2.17 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised only when:
i. an Company entity has a present obligation (legal or constructive) as a result of a past event; and
ii. it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; and
iii. a reliable estimate can be made of the amount of the obligation
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time
value of money is material, the carrying amount of the provision is the present value of those cash flows.
Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is
virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of:
i. a present obligation arising from past events, when it is not probable that an outflow of resources will be
required to settle the obligation; and
ii. a present obligation arising from past events, when no reliable estimate is possible.
Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities
and contingent assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected
to be received under such contract, the present obligation under the contract is recognised and measured as a
provision.
2.18 Statement of Cash Flows:
Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities.
Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:
i. changes during the period in operating receivables and payables transactions of a non-cash nature;
ii. non-cash items such as depreciation, provisions, deferred taxes, unrealized gains and losses; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are
not available for general use as on the date of Balance Sheet.
2.19 Earnings Per Share:
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted
average number of ordinary shares outstanding during the year. Diluted earnings per share is determined by
adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares
outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
2.20 Key source of estimation:
The preparation of financial statements in conformity with Ind AS requires that the management of the Company
makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the
reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the
financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates include useful lives of property, plant and equipment & intangible assets, expected credit loss
on loan books, future obligations in respect of retirement benefit plans, fair value measurement etc. Difference, if
any, between the actual results and estimates is recognised in the period in which the results are known.
2.21 Changes in Accounting Standard and recent accounting pronouncements (New Accounting Standards issued
but not effective):
On March 30, 2021, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards)
(Amendments) Rules, 2019, notifying Ind AS 116 on Leases. Ind AS 116 would replace the existing leases standard Ind
AS 17. The standard sets out the principles for the recognition, measurement, presentation and disclosures for both
parties to a contract, i.e. the lessee and the lessor. Ind AS 116 introduces a single lease accounting model and requires
a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying
asset is of low value. Currently for operating lease, rentals are charged to the statement of profit and loss. The
Company is currently evaluating the implication of Ind AS 116 on the financial statements.
The Companies (Indian Accounting Standards) Amendment Rules, 2019 notified amendments to the following
accounting standards. The amendments would be effective from April 1, 2019
a) Ind AS 12, Income taxes — Appendix C on uncertainty over income tax treatments
b) Ind AS 19— Employee benefits
c) Ind AS 23 - Borrowing costs
d) Ind AS 28— investment in associates and joint ventures
e) Ind AS 103 and Ind AS 111 — Business combinations and joint arrangements
f) Ind AS 109 — Financial instruments
The Company is in the process of evaluating the impact of such amendments.
2.22 Inventories
Inventories have been valued at the method prescribed in the Accounting Standards.
2.23 Other Income Recognition
Interest on Loan is booked on a time proportion basis taking into account the amounts invested and the rate of
interest.
Dividend income on investments is accounted for when the right to receive the payment is established.
2.24 Purchases
Purchase is recognized on passing of ownership in share based on broker's purchase note.
2.25 Expenditure
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
2.26 Investments
Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A
provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments.
Investments are classified into current and long-term investments.
Investments that are readily realizable and are intended to be held for not more than one year from the date, on
which such investments are made, are classified as current investments. All other investments are classified as non¬
current investments.
2.27 Related Parties
Parties are considered to be related if at any time during the reporting period one party has the ability to control the
other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related party relationships are covered:
i. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are
under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow
subsidiaries);
ii. Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which
the reporting enterprise is an associate or a joint venture;
iii. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives
them control or significant influence over the enterprise, and relatives of any such individual;
iv. Key management personnel (KMP) and relatives of such personnel; and
v. Enterprises over which any person described in (iii) or (iv) is able to exercise significant influence.
2.28 Stock In Trade
Shares are valued at cost or market value, whichever is lower. The comparison of Cost and Market value is done
separately for each category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is lower. Net asset value of units declared by
mutual funds is considered as market value for non-exchange traded Mutual Funds.
