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C AN IN WIT IN IA
India’s industrial sector has always been an ocean of opportunities, but lack of policy support and sluggish demand
prevented the growth of the sector. Despite being a leading player in the Indian industrial sector, BFL had to look at
foreign markets for growth, to satiate its ambitions.
However, we believe that the tide is turning, for good. Government focus on infrastructure investment coupled
with policy measures such as Strategic Partnership, provision of Buy (Indian) in Defence Procurement Policy (DPP)
2016 and mandatory local sourcing will enable Indian companies with proven capabilities to be at the forefront of
addressing the country’s demand requirements.
Bharat Forge has relentlessly focused on diversification and transformation, actively driven by technology and
innovation. This strategic approach has culminated in the Company consistently creating value for its stakeholders
across the spectrum.
Through innovative thinking and processes, we are growing our expertise in manufacturing components and offering
solutions for the automotive industry while expanding into other sectors, from energy and railways to mining and
aerospace. We are strengthening India’s economic backbone, augmenting national capabilities and ensuring a bigger
footprint for the country and for the Company.
Kalyani Centre for Manufacturing Innovation
With a customer base that includes top-5 global commercial • Net Long-Term Debt / Equity at 0.03 as of
vehicle and passenger vehicle manufacturers, and virtually March 31, 2017
every global OEM and Tier I supplier in the automotive space
and a wide range of marquee customers in the industrial • Establishment of manufacturing footprint in North
sector, BFL today is among the few global component America
manufacturers with capability to offer front line design
and engineering, dual shore manufacturing capability, • Divestment of 49% stake in Joint Venture with
and full-service supply capability. It takes pride in being at Alstom
the vanguard of a globalizing India, and to contribute to
‘Make in India,’ which is fast becoming a global brand in the
manufacturing industry.
LISTIN CO ES
LO AL PRESENCE
BFL’s manufacturing facilities are spread over 10 locations across five countries – four in India, three in Germany, and
one each in Sweden, North America and France. BFL is a global company having world-class engineering capabilities and
state-of-the-art manufacturing facilities.
Our Facilities are strategically located. Across the World. Close to You.
CUSTOMERS
MANUFACTURIN AN CUSTOMERS
LO AL EA UARTERS
MANUFACTURIN AN CUSTOMERS
MARINE AEROSPACE
OIL AN AS
IN IA
AMERICAS
EUROPE
ASIA PACIFIC
RAILWAYS
COMMERCIAL VE ICLES
IN USTRIAL
Mr. Vimal Bhandari Mr. B P Kalyani Mr. G K Agarwal Mr. Amit B Kalyani
Director Executive Director Deputy Managing Executive Director
Director
SITTIN L TO R
Mr. B N Kalyani Mr. Pratap G Pawar Dr. T Mukherjee Mr. Naresh Narad
Chairman & Director Director Director
Managing Director
CORPORATE INFORMATION
AN ERS AU ITORS RE ISTERE OFFICE
FY FY FY FY FY FY FY FY FY FY
FY FY FY FY FY FY FY FY FY FY
FY FY FY FY FY FY FY FY FY FY
Our focus on developing new processes, expanding the product portfolio and leveraging our innovation capabilities is
opening up new growth avenues. The Company is starting to garner order wins from existing as well as new customers both
in India and globally. The Company’s strategy to target import dependent sectors such as Oil & Gas, Mining, Power, Railways
and Aerospace amongst others, to grow non-linearly, is bearing fruit. We have already procured several sample orders in
new categories.
RAIL POWER
Indian Railways has been one of the biggest contributors The power sector in India is going through a period of
to the ‘Make in India’ initiative and has undertaken significant growth and transformation. India as a signatory
various initiatives to provide impetus to the program. to COP 21 is committed to carbon emission reduction. The
The Government is investing heavily in building rail Government is focusing on generating 40% of the country’s
infrastructure in the country. Its key focus areas/initiatives total installed power capacity from non-fossil fuel resources
include Manufacturing Rolling Stock, High Speed Rail by FY 2030. Simultaneously, it is also putting a thrust on
Projects, Dedicated Freight Corridors (DFC), Rail Wheel Plant, making thermal plants more energy-efficient through usage
Electric Loco Assembly, Traction Alternator Factory, Coach of good quality coal, modernizing conventional TG’s, and
Manufacturing and Up-gradation. making a conscious shift from sub-critical to super-critical
power plants.
Using its Centre of Advanced Manufacturing, the Company
has indigenously developed a number of highly critical The Company currently supplies forgings for renewable
components for the Indian Railways. We are leveraging our and non-renewable energy sources. The shift from sub to
technological advantage and skilled human resources to super critical power plants coupled with expected growth in
develop more product offerings for the Indian Railways, renewable energy sector presents a significant opportunity
thereby also supporting the Government’s import to expand our product portfolio and customer base.
substitution initiative.
India is the world’s fourth largest The Indian Air Force and civil India has one of the highest military
energy consumer. The country’s aviation industry are in the cusp of budgets in the world – it is ranked
oil consumption is expected to rise transformational change. These sectors among top-10 spenders in this sector.
manifold over the next decade to cater are offering unique opportunities in The country imports about 70% of its
the demands of a growing economy. increasing the country’s self-reliance. defence requirements. There is a clear
India plans to reduce its dependence As an established player in both the belief that defence manufacturing
on imports and achieve at least a domestic and export sectors, BFL is is a crucial pillar to revitalize India’s
10% reduction in energy imports ready to seize these opportunities manufacturing sector, thereby
by FY 2022. For this, it is increasing through extensive tie-ups, joint advancing the country’s impetus on
investments in oil and gas exploration, ventures and technology transfers. self-reliance.
developing discovered oil and gas
reserves, enhancing production Currently a high percentage of import With the Government’s agenda to
from existing fields, and tapping content prevails in the aerospace reduce import dependence in defence
unconventional resources like shale sector. Both HAL & ISRO have by 35-40%, it is actively promoting
gas, etc. emphasized on upscaling localization. indigenous defence manufacturing
This will provide a strong impetus to with initiatives like Make in India and
Oil exploration and production spend domestic companies for supply of policy reforms including allowing
in the country has doubled in the last components. 100% Foreign Direct Investment (FDI)
5 years and the same is expected to be in this sector. The establishment of a
robust in the near future. BFL has always exhibited fundamental new procurement regime under the
strength in technologically advanced Defence Procurement Policy (DPP-
Bharat Forge has developed a new product development and 2016) with new categories under
reputation for supplying high value has been one of the foremost indigenously designed, developed and
and high technology Oil and Gas suppliers at the sub-component and manufactured (IDDM) and MAKE
forgings in the global markets with component levels for HAL and ISRO provisions, bear a promise to ensure
applications across surface, sub-sea, among others. The Company has expeditious procurement and import
deep-sea and shale. The differentiated transformed itself into a manufacturer substitution. The Government’s main
technology expertise displayed by the of critical aerospace components by focus is on developing an ecosystem
Company has helped win prestigious achieving the necessary certifications wherein all core and ancillary activities
orders from our customers who are and modernizing our existing related to defence manufacturing can
top global oil and gas players. With manufacturing facilities with cutting- co-exist.
our vast repository of metallurgical edge technologies. This has enabled
knowledge, and in-house innovation us to become suppliers for global BFL has been supplying components
capabilities, we are well-set to support aerospace companies looking to to the Indian defence sector since last
the development of India’s domestic outsource products and components 30 years. With a thrust on incremental
hydrocarbon production. from India. domestic supplies, the Company is all
the more enthused and prepared to
seize enhanced growth potential in this
sector.
Crankshaft Manufacturing
1. ECONOMIC OVERVIEW
Global Economy
The world economy grew by 3.1% in 2016, mainly due to recovery in industrial activity and rise in commodity
prices. The US economy strengthened after a weak start to 2016. This up-trend was mainly driven by a strong
labour market and improved household balance sheets, which are translating into higher consumption, increased
manufacturing sales and better investment prospects. In Europe, industrial activity recovered, and economic
expectations have risen in several large developed economies.
LO AL ROWT
4.50 4.80
4.10
Global Economy
3.60
3.40
Advanced Economies
3.10
Emerging Markets and
Developing Economies
1.90 2.00
1.60
Outlook
GDP growth is expected to exceed the 7% mark
in 2018, absorbing the short-term turmoil in the
aftermath of demonetization. Having traversed this
phase, the country is set to realize demonetization’s
long-term gains in terms of greater tax compliance,
increased digitization and investments in capital
formation. The expected fiscal deficit for 2017–18
is 3.2% of the GDP. This looks achievable, given the
thrust on tax collection as India enters the GST era, as
also greater tax compliance post demonetization.
2. BUSINESS ENVIRONMENT
2.1 Global Automobile Industry
Global car sales witnessed sustained acceleration ASIA PACIFIC
in the final months of 2016 due to stronger global EUROPE
economic growth. Increased replacement demand in
NORT AMERICA
SOUT AMERICA
OT ER
Source: WardsAuto.com
We expect growth to The current financial year was eventful for the
79%
Indian automotive industry. Auto manufacturers
continue in the coming
witnessed major challenges such as the ban on
years, driven by a ramp-up diesel cars, ban on sale and registration of BS
CAGR OF of production, enhanced 3 vehicles, and demonetization. Despite these
PV EXPORT
value additions, and trials which forced companies to recalibrate
REVENUES their market strategies and policies, the industry
OVER THE introduction of new
seems to be on the positive growth trajectory. The
LAST 3 YEARS products. commercial vehicles’ segment was less impacted
Rural Market
The Indian automobile industry is yet to fully tap the
demand from rural areas. Over the next decade,
the industry seeks to double its sales on the back of
steadily increasing rural growth. It is also expected to
Impeller Machining
R&D (` Million)
Particulars 2016-17 2015-16 % Change
The Company is utilizing its innovation and in-
Depreciation 2,948.51 3,084.51 (4.4)
house R&D expertise to focus on new product
Interest 727.70 905.06 (19.7)
development to catalyze various “Make in India”
Other Income 994.90 1,123.45
initiatives. Its R&D centres are equipped with robust
Profit Before Tax 8,345.43 10,768.60 (22.5)
testing infrastructure, which ensures world-class
Exchange Gain/(Loss) (300.75) (466.60)
performance. The Company has demonstrated sound
Profit Before Tax 8,044.68 10,302.00 (21.9)
technology absorption capabilities, translating into a
Exceptional Item 380.24 (42.20)
shortened learning curve and stronger proprietary
Profit Before Tax 8,424.92 10,259.80 (17.9)
knowledge management.
Taxation 2,574.15 3,283.62
Profit After Tax 5,850.77 6,976.18 (16.1)
Favourable Environment
EPS 25.13 29.97
With favourable regulatory developments, importance
to indigenisation, and an increasing thrust on
infrastructure projects, the Company is well placed to Total Income
cater to the various industrial segments. We expect FY 2016-17 witnessed a decline of 10.2% in total
to see increased traction from mining, construction, revenues, from `45,255 million in the last year to
power, defence and government agencies. `40,661 million in this fiscal. Domestic sales grew
by 5.6% mainly on account of growth in M&HCV
4. FINANCIAL REVIEW revenues and robust 13.4% growth in Industrial
4.1 Standalone revenues benefitting from new orders across
(` Million) sectors.
Particulars 2016-17 2015-16 % Change
Total Revenue 40,661.28 45,254.77 (10.2) However, domestic market gain was offset by drop
Raw Material 13,205.38 14,893.58 (11.3) in exports (22.3%) largely due to the decline in the
Manufacturing Expenses 6,560.10 6,596.98 (0.6) North American class 8 truck demand, and continued
sluggishness in commodity related sectors such as
Manpower Cost 3,759.45 3,725.18 0.9 oil & gas, construction and mining due to a decline
Other Expenditure 6,109.61 6,404.31 (4.6) in commodity prices. While the export revenues
Total Expenditure 29,634.54 31,620.05 (6.3) recovered in the second half of FY 2017, the recovery
EBITDA 11,026.74 13,634.72 (19.1) was not strong enough to re-coup decline witnessed
EBITDA % 27.1% 30.1% in the first half.
5.6%
5.6% mainly on account of
growth in M&HCV revenues The JV, incorporated in Delhi with its manufacturing
FY 2017 and robust 13.4% growth facility at Sanand, was formed in 2009 to address
DOMESTIC opportunities arising from the expansion in the Indian
in Industrial revenues
SALES power sector.
GROWTH benefitting from new
orders across sectors.
Patents
Acquisition of Walker Forge A total of 10 patent applications were filed in FY 2017,
As part of its dual shore manufacturing model, BFL bringing the number of patents filed till date to 34.
had a presence in North America through Bharat Already, BFL has been granted 4 patents while the
Forge America in Lansing, Michigan, since 2006. This remaining await evaluation. BFL has a healthy pipeline
company catered to the passenger vehicle market in of patents for the next year too, on which work is in
North America. However, we moved out from North progress.
America post the 2008 GFC and the subsequent
decline in Passenger Vehicle market. 7. INFORMATION TECHNOLOGY
Key Highlights of FY 2017
We have always felt the need to be close to our • SAP SOH (Suite ON HANA) Deployment
customers in all major geographies, and keeping this In Phase 1 of digital transformation project using
in mind, we have re-established our manufacturing SAP, the Company has upgraded current SAP from
footprint in North America through the acquisition of SAP ECC to latest SAP Platform SAP HANA suite.
Walker Forge Tennessee LLC. The Company has since This is the latest technology from SAP providing
been renamed, Bharat Forge PMT Technologie (BF- in-memory computing for providing ability to use
PMT). real-time information.
and morale which includes suggestion scheme, cross institutionalized. Besides, performance-linked
functional competition and birthday celebrations. incentive programmes were introduced to increase
The Company facilitates continuous engagement employee motivation.
between the management and various teams.
These dialogues help in growing strategic and 9. CORPORATE SOCIAL RESPONSIBILITY
operational awareness, and enhancing efficiencies At Bharat Forge, CSR is an integration of social and
through idea-exchange. environmental causes with business objectives.
We understand that the spirit behind CSR activities
Performance and rewards: The Company is to engage companies’ financial resources, and
undertakes regular appraisals wherein high technological and management competencies for the
performers are recognized every month. larger good of communities and the environment.
Recognition programmes like the Employee of
the Month and Maximum Attendance Award were Our CSR journey started in 1970 when we established
community centres at various locations for women
empowerment. Since then, BFL has taken up scores
of CSR activities with a simple objective of ‘Giving
Back’ to the society.
BFL engages in CSR activities in primary,
secondary & tertiary education, skill BFL engages in CSR activities in primary, secondary
development, vocational training, & tertiary education, skill development, vocational
environmental and ecological protection, training, environmental and ecological protection,
health and hygiene, character building through
health and hygiene, character building
sports, and recently, village development.
through sports, and recently, village
development.
11. INTERNAL SYSTEMS AND THEIR ADEQUACY expressed or implied. Important developments
Bharat Forge has a proper and adequate internal that could affect the Company’s operations include
control system in place to safeguard assets and a downtrend in the forging industry — global or
protect against loss from any unauthorised use or domestic or both, significant changes in political
disposition. The system authorises, records and and economic environment in India or key markets
reports transactions and ensures recorded data abroad, tax laws, litigation, labour relations, exchange
are reliable to prepare financial information and to rate fluctuations, interest and other costs.
maintain accountability of assets. The Company’s
internal controls are supplemented by an
extensive programme of internal audits, review by
management and documented policies, guidelines
and procedures. BFL’s people-centric policies and
initiative facilitate in retaining
12. CAUTIONARY STATEMENT knowledge capital. Its training
Statements in this Management Discussion and
calendar, performance management
Analysis describing the Company’s objectives,
projections, estimates and expectations may be system and people involvement and
‘forward looking statements’ within the meaning motivation initiatives facilitate it to
of applicable laws and regulations. Actual results encourage and retain talent.
might differ substantially or materially from those
To the Members,
Your Directors have pleasure in presenting the 56th (Fifty-sixth) Annual Report on the business and operations of the
Company together with the audited financial statements for the Financial Year ended March 31, 2017.
1. FINANCIAL HIGHLIGHTS
The financial performance of the Company on standalone and consolidated basis for the Financial Year ended
March 31, 2017 as compared to previous year is summarised in the following table:
In ` Million
Standalone Consolidated
Particulars
FY 2017 FY 2016 FY 2017 FY 2016
Total Income 41,656.18 46,378.22 67,174.35 71,336.83
Revenue outside India 19,417.50 24, 984.73 44,817.70 49,742.00
Net Profit
Profit for the year before Taxation & Exceptional Item 8,044.68 10,302.00 8,183.39 9,712.72
Add/(Less): Exceptional Item 380.24 (42.20) 1,284.29 (54.69)
Provision for Taxation:
Current tax 2,600.04 3,130.86 2,703.68 3,219.88
Deferred tax (25.89) 152.76 (213.12) (55.33)
Adjustment of tax relating to earlier year/MAT credit - - 1.11 0.21
Profit for the year from continuing operations 5,850.77 6,976.18 6,976.01 6,493.27
Profit for the year from discontinued operations - - 131.17 260.33
Profit for the year 5,850.77 6,976.18 7,107.18 6,753.60
Less: Non-controlling interests - - 61.02 (30.95)
Profit for the year attributable to equity holders of the parent 5,850.77 6,976.18 7,046.16 6,784.55
Items of other comprehensive income (net of tax) 48.82 (73.65) (14.93) (45.87)
Total 5,899.59 6,902.53 7,031.23 6,738.68
Balance of Profit from previous year 23,405.20 19,824.80 21,337.64 17,921.09
Debenture Redemption Reserve written back 1,065.00 - 1,065.00 -
Profit available for appropriation 30,369.79 26,727.33 29,433.87 24,659.77
APPROPRIATIONS:
Interim Dividend on Equity Shares 581.99 1,629.56 581.99 1,629.56
Tax on above dividend 118.48 331.74 118.48 331.74
Final Dividend on Equity Shares 116.40 1,047.57 116.40 1,047.57
Tax on above dividend 23.70 213.26 23.70 213.26
Transfer to General Reserve 100.00 100.00 100.00 100.00
Adjustment during the year - - 82.06 -
Surplus retained in Statement of Profit and Loss 29,429.22 23,405.20 28,411.24 21,337.64
Being applicable, the Company has adopted Ind AS from April 1, 2016 and accordingly, the transition was carried
out, from the Accounting Principles generally accepted in India as specified under Section 133 of the Companies
Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 (previous GAAP) to Ind AS 101 “First time
adoption of Indian Accounting Standards”.
The impact of transition has been recorded in opening ` 2,700 Million from the domestic market across
reserves as at April 1, 2015 and the periods presented various segments and geographies for the
have been restated / reclassified. existing as well as new products.
The total dividend for the financial year ended March 7. PARTICULARS OF CONTRACTS OR
31, 2017, including the proposed final dividend ARRANGEMENTS with RELATED PARTIES
would aggregate to ` 2,101.40 Million inclusive of the All contracts or arrangements entered into by the
dividend tax. Company with Related Parties are at arm’s length and
are in the ordinary course of business.
The final dividend payout has been formulated in
accordance with the Dividend Distribution Policy of Pursuant to Section 134 of the Companies Act, 2013
the Company. read with Rule 8(2) of the Companies (Accounts)
Rules, 2014, the particulars of transactions with
4. RESERVES related parties are provided in Form AOC-2 which
During the year under review, the Company proposes is annexed as Annexure “A” to this report. Related
to transfer ` 100.00 Million to the General Reserve. Party disclosures as per Ind AS 24 have been provided
in Note 39 to the financial statement.
An amount of ` 29,429.22 Million is proposed to be
The policy on Related Party Transactions as approved
retained as surplus in the Profit and Loss account.
by the Board has been displayed on the Company’s
website at:
5. PERFORMANCE OF THE COMPANY
a) Total Income: http://bharatforge.com/images/PDFs/policies/BFL.
During the year under review, the total income of RPT%20Policy.pdf
the Company on a standalone basis amounted to
` 41,656.18 Million as against ` 46,378.22 Million There has been no change to the policy on Related
in the previous year, representing a decrease Party Transactions during the financial year ended
of 10.20%. The total domestic revenue of the March 31, 2017.
Company has grown by 4.80%.
8. DEPOSITS
Further, during the year under review, the
During the year under review, the Company has
Company has secured long term export not accepted any deposit under Chapter V of the
orders of US$ 80 Million and domestic order of Companies Act, 2013.
Accordingly, the unpaid or unclaimed dividend 18. EXTRACT OF ANNUAL RETURN
remaining unpaid / unclaimed for a period of seven In accordance with Section 134(3)(a) of the Companies
years from the date they became due for payment, Act, 2013, an extract of the Annual Return of the
have been transferred to the IEPF established by the Company in Form MGT-9 is appended as Annexure
Central Government. No claim shall be entertained “C” to this Report.
against the Company for the amounts so transferred.
19. DIRECTORS’ RESPONSIBILITY STATEMENT
Recently, the MCA has notified the Investor Education Pursuant to Section 134(5) of the Companies Act,
and Protection Fund Authority (Accounting, Audit, 2013, Directors confirm that:
Transfer and Refund) Rules, 2016 (IEPF Rules).
Pursuant Section 124(6) of the Companies Act, 2013 a. in preparation of the annual accounts for
read with IEPF Rules as amended, all shares in respect the financial year ended March 31, 2017,
of which dividend has not been paid or claimed for the applicable Accounting Standards have
seven consecutive years or more, shall be transferred been followed and there were no material
by the Company to the IEPF. departures;
Accordingly, the Company has sent notice to the b. they have selected such accounting policies
respective shareholders who have not claimed and applied them consistently and made
dividend for seven consecutive years or more and judgments and estimates that are reasonable
the newspaper advertisement stating the same and prudent so as to give a true and fair
has been published in the newspapers. The list of view of the state of affairs of the Company
equity shareholders whose shares are liable to be as on March 31, 2017 and of the profit of the
transfered to IEPF can be accessed on the website of Company for that period;
the Company at below mentioned link:
c. they have taken proper and sufficient care
http://bharatforge.com/images/PDFs/Unclaimed_ for the maintenance of adequate accounting
Dividend/List%20of%20Shareholders%20and%20 records in accordance with the provisions of
shares%20due%20to%20transfer%20to%20the%20 the Companies Act, 2013 for safeguarding the
IEPF%202016%2003%2010.pdf assets of the Company and for preventing
and detecting fraud and other irregularities;
17. DIVIDEND DISTRIBUTION POLICY
The Securities and Exchange Board of India (‘SEBI’) d. they have prepared the annual accounts on a
vide notification bearing No. SEBI/LAD-NRO/GN/2016- going concern basis;
17/008 dated July 8, 2016 has inserted Regulation
43A Dividend Distribution Policy to the SEBI e. they have laid down internal financial controls
(Listing Obligations and Disclosure Requirements) to be followed by the Company and that such
Regulations, 2015. According to this regulation, it is internal financial controls are adequate and
mandatory for the top five hundred listed entities are operating effectively; and
based on market capitalization (calculated as on
March 31st of every financial year) to formulate a f. they have devised proper systems to
Dividend Distribution Policy. ensure compliance with the provisions of all
applicable laws and that such systems were
Accordingly, the Board of Directors of the Company adequate and operating effectively.
has on recommendation of the Audit Committee
adopted the Dividend Distribution Policy. The 20. DIRECTORS AND KEY MANAGERIAL
Dividend Distribution Policy of the Company is PERSONNEL (KMP)
enclosed as Annexure “B” to this report and is also In terms of provisions of the Companies Act, 2013
available on the Company’s website at: and the Articles of Association of the Company,
Mr. G. K. Agarwal and Mr. Kishore Saletore,
http://bharatforge.com/images/PDFs/policies/
Directors of the Company, retire by rotation at the
Dividend%20Distribution%20Policy.pdf.
ensuing Annual General Meeting and being eligible
have offered themselves for re-appointment.
26. NOMINATION AND REMUNERATION POLICY Annexure “F” to this report and is also available on
The Board has, on the recommendation of the the Company’s website at:
Nomination and Remuneration Committee, http://bharatforge.com/images/PDFs/policies/
framed a policy for selection and appointment of NOMINATION_AND_REMUNERATION_POLICY.PDF
Directors, Key Managerial Personnel and Senior
Management Personnel and their remuneration. The There has been no change to the Nomination and
Nomination and Remuneration Policy is appended as Remuneration Policy during the financial year ended
March 31, 2017.
In the meeting held on May 24, 2017, the Audit 31.
CORPORATE SOCIAL RESPONSIBILITY
Committee of the Company has proposed and ACTIVITIES
the Board of Directors of the Company has The Company has been carrying out various Corporate
recommended appointment of M/s. S R B C & Social Responsibility (CSR) activities. These activities
CO LLP, Chartered Accountants, Pune as the are carried out in terms of Section 135 read with
Statutory Auditors of the Company. Subject Schedule VII of the Companies Act, 2013 as amended
to approval of shareholders of the Company, and the Companies (Corporate Social Responsibility
M/s. S R B C & CO LLP, Chartered Accountants, Pune Policy) Rules, 2014.
will hold office for a period of 5 (five) consecutive
years from the conclusion of 56th Annual General During the year under review the Company has spent
Meeting of the Company scheduled to be held on ` 73.04 Million on various CSR activities.
August 10, 2017, till the conclusion of 61st Annual
General Meeting to be held in the year 2022. The CSR Committee of the Company comprises of
Mr. P. G. Pawar, Chairman and Independent Director,
Further, the Notes on financial statements Mr. B. N. Kalyani, Chairman and Managing Director
referred to in the Auditors’ Report are self- and Mr. Amit B. Kalyani, Executive Director.
explanatory and do not call for any further
comments. The Auditors’ Report does not contain The Annual Report on CSR activities and the CSR
any qualification, reservation or adverse remark. initiatives taken during the year is appended as
Annexure “H” to this report.
B. Secretarial Auditor and the Audit
The Board has appointed M/s. SVD & Associates, 32. OBLIGATION OF COMPANY UNDER THE
Company Secretaries, Pune, to conduct SEXUAL HARASSMENT OF WOMEN AT
Secretarial Audit for the financial year 2016-17. WORKPLACE (PREVENTION, PROHIBITION
The Secretarial Audit Report for the financial year AND REDRESSAL) ACT, 2013
ended March 31, 2017 is appended as Annexure
The Company has zero tolerance for sexual
“G” to this report. The Secretarial Audit Report harassment at workplace and has adopted a Policy
does not contain any qualification, reservation or in line with the provisions of the Sexual Harassment
adverse remark. of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013 and the Rules made thereunder
Further, as required under Section 204 of the for prevention and redressal of complaints of sexual
Companies Act, 2013 and Rules thereunder, the harassment at workplace. All women associates
Board has appointed M/s. SVD & Associates, (permanent, temporary, contractual and trainees)
Company Secretaries, Pune, to conduct as well as any women visiting the Company’s office
Secretarial Audit for the financial year 2017-18. premises or women service providers are covered
under this Policy.
C. Cost Auditors
The Board of Directors, on the recommendation
During the year under review, there were no
of Audit Committee, has appointed complaints reported to the Committee constituted
M/s. Dhananjay V. Joshi & Associates, Cost under the Sexual Harassment of Women at Workplace
Accountants, Pune (Firm Registration No.:00030) (Prevention, Prohibition and Redressal) Act, 2013.
as Cost Auditors to audit the cost accounts of
the Company for the financial year 2017-18. 33. VIGIL MECHANISM
As required under the Companies Act, 2013, a The Company has formulated a Whistle Blower Policy,
resolution seeking Member’s approval for the wherein the Employees/Directors/Stakeholders of the
remuneration payable to the Cost Auditors forms Company are free to report any unethical or improper
part of Notice convening the 56th Annual General activity, actual or suspected fraud or violation of the
Meeting. Company’s Code of Conduct. The policy provides
for a mechanism to report such concerns to the
The Cost Audit report for the Financial Year 2015- Audit Committee through specified channels. This
16 was filed with the Ministry of Corporate Affairs mechanism provides safeguards against victimisation
on September 26, 2016. of Employees, who report under the said mechanism.
During the year under review, the Company has not Your Directors are thankful to the Members for
received any complaints under the said mechanism. actively participating in the Green Initiative and seek
The Whistle Blower Policy of the Company has been your continued support for implementation of the
displayed on the Company’s website at the link: green initiative.
Annexure “A”
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred
to in sub-section (1) of Section 188 of the Companies Act, 2013, including certain arm’s length transactions under third
proviso thereto
Accordingly, based on the parameters prescribed 4. STATUTORY/OTHER REQUIREMENTS
by SEBI, the Company has adopted this Policy titled The Board is expected to adhere to the following
“Dividend Distribution Policy of Bharat Forge Limited” while making recommendations to the Shareholders
(“The Policy”). for their approval on dividend payout during any
financial year:
2. PURPOSE AND APPLICABILITY
This Policy reflects the intent of the Company to a) Companies Act, 2013 and applicable rules
reward its shareholders by sharing a portion of its thereunder ;
distributable profits after retaining sufficient funds b) SEBI (Listing Obligations and Disclosure
for its future growth initiatives and maintaining the Requirements) Regulations 2015, as amended
financial soundness of the Company. The purpose of from time- to-time;
this Policy is also to lay down criteria to be considered c) Any other applicable laws for the time being in
by the Board of Directors of the Company (“The force; and
Board”) in taking decision for recommending dividend d) Financial covenants as may be stipulated by
to its shareholders for any financial year. lenders of the Company.
This Policy shall deem to have come into force with 5. THE INTERNAL AND EXTERNAL FACTORS THAT
effect from the date written herein below. SHALL BE CONSIDERED FOR DECLARATION OF
DIVIDEND
This Policy shall not apply to: 5.1 The Board of the Company shall take a
decision to declare dividend after taking
a)
determination and declaration of dividend on into account the following internal and
preference shares, if any, issued or to be issued external factors:
by the Company, since dividend on preference A. Internal Factors :
shares will always be as per the terms of issue The Board shall, among others, consider the
approved by the Shareholders; following indicative internal factors (which are
illustrative and not exhaustive) while taking a
b) distribution
of dividend in kind, i.e. by issuance decision for declaration of dividend:
of fully or partly paid-up bonus shares (whether
equity or preference shares) or other securities; a) The un-consolidated profits of the Company
made during the year;
c)
distribution of cash (i) as an alternative to b) Obligations towards the creditors;
payment of dividend, if any, permissible under c) Business Plans;
the Companies Act, 2013 (“The Act”); (ii) by way d) Expansion plans;
of buy-back of equity shares; (iii) reduction in e) Corporate Restructuring plans;
share capital of the Company; and (iv) on account f) Scheme of arrangement, if any; or
of fraction entitlement due to sub-division, split
g)
Any other factors which can have possible
6. MANNER OF DIVIDEND PAYOUT
material financial implications on the
6.1 Final Dividend :
Company.
a) The Board shall recommend final dividend
B. External Factors : usually in the Board Meeting that considers
In addition to the above, the Board shall, among and approves the annual financial statements
others, consider the following indicative external of the Company.
factors (which are illustrative and not exhaustive)
while taking a decision for declaration of dividend: b) The final dividend, if any, that the Board
may consider shall factor Interim Dividend,
a) Macro-economic environment;
if any, that it might have declared during the
b) Indian/ Global Capital Markets; applicable financial year.
c) Industry outlook (domestic as also global) for
business in which Company operates; 6.2 Interim Dividend :
d) Change in taxation laws and economic/ trade a) The Board may declare Interim Dividend at
policies/ global trade agreements; its complete discretion in line with this Policy,
based on distributable profits arrived at on a
e) Geo-political reasons or
quarterly or half-yearly financial results of the
f)
Any other external factors which can have Company .
a material financial implications on the
Company. b) In case no Final Dividend is declared, Interim
5.2
Circumstances under which the Board Dividend paid during the year, if any, will be
of the Company may or may not regarded as Final Dividend for confirmation of
recommend/ declare dividend : shareholders in the Annual General Meeting.
Subject to the criteria and other provisions of this
Policy, the Board may in its absolute discretion
7.
MANNER OF UTILISATION OF RETAINED
decide not to recommend/ declare any dividend
EARNINGS
The Board may consider retained earnings considering
for any financial year, including for the reason
weighted average cost of capital in application for
such as inadequate un-consolidated profits after
growth initiatives, if any, and increase in stakeholder’s
tax or the growth initiatives of the Company, do
value from long term perspective. The decision of
not warrant distribution of profits.
utilization of the retained earnings of the Company
will, among other, be based on the following factors:
5.3
Financial parameters that shall be
considered while declaring dividend :
a) Strategic and long term plans of the Company;
In cases where the Board considers it appropriate b) Organic and in-organic growth opportunities
to declare Interim Dividend, then for the available to the Company;
purposes of declaring Interim Dividend, the c) Non-fund based needs of the Company, its
Board shall consider un-consolidated profit after subsidiaries and Joint Ventures which may require
tax (PAT) and overall financial projections for the the Company to have a healthy consolidated
unexpired potion of the financial year. In cases balance sheet;
where the Board considers it appropriate to d) Decision for issue of bonus, buy-back etc.; and
recommend final dividend for declaration, then e) Any other criteria which the Board of the Company
for the purposes of declaration of final dividend, may consider appropriate.
the Board shall consider un-consolidated profit
after tax, Interim Dividend declared, if any, and 8. PARAMETERS TO BE ADOPTED WITH REGARD
earnings that the Board deems appropriate to be TO VARIOUS CLASSES OF SHARES
carried to reserves to maintain financial health Presently, the Company has only one class of shares
and to fund growth initiatives of the Company. i.e. equity shares. As and when it proposes to issue any
Considering these aspects including the other other class of shares, this policy shall be accordingly
criteria laid down in this Policy, the Board shall modified, if necessary, to cover such other class of
endeavor to maintain an annual dividend payout securities.
range of 15% to 35% of the un-consolidated profit
after tax of the Company.
Annexure “C”
Form No. MGT-9
EXTRACT OF ANNUAL RETURN
As on the financial year ended on March 31, 2017
[Pursuant to Section 92(3) of the Companies Act, 2013 and rule 12(1)
of the Companies (Management and Administration) Rules, 2014]
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
I) Category-wise Share Holding as on March 31, 2017
Category of %
No. of Shares held at the beginning of the year No. of Shares held at the end of the year
Shareholders change
Demat Physical Total % of Demat Physical Total % of
during
total total
the
share share
year
A. Promoters
(1) Indian
a) Individual/ HUF 808,065 50 808,115 0.35 808,065 50 808,115 0.35 -
b) Central Govt. - - - - - - - - -
c) State Govt.(s) - - - - - - - - -
d) Bodies Corp. 102,332,315 5,677,490 108,009,805 46.40 100,005,315 5,677,490 105,682,805 45.40 1.00
e) Banks/FI - - - - - - - - -
f) Any Other - - - - - - - - -
Sub-total (A) (1): 103,140,380 5,677,540 108,817,920 46.74 100,813,380 5,677,540 106,490,920 45.74 1.00
(2) Foreign
a) NRIs - Individuals - - - - - - - - -
b) Other - Individuals - - - - - - - - -
c) Bodies Corp. - - - - - - - - -
d) Banks/FI - - - - - - - - -
e) Any Other - - - - - - - - -
Sub-total (A) (2):- - - - - - - - - -
Total shareholding
of Promoter (A) = 103,140,380 5,677,540 108,817,920 46.74 100,813,380 5,677,540 106,490,920 45.74 1.00
(A)(1)+(A)(2)
B. Public
Shareholding
1. Institutions
a) Mutual Funds 18,400,651 4,800 18,405,451 7.91 16,780,266 3,750 16,784,016 7.21 0.70
b) Banks/FI 16,987,631 8,775 16,996,406 7.30 15,774,711 7,900 15,782,611 6.78 0.52
c) Central Govt. - - - - - - - - -
d) State Govt.(s) - - - - - - - - -
e) V
enture Capital
- - - - - - - - -
fund
f) Insurance
3,251,244 - 3,251,244 1.40 2,719,951 - 2,719,951 1.17 0.23
Companies
g) FIIs 25,120,037 1,845 25,121,882 10.79 10,729,359 570 10,729,929 4.61 6.18
h) F
oreign Venture
- - - - - - - - -
Capital Funds
i) Others (specify) - - - - - - - - -
(i-i) Foreign bank - - - - - - - - -
(i-ii) F
oreign Portfolio
11,962,474 - 11,962,474 5.14 35,333,222 - 35,333,222 15.18 10.04
Investor
Sub-total (B)(1): 75,722,037 15,420 75,737,457 32.54 81,337,509 12,220 81,349,729 34.95 3.27
b) Individuals
i) Individual
Shareholders
holding nominal 20,790,369 2,484,821 23,275,190 10.01 20,650,685 2,152,099 22,802,784 9.80 0.21
share Capital up to
`1 Lakh
ii) Individual
Shareholders
holding nominal 384,551 109,300 3,954,851 1.70 4,587,809 109,300 4,697,109 2.02 0.32
share Capital in
excess of ` 1 lakh
c) Others (specify)
(c-i) C
learing
771,598 - 771,598 0.33 483,309 - 483,309 0.21 0.12
Member
(c-ii) Trusts 489,606 - 489,606 0.21 1,141,623 - 1,141,623 0.49 0.28
(c-iii) N
on Resident
1,010,190 13,015 1,023,205 0.44 970,610 10,805 981,415 0.42 0.02
Indian
Sub-total (B)(2):- 45,609,693 2,620,046 48,229,739 20.72 42,493,808 2,450,659 44,944,467 19.31 2.61
Total Public
Shareholding (B)=(B) 121,331,730 2,635,466 123,967,196 53.26 123,831,317 2,462,879 126,294,196 54.26 1.00
(1)+ (B)(2)
C. Shares held by
Custodian for GDRs 9,200 - 9,200 - 9,200 - 9,200 - -
& ADRs
Grand Total
224,481,310 8,313,006 232,794,316 100 224,653,897 8,140,419 232,794,316 100 -
(A+B+C)
Sr. Shareholder’s Name Shareholding at the beginning of the Shareholding at the end of the % change in
No. year (As on April 1, 2016) year (As on March 31, 2017) shareholding
No. of % of total % of Shares No. of % of total % of Shares during the
Shares Shares Pledged/ Shares Shares Pledged/ year
of the encumbered of the encumbered
Company to total company to total
shares shares
1 Mr. B.N. Kalyani 39,025 0.02 - 39,025 0.02 - -
2 Mr. Amit B. Kalyani 350,200 0.15 - 350,200 0.15 - -
3 Mr. Gaurishankar N. 345,220 0.15 - 345,220 0.15 - -
Kalyani
Sr. Shareholder’s Name Shareholding at the beginning of the Shareholding at the end of the % change in
No. year (As on April 1, 2016) year (As on March 31, 2017) shareholding
No. of % of total % of Shares No. of % of total % of Shares during the
Shares Shares Pledged/ Shares Shares Pledged/ year
of the encumbered of the encumbered
Company to total company to total
shares shares
4 Mrs. Sulochana N. 50 - - 50 - - -
Kalyani jointly with Mr.
B. N. Kalyani
5 Ms. Sheetal G. Kalyani 11,490 - - 11,490 - - -
6 Mrs. Rohini G. Kalyani 50,730 0.02 - 50,730 0.02 - -
7 Kum. Viraj G. Kalyani 11,400 - - 11,400 - - -
8 KSL Holding Pvt. Ltd. 23,142,870 9.94 - 23,142,870 9.94 - -
9 Ajinkya Investment & 9,818,925 4.22 - 9,818,925 4.22 - -
Trading Company
10 Sundaram Trading and 29,907,087 12.85 - 27,580,087 11.85 - 1.00
Investment Pvt. Ltd.
11 Kalyani Investment 31,656,095 13.60 - 31,656,095 13.60 - -
Company Limited
12 BF Investment Limited 7,807,338 3.35 - 7,807,338 3.35 - -
13 Rajgad Trading Co. Pvt. 662,760 0.28 - 662,760 0.28 - -
Ltd.
14 Tanmarg Investment & 388,000 0.17 - 388,000 0.17 - -
Trading Pvt. Ltd.
15 Yusmarg Investment & 822,000 0.35 - 822,000 0.35 - -
Trading Pvt. Ltd.
16 Kalyani Consultants 328,500 0.14 - 328,500 0.14 - -
Pvt. Ltd.
17 Jannhavi Investment 2,217,570 0.95 - 2,217,570 0.95 - -
Pvt. Ltd.
18 Dronacharya 70,715 0.03 - 70,715 0.03 - -
Investment & Trading
Pvt. Ltd.
19 Cornflower Investment 247,000 0.11 - 247,000 0.11 - -
& Finance Pvt. Ltd
20 Dandakaranya 512,500 0.22 - 512,500 0.22 - -
Investment & Trading
Pvt. Ltd
21 Campanula Investment 344,445 0.15 - 344,445 0.15 - -
& Finance Pvt. Ltd.
22 Hastinapur Investment 84,000 0.04 - 84,000 0.04 - -
& Trading Pvt. Ltd.
Total 108,817,920 46.74 - 106,490,920 45.74 - 1.00
Sr. No. For Each of the Top 10 Shareholders Shareholding at the beginning Cumulative Shareholding during
Name, Date & Reason of change of the year the year
No. of shares % of total shares No. of shares % of total
of the Company shares of the
Company
1 Life Insurance Corporation of India Limited
As on 01.04.2016 16,394,386 7.04 16,394,386 7.04
Add 19.08.2016 Market Purchase 8,985 - 16,403,371 7.05
Add 16.09.2016 Market Purchase 217,535 0.09 16,620,906 7.14
Add 23.09.2016 Market Purchase 665,713 0.29 17,286,619 7.43
Add 30.09.2016 Market Purchase 40,989 0.02 17,327,608 7.44
Add 07.10.2016 Market Purchase 108,074 0.05 17,435,682 7.49
Less 18.11.2016 Market Sale - 4,645 - 17,431,037 7.49
Less 25.11.2016 Market Sale - 42,910 -0.02 17,388,127 7.47
Less 02.12.2016 Market Sale - 148,257 -0.06 17,239,870 7.41
Less 09.12.2016 Market Sale -100,000 -0.04 17,139,870 7.36
Less 16.12.2016 Market Sale -118,002 -0.05 17,021,868 7.31
Less 23.12.2016 Market Sale -33,557 -0.01 16,988,311 7.30
Less 06.01.2017 Market Sale -84,515 -0.04 16,903,796 7.26
Less 10.02.2017 Market Sale -90,000 -0.04 16,813,796 7.22
Less 17.03.2017 Market Sale -203,040 -0.09 16,610,756 7.14
Less 24.03.2017 Market Sale -416,672 -0.18 16,194,084 6.96
Less 31.03.2017 Market Sale -875,000 -0.38 15,319,084 6.58
As on 31.03.2017 15,319,084 6.58
Sr. No. For Each of the Top 10 Shareholders Shareholding at the beginning Cumulative Shareholding during
Name, Date & Reason of change of the year the year
No. of shares % of total shares No. of shares % of total
of the Company shares of the
Company
Less 02.12.2016 Market Sale -137,880 -0.06 6,431,273 2.76
Less 09.12.2016 Market Sale -99,600 -0.04 6,331,673 2.72
Less 16.12.2016 Market Sale -100,016 -0.04 6,231,657 2.68
Less 23.12.2016 Market Sale -54,600 -0.02 6,177,057 2.65
Less 17.02.2017 Market Sale -283,273 -0.12 5,893,784 2.53
Less 24.02.2017 Market Sale -165,000 -0.07 5,728,784 2.46
Less 03.03.2017 Market Sale -76,000 -0.03 5,652,784 2.43
Less 10.03.2017 Market Sale -79,939 -0.03 5,572,845 2.39
Less 17.03.2017 Market Sale -46,061 -0.02 5,526,784 2.37
As on 31.03.2017 5,526,784 2.37
Sr. No. For Each of the Top 10 Shareholders Shareholding at the beginning Cumulative Shareholding during
Name, Date & Reason of change of the year the year
No. of shares % of total shares No. of shares % of total
of the Company shares of the
Company
Less 23.09.2016 Market Sale - 42,286 -0.02 922,336 0.40
Add 30.09.2016 Market Purchase 31,989 0.01 954,325 0.41
Add 07.10.2016 Market Purchase 523,390 0.22 1,477,715 0.63
Less 14.10.2016 Market Sale -2,121 - 1,475,594 0.63
Add 21.10.2016 Market Purchase 10,200 - 1,485,794 0.64
Less 11.11.2016 Market Sale -216,721 -0.09 1,269,073 0.55
Less 18.11.2016 Market Sale -196,086 -0.08 1,072,987 0.46
Add 25.11.2016 Market Purchase 14,893 0.01 1,087,880 0.47
Add 02.12.2016 Market Purchase 588,058 0.25 1,675,938 0.72
Add 09.12.2016 Market Purchase 4,098 - 1,680,036 0.72
Add 16.12.2016 Market Purchase 5,783 - 1,685,819 0.72
Add 23.12.2016 Market Purchase 110,418 0.05 1,796,237 0.77
Less 31.12.2016 Market Sale - 58,000 -0.02 1,738,237 0.75
Add 06.01.2017 Market Purchase 139,902 0.06 1,878,139 0.81
Add 13.01.2017 Market Purchase 8,848 - 1,886,987 0.81
Add 20.01.2017 Market Purchase 3,822 - 1,890,809 0.81
Add 27.01.2017 Market Purchase 4,924 - 1,895,733 0.81
Add 03.02.2017 Market Purchase 278,400 0.12 2,174,133 0.93
Less 10.02.2017 Market Sale -31,279 -0.01 2,142,854 0.92
Less 17.02.2017 Market Sale - 69,600 -0.03 2,073,254 0.89
Less 24.02.2017 Market Sale - 6,349 - 2,066,905 0.89
Add 03.03.2017 Market Purchase 187,196 0.08 2,254,101 0.97
Add 10.03.2017 Market Purchase 38,400 0.02 2,292,501 0.98
Add 17.03.2017 Market Purchase 131,378 0.06 2,423,879 1.04
Add 24.03.2017 Market Purchase 53,522 0.02 2,477,401 1.06
Less 31.03.2017 Market Sale -19,071 -0.01 2,458,330 1.06
As on 31.03.2017 2,458,330 1.06
7 Gagandeep Credit Capital Pvt. Ltd.
As on 01.04.2016 2,141,982 0.92 2,141,982 0.92
Less 08.07.2016 Market Sale -7,000 - 2,134,982 0.92
As on 31.03.2017 2,134,982 0.92
8 Government of Singapore
As on 1.04.2016 2,340,654 1.01 2,340,654 1.01
Add 08.04.2016 Market Purchase 150,769 0.06 2,491,423 1.07
Less 22.04.2016 Market Sale -51,671 -0.02 2,439,752 1.05
Less 29.04.2016 Market Sale -24,778 -0.01 2,414,974 1.04
Less 06.05.2016 Market Sale -43,858 -0.02 2,371,116 1.02
Add 03.06.2016 Market Purchase 181,000 0.08 2,552,116 1.10
Sr. No. For Each of the Top 10 Shareholders Shareholding at the beginning Cumulative Shareholding during
Name, Date & Reason of change of the year the year
No. of shares % of total shares No. of shares % of total
of the Company shares of the
Company
Less 02.12.2016 Market Sale -74,467 -0.03 2,151,583 0.92
Less 16.12.2016 Market Sale -30,000 -0.01 2,121,583 0.91
Less 23.12.2016 Market Sale -47,140 -0.02 2,074,443 0.89
Less 20.01.2017 Market Sale -7,000 - 2,067,443 0.89
Less 27.01.2017 Market Sale -28,000 -0.01 2,039,443 0.88
Less 03.02.2017 Market Sale -15,000 -0.01 2,024,443 0.87
Less 03.03.2017 Market Sale -10,152 - 2,014,291 0.87
Less 10.03.2017 Market Sale -20,274 -0.01 1,994,017 0.86
Less 17.03.2017 Market Sale -3,183 - 1,990,834 0.86
As on 31.03.2017 1,990,834 0.86
10 BT Pension Scheme
As on 01.04.2016 1,447,818 0.62 1,447,818 0.62
Add 24.06.2016 Market Purchase 137,465 0.06 1,585,283 0.68
Add 30.06.2016 Market Purchase 305,433 0.13 1,890,716 0.81
Less 05.08.2016 Market Sale -7,213 - 1,883,503 0.81
Add 23.09.2016 Market Purchase 18,540 0.01 1,902,043 0.82
Less 17.02.2017 Market Sale -13,098 -0.01 1,888,945 0.81
As on 31.03.2017 1,888,945 0.81
Mr. K. M. Saletore, Executive Director & CFO and Ms. Tejaswini Chaudhari, Deputy Company Secretary do not hold any
shares of the Company at the beginning of the year as well as at the end of the year. They have neither acquired any
shares nor sold any shares during the year under review.
