Accounting Policies of Gaekwar Mills Ltd. Company

Mar 31, 2024

SIGNIFICANT ACCOUNTING POLICIES :

Corporate Information

The Gaekwar Mills Limited (referred to as ''the Company'') was incorporated on 16/06/1928 & its Corporate
Identification Number (CIN) is L17120MH1949PLC007731)

a. STATEMENT OF COMPLIANCE :

The financial statements have been prepared in accordance with the Indian Accounting Standards
(Ind-AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and the Companies
(Indian Accounting Standards)(Amendment) Rules, 2016 as amended.

b. BASIS OF PREPARATION :

The financial statements are prepared under historical cost convention, on accrual basis.

c. REVENUE RECOGNITION :

Revenue in respect of Dividend Income is accounted as and when received & Interest income
is accounted on accrual basis.

d. Property, Plant and Equipment

Land is carried at historical cost. All other items of property, plant and equipment are stated at
historical cost less depriciation. Historical cost includes expenditure that is directly attributable
to the acquistion of the items.

e. INVESTMENTS :

Investments are stated at Cost. No adjustments is made in respect of decline in value of
temporary nature, if any, as they are considered long term by the management.

The company does not have any current investment.

The Company was wound up by an order dated 4th February 2008 passed by the Hon. Bombay High
Court. Subsequently, on 10th September, 2009, the Hon. Bombay High Court accorded sanction to a
scheme of Compromise/ Arrangement under section 391 to 393 of the Companies Act, 1956, for the
revival of the Company.

The winding-up order was finally set aside on 30th June 2015 and the Company is now out of liquidation.

NOTE 17:

In earlier years the Company had issued the following two series of debentures:

Secured Non-Convertible Debentures (Series A) each of the face value of Rs. 1,00,000/- at par.

Issued on 9th October 2009 and redeemable on or before the expiry of 8 years
(i.e. maturing on 9th October 2017)

carrying 0% interest for the first three years (upto 09/10/2012),

thereafter carrying interest in the 4th and 5th years at 9% p.a. and thereafter until maturity at 12% p.a
and secured by way of charge on fixed assets of the Company and floating charge
upon all the present and future assets of the Company.

All the debentures of Series A have been held by M/s Mukesh Babu Financial Services Ltd. since last several years.
The Board of Directors of our Company and the Board of Directors of Mukesh Babu Financial Services Ltd ,
at separate meetings held on 30th May 2017 approved the following changes in terms of interest payment and
redemption of the above debentures:

(i) Series A Debentures would bear Zero Percent interest effective 1st April 2016

(ii) the maturity date of Series A debentures will be extended to 09/10/2020

(iii) Series A Debentures of face value Rs 30 crores to be redeemed at a premium of 60% (Rs 18 crores).

The premium of Rs 18 crores payable on redemption of Series A Debentures

was being shown in the Accounts under the head "Miscellaneous Expenditure"
and was written off proportionately over the remaining life of the debentures.

The debentures became due for redemption on 09/10/2020.

In view of the ongoing Covid-19 Pandemic, the Company requested the debentureholder to extend the
Debenture Period by two years upto 09/10/2022.

By their letter of 18th March 2022, M/s Mukesh Babu Financial Services Ltd. proposed that the maturity period of
the said Series A Debentures be extended to 31st March 2025 on condition that the premium on redemption
shall increase by 40% of the face value over and above the premium agreed earlier (i.e. Rs. 19.2 crores being
40% of Rs. 48 crores). This letter was received by the Company on 28th March 2022, and placed before the Board
at their meeting to be held on 27th May 2022.

Zero Percent Secured Non-Convertible Debentures (Series B) each of the face value of Rs. 1,00,000/-

at par issued on 22nd April 2013 and redeemable on or before the expiry of 7 years
(i.e. maturing on 22nd April 2020)

and secured by way of charge on all fixed assets of the Company, ranking pari-passu with the charge holder

of Series A Debentures and floating charge on all other assets of the Company,

both present and future. The pari passu charge to be restricted upto Rs. 5 crores only.

In view of the Covid-19 Pandemic the Company requested the Debentureholder to extend the
Debenture Period upto such time as the liquidity situation improves.

