m. PROVISIONS, CONTINGENT LIABILITIES
Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources
embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Where the time value of money is material, provisions are measured on a discounted basis.
No provision has been made for contingent liability, they have been disclosed by way of notes.
n. ONEROUS CONTRACTS
A provision for onerous contracts is recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
o. GOVERNMENT GRANTS & SUBSIDY
Grants received from the government agencies against specific fixed assets are adjusted to the cost of the assets and capital grants for project capital subsidy are credited to capital reserve. Revenue grants are recognized as other income or reduced from the respective expenditure. Grants & Subsidy are accounted for once the claims are admitted by the appropriate authorities. No Government Grants or subsidy has been received by the company during the year.
p. INCOME TAXES
Tax expense for the year comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences. In contrast, deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.
The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to cover or settle the carrying value of its assets and liabilities.
Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.
Current and deferred tax are recognised as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT is recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realised.
q. REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is probable that the economic benefits will flow to the company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable net of discounts.
Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. Interest income is recognized on time proportion basis taking into account, the amount outstanding and rate applicable.
r. FOREIGN CURRENCY TRANSACTIONS AND TRANSLATIONS
The company has not entered into any Foreign Currency Transaction during the year.
Notes 1 : It is noted that a significant change in the ownership structure and related party relationships of our company. On 21.02.2023, the share pledged by the previous promoters was transferred to UVARC Limited.Consequently, in accordance with Ind AS-24 pertaining to related party disclosure, UVARC Limited is now considered a related party and is reflected accordingly in the corresponding head.
Notes 2 :
(i) The consortium loan obtained from SBI, CBI and PNB which has been assigned to UVARC LIMITED is secured by way of :-
a. First Pari Passu mortgage of Factory Land and Building at Patratu with all term lenders
b. First Pari Passu charge by way of hypothecation with all term lenders on the borrower's plant and machinery and all other movable fixed assets, both present and future of the Borrower's Patratu Unit.
c. First Pari Passu Hypothecation Charge of Capital Work in Progress (Patratu Unit) on pari passu basis with all Term Lenders
d. Second Pari Passu charge with all the lenders by way of hypothecation of the entire Stock/ Work -in-Progress/Receivables and other current assets of the borrower of the Patratu Unit.
e. Common collateral for patratu Unit lender i.e, UVARC Limited (for the loans to the Patratu Unit)
(i) 3rd Pari Passu hypothecation charge over the moveable fixed assets of the Asansol unit
(ii) 2nd hypothecation charge pari-passu with all term lenders over the entire current assets of the Asansol unit (1st charge with UVARC for the credit facilities granted to Asansol Unit)
(iii) 2nd pari-passu mortgage and charge in respect of the land, building & sheds of the Asansol Unit comprised in Mouza - Palashdiha, P.S. Asasnol
f. Personal guarantee of the Promoter of the company.
(ii) a. Due to irregularity in repayment of loans , Banks (easrtwhile lenders) had classified all secured loans of our company as NPA and a recall was made on the same. Hence , the management has classified all the outstanding sums of such NPA secured loans as Current Liability.
b. The loan standing in the name of UVARCL was assigned to them by the erstwhile lenders by way of assignment of debts as per section 5 of SARFAESI Act, 2002. The said loan (principal and interest) is in the nature of a call loan and the same can be called upon for payment by the lender at any given point of time. Accordingly , the same has been classified as a Current Liability
34. Tax expense includes deferred tax Assets amounting to Rs. 204.46Lacs for the year ended March 31, 2024. The management is already in discussion with some lenders and investors regarding expansion of the existing Plant and other new Plant and is confident about the viability of the expansion. The management after considering all the facts, foreseeable future, trading estimates and cash flow forecasts is confident about the sufficient future taxable income which will be available against such deferred tax Assets.
