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Notes to Accounts of BF Utilities Ltd.
Mar 31, 2024
r. Provisions
A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to its present value (unless the effect of time value of money is material) and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingent liabilities and contingent assets, if any, are disclosed in the notes to accounts.
s. Post-employment and other employee benefits
Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment.
Provident fund
Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the scheme. The contributions to the provident fund are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.
Gratuity
Payment for present liability of future payment of gratuity is being made to approved gratuity fund, which fully cover the same under cash accumulation policy of the Life Insurance Corporation of India. The employee''s gratuity is a defined benefit funded plan.
The present value of the obligation under such defined benefit plan is determined based on the actuarial valuation using the Projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet as asset/liability with a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in statement of profit and loss on the earlier of:
⢠The date of the plan amendment or curtailment, and
⢠The date that the Company recognises related restructuring costs
⢠Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
⢠Service costs comprising of current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
⢠Net interest expense or income Superannuation
Superannuation is a defined contribution plan covering eligible employees. The contribution to the superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the
eligible employees as per the scheme. The contribution to this scheme is charged to the statement of profit and loss on an accrual basis. There are no other contributions payable other than contribution payable to the respective fund.
Compensated Absences
Accumulated leave, which is expected to be utilized within the next twelve months, is treated as shortterm employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the reporting date.
Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the entire leave encashment liability as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for twelve months after the reporting date. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond twelve months, the same is presented as non-current liability.
t. Financial instruments
The Company has elected to apply following exceptions/exemptions prospectively at the time of transition.
⢠Classification and measurement of financial assets have been done based on facts and circumstances existed on transition date.
⢠Elected to continue carrying value of equity instruments in subsidiaries, associates and jointly controlled entities as deemed cost on transition date.
⢠De-recognition of financial assets and financial liabilities have been applied prospectively.
⢠Applied the requirements of relating to accounting for difference between fair value of financial asset or financial liability from its transaction price of Ind-AS 109 prospectively.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
⢠Debt instruments at amortized cost
⢠Debt instruments at fair value through other comprehensive income (FVTOCI)
⢠Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
⢠Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI
A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The asset''s contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch'').
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. For all equity instruments not held for trading, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-byinstrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''passthrough'' arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance
b) Financial assets that are debt instruments and are measured as at FVTOCI
c) Trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind-AS11 and Ind-AS 18
d) Loan commitments which are not measured as at FVTPL
e) Financial guarantee contracts which are not measured as at FVTPL
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables or contract revenue receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the statement of profit and loss.
⢠The balance sheet presentation for various financial instruments is described below:Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
⢠Debt instruments measured at FVTOCI:
Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ''accumulated impairment amount'' in the OCI.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
This category generally applies to borrowings. For more information refer Note 12.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
u. Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered an integral part of the Company''s cash management.
v. Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non-cash nature and any deferral or accruals of past or future cash receipts or payments. The cash flows from regular operating, investing and financing activities of the Company are segregated.
w. Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the entity; or a present obligation that arises from past events but is not recognised because it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
x. Dividend to equity holders of the Company
The Company recognises a liability to make cash or non-cash distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
y. Segment reporting
Ind AS 108 ''Operating Segments'' requires Management to determine the reportable segments for the purpose of disclosure in financial statements based on the internal reporting reviewed by the Managing Director, being Chief Operating Decision Maker (CODM) to assess performance and allocate resource. The standard also required Management to make judgments with respect to recognition of segments.
z. Earnings per share
The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting Standard 33 "Earnings per Share". Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
30. Financial Instruments Capital management:
The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the Company consists of debt and total equity of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and shortterm borrowings. The Company''s policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
The Company is not subject to any externally imposed capital requirements.
Refer note 34 for information on ratios.
Fair Value Measurement
Set out below is a comparison, by class, of the carrying amounts and the fair value of the Company''s financial instruments as at 31 March 2024
The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the shortterm maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
1. The fair values of quoted instruments are based on price quotations at the reporting date.
2. The Company has performed fair valuation of material investment in unquoted equity shares, other than in subsidiary company, which has been classified as Investment carried at Fair Value through Other comprehensive Income.
Financial risk management framework:
The Company is exposed primarily to market risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
Market risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the interest rates and other market changes.
Credit risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its cash and cash equivalents and deposits with banks having good reputation and high-quality credit ratings.
The Company has only one customer i.e. Bharat Forge Ltd. To mitigate the credit risk, the Company has taken security deposit of Rs. 200 Million (Rs 200 Million as on March 31, 2023) which covers the sales made by the Company to it over next year(s).
Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, liquid cash and bank balance by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The table below provides details regarding the contractual maturities of significant financial liabilities:
Fair Value Measurement
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS 113 - Fair Value Measurement.
An explanation of each level is as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs for the asset or liability.
31. Gratuity and other post-employment benefit plans Gratuity plan Funded scheme
The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972 and the Scheme framed by the Company. Under the Act, every employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the employee''s length of service and salary at retirement age. Every employee who has completed five years but not more than fifteen years of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972. Every employee who has completed fifteen years of service gets a gratuity on departure at one month''s salary (last drawn) for each completed year of service, subject to maximum for 20 months'' salary as per the Scheme of the Company. The scheme is funded with insurance companies in the form of a qualifying insurance policy.
Risk exposure and asset-liability matching
Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companies take on uncertain long-term obligations to make future benefit payments.
1) Liability risks
a) Asset-liability mismatch risk
Risk arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements.
b) Discount rate risk
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice can have a significant impact on the defined benefit liabilities.
c) Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at management''s discretion may lead to uncertainties in estimating this increasing risk.
2) Asset risks
All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India and other insurance companies. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this
33. Corporate Social Responsibility (CSR)
The Company has formed Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy in accordance with the provisions of section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company has not met any of the thresholds prescribed under section 135 of the Companies Act, 2013 for the financial year 2020-21 and 2021-22. As such, provisions of Section 135 shall not be applicable for immediately subsequent financial years 2022-23 and 2023-24, respectively.
Note on Variation:
1. Current Ratio : Increase in cash and bank balances and reduction in current borrowings
2. Debt-Equity Ratio: Reduction in current borrowings
3. Debt-Service Coverage Ratio: Increase in total revenue and repayment of current borrowings during the year
4. Return on Equity: Increase in total revenue due to increase in dividend income and improvement of equity of the Company as compared to last year.
5. Net Capital Turnover Ratio: Increase in working capital
6. Net Profit Ratio: Increase in profit due to increase in dividend income during the year
7. Return on Capital Employed: Increase in profit due to increase in dividend income during the year
8. Return on Investment in equity shares (subsidiary) : Increase in dividend income during the year
9. Return on Investment in equity shares (other than subsidiaries) : Reduction in dividend income during the
year.
10. Return on investment in Fixed deposits with Banks: Increase in interest income during the year due to increase in fixed deposits.
35. Relationship with Struck off companies:
The Company did not enter into any transaction with Companies struck off from ROC records for the period
ended 31 March 2024 and 31 March 2023.
36. a. 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, whether directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Company (ultimate beneficiaries) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b. No funds have been received by the Company to or in any other person(s) or entity(ies) including foreign entities (funding parties) with the understanding, whether recorded in writing or otherwise, that the Company shall, whether 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;
37. a. Management review of certain litigations by and against the Company does not warrant recognition of
any provision in the books of account as at 31 March, 2024. The Company, shall continue the review in future and if required carry out the necessary accounting adjustments.
b. One of the investors of Nandi Economic Corridor Enterprises Limited (NECE), a step-down subsidiary of the Company, has in terms of Shareholders'' Agreement (SHA) dated 24th December 2010, exercised a default put option of its equity shares held in NECE, on the Company, which the Company has denied as wrongful, and has rejected and disputed its invocation. As on the date of approval of these financial statements, the purchase price of such shares of NECE cannot be estimated since invocation of the put option is under dispute.
38. The Company has advanced amounts aggregating to Rs. 370 million to Nandi Economic Corridor Enterprises Limited (NECE), subsidiary company, for purchase of developed parcels of land, which remain outstanding at the balance sheet date. These have been considered as good and recoverable in these financial statements by the management of the Company based on the balance confirmation received from NECE.
39. Nandi Infrastructure Corridor Enterprise Ltd. (NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE) which are the subsidiaries of the Company, have not yet submitted the audited financial statements for the year ended 31 March, 2024, to the Company.
The Company will prepare consolidated financial statements, once the audited accounts of all the above-mentioned subsidiaries are made available to the Company.
40. Previous year''s figures have been regrouped wherever necessary.
As per our report of even date For and on behalf of the Board of Directors of BF UTILITIES LIMITED
For G.D. Apte & Co. CIN : L40108PN2000PLC015323
Chartered Accountants
ICAI Firm Registration No.: 100515W
Anagha M Nanivadekar A. B. KALYANI B. S. MITKARI
Partner Director Director, CEO, CFO &
Membership No.: 121007 Company Secretary
DIN : 00089430 DIN : 03632549
Pune, 30 May, 2024 Pune, 30 May, 2024
Mar 31, 2023
Provisions
A provision is recognized when the Company has a present obligation as a result of past event; it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not
discounted to its present value (unless the effect of time value of money is material) and are determined
based on the best estimate required to settle the obligation at the reporting date. These estimates are
reviewed at each balance sheet date and adjusted to reflect the current best estimates. If the effect of
the time value of money is material, provisions are discounted using a current pre-tax rate that reflects,
when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision
due to the passage of time is recognised as a finance cost.
Contingent liabilities and contingent assets, if any, are disclosed in the notes to accounts.
s. Post-employment and other employee benefits
Post-employment benefits are employee benefits (other than termination benefits and short-term
employee benefits) that are payable after the completion of employment.
Provident fund
Provident fund is a defined contribution plan covering eligible employees. The Company and the eligible
employees make a monthly contribution to the provident fund maintained by the Regional Provident Fund
Commissioner equal to the specified percentage of the basic salary of the eligible employees as per the
scheme. The contributions to the provident fund are charged to the statement of profit and loss for the
year when the contributions are due. The Company has no obligation, other than the contribution payable
to the provident fund.
