Mar 31, 2023
Nature and purpose of reserves Securities Premium:
Securities premium is used to record the premium on issue of shares . The reserve will be utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve:
The reserve is created out of surplus balance of profit of the Company and is a distributable reserve maintained by the Company. Capital Redemption Reserve:
Represents reserve created during buy-back of Equity Shares as required by the Companies Act 2013 and it is a non-distributable reserve.
Retained Earnings:
Retained earnings pertain to the accumulated earnings by the Company over the years.
Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.
(1) The Company has, during the year, executed a Business Transfer Agreement for the sale / transfer of its Wind Power Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to ^ 5,285 lakhs. The approval from the relevant regulatory authorities for the sale transaction has been obtained on 10 January 2023 and the profit before tax amounting to ^ 1,034 lakhs on this sale (net of expenses incurred amounting to ^ 6 lakhs) is recognized as an Exceptional Item.
(2) The Company has, during the year, executed a Business Transfer Agreement with a promoter group company for the sale / transfer of its Bus Operations Business as a going concern on a slump sale basis for an aggregate sale consideration amounting to ^ 23,000 lakhs. The Company has obtained all the relevant approvals for the sale / transfer, including approval from the regulatory authorities on 25 January 2023. The profit before tax amounting to ^ 17,687 lakhs on sale / transfer (net of expenses incurred amounting to ^ 13 lakhs) is recognized as an Exceptional Item.
E] The Department of Stamps and Registration, Government of Karnataka had issued a notice towards stamp duty payable on acknowledgment of delivery of a letter, article, document, parcel, package or consignment, given by the Company to the sender of such letter, article, document, etc. in accordance with the Karnataka Stamp Act, 1957 (Article- 1 (ii) of the Schedule). The Company has challenged the constitutional validity of the said provision by way of Writ Petition before the Honourable High Court of Karnataka, Circuit Bench at Dharwad. The Writ Petition came-up for hearing and subject to deposit of a sum of ^ 25 lakhs, the Authorities have been directed not to take any coercive action and also to determine the Stamp Duty liability. The Company has paid the deposit of ^ 25 lakhs, disclosed under Other Non-current assets in the books of account, but the quantum of Stamp Duty payable is yet to be arrived at by the Department. In the opinion of the Management, no financial liability is expected to arise in this regard. The financial liability that may ultimately devolve upon the Company is currently not ascertainable and as such no amount has been included as contingent liability towards the same.
Notes:-
a. The Company is in appeal against demands on Income Tax, Customs duty, service tax, goods and services tax.
b. Customs duty liability is in respect of alleged violation of terms and conditions of Non Scheduled Air Transport Service, as claimed by the Customs Department to the extent it can be quantified. The said department has issued a Show cause cum demand notice alleging violation of terms and conditions of Non Scheduled Air Transport Service and demanded, amongst others, customs duty on the import of aircraft, interest and penalty/fine thereon. The Company had earlier availed of the exemption available under the Customs Act, 1962 (the ''Act'') and was accordingly assessed to Nil duty under the Act. The Company has deposited the Customs duty, including interest thereon, without prejudice to further rights. These payments amounting to '' 688.05 lakhs have been disclosed under Other Non-current assets in the books of account. The Company has already filed the necessary response to the demand notice and subsequent to the year end has received a favourable order in this regard.
During the year, the Company has received an order for payment of differential customs duty on import of windshield for aircraft maintenance of '' 3.84 lakhs against which the Company has filed an appeal.
c. The above figures for contingent liabilities do not include amounts towards certain additional penalties/interest that may devolve on the Company in the event of an adverse outcome as the same is subjective and not capable of being presently quantified.
d. Future cash outflows in respect of (A) above can be determined only on receipt of judgments/decisions pending with various forums/authorities.
e. The amount disclosed in respect of (B) above represents the estimated liability based on independent legal opinion obtained by the Management in relation to the various cases of Motor Vehicle Accidents, Consumer disputes, Workmen compensation, etc. filed against the Company.
36 The Honourable Supreme Court, has passed a judgement on 28 February 2019 in relation to inclusion of certain allowances within the scope of "Basic wages" for the purpose of determining contribution to provident fund under the Employees''
Provident Funds & Miscellaneous Provisions Act, 1952. Management, based on legal advice obtained, is of the view that the principles enumerated in the judgement is not applicable to the Company considering the nature of allowances paid and the manner in which it is paid on selective basis to the employees and workers of the Company.
37 Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for R 39,405.53 lakhs net of advances of R 889.23 lakhs. (31 March 2022: R 34,800.44 lakhs and net of advances of R 79.53 lakhs)
38 Certified Emission Reductions Credits
In earlier years, the Company had recognised income by trading complete amount of possible Green House Gas (GHG) emission reductions generated by its Windmill project. The Company''s Clean Development Mechanism (CDM) project is registered with the United Nations Framework Convention on Climate Change (UNFCCC) and necessary approvals for the trade of carbon credits have been procured.
The Company has Certified Emission Reductions (CERs) balance of 306,448 units (net of 2% CDM administration fees) for the period 1 January 2013 to January 2018 which has been certified.
39 Buyback of Equity Shares
The Board of Directors at its meeting held on 30 January 2023 had approved the proposal to buyback up to 8,75,000 fully paid up equity shares having a face value of R 10 each representing up to 0.99% of the total number of equity shares in the paid-up equity share capital of the Company, at a price of R 700 per equity share payable in cash for a maximum amount not exceeding R 6,125 lakh (excluding transaction costs and other incidental expenses), representing 9.44% of the aggregate of the fully paid-up equity share capital and free reserves of the Company, as per the latest audited financial statements of the Company i.e. for the financial year ended 31 March 2022, being within the 10% limit of paid-up share capital and free reserves (including securities premium account) as per the said audited financial statements. The Buyback was undertaken through the Tender Offer route in accordance with the provisions contained in the SEBI (Buy-Back of Securities) Regulations, 2018, as amended and accordingly 8,75,000 equity shares have been extinguished on 17 April 2023.
- During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
- The carrying amounts of Security deposits (current), trade receivables, other current financial assets, cash and cash equivalents, current fixed deposits with banks, current borrowings, trade payables and other current financial liabilities are considered to be approximately equal to their fair value, since those are current in nature.
Fair value hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
- The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of indirectly observable inputs.
Valuation process
The Company evaluates the fair value of financial assets and financial liabilities on periodic basis using the best and most relevant data available.
Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments.
The Company is exposed to market risk, credit risk and liquidity risk. Company''s senior management oversees the management of these risks. It is Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
a) Market risk
Market risk is the risk of any loss in future earnings, in realisable fair value or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
I. Interest rate sensitivity
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company does not have significant exposure to the risk of changes in market interest rates as Company''s long-term debt obligations is at fixed interest rates.
II. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. However, the Company is not exposed to foreign currency risk since it has no unhedged exposure as at reporting date.
b) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, lease liabilities, trade payables and other financial liabilities.
Liquidity risk management
Company''s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The table below summarises the maturity profile of Company''s financial liabilities based on contractual undiscounted payments.
c) Credit risk
Credit risk arises from cash and bank balances, current and non-current financial assets, trade receivables and other financial assets carried at amortised cost.
Credit risk management
To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivable.
Bank balances are held with only high rated banks. Trade receivables are generally recovered within the credit period. Accordingly, the provision for impairment is considered immaterial. Also, trade receivables are monitored on periodic basis for any non-recoverability of the dues.
Terms and conditions of transactions with related parties :
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs vide cash/bank payment. There have been no guarantees received or provided for any related party receivables or payables. For the year ended 31 March 2023, Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2022: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Note:
For the periods upto March 31, 2022, all relevant amounts pertaining to continuing and discontinued operations have been considered
For the periods after March 31, 2022, only relevant amounts pertaining to continuing operations have been considered. Financial ratios given above are not comparable because of impact of accounting for the scheme and different approach followed to calculate ratios for the year ended March 31, 2023 and March 31, 2022
Formulae used for Calculation of Key Ratios and Financial indicators:
Current Ratio = Current Assets / Current Liabilities
Debt - Equity Ratio = (Total Borrowings Total Lease Liabilities Accrued Interest Payable) / Shareholders'' Equity Debt Service Coverage Ratio = EBIDA / (Total Borrowings Total Lease Liabilities Accrued Interest Payable)
Return on Equity = Profit after Tax / Average Shareholder''s Equity
Trade Receivables turnover ratio = Net Credit Sales / Average Trade Receivables
Trade Payables turnover ratio = Net Credit Purchases / Average Trade Receivables
Net capital turnover ratio = Revenue from Operations / (Current Assets - Current Liabilities)
Net Profit Ratio = Profit after tax / Revenue from Operations
Return on Equity Ratio= Net Profits after taxes /Average Shareholder''s Equity
Return on capital employed (ROCE) = Earning before interest and taxes / Capital Employed
Capital Employed = Tangible Net worth Total Borrowings Total Lease Liabilities Accrued Interest Payable Deferred Tax Liabilities
Return on investment = Income generated from invested funds (including capital gains / losses, net of taxes) / Average value of investments
46 Segment Reporting
Based on the criteria given in Ind AS 108 and in the opinion of the Chief Operating Decision maker, ''Transport of Passengers by Air'', which in the previous year was considered as a reportable segment, is now no longer considered a reportable segment. On the sale / transfer of the Wind Power Business and the Bus Operations Business, the Company is engaged only in the Goods Transport Business which, in the context of Ind AS - 108 ""Operating Segments"" constitutes a single reportable business segment as on 31 March 2023."
The Company offers services for the transportation of goods across India using a range of road transportation solutions to its customers, including less than full truck load and full truck load. Under this segment, the Company provides courier services for transportation of small parcels and documents using range of multi-modal solutions..
47 Subsequent Events:
There are no subsequent events that would require adjustments or disclosures in the financial statements as at the Balance Sheet date other than the following:
1) Buyback of equity shares (refer note 39)
2) ''The Board of Directors has granted an in-principle approval for the sale / transfer of the Company''s ''Transportation of Passengers by Air'' Business by way of a slump sale, (including to any related party), subject to receipt of all applicable clearances and approvals from the concerned regulatory authorities.
48 a) Other information required by Division II of the Schedule III to the Act, is either not applicable or there are no reportable matters.
b) Trade Receivables, Trade Payables and Advances from Customers / to Vendors balances are subject to balance confirmation and reconciliation, if any.
c) Previous year figures have been re-grouped / re-classified to confirm to the requirements of the amended Schedule III to the Companies Act, 2013.
Mar 31, 2022
Nature and purpose of reserves Securities Premium:
Securities premium is used to record the premium on issue of shares . The reserve will be utilised in accordance with the provisions of the Act.
General Reserve:
The reserve is created out of surplus balance of profit of the Company and is a distributable reserve maintained by the Company. Capital Redemption Reserve:
Represents reserve created during buy-back of Equity Shares as required by the Companies Act 2013 and it is a non-distributable reserve.
Retained Earnings:
Retained earnings pertain to the accumulated earnings by the Company over the years.
XII. The Company expects to contribute around ^ 656.12 lakhs to the funded plans in financial year 2022-23 towards Gratuity Liability.
- Compensated absences
The obligation for compensated absences is recognised in the same manner as gratuity and net charge to the Statement of Profit and Loss for the year is ^ 323.31 lakhs (31 March 2021: ^ 332.16 lakhs).
Company assesses the assumptions with the projected long-term plans of growth and prevalent industry standards.
Disclosure of payable to vendors as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" is based on the information available with the Company regarding the status of registration of such vendors under the said Act, as per the intimation received from them on requests made by the Company. There are no overdue principal amounts / interest payable amounts for delayed payments to such vendors at the Balance Sheet date. There are no delays in payment made to such suppliers during the year or for any earlier years and accordingly there is no interest paid or outstanding interest in this regard in respect of payment made during the year or on balance brought forward from previous year.
30 Earnings per share
The amount considered in ascertaining the Company''s earnings per share constitutes the net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.
E] The Department of Stamps and Registration, Government of Karnataka had issued a notice towards stamp duty payable on acknowledgment of delivery of a letter, article, document, parcel, package or consignment, given by the Company to the sender of such letter, article, document, etc. in accordance with the Karnataka Stamp Act, 1957 (Article- 1 (ii) of the Schedule). The Company has challenged the constitutional validity of the said provision by way of Writ Petition before the Honourable High Court of Karnataka, Circuit Bench at Dharwad. The Writ Petition came-up for hearing and subject to deposit of a sum of ^ 25 lakhs, the Authorities have been directed not to take any coercive action and also to determine the Stamp Duty liability. The Company has paid the deposit of ^ 25 lakhs, disclosed under Other Non-current assets in the books of account, but the quantum of Stamp Duty payable is yet to be arrived at by the Department. In the opinion of the Management, no financial liability is expected to arise in this regard. The financial liability that may ultimately devolve upon the Company is currently not ascertainable and as such no amount has been included as contingent liability towards the same.