By their letter of 18th March 2022, M/s Mukesh Babu Financial Services Ltd. proposed that the maturity period of
the said Series B Debentures be extended to 31st March 2025 on condition that the premium on redemption
shall increase by 40% of the face value (i.e. Rs. 2 crores being 40% of face value Rs. 5 crores)

The letter was received by the Company on 28th March 2022, and placed before the Board at their meeting
to be held on 27th May 2022

The Scheme of Compromise/Arangement sanctioned by Hon. Bombay High Court in 2009 had made provision
for payment of Rs. 9.71 crores towards Gratuity liability of the workmen. The amount was deposited with the
office of the Mamlatdar, Gandevi.

In spite of repeated publicity through press and television media, it was found that over 1,200 workmen
had not collected their dues even after a period of four years from 2009 to 2013.

An application was made to the High Court in 2013 that the undisbursed funds should be returned to the
Company on its undertaking to pay the claim of the workers, if made thereafter.

The application was considered favourably by Hon. Justice Patel who passed an order to this effect
on 15th January 2014.

Consequent to this order, the Mamlatdar, Gandevi returned to the Company, via the office of the
Official Liquidator attached to the Bombay High Court, Rs. 4,60,84,470 in September 2014
and further amount of Rs. 9,39,712 in July 2015.

No workmen have come forth to make a claim till 31st March 2022 under this scheme.

NOTE 19:

(i) As per the Scheme of Compromise sanctioned by the Bombay High Court in 2009, amounts aggregating to
Rs. 9.71 crores were payable to erstwhile workmen, based on Recovery Certificates in respect of 2,185
workmen issued in the year 2003 by Asst. Labour Commissioner, Navsari. The Company thereupon
deposited with the Mamlatdar, Gandevi Rs. 3.03 crores and issued cheques in favour of

individual workmen aggregating to Rs. 6.63 crores, thus satisfying the claims entirely.

(ii) Subsequent to the sanction of the Scheme, further Recovery Certificates were issued by the

Asst. Labour Commissioner, Navsari, in respect of 386 workmen aggregating to Rs. 1,89,83,135.

The Official Liquidator wrote to the Controlling Authority under the Payment of Gratuity Act
that these fresh claims are not payable as the relevant orders had been passed after date
of winding up of the Company, and without mandatory sanction from the Bombay High Court,
where liquidation proceedings are still pending.

Taking cognizance of this information, the Controlling Authority passed an order dated 02/08/2011
withdrawing the Recovery Certificates.

Withdrawal of the said orders was challenged by a group of workmen before the Gujarat High Court,
wherein the Hon Gujarat High Court has upheld the order of the Controlling Authority.

The said order of the Gujarat High Court was further challenged by the group of workmen before the
Hon. Supreme Court of India, who directed the Bombay High Court to hear the appeal of the workmen
on merit. The appeal has been admitted by the Division Bench of the Bombay High Court,
but no interim or ad interim order has been passed to date.

The Company has been advised that no provision be made in the accounts for the additional amount
of Rs. 1,89,83,135. However the Company has provision of Rs. 73,08,495 for Gratuity and other
related claims carried over from an earlier year.

NOTE 20:During the year the Company received Rs. 36,69,984.89 from its erstwhile bankers Bank of India.

This amount represents proceeds of a fixed Deposit placed in 2004 and written off as unrecoverable at the
time of framing scheme of compromise this has been accounted as income for the year

NOTE 22:

Previous year''s figures have been regrouped, recast or reclassified wherever necessary.

NOTE 23:

Earnings per share has been computed with reference to loss of Rs. 3,64,17,198 |

and 20,00,000 equity shares of Rs 10/- each

previous year loss Rs. 6,55,97,991 and 20,00,000 equity shares of Rs 10/- each
There is no diluted earnings per share as there are no dilutive potential equity shares.

NOTE 24:

In the opinion of the directors and to the best of their knowledge and belief, the value on realization
of Current Assets, Loans and Advances, in the ordinary course of Business, would not be less than the
amount at which they are stated in the Balance Sheet and provision for all known liabilities is adequate.

NOTE 25:

Contingent Liability provided for Rs. NIL(NIL)

A] Expenses in Foreign Currency NIL NIL

B] Earning in Foreign Exchange NIL NIL

Note: 26

During the year, the Company has not traded or invested in Crypto currency or Virtual Currency.

Hence required disclosures have not been given.

Note: 27

During the year, the Company has not entered into any transactions with Companies Struck off under Section 248 .
of the Companies Act, 2013 or Section 560 of the Companies Act, 1956. Hence necessary disclosures in this regard
have not been given.

