xi) Provisions and contingent liabilities /assets
Provisions are recognized when the Company has a 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
obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is
presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is
material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to
the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a
finance cost. Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of
reimbursement. Contingent liabilities are not recognized but are disclosed in notes. Contingent Assets are not
recognized in financial statements.
xii) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects
transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payment
and item of income or expenses associated with investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
xiii) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes
substantial period of time to get ready for its intended use or sale will capitalize as part of the cost of the asset. Other
borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and of costs that
an entity incurs in connection with the borrowing of funds.
xiv) Significant accounting Judgments, estimates and assumptions
In the process of applying the Company's accounting policies, management has made the following estimates,
assumptions and judgments which have significant effect on the amounts recognized in the financial statement:
a. Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax
assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax
assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment
to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of
contingencies/claim/ litigations against the company as it is not possible to predict the outcome of pending
matters with accuracy.
c. Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate
allowances for estimated irrecoverable amounts. Individual trade receivables are written off when
management deems them not collectible. Impairment is made on ECL, which are the present value of the cash
shortfall over the expected life of the financial assets.
d. Defined benefit plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such
obligation are determined using Management valuation as per IND AS 19. The valuation involves making
various assumptions that may differ from actual developments in future. These include the determination of the
discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the
valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these
assumptions. All assumptions are reviewed at each reporting date.
Proceedings under erstwhile SICAAct and BIFR Provisions
a) The company had already paid OTS amount of UPFC loan in the previous years. However in respect of the DADP interest
demanded by UPFC (i.e, Rs. 51.83 Lacs) vide its letter dated 24.03.2011, the company has requested for a waiver of 75%
of Interest demnded vide its letter dated 04.08.2011 in respect of which BIFR board had directed waiver of 50% of DADP
demand as per its order dated 23.05.2012.
Hence, as per the BIFR board's order DADP demand would comes out to Rs. 25.92Lacs.
Further on the basis of BIFR direction, the company had also requested for waiver of 50% DADP Interest amount vide
letter dated 09.02.2013 but UPFC rejected the request vide its letter dated 04.03.2013 stating that the waiver can not
granted as per approved guidelines of the corporation.
However UPFC vide its letter dt 10.2.2014 has asked the company to submit fresh OTS with 10% amount of outstanding
principal as earnest money with in fifteen days of issue of this letter.
The company has filed its objection against this letter and requested to follow the BIFR order for waiver of 50% of DADP
interest
BIFR vide its order dt 12.11.2014 has approved Draft Rehabilitation Scheme of the company and waived of 50% of the
DADP amounting which stood at Rs 25.92 lacs against which the company has paid Rs 21.82 till 31.03.2016. Against this
order of BIFR, the UPFC has Approached AAIFR.
However the ministry of finance has appointed 1st December, 2016 as the date on which provisions of sick industrial
companies (special provisions) Repeal Act, 2003 shall come into force. Therefore the SICA is repealed wef from 1st
December, 2016. The BIFR and AIFR stand dissolved with effect from 1st December, 2016 and all the proceeding before
them stand abated.
Further UPFC has tried to cancel the OTS proceedings but the assessee company has resisted the same vide it's reply dt
27th July, 2017,
Further UPFC has issue a recovery notice to recover outstanding amount which amounting to Rs 4.10 lacs although the
liability of UPFC loan has not been written off till date for want of Closure letter.
During the year, UPFC vide its letter dated 05.03.2024, issued No Dues Certificate after settlement of DADP interest and
company has paid amount of Rs 753500/- in Feb 2024.The balance amount of interest waived by UPFC has been shown
as income in Profit & Loss account.
In October 2003, the company through its directors entered into share purchase agreement with Mr. N.P Jalan and to handover
the management of the company in memorandum of terms dated 16th /17th Jan 2004. After the investment made by Mr. N.P
Jalan and he took over the position of factory on 1st November 2003, the dispute arose between the parties and Jalan Group.
