areas
(32) Balances of receivables, loans, trade payables, advance & deposit received from dealers /customers
are as per books of account. Adjustments, if any, will be made subsequent to the completion of the
CIRP process as per the approved resolution plan.
(33) As detailed in Note. No.1, Corporate Insolvency Resolution Process (“CIRP”) has been initiated in case
of the Company vide order no. C.P. (IB) 1224/MB/2020 delivered on 29th January, 2021 of Hon’able
National Company Law Tribunal (“NCLT”), Mumbai Bench under the Provisions of the Insolvency and
Bankruptcy Code, 2016 (the Code). Pursuant to the order, the management of affairs of the Company
and powers of board of directors of the Company are now vested with the Resolution Professional
(“RP”) who is appointed by the Committee of Creditors (“CoC”). These financial statements have been
certified by the Resolution Professional, Ms. Kanak Jani (IP Registration No: IBBI/IPA-001/IP-P-
017557/2019-2020/12685)
(34) The Company has incurred losses during the year, its liabilities exceed the recoverable value of the
assets and its net worth has been fully eroded as at 31st March, 2024. As mentioned in note no. 33, the
Hon’able NCLT, Mumbai Bench has admitted a petition to initiate insolvency proceedings against the
Company under the Code. As per the Code, it is required that the Company be managed as a going
concern during the CIRP. Further, as mentioned in note no. 1, the CIRP period continues to be in effect
till the CoC approved Resolution Plan of the Company is approved by the NCLT.
The future prospects of the Company would be determined on the completion of CIRP. Hence, in view of
the above facts and considering the smooth progress of the CIRP with the submission of the Resolution
Plan of the prospective Resolution Applicant (PRA), as approved by the CoC, for the final approval of
the Tribunal as of date, these financial statements have been prepared on a going concern basis.
(35) The carrying value of Property, Plant and Equipment (including capital work in progress of Rs. 351.95
Lakhs) and intangible assets as at 31st March 2024 are Rs. 3,083.21 lakhs. As explained in note no 33
above, the Company is under CIRP. As such, the Company has not taken into consideration any
impairment on the value of the Property, Plant and Equipment and intangible assets, if any, in
preparation of Financial statements. Further, the Company has also not made full assessment of
impairment as required by Ind AS 36 on Impairment of Assets, if any, as at 31st March, 2024 in the
value of Property, Plant and Equipment and intangible assets.
(36) As mentioned in note no. 33, the Honourable NCLT, Mumbai Bench has admitted a petition to initiate
insolvency proceeding against the Company under the Code. As part of the Corporate Insolvency
Resolution Process, creditors of the company were called upon to submit claims to the Resolution
Professional (RP) in terms of the applicable provisions of the Insolvency & Bankruptcy Code, 2016
(IBC). Claims submitted by the creditors are being compiled and verified by the RP and the status of the
same is as follows:
The order dated 29th January, 2021 imposes moratorium in accordance with Section 14 of the Code,
and no interest is provided during the CIRP period on the loans outstanding as on the CIRP
commencement date. The amount of claim admitted by the RP may be different than the amount
reflecting in the financial statements of the Company as on 31st March, 2024. While the CIRP has
progressed well as stated above with the successful Resolution Plan currently awaiting approval of the
Tribunal, the impact of the write-offs and write backs have not been considered in the preparation of the
financial statements, pending final approval.
(37) Details of Benami Property held
No proceedings have been initiated or are pending against the Company for holding any benami
property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made
thereunder.
(38) Borrowings of credit facility from banks against security of current assets
During the year ended 31st March, 2024, the Company has not availed any borrowing from banks and
financial institution on the security of its current assets. The working capital facility availed by the
Company from banks and financial institution were classified by the lenders as non-performing assets in
the earlier years and the same were assigned to Edelweiss Assets Reconstruction Company (EARC).
(39) Willful Defaulter
The Company has not been declared willful defaulter by any bank or financial institution or any other
lender during the year.
(40) Relationship with Struck Off Companies
The Company has not entered into any transactions with the companies struck off under Section 248 of
the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the year.
(41) Registration of Charges or satisfaction with Registrar of Companies (ROC)
During the year, there are no instances of any registration, modification or satisfaction of charges which
are pending for registration, modification or satisfaction with Registrar of Companies (ROC) beyond the
statutory period.
(42) Compliance with number of layers of companies
The Company is in compliance with the relevant provisions of the Companies Act, 2013 with respect to
the number of layers prescribed under clause (87) of Section 2 of the Companies Act, 2013 read with
the Companies (Restriction on number of Layers) Rules, 2017.
(43) Compliance with approved Scheme(s) of Arrangements
There is no Scheme of Arrangement approved by the Competent Authority in terms of Sections 230 to
237 of the Companies Act, 2013 during the year and hence, no disclosures are required to be made by
the Company in these financial statements for the year ended 31st March, 2024.
(44) Utilization of Borrowed Funds and Share Premium under Rule 11(e)
No funds have been advanced or loaned or invested (either from borrowed funds or share premium or
any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including
foreign entities (“Intermediaries”) with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate
Beneficiaries).
The Company has not received any fund from any party(s) (Funding Party) with the understanding that
the Company shall whether, directly or indirectly lend or invest in other persons or entities identified by
or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on
behalf of the Ultimate Beneficiaries.
(45) Rounding of Amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest
lakhs as per the requirement of Schedule III, unless otherwise stated.
(46) The Company has not traded or invested in any crypto currency or virtual currency during the year
as well as during previous year.
(47) There has been no fraud by the Company or on the Company during the year as well as during
previous year.
(48) Previous year’s figures have been regrouped / reclassified wherever necessary to conform to
current year’s classification.
(49) The Company does not have any transaction not recorded in the books of accounts that have
been surrendered or disclosed as income during the year as well as during the previous year in the
tax assessments under the Income Tax Act, 1961.
As per our report of even date attached
For Jayesh Dadia & Associates LLP For Premier Limited (In CIRP)
Chartered Accountants
FRN: 121142W / W100122
Jayesh Dadia Kanak Jani
Partner Resolution Professional
Membership No. 033973 IP Registration No:
Place: Mumbai IBBI/IPA-001/IP-P-01757/2019-2020/12685
Dated: 24th May, 2024 AFA Validity upto: 19-12-2024
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