(H) Provisions

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. When the Company expects some or all of a provision to be reimbursed, for example,
under an insurance contract, the reimbursement is recognized as a separate asset, but only when
the reimbursement is virtually certain. The expense relating to a provision is presented in the
statement of Profit and Loss net of any reimbursement.

Provisions are not discounted to their present value and are determined based on the best
estimate required to settle the obligation at the reporting date. These estimates are reviewed at
each reporting date and adjusted to reflect the best estimate.

Continqent Liabilities

A contingent liability is a possible obligation that arises from past events whose existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond
the control of the Company or a present obligation that is not recognized because it is not probable
that an outflow of resources will be required to settle the obligation. A contingent liability also
arises in extremely rare cases, where there is a liability that cannot be recognized because it
cannot be measured reliably. The Company does not recognize a contingent liability but discloses
its existence in the financial statements unless the probability of outflow of resources is remote.

Provisions, contingent liabilities, contingent assets and commitments are reviewed at each
balance sheet date.

(I) Employee Benefits

• Short term obligations

Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled
wholly within 12 months after the end of the period in which the employees render the related
service are recognized in respect of employee's service up to the end of reporting period and are
measured at the amounts expected to be paid when the liabilities are settled. The liabilities are
presented as current employee benefit obligation in the balance sheet.

• Other Long-term employee benefit obligations:

The liabilities for earned leave are not expected to be settled wholly within 12 months after the
end of the period in which the employees render the related service. They are therefore measured
based on the actuarial valuation using projected unit credit method at the year end. The benefits
are discounted using the market yields at the end of the reporting period that have terms
approximating to the term of the related obligation. Re-measurements as a result of experience
adjustments and changes in actuarial assumptions are recognized in profit or loss.

Gratuity Obligations:

Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial
valuation on projected unit credit method made at the end of each financial year.

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling,
excluding amounts included in net interest on the net defined benefit liability and the return on
plan assets (excluding amounts included in net interest on the net defined benefit liability), are
recognized immediately in the Balance Sheet with a corresponding debit or credit to retained
earnings through OCI in the period in which they occur. Re-measurements are not reclassified to
profit or loss in subsequent periods.

Net interest is calculated by applying the discount rate to the net defined benefit
(liabilities/assets).The Company recognized the following changes in the net defined benefit
obligation under employee benefit expenses in statement of profit and loss

• Service cost comprising current service cost, past service cost, gain & loss on curtailments and
non-routine settlements.

• Net interest expenses or income.

(J) Revenue Recognition:

Revenue from sale of goods is recognized when control of the products being sold is transferred
to our customer and when there are no longer any unfulfilled obligations. The- Performance
Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer
acceptance depending on customer terms.

Revenue is measured on the basis of contracted price, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on behalf of the Government such as goods
and services tax, etc. Accumulated experience is used to estimate the provision for such discounts
and rebates. Revenue is only recognized to the extent that it is highly probable a significant
reversal will not occur.

Our customers have the contractual right to return goods only when authorised by the Company.
An estimate is made of goods that will be returned and a liability is recognised for this amount
using a best estimate based on accumulated experience.

Income from services rendered is recognised based on agreements/arrangements with the
customers as the service is performed and there are no unfulfilled obligations. Interest income is
recognised using the effective interest rate (EIR) method.

(K) Leases

Company, as a lessee

The Company as a lessee, recognizes a right-of-use asset and a lease liability for its leasing
arrangements (if any) , if the contract conveys the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified asset, if it involves the use of an
identified asset and the Company has substantially all of the economic benefits from use of the
asset and has right to direct the use of the identified asset.

The cost of the right-of-use asset shall comprise of the amount of the initial measurement of the
lease liability adjusted for any lease payments made at or before the commencement date plus
any initial direct costs incurred. The right-of-use assets is subsequently measured at cost less
any accumulated depreciation, accumulated impairment losses, if any and adjusted for
any remeasurement of the lease liability. The right-of-use assets is depreciated using the straight¬
line method from the commencement date over the shorter of lease term or useful life of right-of-
use asset.

The Company measures the lease liability at the present value of the lease payments that are not
paid at the commencement date of the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be
readily determined, the Company uses incremental borrowing rate.

For short-term and low value leases, the Company recognises the lease payments as an
operating expense on a straight-line basis over the lease term.

The Company as a lessor

Leases for which the Company is a lessor is classified as a finance or operating lease(if any).
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to
the lessee, the contract is classified as a finance lease. All other leases are classified as operating
leases. When the Company is an intermediate lessor, it accounts for its interests in the head lease
and the sublease separately.

The sublease is classified as a finance or operating lease by reference to the ROU asset arising
from the head lease. For operating leases, rental income is recognized on a straight line basis
over the term of the relevant lease.