Notes:-
a. The Company is in appeal against demands on Income Tax, Customs duty, service tax, goods and services tax and ESIC dues.
b. Customs duty liability is in respect of alleged violation of terms and conditions of Non Scheduled Air Transport Service, as claimed by the Customs Department to the extent it can be quantified. The said department has issued a Show cause cum demand notice alleging violation of terms and conditions of Non Scheduled Air Transport Service and demanded, amongst others, customs duty on the import of aircraft, interest and penalty/fine thereon. The Company had earlier availed of the exemption available under the Customs Act, 1962 (the ''Act'') and was accordingly assessed to Nil duty under the Act. The Company has deposited the Customs duty, including interest thereon, without prejudice to further rights. These payments amounting to Rs. 688.05 lakhs have been disclosed under Other Non-current assets in the books of account. The Company has already filed the necessary response to the demand notice and expects a favourable order in this regard.
c. The above figures for contingent liabilities do not include amounts towards certain additional penalties/interest that may devolve on the Company in the event of an adverse outcome as the same is subjective and not capable of being presently quantified
d. Future cash outflows in respect of (A) above can be determined only on receipt of judgments/decisions pending with various forums/authorities.
e. The amount disclosed in respect of (B) above represents the estimated liability based on independent legal opinion obtained by the Management in relation to the various cases of Motor Vehicle Accidents, Consumer disputes, Workmen compensation, etc. filed against the Company.
33 The Honourable Supreme Court, has passed a judgement on 28 February 2019 in relation to inclusion of certain allowances within the scope of "Basic wages" for the purpose of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. Management, based on legal advice obtained, is of the view that the principles enumerated in the judgement is not applicable to the Company considering the nature of allowances paid and the manner in which it is paid on selective basis to the employees and workers of the Company.
34 Capital Commitments
Estimated amount of contracts remaining to be executed on capital account and not provided for R 34,800.44 lakhs (net of advances of R 79.53 lakhs) (31 March 2021: R 4,127.46 lakhs (net of advances of R 1,399.11 lakhs))
35 Certified Emission Reductions Credits
In earlier years, the Company had recognised income by trading complete amount of possible Green House Gas (GHG) emission reductions generated by its Windmill project. The Company''s Clean Development Mechanism (CDM) project is registered with the United Nations Framework Convention on Climate Change (UNFCCC) and necessary approvals for the trade of carbon credits have been procured.
During the year, the Company has sold 3,06,448 Certified Carbon Emission Reductions units (CERs) for a consideration amounting to Rs. 691.49 Lakhs.
The Company has Certified Emission Reductions (CERs) balance of 11,563 units as on 31 March 2022 (306,448 units as on 31 March 2021) (net of 2% CDM administration fees) for the period 1 January 2009 to January 2018 which has been certified. The Company has Certified Emission Reductions (CERs) balance of 65,812 units as on 31 March 2022 (net of 2% CDM administration fees) for the period 1 January 2018 to January 2019 which is under certification and pending to be issued. The financial impact of outstanding CERs remains unrecognised in the books of account, the impact of which, as per the Management, is not expected to be material to the financial statements.
36 Buyback of Equity Shares
The Board of Directors of the Company in their meeting held on February 6, 2021, had approved the proposal for Buy-back of the Company''s equity shares in accordance with Article 63 of the Articles of Association of the Company and pursuant to the provisions of Sections 68, 69, 70 and other applicable provisions of the Companies Act, 2013 ("the Act") and rules made thereunder and in compliance with the SEBl Buy-back Regulations, 2018, ("SEBI Regulations") as amended. The Board had opted for the "Open Market Buy back through Stock Exchanges" as permitted under the SEBI Regulations. Accordingly, the Buy-back by the Company comprised of purchase of fully paid up Equity Shares for an aggregate amount not exceeding R 6,000 lakhs, ("Maximum Buy-back Size"), being 9.73% of the total paid up share capital and free reserves based on the audited financial statements of the Company as at March 31, 2020, at a price not exceeding R 300 per Equity Share ("Maximum Buyback Price") from its shareholders / beneficiary owners of the Company excluding promoters, promoter group companies, under the SEBI Regulations and the Act. The Maximum Buyback Price excludes transaction and other related costs. Based on the Maximum Buyback Price and for Maximum Buyback Size, the maximum number of Equity shares that could be bought back was 20,00,000 Equity shares ("Maximum Buyback Shares").
The Company had, based on the above approval, bought back 20,00,000 fully paid-up Equity shares at an average rate of R 253.36 per fully paid-up Equity share having a face value of R 10 each, resulting in cash outflow of R 5,187.46 lakhs (including transaction costs and Buy-back related expenses of R 120.21 lakhs), amounting to 86.46% of Maximum Buy-back size. In line with the requirements of section 52 of the Act, an amount of R 4,987.46 lakhs has been utilized from the Securities Premium for the Buy-back. An amount of R 1,133.87 lakh was incurred on account of Income-tax on Buy-back, which has also been adjusted from the Securities Premium. The Equity shares so bought back have been extinguished and the amount of Issued and Paid-up Share Capital stands amended accordingly in the books of account of the Company.
During the previous year, in view of the raging COVID-19 pandemic and the nationwide lockdown announced by the Central Government on 24 March 2020, the operations of the Company were totally shut down during the month of April 2020. Concession of lease rent was sought from the lessors / licensors of the leased / licensed properties occupied by the Company across India for the month of April 2020. Several lessors / licensors assented to either a complete concession or partial lease rent concession, totally amounting to ^ 446.70 lakhs (including non-refundable GST amounting to ^ 48.46 lakhs). The Company had applied the practical expedient under Ind AS 116 Leases, inserted vide Notification No. G.S.R. 463(E) dated July 24, 2020, for the above mentioned rent concession amounting to ^ 446.70 lakhs, which was granted on account of the COVID-19 pandemic and the same was recognised as a reduction from ''rent expenses'' in the financial statements.
- During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
- The carrying amounts of Security deposits (current), trade receivables, other current financial assets, cash and cash equivalents, current fixed deposits with banks, current borrowings, trade payables and other current financial liabilities are considered to be approximately equal to their fair value, since those are current in nature.
- The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. They are classified as level 3 fair values in the fair value hierarchy due to the use of indirectly observable inputs.
Valuation process
The Company evaluates the fair value of financial assets and financial liabilities on periodic basis using the best and most relevant data available.
Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise borrowings, lease liabilities, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments.
The Company is exposed to market risk, credit risk and liquidity risk. Company''s senior management oversees the management of these risks. It is Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
a) Market risk
Market risk is the risk of any loss in future earnings, in realisable fair value or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
I. Interest rate sensitivity
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company does not have significant exposure to the risk of changes in market interest rates as Company''s long-term debt obligations is at fixed interest rates.
II. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. However, the Company is not exposed to foreign currency risk since it has no unhedged exposure as at reporting date.
b) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, lease liabilities, trade payables and other financial liabilities.
Liquidity risk management
Company''s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
The table below summarises the maturity profile of Company''s financial liabilities based on contractual undiscounted payments.
c) Credit risk
Credit risk arises from cash and bank balances, current and non-current financial assets, trade receivables and other financial assets carried at amortised cost.
Credit risk management
To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivable.
Bank balances are held with only high rated banks. Trade receivables are generally recovered within the credit period. Accordingly, the provision for impairment is considered immaterial. Also, trade receivables are monitored on periodic basis for any non-recoverability of the dues.
40 Capital management 40.1 Risk 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, Company may adjust the amount of dividends paid to shareholders.
41 Segment Reporting
The Company''s Chief Operating Decision maker - Board of Directors examines the Company''s performance from a product perspective and has identified four reportable segments of its business as follows:
- Goods transport division: Offers services for the transportation of Goods across India using a range of road transportation solutions to the customers, including less than full truck load and full truck load. Under this segment, Company also does courier business for transportation of small parcels and documents using range of multi model solutions.
- Bus operations division: Offers services of transportation solutions through Buses.
- Sale of power division: The wind farm consists of Wind Turbine Generators (WTGs) having individual capacity of 1.25 MW.
- Transport of passengers by air: Offers services for the transportation of passengers by Air through the Aircrafts owned by the Company. The services are offered to the Individuals and corporate representatives.
The above operating segments have been identified considering:
(i) The internal financial reporting systems
(ii) The nature of the product/services
(iii) The risk return profile of individual divisions
Revenue and expenses has been accounted on the basis of their relationship to the operating activities of the segment. Income and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Income" and "Unallocable Expenses" respectively. Assets and Liabilities, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/ Liabilities". Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods/services.
Terms and conditions of transactions with related parties :
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs vide cash/bank payment. There have been no guarantees received or provided for any related party receivables or payables. For the year ended 31 March 2022, Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2021: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
Subsequent Events:
There are no subsequent events that would require adjustments or disclosures in the financial statements as at the Balance Sheet date other than the following: The Company has entered into a Memorandum of Understanding for the sale of its Wind Power Undertaking as a going concern on a Slump sale basis for an aggregate consideration of ^ 4,800 lakhs.
a) Other information required by Schedule III to the Companies Act, 2013, has been given only to the extent applicable.
b) Trade Receivables, Trade Payables and Advances from Customers / to Vendors balances are subject to balance confirmation and reconciliation, if any.
c) Previous year figures have been re-grouped / re-classified to confirm to the requirements of the amended Schedule III to the Companies Act, 2013 effective 1 April 2021.
Mar 31, 2018
1 Earnings per share
The amount considered in ascertaining the Company''s earnings per share constitutes the net profit after tax and includes post tax effect of any exceptional items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.
Notes:-
a. The Company is in appeal against demands on Income Tax, Customs duty, service tax and ESIC dues.
b. Customs duty liability is in respect of alleged violation of terms and conditions of Non Scheduled Air Transport Service, as claimed by the Customs Department to the extent it can be quantified. The said department has issued a Show cause cum demand notice alleging violation of terms and conditions of Non Scheduled Air Transport Service and demanded, amongst others, customs duty on the import of aircraft, interest and penalty/fine thereon. The Company had earlier availed of the exemption available under the Customs Act, 1962 (the ''Act'') and was accordingly assessed to Nil duty under the Act. The Company has deposited the Customs duty, including interest thereon, without prejudice to further rights. These payments have been disclosed under non-current assets in the books of account. The Company has already filed the necessary response to the demand notice and expects a favourable order in this regard.
c. The above figures for contingent liabilities do not include amounts towards certain additional penalties/interest that may devolve on the Company in the event of an adverse outcome as the same is subjective and not capable of being presently quantified.
d. Future cash outflows in respect of (A) above can be determined only on receipt of judgments/decisions pending with various forums/authorities.
e. The amount disclosed in respect of (B) above represents the estimated liability based on independent legal opinion obtained by the management in relation to the various cases of Motor Vehicle Accidents, Consumer disputes, Workmen compensation, etc. filed against the Company.
34 The Department of Stamps and Registration, Government of Karnataka had issued a notice towards stamp duty payable on acknowledgment of delivery of a letter, article, document, parcel, package or consignment, given by the Company to the sender of such letter, article, document, etc. in accordance with the Karnataka Stamp Act, 1957 (Article- 1 (ii) of the Schedule). The Company has challenged the constitutional validity of the said provision by way of Writ Petition before the Honourable High Court of Karnataka, Circuit Bench at Dharwad. The Writ Petition came-up for hearing and subject to deposit of a sum of '' 25 lakhs, the authorities have been directed not to take any coercive action and also to determine the Stamp Duty liability. The Company has paid the deposit of '' 25 lakhs but the quantum of Stamp Duty payable is yet to be arrived at by the department. In the opinion of the management, no financial liability is expected to arise in this regard. The financial liability that may ultimately devolve upon the Company is currently not ascertainable and as such no amount has been included as contingent liability towards the same.
2. The Bhiwandi property admeasuring 240,000 square feet purchased for a total consideration of '' 3,240 lakhs from M/s Indian Corporation, represented by its proprietor, Mr.Rudrapratap Urmaliya Tripathi, as a Power of Attorney holder of the original land owners is registered in the name of VRL by paying appropriate stamp duty and registration fees. The Company is in actual and physical possession of the property and has been carrying out its business activities in the aforesaid premises without any hindrance from anybody whatsoever. However, the Company has been facing difficulties in getting its name updated in the relevant Revenue Records i.e 7/12 extract and has accordingly brought this to the notice of the vendor, who is trying to solve the matter and get the name of the Company entered into the Revenue Records as the owner of the property.
