M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
The Company recognises a provision when there is a present obligation (Legal & Constructive) as a result of past event on which it is
probable that there will be outflow of resources to settle the obligation in respect of which reliable estimates can be made.
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
recognised as a finance cost.
Contingent liabilities are disclosed by way of note to the financial statements after careful evaluation by management of the facts
and legal aspects of the matter involved.
Contingent assets are neither recognized nor disclosed.
N. IMPAIRMENT OF ASSETS
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists,
the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or Cash Generating
Units (CGU’s) fair value less costs of disposal and its value in use. It 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. Where the carrying amount of an
asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using 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 considered, if no such transactions can be identified, an appropriate valuation
model is used.
O. APPLICATION OF SECURITIES PREMIUM ACCOUNT
Share Issue expenses are charged, first against available balance in Securities Premium Account.
P. EXPENDITURE DURING CONSTRUCTION AND EXPENDITURE ON NEW PROJECTS
In case of new projects and in case of substantial modernisation / expansion at existing units of the Company, expenditure incurred
prior to commencement of commercial production is capitalised.
Q. ACCOUNTING OF CLAIMS
Claims receivable are accounted for at the time when reasonable certainty of receipt is established. Claims payable are accounted
for at the time of acceptance.
Claims raised by Government Authorities regarding taxes and duties are accounted for based on the merits of each claim. If same is
disputed by the Company, these are shown as ‘Contingent Liabilities’.
R. FINANCE LEASE
The leases where the lessee effectively retains substantially all the risks and benefits of ownership of the leased items, are classified
as finance leases.
In Case of no reasonable certainty that the lessee will obtain ownership by the end of the lease term, the leasehold land is depreciated
fully over the shorter of the lease term or its useful life.
S. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the
net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the
year are adjusted for the effects of all dilutive potential equity shares.
T. SEGMENT REPORTING POLICIES
Operating segment as a component of an entity is a segment:
• That engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses
relating to transactions with other components of the same entity, i.e., vertical segment),
• Whose operating results are regularly reviewed by the entity’s Chief operating decision maker (CODM) to make decisions about
resources to be allocated to the segment and assess its performance, and
• For which discrete financial information is available.
U. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank, in hand (including cheques in hand) and
short-term investment with an original maturity of three months or less.
Cash flows are reported using indirect method as set out in Ind AS 7 “Statement of Cash Flows,” whereby profit / (loss) before
extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accrual of past or future
cash receipts or payments. The cash flow from operating, investing and financing activities of the Company is segregated based on
the available information.
During CIRP Period of the Company and Liquidation proceeding that followed under IBC, 2016, It’s wholly owned Subsidiary M/s Birla
Cotsyn (India) Limited FZE held no assets and carried no business operations. Pursuant to the handover of the Company in accordance
with the approved scheme of Compromise and and Arrangements Sanctioned by the Hon’ble NCLT Mumbai bench vide order dated 09th
January, 2025, no records related documents pertaining to the Subsidiary M/s Birla Cotsyn (India) Limited FZE were available with the
Liquidator or handed over to the acquirer. Hence we have closed the subsidiary with passing a resolution in the Annual General Meeting
dated 29th September, 2025 and duly outcome submitted to the stock exchange. Furthermore the company had submitted the additional
disclosure on 24th February, 2026 to the Stock Exchange for closure of subsidiary.
Note 4 A
During CIRP Period of the Company and Liquidation proceeding that followed under IBC, 2016, It’s wholly owned Subsidiary M/s Birla
Cotsyn (India) Limited FZE held no assets and carried no business operations. Pursuant to the handover of the Company in accordance
with the approved scheme of Compromise and and Arrangements Sanctioned by the Hon’ble NCLT Mumbai bench vide order dated 09th
January, 2025, no records related documents pertaining to the Subsidiary M/s Birla Cotsyn (India) Limited FZE were available with the
a) The erstwhile promoter group Equity Share Capital of INR 48,60,83,760 comprising of 48,60,83,760 Equity Shares of INR 1 each, fully
paid up, held by the existing Promoters and Promoters group in the Company shall be reduced, cancelled and extinguished without
any payment on record date 07th March 2025.
