xi) Provisions and Contingencies
A provision is recognised when the company
has present obligation (legal or constructive)
as a result of a past event, it is probable
that an outflow of resources embodying
economic benefits will be required to settle the
obligations and a reliable estimate can be made
of the amount of obligation.
Contingent liability is disclosed in case of
- a present obligation arising from past
events, when it is not possible that an
outflow of resources will be required to
settle the obligation.
- Present obligation arising from past events,
when no reliable estimate is possible.
- a possible obligation arising from past
events where the probability of outflow of
resources is not remote.
Contingent assets is not recognised in the
financial statements. A contingent asset
is disclosed, where an inflow of economic
benefits is probable.
Provisions, contingent liabilities and contingent
assets are reviewed at each balance sheet date.
xii) Non-current assets held for sale
Assets held for sale are measured at the lower
of carrying amount or fair value less cost to
sell. The determination of fair value less cost
to sell includes use of the Management's
estimates and assumptions. The fair value of
assets held for sale has been estimated using
valuation techniques (including income-and-
market approach) which include unobservable
inputs. Non-current assets and disposal
group that ceases to be classified under 'Held
for Sale' shall be measured at the lower of
carrying amount before the non-current asset
and disposal group were classified under
'Held for Sale' and its recoverable amount at
the date of subsequent decision not to sell.
Recoverable amount of assets reclassified
from 'Held for Sale' have been estimated using
the Management's assumptions which consist
of significant unobservable inputs.
xiii) Revenue recognition
(i) Revenue from operations
(a) Revenue from sale of products-
Revenue from sale of goods is
recognised when the significant risk
and reward of ownership have been
transferred to the buyer and recovery
of consideration is probable.
(b) Revenue from services-
Revenue from rendering of service
is recognised in the accounting
period in which service is rendered
and recovery of consideration
is probable.
(c) Revenue from contracts: -
Revenue from Contracts, where
the performance obligations are
satisfied over time and where there is
no uncertainty about measurement
or collectability of consideration, is
recognised as per percentage-of-
completion method. The Company
determines the percentage-of-
completion on the basis of direct
measurement of the value of
goods and services transferred to
the customer to-date relative to
the remaining goods and services
promised under the contract.
Revenue in excess of invoicing is
classified as 'Contract assets' while
invoicing in excess of revenue is
classified as 'Contract Liabilities'.
Advance payments received from
customers for which no services
are rendered are shown as 'Advance
from customers'.
(d) Other operational revenue
represents income earned from
the activities incidental to the
business and is recognised when the
performance obligation is satisfied
and right to receive the income is
established as per the terms of
the contract.
Company presents revenues net
of indirect taxes in its statement of
profit & loss.
(ii) Other Income: -
(a) I nterest income: - Interest income
from financial assets is recognised
using effective interest rate method.
(b) Dividend income: -Dividend income
is recognised when the Company's
right to receive the amount has
been established.
(c ) Other items of income are accounted
as and when the right to receive
such income arises and it is probable
that the economic benefits will flow
to the Company and the amount of
income can be measured reliably.
xiv) Exceptional items: -
An item of income or expense which by its
size, type or incidence requires disclosure
in order to improve an understanding of the
performance of the Company is treated as an
exceptional item and disclosed as such in the
financial statements.
xv) De-recognition of financial liabilities: -
The company derecognises financial liabilities
when, and only when, the Company's
obligations are discharged, cancelled or have
expired. The difference between the carrying
amount of the financial liability derecognised
and the consideration paid and payable is
recognised in the statement of profit and loss.
xvi) Earnings per share
Basic earnings per share is 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.
xvii) Statement of Cash flows
Cash flow is reported using the indirect method
whereby net profit before tax is adjusted for
effects of transaction of a non-cash nature.
The cash flow from operating, investing
and financing activities of the Company
are segregated.
xviii) Share warrants
The Company may issue share warrants that
entitle the holder to apply for and be allotted
equity shares at a future date, against payment
of the balance subscription amount. The share
warrants are classified and accounted for based
on the terms of issue and in accordance with Ind
AS 32 - Financial Instruments: Presentation,
Ind AS 109 - Financial Instruments, and Ind AS
113 - Fair Value Measurement.
Where the share warrants meet the criteria
for equity classification (i.e., the instruments
involve the issuance of a fixed number of equity
shares for a fixed amount of cash — "fixed-
for-fixed" condition), the proceeds received
on issuance of warrants are recognized as a
separate component of equity under "Money
received against share warrants" in other
equity. No subsequent fair value changes are
recognized after initial recognition.
Upon exercise of the warrants and receipt of the
balance consideration, the amount originally
recognized under "Money received against
share warrants" is transferred to equity share
capital and securities premium, as applicable.
