Interim Order in the matter of Cressanda Railway Solutions Ltd.

WTM/ASB/CFID/CFID-SEC4/30859/2024-25 SECURITIES AND EXCHANGE BOARD OF INDIA INTERIM ORDER Under Sections 11(1), 11(4) and 11B(1) of the Securities and Exchange Board of India Act,1992 In respect of: SL. No. NOTICEE(S) PAN 1 Cressanda Railway Solutions Limited AAACC1553F (Previously known as Cressanda Solutions Ltd.) 2 Smart infraproperties Private Limited AAQCS6937F 3 Milind Madhukar Palav BOLPP8040R 4 Manohar Iyer Sadahalli Nagaraj ADKPN1944R 5 Rajkumar Dinesh Masalia AKNPM0248H 6 Sanskruti Commotrade LLP ACQFS7054L 7 Kamla Multitrade LLP AAOFK4617K 8 Kittu Commosales LLP AAOFK5636L 9 Intex Commosales LLP AAFFI2676H 10 Litex Traders LLP AAFFL8157J (The aforesaid entities are hereinafter individually referred to by their respective names / Noticee no. and collectively as “Noticees”, unless the context specifies otherwise) Background:

1. Securities and Exchange Board of India (“SEBI”) initiated investigation in the matter of Cressanda Railway Solutions Limited (previously known as Cressanda Solutions Limited) (“Cressanda” / “CRSL” / “the Company”) as it was observed that the Company had changed its registered office address three times during the period February 2022 to May 2022 and its revenue spiked sharply to Rs.75.13 Crore in FY23 from Rs.0.18 Crore in FY22. Further, its KMPs and statutory auditors had resigned during the period November 2021

Interim Order in the matter of Cressanda Railway Solutions Limited to February 2022. The prima facie findings of investigation are mentioned in subsequent paragraphs.

2. Cressanda is listed on BSE since 1986. As per information available on the Company’s website, CRSL is in the business of providing software services, digital media services and information technology (IT) enabled services. CRSL is listed on BSE Limited (BSE) since 1986. Its market capitalization was about Rs.530 Crore at the end of September 2024 while trading at Rs.12.70 per share. The promoter of CRSL is Smart Infraproperties Pvt. Ltd. (“SIPL”) having 0.08% shareholding in CRSL.

3. It was observed that during the period between November 2021 to February 2022 many of the directors and KMPs of the Company had resigned on the reported grounds of pre-occupancy and personal reasons. The Company in its reply to SEBI dated November 6, 2023 submitted that the resignations were due to internal reorganization of its management team and post-Covid economic difficulties. 4. It was observed that the Company during the period from February 2022 to May 2022 had changed its registered office address three times. In its reply to BSE, the Company cited the reason for the frequent changes as shortage of office space. Sudden increase in revenue of the Company after June 2022: 5. The standalone financial performance of the Company from FY12 onwards, as available on the website www.screener.in, is provided in the table below: Mar-15 Mar-16 Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23 Sales 0.00 0.00 0.00 0.00 0.00 0.00 0.09 0.18 75.13 Expenses 0.29 0.19 5.15 0.12 0.09 0.09 0.09 0.23 73.54 Operating Profit -0.29 -0.19 -5.15 -0.12 -0.09 -0.09 0.00 -0.05 1.59 OPM % 0.00 -0.28 0.02 Other Income 0.17 0.03 0.22 0.11 0.00 0.00 0.00 0.33 5.56 Interest 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.01 Depreciation 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Profit before tax -0.15 -0.17 -4.93 -0.01 -0.09 -0.09 0.00 0.27 7.14 Tax % 0.00 -1.47 0.00 0.00 0.00 0.00 0.00 0.25 Net Profit -0.15 -0.42 -4.94 -0.01 -0.09 -0.09 0.00 0.27 5.36

6. It was observed that the Company had NIL revenue from operations between FY15 to FY20. Its Other Income during the period was also either NIL or negligible. The expenses reported by the Company over the said period were also in close proximity to the reported income except during FY17 when the Company reported large expenses (approximately Rs.5 Crore was debited to profit and loss account as provisions for doubtful debts) without reporting revenue in that FY. A part of the said provision for doubtful debt created in FY17 was later written back in FY22 and FY23 to increase the profitability of the Company. 7. It was observed that revenue of the Company in FY22 was merely Rs.18.48 Lakh which exponentially increased to Rs.75.13 Crore next year, i.e. FY23. In response to a specific query in this regard, the Company in its reply dated March 10, 2023 submitted a very generic explanation stating that “due to internal reorganization of the management and operational team and effort of the management, the company was able to post excellent result”. Shareholding Pattern: 8. It was observed that the promoters’ shareholding in the Company decreased from 30.12% as at the end of September 2021 to 8.42% at the end of December 2021 which further reduced to just 0.10% at the end of March 2022. The decrease in promoter shareholding coincided with corresponding increase in the public shareholding. A summary of the quarter-wise shareholding from June 2021 to March 2024 is tabulated below.

Category Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Promoters 30.12 30.12 8.42 0.10 0.08 0.08 0.08 0.08 0.08 0.07 0.07 0.07 (%) FIIs (%) 0.00 0.00 0.00 0.00 0.00 0.30 0.08 0.10 1.32 0.36 0.60 1.17 DIIs (%) 0.03 0.03 0.03 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 Public (%) 69.85 69.85 91.55 99.87 99.90 99.60 99.81 99.79 98.58 99.55 99.31 98.74 No. of Shareholde 2,700 5,842 25,170 35,511 50,076 39,664 40,305 37,364 36,542 38,185 39,473 56,556 rs

9. It was observed that in a span of three years, the number of shareholders of the Company went up over 20 times from 2700 to 56,556.

Purchase and sale of rice by Cressanda 10. It was observed that Cressanda on its website in the “Our Story” section stated “Our offerings include cutting-edge conventional and digital media services, and tech-enabled solutions tailored to large institutional clients” which meant that its core business was media / technology services and related activities. Further, Cressanda’s nature of activity / industry, as reported on BSE website, was IT enabled Services. However, the Company vide letter dated November 6, 2023 confirmed that during FY23 it had entered into sale and purchase of rice, in addition to the sale and purchase of some technology related services. It was observed from Company’s reply dated May 27, 2024 that the value of rice purchased and sold was Rs.53.91 Crore and Rs.56.74 Crore respectively for FY23. The abovementioned purchase and sale accounted for approximately 75% of the purchase and sales of the Company for FY23. The remaining 25% came from the data transfer and social media and IT Consulting by the Company. 11. The counter parties to Cressanda’s purchase and sale transactions for FY23 are mentioned in the Table below. Nature of Business Buy/Sell Name of Counter parties Amount (Rs. Crores) Rice Buy Devanshi Agro Foods, 53.91 Jaisleen/Jasleen Agro Industry, Siddhi Agrotek and Shree Balaji and Co. Sell Jagjivan Multitrade LLP and 56.74 Zahera Traders LLP IT enabled services (data Buy Varanium Cloud Limited 21.07 transfer and media management and IT consulting charges Sell Avance Technologies Limited 21.70

12. It was observed that Cressanda had purchased rice from Devanshi Agro Foods (Devanshi), Jaisleen/Jasleen Agro Industry (Jaisleen), Siddhi Agrotek (Siddi) and Shree Balaji and Co.(Balaji) for Rs.23.45 Crore, Rs.23.97 Crore, Rs.0.90 Crore and Rs.5.60 Crore respectively. The Company sold rice to Jagjivan Multitrade LLP (Jagjivan) and Zahera Traders LLP (Zahera) for Rs.28.49 Crore and Rs.28.24 Crore respectively.

