L. Provisions
Provisions for legal claims and returns are recognised when the company has a present legal or constructive obligation as a result of past event, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provisions due to the passage of time is recognized as interest expense.
M. Earnings per share
i. Basic earnings per share
Basic earnings per share are calculated by dividing:
• The profit attributable to owners of the company
• By the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year and excluding treasury shares.
ii. Diluted earnings per share
Diluted earnings per share adjust the figures used in the determination of basic earnings per share to take into account:
• The after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
• The weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
I. NOTES TO ACCOUNTS:
1. In the opinion of Directors, the Current Assets, Loans & Advances and Investments have a value on realization in the ordinary course of business, which is at least equal to the amount at which they are stated in the Balance Sheet.
2. Contingent Liabilities:
There are no contingent liabilities.
3. Pending Legal Proceedings
1. Legal Proceedings against BSE Limited and Others
Despite knowing that Swojas had been under liquidation for almost 15 years from 2000 till 2015, BSE had frozen demat accounts of New Promoters of Swojas on 13/12/2019 towards outstanding ALF dues by issuing a circular on its own though there is no such provision under SEBI Regulations and further, SEBI has never issued any circular to allow BSE for ALF recovery by freezing demat accounts. In response to Swojas' request to provide ALF invoices from FY 2015-16, BSE provided an invoice to seek compensation on 26/12/2019. There have been multiple inconsistencies under tax, corporate and securities laws on the part of BSE and moreover, on checking with SEBI, Promoters came to know that SEBI had never permitted stock exchanges to seek compensation for unpaid listing fees from listed companies. Further, SEBI also confirmed that it did not empower stock exchanges to freeze demat accounts of promoters for non-payment of ALF.
In view of different communication from SEBI, it was apparent that BSE had exceeded its powers by seeking compensation and even freezing accounts, but BSE still refused to take corrective action and hence, Swojas filed a writ petition with Hon'ble Bombay High Court to primarily challenge authority of BSE to issue circulars on its own for freezing accounts of promoters and other issues including pending application of revocation. In the interim period, SEBI understood the non-compliances by BSE and hence, issued a letter containing Standard Operating Process to be followed for freezing accounts besides directing BSE to unfreeze all accounts of all promoter group entities immediately. Hon'ble Bombay High Court took a note of SEBI's SOPs and asked BSE to unfreeze all accounts immediately, however, given other pending issues, Promoters offered to keep deposit of securities worth Rs 14.16 Lakhs. Hon'ble High Court kept all contentions open and passed an order to ask SEBI to examine various issues and pass a Speaking Order within 8 weeks. BSE challenged it with the Hon'ble Supreme Court, but they refused to interfere in the aforesaid order. Thereafter, Swojas had made a payment of Rs 14.16 Lakhs under protest to BSE.
Swojas had submitted a representation to SEBI on 23rd March 2021 on which SEBI issued a letter dated 24th June 2021. Though some of the points were considered by SEBI as an input for inspection, they did not address major issues related to power of issuing circulars by BSE on its own for suo-moto freezing accounts even when there were no such legal provisions in 2019. Further, revocation of suspension had been delayed and no action was taken by BSE since 2017 on the application submitted by Swojas till May 2023 despite all the compliances. The Company has filed a writ petition against BSE in August 2021 but no hearing took place on the same.
2. Arbitration with M/s Salasar Corporation
Swojas had entered into a memorandum of understanding with M/s Salasar Corporation and also gave an advance to set up a food processing unit at Palghar in 2015 with a timeline to finish the project in 3 years. Due to delay in revocation of suspension for almost 6 years, there were restrictions on issue of new shares as well as transfer of promoters' holding in view of General Order No. 1 issued by Hon'ble Chairman of SEBI on 20-7-2015. Therefore, it was not possible to raise funds for the project and hence, further payment could not be made to Salasar. As per the MOU, interest was duly accounted in the books every year and even tax was deducted till December 2019. However, Salasar stopped providing for interest and had initiated
arbitration proceedings against the company for recovering subsequent instalments payable by Swojas. Swojas had duly represented the case before the Arbitral Tribunal and accordingly, Swojas need not make any further payment to Salasar. However, in view of losses incurred by Salasar Group due to inability of Swojas to make further payment, the Arbitral Tribunal has passed on order allowing Salasar to forfeit the amount as well as interest provided thereon. Swojas had explored alternative options including challenging the arbitral award with the Court of Law, however, due to Covid19 outbreak the action had got delayed. Simultaneously, an option is evaluated to amicably settle the matter instead of taking legal recourse.
4. Balance under the head 'Trade Receivables', 'Trade Payables', 'Loan and Advances Receivable and Payable' are shown as per books of accounts subject to confirmation by concerned parties and adjustment if any, on reconciliation thereof. Confirmation letters have been issued to parties for confirmation of balances with the request to confirm or send / comments by the stipulated date failing which the balances as appearing in the letter would be taken as confirmed. Confirmation letters have been received in very few cases; however, no adverse communication has been received from the parties.
5. Segment reporting
The Company used to originally sell milk and dairy products, however, its operations stopped completely after the commencement of winding up proceedings after 31st August 2000. The main object of the company is to carry out agriculture business, however no revenue has been generated from such activities during the year 2022-23. There have been no other reportable segments identified by Chief Operating Decision Maker and hence no segment reporting is presented under IND AS 108.
The information has been given in respect of such vendors to the extent they could be identified as micro and small enterprises on the basis of information available with the company.
9. Financial instruments and risk management Fair values
1. The carrying amounts of trade payables, other financial liabilities (current), borrowings (current), trade receivables, cash and cash equivalents, other bank balances and loans are considered to be the same as fair value due to their short-term nature.
2. The fair value of financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale.
Set out below, is a comparison by class of the carrying amounts and fair value of the Company's financial instruments, other than those with carrying amounts that are reasonable approximation of fair values:
*Fair value of instruments is classified in various fair value hierarchies based on the following three levels:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices.
Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques, which maximise the use of observable market data and rely as little as possible on entity specific estimates. If significant inputs required to fair value an instruments is observable, the instrument is included in Level 2.
Level 3: If one or more of the significant inputs are not based on observable market data, the instruments is included in level 3
Management uses its best judgement in estimating the fair value of its financial instruments. However, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented above are not necessarily indicative of the amounts that the Company could have realized or paid in sale transactions as of respective dates. As such, the fair value of financial instruments subsequent to the reporting dates may be different from the amounts reported at each reporting date. In respect of investments as at the transaction date, the Company has assessed the fair value to be the carrying value of the investments as these companies are in their initial years of operations obtaining necessary regulatory approvals to commence their business.
10. The previous year's figures have been regrouped, rearranged and reclassified wherever necessary to conform to the current year's presentation.
Inis is the statement of changes in equity referred to in our report of even date.
For Ramanand & Associates For Swojas Energy Foods Ltd
Chartered Accountants
Firm Registration No.: 117776W
Ramanand R Gupta Mr. Vishal Dedhia Mr. Ketan Kataria
Partner Director Director
Membership No.:103975 DIN 00728370 DIN 01943753
UDIN : 24103975BKAHYV5154 Place :Mumbai Date : 29th May, 2024
Nikunj Shah Vishal Chavda
Company Secretary CFO
|