Gratuity
Payment for present liability of future payment of gratuity is being made to approved gratuity fund,
which fully cover the same under cash accumulation policy of the Life Insurance Corporation of India. The
employee''s gratuity is a defined benefit funded plan.
The present value of the obligation under such defined benefit plan is determined based on the actuarial
valuation using the Projected unit credit method.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on
the net defined benefit liability and the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability), are recognised immediately in the balance sheet as asset/liability with
a corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in statement of profit and loss on the earlier of:
⢠The date of the plan amendment or curtailment, and
⢠The date that the Company recognises related restructuring costs
⢠Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.
The Company recognises the following changes in the net defined benefit obligation as an expense
in the statement of profit and loss:
⢠Service costs comprising of current service costs, past-service costs, gains and losses on curtailments
and non-routine settlements; and
⢠Net interest expense or income
Superannuation
Superannuation is a defined contribution plan covering eligible employees. The contribution to the
superannuation fund managed by the insurer is equal to the specified percentage of the basic salary of the
eligible employees as per the scheme. The contribution to this scheme is charged to the statement of
profit and loss on an accrual basis. There are no other contributions payable other than contribution
payable to the respective fund.
Compensated Absences
Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short¬
term employee benefit. The Company measures the expected cost of such absences as the additional
amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting
date. The Company treats accumulated leave expected to be carried forward beyond twelve months, as
long-term employee benefit for measurement purposes. Such long-term compensated absences are
provided for based on the actuarial valuation using the projected unit credit method at the reporting date.
Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The
Company presents the entire leave encashment liability as a current liability in the balance sheet, to the
extent it does not have an unconditional right to defer its settlement for twelve months after the reporting
date. Where the Company has the unconditional legal and contractual right to defer the settlement for a
period beyond twelve months, the same is presented as non-current liability.
t. Financial instruments
The Company has elected to apply following exceptions/exemptions prospectively at the time of transition.
⢠Classification and measurement of financial assets have been done based on facts and circumstances
existed on transition date.
⢠Elected to continue carrying value of equity instruments in subsidiaries, associates and jointly controlled
entities as deemed cost on transition date.
⢠De-recognition of financial assets and financial liabilities have been applied prospectively.
⢠Applied the requirements of relating to accounting for difference between fair value of financial
asset or financial liability from its transaction price of Ind-AS 109 prospectively.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e.,
the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
⢠Debt instruments at amortized cost
⢠Debt instruments at fair value through other comprehensive income (FVTOCI)
⢠Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
⢠Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments at amortised cost
A ''debt instrument'' is measured at the amortised cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual
cash flows, and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in other income in the statement of profit and
loss. The losses arising from impairment are recognised in the statement of profit and loss. This category
generally applies to trade and other receivables.
Debt instrument at FVTOCI
A ''debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling
the financial assets, and
b) The asset''s contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting
date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However,
the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss
in the P&L. On de-recognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified
from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest
income using the EIR method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria
for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized
cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates
a measurement or recognition inconsistency (referred to as ''accounting mismatch'').
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. For all equity instruments not
held for trading, the Company may make an irrevocable election to present in other comprehensive
income subsequent changes in the fair value. The Company makes such election on an instrument-by¬
instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the
instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI
to statement of profit and loss, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes
recognized in the statement of profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial
assets) is primarily derecognised (i.e. removed from the Company''s balance sheet) when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a ''pass¬
through'' arrangement; and either (a) the Company has transferred substantially all the risks and
rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the
risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the
asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to
the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated
liability. The transferred asset and the associated liability are measured on a basis that reflects the rights
and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the maximum amount of consideration that the
Company could be required to repay.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies expected credit loss (ECL) model for measurement
and recognition of impairment loss on the following financial assets and credit risk exposure:
a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt
_securities, deposits, trade receivables and bank balance_
b) Financial assets that are debt instruments and are measured as at FVTOCI
c) Trade receivables or any contractual right to receive cash or another financial asset that result from
transactions that are within the scope of Ind-AS11 and Ind-AS 18
d) Loan commitments which are not measured as at FVTPL
e) Financial guarantee contracts which are not measured as at FVTPL
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade
receivables or contract revenue receivables.
The application of simplified approach does not require the Company to track changes in credit risk.
Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from
its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk
has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk
has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life
of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default
events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with
the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at
the original EIR. When estimating the cash flows, an entity is required to consider:
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected
life of the financial instrument cannot be estimated reliably, then the entity is required to use the
remaining contractual term of the financial instrument
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on
portfolio of its trade receivables. The provision matrix is based on its historically observed default rates
over the expected life of the trade receivables and is adjusted for forward-looking estimates. At every
reporting date, the historical observed default rates are updated and changes in the forward-looking
estimates are analysed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense
in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the
statement of profit and loss.
⢠The balance sheet presentation for various financial instruments is described below:
Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the
balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off
criteria, the Company does not reduce impairment allowance from the gross carrying amount.
⢠Debt instruments measured at FVTOCI:
Since financial assets are already reflected at fair value, impairment allowance is not further reduced
from its value. Rather, ECL amount is presented as ''accumulated impairment amount'' in the OCI.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on
the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e.,
financial assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial
recognition as at fair value through profit or loss. This category also includes derivative financial instruments
entered into by the Company that are not designated as hedging instruments in hedge relationships as
defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they
are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised
in the statement of profit and loss.
Loans and borrowings
This is the category most relevant to the Company. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses are
recognised in statement of profit and loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement
of profit and loss.
This category generally applies to borrowings. For more information refer Note 12.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the de-recognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis, to realise the assets and settle the liabilities simultaneously.
u. Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are
considered an integral part of the Company''s cash management.
v. Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the
effects of transactions of a non-cash nature and any deferral or accruals of past or future cash receipts or
payments. The cash flows from regular operating, investing and financing activities of the Group are
segregated.
w. Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the entity; or a present obligation that arises from past events but is not recognised
because it is not probable that an outflow of resources embodying economic benefits will be required to
settle the obligation; or the amount of the obligation cannot be measured with sufficient reliability. The
Company does not recognize a contingent liability but discloses its existence in the financial statements.
x. Dividend to equity holders of the Company
The Company recognises a liability to make cash or non-cash distributions to equity holders of the Company
when the distribution is authorised and the distribution is no longer at the discretion of the Company. As
per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A
corresponding amount is recognised directly in equity.
y. Segment reporting
Ind AS 108 ''Operating Segments'' requires Management to determine the reportable segments for the
purpose of disclosure in financial statements based on the internal reporting reviewed by the Managing
Director, being Chief Operating Decision Maker (CODM) to assess performance and allocate resource. The
standard also required Management to make judgments with respect to recognition of segments.
z. Earnings per share
The Company reports basic and diluted earnings per share (EPS) in accordance with Indian Accounting
Standard 33 "Earnings per Share". Basic earnings per share are calculated by dividing the net profit or loss
for the period attributable to equity shareholders by the weighted average number of equity shares
outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the
extent that they are entitled to participate in dividends relative to a fully paid equity share during the
reporting period. The weighted average number of equity shares outstanding during the period is adjusted
for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation
of shares) that have changed the number of equity shares outstanding, without a corresponding change in
resources.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable
to equity shareholders and the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
Mar 31, 2018
Corporate Information:
BF Utilities Ltd. (âthe Companyâ or âBFULâ) is a public company domiciled in India and incorporated on 15th September, 2000 under the provisions of the Companies Act,1956 (âthe Actâ). Its shares are listed on National stock exchange and Bombay stock exchange in India. The Company is engaged in the generation of electricity through wind mills. The Companyâs CIN is L40108PN2000PLC015323. The registered office of the Company is located at BF Utilities Limited Mundhwa, Pune Cantonment, Pune 411 036, Maharashtra, India.
The financial statements were authorized for issue in accordance with a resolution of the directors on 3rd May, 2018.
1(a) Terms / rights attached to equity shares
The Company has only one class of equity shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend, as and when proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting except in case of interim dividend.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
1(b) Shares held by holding/ultimate holding company and/or their subsidiaries/associates
The Company being ultimate holding company there are no shares held by any other holding, ultimate holding company and their subsidiaries/associates
1(c) Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date
There are no bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding reporting date.
Note :
On the basis of information available with the Company, regarding the status of suppliers as defined under the ââMicro, Small and Medium Enterprises Development Act, 2006ââ, there are no suppliers covered under above mentioned Act.
Commitments
In case of Nandi Economic Corridor Enterprises Ltd. (NECE), the Company along with Nandi Infrastructure Corridor Enterprises Ltd. (NICE) as a joint sponsor, has given an Undertaking to IDFC Limited, acting as a Lendersâ Agent, in connection with the consortium loan total amounting to Rs. 400 Crores (out of total exposure of Rs 1,650 Crores) advanced to NECE, whereby the Company, along with NICE, has undertaken to ensure continuance of the Project undertaken by NECE, maintenance of shareholding and management control over NECE and provision of requisite technical, financial and managerial expertise, etc. until the final settlement date of the consortium loan.The company has recognised it as Financial Guarantee contract to the extent of Letter of Comfort issued by it.
Further the Company has agreed to grant to NECE, Operation & Maintenance Cost Overrun Support, Yield Equalisation Support, interest differential support under certain Facilities and Major Maintenance Reserve Support, on need basis.
The Company had given security to Axis Bank Limited to the extent of Rs. 30 Crores for securing the term loan facility granted by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the Company, by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara. The said term loan has been repaid during the year by NHDL and charge satisfied.
The Company had given security to Kotak Mahindra Investments Limited to the extent of Rs.30 Crores securing the term loan facility granted by it to Nandi Highway Developers Limited (NHDL), a subsidiary of the Company, by way of pledge of NIL (previous period- 12,301,127) equity shares of Rs. 10 each of NHDL held by the Company. The said term loan has been repaid during the year by NHDL and pledge is released.
