|76| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts 1. The Group was eligible for Investment allowance on new plant and machinery which was applicable upto assessment year 2017-18. 2. Tax adjustments for earlier years The Group was entitled to incentives in the form of excise duty benefit for its Gagal Plant in the state of Himachal Pradesh, in respect of Income Tax Assessment Years 2006-07 to 2015-16. The Group contended in its income tax returns that the said incentives are in the nature of capital receipts, and hence not liable to income tax. The Income Tax department had, for the assessment years 2006-07 to 2012-13, consistently not accepted this position and appeals were filed by the Group against the orders of the Assessing officer, with the Commissioner of Income Tax – Appeals (CIT-A). The Group had received favourable order from the assessing officer in one instance (Assessment Year 2013-14), but considering the several unfavourable orders by the tax department, the Group had up to December 31, 2017, classified the risk of an ultimate outflow of economic benefits for this matter as probable and provided for the same. During the current year, the CIT-A decided the issue in favour of the Group for two assessment years, 2008-09 and 2012-13. Appeals in respect of these two and other years are pending with different levels of appellate authorities for disposal. Additionally for the Assessment year 2014-15, the department had accepted the Group’s contention that these incentives are capital receipts in the assessment order received during the current year. During the current year, however, for the two assessment years with favourable orders by the Assessing officer, the department has issued show cause notices for revisionary proceedings under Section 263 of the Income-tax Act, 1961 in respect of this claim, which are being contested. In view of the series of repeated favourable orders from the tax department, in the current year the Group again reviewed the matter and, after considering the legal merits of the Group’s claim, including inter-alia, the ratio of the decisions of Hon’ble Supreme Court, and the pattern of favourable orders by the department including favourable disposal of the Group’s appeal by the CIT-A during the current year, as mentioned above, the Group has reassessed the risk and concluded that the risk of an ultimate outflow of economic benefits for this matter is no longer probable. Accordingly the Group has reversed the existing provisions of ` 500.63 Crore resulting in reduction in Current Tax Liabilities by ` 200.30 Crore, increase in MAT Credit Entitlement (net) of ` 34.72 Crore and an increase in Non-Current Tax Assets (net) by ` 265.61 Crore. Pending final legal closure of this matter the said amount has been disclosed under contingent liabilities in the financial statements. Deferred tax: Deferred tax relates to the following: Particulars As at December 31, 2018 As at December 31, 2017 ` Crore ` Crore Deferred Tax Liabilities: Depreciation and amortisation differences 895.92 862.29 Deferred tax Liabilities on undistributed profit of associates and joint ventures 10.73 9.07 906.65 871.36 Deferred Tax Assets: Provision for employee benefits 47.37 41.71 Expenditure debited in the Consolidated Statement of Profit and Loss but allowed for tax purposes in the following years 103.81 105.47 Allowance for obsolescence of Stores and Spares 9.88 9.88 Allowance for doubtful debts, advances and other assets 11.79 13.07 MAT credit entitlement 22.67 115.73 Other temporary differences 36.56 33.94 232.08 319.80 Net Deferred Tax Liabilities 674.57 551.56
|77| Chap. 6 – Ind AS 12 — Income Taxes The major components of deferred tax liabilities / assets arising on account of timing differences are as follows: ` Crore Particulars Net Balance as on January 01, 2018 Recognised in the Consolidated Statement of Profit and Loss Recognised in OCI MAT Credit utilised Net Balance as on December 31, 2018 Deferred Tax Liabilities: Depreciation and amortisation differences 862.29 33.63 - - 895.92 Deferred tax liabilities on undistributed profit of associates and joint ventures 9.07 1.66 - - 10.73 871.36 35.29 - - 906.65 Deferred Tax Assets: Provision for employee benefits 41.71 3.06 2.60 - 47.37 Expenditure debited in Consolidated Statement of Profit and Loss but allowed for tax purposes in the following years 105.47 (1.66) - - 103.81 Allowance for obsolescence of Stores and Spares 9.88 - - - 9.88 Allowance for doubtful receivables and other assets 13.07 (1.28) - - 11.79 MAT credit entitlement* 115.73 - - (93.06) 22.67 Other temporary differences 33.94 2.62 - - 36.56 319.80 2.74 2.60 (93.06) 232.08 Net Deferred Tax Liabilities 551.56 32.55 (2.60) 93.06 674.57 *MAT Credit utilised is net of MAT Credit Entitlement of ` 34.72 Crore increased on account of tax adjustments for earlier years as stated above. ` Crore Particulars Net Balance as on January 01, 2017 Recognised in the Consolidated Statement of Profit and Loss Recognised in OCI MAT Credit utilised Net Balance as on December 31, 2017 Deferred Tax Liabilities: Depreciation and amortisation differences 776.99 85.30 - - 862.29 Deferred Tax Liabilities on undistributed profit of associates and Joint venture 7.83 1.24 - - 9.07 784.82 86.54 - - 871.36 Deferred Tax Assets: Provision for employee benefits 44.08 (1.12) (1.25) - 41.71
|78| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts ` Crore Particulars Net Balance as on January 01, 2017 Recognised in the Consolidated Statement of Profit and Loss Recognised in OCI MAT Credit utilised Net Balance as on December 31, 2017 Expenditure debited in the Consolidated Statement of Profit and Loss but allowed for tax purposes in the following years 105.59 (0.12) - - 105.47 Allowance for obsolescence of Stores and Spares 9.88 - - - 9.88 Allowance for doubtful receivables and other assets 17.27 (4.20) - - 13.07 MAT credit entitlement 117.70 59.13 - (61.10) 115.73 Other temporary differences 33.99 (0.05) - - 33.94 328.51 53.64 (1.25) (61.10) 319.80 Net Deferred Tax Liabilities 456.31 32.90 1.25 61.10 551.56 At the end of the reporting period, the aggregate amount of temporary differences associated with undistributed earnings of the subsidiaries for which deferred tax liabilities have not been recognised is `20.87 Crore (Previous Year - ` 18.10 Crore). No liability has been recognised in respect of these differences because management controls the distributions of the earnings of the subsidiaries to the holding company and it has no intention to distribute the earnings of the subsidiaries. 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 related to income taxes levied by the same tax authority. The Group expects to utilize the MAT credit within the next year. The Subsidiaries having the following unused tax losses which arose on incurrence of business losses under the Income Tax for which no deferred tax asset has been recognised in the Balance Sheet. Financial Year Category ` Crore Expiry date 2010-11 Business Loss 0.09 March 31, 2019 2011-12 Business Loss 0.35 March 31, 2020 2012-13 Business Loss 0.86 March 31, 2021 2013-14 Business Loss 1.03 March 31, 2022 2014-15 Business Loss 0.27 March 31, 2023 2015-16 Business Loss 0.21 March 31, 2024 2016-17 Business Loss 0.95 March 31, 2025 2016-17 Depreciation 0.11 Not Applicable 2017-18 Business Loss 1.52 March 31, 2026 2017-18 Depreciation 0.06 Not Applicable Total 5.45 The above information is based on the returns of income filed by the individual subsidiary companies upto assessment year 2018-2019.
|79| Chap. 6 – Ind AS 12 — Income Taxes 2. ALL CARGO LOGISTICS LIMITED Significant Accounting Policies 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 in accordance with the applicable tax laws. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized outside the Statement of Profit and Loss is recognized outside the Statement of Profit and Loss (either in other comprehensive income or 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 liability approach 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 recognized for all taxable temporary differences, except: 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. 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. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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 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 utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 realized 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 recognized outside Statement of Profit and Loss is recognized outside Statement of Profit and Loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the underlying transaction either in OCI (Other Comprehensive Income) 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. Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognized subsequently if new information about facts and circumstances change. Acquired deferred tax benefits recognized within the measurement period reduce goodwill related to that acquisition if they result from new information obtained about facts and circumstances existing at the acquisition date. If the carrying amount of goodwill is zero, any remaining deferred tax benefits are recognized in OCI/ capital reserve depending on the principle explained for bargain purchase gains. All other acquired tax benefits realized are recognized in profit or loss.