The Hon'ble High Court of Delhi vide order dt 18/08/2005 referred the dispute to sole Arbitrator. After the settlement award of
Rs. 2.40 crore, company has paid Rs.1.47 crore till 31/03/2025 and also deposited 93 lakhs with Registrar of Hon'ble Delhi High
Court as per order dated 28.04.2023 and now the matter is pending with Hon'ble Delhi High Court Mediation and Conciliation
Centre). Since the company has paid 1.47 crore till 31/03/2025 & deposited Rs. 93 Lakhs with Registrar, Company has asked
for shares held in Escrow Account and Jalan Group has not complied with consent award , On 24.10.2024 , hearing took place
and Hon'ble High Court passed an order require escrow agent , Mr S S Khetawat to appear personally in the court with the
physical share certificates on next date of hearing i.e on 24.01.2025. During hearing on 16.04.2025, matter is adjourned for
19.08.2025 before Hon’ble Delhi High Court, Case No ( OMP, ENF, COMM) 103/2022.
24 Leases
(a) The Company has taken office space on operating lease Basis the operating lease arrangement are renewable on
periodic bases and aggreement is extend up to 11 months and don’t have any escalation clause .
(b) Company has not entered in any financial lease aggangement.
33 The company has incurred losses which have resulted into erosion of its net worth. The Management plans to diversify in to other line
of business to improve the financial position of business by infusing funds through Directors and proposed loan from financial
institution against its property. Hence the company continues to prepare its Financial Statements on going concern basis.
34 The Company does not have any Immovable Property whose title deeds are not held in the name of the Company.
35 The Company does not have any investment property, hence the question of disclosure and valuation by a registered valuer as defined
under rule 2 of Companies (Registered Valuers and Valuation) Rules, 2017 does not arise.
36 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for
holding any Benami property.
37 The Company has not raised funds from issue of securities or borrowings from banks and financial institutions for the specific purposes.
38 The Company has not given any Loans or advances to specified persons during the year.
39 The Company has not obtained any borrowings from banks or financial institutions on the basis of security of current assets.
40 The Company has not been declared as a wilful defaulter by any lender who has powers to declare a company as a wilful defaulter at
any time during the financial year or after the end of reporting period but before the date when financial are signed.
41 The company has not entered into any scheme of arrangement approved by competent authority In terms of sectons 232 to 237 of
Companies Act 2013 During the year ended March 31 2025 and March 31.2024
42 The Company has not advanced or loan or invested funds to any other person(s) or entity(ies), including foreign entities
(Intermediaries) with the understanding that the Intermediary shall:
43 (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company
(Ultimate Beneficiaries) or
44 (b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
45 The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the
understanding (whether recorded in writing or otherwise) that the Company shall:
46 (a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding
Party (Ultimate Beneficiaries)
47 (b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
48 The provisions of Corporate Social Responsibility under Section 135 of the Companies Act, 2013 are not applicable to the Company.
49 The Company does not have any transactions with struck-off companies.
50 The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as
income during the year in the tax assessments under the Income Tax Act, 1961 ( such as search or survey or ay other relevent
provisions of Income Tax Act 1961).
51 The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
52 The Company does not have any investment in any downstream subsidiary, joint venture, associates, Therefore, compliance with
number of layers of subsidiary is not applicable to the company.
53 The Company does not have any charges or satisfaction which is yet to be registered with the Registrar of Companies (ROC) beyond
the statutory period.
For LN MALIK & CO For and on behalf of the Board of Directors
Chartered Accountants
Firm Reg. No. - 015992N Pradyut Chauhan £“8hP!ndran RS) C“"
Director Whole-time Director (CEO)
SAMEER PAVI (DIN 017483706) (DIN : 01871760)
Partner
Membership No. 091816
Place : New Delhi
Date : 26-05-2025
UDIN: 25091816BMGUEA1007
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