1. Corporate Information
Surana Telecom and Power Limited (“the Company”) is a Public Limited Company registered under the Companies Act, 1956. It is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It was incorporated on 14.08.1989 having its registered office at 5th Floor, Surya Towers, Sardar Patel Road, Secunderabad, Telangana- 500 003. The Company is into the business of manufacturing/Trading of Solar related Products, Generation of Solar Power and Wind Power
2. Basis of preparation
The financial statements are separate financial statements prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time). For all periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These standalone financial statements for the year ended March 31, 2018 are the first the Company has prepared in accordance with Ind AS. Refer to Note 42 for information on how the Company adopted Ind AS.
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
a) Term/rights attached to Equity Shares
The company has only one class of issued equity shares having a par value of Rs. 1/- per share. Each shareholder is entitled to one vote per share. In the event of liquidation of the company. The holders of equity shares will be entitled to receive remaining assets of the company after distribution of all prefential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Description, Nature and Purpose of the each reserve with in equity are as follows.
General Reserve: This reserve is retained earning of the company, which are kept aside out of the Company’s profit to meet future (known or unknown) obligations.
Retained Earnings: Retained earnings comprise of net accumulated profit/(loss) of the Company, after declaration of dividend.
Capital Redemption Reserve: Capital Redemption Reserve was created on account of buy back of shares of the Company.
16 (a) (i) Term Loan shown as at 1st April, 2016 was availed from M/s Indian Overseas Bank. The loan was taken during the financial year 2011-12 and was prepaid during the year 2016-17.
16 (a) (ii) Term Loan disclosed as at 31st March, 2017 includes the Loan taken from M/s State Bank of India, which was transferred from M/s Bhagyanagar India Limited as part of Scheme of demerger. The loan was taken during the financial year 2013-14 and was prepaid during the Current year .
16 (b) (i) Term Loan from Hero FinCorp Ltd is secured by way of exclusive charge on the receivables from Solar Power Project at Gujarat, additionally secured by way of first and exclusive charge on the assets of Solar Power unit at Gujarat and P&M of Wind Power unit at Karnataka and equitable mortgage on one plot situtated at Cherlapally, Hyderabad. Further, it has been guaranted by the some of the directors of the company. The loan is repayable in 84 monthly installments begining from November 2016. Accordingly, amount due with in a Year is Rs. 3,56,34,389/-(Principal only) which is classified under “Other Current Financial Liabilities” .
16 (b) (ii) Lease Rental Discounted facility from Aditya Birla Finance Limited is secured by First and exclusive charge on Plot at Maheshwaram Mandal, Ranga Reddy District w.r.t Current and Future lease Rentals from the property. The loan is repayable in 108 monthly installments beginning from June 2016. Accordingly, amount due within a year is Rs. 17,15,964/- (Principal only) which is classified Under “Other Current Liabilities”.
16 (c) (i) Vehicle loan from HDFC Bank Limited is secured against hyphotication of vehicle. The loan was taken during the financial year 2016-17 and is repayable in monthly installment of Rs. 43,885/- each. Accordingly due with in a year is Rs. 4,80,755/- (Principal only) which is classified under “Other Current Financial Liabilities”.
16 (c) (ii) Vehicle loan from AXIS Bank Limited is secured against hyphotication of vehicle. The loan was taken during the year and is repayable in monthly installment of Rs. 1,72,067/- each. Accordingly due with in a year is Rs. 17,55,412/-(Principal only) which is classified under “Other Current Financial Liabilities”.
18 (a) Cash Credit from M/s HDFC Bank Limited is secured against certain Fixed Assets and Current Assets of the Company. Further, it has been guaranteed by some of the Directors of the Company.
18 (b) Cash credit shown in the previous years was availed from M/s State Bank of India, and Corporation Bank.
20 (a) (i) Term Loan shown as at 1st April, 2016 was availed from M/s Indian Overseas Bank. The loan was taken during the financial year 2011-12 and was prepaid during the year 2016-17.
20 (a) (ii) Term Loan disclosed as at 31st March, 2017 includes the Loan taken from M/s State Bank of India, which was transferred from M/s Bhagyanagar India Limited as part of Scheme of demerger. The loan was taken during the financial year 2013-14 and was prepaid during the Current year .
