q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The assessments undertaken in recognising provisions and contingencies have been made in accordance with
applicable Ind AS. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each
balance sheet date and are adjusted to reflect the current best estimate.
Provisions
Provisions represent liabilities to the Company for which amount, or timing is uncertain. Provisions are recognized
when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable
that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation. If the
effect of the time value of money is material, provisions are determined by discounting the expected future cash
flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments
of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount
is recognized in the statement of profit and loss as a finance cost.
Contingent Liabilities
In normal course of business, contingent liabilities may arise from litigation and other claims against the Company.
There are certain obligations which management of the Company has concluded, based on all available facts
and circumstances, are not probable of payment or are very difficult to quantify reliably, and such obligations
are treated as contingent liabilities and disclosed in the notes but are not reflected as liabilities in the financial
statements. Claims against the Company, where the possibility of any outflow of resources in settlement is
remote, are not disclosed as contingent liabilities. Show Cause Notices received are not treated as Contingent
Liabilities. Although there can be no assurance regarding the final outcome of the legal proceedings in which the
Company is involved, it is not expected that such contingencies will have a material effect on its financial position
or profitability.
Contingent Assets
Contingent assets are not recognised but disclosed in the financial statements when an inflow of economic
benefits is probable.
r. CASH FLOW STATEMENT
Cash flows are reported using indirect method as set out in Ind AS -7 "Statement of Cash Flows", whereby profit/
(loss) before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. Cash flows from operating, investing and financing activities of the
Company are segregated based on available information.
s. SEGMENT REPORTING
The company has two business segments- Edible Oil Operations and Liquor Operations and segment-wise
results, assets and liabilities are accordingly given.
t. FAIR VALUE MEASUREMENT
The Company measures financial instruments 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. Fair value measurement is based on presumption that
transaction to sell asset or transfer liability takes place either:
i. In the principal market for asset or liability, or
ii. In absence of a principal market, in most advantageous market for asset or liability.
The principal or the most advantageous market must be accessible to the Company. Fair Value of an asset or
liability is measured using 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 asset in its highest and best use or by selling it to another market participant that
would use asset in its highest and best use.
The Company uses valuation techniques that are appropriate in circumstances and for which sufficient
data are available to measure fair value, maximising use of relevant observable inputs and minimizing 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.
Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2- Valuation techniques for which lowest level input that is significant to fair value measurement is directly
or indirectly observable.
Level 3- Valuation techniques for which lowest level input that is significant to fair value measurement is
unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by reassessing categorization
(based on the lowest level input that is significant to fair value measurement as a whole) at end of each reporting
period.
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.
u. EXCEPTIONAL ITEMS
Exceptional items are transactions which due to their size or incidence are separately disclosed to enable a
full understanding of the Company's financial performance. Items which may be considered exceptional are
significant restructuring charges, gains or losses on disposal of investments of subsidiaries, associate and joint
ventures and impairment losses/write down in the value of investment in subsidiaries, associates and joint
ventures and significant disposal of fixed assets.
d) Terms / rights attached to Equity shares:
EQUITY SHARES
The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity
shares is entitled to one vote per share. The dividend proposed, if any, by the Board of Directors is subject to the
approval of shareholders except in case of interim dividend. In event of liquidation, the equity shareholders are
eligible to receive the remaining assets of the company, after distribution of all preferential amount in proportion
of their shareholding.
e) The Company has issued preference shares by conversion of loan into preference shares. Other than as
mentioned, Company has not issued any other shares in consideration other than cash or as bonus shares, nor
any shares had been brought back during the year.
f) The Company has not declared any dividends in the current year or preceding year.
c) Terms attached with 0.01% Compulsorily Convertible Preference Shares ('CCPS')
The Company has issued unlisted, fully paid, non-cumulative, non-participating 0.01% Compulsorily Convertible
Preference Shares ('CCPS') of face value of Rs. 10 each. The CCPS shall be compulsorily converted into an equivalent
number of equity shares with a face value of Rs. 10 within 18 months from the date of allotment. The CCPS bears
b) During the previous year, the company has provided for liability for Trade Tax payable to Commercial Tax
Department, Govt. of Uttar Pradesh amounting to Rs . 511.38 lakhs Out of this, liability for Rs 469.18 lakhs was
shown as contingent liability in previous year as the same was under appeal before the Trade Tax Tribunal.
Since this amount has already been recovered by the Commercial Tax Department and the matter being under
litigation for a very long time, the company has booked the liability under exceptional items.
c) During the previous year, the company paid a sum of Rs 9.30 lakhs towards lease rent and Rs 166.42 lakhs
towards Maintenance Charges to UP State Industrial Development Authority in pursuance to the demand raised
by UPSIDA during the current year. Since these amounts pertained to earlier years, these have been grouped
under exceptional item.