|80| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the applicable tax laws, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. Accordingly, MAT is recognized as deferred tax asset in the balance sheet when the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will be realized. The net amount of tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Significant Accounting judgements, estimates and assumptions: Taxes MAT credit is earned by the Group when the normal tax payable as per taxable profit is less than the MAT payable as per book profits. MAT credit earned is the difference between the MAT paid and normal tax payable. Significant judgement is required to check the utilization of the MAT credit based on the likely growth in profitability of the Group and the likely additions made to the property, plant and equipment up to the expiry of the MAT credit earned. Provision for tax liabilities require judgements on the interpretation of tax legislation, developments in case law and the potential outcomes of tax audits and appeals which may be subject to significant uncertainty. Therefore the actual results may vary from expectations resulting in adjustments to provisions, the valuation of deferred tax assets, cash tax settlements and therefore the tax charge in the Statement of Profit or Loss. Taxes as shown in Profit and Loss Account: Profit before tax 30,208 22,522 Income tax expense Current tax 8 9,253 6,028 Deferred tax (3,829) (902) Total Income tax expense 5,424 5,126 Profit for the year 24,784 17,396 Notes to Accounts A. Deferred tax: Deferred tax relates to the following: (` in Lakhs) Particulars Balance Sheet 31 March 2019 31 March 2018 1. Deferred tax asset Difference between depreciation and amortisation of tangible and intangibles assets as per books and tax (6,521) (7,638) Brought forward tax losses 564 686 Allowances for impairment of trade receivables and advances 1,426 (1,856) Provision for compensated absence 290 (209) Others 824 4,944 (3,417) (4,073) MAT Credit entitlement 14,598 13,813 Deferred tax assets (net) 11,181 9,740 2. Deferred tax liability Difference between depreciation and amortisation of tangible and intangibles assets as per books and tax (209) (309) Others (148) (256) (357) (565)
|81| Chap. 6 – Ind AS 12 — Income Taxes Particulars Balance Sheet 31 March 2019 31 March 2018 MAT Credit entitlement - 134 Deferred tax liabilities (net) (357) (431) B. Reconciliation of deferred tax liabilities (net): (` in Lakhs) Particulars 31 March 2019 31 March 2018 Opening balance (431) (168) Tax income / (expense) recognised in profit or loss 199 (135) Tax expense recognised in OCI - (1) MAT credit utilised (134) (500) Exchange Fluctuation 9 (21) Consolidation adjustments - 394 Closing balance (357) (431) C. Reconciliation of deferred tax assets (net): (` in Lakhs) Particulars 31 March 2019 31 March 2018 Opening balance 9,740 7,377 Tax income recognised in profit or loss 497 544 Tax (expense) / income recognised in OCI (418) 605 MAT credit recognised 786 993 Exchange Fluctuation (167) 888 Consolidation adjustments 743 (667) Closing balance 11,181 9,740 The Holding Company has paid tax on dividend received from its foreign subsidiaries. In the current year, in accordance with the opinion of the Ind AS technical facilitation group of The Institute Chartered Accountant of India, the Company has created deferred tax assets amounting to ` 2,484 lakhs which has been adjusted against the dividend distribution tax by the Company on distribution of dividend, in Other Equity. Basis the change in estimate the tax charge for the current year has reduced by the amount of deferred tax asset created. D. Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate for 31 March 2019 and 31 March 2018: (` in Lakhs) Particulars 31 March 2019 31 March 2018 Accounting profit before income tax 30,208 22,522 At India’s statutory income tax rate of 34.944% (31 March 2018: 34.608%) 10,556 7,794 Effect of differential tax rates between holding Company and its’ subsidiaries 1,797 (3,506) Income not chargeable to tax (2,698) (2,791) Tax Credit on dividend received from foreign subsidiary (2,484) - Utilisation of previously unrecognised tax losses (391) 86 Share of results of associates and joint ventures (180) (166) Items not taxable as business income (350) (417) Expenses charged to reserves and allowed for tax purpose (25) 715 Income taxable at lower rate (2,064) (443) Income tax on unrecognised losses carried forward 670 660 Non-deductible expenses 411 2,459
|82| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Particulars 31 March 2019 31 March 2018 Tax effect of earlier years (69) 377 Effect of change in Tax rate 1 35 Others 250 323 At the effective income tax rate of 17.95% (31 March 2018: 22.76%) 5,424 5,126 Income tax expense reported in the Statement of Profit and Loss 5,424 5,126 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 authorities. 3. AVENUE SUPERMARTS LIMITED Significant Accounting Policies Taxes 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 enacted or substantively enacted, at the reporting date in the countries where the group operates and generates taxable income. Deferred income tax is provided using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount for financial reporting purpose at the reporting date. Deferred tax assets and liabilities are determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the asset is realized or the liability is settled. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilize those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are off set where the group has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively. Amendments to Ind AS 12: Income Taxes The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognized those past transactions or events. An entity applies those amendments for annual reporting periods beginning on or after 1st April 2019. Since the group’s current practice is in line with these amendments, the group does not expect any effect on its financial statements. Taxes as shown in Profit and Loss Account: Profit before tax 1,421.94 1,222.07 Tax expense Current tax 33 509.13 421.70 Adjustment of tax related to earlier periods (7.67) (0.44) Deferred tax charge/(credit) 18.02 (5.47) 519.48 415.79 Profit for the year 902.46 806.28
|83| Chap. 6 – Ind AS 12 — Income Taxes Notes to Accounts 33 Income tax expenses (` in Crores) 31st March, 2019 31st March, 2018 Tax expense recognised in the statement of Profit and Loss (a) Income tax expense Current tax Current tax on profits for the year recognised in statement of profit and loss 509.13 421.70 Current tax on Re-measurements gains/(loss) on defined benefit plans recognised in OCI (0.68) (0.27) Adjustments for current tax of prior periods (7.67) (0.44) Total current tax expense 500.78 420.99 Deferred tax (Decrease) increase in deferred tax Total deferred tax expense/(benefit) 18.02 (5.47) Income tax expense 518.80 415.52 Reconciliation of Tax expense and accounting profit multiplied by India’s Domestic rate for 31-3-2019 and 31-3-2018 (b) Reconciliation of tax expense and the accounting profit multiplied by India’s domestic tax rate: Accounting profit before tax 1,421.94 1,203.59 Tax calculated at tax rates applicable to profit 513.34 418.77 Permanent differences due to: Donation 0.39 0.02 Deductions taken for 80E and others (2.79) - Corporate social responsibility 6.22 3.26 Interest on income tax 0.08 0.41 Fines and penalty 0.04 0.00 Deduction from income from house property (0.50) (0.38) Impact of increase of tax rate on Def tax of PY 0.45 - Others 1.57 (6.12) Adjustments for current tax of prior periods - (0.44) Income tax recognised in the statement of profit and loss and OCI 518.80 415.52 4. BHARAT PETROLEUM CORPORATION LIMITED Current Tax 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, by the end of reporting period Current Tax items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income or directly in equity. Deferred tax Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that
|84| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts 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. 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. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized 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 items are recognized in correlation to the underlying transaction either in the Consolidated Statement of Profit and Loss, other comprehensive income 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. Deferred tax is not recognized for the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future. NOTE 28 TAX EXPENSE AND DEFERRED TAX LIABILITIES (NET) (CONSOLIDATED) (a) Amounts recognised in Profit and Loss ` in Crores 2018-19 2017-18 Current tax expense (A) Current year 3,109.18 3,234.82 Short/(Excess) provision of earlier years (99.19) (305.45) Deferred tax expense (B) Origination and reversal of temporary differences* 1,367.53 1,452.24 Tax expense recognised in the income statement (A+B) 4,377.52 4,381.61 (b) Amounts recognised in other comprehensive income ` in Crores 2018-19 2017-18 Particulars Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Items that will not be reclassified to Profit or Loss Remeasurements of the defined benefit plans (209.79) 73.32 (136.47) 33.07 (11.55) 21.52 Equity instruments through Other Comprehensive income- net change in fair value (71.08) 7.50 (63.58) (11.44) (3.81) (15.25) Equity accounted investees - share of OCI 0.03 — 0.03 0.16 — 0.16 Items that will be reclassified to Profit or Loss — — Exchange differences in translating financial statements of foreign operations 305.44 — 305.44 (61.03) — (61.03)
|85| Chap. 6 – Ind AS 12 — Income Taxes (b) Amounts recognised in other comprehensive income ` in Crores 2018-19 2017-18 Particulars Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Equity accounted investees - share of OCI (1,277.89) — (1,277.89) 508.85 — 508.85 Total (1,253.29) 80.82 (1,172.47) 469.61 (15.36) 454.25 (c) Amounts recognised directly in equity ` in Crores 2018-19 2017-18 Particulars Before tax Tax (expense) benefit Net of tax Before tax Tax (expense) benefit Net of tax Temporary difference arising on account of implementation of Ind AS 115 [Refer Note No. 65] (61.16) 21.37 (39.79) - - - Total (61.16) 21.37 (39.79) - - (d) Reconciliation of effective tax rate Particulars 2018-19 2017-18 % ` in Crores % ` in Crores Profit before tax 12,905.37 14,173.52 Tax using the Company’s domestic tax rate (Current year 34.94% and Previous year 4.61%) 34.94% 4,509.65 34.61% 4,905.17 Tax effect of: Non-deductible tax expenses 1.31% 169.31 0.89% 125.64 Tax losses for which no deferred income tax was recognised 0.44% 56.80 0.47% 66.17 Tax-exempt income -0.20% (26.25) -0.73% (103.93) Interest expense not deductible for tax purposes -0.03% (3.59) -0.03% (3.76) Incremental deduction allowed for research and development costs -0.07% (8.55) -0.16% (23.26) Investment allowance deduction 0.01% 1.06 0.01% 1.80 Proposed dividend -0.29% (37.85) -0.63% (89.85) Undistributed Reserves of Associates 0.33% 42.50 0.14% 20.00 Share of profit of equity accounted investees reported net of tax -1.99% (256.33) -2.38% (336.85) Change in Tax Rate# 0.01% 0.74 0.27% 38.66 Others 0.23% 29.22 0.61% 87.27 Effective Income Tax Rate 34.69% 4,476.71 33.07% 4,687.06 Adjustments recognised in current year in relation to the current tax of prior years — (99.19) - (305.45) Income Tax Expense 4,377.52 4,381.61 # Includes BPRL International BV, Netherlands and BPRL International Singapore Pte Ltd., Subsidiaries operates in a tax jurisdiction with different tax rates. Also includes impact of lower tax rate being applicable on BPRL & BGRL.