2. Financial Instruments Capital Management:
The Companyâs objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders and maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may issue new shares or sell assets to reduce debt. The capital structure of the Company consists of debt and total equity of the Company.
The Company determines the amount of capital required on the basis of annual operating plans and long-term product and other strategic investment plans. The funding requirements are met through equity and shortterm borrowings. The Companyâs policy is aimed at combination of short-term and long-term borrowings. The Company monitors the capital structure on the basis of total debt to equity ratio and maturity profile of the overall debt portfolio of the Company.
The Company is not subject to any externally imposed capital requirements.
Total debt includes all long and short term debts as disclosed in note 11 to the financial statements.
The gearing ratio at the end of the reporting period was as follows
Set out below is a comparison, by class, of the carrying amounts and fair value of the Companyâs financial instruments as of March 31, 2018, other than those with carrying amounts that are reasonable approximates of fair values:
The management assessed that the fair value of cash and cash equivalent, trade receivables, trade payables and other current financial assets and liabilities approximate their carrying amounts largely due to the short term maturities of these instruments.
Further the management assessed that the fair value of security deposits and other non current receivables approximate their carrying amounts largely due to discounting at rates which are an approximation of current lending rates.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
1. The fair values of quoted instruments are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
2. The company has not performed a fair valuation of its investment in unquoted ordinary shares which are classified as FVTOCI, as the company believes that the impact of change on account of fair value is insignificant.
Financial Risk management framework:
The Company is exposed primarily to market risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments. The Company assesses the unpredictability of the financial environment and seeks to mitigate potential adverse effects on the financial performance of the Company.
Market Risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Such changes in the values of financial instruments may result from changes in the interest rates and other market changes.
Credit Risk
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk is controlled by analyzing credit limits and creditworthiness of customers on a continuous basis to whom the credit has been granted after obtaining necessary approvals for credit. Outstanding customer receivables are regularly monitored. The Company maintains its cash and cash equivalents and deposits with banks having good reputation and high quality credit ratings.
The company has only one customer i.e. Bharat Forge Ltd. To mitigate the credit risk, the company has taken security deposit of Rs. 20 crores (Rs 20 crores as on March 31, 2017) which covers the sales made by company to it over next year(s).
Liquidity Risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The Company manages liquidity risk by maintaining adequate reserves, liquid cash and bank balanceby continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.The table below provides details regarding the contractual maturities of significant financial liabilities:
Fair Value Measurement
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the Ind AS 113 - Fair Value Measurement. An explanation of each level is as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs for the asset or liability.
3. Gratuity and other post-employment benefit plans Gratuity plan Funded scheme
The Company has a defined benefit gratuity plan for its employees. The gratuity plan is governed by the Payment of Gratuity Act, 1972 and the Scheme framed by the Company. Under the Act, every employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the employeeâs length of service and salary at retirement age. Every employee who has completed five years but not more than fifteen years of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service as per the provisions of the Payment of Gratuity Act, 1972. Every employee who has completed fifteen years of service gets a gratuity on departure at one months salary (last drawn) for each completed year of service, subject to maximum for 20 months salary as per the Scheme of the Company. The scheme is funded with insurance companies in the form of a qualifying insurance policy.
Risk exposure and asset-liability matching
Provision of a defined benefit scheme poses certain risks, some of which are detailed hereunder, as companiestake on uncertain long term obligations to make future benefit payments.
1) Liability risks
a) Asset-liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements.
b) Discount rate risk
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice can have a significant impact on the defined benefit liabilities.
c) Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities especially unexpected salary increases provided at managementâs discretion may lead to uncertainties in estimating this increasing risk.
2) Asset risks
All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India and other insurance companies. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.
The following table summarises the components of net benefit expense recognised in the statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.
The principal assumptions used in determining gratuity for the Companyâs plan is shown below:
The estimates of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The following are the expected benefit payments to the defined benefit plan in future years:
Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal and interest rate) is 3.92 years
Provident Fund
In accordance with the law, all employees of the Company are entitled to receive benefits under the provident fund. Till the Financial Year 2016-17,the Company operated defined benefit plan. Under the defined benefit plan, the Company contributes to the ââ BFUL Employees Provident Fund Trust. ââ. The Company has an obligation to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.
From the Financial Year 2017-18 onwards the Company operated defined contribution plan. Under the defined contribution plan, provident fund is contributed to the government administered provident fund. The Company has no obligation, other than the contribution payable to the provident fund.
4. Income Taxes
A reconciliation of the Income tax provision to the amount computed by applying the statutory income tax rate to the profit before tax is summarised below.
5. First Time Adoption
These financial statements for the year ended March 31, 2018 have been prepared in accordance with Ind-AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with statutory reporting requirements in India immediately before adopting Ind AS (âprevious GAAPâ).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for the year ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at April 1, 2016, the Companyâs date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1,2016 and the financial statements as at and for the year ended March 31, 2017.
First time adoption of Ind AS - Mandatory exceptions and optional exemptions:
The Company has prepared the opening balance sheet as per Ind AS as of April 1, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets and liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognized assets and liabilities.
However, this principle is subject to certain exceptions and certain optional exemptions availed by the company as detailed below:
Exceptions applied
The Company has applied all the mandatory exceptions in accordance with Ind AS 101. Following are the exceptions with significant impact:
1. Estimates
The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Indian GAAP did not require estimation:
- FVTOCI - unquoted and quoted equity instruments
- Impairment of financial assets based on expected credit loss model
The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2016, the date of transition to Ind AS and as of March 31, 2017.
2. Classification and measurement of financial assets
The Company has classified financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
3. De-recognition of financial assets and financial liabilities
The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after April 1, 2016 (the transition date).
4. Impairment of financial assets
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind ASs, whether there has been significant increase in credit risk since the initial recognition, as permitted by Ind AS 101.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
1. Deemed cost for property, plant and equipment and intangible assets
The Company has elected to continue with the carrying value of all its plant and equipment and intangible assets recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
2. Past Business Combinations
The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date of 1st April 2016. Consequently, the Company has kept the same classification for the past business combinations as in its previous GAAP financial statements. The Company has not recognised assets and liabilities that were not recognised in accordance with previous GAAP in the balance sheet of the acquirer and would also not qualify for recognition in accordance with Ind AS in the separate balance sheet of the acquire. The Company has excluded from its opening balance sheet those items recognised in accordance with previous GAAP that do not qualify for recognition as an asset or liability under Ind AS.
3. Investment in subsidiary
The Company has elected to continue with the carrying value of investment in subsidiary recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as at the transition date.
Explanation of transition to Ind AS
The below mentioned reconciliations provide a quantification of the effect of significant differences arising from the transition from Indian GAAP to Ind AS in accordance with Ind AS 101 for the following:
- Equity as at April 1, 2015
- Equity as at March 31, 2016
- Profit for the year ended March 31, 2016
There are no material adjustments to the cash flow statements.
In the reconciliations mentioned above, certain reclassifications are made to Indian GAAP financial information to alignwith the Ind AS presentation.
Foot Notes
1. Investments in Equity Instruments and Mutual Funds
Under previous GAAP, investments in equity instruments were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value.
Under Ind AS, the Company has designated such investments as FVTOCI investments. Ind AS requires FVTOCI investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments at fair value and Indian GAAP carrying amount has been recognised as a separate component of equity, in the FVTOCI reserve, net of related deferred taxes.
Under previous GAAP, investments in Bonds were carried at lower of cost and fair value. Under Ind AS, these investments are measured initially at fair value and subsequently at amortized cost.
Fair value increase on Investments is respectively Rs. 24,09,245 and Rs. 34,99,910 as on April 1, 2016 and March 31, 2017 as compared to corresponding year ended figures reported under Indian GAAP. Income recognised for the year ending March 31, 2017 net of deferred tax is Rs. 939,180 (FVTOCI) and effect of amortised cost interest is Rs. 9470. Profit on sale of Financial Instruments recognised under Indian GAAP already captured through Fair Value changes as above (net of tax effect) is Rs. 471,625.
2. Government Grant
Under previous GAAP, government assistance in the form of a below market rate of interest government loan (such as sales tax deferral scheme) was not recorded.
Under Ind AS, the benefit of a government loan at a below-market rate of interest is treated as a government grant. The loan shall be recognised and measured in accordance with Ind AS 109, Financial Instruments. The benefit of the below market rate of interest shall be measured as the difference between the initial carrying value of the loan determined in accordance with Ind AS 109, and the proceeds received. Government grants shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate.
As at 1st April 2016, Government Loan of Rs. 292,822,608 and Deferred Government Grant of Rs. 959,20,898 has been recognized (Non current portion Rs 63,710,412 and current portion Rs. 32,210,487). During the year 2016-17, Interest unwinding on Loan - Finance cost and Government Grant Income of Rs. 322,10,487 has been recognized in profit or loss. As at 31st March 2017, Government Loan of Rs. 325,033,094 (Non current portion Rs. 214,108,745 and current portion Rs. 110,924,249) and Deferred Government Grant of Rs. 637,10,412 (Non current portion Rs. 36,987,634 and current portion Rs. 26,722,777) is presented in the balance sheet.
3. Financial Guarantee Contract
Under Indian GAAP, financial guarantee (Letter of Support) given by parent on behalf of its subsidiary is recognised as ââContingent Liabilityââ. Under Ind AS, corporate / financial guarantee is treated as financial liability and is measured at Fair Value on initial and subsequent recognition. As such, Fair Value of such guarantee contract (liability) and corresponding amount recoverable from subsidiary (as asset) has been recognised at Rs. 112,262,851 (Non current portion) and Rs. 7,737,149 (current portion) as on April 1, 2016 and for Rs. 104,525,702 (Non current portion) and Rs. 7,737,149 (current portion) as on March 31, 2017. The fair value of guarantee for the year ending March 31, 2017 since not recoverable from subsidiary is written off as expenditure (under other expenses).