I n case the warrants do not meet the equity
classification criteria (e.g., the conversion price
is variable or there are cash settlement options),
they are classified as financial liabilities or
derivative financial instruments and accounted
for in accordance with Ind AS 109 at fair value
through profit or loss (FVTPL). Fair value
changes are recognized in the Statement of
Profit and Loss at each reporting date.
I f the warrants lapse without being exercised,
the amount received and classified as equity
is transferred to capital reserve or retained
earnings, as per the Board's decision.
29. Going Concern Assumption
The Company has accumulated losses in excess of its paid up capital and reserves. Its net worth has been fully eroded. The
Company is incurring continuous losses for past few years. Capacity utilisation in its particle board business is insignificant.
These conditions may indicate the existence of a material uncertainty that may cast significant doubt about the Company's
ability to continue as a going concern.
However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated below:
(i) The Company is in the process of setting up production lines of 8'x4' and 9'x6' size particle boards in its plant at Velapur.
Company has purchased used plant and machinery- made in Germany- for this purpose. Pre-press and forming section
machinery of 9'x6' production line is made in Italy. Remaining useful life of these machines is assessed by the Chartered
Engineer at 8-11 years.
I installation of 8'x4' production line is in full swing and is expected to be commissioned in the month of June 2025.
Installation of 9'x6' production line shall be done in place of existing 13'x6' production line and shall be taken up after
commissioning of 8'x4' production line.
(ii) Pursuant to Shareholder's approval in the Extra-Ordinary General meeting held on 31/01/2025:
(a) Company has increased its authorised share capital from C 25 Crore to C 34 Crore.
(b) Company has allotted on 09/04/2025, total 59,48,000 Convertible warrants of Face Value of C 10/- each at a price
of C 30/- each (25% payable on application and balance within 18 months from the date of allotment), convertible
into 59,48,000 Equity shares in the ratio of 1:1 to persons belonging to Non-Promoters category on preferential
basis, aggregating C 1784.40 lakh.
(c) Company has allotted on 09/04/2025, total 51,33,323 Equity Shares of Face Value of C 10/- each at a price of C 30/-
each (full amount payable on application) to Non-Promoter-Public category on preferential basis aggregating
H 1540.00 lakh.
(d) Company has received application money of H24.86 lakh before 31/03/2025 and balance amount thereafter.
30. Directors of the company have waived off interest on their unsecured loans for the current financial year 2024-25
31. Share warrants
Company vide its EGM dated 31st January, 2025 has approved to offer, issue and allot, on preferential basis, in one or more
tranches, up to maximum of 60,31,333 Convertible Warrants ("Warrants") entitling the warrant holder to exercise option to
convert and get allotted one Equity Share of face value of H 10/- each fully paid up against each warrant within 18 (Eighteen)
months from the date of allotment of warrants, in such manner and on such terms and conditions as set out in the Explanatory
Statement annexed to the notice and at a price of H 30/- (including premium of H 20/- each) (hereinafter referred to as the
"Issue Price" or "Warrants Issue Price"), aggregating up to H 1809.40 lakh or at such other higher prices and aggregate
amount, if any, determined in accordance with the relevant provisions of Chapter V of SEBI ICDR Regulations, in such manner
and on such other terms and conditions, as may be approved or finalized by the Board, to the identified allottees.
The amount payable on Allotment of Warrants shall be 25% of the price per warrant and amount payable before the date of
conversion of Warrants into Equity Shares would be 75% of the total consideration.
The said Warrant(s) shall be issued and allotted to the Non-Promoters, in dematerialized form provided that in case the
allotment of the said Warrants is pending on account of pendency of any approval or permission by any regulatory authority
or the Government of India, the allotment shall be completed within a period of 15 days from the date of receipt of last such
approval or permissions.
The Equity Shares allotted on conversion of the Warrants shall rank pari -passu in all respects (including voting powers and
the right to receive dividend), with the existing equity shares of the Company from the date of allotment thereof and shall be
subject to the provisions of the Memorandum and Articles of Association of the Company.
The tenure of warrants shall not exceed 18 (eighteen) months from the date of allotment of the warrants.
The proposed allottee(s) of Warrants shall be entitled to exercise option to convert warrants, in one or more tranches for
allotment of one Equity Share of face value of H10/- for every warrant, within a period of 18 months from the date of
allotment of such warrants.
In case the Warrant holder does not apply for the conversion of the outstanding Warrants into Equity Shares of the Company
within 18 (eighteen) months from the date of allotment of the said Warrants, then the amount paid on each of the said
outstanding Warrants shall be forfeited and all the rights attached to the said Warrants shall lapse automatically.
The said Warrants by themselves until exercise of conversion option and Equity Shares allotted, do not give to the Warrant
holder any rights with respect to that of the Shareholders of the Company.