Note: 28

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 person(s) or entity(ies),

including foreign entities ("Intermediaries") with the understanding, whether recorded in writing or otherwise,

that the Intermediary shall lend or invest in party identified by or on behalf of the Company (Ultimate Beneficiaries).

Note: 29

No funds have been received by the Company from any person(s) or entity(ies), including foreign entities
("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall,
directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf
of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

Note: 30

There is no income surrendered or disclosed as income during the current or previous financial year in the
Tax assessments under the Income Tax, 1961, that has not been recorded in the Books.

Note: 31

The Company does not hold any Benami Property and no proceedings have been initiated

against the Company under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016)

(formerly the Benami Transactions (Prohibition) Act, 1988 (45 of 1988)) and the rules made thereunder

Note: 32

The Company has not entered into any scheme of arrangement which has an accounting impact in current
or previous financial year

Note: 33

There are no charges or satisfaction yet to be registered with Registrar of Companies.

Note: 34

Information pursuant to the requirements of Schedule III of Companies Act, 2013 have been given
to the extent applicable.

As per our Report of even date attached FOR AND ON BEHALF OF THE BOARD

for M D Pandya & Associates
Chartered Accountants
(Registration No W)

Sd/- Sd/- Sd/-

Mukul D Pandya R.N. Karanjia S.D. Shah

(Partner) Director Director & CEO

(Membership No 33184) (DIN: 00033108) (DIN: 03287393)

Sd/- Sd/-

Nidhi Darak Chief Financial Officer

Company Secretary

(M. No. 28715)

MUMBAI

DATED: 29th May 2024

---

Mar 31, 2014

A. BASIS OF ACCOUNTING :

1. The financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to in sub-section(3c) of Section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. FIXED ASSETS

2. AII fixed assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. REVENUE RECOGNITION :

Revenue in respect of Dividend Income & Interest on Debentures is accounted as an when received.

d. INVESTMENTS :

1) Long Term Investments are stated At Cost. No adjustments is made in respect of decline in value of temporary nature, if any, as they are considered long term by the management.

The company does not have any current investment.

---

Mar 31, 2013

A. BASIS OF ACCOUNTING :

l.The financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to in sub-section(3c) of Section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. FIXED ASSETS

2.AII fixed assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. REVENUE RECOGNITION :

Revenue in respect of Dividend Income & Interest on Debentures is accounted as an when received.

d. INVESTMENTS :

1) Long Term Investments are stated At Cost. No adjustments is made in respect of decline in value of temporary nature, if any, as they are considered long term by the management. The company does not have any current investment.

---

Mar 31, 2012

A. BASIS OF ACCOUNTING :

1. The financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to in sub-section(3c) of Section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. FIXED ASSETS

2. All fixed assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

C. REVENUE RECOGNITION :

Revenue is respect of Dividend Income & Interest on Debentures is accounted as an when received.

---

Mar 31, 2011

A. The financial statements are prepared under historical cost convention on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

B. All fixed assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

C. Investments are shown at cost.

---

Mar 31, 2010

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

---

Mar 31, 2009

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

---

Mar 31, 2008

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub- section (3 C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. AH Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost

---

Mar 31, 2007

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

2. The Company was wound up by an order dated 4th February 2008 passed by the Hon. Bombay High Court in Company Petition no. 228 of 1987 and upon the opinion expressed by the Hon. BIFR in case no. 57 of 1987 which was converted into Company Petition and numbered as CP/ 735 of 2004.

Subsequent to the winding up order as above, the shareholders and the promoters of the company who along with their friends, relatives and associates who held and controlled about 56% of the paid-up Share Capital of the company (hereinafter referred to as the Applicants), propounded a scheme under Section 391 to 393 of the Companies Act, 1956 for the revival of the company. The Hon. Bombay High Court vide its order dated 10th September, 2009 has accorded sanction to a scheme of Compromise/Arrangement under sections 391 to 393 of the Companies Act 1956, inter alia, for revival of the company. The scheme was further modified by the subsequent orders of the Hon. Bombay High Court dated 6th January 2010 and 7th January 2010.

Under the said revival scheme PLATINUM SQUAARE PVT LT., Mumbai is the Strategic Investors in the Company who would provide the funds to the extent of Rs. 30 Crores, over a period of time, for payment of existing negotiated/settled liabilities to the Creditors of the Company (comprising of the Secured Creditors, Statutory dues, Workers and Unsecured Creditors) and for the revival of the companys operation. The Company shall issue to Platinum Square Pvt Ltd 8 years Secured Redeemable Non Convertible Debentures each of the face value of Rs.l, 00,000 at par and each debentures shall be accompanied by a detachable warrant entitling the holder to subscribe for 13 equity shares of the face value of Rs. 100 at par within 18 months from the allotment of the Warrants..