(b) Public Shareholders would continue to own 1 Equity Share in the Company for every 153 existing Equity Shares held by the respective
Public Shareholder. Any fractional share shall be ignored. Balance Equity Shares (i.e., Equity Shares over and above Continuing Public
Shareholding) held by Public Shareholders •shall be annulled, cancelled and extinguished without any payment . Proportionate
shareholding of Public Shareholders post extinguishment/cancellation is likely to be at ~5.48% stake in the proposed shareholding
pattern of the Company From Record date 07th March 2025.
c) As per the order and As an integral part of the scheme, the acquirer ( Along with any of the Acquirer nominees) shall be issued
25,00,00,000/- Equity share of INR 1 Each of the company on 12th March 2025 in the following manner:
Note 11C : Terms/ rights attached to the equity shares
The company has only one class of equity shares having a par value of '.1/- per shares. Each holder of equity shares is entitled to one vote
per share. The company declares and pays dividends (if any) in Indian rupees. The dividends (if any) proposed by the Board of Directors is
subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holder of equity shares will be entitled to receive remaining assets of the company, after
distribution of all preferential amounts, if any. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note No.26
Pursuant to the Scheme of compromise and arrangement (Equivalent to Resolution Plan under IBC 2016) submitted by the Mr. Nikhil
Jain, Rohstoffe International Private Limited and Wendt Finance Private Limited (Together Referred as The Acquire) and its approval by the
Hon’able National Company Law Tribunal, Mumbai bench, vide their orders dated January 9, 2025 and uploaded on website on January 14,
2025, which has been duly implemented from January 14, 2025. (i.e. closing and consequential impacts have been given in accordance
with approved resolution plan / Accounting Standards :-
a) The Company is currently in the process of implementation of Scheme submitted by the Acquirer and pursuant to clause 5.1 of Part
II (Details of the Business Plan for Revival of the Company) of the Scheme, a Monitoring Committee, responsible for supervision
and implementation of the Scheme, has been constituted comprising of 1 representative of the Acquirer and 1 representative of the
Secured Financial Creditors, and the current Liquidator appointed for the Company.
b) The existing directors of the Company as on the date of order have stand replaced by the new Board of Directors from their office
with effect from February 10, 2025. As on date Board consist of Mr. Akhil Jain (Managing Director), Mrs. Sheela Jain (Non-Executive
Director Non-Independent), Mr. Pradip Kumar Das (Independent Director), Mr. Subhash Chandra Varshney (Independent Director),
Mr. Umang Mehta (Independent Director).
c) The erstwhile promoter group Equity Share Capital of INR 48,60,83,760 comprising of 48,60,83,760 Equity Shares of INR 1 each, fully
paid up, held by the existing Promoters and Promoters group in the Company has been reduced, cancelled and extinguished without
any payment on record date 07th March 2025.
d) Public Shareholders would continue to own 1 Equity Share in the Company for every 153 existing Equity Shares held by the respective
Public Shareholder. Any fractional share has been ignored from record date 07th March 2025.
e) Balance Equity Shares (i.e., Equity Shares over and above Continuing Public Shareholding) held by Public Shareholders has been be
annulled, cancelled and extinguished without any payment.
f) Proportionate shareholding of Public Shareholders post extinguishment/cancellation is at ~5.48% stake in the proposed shareholding
pattern of the Company.
g) With effect from Record date 07th March, 2025, the existing issued, subscribed and paid-up equity share capital of the Company has
been reduce from Rs. 268,65.70 Lakh divided into 268,65,70450 equity shares of Rs. each to Rs.1,43.40 Lakh divided into 1,43,39,940
equity share of Rs.1 each thereby reducing the value of issued, subscribed and paid-up equity share capital of the Company by Rs.
267,22.30 Lakh. As prescribed in the Resolution Plan, the reduction in the share capital of the Company amounting to Rs. 267,22.30
Lakh Lakh has been transferred to the capital reserve account of the company.
h) As per the order and as an integral part of the scheme, the acquirer (Along with any of the Acquirer nominees) shall be issued
25,00,00,000/- Equity share of INR 1 Each of the company 12th March 2025 and they will be considered as promoter and promotor
group of company, in the following manner:
27.1 As Per NCLT Scheme approval order the claims of creditors shall stand frozen and will be binding on the Corporate Debtor and its
employees, members, creditors including the Central Government, any State Government or any local authority, guarantors and
other stakeholders. On the date of approval of the Scheme, all claims which are not a part of the Scheme shall stand extinguished
and no person will be entitled to initiate or continue any proceedings in respect to a claim which is not a part of the Scheme.