4. Re-measurements of defined benefit obligations
Under previous GAAP, actuarial gains and losses were recognised in profit and loss. Under Ind AS, the actuarial gains and losses forming part of re-measurement of the net defined benefit plan obligation, are recognised in the Other Comprehensive Income instead of profit or loss. The actuarial gain for the year ended March 31, 2017 under Previous GAAP was Rs. 65,413.
5. Deferred Tax Impact
Deferred tax impacts for the above adjustments, as at April 1, 2016 is of Rs.781,679. Additional deferred tax liability has been created as at April 1, 2016. During the year ending March 31, 2017, increase in liability for Deferred Tax is Rs. 557,699.
6. Disclosure pursuant to IND AS 17 âLeasesâ
The company as a lessee:
Operating Lease
The company has taken land on lease under non cancellable period of 35 years, the future minimum lease payments in respect of which are as follows:
7. Corporate Social Responsibility (CSR)
The company has formed Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy in accordance with the provisions of section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company recognises CSR spends as and when incurred. Relevant details for the financial year/ period covered by these statements are as under.
8. Segment information as required by IND AS 108 ââOperating Segmentsââ as prescribed by Rules, as amended is set out in a separate statement annexed thereto.
9. Certain litigations by and against the Company and subsidiaries of the Company are pending in various Courts, and the matter is subjudice. No cognizance thereof is taken in the above results, pending final outcome of the cases.
During the year due to disputes with the service provider the Companyâs windmills were partly non-operational thereby adversely affecting power generation. The management has taken all possible steps to restore the operations.
10. Nandi Highway Developers Ltd. (NHDL), Nandi Infrastructure Corridor Enterprises Ltd. (NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE), which are the subsidiaries of the Company, are in the process of finalising their accounts for the financial year ended 31st March, 2018 and hence, they have not yet submitted the said audited financials to the Company.
The Company will prepare consolidated financials statements, once the audited accounts of all the above mentioned subsidiaries are made available to the Company.
11. The Company has advanced amounts aggregating to Rs. 370,000,000 to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company, for purchase of developed parcels of land, which remain outstanding at the balance sheet date. These have been considered as good and recoverable in these financial statements by the Management of the Company based on the balance confirmation received from NECE.
12. Disclosures required as per Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have been set out in a separate statement annexed hereto.
13. During the year the Company assigned an intangible asset under development and surplus on the assignment is included under the head Other Income.
14. Previous yearâs figures have been regrouped wherever necessary.
Mar 31, 2017
1. Commitments:
A. In case of Nandi Economic Corridor Enterprises Ltd. (NECE), the Company along with Nandi Infrastructure Corridor Enterprises Ltd. (NICE) as a joint sponsor, has given an Undertaking to IDFC Limited, acting as a Lenders'' Agent, in connection with the consortium loan total amounting to Rs. 16,500 Million advanced to NECE, whereby the Company, along with NICE, has undertaken to ensure continuance of the of the Project undertaken by NECE, maintenance of shareholding and management control over NECE and provision of requisite technical, financial and managerial expertise, etc. until the final settlement date of the consortium loan.
Further the Company has agreed to grant to NECE, Operation & Maintenance Cost Overrun Support, Yield Equalization Support, interest differential support under certain Facilities and Major Maintenance Reserve Support, on need basis.
B. The Company, as a promoter and indirect holding company of Nandi Economic Corridor Enterprises Ltd. (NECE) has signed definitive agreements on 24 December, 2010, in relation to foreign direct investment of Rs. 5,000 million in NECE.
Pursuant to these definitive agreements, NECE has allotted convertible "Securities" to AIRRO (Mauritius)Holdings V (Investor), on the terms and conditions contained in the definitive agreements, whereby the investor would get a shareholding between 8.33% and 16.29% in NECE. However, during the current year, NECE has allotted Equity Shares upon conversion of the securities to the investor granting him 16.29% shares. Hence, the Company''s obligation if any, stands extinguished to that extent.
2. A. The Company had given security to Axis Bank Limited to the extent of Rs. 300 million for securing the term
loan facility granted by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the Company, by way of hypothecation of movable assets and equitable mortgage of fixed assets pertaining to Wind Mill project of the Company located in village Boposhi and Maloshi, Dist Satara.
The said term loan has been repaid during the year by NHDL and charge satisfied
B. The Company has given security to Kotak Mahindra Investments Limited to the extent of Rs.300 million securing the term loan facility granted by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the Company, by way of pledge of 12,301,127(previous period- 12,301,127) equity shares of Rs. 10 each of NHDL held by the Company.
3. Segment information as required by Accounting Standard 17 "Segment Reporting" as prescribed by Rules, as amended is set out in a separate statement annexed thereto.
4. Related party disclosures have been set out in a separate statement annexed to this schedule. The related parties, as defined by Accounting Standard 18 ''Related Party Disclosures'' prescribed by Rules, in respect of which the disclosures have been made, have been identified and taken on record by the Board.
I. Nature of Provisions
A. In terms of various notifications / circulars issued by Government of Maharashtra, electricity duty is payable in respect of wind power sold to third parties. However in absence of clarity on the entire subject and also in view of various other issues the Company as a matter of prudence and without prejudice to dispute the claim, has made a provision for Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling agreement with the distribution licensee viz. Maharashtra State Electricity Distribution Company Limited (MSEDCL). All the projects of wheeling energy are under the open access provisions issued by the Hon'' able Maharashtra Electricity Regulatory Commission (MERC).
II. Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of applicability of Electricity duty for Wind Power Generation, the timing of outflow cannot be determined up to December 2011. However, the Company is generally paying the duty regularly since January 2012.
B. The opening carrying amount of Wheeling and Transmission charges were pertaining to FY 2014-15 due to Open Access permission was withheld. During the year, on receipt of Open Access permission the Wheeling & Transmission charges have been adjusted in the proceeds received through consumers bills. And current provisions are being paid on due dates.
C Provident Fund
The Provident Fund contribution is made to BFUL Employees Provident Fund Trust. In terms of guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of Provident Fund Liability based on assumptions listed below. The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are
*On and from 1st March, 2017, Company deposit the required contribution to the Government Provident Fund.
5. The Company has advanced amounts aggregating to Rs. 370,000,000 to Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company, for purchase of developed parcels of land, which remain outstanding at the balance sheet date. These have been considered as good and recoverable in these financial statements by the Management of the Company based on the balance confirmation received from NECE.
6. Certain litigations by and against the Company and the subsidiaries of the Company are pending in various courts and the matter is subjudice. No cognizance thereof is taken in the preparation of the financial statements, pending final outcome of the cases. During the year, due to dispute with the service provider, Company''s windmills were partly non-operational there by adversely affecting power generation. The management has taken all possible steps to restore the operations.
7. Disclosures required as per Schedule V of SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 have been set out in a separate statement annexed hereto.
8. The Company''s appeal no.9/2015 with MERC with respect to issue of Open Access Permission for the period April 2014 to March 2015 was decided in favour of the Company by MERC on February 8, 2016.
During the Current year, MSEDCL has given Credit with respect to the said power (Generated during 2014-15) in the power bills of consumer. Consequent to Final adjustment in the power bill by MSEDCL, the Company, as a normal accounting practice, has recognized the differential revenue based on actual power tariff rate during the current year.
9 Nandi Highway Developers Ltd. (NHDL), Nandi Infrastructure Corridor Enterprises Ltd. (NICE) and Nandi Economic Corridor Enterprises Ltd. (NECE), which are the subsidiaries of the Company, are in the process of finalizing their accounts for the financial year ended 31st March, 2017 and hence, they have not yet submitted the said audited financials to the Company.
The Company will prepare consolidated financials, once the audited accounts of all the above mentioned subsidiaries are made available to the Company.
10. Diminution other than temporary, if any, in the value of investment in Nandi Highway Developers Ltd. (NHDL), Nandi Infrastructure Corridor Enterprise Ltd (NICE) and Nandi Economic Corridor Enterprise Ltd (NECE) could not be tested pending finalization of accounts of NHDL, NICE and NECE for the financial year ended 31st March,
2017, as explained in Note no. 38. The Company has recorded these investments at cost as on the date of Balance Sheet.
11. The operations of wind farm of the Company were partially affected due to the local issues at the wind farm site and disputes with the service provider. The power generation and corresponding income from operation is lower due to these disturbances. The wind farm has since been functioning normally.
12. The Company supplies entire power generated from its Wind Farm located at Thoseghar in Satara to Bharat Forge Ltd. under the long term agreement. Bharat Forge Ltd. has given notice of partial / total suspension of above power purchase from or after 1st March, 2016.
Consequently, the Company and Bharat Forge Ltd. have signed a Revised Power Purchase Agreement, whereby the parties have agreed for Take or Pay mechanism. Under the Take or Pay mechanism, Bharat Forge Ltd. has agreed to pay power tariff to the Company as per the long term agreement for the electricity generated but not supplied to Bharat Forge Ltd. during the partial / total suspension period. If the electricity generated is sold to any third party, the Company shall give credit for the same to Bharat Forge Ltd.
13. On 16th March, 2016, the Company has acquired 100% shareholding in Avichal Resources Pvt. Ltd. ("Avichal"), in all cash deal. With this acquisition, Avichal has become a wholly owned subsidiary of the Company. Avichal is the owner of some of the land required for the Company''s existing Wind Farm located at Dist. Satara.
14. The company has formed Corporate Social Responsibility (CSR) Committee and has also adopted a CSR Policy in accordance with the provisions of section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The Company recognizes CSR spends as and when incurred. Relevant details for the financial year/ period covered by these statements are as under.
15. Disclosure of Specified Bank Notes (SBNs)
During the year, the Company had Specified Bank Notes or other denomination note as defined in the MCA Notification G.S.R 308(E) dated 31st March, 2017 on the details of Specified Bank Notes (SBNs) held and transacted during the period from 8th November, 2016 to 30th December, 2016.
*For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.".