Further, the Company has received a recent demand from revenue authorities for payment of lease rent of '' 116.82 lakhs (settled at '' 50 lakhs) for using the land since the 7/12 extract did not reflect the Company''s name as owner. This demand from Revenue Authorities of '' 116.82 lakhs (against which '' 50 lakhs was paid) has been settled by the Company, more as a matter of convenience, without accepting the demand, to enable peaceful possession and use of the aforesaid property.
Considering the fact that the property is already registered in the name of the Company vide Registered Sale Deed and further since the Company is in actual and physical possession of the property and has been carrying out its business activities without any hindrance from anybody whatsoever, except that there has been some difficulty in entering the name of the Company in the Revenue Records, the investment made by the Company is safe and fully recoverable. The Company has also obtained appropriate legal opinion in this regard to support its view. That however, in case, for any reasons, entering the name of the Company in the revenue records is not possible, the Vendor has given an option to the Company to buy back the property at mutually agreed consideration, which shall not be less than the purchase price indicated above. Management does not expect any financial impairment of the book value of the aforesaid property considering the representations received from Mr. Rudrapratap Tripathi through his attorney and also the legal opinion obtained by the Company from its own attorney and accordingly no adjustments have been made to the financial statements to this effect.
3. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) - Rs, 41,597.81 lakhs (31 March 2017: Rs, 128.68 lakhs ).
Commitment relating to lease arrangements (refer note 37) Rs, 7,762.30 lakhs (31 March 2017: Rs, 9,305.94 lakhs).
4. The land whereat 33 Wind Turbine Generators (WTGs) are installed (at Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy Limited by Karnataka Forest Department. Consequently, Suzlon Energy Limited has transferred the lease in favour of the Company with requisite clearances from Karnataka Forest Department.
5. The Company has entered into Operating lease agreements for godowns and office facilities and such leases include both cancellable and non-cancellable leases.
Lease rental expense recognized in the Statement of Profit and Loss for the year ended 31 March 2018 in respect of the operating leases is Rs, 9,538.41 lakhs (31 March 2017 : Rs, 8,884.80 lakhs).
Lease rental income recognized in the Statement of Profit and Loss for the year ended 31 March 2018 in respect of operating leases is Rs, 658.57 lakhs (31 March 2017: Rs, 511.37 lakhs).
6. Certified Emission Reductions Credits
In earlier years, the Company had recognised income by trading complete amount of possible Green House Gas (GHG) emission reductions generated by its Windmill project. The Company''s Clean Development Mechanism (CDM) project is registered with the United Nations Framework Convention on Climate Change (UNFCCC) and necessary approvals for the trade of carbon credits has been procured.
The Company has Certified Emission Reductions (CERs) balance of 185,552 units (net of 2% CDM administration fees) for the period 1 January 2013 to January 2016 which has been certified. Further, the certification of CERs generated during the period February 2016 to March 2017 is underway and hence is not quantifiable.
The financial impact of outstanding CERs remains unrecognised in the books of account, the impact of which, as per the management, is not expected to be material to the financial statements.
7. Fair value measurements
Financial instruments by category:
All financial assets and financial liabilities of the Company are under the amortised cost measurement category at each of the reporting dates except Equity investments which are recognised and measured at fair value through profit or loss.
Fair value hierarchy
The following table provides the fair value measurement hierarchy of Company''s financial assets and financial liabilities
- During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
- The carrying amounts of Security deposits, other financial assets, fixed deposits with banks, current borrowings, trade payables and other current financial liabilities are considered to be approximately equal to their fair value, since those are current in nature.
- The fair values computed above for assets measured at amortised cost are based on discounted cash flows using a current borrowing rate. They are classified as level 2 fair values in the fair value hierarchy due to the use of indirectly observable inputs.
Valuation process
The Company evaluates the fair value of financial assets and financial liabilities on periodic basis using the best and most relevant data available.
8. Financial risk management objectives and policies
IThe Company''s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments.
The Company is exposed to market risk, credit risk and liquidity risk. Company''s senior management oversees the management of these risks. It is Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors review and agree policies for managing each of these risks, which are summarised below.
a) Market risk
Market risk is the risk of any loss in future earnings, in realisable fair value or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
I. Interest rate sensitivity
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company does not have significant exposure to the risk of changes in market interest rates as Company''s long-term debt obligations is at fixed interest rates.
II. Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. However, Company is not exposed to foreign currency risk since it has no unhedged exposure as at reporting date.
b) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, trade payables and other financial liabilities.
Liquidity risk management
Company''s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
c) Credit risk
Credit risk arises from cash and bank balances, current and non-current financial assets, trade receivables and other finance assets carried at amortised cost.
Credit risk management
To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of account receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected crec loss allowance for trade receivable.
Bank balances are held with only high rated banks. Trade receivables are generally recovered within the credit perio Accordingly, the provision for impairment is considered immaterial. Also, trade receivables are monitored on periodic bas for any non-recoverability of the dues.
Trade receivables:
The ageing of trade receivables and expected credit loss analysis on these trade receivables is given in below table:
9. Capital management 43.1 Risk 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, Company may adjust the amount of dividends paid to shareholders.
10. Segment Reporting
The Company''s chief operating decision maker - Board of Directors examines the Company''s performance from a product perspective and has identified four reportable segments of its business as follows:
- Goods transport division: Offers services for the transportation of Goods across India using a range of road transportation solutions to the customers, including less than full truck load and full truck load. Under this segment, Company also does courier business for transportation of small parcels and documents using range of multi model solutions.
- Bus operations division: Offers services of transportation solutions through Buses.
- Sale of power division: The wind farm consists of Wind Turbine Generators (WTGs) having individual capacity of 1.25 MW.
- Transport of passengers by air: Offers services for the transportation of passengers by Air through the Aircrafts owned by the Company. The services are offered to the Individuals and corporate representatives.
The above operating segments have been identified considering:
(i) The internal financial reporting systems
(ii) The nature of the product/services
(iii) The risk return profile of individual divisions
Revenue and expenses has been accounted on the basis of their relationship to the operating activities of the segment. Income and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Income" and "Unallocable Expenses" respectively. Assets and Liabilities, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/ Liabilities". Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods/services.
As per Ind AS 24 "Related party Disclosures", disclosure of transactions with the related parties as defined in the Accounting Standard are given below:
a) Names of related parties and description of relationship:
a. Dr.Vijay Sankeshwar (Chairman & Managing Director)
b. Mr.Anand Sankeshwar (Managing Director)
c. Mr. Kalliveerappa Umesh (Executive director) (w.e.f. 19 May 2017)
d. Mr. Ramanand Laxminarayan Bhat (Executive director)
Key Management Personnel (KMP) and their relatives (w.e.f. 04 August 2017)-
e. Mrs.Vani Sankeshwar (President) - relative of director
f. Mrs.Lalitha Sankeshwar - relative of director
g. Mrs.Bharati Holkunde - relative of director
h. Mr. Sunil Nalavadi (Chief Financial Officer)
i. Mr. Aniruddha Phadnavis (Company Secretary)
a. Dr. Prabhakar Kore
b. Mr. J S Korlahalli
c. Mr. C Karunakar Shetty
d. Mrs. Medha Pawar
Non executive directors and Independent directors (with e. Mr. S R Prabhu (tiN 19 May 2017)_
whom transactions have taken place) f. Mr. Ramesh Shetty (till 04 August 2017)_
g. Mr. Shankarasa Ladwa
h. Dr. Anand Pandurangi
i. Dr. Ashok Shettar
j. Dr. Raghottam Akamanchi
a. Aradhana Trust
b. Ayyappa Bhaktha Vrunda Trust
c. Shiva Agencies
d. Sankeshwar Minerals Private Limited
e. Sankeshwar Printers Private Limited
Enterprises in which KMP or their relative have significant f. VRL Media Limited_
influence (with whom transactions have taken place) g. vrl Employees Group Gratuity Trust
h. VRL Foundation
i. Vijayanand Infotech Private Limited
j. Hyperkonnect Technologies Private Limited k. VRL Electronics Private Limited l. Vijayanand Institute of Technologies
Terms and conditions of transactions with related parties :
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs vide cash/bank payment. There have been no guarantees received or provided for any related party receivables or payables. For the year ended 31 March 2018, Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
* As gratuity and compensated absences are computed for all the employees in aggregate, the amounts relating to key managerial personnel cannot be individually identified.
11. Related party disclosures
The Board of Directors of the Company at its meeting held on 3 November 2017, approved a proposal for Buy-back by the Company of fully paid up Equity Shares for an aggregate amount not exceeding '' 4,140 lakhs (referred to as the "Maximum Buyback Size"), at a price not exceeding '' 460/- per Equity Share from the shareholders of the Company excluding promoters, promoter group, persons acting in concert and persons who are in control of the Company, in cash via the open market route through the stock exchanges in accordance with the Securities and Exchange Board of India (Buy Back of Securities) Regulations, 1998 (as amended) and the Companies Act, 2013 and rules made thereunder, as amended. The Company bought back 900,000 equity shares resulting in total cash outflow of '' 3,774.50 lakhs (including premium of '' 3,684.50 lakh). In line with the requirements of the Companies Act, 2013, an amount of '' 3,684.50 lakhs has been utilized from the securities premium balance for the buyback. In addition, '' 97.11 lakhs was incurred on account of buyback expenses which was also adjusted from the securities premium balance. The shares so bought back were extinguished and the issued and paid-up capital stands amended accordingly.
12. The Financial Statements were authorised for issue by the directors on 26 May 2018.
Mar 31, 2017
1. Earnings per share
The amount considered in ascertaining the Company''s earnings per share constitutes the net profit after tax and includes post tax effect of any exceptional items. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year. The number of shares used in computing diluted earnings per share comprises the weighted average number of shares considered for deriving basic earnings per share and also the weighted average number of shares which could have been issued on conversion of all dilutive potential shares.
2. The Company is in appeal against demands on Income Tax, Customs duty and ESIC dues.
3. Customs duty liability is in respect of alleged violation of terms and conditions of Non Scheduled Air Transport Service, as claimed by the Customs Department to the extent it can be quantified. The said department has issued a Show cause cum demand notice alleging violation of terms and conditions of Non Scheduled Air Transport Service and demanded, amongst others, customs duty on the import of aircraft, interest and penalty/fine thereon. The Company had earlier availed of the exemption available under the Customs Act, 1962 (the ''Act'') and was accordingly assessed to Nil duty under the Act. The Company has deposited the Customs duty, including interest thereon, without prejudice to further rights. These payments have been disclosed under non-current assets in the books of account. The Company has already filed the necessary response to the demand notice and expects a favourable order in this regard.
4. The above figures for contingent liabilities do not include amounts towards certain additional penalties/interest that may devolve on the Company in the event of an adverse outcome as the same is subjective and not capable of being presently quantified.
5. Future cash outflows in respect of (A) above can be determined only on receipt of judgments/decisions pending with various forums/authorities.
6. The amount disclosed in respect of (B) above represents the estimated liability based on independent legal opinion obtained by the management in relation to the various cases of Motor Vehicle Accidents, Consumer disputes, Workmen compensation, etc. filed against the Company.
7. The Department of Stamps and Registration, Government of Karnataka had issued a notice towards stamp duty payable on acknowledgment of delivery of a letter, article, document, parcel, package or consignment, given by the Company to the sender of such letter, article, document, etc. in accordance with the Karnataka Stamp Act, 1957 (Article- 1 (ii) of the Schedule). The Company has challenged the constitutional validity of the said provision by way of Writ Petition before the Honourable High Court of Karnataka, Circuit Bench at Dharwad. The Writ Petition came-up for hearing and subject to deposit of a sum of ''25 lakhs, the authorities have been directed not to take any coercive action and also to determine the Stamp Duty liability. The Company has paid the deposit of Rs.25 lakhs but the quantum of Stamp Duty payable is yet to be arrived at by the department. In the opinion of the management, no financial liability is expected to arise in this regard. The financial liability that may ultimately devolve upon the Company is currently not ascertainable and as such no amount has been included as contingent liability towards the same.
8. During the year ended 31 March 2015, the Company had issued a notice to Mr. Rudrapratap Tripathi, proprietor of M/s Indian Corporation, alleging that he has entered into a sale deed with the Company in relation to property situated at Bhiwandi, without being duly authorized to do so by the original land owners. The Company has further alleged that Mr. Rudrapratap Tripathi has not disclosed the defects in the title to the property including the fact that the land is an agricultural land. The Company had paid a sale consideration of Rs.3,240 lakhs towards purchase of the property. In the aforesaid notice, the Company has also alleged cheating and breach of trust by Mr. Rudrapratap Tripathi and has called upon him to refund Rs.3,240 lakhs paid to him along with the stamp duty, registration and other expenses incurred together with interest at the rate of 22% p.a. from the date of payment till the payment receive date, failing which the Company has the rights to initiate criminal proceedings against him. Management has received necessary representations from the attorney of Mr. Rudrapratap Tripathi in relation to sanctity of title and permitted utility of the aforesaid land towards industrial use and occupation. The attorney has also indicated the intention of Mr. Rudrapratap Tripathi to re-purchase the aforesaid property, if required. Management does not expect any financial impairment of the book value of the aforesaid property considering the representations received from Mr. Rudrapratap Tripathi through his attorney and accordingly no adjustments have been made to the financial statements to this effect.
9. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) -Rs.128.68 lakhs (31 March 2016: Nil, 01 April 2015: Nil).
Commitment relating to lease arrangements (refer note 37) Rs.9,306.36 lakhs (31 March 2016: Rs.10,061.72 lakhs, 01 April 2015: Rs.9,553.02 lakhs).
10. The land whereat 33 Wind Turbine Generators (WTGs) are installed (at Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy Limited by Karnataka Forest Department. Consequently, Suzlon Energy Limited has transferred the lease in favour of the Company with requisite clearances from Karnataka Forest Department.
11. The Company has entered into Operating lease agreements for godowns and office facilities and such leases are basically cancellable in nature.
Lease rental expense recognized in the Statement of Profit and Loss for the year ended 31 March 2017 in respect of the operating leases is Rs.8,884.80 lakhs (31 March 2016 : Rs.8,085.08 lakhs).
Lease rental income recognized in the Statement of Profit and Loss for the year ended 31 March 2017 in respect of operating leases is Rs.511.37 lakhs (31 March 2016: Rs.450.69 lakhs).
Certain non-cancellable operating leases extend up to a maximum of seven years from Balance Sheet Date. Some of such lease agreements have a price escalation clause. Maximum obligations on long term non-cancellable operating leases in accordance with the rentals stated in the respective agreements are as under:
12. Certified Emission Reductions Credits
In earlier years, the Company had recognized income by trading complete amount of possible Green House Gas (GHG) emission reductions generated by its Windmill project. The Company''s Clean Development Mechanism (CDM) project is registered with the United Nations Framework Convention on Climate Change (UNFCCC) and necessary approvals for the trade of carbon credits has been procured.
The Company has Certified Emission Reductions (CERs) balance of 128,821 units (net of 2% CDM administration fees) for the period 1 January 2013 to January 2015 which has been certified. Further, the certification of CERs generated during the period February 2015 to March 2017 is underway and hence is not quantifiable.
The financial impact of outstanding CERs remains unrecognized in the books of account, the impact of which, as per the management, is not expected to be material to the financial statements.
13. Contribution towards Corporate Social Responsibility (CSR)
Section 135 of the Companies Act, 2013 and Rules made there under prescribe that every company having a net worth of Rs.500 crore or more, or turnover of Rs.1,000 crore or more or a net profit of ''5 crore or more during any financial year shall ensure that the company spends, in every financial year, at least 2% of the average net profits earned during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy. The provisions pertaining to corporate social responsibility as prescribed under the Companies Act, 2013 are applicable to the Company. The financial details as sought by the Companies Act, 2013 are as follows:
- During the periods mentioned above, there have been no transfers amongst the levels of hierarchy.
- The carrying amounts of Security deposits, other financial assets, fixed deposits with banks, current borrowings, trade payables and other current financial liabilities are considered to be approximately equal to their fair value, since those are current in nature.
- The fair values computed above for assets measured at amortized cost are based on discounted cash flows using a current borrowing rate. They are classified as level 2 fair values in the fair value hierarchy due to the use of indirectly observable inputs.
Valuation process
The Company evaluates the fair value of financial assets and financial liabilities on periodic basis using the best and most relevant data available.
14. Financial risk management objectives and policies
The Company''s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds investments.
The Company is exposed to market risk, credit risk and liquidity risk. Company''s senior management oversees the management of these risks. It is Company''s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors review and agree policies for managing each of these risks, which are summarized below.
15. Market risk
Market risk is the risk of any loss in future earnings, in realizable fair value or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of change in the interest rates, foreign currency exchange rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
16. Interest rate sensitivity
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Company does not have significant exposure to the risk of changes in market interest rates as Company''s long-term debt obligations is at fixed interest rates.
17. Foreign currency risk
The Company has a portion of the business which is transacted in foreign currencies. The fluctuations in foreign currency exchange rates may have impact on the income statement and equity. Company''s exposure to the risk of changes in foreign exchange rates relates primarily to the Company''s operating activities relating to transport of passengers by air and foreign branch in Nepal. The Company is exposed to foreign exchange risk arising from foreign currency receivables and payables. There are certain foreign currency receivables and payables in USD and Nepalese rupee.
Foreign currency risk management
In respect of the foreign currency transactions, all exposures are kept open since the management believes the same will be offsetted by the corresponding receivables and payables which will be in the nature of natural hedge.
18. Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at a reasonable price. For the Company, liquidity risk arises from obligations on account of financial liabilities - borrowings, trade payables and other financial liabilities.
Liquidity risk management
Company''s treasury department is responsible for liquidity and funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company''s net liquidity position through rolling forecasts on the basis of expected cash flows.
19. Credit risk
Credit risk arises from cash and bank balances, current and non-current financial assets, trade receivables and other financial assets carried at amortized cost.
Credit risk management
To manage credit risk, the Company periodically assesses the financial reliability of customers and other counterparties, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Individual risk limits are set accordingly. The Company uses a provision margin to compute the expected credit loss allowance for trade receivable.
Bank balances are held with only high rated banks. Trade receivables are generally recovered within the credit period. Accordingly, the provision for impairment is considered immaterial. Also, trade receivables are monitored on periodic basis for any non-recoverability of the dues.
A First Ind AS Financial statements
These are the Company''s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017, the comparative information presented in these financial statements for the year ended 31 March 2016 and in the preparation of an opening Ind AS balance sheet at 1 April 2015 (the date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and Cash flow is given below:
20. Optional exemptions availed Business combinations
The Company has availed the business combination exemption on first time adoption of Ind AS and accordingly the business combinations prior to date of transition have not been restated to the accounting prescribed under Ind AS 103 - Business combinations.
The Company applies the requirements of Ind AS 103 - Business combinations to business combinations occurring after the date of transition to Ind AS
Deemed cost
Since, there is no change in the functional currency of the Company, it has opted to continue with the carrying values measured under the previous GAAP and use that carrying value as the deemed cost for property, plant and equipment, other intangible assets and investment properties on the date of transition.
Leases
Appendix C to Ind AS 17, Leases, requires an entity to assess whether a contract or arrangement contains a lease. As per Ind AS 17, this assessment should be carried out at inception of the contract or arrangement. However, Company has used Ind AS 101 exemption and assessed all arrangements based for embedded leases based on conditions in place as at the date of transition.
Designation of previously recognized financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at FVTPL on the basis of the facts and circumstances at the date of transition to Ind ASs.
Company has elected to apply this exemption for its investment in equity instruments.
21. Mandatory exceptions applied Estimates
The estimates as at 1 April 2015 and 31 March 2016 are consistent with those made for the same dates in accordance with previous GAAP (after adjustment to reflect differences if any, in accounting policies) apart from the following items where the application of previous GAAP did not require estimation:
22. Impairment of financial assets based on the expected credit loss model; and
23. Investments in equity instruments carried as FVPL or FVOCI.
The estimates used by the Company to present the amounts in accordance with Ind AS reflect conditions that existed at the date on transition to Ind AS.
De-recognition of financial assets and liabilities
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.
The Company has applied the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
Impact of Ind AS adoption on the statement of cash flows for the year ended 31 March 2016 -
All the adjustments on account of Ind AS are non - cash in nature and hence, there is no material impact on the cash flows in the cash flow statement.
24. Impact of fair valuation of Security deposits paid at initial recognition and subsequently at amortized cost
Previous GAAP - Interest free rent deposits were recognized at the transaction price and reduced for repayments/ adjustments made.
Ind AS - Interest free rent deposits are financial assets and are initially recognized at fair value. The difference between the fair value and transaction price is recognized as prepaid rent and amortized over the lease term. Deposit asset is subsequently measured at amortized cost resulting into finance income in the statement of profit and loss. Consequently, the impact on this account of Rs.161.71 lakhs is recognized in the retained earnings as at 01 April 2015, further profit is lower to the extent of Rs.27.24 lakhs for the year ended 31 March 2016.
25. Impact of fair valuation of Security deposits received at initial recognition and subsequently at amortized cost Previous GAAP - Interest free rent deposits received were recognized at the transaction price and reduced for repayments/adjustments made.
Ind AS - Interest free rent deposits are financial liabilities and are initially recognized at fair value. The difference between the fair value and transaction price is recognized as perceived rent and amortized over the lease term. Deposit liability is subsequently measured at amortized cost resulting into Interest expense in the statement of profit and loss.
Consequently, the impact on this account of Rs.5.46 lakhs is recognized in the retained earnings as at 01 April 2015, further profit is lower to the extent of Rs.1.22 lakhs for the year ended 31 March 2016.
26. Finance cost de-recognized/recognized based on effective interest cost
Previous GAAP - Transaction costs were charged to Statement of Profit or loss as and when incurred.
Ind AS - Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the Statement of Profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method. Accordingly borrowings as at 01 April 2015 has been reduced by Rs.59.64 lakhs with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount. Profit for the year ended 31 March 2016 reduced by Rs.31.51 lakhs.
27. Impact on account of deferred taxes
The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred tax has impacted the reserves on date of transition, with consequential impacts to the statement of profit and loss for the subsequent periods.
28. Impact of recognizing actuarial gains / losses on defined benefit obligations in other comprehensive income (OCI) Indian GAAP - Actuarial gains / losses on defined benefit obligations is recognized in statement of profit and loss Ind AS - Actuarial gains / losses on defined benefit obligations is recognized in other comprehensive income. Consequently, actuarial losses of Rs.461.20 lakhs has been recognized in OCI A.6 Under Ind AS, all items of income and expense recognized in period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Item of income and expense that are not recognized in profit or loss but are shown in Statement of profit and loss as "Other comprehensive income" includes re-measurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.
29. Segment Reporting
The Company''s chief operating decision maker - Board of Directors examines the Company''s performance from a product perspective and has identified four reportable segments of its business as follows:
- Goods transport division: Offers services for the transportation of Goods across India using a range of road transportation solutions to the customers, including less than full truck load and full truck load. Under this segment, Company also does courier business for transportation of small parcels and documents using range of multi model solutions.
- Bus operations division: Offers services of transportation solutions through Buses.
- Sale of power division: The wind farm consists of Wind Turbine Generators (WTGs) having individual capacity of 1.25 MW.
- Transport of passengers by air: Offers services for the transportation of passengers by Air through the Aircrafts owned by the Company. The services are offered to the Individuals and corporate representatives.
The above operating segments have been identified considering:
30. The internal financial reporting systems
31. The nature of the product/services
32. The risk return profile of individual divisions
Revenue and expenses has been accounted on the basis of their relationship to the operating activities of the segment. Income and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Income" and "Unallocable Expenses" respectively. Assets and Liabilities, which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocable Assets/ Liabilities". Inter-segment transfers are accounted for at competitive market prices charged to unaffiliated customers for similar goods/services.
Terms and conditions of transactions with related parties :
The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm''s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs vide cash/bank payment. There have been no guarantees received or provided for any related party receivables or payables. For the year ended 31 March 2017, Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2016: Nil, 1 April 2015: Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
33. The Company completed its Initial Public Offering (IPO) pursuant to which 22,823,333 equity shares of the Company of Rs.10 each were allotted at a price of Rs.205 per equity share consisting of fresh issue of 5,707,333 equity shares and an offer for sale of 17,116,000 equity shares by the existing shareholders. Out of the total proceeds from the IPO of Rs.46,787.83 lakhs, the Company''s share is Rs.11,700.03 lakhs arising from the fresh issue of equity shares. The equity shares of the Company were listed on National Stock Exchange of India Limited and BSE Limited on 30 April 2015.
Mar 31, 2016
1. The Department of Stamps and Registration, Government of Karnataka
had issued a notice towards stamp duty payable on acknowledgment of
delivery of a letter, article, document, parcel, package or
consignment, given by the Company to the sender of such letter,
article, document, etc. in accordance with the Karnataka Stamp Act,
1957 (Article- 1 (ii) of the Schedule). The Company has challenged the
constitutional validity of the said provision by way of Writ Petition
before the Honourable High Court of Karnataka, Circuit Bench at
Dharwad. The Writ Petition came- up for hearing and subject to deposit
of a sum of Rs. 25 Lakhs, the authorities have been directed not to
take any coercive action and also to determine the Stamp Duty
liability. The Company has paid the deposit of Rs. 25 Lakhs but the
quantum of Stamp Duty payable is yet to be arrived at by the
department. In the opinion of the management, no financial liability is
expected to arise in this regard. The financial liability that may
ultimately devolve upon the Company is currently not ascertainable and
as such no amount has been included as contingent liability towards the
same.