(L) Fair Value Measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance
sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either:

i. In the principal market for the asset or liability, or

ii. In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their
economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant's ability
to generate economic benefits by using the asset in its highest and best use or by selling it to
another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which
sufficient date are available to measure fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements
are categorized within the fair value hierarchy, described as follows, based on the lowest level
input that is significant to the fair value measurement as a whole:

a. Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

b. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable

c. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Company determines whether transfers have occurred between levels in the hierarchy by
re-assessing categorization (based on the lowest level input that is significant to the fair
value measurement as a whole) at the end of each reporting period.

The Company's management determines the policies and procedures for both recurring and non¬
recurring fair value measurement, such as derivative instruments measured at fair value.

External valuers are involved for valuation of significant assets, such as properties and financial
assets and significant liabilities. Involvement of external valuers is decided upon annually by the
management. The management decided, after discussions with the Company's external valuers
which valuation techniques and inputs to use for each case.

At each reporting date, the management analyses the movements in the values of assets and
liabilities which are required to be re-measured or re-assessed as per the Company's accounting
policies.

The management in conjunction with the Company's external valuers, also compares the change
in the fair value of each asset and liability with relevant external sources to determine whether the
change is reasonable.

For the purpose of fair value disclosures, the Company has determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level
of the fair value hierarchy as explained above

(M) Significant accounting judgments, estimates and assumptions

The preparation of the Company's financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could result in outcomes that require a
material adjustment to the carrying amount of the asset or liability affected in future periods.

Judgments

In the process of applying the Company's accounting policies, management has made the
following judgments, which have the most significant effect on the amounts recognized in the
financial statements.

Operating lease commitments - Company as lessee

The Company has taken various properties on leases. The Company has determined, based on
an evaluation of the terms and conditions of the arrangements, such as the lease term not
constituting a substantial portion of the economic life of the commercial property, and that it does
not retain all the significant risks and rewards of ownership of these properties and accounts for
the contracts as operating leases.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at
the reporting date, that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year, are described below. The Company
based its assumptions and estimates on parameters available when the financial statements were
prepared.

Existing circumstances and assumptions about future developments, however, may change due
to market changes or circumstances arising beyond the control of the Company. Such changes
are reflected in the assumptions when they occur.

a. Taxes

Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax
laws, and the amount and timing of future taxable income. Given the wide range of business
relationships and the long-term nature and complexity of existing contractual agreements,
differences arising between the actual results and the assumptions made, or future changes to
such assumptions, could necessitate future adjustments to tax income and expense already
recorded. The Company establishes provisions, based on reasonable estimates. The amount of
such provisions is based on various factors, such as experience of previous tax audits and

differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
Such differences of interpretation may arise on a wide variety of issues depending on the
conditions prevailing in the respective domicile of the companies.

b. Defined benefit plans

The cost of defined benefit plans (i.e. Gratuity benefit) is determined using actuarial valuations.
An actuarial valuation involves making various assumptions which may difer from actual
developments in the future. These include the determination of the discount rate, future salary
increases, mortality rates and future pension increases. Due to the complexity of the
valuation, the underlying assumptions 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. In determining the appropriate discount rate, management considers the interest
rates of long-term government bonds with extrapolated maturity corresponding to the expected
duration of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables for the specific countries. Future
salary increases and pension increases are based on expected future inflation rates.

c. Fair value measurement of financial instrument

When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot
be measured based on quoted prices in active markets, their fair value is measured using
valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these
models are taken from observable markets where possible, but where this .is not feasible, a
degree of judgment is required in establishing fair values. Judgments include considerations of
inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors
could affect the reported fair value of financial instruments.

(N) Borrowing Costs

Borrowing cost includes interest expense as per effective interest rate [EIR]. Borrowing costs
directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalized as part
of the cost of the asset until such time that the asset are substantially ready for their intended use.
Where funds are borrowed specifically to finance a project, the amount capitalized represents the
actual borrowing incurred. Where surplus funds are available out of money borrowed specifically
to finance project, the income generated from such current investments is deducted from the total
capitalized borrowing cost. Where funds used to finance a project form part of general borrowings,
the amount capitalized is calculated using a weighted average of rate applicable to relevant
general borrowing of the Company during the year. Capitalization of borrowing cost is suspended
and charged to profit and loss during the extended periods when the active development on
the qualifying project is interrupted. All other borrowing costs are expensed in the period in which
they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection
with the borrowing of funds. Borrowing cost also includes exchange differences arising from
foreign currency borrowings to the extent that they are regarded as an adjustment to the borrowing
costs.

(O) Impairment of Non-Financial Assets:

The Company assesses, at each reporting date, whether there is an indication that an asset may
be impaired(if any). If any indication exists, or when annual impairment testing for an asset is
required, the Company estimates the assets recoverable amount. An asset's recoverable amount
is the higher of an asset's or cash-generating units (CGU) fair value less costs of disposal and its
value in use.