16. The Company has reclassified previous period''s figures to confirm to current year''s classification, however, the previous period''s figures are not comparable to those of current year, since the previous period''s figures are for six months.
Sep 30, 2015
1. (b) Terms / rights attached to equity shares :
The Company has only one class of equity shares having a par value of
Rs. 5/- per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupees.
The dividend, as and when proposed by the Board of Directors is subject
to the approval of the Shareholders in the ensuing Annual General
Meeting except in case of interim dividend.
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
2. (c) Shares held by holding/ultimate holding company and/or their
subsidiaries/associates
The Company being ultimate holding company there are no shares held by
any other holding, ultimate holding company and their
subsidiaries/associates
3. (d) Aggregate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting date
There are no bonus shares issued, shares issued for consideration other
than cash and shares bought back during the period of five years
immediately preceding reporting date.
4. Rupee term loan from HDFC Ltd.
Loan from HDFC Ltd. was secured by : Corporate Guarantee issued by KSL
Holdings Private Limited.
This loan was repayable on completion of 24 months from the date of
disbursement i.e. from 25 March, 2014.This loan carried an interest
linked to HDFC Ltd's Corporate Prime Lending Rate. Interest at Base
rate of 8% was payable quarterly and balance on repayment of loan. The
loan has been fully repaid during the year and satisfaction of charge
filed accordingly.
5. Sales tax deferral
Balance outstanding Rs. 502,226,830 (Previous year 615,101,574)
Repayable 1/5th of amount every year after 10 years of the benefit
availed. Repayment schedule
6. As required by and in accordance with Accounting Standard 22 -
'Taxes on Income' prescribed by Companies (Accounts) Rules, 2014, the
Company recognises deferred tax which result from timing differences
after ignoring deferred tax adjustments originating and reversing
during the tax holiday period. The deferred tax adjustments reversing
outside the tax holiday period have been recomputed consequent to the
company's claim of determining the tax holiday period with reference to
the date of each phase of implementation as against the earlier
intended period with reference to a single date of implementation for
the wind power generation business.
Note :
On the basis of information available with the Company, regarding the
status of suppliers as defined under the "Micro, Small and Medium
Enterprises Development Act, 2006", there are no suppliers covered
under above mentioned Act.
7. Commitments:
A. The Company as a Promoter of Nandi Economic Corridor Enterprises
Ltd. (NECE) has given an undertaking to Infrastructure Development
Finance Co. Ltd. (IDFC) in connection with the loan of Rs. 13,200
million (previous year Rs. 13,200 million) advanced to NECE by IDFC,
whereby the company has undertaken to ensure continuance of the project
undertaken by NECE, continued Promoters contributions as per the
Financial plan, with adequate technical, financial and managerial
support at the least until the final settlement date.
Further the Company has committed to meet the shortfall in resources of
NECE by way of Promoters contribution in terms of the Financing Plan
which can be in the form of Equity / Preference Share Capital and / or
granting of interest free unsecured loan until the final settlement
date, which together with current contributions would be subordinate to
the funds borrowed from IDFC and shall not be repaid until the final
settlement date. The Company has further agreed to ensure that the
Borrower adheres to the land sale / Development Plan as mentioned in
the Common Loan Agreement.
B. The Company, as a promoter and indirect holding company of Nandi
Economic Corridor Enterprises Ltd. (NECE) has signed definitive
agreements on 24 December, 2010, in relation to foreign direct
investment of Rs. 5,000 million in NECE.
Pursuant to these definitive agreements, NECE has allotted convertible
"Securities" to AIRRO (Mauritius)Holdings V (Investor), on the terms
and conditions contained in the definitive agreements, whereby the
investor would get a shareholding between 8.33% and 16.29% in NECE.
8. A. The Company has given security to Axis Bank Limited to the
extent of Rs. 300 million for securing the term
loan facility granted by it to Nandi Highway Developers Limited
(NHDL),a subsidiary of the Company, by way of hypothecation of movable
assets and equitable mortgage of fixed assets pertaining to Wind Mill
project of the Company located in village Boposhi and Maloshi, Dist
Satara.
B. The Company has given security to Kotak Mahindra Investments Limited
to the extent of Rs.300 million securing the term loan facility granted
by it to Nandi Highway Developers Limited (NHDL),a subsidiary of the
Company, by way of pledge of 12,301,127(P.Y. 11,071,900) equity shares
of Rs. 10 each of NHDL held by the Company.
9. Related party disclosures have been set out in a separate statement
annexed to this schedule. The related parties, as defined by Accounting
Standard 18 "Related Party Disclosures" prescribed by Rules, in respect
of which the disclosures have been made, have been identified and taken
on record by the Board.
Nature of Provisions
A. In terms of various notifications / circulars issued by Government
of Maharashtra, electricity duty is payable in respect of wind power
sold to third parties. However in absence of clarity on the entire
subject and also in view of various other issues the Company as a
matter of prudence and without prejudice to dispute the claim, has made
a provision for Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling
agreement with the distribution licensee viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL). All the projects of
wheeling energy are under the open access provisions issued by the Hon'
able Maharashtra Electricity Regulatory Commission (MERC). As a matter
of prudence and without prejudice the Company has made a provision for
wheeling and Transmission charges under open access.
Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of
applicability of Electricity duty for Wind Power Generation, the timing
of outflow cannot be determined up to December 2011. However, the
Company is paying the duty regularly since January 2012.
B. Short Term Loans & Advances includes Wheeling and Transmission
charges of Rs. 77,641,966 (P.Y. Rs. 77,641,966) have been paid up to 31
March,2014, to the distribution licensee under protest, as the matter
is pending in appeal with the MERC.
10. The Company has advanced amounts aggregating to Rs. 370,000,000 to
Nandi Economic Corridor Enterprises Limited (NECE), Subsidiary Company,
for purchase of developed parcels of land, which remain outstanding at
the balance sheet date. These have been considered as good and
recoverable in these financial statements by the Management of the
Company based on the balance confirmation received from NECE.
11. Certain litigations by and against the Company and the
subsidiaries of the Company are pending in various courts and the
matter is subjudice. No cognizance thereof is taken in the preparation
of the financial statements, pending final outcome of the cases.
12. Disclosures required as per Clause 32 of the Listing Agreement
have been set out in a separate statement annexed hereto.
13. The Company is required to apply for Open Access Permission to
Maharashtra State Electricity Distribution Co. Ltd., (MSEDCL) every
financial year. Upon receipt of the Open Access Permission, the credit
notes are issued by MSEDCL for power generated at the Company's wind
farm at Satara which are subsequently adjusted in the power bill of the
customer in Pune.
14. Provident Fund
The Provident Fund contribution is made to BFUL Staff Provident Fund
Trust. In terms of guidance note issued by the Institute of Actuaries
of India, the actuary has provided a valuation of Provident Fund
Liability based on assumptions listed below. The assumptions used in
determining the present value of obligation of the interest rate
guarantee under deterministic approach are
The Company has applied for Open Access Permission to MSEDCL for the
financial year 1 April, 2014 to 31 March, 2015 well in time. However,
due to certain policy issues at MSEDCL, it has still not granted Open
Access Permission to the Company for the said year and consequently
credit notes for this period are awaited from MSEDCL. The Company had
preferred an appeal with MERC against this decision of MSEDCL.
Pending issuance of these credit notes, the Company has recognized
revenue from power generation during 1 April, 2014 to 31 March, 2015 at
the average power tariff base rate at Rs. 5.75 per unit generated.
In case of unfavourable decision by MERC and consequent sale of power
to MSEDCL at Rs. 2.52 per unit generated, as per case no 58 of 2008
issued by MSEDCL, the profits of the Company for that year would be
lower by about Rs. 40.5 million net of tax.
However the Company has received Open Access Permission for 3 years
from 1 April, 2015.
15. During the year, the operations of wind farm of the Company were
partially affected due to the local issues at the wind farm site and
disputes with the service provider. The power generation and
corresponding income from operation is lower due to these disturbances.
The wind farm has since been functioning normally.
16. The company has formed Corporate Social Responsibility (CSR)
Committee and has also adopted a CSR Policy in accordance with the
provisions of section 135 of the Companies Act, 2013 and the Companies
(Corporate Social Responsibility Policy) Rules, 2014. The Company
recognises CSR spends as and when incurred. Relevant details for the
financial year covered by these statements are as under.
17. During the year, the Company has sold 0% OFCD's held in DGM
Realities Pvt Ltd. at a profit of Rs 40.4 million.
18. The Company has reclassified previous figures to confirm to this
year's classification.
Related parties where control exist
Subsidiaries Nandi Infrastructure Corridor Enterprise Ltd.
Nandi Highway Developers Ltd.
Step down subsidiary Nandi Economic Corridor Enterprise Ltd.
Associate Hospet Bellari Highways Pvt. Ltd. #
Enterprises owned or significantly Bharat Forge Ltd.
influenced by key management BF Investment Ltd.
personnel or their relatives /Enterprises under common control
Key management personnel Mr. B.S. Mitkari* (CEO & CS)
Mr. S.S.Joshi*
# Ceases to be an associate w.e.f. 17 February , 2015.
*Mr. B.S.Mitkari (CEO) and Mr. S.S.Joshi (Chief Financial Officer) are
key managerial personnel w.e.f. 31 March, 2015 in accordance with the
provisions of the Companies Act 2013.
* Does not include gratuity and leave encashment since the same is
considered for all employees of the Company as a whole
(iv) Gurantee given on behalf of subsidiary
The Company has given security to Axis Bank Limited to the extent of
Rs. 300 Million for securing the term loan facility granted by it to
Nandi Highway Developers Ltd. (See note no. 28A)
The Company has given security to Kotak Mahindra Investments Limited to
the extent of Rs.300 Million securing the term loan facility granted by
it to it to Nandi Highway Developers Limited. (See note no. 28B)
Sep 30, 2014
1 (b) Terms / rights attached to equity shares :
The Company has only one class of Equity Shares having a par value of
Rs. 5/- per share. Equity Shares are parri passu in all respect and
each equity shareholder is entitled to one vote per share. The Company
declares and pays dividends in Indian Rupees. The dividend, as and when
proposed by the Board of Directors is subject to the approval of the
Shareholders in the ensuing Annual General Meeting except in case of
interim dividend.