V. INDEBTEDNESS
Indebtedness of the Company including interest outstanding/accrued but not due for payment
(In ` Million)
Secured Loans Total
Unsecured Loans Deposits
excluding deposits Indebtedness
Indebtedness as at April 1, 2016
i) Principal Amount 6,025.47 20,659.88 0.04 26,685.39
ii) Interest due but not paid - - - -
iii) Interest accrued but not due 48.30 92.76 - 141.06
Total ( i+ii+iii) 6,073.77 20,752.64 0.04 26,826.45
Change in Indebtedness
during the financial year*
i) Addition 223.60 2,022.44 - 2,246.04
*Includes exchange difference, repayment, prepaid expenses movement and interest movement.
Independent
Directors / other
1
Non-executive
Directors
- Fee for
attending board
0.58 0.68 0.23 0.40 0.25 0.20 0.33 0.68 3.35
/committee
meetings
- Commission 1.15 1.40 0.45 0.80 0.50 0.40 0.65 1.35 6.70
- Others, please
- - - - - - - - -
specify
Total B 1.73 2.08 0.68 1.20 0.75 0.60 0.98 2.03 10.05
Total Managerial
Remuneration (A) + (B) 339.64
Overall ceiling as per the Act 918.04
* Non-Executive Director
C. Remuneration to Key Managerial Personnel other than the Managing Director/Whole-time Director/
Manager
(In ` Million)
Key Managerial Personnel
Sr.
Particulars of Remuneration Mr. K. M. Mr. Anand Ms. Tejaswini Total Amount
No.
Saletore* Daga # Chaudhari #
1 Gross Salary
Salary as per provisions contained in Section 17(1) of
a. - 1.05 1.48 2.53
the Income Tax Act, 1961
Value of perquisites under Section 17(2) of the
b. - 0.27 0.02 0.29
Income-tax Act, 1961
Profits in lieu of salary under Section 17(3) of the
c. - - - -
Income-tax Act, 1961
2 Stock Option - - - -
3 Sweat Equity - - - -
4 Commission: - - - -
- As a % of Net Profit - - - -
- others, specify - - - -
5 Others, please specify - - - -
Total - 1.32 1.50 2.82
* For Salary details of Mr. Kishore Saletore, please refer to point No. VI(A) hereinabove.
# Mr. Anand Daga and Ms. Tejaswini Chaudhari are employed for the part of the year.
VII. Penalties/Punishment/Compounding of Offences
Type Section of the Brief Details of Penalty/punishment/ Authority (RD/ Appeal made,
Companies Act,2013 Description compounding fees imposed NCLT/ COURT) if any (give details)
A. Company
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding Nil Nil Nil Nil Nil
B. Directors
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding Nil Nil Nil Nil Nil
C. Other Officers
in default
Penalty Nil Nil Nil Nil Nil
Punishment Nil Nil Nil Nil Nil
Compounding Nil Nil Nil Nil Nil
Annexure “D”
RATIO OF REMUNERATION OF EACH DIRECTOR TO THE MEDIAN
REMUNERATION OF THE EMPLOYEES OF THE COMPANY
* Ms. Tejaswini Chaudhari, Deputy Company Secretary assumed office as a Deputy Company Secretary and Compliance
Officer with effect from July 16, 2016. Due to this, details of increase in remuneration are not determinable.
Annexure “F”
NOMINATION AND REMUNERATION POLICY
The Board of Directors of Bharat Forge Limited (“the Company”) constituted the “Nomination and Remuneration
Committee” (“Committee”) at the Meeting held on May 27, 2014 with immediate effect, consisting of four (4) Non-
Executive Directors of which majority are Independent Directors.
1. To guide the Board in relation to appointment and 2.4.4 Company Secretary
removal of Directors, Key Managerial Personnel
(hereinafter referred to as “KMP”) and Senior 2.5 Listing Agreement means Agreement, as
Management. amended from time to time, executed with
Stock Exchanges for Listing of Securities of the
2. To evaluate the performance of the members of Company.
the Board and provide necessary report to the
Board for further evaluation of the Board. 2.6 Senior Management means personnel of
the Company who are members of its core
3. To recommend to the Board on Remuneration management team being functional heads not
payable to the Directors, KMP and Senior below grade of Senior Vice President.
Management.
3. ROLE OF COMMITTEE
4. To provide to KMP and Senior Management reward 3.1 Matters to be dealt with, perused and recommended
linked directly to their effort, performance, to the Board by the Nomination and Remuneration
dedication and achievement relating to the Committee
Company’s operations.
The Committee shall:
5. To retain, motivate and promote talent and
to ensure long term sustainability of talented 3.1.1 Formulate the criteria for determining
managerial persons and create competitive qualifications, positive attributes and
advantage. independence of a director.
6. To devise a policy on Board diversity. 3.1.2 Identify persons who are qualified to become
Director and persons who may be appointed
7. To develop a succession plan for the Board and to in Key Managerial and Senior Management
regularly review the plan; positions in accordance with the criteria laid
down in this policy.
2. DEFINITIONS
2.1 Act means the Companies Act, 2013 and Rules 3.1.3 Recommend to the Board, appointment
framed thereunder, as amended from time to and removal of Director, KMP and Senior
time. Management Personnel.
2.2 Board means Board of Directors of the Company. 3.1.4 Formulate the criteria for evaluation of
performance of independent directors and
2.3 Directors mean Directors of the Company. Board of Directors.
3.2.2 Term / Tenure 3.3 Policy relating to the Remuneration for the Whole-time
Director, KMP and Senior Management Personnel
a) Managing Director/Whole-time Director:
3.3.1 General:
The Company shall appoint or re-appoint any
person as its Executive Chairman, Managing a) The remuneration / compensation / commission
Director or Executive Director for a term etc. to the Whole-time Director, KMP and Senior
not exceeding five years at a time. No re- Management Personnel will be determined by
appointment shall be made earlier than one the Committee and recommended to the Board
year before the expiry of term. for approval. The remuneration / compensation /
commission etc. shall be subject to the prior/post
approval of the shareholders of the Company and
Central Government, wherever required.
b) The remuneration and commission to be paid to shall be decided and approved by the Board/
the Whole-time Director shall be in accordance the Person authorized by the Board on the
with the percentage / slabs / conditions laid down recommendation of the Committee and
in the Articles of Association of the Company and approved by the shareholders and Central
as per the provisions of the Act. Government, wherever required.
c)
Increments to the existing remuneration/ b) Minimum Remuneration:
compensation structure may be recommended
by the Committee to the Board which should be If, in any financial year, the Company has
within the slabs approved by the Shareholders in no profits or its profits are inadequate, the
the case of Whole-time Director. Company shall pay remuneration to its
Whole-time Director in accordance with the
d) Where any insurance is taken by the Company provisions of Schedule V of the Act and if it
on behalf of its Whole-time Director, Chief is not able to comply with such provisions,
Executive Officer, Chief Financial Officer, the with the previous approval of the Central
Company Secretary and any other employees Government.
for indemnifying them against any liability, the
premium paid on such insurance shall not be c) Provisions for excess remuneration:
treated as part of the remuneration payable
to any such personnel. Provided that if such If any Whole-time Director draws or receives,
person is proved to be guilty, the premium paid directly or indirectly by way of remuneration
on such insurance shall be treated as part of the any such sums in excess of the limits
remuneration. prescribed under the Act or without the
prior sanction of the Central Government,
e) In case any difficulty or doubt arises in the where required, he / she shall refund such
interpretation or implementation of this Policy, sums to the Company and until such sum is
the decision of the Chairman & Managing Director refunded, hold it in trust for the Company.
of the Company shall be final. In exceptional The Company shall not waive recovery of
circumstances, the Chairman & Managing such sum refundable to it unless permitted
Director shall be authorized to exercise functions by the Central Government.
vested in the committee in so far as these relate
to Key Managerial Personnel covered under 3.3.3 Remuneration to Non- Executive /
Clauses 2.4.3, 2.4.4 and the Senior Management; Independent Director:
provided however that such actions taken by the
Chairman & Managing Director shall be placed a) Remuneration / Commission:
before the Committee for ratification in the
succeeding meeting. The remuneration / commission shall be fixed
as per the slabs and conditions mentioned in
3.3.2 Remuneration to Whole-time / Executive the Articles of Association of the Company
/ Managing Director, KMP and Senior and the Act.
Management Personnel:
b) Sitting Fees:
a) Fixed pay:
The Non- Executive / Independent Director
The Whole-time Director/ KMP and Senior may receive remuneration by way of fees for
Management Personnel shall be eligible for a attending meetings of Board or Committee
monthly remuneration as may be approved thereof. Provided that the amount of such
by the Board on the recommendation of fees shall not exceed ` 1,00,000/- (Rupees
the Committee. The breakup of the pay One Lac Only) per meeting of the Board
scale and quantum of perquisites including, or Committee or such amount as may be
employer’s contribution to P.F, pension prescribed by the Central Government from
scheme, medical expenses, club fees etc. time to time.
4. MEMBERSHIP 9. VOTING
4.1 The Committee shall consist of a minimum 3 9.1 Matters arising for determination at Committee
non-executive directors, majority of them being meetings shall be decided by a majority of votes
independent. of Members present and voting and any such
decision shall for all purposes be deemed a
4.2 Minimum two (2) members shall constitute a decision of the Committee.
quorum for the Committee meeting.
9.2 In the case of equality of votes, the Chairman of
4.3 Membership of the Committee shall be disclosed the meeting will have a casting vote.
in the Annual Report.
10. NOMINATION DUTIES
4.4 Term of the Committee shall be continued unless The duties of the Committee in relation to nomination
terminated by the Board of Directors. matters include:
10.8 Making recommendations to the Board other factors as the Committee shall deem
concerning any matters relating to the appropriate all elements of the remuneration
continuation in office of any Director at any of the members of the Board.
time including the suspension or termination
of service of an Executive Director as an 11.2 to approve the remuneration of the Senior
employee of the Company subject to the Management including key managerial
provision of the law and their service contract. personnel of the Company maintaining a
balance between fixed and incentive pay
10.9 Delegating any of its powers to one or more reflecting short and long term performance
of its members or the Secretary of the objectives appropriate to the working of the
Committee; Company.
10.10 Recommend any necessary changes to the 11.3 to delegate any of its powers to one or
Board; and more of its members or the Secretary of the
Committee.
10.11 Considering any other matters, as may be
requested by the Board. 11.4 to consider any other matters as may be
requested by the Board.
11. REMUNERATION DUTIES
The duties of the Committee in relation to 11.5 Professional indemnity and liability insurance
remuneration matters include: for Directors and senior management.
11.1 to consider and determine the Remuneration 12. MINUTES OF COMMITTEE MEETING
Policy, based on the performance and also Proceedings of all meetings must be minuted and
bearing in mind that the remuneration is signed by the Chairman of the Committee at the
reasonable and sufficient to attract, retain subsequent meeting. Minutes of the Committee
and motivate members of the Board and such meetings will be tabled at the subsequent Board and
Committee meeting.
(ii)
The Listing Agreement entered into by the We further report that there are adequate systems and
Company with Stock Exchange(s) pursuant to SEBI processes in the Company commensurate with the size
(Listing Obligations and Disclosure Requirements) and operations of the Company to monitor and ensure
Regulations, 2015. compliance with applicable laws, rules, regulations and
guidelines.
During the period under review the Company has
complied with the provisions of the Act, Rules, Regulations, We further report that during the audit period,
Guidelines, Standards, etc. mentioned above.
1) The Company has redeemed 1760- 10.75%
We further report that Redeemable secured non-convertible debentures of
The Board of Directors of the Company is duly constituted ` 10,00,000/- each at par on 28th April, 2016.
with proper balance of Executive Directors, Non-Executive 2) The Company has redeemed 2500- 11.95%
Directors and Independent Directors. The changes in the Redeemable secured non-convertible debentures of
composition of the Board of Directors that took place ` 10,00,000/- each at par on 5th January, 2017.
during the period under review were carried out in
compliance with the provisions of the Act.
Place: Pune For SVD & Associates
Adequate notice is given to all directors to schedule the Date: 24th May, 2017 Company Secretaries
Board Meetings, agenda and detailed notes on agenda
were sent at least seven days in advance, and a system
exists for seeking and obtaining further information and Sridhar G. Mudaliar
clarifications on the agenda items before the meeting and Partner
for meaningful participation at the meeting. FCS No: 6156
C P No: 2664
All decisions at Board Meetings and Committee Meetings
are carried out unanimously as recorded in the minutes
of the meetings of the Board of Directors or Committees
of the Board, as the case may be.
The Board of Directors at its meeting held on May 27, 2014 Explanation for unspent amount
have adopted the Corporate Social Responsibility (“CSR”) The Company is spending on the CSR activities based
policy of the Company. Eligible funds for CSR activities on the requirement of the projects undertaken by the
in each financial year will be expended in the areas Company. After reviewing the same, the Committee took
of Education, Skill Development, Vocational Training, note that during the financial year 2016-17, an amount of
Sustainability, Environment, Health, Ecological Protection, ` 107.48 Million remained unspent. It was further clarified
Sports and Rural Development through one or more that CSR expenses incurred by the Company during the
implementing agencies/trusts. These CSR activities will be year 2016-17 are lesser than the prescribed limit due
carried out through various programmes or projects as to phase wise implementation of CSR activities. The
specified in the CSR Policy of the Company. The CSR policy Company is spending on the CSR activities based on the
of the Company has been displayed on the Company’s requirement of the projects undertaken by the Company.
website at the link: In FY 2016-17, the Company has undertaken Projects on
http://bharatforge.com/images/PDFs/policies/BFL%20 Village Development and Jalyukta Shivar in 9 villages.
CSR%20Policy-Signed.pdf Currently they are in the first phase and would require
Details of expenditure on CSR activities are as more funds in the next phases. The MoU with Government
follows: of Maharashtra for developing ITI Khed has been extended
(In ` Million) and we will be starting a new Trade ‘Mechatronics’ which
would require substantial investment.
Average net profit of the Company for the last
three financial years i.e.2013–2014, 2014–2015 9,026.11 During the financial year 2016-17, an amount of
and 2015–2016 ` 107.48 Million remained unspent due to phase wise
Prescribed CSR expenditure (2% of the average implementation of CSR activities. The unspent amount of
180.52
net profit computed above) the financial year 2016-17, shall be utilized by the Company
Total amount spent on CSR activities for the in current financial year for CSR Projects undertaken by
73.04
financial year 2016–17
the Company.
Amount unspent, if any 107.48
Manner in which amount spent in the financial year 2016-17 is detailed below:
(In ` Million)
Projects or Amount
programs spent on the
1. Local area Amount projects or
Cumulative Amount
Sector in or others outlay programs
CSR Projects/ expenditure spent Direct
Sr. which the 2. Specify (budget) Sub-heads:
Activities up to the or through
No. Project is the state project or 1) Direct
identified reporting implementing
covered and district programs expenditure
period agency
where wise on projects or
projects was programs.
undertaken 2) Overheads
1 Pune, Through
(i) Kalyani School Education 50.00 50.00 50.00
Maharashtra implementing
(ii) P
ratham Education Education Pune, 3.61 3.61 3.61 agency but
Foundation Maharashtra we are also
personally
monitoring the
project
(In ` Million)
Projects or Amount
programs spent on the
1. Local area Amount projects or
Cumulative Amount
Sector in or others outlay programs
CSR Projects/ expenditure spent Direct
Sr. which the 2. Specify (budget) Sub-heads:
Activities up to the or through
No. Project is the state project or 1) Direct
identified reporting implementing
covered and district programs expenditure
period agency
where wise on projects or
projects was programs.
undertaken 2) Overheads
(iiii) P
radnya Vikas Education Pune, 0.86 0.86 0.86 Through
Program – Jnana Maharashtra implementing
Prabhodhini agency but we
(iv) V arious Education Pune, 2.88 2.88 2.88 are personally
Educational Maharashtra monitoring the
Initiatives: project
Sponsorship to
Vidyarthi Sahayak
Samiti, Nanhi
Kali, Akanksha
Foundation
(V) School Adoption Education Pune, 3.15 1.79 1.79 Directly
- Infrastructural Maharashtra
Development &
Mission Sanitation
of School
ITI, Khed, Bhor & Employment Pune, 9.07 5.11 5.11 Directly
Malegaon Training enhancing Maharashtra
2 Program for ITI vocational skills
Principals from development
Maharashtra
Community Community Pune, 0.75 0.82 0.82 Directly
development center Development Maharashtra
3
& Women
Empowerment
Khelghar Community Pune, 0.37 0.07 0.07 Directly
Development Maharashtra
Health check-up Healthcare Pune, 0.06 0.06 0.06 Through
camps Maharashtra implementing
agency but we
4
are personally
monitoring the
project
Jalyukta Shivar Drought Free Pune and 3.44 2.54 2.54 With the help
Abhiyan Maharashtra Baramati of goverment
i. At Kalewadi Village, Maharashtra officials
Tal. Purandar, Dist. and our
Pune involvement
ii. At Navali Village,
Tal. Purandar,
5 Dist. Pune
iii. At Parwadi village,
Tal. Baramati, Dist.
Pune
iv. At Pawarwadi
Village, Tal.
Purandar, Dist.
Pune
The Responsibility Statement of the Corporate Social Responsibility (CSR) Committee of the Board of Directors of the
Company is reproduced below:
‘The implementation and monitoring of Corporate Social Responsibility (CSR) Policy, is in compliance with CSR objectives
and policy of the Company.’
B. N. KALYANI P. G. PAWAR
Chairman and Managing Director Chairman, CSR Committee
Annexure “I”
Information as per Section 134(3) (m) of the Companies Act, 2013 read with Rule 8 (3) of the Companies
(Accounts) Rules, 2014 forming part of the Directors’ Report for the year ended March 31, 2017
11. Effect of Electron Beam Welding on Microstructure 20. Effect of Quench Delay on Subsurface integrity during
and Mechanical Properties of Ti-6Al-4V Alloy, 2016 Machining of Titanium Alloy Ti6Al4V, 2016 (Procedia
(International Federation of Heat Treatment and Manufacturing 6).
Surface Engineering 2016 Proceedings of the 23rd
IFHTSE Congress April 18–21, 2016, Savannah, 21. Study of fatigue crack growth analysis in micro alloyed
Georgia, USA). steel (38MnVS6) using Digital Image Correlation, 2016
(Materials Science & Technology 2016).
12. Integrating deep cryogenic treatment with nitro-
carburizing to improve performance of AISI H-13 tool 22. Correlation between Fatigue Strength of Forged
steel, (International Federation of Heat Treatment Crankshaft and Endurance Strength of Raw Material,
and Surface Engineering 2016 Proceedings of the 2016 (AIFI Biennial Conference 2016 (Forge Tech
23rd IFHTSE Congress April 18–21, 2016, Savannah, India).
Georgia, USA).
23. Study of Deformation Behavior of Al 6082, 2016 (AIFI
13. Effect of processing route on microstructure and Biennial Conference, 2016 (Forge Tech India).
impact toughness of duplex stainless steel, 2016
(International Federation of Heat Treatment and 24. Effect of Laser Shock Peening (LSP) On AISI L6 Hot
Surface Engineering 2016 Proceedings of the 23rd Work Tool Steel, 2016 (Materials Science & Technology
IFHTSE Congress April 18–21, 2016, Savannah, 2016).
Georgia, USA).
25. Effect of tempering temperature on the
14. Effect of Plasma Nitriding on Corrosion Behavior microstructure, mechanical and magnetic properties
of AISI4330 Low Alloy Steel, 2016 (International of 26NiCrMoV11-5 steel, 2016 (Materials Science &
Federation of Heat Treatment and Surface Engineering Technology 2016).
2016 Proceedings of the 23rd IFHTSE Congress April
18–21, 2016, Savannah, Georgia, USA). 26. Effect of Induction Hardening Case Depth on Residual
Stresses, Microstructural Phases and Fatigue Strength
15. Theoretical study on Cold Open Die Forging Process of 38MnVS6 Micro Alloyed Steel, 2016 (Materials
Optimization for Multipass Workability, 2016 (12th Science & Technology 2016).
international conference on “Numerical methods in
Industrial Forming Processess”-Numiform’16). 27. Influence of laser parameter on surface microstructure
modification of Ti-6Al- 4V, 2016 (CAMS, 2016).
16. Evaluation of the characteristics of the vibration-
assisted tapping process using regression 28. Machinability improvement of Ti-6Al-4V by laser
methodology and artificial neural network (ANN), surface treatment, 2016 (CAMS, 2016).
2016 (International Journal of Latest Research in
Engineering and Technology (IJLRET) ISSN: 2454-5031 29. Study of high temperature stress corrosion crack
Volume 02 - Issue 08 August 2016 PP. 01-13). initiation of alloy IMI 834 by DC potential drop
method, 2016 (Corros. Sci. and Tech. 15, 203-208.
17. Influence of Laser treatment on machinability of DOI:http://dx.doi.org/10.14773/cst.2016.15.5.203).
Ti6Al4V alloy, 2016 (Procedia Manufacturing).
30. Investigation of Process Parameters for Friction Stir Processing (FSP) of Ti-6Al-4V Alloy, 2017 (The Minerals, Metals
& Materials Series, DOI 10.1007/978-3-319-52383-5_7 (TMS-2017).
31. Study on flow properties of rotor grade steel, 2017 (Journal of Metallurgy and Materials Science, Vol. 58, No. 4).
32. Identification of favorable hot working condition for Ti-6Al-4V, 2017 (Journal of Metallurgy and Materials Science,
Vol. 58, Issue 1, pp. 9-18).
IP Generation:
During the year 10 (Ten) patents were filed.
II. T
he benefits derived like product improvement, cost reduction, product development and
import substitution:
III. In case of imported technology (imported during the last 3 years reckoned from the beginning of
the financial year):
Details of Technology Imported Year of Has technology If not fully absorbed, areas where
(product) import been fully absorbed absorption has not taken place and the
reasons thereof
Technology development on 2013 Completed Production started for 2 parts.
precision gears Forging trial completed for other 10 parts.
i. Company has made continuous significant inroads into the Passenger Car segment by ramping existing
orders and getting new business awards from global OEMs.
ii. In its efforts towards broadening product portfolio, Company has entered into new area – Aerospace.
II Total foreign exchange earnings and outgo for the financial year is as follows:
Bharat Forge Limited has consistently aimed at In 2016-17, the Board of the Company met 5 (Five) times
developing a formalised system of Corporate Governance. on May 17, 2016, August 5, 2016, September 3, 2016,
We believe that it is imperative and non-negotiable for a November 8, 2016 and February 8, 2017. The maximum
world class Company to adopt transparent accounting gap between two Board Meetings was 91 (Ninety-one)
policies, appropriate disclosure norms, best-in-class days and minimum time gap was of 28 (Twenty-eight)
board practices and consistent high standards of days.
corporate conduct towards its stakeholders.
Information Supplied to the Board
Bharat Forge Limited is considered as a good model
for Corporate Governance as it implements best-in-class Among others, information supplied to the Board includes:
actions by adopting practices mandated in SEBI (Listing
Obligations and Disclosure Requirements) Regulations, a) Annual operating plans of businesses and budgets
2015 under Corporate Governance and by establishing and any updates thereof;
procedures and systems to be fully compliant with it.
Periodic review of the procedures and systems are done b) Capital budgets and any updates thereof;
in order to ensure continued relevance, effectiveness and
responsiveness to the needs of the Shareholders. c)
Quarterly results for the Company and business
segments;
Bharat Forge Limited discloses information regarding
its financial position, performance and other vital d) Minutes of the meetings of the Audit Committee, other
matters with transparency, fairness and accountability on Committees of the Board and minutes of meetings of
timely basis and the Company is in compliance with the Subsidiary Companies;
requirements stipulated under SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 with e) The information on recruitment and remuneration of
regard to the Corporate Governance, applicable for the senior officers just below the level of Board, including
financial year 2016-17. the appointment or removal of Chief Financial Officer
and Company Secretary;
BOARD OF DIRECTORS
Composition of Board Show cause, demand, prosecution notices and
f)
penalty notices, which are materially important;
The Company’s policy is to maintain an optimum
combination of Executive and Non-Executive Directors. g) Fatal or serious accidents, dangerous occurrences,
As on March 31 2017, Bharat Forge Comprises of 14 any material effluent or pollution problems;
(Fourteen) Directors. The Board Consists of 6 (Six)
Executive Directors (including Chairman and Managing h) Any material default in financial obligations to and by
Director, who is a Promoter Director) and 8 (Eight) Non- the Company or substantial non-payment for goods
executive Directors, 7 (Seven) of whom are Independent sold by the Company;
Directors. The composition of Board is in conformity
with Regulation 17 of SEBI (Listing Obligations and i) Any issue, which involves possible public or product
Disclosure Requirements) Regulations, 2015. Details of liability claims of substantial nature, including any
the composition of the Board of Directors are given in judgment or order, which may have passed strictures
Table 1. on the conduct of the Company or taken an adverse
view regarding another enterprise that can have
negative implications on the Company;
m)
Appointment, remuneration and resignation of x) Appointment of and fixing of remuneration of the
Directors; Auditors as recommended by the Audit Committee;
Table 1: Composition of the Board of Directors etc. for the year 2016- 17
INDEPENDENT DIRECTORS
As mandated by Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the
Companies Act, 2013, the Independent Directors on Bharat Forge Limited’s Board:
b) (i) are not a promoter of the Company or its holding, subsidiary or associate Company;
(iii) M
ajor accounting entries involving estimates n) Discussion with Internal Auditors of any significant
based on the exercise of judgment by findings and follow up thereon;
management.
o) Reviewing the findings of any internal investigations
(iv) S
ignificant adjustments made in the Financial by the Internal Auditors into matters where there is
Statements arising out of audit findings. suspected fraud or irregularity or a failure of internal
control systems of a material nature and reporting
(v) C
ompliance with SEBI (Listing Obligations and the matter to the Board;
Disclosure Requirements) Regulations, 2015 and
p) Discussion with Statutory Auditors before the audit
other legal requirements relating to Financial
commences, about the nature and scope of audit as
Statements.
well as post audit discussion to ascertain the areas of
concern, if any;
(vi) Disclosure of any related party transactions.
q) To look into the reasons for substantial defaults in
(vii) Qualifications in the draft Audit Report. the payment to the depositors, debenture holders,
shareholders (in case of non-payment of declared
Reviewing, with the management, the quarterly
e) dividends) and creditors;
Financial Statements before submission to the Board
for approval; To review the functioning of the Whistle Blower
r)
Mechanism;
f) Reviewing, with the management, the statement of
uses/application of funds raised through an issue s) Approval of appointment of CFO after assessing the
(public issue, rights issue, preferential issue, etc.), the qualifications, experience and background, etc. of the
statement of funds utilised for purposes other than candidate; and
those stated in the offer document/prospectus/notice
t) Carrying out any other function as is mentioned in the
and the report submitted by the monitoring agency
terms of reference of the Audit Committee.
monitoring the utilisation of proceeds of a public
issue, rights issue and preferential issue etc. before
submitting the same to Stock Exchanges; Review of information by the Audit Committee:
a) Management discussion and analysis of financial
g) Review and monitor the Auditor’s independence and condition and results of operations;
performance and effectiveness of audit process;
b) Statement of significant related party transactions
h) Approval or any subsequent modification of (as defined by the Audit Committee), submitted by
transactions of the Company with related parties; management;
c)
Management letters/letters of internal control appointment and removal and to carry out evaluation
weaknesses issued by the Statutory Auditors; of every Director’s performance;
d)
Internal audit reports relating to internal control b)
To formulate the criteria for determining
weaknesses, if any; qualifications, positive attributes and independence
of a Director and recommend to the Board a policy,
e) The appointment, removal and terms of remuneration relating to the remuneration for the Directors, Key
of the Internal Auditors is subject to review by the Managerial Personnel and other employees;
Audit Committee;
c) To extend or continue the term of appointment of
f) The Financial Statement, in particular, the the Independent Director based on the performance
investments made by the unlisted subsidiaries of the report of Independent Director;
Company, in view of the requirements under SEBI
(Listing Obligations and Disclosure Requirements) d)
To act in terms of any consequent statutory
Regulations, 2015; modification(s)/amendment(s)/revision(s) to any of
the applicable provisions to the said Committee;
g)
Details of material individual transactions with
related parties, which are not in the normal course of e) To formulate a criteria for evalution of performance
business; of the Independent Directors and Board of Directors;
and
h) Details of material individual transactions with related
parties or others, which are not at arm’s length basis, f) To devise a policy on diversity of Board of Directors.
along with management’s justification for the same;
Meetings:
i) Review and monitor the Auditor’s independence and The Nomination and Remuneration Committee met 3
performance and effectiveness of audit process; (Three) times during the year 2016-17 on May 17, 2016,
August 5, 2016 and on February 8, 2017.
j) Approval or any subsequent modification of
transactions of the Company with related parties; Table 3:
Attendance record of Nomination and
Remuneration Committee for 2016-17
k) Scrutiny of inter-corporate loans and investments;
Name of the Category Status No. of Meetings
l) Valuation of undertakings or assets of the Company, Director Held Attended
wherever it is necessary; and
Mr. P. G. Pawar Independent Chairman 3 3
Mr. S. M. Independent Member 3 3
m) Evaluation of internal financial controls and risk
Thakore
management systems.
Mr. Vimal Independent Member 3 3
Bhandari
2.
NOMINATION AND REMUNERATION
Mr. P. C. Non-Executive Member 3 3
COMMITTEE Bhalerao
The composition of the Nomination and Remuneration
Committee is as under:
3.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
1 Mr. P. G. Pawar, Independent Director, Chairman
COMMITTEE
2 Mr. S. M. Thakore, Independent Director The composition of the Corporate Social Responsibility
3 Mr. Vimal Bhandari, Independent Director (CSR) Committee is as under:
4 Mr. P. C. Bhalerao, Non-Executive Director 1. Mr. P. G. Pawar, Independent Director, Chairman
2. Mr. B. N. Kalyani, Chairman and Managing Director
Terms of Reference:
a) To identify qualified persons to become Directors 3. Mr. Amit B. Kalyani, Executive Director
and Senior Management in accordance with the
criteria laid down, recommend to the Board their
b)
To recommend the amount of expenditure to be Table 5:
Attendance record of Stakeholders
incurred on the CSR activities; Relationship Committee for 2016-17
Name of the Category Status No. of Meetings
c) To monitor the CSR Policy of the Company from time Director Held Attended
to time; and Mr. P. C. Bhalerao Non-Executive Chairman 1 1
Mr. B. N. Kalyani Executive Member 1 1
To act in terms of any consequent statutory
d) Mrs. Lalita D. Gupte Independent Member 1 1
modification(s)/amendment(s)/revision(s) to any of
the applicable provisions to the said Committee.
Compliance Officer
Meetings: Ms. Tejaswini Chaudhari, Deputy Company Secretary
The CSR Committee met twice during the year 2016-17 on and Chief Compliance Officer, is the Compliance Officer
May 17, 2016 and on February 8, 2017. for complying with requirements of Securities Laws and
SEBI (Listing Obligations and Disclosure Requirements)
Table 4:
Attendance record of Corporate Social Regulations, 2015.
Responsibility (CSR) Committee for 2016-17
Table 6: Number and nature of complaints received
Name of the Category Status No. of Meetings and redressed during the year 2016-17
Director
Held Attended Nature of complaint No. of No. of No. of No. of
complaints complaints complaints complaints
Mr. P. G. Pawar Independent Chairman 2 2
received redressed pending as not solved
Mr. B. N. Kalyani Executive Member 2 2
on March to the
Mr. Amit B. Executive Member 2 2
31, 2017 satisfaction of
Kalyani
shareholders
Non-receipt of
4. STAKEHOLDERS RELATIONSHIP COMMITTEE: shares lodged
Nil Nil Nil Nil
The composition of the Stakeholders Relationship for transfer/
Committee is as under: transmission
Non-receipt of
1. Mr. P. C. Bhalerao, Non-Executive Director, Chairman 8 8 Nil Nil
Dividend
2. Mr. B. N. Kalyani, Chairman and Managing Director Non-receipt
3. Mrs. Lalita D. Gupte, Independent Director of Sub-divided Nil Nil Nil Nil
Shares
Non-receipt of
1 1 Nil Nil
Terms of reference: Annual Report
a) To specifically look into the redressal of grievances of Change of
1 1 Nil Nil
shareholders, debenture holders and other security address
holders;
SEBI Complaints Redress System (SCORES) f) To approve capital expenditure for purchase of plant
The investor complaints are processed in a centralised & machinery, instruments, etc. upto limits specified
web-based complaints redressed system. The salient by the Board;
features of this system include centralised database of g)
To approve capital expenditure to purchase or to
all complaints, online upload of Action Taken Reports acquire on lease, land or any other immovable
(ATRs) by the concerned companies and online viewing property upto the limits specified by the Board; and
by investors of action taken on the complaints and its
current status. h) To open and close bank accounts of the Company and
to authorise employees for operating bank accounts
Designated Exclusive Email-ID of the Company.
The Company has also designated the email-id:
[email protected] exclusively for providing Meetings:
investor servicing. The Finance and Risk Management Committee met 3
(Three) times during the year 2016-17 on May 17, 2016,
5.
FINANCE AND RISK MANAGEMENT November 18, 2016 and March 14, 2017.
COMMITTEE
The composition of the Finance and Risk Management Table 7:
Attendance record of Finance and Risk
Committee is as under: Management Committee for 2016-17
1 Mr. B. N. Kalyani, Chairman and Managing Director, Name of the Category Status No. of Meetings
Chairman Director
Held Attended
2 Mr. P. G. Pawar, Independent Director
Mr. B. N. Kalyani Executive Chairman 3 2
3 Mr. Amit B. Kalyani, Executive Director Mr. P. G. Pawar Independent Member 3 3
4 Mr. P. C. Bhalerao, Non-Executive Director Mr. Amit B.
Executive Member 3 3
Kalyani
Terms of reference: Mr. P. C. Bhalerao Non-Executive Member 3 3
a) To monitor and review risk management plan of the
Company from time to time;
FUNCTIONAL COMMITTEE
b)
To formulate procedures and to inform Board
The Board is authorised to constitute one or more
members about the risk assessment and minimisation
functional committees delegating thereto powers and
procedures of the Company;
duties with respect to specific purposes. Meeting of such
c) To borrow money from Bank/Financial Institution, Committees are held, as and when the need arises. Time
etc. upto limits specified by the Board; schedule for holding the meetings of such Functional
Committees are finalised in consultation with Committee
d)
To invest funds of the Company into shares,
Members.
debentures, securities or any other instruments in
subsidiary, associate and other group Companies
upto limits specified by the Board;
REMUNERATION OF DIRECTORS
Information on remuneration of Directors for the year
e) To grant loans, advance monies or give guarantee or ended March 31, 2017 is given below in Table 8:
provide security in respect of any loans to subsidiary,
associate and other group Companies upto limits
specified by the Board;
Notes:
* Determined on the basis of criteria of Section 2(77) of the Companies Act, 2013.
** Sitting fees include payment of fees for attending Board and Committee meetings.
*** Commission proposed and payable after approval of accounts by the shareholders in the ensuing Annual General
Meeting (AGM).
Further, Company would make all travelling and other arrangements for Directors for their participation in the Board
and other committee meetings or reimburse such expenses, if any.
The Remuneration payments in the Company are made with an aim of rewarding performance based on review of
achievements. The remuneration levels are in consonance with the existing industry practices.
Payments to Non-Executive Directors are decided based on multiple criteria of seniority/experience, number of years
on the Board, Board/Committee meetings attended, Director’s position on the Company’s Board/Committees, other
relevant factors and performance of the Company. There are no pecuniary relationships or transactions of the Non-
Executive Directors vis-a-vis the Company.
The appointment of Directors, their terms of employment, salary fixed pay, variable pay, service contract, notice period
and severance fees, if any, are governed by the applicable policies of the Company.
Details of equity shares of the Company held by Directors as on March 31, 2017 are given below in Table 9:
Table 9: Details of equity shares of the Company held by Directors as on March 31, 2017
None of the Non-Executive Directors holds any Convertible Instruments as on March 31, 2017.
Date, time and venue for the last 3 (Three) Annual General Meetings are given in Table 10 below:
Postal Ballot
No resolution was passed through Postal Ballot during the year 2016-17.
None of the businesses proposed to be transacted in the ensuing Annual General Meeting require passing a Special
Resolution conducted through Postal Ballot.
Subsidiary Companies
Bharat Forge Limited has 8 (Eight) direct subsidiaries out of which 3 (Three) are registered outside India and 5 (Five) are
in India, whose turnover does not exceed the materiality limit prescribed under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.
Since the Company does not have any material unlisted subsidiary, it is not required to nominate an Independent
Director of the Company on the Board of any Subsidiary.
COMPLIANCE WITH MANDATORY AND NON- NSE Electronic Application Processing System
MANDATORY REQUIREMENTS (NEAPS)
The Company has complied with the applicable The NEAPS is a web-based application designed by NSE
mandatory requirements of SEBI (Listing Obligations for Corporates. All periodical compliance filings, like the
and Disclosure Requirements) Regulations, 2015. Shareholding Pattern, Corporate Governance Report,
The Company has adopted following non-mandatory Media Releases etc. are also filed electronically on NEAPS.
requirements of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015. SHAREHOLDERS
Annual Report
The Board Annual Report containing, inter alia, Audited Financial
The Company has Executive Chairman and the office Statements, Consolidated Financial Statements, Board’s
with required facilities is provided and maintained at the
Report, Independent Auditor’s Report and other
Company’s expenses for use of the Chairman.
important information, is circulated to members and
others entitled thereto. The Management Discussion and
Shareholder Rights
Analysis (MDA) Report and Business Responsibility Report
Half yearly financial results are forwarded to the Stock
(BRR) forms part of the Annual Report and is displayed on
Exchanges and uploaded on the website of the Company
the Company’s website: www.bharatforge.com
like quarterly results.
As per the provisions of Investor Education and on January 1, 2017 and the same has been paid on
Protection Fund Authority (Accounting, Audit, Transfer due date. As a result, the said debentures stands fully
and Refund) Rules, 2016, the Company has sent redeemed as at the end of 7th year from the date of
notice to all the Shareholders whose shares are due allotment.
to be transferred to the IEPF and published requisite
advertisement in newspapers. The Company has also As a result, all the debentures of the Company stand
uploaded full details of such Shareholders and Shares redeemed during FY 2016-17.
due to transfer to the IEPF on its website at: www.
bharatforge.com. To verify the details of unencashed All Annual listing fees due during the financial year
/unclaimed dividends and the corresponding shares have been paid.
liable to be transferred to the IEPF, Shareholders are
requested to refer to the weblink:http://bharatforge. DEBENTURE TRUSTEES
com/investors/unclaimed-dividedn-html. The details of Debenture Trustees in terms of SEBI
Circular No. CIR/IMD/DF/18/2013 dated October 29, 2013
LISTING are given below:
Equity
Name of : Catalyst Trusteeship Limited
Equity Shares of Bharat Forge Limited are listed on the
Debenture (formerly GDA Trusteeship
BSE Limited, Mumbai and National Stock Exchange of
Trustees Limited)
India Limited, Mumbai.
Address : “GDA House”, S. No. 94/95,
BSE Script Code – 500493
Plot No. 85, Opp. Kothrud Bus
NSE Trading Symbol – BHARATFORG Depot, Bhusari Colony (Right),
Equity ISIN: INE465A01025 Paud Road, Kothrud, Pune –
411 038, Maharashtra, India
Debt Security Phone No. : 020-2528 0081
a) The 30% installment of Company’s 10.75% Secured Fax No. : 020-2528 0275
Redeemable Non-Convertible Debentures of face
value of ` 1,000,000/- each was due for redemption Email address : [email protected]
on April 28, 2016. The Company has paid the said
installment on April 28, 2016. With this payment of STOCK DATA
final installment, the 10.75% Secured Redeemable Table 11 below gives the monthly high and low prices and
Non-Convertible Debentures of face value of volumes of Bharat Forge Limited (Bharat Forge) Equity
` 1,000,000/- stand fully redeemend as on April 28, Shares at BSE Limited, Mumbai (BSE) and National Stock
2016. Exchange of India Limited, Mumbai (NSE) during the year
2016-17.
b) The Third and Final installment @ 33.34% of
Company’s 11.95% Secured Redeemable Non-
convertible Debentures of ` 2,500 Million of face
value of ` 10,00,000/- each was due for redemption
STOCK PERFORMANCE
Chart ‘A’ plots the movement of Bharat Forge’s equity shares adjusted closing prices compared to the BSE Sensex.
140
120
100
80
60
BFL
40
SENSEX
20
0
Sep-16
Oct-16
Nov-16
Dec-16
Jan-17
Feb-17
Mar-17
Apr-16
Jun-16
Aug-16
Jul-16
May-16
Note : Share prices of Bharat Forge and BSE Sensex have been indexed to 100 as on first working day of FY 2016-17 i.e.
April 1, 2016.
In compliance with the SEBI circular dated December 27, 2002, requiring share registry in terms of both physical and
electronic modes to be maintained at a single point, Bharat Forge has established direct connections with CDSL and
NSDL, the two depositories. As such, the share registry work relating to both physical and electronic mode is being
handled by the Secretarial Department of the Company.
SHAREHOLDING PATTERN
Table 12: Pattern of shareholding by ownership as on March 31, 2017
1 and 2: For definition of Promoter’s shareholding and Public shareholding, refer to Regulation 38 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015.
Table 15: Details of public funding obtained in the last Particulars No. of Number
three years and its implication on paid up Shareholders of Equity
Equity Share Capital
Shares of
Financial Year Amount Raised Effect on Paid
` 2/- each
through Public up Equity Share Aggregate number of 483 173,050
Funding (`) Capital (`) Shareholders and the
2016-17 NIL NIL outstanding shares in the
2015-16 NIL NIL suspense account lynig as on
2014-15 NIL NIL April 1, 2016
Shareholders who 9 6,775
approached the Company
Plant Locations for transfer of shares from
• Mundhwa, Pune Cantonment, Pune – 411 036, suspense account during the
Maharashtra, India. year
Shareholders to whom 9 6,775
shares were transferred
• Gat No.635, Kuruli Village, Chakan, Tal- Khed, District
from the suspense account
Pune – 410 501, Maharashtra, India. during the year
Aggregate number of 474 166,275
• Opposite Jarandeshwar Railway Station, Post - Shareholders and the
Vadhuth, District Satara – 415 011, Maharashtra, outstanding shares in the
India. suspense account lying as on
March 31, 2017
• Tandulwadi & Wanjarwadi, Tal. Baramati, Dist. Pune –
413 206, Maharashtra, India. The voting rights on the said shares shall remain frozen till
the rightful owners of such shares claim the shares.
I, B.N. Kalyani, Chairman and Managing Director of Bharat Forge Limited hereby declare that all the Board members
and senior managerial personnel have affirmed for the year ended March 31, 2017, compliance with the Code of
Conduct of the Company laid down for them
B.N. KALYANI
Chairman and Managing Director
Under Regulation 17 read with Part B of Schedule II of SEBI (Listing Obligations and Disclosure Requirements), 2015
ii)
these statements together present a true and i) significant changes in internal control over
fair view of the Company’s affairs and are in financial reporting during the year;
compliance with existing accounting standards,
applicable laws and regulations. ii) significant changes in accounting policies during
the year and that the same have been disclosed
b) There are, to the best of our knowledge and belief, no in the notes to the financial statement; and
transactions entered into by the Company during the
year 2016-17 which are fraudulent, illegal or violative iii) instances of significant fraud of which we are
of the Company’s Code of Conduct. aware and the involvement therein, if any, of the
management or an employee having a significant
role in the Company’s internal control system
over financial reporting.
K. M. SALETORE B. N. KALYANI
Chief Financial Officer Chairman and Managing Director
Pune: May 24, 2017
2. The preparation of the Corporate Governance Report ii. Obtained and verified that the composition of
is the responsibility of the Management of the the Board of Directors w.r.t. executive and non-
Company including the preparation and maintenance executive directors has been met throughout the
of all relevant supporting records and documents. reporting period;
This responsibility also includes the design,
implementation and maintenance of internal control iii. Obtained and read the Directors Register as on
relevant to the preparation and presentation of the March 31, 2017 and verified that atleast one
Corporate Governance Report. women director was on the Board throughout the
reporting period;
3. The Management along with the Board of Directors
are also responsible for ensuring that the Company iv. Obtained and read the minutes of the following
complies with the conditions of Corporate Governance committee meetings held during the reporting
as stipulated in the Listing Regulations, issued by the period:
Securities and Exchange Board of India.
(a) Board of directors meeting;
Auditor’s Responsibility (b) Audit committee;
(c) Nomination and remuneration committee;
4. Pursuant to the requirements of the Listing (d) Stakeholders relationship committee;
Regulations, our responsibility is to express a (e) Finance and risk management committee; and
reasonable assurance in the form of an opinion (f) Corporate Social Responsibility Committee
whether the Company has complied with the specific
requirements, i.e. clause 17 to 27 and clause 46 (2)(b)
(i) of the Listing Regulations.