In the scheme of Compromise/arrangement referred to above, the company has allotted 3000 8 years Secured R Redeemable Non Convertible Debentures each of the face value of Rs.l, 00,000 at par on 9th of October 2009 .The amount paid up on each debentures as on date is Rs. 17,500/- amounting to Rs. 5,25,00,000/-

Interest dues to Secured Creditors:

Bank of India:

i) Simple interest at 10% p.a from 17.04.2008 to 08.12.2009 ii) Simple interest at 12% p.a from 09.12.2009 till the date of payment, which is not later than 31st March, 2010

Union Bank of India:

i) Simple interest at 10% p. a from 01.06.2008 to 08.12.2009 ii) Simple interest at 12% p. a from 09.12.2009 till the date of payment, which is not later than 31st March, 2010

---

Mar 31, 2006

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

---

Mar 31, 2005

A. The Financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

---

Mar 31, 2004

1. Accounting Policies:-

a. The Financial statements are prepared under historical cost convention, on accrual basis and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. All Fixed Assets have been capitalized at cost inclusive of expenses relating to acquisition and installation.

c. Investments are shown at Cost.

2. The Company was wound up by an order dated 4th February 2008 passed by the Hon. Bombay High Court in Company Petition no. 228 of 1987 and upon the opinion expressed by the Hon. BIFR in case no. 57 of 1987 which was converted into Company Petition and numbered as CP/ 735 of 2004.

Subsequent to the winding up order as above, the shareholders and the promoters of the company who along with their friends, relatives and associates who held and controlled about 56% of the paid-up Share Capital of the company (hereinafter referred to as the Applicants), propounded a scheme under Section 391 to 393 of the Companies Act, 1956 for the revival of the company. The Hon. Bombay High Court vide its order dated 10th September, 2009 has accorded sanction to a scheme of Compromise/Arrangement under sections 391 to 393 of the Companies Act 1956, inter alia, for revival of the company. The scheme was further modified by the subsequent orders of the Hon. Bombay High Court dated 6th January, 2010 and 7th January, 2010.

Under the said revival scheme, PLATINUM SQUARE PVT LTD. Mumbai, is the Strategic Investors in the Company who would provide the funds to the extent of Rs. 30 crores, over a period of time, for payment of existing negotiated/settled liabilities to the Creditors of the Company (comprising of the Secured Creditors, Statutory dues, Workers and Unsecured Creditors) and for the revival of the companys operation. The Company shall issue to Platinum Square Pvt Ltd 8 years Secured Redeemable Non Convertible Debentures each of the face value of Rs. l,00,000 at par and each debentures shall be accompanied by a detachable warrant entitling the holder to subscribe for 13 equity shares of the face value of Rs.l00 at par within 18 months from the allotment of the warrants.

In the scheme of Compromise/arrangement referred to above, the company has allotted 3000, 8 years Secured Redeemable Non Convertible Debentures each of the face value of Rs .l 00,000 at par on 9th of October 2009. The amount paid up on each debentures as on date is Rs.l7,500/- amounting to Rs. 5,25,00,000/-

3. Interest dues to Secured Creditors:

Bank of India:

i) Simple interest at 10% p.a from 17.04.2008 to 08.12.2009

ii) Simple interest at 12% p.a from 09.12.2009 till the date of payment, which is not later than 31st March, 2010

Union Bank of India: i) Simple interest at 10% p. a from 01.06.2008 to 08.12.2009

ii) Simple interest at 12% p. a from 09.12.2009 till the date of payment, which is not later than 31 st March, 2010

---

Mar 31, 2001

A. The financial statements are prepared under historical cost convention, on accrual basis, and are in accordance with requirements of the Companies Act, 1956 and comply with Accounting Standards referred to the sub-section (3C) of the section 211 of the said Act, except in case of certain items which have been accounted on cash basis as reported hereafter.

b. The accounts have been prepared under Historical Cost Convention.

c. All Fixed Assets have been capitalised at cost inclusive of expenses relating to acquisition and installation.

d. No Depreciation has been provided since accounting year ended 30.06.1986.

e. Investments are generally shown At Cost.