10. PROVISIONS, CONTIGENT LIABILITIES AND CONTIGENCT ASSETS
A Provision is recognized when the company has a present legal or constructive obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. Provisions (including retirement benefits) are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. Contingent liabilities are not recognized in profit & loss account but are disclosed in Notes to the Accounts.
11. BORROWING COST
Borrowing Cost that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A Qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.
12. RETIREMENT AND OTHER EMPLOYEE BENEFITS
a. Defined Contribution Plan
Employee benefits in the form of provident fund, superannuation, employees’ state insurance fund and labour welfare fund are considered as defined contribution plans and the contributions are charged to the profit and loss during the year when the contributions to the respective funds are due and as and when services are rendered by employees
b. Defined Benefit Plan Gratuity
In accordance with the Payment of Gratuity Act, 1972, as amended, the Company provides for gratuity, a defined benefit retirement plan (‘the Gratuity Plan’) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee’s salary and the tenure of employment with the Company. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation at each Balance Sheet date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the gratuity fund maintained with the Insurer.
Defined benefit costs are categorized as follows:
a. service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
b. net interest expense or income; and
c. re-measurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
c. Short-term and other long-term employee benefits
The employees of the Company are entitled to compensate absences. The employees can carry forward a portion of the unutilized accumulating compensated absences and utilize it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company fully contributes all ascertained liabilities to the fund maintained with the Insurer. The Company recognizes accumulated compensated absences based on actuarial valuation. Non-accumulating compensated absences are recognized in the period in which the absence occur.
d. Salary and other short-term benefits
The salary and other short-term benefit i.e. Bonus etc. is being paid to the employees when it becomes due.
Actuarial assumptions in respect of provisions for gratuity and leave encashment at balance sheet date are as follows:
4.1 In preparing this report we have heavily relied on the completeness and accuracy of the information, data and assumptions provided to us orally and in writing by or on behalf of the Company and its advisors. We have not completed any detailed validation checks/ investigation on the information, data and assumptions provided, however preliminary broad consistency is viewed in respect of data. As compared to previous valuation assumptions, changes, if any, may be due to change in yield to government bonds/change in entity’s long term views for future.
4.2 This report is based on going concern basis and as per requirements of Accounting Standard mentioned above and its application to the Plan. These results should not be used for any other purpose. In particular, this Report does not constitute a formal funding actuarial valuation of the Plan and does not present any recommendation of contributions or funding levels and hence results will not hold good incase company is closed or mass attrition. This report is provided solely for the company use and for the specific purposes indicated above. Except where I expressly agree in writing, it should not be disclosed or provided to any third party. In the absence of such consent and an express assumption of responsibility, no responsibility whatsoever is accepted by me for any consequences arising from any third party relying on this report or any advice relating to its contents. In any case, irrespective of vendor agreement etc. liability of under signed towards entity or anyone is strictly limited to the billed amount for this report. The Company may provide copy of this Report to its auditors along with rules of the plan, but I make no representation as to the suitability of this report for any purpose other than that for which it was originally provided and accept no responsibility or liability to the company or its auditors in this regard. The company should draw the provisions of this paragraph to the attention of its auditors.
5.1 Principal assumptions are discount rate and salary increase. The discount rate is based upon the yield on govt bonds and the salary increase should take account inflation, seniority, promotion and other relevant factors. However no explicit allowance is used for disability. As per Accounting Standard, selection of appropriate assumption is responsibility of the entity. Though entity has been advised on the suitability wherever applicable, the report is based on assumptions finalized by the entity (after considering long term view entity might have considered these assumptions prudent).
Risk Factors: Other assumptions would have produced different results e.g. a decrease in discount rate or an increase in salary inflation will lead to an increase in reported liability as per table of sensitivity analysis. Similarly change in attrition rates will also impact the liability. Funded plan carries usual investment risks including asset liability mismatch which will impact net liability/expenses and OCI if any.
9. Sundry Creditors:
The dues payable to Micro and Small Enterprises is based on the information available with the Company and takes into account only those suppliers who have responded to the enquiries made by the Company for this purpose.
MSME
The Management has identified enterprises which have provided goods and services to the Company and which qualify under the definition of micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, the disclosure in respect of amounts payable to such enterprises as at 31 March 2024 has been made based on the information available with the Company and interest amounting to H28,04,416/- is computed in regards to the delayed payment.
10. Lease
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the Risks and rewards of ownership to the lessee. All other leases are classified as operating leases. In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessor’s expected inflationary cost increases
11. Preference Shares
In accordance to Ind AS 109 read with Ind AS 32, redeemable preference shares are classified as financial liability. Therefore, the treatment has been given in the financials in accordance with the aforesaid Ind AS.
Financial liabilities: Classification, subsequent measurement and gains and losses financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held for trading, or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in the Statement of Profit or Loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in the Statement of Profit or Loss. Any gain or loss on de-recognition is also recognised in the Statement of Profit or Loss.