35. The Secured financial liabilities which has been classified as NPA by SBI, CBI & SBH is being transferred to UVARC Limited (A securitisation/reconstruction company registered with RBI) “as and where” basis as per SARFAESI Act, 2002. The interest of Rs. 7098.15Lacs (Related to UVARCL) provided in the books as per the rate mentioned in loan agreement entered into between company and consortium lenders.
36. Notes on Going Concern assumptions :
Nature of the Business and Recent Developments
Burnpur Cement Limited is a manufacturing company. Over the past 8 years, since 2015, it is pertinent to tell that, the company has been declared as NPA back in December 2016. There were four secured financial creditor of the company i.e. State Bank of India, Central Bank of India, United Bank of India and West Bengal Financial Corporation. As stated above, West Bengal Financial Corporation has realised its debt by selling the assets of the Asansol Plant. Further, Central Bank of India, State Bank of India and Punjab National bank (Formerly known as United bank of India) via their letter dated 08.04.2019, 17.05.2019 and 11.08.2022 respectively assigned their parts of the secured debts of the company under section 5 of SARFAESI Act, 2002 to UV Asset Reconstruction Company Limited (letters of Assignment attached). UV Asset Reconstruction Company Limited the acting Asset Reconstruction Company to Burnpur Cement Limited under Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002, who has taken over 100% of the total secured debts of the Company has taken over the management of the Company in exercise of power under section 9(1)(a), 15 and 16 of SARFAESI Act, 2002 and clause 7(B) of RBI Circular bearing Reference No. RBI/2015-16/93 DNBR (PD) CC.No.04./SCRC/26.03.001/2015-16 dated 01.07.2015 with effect from 1st October 2019.UV Asset Reconstruction Company Limited has appointed their representatives on the Board of Directors with effect from 1st October 2019 and now the management of the company has been running by their representatives to realise their debts from the company.
Furthermore, The Company was in an offtake agreement with Ultratech Cement Limited (“Ultratech”) by virtue of which the company was selling its entire finished products to Ultratech and the impact of demand and supply of Ultratech directly affected the performance of the company. Further on November 29,2023, M/s UV Asset Reconstruction Company Limited ('UVARCL'), by exercising their powers conferred to them under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Security Interest (Enforcement) Rules, 2002, had by an auction process sold the entire immoveable and moveable assets of the Company situated at Patratu to M/s Ultratech Cement Limited for a total consideration of Rs. 169.79 Crores. The said amount of Rs. 169.79 Crores has been adjusted against the outstanding loan account balance standing in the books of the Company in the name of UVARCL. Hence, company has no actual sales/turnover from 30th Nov, 2023 i.e, from the date of sale of moveable and Immoveable assets of the company.
These issues have resulted in substantial losses and cash flow constraints.
Determination of Not Going Concern
In light of these developments, the company's management has assessed the company's ability to continue as a going concern and the accounts of the company has been prepared on the assumption that the company is not a going concern and further is has concluded that it is not reasonably likely to meet its obligations in the normal course of business over the next 12 months. The assessment was based on the following factors :
• Company do not have any functional production unit
• Significant recurring losses from operations
• Negative cash flows from operations
• Negative net worth or significant deficiencies in working capital
• Inability to secure additional financing
• Challenges in meeting financial covenants or loan obligations Conclusion
In summary, the determination that Burnpur Cement Limited is not a going concern has significant implications for the company's financial statements and business operations. Users of these financial statements should carefully consider the inherent risks and uncertainties associated with this determination.
37. On November 29,2023, M/s UV Asset Reconstruction Company Limited ('UVARCL'), by exercising their powers conferred to them under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Security Interest (Enforcement) Rules, 2002, had by an auction process sold the entire immoveable and moveable assets of the Company situated at Patratuto M/s Ultratech Cement Limited. Consequent to sale of all the assets,81 employees out of 89 employees resigned and left the organization on 30th Nov 2023. Since there was no revenue stream left, the company did not insist these 81 employees to serve the notice period, all pay in lieu of the notice period which amounts to Rs 41,76,908/-
38. Figures pertaining to previous year have been re-grouped/re-arranged, reclassified and restated, wherever considered necessary, to confirm to the classification adopted in the current year.
