Note 1: Significant Accounting Policies & Additional Regulatory Information
1. Corporate Information
M/s B. N. Holdings Limited (Formerly known as Arihant Tournesol Ltd.) (“The Company”) is a company Limited by shares incorporated and domiciled in India. The registered office of the company is situated at 217, Adani Inspire-BKC, G-Block, BKC Main Road, Bandra Kurla Complex, Bandra East, Mumbai, Maharashtra-400051 IN and the Corporate Office is situated at First Floor, B.N. Corporate Park, Plot No. 18, Sector-135, Noida, UP-201304.
B.N. Holdings Limited is engaged in manufacturing & trading of various kinds of edible oil, oil seeds, solvent extraction, extracted oil-cakes, refined oil.
2. Basis of Preparation of Financial Statements
The financial statements of M/s B. N. Holdings Limited have been prepared and presented in accordance with the provisions of Companies Act, 2013 (‘the Act’) and the Indian Accounting Standards (“IND AS”) notified under the companies Indian Accounting Standards Rules,2015 and amendments thereof issued by MCA in exercise of powers prescribed under Section 133 of the Companies Act, 2013 (‘the Act’) and other pronouncements of Institute of Chartered Accountants of India and the relevant provisions of the Act.
The company maintains its accounts on accrual basis following the historical cost convention in accordance with IND AS and other requirements of the Companies Act, 2013 (to the extent notified) and the companies Act 2013 (to the extent applicable).
The preparation of financial statements in conformity with IND AS requires that the management of the company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balance of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts/advances, etc. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in the current and future periods. Wherever changes in presentation are made, comparative figures of the previous year are regrouped accordingly.
Amount in the financial statements are presented in INR in Rs. Lacs unless otherwise provided as permitted by Schedule III to the Companies Act,2013.
3. Use of Estimates
The preparation of financial statements in conformity with IND AS requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
4. Current and Non-Current Classification
ALL assets and LiabiLities are cLassified into current and non-current.
I) Assets
An asset is cLassified as current when it satisfies any of the foLLowing criteria:
a. it is expected to be reaLised in, or is intended for saLe or consumption in the Company’s normaL operating cycLe;
b. it is heLd primariLy for the purpose of being traded;
c. it is expected to be reaLised within 12 months after the reporting date; or
d. it is cash or cash equivaLent unLess it is restricted from being exchanged or used to settLe a LiabiLity for at Least 12 months after the reporting date. Apart from the above, current assets aLso incLude the current portion of non-current financiaL assets. ALL other assets are cLassified as non-current.
ii) LiabiLities
A LiabiLity is cLassified as current when it satisfies any of the foLLowing criteria:
a. it is expected to be settLed in the Company’s normaL operating cycLe;
b. it is heLd primariLy for the purpose of being traded;
c. it is due to be settLed within 12 months after the reporting date; or
d. the company does not have an unconditionaL right to defer settLement of the LiabiLity for at Least 12 months after the reporting date. Terms of a LiabiLity that couLd, at the option of the counter party, resuLt in its settLement by the issue of equity instruments do not affect its cLassification. Apart from the above, current LiabiLities aLso incLude current portion of non-current financiaL LiabiLities. ALL other LiabiLities are cLassified as non-current.
iii) Operating cycLe
Operating cycLe is the time between the acquisition of assets for processing and their reaLization in cash or cash equivaLents.
5. Exceptional Items
Security Deposit of Rs. 14.87 Lacs from MSEB being doubtfuL of reaLization, has been written off in FY 2022-23. However there is no transaction of such nature in FY 2023-24.
6. Foreign Currencies Transactions and Translation
Transactions in foreign currencies are recorded at the exchange rate prevaiLing on the date of transaction. Monetary assets and LiabiLities denominated in foreign currencies are transLated at the functionaL currency cLosing rates of exchange at the reporting date.
Exchange differences arising on settLement or transLation of monetary items are recognised in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directLy attributabLe to the acquisition or construction of quaLifying assets which are capitaLized as cost of assets.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The gain or loss arising on translation of nonmonetary 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 Other Comprehensive Income or Statement of Profit and Loss are also recognised in Other Comprehensive Income or Statement of Profit and Loss,respectively).
In case of an asset, expense or income where a non-monetary advance is paid/received, the date of transaction is the date on which the advance was initially recognised. If there were multiple payments or receipts in advance, multiple dates of transactions are determined for each payment or receipt of advance consideration.