|86| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts (e) Movement in deferred tax balances ` in Crores Particulars As at 31/03/2019 Net balance as at 01/04/2018 Recognised in profit or loss Recognised in OCI Recognised directly in equity Net Balance Deferred tax asset (Netted off against Deferred tax liability) Deferred tax liability Deferred tax asset Deferred tax Asset / (Liabilities) Property, Plant and Equipment (7,150.32) (932.39) — — (8,082.71) — (8,082.71) — Intangible assets (39.42) 15.39 — — (24.03) — (24.03) — Derivatives (0.47) (7.77) — — (8.24) — (8.24) — Inventories 53.68 19.44 — — 73.12 73.12 — — Investments 68.24 (30.95) 7.50 — 44.79 44.79 — — Trade and other receivables 51.71 9.39 — — 61.10 61.10 — — Loans and borrowings 0.48 0.46 — — 0.94 0.94 — — Employee benefits 539.01 (24.12) 73.32 — 588.21 588.21 — — Deferred income 30.86 2.19 — 21.37 54.42 54.42 — — Proposed dividend (38.95) 37.85 — — (1.10) — (1.10) — Provisions 125.37 102.91 — — 228.28 228.28 — — Other Current liabilities 428.60 (33.70) — — 394.90 394.90 — — MAT Credit Entitlement* 680.00 (432.00) — — 248.00 248.00 — — Business Loss - 3.57 — — 3.57 — — 3.57 Deferred Tax on Inter-company transaction 64.94 (3.59) — — 61.35 61.35 — — Undistributed ResevesAssociates (371.04) (42.50) — — (413.54) — (413.54) — Other items 34.91 (51.71) — — (16.80) — (17.50) 0.70 Tax Assets/ (Liabilities) (5,522.40) (1,367.53) 80.82 21.37 (6,787.74) 1,755.11 (8,547.12) 4.27
|87| Chap. 6 – Ind AS 12 — Income Taxes (f) Movement in deferred tax balances ` in Crores As at 31/03/2018 Particulars As at 31/03/2019 Net balance as at 01/04/2017 Recognised in profit or loss Recognised in OCI Recognised directly in equity Net Balance Deferred tax asset (Netted off against Deferred tax liability) Deferred tax liability Deferred tax asset Deferred tax Asset / (Liabilities) Property, plant and equipment (5,285.76) (1,864.56) — — (7,150.32) — (7,150.32) — Intangible assets (23.71) (15.71) — — (39.42) — (39.42) — Derivatives (1.26) 0.79 — — (0.47) — (0.47) — Inventories 80.62 (26.94) — — 53.68 53.68 — — Investments 50.55 21.50 (3.81) — 68.24 68.24 — — Trade and other receivables 97.20 (45.49) — — 51.71 51.71 — — Loans and borrowings 18.52 (18.04) — — 0.48 0.48 — — Employee benefits 661.47 (110.91) (11.55) — 539.01 539.01 — — Deferred income — 30.86 — — 30.86 30.86 — — Proposed dividend (128.80) 89.85 — — (38.95) - (38.95) v- — Provisions 85.89 39.48 — — 125.37 125.37 — — Other Current liabilities 453.45 (24.85) — — 428.60 428.60 — — MAT Credit Entitlement* — 680.00 — — 680.00 680.00 — — Deferred Tax on Inter-company transaction 68.41 (3.47) — — 64.94 64.94 — — Undistributed ReservesAssociates (351.04) (20.00) — — (371.04) — (371.04) — Other items 219.66 (184.75) — — 34.91 34.91 — — Tax Assets/ (Liabilities) (4,054.80) (1,452.24) (15.36) — (5,522.40) 2,077.80 (7,600.20) — (g) As at 31st March 2019, undistributed earning of Subsidiaries and equity accounted investees - share of Joint Ventures amounted to ` 5,051.86 Crores (Previous year : ` 4,315.65 Crores) on which corresponding deferred tax liability was not recognised because the Company controls the dividend policy of its Subsidiaries and is able to veto the payment of dividends of its Joint Ventures i.e. the
|88| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Company controls the timing of reversal of the related taxable temporary differences and management is satisfied that they will not reverse in the foreseeable future. (h) Tax losses carried forward Deferred tax assets have not been recognised in respect of the following items, because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom: ` In Crores Particulars As at 31/03/2019 As at 31/03/2019 As at 31/03/2018 As at 31/03/2018 Gross amount Expiry date Gross amount Expiry date Business loss — — 95.56 2018-19 Business loss 162.58 2019-20 156.42 2019-20 Business loss 625.00 2020-21 611.24 2020-21 Business loss 68.45 2021-22 68.16 2021-22 Business loss 29.79 2022-23 29.79 2022-23 Business loss 35.58 2023-24 33.75 2023-24 Business loss 130.55 2024-25 129.02 2024-25 Business loss 165.13 2025-26 164.09 2025-26 Business loss 9.01 2026-27 - - Long-term Capital loss 0.53 2018-19 0.53 2018-19 Note:- The Corporation 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. *MAT credit entitlement of ` 680.00 crores was recognised in FY 2017-18 as the Corporation was liable to pay tax as per provision of Section 115JB of Income Tax Act, 1961 in the FY 2017-18. MAT Credit of ` 432.00 Crores has been utilized during FY 2018-19. Management is confident that it would be in a position to utilise the balance MAT credit entitlement within the period specified under the Income Tax Act, 1961. 5. TATA CHEMICALS LIMITED Notes to accounts disclosure Taxes Tax expense for the year comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the Statement of Profit and Loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to realise the asset or to settle the liability on a net basis. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount, except when the deferred income tax arises from the initial recognition
|89| Chap. 6 – Ind AS 12 — Income Taxes of an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction. In contrast, deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. The carrying value of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised based on the tax rates and tax laws that have been enacted or substantially enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to cover or settle the carrying value of its assets and liabilities. Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction. Current and deferred tax are recognised as an expense or income in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in OCI or directly in equity. Deferred tax assets include a credit for the Minimum Alternate Tax (‘MAT’) paid in accordance with the tax laws, which is likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT asset is recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably, and it is probable that the future economic benefit associated with the asset will be realised. Amendments Appendix C – Uncertainty over Income Tax Treatments: This interpretation, which will be effective from April 1, 2019, clarifies how entities should evaluate and reflect uncertainties over income tax treatments, in particular when assessing the outcome, a tax authority might reach with full knowledge and information if it were to make an examination. The Group is in the process of evaluating the impact of this amendment on its consolidated financial statements. Significant accounting estimates and assumptions Significant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable profits. The amount of total deferred tax assets could change if management estimates of projected future taxable income or if tax regulations undergo a change. Similarly, the identification of temporary differences pertaining to subsidiaries that are expected to reverse in the foreseeable future and the determination of the related deferred income tax liabilities, require the Management to make significant judgments, estimates and assumptions. 6. VEDANTA LIMITED Accounting Policies (N) Taxation Tax expense represents the sum of current tax and deferred tax. Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been enacted or substantively enacted by the reporting date and includes any adjustment to tax payable in respect of previous years.
|90| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Subject to the exceptions below, deferred tax is provided, using the balance sheet method, on all temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes and on carry forward of unused tax credits and unused tax losses: • tax payable on the future remittance of the past earnings of subsidiaries where 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 income tax is not recognised on initial recognition as well as on the impairment of goodwill which is not deductible for tax purposes or on 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 (tax loss); and • deferred tax assets (including MAT credit entitlement) are recognised only to the extent that it is more likely than not that they will be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Tax relating to items recognized outside consolidated statement of profit and loss is recognised outside consolidated statement of profit and loss (either in other comprehensive income or equity). The carrying amount of deferred tax assets (including MAT credit entitlement) is reviewed at each reporting date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority. Deferred tax is provided on temporary differences arising on acquisitions that are categorised as Business Combinations. Deferred tax is recognised at acquisition as part of the assessment of the fair value of assets and liabilities acquired. Subsequently deferred tax is charged or credited in the profit or loss/other comprehensive income as the underlying temporary difference is reversed. Disclosures 34. TAX (a) Tax charge/(credit) recognised in profit or loss (including on exceptional items) (` in Crore) Particulars Year ended March 31, 2019 Year ended March 31, 2018 Current tax: Current tax on profit for the year 2,683 2,828 Charge/(credit) in respect of current tax for earlier years (6) 39 Charge in respect of exceptional items - 51 Total Current Tax (a) 2,677 2,918 Deferred tax: Origination and reversal of temporary differences 1,075 2,380 Charge in respect of deferred tax for earlier years (2) 92 Charge in respect of exceptional items 112 2,023 Total Deferred Tax (b) 1,185 4,495
|91| Chap. 6 – Ind AS 12 — Income Taxes (` in Crore) Particulars Year ended March 31, 2019 Year ended March 31, 2018 Distribution tax on dividend from subsidiaries (c) - (1,536) Net tax expense (a+b+c) 3,862 5,877 Profit before tax 13,560 19,569 Effective income tax rate (%) 28% 30% Tax expense (` in Crore) Particulars Year ended March 31, 2019 Year ended March 31, 2018 Tax effect of exceptional items 112 2,074 Tax expense- others 3,750 3,803 Net tax expense 3,862 5,877 (b) A reconciliation of income tax expense/ (credit) applicable to profit/ (loss) before tax at the Indian statutory income tax rate to recognised income tax expense for the year indicated are as follows. Given the majority of the Group’s operations are located in India, the reconciliation has been carried out from the Indian statutory income tax rate. (` in Crore) Particulars Year ended March 31, 2019 Year ended March 31, 2018 Profit before tax 13,560 19,569 Indian statutory income tax rate 34.944% 34.608% Tax at statutory income tax rate 4,739 6,772 Disallowable expenses 241 153 Non-taxable income (192) (241) FCTR Recycled to P&L (Refer note 33) - 514 Tax holidays and similar exemptions (808) (996) Effect of tax rate differences of subsidiaries operating in other jurisdictions (43) 370 Dividend distribution tax - (1,536) Unrecognised tax assets (net) (73) 271 Change in deferred tax balances due to change in income tax rate from 34.608% to 34.944% - 89 Capital Gains subject to lower tax rate (206) (76) Charge/(credit) in respect of earlier years (8) 131 Other permanent differences 212 426 Total 3,862 5,877 Certain businesses of the Group within India are eligible for specified tax incentives which are included in the table above as tax holidays and similar exemptions. Most of such tax exemptions are relevant for the companies operating in India. These are briefly described as under:
|92| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts The location based exemption In order to boost industrial and economic development in undeveloped regions, provided certain conditions are met, profits of newly established undertakings located in certain areas in India may benefit from a tax holiday. Such a tax holiday works to exempt 100% of the profits for the first five years from the commencement of the tax holiday, and 30% of profits for the subsequent five years. This deduction is available only for units established up to March 31, 2012. However, such undertaking would continue to be subject to the Minimum Alternative tax (‘MAT’). The Group has such types of undertakings at Haridwar and Pantnagar, which are part of Hindustan Zinc Limited (Zinc India). FY 2018 was the last year of eligibility for deduction for Haridwar unit. In the current year, Pantnagar is the only unit eligible for deduction at 30% of taxable profit. The location based exemption: SEZ Operations In order to boost industrial development and exports, provided certain conditions are met, profits of undertaking located in Special Economic Zone (‘SEZ’) may benefit from a tax holiday. Such a tax holiday works to exempt 100% of the profits for the first five years from the commencement of the tax holiday, 50% of profits for five years thereafter and 50% of the profits for further five years provided the amount allowable in respect of deduction is credited to Special Economic Zone Re-Investment Reserve account. However, such undertaking would continue to be subject to the Minimum Alternative tax (‘MAT’). The Group has setup SEZ Operations in its aluminium division of Vedanta Limited (where no benefit has been drawn). Sectoral Benefit - Power Plants and Port Operations To encourage the establishment of infrastructure certain power plants and ports have been offered income tax exemptions of up to 100% of profits and gains for any ten consecutive years within the 15 year period following commencement of operations subject to certain conditions. The Group currently has total operational capacity of 8.4 Giga Watts (GW) of thermal based power generation facilities and wind power capacity of 274 Mega Watts (MW) and port facilities. However, such undertakings would continue to be subject to MAT provisions. The Group has power plants which benefit from such deductions, at various locations of Hindustan Zinc Limited (where such benefits has been drawn), Talwandi Sabo Power Limited, Vedanta Limited and Bharat Aluminium Company Limited (where no benefit has been drawn). The Group operates a zinc refinery in Export Processing Zone, Namibia which has been granted tax exempt status by the Namibian government. In addition, the subsidiaries incorporated in Mauritius are eligible for tax credit to the extent of 80% of the applicable tax rate on foreign source income. The total effect of such tax holidays and exemptions was ` 808 Crore for the year ended March 31, 2019 (March 31, 2018: ` 996 Crore). (c) Deferred tax assets/liabilities The Group has accrued significant amounts of deferred tax. The majority of the deferred tax liability represents accelerated tax relief for the depreciation of property, plant and equipment, the depreciation of mining reserves and the fair value uplifts created on acquisitions, net of losses carried forward by Vedanta Limited (post the re-organisation) and unused tax credits in the form of MAT credits carried forward in Vedanta Limited, Cairn Energy Hydrocarbons Limited and Hindustan Zinc Limited. Significant components of Deferred tax (assets) and liabilities recognized in the consolidated balance sheet are as follows :
|93| Chap. 6 – Ind AS 12 — Income Taxes (` in Crore) Significant components of Deferred tax (assets) and liabilities Opening balance as at April 01, 2018 Charged / (credited) to statement of profit or loss Charged / (credited) to other comprehensive income Charged / (credited) to equity Deferred tax on Acquisition through business combination Exchange difference transferred to translation of foreign operation Closing balance as at March 31, 2019 Property, Plant and Equipment 14,032 1,712 - - - 214 15,958 Voluntary retirement scheme (42) 2 - - - - (40) Employee benefits (97) (2) (25) - - 4 (120) Fair valuation of derivative asset/liability (78) 42 (9) - - - (45) Fair valuation of other asset/ liability 815 (126) (17) - - 8 680 MAT credit entitlement (11,084) 727 37 - - (1) (10,321) Unabsorbed depreciation and tax losses (3,462) (1,098) - - - - (4,560) Dividend distribution tax (338) - - 338 - - - Other temporary differences (462) (72) (12) - - 3 (543) Total (716) 1,185 (26) 338 - 228 1,009 For the year ended March 31, 2018 (` in Crore) Significant components of Deferred tax (assets) and liabilities Opening balance as at April 01, 2017 Charged / (credited) to statement profit or loss Charged / (credited) to other comprehensive income Other Adjustments* Deferred tax on Acquisition through business combination (Refer Note 4(b)) Exchange difference transferred to translation of foreign operation Closing balance as at March 31, 2018 Property, Plant and Equipment 10,535 3,386 - - (21) 132 14,032 Voluntary retirement scheme (48) 6 - - - - (42) Employee benefits (81) (9) (3) - - (4) (97) Fair valuation of derivative asset/liability (34) (9) (35) - - - (78) Fair valuation of other asset/ liability 1,120 (622) (2) - 295 24 815 MAT credit entitlement (12,381) 1,295 (4) - - 6 (11,084) Unabsorbed depreciation and tax losses (3,899) 437 - - - - (3,462) Dividend distribution tax* - - - (338) - - (338) Other temporary differences (620) 11 7 - 129 11 (462) Total (5,408) 4,495 (37) (338) 403 169 (716) * represents dividend distribution tax paid by a subsidiary for which credit has been availed.
|94| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Deferred tax assets and liabilities have been offset where they arise in the same taxing jurisdiction with a legal right to offset but not otherwise. Accordingly the net deferred tax (assets)/liability has been disclosed in the Balance Sheet as follows : (` in Crore) Particulars As at March 31, 2019 As at March 31, 2018 Deferred tax assets (3,475) (4,934) Deferred tax liabilities 4,484 4,218 Net Deferred tax (assets) / Liabilities 1,009 (716) Recognition of deferred tax assets on MAT credit entitlement is based on the respective legal entity’s present estimates and business plans as per which the same is expected to be utilized within the stipulated fifteen year period from the date of origination. Deferred tax assets in the Group have been recognised to the extent there are sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity which are expected to reverse. For certain components of the Group, deferred tax assets on carry forward unused tax losses have been recognised to the extent of deferred tax liabilities on taxable temporary differences available. It is expected that any reversals of the deferred tax liability would be offset against the reversal of the deferred tax asset at respective entities. Unused tax losses / unused tax credit for which no deferred tax asset has been recognized amount to ` 12,114 Crore and ` 3,500 Crore as at March 31, 2019 and March 31, 2018 respectively. As at March 31, 2019 (` in Crore) Unused tax losses/ unused tax credit* Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilised business losses 128 1,094 628 1,527 3,377 Unabsorbed depreciation - - - 8,728 8,728 Unutilised R&D credit - - - 9 9 Total 128 1,094 628 10,264 12,114 *Includes ` 1,799 crore and ` 6,741 crore of business losses and unabsorbed depreciation respectively pursuant to acquisition of ESL (Refer Note 4(a)) As at March 31, 2018 (` in Crore) Unused tax losses/ unused tax credit Within one year Greater than one year, less than five years Greater than five years No expiry date Total Unutilised business losses - - - 1,201 1,201 Unabsorbed depreciation - - - 2,020 2.020 Capital losses 128 142 - - 270 Unutilised R&D credit - - - 9 9 Total 128 142 - 3,230 3,500
|95| Chap. 6 – Ind AS 12 — Income Taxes No deferred tax assets has been recognised on these unused tax losses/ unused tax credit as there is no evidence that sufficient taxable profit will be available in future against which these can be utilised by the respective entities. Additionally, the Group has not recognised MAT credit for one of its components, details of which are as under: (` in Crore) Year of Expiry As at March 31, 2019 As at March 31, 2018 2022 104 104 2023 14 14 2024 52 52 2025 52 52 2026 103 103 2027 63 63 2028 8 8 2029 4 4 Total 400 400 The Group has not recognised any deferred tax liabilities for taxes that would be payable on the Group’s share in unremitted earnings of certain of its subsidiaries because the Group controls when the liability will be incurred and it is probable that the liability will not be incurred in the foreseeable future. The amount of unremitted earnings are ` 32,485 crore and ` 31,488 crore as at March 31, 2019 and March 31, 2018 respectively. (d) Non-current tax assets Non-current tax assets of ` 3,484 crore (March 31, 2018: ` 3,389 crore) mainly represents income tax receivable from Indian tax authorities by Vedanta Limited relating to the refund arising consequent to the Scheme of Amalgamation & Arrangement made effective in August 2013 pursuant to approval by the jurisdiction High Court and receivables relating to matters in tax disputes in Group companies including tax holiday claim. 7. WIPRO LIMITED Income tax comprises current and deferred tax. Income tax expense is recognised in the consolidated statement of profit and loss except to the extent it relates to a business combination, or items directly recognised in equity or in other comprehensive income. Current income tax Current income tax for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities based on the taxable income for the period. The tax rates and tax laws used to compute the current tax amounts are those that are enacted or substantively enacted as at the reporting date and applicable for the period. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised amounts and where it intends either to settle on a net basis, or to realise the asset and liability simultaneously. Deferred income tax Deferred income tax is recognised using the balance sheet approach. Deferred income tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements, except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profits or loss at the time of the transaction.