The fair value of financial assets and liabilities are included at the amount at which instruments could be exchanged
in a current transaction between the willing parties. The following methods and assumptions were used to estimate
the fair value:
i. The Company has opted to fair value its unquoted equity instruments at its Net Asset Value through Retained
Earnings.
ii. The fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial
assets, short term borrowings, trade payables, and other financial liabilities approximates their carrying
amounts largely due to the short-term maturities of these instruments. Company has adopted Effective Interest
Rate Method (EIR) for fair valuation of long term borrowings.
2.29 Fair Value Hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
2.30 Financial Risk Management Objectives and Policies:
The Company's activities are exposed to a variety of Financial Risks from its Operations. The key financial risks
include Market risk, Credit risk and Liquidity risk.
i. Market Risk:
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of
changes in market prices. Market risk comprises mainly three types of risk, foreign currency risk, Interest rate
risk and other price risk such as Equity price risk and Commodity Price risk.
ii. Foreign Currency Risk:
There are no Foreign Currency transactions during the financial year.
iii. Foreign Currency Sensitivity:
There are no Foreign Currency transactions during the financial year.
iv. Credit Risk:
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or
customer contract, leading to a financial loss. The company is exposed to credit risk from its operating
activities (primarily trade receivables).
v. Trade Receivables:
Customer credit risk is managed based on company's established policy, procedures and controls. The
company assesses the credit quality of the counterparties, taking into account their financial position, past
experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The
Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer
receivables are regularly monitored and assessed. The Company follows the simplified approach for
recognition of impairment loss and the same, if any, is provided as per its respective customer's credit risk as
on the reporting date.
vi. Liquidity Risk:
Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated
with its financial liabilities that are settled by delivering cash or another financial asset. The company's
approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
2.31 Summary of Significant Accounting Policies General
• Contingent Liabilities & Commitments - Nil
• Additional Information disclosed as per Part II of the Companies Act, 2013 - Nil
2.32 Cash and cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand,
deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of
three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the
balance sheet.
2.33 Earnings/(loss) per share
i. Basic earnings/ (loss) per share
Basic earnings / (loss) per share is calculated by dividing:
• the profit attributable to owners of the Company
• by the weighted average number of equity shares outstanding during the financial year.
ii. Diluted earnings / (loss) per share
Diluted earnings / (loss) per share adjusts the figures used in the determination of basic earnings per share to
take into account:
• the after income tax effect of interest and other financing costs associated with dilutive potential equity
shares, and
• the weighted average number of additional equity shares that would have been outstanding assuming the
conversion of all dilutive potential equity shares.
Notes:
1. It is to be noted that the above valuation of Unlisted Shares held by Company is done as per Valuation per valuation
report provided to us and declaration received from management of the Company for FY 2023-2024, is Rs. 2347.01
Lakh. The said Valuation of Rs. 2347.01 Lakh is based on the last audited balance sheets of unlisted Companies
provided by management. During verification of record based on previous valuation report in November 2022 total
valuation of Shares held by company is Rs. 7,22,42,307/- i.e. Realization Value as per Valuation Report of Independent
Valuer appointed under IBC. We have noted that there is significant difference between these reports however; we
have relied upon the valuation done by the Company and provided to us.
2. In The above shares held by company out of which some of share Certificates are not found during the course of
physical verification. We have been informed by Board of Directors (Old Management) that they are in Process of
searching the physical share certificates and if they fail to locate these missing share certificates, the Company will
apply for the duplicate share certificates.
3. We have taken the valuation of Unlisted Equity Shares held by the Company (as disclosed above), of Ferromet Steels
Pvt. Ltd., Sigma Limited and Sritech Academy Private Limited as Nil for the reason of there is Nil valuation as per
Report and also the financial statements are not available.
(d) T erms and rights attached to Equity Shares:
The Company has only one class of Equity Shares having a Face Value of ? 10/- per share. Each holder of Equity Shares
is entitled to one vote per share. The Company declares and pays dividend in Indian rupees. In the event of liquidation
of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after
distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by
the shareholders.
In the event of Liquidation of the Company, the holders of the equity shares will be entitled to receive remaining assets
of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of
equity shares held by the shareholders.