In the event of Liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
2 (a) Rupee Term Loan from Axis Bank Ltd.
Loan from Axis Bank was secured by first charge on the movable and
immovable assets of Wind Mill Project located at village Boposhi and
Maloshi, Dt. Satara.
Repaid during the year on completion of 36 months from the date of
first disbursement i.e. from 28 July, 2011 and Interest paid at Base
rate 4.25% p.a., Charge satisfied.
3 (b) Rupee Term Loan from HDFC Ltd.
Above loan from HDFC Ltd is secured by : Corporate Guarantee issued by
KSL Holdings Private Limited, Bullet repayment on completion of 24
months from the date of first disbursement i.e. from 25 March, 2014.
Interest is linked to HDFC Ltd''s Corporate Prime Lending Rate. Present
Rate of interest is 13.5% payable quarterly.
4 (c) Sales Tax deferral
Balance outstanding Rs. 615,101,574 (Previous year 707,609,064)
Repayable 1/5th of amount every year after 10 years of the benefit
availed.
5 (a) As required by and in accordance with Accounting Standard 22 -
''Taxes on Income'' prescribed by Companies (Accounting Standards) Rules,
2006, as amended the Company recognises Deferred Tax which result from
timing differences after ignoring Deferred Tax adjustments originating
and reversing during the tax holiday period. The Deferred tax
adjustments reversing outside the Tax holiday period have been
recomputed consequent to the company''s claim of determining the Tax
holiday period with reference to the date of each phase of
implementation as against the earlier intended period with reference to
a single date of implementation for the Wind power generation business.
Particulars of Contingent liabilities As at 30th As at 30th
September 2014 September 2013
Rupees Rupees
6. Contingent Liabilities not provided
for in respect of
a) Claims against the Company not
acknowledged as debt. 106,592,832 59,858,522
b) Guarantee given by the Company on
behalf of other 300,000,000 300,000,000
Company (See Note No 28)
7. Commitments:
A. The Company as a Promoter of Nandi Economic Corridor Enterprises Ltd
(NECE) has given an undertaking to Infrastructure Development Finance
Co. Ltd (IDFC) in connection with the loan of Rs. 13,200 million
(previous year Rs. 13,200 million) advanced to NECE by IDFC, whereby
the company has undertaken to ensure continuance of the project
undertaken by NECE, continued Promoters contributions as per the
Financial plan, with adequate technical, financial and managerial
support at the least untill the final settlement date.
Further the Company has committed to meet the shortfall in resources of
NECE by way of Promoters contribution in terms of the Financing Plan
which can be in the form of Equity / Preference Share Capital and / or
granting of interest free unsecured loan untill the final settlement
date, which together with current contributions would be subordinate to
the funds borrowed from IDFC and shall not be repaid until the final
settlement date. The Company has further agreed to ensure that the
Borrower adheres to the land sale / Development Plan as mentioned in
the Common Loan Agreement.
B. The Company, as a promoter and indirect holding company of Nandi
Economic Corridor Enterprises Ltd. (NECE) has signed definitive
agreements on 24th December 2010, in relation to foreign direct
investment of Rs. 5,000 Million in NECE.
Pursuant to these definitive agreements, NECE has allotted convertible
"Securities" to AIRRO (Mauritius) Holdings V (Investor), on the terms
and conditions contained in the definitive agreements, whereby the
investor would get a shareholding between 8.33% and 16.29% in NECE.
8. The Company has given security to Axis Bank Limited to the extent
of Rs. 300 Million for securing the term loan facility granted by it to
Nandi Highway Developers Limited (a subsidiary of the Company) by way
of hypothecation of movable assets and equitable mortgage of fixed
assets pertaining to Wind Mill project of the Company located in
village Boposhi and Maloshi, Dist Satara.
9. Segment information as required by Accounting Standard 17 "Segment
Reporting" as prescribed by Companies (Accounting Standards) Rules
2006, as amended is set out in a separate statement annexed thereto.
10. Related party disclosures have been set out in a separate statement
annexed to this schedule. The related parties, as defined by Accounting
Standard 18'' Related Party Disclosures'' prescribed by Companies
(Accounting Standards) Rules, 2006, in respect of which the disclosures
have been made, have been identified and taken on record by the Board.
Nature of Provisions
A. In terms of various notifications / circulars issued by Government
of Maharashtra, electricity duty is payable in respect of wind power
sold to third parties. However in absence of clarity on the entire
subject and also in view of various other issues the Company as a
matter of prudence and without prejudice to dispute the claim, has made
a provision for Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling
agreement with the distribution licensee viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL). All the projects of
wheeling energy are under the open access provisions issued by the Hon''
able Maharashtra Electricity Regulatory Commission (MERC). As a matter
of prudence and without prejudice the Company has made a provision for
wheeling and Transmission charges under open access.
Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of
applicability of Electricity duty for Wind Power Generation, the timing
of outflow cannot be determined up to December 2011. However, the
Company is paying the duty regularly since January 2012.
B. Short Term Loans & Advances includes Wheeling and Transmission
charges of Rs. 77,641,966/- (P.Y. Rs. 71,970,241/-) have been paid to
the distribution licensee under protest, as the matter is pending in
appeal with the MERC.
11. Liability for employee benefit has been determined by an actuary,
appointed for the purpose, in conformity with the principles set out in
the Accounting Standard - 15 (Revised) Employee Benefit, prescribed by
Companies (Accounting Standards) Rules, 2006, as amended the details of
which are as hereunder:
C Provident Fund
The Provident Fund contribution is made to BFUL Staff Provident Fund
Trust. In terms of guidance note issued by the Institute of Actuaries
of India, the actuary has provided a valuation of Provident Fund
Liability based on assumptions listed below. The assumptions used in
determining the present value of obligation of the interest rate
guarantee under deterministic approach are
12. Advance for purchase of land is given to Nandi Economic Corridor
Enterprises Limited (NECE), Subsidiary Company. Land is yet to be
transferred in the name of the Company.
13. Certain litigations by and against the Company and subsidiaries of
the Company are pending in various courts and the matter is subjudice.
No cognizance thereof is taken in the preparation of financial
statement, pending final outcome of the cases.
14. Disclosures required as per Clause 32 of the Listing Agreement have
been set out in a separate statement annexed hereto.
15. The Company is required to apply for Open Access Permission to
Maharashtra State Electricity Distribution Co. Ltd., (MSEDCL) every
financial year. Upon receipt of the Open Access Permission, the credit
notes are issued by MSEDCL for power generated at the Company''s Wind
Farm at Satara which are subsequently adjusted in the power bill of the
customer in Pune.
The Company has applied for Open Access Permission to MSEDCL for the
financial year 1st April 2014 to 31st March, 2015 well in time.
However, due to certain policy issues at MSEDCL, it has still not
granted Open Access Permission to the Company for FY 2014-15.
Consequently credit notes for the period starting from 1st April, 2014
are awaited.
Pending issuance of these credit notes and based on earlier years
experience, the Company has recognized revenue from power generation
during 1st April, 2014 to 30th September, 2014 at the average power
tariff rate of the previous year.
In the event of non-receipt of the Open Access Permission and
consequent sale of power to MSEDCL, as per case no. 58 of 2008 issued
by MSEDCL, the profits of the Company for the accounting year ended
30th September, 2014 would be lower by about Rs. 34.69 Million net of
tax.
16. Nandi Infrastructure Corridor Enterprises Ltd. (NICE) and Nandi
Economic Corridor Enterprises Ltd. (NECE), which are the subsidiaries
of the Company, have obtained extension of time u/s 96 of the Companies
Act, 2013 from Registrar of Companies, Bangalore Karnataka.
The Company will prepare consolidated financials, once the audited
accounts of both the above mentioned subsidiaries are made available to
the Company.
17. Diminution other than temporary, if any, in the value of investment
in Nandi Infrastructure Corridor Enterprise Ltd (NICE) and Nandi
Economic Corridor Enterprise Ltd (NECE) could not be tested due to
non-availability of accounts of NICE and NECE for the financial year
ended 31st March, 2014, as explained in Note no. 38. The Company has
recorded these investments at cost as on 30th September, 2014.
18. The Company has reclassified previous figures to confirm to this
year''s classification.
Sep 30, 2013
1 (b) Terms / rights attached to equity shares :
The Company has only one class of Equity Shares having a par value of
Rs. 5/- per share. Equity Shares are parri passu in all respect and
each equity shareholder is entitled to one vote per share. The Company
declares and pays dividends in Indian Rupees. The dividend, as and when
proposed by the Board of Directors is subject to the approval of the
Shareholders in the ensuing Annual General Meeting except in case of
interim dividend.
In the event of Liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
2 (a) Rupee Term Loan from Axis Bank Ltd.
Above loan from Axis Bank is secured by first charge on the movable and
immovable assets of Wind Mill Project located at village Boposhi and
Maloshi, Dt. Satara.
Bullet repayment on completion of 36 months from the date of first
disbursement i.e. from 28 July, 2011 and Interest payable at Base rate
4.25% p.a., payable monthly.
3 (b) Sales Tax deferral
Balance outstanding Rs. 707,609,062 (Previous year 774,837,571)
Repayable 1/5th of amount every year after 10 years of the benefit
availed.
4 (a) As required by and in accordance with Accounting Standard 22 -
''Taxes on Income'' prescribed by Companies (Accounting Standards) Rules,
2006, as amended the Company recognises Deferred Tax which result from
timing differences after ignoring Deferred Tax adjustments originating
and reversing during the tax holiday period. The Deferred tax
adjustments reversing outside the Tax holiday period have been
recomputed consequent to the company''s claim of determining the Tax
holiday period with reference to the date of each phase of
implementation as against the earlier intended period with reference to
a single date of implementation for the Wind power generation business.