Exchange differences arising on a monetary item that forms part of a company’s net investment in a foreign operation is recognised in profit or loss in the financial statements of the company. The Foreign Exchange Loss of Rs 13,624.00 is recognized in profit and loss account on account of translation of company’s net investment in a foreign subsidiaries. The closing exchange rate has been adopted from State Bank of India TT Sell Rate as on 30.03.2024 as 31st March 2024 was public holiday.
7. Revenue Recognition
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration entitled in exchange for those goods or services. The Company is generally the principal as it typically controls the goods or services before transferring them to the customer. Generally, control is transferred upon shipment of goods to the customer or when the goods is made available to the customer, provided transfer of title to the customer occurs and the Company has not retained any significant risks of ownership or future obligations with respect to the goods shipped. Revenue from rendering of services is recognised over time by measuring the progress towards complete satisfaction of performance obligations at the reporting period. Revenue is measured at the amount of consideration which the Company expects to be entitled to in exchange for transferring distinct goods or services to a customer as specified in the contract, excluding amounts collected on behalf of third parties (for example taxes and duties collected on behalf of the government). Consideration is generally due upon satisfaction of performance obligations and a receivable is recognised when it becomes unconditional. Revenues are recognized exclusive of GST.
8. Property Plant & Equipments, Capital WIP, Depreciation
Fixed assets are carried at cost of acquisition less accumulated depreciation and accumulated impairment loss, if any. Fixed assets are accounted for at cost of acquisition or construction inclusive of inward freight, duties, taxes and directly attributable costs of bringing the asset to its working condition for its intended use. Subsequent expenditures related to an item of fixed asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance. Advances paid towards the acquisition of fixed assets outstanding at each balance sheet date are shown as capital advances under short-term loans and advances and assets under installation or under construction as at the balance sheet date are shown as capital work-in-progress under fixed assets. Depreciation on tangible assets is provided on the written down value method over the useful lives of assets given under the
Companies Act, 2013. Depreciation for assets purchased/ sold during the year is proportionately charged. Depreciation and amortisation methods, useful lives and residual values are reviewed periodically, including at each financial year end. There are no PPE, CWIP with the company at the end of the period.
9. Intangible Assets and Amortisation
Brands and computer software acquired by the Company, the value of which is not expected to diminish in the foreseeable future, are capitalised and recorded in the balance sheet as trademarks and computer software at cost of acquisition less accumulated amortisation. These are being amortised on straight-line method over the estimated useful life as mentioned below. Useful life of trademark are determined by persuasive evidences of expected usage contributing towards the performance and significant expenditure incurred to sustain the useful life of brands. Recoverable value of such brands are assessed in each financial year. The amortisation rates are as follows:
- Trademarks - 5 years
- Computer Software - 5 years
There are no Intangible assets with the company at the end of the period.
10. Impairment of Assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, impairment provision is created to bring down the carrying value to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of profit and loss. If at the balance sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the impairment provision created earlier is reversed to bring it at the recoverable amount subject to a maximum of depreciated historical cost.
11. Investments 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 instruments also include derivative contracts such as call options to buy out stake in subsidiary.
Initial recognition and measurement
Financial assets are initially recognized when the Company becomes a party to the contractual provisions of the instrument. All financial assets other than those measured subsequently at fair value through profit and loss, are recognized initially at fair value plus transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For the purpose of subsequent measurement, financial assets are classified in four categories:
• Amortized cost,
• Fair value through profit (FVTPL)
• Fair value through other comprehensive income (FVTOCI)
on the basis of its business model for managing the financial assets and the contractual cash flow characteristics of the financial asset.
Amortized cost :
A financial instrument is measured at the amortized 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 flows, and contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method.
Fair value through profit and loss ('FVTPL'):
All financial assets that do not meet the criteria for amortised cost or fair value through other comprehensive income are measured at fair value through profit or loss with all changes recognized in the statement of profit and loss. Interest income (basis EIR method), from financial assets at fair value through profit or loss is recognised in the statement of profit and loss within finance income/ finance costs separately from the other gains/ losses arising from changes in the fair value.
Derivative financial instruments (call option over shares of subsidiaries) are classified as financial instruments at fair value through profit or loss. Such derivative financial instruments are initially recognised at fair value.
They are subsequently re-measured at their fair value, with changes in fair value being recognised in the statement of profit and loss.
Fair value through Other Comprehensive Income ('FVOCI')
Financial assets are measured at FVOCI if both the following conditions are met:
The asset is held within a business model whose objective is achieved by both -
collecting contractual cash flows and selling financial assets and
- contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount outstanding.