The company has redeemed 7,72,500 preference share of face value of H100 during the year at par and the correspondence effect has been taken towards financial liability and its reserve.
12. Impairment of Assets
In accordance with IND AS 36 ‘Impairment of Assets’ issued by Institute of Chartered Accountants of India, the company has assessed the potential generation of economic benefits from its business units as on the balance sheet date and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business: there is no indication to the contrary and accordingly, the management is of the view that no impairment provision is called for in these accounts.
13. Depreciation
In accordance with IND AS 16 ‘property, Plant and Equipment’ issued by institute of Chartered Accountants of India, the company has calculated the depreciation on the revised carrying amount (after revalution) of PPE. Accordingly, the new depreciation is higher than the original depreciation. The amount of additional depreciation charged excess on revalued assets, has been moved though Profit & Loss Account. Further, the company has transffered the amount of excess depreciation net of tax impact (if any) has been moved from revalution reserve to retained earnings.
16. Corporate Social Responsibility
CSR amount required to be spent as per Section 135 of the Companies Act, 2013 read with Schedule VII thereof by the Company during the year is H23.13 lacs (previous year Nil), the company has duly spent the same.
17. The debt of the company was assigned by the banks to M/s Alchemist Asset Restructuring Company Limited (AARCL) in earlier year(s). During the year under consideration, the company had prepaid the entire outstanding debt due to Alchemist Asset Reconstruction Company Limited and had obtained No Dues Certificate form AARCL. The company has received One Time Settlement benefits to the tune of H586.88 lacs.
18. During the year under consideration, the Company has issued Listed, Secured 18% Coupon, Non Convertible Debentures of face value of H1 lac each on Private Placement basis to Neo Special Credit Opportunity Fund under the Trusteeship of Catalyst Trusteeship Limited of H15,000 lacs (for security and repayment schedule, refer Schedule 13).
19. PLEDGING OF SHARES
The promoters of the company had earlier pledged 1,39,72,490 equity shares in favour of Lenders/AARC to the company as security, later on the company had prepaid all the loan due to AARC in the financial year 2023-24 and get the securities released.
During the month of March 2024, the company has issued 18% Secured, Listed, Redeemable, Non-Convertible Debentures to the tune of H15,000 lacs to M/s Neo Special Credit Opportunity Fund under the Trusteeship of Catalyst Trusteeship Limited. The pledging of 50% i..e 83,24,255 equity shares of Mr. Parveen Jan shareholding in favour of Catalyst Trusteeship Limited is under process.
20. Earning Per Share
The calculations of profit attributable to equity shareholders and weighted average number of equity shares outstanding for purposes of basic earnings per share calculation are as follows:
(iv) No proceedings have been initiated or pending against the company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and the rules made thereunder during the year ended March 31st, 2024 and March 31st, 2023.
(v) The company has not obtained any borrowings from the banks and financial institutions on the basis of security of current assets.
(vi) The Company has not been declared as willful defaulter by any bank or financial Institution or other lender during the year ended March 31st, 2024 and March 31st, 2023.
(vii) The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(viii) The Company does not have any subsidiary as at March 31st, 2023 and March 31st, 2022 and accordingly clause (87) of section 2 of the Act read with Companies (Restriction on number of Layers) Rules, 2017 is not applicable.
(ix) Undisclosed Income
There are no transactions not recorded in the books of accounts during the year ended March 31st, 2024 and March 31st, 2023 that has been surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961.
There are no previously unrecorded income and related assets to be recorded in the books of account during the year ended March 31st, 2024 and March 31st, 2023.
(x) Details of Crypto Currency or Virtual Currency
The Company has not traded or invested in Crypto currency or Virtual Currency during the year ended March 31st, 2024 and March 31st, 2023.
(xi) Utilization of Borrowed funds and share premium:
(A) During the year ended and as at March 31st, 2024 and March 31st, 2023, the Company has not advanced or loaned or invested funds (either borrowed funds or share premium or any other sources or kind of funds) to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding (whether recorded in writing or otherwise) that the Intermediary shall :
(i) 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
(ii) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
(B) During the year ended and as at March 31st 2024 and March 31st 2023, 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
(i) 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) or
(ii) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
22. Previous year figure has been regrouped and reclassified wherever considered necessary to make them comparable to those of the current year.
The above Note on Significant Accounting Policies 1 to 13 and Other Note 1 to 21 form an integral part of the Balance Sheet as at 31st March 2024 and has been authenticated as such.
For Sahni Bansal & Associates For and On Behalf of the Board of Directors
Chartered Accountants F.R.N: 514470C
Sd/- Sd/- Sd/-
Pardeep Surrinder Sahni Mr. Pardeep Kumar Jain Mr. Abhay Jain
Partner Managing Director Managing Director
Membership No. 093866 Din: 00024879 Din: 01876385
UDIN:24093866BKEFHE1663
Sd/- Sd/-
Date: May 27, 2024 Mr. Parv Jain Ms Aaina Gupta
Place: Ghaziabad Chief Financial Officer Company Secretary
M.No. A43233
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