5. E-mail id [email protected]
Manufacturing locations:
Pune, Satara, Baramati, Chakan
Corporate Offices:
Delhi, Noida, Hyderabad, Bengaluru, Jamshedpur,
Kolkata, Chennai and Mumbai
10. Markets served by the Company – Local/State/ India, North America (US, Canada and Mexico),
National/International South America (Brazil), Europe and Asia Pacific
5. List of activities in which expenditure in 4 above has i) Promotion of education for the underprivileged
been incurred: children and girls;
ii) Mission Sanitation of Schools (SOS) under
Swachh Vidyalaya;
iii) Setting up of the Kalyani School at Manjri, Pune;
iv) Skill enhancement of rural youth for generating
employability;
v) Community Development (Women
Empowerment, Health & Hygiene for women, Sr.
citizens and children);
vi) Environment sustainability - Waste Management,
Tree Plantation and cleanliness programmes
under Swachh Bharat Abhiyaan;
vii) Drought Free Maharashtra: 2019 under Jalyukta
Shivar Abhiyaan for villages in Pune District;
viii) Promotion of nationally recognised sports; and
ix) Leadership skill development of ITI Principals
from Maharashtra.
a) Details of Compliances:
Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
1. Do you have a policy/policies for Y Y Y Y N Y Y Y Y
2. Has the policy being formulated in consultation with Y Y Y Y NA Y Y Y Y
the relevant stakeholders?
3. Does the policy conform to any national / Yes, the policies are in line with international standards
international standards? If yes, specify? (50 words) such as ISO 9001, TS 16949, ISO 14001, ISO 27001, OHSAS
18001 and meet national regulatory requirements
such as the Companies Act, 2013 and SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015. Also guidelines as per NVG on social, environment
and economic responsibility of business have been
considered for formulation of some policies.
4. Has the policy being approved by the Board? If yes, Y Y Y Y NA Y Y Y Y
has it been signed by MD/owner/ CEO/ appropriate
Board Director?
5. Does the Company have a specified committee These policies are administered and supervised by the
of the Board/ Director/Official to oversee the management of the Company through a robust internal
implementation of the policy? governance structure.
6. Indicate the link for the policy to be viewed online? Policies on HR, ISO, CSR, Insider Trading, Code of
Conduct, Related Party etc. are available on links such as:
http://bflapp.bharatforge.com/hronline/Pages/
CodeofConduct.aspx
http://portal.bharatforge.com/default.aspx
http://bharatforge.com/investors/policies.html
7. Has the policy been formally communicated to all Y Y Y Y NA Y Y Y Y
relevant internal and external stakeholders?
8. Does the Company have in-house structure to Y Y Y Y NA Y Y Y Y
implement the policy/policies?
9. Does the Company have a grievance redressal Y Y Y Y NA Y Y Y Y
mechanism related to the policy/policies to address
stakeholders’ grievances related to the policy/
policies?
10. Has the Company carried out independent audit/ The Quality, Safety, Health and Environmental Policies
evaluation of the working of this policy by an internal are subject to internal and external audits as part of
or external agency? certification process and ongoing periodic assessments.
Other policies are periodically evaluated for their efficacy
through Internal Audit mechanism.
(b) If answer to the question at serial number 1 against any principle, is ‘No’, please explain why: (Tick upto 2
options)
Sr. Questions P1 P2 P3 P4 P5 P6 P7 P8 P9
No.
1. The Company has not understood the Principles - - - - - - - - -
2. The Company is not at a stage where it finds itself - - - - - - - - -
in a position to formulate and implement the
policies on specified principles
3. The Company does not have financial or manpower - - - - - - - - -
resources available for the task
4. It is planned to be done within next 6 months - - - - - - - - -
3. Governance related to BR
(a) Indicate the frequency with which the Board of Directors, Annually
Committee of the Board or CEO meet to assess the BR
performance of the Company. Within 3 months, 3-6 months,
Annually, More than 1 year
(b) Does the Company publish a BR or a Sustainability Report? The Company has been publishing the
What is the hyperlink for viewing this report? How frequently BR Report as a part of its Annual Report
it is published? from last year which can be viewed
at: http://bharatforge.com/investors/company-
reports/annual-reports.html
The Company has deep-rooted beliefs of doing things right. The Company has always believed that the virtuous path to
success can never be achieved by over-looking the significance of ethics, transparency and accountability.
Our philosophy is to conduct the business with high ethical standards as laid down in our “Code of Conduct”. The
Company’s policy on Code of Conduct and Ethics, Risk Management and Whistle Blower reflects the values and
commitment to ethical business practices.
Principle 1: Businesses should conduct and govern themselves with Ethics, Transparency and Accountability
(a) Does the policy relating to ethics, bribery and The “Code of Conduct” of the Company provides guidelines
corruption cover only the Company? Yes/No. and policies on ethics, bribery and corruption which are
Does it extend to the Group/Joint Ventures/ binding for all our employees.
Suppliers/Contractors/NGOs/Others?
The said policy/guidelines are communicated to our Key
Vendors / Suppliers.
(b) How many stakeholder complaints have been During the year under review, the Company has not
received in the past financial year and what received any complaint in connection with ethics, bribery or
percentage was satisfactorily resolved by the corruption.
management? If so, provide details thereof, in
about 50 words or so.
(i) Reduction during sourcing/production/ For heat treatment operation, energy consumption is
distribution achieved since the previous year reduced by 35 to 40%.
throughout the value chain?
(ii) Reduction during usage by consumers (energy, Weight reduction for components re-engineered have come
water) has been achieved since the previous down by 5 to 15%.
year?
(c) Does the Company have procedures in place for The Company’s supplier selection, assessment and
sustainable sourcing (including transportation)? If evaluation process includes elements of sustainability. This
yes, what percentage of your inputs was sourced includes initial supplier survey, continuous risk assessments
sustainably? Also, provide details thereof, in and audits.
about 50 words or so.
(d) Has the Company taken any steps to procure The Company has a network of Medium Enterprises around
goods and services from local & small producers, its factory which complements our manufacturing capability.
including communities surrounding their place of Quality of our final product depends on the capability of our
work? inputs and therefore, due steps are taken to ensure quality
If yes, what steps have been taken to improve of inputs received from vendors by deploying our standard
their capacity and capability of local and small quality systems in their plant as well.
vendors?
The steps taken to improve the capability and capacity of
local vendors include:
• Hand-holding the vendors for developing Quality
Management Systems for improving the product quality,
reducing the wastages and sustainable development.
• Providing technical help to vendors for up-gradation
of their equipment which has helped in enhancing the
capacity and capability.
(e) Does the Company have a mechanism to recycle As part of its endeavor of contributing towards reducing
products and waste? If yes, what is the percentage carbon footprint and ensuring sustainability across all
of recycling of products and waste (separately as operations, the Company focuses on various initiatives like:
<5%, 5-10%, >10%). Also, provide details thereof,
• Sending 100% forging flash to steel mills for re-cycling.
in about 50 words or so.
• 100% re-use of treated industrial effluent for processing.
• 30 to 40% waste heat is recovered using regenerative
burners resulting in reducing the fuel combustion.
• 50% of re-cycled water from sewage treatment plant is
used for maintenance of greenery in the Plant.
• Implementation of rain water harvesting.
• 100% of hazardous waste sent to authorised party.
• Recycling of packing boxes.
We have a constructive work environment wherein the employees are motivated to understand their talent and
potential by providing challenging work opportunities. This also helps in their professional growth. We are committed
to providing our employees with a safe and healthy work environment.
We employ various talents through different platforms thus setting up a strong foundation for the future.
(a) Please indicate the total number of employees 4,727 (Officers + Bargainable Employees)
(b) Please indicate the total number of employees 2,861
hired on temporary/contractual/casual basis
(c) Please indicate the number of permanent women 51
employees
(d) Please indicate the number of permanent 7
employees with disabilities
(e) Do you have an employee association that is Yes
recognised by management
(f) What percentage of your permanent employees Approximately, 40.61% of permanent employees are
is members of this recognised employee members of the recognised employee association.
association?
Principle 4: Businesses should respect the interests of, and be responsive towards all stakeholders, especially
those who are disadvantaged, vulnerable and marginalised.
The Company follows very high standard of Corporate Governance which covers all stakeholders. The Company is
especially sensitive to needs of the underprivileged segment of the community around us and is working in improving
their lifestyle. These are covered in greater detail under Principle 8.
(a) Has the Company mapped its internal and Yes, the principal stakeholders of the Company are its
external stakeholders? Yes/No employees, shareholders, suppliers, customers, vendors,
partners, government and regulatory authorities, trade
union, associates, etc. These stakeholders are mapped in
a structured manner through systematic communication
platforms which helps us to understand the customer needs
and the improvement opportunities for the Company in all
prospects.
(b) Out of the above, has the Company identified Yes, programs have been conducted under the CSR and
the disadvantaged, vulnerable & marginalised environment protection initiatives, so as to have positive
stakeholders social impact on the disadvantaged, vulnerable and
marginalised stakeholders.
(c) Are there any special initiatives taken by the The Company has always made special efforts for the people
Company to engage with the disadvantaged, and communities residing in the nearby vicinity of the plant
vulnerable and marginalised stakeholders. If so, locations to enable them to improve their way of living. The
provide details thereof, in about 50 words or so. Company is involved in diverse activities to create a positive
social impact by helping the disadvantaged, vulnerable
and marginalised communities. The Company’s varied
activity primarily focuses on health, education, sanitation
and environment protection. The Company closely works
with various NGOs, trusts, charitable societies, etc. to meet
its aim of contributing towards the society at large for
promotion and development of rural areas, deprived people
and communities.
(a) Does the policy of the Company on human rights The Company does not have a standalone policy for human
cover only the Company or extend to the Group/Joint rights, however, the Company’s internal policies on Code
Ventures/Suppliers/Contractors/NGOs/Others? of Conduct, Ethics and CSR recognises all the key aspects
of human rights which lays down the acceptable behavior
of the employees and provides for stringent disciplinary
actions in case of violation of these policies.
(b) How many stakeholder complaints have been During the year under review, the Company has not received
received in the past financial year and what any complaint from any stakeholders.
percent was satisfactorily resolved by the
management?
Principle 6: Business should respect, protect and make efforts to restore the environment
The Company makes efforts to safeguard the environment. Steps are taken for optimal utilisation of our resources in
line with ISO-14001 standards requirements.
(a) Does the policy related to Principle 6 cover only The Company’s environmental policy extends to its critical
the Company or extends to the Group/Joint suppliers and all other stakeholders.
ventures/ Suppliers/Contractors /NGOs/others?
(b) Does the Company have strategies/initiatives As a part of its endeavor of contributing towards reducing
to address global environmental issues such as carbon footprint and ensuring sustainability across all
climate change, global warming, etc.? Y/N. If yes, operations, the Company focuses on various initiatives
please give hyperlink for webpage etc. like: using bio-fuels, modern regenerative combustion
technology, recycled water, etc. in its manufacturing
operations. These initiatives can be viewed at: http://www.
bharatforge.com/company/sustainability.
(c) Does the Company identify and assess potential Yes, environmental risks are covered in the Company's
environmental risks? Y/N principles that are based on ISO-14001 standards. Every unit
or plant implements the following:
i) EHS risks and opportunities;
ii) Identification and evaluation of EHS aspects and
requirements;
iii) Legal obligations and other requirements; and
iv) EHS emergency management.
Once risks are identified, steps are taken to measure and
mitigate these risks through EHS management system
approach.
(d) Does the Company have any project related The Company continues to work towards development and
to Clean Development Mechanism (CDM)? If implementation of climate change mitigation project mainly
so, provide details thereof, in about 50 words through energy saving projects. However, we don’t have any
or so. Also, if Yes, whether any environmental registration for CDM projects.
compliance report is filed?
Principle 7: Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible
manner
(a) Is your Company a member of any trade and The Company is member of:
chamber or association? If Yes, name only
(i) Confederation of Indian Industry (CII);
those major ones that your business deals
with: (ii) World Economic Forum (WEF);
(iii) Federation of Indian Chambers of Commerce and Industry
(FICCI);
(iv) Mahratta Chamber of Commerce, Industry and Agriculture
(MCCIA); and
(v) Automotive Component Manufacturers Association of
India (ACMA).
(b) Have you advocated/lobbied through From time to time, the Company has joined hands with above
above associations for the advancement or mentioned associations for the betterment and advancement
improvement of public good? Yes/No. If yes, of the society at large. The Company has contributed in the
specify the broad areas (drop box: Governance areas of:-
and Administration, Economic Reforms,
i) economic reforms
Inclusive Development Policies, Energy
Security, Water, Food Security, Sustainable ii) corporate governance and transparency
Business Principles, Others)
iii)
education and skill development
iv)
women empowerment and child welfare
v) sanitation and hygiene
vi)
addressing issues pertaining to global warming, climate
change, environment protection and pollution control
Principle 9: Businesses should engage with and provide value to their customers and consumers in a responsible
manner
All the Company’s efforts are ultimately to make the customer satisfied with what it serves. The Company believes in the
philosophy of ‘customer first’ and thus inculcates an atmosphere in the organisation wherein everyone understands
that customer satisfaction is their primary objective.
(a) What percentage of customer complaints/ As on March 31 2017, total 4 (four) complaints were pending.
consumer cases are pending as on the end of Normally, it takes minimum 90 (ninety) days for closing the
financial year? customer complaint.
(b) Does the Company display product information Since the Company’s products are OEM specific and as
on the product label, over and above what is per OEM requirements, the Company displays product
mandated as per local laws? Yes/No/N.A./Remarks requirement on packaging as per the requirements of OEM
(additional information) and consistent with applicable laws. The typical information
displayed on product includes details of manufacturer, heat
code, process no. dispatch no., part no. etc.
(c) Is there any case filed by any stakeholder against No.
the Company regarding unfair trade practices,
irresponsible advertising and/or anti-competitive
behaviour during the last 5 (five) years and
pending as on end of financial year? If so, provide
details thereof, in about 50 words or so.
(d) Did your Company carry out any consumer Customer response and customer satisfaction are one of
survey/ consumer satisfaction trends? the most important factors of any business. The Company
engages with its customers at various platforms to
understand their expectations.
The Company obtains the customer feedback directly or
referring to customer portal on monthly basis and compile
the “Voice of Customer Report” to identify areas of concern
reported. Accordingly, corrective measures have been
planned and implemented. Customer Satisfaction trends are
compiled, monitored and reviewed by top management at
defined intervals for getting the directives for improvement.
We have audited the accompanying standalone Ind AS financial statements of Bharat Forge Limited (“the Company”),
which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of
Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then
ended, and a summary of significant accounting policies and other explanatory information.
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013
(“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view
of the financial position, financial performance including other comprehensive income, cash flows and changes in equity
of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting
Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards)
Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial
control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant
to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit. We have
taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to
be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit
of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of
Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks
of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the
standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall
presentation of the standalone Ind AS financial statements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS
financial statements give the information required by the Act in the manner so required and give a true and fair view
in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at
March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year
ended on that date.
1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the Central Government of
India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters
specified in paragraphs 3 and 4 of the Order.
(a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purpose of our audit;
(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income,
the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with
the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards
specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as
amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being
appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according
to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial position in its standalone
Ind AS financial statements – Refer Note 38 to the standalone Ind AS financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for
material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 20
to the standalone Ind AS financial statements;
iv. The Company has provided requisite disclosures in Note 13 to these standalone Ind AS financial
statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as
well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016.
Based on our audit procedures and relying on the management representation regarding the holding
and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are
in accordance with the books of accounts maintained by the Company and as produced to us by the
Management.
Annexure 1 referred to in paragraph 1 under the heading “Reporting on Other Legal and Regulatory
Requirements” of our report of even date.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular
programme of verification which, in our opinion, is reasonable having regard to the size of the Company and
the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management the title deeds of immovable
properties included in fixed assets are held in the name of the Company except six number of immovable
properties aggregating INR 26.80 million as at March 31, 2017 for which title deed were not available with the
Company and hence we are unable to comment on the same.
(ii) The inventory has been physically verified by the management during the year. In our opinion, the frequency of
verification is reasonable. No material discrepancies were noticed on such physical verification. Inventories lying
with third parties have been confirmed by them as at March 31, 2017 and no material discrepancies were noticed
in respect of such confirmations.
(iii) (a) The Company has granted loans to five parties covered in the register maintained under section 189 of the
Act. In our opinion and according to the information and explanations given to us, the terms and conditions
of the loans are not prejudicial to the Company's interest.
(b) In respect of loans granted to Companies covered in the register maintained under section 189 of the
Companies Act, 2013, repayment of the principal amount is as stipulated and payment of interest has been
regular except for loans granted by the Company to two of its subsidiaries, where repayment of principal
amount in case of one subsidiary was not as stipulated and payment of interest has not been regular in case
of both the subsidiaries.
(c) The company has a sum of amounts aggregating to INR 15.59 million which are overdue for more than
ninety days from two Companies covered in the register maintained under section 189 of the Companies Act,
2013 and in our opinion and according to the information and explanations given by the management, the
Company has taken reasonable steps for recovery of these overdue principal and interest as the case may
be.”
(v) The Company has not accepted any deposits from the public. Therefore, in our opinion, the provisions of clause
(v) of the Order are not applicable to the Company. However, according to the information and explanations given
to us, in respect of deposits accepted earlier under relevant provisions of the erstwhile Companies Act, 1956, and
the rules framed thereunder, there are certain unclaimed deposit amounting to INR 0.04 million including interest
thereon subject to litigation.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by
the Central Government for the maintenance of cost records under section 148(1) of the Act, related to the
manufacture of forged products, and are of the opinion that prima facie, the specified accounts and records have
been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax,
service tax, duty of custom, duty of excise, value added tax, local body tax, cess and other material statutory
dues have generally been regularly deposited with the appropriate authorities though there has been slight
delay in few cases.
(b) According to the information and explanations given to us, undisputed dues in respect of provident fund,
employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax,
local body tax, cess and other material statutory dues which were outstanding, at the year end, for a period
of more than six months from the date they became payable, are as follows:
Statement of arrears of statutory dues outstanding for more than six months
Name of the statute Nature of the Amount Period to which Due date Date of Remarks,
dues (INR in the amount payment if any
million) relates
Maharashtra municipal Local Body 115.66 P.Y. 2015-16 Various Not paid -
Corporation Act, 1949 Tax (LBT) & 2016-17 dates
and Bombay Provincial
Municipal Corporation
(Local Body Tax) Rules,
2010(LBT rules)
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, duty of
custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the statute Nature of the dues Amount (INR Period to which the Forum where the
in million)# amount relates dispute is pending
Income Tax Act, 1961 Non deduction of - AY 2014-15 CIT Appeals
withholding taxes u/s 195
(INR 54.92 million)
Property tax# Demand received for various 134.77 AY 2005-06 to High Court
cases (INR 121.94 million 2016-2017
paid under protest)
Central Excise Act, 1944 Demand received for various 31.03 AY 2004-05 to Commissioner
cases (INR 9.70 million paid 2016-2017 Appeals/ CESTAT
under protest)
# Excludes interest and penalty
(viii) In our opinion and according to the information and explanations given by the management, the Company has
not defaulted in repayment of dues to bank or debenture holders or government. The Company did not have any
outstanding dues in respect of financial institution.
(ix) In our opinion and according to the information and explanations given by the management, the Company has
utilized the monies raised by way of term loans for the purposes for which they were raised. The Company does
not have any unutilised money out of initial public offer / further public offer.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial
statements and according to the information and explanations given by the management, we report that no fraud
by the Company or no material fraud on the Company by the officers and employees of the Company has been
noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been
paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with
Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3(xii) of the Order are not
applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties
are in compliance with section 177 and 188 of the Act where applicable and the details have been disclosed in the
notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet,
the Company has not made any preferential allotment or private placement of shares or fully or partly convertible
debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable
to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any
non-cash transactions with directors or persons connected with him as referred to in section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of
India Act, 1934 are not applicable to the Company.
Annexure 2 referred to in paragraph 2(f) under the heading “Reporting on Other Legal and Regulatory
Requirements” of our report of even date.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act,
2013 (“the Act”)
We have audited the internal financial controls over financial reporting of Bharat Forge Limited (“the Company”) as of
March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended
on that date.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based
on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of
the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the
Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with eth-
ical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such controls operated effectively in
all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial con-
trols system over financial reporting and their operating effectiveness. Our audit of internal financial controls over fi-
nancial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing
the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal
control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assess-
ment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opin-
ion on the internal financial controls system over financial reporting.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial
reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017,
based on the internal control over financial reporting criteria established by the Company considering the essential
components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Re-
porting issued by the Institute of Chartered Accountants of India.
In ` Million
As at As at As at
Notes
March 31, 2017 March 31, 2016 April 1, 2015
ASSETS
I. Non-Current assets
(a) Property, plant and equipment 3 23,609.21 22,709.61 20,615.29
(b) Capital work-in-progress 3,742.62 3,219.43 2,541.57
(c) Investment property 4 2.89 2.89 2.89
(d) Intangible assets 5 123.98 59.72 59.65
(e) Investment in subsidiaries and joint 6 5,799.50 6,064.75 5,973.53
ventures
(f) Financial assets
(i) Investments 7 3,687.39 912.80 515.09
(ii) Loans 8 37.64 203.83 214.91
(iii) Trade receivables 12 5.49 20.87 -
(iv) Derivative instruments 9 1,564.89 600.58 1,837.83
(v) Other non-current financial assets 10 317.39 367.03 260.98
(g) Income tax assets (net) 260.53 261.52 256.98
(h) Other non-current assets 14 2,577.51 3,080.51 2,617.90
41,729.04 37,503.54 34,896.62
II. Current assets
(a) Inventories 11 4,264.92 3,663.46 3,790.07
(b) Financial assets
(i) Investments 7 8,231.66 7,232.06 4,564.63
(ii) Loans 8 252.51 452.97 202.19
(iii) Trade receivables 12 13,799.41 14,201.55 16,038.78
(iv) Derivative instruments 9 1,961.97 1,154.32 3,422.63
(v) Cash and cash equivalents 13 2,407.87 2,967.54 3,160.41
(vi) Other bank balances 13 373.83 779.37 2,757.71
(vii) Other current financial assets 10 418.10 485.18 678.05
(c) Other current assets 14 3,246.70 3,351.62 4,426.40
(d) Asset held for sale 3 84.24 - -
35,041.21 34,288.07 39,040.87
Total assets 76,770.25 71,791.61 73,937.49
EQUITY AND LIABILITIES
Equity
(a) Equity share capital 15 465.68 465.68 465.68
(b) Other equity 16 41,853.64 35,349.52 33,945.84
Total equity 42,319.32 35,815.20 34,411.52
Liabilities
I. Non-current liabilities
(a) Financial liabilities
(i) Borrowings 18 7,903.47 13,932.75 15,479.29
(ii) Other financial liabilities 19 6.40 2.67 5.32
(b) Provisions 20 268.92 217.43 252.76
(c) Deferred tax liabilities (net) 21 3,032.92 2,369.70 3,392.87
(d) Other non-current liabilities 23 291.83 607.38 -
11,503.54 17,129.93 19,130.24
carried over 11,503.54 17,129.93 19,130.24
carried over 42,319.32 35,815.20 34,411.52
In ` Million
As at As at As at
Notes
March 31, 2017 March 31, 2016 April 1, 2015
brought over 42,319.32 35,815.20 34,411.52
brought over 11,503.54 17,129.93 19,130.24
II. Current liabilities
(a) Financial liabilities
(i) Borrowings 18 9,076.80 8,960.97 11,277.08
(ii) Trade payables 22 4,639.51 4,317.02 6,286.20
(iii) Other current financial liabilities 19 7,871.79 4,363.55 2,092.10
(b) Provisions 20 338.20 304.58 276.71
(c) Other current liabilities 23 876.89 716.46 407.20
(d) Current tax liabilities (net) 144.20 183.90 56.44
22,947.39 18,846.48 20,395.73
Total liabilities 34,450.93 35,976.41 39,525.97
Total equity and liabilities 76,770.25 71,791.61 73,937.49
In ` Million
Year ended Year ended
Notes
March 31, 2017 March 31, 2016
Income
Revenue from operations 24 40,661.28 45,254.77
Other income 25 994.90 1,123.45
Total income [i] 41,656.18 46,378.22
Expenses
Cost of raw materials and components consumed 26 13,727.92 14,911.63
(Increase) in inventories of finished goods, work-in-progress, dies and 27 (522.54) (18.05)
scrap
Excise duty on sale of goods 2,014.65 1,916.66
Employee benefits expense 28 3,759.45 3,725.18
Depreciation and amortisation expense 29 2,948.51 3,084.51
Finance costs 30 727.70 905.06
Other expenses 31 10,955.81 11,551.23
Total expenses [ii] 33,611.50 36,076.22
Profit before exceptional items and tax [i - ii] 8,044.68 10,302.00
Exceptional items gain/(loss) 32 380.24 (42.20)
Profit before tax 8,424.92 10,259.80
Tax expense
Current tax 2,600.04 3,130.86
Deferred tax (25.89) 152.76
Total tax expense 2,574.15 3,283.62
Profit for the year 5,850.77 6,976.18
Other comprehensive income
Other Comprehensive Income to be reclassified to profit or loss
in subsequent period (net of tax)
- Net movement on cash flow hedges 33 1,100.98 (2,238.51)
- Foreign Currency Monetary Items Translation Difference 33 472.42 (38.21)
Account
[a] 1,573.40 (2,276.72)
Other Comprehensive Income not to be reclassified to profit or
loss in subsequent period (net of tax)
- Re-measurement gains / (losses) of defined benefit plans 33 (41.31) 16.58
- Net (loss)/gain on FVTOCI equity securities 33 90.13 (90.23)
[b] 48.82 (73.65)
In ` Million
Year ended Year ended
Notes
March 31, 2017 March 31, 2016
Other comprehensive income for the year (net of tax) [a+b] 1,622.22 (2,350.37)
Total comprehensive income for the year (net of tax) 7,472.99 4,625.81
Earning per equity share [nominal value per share ` 2/- (March 31, 34
2016: ` 2/- )]
Basic 25.13 29.97
Diluted 25.13 29.97
In ` Million
Particulars March 31, 2017 March 31, 2016
Operating activities
Profit before tax 8,424.92 10,259.80
Adjustment to reconcile profit before tax to net cash flows
Depreciation and amortisation expense 2,948.51 3,084.51
Gain on sale of investment in joint venture (540.07) -
Unrealised foreign exchange loss 423.84 205.46
Interest income on fixed deposit and others (158.64) (185.96)
Interest income on loan to subsidiaries (52.22) (52.14)
Provision no longer required (35.13) (1.05)
Provision for doubtful debts and advances (net) 19.72 4.55
Bad debts/ advances written off 6.11 16.03
Finance costs 727.70 905.06
(Profit)/ loss on sale of property, plant and equipment (net) 16.99 0.29
Dividend income (369.97) (375.19)
Net (gain) on sale of investment (19.87) (26.85)
Net (gain)/loss on fair valuation of financial instruments (FVTPL) (50.37) 14.24
Provision for dimunition in value of investment in subsidiary and joint venture 23.74 -
Operating profit before working capital changes 11,365.26 13,848.75
Movements in working capital :
(Increase)/ Decrease in trade receivable (13.43) 2,163.43
(Increase)/Decrease in inventories (601.46) 126.61
Decrease/(Increase) in loans 3.69 (25.64)
Decrease/ (Increase) in other financial assets 48.12 (38.56)
Decrease in other assets 571.99 1,099.35
Increase/(Decrease) in provisions 24.47 (5.07)
Increase/(Decrease) in trade payables 355.44 (2,008.30)
Increase/ (Decrease) in other financial liabilities 7.18 (5.67)
(Decrease)/Increase in other liabilities (198.69) 916.64
Cash generated from operations 11,562.57 16,071.54
Direct taxes paid (net of refunds) (2,638.75) (3,007.94)
Net cash flow from operating activities (A) 8,923.82 13,063.60
Investing activities
Purchase of property, plant & equipment and intangible assets (including (4,399.63) (5,812.33)
capital work-in-progress and capital advances)
Proceeds from sale of property, plant & equipment and intangible assets 107.96 54.95
Investments in subsidiaries/joint ventures (1,206.42) -
Proceeds from sale of investments in subsidiaries/joint ventures 2,292.58 -
Loan given to subsidiaries (304.88) (444.55)
Proceeds from loan given to subsidiaries 305.78 104.11
Proceeds from Intercorporate deposits - 50.00
Investments in financial instruments (38,002.61) (31,057.54)
Proceeds from sale of financial instruments 34,778.80 29,987.74
Interest received 265.16 229.63
Dividends received 369.97 375.19
Net cash (used) in investing activities (B) (5,793.29) (6,512.80)
In ` Million
Particulars March 31, 2017 March 31, 2016
Financing activities
Dividend paid on equity shares (698.40) (2,677.13)
Tax on equity dividend paid (142.18) (545.00)
Interest Paid (811.94) (953.47)
Proceeds from borrowings 38,161.89 41,522.52
Repayment of borrowings (40,228.71) (44,100.11)
Investment in subsidiary leading to change in ownership interest without loss - (13.93)
of control
Net cash flow from / (used in) financing activities (C) (3,719.34) (6,767.12)
Net (decrease) in cash and cash equivalents (A + B + C) (588.81) (216.32)
Net foreign exchange difference - -
Cash and cash equivalents at the beginning of the year 2,835.59 3,051.91
Cash and cash equivalents at the end of the year 2,246.78 2,835.59
Cash and Cash equivalents for the purpose of cash flow statement
In ` Million
March 31, 2017 March 31, 2016
Balances with banks:
In cash credit and current accounts 2,192.13 2,966.84
Deposits with original maturity of less than three months 215.00 -
Cash on hand 0.74 0.70
Total 2,407.87 2,967.54
Less : cash credit 161.09 131.95
2,246.78 2,835.59
The accompanying notes form an integral part of the financial statements.
1 Corporate information
Bharat Forge Limited (“the Company”) is a public Company domiciled in India and incorporated under the
provisions of Companies Act, 1956. The Company’s shares are listed on two stock exchanges in India. The Company
is engaged in the manufacturing and selling of forged and machined components for auto and industrial sector.
The Company caters to both domestic and international markets. The registered office of the Company is located
at Bharat Forge Limited, Mundhwa, Pune. Also the Company has manufacturing facilities at Mundhwa, Baramati,
Chakan and Satara locations. The Company’s CIN is L25209PN1961PLC012046. The financial statements were
authorized for issue in accordance with a resolution of the directors on May 24, 2017.
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities
which have been measured at fair value:
4 Derivative financial instruments;
4 Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial in-
struments).
In addition, the carrying values of recognized assets and liabilities designated as hedged items in fair value hedges
that would otherwise be carried at amortized cost are adjusted to record changes in the fair values attributable to
the risks that are being hedged in effective hedge relationships.
4
Expected to be realised within twelve months after the reporting period, or
4
Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
twelve months after the reporting period
b. Foreign currencies
The Company’s financial statements are presented in INR, which is also its functional currency.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Exchange difference that arise on settlement of monetary
items or on reporting at each balance sheet date of the Company’s monetary items at the closing rate are
recognized as income or expenses in the period in which they arise except for differences pertaining to Long
Term Foreign Currency Monetary Items as mentioned subsequently.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using
the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a
foreign currency are translated using the exchange rates at the date when the fair value is determined. The
gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the
recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items
whose fair value gain or loss is recognised in OCI or statement of profit and loss are also recognised in OCI or
statement of profit and loss, respectively).
Exchange differences
The Company has availed the option available under Ind AS 101 para D13 AA and is continuing the policy
adopted for accounting for exchange difference arising from translation of long term foreign currency
monetary items recognised in the financial statements for the period ending March 31, 2016, pertaining to
long term foreign currency translation difference account (FCMITDA). Hence, such exchange differences are
accounted as below:
a. Exchange differences arising on long-term foreign currency monetary items related to acquisition of
a property, plant and equipment are capitalized and depreciated over the remaining useful life of the
asset.
c. All other exchange differences are recognized as income or as expenses in the period in which they arise.
For the purpose of (a) and (b) above, the Company treats a foreign monetary item as “long-term foreign
currency monetary item”, if it has a term of 12 months or more at the date of its origination.
Further the Company does not differentiate between exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange
difference.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:
4
In the principal market for the asset or liability, or
4
In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use
when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximising the use of relevant observable inputs and minimising the
use of unobservable inputs.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of
each reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial
assets. Involvement of external valuers is decided upon annually by the management. Selection criteria
include market knowledge, reputation, independence and whether professional standards are maintained.
The management decides, after discussions with the Company’s external valuers, which valuation techniques
and inputs to use for each case.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes.
4
Disclosures for valuation methods, significant estimates and assumptions (note 49)
4
Quantitative disclosures of fair value measurement hierarchy (note 47)
4
Investment in unquoted equity shares
4
Investment properties (note 4)
4
Financial instruments (including those carried at amortised cost) (note 48)
e. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and
the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured
at the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding taxes or duties collected on behalf of the government. The Company has concluded
that it is the principle in all of its revenue arrangements since it is the primary obligor in all the revenue
arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
Based on the Educational Material on Ind AS 18 issued by the ICAI, the Company has assumed that recovery
of excise duty flows to the Company on its own account. This is for the reason that it is a liability of the
manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not.
Since the recovery of excise duty flows to the Company on its own account, revenue includes excise duty.
Sale of goods
a. Revenue from the domestic sales is recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods
is measured at the fair value of the consideration received or receivable, net of returns and allowances,
trade discounts and volume rebates.
b. Revenue from export sales are recognized when all the significant risks and rewards of ownership of the
goods have been passed to the buyer, usually on the basis of dates of bill of lading. Revenue from the
sale of goods is measured at the fair value of the consideration received or receivable, net of returns and
allowances, trade discounts and volume rebates.
Export incentives
Revenue from export incentives are accounted for on export of goods if the entitlements can be estimated
with reasonable assurance and conditions precedent to claim are fulfilled.
Sale of services
Revenue from sale of services is recognised by reference to the stage of completion, and is measured net of
service tax. Stage of completion is measured by reference to proportion of cost incurred till date to the total
estimated contract cost.
Interest income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive
income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash receipts over the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability.
When calculating the effective interest rate, the Company estimates the expected cash flows by considering
all the contractual terms of the financial instrument (for example, prepayment, extension, call and similar
options) but does not consider the expected credit losses. Interest income is included in other income in the
statement of profit and loss.
Dividends
Dividend income is recognised when the Company’s right to receive the payment is established, which is
generally when shareholders approve the dividend.
f. Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the grant or subsidy relates to revenue, it is recognized
as income on a systematic basis in the statement of profit and loss over the periods necessary to match
them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it
is recognized as deferred income and is allocated to statement of profit and loss over the periods and in the
proportions in which depreciation on those assets is charged.
When loans or similar assistance are provided by governments or related institutions, with an interest rate
below the current applicable market rate, the effect of this favourable interest is regarded as a government
grant. The loan or assistance is initially recognised and measured at fair value and the government grant is
measured as the difference between the initial carrying value of the loan and the proceeds received. The loan
is subsequently measured as per the accounting policy applicable to financial liabilities.
g. Taxes
Current income tax relating to items recognised outside the statement of profit and loss is recognised outside
the statement of profit and loss (either in other comprehensive income or in equity). Current tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
W
hen the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, when the timing of the reversal of the temporary differences can be controlled
and it is probable that the temporary differences will not reverse in the foreseeable future
W
hen the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss
In respect of deductible temporary differences associated with investments in subsidiaries, associates
and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit will be available
against which the temporary differences can be utilized
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the
statement of profit and loss (either in other comprehensive income or in equity). Deferred tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
In the situations where the Company is entitled to a tax holiday under the Income-tax Act, 1961 enacted in
India or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or
liability) is recognized in respect of timing differences which reverse during the tax holiday period, to the
extent the Company’s gross total income is subject to the deduction during the tax holiday period. Deferred
tax in respect of timing differences which reverse after the tax holiday period is recognized in the year in
which the timing differences originate. However, the Company restricts recognition of deferred tax assets to
the extent that it has become reasonably certain, that sufficient future taxable income will be available against
which such deferred tax assets can be realized. For recognition of deferred taxes, the timing differences
which originate first are considered to reverse first.
For these purposes, sale transactions include exchanges of non-current assets for other non-current assets
when the exchange has commercial substance. The criteria for held for sale classification is regarded as met
only when the assets or disposal Company is available for immediate sale in its present condition, subject
only to terms that are usual and customary for sales of such assets (or disposal group), its sale is highly
probable; and it will genuinely be sold, not abandoned. The Company treats sale of the asset or disposal
group to be highly probable when:
4
The appropriate level of management is committed to a plan to sell the asset (or disposal group)
4
An active programme to locate a buyer and complete the plan has been initiated (if applicable)
4
The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to its
current fair value
4
The sale is expected to qualify for recognition as a completed sale within one year from the date of
classification, and
4
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn
Non-current assets held for sale/for distribution to owners and disposal group are measured at the lower of
their carrying amount and the fair value less costs to sell/distribute. Assets and liabilities classified as held for
sale/ distribution are presented separately in the balance sheet.
Property, plant and equipment and intangible assets once classified as held for sale/ distribution to owners
are not depreciated or amortised.
Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation
and impairment loss (if any). Internally manufactured property, plant and equipment are capitalised at cost,
including non-cenvatable excise duty, wherever applicable. All significant costs relating to the acquisition and
installation of property, plant and equipment are capitalised. Such cost includes the cost of replacing part of
the property, plant and equipment and borrowing costs for long-term construction projects if the recognition
criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the
Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection
is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if
the recognition criteria are satisfied. All other repair and maintenance costs are recognised in statement of
profit and loss as incurred. The present value of the expected cost for the decommissioning of an asset after
its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Refer to
note 49 regarding significant accounting judgements, estimates and assumptions and provisions for further
information.
The identified components are depreciated over their useful lives, the remaining asset is depreciated over the
life of the principal asset.
Depreciation for identified components is computed on straight line method based on useful lives, determined
based on internal technical evaluation as follows:
The Company, based on technical assessment made by a technical expert and management estimate,
depreciates certain items of building, plant and equipment over estimated useful lives which are different
from the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that
these estimated useful lives are realistic and reflect fair approximation of the period over which the assets
are likely to be used.
Freehold land is carried at cost. The Company has taken certain land on lease for a period of 99 years.
Leasehold land is amortised on the straight line method over period of the lease.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.
j. Investment properties
Since there is no change in the functional currency, the Company has elected to continue with the carrying
value for all of its investment property as recognised in its Indian GAAP financial statements as deemed cost
at the transition date, viz., April 1, 2015.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss, if any.
Though the Company measures investment property using cost based measurements, the fair value
measurement of investment property is disclosed in note 4. Fair values are determined based on a periodic
evaluation performed by an accredited external independent valuer applying valuation model recommended
by recognised valuation standards.
Investment properties are derecognised either when they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference between
the net disposal proceeds and the carrying amount of the asset is recognised in the statement of profit and
loss in the period of derecognition.
k. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in statement of profit and loss in the period in which the expenditure is incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of
carrying value of another asset, as provided by another Ind AS.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the net carrying amount of the asset and are recognised in the statement of profit
and loss when the asset is derecognised.
The summary of amortization policy applied to the Company’s intangible assets is as below:
Computer software 3
4
The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
4
Its intention to complete and its ability and intention to use or sell the asset
4
The ability to measure reliably the expenditure during development
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less
any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is available for use. It is amortised over the period of expected future
benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure
forms part of carrying value of another asset.
During the period of development, the asset is tested for impairment annually.
l. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist
of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost
also includes exchange differences to the extent regarded as an adjustment to the borrowing costs w.r.t.
borrowings taken on or after April 1, 2016.
m.
Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to
use the asset or assets, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to April 1, 2015, the Company has determined whether the arrangements
contain a lease on the basis of facts and circumstances existing on the date of transition.
Company as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that
the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of
the estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line
basis over the lease term unless the same is in line with inflation.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an
asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line
basis over the term of the relevant lease unless the same is in line with inflation. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and
recognised over the lease term on the same basis as rental income. Contingent rents are recognised as
revenue in the period in which they are earned.
n. Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs
incurred in bringing the inventories to their present location and condition.
Raw materials and components, stores and spares and loose tools are valued at lower of cost and net
realizable value. However, materials and other items held for use in the production of inventories are not
written down below cost if the finished products in which they will be incorporated are expected to be sold at
or above cost. Costs are determined on weighted average basis.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct
materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
Cost of finished goods includes excise duty. Cost of work-in-progress and finished goods are determined on
a weighted average basis.
Dies are valued at cost or net realisable value. Cost includes direct material and labour and a proportion of
manufacturing overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset. In determining fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair
value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, which are
prepared separately for each of the Company’s CGUs to which the individual assets are allocated. These
budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term
growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow
projections beyond periods covered by the most recent budgets/forecasts, the Company extrapolates
cashflow projections in the budget using a steady or declining growth rate for subsequent years, unless an
increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth
rate for the products, industries, or country or countries in which the entity operates, or for the market in
which the asset is used.
Impairment losses including impairment on inventories, are recognised in the statement of profit and loss.
For the assets, an assessment is made at each reporting date to determine whether there is an indication
that previously recognised impairment losses no longer exist or have decreased. If such indication exists,
the Company estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss
is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of
the asset does not exceed its recoverable amount, nor exceeds the carrying amount that would have been
determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such
reversal is recognised in the statement of profit and loss.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as a finance cost.
Provident fund
The Company operates two plans for its employees to provide employee benefits in the nature of provident
fund.
Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee
and the Company make monthly contributions to the provident fund plan equal to a specified percentage
of the covered employee’s salary. The Company contributes a part of the contributions to the “Bharat
Forge Company Limited Staff Provident Fund Trust”. The rate at which the annual interest is payable to the
beneficiaries by the trust is being administered by the government. The Company has an obligation to make
good the shortfall, if any, between the return from the investments of the trust and the notified interest rate.
The cost of providing benefits under above mentioned defined benefit plan is determined using the projected
unit credit method with actuarial valuations being carried out at each balance sheet date, which recognizes
each period of service as giving rise to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation.
Remeasurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts
included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts
included in net interest on the net defined benefit liability), are recognised immediately in the balance sheet
as an asset/liability with a corresponding debit or credit to retained earnings through OCI in the period in
which they occur. Remeasurements are not reclassified to profit or loss in subsequent periods.
The employees which are not covered under the above scheme, their portion of provident fund is contributed
to the government administered pension fund which is a defined contribution scheme. The Company has no
obligation, other than the contribution payable to the provident fund. The Company recognizes contribution
payable to the provident fund scheme as expenditure, when an employee renders the related service. If the
contribution payable to the scheme for service received before the balance sheet date exceeds the contribution
already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution
already paid. If the contribution already paid exceeds the contribution due for services received before the
balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to,
a reduction in future payment or a cash refund.
Remeasurements, comprising of actuarial gains and losses, excluding amounts included in net interest on
the net defined benefit liability and the return on plan assets (excluding amounts included in net interest
on the net defined benefit liability), are recognised immediately in the balance sheet as asset/liability with a
corresponding debit or credit to retained earnings through OCI in the period in which they occur.
Remeasurements are not reclassified to profit or loss in subsequent periods.
Past service costs are recognised in statement of profit and loss on the earlier of:
4
The date of the plan amendment or curtailment, and
4
The date that the Company recognises related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company
recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and
loss:
4
Service costs comprising of current service costs, past-service costs, gains and losses on curtailments and non-
routine settlements; and
Superannuation
Retirement benefit in the form of superannuation plan is a defined contribution plan. Defined contributions
to insurance Company for employees covered under Superannuation scheme are accounted at the rate of
15% of such employees’ basic salary. The Company recognizes expense toward the contribution paid/ payable
to the defined contribution plan as and when an employee renders the relevant service. If the contribution
already paid exceeds the contribution due for service before the balance sheet date, the Company recognise
that excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a
reduction in future payments or cash refund. If the contribution already paid is lower than the contribution
due for service before the balance sheet date, the Company recognises that difference as a liability. The
Company has no obligation, other than the contribution payable to the superannuation fund.
Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The
Company presents the leave as a current liability in the balance sheet, to the extent it does not have an
unconditional right to defer its settlement for 12 months after the reporting date. Where the Company has
the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the
same is presented as non-current liability.
Termination benefits
Termination benefits are payable when employment is terminated by the Company before the normal
retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The
Company recognizes termination benefits at the earlier of the following dates: (a) when the Company can no
longer withdraw the offer of these benefits; and (b) when the entity recognizes cost for a restructuring that is
within the scope of Ind AS 37 and involves payment of termination benefits. In the case of an offer made to
encourage voluntary redundancy, the termination benefits are measured based on the number of employees
expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period
are discounted to present value.
r. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
4 Debt instruments at amortised cost
4 Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
4 Equity instruments measured at fair value through other comprehensive income (FVTOCI)
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash
flows, and
This category is the most relevant to the Company. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in other income in the statement of profit and
loss. The losses arising from impairment are recognised in the statement of profit and loss. This category
generally applies to trade and other receivables.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost
or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as ‘accounting mismatch’). The Company has not
designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. For all equity instruments not held
for trading, the Company may make an irrevocable election to present in other comprehensive income sub-
sequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis.
The classification is made on initial recognition and is irrevocable.
CL is the difference between all contractual cash flows that are due to the Company in accordance with the
E
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original EIR. When estimating the cash flows, an entity is required to consider:
4 All contractual terms of the financial instrument (including prepayment, extension, call and similar
options) over the expected life of the financial instrument. However, in rare cases when the expected life
of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining
contractual term of the financial instrument
4 Cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms
As a practical expedient, the Company uses a provision matrix to determine impairment loss allowance on
portfolio of its trade receivables. The provision matrix is based on its historically observed default rates over
the expected life of the trade receivables and is adjusted for forward-looking estimates. At every reporting
date, the historical observed default rates are updated and changes in the forward-looking estimates are
analysed.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense
in the statement of profit and loss. This amount is reflected under the head ‘other expenses’ in the statement
of profit and loss.
The balance sheet presentation for various financial instruments is described below:
4 Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the bal-
ance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the
Company does not reduce impairment allowance from the gross carrying amount.
4 Debt instruments measured at FVTOCI:
Since financial assets are already reflected at fair value, impairment allowance is not further reduced
from its value. Rather, ECL amount is presented as ‘accumulated impairment amount’ in the OCI.
For assessing increase in credit risk and impairment loss, the Company combines financial instruments on
the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed to
enable significant increases in credit risk to be identified on a timely basis.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial
assets which are credit impaired on purchase/ origination.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Company’s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
This category generally applies to borrowings. For more information refer Note 18.