After initial measurement, these assets are subsequently measured at fair value. Dividends, Interest income under effective interest method, foreign exchange gains and losses and impairment losses are recognized in the Statement of Profit and Loss. Other net gains and losses are recognized in other comprehensive Income.
A financial asset (or, where applicable, a part of a financial asset or a part of a group of similar financial assets) is primarily derecognized (i.e. removed from the Company’s balance sheet) when:
The contractual rights to receive cash flows from the financial asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘passthrough’ arrangement; and either
- (a) the Company has transferred substantially all the risks and rewards of the asset, or
- (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
On de-recognition, any gains or losses on all equity instruments (measured at FVTPL) and debt instruments (other than debt instruments measured at FVOCI) are recognized in the Statement of Profit and Loss. Gains and losses in respect of debt instruments measured at FVOCI and that are accumulated in OCI are reclassified to profit or loss on de-recognition.
Impairment of financial assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortized cost and debt instruments measured at FVOCI.
Loss allowances on trade receivables are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets, the loss allowance is measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit risk at the reporting date.
Financial liabilities
Initial recognition and measurement
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 instruments also include derivative contracts such as call options to buy out stake in subsidiary.
Initial recognition and measurement
Financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
Financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss, transaction costs that are directly attributable to its acquisition or issue.
Subsequent measurement
Subsequent measurement is determined with reference to the classification of the respective financial liabilities.
A financial Liability is classified as Fair Value through Profit or Loss (FVTPL) if it is classified as held-for trading or is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and changes therein, including any interest expense, are recognized in the Statement of Profit and Loss.
Financial Liabilities at amortized cost:
After initial recognition, financial liabilities other than those which are classified as FVTPL are subsequently measured at amortized cost using the effective interest rate (“EIR”) method.
Amortized cost is calculated by taking into account any discount or premium and fees or costs that are an integral part of the EIR. The amortization done using the EIR method is included as finance costs in the Statement of Profit and Loss
Derecognition
A financial liability is derecognized 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 recognized in the statement of profit or loss.
Derivative financial instruments
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 through profit or loss account. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.
Investments in subsidiaries, associates and joint ventures: No Investment held during the financial year by the company.
The company has invested Rs. 7200 lacs in Non-cummulative Preference Shares of Epitome Industries India Ltd. at face value of Rs. 10 each. Since the investment has been made at face value in preference shares, it is at par with the provisions of Ind AS.
The company has given security deposit of Rs. 15000/- as Rental Deposit to M/s B N Corporate Park Pvt Ltd for taking the office premises on lease.
12. Inventories
Inventories are valued at lower of cost price and estimated net realisable value after providing for cost of obsolescence, where necessary. Cost of inventories comprises cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and
condition. In the case of finished goods, cost comprises material, Labour and applicable overhead expenses and duties including excise duty paid/payable thereon.Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The comparison of cost and net realisable value is made on an item-by-item basis. Goods in transit / with third parties and at godowns are valued at cost which represents the costs incurred upto the stage at which the goods are in transit / with third parties and at godowns. There are no inventories in the company at the year end.
13. Foreign Exchange Conversion
The transactions in foreign currency are accounted for at a standard exchange rate of the month in which the transactions take place. Exchange differences arising on foreign currency transactions settled during the year are recognised in the statement of profit and loss. Monetary assets and liabilities denominated in foreign currencies as at the balance sheet date, not covered by forward exchange contracts, are translated at year end rates. The resultant exchange differences are recognised in the statement of profit and loss. Non-monetary assets are recorded at a standard exchange rate of the month in which the transactions take place. In respect of forward contracts, the differences between contracted exchange rates and monthly standard exchange rates are recognised as income or expense over the life of the contracts.
14. Retirement and other Employee Benefits
For Employees covered under Employees Provident Fund and Miscellaneous Provisions Act, 1952:
All employees of the Company which are covered under the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952 receive benefits under the Provident Fund which is a defined benefit plan wherein the government provides the guarantee of a specified return on contribution. The contribution is made both by the employee and the Company equal to 12% of the employees' salary for the months April 2023 to March 2024. These contributions are made to the Fund administered and managed by the government authorities.
Gratuity:
The payment of Gratuity act 1972 is applicable when an employee has completed five years of service. Since in our organisation no employee has completed five years of service or is due to complete five years in current financial year, hence we foresee no cash outflow on this statutory liability, therefore no provision is made in the current period regarding the same.
Encashment of leave is accounted on the basis of actuarial valuation.
Short-term employee benefits such as salaries, wages, short-term compensated absences, cost of bonus, and performance linked rewards falling due wholly within its twelve months of rendering the service are classified as short-term employee benefits and are expensed in the period in which the employee renders the related service.