13. Examination of the ledger of the abovementioned entities in the books of Cressanda revealed that Cressanda’s purchases of rice from Devanshi and sale to Jagjivan happened simultaneously. To illustrate, Cressanda entered into three purchase transactions with Devanshi for similar amounts (Rs.6.42 Lakh, Rs.6.44 Lakh and Rs.6.53 Lakh) on July 1, 2022. Simultaneously, Cressanda entered into three sales transactions with Jagjivan on the same day, i.e. July 1, 2022 for similar amounts (Rs.6.61 Lakh, Rs.6.63 Lakh and Rs.6.72 Lakh) by adding certain markup to the purchase amounts. Similar pattern was observed in all purchase and sales transactions between Cressanda, Devanshi and Jagjivan. Cressanda purchased rice from Devanshi and sold to Jagjivan during July 2022 to September 2022 (all days) and from January 2023 to March 2023 (few days). 14. It was observed that the Company used the same modus operandi as above in its dealings with Jaisleen (buying) and Zahera (selling), with whom it entered into purchase and sale transactions during October 2022 to December 2022 (all days) and from January 2023 to March 2023 (few days). 15. Cressanda vide its letter dated May 27, 2024 provided copies of purchases and sales invoices. A random scrutiny of purchase and sales invoices dated July 19, 2022 and July 18, 2022 showed that the vehicles purportedly used for transporting the purchased and sold goods were same. It was observed that on the same day, same vehicles were shown to have been used for transporting goods from Devanshi Agro Foods to Cressanda and from Cressanda to Jagjivan Multitrade LLP. It was also noted that in many instances, the same vehicle registration numbers were mentioned in the purchase invoices as well as sales invoices. A search of the vehicle registration numbers provided in the invoices on a sample basis (5 invoices) on the Vahan Portal showed that while the registration numbers of two vehicles were non-existent, one registration number pertained to a two wheeler and the remaining two registration numbers pertained to heavy vehicles. Further, the shipping address of Cressanda on the invoices was from Mumbai whereas the shipping address of Jagjivan was that from Nagpur.

16. It was observed that Cressanda, Devanshi and Jagjivan had executed sale / purchase transactions in a circular fashion, wherein Cressanda first purchased rice from Devanshi and then sold the said rice to Jagjivan, which in turn purportedly sold the said rice to Devanshi. A summary of the trail of the related bank transactions observed in the bank accounts of Cressanda (Yes Bank Account No. 45963300001294), Devanshi (AU Bank Account No. 2302236846772140) and Jagjivan (Yes Bank Account No. 016263400005291) is as follows. Name of Recipient Bank Amount Date Transferor Transferor Bank /account Name Recipient /account (Rs.) 08/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 99,60,400 08/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 99,24,000 08/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 99,38,800 09/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 2,48,81,780 09/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 2,48,05,000 09/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 2,48,10,400 10/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 49,48,400 10/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 50,00,000 10/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 49,79,400 11/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 49,50,600 11/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 49,85,000 11/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 49,49,200 13/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 4,19,33,600 13/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 3,53,53,400 13/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 4,19,13,300 14/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 4,49,54,600 14/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 4,50,03,500 14/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 4,99,89,300 15/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 4,40,02,800 15/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 4,46,00,000 15/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 4,40,02,400 16/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 45,67,800 16/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 80,00,000 16/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 45,61,900 17/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 1,50,00,000 20/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 49,86,500

20/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 49,90,000 20/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 49,78,400 21/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 94,86,700 21/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 74,00,000 21/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 94,80,800 25/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 49,83,300 25/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 1,24,24,640 25/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 49,78,640 28/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 29,24,730 28/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 13,00,000 28/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 29,24,030 29/03/2023 Cressanda Yes/045963300001294 Devanshi AUB/2302236846772140 3,18,90,410 29/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 3,34,00,850 29/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 3,03,15,940 31/03/2023 Jagjivan Multitrade Yes/016263400005291 Cressanda Yes/045963300001294 3,18,00,000 31/03/2023 Devanshi AUB/2302236846772140 Jagjivan Multitrade Yes/016263400005291 15,74,000

17. While the above table summarizes the total fund transfers on any particular day, the actual transactions were smaller. It was observed that smaller amounts of approximately Rs.50 Lakh were circulated multiple times on most occasions between the three parties, which added up to large amounts, as reflected in the table above. The net fund movement of the aforementioned entities during March 2023 is shown in the table below: Sum of Amount (Rs.) Name of Recipient Cressanda Name of Transferor Solutions Devanshi Agro foods Jagjivan Multitrade Cressanda Solutions 23,44,71,620 Devanshi Agro Foods 23,93,96,510 Jagjivan Multitrade 28,39,86,390 Grand Total 28,39,86,390 23,44,71,620 23,93,96,510

18. From the above, it was apparent that in the abovementioned circular transactions, there was no actual movement of goods and the purchases and sales were merely on paper through books entries. Cressanda booked the non-genuine transactions by first raising invoices and then entering into bank transactions on real time basis to make the transactions appear genuine. The fictitious transactions appeared to have been executed with the sole intention of inflating the revenue and expenditure leading to mis-statement of books of accounts and consequently the financial statements of the Company. A pictorial representation of the transactions is as follows:

19. Similar circular transactions of purchase and sale of rice were observed amongst Cressanda, Jaisleen Agro Industry and Zahera Traders LLP. it is observed that Cressanda has purchased rice from Jaisleen Agro Industry which seems to have purchased rice from Zahera Traders LLP which in turn has purchased rice from Cressanda itself. A summary of the circular transactions among the said entities, as found in the bank statements of the aforementioned entities, is provided in the following table. Date Name of Transferor Bank /account Name Recipient Bank /account Amount Rs. Transferor Recipient 10/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 1,49,73,600 10/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 1,49,35,900 10/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 98,65,000 11/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 49,84,400 11/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 49,80,200 13/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 1,00,75,000 16/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 4,49,99,000 16/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 4,49,99,000 16/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 1,50,52,000 17/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 8,80,08,200 17/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 7,79,26,600 17/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 7,48,15,600 18/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 98,08,300 20/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 3,99,30,500 20/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 3,98,69,000 20/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 4,11,35,900 21/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 2,48,00,690 21/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 2,47,43,100

Date Name of Transferor Bank /account Name Recipient Bank /account Amount Rs. Transferor Recipient 21/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 2,98,40,000 25/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 44,98,700 25/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 44,88,700 29/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 14,99,750 29/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 4,00,000 31/03/2023 Cressanda Yes/045963300001294 Jasleen Agro AUB/2302236846737654 1,60,00,000 31/03/2023 Jasleen Agro AUB/2302236846737654 ZAHERA Yes/042163400003036 1,71,08,500 31/03/2023 ZAHERA Yes/042163400003036 Cressanda Yes/045963300001294 3,72,75,000 20. The net fund movement of the aforementioned entities during March 2023 is shown in the table below: Sum of Amount (Rs.) Name of Recipient Name of Transferor Cressanda Solutions Jasleen Agro Industries Zahera Traders LLP Cressanda Solutions 23,96,94,840 Jaisleen Agro Industries 23,92,59,300 Zahera Traders LLP 21,80,58,500 Grand Total 21,80,58,500 23,96,94,840 23,92,59,300 21. A graphical summary of the transactions is as follows:

22. In view of the above, the purchases and sales of rice by the Company appeared to be merely book adjustments entries without movement of goods. The same projected good revenue and expenditure of the Company indicative of healthy growth in a corporate. Transactions with Varanium Cloud Ltd. and Avance Technologies Ltd. 23. It was observed that apart from purchase and sale of rice during FY23, the Company also entered into purchase and sale of services pertaining to data transfer, social media and IT Consultancy. Such purchases were made from Varanium Cloud Limited (Varanium) and sales were made to Avance Technologies Limited (Avance). Cressanda in its reply dated May 27, 2024 submitted the figures of IT related sales and purchase as Rs.21.70 Crore and Rs.21.07 Crore respectively. 24. Varanium vide letter dated December 22, 2023 submitted that the total value of sales to Cressanda on various dates in June 2022 was Rs.21.07 Crore against which it received a payment of Rs.18.70 Crore on various dates in July 2022. Further, Avance vide letter dated December 26, 2023 submitted that it purchased goods and services (Data transfer, social media management and IT Consulting charges and Global VOIP & Video conferencing hosted solutions on jump talk platform 5000 seats for 1 day) worth Rs.21.70 Crore from Cressanda on various dates in June 2022 against which it made total payment of Rs.19.64 Crore on various dates in July 2022. 25. From reply dated December 22, 2023 of Varanium, it was observed that Varanium raised a total of 29 invoices having consecutive serial numbers in respect of Data Transfer Social Media Management and IT consulting charges for Rs.21.07 Crore spread over 28 dates between June 02, 2022 to June 30, 2022. It was observed that all the said 29 invoices raised by Varanium to Cressanda were same except for the dates and invoice nos. mentioned therein.