Particulars of Contingent
liabilities As at 30th As at 30th
September 2013 September 2012
Rupees Rupees
5. Contingent Liabilities not
provided for in respect of
a) Claims against the Company not
acknowledged as debt. 59,858,522 59,858,522
b) Guarantee given by the Company on
behalf of 300,000,000 300,000,000
other Company (See Note No 28)
6. Commitments:
A. The Company as a Promoter of Nandi Economic Corridor Enterprises
Ltd (NECE) has given an undertaking to Infrastructure Development
Finance Co. Ltd ( IDFC) in connection with the loan of Rs. 13,200
million (previous year Rs. 13,200 million) advanced to NECE by IDFC,
whereby the company has undertaken to ensure continuance of the project
undertaken by NECE, continued Promoters contributions as per the
Financial plan, with adequate technical, financial and managerial
support at the least until the final settlement date.
Further the company has committed to meet the shortfall in resources of
NECE by way of Promoters contribution in terms of the Financing Plan
which can be in the form of Equity / Preference Share Capital and / or
granting of interest free unsecured loan until the final settlement
date, which together with current contributions would be subordinate to
the funds borrowed from IDFC and shall not be repaid until the final
settlement date. The company has further agreed to ensure that the
Borrower adheres to the land sale / Development Plan as mentioned in
the Common Loan Agreement.
B. The Company, as a promoter and indirect holding company of Nandi
Economic Corridor Enterprises Ltd. (NECE) has signed definitive
agreements on 24th December 2010, in relation to foreign direct
investment of Rs. 500 crores in NECE.
Pursuant to these definitive agreements, NECE has allotted convertible
"Securities" to AIRRO (Mauritius)Holdings V (Investor), on the terms and
conditions contained in the definitive agreements, whereby the investor
would get a shareholding between 8.33% and 16.29% in NECE.
7. The Company has given security to Axis Bank Limited to the extent
of Rs. 30 Crores for securing the term loan facility granted by it to
Nandi Highway Developers Limited (a subsidiary of the Company) by way
of hypothecation of movable assets and equitable mortgage of fixed
assets pertaining to Wind Mill project of the Company located in
village Boposhi and Maloshi, Dist Satara.
8. Segment information based on Consolidated Financial Statements, as
required by Accounting Standard 17 "Segment Reporting" as prescribed by
Companies (Accounting Standards) Rules 2006, as amended is set out in a
separate statement annexed thereto.
9. Related party disclosures have been set out in a separate
statement annexed to this schedule. The related parties, as defined by
Accounting Standard 18'' Related Party Disclosures'' prescribed by
Companies (Accounting Standards) Rules, 2006, in respect of which the
disclosures have been made, have been identified and taken on record by
the Board.
Nature of Provisions
A. In terms of various notifications / circulars issued by Government
of Maharashtra, electricity duty is payable in respect of wind power
sold to third parties. However in absence of clarity on the entire
subject and also in view of various other issues the Company as a
matter of prudence and without prejudice to dispute the claim, has made
a provision for Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling
agreement with the distribution licensee viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL). All the projects of
wheeling energy are under the open access provisions issued by the
Hummable Maharashtra Electricity Regulatory Commission (MERC). As a
matter of prudence and without prejudice the Company has made a
provision for wheeling and Transmission charges under open access.
Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of
applicability of Electricity duty for Wind Power Generation, the timing
of outflow cannot be determined up to December 2011. However, the
Company is paying the duty regularly since January 2012.
B. Short Term Loans & Advances includes Wheeling and Transmission
charges of Rs. 71,970,241/- (P.Y. Rs. 52,956,810/-) have been paid to
the distribution licensee under protest, as the matter is pending in
appeal with the MERC.
10. Advance for purchase of land is given to Nandi Economic Corridor
Enterprises Limited (NECE), Subsidiary Company. Land is yet to be
transferred in the name of the Company.
11. Till the accounting year ended 30th September, 2012, the Company
accounted for the income from Carbon Credits (CERs) and Renewable
Energy Certificates (RECs) in the year in which it was entitled to
receive the CERs and RECs. Consequent to the Guidance Note issued by
ICAI on the accounting of CERs and RECs, which is effective from the
accounting year commencing on or after 1st April, 2012, the income from
CERs and RECs is to be recognized in the year of its actual sales.
Necessary written off adjustments have been made in the accounts to
give effect to the aforesaid Guidance Note.
12. Disclosures required as per Clause 32 of the Listing Agreement
have been set out in a separate statement annexed hereto.
13. The Company has reclassified previous figures to confirm to this
year''s classification.
Sep 30, 2012
Basis of Preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and the other relevant provisions
of the Companies Act, 1956.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year except further
change in accounting policy as explained below:
During the year ended September 30, 2012, the revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
Company, for preparation and presentation of its financial statements.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on nature of business and activities carried out by the Company,
time between acquisition of assets and their realisation in cash and
cash equivalent, the Company has ascertained its operating cycle as 12
months for the purpose of current / non-current classification of
assets and liabilities.
1 (a) Terms / rights attached to equity shares :
The Company has only one class of Equity Shares having a par value of
Rs. 5/- per share. Equity Shares are parri passu in all respect and
each equity shareholder is entitled to one vote per share. The Company
declares and pays dividends in Indian Rupees. The dividend, as and when
proposed by the Board of Directors is subject to the approval of the
Shareholders in the ensuing Annual General Meeting except in case of
interim dividend.
In the event of Liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
2 (a) Rupee Term Loan from Axis Bank Ltd.
Balance outstanding Rs. 200,000,000 (Previous year Rs. 200,000,000)
Above loan is secured by first charge on the movable and immovable
assets of Wind Mill Project located at village Boposhi and Maloshi, Dt.
Satara.
Bullet repayment on completion of 36 months from the date of first
disbursement i.e from 28 July, 2011 and interest of Base rate 4.25%
p.a., payable monthly.
3 (a) Sales Tax deferral
Balance outstanding Rs. 774,837,571 (Previous year Rs. 820,787,101)
Repayable 1/5th of amount every year after 10 year of the benefit
availed.
4 (a) As required by and in accordance with Accounting Standard 22 -
''Taxes on Income'' prescribed by Companies (Accounting Standards)
Amendment Rules, 2006, the Company recognises Deferred Tax which result
from timing differences after ignoring Deferred Tax adjustments
originating and reversing during the tax holiday period. The Deferred
tax adjustments reversing outside the Tax holiday period have been
recomputed consequent to the company''s claim of determining the Tax
holiday period with reference to the date of each phase of
implementation as against the earlier intended period with reference to
a single date of implementation for the Wind Power generation business.
Note :
On the basis of information available with the Company, regarding the
status of suppliers as defined under the "Micro, Small and Medium
Enterprises Development Act, 2006", there are no suppliers covered
under above mentioned Act.
Particulars of Contingent liabilities As at 30th As at 30th
September
2012 September
2011
Rupees Rupees
5. Contingent Liabilities not provided
for in respect of
a) Claims against the Company not
acknowledged as debt. 59,858,522 59,858,522
b) Guarantee given by the Company on
behalf of 300,000,000 300,000,000
other Company ( See Note No 28)
6. Commitments:
A. The Company as a Promoter of Nandi Economic Corridor Enterprises
Ltd (NECE) has given an undertaking to Infrastructure Development
Finance Co. Ltd ( IDFC) in connection with the loan of Rs. 13,200
million (previous year Rs. 13,200 million) advanced to NECE by IDFC,
whereby the company has undertaken to ensure continuance of the project
undertaken by NECE, continued Promoters contributions as per the
Financial plan, with adequate technical, financial and managerial
support at the least untill the final settlement date.
Further the company has committed to meet the shortfall in resources of
NECE by way of Promoters contribution in terms of the Financing Plan
which can be in the form of Equity / Preference Share Capital and / or
granting of interest free unsecured loan untill the final settlement
date, which together with current contributions would be subordinate to
the funds borrowed from IDFC and shall not be repaid until the final
settlement date. The company has further agreed to ensure that the
Borrower adheres to the land sale / Development Plan as mentioned in
the Common Loan Agreement.
B. The Company, as a promoter and indirect holding company of Nandi
Economic Corridor Enterprises Ltd. (NECE) has signed definitive
agreements on 24th December 2010, in relation to foreign direct
investment of Rs. 500 crores in NECE.
Pursuant to these definitive agreements, NECE has allotted convertible
"Securities"to AIRRO (Mauritius) Holdings V (Investor), on the terms
and conditions contained in the definitive agreements, whereby the
investor would get a shareholding between 8.33% and 16.29% in NECE.
7. The Company has given security to Axis Bank Limited to the extent
of Rs. 30 Crores for securing the term loan facility granted by it to
Nandi Highway Developers Limited (a subsidiary of the Company) by way
of hypothecation of movable assets and equitable mortgage of fixed
assets pertaining to Wind Mill project of the Company located in
village Boposhi and Maloshi, Dist Satara.
8. Segment information based on Consolidated Financial Statements, as
required by Accounting Standard 17 "Segment Reporting"as prescribed by
Companies (Accounting Standards) Rules 2006 is set out in a separate
statement annexed thereto.
9. Related party disclosures have been set out in a separate
statement annexed to this schedule. The related parties, as defined by
Accounting Standard 18'' Related Party Disclosures'' prescribed by
Companies (Accounting Standards) Rules, 2006, in respect of which the
disclosures have been made, have been identified and taken on record by
the Board.
10. Consequent to completion of the renewal of registration of the
wind power generation project as a Clean Development Mechanism (CDM)
project with UNFCCC, the Company has accrued income in respect of
Certified Emission Reduction (CER) units, which are to be received on
completion of further formalities. Income accrued for the year is
Rs.2,540,566/- (Previous year Rs. 19,713,473/-). After considering the
CER received during the current year and the exchange rate
fluctuations, CERs Written off of Rs. 17,938,606/- (Previous year Rs.