39. There were no Foreign exchange inflow and outflow during the year.
40. The company operates in Single Segment of Production and Sales of Cement.
41. In terms of Section 22 of Micro, Small & Medium Enterprises Act 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the enterprises under the above Act, the required information could not be furnished. In view of above and in absence of relevant information, the auditor has relied upon the same.
42. The Company has defined gratuity plan. Every employee who has completed 5 years or more of service is entitled to gratuity on terms not less favorable than the provisions of the Payment of Gratuity Act, 1972. The amount of contribution to be made is arrived at the balance sheet date, as given below and is accounted accordingly :
Opening Balance as per Books Rs. 14442284.00
Provision made during the Year Rs. 403589.00
Closing Balance as per Books Rs. 10534881.00
Gratuity Paid during the year Rs. 4310992.00
43. Advances, Trade Payables and Trade Receivables are subject to confirmation from respective parties and consequential reconciliation, adjustment arising therefrom, if any. The management however doesnot expect any material variations. Provisions wherever considered necessary have been made.
44. In the opinion of the management, the current assets, loans and advances have a value on realization in the ordinary course of business, which is at least equal to the amount at which they are stated.
45. It is noted that a significant change in the ownership structure and related party relationships of our company. On 21.02.2023, the share pledged by the previous promoters was transferred to UVARC Limited. Consequently, in accordance with Ind AS-24 pertaining to related party disclosure, UVARC Limited is now considered a related party and is reflected accordingly in the corresponding head.
46. The Company was in an offtake agreement with Ultratech Cement Limited (“Ultratech”) by virtue of which the company was selling its entire finished products to Ultratech and the impact of demand and supply of Ultratech directly affected the performance of the company. Further on November 29,2023, M/s UV Asset Reconstruction Company Limited ('UVARCL'), by exercising their powers conferred to them under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 read with Security Interest (Enforcement) Rules, 2002, had by an auction process sold the entire immoveable and moveable assets of the Company situated at Patratu to M/s Ultratech Cement Limited for a total consideration of Rs. 169.79 Crores. The said amount of Rs. 169.79 Crores has been adjusted against the outstanding loan account balance standing in the books of the Company in the name of UVARCL. Hence, company has no actual sales/turnover from 30th Nov, 2023 i.e, from the date of sale of moveable and Immoveable assets of the company.
47. The cash balance of Rs 22,90,054/- as on 31st March 2024 was lying in the lock and key at Kolkata office of the company. The auditor requested the confirmation of the same from the Board of Directors and it was provided in writing by the Board of Directors to the auditor.
48. Some old bank accounts having balances of total of Rs 45.39 lacs, pertaining to the tenure of old management (Promoter management) is lien with some bank guarantees. These bank guarantee and balance thereon could not be verified due to unavailability of details and documents.
49. RELATED PARTY DISCLOSURE
Related Party transaction as per India Accounting Standard 24 issued by ICAI
A. As defined in Indian Accounting Standard 24, the company has a related party relationship in the following :
Key Management Personnel
a. Mr. PawanPareek ,CFO
b. Mr. Indrajeet Kumar Tiwary, Wholetime Director
c. Mr. Jit Roy Choudhury, Company Secretary (upto11.03.2024)
d. Mrs. Puja Guin (from 01.04.2024 onwards)
For M/s K. Pandeya & Co. For and on behalf of the Board
(Chartered Accountants)
Firm Registration No. 000135C
(C.A. Gopal Singh) Indrajeet Kumar Tiwary Ritesh Aggarwal
Partner Whole time Director Director
Membership No. 403581 Din : 06526392 Din : 07671600
Date : 28thday of May 2024
Place : Kolkata Pawan Pareek Puja Guin
CFO Company Secretary
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