20 (b) (i) Term Loan from Hero FinCorp Ltd is secured by way of exclusive charge on the receivables from Solar Power Project at Gujarat, additionally secured by way of first and exclusive charge on the assets of Solar Power unit at Gujarat and P&M of Wind Power unit at Karnataka and equitable mortgage on one plot situtated at Cherlapally, Hyderabad. Further, it has been guaranted by the some of the directors of the company. The loan is repayable in 84 monthly installments begining from November 2016. Accordingly, amount due with in a Year is Rs. 3,56,34,389/-(Principal only) which is classified under “Other Current Financial Liabilities” .
20 (b) (ii) Lease Rental Discounted facility from Aditya Birla Finance Limited is secured by First and exclusive charge on Plot at Maheshwaram Mandal, Ranga Reddy District w.r.t Current and Future lease Rentals from the property. The loan is repayable in 108 monthly installments beginning from June 2016. Accordingly, amount due within a year is Rs. 17,15,964/- (Principal only) which is classified Under “Other Current Liabilities”.
20 (c) (i) vehicle loan from HDFC Bank Limited is secured against hyphotication of vehicle. The loan was taken during the financial year 2016-17 and is repayable in monthly installment of Rs. 43,885/- each. Accordingly due with in a year is Rs. 4,80,755/- (Principal only) which is classified under “Other Current Financial Liabilities”.
20 (c) (ii) vehicle loan from AXIS Bank Limited is secured against hyphotication of vehicle. The loan was taken during the financial year 2017-18 and is repayable in monthly installment of Rs. 1,72,067/- each. Accordingly due with in a year is Rs. 17,55,412/- (Principle only)which is classified under “Other Current Financial Liabilities”.
3. Disclosure required under Section 186(4) of the Companies Act 2013
For details of Loans, advances and guarantee given and securities provided to any of the related party. Please refer note no: 32
4. In the opinion of Board of Directors and to the best of their knowledge and belief, the value on realization of current assets, loans and advances in the ordinary course of business, would not be less than the amount at which the same are stated in the Balance Sheet.
5. Retirement and Other Employees Benefits
The Company's employee benefits primarily cover provident fund, gratuity and leave encashment.
Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue.
Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done. The gratuity liability and the net periodic gratuity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ losses are immediately charged to the Profit & Loss account and are not deferred.
The following table summarizes the components of Net Benefit expenses recognized in the Profit & Loss account and amount recognized in the Balance Sheet for the respective plans.
6. financial risk management objectives and policies
The Company's principal financial liabilities comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance and support Company's operations. The Company's principal financial assets include inventory, trade and other receivables, cash and cash equivalents and land advances and refundable deposits that derive directly from its operations. The Company is exposed to market risk, credit risk and liquidity risk.
A. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ realestate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits
Interest rate risk
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. The Company's exposure to the risk of changes in market interest rates relates primarily to the Company's long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.
B. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including refundable joint development deposits, security deposits, loans to employees and other financial instruments.
Trade receivables
i. Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company's credit risk in this respect.
ii. Receivables resulting from other than sale of properties: The firm has established credit limits for customers and monitors their balances on ongoing basis. Credit Appraisal is performed before leasing agreements are entered into with customers. The risk is also marginal due to customers placing significant amount of security deposits for lease and fit out rentals.
Financial Instrument and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company's Finance department in accordance with the Company's policy. Investments of surplus funds are reviewed and approved by the Company's Board of Directors on an annual basis The Company's maximum exposure to credit risk for the components of the statement of financial position at 31 March 2018 and 2017 is the carrying amounts.
C. Liquidity risk
The Company's objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.
The table below summarizes the maturity profile of the Company's financial liabilities based on contractual undiscounted payments:
7. Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company's capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
8. First-time adoption of Ind AS
These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company's opening balance sheet was prepared as at April 1, 2016, the Company's date of transition to Ind AS.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
(a) Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and investment property at their previous GAAP carrying value.
(b) Ind AS 27 requires investments in subsidiaries to be recorded at cost or in accordance with Ind AS 109 in its separate financial statements. However Ind AS 101 provides an option in case the Company decides to measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) at that date. The Company can avail the above exemption and recognize the investment in firms at the previous GAAP carrying amount at the date of transition to Ind AS.
The Company has also prepared a reconciliation of equity as at March 31, 2017 and April 1, 2016 under the Previous GAAP with the equity as reported in these financial statements under Ind AS, that reflect the impact of Ind AS on the components of statement of balance sheet which is presented below:
Notes to reconciliations between previous GAAP and Ind AS
Other comprehensive income:
Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit/loss to profit/loss as per Ind AS. Further, Indian GAAP profit/loss is reconciled to total comprehensive income as per Ind AS.
9. Previous year's figures have been regrouped and rearranged, wherever found necessary.
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