Further, Varanium received total payments of Rs.18.70 Crore between July 8, 2022 to July 15, 2022 (8 dates of July 2022). 26. Varanium in its reply stated that there was no outstanding due from Cressanda, even though it appeared from the trial balance submitted by Cressanda vide its reply dated February 29, 2024 that Rs.86.13 Lakh was outstanding as on March 31, 2024 in the books of Cressanda. 27. Similarly, from reply dated December 26, 2023 of Avance, it was observed that Cressanda raised 29 invoices having consecutive serial nos. to Avance in respect of IT related services for Rs.21.70 Crore spread over 29 dates between June 02, 2022 to June 30, 2022. Further, Avance made payments of Rs.19.64 Crore between July 8, 2022 to July 15, 2022 (8 dates of July 2022). Rs.36.78 Lakh was deducted as TDS by Avance and balance Rs.1.69 Crore was outstanding as on March 31, 2023 and Rs.1.30 Crore as on March 31, 2024. It was observed that all 29 invoices raised by Cressanda to Avance were same except for the dates and invoice nos. mentioned therein. 28. A perusal of the bank account statements of Cressanda, Avance and varanium revealed circular transactions amongst the three entities during July 8, 2022 to July 15, 2022. From perusal of their bank account statements, it was observed that approximately Rs.54.48 Crore was circulated amongst the three entities.

It was observed that Cressanda paid approximately Rs.19.84 Crore to Varanium towards purchases of product and services as discussed above. On the same day, Varanium in turn paid approximately Rs.19.84 Crore to Avance and Avance paid approximately Rs.14.79 Crore to Cressanda towards the purchase of products and services. The circular transactions amongst the three entities were carried out in a manner that the receipt of funds by one entity was subsequently used by the said entity for making payment to other entity. The table below gives details of the aforesaid circuitous transactions. Date From Entity From Bank / Account TO Entity TO Bank/ Account Amount (Rs.) Cressanda Varanium 08/07/2022 Solutions Ltd AUB/ 2221253138605492 Cloud Limited ICIC0003449/344905001130 6424990 Varanium ICIC0003449/ Avance 08/07/2022 Cloud Limited 344905001130 Technologies ICICI 000405109455 6325000 Avance Cressanda 08/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 6353000 Cressanda Varanium 11/07/2022 Solutions Ltd AUB/ 2221253138605492 Cloud Limited ICIC0003449/344905001130 103024000 Varanium ICIC0003449/ Avance 11/07/2022 Cloud Limited 344905001130 Technologies ICICI 000405109455 103148362 Avance Cressanda 11/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 100985000 Cressanda Varanium 12/07/2022 Solutions Ltd AUB/ 2221253138605492 Cloud Limited ICIC0003449/344905001130 29600000 Varanium ICIC0003449/ Avance 12/07/2022 Cloud Limited 344905001130 Technologies ICICI 000405109455 29580000 Avance Cressanda 12/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 29705000 Cressanda Varanium 13/07/2022 Solutions Ltd AUB/ 2221253138605492 Cloud Limited ICIC0003449/344905001130 18115000 Varanium ICIC0003449/ Avance 13/07/2022 Cloud Limited 344905001130 Technologies ICICI 000405109455 18100000

Avance Cressanda 13/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 18050000 Cressanda Varanium 14/07/2022 Solutions Ltd AUB/2221253138605492 Cloud Limited ICIC0003449/344905001130 36248000 Varanium Avance 14/07/2022 Cloud Limited ICIC0003449/344905001130 Technologies ICICI 000405109455 36225000 Avance Cressanda 14/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 36260000 Cressanda Varanium 15/07/2022 Solutions Ltd AUB/2221253138605492 Cloud Limited ICIC0003449/344905001130 5085000 Varanium Avance 15/07/2022 Cloud Limited ICIC0003449/344905001130 Technologies ICICI 000405109455 5050000 Avance Cressanda 15/07/2022 Technologies ICICI 000405109455 Solutions Ltd AUB/2221253138605492 5070000

29. The transactions in the above table are summarized diagrammatically below:

30. The circuitous nature of the transactions clearly indicate that the transactions were not genuine. Cressanda procured/purchased certain IT services from Varanium and on the same day it provided the same services to Avance. It appeared that Cressanda sourced purchase invoices from Varanium and raised sales invoices to Avance without availing / providing any actual services.

Further, it circulated the funds through its bank account on the same dates to make the fictitious transactions appear genuine. Summary of Observations in respect of sales and purchases 31. In view of the above observations, it appeared that the sales and purchase transactions, i.e. sales and purchases of rice and IT enabled services reported by the Company were fictitious. To make the transactions appear genuine, funds were moved in a circular fashion amongst the entities wherein payments by one entity acted as source for onward transfer to the other. The Company in its Annual Report for FY23 reported a total purchase of Rs.71.77 Crore and total sales of Rs.75.13 Crore. However, the Company in its reply dated May 27, 2024 submitted that its total purchases and sales amounted to Rs.74.98 Crore and Rs.78.44 Crore respectively, which was more than the amount reported in the audited financial statements of the Company. The financial statements of the Company appeared to be misstated to the extent of fictitious sales and purchases as discussed in the foregoing paragraphs. 32. Further, a perusal of the ledger accounts received from the Company vide letter dated June 13, 2024 and bank accounts of the Company until December 2023 showed similar circuitous transactions with respect to sale and purchase of rice during FY24 as well. 33. Further, Other Income recorded in the books of accounts also appeared fictitious, as it was a result of writing back of the provisions for bad debts created earlier. Off-loading of shares by Promoter through Off-market Transfers 34. It was seen that the promoter of Cressanda, SIPL, had resorted to off market transfers to divest its holding in the Company during the period November 30, 2021 to January 21, 2022. As per information obtained from the depositories, shares were transferred in off-market transactions to the following entities:

Date Source Client Name Target Client Name/DP ID Transferred Qty 30/11/2021 Smart Infraproperties Heroic Mercantile Private Limited / 1,50,00,000 Private Limited (SIPL) 1203410000448494 06/12/2021 CDSL Orange Mist Productions Private 1,50,00,000 (1201370000464047) Limited/ 1201370000413536 06/12/2021 Avance Technologies Limited / 5,00,000 Total shares held by 1204330000133682 06/12/2021 SIPL as of September Tango Commosales LLP/ 1,50,00,000 30, 2021 before 1202060000956586 20/12/2021 transfer of 9,14,25,000 Zuber Trading LLP/ 1,00,00,000 shares (30.12% ) 1203410000597199 20/12/2021 Heroic Mercantile Private Limited/ 1,00,00,000 1203410000448494 05/01/2022 Yuvika Tradewing LLP/ 2,00,00,000 1203410000596961 Others 56,16,720 Total 9,11,16,720 Note: As on March 31, 2024 the promoter shareholding was a mere 3,08,280 shares, i.e., 0.07% of the total shares of the Company. 35. It was found that the entities, to whom the shares were transferred in off-market transactions, subsequently sold the same shares in the market. It was seen that the price of the scrip started going up from around Rs.3.20 in November 2021 to a high of about Rs.45 during June 2022. Sales of shares by the Recipients of Off-market Transfers 36. Entities, which received shares of Cressanda in off-market transactions from the promoter, had been trading heavily in the scrip since June 2021 (i.e. even prior to receiving shares from the promoter in off-market) in open market. The details of their transactions from November 30, 2021 (when they started receiving shares from the promoter) to March 31, 2023 are provided below: NON INDIVIDUAL PURCHASE PURCHASE SELL QTY SELL VALUE Net sale Trading Profit CLIENTNAME QTY VALUE (IN (IN Rs.) Qty earned (Rs.) Rs.) TANGO - COMMOSALES LLP 8,79,54,435 2,72,30,47,850 9,75,40,540 2,56,22,63,978 95,86,105 16,07,83,871 YUVIKA TRADEWING LLP 1,64,89,686 22,17,13,943 3,63,86,186 83,78,16,357 1,98,96,500 61,61,02,414 ZUBER TRADING LLP 2,48,72,797 39,15,79,290 3,45,22,988 77,33,43,077 96,50,191 38,17,63,787 ORANGE MIST PRODUCTIONS PRIVATE LIMITED 14,48,107 2,22,75,803 1,60,33,058 12,46,37,753 1,45,84,951 10,23,61,949 AVANCE TECHNOLOGIES LIMITED 18,94,395 3,06,30,442 20,30,299 3,39,70,641 1,35,904 33,40,199 Grand Total 13,26,59,420 3,38,92,46,727 18,65,13,071 4,33,20,31,806 5,38,53,651 94,27,84,478

37. It was observed from the above table that the quantity of shares sold by the aforementioned entities was significantly higher than their purchases during the same period. On net basis, they sold 5.39 Crore shares which was approximately 14% of the total shareholding of the Company as on March 31, 2023. The transactions during this period resulted in a trading profit of Rs.94.28 Crore to the aforementioned entities. 38. It was further seen that the promoter, SIPL, received funds from the bank accounts of the aforementioned entities who received the shares in the off-market transactions and profited from trading in the shares in the market. A summary of such receipts during January 21, 2022 to March 03, 2022 is provided in table below: Recipient Recipient Transferred by Sum of Credit Account Name Account No. (Rs.) Smart 212125313691320 Orange Mist 2,75,00,000 Infraproperties 1 (Au Bank) Productions Private Private Limited Limited Yuvika Tradewing LLP 12,94,00,000 Zuber Trading LLP 7,12,50,000 Smart Infraproperties Private Limited 22,81,50,000 Total Details of further payments, if any, received from the aforementioned entities are being investigated.