The Warrants shall be exercised in a manner that is in compliance with the minimum public shareholding norms prescribed
for the Company under the LODR Regulations and the Securities Contracts (Regulation) Rules, 1957.
The issue of the Warrants as well as Equity Shares arising from the exercise of the Warrants shall be governed by the regulations
and guidelines issued by SEBI or any other statutory authority as the case may be including any modifications thereof.
Upon exercise of the option by the allottee to convert the warrants within a period of 18 months, the equity shares, pursuant
to exercise of warrants, shall be allotted in compliance with provisions of Regulation 162(2) of ICDR Regulations.
The Warrants and the Equity Shares allotted pursuant to exercise of such Warrants shall be subject to a lock-in for such
period as specified under applicable provisions of the ICDR Regulations and allotted equity shares shall be listed on the stock
exchanges subject to the receipt of necessary permissions and approvals.
The Company shall provide the listing and trading approvals for the Equity Shares to be issued and allotted to the Warrant
holders upon exercise of the Warrants from the relevant Stock Exchanges in accordance with the LODR Regulations and all
other applicable laws, rules and regulations. the pre-preferential allotment shareholding of the Proposed Allottees, if any, in
the Company shall be subject to lock-in as specified in the provisions of Chapter V of the SEBI ICDR Regulations.
Share warrants are alloted on 09/04/2025. Share warrant application money received up to 31/03/2025 is shown under
other financial liabilities.
32. Security Clause:
(i) Cash Credit: -
Primary security: Working capital and Bank guarantee facility from a bank are secured by first charge on the Company's
current assets, present and future, including stocks, goods in process, goods in transit, receivables and book debts.
The Bank guarantee facility is also secured by counter guarantee of the Company.
Collateral: These loans are further secured by equitable mortgage of immovable properties of the Company situated at
village Velapur in district Solapur in Maharashtra.
The above loans are further secured by personal guarantees of some of the Directors of the Company.
(ii) Working Capital Term Loans (UGECL): -
Working capital term loans (UGCEL) comprising of UGECL-I of C NIL lakh (Previous year C 44.73 lakh) and UGECL-II
of C 58.77 lakh (Previous year C 91.28) from Union Bank of India are given under Union Guarantee Emergency Credit
Line Scheme.
Primary security: Working Capital Term Loan (UGECL-I ) from Bank is secured by first charge on the Company's current
assets, present and future, including stocks, goods in process, goods in transit, receivables and book debts.
Working Capital Term Loan (UGECL-II) from Bank is secured by second charge on the above assets.
Collateral: UGCCL loans are further secured by equitable mortgage of immovable properties of the Company situated
at village Velapur in district Solapur in Maharashtra.
UGECL-I is fully repaid in November 2024.
UGECL-II is repayable in 36 equal monthly instalments after moratorium period of 12 months.
33. Sale of part of excess land situated at Velapur
(i) Company had obtained Shareholders' approval in the Annual General Meeting held on 27/09/2019 for sale of part of excess
land admeasuring about 40 acres (non-core asset) of the Company situated at Velapur, Taluka-Malshiras, District-Solapur,
Maharashtra. The same was classified as held for sale at its carrying amount of C 1000.12 lakh. Company has sold 27.97
acres of land up to 31/03/2025. Further sale of land is in progress. Profit on such sale was shown under exceptional income.
Company has received C 286.41 lakh as advance from parties interested in purchasing above land. Execution and registration
of transaction was pending as on 31/03/2025.
(ii) Company had obtained Shareholders' approval in the Extra-Ordinary General Meeting held on 09/12/2023 for sale of
additional excess land admeasuring about 20 acres (non-core asset) of the Company situated at Velapur, Taluka-Malshiras,
District-Solapur, Maharashtra to M/s Western Bio Systems Private Limited (related party) in repayment of ICD given by the
said party. Accordingly, carrying cost of land C 784.08 lakh is shown as "Assets held for sale" as per Ind-AS 105 on "Non¬
current assets held for sale and discontinued operations". Company is in the process of obtaining approval of the bank for
this sale transaction.
Pending completion of the above sale transaction, the Company has transferred amount of H 1000 lakhs received from the
above party to Advance received for sale of land a/c and stopped providing interest on the same.
34 . The Company is in the process of setting up production lines of 8'x4' and 9'x6' size particle boards in its plant at Velapur.
Company has purchased used plant and machinery- made in Germany- for this purpose. Pre-press and forming section
machinery of 9'x6' production line is made in Italy. Remaining useful life of these machines is assessed by the Chartered
Engineer at 8-11 years.
Installation of 8'x4' production line is in full swing and is expected to be commissioned in the month of June 2025. Installation
of 9'x6' production line shall be done in place of existing 13'x6' production line and shall be taken up after commissioning of
8'x4' production line. Existing 13'x6' production line is proposed to be scrapped.
