(l) Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Contingent Assets are not recognized, but disclosed in the financial statements, if an inflow of economic benefits is probable.
In respect of GST for FY 2019-20 & 2020-21, a search was initiated by Director General of GST Intelligence (DGGI) in the premises of the company. As a result of search, the company made liable to reverse input tax credit of Rs. 383.08 for the F.Y. 2019-20 & 20-21. Out of the same, the company has paid Rs. 50.00 through duty reversal and Rs. 163.00 paid through cash ledger. Management has taken advice of GST consultant and according to their advice an application was filed with GST department stating that the said payment of Rs. 213.00 shall be treated as duty payment under protest. After taking professional consultation, the management is confident of getting back Rs. 213.00 which is accounted under the head Loans and Advances. Hence, total amount of 383.08 is considered as contingent liability as the matter is subjudice.
(m) Earnings per Share (EPS):
Basic Earnings per share is calculated by dividing the net profit after tax by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share adjust the figures used in determination of basic earnings per share to take into account the conversion of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as at the beginning of the period unless issued at a later date.
(n) Cash and cash equivalents:
Cash and cash equivalents include bank balance, cash on hand, demand deposits with banks, other short term highly liquid investments with original maturities of three months or less.
(o) Cash Flow Statements:
The cash flow statement has been prepared under the indirect method as set out in Accounting Standard (AS 3) statement of cash flows. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of
(t) Impairment of Assets:
The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets' net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital. After impairment, depreciation/amortization is provided on the revised carrying amount of the asset over its remaining useful life.
(u) Event Occurring after the Balance sheet Date (AS 4)
In the case of M/s Fernas construction as disclosed in the above Notes 12 and Note 14 respectively, recovery suit under MSMED Act, 2006 was filed by the company. On 27th May 2025, i.e. after the balance sheet date. The arbitration award has been passed and management is in the process of analyzing the legal recourse available for further action as the award amount is lower than the expected recoverable amount. Considering the provisions as prescribed under AS- 4, the event has occurred after the balance sheet date and before the date on which financial statements are approved by the Board, the amount of Rs. 851.56 Lakh has been disclosed as Disputed considered Good as at 31.3.2025. Considering the above, since the ultimate outcome cannot be estimated upto the date of audit report, the related accounting treatment with respect to the above and its related impact on the financial statements will be taken into consideration in the next financial year once the final decision is taken by the management as regards challenging / non challenging the said Arbitral Award.
(B) Notes on Accounts:
1) Balances of Depositors, Sundry Debtors, Creditors, and Loans & Advances are subject to confirmation and reconciliation, if any. In many cases where confirmations are not available, management has given approval after verification of transactions reflected in ledger account.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
12) The Company is a Level-I Enterprise as defined in applicability of Accounting Standards to Corporate Entities. Accordingly, the Company has complied with the Accounting Standards applicable to Level-I Enterprise.
Signature to notes 1 to 27
For, For and on behalf of the Board of Directors
B J Patel & J L Shah Chartered Accountants FRN: 104148W
CA Darshan B Patel (Partner)
Membership No.: 108350 UDIN: 25108350BMJOZL1240
Bhaminiben Mehta Girishkumar Raval
Director Managing Director
DIN:01646822 DIN:01646747
Date: 29/05/2025
Ishita Raval Himali M. Thakkar
Place: AHMEDABAD
|