2.6. Provisions, contingent liabilities and contingent assets
Contingent liability:
A possible obligation that arises from past events and the existence of which will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events
not wholly within the control of the Company are disclosed as contingent liability and not
provided for. Such liability is not disclosed if the possibility of outflow of resources is
remote.
Contingent assets:
A contingent asset is a possible asset that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of one or more uncertain future
events not wholly within the control of the Company. Contingent assets are not recognised
and disclosed only when an inflow of economic benefits is probable.
Provisions:
A provision is recognized when as a result of a past event, the Company has a present
obligation whether legal or constructive that can be estimated reliably and it is probable that
an outflow of economic benefits will be required to settle the obligation. If the obligation is
expected to be settled more than 12 months after the end of reporting date or has no definite
settlement date, the provision is recorded as non-current liabilities after giving effect for
time value of money, if material. Where discounting is used, the increase in the provision
due to the passage of time is recognized as a finance cost.
2.7. Revenue Recognisation
a) Revenue from the sale of goods is recognised when significant risks and rewards in
respect of ownership of the goods are transferred to the customer, as per the terms of the
order. The company has shown separately in the expenses as the revenues from the
operations are stated at gross amount as per the Requirement of Ind AS 115. Further, the
amounts collected on behalf of third parties such as government authorities for VAT, Service
Tax and GST are excluded from the revenue since the same do not result in increase in
Equity.
b) Interest Income is recognised on time proportion basis.
2.8. Income taxes
Income tax expense comprises current and deferred tax expense. Income tax expenses are
recognized in statement of profit and loss, except when they relate to items recognized in
other comprehensive income or directly in equity, in which case, income tax expenses are
also recognized in other comprehensive income or directly in equity respectively.
Current tax is the tax payable on the taxable profit for the year, using tax rates enacted or
substantively enacted by the end of reporting period by the governing taxation laws, and
any adjustment to tax payable in respect of previous periods. Current income tax assets and
liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. Management periodically evaluates positions taken in the tax returns with
respect to situations in which applicable tax regulations are subject to interpretation and
establishes provisions where appropriate.
Deferred taxes arising from deductible and taxable temporary differences between the tax
base of assets and liabilities and their carrying amount in the financial statements are
recognized using substantively enacted tax rates and laws expected to apply to taxable
income in the years in which the temporary differences are expected to be received or
settled.
Deferred tax asset are recognized only to the extent that it is probable that future taxable
profit will be available against which the deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred income tax assets to be utilized.
2.9. Earnings Per Share
a) Basic earnings per share are calculated by dividing the net profit for the period
attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period.
b) For the purpose of calculating diluted earnings per share, the net profit for the period
attributable to equity shareholders and the weighted average number of shares outstanding
during the period are adjusted for the effects of all dilutive potential equity shares, if any.
2.10. Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of
qualifying assets, which are assets that necessarily take a substantial period of time to get
ready for their intended use or sale, are added to the cost of these assets, until such time as
the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in statement of profit and loss in the period in
which they are incurred.
2.11. Segment Reporting
The company has only one preliminary reportable segment i.e. manufacturing of Biscuits for
Britannia Industries Limited and Trading of shares and securities hence there is no separate
reportable segments as required in Ind AS 108 issued by ICAI.
2.12. Depreciation
Depreciation on tangible fixed assets is provided using the Straight-Line Method based on
the useful life of the assets as estimated by the management and is charged to the Statement
of Profit and Loss as per the requirement of Schedule II of the Companies Act, 2013. In case
of additions or deletions during the year, depreciation is computed from the month in which
such assets are put to use and up to previous month of sale or disposal, as the case may be.
The Factory land is shown under the head "Assets Held For Sale" hence no depreciation is
charged.
2.13. Foreign currency Transactions
Foreign currency transactions are recorded at the exchange rate prevailing at the date of
transactions. Exchange difference arising on settlement of transactions is recognised as
income or expense in the year in which they arise.
Monetary assets and liabilities related to foreign currency transactions remaining unsettled
at the end of the year are restated at the year-end rate and difference in translations and
unrealised gains / (losses) on foreign currency transactions are recognised in the statement
of profit & loss.
The premium or discount arising at the inception of forward exchange contracts is amortised
as expense or income over the life of the contract. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the exchange rates change.
Any profit or loss arising on cancellation or renewal of forward exchange contract is
recognised as income or as expense for the year.
2.14. Non current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continuing use and sale is
considered highly probable. A sale is considered as highly probable when decision has been
made to sell, assets are available for immediate sale in its present condition, assets are being
actively marketed and sale has been agreed or is expected to be concluded within 12 months
of the date of classification.
Non-current assets held for sale are neither depreciated nor amortised. Assets and liabilities
classified as held for sale are measured at the lower of their carrying amount and fair value
less cost of sale and are presented separately in the Balance Sheet.
The management is not able to sale the factory land during the year due to the Covid 19
pandemic situation which is beyond its control. The intention of the management is
however still the same to sale the assets.
19. a) In opinion of the directors, contingent liability not provided is Rs. Nil. (Nil)
b) Estimated amount of contracts remaining to be executed on capital account and
not provided for: Rs. Nil (Nil).
20. Balances of Trade Payables, Unsecured Loans, Trade Receivables, Long Term and Short¬
Term Loans & Advances, In-operative bank accounts, Other Current and Other Non¬
Current Assets and Provisions are subject to the confirmation of the parties concerned.
Wherever confirmation of the parties for the amounts due to them / amounts due from
them as per books of accounts are not received, necessary adjustments, if any, will be made
when the accounts are reconciled / settled.
21. In the absence of information regarding outstanding dues of MICRO or Small-Scale
Industrial Enterprise(s) as per The Micro, Small & Medium Enterprise Development Act, the
Company has not disclosed the same as required by Schedule III to the Companies Act.
22. Wherever no vouchers and documentary evidences were made available for our
verification, we have relied on the authentication given by management of the company.
26. Balance confirmations for debit/credit balances have been sought.
27. Additional information pursuant to Act, 2013 to the extent applicable. (As certified by the
Directors).
A) Installed Capacity: NA
B) Production: NA
(C) Value of Imported and Indigenous raw materials (including components) consumed and
their percentage: NA
28. Expenditure in foreign currency during the year on account of royalty, know-how,
professional consultancy fees, interest and other matters Rs. Nil (Previous Years Rs. Nil)
29. C.I.F. Value of Imports of raw materials, components and spares -
Rs. Nil (Previous year Rs. Nil)
30. Earning in foreign exchange on account of export etc. - Rs. Nil
31. Remittance in foreign currency on account of dividend etc. - Rs. Nil (Previous year Rs. Nil)
32. In the opinion of Board of Directors, the current asset, loans & advances are
approximately of the same value, if realized in the ordinary course of business. The
provision for all known liabilities is adequate and not in excess of the amount reasonably
necessary.
As per our report of even date For and on behalf of the Board of Directors
FOR KESHRI & ASSOCIATES SHAH FOODS LIMITED
Chartered Accountants
Firm registration no. 310006E
sd/- sd/-
Sd/-
Jagdish Rameshbhai Asawa MANAN RAJESH PATEL HEMAKSHI MANAN PATEL
Partner DIRECTOR Managing Director
Membership No. 163626 DIN : 03496656 DIN : 07297442
Place : Ahmedabad Place : Ahmedabad
Date : 28/05/2025 Date : 28-05-2025
|