Recoverable amount is determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or groups of assets. When
the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered
impaired and

In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.

In determining fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used. These
calculations are corroborated by valuation multiples, quoted share prices for publicly traded
companies or other available fair value indicators.

The Company bases its impairment calculation on detailed budgets and forecast calculations,
which are prepared separately for each of the Company's CGUs to which the individual assets
are allocated. These budgets and forecast calculations generally cover a period of five years. For
longer periods, a long-term growth rate is calculated and applied to project future cash flows after
the fifth year. To estimate cash flow projections beyond periods covered by the most
recent budgets/forecasts, the Company extrapolates cash flow projections in the budget using a
steady or declining growth rate for subsequent years, unless an increasing rate can be justified.
In any case, this growth rate does not exceed the long-term average growth rate for the products,
industries, or country or countries in which the entity operates, or for the market in which the asset
is used.

Impairment losses of operations, including impairment on inventories, are recognized in
the statement of profit and loss, except for properties previously revalued with the revaluation
surplus taken to OCI. For such properties, the impairment is recognized in OCI up to the amount
of any previous revaluation surplus.

After impairment depreciation is provided on the revised carrying amount of the asset over its
remaining economic life.

An assessment is made in respect of assets at each reporting date to determine whether there is
an indication that previously recognized impairment losses no longer exist or have decreased. If
such indication exists, the Company estimates the asset's or CGU's recoverable amount. A
previously recognized impairment loss is reversed only if there has been a change in the
assumptions used to determine the asset's recoverable amount since the last impairment loss
was recognized. The reversal is limited so that the carrying amount of the asset does not exceed
its recoverable amount, nor exceed the carrying amount that would have been determined, net
of depreciation, had no impairment loss been recognized for the asset in prior years. Such
reversal is recognized in the statement of profit or loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a revaluation increase.

(P) Government Grants:

Government grants (if any) are recognized where there is reasonable assurance that the grant
will be received and all attached conditions will be complied with. When the grant relates to an
expense item, it is recognized as income on a systematic basis over the periods that the related
costs, for which it is intended to compensate, are expensed. When the grant relates to an
asset, it is recognized as income in equal amounts over the expected useful e of the related
asset. However, if any export obligation is attached to the grant related to an asset, it is recognized
as income on the basis of accomplishment of the export obligation.

When the Company receives grants of non-monetary assets, the asset and the grant are recorded
at fair value amounts and released to profit or loss over the expected useful life in a pattern of
consumption of the benefit of the underlying asset i.e. by equal annual installments.

(Q) Earnings per share:

Basic and diluted earnings per Equity Share are computed in accordance with Indian Accounting
Standard 33 'Earnings per Share', notified accounting standard by the Companies (Indian
Accounting Standards) Rules of 2015 (as amended). Basic earnings per share is calculated by
dividing the net profit or loss attributable to equity holder of Company (after deducting preference
dividends and attributable taxes, if any) by the weighted average number of equity shares
outstanding during the period. Partly paid equity shares are treated as a fraction of an equity
share to the extent that they are entitled to participate in dividends relative to a fully paid equity
share during the reporting period. The weighted average number of equity shares outstanding
during the period is adjusted for events such as bonus issue, bonus element in a rights issue,
share split, and reverse share split (consolidation of shares) that have changed the number of
equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period,
attributable to equity shareholders of the Company and the weighted average number of shares
outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(a) The Central Excise Authorities, Mumbai had imposed duty and penalty aggregating to Rs. 44.00 Lacs for
purchase of certain items against CT-3 forms without payment of duty in earlier years as shown in the following
table:
(b) Interest on bank borrowings has not been provided for during the year due to the reasons mentioned in Note
No. 12 (Borrowings), thus, the liability of the company is understated to the extent of interest not provided for
and the liability in respect of the same may arise in future.

35

³⁵ BSE has imposed a penalty amounting to Rs.1,24,52,540/- for non compliance. RP has filed a request with BSE
for waiver of such penalty. No provision has been taken in the accounts for the said liability as RP is of the
opinion that the said amount shall be waived by BSE. Necessary adjustments shall be made after receiving final
orders from BSE.

36 Bank Borrowings

a) The Banks (SBI and UCO Bank) have classified the accounts of the Company as Non- Performing
Assets on 30.06.2017 and issued notices under SARFAESI Act, 2002 on 02.05.2018 and 24.09.2018
respectively.

b) The Company submitted proposal to State Bank of India for settlement of its dues through One Time
Settlement Scheme (OTS) on 10.07.2019. State Bank of India approved the same vide Sanction Letter No.
SAMB/CHD/T-1/1920 dated 11.02.2020. The total debt was settled for an amount of Rs. 850 Lakhs against the
outstanding amount of Rs 1340.37 Lakhs. However, the company defaulted to make the payment as per the
said OTS Scheme.