40. RESTRUCTURING OF TRADE TAX/ COMPOUNDING TAX/ STATE DEVELOPMENT TAX/ TURNOVER TAX/ VAT AND
POWER CHARGES ETC.
(a) The company had made reference to Board for Industrial and Financial Reconstruction (BIFR), under the provisions
of Sick Industrial Companies (Special Provisions) Act, 1985, due to complete erosion of its net worth as on 30th
June 2000. The company was thereafter declared a Sick company by BIFR vide its order dated 28.5.2001. As per
the sanctioned scheme of BIFR, Govt of UP had deferred Trade Tax/ Compounding tax/ State Development tax/
Turnover Tax/ VAT and power charges etc. A part of the deferred trade tax was also converted into unsecured
interest free loan.
(b) Subsequently in pursuance to BIFR vide order dated 25.07.2016 (as Corrected by the Corrigendum Dated
20.10.2016) and Uttar Pradesh Government's policy for revival of sick unit industries in the State, the Government
vide UP Govt order No 1571/77-1-2016-10 (BIFR)/ 2009TC dated 29.12.2016 has granted/ extended the following
relief and concessions to the company in respect of the payment of the dues deferred in the past -
i) Interest Free loan given by PICUP in lieu of deferred trade tax is now payable in 10 annual installments after
a moratorium period of 2 years i.e. wef 29.12.2018. The interest charged by PICUP has been waived and no
interest would be charged for extended or future period.
ii) Trade Tax/VAT/CST deferred by the Commercial Tax Department is to paid in 10 annual installments after a
moratorium period of 2 years i.e. wef 29.12.2018. Interest, if any charged by the Commercial Tax Department
has been waived and no interest would be charged for future period.
iii) The Principal amount of power dues amounting to Rs 641.14 lacs is to paid to Paschimanchal Vidyut Vitran
Nigam Ltd in 10 annual installments after a moratorium period of 2 years i.e. wef 29.12.2018. Interest/
surcharge levied by PVVNL has been waived and no interest/surcharge would be charged for future period.
This has been approved by the Uttar Pradesh Electricity Regulatory Commission in pursuance to the petition
filed by the Power Department, Government of UP.
iv) The minimum demand charges levied by Paschimanchal Vidyut Vitran Nigam Ltd during the priod of
disconnection has been waived. This has been approved by the Uttar Pradesh Electricity Regulatory
Commission in pursuance to the petition filed by the Power Department, Government of UP.
(c) The company has deposited a sum of Rs 346.92 lacs with PICUP as security deposit as per the rehabilitation
scheme sanctioned by Government of UP on 29.12.2016 in terms of their One Time Policy for the revival of sick
units. This amount would be refunded to the company after the completition of the rehabilitation period if the
company does not violate any terms and conditions of the rehabilitation scheme. Otherwise this amount would
be forfeited. The company has complied with the terms and conditions of the scheme as on the date of signing
the balance sheet.
47. ADDITIONAL REGULATORY INFORMATION
(A) The Company does not have any Benami property, where any proceeding has been initiated or pending against
the Company for holding any Benami property.
(B) The Company do not have any transactions with companies struck off under section 248 of the Companies Act,
2013.
(C) The Company do not have any charges or satisfaction which is yet to be registered with Registrar of Companies
(ROC) beyond the statutory period.
(D) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(E) No funds have been advanced or loaned or invested (either from borrowed funds or share premium or any
other sources or kind of funds) by the Company to or in any other persons or entities, including foreign entities
("Intermediaries") with the understanding, whether recorded in writing or otherwise, that the Intermediary shall
lend or invest in other person or entities ("ultimate beneficiaries") by or on behalf of the Company or provide any
guarantee, security or the like to or on behalf of the ultimate beneficiaries. The Company has not received any
funds from any persons or entities, including foreign entities ("Funding Parties"), with the understanding that the
Company shall lend or invest in other persons or entities identified by or on behalf of the Funding Party or provide
any guarantee, security or the like from to or on behalf of the Ultimate Beneficiaries.
(F) The Company has not entered into any 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 any other relevant provisions of the Income Tax Act, 1961).
(G) The Company does not have any foreign currency exposure.
(H) The company has not been declared as wilful defaulter by any bank or financial institution or any other lender.
(I) The Company did not have any foreign exchange contracts including derivative contracts for which there were
any material foreseeable losses.
(J) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by
the Company.
49. FAIR VALUE MEASUREMENTS
The Company measures financial instruments 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. Fair value measurement is based on presumption that transaction to sell asset or transfer
liability takes place either:
i. In the principal market for asset or liability, or
ii. In absence of a principal market, in most advantageous market for asset or liability.