At the inception of a hedge relationship, the Company formally designates and documents the hedge
relationship to which the Company wishes to apply hedge accounting and the risk management objective and
strategy for undertaking the hedge. The documentation includes the Company’s risk management objective
and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the
nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the
hedging instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash
flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting
changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have
been highly effective throughout the financial reporting periods for which they were designated.
For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is
amortised through statement of profit and loss over the remaining term of the hedge using the EIR method.
EIR amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases
to be adjusted for changes in its fair value attributable to the risk being hedged.
If the hedged item is derecognised, the unamortised fair value is recognised immediately in statement of
profit and loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent
cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as
an asset or liability with a corresponding gain or loss recognised in statement of profit and loss.
The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge
reserve, while any ineffective portion is recognised immediately in the statement of profit and loss.
The Company uses forward currency contracts as hedges of its exposure to foreign currency risk in forecast
transactions and firm commitments. The ineffective portion relating to foreign currency contracts is
recognised in finance costs (Refer note 50).
Amounts recognised as OCI are transferred to statement of profit and loss when the hedged transaction
affects profit or loss, such as when the hedged financial income or financial expense is recognised or when
a forecast sale occurs. When the hedged item is the cost of a non-financial asset or non-financial liability, the
amounts recognised as OCI are transferred to the initial carrying amount of the non-financial asset or liability.
If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part
of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the
criteria for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in
equity until the forecast transaction occurs or the foreign currency firm commitment is met.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered
an integral part of the Company’s cash management.
v. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors that
makes strategic decisions.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to
equity shareholders and the weighted average number of shares outstanding during the period are adjusted
for the effects of all dilutive potential equity shares.
(362.84)
at March 31, 2017 - 5.73 981.55 24,096.62 20.37 0.43 421.09 650.93 236.54 1,838.73 97.77 28,349.76
Net block
at April 1, 2015 173.39 139.86 2,441.96 16,674.87 14.66 0.02 170.66 233.30 65.31 695.09 6.17 20,615.29
at March 31, 2016 173.39 138.30 2,751.25 16,814.75 20.58 0.02 141.20 259.06 56.70 2,354.36 - 22,709.61
at March 31, 2017 173.39 69.23 3,923.23 16,743.07 40.78 0.02 114.66 300.10 92.93 2,151.80 - 23,609.21
(a) Buildings include cost of hangar jointly owned with other companies ` 0.12 million (March 31, 2016: ` 0.12 million, April 1, 2015: ` 0.12 million)
(b) Documents for the ownership of premises at Mittal Towers, Mumbai; Bangalore branch office, Land at Bhima Koregaon, Hangar at Lohegaon, Surajban apartments and Flat at Lullanagar, Pune
STATUTORY REPORTS
costs on the date of transition and has carried forward gross block and accumulated depreciation only for discloser purposes.
NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS
For the year ended March 31, 2017 (Contd.):
4. Investment property
In ` Million
Freehold Land
Cost
at April 1, 2015 2.89
Additions -
Disposals -
at March 31, 2016 2.89
Additions -
Disposals -
at March 31, 2017 2.89
Depreciation and impairment
at April 1, 2015 -
Depreciation for the year -
at March 31, 2016 -
Depreciation for the year -
at March 31, 2017 -
Net block
at April 1, 2015 2.89
at March 31, 2016 2.89
at March 31, 2017 2.89
The Company’s investment properties consist of three parcels of land situated at Mundhwa, Satara and Chakan.
Management determined that the investment properties consist of only one class of assets − free hold land − based on
the nature, characteristics and risks of each property.
As at March 31, 2017, March 31, 2016 and April 1, 2015, the fair values of the properties are ` 430.31 million, ` 412.02
million and ` 370.53 million respectively. The Company obtains independent valuations for its investment properties at
least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such
information is not available, the Company considers ready reckoner rates. The fair values of investment properties
have been determined by an independent valuer. The main input used is the ready reckoner rate. All resulting fair
value estimates for investment properties are included in Level 2.
The Company has no restrictions on the realisability of its investment properties and no contractual obligations to
either purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Freehold land includes 25 acres of land situated at Pune and 24.13 acres of land situated at Satara and 8.40 acres of
land situated at chakan which have been given on lease. Due to certain matters being sub-judice, the Company has not
executed lease deed with related party for one of the said land.
5. Intangible assets
In ` Million
Computer software Total
Cost
at April 1, 2015 80.15 80.15
Purchase 18.90 18.90
at March 31, 2016 99.05 99.05
Purchase 95.22 95.22
Exchange differences (0.05) (0.05)
at March 31, 2017 194.22 194.22
Amortisation and impairment
at April 1, 2015 20.50 20.50
Amortisation 18.83 18.83
at March 31, 2016 39.33 39.33
Amortisation 30.91 30.91
at March 31, 2017 70.24 70.24
Net block
at April 1, 2015 59.65 59.65
at March 31, 2016 59.72 59.72
at March 31, 2017 123.98 123.98
T he Company has elected to continue with the carrying value of intangible assets as recognised in financial statements as per Indian GAAP
and regard those values as deemed costs on the date of transition and has carried forward gross block and accumulated depreciation only for
discloser purposes.
At Cost
Unquoted equity instruments (fully paid)
- Investment in wholly owned subsidiaries
Bharat Forge Global Holding GmbH
Subscription to the equity share capital EUR 5,000,000 (March 287.98 287.98 287.98
31, 2016 : EUR 5,000,000; April 1, 2015 : EUR 5,000,000)
Capital contribution credited in favour of Bharat Forge Limited 3,675.98 3,675.98 3,675.98
[Refer Note 6 (a)] EUR 57,464,428 [March 31, 2016:EUR
57,464,428; April 1, 2015:EUR 57,464,428]
3,963.96 3,963.96 3,963.96
Bharat Forge America Inc. [Refer Note 6 (b)]
USD 33,396,597 (March 31, 2016 : USD 21,596,597; April 1, 831.91 22.93 22.93
2015 : USD 21,596,597)
64,000 (March 31, 2016: Nil, April 1, 2015: Nil) equity shares of 304.78 - -
£ 1/- each fully paid up in Bharat Forge International Limited
[Refer Note 6 (c)]
95,527,694 (March 31, 2016 : 27,519,594, April 1, 2015: 575.28 185.20 107.91
19,791,494) equity shares of ` 10/- each fully paid up in BF
Infrastructure Limited [Refer Note 6 (d)]
Nil (March 31, 2016: 40,050,000, April 1, 2015: 40,050,000) - 110.50 110.50
equity shares of ` 10/- each fully paid up in BF Infrastructure
Ventures Limited [Refer Note 6 (d)]
Nil (March 31, 2016: 50,000, April 1, 2015 : 50,000) equity - 0.50 0.50
shares of ` 10/- each fully paid up in Kalyani Polytechnic Private
Limited [Refer Note 6 (i)]
- Other subsidiaries where Company holds 51% or more of
the equity share capital
1,655,202 (March 31, 2016: 1,655,202, April 1, 2015 : 1,655,202) 16.55 16.55 16.55
equity shares of ` 10/- each fully paid up in Analogic Controls
India Limited [Refer Note 6 (f)]
Less : Provision for impairment in value of investments 16.55 - -
- 16.55 16.55
10,000 (March 31, 2016: 10,000, April 1, 2015: 10,000) equity 0.10 0.10 0.10
shares of ` 10/- each fully paid up in BF Elbit Advanced Systems
Private Limited
9,990,600 (March 31, 2016: 1,443,000, April 1, 2015 : 50,000) 99.90 14.43 0.50
equity shares of ` 10/- each fully paid up in Kalyani Strategic
Systems Limited [Refer Note 6 (e)]
- Investments in joint ventures
6,839,100 (March 31, 2016: 6,120,000, April 1, 2015 : 6,120,000) 30.76 23.57 23.57
equity shares of ` 10/- each fully paid up in BF NTPC Energy
Systems Limited [Refer Note 6 (g)]
Less : Provision for impairment in value of investments 7.19 - -
23.57 23.57 23.57
Nil (March 31, 2016: 151,826,496, April 1, 2015 : 151,826,496) - 1,727.01 1,727.01
equity shares of ` 10/- each fully paid up in ALSTOM Bharat
Forge Power Private Limited [Refer Note 6 (h)]
Total 5,799.50 6,064.75 5,973.53
Aggregate value of unquoted investments 5,823.24 6,064.75 5,973.53
Aggregate amount of impairment in value of investments 23.74 - -
(d) Merger of BF Infrastructure Limited (BFIL) and BF Infrastructure Ventures Limited (BFIVL)
(wholly owned Subsidiaries)
The Board of Directors of BFIL and BFIVL approved a Scheme of Amalgamation (Scheme) on July 9, 2015 with BFIVL
being transferor company. The Scheme is approved by Hon’ble High Court of Bombay on August 18, 2016 with
appointed date April 1, 2015. Persuant to the merger shares of BFIL at fair value of ` 110.50 million have been
alloted to the shareholder of BFIVL in the ratio of 1:1.
During the Current year, the Company has made further Investment in BFIL of ` 279.58 million by acquiring
27,958,100 shares of ` 10/- each.
7. Investments
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current investment
(a) At amortised cost
- Bonds (unquoted)
Nil (March 31, 2016: 500; April 1, 2015: 500) Non-convertible - 5.00 5.00
redeemable secured taxable bonds of ` 10,000/- each -
Series IX (2013-14)
Total investments at amortised cost (a) - 5.00 5.00
(b) Investment at fair value through OCI (FVTOCI)
Equity instruments (unquoted)
- Investments in others (Company holds 5% or more of the
share capital) (fully paid)
38,384,202 (March 31, 2016: 21,067,894, April 1, 2015: 524.71 250.29 315.60
21,067,894) equity shares of ` 10/- each fully paid up in Khed
Economic Infrastructure Private Limited [(Refer Note 7(b)]
Equity instruments (quoted)
- Investments in others (fully paid)
613,000 (March 31, 2016: 613,000, April 1, 2015 : 613,000) 79.50 90.63 115.55
equity shares of ` 2/- each fully paid up in KPIT Technologies
Limited
Total FVTOCI investments (b) 604.21 340.92 431.15
(c) Investments at fair value through profit or loss (FVTPL)
- Debentures (unquoted)
Other subsidiaries where Company holds 51% or more
of the equity share capital (fully paid)
1,573,100 (March 31, 2016: 1,573,100; April 1, 2015 : 866,467) 3.60 139.69 78.94
0% Compulsorily Convertible Debentures of ` 100/- each in
Analogic Controls India Limited [Refer note 32(c)]
- Equity instruments (unquoted)
Investments in others (Company holds 5% or more of
the share capital) (fully paid)
504,432 (March 31, 2016: 504,432, April 1, 2015: 504,432) - - -
equity shares of ` 10/- each fully paid up in Gupta Energy
Private Limited [Refer note 7(a)]
- Preference shares (unquoted)
Investment in wholly owned subsidiaries (fully paid)
21,814,050 (March 31, 2016: 21,814,050, April 1, 2015: - - -
21,814,050) redeemable preference shares of ` 10/- each
fully paid up in BF Infrastructure Limited
- Investments in private equity fund (unquoted funds)
720,000 (March 31, 2016 : 280,000, April 1, 2015 : Nil) Units of 72.79 26.07 -
` 100/- each of Paragon Partners Growth Fund - I [Refer note 7(c)]
- Investments in mutual funds (quoted funds)
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 10 20.11 - -
each of Birla Sun Life Fixed Term Plan - Series OE (1153 days)
- Direct Plan-Growth
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 10 20.10 - -
each of Birla Sun Life Fixed Term Plan - Series OG (1146 days)
- Direct Plan-Growth
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.17 - -
` 10 each of Birla Sun Life Fixed Term Plan - Series OH
(1120 days) - Direct Plan-Growth
carried over 60.38 - -
carried over 76.39 165.76 78.94
carried over 604.21 345.92 436.15
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current investment (Contd.):
brought over 604.21 345.92 436.15
brought over 76.39 165.76 78.94
brought over 60.38 - -
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 20.12 - -
10 each of Birla Sun Life Fixed Term Plan - Series OI (1120
days) - Direct Plan-Growth
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 20.06 - -
10 each of Birla Sun Life Fixed Term Plan - Series OK (1135
days) - Direct Plan-Growth
20,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 20.11 - -
1,000 each of DHFL Pramerica Fixed Duration Fund - Series
AE - Direct Plan - Growth Option
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 20.14 - -
10 each of DSP BlackRock FMP - Series 204 - 37M - Direct
Plan - Growth
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 54.97 50.09 -
Units of ` 10 each of HDFC FMP 1107D March 2016 (1) Series
36 - Direct Option - Growth Option
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 55.00 50.13 -
Units of ` 10 each of HDFC FMP 1114D March 2016 (1) Series
35 - Direct Option - Growth Option
5,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 50.22 - -
10 each of HDFC FMP 1169D February 2017 (1) Series 37 -
Direct - Growth
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 54.80 50.09 -
Units of ` 10 each of ICICI Prudential Fixed Maturity Plan -
Series 78 - 1115 Days Plan X Direct Plan Cumulative Option
2,000,000 (March 31, 2016: 2,000,000; April 1, 2015: Nil) 21.93 20.05 -
Units of ` 10 each of ICICI Prudential Fixed Maturity Plan -
Series 78 - 1130 Days Plan T Direct Plan Cumulative Option
2,000,000 (March 31, 2016: 2,000,000; April 1, 2015: Nil) 21.92 20.12 -
Units of ` 10 each of ICICI Prudential Fixed Maturity Plan -
Series 78 - 1135 Days Plan W Direct Plan Cumulative Option
3,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 30.10 - -
10 each of ICICI Prudential Fixed Maturity Plan - Series 80 -
1187 Days Plan G - Direct Plan - Cumulative Option
3,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 30.18 - -
10 each of ICICI Prudential Fixed Maturity Plan - Series 80 -
1194 Days Plan F - Direct Plan - Cumulative Option
3,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 30.24 - -
10 each of ICICI Prudential Fixed Maturity Plan - Series 80 -
1253 Days Plan J - Direct Plan - Cumulative Option
2,000,000 (March 31, 2016: 2,000,000; April 1, 2015: Nil) 21.96 20.08 -
Units of ` 10 each of Kotak FMP Series 191 - Direct Growth
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of ` 20.12 - -
10 each of Kotak FMP Series 200-Direct Growth
carried over 532.25 210.56 -
carried over 76.39 165.76 78.94
carried over 604.21 345.92 436.15
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current investment (Contd.):
brought over 604.21 345.92 436.15
brought over 76.39 165.76 78.94
brought over 532.25 210.56 -
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 55.16 50.34 -
Units of ` 10 each of Reliance Fixed Horizon Fund XXX-
Series 13 -Direct Growth Plan
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 54.88 50.00 -
Units of ` 10 each of Reliance Fixed Horizon Fund XXX-
Series 17 -Direct Growth Plan
3,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 30.13 - -
` 10 each of Reliance Fixed Horizon Fund XXXII- Series 8 -
Direct Growth Plan
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.15 - -
` 10 each of Reliance Fixed Horizon Fund XXXIII- Series 1 -
Direct Growth Plan
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.15 - -
` 10 each of Reliance Fixed Horizon Fund XXXIII- Series 3 -
Direct Growth Plan
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.13 - -
` 10 each of Reliance Fixed Horizon Fund XXXIII- Series 4 -
Direct Growth Plan
2,000,000 (March 31, 2016: 2,000,000; April 1, 2015: Nil) 21.99 20.09 -
Units of ` 10 each of SBI Debt Fund Series B - 35 (1131 Days)
- Direct Growth
5,000,000 (March 31, 2016: 5,000,000; April 1, 2015: Nil) 54.65 50.00 -
Units of ` 10 each of SBI Debt Fund Series B - 36 (1131 Days)
- Direct Growth
2,000,000 (March 31, 2016: 2,000,000; April 1, 2015: Nil) 22.07 20.13 -
Units of ` 10 each of UTI Fixed Term Income Fund Series
XXIV-VIII (1184 Days) Direct Growth Plan
2,000,000 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.11 - -
` 10 each of UTI Fixed Term Income Fund Series XXVI-VI
(1146 Days)- Direct Growth Plan
851.67 401.12 -
- Investments in mutual funds (unquoted funds)
1,031,029.876 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 268.60 - -
` 100 each of Birla Sun Life Cash Plus - Growth - Regular Plan
342,047.800 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 108.99 - -
` 100 each of Birla Sun Life Savings Fund - Growth - Regular
Plan
100,614.884 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 321.93 - -
` 10 each of HDFC Liquid Fund - Regular Plan - Growth
3,847,145.226 (March 31, 2016: Nil; April 1, 2015: Nil) Units 108.76 - -
of ` 10 each of HDFC Floating Rate Income Fund - Short
Term Plan - Wholesale Option - Regular Plan - Growth
350,440.803 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 109.11 - -
` 100 each of ICICI Prudential Flexible Income - Growth
1,341,618.683 (March 31, 2016: Nil; April 1, 2015: Nil) Units 322.20 - -
of ` 100 each of ICICI Prudential Liquid Plan - Growth
9,291,003.521 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 109.52 - -
` 10 each of Reliance Banking & PSU Debt Fund- Growth Plan
carried over 1,349.11 - -
carried over 928.06 566.88 78.94
carried over 604.21 345.92 436.15
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current investment (Contd.):
brought over 604.21 345.92 436.15
brought over 928.06 566.88 78.94
brought over 1,349.11 - -
109,856.125 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 268.29 - -
` 1,000 each of Reliance Liquidity Fund - Growth Plan -
Growth Option
84,283.317 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 214.56 - -
` 1,000 each of SBI Premier Liquid Fund - Regular Plan -
Growth
25,677.546 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 53.93 - -
` 1,000 each of SBI Ultra Short Term Debt Fund - Regular
Plan - Growth
80,850.584 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 214.79 - -
` 1,000 each of UTI Liquid Cash Plan Institutional - Growth
24,285.753 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 54.44 - -
` 1,000 each of UTI Treasury Advantage Fund Institutional
Plan - Growth
2,155.12 - -
Total FVTPL investments (c) 3,083.18 566.88 78.94
Total (a) + (b) + (c) 3,687.39 912.80 515.09
Current investments
Investments at fair value through profit or loss (FVTPL)
- Investments in mutual funds (Unquoted funds)
330,619.111 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 330.91 - -
` 1,000 each of Axis Liquid Fund - Daily Dividend Reinvestment
Nil (March 31, 2016: 146,455.866; April 1, 2015: 67,680.139) - 245.45 104.82
Units of ` 1,000 each of Axis Liquid Fund - Growth
3,067,967.704 (March 31, 2016: Nil; April 1, 2015: Nil) Units 307.39 - -
of ` 100 each of Birla Sun Life Cash Plus - Daily Dividend
Reinvestment - Regular Plan
Nil (March 31, 2016: 1,286,482.144 ; April 1, 2015: - 312.32 483.64
2,156,388.990) Units of ` 100 each of Birla Sun Life Cash Plus
- Growth - Regular Plan
4,886,828.808 (March 31, 2016: Nil; April 1, 2015: Nil) Units 490.83 - -
of ` 100 each of Birla Sun Life Savings Fund - Daily Dividend
Reinvestment - Regular Plan
Nil (March 31, 2016: 1,761,140.710; April 1, 2015: Nil) Units - 515.77 -
of ` 100 each of Birla Sun Life Savings Fund - Growth -
Regular Plan
2,020,447.526 (March 31, 2016: Nil; April 1, 2015: Nil) Units 202.66 - -
of ` 100 each of DHFL Pramerica Insta Cash Plus Fund - Daily
Dividend Reinvestment
Nil (March 31, 2016: 983,923.561; April 1, 2015: Nil) Units of - 193.23 -
` 100 each of DHFL Pramerica Insta Cash Plus Fund - Growth
Nil (March 31, 2016: 16,199.416; April 1, 2015: 16,582.587) - 32.96 31.33
Units of ` 1,000 each of DSP BlackRock Money Manager
Fund - Regular Plan - Growth
carried over 1,331.79 1,299.73 619.79
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Current investments (Contd.):
brought over 1,331.79 1,299.73 619.79
13,508,353.272 (March 31, 2016: Nil; April 1, 2015: Nil) Units 136.21 - -
of ` 10 each of DSP Black Rock Ultra Short Term Fund -
Regular Plan - Daily Dividend Reinvestment
232,200.324 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 232.39 - -
` 1,000 each of DSP BlackRock Liquidity Fund - Institutional
Plan - Daily Dividend Reinvestment
Nil (March 31, 2016: 115,276.042; April 1, 2015: 43,726.745) - 249.24 87.43
Units of ` 1,000 each of DSP BlackRock Liquidity Fund -
Institutional Plan - Growth
Nil (March 31, 2016: Nil; April 1, 2015: 849,597.853) Units of - - 154.08
` 100 each of DWS Insta Cash Plus Fund - Growth
356,454.750 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 356.71 - -
` 1,000 each of Franklin India Treasury Management Account
- Super Institutional Plan - Daily Dividend Reinvestment
Nil (March 31, 2016: 50,313.727; April 1, 2015: 25,562.613) - 113.82 53.36
Units of ` 1,000 each of Franklin India Treasury Management
Account - Super Institutional Plan - Growth
Nil (March 31, 2016: Nil; April 1, 2015: 3,330,895.734) Units - - 61.76
of ` 10 each of Franklin India Ultra Short Bond Fund -Super
Institutional Plan - Growth
332,918.327 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 339.52 - -
` 10 each of HDFC Liquid Fund - Regular Plan - Daily
Dividend Reinvestment
Nil (March 31, 2016: 156,451.577; April 1, 2015: - 466.94 200.27
7,262,411.264) Units of ` 10 each of HDFC Liquid Fund -
Regular Plan - Growth
62,921,809.49 (March 31, 2016: Nil; April 1, 2015: Nil) Units 634.31 - -
of ` 10 each of HDFC Floating Rate Income Fund - Short
Term Plan - Wholesale Option - Regular Plan - Daily Dividend
Reinvestment
3,847,145.226 (March 31, 2016: 20,638,251.911; April 1, - 537.50 507.62
2015: 21,188,629.603) Units of ` 10 each of HDFC Floating
Rate Income Fund - Short Term Plan - Wholesale Option -
Regular Plan - Growth
4,868,216.384 (March 31, 2016: Nil; April 1, 2015: Nil) Units 514.74 - -
of ` 100 each of ICICI Prudential Flexible Income - Daily
Dividend Reinvestment
Nil (March 31, 2016: 1,546,464.721; April 1, 2015: - 442.63 173.92
661,022.388) Units of ` 100 each of ICICI Prudential Flexible
Income - Growth - Regular Plan
4,897,405.293 (March 31, 2016: Nil; April 1, 2015: Nil) Units 490.22 - -
of ` 100 each of ICICI Prudential Liquid Plan - Daily Dividend
Reinvestment
Nil (March 31, 2016: 2,696,028.444; April 1, 2015: - 603.52 262.13
1,267,195.547) Units of ` 100 each of ICICI Prudential Liquid
Plan - Growth
Nil (March 31, 2016: Nil; April 1, 2015: 777,419.206) Units of - - 150.23
` 100 each of ICICI Prudential Money Market Fund - Regular
Plan - Growth
229,840.699 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 230.09 - -
` 1,000 each of IDFC Cash Fund - Daily Dividend Reinvestment
- (Regular Plan)
carried over 4,265.98 3,713.38 2,270.59
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Current investments (Contd.):
brought over 4,265.98 3,713.38 2,270.59
Nil (March 31, 2016: 166,608.036; April 1, 2015: 100,233.590) - 306.36 170.30
Units of ` 1,000 each of IDFC Cash Fund - Growth - (Regular
Plan)
17,849,345.464 (March 31, 2016: Nil; April 1, 2015: Nil) Units 179.76 - -
of ` 10 each of IDFC Ultra Short Term Fund - Daily Dividend
Reinvestment - (Regular Plan)
Nil (March 31, 2016: 3,480,401.579; April 1, 2015: - 73.91 20.95
1,071,949.889) Units of ` 10 each of IDFC Ultra Short Term
Fund - Growth - (Regular Plan)
19,982.607 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 20.00 - -
` 1,000 each of Indiabulls Liquid Fund - Existing Plan - Daily
Dividend Reinvestment
124,959.118 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 125.16 - -
` 1,000 each of Invesco India Liquid Fund - Daily Dividend
Reinvestment
50,540.397 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 50.63 - -
` 1,000 each of Invesco India Ultra Short Term Fund - Daily
Dividend Reinvestment
9,981,592.309 (March 31, 2016: Nil; April 1, 2015: Nil) Units 104.11 - -
of ` 10 each of JM High Liquidity Fund - Daily Dividend
Reinvestment
Nil (March 31, 2016: 1,213,770.282; April 1, 2015: Nil) Units - 50.16 -
of ` 10 each of JM High Liquidity Fund-Growth
Nil (March 31, 2016: Nil; April 1, 2015: 6,138,928.524) - - 111.16
Units of ` 10 each of JPMorgan India Liquid Fund Super
Institutional Plan - Growth
242,552.5075 (March 31, 2016: Nil; April 1, 2015: Nil) Units 296.60 - -
of ` 1,000 each of Kotak Liquid Regular Plan - Daily Dividend
Reinvestment
Nil (March 31, 2016: 18,394.599; April 1, 2015: Nil) Units of - 56.46 -
` 1,000 each of Kotak Liquid Scheme Plan A - Growth
24,889,841.582 (March 31, 2016: Nil; April 1, 2015: Nil) 250.88 - -
Units of ` 10 each of Kotak Treasury Advantage Fund-Daily
Dividend Reinvestment (Regular Plan)
Nil (March 31, 2016: 9,871,987.041; April 1, 2015: - 238.39 177.02
7,948,730.866) Units of ` 10 each of Kotak Treasury
Advantage Fund - Growth
159,463.169 (March 31, 2016: Nil; April 1, 2015: Nil) Units 161.34 - -
of ` 1,000 each of L&T Liquid Fund Regular - Daily Dividend
Reinvestment
Nil (March 31, 2016: 64,483.622; April 1, 2015: 55,418.577) - 133.75 106.23
Units of ` 1,000 each of L&T Liquid Fund Regular - Growth
10,183,012.422 (March 31, 2016: Nil; April 1, 2015: Nil) Units 104.45 - -
of ` 10 each of L&T Ultra Short Term Fund Regular - Daily
Dividend Reinvestment
Nil (March 31, 2016: 2,068,075.276; April 1, 2015: Nil) Units - 50.84 -
of ` 10 each of L&T Ultra Short Term Fund - Growth Plan
carried over 5,558.91 4,623.25 2,856.25
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Current investments (Contd.):
brought over 5,558.91 4,623.25 2,856.25
96,049.529 (March 31, 2016: Nil; April 1, 2015: Nil) Units 105.46 - -
of ` 1,000 each of LIC MF Liquid Fund - Daily Dividend
Reinvestment
Nil (March 31, 2016: 18,831.862; April 1, 2015: Nil) Units of - 51.62 -
` 1,000 each of LIC NOMURA MF Liquid Fund-Growth
17,583,190.396 (March 31, 2016: Nil; April 1, 2015: Nil) Units 178.18 - -
of ` 10 each of Reliance Banking & PSU Debt Fund- Weekly
Dividend Reinvestment Plan
Nil (March 31, 2016: 14,298,652.27; April 1, 2015: Nil) Units - 154.26 -
of ` 10 each of Reliance Banking & PSU Debt Fund- Growth
Plan
50,021.832 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 50.40 - -
` 1,000 each of Reliance Money Manager Fund - Daily
Dividend Reinvestment
Nil (March 31, 2016: 111,837.561; April 1, 2015: 88,839.788) - 232.05 170.01
Units of ` 1,000 each of Reliance Money Manager Fund -
Growth Plan - Growth Option
18,826,472.402 (March 31, 2016: Nil; April 1, 2015: Nil) Units 321.86 - -
of ` 10 each of Reliance Medium Term Fund - Daily Dividend
Reinvestment
Nil (March 31, 2016: 5,921,029.667; April 1, 2015: - 185.83 175.54
6,074,241.265) Units of ` 10 each of Reliance Medium Term
Fund - Growth Plan - Growth Option
301,009.115 (March 31, 2016: Nil; April 1, 2015: Nil) Units 301.16 - -
of ` 1,000 each of Reliance Liquidity Fund - Daily Dividend
Reinvestment
Nil (March 31, 2016: 112,632.122; April 1, 2015: 95,161.955) - 256.52 200.33
Units of ` 1,000 each of Reliance Liquidity Fund - Growth
Plan - Growth Option
Nil (March 31, 2016: 57,134.504; April 1, 2015: 18,087.481) - 118.88 34.77
Units of ` 1,000 each of Religare Invesco Liquid Fund -
Growth Plan
395,887.551 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 397.17 - -
` 1,000 each of SBI Premier Liquid Fund - Regular Plan -
Daily Dividend Reinvestment
Nil (March 31, 2016: 160,273.315; April 1, 2015: 126,364.215) - 380.82 277.46
Units of ` 1,000 each of SBI Premier Liquid Fund - Regular
Plan - Growth
263,643.626 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 265.30 - -
` 1,000 each of SBI Ultra Short Term Debt Fund - Regular
Plan - Daily Dividend Reinvestment
Nil (March 31, 2016: 105,637.362; April 1, 2015: Nil) Units of - 205.70 -
` 1,000 each of SBI Ultra Short Term Debt Fund - Regular
Plan - Growth
17,486,424.448 (March 31, 2016: Nil; April 1, 2015: Nil) 176.53 - -
Units of ` 10 each of Sundaram Money Fund -Regular Daily
Dividend Reinvestment
carried over 7,354.97 6,208.93 3,714.36
7. Investments (Contd.):
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Current investments (Contd.):
brought over 7,354.97 6,208.93 3,714.36
Nil (March 31, 2016: 5,280,972.652; April 1, 2015: - 168.40 130.06
4,412,094.774) Units of ` 10 each of Sundaram Money Fund
- Regular Growth
104,942.987 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 105.31 - -
` 1,000 each of Tata Ultra Short Term Fund Regular Plan -
Daily Dividend Reinvestment
Nil (March 31, 2016: 22,684.694; April 1, 2015: Nil) Units of - 51.68 -
` 1,000 each of Tata Floater Fund - Growth
148,992.595 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 166.06 - -
` 1,000 each of Tata Liquid Fund Regular Plan - Daily
Dividend Reinvestment
Nil (March 31, 2016: 56,092.046; April 1, 2015: 61,203.589) - 156.46 157.80
Units of ` 1,000 each of Tata Liquid Fund Plan A - Growth
256,039.810 (March 31, 2016: Nil; April 1, 2015: Nil) Units 261.02 - -
of ` 1,000 each of UTI Liquid Cash Plan Institutional - Daily
Dividend Reinvestment
Nil (March 31, 2016: 148,186.879; April 1, 2015: 123,975.310) - 367.01 283.84
Units of ` 1,000 each of UTI Liquid Cash Plan Institutional -
Growth
343,029.171 (March 31, 2016: Nil; April 1, 2015: Nil) Units of 344.30 - -
` 1,000 each of UTI Treasury Advantage Fund Institutional
Plan - Daily Dividend Reinvestment
Nil (March 31, 2016: 135,441.496; April 1, 2015: 62,267.616) - 279.58 118.15
Units of ` 1,000 each of UTI Treasury Advantage Fund
Institutional Plan - Growth
8,231.66 7,232.06 4,404.21
Quoted funds
Nil (March 31, 2016: Nil; April 1, 2015: 5,000,000) Units of - - 53.44
` 10 each of HDFC FMP 370D June 2014 (2) - Series 31 -
Regular - Growth
Nil (March 31, 2016: Nil; April 1, 2015: 2,000,000) Units of - - 21.33
` 10 each of HDFC FMP 371D June 2014 (3) - Series 31 -
Regular - Growth
Nil (March 31, 2016: Nil; April 1, 2015: 3,000,000) Units of - - 32.27
` 10 each of ICICI Prudential FMP Series 74 - 369 Days Plan K
Regular Plan Cumulative
Nil (March 31, 2016: Nil; April 1, 2015: 2,000,000) Units of - - 21.32
` 10 each of ICICI Prudential FMP Series 74 - 370 Days Plan X
Regular Plan Cumulative
Nil (march 31, 2016: Nil; April 1, 2015: 3,000,000) Units of - - 32.06
` 10 each of Reliance Fixed Horizon Fund - XXVI - Series 31 -
Growth Plan
- - 160.42
Total 8,231.66 7,232.06 4,564.63
Aggregate book value of quoted investments 931.17 491.75 275.97
Aggregate market value of quoted investments 931.17 491.75 275.97
Aggregate value of unquoted investments 10,987.88 7,653.11 4,803.75
Aggregate amount of impairment in value of investments - - -
7. Investments (Contd.):
(d) Investments at fair value through OCI (fully paid) reflect investment in quoted and unquoted equity securities.
Refer note 47 for determination of their fair values.
(e) Investments at fair value through PL (fully paid) reflect investment in quoted and unquoted debt instruments and
unquoted equity securities. Refer note 47 for determination of their fair values.
8. Loans
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current (Unsecured, considered good)
Loans to related parties (Refer notes 39 & 42)
Loans to subsidiaries - 88.26 126.06
Loans to others - 75.00 75.00
Other loans
Loan to employees 37.64 40.57 13.85
Total 37.64 203.83 214.91
Current (Unsecured, considered good)
Loans to related parties (Refer notes 39 & 42)
Loans to subsidiaries 177.51 452.97 152.19
Loans to others 75.00 - -
Other loans
Intercorporate deposits - - 50.00
Total 252.51 452.97 202.19
No loans and advances are due from directors or other officers of the Company either severally or jointly with any
other person.
Loans are non derivative financial assets which generate fixed interest income for the Company. The carrying value
may be affected by changes in the credit risk of the counter party.
9. Derivative instruments
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current
Cash flow hedges
Foreign exchange forward contracts 1,564.89 600.58 1,837.83
Total 1,564.89 600.58 1,837.83
Current
Cash flow hedges
Foreign exchange forward contracts 1,961.97 1,154.32 3,422.63
Total 1,961.97 1,154.32 3,422.63
Derivative instruments at fair value through OCI reflect the positive change in fair value of foreign exchange forward contracts,
designated as cash flow hedges to hedge highly probable forecast sales in US dollars (USD) and Euro (EUR).
11. Inventories
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Raw materials and components [includes items lying with third
721.87 696.79 992.91
parties]
Work-in-progress [includes lying with third parties] 2,190.87 1,945.55 2,094.60
Finished goods [includes in transit] 535.65 301.92 57.14
Stores, spares and loose tools 680.30 649.83 534.25
Dies and dies under fabrication 117.90 55.26 85.34
Scrap 18.33 14.11 25.83
Total 4,264.92 3,663.46 3,790.07
During the year ended March 31, 2017: ` 40.49 million (March 31, 2016: ` Nil) was recognised as an expense for inventories
carried at net realisable value.
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Secured
Considered good 95.45 115.57 154.07
95.45 115.57 154.07
Unsecured
Considered good (including related parties receivables) 13,759.45 14,156.85 15,934.71
Doubtful 70.87 51.15 39.90
13,830.32 14,208.00 15,974.61
Impairment allowance (allowance for bad and doubtful debts)
Unsecured
Considered good (50.00) (50.00) (50.00)
Doubtful (70.87) (51.15) (39.90)
(120.87) (101.15) (89.90)
Total 13,804.90 14,222.42 16,038.78
Non-current 5.49 20.87 -
Current 13,799.41 14,201.55 16,038.78
Total 13,804.90 14,222.42 16,038.78
No trade receivables are due from directors or other officers of the Company either severally or jointly with any other
person.
For details of balances outstanding and terms and conditions relating to related party receivables, refer note 39.
Trade receivables are non-interest bearing and are generally on terms of 30 to 270 days.
For details of debts due from firms or private companies in which any director is a partner, a director or a member,
refer note 39 of related party transactions.
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Transferred receivables 7,972.94 8,486.28 10,494.14
Associated borrowing (bank loans - Refer note 18) 7,975.34 8,487.48 10,497.25
Bank deposits earns interest at fixed rates. Short-term deposits are generally made for varying periods between seven
days to twelve months, depending on the cash requirements of the Company, and earn interest at the respective
deposit rates.
* Industrial Promotion Subsidy (IPS) under Package Scheme of Incentives (PSI) 2007 with continual conditions.
** Includes receivable against schemes such as Duty Entitlement Pass Book Scheme (DEPB), Duty Drawback, Status
Holder Incentive Scheme (SHIS), Focus Product Scheme (FPS), Focus Market Scheme (FMS), Market Linked Focus
Product Scheme (MLFPS) and Merchandise Exports from India Scheme (MEIS). There are no unfulfilled conditions or
other contingencies attached to the said Government grants
*** Includes prepaid expenses, sundry debit balances etc.
(b) Reconciliation of equity shares outstanding at the beginning and at the end of the reporting
year
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
Equity shares
No. In ` Million No. In ` Million No. In ` Million
At the beginning of the year 232,794,316 465.59 232,794,316 465.59 232,794,316 465.59
Issued during the year - - - - - -
Outstanding at the end of the year 232,794,316 465.59 232,794,316 465.59 232,794,316 465.59
(d) Aggregate number of bonus shares issued for consideration other than cash and shares bought
back during the period of five years immediately preceding the reporting date
There are no bonus shares issued for consideration other than cash and shares bought back during the period of
five years immediately preceding the reporting date.
* The shareholding information has been extracted from the records of the Company including register of shareholders/
members and is based on legal ownership of shares.
(f) Shares reserved for issue under option
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
No. No. No.
2,340 (March 31, 2016: 2,340, April 1, 2015 : 2,340) equity shares 3,510 3,510 3,510
of ` 2/- each out of the previous issue of equity shares on a right
basis together with 234 (March 31, 2016: 234, April 1, 2015 : 234)
detachable warrants entitled to subscription of 1,170 (March 31,
2016: 1,170, April 1, 2015: 1,170) equity shares of ` 2/- each, have
been kept in abeyance and reserve for issue pending adjudication
of title to the pre-right holding.
18. Borrowings
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current borrowings
- Debentures (secured)
Nil (March 31, 2016: 2,500; April 1, 2015: 2,500) - 11.95 % - - 833.50
Redeemable non-convertible debentures (Refer note 18(a))
Nil (March 31, 2016: 1,760; April 1, 2015: 1,760) - 10.75 % - - 528.00
Redeemable non-convertible debentures (Refer note 18(a))
- Term loans from banks
Foreign currency term loans (unsecured)
On syndication basis (Refer note 18(b)) 6,081.77 13,043.81 14,111.71
On bilateral basis (Refer note 18(b)) 1,383.00 - -
Buyers line of credit for import of goods (Refer note 18(c)) 432.40 883.47 -
- Other loans (secured)
IGSTC R&D project loan (Refer note 18(d)) 6.30 5.47 6.08
Total 7,903.47 13,932.75 15,479.29
Current borrowings
- Current maturity of debentures (secured)
Nil (March 31, 2016: 2,500; April 1, 2015: 2,500) - 11.95 % - 833.50 833.25
Redeemable non-convertible debentures (Refer note 18(a))
Nil (March 31, 2016: 1,760; April 1, 2015: 1,760) - 10.75 % - 528.00 616.00
Redeemable non-convertible debentures (Refer note 18(a))
- Current maturity of term loans from banks
Foreign currency term loans (unsecured)
On syndication basis (Refer note 18(b)) 6,810.30 1,987.80 -
Buyers line of credit for import of goods (Refer note 18(c)) 432.40 441.73 -
- Current maturity of other loans (secured)
IGSTC R&D project loan (Refer note 18(d)) 1.80 0.61 -
carried over 7,244.50 2,430.14 1,449.25
Figures In Million
Balance outstanding
Date of repayment
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015
USD ` USD ` USD `
From
- October 31, 2016 (half yearly) 60.00 3,891.60 80.00 5,300.80 80.00 5,000.80
- October 31, 2016 (half yearly) 30.00 1,945.80 40.00 2,650.40 40.00 2,500.40
- October 31, 2017 (half yearly) 60.00 3,891.60 60.00 3,975.60 60.00 3,750.60
- March 16, 2019 (yearly) 50.00 3,243.00 50.00 3,313.00 50.00 3,125.50
(c) Buyers line of credit for import of goods from banks (Unsecured)
Balance outstanding USD 13.34 million(` 864.80 million) (March 31, 2016 : USD 20 million (` 1325.20 million), April
1, 2015: Nil) Repayable in 3 equal yearly instalments starting from May 2016, along with interest @ LIBOR + 135 bps
20. Provisions
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Provision for employee benefits
Non-current
Provision for gratuity (Refer note 37(a)) 190.03 177.56 220.36
Provision for special gratuity (Refer note 37(b)) 46.78 38.20 32.40
Provision for employees' provident fund (Refer note 37(c)) 32.11 1.67 -
Total 268.92 217.43 252.76
Current
Provision for gratuity (Refer note 37(a)) 80.00 80.00 70.00
Provision for special gratuity (Refer note 37(b)) 13.62 8.51 13.03
Provision for leave benefits 244.58 216.07 193.68
Total 338.20 304.58 276.71
Deferred tax
In ` Million
Balance Sheet
March 31, 2017 March 31, 2016 April 1, 2015
Deferred tax relates to the following:
Accelerated depreciation for tax purposes 2,340.16 2,162.14 1,965.05
Other taxable temporary differences 20.31 32.00 40.65
Fair valuation of cash flow hedges 1,168.98 586.30 1,771.01
Privilege leave encashment and gratuity (178.10) (163.91) (167.52)
Provision for bad and doubtful debts and advance (42.13) (35.30) (33.74)
Disallowance under Section 43B of Income Tax Act, 1961 (185.50) (142.49) (53.99)
Disallowance under Section 40(a) of Income Tax Act, 1961 (40.87) (11.03) (67.71)
Voluntary retirement scheme (5.07) (2.03) (2.96)
Other deductible temporary differences (44.86) (55.98) (57.92)
Net deferred tax liabilities 3,032.92 2,369.70 3,392.87
(a) Adjustment to general reserve includes deferred tax impact relating to revesion of depreciation as per
Schedule II of Companies Act, 2013 in earlier period.
(b) The Company offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current
tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income
taxes levied by the same tax authority.
(c) During the year ended March 31, 2017 and March 31, 2016 the Company has paid dividend to its shareholders.
This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company
believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence,
DDT paid is charged to equity.
(d) The Company has tax losses which arose due to capital loss of ` 132.90 million (March 31, 2016: ` 17.98 million,
April 1, 2015: ` 17.98 million) that are available for offsetting for eight years against future taxable profits of the
companies under the head capital gains. This loss will expire in eight years from the end of the respective year to
which it pertains. Deferred tax assets have not been recognised in respect of the above mentioned loss as they
may not be used to offset taxable profits, they have arisen on account of loss on sale of investment and there are
no other tax planning opportunities or other evidence of recoverability in the near future. If the Company were
able to recognise all unrecognised deferred tax assets, the profit would increase by ` 45.99 million
(March 31, 2016 : ` 6.22 million).
* Others includes rent received in advance, rent equalisation reserve and other miscellaneous liabilities.
* Government grants have been received as part of the Packaged Scheme of Incentives for the purpose of capital
investment in designated areas. There are no unfulfilled conditions or contingencies attached to these grants.
** Miscellaneous income includes sundry scrap sale, discount received and miscellaneous recoveries.
(b) Provision for diminution in value of investment in subsidiary and joint venture
- Analogic Controls India Limited (ACIL) - Subsidiary
Considering the significant decline in business activities and losses incurred by ACIL, the Company has
provided an amount of ` 16.55 million towards diminution in carrying cost of its investments in current
year.
In ` Million
During the year ended Cash flow FVTOCI Foreign currency Retained Income Total
March 31, 2016 hedge reserve monetary items earnings tax /
reserve translation Deferred
difference tax effect
account
Foreign exchange revaluation differences - - (38.21) - - (38.21)
Currency forward contracts (151.27) - - - 52.35 (98.92)
Reclassified to statement of profit or loss (3,271.95) - - - 1,132.36 (2,139.59)
Gain / (Loss) on FVTOCI financial assets - (90.23) - - - (90.23)
Re-measurement gains (losses) on defined - - - 25.36 (8.78) 16.58
benefit plans
Total (3,423.22) (90.23) (38.21) 25.36 1,175.93 (2,350.37)
35. Leases
(a) Operating
leases : Company as lessee
he Company has entered into agreements in the nature of lease/leave and license agreement with different lessors/
T
licensors for the purpose of establishment of office premises/residential accommodations etc. These are generally in the
nature of operating lease/leave and license. There are no transactions in the nature of sublease. Period of agreements
are generally up to three years and renewal at the options of the lessee. There are no escalation clauses or restrictions
placed upon the Company by entering into these leases.
In ` Million
Particulars Year ended Year ended
March 31, 2017 March 31, 2016
Minimum lease payments to be recognised in the statement of profit and
loss during the year
Within one year 4.17 -
After one year but not more than five years 1.24 -
More than five years - -
1) Liability risks
a) Asset-liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation
swings caused by interest rate movements.
2) Asset risks
All plan assets are maintained in a trust fund managed by a public sector insurer viz. LIC of India and other
insurance companies. LIC has a sovereign guarantee and has been providing consistent and competitive
returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily
in risk averse markets. The Company has no control over the management of funds but this option provides
a high level of safety for the total corpus. A single account is maintained for both the investment and claim
settlement and hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.
The following table summarises the components of net benefit expense recognised in the statement of profit
and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.
The principal assumptions used in determining gratuity for the Company’s plan is shown below:
Particulars As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table IALM(2006-08) ult IALM(2006-08) ult IALM(2006-08) ult
Discount rate 7.20% 7.80% 7.80%
Expected rate of return on plan assets 7.80% 7.80% 9.10%
Rate of increase in compensation levels 6.00% 6.00% 6.00%
Expected average remaining working lives (in years) 7.48 7.36 7.35
Withdrawal rate (based on grade and age of employees)
Age upto 30 years 12.00% 12.00% 12.00%
Age 31 - 44 years 12.00% 12.00% 12.00%
Age 45 - 50 years 8.00% 8.00% 8.00%
Age above 50 years 8.00% 8.00% 8.00%
Changes in the present value of the defined benefit obligation recognised in balance sheet are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Present value of obligation as at the beginning of the
713.70 677.23 598.83
period
Interest expense 53.92 51.12 52.79
Current service cost 51.41 51.81 48.06
Benefits (paid) (44.96) (43.54) (37.34)
Remeasurements on obligation [Actuarial (Gain) / Loss] 25.61 (22.92) 14.89
Closing defined benefit obligation 799.68 713.70 677.23
Changes in the fair value of plan assets recognised in the balance sheet are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Opening fair value of plan assets 456.14 386.87 322.98
Interest Income 36.94 31.55 30.87
Contributions 79.77 78.82 69.85
Benefits paid (44.96) (43.54) (37.34)
Remeasurements
Return on plan assets, excluding amount recognized in 1.76 2.44 0.51
Interest Income - Gain / (Loss)
Closing fair value of plan assets 529.65 456.14 386.87
Actual return on plan assets 38.70 33.99 31.39
Sensitivity analysis
A) Impact of change in discount rate when base assumption is decreased/increased present value of obligation
In ` Million
Discount rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 842.25 750.69 709.00
Increase by 1% 761.39 680.24 644.90
B) Impact of change in salary increase rate when base assumption is decreased/increased present value of
obligation
In ` Million
Salary increment rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 766.61 685.34 649.51
Increase by 1% 835.79 744.71 703.37
C) Impact of change in withdrawal rate when base assumption is decreased/increased present value of obligation
In ` Million
Withdrawal rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 798.63 711.46 672.21
Increase by 1% 800.70 715.85 679.39
The estimates of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion
and other relevant factors, such as supply and demand in the employment market.