In view of introduction of new product lines, management has decided to dispose-off the WIP stock of existing 13.5'x6'
production line at discounted price. Accordingly, management has sold remaining stock of raw boards and finished goods
stock of said existing 13.5'X6' production line at discounted price. Company has recognised loss of C 855.79 lakh on the
disposal of said raw board and finished goods stock.
36. Employee Benefits
a) Defined contribution plan
The Company has recognised C 10.46 lakh (Previous year C 10.55 lakh) towards post employed defined contribution
plans comprising of provident fund and superannuation fund in the statement of profit and loss.
b) Defined benefit plan
In accordance with payment of Gratuity Act, 1972, the Company is required to provide post-employment benefit to its
employees in the form of Gratuity. Valuation in respect of gratuity liability has been carried out by independent actuary
as at the balance sheet date. In accordance with the requirement of Ind-AS, the disclosure relating to the Company's
gratuity plan are provided below :-
37. Income-tax:
(i) Current Tax:
In view of unabsorbed depreciation and accumulated business losses, the Company does not expect any income-tax
liability during the current financial year.
(ii) Deferred Tax:
The Company has deferred tax asset on account of unabsorbed business losses/depreciation/ allowances /impairment
provisions as given below. However, management of the Company is not sure that the future taxable profit may be
available to set off deferred tax assets due to continuous operating losses. Accordingly, management of the Company
has decided not to recognise deferred tax assets till the time there is reasonable probability of future taxable income.
Notes: -
(a) Decrease in debt equity ratio is due to increase in borrowings and reduction in equity.
(b) Debt service coverage ratio is reduced increase in losses during the year.
(c ) Return on equity ratio is reduced due to losses incurred during the year.
(d) Trade receivable turnover improved due to better collection of trade receivables.
(e ) Trade payable turnover increase due to decrease in purchase and increase in payables.
(f) Net capital turnover ratio is improved due to reduction in average working capital.
(g ) Net profit ratio is decrease due to losses incurred during the year with corresponding decrease in turnover.
(h) Return on capital employed is reduced due to losses incurred during the year.
46. Other Notes
(i) Details of Benami Properties
The Company does not own any benami property neither any proceedings are initiated or pending against the Company
under the Prohibition of Benami Property Transactions Act, 1988
(ii) Borrowings secured against current assets
The Company has fund based borrowings from banks or financial institutions on the basis of security of current assets.
It has filed quarterly returns or statements of current assets with banks or financial institutions. The Returns for first
three quarters are tallied with respect to value of inventory, Receivables, Bank borrowing for Working capital and
Sundry creditors. However, returns are not matching with respect to other current assets and other current liabilities.
Company is yet to file the return for the fourth quarter.
(iii) Wilful defaulter
The Company has not been declared as wilful defaulter by any bank or financial institution or other lender.
(iv) Relationship with Struck off Companies
As per the information available with the Company, the Company has not entered into any transactions with companies
stuck-off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956
(v) Registration of charges with ROC
There are two charges totalling to INR 356.81 created in favour of banks which are pending for satisfaction. There are
no outstanding dues to these banks and satisfaction of these charges is pending due to technical issues which are
being sorted out by the Company.
(vi) Utilisation of Borrowed funds and share premium
The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign
entities (Intermediaries) nor has it received any fund from any person(s) or entity(ies), including foreign entities (Funding
Party).
(vii) Details of Crypto-Currency or Virtual Currency
The Company has not traded or invested in Crypto-Currency or Virtual Currency during the financial year.
(viii) Audit trail (edit log)
The company has used an accounting software for maintaining its books of accounts which has a feature of recording
audit trail (edit log) facility and same has operated throughout the year for all relevant transactions recorded in the
software.
Further, the Company take care of the audit trail (edit log) feature is not tempered with and preserving of audit trail by
the Company as per statutory requirement for record retention.
47. Balances of debtors, advances and creditors are subject to confirmation.
48. Previous year figures are reclassified/ regrouped, where required, to conform with current year presentation.
As per our report of even date Sd/- Sd/-
For CHATURVEDI SK & FELLOWS LLP G.R.K. Raju G.P.K. Raju
Chartered Accountants Chairman & Chief Executive Officer Executive Director & Chief Financial Officer
DIN: -01516984 DIN: -05180152
Sd/- Sd/- Sd/-
Subhash Salvi Mrs. Tanuja Deshpande Siva Sankar Kalive
Partner Company Secretary Director
(Firm Regn. No. 112627W/W100843; Partner's M. No. A38642 DIN:-07354617
Membership No. 127661)
Place: Pune
Date: 15/05/2025
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