Fair Value of an asset or liability is measured using 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 asset in
its highest and best use or by selling it to another market participant that would use asset in its highest and best use.
The Company uses valuation techniques that are appropriate in circumstances and for which sufficient data are
available to measure fair value, maximising use of relevant observable inputs and minimizing 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.
Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2- Valuation techniques for which lowest level input that is significant to fair value measurement is directly or
indirectly observable.
Level 3- Valuation techniques for which lowest level input that is significant to fair value measurement is unobservable.
For assets and liabilities that are recognised 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 fair value measurement as a whole) at end of each reporting period. 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.
50. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company's Corporate Treasury function provides services to the business, co-ordinates access to domestic
market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The company
does not have foreign trade transactions nor any foreign currency transactions. The Board of Directors manages the
financial risk of the company through internal risk reports and analyse exposure by magnitude of risk.
The Company's overall risk management procedures to minimise potential adverse effects of financial market on the
Company are as follows:
(A) Market Risk
Market risk is attributable to all market risk sensitive financial instruments including investments and deposits, foreign
curreny receivables or payables. It includes three types of risks: a) Interest rate risk, b) Currency risk and c) price and
commodity risk.
A) Interest Rate Risk: The Company's borrowings are at fixed rates. Therefore, interest rate risk does not have any
major impact on the company.
B) Currency Risk: Since, Company does not have any foreign currency dealings, this risk is not applicable to the
Company.
C) Price and commodity risk: The Company majorly purchases Spirits and Grain in its manufacturing. Since, prices
are generally regulated, there are no major movements in the prices. Therefore, the adversity of this risk is low.
(B) Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial intrument leading to a
financial loss. The Company's exposure to credit risk primarily consists of Trade receivables and other financial
assets. The Company deals with only few customers since liquor opertions are government regulated. Therefore,
default risk on the part of debtors is significantly low.
(C) Liquidity Risk
The Company's principle source of liquidity are Cash and cash equivalents and cash generated from operations.
The Company manages its liquidity risk in a manner so as to meet its normal financial obligations without any
significant delay. The Company has developed appropriate internal control systems and contingency plans for
managing liquidity risk.
51. CAPITAL MANAGEMENT
(A) Risk Management
Capital management is driven by Company's policy to maintain a sound capital base to support the continued
development of its business. The Management and Board of Directors seeks to maintain a prudent balance
between different components of Company's capital. Management monitors capital structure and net financial
debt at individual currency level. Net financial debt is defined as current and non-current financial liabilities
including lease liabilities less cash and cash equivalents and short term investments.
The capital structure is governed by policies approved by the Board of Directors and monitors capital using a
gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt,
interest bearing loans and borrowings, trade and other payables, lease liabilities, less cash and cash equivalents.
52. Segment Reporting
Disclosure as per Indian Accounting Standard (Ind AS) 108 "Operating Segments:
The company has two business segments- Edible Oil Operations and Liquor Operations. Edible oil opeartions consists
of trading activities and high seas sale of edible oil. No manufacturing is being done for edible oils. Liquour operarions
consists of manufacturing IMFL drinks through the Company's plant situated at Sandila, Dist. Hardoi, Uttar Pradesh.
The company is exclusively manufacturing IMFL for United Spirits Limited.
53. During the year, the Company has earned a profit of Rs. 2935.65 lakhs (Previous year Rs. 1480.88 lakhs). However
due to operational losses in earlier years, there has been erosion of its net worth due to which the Company has
accumulated losses amounting to Rs. 879.68 lakhs as at 31 March 2025 (31 March 2024: Rs. Rs. 4788.42 lakhs).
However,in the view of the fact the company has earned a profit during the year and Management is of the view
that after the commissioning of Distillery unit in September 2022, the company is expected to earn profits in the
coming years . Therefore, Company does not anticipate that it will not be able to realize its assets and discharge its
liabilities in the normal course of business. Accordingly,the company has prepared these financial statements on a
going concern basis.
54. Previous year's figures have been regrouped/reclassified, wherever considered necessary, to conform to current
year's classification.
As per our report of even date attached
For PAWAN SHUBHAM & CO. For and On behalf of the Board of Directors of
Chartered Accountants SHRI GANG INDUSTRIES & ALLIED PRODUCTS LIMITED
Firm's Registration No: 011573C
(CA Krishna Kumar) Arun Kumar Sharma Sanjay Kumar Jain
PARTNER Whole Time Director Director
Membership No. 523411 DIN: 09008061 DIN: 01014176
Mayank Gupta Kanishka Jain
Place: New Delhi Chief Financial Officer Company Secretary
Date: 28.04.2025 M.No: F13164
|