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
The following are the expected benefit payments to the defined benefit plan in future years:
In ` Million
Particulars As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal and interest rate)
is 6.7 years.
(b)
Special gratuity
The Company has a defined benefit special gratuity plan. Under the gratuity plan, every eligible employee who has
completed ten years of service gets an additional gratuity on departure which will be salary of five months based on last
drawn basic salary. The scheme is unfunded.
1) Liability risks
a) Asset-liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings
caused by interest rate movements.
Changes in the present value of the defined benefit obligation recognised in balance sheet are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Present value of obligation as at the beginning of the period 46.71 45.43 39.11
Interest expense 3.45 3.40 3.24
Current service cost 3.59 3.59 8.30
Benefits (paid) (4.85) (3.58) (6.23)
Remeasurements on obligation [Actuarial (Gain) / Loss] 11.50 (2.13) 1.01
Closing Defined Benefit Obligation 60.40 46.71 45.43
Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal and interest rate) is
8.97 years
Sensitivity analysis
A) Impact of change in discount rate when base assumption is decreased/increased present value of obligation
In ` Million
Discount rate Year ended Year ended Year ended
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 64.10 49.22 47.69
Increase by 1% 57.10 44.45 43.40
B) I mpact of change in salary increase rate when base assumption is decreased/increased present value of
obligation
In ` Million
Salary increment rate Year ended Year ended Year ended
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 57.54 44.47 43.72
Increase by 1% 63.55 48.82 47.30
C) Impact of change in withdrawal rate when base assumption is decreased/increased present value of obligation
In ` Million
Withdrawal rate Year ended Year ended Year ended
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 57.11 46.47 45.22
Increase by 1% 63.57 46.94 45.43
The details of the defined benefit plan based on actuarial valuation report are as follows:
1) Liability risks:
a. Asset-liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities ,the company is successfully able to neutralize valuation swings
caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.
b. Discount rate risk
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in
practice can have a significant impact on the defined benefit liabilities.
c. Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes.
Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of
liabilities especially unexpected salary increases provided at management's discretion may lead to uncertainties
in estimating this increasing risk.
The following table summarises the components of net benefit expense recognised in the statement of profit
and loss and the funded status and amounts recognised in the balance sheet for the provident fund.
Particulars Year ended Year ended Year ended
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table IALM(2006-08) ult IALM(2006-08) ult IALM(2006-08) ult
Discount rate 7.20% 7.80% 7.80%
Interest Rate declared by EPFO for the year 8.65% 8.80% 8.80%
Yield Spread 0.50% 0.50% 0.50%
Expected average remaining working lives of employees 7.50* 7.62* 7.62*
(in years)
Withdrawal Rate
Age upto 30 years 12.00% 12.00% 12.00%
Age 31 - 44 years 12.00% 12.00% 12.00%
Age 45 - 50 years 8.00% 8.00% 8.00%
Age above 50 years 8.00% 8.00% 8.00%
* It is an actuarially calculated term of the plan using probabilities of death, withdrawal and retirement.
* The claim against the Company comprise of dues in respect to personnel claims (amount unascertainable), local taxes
etc.
# The Company is contesting the demands and the management, including its tax/legal advisors, believe that its position
will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax
demand raised.
T
he management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the
Company's financial position and results of operations.
Note : In cases where the amounts have been accrued, it has not been included here.
Related parties with whom transactions have taken place during the period
Joint Ventures ALSTOM Bharat Forge Power Private Limited (up to March 24, 2017)
BF NTPC Energy Systems Limited
Joint venture of a subsidiary David Brown Bharat Forge Gear Systems India Limited
(up to September 30, 2015)
BF Premier Energy Systems Private Limited
Enterprises owned or significantly Kalyani Carpenter Special Steels Private Limited (up to August 4, 2016)
influenced by key management Kalyani Steels Limited
BF Utilities Limited
personnel or their relatives Khed Economic Infrastructure Private Limited
Kalyani Maxion Wheels Private Limited
Automotive Axles Limited
Daimler India Commercial Vehicles Private Limited (w.e.f. May 19, 2016)
Key management personnel Mr. B. N. Kalyani
Mr. A. B. Kalyani
Mr. G. K. Agarwal
Mr. B. P. Kalyani
Mr. S. E. Tandale
Mr. K. M. Saletore
Independent directors
Mr. P. G. Pawar
Mr. S. M. Thakore
Mrs. Lalita D. Gupte
Mr. P. H. Ravikumar
Mr. P. C. Bhalerao
Mr. Naresh Narad
Dr. T. Mukherjee
Mr. Vimal Bhandari
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
No. relationship March 31, 2017 March 31, 2016
8 Proceeds from
- Loan given Subsidiaries
Bharat Forge Global Holding GmbH [includes
exchange (gain)/loss)] 301.48 74.11
BF Infrastructure Ventures Limited - 30.00
Analogic Controls India Limited 4.30 -
305.78 104.11
9 Interest accrued Subsidiaries
Bharat Forge Global Holding GmbH 11.56 7.76
Analogic Controls India Limited 0.20 4.49
BF Elbit Advanced Systems Private Limited 7.83 6.46
BF Infrastructure Ventures Limited - 3.37
BF Infrastructure Limited 2.63 -
22.22 22.08
Enterprises owned or significantly influenced
by key management personnel or their
relatives
Kalyani Steels Limited 22.50 22.56
BF Utilities Limited 7.50 7.50
30.00 30.06
52.22 52.14
10 Advance from customers Subsidiaries
Bharat Forge International Limited - 669.55
- 669.55
Enterprises owned or significantly influenced
by key management personnel or their
relatives
Automotive Axles Limited 6.95 1.19
6.95 1.19
6.95 670.74
11 Managerial remuneration Key management personnel
Mr. B. N. Kalyani 150.92 141.71
Mr. A. B. Kalyani 43.95 42.65
Mr. G. K. Agarwal 44.30 43.27
Mr. S. E. Tandale 34.10 32.78
Mr. B. P. Kalyani 32.18 30.65
Mr. K. M. Saletore 24.16 23.70
Mr. A. C. Daga 1.32 4.12
Ms. Tejaswini R. Chaudhari 1.50 -
332.43 318.88
The above disclosure does not include reimbursement of expenses paid or received.
* Does not include gratuity and leave encashment since the same is considered for all employees of the Company as a
whole.
Outstanding balances at the year end are unsecured with a short term duration and interest free except for loans
and settlement occurs in cash. For the year ended March 31, 2017 the Company has not recorded any impairment of
receivables relating to amount owed by related parties (March 31, 2016 : Nil, April 1, 2015 : Nil). This assessement is
undertaken in each financial year through examining the financial position of the related party & the market in which
the related party operates.
All transactions were made on normal commercial terms and conditions and at market rates.
For details of guarantees given to group companies refer note 46.
The Company has various welfare trusts to administer the long term benefit for its employees. Further the Company
operates defined benefit plans by way of gratuity trusts, provident fund trusts etc. For details also refer note 37.
(e) P
erformance guarantee:
he Company along with its joint venture partner has given an irrecoverable and unconditional joint undertakings to the
T
customers of joint venture company - ALSTOM Bharat Forge Power Private Limited (ABFPPL), for transfer of technology,
training, execution of steam turbines generator sets and auxiliary equipment and for successful performance of the
projects awarded to ABFPPL.
42. L
oans and advances in the nature of loans given to subsidiaries and associates and firms/
companies in which directors are interested
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Bharat Forge Global Holding Gmbh*
Balance outstanding 69.13 376.85 67.19
Maximum amount outstanding during the year 376.85 449.76 82.34
BF Infrastructure Ventures Limited* $
Balance outstanding - 30.56 60.55
Maximum amount outstanding during the year 30.56 60.55 60.55
BF Infrastructure Limited*
Balance outstanding 36.56 57.70 65.31
Maximum amount outstanding during the year 57.70 78.88 107.67
BF Utilities Limited #
Balance outstanding 75.00 75.00 75.00
Maximum amount outstanding during the year 75.00 75.00 75.00
BF Elbit Advanced Systems Private Limited *
Balance outstanding 71.82 71.82 20.00
Maximum amount outstanding during the year 71.82 71.82 20.00
Analogic Controls India Limited
Balance outstanding - 4.30 65.00
Maximum amount outstanding during the year 4.30 4.30 65.00
* Receivable on demand
# Receivable in 3 years from the date of origination of loan
$ Merged with BF Infrastructure Limited w.e.f. April 1, 2015
43. D
etails of dues to Micro and Small Enterprises as defined under Micro, Small and Medium
Enterprises Development Act, 2006 (MSMED, Act 2006)
In ` Million
Year ended Year ended Year ended
March 31, 2017 March 31, 2016 April 1, 2015
Principal amount due to suppliers under MSMED Act, 2006 * - 14.94 32.81
Interest accrued and due to suppliers under MSMED Act, 2006 on - - -
the above amount
Payment made to suppliers (other than interest) beyond the 204.84 258.88 201.92
appointed day, during the year
Interest paid to suppliers under MSMED Act, 2006 (other than - - -
section 16)
Interest paid to suppliers under MSMED Act, 2006 (Section 16) - - -
Interest due and payable to suppliers under MSMED Act, 2006 for 0.48 1.89 1.10
the payments already made
Interest accrued and remaining unpaid at the end of the year to 4.27 3.79 2.08
suppliers under MSMED Act, 2006
* Amount includes due and unpaid of ` Nil (March 31, 2016: ` Nil)
The information has been given in respect of such vendors to the extent they could be identified as "Micro and Small"
enterprises on the basis of information available with the Company.
(b) Amount spent during the year ending on In cash Yet to be paid Total
in cash *
- March 31, 2017
i) Construction/acquisition of any asset - - -
ii) On purposes other than (i) above 72.39 0.65 73.04
72.39 0.65 73.04
- March 31, 2016
i) Construction/acquisition of any asset - - -
ii) On purposes other than (i) above 124.65 0.33 124.98
124.65 0.33 124.98
* Paid subsequently in the following month
46. Disclosures required under Sec. 186(4) of the Companies Act, 2013
In ` Million
Name of the loanee Purpose Rate of Year ended Year ended Year ended
Interest (p.a.) March 31, 2017 March 31, 2016 April 1, 2015
Bharat Forge Global General corporate 7.75% / 3.50% # 69.13 376.85 67.19
Holding GmbH purpose *
BF Infrastructure Ventures General corporate 7.75% - 30.56 -
Limited $ purpose *
BF Infrastructure Limited Advance * NA - 57.70 65.31
BF Infrastructure Limited General corporate 7.75% 36.56 - -
purpose *
BF Elbit Advanced Systems Working capital * 10.00% 71.82 71.82 20.00
Private Limited
BF Utilities Limited General corporate 10.00% 75.00 75.00 75.00
purpose **
Analogic Controls India General corporate 13.00% - 4.30 65.00
Limited purpose *
# For the loan given in FY 2010-11
$ Merged with BF Infrastructure Limited w.e.f. April 1, 2015
* Receivable on demand
** Receivable in 3 years from the date of origination of loan
- All advances are unsecured
- Details of investments made are given in Note 6 & 7
- Guarantee given on behalf of
- Bharat Forge Kilsta AB, step down subsidiary company, of ` 1,244.70 million (March 31, 2016: ` 1,356.84 million;
April 1, 2015 : Nil) for working capital requirement.
- Bharat Forge Global Holding GmbH, Wholly owned subsidiary company, of ` Nil (March 31, 2016: Nil;
April 1, 2015: 1,314.90 million) for working capital requirement and term loan.
- Bharat Forge America Inc., wholly owned subsidiary company, of ` 259.40 million (March 31, 2016: Nil;
April 1, 2015: Nil) for term loan.
In ` Million
Quantitative disclosure fair value measurement hierarchy Fair value measurement using
for assets as at March 31, 2016: Quoted prices in Significant Significant
active markets observable unobservable
(Level 1) inputs (Level 2) inputs (Level 3)
Financial assets at FVTOCI
Unquoted equity instruments
Khed Economic Infrastructure Private Limited - - 250.29
Gupta Energy Private Limited - - -
Quoted equity instruments
KPIT Technologies Limited 90.63 - -
Derivative instruments at fair value through OCI
Cash flow hedges - 1,754.90 -
Financial assets at FVTPL
Debentures (unquoted)
0% Compulsorily Convertible Debentures of ` 100/- each - - 139.69
in Analogic ControlsIndia Limited
Preference shares (unquoted)
BF Infrastructure Limited - - -
Other investments
Unquoted funds
Investments in private equity fund - 26.07 -
Investments in mutual funds - 7,232.06 -
Quoted funds
Investments in mutual funds 401.12 - -
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be
exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following
methods and assumptions were used to estimate the fair values: .
(i) Long-term fixed-rate and variable-rate receivables are evaluated by the Company based on parameters such
as individual creditworthiness of the customer. Based on this evaluation, allowances are taken into account
for the expected credit losses of these receivables.
(ii) The fair values of quoted instruments are based on price quotations at the reporting date. The fair value
of unquoted instruments, loans from banks as well as other non-current financial liabilities is estimated
by discounting future cash flows using rates currently available for debt on similar terms, credit risk and
remaining maturities. In addition to being sensitive to a reasonably possible change in the forecast cash flows
or the discount rate, the fair value of the equity instruments is also sensitive to a reasonably possible change
in the growth rates. The valuation requires management to use unobservable inputs in the model, of which
the significant unobservable inputs are disclosed in the tables below. Management regularly assesses a range
of reasonably possible alternatives for those significant unobservable inputs and determines their impact on
the total fair value.
(iii) The fair values of the unquoted equity shares have been estimated using a DCF model. The valuation requires
management to make certain assumptions about the model inputs, including forecast cash flows, discount
rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably
assessed and are used in management’s estimate of fair value for these unquoted equity investments.
(iv) The Company enters into derivative financial instruments with various counterparties, principally financial
institutions with investment grade credit ratings. Foreign exchange forward contracts are valued using
valuation techniques, which employs the use of market observable inputs. The most frequently applied
valuation techniques include forward pricing using present value calculations. The models incorporate various
inputs including the credit quality of counterparties, foreign exchange spot and forward rates, yield curves of
the respective currencies, currency basis spreads between the respective currencies and forward rate curves
of the underlying. All derivative contracts are fully cash collateralised, thereby eliminating both counterparty
and the Company’s own non-performance risk. As at March 31, 2017 the marked-to-market value of derivative
asset positions is net of a credit valuation adjustment attributable to derivative counterparty default risk.
The changes in counterparty credit risk had no material effect on the hedge effectiveness assessment for
derivatives designated in hedge relationships and other financial instruments recognised at fair value.
(v) The fair values of the Company’s interest-bearing borrowings and loans are determined by using DCF method
using discount rate that reflects the issuer’s borrowing rate as at the end of the reporting period. The own
nonperformance risk as at March 31, 2017 was assessed to be insignificant.
Judgements
In the process of applying the Company’s accounting policies, management has made the following judgements,
which have the most significant effect on the amounts recognised in the financial statements:
1) Significant judgement is required to apply lease accounting rules under Appendix C to Ind AS 17 determining
whether an arrangement contains a lease. In assessing the applicability to arrangements entered into by the
Company with its various sub-contractors regarding providing of certain services, the Company has exercised
judgment to evaluate the right to use the underlying assets, substance of the transaction including legally
2) Embedded derivative – The Company has entered into certain hybrid contracts i.e. where an embedded
derivative is a component of a non-derivative host contract, in the nature of financial liability. The Company
has exercised judgement to evaluate if the economic characteristics and risks of the embedded derivative are
closely related to the economic characteristics and risks of the host. Based on the evaluation, the Company
has concluded, that these economic characteristics and risks of the embedded derivatives are closely related
to the economic characteristics and risks of the host and thus not separated from the host contract and not
accounted for separately.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and risks specific to the asset.
In determining the fair value less costs to disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
assumptions that may differ from actual developments in the future. These include the determination of the
discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions
are reviewed at each reporting date.
The mortality rate is based on publicly available mortality tables for India. Those mortality tables tend to change
only at interval in response to demographic changes. Future salary increases and gratuity increases are based on
expected future inflation rates for India.
The Company has ` 132.90 million (March 31, 2016: ` 17.98 million; April 1, 2015: ` 17.98 million) of tax losses
carried forward. These losses relate to loss under the head capital gain, which will expire in 8 years and may not be
available to offset taxable income under the same head. On this basis, the Company has determined that it cannot
recognise deferred tax assets on the tax losses carried forward.
If the Company was able to recognise all unrecognised deferred tax assets, profit and equity would have
increased by ` 45.99 million (March 31, 2016 : ` 6.22 million). Further details on taxes are disclosed in
note 21.
The terms of the foreign currency forward contracts match the terms of the expected highly probable forecast
transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss. Notional amounts
of outstanding forward contracts are as as follows
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Nature
of Currency Purpose Foreign Foreign Foreign
In ` Million
Currency In ` Million Currency in Currency In ` Million
instrument
in Million Million in Million
Forward USD Hedging of highly
398.11 29,533.80 480.11 31,807.29 567.10 35,438.08
Contracts probable sales
Forward EUR Hedging of highly
83.40 7,633.74 123.77 9,328.77 201.92 13,567.21
Contracts probable sales
The cash flow hedges of the expected future sales during the year ended March 31, 2017 were assessed to be highly
effective and a net unrealised gain of ` 3,377.78 million, with a deferred tax liability of ` 1,168.98 million relating to the
hedging instruments, is included in OCI. Comparatively, the cash flow hedges of the expected future sales during the
year ended March 31, 2016 were assessed to be highly effective and an unrealised gain of ` 1,694.12 million with a
deferred tax liability of ` 586.30 million was included in OCI in respect of these contracts.
The amount removed from OCI during the year and included in the carrying amount of the hedging items as a basis
adjustment for the year ended March 31, 2017 is detailed in Note 33, totalling ` 872.70 million (net of deferred tax)
(March 31, 2016: ` 2,139.59 million). The amounts retained in OCI at March 31, 2017 are expected to mature and affect
the statement of profit and loss till year ended March 31, 2020.
Reclassifications to profit or loss during the year gains or losses included in OCI are shown in Note 33.
The Company’s principal financial liabilities other than derivatives, comprise loans and borrowings, trade payables and
financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations.
The Company’s principal financial assets include loans, trade and other receivables and cash and cash equivalents that
derive directly from its operations. The Company also holds FVTOCI and FVTPL investments and enters into derivative
transactions.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees
the management of these risks. The Company’s senior management is supported by a Finance and Risk Management
Committee (FRMC) that advises on financial risks and the appropriate financial risk governance framework for the
Company. The FRMC provides assurance that the Company’s financial risk activities are governed by appropriate policies
and procedures and that financial risks are identified, measured and managed in accordance with the Company’s
policies and risk objectives. All derivative activities for risk management purposes are carried out by experienced
members from the senior management who have the relevant expertise, appropriate skills and supervision. It is the
Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors
reviews and agrees policies for managing each of these risks, which are summarised as below.
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 three types of risk: interest rate risk, currency risk and other price risk, such
as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings,
deposits, investment in mutual funds, FVTOCI investments and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2017 and March 31, 2016.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating
interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all
constant and on the basis of hedge designations in place as at March 31, 2017.
The analysis exclude the impact of movements in market variables on: the carrying values of gratuity and other post-
retirement obligations and provisions.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks.
This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016 including
the effect of hedge accounting
The Company generally borrows in Foreign Currency, considering natural hedge it has against its export. Long-term
and short-term foreign currency debt obligations carry floating interest rates.
The Company avails short term debt in foreign currency up to tenor of 9 months, in the nature of export financing for
its working capital requirements. LIBOR or EURIBOR for the said debt obligations is fixed for the entire tenor of the
debt, at the time of availment.
* During the year, EURIBOR was trading in negative zone and Euro borrowings were floored at zero.
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment, showing a significantly higher volatility than in prior years.
The Company manages its foreign currency risk by hedging its forecasted sales up to 4 years to the extent of 25%-65%
on rolling basis and Company keep its long term foreign currency borrowings un-hedged which will be natural hedge
against its un-hedged exports. The Company may hedge its long term borrowing near to the repayment date to avoid
rupee volatility in short term.
When a derivative is entered into for the purpose of being a hedge, the Company negotiates the terms of those
derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives cover the
period of exposure from the point the cash flows of the transactions are forecasted up to the point of settlement of the
resulting receivable or payable that is denominated in the foreign currency.
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 deposits with banks and financial institutions, investment in mutual funds,
other receivables and deposits, foreign exchange transactions and other financial instruments.
Trade receivables
Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer
credit risk management. Further, Company’s customers includes marquee OEMs and Tier I companies, having
long standing relationship with the Company. Outstanding customer receivables are regularly monitored and
reconciled. At March 31, 2017, receivable from Company’s top 5 customers accounted for approximately 34%
(March 31, 2016: 24%) of all the receivables outstanding. An impairment analysis is performed at each reporting date on
an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogeneous
groups and assessed for impairment collectively. The calculation is based on historical data. The maximum exposure to
credit risk at the reporting date is the carrying value of each class of financial assets disclosed in Note 12. The Company
does not hold collateral as security except in case of few customers. The Company evaluates the concentration of risk
with respect to trade receivables as low, as its customers are located in several jurisdictions and industries and operate
in largely independent markets.
The Company’s maximum exposure to credit risk for the components of the balance sheet at March 31, 2017 and
March 31, 2016 is the carrying amounts as illustrated in the respective notes except for financial guarantees and
derivative financial instruments. The Company’s maximum exposure relating to financial guarantees and financial
derivative instruments is noted in Note 46.
Liquidity risk
Cash flow forecasting is performed by Treasury function. Treasury monitors rolling forecasts of the Company’s
liquidity requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes
into consideration the compliance with internal cash management. The Company’s treasury invests
surplus cash in marketable securities as per the approved policy, choosing instruments with appropriate
maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned
forecasts. At the reporting date, the Company held mutual funds of ` 11,238.45 million (March 31, 2016:
` 7,633.18 million; April 1, 2015: ` 4,564.63 million) and other liquid assets of ` 2,747.87 million (March 31, 2016:
` 3,697.54 million; April 1, 2015: ` 5,892.74 million) that are expected to readily generate cash inflows for managing
liquidity risk.
As per the Company’s policy, there should not be concentration of repayment of loans in a particular financial year. In
case of such concentration of repayment, the Company evaluates the option of refinancing entire or part of repayments
for extended maturity. The Company assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. The Company has access to a sufficient variety of sources of funding and debt maturing within
12 months can be rolled over with existing lenders and the Company is also maintaining surplus funds with short term
liquidity for future repayment of loans.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and
borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in
the current period.
o changes were made in the objectives, policies or processes for managing capital during the years ended
N
March 31, 2017 and March 31, 2016.
In ` Million
In ` Million
* The previous GAAP figrures have been reclassified to conform to Ind AS presentation requirements for the purpose
of this note.
Reconciliation of Statement of profit and loss for the year ended March 31, 2016
In ` Million
Particulars Notes Indian GAAP * Adjustments Ind AS
Income
Revenue from operations 8 43,054.10 2,200.67 45,254.77
Other income 1 998.66 124.79 1,123.45
Total income [I] 44,052.76 2,325.46 46,378.22
Expenses
Cost of raw materials and components consumed 12 15,286.57 (374.94) 14,911.63
(Increase)/decrease in inventories of finished goods, 12 (17.38) (0.67) (18.05)
work-in-progress, dies and scrap
Excise duty on sale of goods 8 - 1,916.66 1,916.66
Employee benefits expense 5 3,721.56 3.62 3,725.18
Depreciation and amortisation expense 12 2,613.78 470.73 3,084.51
Finance costs 5 863.17 41.89 905.06
Other expenses 1, 8 11,233.13 318.10 11,551.23
Total expenses (II) 33,700.83 2,375.39 36,076.22
Profit before exceptional items and tax [I - II] 10,351.93 (49.93) 10,302.00
Exceptional items gain/(loss) (42.20) - (42.20)
Profit before tax 10,309.73 (49.93) 10,259.80
Tax expense
Current tax 3,130.86 - 3,130.86
Deferred tax 9 168.25 (15.49) 152.76
Total tax expense 3,299.11 (15.49) 3,283.62
Profit for the year 7,010.62 (34.44) 6,976.18
Other comprehensive income
Other Comprehensive Income to be reclassified to
profit or loss in subsequent period (net of tax)
- Net movement on cash flow hedges 3 - (2,238.51) (2,238.51)
- Foreign Currency Monetary Items Translation - (38.21) (38.21)
15
Difference Account
[a] - (2,276.72) (2,276.72)
Other Comprehensive Income not to be reclassified
to profit or loss in subsequent period (net of tax)
- Re-measurement gains / (losses) of defined
5 - 16.58 16.58
benefit plans
- Net (loss)/gain on FVTOCI equity securities 1 - (90.23) (90.23)
[b] - (73.65) (73.65)
Other comprehensive income for the year (net of tax) [a+b] - (2,350.37)
Total comprehensive income for the year (net of tax) - 4,625.81
* The previous GAAP figrures have been reclassified to conform to Ind AS presentation requirements for the purpose of this
note.
Under Indian GAAP, the Company accounted for mutual funds as investment measured at lower of cost or NRV.
Under Ind AS, the Company classified these mutual funds as FVTPL investments. Ind AS requires such investments
to be measured at fair value. At the date of transition to Ind AS, difference between the instruments at fair value
and cost as at the date of transition has been recognised in other equity, net of related deferred taxes.
2) Trade receivables
Under Indian GAAP, the Company has created provision for impairment of receivables which consists only in
respect of specific amount for probable losses. Under Ind AS, impairment allowance has been determined
based on Expected Credit Loss (ECL) model. Due to ECL model, the Company impaired its trade receivable by
` 32.70 million (net of related deferred tax) on April 1, 2015 which has been eliminated against other equity.
3) Derivative instruments
The Company has taken certain forward foreign exchange contracts which were designated as hedging instruments
under Indian GAAP and have been designated as at the date of transition to Ind AS as hedging instrument in cash
flow hedges for expected future sales for which the Company has firm commitments or expected sales that are
highly probable. The corresponding adjustment has been recognised as a separate component of equity, in the
cash flow hedge reserve. On the date of transition, cash flow hedge reserve was debited by ` 1,771.01 million
on April 1, 2015 and net movement of ` 2,238.51 million (net of related deferred tax) during the year ended on
March 31, 2016 was recognized in OCI and subsequently taken to cash flow hedge reserve. Further, the Company
has recognized Credit Value Adjustments (‘CVA’)/Debit Value Adjustments (‘DVA’) as part of fair valuation of these
instruments and the same has been adjusted in the other equity on the date of transition to Ind AS and in the
statement of profit and loss subsequently.
In case of the Company, the declaration of dividend occurs after the period end. Therefore, the liability of
` 1,260.84 million for the year ended on March 31, 2015 recorded for dividend including DDT theron has been
derecognised against other equity on April 1, 2015. The proposed dividend and DDT thereon for the year ended
on March 31, 2016 of ` 140.09 million recognized under Indian GAAP was reduced from other payables and with
a corresponding impact in the other equity.
Proposed dividend including DDT liability amounting to ` 1,260.84 million which was derecognised as on the
transition date, has been recognised in other equity during the year ended March 31, 2016 as declared and paid.
8) Revenue
Under Indian GAAP, revenue from sale of products was presented excluding excise duty. Under Ind AS, revenue
from sale of products is presented inclusive of excise duty. Excise duty paid is presented on the face of the
statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total
expenses for the year ended March 31, 2016 by ` 1,916.66 million. There is no impact on total equity and profits.
Under the Indian GAAP certain expenses in the nature of freight and other sales related expenses were netted off
against sales. Under Ind AS such expenses have been reclassified to other expenses so as to measure revenue at
fair value of consideration received or receivable. This change has no impact on the profits and other equity for
the year.
Footnotes to the reconciliation of equity as at April 1, 2015 & March 31, 2016 and Statement of profit
and loss for the year ended March 31, 2016 (Contd.):
9) Deferred tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences
between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred
taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of
an asset or liability in the balance sheet and its tax base. This has resulted in recognition of deferred tax on new
temporary differences which was not required under Indian GAAP.
In addition, the various transitional adjustments lead to temporary differences. According to the accounting
policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation
to the underlying transaction either in other equity or a separate component of equity.
11) Borrowings
The Company recognized the transaction costs pertaining to the borrowings on a straight line basis over the
term of the loan under Indian GAAP. The unamortized portion of such cost was recognized as part of ‘prepaid
expense’ which amounted to ` 265.59 million on the date of transition to Ind AS. As per Ind AS 109, borrowings
are measured at amortized cost and hence, unamortized portion of transaction costs has been adjusted against
the amount of borrowings and not shown separately as part of assets.
Footnotes to the reconciliation of equity as at April 1, 2015 & March 31, 2016 and Statement of profit
and loss for the year ended March 31, 2016 (Contd.):
Auditor’s Responsibility
Our responsibility is to express an opinion on these consolidated Ind AS financial statements based on our audit. While
conducting the audit, we have taken into account the provisions of the Act, the accounting and auditing standards
and matters which are required to be included in the audit report under the provisions of the Act and the Rules
made thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of
Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply
with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks
of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal financial control relevant to the Holding Company’s preparation of
the consolidated Ind AS financial statements that give a true and fair view in order to design audit procedures that
are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of the accounting estimates made by the Holding Company’s Board of Directors, as well
as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence
obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-
paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit
opinion on the consolidated Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us and based on the
consideration of reports of other auditors on separate financial statements and on the other financial information of the
subsidiaries, associates and joint ventures, the aforesaid consolidated Ind AS financial statements give the information
required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles
generally accepted in India of the consolidated state of affairs of the Group, its associates and joint ventures as at
March 31, 2017, their consolidated profit including other comprehensive income, and their consolidated cash flows
and consolidated statement of changes in equity for the year ended on that date.
Emphasis of Matter
We draw your attention to the following emphasis of matter paragraph included in the audit report as under:
BF Infrastructure Limited vide report dated May 18, 2017 issued by an Independent firm of accountants, reproduced
by us as under:
Note 39 of the financial statements, relating to amalgamation of BF Infrastructure Ventures Limited with the Company
which has been accounted under the "Pooling of Interest Method" as per Accounting standard 14 - Accounting for
Amalgamations (AS 14) in compliance with the Scheme of Amalgamation pursuant to Sections 391-394 of the Companies
Act, 1956 approved by the Hon' ble High Court of Bombay. This accounting treatment is different from that prescribed
under Indian Accounting Standard (Ind AS). Had the accounting treatment prescribed under Ind AS been followed,
equity impact would have been Nil. Our opinion is not qualified in respect of this matter.
ALSTOM Bharat Forge Power Private Limited vide report dated May 23, 2017 issued by an Independent firm of
accountants, reproduced by us as under:
a.
Attention is drawn to note 63 which explains in detail the write off of capital work in progress (in relation to
building) and recognition of assets retirement obligation amounting to INR 2,162.85 million and INR 7.20 million
respectively and adjustment of retained earnings as at 1 April 2015 by the corresponding amount, and write off of
the cost of leased land amounting to INR 233.70 million on expiry of tenancy rights in the current year. Our report
is not modified in respect of these matters.
b.
Attention is drawn to note 63 which describes that the Company has considered margin release relating to
certain projects aggregating to INR 630.72 million (related tax expense of INR Nil) by recording in the year ending
31 March 2016 as the same was relating to that period. Our report is not modified in respect of these matters.
(a)
We / the other auditors whose reports we have relied upon, have sought and obtained all the information and
explanations which to the best of our knowledge and belief were necessary for the purpose of our audit of the
aforesaid consolidated Ind AS financial statements;
(b) In our opinion proper books of account as required by law relating to preparation of the aforesaid consolidation
of the financial statements have been kept so far as it appears from our examination of those books and reports
of the other auditors;
(c) The consolidated Balance Sheet, consolidated Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the consolidated Cash Flow Statement and consolidated Statement of Changes in Equity
dealt with by this Report are in agreement with the books of account maintained for the purpose of preparation
of consolidated Ind AS financial statements;
In our opinion, the aforesaid consolidated Ind AS financial statements comply with the Accounting Standards
(d)
specified under section 133 of the Act, read with the Companies (Indian Accounting Standard) Rules, 2015, as
amended;
(e) On the basis of the written representations received from the directors of the Holding Company as on March 31,
2017 taken on record by the Board of Directors of the Holding Company and the reports of the statutory auditors
who are appointed under Section 139 of the Act, of its subsidiary companies, associate companies and joint
ventures incorporated in India, none of the directors of the Group’s companies, its associates and joint ventures
incorporated in India is disqualified as on March 31, 2017 from being appointed as a director in terms of Section
164 (2) of the Act;
With respect to the adequacy and the operating effectiveness of the internal financial controls over financial
(f)
reporting of the Holding Company and its subsidiary companies, associate companies and joint ventures
incorporated in India, refer to our separate report in “Annexure 1” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according
to the explanations given to us and based on the consideration of the report of the other auditors on separate
financial statements as also the other financial information of the subsidiaries, associates and joint ventures, as
noted in the ‘Other Matter’ paragraph:
i. The consolidated Ind AS financial statements disclose the impact of pending litigations on its consolidated
financial position of the Group, its associates and joint ventures – Refer Note 44 to the consolidated Ind AS
financial statements;
ii. Provision has been made in the consolidated Ind AS financial statements, as required under the applicable law
or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative
contracts – Refer (a) Note 20 to the consolidated Ind AS financial statements in respect of such items as it
relates to the Group, its associates and joint ventures and (b) the Group’s share of net profit in respect of its
associates;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and
Protection Fund by the Holding Company, its subsidiaries, associates and joint ventures incorporated in India
during the year ended March 31, 2017.
iv.
The Holding Company, subsidiaries, its associates and joint ventures incorporated in India, have provided
requisite disclosures in Note 13 to these consolidated Ind AS financial statements as to the holding of
Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank
Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and
relying on the management representation of the Holding Company regarding the holding and nature of
cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with
the books of accounts maintained by the Group including its associates and joint ventures and as produced
to us by the Management of the Holding Company.
Other Matter
(a)
We did not audit the financial statements and other financial information, in respect of nineteen subsidiaries,
whose Ind AS financial statements include total assets of INR 25,891.93 million and net assets of INR 6,368.10
million as at year ended December 31, 2016 and March 31, 2017 as applicable, and total revenues of INR 33,039.65
million and net cash outflows of INR 267.20 million for the year ended on that date. These financial statement
and other financial information have been audited by other auditors, which financial statements, other financial
information and auditor’s reports have been furnished to us by the management. The consolidated Ind AS
financial statements also include the Group’s share of net loss of INR 131.20 million for the year ended March
31, 2017, as considered in the consolidated Ind AS financial statements, in respect of two associates and three
joint ventures, whose financial statements, other financial information have been audited by other auditors and
whose reports have been furnished to us by the Management. Our opinion on the consolidated Ind AS financial
statements, in so far as it relates to the amounts and disclosures included in respect of these subsidiaries, joint
ventures and associates, and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates
to the aforesaid subsidiaries, joint ventures and associates, is based solely on the reports of such other auditors.
Certain of these subsidiaries/associates are located outside India whose financial statements and other financial
information have been prepared in accordance with accounting principles generally accepted in their respective
countries and which have been audited by other auditors under generally accepted auditing standards applicable
in their respective countries. The Company’s management has converted the financial statements of such
subsidiaries/associates located outside India from accounting principles generally accepted in their respective
countries to accounting principles generally accepted in India. Respective other auditors have audited these
conversion adjustments made by the Company’s management. Our opinion in so far as it relates to the balances
and affairs of such subsidiaries/associates located outside India is based on the report of other auditors and the
conversion adjustments prepared by the management of the Company and audited by respective other auditors.
Our above opinion on the consolidated Ind AS financial statements, and our report on Other Legal and Regulatory
Requirements above, is not modified in respect of the above matters with respect to our reliance on the work
done and the reports of the other auditors and the financial statements and other financial information certified
by the Management.
Annexure 1 referred to in paragraph (g) under the heading “Reporting on Other Legal and Regulatory
Requirements” of our report of even date.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the
Companies Act, 2013 (“the Act”)
In conjunction with our audit of the consolidated financial statements of Bharat Forge Limited as of and for the year
ended March 31, 2017, we have audited the internal financial controls over financial reporting of Bharat Forge Limited
(hereinafter referred to as the “Holding Company”) and its subsidiary companies, its associate companies and joint
ventures, which are companies incorporated in India, as of that date.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based
on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, both, issued by Institute of Chartered
Accountants of India, and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an
audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting was established and maintained and if such controls operated effectively in
all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls
system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial
reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control
based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained and the audit evidence obtained by the other auditors in terms
of their reports referred to in the Other Matters paragraph below, is sufficient and appropriate to provide a basis for
our audit opinion on the internal financial controls system over financial reporting.
reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable
detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company's assets that
could have a material effect on the financial statements.
Opinion
In our opinion, the Holding Company, its subsidiary companies, its associate companies and joint ventures, which are
companies incorporated in India, have, maintained in all material respects, an adequate internal financial controls
system over financial reporting and such internal financial controls over financial reporting were operating effectively
as at March 31, 2017, based on the internal control over financial reporting criteria established by the Holding Company
considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial
Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
Other Matters
Our report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial
controls over financial reporting of the Holding Company, insofar as it relates to these six subsidiary companies, two
associate companies and three joint ventures, which are companies incorporated in India, is based on the corresponding
reports of the auditors of such subsidiary, associate and jointly controlled companies incorporated in India.
In ` Million
ASSETS Notes As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
I. Non-current assets
(a) Property, plant and equipment 3 32,208.87 30,777.54 25,833.31
(b) Capital work-in-progress 3,997.32 3,918.43 3,897.03
(c) Investment property 4 2.89 2.89 2.89
(d) Goodwill 5 424.18 443.72 427.21
(e) Other intangible assets 5 134.79 118.47 147.55
(f) Intangible assets under development 534.47 169.70 110.54
(g) Investment in associate and joint venture 6 0.13 849.75 622.66
(h) Financial assets
(i) Investments 7 3,683.79 773.11 436.15
(ii) Loans 8 37.64 127.85 88.85
(iii) Trade receivables 12 8.07 20.87 -
(iv) Derivative instruments 9 1,564.89 600.58 1,837.83
(v) Other financial assets 10 359.94 370.85 261.68
(i) Income tax assets (net) 317.79 336.26 394.12
(j) Other non-current assets 14 2,932.17 1,865.76 1,452.19
46,206.94 40,375.78 35,512.01
II. Current assets
(a) Inventories 11 10,752.03 9,967.82 8,663.78
(b) Financial assets
(i) Investments 7 8,231.66 7,231.26 4,564.63
(ii) Loans 8 392.00 266.02 338.37
(iii) Trade receivables 12 13,410.69 14,017.43 15,966.71
(iv) Derivative instruments 9 1,961.97 1,154.32 3,422.63
(v) Cash and cash equivalent 13 2,884.15 3,710.96 3,496.73
(vi) Other bank balances 13 476.67 781.97 2,764.14
(vii) Other financial assets 10 447.74 263.06 86.12
(c) Other current assets 14 3,626.87 5,150.97 6,777.10
(d) Asset held for sale 16.72 - -
42,200.50 42,543.81 46,080.21
Total assets 88,407.44 82,919.59 81,592.22
EQUITY AND LIABILITIES
Equity
(a) Equity share capital 15 465.68 465.68 465.68
(b) Other equity 16 40,697.99 33,666.54 32,038.74
Equity attributable to equity holders of the parent 41,163.67 34,132.22 32,504.42
Non-controlling interests 100.40 (42.63) (34.87)
Total equity 41,264.07 34,089.59 32,469.55
Liabilities
I. Non-current liabilities
(a) Financial liabilities
(i) Borrowings 18 10,590.70 16,381.41 16,601.45
(ii) Other financial liabilities 19 6.40 2.67 5.32
(b) Provisions 20 1,315.38 1,163.07 1,188.47
(c) Deferred tax liabilities (net) 21 2,606.19 1,964.10 3,148.02
(d) Other non-current liabilities 23 563.06 630.96 590.12
15,081.73 20,142.21 21,533.38
carried over 15,081.73 20,142.21 21,533.38
carried over 41,264.07 34,089.59 32,469.55
In ` Million
Liabilities Notes As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
brought over 41,264.07 34,089.59 32,469.55
brought over 15,081.73 20,142.21 21,533.38
II. Current liabilities
(a) Financial liabilities
(i) Borrowings 18 12,621.79 13,052.17 14,327.51
(ii) Trade payables 22 8,463.34 8,372.05 9,025.57
(iii) Other current financial liabilities 19 8,972.66 5,010.88 2,690.22
(b) Provisions 20 537.97 492.92 382.34
(c) Other current liabilities 23 1,286.51 1,536.90 1,058.51
(d) Current tax liabilities (net) 179.37 222.87 105.14
32,061.64 28,687.79 27,589.29
Total liabilities 47,143.37 48,830.00 49,122.67
Total equity and liabilities 88,407.44 82,919.59 81,592.22
In ` Million
Notes Year ended Year ended
March 31, 2017 March 31, 2016
Continuing operations
Income
Revenue from operations 24 65,981.56 70,015.56
Other income 25 1,192.79 1,321.27
Total income [i] 67,174.35 71,336.83
Expenses
Cost of raw materials and components consumed 26 24,843.58 27,116.25
(Increase) in inventories of finished goods, work-in-progress, dies and scrap 27 (485.80) (1,435.94)
Excise duty on sale of goods 2,020.12 1,924.08
Project cost 20.62 80.24
Employee benefits expense 28 9,309.23 9,152.63
Depreciation and amortisation expense 29 4,520.47 4,529.76
Finance costs 30 999.62 1,159.60
Other expenses 31 17,763.32 19,097.49
Total expenses [ii] 58,991.16 61,624.11
Profit before share of profit/(loss) of associates, joint ventures, 8,183.19 9,712.72
exceptional items and tax from continuing operations[i - ii]
In ` Million
Notes Year ended Year ended
March 31, 2017 March 31, 2016
Profit for the year
Attributable to:
Equityholders of the parent 7,046.16 6,784.55
Non-controlling interests 61.02 (30.95)
Total comprehensive income for the year
Attributable to:
Equityholders of the parent 8,082.38 4,846.54
Non-controlling interests 61.02 (30.95)
Earnings per share for continuing operations [nominal value per share ` 2/- 35
(March 31, 2016: ` 2/- )]
Basic 29.70 28.03
Diluted 29.70 28.03
Earnings per share for discontinued operations [nominal value per share 35
` 2/- (March 31, 2016: ` 2/- )]
Basic 0.56 1.12
Diluted 0.56 1.12
Earning per equity share for continuing and discontinued operations [nominal 35
value per share ` 2/- (March 31, 2016: ` 2/- )]
Basic 30.26 29.15
Diluted 30.26 29.15
B. Other equity
In ` Million
Particulars Reserves and Surplus Items of OCI Total
Security Debenture Capital Capital General Retained Foreign Equity Cash Foreign Currency
premium redemption reserves redemption reserve Earnings currency instruments flow Monetary Item Non
account reserve Reserve translation through other hedge Translation Controlling
reserve comprehensive reserve Difference Account interests
(FCTR) income (FCMITDA)
For the year ended March 31, 2016
Balance as at the April 1, 2015 7,096.48 1,065.00 15.50 300.00 2,958.78 17,800.86 - 120.23 3,346.33 (664.44) (34.87) 32,003.87
- Profit for the year - - - - - 6,784.55 - - - (30.95) 6,753.60
- Other Comprehensive Income - - - - - 44.36 384.58 (90.23) (2,238.51) (38.21) (1,938.01)
- Adjustment for the year 3.39 3.39
- - - - - 6,828.91 384.58 (90.23) (2,238.51) (34.82) (30.95) 4,818.98
Transfer from retained earnings - - - - 100.00 - - - - 100.00
Adjustment for the year - - - - - - - - 23.19 23.19
Transfer to General Reserve - - - - - (100.00) - - - (100.00)
Transaction with owners in their capacity as owners
- Equity dividend - - - - - (1,047.57) - - - (1,047.57)
- Tax on Equity dividend - - - - - (213.26) - - - (213.26)
- Interim equity dividend - - - - - (1,629.56) - - - (1,629.56)
- Tax on Interim equity dividend - - - - - (331.74) - - - (331.74)
Balance as at March 31, 2016 7,096.48 1,065.00 15.50 300.00 3,058.78 21,307.64 384.58 30.00 1,107.82 (699.26) (42.63) 33,623.91
Statement of changes in equity
for the period ended March 31, 2017 (Contd.):
B. Other equity(Contd.):
In ` Million
Particulars Reserves and Surplus Items of OCI Total
Security Debenture Capital Capital General Retained Foreign Equity Cash Foreign Currency
premium redemption reserves redemption reserve Earnings currency instruments flow Monetary Item Non
account reserve Reserve translation through other hedge Translation Controlling
reserve comprehensive reserve Difference Account interests
(FCTR) income (FCMITDA)
For the year ended March 31, 2017
Balance as at the April 1, 2016 7,096.48 1,065.00 15.50 300.00 3,058.78 21,307.64 384.58 30.00 1,107.82 (699.26) (42.63) 33,623.91
Transfer to retained earnings
- Profit for the year - - - - - 7,046.16 - - - - 61.02 7,107.18
- Other Comprehensive Income - - - - - (105.06) (522.25) 90.13 1,100.98 472.42 1,036.22
- - - - - 6,941.10 (522.25) 90.13 1,100.98 472.42 61.02 8,143.40
Transfer from retained earnings - - - - 100.00 - 100.00
Adjustment for the year - - - - (210.36) - - - - (0.11) (210.47)
Acquisition of additional shares 82.12 82.12
Transfer to general reserve - - - - - (100.00) - - - - (100.00)
Transfer to retained earnings (1,065.00) 1,065.00 -
Transaction with owners in their capacity as owners
- Equity dividend - - - - - (116.40) - - - - (116.40)
- Tax on Equity dividend - - - - - (23.70) - - - - (23.70)
- Interim equity dividend - - - - - (581.99) - - - - (581.99)
- Tax on Interim equity dividend - - - - - (118.48) - - - - (118.48)
COMPANY OVERVIEW
Balance as at March 31, 2017 7,096.48 - 15.50 300.00 2,948.42 28,373.17 (137.67) 120.13 2,208.80 (226.84) 100.40 40,798.39
The accompanying notes form an integral part of the financial statements.