39. It was further seen that during the aforementioned period SIPL also transferred funds to / received funds from various entities. A Summary of all major receipts and payments by SIPL is shown in the table below. Recipient Recipient Account Received/ Transferred by Sum of Debit Sum of Credit Account Name No. (Payments) (Receipts) Smart 2121253136913201 Emporis Projects Limited 5,30,00,000 1,37,00,000 Infraproperties AU Bank Gittanjali Commosales LLP 14,02,00,000 Private Limited Indranil Traders LLP 2,88,00,000 Joydeep Commosales LLP 3,20,00,000 Orange Mist Productions 2,75,00,000 Private Limited Orbit Electro Equipments 17,29,00,000 44,00,000 Yuvika Tradewing LLP 12,94,00,000 Zuber Trading LLP 7,12,50,000 Smart Infraproperties Private Limited 39,81,00,000 27,50,50,000 Total

Preferential issue of convertible warrants 40. It was observed that the Company issued 9,49,18,000 convertible warrants (convertible within 18 months of allotment of warrants) on preferential basis @ Rs.7 (face value Re. 1) per warrant to 33 allottees in March 2022 for a total consideration of Rs.66,44,26,000. The consideration for warrant was to be paid in two tranches, whereby Rs.1.75 (25%) per share (total Rs.16,61,06,500) was to be paid on application and allotment of warrants and Rs.5.25 (75%) per warrant (total Rs.49,83,19,500) was to be paid on conversion of the warrants into equity shares. From the postal ballot notice dated February 9, 2022 filed with BSE, it was observed that the object of the preferential issue of convertible warrants was to: i. fund long term capital requirements for future growth of the company; ii. meet working capital requirements; iii. invest in new projects companies, bodies corporate; and iv. meet general corporate purposes.

41. It is surprising to note that the preferential issue was announced by the Company when the promoter shareholding had already come down to 0.10% of the paid-up capital of the Company. 42. The details of the allottees of convertible warrants are as follows: Sr. no. Name of the Proposed Allottee Category warrants Amount on Amount on application conversion (Rs.) (Rs.) 1 Sanskruti Commotrade LLP Non-promoter 98,00,000 1,71,50,000 5,14,50,000 2 Avantika Commosales LLP Non-promoter 97,50,000 1,70,62,500 5,11,87,500 3 Kamla Multitrade LLP Non-promoter 95,50,000 1,67,12,500 5,01,37,500 4 Gujarish Tradewing LLP Non-promoter 1,25,00,000 2,18,75,000 6,56,25,000 5 Kittu Commosales LLP Non-promoter 1,00,00,000 1,75,00,000 5,25,00,000 6 Gazala Constructions Private Limited Non-promoter 60,00,000 1,05,00,000 3,15,00,000 7 Intex Commosales LLP Non-promoter 98,31,000 1,72,04,250 5,16,12,750 8 Litex Traders LLP Non-promoter 96,50,000 1,68,87,500 5,06,62,500 9 Samir Navinchandra Shah Non-promoter 10,000 17,500 52,500 10 Apurvi Samir Shah Non-promoter 10,000 17,500 52,500 11 Ketan Navinchandra Shah Non-promoter 10,000 17,500 52,500 12 Riddhi Ketan Shah Non-promoter 10,000 17,500 52,500 13 RajKumar Dinesh Masalia Non-promoter 25,000 43,750 1,31,250 14 Piyush Mahasukhlal Shah Non-promoter 50,000 87,500 2,62,500

15 Dimple Piyush Shah Non-promoter 50,000 87,500 2,62,500 16 Foram Kalpesh Chawalla Non-promoter 25,000 43,750 1,31,250 17 Sangeeta Kalpesh Chawal Non-promoter 25,000 43,750 1,31,250 18 Shanmukh Shah Non-promoter 50,000 87,500 2,62,500 19 Parul Shanmukh Shah Non-promoter 50,000 87,500 2,62,500 20 Jayshree Paresh Shah Non-promoter 50,000 87,500 2,62,500 21 Paresh Navin Shah Non-promoter 50,000 87,500 2,62,500 22 Manoj Shah Non-promoter 50,000 87,500 2,62,500 23 Nisha Manoj Shah Non-promoter 50,000 87,500 2,62,500 24 Puneet Singh Non-promoter 5,00,000 8,75,000 26,25,000 25 Subhash Chand Barjatya Non-promoter 20,00,000 35,00,000 1,05,00,000 26 Sarita Jain Non-promoter 20,00,000 35,00,000 1,05,00,000 27 Mayyank Jain Non-promoter 15,00,000 26,25,000 78,75,000 28 Rajnni J Jain Non-promoter 15,00,000 26,25,000 78,75,000 29 Abhishekh Jain Non-promoter 15,00,000 26,25,000 78,75,000 30 Deepika Jain Non-promoter 15,00,000 26,25,000 78,75,000 31 Shalini Mishra Non-promoter 2,22,000 3,88,500 11,65,500 32 Rajesh Shah Non-promoter 1,00,000 1,75,000 5,25,000 33 Ami Niraj Shah Non-promoter 65,00,000 1,13,75,000 3,41,25,000 Total number of warrants allotted 9,49,18,000 16,61,06,500 49,83,19,500 Total amount received on allotment of warrants 66,44,26,000

43. It was observed that out of the 33 warrant allottees in the preferential issue, 8 allottees accounted for approximately 81% (7,70,81,000 warrants) of the allotted warrants. The aforesaid 8 allottees were found to be directly / indirectly connected to Mr. Rajkumar Masalia. Their connections to Mr.Rajkumar Masalia are discussed later in this Order. Source of funds and utilization of issue proceeds: 44. The source of funds for application money and for subsequent conversion of warrants and the utlisation of the money received by the Company were examined. 45. It was observed that Mr. Rajkumar Dinesh Masalia (Mr. Rajkumar Masalia / Mr. Masalia), who was appointed as additional director of the Company on August 07, 2023 and thereafter appointed as Executive Director on August 30, 2023, was also one of the allottees in the preferential issue of convertible warrants and was allotted 25000 warrants on March 21, 2022 upon payment of the application amount of Rs.43,750. The said warrants were converted into equal equity shares upon payment of balance amount of Rs.1,31,250 on April 5, 2022.