|96| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Deferred income tax assets are recognised to the extent 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 utilized Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences that is expected to reverse within the tax holiday period, taxable temporary differences associated with investments in subsidiaries, associates and foreign branches where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred income 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 income tax asset to be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period 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. The Company offsets deferred income tax assets and liabilities, where it has a legally enforceable right to offset current tax assets against current tax liabilities, and they relate to taxes levied by the same taxation authority on either the same taxable entity, or on different taxable entities where there is an intention to settle the current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. 27. Income tax Income tax expense has been allocated as follows: Year ended March 31, 2019 March 31, 2018 Income tax expense as per the statement of profit and loss ` 25,243 ` 22,391 Income tax included in Other comprehensive income on: Unrealised gains/ (losses) on investment securities (65) (645) Gains/(losses) on cash flow hedging derivatives 633 (1,448) Defined benefit plan actuarial gains/(losses) 47 255 Total income taxes ` 25,858 ` 20,553 Income tax expense consists of the following: Year ended March 31, 2019 March 31, 2018 Current taxes Domestic ` 17,986 ` 18,500 Foreign 5,663 7,834 23,649 26,334 Deferred taxes Domestic (178) 3 Foreign 1,772 (3,946) 1,594 (3,943) Total income taxes ` 25,243 ` 22,391 Income tax expenses are net of reversal of provisions pertaining to earlier periods, amounting to ` 2,267 and ` 380 for the year ended March 31, 2019 and 2018, respectively.
|97| Chap. 6 – Ind AS 12 — Income Taxes The reconciliation between the provision of income tax and amounts computed by applying the Indian statutory income tax rate to profit before tax is as follows: Year ended March 31, 2019 March 31, 2018 Profit before tax ` 115,422 ` 102,422 Enacted income tax rate in India 34.94% 34.61% Computed expected tax expense 40,328 35,448 Effect of: Income exempt from tax (18,469) (12,878) Basis differences that will reverse during a tax holiday period (796) 167 Income taxed at higher/ (lower) rates (1,002) (111) Reversal of deferred tax liability for past years due to rate reduction* - (1,563) Income taxes related to prior years (2,267) (380) Changes in unrecognised deferred tax assets 3,972 239 Expenses disallowed for tax purpose 3,503 1,431 Others, net (26) 38 Total income taxes expenses ` 25,243 ` 22,391 Effective tax rate 21.87% 21.86% * The “Tax Cuts and Jobs Act,” was signed into law on December 22, 2017 (‘US tax reforms’) which among other things, makes significant changes to the rules applicable to the taxation of corporations, such as changing the corporate tax rate from 35% to 21% rate effective January 1, 2018. For the year ended March 2018, the Company took a positive impact of ` 1,563 on account of re-statement of deferred tax items pursuant to US tax reforms. The components of deferred tax assets and liabilities are as follows: As at March 31, 2019 March 31, 2018 Carry-forward losses * ` 3,149 ` 5,694 Trade payables and other liabilities 3,713 3,107 Allowances for lifetime expected credit losses 4,521 4,499 Minimum alternate tax — 74 Cash flow hedges — 29 Others 318 — 11,701 13,403 Property, plant and equipment (1,807) (2,132) Amortisable goodwill (1,899) (1,810) Intangible assets (2,295) (3,190) Interest on bonds and fair value movement of investments (1,455) (1,712) Cash flow hedges (604) — Contract liabilities (289) (273) Others (1,132) (403) ` (9,481) ` (9,520)
|98| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts As at March 31, 2019 March 31, 2018 Net deferred tax assets / (liabilities) ` 2,220 ` 3,883 Amounts presented in statement of consolidated balance sheet Deferred tax assets ` 5,604 ` 6,908 Deferred tax liabilities ` (3,384) ` (3,025) * Includes deferred tax asset recognised on carry-forward losses pertaining to business combinations. Movement in deferred tax assets and liabilities Movement during the year ended March 31, 2019 As at April 1, 2018 Credit/ (charge) in the consolidated statement of profit and loss Credit/ (charge) in the Other comprehensive income Others (Refer Note 40) As at March 31, 2019 Carry-forward losses 5,694 (2,879) 334 — 3,149 Trade payables and other liabilities 3,107 295 (22) 333 3,713 Allowances for lifetime expected credit losses 4,499 9 2 11 4,521 Minimum alternate tax 74 (74) — — — Property, plant and equipment (2,132) 217 (93) 201 (1,807) Amortisable goodwill (1,810) 16 (105) — (1,899) Intangible assets (3,190) 1,076 (181) — (2,295) Interest on bonds and fair value movement of investments (1,712) 186 71 — (1,455) Cash flow hedges 29 — (633) — (604) Contract liabilities (273) (1) (15) — (289) Others (403) (439) 27 1 (814) Total 3,883 (1,594) (615) 546 2,220 Movement during the year ended March 31, 2018 As at April 1, 2017 Credit/ (charge) in the consolidated statement of profit and loss Credit/ (charge) in the Other comprehensive income On account of business combination Assets held for sale As at March 31, 2018 Carry-forward losses 5,513 133 48 — — 5,694 Trade payables and other liabilities 3,151 243 (246) — (41) 3,107 Allowances for lifetime expected credit losses 2,955 1,564 2 — (22) 4,499 Minimum alternate tax 1,520 (1,446) — — — 74 Property, plant and equipment (4,117) 911 (76) — 1,150 (2,132)
|99| Chap. 6 – Ind AS 12 — Income Taxes Movement during the year ended March 31, 2018 As at April 1, 2017 Credit/ (charge) in the consolidated statement of profit and loss Credit/ (charge) in the Other comprehensive income On account of business combination Assets held for sale As at March 31, 2018 Amortisable goodwill (4,057) 1,522 (53) — 778 (1,810) Intangible assets (4,511) 1,546 (112) (113) — (3,190) Interest on bonds and fair value movement of investments (2,245) (112) 645 — — (1,712) Cash flow hedges (1,419) — 1,448 — — 29 Contract liabilities (183) (35) (9) — (46) (273) Others (87) (383) (75) — 142 (403) Total (3,480) 3,943 1,572 (113) 1,961 3,883 Deferred taxes on unrealised foreign exchange gain / loss relating to cash flow hedges, fair value movements in investments and actuarial gains/losses on defined benefit plans are recognised in other comprehensive income. Deferred tax liability on the intangible assets identified and carry forward losses on acquisitions is recorded by an adjustment to goodwill. Other than these, the change in deferred tax assets and liabilities is primarily recorded in the consolidated statement of profit and loss. In assessing the realisability of deferred tax assets, the Company considers the extent to which it is probable that the deferred tax asset will be realised. The ultimate realisation of deferred tax assets is dependent upon the generation of future taxable profits during the periods in which those temporary differences and tax loss carry- forwards become deductible. The Company considers the expected reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based on this, the Company believes that it is probable that the Company will realise the benefits of these deductible differences. The amount of deferred tax asset considered realisable, however, could be reduced in the near term if the estimates of future taxable income during the carry-forward period are reduced. Deferred tax asset amounting to ` 6,769 and ` 3,756 as at March 31, 2019 and 2018, respectively in respect of unused tax losses have not been recognised by the Company. The tax loss carry-forwards of ` 24,355 and ` 14,510 as at March 31, 2019 and 2018, respectively, relates to certain subsidiaries on which deferred tax asset has not been recognised by the Company, because there is a lack of reasonable certainty that these subsidiaries may generate future taxable profits. Approximately, ` 8,191 and ` 6,223 as at March 31, 2019 and 2018, respectively, of these tax loss carry-forwards is not currently subject to expiration dates. The remaining tax loss carry-forwards of approximately, ` 16,164 and ` 8,287 as at March 31, 2019 and 2018, respectively, expires in various years through fiscal 2038. The Company has recognised deferred tax assets of ` 3,149 and ` 5,694 primarily in respect of carry forward losses of its various subsidiaries as at March 31, 2019 and 2018, respectively. Management’s projections of future taxable income and tax planning strategies support the assumption that it is probable that sufficient taxable income will be available to utilise these deferred tax assets. The Company has calculated its tax liability for current domestic taxes after considering MAT. The excess tax paid under MAT provisions over and above normal tax liability can be carried forward and set-off against future tax liabilities computed under normal tax provisions. The Company was required to pay MAT and accordingly, a deferred tax asset of ` Nil and ` 74 has been recognised in the statement of consolidated balance sheet as of March 31, 2019 and 2018 respectively. A substantial portion of the profits of the Company’s India operations are exempt from Indian income taxes being profits attributable to export operations and profits from units established under the Special Economic Zone Act, 2005 scheme. Units designated in special economic zones providing service on or after April 1,
|100| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts 2005 will be eligible for a deduction of 100 percent of profits or gains derived from the export of services for the first five years from commencement of provision of services and 50 percent of such profits and gains for a further five years. Certain tax benefit are also available for a further five years subject to the unit meeting defit conditions. Profit from certain other undertakings are also eligible for preferential tax treatment. The tax holiday period being currently available to the Company expires in various years through fiscal 2032-33. The expiration period of tax holiday for each unit within a SEZ is determined based on the number of years that have lapsed following year of commencement of production by that unit. The impact of tax holidays has resulted in a decrease of current tax expense of ` 15,390 and ` 11,635 for the years ended March 31, 2019 and 2018, respectively, compared to the effective tax amounts that we estimate we would have been required to pay if these incentives had not been available. The per share effect of these tax incentives for the years ended March 31, 2019 and 2018 was ` 2.56 and ` 1.84, respectively. Deferred income tax liabilities are recognised for all taxable temporary differences except in respect of taxable temporary differences associated with investments in subsidiaries where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Accordingly, deferred income tax liabilities on cumulative earnings of subsidiaries amounting to ` 52,488 and ` 51,432 as of March 31, 2019 and 2018, respectively and branch profit tax @ 15% of the US branch profit have not been recognised. Further, it is not practicable to estimate the amount of the unrecognised deferred tax liabilities for these undistributed earnings. ll