In ` Million
Particulars March 31, 2017 March 31, 2016
Operating activities
Profit before tax 9,467.68 9,658.03
Add/(Less): Share of profit/(loss) of associates and joint ventures (net of tax) 0.20 -
9,467.88 9,658.03
Adjustment to reconcile profit before tax to net cash flows
Depreciation and amortisation expense 4,520.47 4,529.76
Gain on sale of investment in joint venture (1,291.48) -
Unrealised foreign exchange loss 448.20 231.86
Interest income on fixed deposit and others (201.21) (245.30)
Provision no longer required (76.04) (19.15)
Provision for doubtful debts and advances (net) 61.37 35.58
Bad debts/ advances written off 3.38 17.30
Finance costs 999.62 1,159.60
(Profit)/loss on sale of property, plant and equipment (net) 20.64 44.36
Dividend income (369.97) (375.19)
Net (gain) on sale of investment (19.87) (26.85)
Net (gain)/loss on fair valuation of financial instruments (FVTPL) (186.46) 4.34
Provision for dimunition in value of investment in subsidiary and joint venture 7.19 -
Effects of consolidation 75.99 (387.39)
Operating profit before working capital changes 13,459.71 14,626.95
Movements in working capital :
Decrease in trade receivable 149.67 2,249.88
(Increase) in inventories (784.21) (1,304.04)
(Increase) in loans (35.01) (15.57)
(Increase) in other financial assets (209.35) (376.99)
Decrease in other assets 509.69 1,491.67
Increase in provisions 116.92 87.57
Increase/(Decrease) in trade payables 165.15 (674.54)
Increase/ (Decrease) in other financial liabilities 280.21 (2.12)
(Decrease)/Increase in other liabilities (407.33) 519.23
Cash generated from operations 13,245.45 16,602.04
Direct taxes paid (net of refunds) (2,728.71) (3,044.29)
Net cash flow from operating activities (A) 10,516.74 13,557.75
Investing activities
Purchase of property, plant and equipment and intangible assets (including capital (6,553.70) (8,971.79)
work-in-progress and capital advances)
Proceeds from sale of property, plant and equipment and intangible assets 115.11 68.76
Investments in associates/joint ventures (7.23) (0.05)
Proceeds from sale of investments in associates/joint ventures 2,292.58 33.62
Proceeds from Intercorporate deposits - 50.00
Investments in financial instruments (38,002.61) (31,057.54)
Proceeds from sale of financial instruments 34,780.60 29,992.37
Interest received 161.45 241.20
Dividends received 369.97 375.19
Net cash (used) in investing activities (B) (6,843.83) (9,268.24)
In ` Million
Particulars March 31, 2017 March 31, 2016
Financing activities
Dividend paid on equity shares (698.40) (2,677.13)
Tax on equity dividend paid (142.18) (545.00)
Interest Paid (1,047.66) (1,206.15)
Proceeds from borrowings 38,666.37 44,451.88
Repayment of borrowings (40,784.74) (44,506.91)
Net cash flow from / (used in) financing activities (C) (4,006.61) (4,483.31)
Net (decrease) in cash and cash equivalents (A + B + C) (333.70) (193.80)
Net foreign exchange difference - -
Cash and cash equivalents at the beginning of the year 3,579.01 3,388.23
Cash and cash equivalents at the end of the year 3,245.31 3,194.43
Foreign currency translation reserve movement (522.25) 384.58
Cash and cash equivalents at the end of the year 2,723.06 3,579.01
Cash and Cash equivalents for the purpose of cash flow statement
Balances with banks:
In cash credit and current accounts 2,667.60 3,709.17
Deposits with original maturity of less than three months 215.00 -
Cash on hand 1.55 1.79
Total 2,884.15 3,710.96
Less : cash credit 161.09 131.95
2,723.06 3,579.01
1 Corporate information
The consolidated financial statements comprise financial statements of Bharat Forge Limited (“the Company”)
and its subsidiaries (collectively, the Group) for the year ended March 31, 2017. Bharat Forge Limited (“the
Company”) is a public Company domiciled in India. Its shares are listed on two stock exchanges in India. The
Group is engaged in the manufacturing and selling of forged components. The Group caters to both domestic and
international markets. The registered office of the Company is located at Mundhwa, Pune. The Company’s CIN is
L25209PN1961PLC012046. The consolidated financial statements were authorized for issue in accordance with a
resolution of the directors on May 24, 2017.
The consolidated financial statements have been prepared on a historical cost basis, except for the following
assets and liabilities which have been measured at fair value:
Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial
4
instruments).
In addition, the carrying values of recognised assets and liabilities designated as hedged items in fair value hedges
that would otherwise be carried at amortised cost are adjusted to record changes in the fair values attributable to
the risks that are being hedged in effective hedge relationships.
Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the
4
investee)
4 Exposure, or rights, to variable returns from its involvement with the investee, and
4 The ability to use its power over the investee to affect its returns
Generally, there is a presumption that a majority of voting rights result in control. To support this presumption
and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all
relevant facts and circumstances in assessing whether it has power over an investee, including:
4 The contractual arrangement with the other vote holders of the investee
The size of the Group’s holding of voting rights relative to the size and dispersion of the holdings of the other
4
voting rights holders
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group
obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities,
income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated
financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.
Consolidated financial statements are prepared using uniform accounting policies for like transactions and other
events in similar circumstances. If a member of the Group uses accounting policies other than those adopted
in the consolidated financial statements for like transactions and events in similar circumstances, appropriate
adjustments are made to that Group member’s financial statements in preparing the consolidated financial
statements to ensure conformity with the Group’s accounting policies.
The consolidated financial statements in respect of overseas subsidiaries/associate companies (other than Bharat
Forge International Limited) are drawn for the year ended December 31, 2016, whereas the financial statements of
the Company are drawn for the year ended March 31, 2017. The effect of significant transactions and other events
that occur between January 1, 2017 and March 31, 2017 are considered in the consolidated financial statements
if it is material in nature. The financial statements of Bharat Forge International Limited have been prepared for
the year ended March 31, 2017. The financial statements of Indian subsidiaries/associates/joint controlled entities
have been drawn for the year ended March 31, 2017.
Consolidation procedure:
(a) Combine like items of assets, liabilities, equity, income, expenses and cash flows of the parent with those of its
subsidiaries. For this purpose, income and expenses of the subsidiary are based on the amounts of the assets
and liabilities recognised in the consolidated financial statements at the acquisition date.
(b) Offset (eliminate) the carrying amount of the parent’s investment in each subsidiary and the parent’s portion
of equity of each subsidiary. Business combinations policy explains how to account for any related goodwill.
(c) Eliminate in full intra-group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between entities of the Group (profits or losses resulting from intragroup transactions that are
recognised in assets, such as inventory and fixed assets, are eliminated in full). Intragroup losses may indicate
an impairment that requires recognition in the consolidated financial statements. Ind AS12 Income Taxes
applies to temporary differences that arise from the elimination of profits and losses resulting from intra-
group transactions.
Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of
the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests
having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries
to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and
liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation.
Reclassifies the parent’s share of components previously recognised in OCI to the statement of profit and
4
loss or retained earnings, as appropriate, as would be required if the Group had directly disposed of the
related assets or liabilities
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their
acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing
present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of
resources embodying economic benefits is not probable. However, the following assets and liabilities acquired
in a business combination are measured at the basis indicated below:
Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements
4
are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits
respectively.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic circumstances and pertinent
conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by
the acquiree.
Contingent consideration classified as an asset or liability that is a financial instrument and within the
scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised
in the statement of profit and loss. If the contingent consideration is not within the scope of Ind AS 109, it is
measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is
not remeasured at subsequent reporting dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and
the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable
assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate
consideration transferred, the Group reassesses whether it has correctly identified all of the assets acquired
and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised
at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired
over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity
as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain
directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose
of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to
each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of
whether other assets or liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more
frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash
generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying
amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in the statement of
profit and loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit
is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of
the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is
measured based on the relative values of the disposed operation and the portion of the cash-generating unit
retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which
the combination occurs, the Group reports provisional amounts for the items for which the accounting is
incomplete. Those provisional amounts are adjusted through goodwill during the measurement period, or
additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances
that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.
These adjustments are called as measurement period adjustments. The measurement period does not exceed
one year from the acquisition date.
The considerations made in determining whether significant influence or joint control are similar to those
necessary to determine control over the subsidiaries.
The Group’s investments in its associate and joint venture are accounted for using the equity method. Under
the equity method, the investment in an associate or a joint venture is initially recognised at cost. The carrying
amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate
or joint venture since the acquisition date. Goodwill relating to the associate or joint venture is included in the
carrying amount of the investment and is not tested for impairment individually.
The statement of profit and loss reflects the Group’s share of the results of operations of the associate or joint
venture. Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there
has been a change recognised directly in the equity of the associate or joint venture, the Group recognises
its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses
resulting from transactions between the Group and the associate or joint venture are eliminated to the extent
of the interest in the associate or joint venture.
If an entity’s share of losses of an associate or a joint venture equals or exceeds its interest in the associate or
joint venture (which includes any long term interest that, in substance, form part of the Group’s net investment
in the associate or joint venture), the entity discontinues recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture. If the associate or joint venture subsequently reports
profits, the entity resumes recognising its share of those profits only after its share of the profits equals the
share of losses not recognised.
The aggregate of the Group’s share of profit or loss of an associate and a joint venture is shown on the face of
the statement of profit and loss.
The financial statements of the associate or joint venture are prepared for the same reporting period as the
Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group determines whether it is necessary to recognise an impairment
loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether
there is objective evidence that the investment in the associate or joint venture is impaired. If there is such
evidence, the Group calculates the amount of impairment as the difference between the recoverable amount
of the associate or joint venture and its carrying value, and then recognises the loss as ‘Share of profit/(loss) of
an associate and a joint venture’ in the statement of profit and loss.
Upon loss of significant influence over the associate or joint control over the joint venture, the Group measures
and recognises any retained investment at its fair value. Any difference between the carrying amount of the
associate or joint venture upon loss of significant influence or joint control and the fair value of the retained
investment and proceeds from disposal is recognised in the statement of profit and loss.
Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least
4
twelve months after the reporting period
There is no unconditional right to defer the settlement of the liability for at least twelve months after the
4
reporting period
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash
and cash equivalents. The Group has identified twelve months as its operating cycle.
d.
Foreign currencies
The Group’s consolidated financial statements are presented in INR, which is also the parent’s functional
currency. For each entity the Group determines the functional currency and items included in the financial
statements of each entity are measured using that functional currency. The Group uses the direct method of
consolidation and on disposal of a foreign operation the gain or loss that is reclassified to the statement of
profit and loss reflects the amount that arises from using this method.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency
spot rates of exchange at the reporting date. Exchange difference that arise on settlement of monetary items
or on reporting at each balance sheet date of the Company’s monetary items at the closing rate are recognized
as income or expenses in the period in which they arise except for differences pertaining to Long Term Foreign
Currency Monetary Items as mentioned subsequently.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined. The gain or
loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition
of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value
gain or loss is recognised in OCI or the statement of profit and loss are also recognised in OCI or the statement
of profit and loss, respectively).
Exchange differences
The Group has availed the option available under Ind AS 101 para D13 AA and is continuing the policy adopted
for accounting for exchange difference arising from translation of long term foreign currency monetary items
recognised in the financial statements for the period ending March 31, 2016, pertaining to long term foreign
currency translation difference account (FCMITDA). Hence, such exchange differences are accounted as below:
a) Exchange differences arising on long-term foreign currency monetary items related to acquisition of
property, plant and equipment are capitalized and depreciated over the remaining useful life of the asset.
b) Exchange differences arising on other long-term foreign currency monetary items are accumulated in the
FCMITDA through Other Comprehensive Income (OCI). The amortisation of the balance of FCMITDA is
transferred to the statement of profit and loss over the remaining life of the respective monetary item
c) All other exchange differences are recognized as income or as expenses in the period in which they arise.
For the purpose of (a) and (b) above, the Group treats a foreign monetary item as “long-term foreign currency
monetary item”, if it has a term of 12 months or more at the date of its origination.
Further, the Group does not differentiate between exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference.
Group companies
On consolidation, the assets and liabilities of foreign operations are translated into INR at the rate of exchange
prevailing at the reporting date and their statements of profit and loss are translated at exchange rates prevailing
at the dates of the transactions. For practical reasons, the Group uses an average rate to translate income and
expense items, if the average rate approximates the exchange rates at the dates of the transactions. The
exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign
operation, the component of OCI relating to that particular foreign operation is recognised in the statement of
profit and loss.
Any goodwill arising in the acquisition/ business combination of a foreign operation on or after April 1, 2015
and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the
reporting date.
Any goodwill or fair value adjustments arising in business combinations/ acquisitions, which occurred before
the date of transition to Ind AS (April 1, 2015), are treated as assets and liabilities of the entity rather than as
assets and liabilities of the foreign operation. Therefore, those assets and liabilities are non-monetary items
already expressed in the functional currency of the parent and no further translation differences occur.
Cumulative currency translation differences for all foreign operations are deemed to be zero at the date of
transition, viz., April 1, 2015. Gain or loss on a subsequent disposal of any foreign operation excludes translation
differences that arose before the date of transition but includes only translation differences arising after the
transition date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. The fair value measurement is based on
the presumption that the transaction to sell the asset or transfer the liability takes place either:
4 In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Group. The fair value of an asset
or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
4 Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
4
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
4 Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group
determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
External valuers are involved for valuation of significant assets, such as properties and unquoted financial
assets. Involvement of external valuers is decided upon annually by the management. Selection criteria
include market knowledge, reputation, independence and whether professional standards are maintained.
The management decides, after discussions with the Group’s external valuers, which valuation techniques and
inputs to use for each case.
For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes.
4 Disclosures for valuation methods, significant estimates and assumptions (note 36)
f. Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and
the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured
at the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment and excluding taxes or duties collected on behalf of the government. The Group has concluded that it
is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements
as it has pricing latitude and is also exposed to inventory and credit risks.
Based on the Educational Material on Ind AS 18 issued by the ICAI, the Group has assumed that recovery of
excise duty flows to the Group on its own account. This is for the reason that it is a liability of the manufacturer
which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery
of excise duty flows to the Group on its own account, revenue includes excise duty.
However, sales tax/ value added tax (VAT) is not received by the Group on its own account. Rather, it is tax
collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded
from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
Sale of goods
a. Revenue from the domestic sales is recognised when the significant risks and rewards of ownership of
the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is
measured at the fair value of the consideration received or receivable, net of returns and allowances, trade
discounts and volume rebates.
b. Revenue from export sales are recognised when all the significant risks and rewards of ownership of the
goods have been passed to the buyer, usually on the basis of dates of bill of lading. Revenue from the
sale of goods is measured at the fair value of the consideration received or receivable, net of returns and
allowances, trade discounts and volume rebates.
Export incentives
Revenue from export incentives are accounted for on export of goods if the entitlements can be estimated
with reasonable assurance and conditions precedent to claim are fulfilled.
Sale of services
Revenue from sale of services is recognised by reference to the stage of completion, and is measured net of
service tax. Stage of completion is measured by reference to proportion of cost incurred till date to the total
estimated contract cost.
Interest income
For all debt instruments measured either at amortised cost or at fair value through other comprehensive
income, interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts
the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter
period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a
financial liability. When calculating the effective interest rate, the Group estimates the expected cash flows by
considering all the contractual terms of the financial instrument (for example, prepayment, extension, call and
similar options) but does not consider the expected credit losses. Interest income is included in finance income
in the statement of profit and loss.
Dividends
Dividend income is recognised when the Group’s right to receive the payment is established, which is generally
when shareholders approve the dividend.
Project revenue
Contract prices are either fixed or subject to price escalation clauses. Revenues are recognised on a percentage
completion method measured by segmented portions of the contract, i.e. “Contract Milestones” achieved.
Contract Milestones, in respect of certain contracts, are considered on the basis of physical dispatch which
is generally representative of the significant portion of the work done as per the terms and conditions of the
contract. The relevant cost is recognised in the financial statements in the year of recognition of revenues.
Recognition of profit is adjusted to ensure that it does not exceed the estimated overall contract margin.
Contract revenue earned in excess of billing has been included under “Other Current Assets” and billing in
excess of contract revenue has been included under “Other Current Liabilities” in the Balance Sheet. If it is
expected that a contract will make a loss, the estimated loss would be provided for in the books of account.
Such losses are based on technical assessments.
If it is expected that a contract will make a loss, the estimated loss is provided for in the books of account. Such
losses are based on technical assessments and on management’s analysis of the risks and expenses on a case
to case basis.
Amounts due in respect of price escalation claims including those linked to published indices and/or variation
in contract work are recognised as revenue only if the contract allows for such claims or variations and /or
there is evidence that the customer has accepted it and it is probable that these will result in revenue and are
capable of being reliably measured.
Liquidated damages/penalties are provided for, based on management’s assessment of the estimated liability,
as per contractual terms, technical evaluation, past experience and/or acceptance.
g. Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and
all attached conditions will be complied with. When the grant or subsidy relates to revenue, it is recognized
as income on a systematic basis in the statement of profit and loss over the periods necessary to match
them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it
is recognized as deferred income and is allocated to statement of profit and loss over the periods and in the
proportions in which depreciation on those assets is charged.
When loans or similar assistance are provided by governments or related institutions, with an interest rate
below the current applicable market rate, the effect of this favourable interest is regarded as a government
grant. The loan or assistance is initially recognised and measured at fair value and the government grant is
measured as the difference between the initial carrying value of the loan and the proceeds received. The loan
is subsequently measured as per the accounting policy applicable to financial liabilities.
h. Taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to
the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date in the countries where the Group operates and generates taxable
income.
h. Taxes (Contd.):
Current income tax relating to items recognised outside the statement of profit and loss is recognised outside
the statement of profit and loss (either in other comprehensive income or in equity). Current tax items
are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets
and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
4 When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in
a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
4 In respect of taxable temporary differences associated with investments in associates and interests in joint
ventures, when the timing of the reversal of the temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the foreseeable future
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised except:
4 When the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss
4 In respect of deductible temporary differences associated with investments in associates and interests in
joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against which the
temporary differences can be utilized
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset
to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised
to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be
recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside the statement of profit and loss is recognised outside the
statement of profit and loss (either in other comprehensive income or in equity). Deferred tax items are
recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
In the situations where the Group is entitled to a tax holiday under the Income-tax Act, 1961 enacted in India
or tax laws prevailing in the respective tax jurisdictions where it operates, no deferred tax (asset or liability)
is recognized in respect of timing differences which reverse during the tax holiday period, to the extent the
Group’s gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect
of timing differences which reverse after the tax holiday period is recognized in the year in which the timing
differences originate. However, the Group restricts recognition of deferred tax assets to the extent that it has
become reasonably certain that sufficient future taxable income will be available against which such deferred
tax assets can be realized. For recognition of deferred taxes, the timing differences which originate first are
considered to reverse first.
i. Non-current assets held for sale/ distribution to owners and discontinued operations
The Group classifies non-current assets and disposal Group’s as held for sale if their carrying amounts will be
recovered principally through a sale rather than through continuing use. Actions required to complete the
sale should indicate that it is unlikely that significant changes to the sale/ distribution will be made or that the
decision to sell will be withdrawn. Management must be committed to the sale expected within one year from
the date of classification.
For these purposes, sale transactions include exchanges of non-current assets for other non-current assets
when the exchange has commercial substance. The criteria for held for sale classification is regarded as met
only when the assets or disposal group is available for immediate sale in its present condition, subject only to
terms that are usual and customary for sales of such assets (or disposal group’s), its sale is highly probable;
and it will genuinely be sold, not abandoned. The Group treats sale of the asset or disposal group to be highly
probable when:
4 The appropriate level of management is committed to a plan to sell the asset (or disposal group),
4 An active programme to locate a buyer and complete the plan has been initiated (if applicable),
4
The asset (or disposal group) is being actively marketed for sale at a price that is reasonable in relation to
its current fair value,
4
The sale is expected to qualify for recognition as a completed sale within one year from the date of
classification , and
4
Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be
made or that the plan will be withdrawn.
Non-current assets held for sale/for distribution to owners and disposal group’s are measured at the lower
of their carrying amount and the fair value less costs to sell. Assets and liabilities classified as held for sale/
distribution are presented separately in the balance sheet.
Property, plant and equipment and intangible assets once classified as held for sale to owners are not
depreciated or amortised.
i. Non-current assets held for sale/ distribution to owners and discontinued operations
(Contd.):
A disposal group qualifies as discontinued operation if it is a component of an entity that either has been
disposed of, or is classified as held for sale, and:
4
Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of
operations
Or
Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued operations in the statement of profit and loss.
Additional disclosures are provided in Note 33. All other notes to the consolidated financial statements mainly
include amounts for continuing operations, unless otherwise mentioned.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised.
The identified components are depreciated over their useful lives, the remaining asset is depreciated over the
life of the principal asset.
Depreciation for identified components is computed on straight line method based on useful lives, determined
based on internal technical evaluation as follows:
Expenditure on power line is amortised on a straight-line basis over a period of six years.
The Company and its Indian subsidiaries, based on technical assessment made by technical expert and
management estimate, depreciates certain items of building, plant and equipment over estimated useful lives
which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The management
believes that these estimated useful lives are realistic and reflect fair approximation of the period over which
the assets are likely to be used.
The Group has taken certain land on lease for a period of 99 years. Leasehold land is amortised on the straight
line method over period of the lease. Freehold land is carried at cost.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon
disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising
on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying
amount of the asset) is included in the income statement when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year end and adjusted prospectively, if appropriate.
k. Investment property
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial
recognition, investment properties are stated at cost less accumulated depreciation and accumulated
impairment loss, if any.
Though the Group measures investment property using cost based measurements, the fair value
measurement of investment property is disclosed in note 4. Fair values are determined based on a periodic
evaluation performed by an accredited external independent valuer applying valuation model recommended
by recognised valuation standards.
Investment properties are derecognised either when they have been disposed of or when they are permanently
withdrawn from use and no future economic benefit is expected from their disposal. The difference between
the net disposal proceeds and the carrying amount of the asset is recognised in the statement of profit and
loss in the period of derecognition.
l. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition,
intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Internally generated intangibles, excluding capitalised development costs, are not capitalised and the related
expenditure is reflected in the statement of profit and loss in the period in which the expenditure is incurred.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible
assets with finite lives is recognised in the statement of profit and loss unless such expenditure forms part of
carrying value of another asset, as provided by another Ind AS.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the net carrying amount of the asset and are recognised in the statement of profit
and loss when the asset is derecognised.
The summary of amortisation policy applied to the Group’s intangible assets is as below:
4 The technical feasibility of completing the intangible asset so that the asset will be available for use or sale
4 Its intention to complete and its ability and intention to use or sell the asset
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less
any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is available for use. It is amortised over the period of expected future
benefit. Amortisation expense is recognised in the statement of profit and loss unless such expenditure forms
part of carrying value of another asset.
During the period of development, the asset is tested for impairment annually.
m. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of
the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of
interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also
includes exchange differences to the extent regarded as an adjustment to the borrowing costs w.r.t. borrowing
taken on or after April 1, 2016.
n. Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the
arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the
arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use
the asset or assets, even if that right is not explicitly specified in an arrangement.
For arrangements entered into prior to April 1, 2015, the Group has determined whether the arrangements
contain a lease on the basis of facts and circumstances existing on the date of transition.
Group as a lessee
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers
substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease.
Finance leases are capitalised at the commencement of the lease at the inception date fair value of the leased
property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned
between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on
the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of
profit and loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in
accordance with the Company’s general policy on the borrowing costs.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that
the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the
estimated useful life of the asset and the lease term.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line
basis over the lease term unless the same is in line with inflation.
Group as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset
are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis
over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease
are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as
rental income. Contingent rents are recognised as revenue in the period in which they are earned.
o. Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs
incurred in bringing the inventories to their present location and condition.
Raw materials and components, stores and spares and loose tools are valued at lower of cost and net realizable
value. However, materials and other items held for use in the production of inventories are not written down
below cost if the finished products in which they will be incorporated are expected to be sold at or above cost.
Costs are determined on weighted average basis.
Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct
materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
Cost of finished goods includes excise duty. Cost of work-in-progress and finished goods are determined on a
weighted average basis.
Dies are valued at cost or net realisable value. Cost includes direct material and labour and a proportion of
manufacturing overheads based on normal operating capacity.
Scrap is valued at net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and estimated costs necessary to make the sale.
Superannuation
Retirement benefit in the form of superannuation plan is a defined contribution plan. Defined contributions to
Life Insurance Corporation for employees covered under Superannuation scheme are accounted at the rate
of 15% of such employees’ basic salary. The Group recognizes expense toward the contribution paid/ payable
to the defined contribution plan as and when an employee renders the relevant service. If the contribution
already paid exceeds the contribution due for service before the balance sheet date, the Group recognise that
excess as an asset (prepaid expense) to the extent that the prepayment will lead to, for example, a reduction in
future payments or cash refund. If the contribution already paid is lower than the contribution due for service
before the balance sheet date, the Group recognises that difference excess as a liability. The Group has no
obligation, other than the contribution payable to the superannuation fund.
The Group treats accumulated leave expected to be carried forward beyond twelve months, as long-term
employee benefit for measurement purposes. Such long-term compensated absences are provided for based
on the actuarial valuation using the projected unit credit method at the year-end.
Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Group
presents the leave as a current liability in the balance sheet, to the extent it does not have an unconditional
right to defer its settlement for 12 months after the reporting date. Where the Group has the unconditional
legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as
non-current liability.
Termination benefits
Termination benefits are payable when employment is terminated by the Group before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognizes
termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer
of these benefits; and (b) when the entity recognizes cost for a restructuring that is within the scope of Ind
AS 37 and involves payment of termination benefits. In the case of an offer made to encourage voluntary
redundancy, the termination benefits are measured based on the number of employees expected to accept
the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to
present value.
Actuarial gains and losses for all defined benefit plans are recognized in full in the period in which they occur
in the consolidated statement of profit and loss.
s. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.
Financial assets
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at
fair value through profit and loss, transaction costs that are attributable to the acquisition of the financial
asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by
regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the
date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories:
4 Debt instruments at amortised cost
4 Debt instruments, derivatives and equity instruments at fair value through profit and loss (FVTPL)
4 Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments at amortised cost
A ‘debt instrument’ is measured at the amortised cost if both the following conditions are met:
The asset is held within a business model whose objective is to hold assets for collecting contractual cash
4
flows, and
Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of
4
principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Group. After initial measurement, such financial assets are subsequently
measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by
taking into account any discount or premium on acquisition and fees or costs that are an integral part of the
EIR. The EIR amortisation is included in other income in the statement of profit and loss. The losses arising from
impairment are recognised in the statement of profit and loss. This category generally applies to trade and
other receivables.
In addition, the Group may elect to designate a debt instrument, which otherwise meets amortised cost or FVTOCI
criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement
or recognition inconsistency (referred to as ‘accounting mismatch’). The Group has not designated any debt
instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in
the statement of profit and loss.
Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. For all equity instruments not
held for trading, the Group may make an irrevocable election to present in other comprehensive income
subsequent changes in the fair value. The Group makes such election on an instrument-by-instrument basis.
The classification is made on initial recognition and is irrevocable.
If the Group decides to classify an equity instrument as FVTOCI, then all fair value changes on the instrument,
excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to the statement
of profit and loss, even on sale of investment. However, the Group may transfer the cumulative gain or loss
within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized
in the statement of profit and loss.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is primarily derecognised (i.e. removed from the Group’s balance sheet) when:
4 The rights to receive cash flows from the asset have expired, or
The Group has transferred its rights to receive cash flows from the asset or has assumed an obligation
4
to pay the received cash flows in full without material delay to a third party under a ‘pass-through’
arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset,
or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has
neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control
of the asset, the Group continues to recognise the transferred asset to the extent of the Group’s continuing
involvement. In that case, the Group also recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in
the statement of profit and loss. This amount is reflected under the head ‘other expenses’ in the statement of
profit and loss.
The balance sheet presentation for various financial instruments is described below:
Financial assets measured as at amortised cost, contractual revenue receivables and lease receivables: ECL
4
is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance
sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Group
does not reduce impairment allowance from the gross carrying amount.
Since financial assets are already reflected at fair value, impairment allowance is not further reduced from
its value. Rather, ECL amount is presented as ‘accumulated impairment amount’ in the OCI.
For assessing increase in credit risk and impairment loss, the Group combines financial instruments on
the basis of shared credit risk characteristics with the objective of facilitating an analysis that is designed
to enable significant increases in credit risk to be identified on a timely basis.
The Group does not have any purchased or originated credit-impaired (POCI) financial assets, i.e., financial
assets which are credit impaired on purchase/ origination.
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit and loss,
loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables,
net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank
overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities designated upon initial
recognition as at fair value through profit and loss. This category also includes derivative financial instruments
entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by
Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated
as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement
of profit and loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs
that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit
and loss.
This category generally applies to borrowings. For more information refer Note 18.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as the derecognition of the original liability and the recognition of a new liability.
The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Embedded derivatives
An embedded derivative is a component of a hybrid (combined) instrument that also includes a non-derivative
host contract – with the effect that some of the cash flows of the combined instrument vary in a way similar to
a stand-alone derivative. An embedded derivative causes some or all of the cash flows that otherwise would
be required by the contract to be modified according to a specified interest rate, financial instrument price,
commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable,
provided in the case of a non-financial variable that the variable is not specific to a party to the contract.
Reassessment only occurs if there is either a change in the terms of the contract that significantly modifies
the cash flows that would otherwise be required or a reclassification of a financial asset out of the fair value
through profit and loss.
If the hybrid contract contains a host that is a financial asset within the scope of Ind AS 109, the Group does
not separate embedded derivatives. Rather, it applies the classification requirements contained in Ind AS 109
to the entire hybrid contract. Derivatives embedded in all other host contracts are accounted for as separate
derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those
of the host contracts and the host contracts are not held for trading or designated at fair value through profit
or loss. These embedded derivatives are measured at fair value with changes in fair value recognised in the
statement of profit and loss, unless designated as effective hedging instruments.
The Group uses derivative financial instruments, such as forward currency contracts, interest rate swaps and
forward commodity contracts, to hedge its foreign currency risks, interest rate risks and commodity price risks,
respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as
financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to the statement
of profit and loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later
reclassified to the statement of profit and loss when the hedge item affects the statement of profit and loss or
treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-
financial asset or non-financial liability.
Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability
4
or an unrecognised firm commitment
Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a
4
particular risk associated with a recognised asset or liability or a highly probable forecast transaction or
the foreign currency risk in an unrecognised firm commitment.
At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship
to which the Group wishes to apply hedge accounting and the risk management objective and strategy for
undertaking the hedge. The documentation includes the Group’s risk management objective and strategy for
undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the
risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the hedging
instrument’s fair value in offsetting the exposure to changes in the hedged item’s fair value or cash flows
attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes
in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been
highly effective throughout the financial reporting periods for which they were designated.
Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:
For fair value hedges relating to items carried at amortised cost, any adjustment to carrying value is amortised
through the statement of profit and loss over the remaining term of the hedge using the EIR method. EIR
amortisation may begin as soon as an adjustment exists and no later than when the hedged item ceases to be
adjusted for changes in its fair value attributable to the risk being hedged.
If the hedged item is derecognised, the unamortised fair value is recognised immediately in the statement
of profit and loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent
cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an
asset or liability with a corresponding gain or loss recognised in the statement of profit and loss.
In ` Million
Electrical Factory Furniture and Vehicles and Power line Sub Total (B) Grand Total
installations equipments fixtures aircraft (A+B)
Cost
At April 1, 2015 527.60 4,244.88 298.48 2,231.98 97.77 7,400.71 57,119.04
Foreign Currency Translation Reserve - 265.79 - 3.88 - 269.67 1,104.26
Additions 4.03 390.82 13.03 1,795.90 - 2,203.78 8,432.72
Disposals - (42.91) (1.77) (15.02) - (59.70) (322.00)
Other adjustments
- Borrowing cost - 0.80 - - - 0.80 75.88
- Exchange differences - 3.88 - 52.90 - 56.78 425.79
- Other adjustments (Refer note f) - (1,546.64) - - - (1,546.64) 69.75
At March 31, 2016 531.63 3,316.62 309.74 4,069.64 97.77 8,325.40 66,905.44
Foreign Currency Translation Reserve - (38.31) - (1.99) - (40.30) (393.89)
Additions 4.12 379.11 48.51 3.32 - 435.06 5,503.38
Additions on acquisition of subsidiary - - - 0.34 - 0.34 531.63
Disposals - (79.10) (23.60) (18.33) - (121.03) (1,652.71)
Other adjustments
- Borrowing cost - 0.39 - - - 0.39 37.71
- Exchange differences - (0.57) - (14.60) - (15.17) (71.03)
- Transferred to assets held for sale - - (16.92)
- Other adjustments - - - - - - (0.41)
As at March 31, 2017 535.75 3,578.14 334.65 4,038.38 97.77 8,584.69 70,843.20
Depreciation
COMPANY OVERVIEW
(a) Buildings include cost of hangar jointly owned with other companies ` 0.12 million (March 31, 2016: ` 0.12 million,
April 1, 2015: ` 0.12 million)
(b) Documents for the ownership of premises at Mittal Towers, Mumbai; Bangalore branch office, Land at Bhima
Koregaon, Hangar at Lohegaon, Surajban apartments and flat at Lullanagar, Pune are not available with the
Company
(c) The lease hold land situated at Village Jejuri is held for sale.
The amount of borrowing costs capitalised as other adjustments in the above note reflects the amount of borrowing
cost transferred from Capital work-in-progress (CWIP) balances. The borrowing costs capitalised during the year
ended March 31, 2017 was ` 44.17 million (March 31, 2016: ` 41.25 million). The Group capitalised these borrowing
costs in the capital work-in-progress(CWIP).
(g) The Company has elected to continue with the carrying value of property , plant and equipment as recognised in
financial statements as per Indian GAAP and regard those values as deemed costs on the date of transition and has
carried forward gross block and accumulated depreciation only for disclosure purposes.
The Group's investment properties consist of three parcels of land situated at Mundhwa, Satara and Chakan. Management
determined that the investment properties consist of only one class of assets − free hold land − based on the nature,
characteristics and risks of each property.
As at March 31, 2017, March 31, 2016 and April 1, 2015, the fair values of the properties are ` 430.31 million, ` 412.02
million and ` 370.53 million respectively. The Group obtains independent valuations for its investment properties at
least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such
information is not available, the Group considers ready reckoner rates. The fair values of investment properties have
been determined by an independent valuer. The main input used is the reckoner rate. All resulting fair value estimates
for investment properties are included in Level 2.
The Group has no restrictions on the realisability of its investment properties and no contractual obligations to either
purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
Freehold land includes 25 acres of land situated at Pune and 24.13 acres of land situated at Satara, and 8.40 acres of land
situated at Chakan which have been given on lease. Due to certain matters being sub judice, the Group has not executed
lease deed with related party for one of the said land.
Cost
at April 1, 2015 427.21 238.49 292.77 301.72 1,260.19
Foreign Currency Translation Reserve 16.51 11.43 21.64 22.30 71.88
Additions - 30.63 57.06 - 87.69
at March 31, 2016 443.72 280.55 371.47 324.02 1,419.76
Foreign Currency Translation Reserve (19.54) (2.15) (4.55) (3.95) (30.19)
Additions - 97.91 - - 97.91
Disposals - (2.57) - - (2.57)
Other adjustments
- Exchange differences - (0.05) - - (0.05)
at March 31, 2017 424.18 373.69 366.92 320.07 1,484.86
Depreciation/ Amortisation
at April 1, 2015 - 159.15 226.61 299.67 685.43
Foreign Currency Translation Reserve - 10.41 18.26 22.13 50.80
Charge for the year - 32.86 86.88 1.60 121.34
Disposals - 0.03 - (0.03)
at March 31, 2016 - 202.45 331.75 323.37 857.57
Foreign Currency Translation Reserve - (2.32) (5.55) (3.99) (11.86)
Charge for the year - 41.34 40.72 0.69 82.75
Disposals - (2.57) - - (2.57)
at March 31, 2017 - 238.90 366.92 320.07 925.89
Net Block
at April 1, 2015 427.21 79.34 66.16 2.05 574.76
at March 31, 2016 443.72 78.10 39.72 0.65 562.19
at March 31, 2017 424.18 134.79 - - 558.97
‘The Company has elected to continue with the carrying value of intangible assets as recognised in financial statements as
per Indian GAAP and regard those values as deemed costs on the date of transition and has carried forward gross block and
accumulated depreciation only for disclosure purposes.
Impairment of Goodwill:
Goodwill is tested for impairment annually and no impairment charge was identified for year ended March 31,2017
and March 31, 2016.
The Group has identified the Company Mécanique Générale Langroise (MGL) as the CGU. The goodwill acquired
through business combination has been entirely allocated to CGU ‘MGL’. The carrying amount of goodwill and brand as
at March 31, 2017 is ` 428.18 million (March 31, 2016 : ` 443.72 million).
The recoverable amount of the CGU, is determined based on a value in use calculation using cash flow projections from
financial budgets approved by senior management covering a five-year period. The pre-tax discount rate applied to the
cash flow projections for impairment testing during the current year is 10.5% (March 31, 2016 : 8.6%). The growth rate
used to extrapolate the cash flows of the unit beyond the five-year period is 1.5% (March 31, 2016 : 1.5%). This growth
rate exceeds the industry average growth rate by 0.70%. The management of MGL believes this growth rate is justified.
As a result of the analysis, management did not identify impairment for this CGU.
Weighted Average Cost of Capital % (WACC) befor tax (Discount rate) : 10.5% (March 31, 2016 : 8.6%)
The discount rate is calculated as follows : WACC = Cost of equity x (1- gearing) + Cost of debt x (1- tax rate) x gearing.
The terminal growth rate used is the growth rate of the peer group and is in line with long term inflation rate.
We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable changes
in key assumptions would cause the recoverable amount of the CGU to be less than the carrying value.
7. Investments
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current investment
(a) At amortised cost
- Bonds (unquoted)
Nil (March 31, 2016: 500, April 1, 2015 : 500) Non-
convertible redeemable secured taxable bonds of
` 10,000/- each - Series IX (2013-14) - 5.00 5.00
Total Investments at amortised cost (a) - 5.00 5.00
(b) Investment at fair value through OCI (FVTOCI)
- Equity instruments (unquoted)
- Investments in others (Company holds 5% or more
of the share capital) fully paid
38,384,202 (March 31, 2016: 21,067,894, April 1, 2015:
21,067,894) equity shares of ` 10/- each fully paid up
in Khed Economic Infrastructure Private Limited (Refer
note 7 (d)) 524.71 250.29 315.60
- Equity instruments (quoted)
613,000 (March 31, 2016: 613,000 , April 1, 2015 :
613,000) equity shares of ` 2/- each fully paid up in KPIT
Technologies Limited 79.50 90.63 115.55
Total FVTOCI Investments (b) 604.21 340.92 431.15
(c) Investments at fair value through profit or loss (FVTPL)
Equity instruments (unquoted)
Investments in others (Company holds 5% or more of
the share capital)
504,432 (March 31, 2016: 504,432, April 1, 2015: 504,432)
equity shares of ` 10/- each fully paid up in Gupta Energy
Private Limited (refer note 7(a) ) - - -
Investments in private equity fund (unquoted funds)
720,000 (March 31, 2016 : 280,000, April 1, 2015 : Nil)
Units of ` 100/- each of Paragon Partners Growth Fund -
I (Refer note 7(e)) 72.79 26.07 -
- Investments in mutual funds (quoted funds) (Refer
standalone note 7 for details) 3,006.79 401.12 -
Total FVTPL Investments (c) 3,079.58 427.19 -
Total (a) + (b)+ (c) 3,683.79 773.11 436.15
Current investments
Investments at fair value through profit or loss (fully
paid)
- Unquoted funds
- Investments in mutual funds (Refer standalone note
7 for details) 8,231.66 7,231.26 4,404.21
- Quoted funds
- Investments in mutual funds (Refer standalone note
7 for details) - - 160.42
Total 8,231.66 7,231.26 4,564.63
Aggregate book value of quoted investments 3,086.29 491.75 275.97
Aggregate market value of quoted investments 3,086.29 491.75 275.97
Aggregate value of unquoted investments 8,829.16 7,512.62 4,724.81
7. Investments (Contd.):
(a) Gupta Energy Private Limited
Shares of Gupta Energy Private Limited pledged against the facility obtained by Gupta Global Resources Private
Limited.
(b) Investments at fair value through OCI (fully paid) reflect investment in quoted and unquoted equity securities.
Refer note 55 for determination of their fair values.
(c) Investments at fair value through statement of Profit and Loss (fully paid) reflect investment in unquoted equity
securities. Refer note 55 for determination of their fair values.
(d) Khed Economic Infrastructure Private Limited
During the current year, the Group has made further investment in Khed Economic Infrastructure Private
Limited of ` 173.16 million by acquiring 17,316,308 shares of ` 10/- each.
(e) Paragon Partners Growth Fund - I
During the current year, the Group has made further investment in Paragon Partners Growth Fund - I of ` 44.00
million by acquiring 440,000 units of ` 100/- each.
8. Loans
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current (Unsecured, considered good)
Loan to related parties [Refer note 48 & 50] - 75.00 75.00
Other loans
Loan to employees 37.64 52.85 13.85
Total 37.64 127.85 88.85
Current (Unsecured, considered good)
Loan to related parties [Refer note 48 & 50] 75.00 - -
Other loans
Other loans 317.00 266.02 288.37
Intercorporate deposits - - 50.00
Total 392.00 266.02 338.37
No loans and advances are due from directors or other officers of the Group either severally or jointly with any other
person.
Loans are non derivative financial assets which generate fixed interest income for the Group. The carrying value may be
affected by changes in the credit risk of the counter party.
9. Derivative instruments
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current
Cash flow hedges
Foreign exchange forward contracts 1,564.89 600.58 1,837.83
Total 1,564.89 600.58 1,837.83
Current
Cash flow hedges
Foreign exchange forward contracts 1,961.97 1,154.32 3,422.63
Total 1,961.97 1,154.32 3,422.63
Derivative instruments at fair value through OCI reflect the positive change in fair value of foreign exchange forward contracts,
designated as cash flow hedges to hedge highly probable forecast sales in US dollars (USD) and Euro (EUR).
11. Inventories
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Raw materials and components [includes items lying with third 1,538.59 1,138.16 1,450.20
parties]
Work-in-progress [includes lying with third parties] 4,113.57 3,748.65 3,546.45
Finished goods [includes in transit] 3,938.85 3,685.93 2,374.46
Stores, spares and loose tools 1,023.63 1,325.72 1,181.50
Dies and dies under fabrication 119.06 55.25 85.34
Scrap 18.33 14.11 25.83
Total 10,752.03 9,967.82 8,663.78
During the year ended March 31, 2017 ` 40.49 million (March 31, 2016: Nil) was recognised as an expense for inventories
carried at net realisable value.
(c) Shares held by holding/ ultimate holding company and /or their subsidiaries/ associates
The Company being ultimate holding company, there are no shares held by any other holding, ultimate holding
company and their subsidiaries/associates.
(d) Aggregate number of bonus shares issued for consideration other than cash and shares bought back during
the period of five years immediately preceeding the reporting date
There are no bonus shares issued, shares issued for consideration other than cash and shares bought back during
the period of five years immediately preceeding reporting date.
General reserve
Opening balance 3,058.78 2,958.78
Add: Amount transferred from surplus balance in the statement of profit and 100.00 100.00
loss
Less: Adjusted during the year [Refer note 21(a)] 210.36 -
Closing balance 2,948.42 3,058.78
In ` Million
Other Equity As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Capital reserve 15.50 15.50 15.50
For the year ended on March 31, 2016 : ` 0.50 per share (March 31, 2015 116.40 1,047.57
: ` 4.50 per share)
DDT on final dividend 23.70 213.26
Interim dividend
For the year ended on March 31, 2017; ` 2.50 per share (March 31, 2016; 581.99 1,629.56
` 7.00 per share)
DDT on interim dividend 118.48 331.74
Proposed dividend on equity shares :
18. Borrowings
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Non-current borrowings
- Debentures (secured)
Nil (March 31, 2016: 2,500; April 1, 2015: 2,500) - 11.95 %
Redeemable non-convertible debentures [Refer note18(a)(i)] - - 833.50
Nil(March 31, 2016: 1,760; April 1, 2015: 1,760) - 10.75 %
Redeemable non-convertible debentures [Refer note18(a)(ii)] - - 528.00
- Term loans from banks
Foreign currency term loans (secured)
From Standard Chartered Bank, London [Refer note18 b(i)] 424.28 380.18 -
From Hypo Vereins Bank, Germany [Refer note18 b(ii)] 6.71 43.05 73.84
From ICICI Bank, Frankfurt [Refer note18 b(iii)] - - -
From Unicredit Bank, Germany [Refer note18 b(iv)] - - 2.43
From Unicredit Bank, Germany [Refer note18 b(v)] - - -
From Standard Chartered Bank, London [Refer note18 b(vi)] 254.64 386.67 472.01
From Unicredit Bank and Sachsenbank, Germany [Refer 11.58 11.72 16.38
note18 b(vii)]
From Sachsenbank, Germany [Refer note18 b(viii)] 143.24 167.31 176.56
From Standard Chartered Bank, London [Refer note18 b(ix)] 63.66 96.67 120.02
From Unicredit Leasing Finance, Germany [Refer note18 b(x)] 87.51 113.46 32.25
From Unicredit Leasing Finance, Germany [Refer note18 b(xi)] 49.91 38.34 -
From Deutsche Leasing Finance, Germany [Refer note18 98.44 121.11 64.24
b(xii)]
From BNP Paribas, France [Refer note18 b(xiii)] - - -
From BNP Paribas, France [Refer note18 b(xiv)] - - 2.41
From Societe Generale, France [Refer note18 b(xv)] 2.61 7.54 11.09
From Kolb Bank, France [Refer note18 b(xvi)] - 2.19 4.76
From Credit Mutuel, France [Refer note18 b(xvii)] 10.36 19.92 22.13
From BNP Paribas, France [Refer note18 b(xviii)] 9.65 12.51 13.95
From Societe Generale, France [Refer note18 b(xix)] 2.73 4.07 -
From Barclays Bank, UK [Refer note18 b(xx)] 268.24 604.69 -
From Standard Chartered Bank, London [Refer note18 b(xxi)] 572.94 217.50 -
From Barclays Bank, UK [Refer note18 b(xxii)] 220.45 - -
From Unicredit Leasing Finance, Germany [Refer note18 26.17 - -
b(xxiii)]
Foreign currency term loans (unsecured)
On syndication basis [Refer note18 c(i)] 6,081.77 13,043.81 14,111.71
On bilateral basis [Refer note18 c(i)] 1,383.00 - -
From Credit Mutuel, France [Refer note18 c(iii)] 1.68 2.25 2.56
Buyers line of credit for import of goods [Refer note18 c(iv)] 432.40 883.47 -
From Citibank , New York [Refer note18 c(v)] 271.82 - -
carried over 10,423.79 16,156.46 16,487.84
Current borrowings
- Current maturity of debentures (secured)
Nil (March 31, 2016: 2,500; April 1, 2015: 2,500) - 11.95%
Redeemable non-convertible debentures [Refer note 18a(i)] - 833.50 833.25
Nil (March 31, 2016: 1,760; April 1, 2015: 1,760) - 10.75%
Redeemable non-convertible debentures [Refer note 18a(ii)] - 528.00 616.00
Repayable in 3 equal yearly instalments starting from May, 2016, along with interest at LIBOR + 1.35% per annum
(v) From Citibank, USA (Unsecured)
Balance outstanding USD 4 million (March 31, 2016: Nil; April 1, 2015: Nil)
Secured by charge over fixed assets of one of the subsidiaries located at Ennepetal, Germany repayable in 3 annual
instalments starting from December 2018, along with interest at 3 month Euribor +2.4% per annum
Secured by the first and exclusive charge on land, building and hypothecation of equipments, fixtures and fittings
proposed to be purchased out of the term loan. The loans are repayable in 29 monthly equal instalments starting
from April 2015 with interest at base rate + 3.00% per annum. The loan is fully repaid during the year.