Note No.28
Disclosures relating to amounts payable as at the year-end payable to Micro and Small Enterprises have been made in the accounts, as
required under the Micro, Small and Medium Enterprises Development Act, 2006 to the extent of information available with the Company
determined on the basis of intimation received from suppliers regarding their status and the required disclosure. .
ii. Leave Encashment
Provision towards liability for Leave Encashment made on the basis of actuarial valuation as per Accounting Standard 15
(Revised). Actuarial value of liability is Rs. 6,39,345/- (Previous year Nil) is based upon following assumptions.
Discount rate: 7.07 %
Salary escalation: 5.00%
Note: 34 Fair values of financial assets and financial liabilities:
(i) Valuation All financial instruments are initially recognized and subsequently re-measured at fair value as described below: The fair
value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction
between the willing parties, other than in a forced or liquidation sale. The fair value of investment in quoted Equity Shares, Bonds,
Government Securities, Treasury Bills and Mutual Funds is measured at quoted price or NAV. The fair value of the remaining financial
instruments is determined using discounted cash flow analysis. The financial instruments are categorized into three levels based
on the inputs used to arrive at fair value measurements as described below: Level 1: Quoted prices (unadjusted) in active markets
for identical assets or liabilities; and Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the
asset or liability, either directly or indirectly. Level 3: Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable. The carrying values of the financial instruments by categories were as follows:
The following is the hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
*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).
No financial assets/liabilities have been valued using level 1 fair value measurements.
The following table presents fair value hierarchy of assets and liabilities measured at fair value on a recurring basis:
(ii) Foreign currency risk:
The Company is exposed to foreign currency risk arising mainly on borrowing, export of finished goods and import of raw
material. Foreign currency exposures are managed within approved policy parameters utilising forward contracts.
(B) Credit risk:
The carrying amounts of borrowings, trade payables, other financial liabilities and other current liabilities are considered to
approximate their fair values due to their short-term nature. They are classified as level 3 fair values in the fair value hierarchy due to
the inclusion of unobservable inputs including own and counterparty credit risk.
Note 35 Financial risk management objectives and policies:
The Company is exposed to various financial risks. These risks are categorized into market risk, credit risk and liquidity risk. The Company’s
risk management is coordinated by the Board of Directors and focuses on securing long term and short-term cash flows. The Company
does not engage in trading of financial assets for speculative purposes.
(A) 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 three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and
commodity risk. Financial instruments affected by market risk include borrowings and derivative financial instruments.
(i) Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s
long-term debt obligations with floating interest rates.
(ii) Foreign currency risk:
The Company is exposed to foreign currency risk arising mainly on borrowing, export of finished goods and import of raw
material. Foreign currency exposures are managed within approved policy parameters utilising forward contracts.
(B) Credit risk:
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its
contractual obligations. Credit risk arises principally from the statutory deposits with regulatory agencies and also arises from cash
held with banks and financial institutions. The maximum exposure to credit risk is equal to the carrying value of the financial assets.
The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality
of the counterparties, taking into account their financial position, past experience and other factors.
The Company limits its exposure to credit risk of cash held with banks by dealing with highly rated banks and institutions and retaining
sufficient balances in bank accounts required to meet a month’s operational costs. The Management reviews the bank accounts on
regular basis and fund drawdowns are planned to ensure that there is minimal surplus cash in bank accounts. The Company does
not foresee any credit risks on deposits with regulatory authorities.
( C ) Liquidity risk:
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company
manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when
due.
Note 36 Capital management:
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves
attributable to the equity holders. The primary objective of the Company’s capital management is to maximize the shareholder value and
to ensure the Company’s ability to continue as a going concern.
The Company monitors gearing ratio i.e. total debt in proportion to its overall financing structure, i.e. equity and debt. Total debt mainly
comprises of borrowings from banks, financial institutions and Unsecured Loans. The Company manages the capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
Note No.38
Comparative figures for the previous year have been regrouped and / or rearranged wherever necessary.
As per our attached report of even date
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