|101| Chap. 7 – Ind AS 16 — Property Plant and Equipment Chapter 7 Ind AS 16 — Property Plant and Equipment 1. ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED Under the previous GAAP (Indian GAAP), Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises the purchase price, borrowing costs (if capitalization criteria are met) and other cost directly attributable to bringing the asset to its working condition for the intended use. The Group has elected to regard previous GAAP carrying values of property, plant and equipment as deemed cost at the date of transition to Ind AS. Property, plant and equipment and Capital work-inprogress are stated at cost. Such cost includes the cost of replacing parts of the 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 Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized 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 consolidated profit and loss as incurred. The present value of the expected cost for the decommissioning of the asset after its use is included in the cost of respective asset if recognition criteria for the provision are met. The Group adjusts exchange differences arising on translation difference/settlement of long term foreign currency monetary items outstanding in the Indian GAAP financial statements for the period ending immediately before the beginning of the first Ind AS financial statements i.e. March 31, 2016 and pertaining to the acquisition of a depreciable asset to the cost of asset and depreciates the same over the remaining useful life of the asset. The depreciation on such foreign exchange difference is recognised from first day of the financial year. Borrowing cost relating to acquisition / construction of Property, Plant and Equipment which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as prescribed under Part C of Schedule II of the Companies Act, 2013 except for the assets mentioned below for which useful 215 lives have been estimated by the management. The Identified component of fixed assets are depreciated over their useful lives and the remaining components are depreciated over the life of the principal assets. 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 estimated the following useful life to provide depreciation on its certain Property, Plant and Equipment based on assessment made by expert and management estimate. Assets Estimated Useful life Leasehold Land Right to Use over the balance period of Concession Agreement and approved Supplementary Concession Agreement (as mentioned in note 1) / Over the period of agreement of 20 years Leasehold Land Development Over the balance period of Concession Agreement and approved Supplementary Concession Agreement by Gujarat Maritime board as applicable.(as mentioned in note 1)
|102| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Assets Estimated Useful life Marine Structure, Dredged Channel, Building RCC Frame Structure 50 years as per concession agreement/over the balance period of concession agreement as applicable Dredging Pipes - Plant and Machinery 15 Years Nylon and Steel coated belt on Conveyor - Plant and Machinery 4 Years and 10 Years respectively Inner Floating and outer floating hose, String of Single Point Mooring - Plant and Machinery 6 Years Fender, Buoy installed at Jetty - Marine Structures 5 - 10 Years Bridges, Drains & Culverts 25 Years as per concession agreement Carpeted Roads – Other than RCC 10 Years Tugs 20 Years An item of property, plant and equipment covered under Concession agreement, sub-concession agreement and supplementary concession agreement, shall be transferred to and shall vest in Grantor (government authorities) at the end of respective concession agreement. In cases, where the Group is expected to receive consideration of residual value of property from grantor at the end of concession period, the residual value of contracted property is considered as the carrying value at the end of concession period based on depreciation rates as per management estimate/ Schedule II of the Companies Act, 2013 and in other cases it is Nil. An item of property, plant and equipment and any significant part initially recognized is derecognized 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. 2. ADANI POWER LIMITED Property, plant and equipment are stated at original cost grossed up with the amount of tax / duty benefits availed, less accumulated depreciation and accumulated impairment losses, if any. Properties in the course of construction are carried at cost, less any recognised impairment losses. All costs, including borrowing costs incurred up to the date the asset is ready for its intended use, is capitalised along with respective asset. 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. In respect of business covered under part A of Schedule II to the Companies Act, 2013, depreciation is recognised based on the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The useful life of property, plant and equipment is considered based on life prescribed in schedule II to the Companies Act, 2013 except in case of power plant assets, where the life has been estimated at 25 years based on technical assessment, taking into account the nature of assets, the estimated usage of the assets, the operating condition of the assets, anticipated technical changes, manufacturer warranties and maintenance support. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. In respect of business covered under part B of Schedule II to the Companies Act, 2013, depreciation is recognised based on the cost of assets (other than freehold land and properties under construction) at the rate as well as methodology notified by the Central Electricity Regulatory Commission (‘’CERC”) (Term and Condition of Tariff) Regulations, 2014.
|103| Chap. 7 – Ind AS 16 — Property Plant and Equipment An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss. 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 any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Subsequent costs are depreciated over the residual life of the respective assets. Disclosure Property, Plant and Equipment and Capital Work-In-Progress Description of Assets Tangible Assets Capital WorkInProgress Land - Leasehold Land - Freehold Buildings Plant and Equipment (Refer note II) Furniture and Fixtures Railway Sidings Computer Office Equipments Vehicles Total I. Cost Balance as at 1st April, 2017 139.01 89.08 1,409.49 58,201.63 23.37 254.89 23.37 44.69 13.29 60,198.82 124.61 Additions 46.23 0.66 66.94 350.72 0.88 - 4.06 0.58 0.49 470.56 224.04 Effect of foreign currency exchange differences - - - 23.15 - - - - - 23.15 - Disposals / transfers - - 0.12 60.64 - - 0.10 0.07 0.32 61.25 228.79 Balance as at 31st March, 2018 185.24 89.74 1,476.31 58,514.86 24.25 254.89 27.33 45.20 13.46 60,631.28 119.86 Additions 6.81 340.68 26.49 75.79 3.52 - 0.76 1.50 3.51 459.06 550.04 Additions on account of acquisition of subsidiaries 122.67 76.21 - 0.30 0.10 - 0.02 0.03 - 199.33 114.94 Effect of foreign currency exchange differences - - - 404.40 - - - - - 404.40 - Disposals / transfers 0.03 - 5.93 28.61 2.32 0.01 0.24 1.82 0.33 39.29 434.76 Balance as at 31st March, 2019 314.69 506.63 1,496.87 58,966.74 25.55 254.88 27.87 44.91 16.64 61,654.78 350.08 II. Accumulated depreciation and amortisation Balance as at 1st April, 2017 2.04 - 90.54 5,842.84 5.53 34.45 9.36 17.13 3.78 6,005.67 Depreciation expense 1.54 - 57.17 2,600.87 2.86 17.69 5.80 8.00 2.00 2,695.93 Disposals / transfers - - - 10.48 - - 0.05 0.03 0.18 10.74 Balance as at 31st March, 2018 3.58 - 147.71 8,433.23 8.39 52.14 15.11 25.10 5.60 8,690.86 Depreciation expense (Refer note (v) below) 1.68 - 62.33 2,649.79 2.87 17.68 4.46 7.44 2.44 2,748.69 Disposals / transfers - - 1.88 4.11 1.30 - 0.17 1.41 0.15 9.02 Balance as at 31st March, 2019 5.26 - 208.16 11,078.91 9.96 69.82 19.40 31.13 7.89 11,430.53
|104| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Description of Assets Tangible Assets Capital WorkInProgress Land - Leasehold Land - Freehold Buildings Plant and Equipment (Refer note II) Furniture and Fixtures Railway Sidings Computer Office Equipments Vehicles Total Carrying amount : As at 1st April, 2017 136.97 89.08 1,318.95 52,358.79 17.84 220.44 14.01 27.56 9.51 54,193.15 124.61 As at 31st March, 2018 181.66 89.74 1,328.60 50,081.63 15.86 202.75 12.22 20.10 7.86 51,940.42 119.86 As at 31st March, 2019 309.43 506.63 1,288.71 47,887.83 15.59 185.06 8.47 13.78 8.75 50,224.25 350.08 3. ALL CARGO LOGISTICS LIMITED Notes to accounts disclosure a) Significant Accounting Policies Freehold land is carried at historical cost. Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises the purchase price and any cost attributable to bringing the asset to its working condition for its intended use. Borrowing cost relating to acquisition of tangible assets which take substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Capital work in progress is stated at cost. When significant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized 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 recognized in Statement of Profit and Loss as incurred. Depreciation Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows: Category Useful lives ( in years ) Building 30 to 60 Plant and machinery 5 to 15 Vessels 8 to 10 Heavy equipments 12 Furniture and fixtures 5 to 10 Vehicles 8 to 10 Computers 3 to 6 Office equipments 5 to 7 Other tangible assets 3 to 7 Leasehold land 30 to 999 Leasehold improvements shorter of the estimated useful life of the asset or the lease term not exceeding 10 years The Group, based on internal assessment and management estimate, depreciates certain items of Heavy Equipments and Office 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. In case of foreign subsidiaries, the tangible assets are depreciated on a straight-line basis, based on expected economic life of the assets estimated on the basis of internal assessment by the management which are lower in some cases than the lives prescribed under Part C of Schedule II of the Act.