46. Mr. Rajkumar Masalia was found to be the authorised signatory in bank accounts of 76 entities (companies and LLPs) and also a director in one company whose bank accounts were maintained with the Sahyadri Sahakari Bank Limited, Chira Bazar Branch, Mumbai. The Sahyadri Sahakari Bank Limited is a co-operative bank affiliated to the SVC Co-operative Bank Limited. In addition to the aforesaid 77 entities’ bank accounts, he was also authorised signatory in bank accounts of 4 other entities (companies and LLPs) maintained with Yes Bank Limited, two of which were closed in April 2021. He was also authorised signatory in the bank accounts of Emporis Projects Limited opened on October 07, 2020 and Sonal Styles Private Limited maintained with ICICI Bank. 47. The details of the bank accounts in which Mr. Rajkumar Masalia was authorised signatory or director are given in the table below: The Sahyadri Sahakari Bank Limited Sr. A/C No. Bank Account Name A/C Open date Authorized Signatory No. 1 4900 Naseen Tradelink Private Limited 16/02/2019 Rajkumar Dinesh Masalia 2 4901 Aprateem Trading Private Limited 21/02/2019 Rajkumar Dinesh Masalia 3 4902 Heroic Mercantile Private Limited * 21/02/2019 Rajkumar Dinesh Masalia 4 4903 Anumita Infrastucture Private Limited 21/02/2019 Rajkumar Dinesh Masalia 5 4904 Ethan Constructions Private Limited 21/02/2019 Rajkumar Dinesh Masalia 6 4905 Adila Traders Private Limited 21/02/2019 Rajkumar Dinesh Masalia 7 4906 Bulltext Reality Private Limited 21/02/2019 Rajkumar Dinesh Masalia 8 4907 Sunayana Investment Company Limited 21/02/2019 Rajkumar Dinesh Masalia 9 4908 Abijah Real Estate Private Limited 21/02/2019 Rajkumar Dinesh Masalia 10 4909 Sally Real Estate Private Limited 21/02/2019 Rajkumar Dinesh Masalia 11 4910 Silvercade Trading Private Limited 21/02/2019 Rajkumar Dinesh Masalia 12 4911 Abrv Trading Private Limited 21/02/2019 Rajkumar Dinesh Masalia 13 4912 Roho Real Estate Private Limited 22/02/2019 Rajkumar Dinesh Masalia 14 4913 Nazima Impex Private Limited 22/02/2019 Rajkumar Dinesh Masalia 15 4914 Mahir Mercantile Private Limited 22/02/2019 Rajkumar Dinesh Masalia 16 4915 Orange Mist Productions Private Limited * 22/02/2019 Rajkumar Dinesh Masalia 17 4916 Lander Infraprojects Private Limited 22/02/2019 Rajkumar Dinesh Masalia 18 4917 Radford Real Estate Private Limited 22/02/2019 Rajkumar Dinesh Masalia 19 4918 Suketu Commosales LLP 22/02/2019 Rajkumar Dinesh Masalia 20 4919 Indivar Traders Private Limited 22/02/2019 Rajkumar Dinesh Masalia 21 4920 Shine Commosales LLP 22/02/2019 Rajkumar Dinesh Masalia 22 4921 Anvita Real Estate Private Limited 22/02/2019 Rajkumar Dinesh Masalia 23 4922 Golding Mercantile Private Limited 26/02/2019 Rajkumar Dinesh Masalia 24 4923 Nishottam Traders Private Limited 27/02/2019 Rajkumar Dinesh Masalia 25 4924 Enakshi Impex Private Limited 27/02/2019 Rajkumar Dinesh Masalia 26 4925 V And R Yarns Private Limited 27/02/2019 Rajkumar Dinesh Masalia 27 4926 Parkway Properties Private Limited 27/02/2019 Rajkumar Dinesh Masalia

28 4927 Dizzystone Trading Private Limited 27/02/2019 Rajkumar Dinesh Masalia 29 4928 Acacio Tradelink Private Limited 27/02/2019 Rajkumar Dinesh Masalia 30 4929 Longseal Machinary Private Limited 28/02/2019 Rajkumar Dinesh Masalia 31 4930 Ainesh Trading Private Limited 28/02/2019 Rajkumar Dinesh Masalia 32 4931 Tango Commosales LLP * 28/02/2019 Rajkumar Dinesh Masalia 33 4932 Ojal Multitrading Private Limited 01/03/2019 Rajkumar Dinesh Masalia 34 4933 Zuber Trading LLP * 01/03/2019 Rajkumar Dinesh Masalia 35 4934 Aadhaar Ventures India Limited 01/03/2019 Rajkumar Dinesh Masalia 36 4935 Akarshika Traders LLP 02/03/2019 Rajkumar Dinesh Masalia 37 4936 Snehil Real Estate Private Limited 02/03/2019 Rajkumar Dinesh Masalia 38 4937 Wellman Tradelinks Private Limited 02/03/2019 Rajkumar Dinesh Masalia 39 4938 Energy Commotrade Private Limited 02/03/2019 Rajkumar Dinesh Masalia 40 4939 Rosewood Vintrade Private Limited 02/03/2019 Rajkumar Dinesh Masalia 41 4940 Agrata Real Estate Private Limited 02/03/2019 Rajkumar Dinesh Masalia 42 4941 Intertick Developers Private Limited 02/03/2019 Rajkumar Dinesh Masalia 43 4942 Sonal Styles Private Limited 02/03/2019 Rajkumar Dinesh Masalia 44 4945 Aalyya Traders Private Limited 08/03/2019 Rajkumar Dinesh Masalia 45 4946 Gazala Constructions Private Limited # 08/03/2019 Rajkumar Dinesh Masalia 46 4947 Saint Infrastructure Private Limited 08/03/2019 Rajkumar Dinesh Masalia 47 4948 Yantra Natural Resources Limited 08/03/2019 Rajkumar Dinesh Masalia 48 4951 Yuvika Tradewing LLP * 18/03/2019 Rajkumar Dinesh Masalia 49 4953 LN Industries India Limited 26/03/2019 Rajkumar Dinesh Masalia 50 4955 Joydeep Commosales LLP 12/04/2019 Rajkumar Dinesh Masalia 51 4956 Ramila Traders LLP 16/04/2019 Rajkumar Dinesh Masalia 52 4959 Litex Traders LLP # 23/04/2019 Rajkumar Dinesh Masalia 53 4960 Mishti Traders LLP 23/04/2019 Rajkumar Dinesh Masalia 54 4961 Mina Commosales LLP 25/04/2019 Rajkumar Dinesh Masalia 55 4963 Mahashali Tradewing LLP 03/05/2019 Rajkumar Dinesh Masalia 56 4964 Kittu Commosales LLP # 04/05/2019 Rajkumar Dinesh Masalia 57 4965 Gajraj Commosales LLP 13/05/2019 Rajkumar Dinesh Masalia 58 4966 Moonlight Multitrade LLP 13/05/2019 Rajkumar Dinesh Masalia 59 4967 Parag Multi Trade LLP 13/05/2019 Rajkumar Dinesh Masalia 60 4968 Pankti Commosales LLP 14/05/2019 Rajkumar Dinesh Masalia 61 4969 Qazi Traders LLP 14/05/2019 Rajkumar Dinesh Masalia 62 4970 Lifefour Multitrading Private Limited 16/05/2019 Rajkumar Dinesh Masalia 63 4971 Offerlink Infraprojects Private Limited 21/05/2019 Rajkumar Dinesh Masalia 64 4972 Matulya Trading Private Limited 22/05/2019 Rajkumar Dinesh Masalia 65 4975 Indranil Traders LLP 18/06/2019 Rajkumar Dinesh Masalia 66 4976 Sunflower Commosales Private Limited 20/06/2019 Rajkumar Dinesh Masalia 67 4982 Emporis Projects Limited 18/07/2019 Rajkumar Dinesh Masalia 68 4983 Zenstar Infrastructure Private Limited 18/07/2019 Rajkumar Dinesh Masalia 69 4987 Grantview Properties Private Limited 05/08/2019 Rajkumar Dinesh Masalia 70 4988 Ayog Infrastructure Private Limited 06/08/2019 Rajkumar Dinesh Masalia 71 4990 Vaishali Commosales LLP 23/08/2019 Rajkumar Dinesh Masalia 72 4992 Panki Investments Limited 29/08/2019 Rajkumar Dinesh Masalia 73 4995 Marisha Real Estate Private Limited 29/11/2019 Rajkumar Dinesh Masalia 74 5004 C And K Realtors Private Limited 06/03/2020 Rajkumar Dinesh Masalia 75 5028 Amritabhagwati Tradewing Private Limited 19/10/2022 Rajkumar Dinesh Masalia 76 5029 Sanmay Trading Private Limited 01/11/2022 Rajkumar Dinesh Masalia Sr.

A/C No. Bank Account Name A/C Open date Director No. 1 4943 Krystalklear Properties Private Limited 02/03/2019 Rajkumar Dinesh Masalia

Yes Bank Limited Sr. A/C No. Bank Account Name A/C Open date Authorized Signatory No. 1 016263300003131 Cross Rose Sales LLP 31/08/2020 Rajkumar Dinesh Masalia 2 016263300003151 Avantika Commosales LLP # 09/09/2020 Rajkumar Dinesh Masalia 3 016263300003367 Dhavni Trading LLP 22/09/2020 Rajkumar Dinesh Masalia 4 016263300003377 Gittanjali Commosales LLP 30/09/2020 Rajkumar Dinesh Masalia ICICI Bank Sr. A/C No. Bank Account Name A/C Open date Authorized Signatory No. 1 641105000696 Emporis Projects Limited 07/10/2020 Rajkumar Dinesh Masalia 2 037605006503 Adamina Traders Private Limited Note: The aforementioned entities in the table above are together referred to as Masalia group entities. * Entities are recipient of shares transferred in off-market by the promoter entities and have subsequently sold the same in the Market # Entities are allottees of warrants in the preferential allotments of warrants by the Company.