2. During the year ended 31 March 2015, the Company had issued a notice
to Mr. Rudrapratap Tripathi, proprietor of M/s Indian Corporation,
alleging that he has entered into a sale deed with the Company in
relation to property situated at Bhiwandi, without being duly
authorized to do so by the original land owners. The Company has
further alleged that Mr. Rudrapratap Tripathi has not disclosed the
defects in the title to the property including the fact that the land
is an agricultural land. The Company had paid a sale consideration of
Rs. 3,240 Lakhs towards purchase of the property. In the aforesaid
notice, the Company has also alleged cheating and breach of trust by
Mr. Rudrapratap Tripathi and has called upon him to refund Rs. 3,240
Lakhs paid to him along with the stamp duty, registration and other
expenses incurred together with interest at the rate of 22 ACU- p.a. from
the date of payment till the payment receive date, failing which the
Company has the rights to initiate criminal proceedings against him.
Management has received necessary representations from the attorney of
Mr. Rudrapratap Tripathi in relation to sanctity of title and permitted
utility of the aforesaid land towards industrial use and occupation.
The attorney has also indicated the intention of Mr. Rudrapratap
Tripathi to re-purchase the aforesaid property, if required. Management
does not expect any financial impairment of the book value of the
aforesaid property considering the representations received from Mr.
Rudrapratap Tripathi through his attorney and accordingly no
adjustments have been made to the financial statements to this effect.
3. During the year ended 31 March 2015, the Company had sold land at
Bengaluru, having book value of Rs.3,128.37 Lakhs for value aggregating
Rs. 3,500 Lakhs. The profit on sale of the aforesaid land amounting to
Rs. 371.63 Lakhs has been accounted as exceptional item in the
Statement of Profit and Loss for the year ended 31 March 2015.
4. Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances)
- Nil (Previous year: Nil). Commitment relating to lease arrangements
(refer note 33) Rs. 10,061.72 Lakhs (Previous year: 9,553.02 Lakhs).
5. The land whereat 34 Wind Turbine Generators (WTGs) are installed (at
Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy
Limited by Karnataka Forest Department. Consequently, Suzlon Energy
Limited has transferred the lease in favour of the Company with
requisite clearances from Karnataka Forest Department.
6. The Company has entered into Operating lease agreements for godowns
and office facilities and such leases are basically cancellable in
nature.
Lease rental expense recognized in the Statement of Profit and Loss for
the year ended 31 March 2016 in respect of the operating leases is Rs.
7,858.30 Lakhs (Previous year: Rs. 6,949.59 Lakhs).
Lease rental income recognized in the Statement of Profit and Loss for
the year ended 31 March 2016 in respect of operating leases is Rs.
447.62 Lakhs (Previous year: Rs. 410.54 Lakhs).
7. CERTIFIED EMISSION REDUCTIONS CREDITS
In earlier years, the Company had recognised income by trading complete
amount of possible Green House Gas (GHG) emission reductions generated
by its Windmill project. The Company''s Clean Development Mechanism
(CDM) project is registered with the United Nations Framework
Convention on Climate Change (UNFCCC) and necessary approvals for the
trade of carbon credits has been procured.
The Company has Certified Emission Reductions (CERs) balance of
1,28,821 units (net of 2 ACU- CDM administration fees) for the period 1
January 2013 to January 2015 which has been certified. Further, the
certification of CERs generated during the period February 2015 to
March 2016 is underway and hence is not quantifiable.
The financial impact of outstanding CERs remains unrecognised in the
books of account, the impact of which, as per the management, is not
expected to be material to the financial statements.
8. CONTRIBUTION TOWARDS CORPORATE SOCIAL RESPONSIBILITY (CSR)
Section 135 of the Companies Act, 2013 and Rules made thereunder
prescribe that every company having a net worth of Rs. 500 crore or
more, or turnover of Rs. 1,000 crore or more or a net profit of Rs. 5
crore or more during any financial year shall ensure that the company
spends, in every financial year, at least 2 ACU- of the average net profits
earned during the three immediately preceding financial years, in
pursuance of its Corporate Social Responsibility Policy. The provisions
pertaining to corporate social responsibility as prescribed under the
Companies Act, 2013 are applicable to VRL Logistics Limited. The
financial details as sought by the Companies Act, 2013 are as follows:
9. PREVIOUS YEAR FIGURES
The previous year''s figures have been recast / regrouped / rearranged
wherever considered necessary.
Mar 31, 2015
Company overview
VRL Logistics Limited (the "Company") is in logistics services
dealing mainly in domestic transportation of goods. Other businesses
include bus operations, air chartering service, sale of power and sale
of certified emission reductions (CER) units generated from operation
of wind mills. The operations of the Company are spread all over the
country through various branches.
a) Rights/preferences/restrictions attached to equity shares
The Company has only one class of equity shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote
per share. Any fresh issue of equity shares shall rank pari-passu with
the existing shares. The Company declares and pays dividend in Indian
Rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing General Meeting, except
interim dividend.
In the event of liquidation of the Company, the holder of equity shares
will be entitled to receive the remaining assets of the Com- pany,
after distribution of all preferential amounts, if any, in proportion
to the number of equity shares held by the shareholders.
b) Terms of conversion of preference shares
The conversion parameters are specified in the Share Purchase and
Subscription Agreement and Shareholder's agreement dated 15 December
2011 entered into by the Company with the promoters, other shareholders
and NSR - PE Mauritius, LLC (the 'investor'), based on which the
Company had issued 11,046,875, 0.001% Compulsorily and mandatorily
convertible participatory preference shares (CCPPS) of face value of
Rs.100 each. These shares were converted on 1 September 2013 in
accordance with the conversion parameters specified in the agreements,
into 14,836,162 equity shares of Rs.10 each fully paid.
a) Employee benefits
Gratuity is provided based on actuarial valuation for employees covered
under the Group Gratuity Scheme. Few employees like drivers and hamaals
are not covered under the Group Gratuity Scheme on account of very high
attrition rates (specific to the indus- try and in their categories)
and therefore gratuity payments made to them during each of the
reporting periods are charged to the Statement of Profit and Loss of
such periods. Further, no provision is made for compensated absences
for drivers and hamaals on similar grounds and such compensated
absences are charged to Statement of Profit and Loss in the reporting
periods during which such payments are made.
i) Defined Contribution Plans: The amount recognised as an expense
during the year is Rs.1,527.89 lacs (Previous year: Rs.1186.38 lacs).
a) There are no Micro, Small and Medium Enterprises, to whom the
Company owes dues, which are outstanding for more than 45 days as at 31
March 2015. This information as required to be disclosed under the
Micro, Small and Medium Enterprises Development Act, 2006 has been
determined to the extent such parties have been identified on the basis
of information available with the Company and has been relied upon by
the statutory auditors of the Company.
PARTICULARS As at As at
31 March 2015 31 March 2014
2 CONTINGENT LIABILITIES NOT PROVIDED FOR
A] Claims against the Company not
acknowledged as Debts
Income tax matters 775.92 513.43
Customs Duty (refer note (c) below) 1,569.02 1,569.02
ESIC matter 12.92 12.92
2,357.86 2,095.37
B] Disputed claims pending in Courts 638.55 529.19
C] Guarantees given on behalf of the
Company by banks 37.78 22.10
D] Other contractual matters 334.31 273.50
Total 3,368.50 2,920.16
Notes:-
a. The Company is in appeal against demands from Income Tax, Customs
duty and ESIC authorities.
b. The above figures for contingent liabilities do not include amounts
towards certain additional penalties/interest that may devolve on the
Company in the event of an adverse outcome as the same is subjective
and not capable of being presently quantified.
c. Customs duty liability is in respect of alleged violation of terms
and conditions of Non Scheduled Air Transport Ser- vice, as claimed by
the Customs Department to the extent it can be quantified. The said
department has issued a Show cause cum demand notice alleging violation
of terms and conditions of Non Scheduled Air Transport Service and de-
manded, amongst others, customs duty on the import of air- craft and
interest thereon. The Company had earlier availed of the exemption
available under the Customs Act, 1962 (the 'Act') and was accordingly
assessed to Nil duty under the Act. The Company has deposited the
Customs duty, including in- terest thereon, without prejudice to
further rights. These payments have been disclosed as deposits in the
books of account. The Company has already filed the necessary re-
sponse to the notice and expects a favourable order in this regard.
d. Future cash outflows in respect of (A) above can be deter- mined
only on receipt of judgments/decisions pending with various
forums/authorities.
e. The amount disclosed in respect of (B) above represents the
estimated liability based on independent legal opinion ob- tained by
the management in relation to the various cases of Motor Vehicle
Accidents, Consumer disputes, Workmen compensation, etc. filed against
the Company.
3 The Department of Stamps and Registration, Government of Karnataka
had issued a notice towards stamp duty payable on acknowledgment of
delivery of a letter, article, document, parcel, package or
consignment, given by the Company to the sender of such letter,
article, document, etc. in accord- ance with the Karnataka Stamp Act,
1957 (Article- 1 (ii) of the Schedule). The Company has challenged the
constitutional validity of the said provision by way of Writ Petition
before the Honourable High Court of Karnataka, Circuit Bench at
Dharwad. The Writ Petition came-up for hearing and subject to deposit
of a sum of Rs.25 lacs, the authorities have been directed not to take
any coercive action and also to deter- mine the Stamp Duty liability.
The Company has paid the de- posit of Rs 25 lacs but the quantum of
Stamp Duty payable is yet to be arrived at by the department. In the
opinion of the management, no financial liability is expected to arise
in this regard. The financial liability that may ultimately devolve
upon the Company is currently not ascertainable and as such no amount
has been included as contingent liability towards the same.
4 The Company has issued a notice dated 5 November 2014 to Mr.
Rudrapratap Tripathi, proprietor of M/s Indian Corpora- tion, alleging
that he has entered into a sale deed with the Company in relation to
property situated at Bhiwandi, with- out being duly authorized to do so
by the original land own- ers. The Company has further alleged that Mr.
Rudrapratap Tripathi has not disclosed the defects in the title to the
prop- erty including the fact that the land is an agricultural land.
The Company has paid a sale consideration of Rs.3,240 lacs towards
purchase of the property. In the aforesaid notice, the Company has also
alleged cheating and breach of trust by Mr. Rudrapratap Tripathi and
has called upon him to re- fund Rs.3,240 lacs paid to him along with
the stamp duty, registration and other expenses incurred together with
interest at the rate of 22% p.a. from the date of payment till the
payment receive date, failing which the Company has the rights to
initiate criminal proceedings against him. Man- agement has received
necessary representations from the attorney of Mr. Rudrapratap Tripathi
in relation to sanctity of title and permitted utility of the aforesaid
land towards in- dustrial use and occupation. The attorney has also
indicated the intention of Mr. Rudrapratap Tripathi to re-purchase the
aforesaid property, if required, at the sale consideration paid by the
Company. Management does not expect any financial impairment of the
book value of the aforesaid property con- sidering the representations
received from Mr. Rudrapratap Tripathi through his attorney and
accordingly no adjustments have been made to the financial statements
to this effect
5 During the year ended 31 March 2015, the Company had sold land at
Bangalore, having book value of Rs.3,128.37 lacs for value aggregating
Rs.3,500 lacs. The profit on sale of the aforesaid land amounting to
Rs.371.63 lacs has been accounted as exceptional item in the Statement
of Profit and Loss for the year ended 31 March 2015.
During the year ended 31 March 2014, the Company had sold land at
Gurgaon, Haryana having book value of Rs.1,155.28 lacs for value
aggregating Rs.1,860 lacs. An amount of Rs.41 lacs was incurred towards
the sale process including conver- sion of land into Non Agricultural
Land. The profit on sale of the aforesaid land amounting to Rs.663.72
lacs has been accounted as exceptional item in the Statement of Profit
and Loss for the year ended 31 March 2014.
6 Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) - Nil (Previous year:
Rs.59.16 lacs).
7 The land whereat 34 Wind Turbine Generators (WTGs) are installed (at
Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy
Limited by Karnataka Forest Depart- ment. Consequently, Suzlon Energy
Limited has transferred the lease in favour of the Company with
requisite clearances from Karnataka Forest Department.
8 The Company has entered into Operating lease agreements for godowns
and office facilities and such leases are basically cancellable in
nature.
