CESC Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Mar 2018
Auditor and Management Disclosures and Notes for the annual results dated 31 Mar 2018
1. In order to lay specific focus on its operations and investments in the areas, inter alia, of power distribution, generation, organized retail and other sundry areas including business process outsourcing & property by way of due alignment, the Board of Directors of CE$C Limited (Parent Company) at its meeting held on 18th May, 2017 approved, subject to necessary approvals, a composite scheme of arrangement under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 ('the Scheme') involving the Parent and nine of its subsidiaries The Scheme provides for restructuring of the Parent and its undertakings referred to in the Scheme into four listed entities, focussed on the above referred four verticals, the appointed date being 1 October 2017.
Upon implementation of the Scheme, (i) each shareholder of the Parent registered on a record date to be fixed for the purpose would be entitled to fully paid shares of the respective companies in the ratios set out in the Scheme, and (ii) face value of equity shares of the Parent will be reduced and simultaneously shares so reduced consolidated with consequential reduction in its issued, subscribed and paid up equity share capital in the manner set out in the Scheme. The Scheme sanctioned by the Hon'ble National Company Law Tribunal, Kolkata Bench (NCLT) by its Order dated 28 March. 2018 will be implemented on the terms and conditions stated therein inter alia, upon satisfaction of the conditions precedent and obtaining the approvals as referred to in the NCLT order.
Upon such implementation, necessary accounting effect relating thereto will be given in due course in the financial statements, with its consequential impact on the financial results and pending which, these financial information have been prepared in terms of Regulation 33 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
2. In the above financial results of the Group, earnings from revenue from operations in respect of the Parent is determined in accordance with the relevant orders of the West Bengal Electricity Regulatory Commission (WBERC), the regulator The effect of adjustments relating to advance against depreciation, cost of fuel and purchase of power and those having bearing on revenue account, as appropriate, based on the Company's understanding of the applicable available regulatory provisions and available orders of the competent authorities have been included in Regulatory (income) / expense, which may, however, necessitate further adjustments upon receipt of subsequent orders/directions in this regard. Including finalisation of the underlying issues relating to mining of coal from Sarisatoli coal mine, which commenced from April, 2015.
3. Part A of Schedule II to the Companies Act. 2013 (the 'Act), inter alia, provides that depreciable amount of an asset is the cost of an asset or other amount substituted for cost. Part B of the said Schedule deals with the useful life or residual value of an asset as notified for accounting purpose by a Regulatory Authority constituted under an act of Parliament or by the Central Government for calculating depreciation to be provided for such asset irrespective of the requirement of Schedule II In terms of applicable Regulations under the Electricity Act, 2003, depreciation on tangible assets, other than freehold land. is provided on straight line method on a pro-rata basis at the rates specified therein, forming the basis for determining the Company's tariff by West Bengal Electricity Regulatory Commission which is also required to be used for accounting purposes as specified in the said Regulations. Based on legal opinions and accounting opinions obtained, the Parent continues with the consistently followed practice of recouping the additional charge of depreciation relatable to the increase in value arising from fair valuation on the date of transition to Ind-AS from Retained Earnings, which for the year ended 31 March 2018 amounts to Rs. 311 crores (previous year Rs. 342 crores)
4. (i) Other expenses contained in columns (1) to (5) include interest on security deposit of Rs. 23 crore, Rs. 26 crore, Rs. 27 crore, Rs. 108 crore and Rs. 110 crore, for the respective periods
(ii) EPS without Regulatory (income) / expenses contained in Columns (1) to (5) in the above financial results works out to Rs. 5.07, Rs. 5.17 Rs. 2.03 Rs. 53.35, Rs. 53.81 for the respective periods.
5. An interim dividend of Rs. 191 45 crore ( Rs. 12 per equity share ) was declared by Parent on 28 February, 2018 and paid during the quarter.
6. The figures for last quarter are the balancing figures between audited figures in respect of the full financial year ended 31.03.2018 and the published year to date figures upto 31.12.2017, being the date of end of the third quarter of the current financial year which were subject to limited review.
7. The company is engaged in generation and distribution of electricity and does not operate in any other reportable segment.
8. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors at their respective meetings held on 22 May, 2018 and 23 May 2018 respectively
9. There were no exceptional items during the quarter and year ended on 31 March 2018.
10. Figures for the previous periods have been regrouped / reclassified wherever necessary to conform to current period's classification.