1.14 Provisions, Contingent Liabilities and Contingent Assets a. Provisions:
A provision is recognized when the company has a present obligation as a result of past events; 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 are not discounted to their present value and are recognized based on best estimates required
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to settle the obligation at the balance sheet date. These arc reviewed at each balance sheet date and adjusted to reflect the current best efforts.
b. Contingent Liability
Contingent liability is disclosed for
(i) Possible obligation which will be confirmed only by future events not wholly within the control of the company or
(ii) Present obligation arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
Contingent assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.
Note 2: ADDITIONAL NOTES TO BALANCE SHEET AND STATEMENT OF PROFIT & LOSS AS AT 31st M ARCH, 2024:
2.1 Note 3 to 29 are annexed to and form integral part of balance sheet, statement of
profit & loss & cash flow statement.
2.2 Previous year figures have been regrouped, reclassified and rearranged wherever
necessary to make them comparable with the current year figures.
2.3 As explained by the management, physical verification of inventories has been
conducted at regular intervals and no material discrepancies were observed.
2.4 In the opinion of the management current assets, loans and advances have a value on
realization in the ordinary course of business; however, the balances of sundry debtors, creditors and loans & advances are subject to confirmation & adjustements, if any, required upon such confirmations are not ascertainable and hence not provided for.
Certain balances of Sundry debtors to Rs 508.67 Lakhs were outstanding as on 31/03/2024, out of said balance Rs. 167.59 Lakhs is more than 3 years old. The confirmations from the parties to whom these amounts to be received has not been made available. Out of such debtors, provision for doubtful debts should be recognized in respect of debtors, outstanding for a period of three years or more where no movement has taken place and no confirmations are available. Though the Management has certificated that no provision is required to be made for debtor’s o/s more than 3 years, since these amounts will be realized in the current financial vear, however vve are of the view that the said amount should be written off.
Adjustments if any are not ascertainable and will be provided on identification of such parties.
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2.15 Contingent Liabilties Bank Guarantee
The Company is in the violation of Section 185 of the Companies Act, 2013 as it has provided corporate guarantee along with property to Canara Bank on behalf of Natural Herbal & Seeds to the tune of Rs.10.60 Crore to obtain the credit facilities by the sister concern. The Said firm for which corporate gurantee and property is given is under stress, however since account is not classified as NPA, no provision for contingent liability is booked
In addition to the guarantee, company has provided two properties registered in its name as collateral security to the Canara bank on behalf of Natural Herbal & Seeds.
2.16 Acceptance of Deposit
The Company is in violation of Section 73 of the Companies Act, 2013 read together with the Companies (Accepatnces of Deposits) Rules, 2014 as it has taken advances from customers amounting to Rs. 234.64 lacs having outstanding balances of more than 365 davs. In terms of Rule 2(1) (xii)(a) such advances are liable to be treated as deposits reads together with section 73 of the Companies Act, 2013 hence the Company is in violation of same.
2.17 Purchase from Unregistered Parties
The company is dealing in Mentha oil which is purchased from farmers, payments for which are being made in cash. Due to the nature of business of the company, it is difficult to verify the coverage of expenditure u/s 40A(3).
2.18 During the financial year, the Company has sold Land situated at Orai, Uttar Pradesh to various persons worth Rs 321.79 Lacs, on which profit of Rs. 317.33 lac is shown in books. Since this income is exceptional and not in line with the Company primary business, hence this is shown under exceptional item.
2.19 There are several cases of GST & Income Tax against the Company, however in most of the cases either demand is not confirmed and/or appeal is filled by the Company, therefore in lack of specific figure we are unable to figure out the exact liabilities (if anv) arise against the Company.
2.20 Various Ratios are enclosed in Annexure C
As per our report of even date For PMAS & Associates LLP
Chartered Accountants For and on behalf of the Board of Directors
Firm Regn. No.:024726N/N500068
CA.^thaJawa Praveen Rastogi Sachin Rastogi
PaDirector Director
M.No.529237 DIN: 01414608 DIN: 05134858
New Delhi: 29.05.2024
Utpal Tondon
Chief Finance Officer