Lease rental expense recognized in the Statement of Profit and Loss for
the year ended 31 March 2015 in respect of the operating leases is
Rs.6,949.59 lacs (Previous year: Rs 5,981.19 lacs).
Lease rental income recognized in the Statement of Profit and Loss for
the year ended 31 March 2015 in respect of operating leases is Rs.
410.54 lacs (Previous year: Rs.498.46 lacs).
Certain non-cancellable operating leases extend upto a maximum of nine
years from their respective dates of incep- tion. Some of such lease
agreements have a price escalation clause. Maximum obligations on long
term non-cancellable operating leases in accordance with the rentals
stated in the respective agreements are as under:
9 CERTIFIED EMISSION REDUCTIONS CREDITS
The Company earns income by trading complete amount of possible Green
House Gas (GHG) emission reductions gen- erated by its Windmill
project. The Company's Clean Devel- opment Mechanism (CDM) project is
registered with the United Nations Framework Convention on Climate
Change (UNFCCC) and necessary approvals for the trade of carbon credits
has been procured.
The Company has entered into an agreement dated 29 Oc- tober 2009 with
Asian Development Bank (ADB) (as trustee of the Asia Pacific Carbon
Fund) amended vide 'Amendment and Restatement Agreement' dated 01
August 2011, for sale of Certified Emission Reductions (CERs),
generated during the period March 2009 to December 2012 (delivery
period). The Company had generated and delivered the relevant units of
CERs in accordance with the aforesaid agreements in earlier years and
recognised revenue accordingly.
However, as per the 'Sale and Purchase of surplus CER's' clause in the
aforesaid agreement, whenever the Company generates surplus CER's i.e.
CER's in excess of the contract CER's on or before 31 December 2012,
which has been lat- er verified and certified, ADB shall have the right
but not the obligation, to purchase the said surplus CER's from the
Company. Correspondingly, ADB had procured 61,366 CERs during an
earlier year, in accordance with the contract. The balance 11,563 (net
of 2% CDM administration fees) CERs, which has been certified but not
purchased by ADB along with 69,342 (net of 2% CDM administration fees)
CERs certi- fied for the period January 2013 to January 2014, remains
unrecognised in the books of account, the impact of which, as per the
management, is not expected to be material to the financial statements.
Further, the certification of CERs generated during the pe- riod
February 2014 to March 2015 is underway and hence is not quantifiable.
10 EARNINGS PER SHARE
The amount considered in ascertaining the Company's earnings per share
constitutes the net profit after tax and includes post tax effect of
any exceptional / extra ordinary items. The number of shares used in
computing basic earnings per share is the weighted average number of
shares outstanding during the year. The number of shares used in
computing diluted earnings per share com- prises the weighted average
number of shares considered for deriving basic earnings per share and
also the weighted average number of shares which could have been issued
on conversion of all dilutive potential shares.
11 SEGMENT REPORTING
Reporting segments in accordance with Accounting Standard 17, Segment
reporting, prescribed under Section 133 of the Companies Act, 2013 read
with Rule 7 of the Companies (Accounts) Rules, 2014, are Goods
transport, Bus operations, Sale of power and Air chartering service.
12 RELATED PARTY DISCLOSURES
Related party transactions are transfer of resources or obligations
between related parties, regardless of whether a price is charged.
Parties are considered to be related, if one party has the ability,
directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial or
operating decisions. Parties are considered to be related if they are
subject to common control or significant influence. List of related
parties, as certified by the management, together with the transactions
and related balances are given below:
Key Management Personnel (KMP) and their relatives
a. Dr.Vijay Sankeshwar (Chairman & Managing Director)
b. Mr.Anand Sankeshwar (Managing Director)
c. Mrs.Vani Sankeshwar (President) - relative of director
d. Mrs.Lalitha Sankeshwar - relative of director
e. Mrs.Bharati Holkunde - relative of director
f. Mr. Sunil Nalavadi (Chief Financial Officer) (disclosures applicable
w.e.f. 1 April 2014)
g. Mr. Aniruddha Phadnavis (Company Secretary) (disclosures applicable
w.e.f. 1 April 2014)
Companies in which KMP or their relative have significant influence
a. Aradhana Trust
b. Ayyappa Bhaktha Vrunda Trust
c. Shiva Agencies
d. Sankeshwar Minerals Private Limited
e. Sankeshwar Printers Private Limited
f. VRL Media Limited
Enterprise having significant influence over the entity NSR- PE
Mauritius LLC
13 SUBSEQUENT EVENT
The Company completed its Initial Public Offering (IPO) pursuant to
which 22,823,333 equity shares of the Company of Rs. 10 each were
allotted at a price of Rs. 205 per equity share consisting of fresh
issue of 5,707,333 equity shares and an offer for sale of 17,116,000
equity shares by the selling shareholders. The equity shares of the
Company were listed on The National Stock Exchange of India Limited and
Bombay Stock Exchange Limited on 30 April 2015.
14 PREVIOUS YEAR FIGURES
The previous year's figures have been recast / regrouped / rearranged
wherever considered necessary.
Mar 31, 2014
1) Company overview
VRL Logistics Limited (the "Company") is in logistics services dealing
mainly in domestic transportation of goods. Other businesses include
bus operations, air chartering service, sale of power and sale of
certified emission reductions (CER) units generated from operation of
wind mills. The operations of the Company are spread all over the
country through various branches.
2) Rights / preferences / restrictions attached to equity shares
"The Company has only one class of equity shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote
per share. Any fresh issue of equity shares shall rank pari-passu with
the existing shares. The Company declares and pays dividend in Indian
Rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing General Meeting, except
interim dividend.
In the event of liquidation of the Company, the holder of equity shares
will be entitled to receive the remaining assets of the Company, after
distribution of all preferential amounts, if any, in proportion to the
number of equity shares held by the shareholders."
3) Term of conversion of preference shares
Pursuant to conversion parameters specified in the Share Purchase and
Subscription Agreement and Shareholder''s agreement dated 15 December
2011 entered with the promoters, other shareholders and NSR - PE
Mauritius, LLC (the ''investor''), the Company had issued 11046875,
0.001% compulsorily and mandatorily convertible participatory
preference shares (CCPPS) of face value of Rs.100 each. These shares
have been converted on 01 September 2013 in accordance with the
conversion parameters specified in the agreements, into 14836162 Equity
shares of Rs.10 each fully paid.
4) Employee benefits
Gratuity is provided based on actuarial valuation for employees covered
under the Group Gratuity Scheme. Few employees like drivers and hamaals
are not covered under the Group Gratuity Scheme on account of very high
attrition rates (specific to the industry and in their categories) and
therefore gratuity payments made to them during each of the reporting
periods are charged to the Statement of Profit and Loss of such
periods. Further, no provision is made for compensated absences for
drivers and hamaals on similar grounds and such compensated absences
are charged to Statement of Profit and Loss in the reporting periods
during which such payments are made.
i) Defined Contribution Plans: The amount recognised as an expense
during the year is Rs.1186.38 lakhs (Previous year: Rs.1069.65 lakhs).
As at As at
31 March 2014 31 March 2013
PARTICULARS
5) CONTINGENT LIABILITIES NOT PROVIDED FOR
A) Claims against the Company
not acknowledged as Debts
Income tax matters 513.43 499.12
Central Excise matters - 1085.35
Customs Duty (refer note (c) below) 694.92 694.92
PF and ESIC matters 12.92 12.92
Other contractual matters 273.50 184.63
1494.77 2476.94
B) Disputed claims pending 529.19 478.05
in Courts
Total 2023.96 2954.99
Notes:
a. The Company is in appeal against demands from Income Tax, Provident
Fund and ESIC authorities.
b. The above figures for contingent liabilities do not include amounts
towards penalties / interest that may devolve on the Company in the
event of an adverse outcome as the same is subjective and not capable
of being presently quantified.
c. Customs duty liability is in respect of alleged violation of terms
and conditions of Non Scheduled Air Transport Service, as claimed by
the Customs Department to the extent it can be quantified. The said
department has issued a Show cause cum demand notice alleging violation
of terms and conditions of Non Scheduled Air Transport Service and
demanded, amongst others, customs duty on the import of aircraft and
interest thereon. The Company had earlier availed of the exemption
available under the Customs Act, 1962 (the ''Act'') and was accordingly
assessed to Nil duty under the Act. The Company has deposited the
Customs duty, including interest thereon, without prejudice to further
rights. These payments have been disclosed as deposits in the books of
account. The Company has already filed the necessary response to the
notice and expects a favourable order in this regard.
d. Future cash outflows in respect of (A) above can be determined only
on receipt of judgments / decisions pending with various forums /
authorities.
e. The amount disclosed in respect of (B) above represents the
estimated liability based on independent legal opinion obtained by the
management in relation to the various cases of Motor Vehicle Accidents,
Consumer disputes, Workmen compensation etc. filed against the Company.
6) The Department of Stamps and Registration, Government of Karnataka
had issued a notice towards stamp duty payable on acknowledgment of
delivery of a letter, article, document, parcel, package or
consignment, given by the Company to the sender of such letter,
article, document, etc. in accordance with the Karnataka Stamp Act,
1957 (Article - 1 (ii) of the Schedule). The Company has challenged the
constitutional validity of the said provision by way of Writ Petition
before the Honourable High Court of Karnataka, Circuit Bench at
Dharwad. The Writ Petition came-up for hearing and subject to deposit
of a sum of Rs.25 lakhs, the authorities have been directed not to take
any coercive action and also to determine the Stamp Duty liability. The
Company has paid the deposit of Rs.25 lakhs but the quantum of Stamp
Duty payable is yet to be arrived at by the department. In the opinion
of the management, no financial liability is expected to arise in this
regard. The financial liability that may ultimately devolve upon the
Company is currently not ascertainable and as such no amount has been
included as contingent liability towards the same.
7) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) - Rs.1070.25 lakhs
(Previous year: Rs.568.12 lakhs).
8) In the opinion of the Management, Current Assets, Loans and Advances
have a value on realization in the ordinary course of business, at
least equal to the amounts at which they are stated.
9) The land whereat 34 Wind Turbine Generators (WTGs) are installed (at
Kappatgudda, Gadag District, Karnataka) is leased to Suzion Energy
Limited by the Karnataka Forest Department. Consequently, Suzion Energy
Limited has transferred the lease in favour of the Company with
requisite clearances from Karnataka Forest Department.
10) The Company has entered into Operating lease agreements for godowns
and office facilities and such leases are basically cancellable in
nature.
Lease rental expense recognized in the Statement of Profit and Loss for
the year ended 31 March 2014 in respect of the operating leases is
Rs.5981.19 lakhs (Previous year: Rs.4849.43 lakhs).
Lease rental income recognized in the Statement of Profit and Loss for
the year ended 31 March 2014 in respect of operating leases is
Rs.498.46 lakhs (Previous year: Rs.475.51 lakhs).
Certain non-cancellable operating leases extend upto a maximum of ten
years from their respective dates of inception. Some of such iease
agreements have a price escalation clause. Maximum obligations on long
term non-cancellable operating leases in accordance with the rentals
stated in the respective agreements.
11) Other current assets as at 31 March 2013 included net book value of
land at Gurgaon, Haryana aggregating Rs.1155.28 lakhs which had been
retired from active use and was heid for disposai. This land was
accordingiy stated at the lower of net book value and net realisable
value as on 31 March 2013. During the year, the Company has entered
into a sale deed dated 29 October 2013 with respect to the land at
Gurgaon for value aggregating Rs.1860 lakhs. An amount of Rs.41 lakhs
was incurred towards the sale process including conversion of land into
Non Agricultural Land. The profit on sale of the aforesaid land
amounting to Rs.663.72 lakhs has been accounted as exceptional item
in the Statement of Profit and Loss for the year ended 31 March 2014.
12) CERTIFIED EMISSION REDUCTIONS CREDITS
The Company earns income by trading complete amount of possible Green
House Gas (GHG) emission reductions generated by its Windmill project.
The Company''s Clean Development Mechanism (CDM) project is registered
with the United Nations Framework Convention on Climate Change (UNFCCC)
and necessary approvals for the trade of carbon credits has been
procured.
The Company has entered into an agreement dated 29 October 2009 with
Asian Development Bank (ADB) (as trustee of the Asia Pacific Carbon
Fund) amended vide ''Amendment and Restatement Agreement'' dated 01
August 2011, for sale of Certified Emission Reductions (CERs),
generated during the period March 2009 to December 2012 (delivery
period). The Company has generated and delivered the relevant units of
CERs in accordance with the aforesaid agreements as at 31 March 2014
and recognised revenue accordingly.
However, as per the ''Sale and Purchase of surplus CER''s'' clause in the
aforesaid agreement, whenever the Company generates surplus CER''s i.e..