|105| Chap. 7 – Ind AS 16 — Property Plant and Equipment 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. b) Significant accounting judgements, estimates and assumptions Property, plant and equipment Property, plant and equipment represent a significant proportion of the asset base of the Group. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Group assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets. 4. BAJAJ AUTO LIMITED A. Property, plant and equipment i) Capital work in progress, property, plant and equipment except land are carried at historical cost of acquisition, construction or manufacturing, as the case may be, less accumulated depreciation and amortisation. Freehold land is carried at cost of acquisition. ii) Cost represents all expenses directly attributable to bringing the asset to its working condition capable of operating in the manner intended. Such cost includes the cost of replacing part of the plant and equipment, 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 the Statement of Profit and Loss as incurred. iii) Costs incurred to manufacture/construct property, plant and equipment are reduced from the total expense under the head ‘Expenses, included in above items, capitalised’ in the Statement of Profit and Loss. iv) Land and buildings acquired/constructed, not intended to be used in the operations of the Company and held for earning long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, are categorised as investment property. v) 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 Statement of Profit and Loss when the asset is derecognised. vi) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at regular intervals and adjusted prospectively, if appropriate. B. Depreciation and amortisation methods, estimated useful lives and residual value (a) Leasehold land Premium on leasehold land is amortised over the period of lease. (b) Other tangible assets i. a. Depreciation is provided on a pro rata basis on straight line method to allocate the cost, net of residual value over the estimated useful lives of the assets. b. Where a significant component (in terms of cost) of an asset has an estimated economic useful life shorter than that of its corresponding asset, the component is depreciated over its shorter life. c. The Company, based on technical assessment made by technical expert and management estimate, depreciates certain items of property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The
|106| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts management believes that these estimated useful lives are realistic and refiect fair approximation of the period over which the assets are likely to be used. ii. Assets which are depreciated over useful life/residual value different than those indicated by Schedule II are as under: Asset class As per Schedule II Useful life Aircraft 20 years 10 years PDC Dies 8 years 3 years iii. Depreciation on additions is being provided on pro rata basis from the month of such additions. iv. Depreciation on assets sold, discarded or demolished during the year is being provided upto the month in which such assets are sold, discarded or demolished. Property, plant and equipment Current year (` In Crore) Particulars Gross block Depreciation Net block As at 1 April 2018 Additions Deductions/ adjustments As at 31 March 2019 As at 1 April 2018 Deductions For the year As at 31 March 2019 As at 31 March 2019 Land freehold 20.09 – 0.12 19.97 – – – – 19.97 Land leasehold 53.04 – 0.65 52.39 – – – – 52.39 Buildings 929.46 3.12 0.48 932.10 287.11 0.08 25.91 312.94 619.16 Waterpumps, reservoirs and mains 17.31 0.05 – 17.36 11.96 – 0.80 12.76 4.60 Plant and machinery 1,381.46 36.71 54.02 1,364.15 966.75 49.49 61.48 978.74 385.41 Computers and IT Equipment 77.59 2.34 2.43 77.50 63.42 2.43 7.28 68.27 9.23 Dies and jigs 739.01 57.39 18.02 778.38 511.60 14.22 57.39 554.77 223.61 Electric installations 73.83 0.46 – 74.29 66.99 – 1.54 68.53 5.76 Factory equipment 376.79 26.31 2.10 401.00 175.63 1.71 25.72 199.64 201.36 Furniture 49.60 1.82 10.59 40.83 30.30 10.59 3.09 22.80 18.03 Office equipment 50.58 5.53 10.85 45.26 41.96 10.85 4.32 35.43 9.83 Electric fittings 31.53 0.28 – 31.81 21.51 – 1.92 23.43 8.38 Vehicles and aircraft 648.85 17.19 304.73 361.31 450.69 284.45 64.11 230.35 130.96 Total 4,449.14 151.20 403.99 4,196.35 2,627.92 373.82 253.56 2,507.66 1,688.69 Capital work-inprogress 11.15 9.48 9.09 11.54 – – – – 11.54 Previous year (` In Crore) Particulars Gross block Depreciation Net block As at 1 April 2017 Additions Deductions/ adjustments As at 31 March 2017 As at 1 April 2017 Deductions For the year As at 31 March 2018 As at 31 March 2018 Land freehold 20.18 – 0.09 20.09 – – – – 20.09 Land leasehold 53.69 – 0.65 53.04 – – – – 53.04 Buildings 877.46 52.35 0.35 929.46 259.25 0.06 27.92 287.11 642.35 Waterpumps, reservoirs and mains 17.18 0.13 – 17.31 11.16 – 0.80 11.96 5.35
|107| Chap. 7 – Ind AS 16 — Property Plant and Equipment (` In Crore) Particulars Gross block Depreciation Net block As at 1 April 2017 Additions Deductions/ adjustments As at 31 March 2017 As at 1 April 2017 Deductions For the year As at 31 March 2018 As at 31 March 2018 Plant and machinery 1,436.41 31.94 86.89 1,381.46 983.15 81.46 65.06 966.75 414.71 Computers and IT Equipment 86.52 3.88 12.81 77.59 66.29 12.81 9.94 63.42 14.17 Dies and jigs 694.97 78.18 34.14 739.01 489.16 32.40 54.84 511.60 227.41 Electric installations 72.98 0.85 – 73.83 64.36 – 2.63 66.99 6.84 Factory equipment 368.99 18.05 10.25 376.79 158.99 9.62 26.26 175.63 201.16 Furniture 47.07 2.66 0.13 49.60 26.50 0.11 3.91 30.30 19.30 Office equipment 49.17 1.70 0.29 50.58 37.27 0.28 4.97 41.96 8.62 Electric fittings 31.38 0.23 0.08 31.53 19.06 0.07 2.52 21.51 10.02 Vehicles and aircraft 643.28 16.86 11.29 648.85 385.48 3.82 69.03 450.69 198.16 Total 4,399.28 206.83 156.97 4,449.14 2,500.67 140.63 267.88 2,627.92 1,821.22 Capital work-in-progress 10.64 10.89 10.38 11.15 – – – – 11.15 5. BHARAT PETROLEUM CORPORATION LIMITED Accounting Policy I. Property, Plant and Equipment are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. II. The initial cost of an asset comprises its purchase price or construction cost (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use). III. Direct expenses incurred during construction period on capital projects are capitalized. Other expenses of the project Group which are allocated to projects costing above a threshold limits are also capitalized. Expenditure incurred on enabling assets are capitalised. IV. Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. V. Expenditure on assets, other than plant and machinery, LPG cylinders and pressure regulators, not exceeding threshold limits are charged to revenue. VI. Spare parts which meet the definition of Property, Plant and Equipment are capitalized as Property, Plant and Equipment in case the unit value of the spare part is above the threshold limits. In other cases, the spare part is inventorized on procurement and charged to Consolidated Statement of Profit and Loss on consumption. VII. An item of Property, Plant and Equipment and any significant part initially recognized separately as part of Property, Plant and Equipment is derecognized upon disposal; or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset is included in the Consolidated Statement of Profit and Loss when the asset is derecognized. VIII. The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end and changes, if any, are accounted in the line with revisions to accounting estimates. IX. In respect of the capital goods common for both GST and non-GST products, the GST input tax credit is taken on the eligible portion based on GST and non-GST product ratio in the month of procurement and the ineligible portion is capitalised. Subsequently, this ratio is reviewed every month as per the
|108| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts GST provisions and the differential GST amount arising due to changes in the ratio is capitalised when beyond the materiality threshold. X. The Group has elected to use the exemption available under Ind AS 101 to continue the carrying value for all of its Property, Plant and Equipment as recognized in the financial statements as at the date of transition to Ind ASs, measured as per the previous GAAP and use that as its deemed cost as at the date of transition (1st April 2015). Depreciation Depreciation on Property, Plant and Equipment are provided on the straight line basis, over the estimated useful lives of assets (after retaining the estimated residual value of upto 5%). These useful lives determined are in line with the useful lives as prescribed in the Schedule II of the Act, except in following cases: I. Plant & Machinery at Retail Outlets (other than Storage tanks and related equipments) are depreciated over a useful life of 15 years based on the technical assessment. II. Computer equipments are depreciated over a period of 3 years and Mobile phones are depreciated over a period of 2 years based on internal assessment. Electronic and electrical equipments provided to management staff under Furniture on Hire scheme are depreciated over a period of 4 years (previously 6 years) as per internal assessment. Other furniture items provided to management staff are depreciated over a period of 6 years as per internal assessment. III. Solar Panels are depreciated over a period of 25 years based on the technical assessment of useful life and applicable warranty conditions. IV. Moulds, used for the manufacturing of the packaging material for Lubricants, are depreciated over a period of 5 years based on technical assessment of useful life V. . Items of Property, Plant and Equipment costing not more than the threshold limits are depreciated at 100 percent in the year of acquisition except LPG Cylinders and Pressure Regulators which are depreciated over a useful life of 15 years based on the technical assessment. VI. In case of BPRL, workstations are depreciated over a period of 5 years. The useful lives are estimated based on the internal assessment. Depreciation is charged on additions/deletions on pro-rata monthly basis including the month of addition/deletion. VII. Components of the main asset that are significant in value and have different useful lives as compared to the main asset are depreciated over their estimated useful life. Useful life of such components has been assessed based on historical experience and internal technical assessment. VIII. Depreciation on spare parts specific to an item of Property, Plant and Equipment is based on life of the related Property, Plant and Equipment. In other cases, the spare parts are depreciated over their estimated useful life based on the technical assessment. IX. Depreciation is charged on additions / deletions on pro-rata monthly basis including the month of addition / deletion Estimates: Estimates of oil and natural gas reserves are used to calculate depreciation, depletion and amortization charges for the Group’s oil and gas properties. The impact of changes in estimated proved reserves is dealt with prospectively by amortizing the remaining carrying value of the asset over the expected future production. Oil and natural gas reserves also have a direct impact on the assessment of the recoverability of asset carrying values reported in the Consolidated Financial Statements. If proved reserves estimates are revised downwards, retained earnings could be affected by changes in depreciation expense or an immediate write-down of the property’s carrying value.