Defined contribution plan: Company’s contributions due/ payable during the year towards provident fund is recognized in the statement of profit and loss. The Company has no obligation other than the contribution payable to the provident fund.
15. Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Interest income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.
All other borrowing costs are recognized in statement of profit and loss in the period in which they are incurred.
16. Income-Tax Expense
Income tax expense comprises current tax and deferred tax charge or credit. Income-tax expense is recognised in the statement of profit and loss.
I) Current tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
ii) Deferred tax
Deferred tax charge or credit reflects the tax effects of timing differences between accounting income and taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in future. Deferred tax assets are reviewed at each balance sheet date and are written-down or written-up to reflect the amount that is reasonably certain to be realised. The break-up of the major components of the deferred tax assets and liabilities as at balance sheet date has been arrived at after setting off deferred tax assets and liabilities where the Company has a legally enforceable right to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.
17. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised only when:
(i) the Company has a present obligation (legal or constructive) as a result of a past event;
(ii) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
(iii) a reliable estimate can be made of the amount of the obligation.
Provision is measured using the cash flows estimated to settle the present obligation and: when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.
A disclosure for a contingent Liability is made when there is a possible obligation or a present obligation arising from past events that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present-obligation in respect of which the likelihood of outflow of resources is remote, no disclosure is made.
Contingent Assets are not recognized but are disclosed in the notes to financial statements when inflow of economic benefits is probable.
18. Cash Flow Statement
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method, adjusting the profit before tax excluding exceptional items for the effects of:
(I) changes during the period in inventories and operating receivables and payables, transactions of a non-cash nature;
(ii) non-cash items such as depreciation, provisions, unrealised foreign currency gains and losses; and
(iii) all other items for which the cash effects are investing or financing cash flows.
19. Segment Reporting
Segment Reporting as defined in IND AS 108 is not applicable.
20. Related Party Transaction
Parties are considered to be related if at any time during the year; one party has the ability to control the other party or to exercise significant influence over the other party in making financial and / or operating decision. (As per Annexure-1)
21. Earnings Per Share
Basic earnings per share (“EPS”) is computed by dividing the net profit after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Dilutive potential equity shares are deemed converted as of the beginning of the year, unless they have been issued at a later date. Detailed disclosure of EPS is as per Annexure-3.
22. There is no pending registration of charges or pending satisfaction with Registrar of Companies (ROC) beyond statutory limits.
23. Previous year’s compiled figures have been regrouped, reclassified and rearranged wherever necessary for proper presentation. Amounts and other disclosures for the preceding year are included as an integral part of the current year consolidated financial statements and are to be read in relation to the amounts and other disclosures relating to current year. Figures have been rounded off to nearest of rupee in Lacs.
24. That the company has increased its authorized Share Capital from INR 1000 lacs to INR 2800 Lacs in May,2023 and thereafter the company further increased the authorized share capital from INR 2800 Lacs to INR 6200 Lacs in Dec, 2023.
25. There are no pending Litigation/ Litigation settlements during the period.
26. There has been no Loan defauLt or breach of a Loan agreement during the reporting period.
27. No business or economic circumstances have been envisaged that affect the fair vaLue of the company’s financiaL assets & financiaL Liabilities. Hence, those assets or Liabilities are recognized at fair vaLue or amortized cost.
28. The company has opened two new whoLLy owned foreign subsidiaries, one being BN HoLdings Europe Ltd and other being BN HoLdings Singapore PTE. DetaiLs of Investment is mentioned in Annexure-1. As regards the preparation of consoLidated financiaL statements as required u/s 129(3) of the Companies Act,2013 read with IND AS 110 and Companies (Accounts) RuLes, 2014, the company has prepared consoLidated financiaL statements.
29. The company has issued 1,79,34,782 convertibLe warrants for aggregate consideration of US$ 10 MiLLion (Indian Rs. 8,250 Lacs approx) by way of preferentiaL aLLotment on a private pLacement basis, in accordance with the provision of the SEBI (Issue of CapitaL and DiscLosure Requirements) ReguLations, 2022 to GLobaL Focus Fund, Mauritius on 18.08.2023. These share warrants are convertibLe into 1,79,34,782 equity shares of the company at the option of the warrant hoLders in one or more tranches, on or after the date of issue of the warrant but not Later than 18 months from the date of aLLotment. However during the period onLy Rs. 7,474.99 Lacs has been received against these share warrants.
30. The additionaL reguLatory information and Ratio’s AnaLysis of the company are discLosed in Annexure-2
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