CER''s in excess of the contract CER''s on or before 31 December 2012,
which has been later verified and certified, ADB shall have the right
but not the obligation, to purchase the said surplus CER''s from the
Company. Correspondingly, ADB had procured 61366 CERs during the year,
in accordance with the contract, and the balance 11563 (net of 2% CDM
administration fees) CERs, which has been certified but not purchased
by ADB, remains unrecognised in the books of account, the impact of
which, as per the management, is not expected to be material to the
financial statements.
Further, the certification of CERs generated during the period January
2013 to March 2014 is underway and hence is not quantifiable.
13) EARNINGS PER SHARE
The amount considered in ascertaining the Company''s earnings per share
constitutes the net profit after tax and includes post tax effect of
any exceptional / extra ordinary items. The number of shares used in
computing basic earnings per share is the weighted average number of
shares outstanding during the period. The number of shares used in
computing diluted earnings per share comprises the weighted average
number of shares considered for deriving basic earnings per share and
also the weighted average number of shares which could have been issued
on conversion of all dilutive potential shares.
14) RELATED PARTY DISCLOSURES
Related party transactions are transfer of resources or obligations
between related parties, regardless of whether a price is charged.
Parties are considered to be related, if one party has the ability,
directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial or
operating decisions. Parties are considered to be related if they are
subject to common control or significant influence. List of related
parties, as certified by the management, together with the transactions
and related balances are given below:
a) Names of related parties and description of relationship:
(i) Key Management Personnel (KMP) and their relatives
a. Dr. Vijay Sankeshwar (Chairman & Managing Director)
b. Mr. Anand Sankeshwar (Managing Director)
c. Mrs. Vani Sankeshwar (President) - relative of director
d. Mrs. Lalitha Sankeshwar - relative of director
e. Mrs. Bharati Holkunde - relative of director
(ii) Companies in which KMP or their relative have significant
influence
a. Aradhana Trust
b. Ayyappa Bhaktha Vrunda Trust
c. Shiva Agencies
d. Sankeshwar Minerals Private Limited
e. Sankeshwar Printers Private Limited
f. VRL Cements Limited
g. VRL Media Limited
(iii) Enterprise having significant influence over the entity
NSR-PE Mauritius LLC
15) PREVIOUS YEAR FIGURES
The previous year''s figures have been recast / regrouped / rearranged
wherever considered necessary.
Mar 31, 2013
1) Company overview
VRL Logistics Limited (the "Company") is in logistics services dealing
mainly in domestic transportation of goods. Other businesses include
bus operations, air chartering service, sale of power and sale of
certified emission reductions (CER) units generated from operation of
wind mills. The operations of the Company are spread all over the
country through various branches with concentration in South India and
Maharashtra.
2) Rights / preferences / restrictions attached to equity shares
"The Company has only one class of equity shares having a par value of
Rs.10 per share. Each holder of equity shares is entitled to one vote
per share. Any fresh issue of equity shares shall rank pari-passu with
the existing shares. The Company declares and pays dividend in Indian
Rupees. The dividend proposed by the Board of Directors is subject to
the approval of the shareholders in the ensuing General Meeting, except
interim dividend. In the event of liquidation of the Company, the
holder of equity shares will be entitled to receive the remaining
assets of the Company, after distribution of all preferential amounts,
if any, in proportion to the number of equity shares held by the
shareholders."
3) Term of conversion/right attached to preference shares
"The compulsorily and mandatorily convertible participatory preference
shares (CCPPS) are entitled to dividend at 0.001% per annum per CCPPS.
In addition, the CCPPS holders have the right to participate further in
the distributable profits of the Company and to receive dividends as
may be determined by the Board in accordance with and subject to
applicable laws (the "Participatory Preferential Dividend" and together
with the Fixed Preferential Dividend, the "Preferential Dividend")
provided that the aggregate preferential dividend in any period shall
be equal to the amount which would have been payable as dividend to the
holders of the CCPPS assuming all the CCPPS had been converted into
equity shares. The CCPPS shall be mandatorily and compulsorily
converted into equity shares on 1 September 2013 in accordance with the
conversion parameters specified in the Share Purchase and Subscription
Agreement and Shareholder''s agreement dated 15 December 2011. The
holders of preference shares have rights to receive notices of, attend
or vote at general meetings subject to conditions mentioned in the
aforesaid agreement. In the event of liquidation of the Company before
conversion of CCPPS, the holders of preference shares will have
priority over equity shares in the payment of dividend and repayment of
capital."
4) Employee benefits
Gratuity is provided based on actuarial valuation for employees covered
under the Group Gratuity Scheme. Few employees like drivers and hamaals
are not covered under the Group Gratuity Scheme on account of very high
attrition rates (specific to the industry and in their categories) and
therefore gratuity payments made to them during each of the reporting
periods are charged to the Statement of Profit and Loss of such
periods. Further, no provision is made for compensated absences for
drivers and hamaals on similar grounds and such compensated absences
are charged to Statement of Profit and Loss in the reporting periods
during which such payments are made.
i) Defined Contribution Plans: The amount recognised as an expense
during the year is Rs.1069.65 lakhs (Previous year: Rs.833.86 lakhs).
PARTICULARS As at As at
31.03.2013 31.03.2012
5) CONTINGENT LIABILITIES NOT PROVIDED FOR
A] Claims against the Company not
acknowledged as Debts
Income tax matters 499.12 485.01
Service tax matters - 514.40
Central Excise matters 1085.35 1085.35
Customs Duty (refer note (c) below) 694.92 694.92
PF and ESIC matters 12.92 12.92
Other contractual matters 184.63 113.07
2476.94 2905.67
B] Disputed claims pending in Courts 9560.95 7199.47
Total 12037.89 10105.14
Notes:
a. The Company is in appeal against demands from Income Tax, Provident
Fund and ESIC authorities.
b. The above figures for contingent liabilities do not include amounts
towards penalties / interest that may devolve on the Company in the
event of an adverse outcome as the same is subjective and not capable
of being presently quantified.
c. Customs duty liability is in respect of alleged violation of terms
and conditions of Non Scheduled Air Transport Service, as claimed by
the Customs Department to the extent it can be quantified. The said
department has issued a Show cause cum demand notice alleging violation
of terms and conditions of Non Scheduled Air Transport Service and
demanded, amongst others, customs duty on the import of aircraft and
interest thereon. The Company had earlier availed of the exemption
available under the Customs Act, 1962 (the ''Act'') and was accordingly
assessed to Nil duty under the Act. The Company has deposited the
Customs duty, including interest thereon, without prejudice to further
rights. These payments have been disclosed as deposits in the books of
account. The Company has already filed the necessary response to the
notice and expects a favourable order in this regard.
d. Future cash outflows in respect of (A) above can be determined only
on receipt of judgments / decisions pending with various forums /
authorities.
e. The amount disclosed in respect of (B) above pertains to the
various cases of Motor Vehicle Accidents, Consumer disputes, Workmen
compensation, etc. filed against the Company. A substantial portion of
the expected liability / payment arising out of the same would devolve
on third parties such as Insurance Companies, etc.
5) The Department of Stamps and Registration, Government of Karnataka
had issued a notice towards stamp duty payable on acknowledgment of
delivery of a letter, article, document, parcel, package or
consignment, given by the Company to the sender of such letter,
article, document, etc. in accordance with the Karnataka Stamp Act,
1957 (Article- 1 (ii) of the Schedule). The Company has challenged the
constitutional validity of the said provision by way of Writ Petition
before the Honourable High Court of Karnataka, Circuit Bench at
Dharwad. The Writ Petition came-up for hearing and subject to deposit
of a sum of Rs.25 lakhs, the authorities have been directed not to take
any coercive action and also to determine the Stamp Duty liability. The
Company has paid the deposit of Rs.25 lakhs but the quantum of Stamp
Duty payable is yet to be arrived at by the department. In the opinion
of the management, no financial liability is expected to arise in this
regard. The financial liability that may ultimately devolve upon the
Company is currently not ascertainable and as such no amount has been
included as contingent liability towards the same.
6) During the year ended 31 March 2013, the Company received income tax
refund of Rs.279.18 lakhs in relation to assessment year 2011-12, which
has been adjusted against the advance tax for the aforesaid year.
However, Company is yet to receive the concluding order in this
respect. In the opinion of the management, no financial liability is
expected to arise in this regard. Further, the appropriate allocation
towards amount paid as advance tax in earlier years and interest income
will be made once the final orders are received in this respect.
7) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) Rs.568.12 lakhs
(Previous year: Rs.5,513.86 lakhs).
8) In the opinion of the Management, Current Assets, Loans and Advances
have a value on realization in the ordinary course of business, at
least equal to the amounts at which they are stated.
9) The land whereat 34 Wind Turbine Generators (WTGs) are installed (at
Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy
Limited by the Karnataka Forest Department. Consequently, Suzlon Energy
Limited has transferred the lease in favour of the Company with
requisite clearances from Karnataka Forest Department.
10) The Company has entered into Operating leases for godowns and
office facilities and such leases are basically cancellable in nature.
Lease rental expense recognized in the Statement of Profit and Loss for
the year ended 31 March 2013 in respect of the operating leases is
Rs.4,849.43 lakhs (Previous year: Rs.3984.61 lakhs).
Lease rental income recognized in the Statement of Profit and Loss for
the year ended 31 March 2013 in respect of operating leases is
Rs.475.51 lakhs (Previous year: Rs.241.67 lakhs).
Certain non-cancellable operating leases extend upto a maximum of six
years from their respective dates of inception. Some of such lease
agreements have a price escalation clause. Maximum obligations on long
term non-cancellable operating leases in accordance with the rentals
stated in the respective agreements.
11) Other current assets as at 31 March 2013 include net book value of
land at Gurgaon, Haryana aggregating Rs.1155.28 lakhs which has been
retired from active use and is held for disposal. In accordance with
Accounting Standard 10, Accounting for Fixed Assets, items of fixed
assets that have been retired from active use and held for disposal are
stated at the lower of net book value and net realisable value. The net
realisable value as per the agreement of sale dated 13 October 2010,
entered into with the buyer is Rs.1600 lakhs and therefore it is stated
at its book value. Advance received in accordance with the aforesaid
agreement is Rs.160 lakhs. An amount of Rs.41 lakhs has been incurred
towards the sale process including conversion of land into Non
Agricultural Land and hence would be adjusted against the sale
consideration when the entire transaction concludes, which is expected
in the financial year 2013-14.
The Company had authorised the buyer to construct a warehouse on the
said land and enter into lease deed on behalf of the Company. The buyer
misused such authorisation and executed and registered a lease deed for
the said property in favour of his wife for a period of 30 years. The
Company has initiated legal proceedings against the buyer in the Civil
and Criminal Court, Gurgaon (the ''Court'') and the Court has granted a
''Status Quo Injunction'' in respect of the said property and the
aforesaid lessee is restrained from occupation of the said property.
The management is confident of concluding the entire transaction in the
financial year 2013-14 and recovering the balance consideration.
12) The Company was contemplating to purchase properties in Gurgaon for
establishing a Transhipment Yard. The Company has entered into an
agreement with Vikas Yadav for arranging the sale deed from the
respective land owners at Gurgaon and a sum of Rs.660 lacs was paid in
the year 2011-12 towards the same. The Company subsequently realised
that the property shown by Vikas Yadav has been notified by Government
of Haryana for acquisition towards Civic amenities and since this
matter was suppressed by Vikas Yadav, the deal had to be cancelled.
Further, Vikas Yadav is not able to pay back the amount paid by the
Company and accordingly the Company has filed both Civil and Criminal
Cases at Hubballi for recovery of the amount. The management is
confident of recovering the advance amount in the financial year
2013-14.
13) CERTIFIED EMISSION REDUCTIONS CREDITS
The Company earns income by trading complete amount of possible Green
House Gas (GHG) emission reductions generated by its Windmill project.
The Company''s Clean Development Mechanism (CDM) project is registered
with the United Nations Framework Convention on Climate Change (UNFCCC)
and necessary approvals for the trade of carbon credits has been
procured
The Company has entered into an agreement dated 29 October 2009 with
Asian Development Bank (ADB) (as trustee of the Asia Pacific Carbon
Fund) amended vide ''Amendment and Restatement Agreement'' dated 01
August 2011, for sale of Certified Emission Reductions (CERs),
generated during the period March 2009 to December 2012 (delivery
period). The Company has generated and delivered the relevant units of
CERs in accordance with the aforesaid agreements as at 31 March 2013
and recognised revenue accordingly.
As per the ''Sale and Purchase of surplus CER''s'' clause in the aforesaid
agreement, when the Company generates surplus CER''s i.e. CER''s in
excess of the contract CER''s on or before 31 December 2012, which are
later verified and certified, ADB shall have the right but not the
obligation, to purchase the said surplus CER''s from the Company.
