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Moneycontrol.com India | Notes to Account > Vanaspati & Oils > Notes to Account from BCL Limited - BSE: 524332, NSE: N.A
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BCL Limited

BSE: 524332|ISIN: INE412G01016|SECTOR: Vanaspati & Oils
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Dec 09, 16:00
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BCL Limited is not listed on NSE
Mar 15
Notes to Accounts Year End : Mar '18

A. CORPORATE INFORMATION

BCL Industries Limited (“the company”) is a listed entity incorporated in India.

The address of its register office and principal place of business is “HAZI RATTAN LINK ROAD, POST BOX NO. 71, BHATINDA (PB) -151001”.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The Expected Rate of Return on Plan Assets is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risks, historical results of return on Plan Assets and the Company’s policy for Plan Assets Management.

I. THE EXPECTED CONTRIBUTIONS FOR DEFINED BENEFIT PLAN FOR THE NEXT FINANCIAL YEAR WILL BE IN LINE WITH FY 2017-18.

II. SENSITIVITY ANALYSIS

Significant Actuarial Assumptions for the determination of the defined benefit obligation are discount trade, expected salary increase and employee turnover. The sensitivity analysis below, have been determined based on reasonably possible changes of the assumptions occurring at end of the reporting period , while holding all other assumptions constant. The result of Sensitivity analysis is given below:

These plans typically expose the Group to actuarial risks such as: investment risk, interest risk, longevity risk and salary risk.

Investment risk: The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Interest risk: A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in the return on the plan debt investments.

Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.

Salary risk: The present value of the defined plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

1.1 CORPORATE SOCIAL RESPONSIBILIY (CSR)

(a) CSR amount required to be spent as per section 135 of the Companies Act, 2013 read with Schedule VII required by the company during the year.

(b) Expenditure related to Corporate Social Responsibility is Rs. 18.49 lakhs (Previous Year 27.74 lakhs)

NOTE 2: RELATED PARTY DISCLOSURE

i) As per Ind AS 24, the disclosures of transactions with the related parties are given below:

List of related parties where control exists and also related parties with whom transactions have taken place and relationships :

Note:

(1) The transactions with related parties are made on terms equivalent to those that prevail in arm’s length transactions.

(2) Review of outstanding balances is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

These balances are unsecured and their settlement occurs through Banking channel.

3. DETAILS OF INCOME TAX DEMAND/DEFAULTS

(a) There is no outstanding demand of any assessment year till A/Y 2016-17 and the assessment for the assessment year 2017-18 is lying pending.

4. CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS

4.1 CAPITAL MANAGEMENT

The Company manages its capital to ensure that it will continue as going concern while maximising the return to stakeholders.

The company manages its capital structure and make adjustment in light of changes in business condition. The overall strategy remains unchanged as compare to last year.

The Company adheres to a robust Capital Management framework which is underpinned by the following guiding principles;

a) Maintain financial strength to ensure BBB Stable ratings domestically and investment grade ratings internationally.

b) Ensure financial flexibility and diversify sources of financing and their maturities to minimize liquidity risk while meeting investment requirements.

c) Proactively manage group exposure in forex, interest and commodities to mitigate risk to earnings.

d) Leverage optimally in order to maximize shareholder returns while maintaining strength and flexibility of the Balance sheet.

This framework is adjusted based on underlying macro-economic factors affecting business environment, financial market conditions and interest rates environment.

4.2 FINANCIAL INSTRUMENTS

Valuation

All financial instruments are initially recognized and subsequently re-measured at fair value as described below:

a) The fair value of investment in quoted Equity Shares is measured at quoted price.

b) The fair value of Forward Foreign Exchange contracts and Currency Swaps is determined using forward exchange rates and yield curves at the balance sheet date.

c) The fair value of Foreign Currency Option contracts is determined using the Black Scholes valuation model.

d) Commodity derivative contracts are valued using readily available information in markets and quotations from exchange, brokers and price index developers.

e) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.

f) All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.

The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and

Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

4.4 FOREIGN CURRENCY RISK

The following table shows foreign currency exposures in USD, EUR and JPY on financial instruments at the end of the reporting period. The exposure to foreign currency for all other currencies are not material.

Commodity Price Risk

Commodity price risk arises due to flucation in prices of crude oil, other feed stock and products. The company has a risk management framework aimed at prudently managing the risk arising from the volatility in commodity prices and freight costs

The company’s commodity risk is managed centrally through well-established trading operations and control processes. In accordance with the risk management policy, the company enters into various transactions using derivatives and uses over the counter (OTC) as well as Exchange Traded Futures, Options and swap contracts to hedge its commodity and freights exposure.

Credit Risk

Credit risk is the risk that a customer or counterparty to a financial instrument will fail to perform or pay amounts due causing financial loss to the company. It arises from cash and cash equivalents, financial instruments and principally from credit exposures to customers relating to outstanding receivables. The Company deals with highly rated counter parties.

Liquidity Risk

Liquidity risk is the risk that suitable sources of funding for the company’s business activities may not be available. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due, so that the company is not forced to obtain funds at higher rates. The Company monitors rolling forecasts of the Company’s cash flow position and ensure that the Company is able to meet its financial obligation at all times including contingencies.

5. EVENTS AFTER THE REPORTING PERIOD

The Board of Directors have not recommended payment of dividend.

6. OPERATING SEGEMENT

The Company has identify three reportable segements viz. Oil & Vanaspati, Distillery and Real Estate. All the activities of the Company revolve around these main business. Accordingly, the Company has only three identifiable segment reportable under Ind AS 108 “Operating Segment”. The Managing Director (the ‘Chief Operational Decision Maker as defined in IND AS 108 - Operating Segments) monitors the operating results of the entity’s business for the purpose of making decisions about resource allocation and performance assessment.

The accounting policies adopted for segment reporting are in line with the accounting policy of the Company with following additional policies for segment reporting.

a) Revenue and Expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenue and Expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as “Unallocable”.

b) Segment Assets and Segment Liabilities represent Assets and Liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as “Unallocable”.

Note:Unallocable Liabilities include Deferred Tax & Current Tax Liabilities.

1 Inter segment pricing are at Arm’s length basis.

2 As per Indian Accounting Standard 108 - Operating Segments, the Company has reported segment information on standalone basis.

3 The reportable Segments are further described below :

- The refining segement includes production and marketing operations of the Oil and Vanaspati Ghee

- The Distillery segement includes production and marketing operations of The Liquor for human consumption.

- The Real Estate segement includes construction of residential house.

7. APPROVAL OF FINANCIAL STATEMENTS

The financial statements were approved for issue by the board of directors on 30/05/2018

8. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES (MSME)

The above information has been detemined to the extent such parties have been identified on the basis of information provided by the company, which has been relied upon by the auditors.

Notes:

I Fair valuation for Financial Assets:

The Company has valued financial assets (other than Investment in associate which are accounted at cost), at fair value. Impact of fair value changes as on the date of transition, is recognised in opening reserves and changes thereafter are recognised in Statement of Profit and Loss or Other Comprehensive Income, as the case may be.

II Deferred Tax:

Income Tax impact on fair valuation of financial assets are given in the Deferred Tax Asset or, Liability.

III Others:

a) Actuarial Gain / (Loss) on Defined Benefit plan given in Other Comprehensive Income and corresponding Income Tax effect was given in the provision for Income Tax for Other Comprehensive Income.

b) As per Ind AS, the liability for propsed dividend is recognised in the year in which it has been declared and approved.

Source : Dion Global Solutions Limited
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