48. An individual who is an authorised signatory of bank accounts of an entity effectively controls the finances of the entity. Such control over finance also in turn indicates control over the affairs of that entity. Accordingly, there is an apprehension that Mr. Rajkumar Masalia, being authorised signatory in the bank accounts of the aforementioned entities, was controlling the finance of the entities and thereby controlling the affairs of the entities. Therefore, these entities are commonly referred to as Masalia Group entities. 49. Apart from the abovementioned entities, certain other entities, viz. DAM Commosales LLP and Jaisal Tradewing LLP were also found to be connected to Rajkumar Masalia through common directorship with certain Masalia Group entities mentioned in the Table above. Further, Yes Bank vide email dated June 17, 2024 provided details of authorised signatories to the bank accounts of certain entities who appeared to be connected to Rajkumar Masalia. The details are tabulated below.

Connection with entities mentioned Account No. Name Authorised in the Table under Signatory 1 Authorised paragraph 47 (AS 1) Signatory 2 (AS 2) above: AS1 is director Jaisal /partner of entities 016263400004412 Tradewing Rahul mentioned at sl. 15, Sudhakar Ahire Navin Agarwal 47, 56 AS1 is director/partner of Jagjivan entities mentioned at 016263400005291 Multitrade sl. 3, 9 and 31. AS 2 LLP is is director/partner Shital Sanjay Sanjay Mahadev of entities mentioned Devlekar Unavane at sl. 62 AS1 is director/partner of Gajraj entities mentioned at 016263400006373 Commosales sl. 3, 14, 57, 65. AS 2 LLP Ganpat is director/partner of Kashinath Leena Naresh entities mentioned at Shinde Nagda sl. 7, 57, 65 AS1 is director/partner of entities mentioned at Jaisal Vin 016363400000795 sl. 25. AS 2 is Trade LLP director/partner of Ramdas Sushama entities mentioned at Bisesar Bharati Bhimsen Sawant sl. 36. No identified. Arun Sunflower Kumar Tyagi is 022483900001196 Marketing Arun Kumar present MD of Tyagi Shabnam Tyagi Cressanda AS1 is Pakhi director/partner of 042163400001740 Multitrade Nirav Rasik entities mentioned at LLP Savla Mital Bharat Satra sl. 61. AS1 and AS2 are Zahera director/partner of 042163400003036 Traders Llp Maruti Dinkar Meena entities mentioned at Helonde Dharmendra Bohat sl. 55.

50. As the entities mentioned in the above table were found to be connected to Rajkumar Masalia, they were also considered as part of Masalia Group entities. It was noted that Jagjivan Multitrade LLP and Zahera Traders LLP were the same entities to whom rice was sold by Cressanda during FY23 and FY24.

51. It was observed that a large number of bank accounts of Masalia Group entities, where Rajkumar Masalia was an authorized signatory, were opened on the same day in the Sahyadri Sahakari Bank Ltd. The account opening dates for some of the accounts were: Account opening date No. of accounts opened 21/02/2019 11 22/02/2019 10 02/03/2019 9 27/02/2019 6 08/03/2019 4

52. As stated above, Rajkumar Masalia was one of the allottees in the preferential issue of convertible warrants. He was also the authorized signatory in the bank accounts of four other allottees, viz. Avantika Commosales LLP, Kittu Commosales LLP, Gazala Constructions Private Limited and Litex Traders LLP. The said four allottees accounted for approximately 37% of the warrants allotted. 53. Further, four other allottees namely, Sanskruti Commotrade LLP, Kamla Multitrade LLP, Gujarish Tradewing LLP and Intex Commosales LLP accounted for another 44% of the total warrants allotted in the preferential issues. 54. It was observed that a part of the funds received by the Company from some of the allottees were refunded to them. The details are provided in the following paragraphs.

Sanskruti Commotrade LLP 55. Sanskruti Commotrade LLP (Sanskruti) was allotted 98 Lakh warrants for a total consideration of Rs.6.86 Crore. Sanskruti paid Rs.1.7150 Crore as application money on March 21, 2022. Later, Sanskruti paid Rs.5.1450 Crore towards conversion of the warrants which was received from Bank Account No. 42163300002420 of Rooprekha Textile LLP. On April 07, 2022, Rs.5.15 Crore was transferred from Cressanda to Rooprekha Textile. Cressanda on April 11, 2022 further transferred Rs.2.03 Crore to Rooprekha Textile from its Yes Bank Account No. 45963300001294. The details of the fund transfers are provided below:

Sanskruti Commotrade LLP - 98,00,000 warrants Allotment Money From To Date Amount Entity Bank/Bank Account Entity Bank/Bank Account 19/03/2022 50,000 Emporis Projects ICICI/ 641105000696 Savla Trdaers Yes/ Limited (Masalia 098663700001316 Group) Betal Traders Yes/ Savla Trdaers Yes/ 19/03/2022 1,71,00,000 (Masalia Group) 42163400001730 098663700001316 Savla Trdaers Yes/ Sanskruti Yes/ 19/03/2022 1,71,50,000 098663700001316 Commotrade LLP 18963400006370 21/03/2022 1,71,50,000 Sanskruti Yes/ Cressanda AUB/ Commotrade 18963400006370 2221253138605492 LLP Allotment Money From To Rooprekha Yes/ Sanskruti Yes/ Textile LLP 42163300002420 Commotrade LLP 18963400006370 04/04/2022 5,00,00,000 (Masalia Group) Rooprekha Yes/ Sanskruti Yes/ Textile LLP 42163300002420 Commotrade LLP 18963400006370 05/04/2022 15,00,000 (Masalia Group) Sanskruti Yes/ Yes/ Commotrade 18963400006370 45963300001294 04/04/2022 2,00,00,000 LLP Cressanda Sanskruti Yes/ Yes/ Commotrade 18963400006370 45963300001294 05/04/2022 3,14,50,000 LLP Cressanda Yes/ Rooprekha Textile Yes/ 45963300001294 LLP (Masalia 42163300002420 Group) 07/04/2022 5,15,00,000 Cressanda Yes/ Rooprekha Textile Yes/ 45963300001294 LLP (Masalia 42163300002420 11/04/2022 2,03,00,000 Cressanda Group)

56. A chart indicating flow of warrant conversion money in the case of Sanskruti is shown below.

Kamla Multitrade LLP

57. Kamla Multitrade LLP (Kamla) had applied and was allotted 95,50,000 warrants for a total consideration of Rs.6.6850 Crore. Kamla paid Rs.1.67 Crore as application money on March 21, 2022, which it had received from Nidi Traders. Nidi Traders received the said money from Yuvika Tradewing LLP.

58. Similarly, Kamla paid Rs. 5.01 Crore on April 08, 2022 towards conversion of warrants into equity shares out of Rs.5.25 Crore received from Khodiyar Enterprise on April 08, 2022. Khodiyar Enterprise in turn received Rs 5.70 Crore from Krishna Enterprise on April 07, 2022. Krishna Enterprise in turn received Rs.6.33 Crore on April 07, 2022 from Shree Vadechi Infrasoft Private Limited (Shree Vadechi) and Shree Vadechi received Rs.5.25 Crore on April 08, 2022 from Yes Bank Account No. 45963300001294 of Cressanda. The details of the fund transfers are provided below:

Kamla Multitrade LLP - 95,50,000 warrants Application Money From To Date Amount Entity Bank/Bank Account Entity Bank/Bank Account 21/03/2022 1,67,12,500 Kamla Multitrade LLP Yes/ Cressanda AUB/ (Masalia Group) 042163400001820 2221253138605492 Allotment Money From To Shree Vadechi Cosmos Co-op Bank / Krishna PNB/ 5,70,00,000 Infrasoft 50100104343 Enterprise 6700005500000315 07/04/2022 Krishna Enterprise PNB/ Khodiyar PNB/ 5,70,00,000 6700005500000315 Enterprise 6700005500000388 08/04/2022 Khodiyar Enterprise PNB Kamla Yes/ Multitrade /6700005500000388 042163400001820 LLP (Masalia 08/04/2022 5,25,00,000 Group) Kamla Multitrade LLP Yes/ Yes/ (Masalia Group) 042163400001820 45963300001294 08/04/2022 5,01,37,500 Cressanda Yes/ Shree Cosmos Co-op Bank 45963300001294 Vadechi / 50100104343 5,25,00,000 Infrasoft 08/04/2022 Cressanda

59. A chart indicating flow of warrant conversion money in the case of Kamla Multitrade is given below:

Kittu Commosales LLP 60. Kittu Commosales LLP (Kittu) had applied and was allotted 1,00,00,000 warrants for a total consideration of Rs.7 Crore. Kittu paid Rs. 1,75,00,000 as application money on March 21, 2022.