Note 15 — Contingent Liabilities not provided for
Since the Company is under NCLT Process and claims have been filed by respective claimants, we are of the opinion that
there is no Contingent Liabilities as on date.
Note 16: Corporate Social Responsibility
The Company does not meet the criteria specified in sub section (1) of section 135 of the Companies Act, 2013, read with
Companies [Corporate Social Responsibility (CSR)] Rules, 2014. Therefore it is not required to incur any expenditure on
account of CSR activities during the year.
In accordance with the applicable provisions of the Insolvency and Bankruptcy Code, 2016, (IBC), M/s. Nirnidhi
Consultants Private Limited, Kolkata, petitioner in their capacity as Financial Creditor have filed a petition under the
IBC with the Honorable National Company Law Tribunal, Mumbai Bench (NCLT). The NCLT vide its order dated 25th
November, 2022 admitted petition and allowed and initiation of the Corporate Insolvency Resolution Process (C1RP)
ordered in respect of the Company appointed Mr. Deepak Saruparia, as the Interim Resolution Professional (IRP) as
proposed by the Petitioner in terms of the IBC. The appointment of Mr. Deepak Saruparia was confirmed by the
NCLT vide its order dated 25th November, 2022. On appointment of the IRP under the IBC, the powers of the Board
of Directors of the Company were suspended.
Note 23:
During verification process of shares held stock in trade for preparation of financial statement, following Share
Certificates were found missing, however we have been informed by board of Directors (Old Management) that they
are in process of searching these share certificates. If the management fails to locate these share certificates, the
Company will apply for Duplicate Shares.
There are no Micro and Small Scale Business Enterprises, to whom the Company owes dues, which are outstanding
for more than 45 days as at March 31, 2024. This information as required to be disclosed under Micro, Small and
Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on
the basis of information available with the Company.
Note 25: Other Notes to Accounts
i. In the opinion of the management, current assets, loans and advances and other receivables are
approximately of the value stated, if realized in the ordinary course of business. The provisions of all known
liability are ascertained, except for Trade Receivables. Since the receivables are dues for more than one year,
we are not certain about the recoveries of the same. The Company is confident of receiving the dues and
hence no contingency liabilities have been provided.
ii. Previous year figures have been restated to confirm the classification of the current year.
iii. Balances of Sundry Debtors, Unsecured Loans, and Sundry Creditors are Loans & Advances are subject to
reconciliation, since conformations have not been received from them. Necessary entries will be passed on
receipt of the same if required.
iv. The company has not provided for Gratuity and Leave Encashment to Employees on accrual basis, which is
not in conformity with AS-15 issued by ICAI. However, in the opinion of management the amount involved is
negligible and has no impact on Statement of Profit & Loss.
v. We draw the attention of members that the Company is having investments in some of small cap illiquid
stocks where either there is very thin trading or is no trading during the entire financial year. Even trading in
some of these shares has been suspended by Stock Exchange (BSE). The Company has valued these shares on
last traded price on BSE and has not made any provision for the possible losses.
vi. The audited financial statement, valuation of the unquoted investments are subject to the valuation by
independent valuer, as per management explanation they are under process to carrying out fair valuation
from registered valuer , these are shown its investment value.
vii. We have not been provided with the Valuation Report of Unquoted Stocks and thus have been taken at cost
price. We are unable to comment on the impact of the same on Statement of Profit & Loss.
viii. The Company is under IBC at Mumbai Bench. The Case has been admitted by honorable court w.e.f. 25th
November 2022.
As per our Report of Even date
For & on behalf of the Board
For BIHARI SHAH & CO.
Chartered Accountants
FRN- 119020W
Pradeep Bissa Sarita P. Bissa
Suspended Managing Director Suspended Non-Executive Director
Kunal T. Sanghavi (DIN: 07361524) (DIN: 07361557)
Partner
Membership No: 173487
UDIN: 24173487BKADRS1602 ^
Deepak Saruparia
r Chandrasekhar G. Purohit Court Appointed IRP
Place: Ahmedabad
Date: October 24, 2024 CFO (DIN: 0736l557>
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