Secured by equitable mortgage of land, building and hypothecation of equipment, furniture and fittings (present
and future) and by hypothecation of motor cars purchased. The loans was repayable in 36 to 72 monthly equal
instalments with interest at base rate + 4% per annum. This loan was fully repaid during previous financial year.
(e) Other loans
(i) IGSTC R&D project loan (Secured)
Balance outstanding ` 8.10 Million (March 31, 2016 : ` 6.08 Million, April 1, 2015: ` 6.08 Million)
The loan is secured by bank guarantee executed by the Company in favour of IGSTC. Repayable in 10 half yearly
installments starting from January 14, 2017, along with interest at 3% per annum
(ii) Finance lease obligations (Secured)
Finance lease is secured by hypothecation of said asset. The finance lease is due for repayment over a period of 6
years.
(f) Foreign currency loans
(i) From Banks
Short term loans from banks are repayable within 360 days with interest at 6 month Euribor +2.5% per annum.
(ii) Preshipment packing credit
The loan is secured against hypothecation of stocks of semi finished and finished goods, raw materials, finished
dies and die blocks (included in property, plant and equipment), work-in-progress, consumable stores and spares
(also refer note 3 and note 11), book debts (also refer note 12) etc.
Preshipment packing credit - foreign currency (secured & unsecured) is repayable within 180 days and carries
interest @ LIBOR + 10 bps to LIBOR + 45 bps
The loan is secured against hypothecation of stocks of semi finished and finished goods, raw materials, finished dies
and die blocks (included in property, plant and equipment), work-in-progress, consumable stores and spares (also
refer note 3 and note 11), book debts (also refer note 12) etc.
Bill discounting (secured & unsecured) with banks is repayable within 210 days and carries interest LIBOR + 10 bps
to LIBOR + 45 bps
(g) Rupee loans
(i) Cash credits (secured)
Cash credit from banks is secured against hypothecation of stocks of semi finished and finished goods, raw materials,
finished dies and die blocks (included in property, plant and equipment), work-in-progress, consumable stores and
spares (also refer note 3 and note 11), book debts (also refer note 12) etc.
Cash credit is repayable on demand and carries interest @ 9.45% to 14.50% per annum.
(ii) LC discounting (secured)
LC Discounting Facility from ICICI Bank covers discounting of inland bills drawn by suppliers of raw material,
consumable stores and spares and backed by letters of credit issued by ICICI bank or other first class banks. The
facility carries interest as informed by ICICI Bank from time to time.
(iii) Loans from companies and directors
Loans from companies and directors are repayable on demand carrying interest in the range of 13% to 18% per
annum.
20. Provisions
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Provision for employees' benefits
Non-current
Provision for gratuity (Refer note 43) 191.91 180.34 292.89
Provision for special gratuity (Refer note 43) 46.78 38.20 32.40
Provision for pension and similar obligation 925.52 839.74 790.54
Provision for jubilee scheme 49.95 46.58 39.93
Provision for early retirement 69.11 56.54 32.71
Provision for employee's provident fund (Refer note 43) 32.11 1.67 -
1,315.38 1,163.07 1,188.47
Current
Provision for gratuity (Refer note 43) 80.04 80.01 0.24
Provision for special gratuity (Refer note 43) 13.62 8.51 13.03
Provision for leave benefits 444.31 404.40 369.07
537.97 492.92 382.34
In ` Million
Year ended Year ended
Statement of profit and loss
March 31, 2017 March 31, 2016
Current income tax
Current income tax charge (including taxes for earlier years) 2,704.79 3,219.88
Deferred tax
Relating to origination and reversal of temporary differences (213.12) (55.12)
Tax expense reported in the statement of profit and loss 2,491.67 3,164.76
In ` Million
Year ended Year ended
Other comprehensive income (OCI)
March 31, 2017 March 31, 2016
Deferred tax related to items recognised in OCI
Net loss/(gain) on revaluation of cash flow hedges 582.68 (1,184.71)
Net loss/(gain)on re-measurement of defined benefit plans (50.37) 20.13
Tax charged to OCI 532.31 (1,164.58)
Reconciliation of tax expenses and the accounting profit multiplied by India’s domestic tax rate for March 31,
2016 and March 31, 2017
In ` Million
Year ended Year ended
March 31, 2017 March 31, 2016
Accounting profit before tax from operations 9,467.68 9,658.03
Accounting profit before income tax
At India’s statutory income tax rate of 34.608% (March 31, 2016: 34.608%) 3,276.57 3,342.45
Income claimed exempt (211.62) (129.84)
R&D Weighted deduction (123.59) (158.55)
Investment allowance (60.13) (98.60)
80 IA Tax holiday (10.38) (10.38)
Disallowances (witholding tax, donations, etc.) 169.12 144.10
Profit on sale of investment in JV (444.47) -
Effect of lower tax rates (53.53) (55.51)
Others (50.30) 131.09
At the effective income tax rate of 26% (March 31, 2016: 33 %) 2,491.67 3,164.76
Tax expense reported in the statement of profit and loss 2,491.67 3,164.76
Major components of deferred tax for the year ended March 31, 2017 and March 31, 2016:
In ` Million
Deferred tax expense/(income) Statement of Profit and Loss
March 31, 2017 March 31, 2016
Deferred tax relates to the following:
Accelerated depreciation for tax purposes (126.08) 189.73
Other taxable temporary differences (11.31) (8.65)
Privilege leave encashment and gratuity (96.70) 70.53
Provision for bad and doubtful debts and advance (7.64) (1.33)
Deferred Maintenance 0.19 4.51
Disallowance under Section 43B of Income Tax Act, 1961 (21.14) (97.28)
Disallowance under Section 40(a) of Income Tax Act, 1961 (29.84) 56.68
Voluntary retirement scheme (3.04) 0.93
Unrealised profit on inventory (28.00) (44.04)
Loss carried forward 107.65 (123.08)
Other deductible temporary differences 115.33 (67.34)
Other (including foreign currency translation reserve etc.) (112.54) (35.78)
Deferred tax expense/(income) (213.12) (55.12)
In ` Million
Deferred tax in the balance sheet as follows March 31, 2017 March 31, 2016 April 1, 2015
(a) Adjustment to general reserve includes deferred tax impact relating to revision of depreciation as per Schedule II
of Companies Act, 2013 and other adjustments in earlier periods.
- The Group offsets tax assets and liabilities if and only if it has a legally enforceable right to set off current tax
assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same tax authority.
- During the year ended March 31, 2017 and March 31, 2016 the Group has paid dividend to its shareholders.
This has resulted in payment of DDT to the taxation authorities. The Group believes that DDT represents
additional payment to taxation authority on behalf of the shareholders. Hence, DDT paid is charged to equity.
- The Group has tax losses which arose due to capital loss and carried forward business losses in India of
` 358.76 million (March 31, 2016: ` 262.27 million, April 1, 2015: ` 296.60 million) that are available for offsetting
for eight years against future taxable profits of the Company under the head capital gains. This loss will expire
in eight years from the end of the respective year to which it pertains.
- The Group has tax losses which arose due to carried forward business losses in the USA of ` 1,753.98 million
(March 31, 2016: ` 1,685.92 million, April 1, 2015: ` 1,569.48 million) that are available for offsetting for eight
years against future taxable profits under relevant heads of income of the companies in which the losses
arose. This loss will expire in year 2036.
- The Group has tax losses which arose due to carried forward business losses in Sweden of ` 1,045.36 million
(March 31, 2016: ` 1,025.11 million, April 1, 2015: ` 1,222.58 million) that are available for offsetting for eight
years against future taxable profits under relevant heads of income of the companies in which the losses
arose. This loss can be forward indfinitely.
- Deferred tax assets have not been recognised in respect of the above mentioned loss as they may not be used
to offset taxable profits, they have arisen on account of loss on sale of investment and there are no other
tax planning opportunities or other evidence of recoverability in the near future. If the Group was able to
recognise all unrecognised deferred tax assets, the profit would increase by ` 1,092 million (March 31, 2016:
` 1,029 million)
Certain subsidiaries of the group have undistributed earnings of ` 1,330.89 million (March 31, 2016: ` 770.04
million) which, if paid out as dividends, would be subject to tax in the hands of the recipient. An assessable
temporary difference exists, but no deferred tax liability has been recognised as the parent entity is able to
control the timing of distributions from this subsidiary and is not expected to distribute these profits in the
foreseeable future.
In ` Million
Period ended
September 30,
2015 (unaudited)
Operating activities 1.97
Investing activities (0.05)
Financing activities -
Net cash inflows / (outflows) 1.92
(a) Description
During the year ended March 31, 2017, the Group, divested its stake in its joint venture operation - ALSTOM Bharat
Forge Power Private Limited to its Joint Venture partner GE Pacific Private Limited, the Group has sold its stake of
49% on March 24, 2017.
The joint venture under consideration is a component of the group that represents a separate major line of
business. The business of ALSTOM Bharat Forge Power Private Limited represented the group’s Project operating
segment until March 24, 2017. Financial information relating to the discontinued operation for the period to the
date of disposal is set out below.
Share of profit of joint venture included in statement of profit and loss 131.17 260.71
Share in other comprehensive income (6.82) 0.27
In ` Million
Year ended Year ended
March 31, 2017 March 31, 2016
Operating activities 2,642.33 874.51
Investing activities (520.24) (3,060.58)
Financing activities (723.98) 1,812.13
Net cash inflows / (outflows) 1,398.11 (373.94)
* The Group has sold its stake of 49% on March 24, 2017. However as the transaction has concluded near to March
31, 2017, the Group has based on materiality, considered March 31, 2017 amounts for the purpose of recording the
disposal.
In ` Million
During the year ended March 31, Cash flow FVTOCI Foreign Retained Foreign Income Total
2016 hedge Reserve currency earnings currency tax /
reserve monetary translation Deferred
items differences tax effect
translation
difference
account
Foreign exchange translation
differences - - (38.21) - - - (38.21)
Currency forward contracts (151.27) - - - - 52.35 (98.92)
Reclassified to statement of profit
and loss (3,271.95) - - - - 1,132.36 (2,139.59)
Gain / (Loss) on FVTOCI financial
assets - (90.23) - - - - (90.23)
Re-measurement gains (losses) on
defined benefit plans (including
-
share of associate,joint venture - - - 64.49 (20.13) 44.36
and discontinued operations)
Foreign exchange translation
difference - - - - 384.58 - 384.58
(3,423.22) (90.23) (38.21) 64.49 384.58 1,164.58 (1,938.01)
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements,
which have the most significant effect on the amounts recognised in the financial statements:
1) Significant judgement is required to apply lease accounting rules under appendix C to Ind AS 17 Determining
whether an arrangement contains a lease. In assessing the applicability to arrangements entered into by
the Group with its various sub-contractors regarding providing of certain services, the Group has exercised
judgment to evaluate the right to use the underlying assets, substance of the transaction including legally
enforced arrangements, and other significant terms and conditions of the arrangement to conclude whether
the arrangements meets the criteria under Appendix C to Ind AS 17. Based on the evaluation, the Group
has concluded that the arrangements do not meet the definition of lease as specified under appendix C to
Ind AS 17.
2) Embedded derivative – The Group has entered into certain hybrid contracts i.e. where an embedded
derivative is a component of a non-derivative host contract, in the nature of financial liability. The Group has
exercised judgement to evaluate if the economic characteristics and risks of the embedded derivative are
closely related to the economic characteristics and risks of the host. Based on the evaluation, the Group has
concluded, that these economic characteristics and risks of the embedded derivatives are closely related to
the economic characteristics and risks of the host and thus not separated from the host contract and not
accounted for separately.
3) Discontinued operations - The Group has sold its stake in joint ventures i.e. David Brown Bharat Forge Gear
Systems India Limited and ALSTOM Bharat Forge Power Private Limited in financial year 2015-16 and 2016-
17 respectively. The Group has exercised judgement and assessed that both of these joint ventures are
components of the Group that represents a separate major line of business. Accordingly, the same have
been presented as discontinued operations since the criteria as per Ind AS 105 is satisfied.
Bharat Forge America (“BFA”) is subsidiary of the Company which was operational from 2005 to 2013. From
the financial year ended 2013, there had been no operations in this entity. Since then operations had been
discontinued, all the fixed assets were sold and asset and external liabilities were settled but the Company
still held some current assets. Under Indian GAAP, disclosure was made for these discontinuing operations
and the remaining assets were disclosed as “assets held for sale” for FY 12-13 to FY 15-16. In the FY 16-17,
BFA has acquired a fully operational Company Walker Forge Tennesse LLC (now known as Bharat Forge
PMT Technologie LLC, USA). The Group has made an Ind AS 105 assessment for Bharat Forge America and
concluded that it will not satisfy the criteria of “Discontinued Operations” or “Assets held for sale” on the date of
transition or subsequently and accordingly, the same are considered as part of continuing operations.
4) Control assessment for Joint ventures - In assessing the power over investee for control evaluation, the Group
has exercised judgement in considering certain rights given to the co-venturer in a joint venture arrangement
as either substantive rights or protective rights. The Group has evaluated if the rights are designed to protect
the interests of their holder without giving that party power over the investee to which those rights relate in
which case, it is considered as protective right not considered in the control assessment for joint ventures.
Also, in case of all the joint arrangements, the Group has interest in the net assets of the joint arrangements
and accordingly the same is considered as joint ventures.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and risks specific to the asset.
In determining the fair value less costs to disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
The mortality rate is based on publicly available mortality tables based on the country where the entity operates.
Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases
and gratuity increases are based on expected future inflation rates of the respective counrty.
4 The Group has tax losses which arose due to carried forward business losses in the USA of ` 1,753.98 million
(March 31, 2016: ` 1,685.92 million, April 1, 2015: ` 1,569.48 million) that are available for offsetting for eight
years against future taxable profits under relevant heads of income of the companies in which the losses
arose. This loss will expire in year 2036.
4 T
he Group has tax losses which arose due to carried forward business losses in Sweden of ` 1,045.36 million
(March 31, 2016: ` 1,025.11 million, April 1, 2015: ` 1,222.58 million) that are available for offsetting for eight
years against future taxable profits under relevant heads of income of the companies in which the losses
arose. This loss can be carried forward indefinitely.
If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased by
` 1,092.00 million (March 31, 2016 : ` 1,029.00 million). Further details on taxes are disclosed in note 21.
List of Subsidiaries which are not included in the consolidation based on materiality
Name % equity interest
Principal Country of March March April Financial year
activities incorporation 31, 2017 31, 2016 1, 2015 ended on
Kalyani Polytechnic Private Limited (upto Others India NA 100% 100% March 31,
January 2017) 2017
List of associates which are not included in the consolidation based on materiality
Name % equity interest
Principal Country of March March April Financial year
activities incorporation 31, 2017 31, 2016 1, 2015 ended on
Talbahn GmbH Others Germany 35%* 35%* 35%* December
31, 2016
Tecnica UK Limited (shares held through Others U.K. NA Closed (in 30%* December
subsidiary) December 31, 2016
2015)
* held through subsidiaries
Details of the Group’s ownership interest in associate, which have been included in the consolidation,
are as follows:
Name % equity interest
Principal Country of March March April Financial year
activities incorporation 31, 2017 31, 2016 1, 2015 ended on
Ferrovia Transrail Solutions Private Others India 49%* 49%* 49%* March 31,
Limited 2017
Hospet Bellary Highways Private Others India 35%* 35%* - March 31,
Limited 2017
* held through subsidiaries
The gross amount and fair value of the trade receivables is ` 191.92 million. None of the trade receivables is credit impaired
and it is expected that the full contractual amounts can be collected.
The fair value measurements are based on significant inputs that are not observable in the market. The fair value
estimate is based on:
1) An assumed discount rate of 14%
2) A terminal value, calculated based on long-term sustainable growth rates for the industry ranging from 2% to 4%, which
has been used to determine income for the future years
3) A reinvestment ratio of 60% of earnings
From the date of acquisition, BF PMT has contributed `132 million of revenue and ` (10) million to the loss before tax from
continuing operations of the Group. If the combination had taken place at the beginning of the year, revenue from continuing
operations would have been more by ` 1,882 million and the profit before tax from continuing operations for the Group would
have been lower by ` (336) million.
39. Merger of BF Infrastructure Ventures Limited (‘BFIVL’) and BF Infrastructure Limited (‘BFIL’)
Pursuant to the Honourable High Court order dated at July 8, 2016, BFIL acquired BFIVL for synergies of operations
and cost savings. The Group has opted to follow accounting treatment as stated in the High Court order.
However,as per Ind AS the same will not be construed as a business combination since the aquired components
do not meet the definition of business. Accordingly, with effect from the appointed date i.e. April 1, 2015, BFIL
has accounted for this merger using pooling of interest method under Accounting Standard 14 for “Accounting
for Amalgamations”. As per this method, the assets and liabilities are recorded by BFIL at the carrying values (as
appearing in the books of BFIVL). The identity of the reserves will be preserved in the financial statements of BFIL.
Thus, the consolidated financial statements have been restated from April 1, 2015 to give effect to the above
transaction. There is no impact on the consolidated financial statements due to merger since it is a common
control transaction.
Summarised statement of profit and loss for the year ended March 31, 2017:
In ` Million
Kalyani Analogic BF Elbit Advance
Strategic Controls India Systems Limited
Systems Limited Limited
Revenue 1.14 77.21 -
Cost of raw materials and components consumed 5.05 24.71 -
(Increase )/decrease in inventories of finished goods, (5.05) 11.32 -
work-in-progress, dies and scraps
Employee benefits expense - 12.62 -
Depreciation and amortisation expense - 3.25 0.26
Finance costs - 35.35 8.74
Other expenses 3.94 39.21 1.29
Profit before tax (2.80) (49.25) (10.29)
Income tax (0.33) (1.11) -
Profit for the year from continuing operations (3.13) (50.36) (10.29)
Share in profit and loss of associates/joint venture - - -
Total comprehensive income (3.13) (50.04) (10.29)
Attributable to non-controlling interests (1.53) - -
Dividends paid to non-controlling interests - - -
Summarised statement of profit and loss for the year ended March 31, 2016:
In ` Million
Kalyani Strategic Analogic Controls BF Elbit Advance
Systems Limited India Limited Systems Limited
Revenue 0.45 102.96 1.45
Cost of raw material and components consumed - 44.32 -
(Increase )/decrease in inventories of finished goods, work- - 11.52 -
in-progress, dies and scraps
Employee benefits expense - 25.74 -
Depreciation and amortisation expense - 4.02 0.26
Finance costs - 34.59 6.91
Other expenses 9.69 48.20 19.29
Profit before tax (9.24) (65.43) (25.01)
Income tax - - -
Profit for the year from continuing operations (9.24) (65.43) (25.01)
Share in profit and loss of associate/joint venture (0.50) - -
Total comprehensive income (9.74) (64.88) (25.01)
Attributable to non-controlling interests (4.78) (26.17) -
Dividends paid to non-controlling interests - - -
uring the year ended March 31, 2017, the Group divested its stake in its joint venture operation - ALSTOM Bharat
D
Forge Power Limited to its Joint Venture partner GE Pacific Private Limited. The Group has sold its stake of 49% on
March 24, 2017. However, as the transaction has concluded near to March 31, 2017, the Group has based on materiality
considered March 31, 2017 for the purpose of recording the disposal .
Summarised balance sheet
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Interest in assets, liabilities, income and expenditure
with respect to jointly controlled entities are as follows:
The associate had contingent liabilities on account of claims against the Group not acknowledged as Debts
(Group’s share) of ` 169.11 million as at March 31, 2017, ` 156.36 million as at March 31, 2016 and ` 87.09 million as at
April 1, 2015.
2) Asset Risks
All plan assets are maintained in a trust fund managed by a public sector insurer viz; LIC of India and other
insurance companies. LIC has a sovereign guarantee and has been providing consistent and competitive returns
over the years. The company has opted for a traditional fund wherein all assets are invested primarily in risk
averse markets. The company has no control over the management of funds but this option provides a high level
of safety for the total corpus. A single account is maintained for both the investment and claim settlement and
hence 100% liquidity is ensured. Also interest rate and inflation risk are taken care of.
The following table summarises the components of net benefit expense recognised in the Statement of profit and loss
and the funded status and amounts recognised in the balance sheet for the gratuity plan.
The principal assumptions used in determining gratuity for the Company’s plan is shown below:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table IALM(2006-08) ult IALM(2006-08) ult IALM(2006-08) ult
Discount rate 7.20% 7.80% 7.80%
Expected rate of return on plan assets 7.80% 7.80% 9.10%
Rate of increase in compensation levels 6.00% 6.00% 6.00%
Expected average remaining working lives (in years) 7.48% 7.36% 7.35%
Withdrawal rate (based on grade and age of employees)
Age upto 30 years 12.00% 12.00% 12.00%
Age 31 - 44 years 12.00% 12.00% 12.00%
Age 45 - 50 years 8.00% 8.00% 8.00%
Age above 50 years 8.00% 8.00% 8.00%
Changes in the present value of the defined benefit obligation recognised in balance sheet are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Present value of obligation as at the beginning of the period 713.70 677.23 598.83
Interest expense 53.92 51.12 52.79
Current service cost 51.41 51.81 48.06
Benefits (paid) (44.96) (43.54) (37.34)
Remeasurements on obligation [Actuarial (Gain) / Loss] 25.61 (22.92) 14.89
Closing Defined Benefit Obligation 799.68 713.70 677.23
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Opening fair value of plan assets 456.14 386.87 322.98
Interest Income 36.94 31.55 30.87
Contributions 79.77 78.82 69.85
Benefits paid (44.96) (43.54) (37.34)
Remeasurements
Return on plan assets, excluding amount recognized in Interest Income 1.76 2.44 0.51
- Gain / (Loss)
Closing fair value of plan assets 529.65 456.14 386.87
Actual return on plan assets 38.70 33.99 31.39
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Funds managed by insurer 100.00% 100.00% 100.00%
Sensitivity analysis
A) Impact of change in discount rate when base assumption is present value of obligation decreased/increased
present value of obligation
In ` Million
Discount rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 842.25 750.69 709.00
Increase by 1% 761.39 680.24 644.90
B) Impact of change in salary increase rate when base assumption is decreased/increased present value of
obligation
In ` Million
Salary increment rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 766.61 685.34 649.51
Increase by 1% 835.79 744.71 703.37
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Within one year 220.98 136.56 195.04
After one year but not more than five years 291.68 357.37 309.33
After five years but not more than ten years 339.17 323.43 294.84
Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal and interest rate)
is 6.7 years.
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes.
Rising salaries will often result in higher future defined benefit payments resulting in a higher present value of
liabilities especially unexpected salary increases provided at management’s discretion may lead to uncertainties
in estimating this increasing risk.
2) Asset risks
This represents unmanaged risk and a growing liability. There is an inherent risk here that the Company may
default on paying the benefits in adverse circumstances. Funding the plan removes volatility in the company’s
financials and also helps the Company to manage the defined benefit risk through increased return on the funds
made available for the plan.
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table IALM(2006-08) IALM(2006-08) IALM(2006-08)
ult ult ult
Discount rate 7.20% 7.80% 7.80%
Rate of increase in compensation levels 6.00% 6.00% 6.00%
Expected average remaining working lives (in years) 6.86 6.27 6.05
Withdrawal rate (based on grade and age of employees)
Age upto 30 years 12.00% 12.00% 12.00%
Age 31 - 44 years 12.00% 12.00% 12.00%
Age 45 - 50 years 8.00% 8.00% 8.00%
Age above 50 years 8.00% 8.00% 8.00%
Changes in the present value of the defined benefit obligation recognised in balance sheet are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Present value of obligation as at the beginning of the period 46.71 45.43 39.11
Interest expense 3.45 3.40 3.24
Current service cost 3.59 3.59 8.30
Benefits (paid) (4.85) (3.58) (6.23)
Remeasurements on obligation [Actuarial (Gain) / Loss] 11.50 (2.13) 1.01
Closing Defined Benefit Obligation 60.40 46.71 45.43
The followings are the expected benefit payments to the defined benefit plan in future years :
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Within one year 9.82 8.51 9.57
After one year but not more than five years 32.51 26.49 27.20
After five years but not more than ten years 54.35 37.23 29.37
Weighted average duration of the plan (based on discounted cash flows using mortality, withdrawal and interest rate) is 8.97
years
B) Impact of change in salary increase rate when base assumption is decreased/increased present value of
obligation
In ` Million
Salary increment rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 57.54 44.47 43.72
Increase by 1% 63.55 48.82 47.30
C) Impact of change in withdrawal rate when base assumption is decreased/increased present value of obligation
In ` Million
Withdrawal rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 57.11 46.47 45.22
Increase by 1% 63.57 46.94 45.43
1) Liability risks:
a) Asset-liability mismatch risk-
Risk which arises if there is a mis match in the duration of the assets relative to the liabilities. By matching
duration with the defined benefit liabilities, the company is successful able to neutralize valuation swings
caused by interest rate movements. Hence companies are encouraged to adopt asset-liability management.
Variations in the discount rate used to compute the present value of the liabilities may seem small, but in practice
can have a significant impact on the defined benefit liabilities.
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising
salaries will often result in higher future defined benefit payments resulting in a higher present value of liabilities
especially unexpected salary increases provided at management’s discretion may lead to uncertainties in estimating
this increasing risk.
The following table summarises the components of net benefit expense recognised in the Statement of profit and loss and the
funded status and amounts recognised in the balance sheet for the provident fund.
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table IALM(2006-08) IALM(2006-08)
ult ult
Discount rate 7.20% 7.80% 7.80%
Interest Rate declared by EPFO for the year 8.65% 8.80% 8.80%
Yield Spread 0.50% 0.50% 0.50%
Expected average remaining working lives of employees (in years) 7.50* 7.62* 7.62*
Withdrawal Rate
Age upto 30 years 12.00% 12.00% 12.00%
Age 31 - 44 years 12.00% 12.00% 12.00%
Age 45 - 50 years 8.00% 8.00% 8.00%
Age above 50 years 8.00% 8.00% 8.00%
* It is an actuarially calculated term of the plan using probabilities of death, withdrawal and retirement.
Table showing changes in present value of expected interest rate shortfall:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Present value of expected Interest rate shortfall as at 22.64 14.40 -
the beginning of the period
Interest cost 1.77 1.12 -
Current service cost 2.48 2.30 1.79
Actuarial (Gain) / Loss on obligations 31.64 4.82 12.61
Present value of expected Interest rate shortfall as at 58.53 22.64 14.40
the end of the period
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Mortality table Heubeck 2005 G Heubeck 2005 G Heubeck 2005 G
Discount rate 1.72% to 2.42% 1.72% to 2.42% 1.72% to 2.42%
Expected rate of return on plan assets
Rate of increase in compensation levels 2.00% 2.00% 2.00%
Expected average remaining working lives (in years) 8.82 to 11.41 8.82 to 11.41 8.82 to 11.41
Withdrawal rate (based on grade and age of employees)
Age upto 30 years 2.30% 2.30% 2.30%
Age 31 - 44 years 1.10% 1.10% 1.10%
Age 45 - 49 years 0.70% 0.70% 0.70%
Age above 50 years 0.30% 0.30% 0.30%
Changes in the present value of the defined benefit obligation (recognised in consolidated balance sheet) are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Opening defined benefit obligation 765.32 776.11 560.76
Interest expense 20.36 16.87 23.69
Current service cost 24.09 25.69 20.54
Benefits paid (16.45) (15.26) (8.28)
Remeasurements on obligation [Actuarial (Gain) / Loss] 92.50 (38.09) 179.40
Closing defined benefit obligation 885.82 765.32 776.11
Changes in the fair value of plan assets (recognised in the consolidated balance sheet) are as follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Opening fair value of plan assets - - -
Adjustment to opening balance - - -
Interest Income 0.57 - -
Contributions 0.39 - -
Benefits paid - - -
Remeasurements-Actuarial gains / (losses) - - -
Return on plan assets, excluding amount recognized in Interest Income
18.49 - -
- Gain / (Loss)
Closing fair value of plan assets 19.45 - -
Actual return on plan assets 0.57 - -
In addition to above, in case of certain subsidiaries actuarial liability is determined based on estimates amounting to
` 59.15 million (March 31, 2016: ` 74.42 million, April 1, 2015: ` 14.43 million)
Sensitivity analysis
Impact of change in discount rate when base assumption is present value of obligation decreased/increased
present value of obligation
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 0.50% 90.84 80.80 94.15
Increase by 0.50% 79.34 70.71 81.87
The pension scheme pertains to employees who have already left the organisation. Hence the impact of change in salary
increase rate and withdrawl rate is nil and hence not disclosed.
The followings are the expected contributions to the defined benefit plan in future years :
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Within the next 12 months (next annual 5.72 6.09 6.38
reporting period) 33.68 31.27 32.39
Between 2 and 5 years 101.38 97.57 91.10
Beyond 5 and 10 years 167.17 174.08 178.80
Beyond 10 years 1,234.80 1,268.79 1,359.05
Total expected payments 1,542.75 1,577.80 1,667.72
The gratuity benefits are governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who
has completed five years of service is entitled to specific benefit. The level of benefits provided depends on
the member’s length of service and salary at retirement age. Every employee who has completed five years or
more of service gets a gratuity on departure at 15 days salary (last drawn) for each completed year of service
as per the provisions of the Payment of Gratuity Act, 1972. The Plan is unfunded as on the valuation date.
The principal assumptions used in determining gratuity for the subsidiary’s plan is shown below:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
IALM 2006-08 IALM 2006-08 IALM 2006-08
Mortality table
Ult Ult Ult
Discount rate 7.46% 7.46% 7.77%
Expected rate of return on plan assets 8.25% 8.35% 9.00%
Rate of increase in compensation levels 6.00% 6.00% 6.00%
Expected average remaining working lives (in years) 19.79 20.50 21.35
Withdrawal rate (based on grade and age of employees)
Age upto 30 years 3.00% 3.00% 3.00%
Age 31 - 44 years 3.00% 3.00% 3.00%
Age 45 - 50 years 3.00% 3.00% 3.00%
Age above 50 years 3.00% 3.00% 3.00%
Changes in the present value of the defined benefit obligation (recognised in consolidated balance sheet) are as
follows:
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Opening defined benefit obligation 3.03 2.57 0.93
In case of certain Indian subsidiaries, acturial liability is determined based on estimates amounting to ` 0.72 million (March 31,
2016: ` 0.26 million, April 1, 2015: ` 0.22 million)
The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Funds managed by insurer 100.00% 100.00% 100.00%
Sensitivity analysis
A) Impact of change in discount rate when base assumption is decreased/increased by 100 basis point
Present value of obligation
In ` Million
Discount rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
8.46% 1.64 2.13 2.40
6.46% 2.07 2.29 2.76
B) Impact of change in salary increase rate when base assumption is decreased/increased by 100 basis point
Present value of obligation
In ` Million
Salary increament rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
7.00% 2.09 2.18 2.18
5.00% 1.63 2.08 2.30
C) Impact of change in withdrawal rate when base assumption is decreased/increased Present value of obligation
In ` Million
Withdrawal rate As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Decrease by 1% 2.09 2.18 2.18
Increase by 1% 1.63 2.08 2.30
The estimates of future salary increases, considered in actuarial valuation, takes account of inflation, seniority, promotion and
other relevant factors, such as supply and demand in the employment market.
The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit
obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period.
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Year ending March 31
Within one year 0.09 0.10 0.09
After one year but not more than five years 0.45 0.44 0.42
After five years but not more than ten years 2.80 2.60 2.65
Total expected payments 3.34 3.14 3.16
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
(a) Guarantees given by Group Bankers on behalf of the Group, against
sanctioned guarantee limit of ` 4,000 million (March 31, 2016: ` 4,000
million, April 1, 2015: ` 4,000 million) for contracts undertaken by the 2,232.14 1,442.45 958.50
Group and other matters are secured by extension of charge by way
of joint hypothecation of stock-in-trade, stores and spares etc., book
debts, subject to prior charge in their favour.
(b) Estimated value of contracts remaining to be executed on capital
1,176.15 1,942.41 3,166.27
accounts and not provided for, net of advances
(c) Commitments relating to further investment in private equity fund of
28.00 72.00 -
Paragon Partners Growth Fund - I
(d) For commitments relating to lease agreements, please refer note 46
Performance guarantee:
The Group along with its joint venture partner has given an irrecoverable and unconditional joint undertaking to the customers
of joint venture company - ALSTOM Bharat Forge Power Private Limited (ABFPPL), for transfer of technology, training, execution
of steam turbines generator sets and auxiliary equipment and for successful performance of the projects awarded to ABFPPL.
46. Leases
(a) Operating leases : Group as lessee
The Group has entered into agreements in the nature of lease/leave and license agreement with different lessors/
licensors for the purpose of establishment of office premises/residential accomodations etc. These are generally
in the nature of operating lease/leave and license. There are no transactions in the nature of sub lease. Period
of agreements are generally upto three years and renewal at the options of the lessee. There are no escalation
clauses or restrictions placed upon the Group by entering into these leases.
Minimum lease payments recognised in the statement of profit and loss during the year
On cancellable leases 245.90 227.02
On non-cancellable leases 13.51 -
259.41 227.02
The Group has entered into non-cancellable operating leases for building, with lease term 4 years. The Group has an option
to extend the lease by mutual consent. The lease includes escalation clause. Future minimum rentals payable under non-
cancellable operating leases as at 31 March are, as follows:
In ` Million
Year ended Year ended
March 31, 2017 March 31, 2016
In ` Million
Year ended Year ended
March 31, 2017 March 31, 2016
Lease rentals received during the year
On cancellable leases 4.82 6.31
On non-cancellable leases - -
4.82 6.31
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Particulars Minimum Present value Minimum Present value Minimum Present value
payments of MLP payments of MLP payments of MLP
48. Loans and advances in the nature of loans given to associates and firms/companies in which
directors are interested
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
BF Utilities Limited #
Balance outstanding as at March 31 75.00 75.00 75.00
Maximum amount outstanding during the year 75.00 75.00 75.00
Other expenses:
Legal and professional charges 6.78 1.94
Membership fees 2.60 -
EDP expenses 9.41 14.85
Other expenses 53.49 55.54
Total 310.93 357.69
50. Disclosures required under Sec 186(4) of the Companies Act 2013
In ` Million
Name of the loanee Purpose Rate of Year ended Year ended Year ended
Interest March 31, March 31, April 1,
(p.a.) 2017 2016 2015
BF Utilities Limited General corporate purpose * 10.00% 75.00 75.00 75.00
* Receivable in 3 years from the date of origination of loan
51. Disclosure pursuant to Indian Accounting Standard (Ind AS) 11 “Construction contracts”
In ` Million
Year ended Year ended
March 31, 2017 March 31, 2016
Contract revenue recognised during the period 41.02 1.74
In respect of contracts in progress as at March 31:
Aggregate amount of contract cost incurred and recognised profits (less recognised 20.62 80.24
losses) for all contracts in progress up to the reporting date
Associates Ferrovia Transrail Solutions Private Limited (Investment through wholly owned
subsidiary), India
Hospet Bellary Highways Private Limited (Investment through wholly owned
subsidiary), India
Joint Ventures ALSTOM Bharat Forge Power Private Limited, India (up to March 24, 2017)
BF NTPC Energy Systems Limited, India
David Brown Bharat Forge Gear Systems India Limited, India (up to September 30,
2015)
BF Premier Energy Systems Private Limited, India
Enterprises owned or significantly Kalyani Carpenter Special Steels Private Limited, India (up to August 4, 2016)
influenced by key management personnel Kalyani Steels Limited, India
or through their subsidiaries/associates/ BF Utilities Limited, India
joint ventures Automotive Axles Limited, India
Khed Economic Infrastructure Private Limited, India
Kalyani Maxion Wheels Private Limited, India
Daimler India Commercial Vehicles Private Limited, India (w.e.f. May 19, 2016)
ALSTOM Holdings, France
GE Power India Limited (formally known as ALSTOM India Limited), India
GE India Industrial Private Limited, India
ALSTOM POWER INC., USA
GE India Industrial Pvt Ltd, India
General Electric Energy UK Limited, UK
General Electric Switz, Switzerland
General Electric Technology GmbH (formerly known as ALSTOM Technology
Limited), Germany
General Electric (Switzerland) GmbH (formerly known as ALSTOM Switzerland
Limited), Switzerland
GE Power AG (formerly known as ALSTOM Power GMBH), Germany
GE Power SP Z.O.O. (formerly known as ALSTOM Power SP ZOO), Poland
ALSTOM Service Sdn Bhd, Malaysia
ALSTOM Asia Pacific Sdn Bhd, Malaysia
ALSTOM Beizhong Power (Beijing) Co, China
ALSTOM Power Italia S.P.A., Italy
ALSTOM T&D India Limited, India
Thermodyn S.A.S., France
ALSTOM Grid SAS, France
Alstom Middle East Fze, Dubai (UAE)
ALSTOM Technologie AG, Germany
ALSTOM Power Systems SA, France
ALSTOM Power Systems, France
ALSTOM Support, France
ALSTOM China Investment Co. Ltd, China
ALSTOM S&E Africa (PTY), South Africa
Joint Ventures of fellow subsidiary Elbit Systems Land and C4I Limited, India
Enterprises having common Key
Integrated Clean Room Technologies Limited, India
Management Personnel
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
no. relationship March 31, 2017 March 31, 2016
1. Purchase of raw materials Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
Kalyani Carpenter Special Steels Private Limited,
2,576.89 8,963.24
India
Kalyani Steels Limited, India 3,995.07 3,586.71
GE Power AG 14.92 190.66
Others 558.09 1,343.35
7,144.97 14,083.96
2. Other Expenses
- Power, fuel and water Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
BF Utilities Limited, India 114.91 190.58
114.91 190.58
- Rent Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
Kalyani Carpenter Special Steels Private Limited,
0.04 0.13
India
Automotive Axles Limited, India 0.16 -
GE Power India Limited, India 47.48 43.49
47.68 43.62
Relatives of directors and other directors
Mrs. S. S. Tandale 0.18 0.18
0.18 0.18
-Directors' fees and
Relatives of directors and other directors
travelling expenses
Mr. P. G. Pawar 0.70 0.53
Mr. S. M. Thakore 0.81 0.55
Mrs. Lalita D. Gupte 0.22 0.30
Mr. P. H. Ravikumar 0.63 0.50
Mr. P. C. Bhalerao 0.68 0.75
Mr. Vimal Bhandari 0.59 0.20
Mr. Naresh Narad 0.29 0.20
Dr. T. Mukherjee 0.49 0.20
4.41 3.23
-Commission to directors Relatives of directors and other directors
other than managing and Mr. P. G. Pawar 1.40 1.05
whole time directors
Mr. S. M. Thakore 1.15 1.10
Mrs. Lalita D. Gupte 0.45 0.60
Mr. P. H. Ravikumar 0.80 1.00
Mr. P. C. Bhalerao 1.35 1.50
Mr. Naresh Narad 0.50 0.40
Dr. T. Mukherjee 0.40 0.40
Mr. Vimal Bhandari 0.65 0.40
6.70 6.45
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
no. relationship March 31, 2017 March 31, 2016
-Project Cost Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
General Electric (Switzerland) GmbH 12.86 28.10
General Electric Technology GmbH - 11.93
GE Power SP Z.O.O. - 7.03
Others 1.87 1.29
14.73 48.35
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
no. relationship March 31, 2017 March 31, 2016
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
no. relationship March 31, 2017 March 31, 2016
6. Other income
-Rent Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
Kalyani Maxion Wheels Limited 0.05 -
0.05 -
7. Finance provided: Enterprises owned or significantly influenced
by key management personnel or through
their subsidiaries/associates/joint ventures
-Investments Khed Economic Infrastructure Private Limited 173.16 -
173.16 -
Joint ventures
BF NTPC Energy Systems Limited 7.19 -
7.19 -
In ` Million
Sr. Nature of transaction Name of the related party and nature of Year ended
no. relationship March 31, 2017 March 31, 2016
Joint ventures
BF NTPC Energy Systems Limited 0.74 11.67
0.74 11.67
Associates
Ferrovia Transrail Solutions Private Limited, India 311.99 249.31
311.99 249.31
* Does not include gratuity and leave encashment since the same is considered for all employees of the Group as a whole
Outstanding balances at the year end are unsecured with a short term duration and interest free except for loans and settlement
occurs in cash. For the year ended March 31, 2017 the Group has not recorded any impairment of receivables relating to
amount owed by related parties (March 31, 2016 : Nil, April 1, 2015 : Nil). This assessment is undertaken in each financial year
through examining the financial position of the related party and the market in which the related party operates.
All transactions were made on normal commercial terms and conditions and at market rates.
The Group has various welfare trusts to administer the post employment benefits for its employees which includes Bharat
Forge Co. Ltd. Educational Welfare Trust No. II (and various 40 other trusts). Further the Group operates various defined
benefit plans by way of gratuity trusts, provident fund trusts etc., for details of contribution to such trusts refer note 43.
The Company has various welfare trusts to administer the long term benefits for its employees. Further the Company operates
defined benefit plans by way of gratuity trusts, provident fund trusts etc. For details also refer note 43.
The Group has identified its reporting segments as “Forgings”, “Projects (Capital goods)” and “Others” which represents
the Group businesses not covered in Forgings and Projects (Capital goods) segment. The Chairman is the chief operation
decision maker. The Chief operating decision makers monitors the operating results of the business units separately
based on the above segments for the purpose of making decisions about resource allocation and performance
assessment. Each segment’s performance is evaluated based on profit or loss and is measured consistently with profit
or loss in the consolidated financial statements. Transfer prices between operating segments, if any, are on an arm’s
length basis in a manner similar to transactions with third parties.
The “Forgings” segment produces and sells steel forging products comprising of forgings, finished machined crankshafts,
front axle assembly and components and ring rolling etc. The “Projects (Capital goods)” includes engineering,
procurement and commissioning business for power related projects. “Others” primarily include infrastructure projects
& other activities.
No operating segments have been aggregated to form the above reportable operating segments
In ` Million
Sr.
March 31, 2017 March 31, 2016
No.
1 Segment revenue
a Forgings 65,788.55 69,743.07
b Projects (capital goods) - 8,593.26
c Others 257.68 420.93
d Discontinued operations 3,002.86 -
e Unallocable - -
Total 69,049.09 78,757.26
Adjustments and eliminations (3,067.53) (8,741.70)
Revenue from operations 65,981.56 70,015.56
2 Segment results
a Forgings 9,561.31 11,895.72
b Projects (capital goods) - 698.65
c Others (73.52) (28.90)
d Discontinued operations 1,104.66 (0.36)
Total segment profits 10,592.45 12,565.11
Less: Finance cost from continuing operations (999.60) (1,513.38)
Less: Finance cost from discontinued operations (599.23) (0.02)
Less: Other un-allocable expenditure net off un-allocable income (285.07) (1,642.31)
Add: Exceptional items 1,284.34 54.69
Total profits before tax and exceptional items 9,992.89 9,464.09
Adjustments and eliminations (525.21) 193.94
Consolidated 9,467.68 9,658.03
In ` Million
Sr.
March 31, 2017 March 31, 2016
No.
3 Segment income/(expense)
3.1 Depreciation and amortisation
a Forgings 4,442.02 4,218.64
b Projects (capital goods) - 150.88
c All other segements 79.31 80.86
d Discontinued operations 303.68 0.31
e Unallocable - 233.44
Total segments 4,825.01 4,684.13
Adjustments and eliminations (relates to discontinued operations & others) (304.54) (154.37)
Consolidated 4,520.47 4,529.76
3.2 Income tax expense/income
a Forgings 2,491.46 3,163.83
b Projects (capital goods) - (11.32)
c All other segements (0.03) 0.93
d Discontinued operations 374.26 -
Total segments 2,865.69 3,153.44
Adjustments and eliminations (374.02) 11.32
Consolidated 2,491.67 3,164.76
3.3 Share of profit of an associate and a joint venture (including discontinued
operations
a Forgings - -
b Projects (Capital goods) - 260.70
c All other segements 0.20 -
d Discontinued operations 131.17 (0.37)
Total segments 131.37 260.33
In ` Million
Sr.
March 31, 2017 March 31, 2016 April 1, 2015
No.
4 Segment assets
a Forgings 69,805.97 60,646.89 62,511.86
b Projects (Capital goods) - 14,703.79 10,495.37
c Others 1,926.90 2,126.57 1,629.21
d Discontinued operations - - -
e Unallocable 16,705.19 20,435.67 17,369.32
Total 88,438.06 97,912.92 92,005.76
Adjustments and eliminations (30.62) (14,993.33) (10,413.54)
Consolidated 88,407.44 82,919.59 81,592.22
6 Other disclosures
6.1 Investments in associates and joint ventures
a Forgings - - 0.30
b Projects (capital goods) - 849.16 588.20
c All other segements 0.13 0.59 34.16
Total segments 0.13 849.75 622.66
Adjustments and eliminations - - -
Consolidated 0.13 849.75 622.66
In ` Million
Sr. March 31, 2017 March 31, 2016
No.