61. Kittu paid Rs.5.25 Crore on April 07, 2022 towards conversion of warrants into equity shares. The said amount was paid out of Rs.5.38 Crore received by Kittu on April 07, 2022 from Niva Paper Co. (Niva). Niva had received Rs.5.40 Crore on April 07, 2022 from Pakhi Multitrade LLP which in turn had received the said amount from Yes Bank Account No. 45963300001294 of Cressanda. The details of the fund transfers are provided below: Kittu Commosales LLP - 1,00,00,000 warrants Application Money From To Date Amount Entity Bank/Bank Entity Bank/Bank Account Account 21/03/2022 1,75,00,000 Kittu Commosales Yes/ Cressanda AUB/ LLP (Masalia Group) 018963400008198 2221253138605492 Allotment Money From To Yes/ Pakhi Yes/ 45963300001294 Multitrade 42163400001740 07/04/2022 5,40,00,000 Cressanda LLP Pakhi Multitrade LLP Yes/ Niva Paper Yes/ 07/04/2022 5,40,00,000 42163400001740 Co. 42185800002861 Niva Paper Co. Yes/ Kittu Yes/ 42185800002861 Commosales 018963400008198 LLP (Masalia 07/04/2022 5,38,00,000 Group) Kittu Commosales Yes/ Yes/ 07/04/2022 5,25,00,000 LLP (Masalia Group) 018963400008198 Cressanda 45963300001294

62. A chart indicating flow of warrant conversion money in the case of Kittu Commosales LLP is given below.

Intex Commosales LLP 63. Intex Commosales LLP (Intex) had applied and was allotted 98.31 Lakh warrants for a total consideration of Rs.6.88 Crore. Intex paid Rs.1.72 Crore as application money on March 21, 2022 from its Yes Bank Account No. 098663300002143.

64. Intex paid Rs.5.16 Crore on April 07, 2022 and August 02, 2022 towards conversion of the warrants from its Yes Bank Account No. 098663300002143. Intex received Rs.5.14 Crore on April 07, 2022 from A1 Construction Item Supplier, which in turn had received Rs.5.145 Crore on April 07, 2022 from Suketu Commosales LLP. Suketu Commosales LLP on the same day i.e. April 07, 2022 had received Rs.5.145 Crore from Rooprekha Textile LLP. Cressanda on April 07, 2022 transferred Rs.5.15 Crore to Rooprekha Textile from its Yes Bank Account No. 45963300001294. The details of the fund transfers are provided below:

Intex Commosales LLP - 98,31,000 warrants Application Money From To Date Amount Entity Bank/Bank Entity Bank/Bank Account Account 19/03/2022 1,72,50,000 Emporis Projects ICICI/ A1, Construction Yes/ Limited (Masalia 641105000696 Item Supplier 98663700001409 Group) 19/03/2022 1,72,04,500 A1, Construction Item Yes/ Intex Commosales Yes/ Supplier 98663700001409 LLP 098663300002143 21/03/2022 1,72,04,250 Intex Commosales Yes/ Cressanda AUB/ LLP 098663300002143 2221253138605492

Allotment Money From To Yes/ Rooprekha Textiles Yes/ 45963300001294 LLP (Masalia 42163300002420 07/04/2022 5,15,00,000 Cressanda Group) Rooprekha Textiles Yes/ Suketu Yes/ LLP (Masalia Group) 42163300002420 Commosales 045963300000827 LLP(Masalia 07/04/2022 5,14,50,000 Group) Suketu Commosales Yes/ A1 Construction Yes/ 07/04/2022 5,14,50,000 LLP (Masalia Group) 045963300000827 Item Supplier 98663700001409 A1 Construction Item Yes/ Intex Commosales Yes/ 07/04/2022 5,14,00,000 Supplier 98663700001409 LLP 098663300002143 Betal Traders LLP Yes/ Intex Commosales Yes/ 07/04/2022 3,00,000 (Masalia Group) 42163400001730 LLP 098663300002143 Intex Commosales Yes/ Yes/ 07/04/2022 5,16,12,750 LLP 098663300002143 Cressanda 45963300001294

65. A chart indicating flow of warrant conversion money in the case of Intex Commosales LLP is given below:

Litex Traders LLP 66. Litex Traders LLP (Litex) had applied and was allotted 96.50 Lakh warrants for a total consideration of Rs.6.755 Crore. Litex paid Rs. 1.69 Crore as application money on March 21, 2022.

67. Litex paid Rs. 5.07 Crore to Cressanda on April 08, 2022 towards conversion of warrants into equity shares. It was observed that Litex received Rs.5.07 Crore on April 08, 2022 from Betal Traders (Rs.3.80 Crore) and Silvercade Trading Private Limited (Rs.1.27 Crore). Further, Cressanda paid Rs.3.80 Crore to Betal Traders LLP. The details of the fund transfers are provided below:

Litex Traders LLP - 96,50,000 warrants Application Money From To Date Amount Entity Bank/Bank Entity Bank/Bank Account Account 21/03/2022 1,68,87,500 Litex Trdaers Sahyadri Bank Cressanda AUB/ LLP (Masalia /CA 4959 2221253138605492 Group) Allotment Money From To Yes/ Betal Traders Yes/ 08/04/2022 3,80,00,000 Cressanda 45963300001294 LLP 42163400001730 Betal Traders Yes/ Litex Trdaers Sahyadri Bank /CA LLP 42163400001730 LLP (Masalia 4959 08/04/2022 3,80,00,000 Group) Litex Trdaers Sahyadri Bank Cressanda AUB/ LLP (Masalia /CA 4959 2221253138605492 08/04/2022 5,06,62,500 Group)

68. A chart indicating flow of warrant conversion money in the case of Litex Traders LLP is given below:

69. The receipt of funds by the preferential allottees out of the application and warrant conversion money received by the Company are summarized below:

Name of applicants No. of Application Conversion Funds Funds warrants amount amount received back received back (Rs) (Rs.) by Allottees from indirectly Company through Sanskruti 98,00,000 1,71,50,000 5,15,00,000 5,15,00,000* Rooprekha Commotrade LLP Textiles LLP Kamla Multitrade 95,50,000 1,67,12,500 5,01,37,500 5,25,00,000 Shri Vadechi LLP Kittu Commosales 1,00,00,000 1,75,00,000 5,25,00,000 5,40,00,000 Pakhi Multitrade LLP Intex Commosales 98,31,000 1,72,04,250 5,16,12,750 5,15,00,000* Rooprekha LLP Textiles LLP Litex Traders LLP 96,50,000 1,68,87,500 5,06,62,500 3,80,00,000 Betal Traders Total 19,60,00,000 *Fund received by Rooprekha from Cressanda after conversion of warrants by Sanskruti was re-routed to Intex for making payment for conversion of warrants. Accordingly, while arriving at the total, the amount has been considered only once.

Utilisation of proceeds of the preferential issue of convertible warrants

70. The total money received by the Company in respect of application for the issue of convertible warrants and subsequent conversion of warrants into equity shares was Rs.66.4426 Crore. Out of the same, Rs.19.60 Crore was routed back to five allottees, as discussed in preceding paragraphs. Further, out of the remaining amount received by the Company, an amount of Rs.45.05 Crore was given as loans and advances to various Masalia Group entities, as per the following details.

Sl. Remarks No. Name of Entity Loan Given (Rs.) 2.03 Crore (7.18 Crore – 5.15 Masalia Group entities 1 Rooprekha Textile LLP Crore) Masalia Group entities 2 Dam Commosales LLP 7.00 Crore Suketu Commosales Masalia Group entities 3 LLP 12.49 Crore Shree Vadechi Infrasoft 23.50 crore (28.75 Crore – Part of the funds routed to 4 Private Limited 5.25 Crore) Masalia Group entities 45.05 Crore

71. The utilization of application money for subscription of warrants and the subsequent payments for conversion of the same to equity in the Company is shown diagrammatically below:

72. The sources of payment of application money and the warrant conversion money by other allottees are under examination by SEBI.

Role of entities Company 73. As discussed in detail above, the Company (Cressanda) entered into fictitious purchase and sales resulting into inflated financials of the company not representing true and fair view of the state of affairs of the Company. Further, the Company raised money through preferential issue and allotment of warrants. However, a large part of the application and allotment money was round-tripped and diverted / returned to the allottees.

74. In view of the above, the Company is alleged to have prima facie violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992, regulations 3(a), (b), (c) (d), 4(1), 4(2)(f), (k) & (r) of the SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003 (“PFUTP Regulations, 2003”) and Regulations 4(1), 4(2)(e), 33 and 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations, 2015”).