Subsequent to the Balance Sheet date, 72,929 (net of 2% CDM
administration fees) CER''s have been certified and are ready to be
delivered. However, ADB has agreed to procure 61,366 CERs in accordance
with the contract.
14) EARNINGS PER SHARE
The amount considered in ascertaining the Company''s earnings per share
constitutes the net profit after tax and includes post tax effect of
any exceptional / extra ordinary items. The number of shares used in
computing basic earnings per share is the weighted average number of
shares outstanding during the period. The number of shares used in
computing diluted earnings per share comprises the weighted average
number of shares considered for deriving basic earnings per share and
also the weighted average number of shares which could have been issued
on conversion of all dilutive potential shares.
15) RELATED PARTY DISCLOSURES
Related party transactions are transfer of resources or obligations
between related parties, regardless of whether a price is charged.
Parties are considered to be related, if one party has the ability,
directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial or
operating decisions. Parties are considered to be related if they are
subject to common control or significant influence. List of related
parties, as certified by the management, together with the transactions
and related balances are given below:
Key Management Personnel (KMP) and their relatives
a . M r. Vijay Sankeshwar (Chairman & Managing Director)
b. Mr. Anand Sankeshwar (Managing Director)
c. Mrs. Vani Sankeshwar - relative of director
d. Mrs. Lalitha Sankeshwar - relative of director
e. Mrs. Bharati Holkunde - relative of director
Companies in which KMP or their relative have significant influence
a. Aradhana Trust
b. Shiva Agencies
c. Sankeshwar Minerals Private Limited
d. Sankeshwar Printers Private Limited
e. VRL Cements Limited
f. VRL Media Limited
Enterprise having significant influence over the entity
NSR - PE Mauritius LLC
Mar 31, 2012
1) Employee benefits
Gratuity is provided based on actuarial valuation for employees covered
under the Group Gratuity Scheme. Few employees like drivers and hamaals
are not covered under the Group Gratuity Scheme on account of very high
attrition rates (specific to the industry and in their categories) and
therefore gratuity payments made to them during each of the reporting
periods are charged to the Statement of Profit and Loss of such
periods. Further, no provision is made for compensated absences for
drivers and hamaals on similar grounds and such compensated absences
are charged to Statement of Profit and Loss in the reporting periods
during which such payments are made.
i) Defined Contribution Plans: The amount recognised as an expense
during the year is Rs.833.86 lacs (Previous year: Rs.706.47 lacs).
ii) Defined Benefit Plans (Gratuity scheme):
PARTICULARS As at As at
31.03.2012 31.03.2011
2) CONTINGENT LIABILITIES NOT PROVIDED FOR
A] Claims against the Company not
acknowledged as Debts
Income tax matters 485.01 1,020.10
Service tax matters - Others 514.40 514.40
Central Excise matters 1085.35 809.19
Customs Duty (refer note (c) below) 694.92 694.92
PF and ESIC matters 12.92 12.92
Other contractual matters 113.07 53.11
2905.67 3104.64
B] Disputed claims pending in Courts 7199.47 6011.34
Total 10105.14 9115.98
Notes:
a. The Company is in appeal against demands from Income Tax, Service
Tax, Provident Fund and ESIC authorities.
b. The above figures for contingent liabilities do not include amounts
towards penalties that may devolve on the Company in the event of an
adverse outcome as the same is subjective and not capable of being
presently quantified.
c. The Finance Act 2011, which received the assent of the President of
India on 8 April 2011, has retrospectively exempted with effect from
1 April 2000, service tax levied on tour operators having a contract
carriage permit for inter-state or intra state transportation of
passengers. The Customs, Excise and Service Tax Appellate Tribunal
(CESTAT) has directed the adjudicating authorities (Commissioner of
Central Excise and Customs) to consider the assessees'' claim for
exemption and pass speaking orders after giving the assessees
reasonable opportunities of being personally heard. Considering these
developments, the management believes that there would be no liability
to pay service tax on tour operator service based on demands raised
earlier and accordingly has not disclosed the same as contingent
liability.
d. Customs duty liability is in respect of alleged violation of terms
and conditions of Non Scheduled Air Transport Service, as claimed by
the Customs Department to the extent it can be quantified. The said
department has issued a Show cause cum demand notice alleging violation
of terms and conditions of Non Scheduled Air Transport Service and
demanded, amongst others, customs duty on the import of aircraft and
interest thereon. The Company had earlier availed of the exemption
available under the Customs Act, 1962 (the ''Act'') and was accordingly
assessed to Nil duty under the Act. The Company has deposited the
Customs duty, including interest thereon, without prejudice to further
rights. These payments have been disclosed as deposits in the books of
account. The Company has already filed the necessary response to the
notice and expects a favourable order in this regard.
e. Future cash outflows in respect of (A) above can be determined only
on receipt of judgments / decisions pending with various forums /
authorities.
f. The amount disclosed in respect of (B) above pertains to the
various cases of Motor Vehicle Accidents, Consumer disputes, Workmen
compensation, etc. filed against the Company. A substantial portion of
the expected liability / payment arising out of the same would devolve
on third parties such as Insurance Companies, etc.
3) The Company has received a letter during the year from the
Department of Stamps and Registration, Government of Karnataka, towards
stamp duty payable on acknowledgment of delivery of a letter, article,
document, parcel, package or consignment, given by the Company to the
sender of such letter, article, document, etc. in accordance with the
Karnataka Stamp Act, 1957 (Article - 1 (ii) of the Schedule). The
Company has challenged the constitutional validity of the said
provision before the Honourable High Court of Karnataka, Circuit Bench
at Dharwad and subsequent to the Balance Sheet date, the Honourable
Court has passed Interim Orders to deposit a sum of Rs.25 lacs pending
disposal of the case. The quantum of Stamp Duty payable is yet to be
arrived at by the Government. In the opinion of the management, no
financial liability is expected to arise in this regard. The financial
liability that may ultimately devolve upon the Company is currently not
ascertainable and as such no amount has been included as contingent
liability towards the same.
4) Estimated amount of contracts remaining to be executed on capital
account and not provided for (net of advances) - Rs.5513.86 lacs
(Previous year: Rs.1937.63 lacs).
5) In the opinion of the Management, Current Assets, Loans and Advances
have a value on realization in the ordinary course of business, at
least equal to the amounts at which they are stated.
6) The land whereat 34 Wind Turbine Generators (WTGs) are installed (at
Kappatgudda, Gadag District, Karnataka) is leased to Suzlon Energy
Limited by the Karnataka Forest Department. Consequently, Suzlon Energy
Limited has transferred the lease in favour of the Company with
requisite clearances from Karnataka Forest Department.
7) The Company has entered into Operating leases for godowns and office
facilities and such leases are basically cancellable in nature.
Lease rental expense recognized in the Statement of Profit and Loss for
the year ended 31 March 2012 in respect of the operating leases is
Rs.3984.61 lacs (Previous year: Rs.3311.90 lacs)
Lease rental income recognized in the Statement of Profit and Loss for
the year ended 31 March 2012 in respect of operating leases is
Rs.241.67 lacs (Previous year: Rs.230.41 lacs).
Certain non-cancellable operating leases extend upto a maximum of five
years from their respective dates of inception. Some of such lease
agreements have a price escalation clause. Maximum obligations on long
term non-cancellable operating leases in accordance with the rentals
stated in the respective agreements.
8) Other current assets as at 31 March 2012 include net book value of
land at Gurgaon, Haryana aggregating Rs.1155.28 lacs which has been
retired from active use and is held for disposal. In accordance with
Accounting Standard 10, Accounting for Fixed Assets, items of fixed
assets that have been retired from active use and held for disposal are
stated at the lower of net book value and net realisable value. The net
realisable value as per the agreement of sale dated 13 October 2010,
entered into with the buyer is Rs.1600 lacs and therefore it is stated
at its book value. Advance received in accordance with the aforesaid
agreement is Rs.160 lacs. An amount of Rs.41 lacs has been incurred
towards the sale process including conversion of land into Non
Agricultural Land and hence would be adjusted against the sale
consideration when the entire transaction concludes, which is expected
in the financial year 2012-13.
The Company had authorised the buyer to construct a warehouse on the
said land and enter into lease deed on behalf of the Company. The buyer
misused such authorisation and executed and registered a lease deed for
the said property in favour of his wife for a period of 30 years. The
Company has initiated legal proceedings against the buyer in the Civil
and Criminal Court, Gurgaon (the ''Court'') and the Court has granted a
''Status Quo Injunction'' in respect of the said property and the
aforesaid lessee is restrained from occupation of the said property.
The management is confident of concluding the entire transaction in the
financial year 2012-13 and recovering the balance consideration.
9) CERTIFIED EMISSION REDUCTIONSCREDITS The Company earns income by
trading complete amount of possible Green House Gas (GHG) emission
reductions generated by its Windmill project. The Company''s Clean
Development Mechanism (CDM) project is registered with the United
Nations Framework Convention on Climate Change (UNFCCC) and necessary
approvals for the trade of carbon credits has been procured.
The Company has entered into an agreement dated 29 October 2009 with
Asian Development Bank (ADB) (as trustee of the Asia Pacific Carbon
Fund) amended vide ''Amendment and Restatement Agreement'' dated 01
August 2011, for sale of Certified Emission Reductions (CERs),
generated during the period March 2009 to December 2012 (delivery
period). The Company has generated and delivered the relevant units of
CERs in accordance with the aforesaid agreements as at 31 March 2012
and recognised revenue accordingly.
10) MANAGERIAL REMUNERATION
Managerial remuneration under Section 198 of the Companies Act, 1956,
read along with provisions of Schedule XIII, paid / payable to the
Directors is as under:
11) EARNINGS PER SHARE
The amount considered in ascertaining the Company''s earnings per share
constitutes the net profit / (loss) after tax and includes post tax
effect of any exceptional / extra ordinary items. The number of shares
used in computing basic earnings per share is the weighted average
number of shares outstanding during the period. The number of shares
used in computing diluted earnings per share comprises the weighted
average number of shares considered for deriving basic earnings per
share and also the weighted average number of shares which could have
been issued on conversion of all dilutive potential shares.
12) RELATED PARTY DISCLOSURES
Related party transactions are transfer of resources or obligations
between related parties, regardless of whether a price is charged.
Parties are considered to be related, if one party has the ability,
directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial or
operating decisions. Parties are considered to be related if they are
subject to common control or significant influence. List of related
parties, as certified by the management, together with the transactions
and related balances are given below:
a) Names of related parties and description of relationship:
1. Key Management Personnel (KMP) a. Mr. Vijay Sankeshwar
and their relatives (Chairman & Managing Director)
b. Mr. Anand Sankeshwar
(Managing Director)
c. Mrs. Vani Sankeshwar -
relative of Director
d. Mrs. Lalitha Sankeshwar -
relative of director
e. Mrs. Bharati Holkunde -
relative of director
2. Companies in which KMP or their a. Aradhana Trust
relative has significant influence
b. Shiva Agencies
c. Sankeshwar Minerals
Private Limited
d. Sankeshwar Printers
Private Limited
e. VRL Cements Limited
f. VRL Media Limited
13) SUBSEQUENTEVENTS
The Company has entered into a Share Purchase and Subscription
Agreement and Shareholders'' agreement dated 15 December 2011 with the
promoters, other shareholders and NSR - PE Mauritius, LLC (the
''investor'') partly amended vide First Amendment Agreement dated 27
March 2012, for issue and allotment of 11046875, 0.001% compulsorily
and mandatorily convertible participatory preference shares (CCPPS) of
face value of Rs.100 each of the Company at an issue price of Rs.113.15
per share, aggregating Rs.12500 lacs. The CCPPS shall be mandatorily
and compulsorily converted into equity shares of Rs.10 each on 1
September 2013 in accordance with the conversion parameters specified
in the agreements. The issue and allotment of CCPPS have been completed
in the month of April 2012.
The Board of Directors of the Company have recommended a final dividend
of 6% (Rs.0.60 per share of face value, Rs.10 each) to its equity
shareholders for the financial year 2011-12. Pursuant to such equity
dividend recommendation and in view of the participating nature of the
CCPPS issued to the investor, a further provision of Rs.66.28 lacs is
being made towards proportionate dividend payable on such CCPPS in
accordance with the Shareholders'' agreement entered into with the said
Investor.
14) PREVIOUS YEAR FIGURES
The previous year''s figures have been recast / regrouped / rearranged
wherever considered necessary in accordance with Revised Schedule VI
forming part of the Companies Act, 1956 and effective for the financial
year commencing on or after 01 April 2011.