6.2 Capital expenditure for the year
a Forgings 6,098.98 7,051.59
b Projects (capital goods) - 4,271.19
c All other segements 0.57 35.59
d Unallocable - 1,989.47
e Discontinued operations 765.67 -
Total segments 6,865.22 13,347.84
Adjustments and eliminations (765.67) (4,325.75)
Consolidated 6,099.55 9,022.09
In ` Million
Sr. March 31, 2017 March 31, 2016
No.
7 Information in respect of geographical areas
7.1 Segment revenue from external customers
a Within India 20,525.57 20,982.32
b Outside India 45,455.99 49,033.24
Total 65,981.56 70,015.56
The revenue information above is based on location of the customers
In ` Million
Sr. March 31, 2017 March 31, 2016 April 1, 2015
No.
7.2 Segment non-current assets
a Within India 34,491.42 30,235.27 26,075.37
b Outside India 9,726.45 9,096.21 7,171.60
Total 44,217.87 39,331.48 33,246.97
In ` Million
March 31, 2017 March 31, 2016
Reconciliation of Revenues
Segment Revenue 69,049.09 78,757.26
Less: Revenue from discontinued operations 3,002.86 12.13
Less: Revenue from joint ventures and associates 64.67 8,729.57
Total Revenue 65,981.56 70,015.56
Reconciliation of Results
Segment Results 9,992.89 9,464.09
Less: Results from discontinued operations 505.32 (0.34)
Less: Results from joint ventures and associates 19.89 (193.60)
Total Results 9,467.68 9,658.03
Reconciliation of Liabilities
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Segment Liabilities 15,986.69 21,468.75 23,952.15
Less: Liabilities pertaining to joint ventures and associates 46.90 6,174.79 7,571.32
Less: Liabilities pertaining to discontinued operations - - 6.07
Total Liabilities 15,939.79 15,293.96 16,374.76
54. Hedging activities and derivatives
Derivatives not designated as hedging instruments
The Group has used foreign exchange forward contracts to manage repayment of some of its foreign currency
denominated borrowings. These foreign exchange forward contracts are not designated as cash flow hedges
and are entered into for periods consistent with foreign currency exposure of the underlying transactions i.e. the
repayments of foreign currency denominated borrowings.
Cash flow hedges
Foreign currency risk
Foreign exchange forward contracts measured at fair value through OCI are designated as hedging instruments in
cash flow hedges of forecast sales in US Dollar and Euro. These forecast transactions are highly probable.
The foreign exchange forward contract balances vary with the level of expected foreign currency sales and changes
in foreign exchange forward rates.
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Assets Liabilities Assets Liabilities Assets Liabilities
Fair value of foreign currency forward
contracts designated as hedging 3,526.86 - 1,754.9 - 5,260.46 -
instruments
he terms of the foreign currency forward contracts match the terms of the expected highly probable forecast
T
transactions. As a result, no hedge ineffectiveness arise requiring recognition through profit or loss. Notional amounts
of outstanding forward contracts are as follows
In ` Million
March 31, 2017 March 31, 2016 April 1, 2015
Nature Foreign Foreign In ` Foreign
Currency Purpose In `
of instrument Currency In ` Million Currency in Million Currency
Million
in Million Million in Million
Forward USD Hedging of
Contracts highly probable 398.11 29,533.80 480.11 31,807.29 567.10
35,438.08
sales
Forward EUR Hedging of
Contracts highly probable 83.40 7,633.74 123.77 9,328.77 201.92
13,567.21
sales
he cash flow hedges of the expected future sales during the year ended March 31, 2017 were assessed to be highly
T
effective and a net unrealised gain of ` 3,377.78 million, with a deferred tax liability of ` 1,168.98 million relating to the
hedging instruments, is included in OCI. Comparatively, the cash flow hedges of the expected future sales during the
year ended March 31, 2016 were assessed to be highly effective and an unrealised gain of ` 1,694.12 million with a
deferred tax liability of ` 586.30 million was included in OCI in respect of these contracts
The amount removed from OCI during the year and included in the carrying amount of the hedging items as a basis
adjustment for the year ended March 31, 2017 is detailed in Note 34, totalling ` 872.70 million (net of deferred tax)
(March 31, 2016: ` 2,139.59 million). The amounts retained in OCI at March 31, 2017 are expected to mature and affect
the statement of profit and loss till year ended March 31, 2020.
Reclassifications to statement of profit and loss during the year gains or losses included in OCI are shown in note 34.
Unquoted funds
Investments in private equity fund - 72.79 -
Investments in mutual funds - 10386.78 -
Quoted funds
Investments in mutual funds 851.67 - -
Quantitative disclosure fair value measurement hierarchy for assets as at March 31, 2016:
In ` million
Fair value measurement using
Quoted prices in Significant Significant
Particulars
active markets observable inputs unobservable inputs
(Level 1) (Level 2) (Level 3)
Financial assets at FVTOCI
Unquoted equity instruments
Khed Economic Infrastructure Private Limited - - 250.29
Gupta Energy Private Limited - - -
Quoted equity instruments
KPIT Technologies Limited 90.63 - -
Derivative instruments at fair value through OCI
Cash flow hedges - 1,754.90 -
Financial assets at FVTPL
Unquoted funds
Investments in private equity fund - 26.07 -
Investments in mutual funds - 7,231.26 -
Quoted funds
Investments in mutual funds 401.12 - -
Unquoted funds
Investments in private equity fund - - -
Investments in mutual funds - 4,404.21 -
Quoted funds
Investments in mutual funds 160.42 - -
There have been no transfers between level 1 and level 2 during the year ended March 31, 2017 and March 31, 2016.
The management assessed that the fair value of cash and cash equivalent, trade receivables, derivative instruments, trade
payables, and other current financial assets and liabilities approximate their carrying amounts largely due to the short term
maturities of these instruments.
Further the management assessed that the fair value of security deposits and other non current recievables approximate
their carrying amounts largely due to discounting at rates which are an approximation of current lending rates.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions
were used to estimate the fair values:
(i) Long-term fixed-rate and variable-rate receivables are evaluated by the Group based on parameters such as individual
creditworthiness of the customer. Based on this evaluation, allowances are taken into account for the expected credit
losses of these receivables.
The significant unobservable inputs used in the fair value measurements categorised within Level 3 of the fair value hierarchy,
together with a quantitative sensitivity analysis as at March 31, 2017 are as shown below
"Significant
Valuation “Range "Sensitivity of the
unobservable
technique (weighted average)” input to fair value"
inputs"
Unquoted Cost method Estimated March 31, 2017: ` 9.30 million to ` 12.60 5% increase/ (decrease) in
equity shares in realization rates million /acre realization rate would result
Khed Economic for developed (Weighted average: ` 10.70 million/acre.) in increase/ (decrease) in
Infrastructure land and March 31, 2016: ` 8.80 million to ` 12.60 fair value per share by ` 1.45
Private Limited Land under million/acre (March 31, 2016: ` 1.54,
development (Weighted average: ` 10.40 million/acre.) April 1, 2015: ` 1.54).
April 1, 2015: ` 8.80 million to Rs. 12.60
million/acre
(Weighted average: ` 10.40 million/acre.)
Estimated Not Applicable
realization rates
for undeveloped
Land
The Group has an investment in equity instrument of Gupta Energy Private Limited (“GEPL”) . The same is classified as fair
value through profit and loss. Over the years GEPL has been making consistent losses.The management of the Group has
made attempts to obtain latest information for the purpose of valuation. However, such information is not availabe as GEPL
has not filed the financial statements with MCA since FY 2014 -15 In view of the above the management believes that the fair
value of the investment in Nil as at April 1, 2015.
The Group’s principal financial liabilities other than derivatives, comprise loans and borrowings, trade payables and
financial guarantee contracts. The main purpose of these financial liabilities is to finance the Group’s operations.
The Group’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents
that derive directly from its operations. The Group also holds FVTOCI and FVTPL investments and enters into
derivative transactions.
The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the
management of these risks. The Group’s senior management is supported by a Finance and Risk Management
Committee (FRMC) that advises on financial risks and the appropriate financial risk governance framework for the
Group. The FRMC provides assurance that the Group’s financial risk activities are governed by appropriate policies
and procedures and that financial risks are identified, measured and managed in accordance with the Group’s
policies and risk objectives. All derivative activities for risk management purposes are carried out by experienced
members from the senior management who have the relevant expertise, appropriate skills and supervision. It
is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of
Directors reviews and agrees policies for managing each of these risks, which are summarised as below.
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 three types of risk: interest rate risk, currency risk and other price
risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and
borrowings, deposits, investment in mutual funds, FVTOCI investments and derivative financial instruments.
The sensitivity analysis in the following sections relate to the position as at March 31, 2017 and March 31, 2016.
The sensitivity analysis have been prepared on the basis that the amount of net debt, the ratio of fixed to floating
interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all
constant and on the basis of hedge designations in place at March 31, 2017.
The analysis excludes the impact of movements in market variables on: the carrying values of gratuity and other
post-retirement obligations and provisions.
The following assumptions have been made in calculating the sensitivity analysis:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market
risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016
including the effect of hedge accounting
The Group generally borrows in Foreign Currency, considering natural hedge it has against its export. Long-term
and Short-term foreign currency debt obligations carry floating interest rates.
The Group avails short term debt in foreign currency up to tenor of 9 months, in the nature of export financing for
its working capital requirements. LIBOR or EURIBOR for the said debt obligations is fixed for the entire tenor of the
debt, at the time of availment.
The Group has an option to reset LIBOR or EURIBOR either for 6 Months or 3 months for its long term debt
obligations. To manage its interest rate risk, the Group evaluates the expected benefit from either of the LIBOR
resetting options and accordingly decides. The Group also has an option for its long term debt obligations to enter
into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and
variable rate interest amounts calculated by reference to an agreed-upon notional principal amount. However,
there were no interest rates swaps entered in to by the Group during any of the periods reported. At March 31,
2017, the Group’s entire long term borrowings are at a floating rate of interest (March 31, 2016: 91%).
The assumed movement in basis points for the interest rate sensitivity analysis is based on the currently observable
market environment, showing a significantly higher volatility than in prior years.
When a derivative is entered into for the purpose of being a hedge, the Group negotiates the terms of those
derivatives to match the terms of the hedged exposure. For hedges of forecast transactions the derivatives
cover the period of exposure from the point the cash flows of the transactions are forecasted up to the point of
settlement of the resulting receivable or payable that is denominated in the foreign currency.
At the reporting date, the exposure to unlisted equity securities at fair value was ` 597.50 million. Sensitivity
analysis of these investments have been provided in Note 56.
At the reporting date, the exposure to listed equity securities at fair value was ` 79.50 million. A decrease of 10%
on the NSE market index could have an impact of approximately ` 7.95 million on the OCI or equity attributable to
the Group. An increase of 10% in the value of the listed securities would also impact OCI and equity. These changes
would not have an effect on profit or loss.
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 Group is exposed to credit risk from its operating activities (primarily trade
receivables) and from its financing activities, including deposits with banks and financial institutions, investment in
mutual funds, other receivables and deposits, foreign exchange transactions and other financial instruments.
Liquidity risk
Cash flow forecasting is performed by Treasury function. Treasury monitors rolling forecasts of the Group’s liquidity
requirements to ensure it has sufficient cash to meet operational needs. Such forecasting takes into consideration the
compliance with internal cash management. The Group’s treasury invests surplus cash in marketable securities as
per the approved policy, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient
headroom as determined by the above-mentioned forecasts. At the reporting date, the Group held mutual funds of
` 11,238.45 million (March 31, 2016: ` 7,632.38 million, April 1, 2015:` 6,564.63 million) and other liquid assets of
` 3,360.82 million (March 31, 2016: ` 4,492.93 million, April 1, 2015: ` 4,235.49 million) that are expected to readily
generate cash inflows for managing liquidity risk.
As per the Group’s policy, there should not be concentration of repayment of loans in a particular financial year. In case
of such concentration of repayment, the Group evaluates the option of refinancing entire or part of repayments for
extended maturity. The Group assessed the concentration of risk with respect to refinancing its debt and concluded
it to be low. The Group has access to a sufficient variety of sources of funding and debt maturing within 12 months
can be rolled over with existing lenders and the Group is also maintaining surplus funds with short term liquidity for
future repayment of loans.
In ` million
Particulars Less than 1 year 1 to 5 years > 5 years Total
March 31, 2017
Borrowings 12,251.45 10,533.73 56.97 22,842.15
Trade and other payables 8,463.34 - - 8,463.34
Other financial liabilities 9,343.00 6.4 - 9,349.40
30,057.79 10,540.13 56.97 40,654.89
March 31, 2016
Borrowings 13,052.17 16,291.81 89.60 29,433.58
Trade and other payables 8,372.05 - - 8,372.05
Other financial liabilities 5,010.88 2.67 - 5,013.55
26,435.10 16,294.48 89.60 42,819.18
April 1, 2015
Borrowings 14,327.51 16,601.45 - 30,928.96
Trade and other payables 9,025.57 - - 9,025.57
Other financial liabilities 2,690.22 5.32 - 2,695.54
26,043.30 16,606.77 - 42,650.07
For the purpose of the Group’s capital management, capital includes issued equity capital, share premium and all
other equity reserves attributable to the equity holders of the Group. The primary objective of the Group’s capital
management is to maximise the shareholder value.
The Group manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. To maintain or adjust the capital structure, the Group may adjust the
dividend payment to shareholders, return capital to shareholders or issue new shares. The Group monitors capital
using a net debt equity ratio, which is net debt divided by equity. The Group’s policy is to keep the net debt equity
ratio below 1.00. The Group includes within its borrowings net debt and interest bearing loans less cash and cash
equivalents.
In ` Million
As at As at As at
March 31, 2017 March 31, 2016 April 1, 2015
Borrowings 31,240.63 33,751.69 32,747.84
Less: Cash and other liquid assets 14,465.41 12,075.94 10,800.12
Net debt 16,775.22 21,675.75 21,947.72
Equity 41,264.07 34,089.59 32,469.55
Net debt /equity Ratio 0.40 0.63 0.68
In order to achieve this overall objective, the Group’s capital management, amongst other things, aims to ensure
that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure
requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and
borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing
in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March
31, 2017 and March 31, 2016.
Name of the entity in the group Net assets (Total assets - total Share in profit and loss Share in Other Comprehensive Share in Total Comprehensive
liabilities) Income Income
As a % of ` Million As a % of ` Million As a % of ` Million As a % of ` Million
consolidated consolidated consolidated consolidated
net assets profit or loss other total
Comprehensive Comprehensive
income income
Parent
Bharat Forge Limited
Balance as at 31 March, 2017 102.81 42,319.32 82.32 5,850.77 156.55 1,622.22 91.77 7,472.99
Balance as at 31 March, 2016 104.93 35,815.20 103.30 6,976.18 121.28 (2,350.37) 96.06 4,625.81
Subsidiaries
Indian
1) B F Infrastructure Limited
Balance as at 31 March, 2017 0.49 200.76 (0.47) (33.10) (0.01) (0.13) (0.41) (33.23)
Balance as at 31 March, 2016 (0.13) (45.60) (0.47) (31.97) (0.01) 0.21 (0.66) (31.76)
2)Kalyani Strategic Systems
Limited
Balance as at 31 March, 2017 0.46 188.61 0.01 0.44 - - 0.01 0.44
Balance as at 31 March, 2016 0.06 20.57 (0.10) (6.98) - - (0.14) (6.98)
3) K alyani Rafael Advanced
Systems Private Limited
Balance as at 31 March, 2017 0.48 198.28 (0.05) (3.58) - - (0.04) (3.58)
Balance as at 31 March, 2016 (0.00) (0.76) (0.03) (2.26) - - (0.05) (2.26)
4) B
F Elbit Advanced Systems
Private Limited
Balance as at 31 March, 2017 (0.20) (81.98) (0.14) (10.29) - - (0.13) (10.29)
Balance as at 31 March, 2016 (0.21) (71.75) (0.37) (25.01) - - (0.52) (25.01)
5) Analogic Controls India Limited
Balance as at 31 March, 2017 (0.43) (178.83) (0.71) (50.35) 0.03 0.32 (0.61) (50.03)
Balance as at 31 March, 2016 (0.38) (128.80) (0.97) (65.43) (0.03) 0.55 (1.35) (64.88)
6) BFIL - CEC JV
Balance as at 31 March, 2017 0.00 0.08 0.00 0.03 - - 0.00 0.03
Balance as at 31 March, 2016 0.00 0.05 0.00 0.04 - - 0.00 0.04
Foreign
1) Bharat Forge Global Holding
GmbH
Balance as at 31 March, 2017 16.82 6,922.91 7.72 548.50 1.91 19.76 6.98 568.26
Balance as at 31 March, 2016 18.91 6,454.34 (22.31) (1,506.41) 0.52 (10.14) (31.49) (1,516.55)
2) Bharat Forge CDP GmbH
Balance as at 31 March, 2017 6.85 2,819.74 (1.04) (73.72) (7.43) (76.96) (1.85) (150.68)
Balance as at 31 March, 2016 8.79 3,001.42 0.74 50.05 (1.49) 28.96 1.64 79.01
Name of the entity in the group Net assets (Total assets - total Share in profit and loss Share in Other Comprehensive Share in Total Comprehensive
liabilities) Income Income
As a % of ` Million As a % of ` Million As a % of ` Million As a % of ` Million
consolidated consolidated consolidated consolidated
net assets profit or loss other total
Comprehensive Comprehensive
income income
3) Bharat Forge Holding GmbH
Balance as at 31 March, 2017 1.02 418.98 - - - - - -
Balance as at 31 March, 2016 1.24 424.15 0.07 4.89 - - 0.10 4.89
4) Bharat Forge
Aluminiumtechnik GmbH
Balance as at 31 March, 2017 3.06 1,260.08 0.14 10.14 (0.04) (0.45) 0.12 9.69
Balance as at 31 March, 2016 3.71 1,266.18 0.19 12.83 0.02 (0.44) 0.26 12.39
5) Bharat Forge Kilsta AB
Balance as at 31 March, 2017 0.38 157.06 (1.35) (95.90) 0.56 5.78 (1.11) (90.12)
Balance as at 31 March, 2016 0.42 142.80 1.20 81.04 (0.03) 0.67 1.70 81.71
6) Bharat Forge Hong Kong
Limited
Balance as at 31 March, 2017 (0.02) (10.22) (0.04) (3.18) - - (0.04) (3.18)
Balance as at 31 March, 2016 (0.02) (6.78) (0.29) (19.91) - - (0.41) (19.91)
7) Bharat Forge Daun GmbH
Balance as at 31 March, 2017 0.57 235.86 (0.03) (2.45) (0.58) (6.04) (0.10) (8.49)
Balance as at 31 March, 2016 0.72 247.04 (0.13) (8.56) (0.31) 6.02 (0.05) (2.54)
8) Mécanique Générale Langroise
Balance as at 31 March, 2017 0.79 323.53 (0.82) (58.51) 0.07 0.78 (0.71) (57.73)
Balance as at 31 March, 2016 1.12 383.81 (0.42) (28.51) (0.09) 1.66 (0.56) (26.85)
9) Bharat Forge International
Limited
Balance as at 31 March, 2017 1.11 455.50 3.43 243.88 - - 2.99 243.88
Balance as at 31 March, 2016 1.34 459.05 2.48 167.56 - - 3.48 167.56
10) Bharat Forge America Inc.
Balance as at 31 March, 2017 1.61 662.82 (0.57) (40.19) - - (0.49) (40.19)
Balance as at 31 March, 2016 (0.28) (96.06) (0.37) (24.67) - - (0.51) (24.67)
11) Bharat Forge PMT Technologie
LLC
Balance as at 31 March, 2017 3.13 1,288.24 (0.14) (10.04) - - (0.12) (10.04)
Balance as at 31 March, 2016 - - - - - - - -
12) Bharat Forge Tennessee Inc.
Balance as at 31 March, 2017 1.10 451.38 (0.01) (0.45) - - (0.01) (0.45)
Balance as at 31 March, 2016 - - - - - - - -
Non-controlling interests in all
subsidiaries
Balance as at 31 March, 2017 (0.24) (100.40) (0.86) (60.89) (0.01) (0.13) (0.75) (61.02)
Balance as at 31 March, 2016 0.12 42.63 0.46 30.73 (0.01) 0.22 0.64 30.95
Associates
(accounting as per the equity method)
1) Ferrovia Transrail Solutions
Private Limited*
Balance as at 31 March, 2017 0.16 0.00 0.01 0.00 0.03 0.00 0.04
Balance as at 31 March, 2016 0.10 - - (0.00) 0.01 0.00 0.01
Name of the entity in the group Net assets (Total assets - total Share in profit and loss Share in Other Comprehensive Share in Total Comprehensive
liabilities) Income Income
As a % of ` Million As a % of ` Million As a % of ` Million As a % of ` Million
consolidated consolidated consolidated consolidated
net assets profit or loss other total
Comprehensive Comprehensive
income income
2) Hospet Bellary Highways
Private Limited*
Balance as at 31 March, 2017 (129.37) - - - - - -
Balance as at 31 March, 2016 (129.34) - - - - - -
Joint Ventures
(accounting as per the equity
method)
1)ALSTOM Bharat Forge Power
Private Limited*
Balance as at 31 March, 2017 1,762.25 1.85 131.17 (0.66) (6.82) 1.53 124.35
Balance as at 31 March, 2016 1,508.46 3.86 260.70 (0.01) 0.27 5.42 260.97
2) B
F NTPC Energy Systems
Limited*
Balance as at 31 March, 2017 57.75 (0.02) (1.26) - - (0.02) (1.26)
Balance as at 31 March, 2016 46.12 (0.03) (2.10) - - (0.04) (2.10)
3)BF Premier Energy Systems Pvt.
Limited*
Balance as at 31 March, 2017 (0.85) 0.01 0.40 - - 0.00 0.40
Balance as at 31 March, 2016 (0.04) 0.01 0.52 - - 0.01 0.52
4) David Brown Bharat Forge Gear
Systems India Limited*
Balance as at 31 March, 2017 66.49 - - - - - -
Balance as at 31 March, 2016 67.25 (0.01) (0.38) - - (0.01) (0.38)
Adjustments arising out of
consolidation
March 31, 2017 (39.76) (16,368.05) 10.77 765.75 (50.39) (522.14) 2.99 243.61
March 31, 2016 (40.36) (13,775.27) 13.20 891.25 (19.83) 384.37 26.49 1,275.62
Total after elimination on 100.00 41,163.67 100.00 7,107.18 100.00 1,036.22 100.00 8,143.40
account of consolidation-2017
Total after elimination on 100.00 34,132.22 100.00 6,753.60 100.00 (1,938.01) 100.00 4,815.59
account of consolidation-2016
* The net assets of the entity have not been consolidated under the equity method.
Accordingly, the Group has prepared financial statements which comply with Ind AS applicable for periods ending on
March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described
in the summary of significant accounting policies. In preparing these financial statements, the Group’s opening
balance sheet was prepared as at April 1, 2015, the Group’s date of transition to Ind AS. This note explains the principal
adjustments made by the Group in restating its Indian GAAP financial statements, including the balance sheet as at
April 1,2015 and the financial statements as at and for the year ended March 31, 2016.
Exceptions applied
The Group has applied all the mandatory exceptions in accordance with Ind AS 101. Following are the exceptions
with significant impact:
1) Estimates
The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in
accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from
the following items where application of Indian GAAP did not require estimation:
FVTOCI – unquoted and quoted equity shares
FVTPL – debt securities
Impairment of financial assets based on expected credit loss model
The estimates used by the Group to present these amounts in accordance with Ind AS reflect conditions at
April 1, 2015, the date of transition to Ind AS and as of March 31, 2016.
2) Classification and measurement of financial assets
The Group has classified financial assets on the basis of the facts and circumstances that exist at the date of
transition to Ind AS.
4) Hedge accounting
The Group uses derivative financial instruments, such as forward currency contracts to hedge its foreign
currency risks respectively. Under Indian GAAP, there is no mandatory standard that deals comprehensively
with hedge accounting, which has resulted in the adoption of varying practices. The Group has designated
various economic hedges and applied economic hedge accounting principles to avoid profit or loss mismatch.
All the hedges designated under Indian GAAP are of types which qualify for hedge accounting in accordance
with Ind AS 109 also. Moreover, the Group, before the date of transition to Ind AS, has designated a transaction
as hedge and also meets all the conditions for hedge accounting in Ind AS 109. Consequently, the Group
continues to apply hedge accounting after the date of transition to Ind AS.
5) Government loans
The Group has elected to apply the requirements of Ind AS 109 Financial Instruments and Ind AS 20 Accounting
for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing
at the date of transition to Ind AS and has not recognised the corresponding benefit of the government loan
at a below-market rate of interest as a government grant.
1) Deemed cost for Property, plant and equipment and Intangible assets
The Group has elected to continue with the carrying value for all of its property, plant and equipment and
intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured
as per the Indian GAAP and use that as its deemed cost as at the date of transition. The Group has elected to
continue with the carrying value for all of its exploration and evaluation assets as recognised in the financial
statements as at the date of transition to Ind AS, measured as per the Indian GAAP and use that as its deemed
cost as at the date of transition.
2) Embedded lease
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease.
In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or
arrangement. However, the Group 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.
4) Business combinations
Ind AS 103 Business Combinations has not been applied to acquisitions of subsidiaries, which are
considered businesses under Ind AS that occurred before April 1, 2015. Use of this exemption means that
the Indian GAAP carrying amounts of assets and liabilities, that are required to be recognised under Ind
AS, is their deemed cost at the date of the acquisition. After the date of the acquisition, measurement is
in accordance with respective Ind AS. The Group recognises all assets acquired and liabilities assumed
in a past business combination, except (i) certain financial assets and liabilities that were derecognised
and that fall under the derecognition exception, and (ii) assets (including goodwill) and liabilities
that were not recognised in the acquirer’s consolidated balance sheet under its previous GAAP and
that would not qualify for recognition under Ind AS in the individual balance sheet of the acquiree.
Assets and liabilities that do not qualify for recognition under Ind AS are excluded from the opening Ind AS
balance sheet. The Group did not recognise or exclude any previously recognised amounts as a result of Ind
AS recognition requirements.
Ind AS 101 also requires that Indian GAAP carrying amount of goodwill must be used in the opening Ind
AS balance sheet (apart from adjustments for goodwill impairment and recognition or derecognition
of intangible assets). In accordance with Ind AS 101, the Group has tested goodwill for impairment
at the date of transition to Ind AS. No goodwill impairment was deemed necessary at April 1, 2015.
The group has used same exemptions for interest in associates and joint ventures.
5) Currency translation differences
Cumulative currency translation differences for all foreign operations are deemed to be zero as at
April 1, 2015
7) Non-controlling interests
As per Ind AS 110, entities are required to attribute the profit or loss and each component of other
comprehensive income to the owners of the parent and to the non-controlling interests. This requirement
needs to be followed even if this results in the non-controlling interests having a deficit balance. Ind
AS 101 requires the above requirement to be followed prospectively from the date of transition.
Consequently, the group has applied the above requirement prospectively.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to
evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-
cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet
for liabilities arising from financing activities, to meet the disclosure requirement.
The Group is evaluating the requirements of the amendment and the effect on the financial statements is being
evaluated.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-
settled awards. Market-based performance conditions and non-vesting conditions are reflected in the ‘fair values’,
but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of
awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based
payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction,
the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award
that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The
cash payment to the tax authority is treated as if it was part of an equity settlement.
Since the Group does not have cash settled awards or awards with net settlement features, this amendment does not
have any effect on the financial statements of the Group.
* The previous GAAP amounts have been reclassified to conform to Ind AS presentation requirements for the purpose of this
note.
In ` Million
Notes Indian GAAP* Ind AS Ind AS
Adjustments
LIABILITIES
I. Non-current liabilities
(a) Financial liabilities
(i) Borrowings 10, 11, 15 20,614.09 (4,232.68) 16,381.41
(ii) Other non-current financial liabilities 2.67 - 2.67
(b) Provisions 17 1,174.05 (10.98) 1,163.07
(c) Deferred tax liabilities (net) 9, 15 1,830.89 133.21 1,964.10
(d) Other non-current liabilities 630.96 - 630.96
24,252.66 (4,110.45) 20,142.21
II. Current liabilities
(a) Financial liabilities
(i) Borrowings 7, 10, 11, 15 7,582.87 5,469.30 13,052.17
(ii) Trade payables 15 11,575.40 (3,203.35) 8,372.05
(iii) Other current financial liabilities 15 7,555.30 (2,544.42) 5,010.88
(b) Provisions 4 723.32 (230.40) 492.92
(c) Other current liabilities 15 1,836.37 (299.47) 1,536.90
(d) Current tax liabilities (net) 15 232.87 (10.00) 222.87
29,506.13 (818.34) 28,687.79
Total liabilities 53,758.79 (4,928.79) 48,830.00
Total equity and liabilities 89,480.25 (6,560.66) 82,919.59
* The previous GAAP amounts have been reclassified to conform to Ind AS presentation requirements for the purpose of this
note
In ` Million
Notes Indian Ind AS Ind AS
GAAP Adjustments
Other comprehensive Income that will not be reclassified
to profit or loss in subsequent period (net of tax)
Re-measurement gains / (losses) of defined benefit plans 5 - 44.09 44.09
Net gain/(loss) on FVTOCI equity securities 1 - (90.23) (90.23)
Share of other comprehensive income arising from 0.27 0.27
discontinued operations
(B) - (45.87) (45.87)
Other comprehensive income for the year, net of tax - (1,938.01) (1,938.01)
[A+B]
Total comprehensive income for the year, net of tax 6,470.23 (1,654.64) 4,815.59
attributable to:
* The previous GAAP amounts have been reclassified to conform to Ind AS presentation requirements for the purpose of
this note.
Under Indian GAAP, the Group accounted for long term investments in debt securities as investment measured at
cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Group has
designated certain investments as FVTPL debt investments. Ind AS requires FVTPL to be measured at fair value. At
the date of transition to Ind AS, difference between the instruments at fair value and amortised cost as at the date
of transition has been recognised in other equity, net of related deferred taxes.
Under Indian GAAP, the Group accounted for mutual funds as investment measured at lower of cost or NRV.
Under Ind AS, the Group classified these mutual funds as FVTPL investments. Ind AS requires such investments to
be measured at fair value. At the date of transition to Ind AS, difference between the instruments at fair value and
cost as at the date of transition has been recognised in other equity, net of related deferred taxes.
2) Trade receivables
Under Indian GAAP, the Group has created provision for impairment of receivables which consists only in respect
of specific amount for probable losses. Under Ind AS, impairment allowance has been determined based on
Expected Credit Loss (ECL) model. Due to ECL model, the Group impaired its trade receivable by ` 41.70 million
(net of related deferred tax) on April 1, 2015 which has been eliminated against other equity.
3)
Derivative instruments
The Group has taken certain forward foreign exchange contracts which were designated as hedging instruments
under Indian GAAP and have been designated as at the date of transition to Ind AS as hedging instrument in cash
flow hedges for expected future sales for which the Group has firm commitments or expected sales that are highly
probable. The corresponding adjustment has been recognised as a separate component of equity, in the cash flow
hedge reserve. On the date of transition, cash flow hedge reserve was debited by ` 1,771.01 million on April 1, 2015
and net movement of ` 2,238.51 million (net of related deferred tax) during the year ended on March 31, 2016 was
recognized in OCI and subsequently taken to cash flow hedge reserve. Further, the Group has recognized Credit
Value Adjustments (‘CVA’)/Debit Value Adjustments (‘DVA’) as part of fair valuation of these instruments and the
same has been adjusted in the other equity on the date of transition to Ind AS and in the statement of profit and
loss subsequently.
4)
Provisions
Under Indian GAAP, proposed dividends including dividend distribution tax (DDT) are recognised as a liability
in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is
recognised as a liability in the period in which it is declared by the Group (usually when approved by shareholders
in a general meeting) or paid.
In case of the Group, the declaration of dividend occurs after the period end. Therefore, the liability of ` 1,260.84
million for the year ended on March 31, 2015 recorded for dividend including DDT theron has been derecognised
against other equity on April 1, 2015. The proposed dividend and DDT theron for the year ended on March 31, 2016
of ` 140.09 million recognized under Indian GAAP was reduced from other payables and with a corresponding
impact in the other equity.
Proposed dividend including DDT liability amounting to ` 1,260.84 million which was derecognised as on the
transition date, has been recognised in other equity during the year ended March 31, 2016 as declared and paid.
8)
Revenue
Under Indian GAAP, revenue from sale of products was presented excluding excise duty. Under Ind AS, revenue
from sale of products is presented inclusive of excise duty. Excise duty paid is presented on the face of the
statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and
total expenses for the year ended March 31, 2016 by ` 1,924.08 million. There is no impact on total equity and
profits.
Under the Indian GAAP certain expenses in the nature of freight and other sales related expenses were netted off
against sales. Under Ind AS such expenses have been reclassified to other expenses so as to measure revenue at
fair value of consideration received or receivable. This change has no impact on the profits and other equity for
the year.
9)
Deferred tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences
between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred
taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of
an asset or liability in the balance sheet and its tax base. This has resulted in recognition of deferred tax on new
temporary differences which was not required under Indian GAAP.
In addition, the various transitional adjustments lead to temporary differences. According to the accounting
policies, the Group has to account for such differences. Deferred tax adjustments are recognised in correlation to
the underlying transaction either in other equity or a separate component of equity.
10)
Government Loan
The Group has a below-market rate government loan of ` 6.08 million outstanding as at the date of transition to
Ind AS. Such loan was recognized at book value under Indian GAAP. The Group has elected to apply the exemption
pertaining to government grant whereby the provisions of Ind AS 109, ‘Financial Instruments’, and Ind AS 20,
‘Accounting for Government Grants and Disclosure of Government Assistance’ shall be applied prospectively to
such loan from the date of transition to Ind AS. Accordingly, Indian GAAP carrying amount of the loan at the date of
transition to Ind AS has been continued as the carrying amount of the loan in the opening Ind AS Balance Sheet.
11)
Borrowings
The Group recognized the transaction costs pertaining to the borrowings on a straight line basis over the term of
the loan under Indian GAAP. The unamortised portion of such cost was recognized as part of ‘prepaid expense’
which amounted to ` 265.59 million on the date of transition to Ind AS. As per Ind AS 109, borrowings are measured
at amortized cost and hence, unamortised portion of transaction costs has been adjusted against the amount of
borrowings and not shown separately as part of assets.
effective interest rate method. At the date of transition to Ind AS, the difference between amortised cost and the
Indian GAAP carrying amount has been recognised in other equity (net of related deferred tax). The resulting impact of
` 102.29 million for April 1, 2015 and ` 81.63 million for March 31, 2016 have been reclassified to prepaid expenses and
a corresponding decrease of ` 24.40 million in total comprehensive income for the year ended March 31, 2016.
63. The Group had taken a piece of land on lease at Mundra location (Adani Port) in Gujarat and had initially planned
to set up its manufacturing facility. However, due to a direction by the Honorable High Court of Gujarat relating
to certain pending environmental clearances, the construction work at Mundra had been discontinued during
financial year ended 2013. Further, the Group took a decision to move to another site and commenced its alternate
construction facility in the financial year 2013, which has been substantially put to use later. As at 1 April 2016,
the Group was carrying land and building (capital work in progress) pertaining to the aforesaid mentioned site at
Mundra amounting to ` 233.70 million and ` 2,312.85 million respectively. Management has evaluated the possible
case of impairment in absence of any planned alternative use for the constructed building/ land. Accordingly,
the management has assessed the realisable value of the building for ` 150 million on the basis of the valuation
report. As the events triggering the aforesaid impairment happened prior to April 1, 2015, the Group has created a
provision for impairment for carrying value (net of realisable value) of capital work in progress (related to building)
and concluded that this is a prior period item as per erstwhile Indian GAAP. Consequently, the adjustment is
recorded through opening retained earnings as at April 1, 2015. Further, since the rights to the land have expired
in the current year, the cost of leased land amounting to ` 233.70 million (net of realizable value of ` Nil) has been
written off in the current year.
Further, the management has also taken into consideration the fact that, there is a contractual asset retirement
obligation amounting to ` 7.2 million pertaining to Mundra land. This being a prior period item as erstwhile Indian
GAAP, the Company has recognized asset retirement obligation on the aforesaid site and adjusted its opening
retained earnings as at April 1, 2015.
Further, margin release related to certain projects amounting to ` 630.72 million(related tax expense of ` Nil) is
pertaining to previous year and therefore, recorded in the year ended March 31, 2016.
2 Bharat Forge CDP GmbH Jan 16 to Dec 16 EUR 71.62 35.81 2,984.19 6,885.82 3,865.82 - 11,243.62 179.88 - 179.88 - 100%
3 Bharat Forge Holding GmbH Jan 16 to Dec 16 EUR 71.62 1.79 417.19 1,093.29 674.31 - - (3.14) - (3.14) - 100%
5 Bharat Forge Kilsta AB Jan 16 to Dec 16 SEK 7.46 149.20 (41.20) 3,108.08 3,000.08 - 5,593.29 (159.93) (3.51) (156.42) - 100%
6 Bharat Forge Hong Kong Limited Jan 16 to Dec 16 USD 67.95 1,202.97 (1,213.20) 4.27 14.50 - - (2.75) 0.47 (3.22) - 100%
7 Bharat Forge Daun GmbH Jan 16 to Dec 16 EUR 71.62 3.58 253.33 717.66 460.75 - 947.84 57.82 - 57.82 - 100%
8 Mecanique Generale Langroise Jan 16 to Dec 16 EUR 71.62 42.97 214.77 372.54 114.81 - 410.54 (19.25) (0.04) (19.21) - 100%
9 Bharat Forge America Inc. Jan 16 to Dec 16 USD 67.95 - 662.82 1,036.17 373.34 - - (40.63) - (40.63) - 100%
10 Bharat Forge PMT Technologie LLC Jan 16 to Dec 16 USD 67.95 6.62 1,281.62 1,478.49 190.25 - 133.54 (10.15) - (10.15) - 100%
11 Bharat Forge Tennessee Inc. Jan 16 to Dec 16 USD 67.95 506.02 (54.64) 505.33 53.95 - - (0.69) (0.24) (0.46) - 100%
COMPANY OVERVIEW
12 Bharat Forge International Limited Apr 16 to Mar 17 USD 64.84 6.79 684.40 8,092.71 7,401.52 - 9,855.66 295.87 60.18 235.69 - 100%
13 BF Infrastructure Limited Apr 16 to Mar 17 INR 1.00 955.28 (754.52) 1,010.03 809.27 - - (34.32) (1.22) (33.10) - 100%
14 Kalyani Strategic Systems Limited Apr 16 to Mar 17 INR 1.00 195.90 (7.29) 193.12 4.51 - - 0.77 0.33 0.44 - 51%
17 Analogic Controls India Limited Apr 16 to Mar 17 INR 1.00 27.59 (206.42) 157.42 336.25 - 73.42 (49.24) 1.11 (50.35) - 60%
18 BFIL-CEC JV * Apr 16 to Mar 17 INR 1.00 - 0.08 97.56 97.48 - 41.02 0.04 0.01 0.03 - 100%
B. N. KALYANI G. K. AGARWAL
Chairman and Managing Director Deputy Managing Director
TEJASWINI CHAUDHARI
KISHORE SALETORE Deputy Company Secretary
Executive Director & CFO
Place: Pune
Date: May 24, 2017
COMPANY OVERVIEW STATUTORY REPORTS FINANCIAL STATEMENTS
NOTES
10. Members who hold shares in electronic form not claimed by the Shareholder for a period
are requested to write their DP ID and Client of seven (7) consecutive years or more are
ID numbers and those who hold shares in required to be transferred by the Company to
physical form are requested to write their the Investor Education and Protection Fund
Folio Number/s in the Attendance Slip for (IEPF).
attending the AGM to facilitate identification
As per Section 124(6) of the Companies Act,
of Membership at the AGM.
2013 read with the IEPF Rules as amended,
11. In case of joint holders attending the AGM, all the shares in respect of which dividend
only such joint holder whose name appears has remained unpaid/unclaimed for a period
as first holder in the order of names in the of seven (7) consecutive years or more are
Register of Members of the Company will be required to be transferred to the demat
entitled to vote. account of IEPF Authority.
12. In terms of the Articles of Association of The Company has sent notice to all the
the Company, read with Section 152 of the Shareholders whose dividends are lying
Companies Act, 2013, Mr. G. K. Agarwal unpaid/unclaimed against their name for
and Mr. Kishore M. Saletore, Directors of seven (7) consecutive years or more and has
the Company are liable to retire by rotation also published advertisement in newspapers.
at the ensuing AGM and being eligible, offer The details of such Members and shares due
themselves for re-appointment. The Board of for transfer to the IEPF are available on the
Directors of the Company recommends their Company’s website www.bharatforge.com to
respective re-appointments. enable such Members to verify the details of
unpaid/unclaimed dividends and the shares
Additional information pursuant to Regulation
liable to be transferred to the IEPF. The
17 and 36 of SEBI (Listing Obligations and
Members are requested to contact Secretarial
Disclosure Requirements) Regulations,
Department of the Company for encashing
2015, in respect of Directors seeking
the unpaid/unclaimed dividend standing to
re-appointment at the AGM, forms part of the
the credit of their account.
Notice.
In the event of transfer of shares and the
13. Those Members who have not encashed/
unclaimed dividends to IEPF, Members are
received their Dividend Warrants for the
entitled to claim the same from IEPF Authority
previous year(s), may approach to the
in accordance with the IEPF Rules.
Secretarial Department at the Registered
Office of the Company for claiming unpaid/ 15. On July 27, 2005, the Company had sub-
unclaimed dividend. divided its Equity Shares of the Face Value
of ` 10/- each into the Equity Shares of
14. The Ministry of Corporate Affairs (“MCA”)
Face Value of ` 2/- each. Accordingly, the
has notified provisions relating to unpaid/
Members were requested to surrender their
unclaimed dividend under Section 124
old Share Certificate(s) of the face value of
and 125 of the Companies Act, 2013 and
` 10/- each and obtain from the Company
Investor Education and Protection Fund
the new Share Certificate(s) of the face value
Authority (Accounting, Audit, Transfer and
of ` 2/- each. Those Members who have still
Refund) Rules, 2016. As per provisions of the
not obtained the new Share Certificate(s) of
Companies Act, 2013, dividends which are
User ID and Password along with a copy of ID and password/PIN for remote
this Notice to the Members separately. e-voting. Please note that the
password is an initial password.
23. Mr. S.V. Deulkar, Partner of M/s. SVD &
Associates, Company Secretaries, Pune has Note: Shareholders already
been appointed as the Scrutiniser to scrutinise registered with NSDL for e-voting
the voting and remote e-voting process in a will not receive the PDF file “BFL
fair and transparent manner. remote e-voting.pdf”.
24. The facility for voting through Ballot Paper (ii) Launch internet browser by
shall be made available at the AGM and the typing the following URL:
Members attending the AGM who have not https://www.evoting.nsdl.com
cast their vote by remote e-voting shall be
(iii) Click on Shareholder – Login
able to exercise their right at the AGM through
Ballot Paper. (iv) Put user ID and password as initial
password/PIN noted in step (i)
25. The Members who have cast their vote by
above. Click Login.
remote e-voting prior to the AGM may also
attend the AGM but shall not be entitled to (v) Password change menu will
cast their vote again. appear. Change the password/
PIN with new password of your
The remote e-voting period commences on
choice with minimum 8 digits/
Monday, August 7, 2017 (9:00 a.m.) (I.S.T.)
characters or combination thereof.
and ends on Wednesday, August 9, 2017 (5:00
Note new password. It is strongly
p.m.) (I.S.T.) During this period, Members
recommended not to share your
of the Company, holding shares either in
password with any other person
physical form or in dematerialised form, as
and take utmost care to keep your
on the cut-off date i.e. Thursday, August 3,
password confidential.
2017 may cast their vote by remote e-voting.
The remote e-voting module shall be disabled (vi) Home page of remote e-voting
by NSDL for voting thereafter. Once the opens. Click on remote e-voting:
vote on a resolution is cast by the Member, Active Voting Cycles.
the Member shall not be allowed to change
it subsequently. E-voting rights cannot be (vii) Select “EVEN” of “BHARAT FORGE
exercised by a Proxy. LIMITED” which is 106280.
26. The instruction of e-voting are as under: (viii) Now you are ready for remote
e-voting as Cast Vote page opens.
I. In case a Member receives an email from
NSDL [for Members whose email IDs are (ix) Cast your vote by selecting
registered with the Company/Depository appropriate option and click on
Participants(s)] : “Submit” and also “Confirm” when
prompted.
(i) Open email and open PDF file viz;
“BFL-remote e-voting.pdf” with your (x) Upon confirmation, the message
Client ID or Folio No. as password. “Vote cast successfully” will be
The said PDF file contains your user displayed.
Tejaswini Chaudhari
Deputy Company Secretary
Registered Office:
Mundhwa, Pune Cantonment,
Pune 411 036, Maharashtra, India
CIN: L25209PN1961PLC012046
CIN : L25209PN1961PLC012046
Registered Office : Mundhwa, Pune Cantonment, Pune 411036, Maharashtra, India
Phone : +91 20 6704 2777/ 2476 Fax : +91 20 2682 2163
E-mail : [email protected] Website : www.bharatforge.com
(Pursuant to Section 105 (6) of the Companies Act, 2013 and Rule 19(3) of the Companies (Management and Administration) Rules, 2014)
3. A person can act as a Proxy on behalf of Members not exceeding 50 (fifty) and holding in the aggregate not more than Ten
percent (10%) of the total Share Capital of the Company carrying voting rights. A Member holding more than Ten percent
(10%) may appoint a single person as a Proxy and such person shall not act as a Proxy for any other person or Shareholder.
4. It is optional to indicate your preferences. If you leave the ‘For‘ or ‘Against‘ column blank against any or all resolutions, your
Proxy will be entitled to vote in the manner as he/she may deem appropriate.
12 ANNUAL REPORT 2016-17
TH
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56th Annual Report 2016-17
ATTENDANCE SLIP
I hereby record my presence at the 56th (Fifty-sixth) ANNUAL GENERAL MEETING of the Company held at
the Registered Office of the Company at Mundhwa, Pune Cantonment, Pune - 411 036, Maharashtra, India, on
Thursday, August 10, 2017 at 10:30 a.m. (I.S.T.)
Note: Please handover this slip at the entrance of the Meeting Venue.
E-VOTING
Users who wish to opt for e-voting may use the following login credentials.
EVEN (Remote E-Voting Event No.) USER ID PASSWORD
106280
Please follow steps for e-voting procedure as given in the Notice of Annual General Meeting.
BHARAT FORGE LIMITED
Mundhwa, Pune Cantonment,
Pune 411 036, Maharashtra, India,
Phone: +91 20 6704 2777 / 2476
Fax: +91 20 2682 2163
Email: [email protected]
www.bharatforge.com