The Company submitted another proposal to State Bank of India on 27.08.2020 for extension of time for
payment of balance unpaid compromise amount of Rs. 722 lakhs upto 31.03.2021. State Bank of India
approved the same vide Sanction Letter No. SAMB/CHD/T-1/956/A dated 29.10.2020.

The Company paid only Rs. 138 Lakhs till 31.03.2021 inclusive of upfront payment and the Company and
promoters could not fulfil its commitment to repay the balance in time. State Bank of India has classified the
accounts of the company as Recalled Assets Account on 29.09.2021 and balance due has been transferred to
Recalled Assets account by the Bank.

37 Goods and Services Tax (GST)

The GST Returns filed monthly by the Company are subject to reconciliation and the differences, if any, with the
Books of Accounts, will be dealt with at the time of filing of Annual Return in Form GSTR9 and GSTR9C by the
company. GSTR9 & 9C has not been filed by the company from F/Y 2020-21 to F/Y 2022-2023

38 Deferred Tax

The Company offsets deferred tax assets and liabilities if and only if it has a legally enforceable right to set of
the deferred tax assets with deferred tax liabilities provided it relates to taxes levied by the same tax authority.

The Company has brought forward business losses amounting to Rs. 1844.10 Lakhs (pertaining to AY 2019- 20
to A.Y. 2021-22)

The Company has brought forward unabsorbed depreciation amounting to Rs. 2224.07 lakhs that are available
for offsetting for an indefinite period against future taxable profits of the Company.

The Company has not recognized Deferred Tax Asset as a matter of prudence specifically in the light of
accumulated losses and due to continuing losses incurred by the company in the past. Further, it seems that
there will be no taxable profits in near future for utilization of this deferred tax asset.

39 Claims Admitted :

Claims of Rs 54,63,52,403.00 admitted till the date of audit as per list of claims provided by RP, out of which
Statutory dues amounts to Rs 1,79,99,099.00 for which no provision has been made in the books of accounts
during the year. Detail of Statutory Dues is as follows:

The management assessed that carrying values of trade receivables, cash and cash equivalents, other bank
balances, loans and advances to related parties, interest receivable, trade payables, capital creditors, other
current financial assets and liabilities are considered to be the same as their fair values, due to their short-term
nature.

The fair value of loans from banks and other financial liabilities are estimated by discounting future cash flows
using rates currently available for debt on similar terms, credit risk and remaining maturities. The valuation
requires management to use observable and unobservable inputs in the model, out of which the significant
observable and unobservable inputs are disclosed below. Management regularly assesses a range of
reasonably possible alternatives for those significant observable and unobservable inputs and determines their
impact on the total fair value of loans from banks and other financial liabilities.

The fair value of the financial assets and liabilities is reported at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a liquidation or forced sale.

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments
by valuation technique:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets/ liabilities.

Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair value
are observable, either directly or indirectly.

Level 3: Techniques that use inputs that have a significant effect on the recorded fair value that are
not based on observable market data.

42 The Income Tax Authorities has raised the demand of Rs 1,44,79,671.00 (including accrued interest ) for the
Assessment year 2017-18 vide demand ref: no. 2018201737040266463C and for Rs 18,92,570.00 (including
accrued interest ) for Assessment Year 2018-19 vide demand ref: no. 2019201837063789773C for which
no provision has been made in the books of accounts , as claim has not been filled by the Income Tax
Authorities till the date of audit.

43 As there are no foreign currency payable at the end of the year and hence foreign currency exposure not '
hedged by derivative instruments or otherwise have been disclosed.

44 The inventories are taken as per records of the company. As there are no operations in the company during the
year, the value of Inventories as were appearing as on 31.03.2023 are being taken as on 31.03.2024.

45 The accumulated losses of the company as on 31st March 2024 exceeds its Paid Up Capital & Free Reserves.
Since the net worth of the company have become negative, it is a Sick Industrial Unit. In view of uncertainty, the
financial statements of the company have been prepared on Going Concern Basis during the pendency of
Insolvency & bankruptcy Proceedings.

47 Previous year figures have been regrouped/ reclassified/ recalculated as and where the same were necessary.

A Company undergoing Corporate Insolvency Resolution Process vide NCLT order under the IBC

For Krishan Rakesh & Co.

Chartered Accountants Countersigned by:

Firm Regn. No.: 009088N

Sd/-

Sd/- Rajender Kumar Jain

(K.K.Gupta) Resolution Professional

Place : Delhi Partner (Regd. No. IBBI/IPA-001/IP-

Date : 06-12-2024 M.No.:087891 P00543/2017-18/10968)