9,440,565/-). Income receivable as at 30th September 2012 amounts to Rs
9,863,404/- (Previous year Rs. 25,026,399/-).
Nature of Provisions
A. In terms of various notifications / circulars issued by Government
of Maharashtra, electricity duty is payable in respect of wind power
sold to third parties. However in absence of clarity on the entire
subject and also in view of various other issues the Company as a
matter of prudence and without prejudice to dispute the claim, has made
a provision for Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling
agreement with the distribution licensee viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL). All the projects of
wheeling energy are under the open access provisions issued by the Hon''
able Maharashtra Electricity Regulatory Commission (MERC). As a matter
of prudence and without prejudice the Company has made a provision for
wheeling and Transmission charges under open access.
Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of
applicability of Electricity duty for Wind Power Generation, the timing
of outflow can not be determined.
B. Short Term Loans & Advances includes Wheeling and Transmission
charges of Rs. 52,956,811/- have been paid to the distribution licensee
under protest, as the matter is pending in appeal with the MERC.
11. Liability for employee benefit has been determined by an actuary,
appointed for the purpose, in conformity with the principles set out in
the Accounting Standard - 15 (Revised) Employee Benefit, prescribed by
Companies (Accounting Standards) Rules, 2006 the details of which are
as hereunder:
12. Advance for purchase of land is given to Nandi Economic Corridor
Enterprises Limited (NECE), Subsidiary Company. Land is yet to be
transferred in the name of the Company.
13. During the accounting year 2010-11, the Company registered its
18.33 MW Wind Power project located in Satara District, as an eligible
project for issuance of Renewable Energy Certificates (RECs). The
Company had filed necessary applications for issuance of RECs with
respect to Wind Power generated subsequent to such registration. The
Company, during the year accrued 55,091 RECs of which 43,310 REC''s were
sold on Indian Energy Exchange.
14. Disclosures required as per Clause 32 of the Listing Agreement
have been set out in a separate statement annexed hereto.
15. The financial statement for the year ended 30 September, 2011 had
been prepared as per the then applicable, pre-revised Schedule VI to
the Companies Act, 1956. Consequent to the notification issued by
Ministry of Company Affairs dated 28 February, 2011; the financial
statements for the year ended 30 September, 2012 are prepared as per
Revised Schedule VI. Accordingly, the previous year figures have also
been reclassified to conform to this year''s classification. The
adoption of Revised Schedule VI for previous year figures does not
impact recognition and measurement principles followed for preparation
of financial statements.
Sep 30, 2009
1 The High Court of Judicature at Bombay has passed an Order on 5th
February, 2010, approving the Scheme of Arrangement between Bhalchandra
Investment Limited, Forge Investment Limited, Mundhwa Investment
Limited, Jalakumbhi Investment and Finance Limited, Jalakamal
Investment and Finance Limited, Kalyani Utilities Development Limited,
(collectively called "the Amalgamating Companies"), BF Utilities
Limited ("Amalgamated Company" / "Demerged Company") and BF Investment
Limited ("Resulting Company") and their Respective Shareholders
("Scheme").
The Appointed Date of the Scheme is 1 st April, 2009 and the Effective
Date of the Scheme is 26th February, 2010.
Upon the coming into effect of this Scheme and with effect from the
Appointed Date, the Undertaking of each of the Amalgamating Companies
have, been transferred to and vested in the Company (Amalgamated
Company) as a going concern. Thereafter with effect from the Appointed
Date the Demerged Undertaking i.e. the Investment Business Undertaking
of the Company (Demerged Company) has also been transferred to and
vested in the Resulting Company on a going concern basis.
The Board of Directors of the Company in their meeting held on 29th
December, 2009 had approved the Financial Statements for the year ended
30th September, 2009. The auditors had submitted their report dated
29th December, 2009 on the same. The financial results based on these
approved Financial Statements were submitted to Stock Exchanges as per
Clause 41 of the Listing Agreement with Stock Exchanges.
The effectiveness of the Scheme of Arrangement being a material event,
the Company has revised the Financial Statements for the year ended
30th September, 2009 which were earlier approved by the Board on 29th
December, 2009, but pending approval of the Shareholders in the ensuing
Annual General Meeting for giving effects to various transfers
emanating from the Scheme. The Company has, therefore, surrendered the
signed sets of profit and loss account and cash flow statement for the
year ended 30th September, 2009 and the balance sheet as on that date
together with the auditors report as explained above to the auditors to
enable them to issue their Revised Audit Report on the Revised
Financial Statements.
The Company had sought extension of time for holding the Annual General
Meeting for adoption of the Financial Statements for the year ended
30th September, 2009. The Registrar of Companies, Pune vide his letter
dated 24th February, 2010 has granted extension of time of three months
( i.e. upto 30th June, 2010 ) for holding the Annual General Meeting.
The revised Financial Statements for the year ended 30th September,
2009 have been prepared after giving effects of the Scheme in the
appropriate account heads in the books of account of the Company, which
are summarized as under:
D. Details of Fund Flows of the Investment Business Undertaking during
April 2009 to September 2009, resulting from operations of Investment
Business Undertaking held and carried on in trust by BF Utilities
Limited and the Amalgamating Companies for BF Investment Limited
resulting to an amount payable to the latter aggregating to a Rs.156
103 081/-.
2. In view of the revision to the Financial Statements to give effect
to the Schemeof Arrangement detailed in Note No. 1 above, disclosure
in notes hereinafter have also been suitably amended and / or revised.
As at 30th As at 30th
September 2009 September 2008
Rupees Rupees
3 Contingent Liabilities not
provided for in respect of
a) Claims against the Company
not acknowledged as debt. 18 656 449 --
b) See Note 6 Below
4 The Company has entered into a Put Option Agreement dated 29/9/2008
and Call Option Agreement dated 1/10/2008 with Axis Bank Limited in
respect of Rs. 175 Crores Non Convertible Debentures issued by Nandi
Economic Corridor Enterprises Limited (NECE) to Axis Bank Limited
(Debentures).
Under the said Put Option Agreement, Axis Bank has the option to call
upon the Company to buy the Debentures at Put Exercise Price at the end
of 3rd, 4th and 5th year from the issue of Debentures or at anytime in
the event of any default by NECE. Similar Call option is vested with
the Company.
5 (i) Term Loan from Industrial Development Bank Of India Limited, is
secured by first charge by way of hypothecation of receivables, both
present and future from sale of power/electricity and sale assignment
of Sales Tax benefit pertaining to the Wind Mill Project at village
Boposhi, Maloshi and Kadave Khurd, Dt. Satara, the amount lying in cash
Collateral account and stock, book debts, machinery etc. pertaining to
the above Wind Mill Project. Secured by first charge by way of mortgage
of land and building at village Boposhi,Maloshi and Kadave Khurd, Dt.
Satara. pertaining to the above Wind Mill Project.
(ii) Term Loan from Citicorp Finance (India) Limited, was secured
against pledge of shares held by Subsidiary Companies, repaid during
the year, charge satisfied.
(iii) Term Loan from Axis Bank Limited, is secured by second charge on
the movable and immovable assets of Wind Mill Project located at
village Boposhi and Maloshi, Dt. Satara.
6 Segment information, based on the revised consolidated financial
statements of the Company and its Subsidiaries is set out in a separate
statement annexed to the schedule.
7 Related party disclosures have been set out in a separate statement
annexed to this schedule. The related parties, as defined by Accounting
Standard 18 Related Party Disclosure prescribed by Companies
(Accounting Standards) Amendment Rules, 2006, in respect of which the
disclosures have been made, have been identified and taken on record by
the Board.
8 Consequent to completion of the renewal of registration of the wind
power generation project as a Clean Development Mechanism (CDM) project
with UNFCCC, the Company has accrued income in respect of Certified
Emission Reduction (CER) units, which are to be received on completion
of further formalities, amounting to Rs. 1 2 862 491 /- on account of
reasonable certainty of their receipt. Income receivable as at
30/09/2009 amounts to Rs 25 811 229/-.
9 The disclosures required by Accounting Standard 29 "Provision,
Contingent Liabilities, Contingent Assets" prescribed by Companies
(Accounting Standards) Amendment Rules, 2006 are as follows.
Nature of Provisions
A. In terms of various notifications / circulars issued by Government
of Maharashtra, electricity duty is payable in respect of wind power
sold to third parties. However in absence of clarity on the entire
subject and also in view of various other issues the Company as a
matter of prudence and without prejudice has made a provision for
Electricity duty.
B. All the Wind Power Projects have completed the tenure of wheeling
agreement with the distribution licensee viz. Maharashtra State
Electricity Distribution Company Limited (MSEDCL). All the projects of
wheeling energy are under the open access provisions issued by the Hon
able Maharashtra Electricity Regulatory Commission (MERC). As a matter
of prudence and with out prejudice the Company has made a provision for
wheeling and Transmission charges under open access.
Expected timing of resulting outflow:
A. Since the matter is yet to be resolved / clarified in respect of
applicability of Electricity duty for Wind Power Generation, the timing
of outflow can not be determined.
B, Wheeling and Tranmission charges have been paid to the distribution
licensee under protest (included under Advances recoverable in Cash or
in Kind) as the matter is pending in appeal with the MERC.
10. In the basis of information available with the Company, regarding
the status of suppliers as defined under the "Micro Small and Medium
Enterprises Development Act 2006", there are no suppliers covered under
above mentioned Act and hence the question of provision or payment of
interest and related disclosures under the said Act does not arise.
11. Miscellaneous Income includes Rs. 8,100,000/- on account of
doubtful advances written off in earlier years, now recovered.
12. Information required in terms of Part IV of Sechdule VI to the
Companies Act, 1956 is attached.
13. Significant accounting policies followed by the Company are as
stated in the statement annexed to this schedule.
14. Disclosures required as per Clause 32 of the Listing Agreement
have been set out in a separate statement annexed hereto.
15. Current years figures are not comparable with that of the
previous year due to the effect of the "Composite scheme of
arrangement" as detailed in the note no. 1 above.
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Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
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