Smart Infraproperties Pvt. Ltd. (SIPL)

75. As discussed above, SIPL had transferred shares in off-market transactions to certain entities which subsequently sold the shares in the market and transferred part of the proceeds to SIPL. It appears that SIPL was involved with the Company in executing the fraudulent scheme devised by the Company.

76. In view of the above, SIPL is alleged to have prima facie violated the provision of Section 12A (b) and (c) of the SEBI Act, 1992, regulations 3 (c) & (d) and 4(1) of PFUTP Regulations, 2003.

Milind Madhukar Palav 77. It is observed from the Annual report for FY21 that Mr. Milind Madhukar Palav was Executive Director and CFO of the Company during the investigation period. He was appointed as Executive Director and CFO of the Company on November 25, 2021 until his resignation on August 7, 2023. Mr. Milind Palav was signatory to the financial statement for FY23. Being CFO, he was responsible for the preparation of the financial statement and the contents therein. He had also certified the statement of deviation dated July 11, 2023 submitted to the stock exchange in respect of the application of funds raised from preferential issue of convertible warrants. In the aforesaid statement, he stated that there was no deviation. However, it was brought out during investigation that the proceeds of the preferential issue were diverted as loans and advances. In view of the above, Mr. Milind Palav is alleged to have prima facie violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992, regulations 3(a), (b), (c) (d), 4(1), 4(2)(c) & (f) of PFUTP Regulations, 2003 and regulations 4(1), 4(2)(e), (f), 32(1), 33 and 34 of LODR Regulations, 2015 read with Section 27 of SEBI Act, 1992.

Manohar Iyer S. Nagraj

78. Mr. Manohar Iyer S. Nagraj was the Managing Director of Cressanda during FY23. He was appointed on 09/02/2023 and resigned on September 30, 2023. He was a signatory to the financial statements and Annual Reports of the Company for FY23. Being Managing Director of Cressanda, he was responsible for the preparation of the financial statement and Annual Report for FY23 and the contents therein. Further, he was aware of the fictitious sales and purchase transactions by the Company, since many of such transactions involving sales and purchases of rice were undertaken in March 2023. Further the funds movement (receipts and payments) in respect of those transactions were also during his period as Managing Director of the Company.

79. In view of the above, Mr. Manohar Iyer is alleged to have prima facie violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992, regulations 3(a), (b), (c) (d), 4(1), 4(2)(c) & (f) of the PFUTP Regulations, 2003 and Regulations 4(1), 4(2)(e), (f), 32(1), 33 and 34 of LODR Regulations, 2015 read with Section 27 (1) of SEBI Act, 1992.

Rajkumar Dinesh Masalia 80. Rajkumar Dinesh Masalia was appointed as Executive Director with effect from August 7, 2023. As discussed in the earlier paragraphs, Mr. Rajkumar Masalia was authorised signatory in the bank accounts of various conduit entities used for providing funds for the application and conversion in the preferential issue of convertible warrants by Cressanda. Some of these entities were also applicants in the preferential issue. It prima facie appears that Mr. Rajkumar Masalia was instrumental in the irregularities in the preferential allotment of convertible warrants, which resulted in allotment of equity shares upon conversion of the warrants without actual receipt of money in the Company. While Mr. Rajkumar Masalia was summoned to appear before the IA vide summons dated December 4, 2023 and November 3, 2023, he failed to appear before the IA.

81. In view of the above, Rajkumar Masalia has prima facie violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992 and regulations 3(a), (b), (c) (d), 4(1), 4(2)(c) & (f) of the PFUTP Regulations, 2003.

Sanskruti Commotrade LLP, Kamla Multitrade LLP, Kittu Commosales LLP, Intex Commosales LLP and Litex Traders LLP 82. As discussed above, Sanskruti Commotrade LLP, Kamla Multitrade LLP, Kittu Commosales LLP, Intex Commosales LLP and Litex Traders LLP were preferential allottees. Out of these, Kittu Commosales and Litex Traders LLP appeared to be controlled by Mr.Rajkumar Masalia, as he was the authorized signatory for the bank accounts of the said entities. It was observed that the warrant application and conversion money paid by the abovementioned five entities to the Company was routed back to them by the Company. Accordingly, they appear to be involved in the fraudulent deals of the Company in respect of the preferential allotment.

83. In view of the above, the abovementioned five Noticees are alleged to have prima facie violated the provision of Section 12A(a), (b) and (c) of the SEBI Act, 1992 and regulations 3(a), (b), (c) (d), 4(1), 4(2)(a) & (h) of the PFUTP Regulations, 2003.

Need for an Interim Directions

84. It is noted that the Company has been engaging in bogus sales and purchases of rice and IT related products and generating fictitious revenue to inflate its books of accounts. The manipulation of books of accounts and financial statements resulting from apparently non-genuine purchase and sales transactions pertain to FY23. It is seen that such transactions continued to happen in FY24 as well.

85. It is pertinent to note that SEBI has already issued an Interim Order dated May 10, 2024 against Varanium Cloud Ltd. and its Managing Director for alleged mis-statement of financials. As discussed earlier in this order, Cressanda is one of the entities with whom Varanium had executed allegedly fictitious transactions. 86. It has also been observed that part of the proceeds of the preferential allotment of warrants has been diverted by the Company. While payments by 28 allottees to Cressanda are still under examination, there is a prima facie case that Noticees 6 to 10 were allotted shares against partial or no consideration in the abovementioned preferential allotments. There is a real possibility that once this Interim Order is issued, Noticees 6-10 may sell the shares allotted to them and make an exit. Thus, they need to be restrained from doing so. 87. The fact that Cressanda made an issue of 9,49,18,000 equity shares on preferential basis to 33 allottees in March 2022 and raised Rs.66.44 Crore (a part of which was routed back to some of the allottees, as discussed above) when the promoter shareholding in the Company had come down to 0.10% of the paid-up capital of the Company coupled with the fact that the Company booked fictitious sales and purchases points towards a fraudulent scheme by the Company to mislead unsuspecting investors into believing that the Company had good prospects. While the Company had NIL or negligible revenue from operations from FY15 to FY22, the Company reported a quantum jump in its sales during FY23 (sales of Rs.75.13 Crore) through fictitious transactions. The Company appears to have taken advantage of rigged financial statements to lure investors by creating a false narrative of the Company which is reflected by the fact that the number of public shareholders of the Company increased more than 20 times from 2700 to 56,556 within a span of three years. Certainly, the investors had been led up the garden path while the promoter transferred shares to dubious entities in off-market transactions who then sold the same shares in the market.

88. In view of the above observations and considering the gravity of the prima facie findings, I am of the opinion that urgent intervention by SEBI, by way of issuance of interim directions, is warranted in this matter to safeguard the interests of investors and uphold the integrity of the financial system. Accordingly, I deem it to be a fit case to issue appropriate directions, pending a detailed investigation.

Directions: 89. In view of the prima facie findings and observations recorded in the preceding paragraphs and in order to protect the interests of shareholders of Cressanda and other investors and the integrity of the securities market, I, in exercise of the powers conferred upon me under Sections 11, 11(4) and 11B(1) read with Section 19 of the SEBI Act, 1992 hereby issue the following directions, which shall be in force until further orders: (a) Noticees 1 to 10 are restrained from buying, selling or dealing in the securities market and are further prohibited from accessing or associating themselves with the securities market, either directly or indirectly, in any manner whatsoever until further orders. If the Noticees have any open position in any exchange traded derivative contracts, as on the date of the order, they can close out /square off such open positions within 7 days from the date of this order. The Noticees are permitted to settle the pay-in and pay-out obligations in respect of transactions, if any, which have taken place before the close of trading on the date of this Order. (b) Mr. Rajkumar Dinesh Masalia (Noticee 5) is restrained from acting as a Director / Key Managerial Personnel of any listed company or its subsidiary or any company which intends to raise money from the public or any SEBI registered intermediary, until further orders. 90. The foregoing prima facie observations, contained in this Order, are made on the basis of the material available on record. The Noticees may, within 21 days from the date of receipt of this Order, file their reply/objections, if any, to this Order and may also indicate whether they desire to avail an opportunity of personal hearing on a date and time to be fixed in that regard. 91. The above directions shall take effect immediately and shall be in force until further orders. 92. A copy of this order shall be served upon Noticees, Stock Exchanges, Registrar and Transfer Agents and Depositories for necessary action and compliance with the above directions.

DATE: OCTOBER 11, 2024 ASHWANI BHATIA PLACE: MUMBAI WHOLE TIME MEMBER SECURITIES AND EXCHANGE BOARD OF INDIA