|109| Chap. 7 – Ind AS 16 — Property Plant and Equipment 6. CHAMBAL FERTILISERS AND CHEMICALS LIMITED Accounting Policy Property plant and equipment (“PPE”) PPE are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, including import duties and non- refundable purchase taxes, borrowing costs if recognition criteria are met and any directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent expenditure related to an item of PPE is capitalised only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably. Such cost includes the cost of replacing part of the plant and equipment. When significant parts of plant and equipment are required to be replaced at intervals, the Group 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 the Statement of Profit and Loss as incurred. Items of stores and spares that meet the definition of PPE are capitalized at cost. Otherwise, such items are classified as inventories. Catalysts which are used in commissioning of new plant are capitalized and are amortized based on the estimated useful life as technically assessed. Subsequent issues of catalysts, if any, are treated as inventory. Gains or losses arising from derecognition of the assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized. Depreciation on PPE Depreciation on PPE is calculated using the straight-line method to allocate their cost, net of their residual values, over their useful lives estimated by the management based on technical evaluation which are equal to the useful life prescribed under Schedule II to the Companies Act, 2013, other than the cases as mentioned in para (i) to (vii) below where the useful lives are different from those 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. A major portion of the plant and equipment of the Parent Company has been considered as continuous process plant. S. No. Assets Useful lives (i) Leasehold Land - Leasehold Improvements - Assets under finance lease Amortised over 99 Years Ranging from 3 to 15 Years Ranging from 3 to 9 Years These assets are amortised over the period of respective leases or useful lives of assets whichever is lower. (ii) Plant and equipment Over their useful lives ranging from 1 to 35 years. (iii) Insurance / capital / critical stores and spares Over the remaining useful life of related plant and equipment or useful life of insurance / capital / critical spare part whichever is lower. (iv) Vehicles Depreciated over 5 years. After the expiry of 5 years, the vehicle gets normally replaced. (v) Railway siding 30 years based on technical evaluation that the railway siding is currently in use. (vi) Building (other than factory building) Reinforced Cement Concrete Frame structure Over their useful lives ranging from 10 to 60 years.
|110| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts S. No. Assets Useful lives (vii) PPE of Software business - Computers and accessories – 3 years - Furniture and fixtures – 5 years - Vehicles – 5 years Assets costing below ` 5,000 are depreciated in the year of purchase. The residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate. 7. DLF LIMITED Accounting Policy Recognition and initial measurement Property, plant and equipment at their initial recognition are stated at their cost of acquisition. On transition to Ind AS, the Group had elected to measure all of its property, plant and equipment at the previous GAAP carrying value (deemed cost). The cost comprises purchase price, borrowing cost, if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discount and rebates are deducted in arriving at the purchase price. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that incremental future economic benefits associated with the item will flow to the Group. When significant parts of plant and equipment are required to be replaced at intervals, the Group 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. Any remaining carrying amount of the cost of the previous inspection is derecognised. All other repair and maintenance costs are recognised in statement of profit and loss as incurred. The Group identifies and determines cost of each component/ part of the asset separately, if the component/ part have a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. 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. The periodic unwinding of the discount is recognised in the statement of profit and loss as a finance cost. Property, plant and equipment are subsequently measured at cost net of accumulated depreciation and accumulated impairment losses, if any. Depreciation on property, plant and equipment is provided on a straight-line basis, over the estimated useful lives of the assets as follows:- Asset category* Estimated Useful life in years Estimated useful life as per Schedule II of Companies Act, 2013 Buildings 20 to 60 Plant and machinery 10 to 20 15 Computers And data processing units — Servers and networks 6 6 — Desktops, laptops and other devices 3 3 Furniture and fixtures 5 to 10 10 Office equipment 3 to 20 5 Air conditioners and coolers 5 5 Vehicles 8 to 10 8 to 10 Aircraft and helicopters 20 20 The Group, based on technical assessment made by technical expert and management estimate, depreciates certain items of buildings, plant and machinery, furniture and fixtures, office equipment over estimated
|111| Chap. 7 – Ind AS 16 — Property Plant and Equipment 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. *In case of assets pertaining to Golf and Club operations, the Group based on technical evaluation and management estimate, revised the useful life of the assets during the previous year as below: Asset category* Useful life (in years) Buildings 20 Plant and machinery 10 Furniture and fixtures 5 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 leasehold improvements are depreciated over the period of lease or life of asset whichever is less. The residual values, useful lives and method of depreciation are reviewed at the end of each financial year and adjusted prospectively, if appropriate De-recognition An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition 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 de-recognised. Capital work-in-progress and intangible assets under development Capital work-in-progress and intangible assets under development represents expenditure incurred in respect of capital projects/ intangible assets under development and are carried at cost less accumulated impairment loss, if any. Cost includes land, related acquisition expenses, development/ construction costs, borrowing costs and other direct expenditure. Disclosure 4A. PROPERTY, PLANT AND EQUIPMENT# The changes in the carrying value of property, plant and equipment for the year ended 31 March 2019 are as follows: Description Gross block Accumulated depreciation Net block 1 April 2018 Additions Disposals^/ Adjustments Assets held for Sale 31 March 2019 1 April 2018 Additions Disposals/ Adjustments Assets held for Sale 31 March 2019 31 March 2019 31 March 2018 Land 42,387.62 99.64 — — 42,487.26 2.25 10.24 — — 12.49 42,474.77 42,385.37 Buildings and related equipments 72,532.50 2,684.39 — — 75,216.89 7,256.38 5,780.66 — — 13,037.04 62,179.85 65,276.12 Plant and machinery 50,930.38 1,467.26 3,405.65 — 48,991.99 13,034.85 4,978.95 657.43 — 17,356.37 31,635.62 37,895.53 Furniture and fixtures 5,953.23 833.67 158.48 — 6,628.42 3,567.35 1,026.49 147.23 — 4,446.61 2,181.81 2,385.88 Office equipments 1,553.89 914.26 14.37 — 2,453.78 856.31 506.63 14.42 — 1,348.52 1,105.26 697.58 Vehicles 1,349.96 190.53 370.85 — 1,169.64 412.80 215.90 326.27 — 302.43 867.21 937.16 Leasehold improvements 1,913.15 626.60 — — 2,539.75 1,385.59 104.30 — — 1,489.89 1,049.86 527.56 Helicopter 6,029.54 — — — 6,029.54 1,248.98 415.95 — — 1,664.93 4,364.61 4,780.56 Total 182,650.27 6,816.35 3,949.35 — 185,517.27 27,764.51 13,039.12 1,145.35 — 39,658.28 145,858.99 154,885.76
|112| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts The changes in the carrying value of property, plant and equipment for the year ended 31 March 2018 are as follows: Description Gross block Accumulated depreciation Net block 1 April 2017 Additions Disposals^/ Adjustments Assets held for Sale^^ 31 March 2018 1 April 2017 Additions Disposals^/ Adjustments Assets held for Sale^^ 31 March 2018 31 March 2018 31 March 2017 Land 29,934.47 12,552.79 99.64 — 42,387.62 1.50 0.75 — — 2.25 42,385.37 29,932.97 Buildings and related equipments 96,609.47 36,176.49 60,253.46 — 72,532.50 4,388.71 5,522.91 2,655.24 — 7,256.38 65,276.12 92,220.76 Plant and machinery 113,370.15 64,937.92 127,354.83 22.86 50,930.38 23,011.46 11,033.17 20,987.53 22.25 13,034.85 37,895.53 90,358.69 Furniture and fixtures 6,667.18 1,002.82 1,716.77 — 5,953.23 2,658.18 1,663.05 753.88 — 3,567.35 2,385.88 4,009.00 Office equipments 2,180.42 921.27 1,547.80 — 1,553.89 908.48 370.58 422.75 — 856.31 697.58 1,271.94 Vehicles 2,303.85 419.25 1,373.14 — 1,349.96 837.82 344.39 769.41 — 412.80 937.16 1,466.03 Leasehold improvements 3,609.37 1,357.01 3,053.23 — 1,913.15 1,194.94 398.46 207.81 — 1,385.59 527.56 2,414.43 Helicopter 6,029.54 — — — 6,029.54 833.03 415.95 — — 1,248.98 4,780.56 5,196.51 Total 260,704.45 117,367.55 195,398.87 22.86 182,650.27 33,834.12 19,749.26 25,796.62 22.25 27,764.51 154,885.76 226,870.33 # Property, plant and equipment have been pledged as security for borrowings, refer note 22 & 27 for details. ^ Please refer note 43. ^^ Refer note 57. 7. CAPITAL WORK-IN-PROGRESS The changes in the carrying value of capital work-in-progress for the year ended 31 March 2019 are as follows: Description Gross block 1 April 2018 Additions Disposals/ Adjustments 31 March 2019 Gross amount 13,732.82 2,634.36 6,075.65 10,291.53 The changes in the carrying value of capital work-in-progress for the year ended 31 March 2018 are as follows: Description Gross block 1 April 2017 Additions Disposals/ Adjustments 31 March 2018 Gross amount 15,276.38 10,042.47 11,586.03 13,732.82 (i) Contractual obligations Refer note 48 for disclosure of contractual commitments for the acquisition of property, plant and equipment. (ii) Capitalised borrowing cost For borrowing cost capitalisation disclosure, refer note 33. (iii) Capital work-in-progress Capital work-in progress comprises expenditure for buildings, plant and machinery under course of construction and installation.
|113| Chap. 7 – Ind AS 16 — Property Plant and Equipment (iv) Reassessment of useful lives of assets During the previous year, the Group has based on technical evaluation reassessed the remaining useful life of golf and club assets classified under building, plant and machinery. Due to this reassessment, useful lives have been reduced to 20 years. 8. GVK POWER AND INFRASTRUCTURE LIMITED Accounting Policy Property, plant and equipment including land are stated at cost, net of credit availed in respect of any taxes, duties less accumulated depreciation and accumulated impairment losses. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Financing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for intended use are also included to the extent they relate to the period upto such assets are ready for their intended use. Expenditure directly relating to construction/erection activity is capitalized. Indirect expenditure incurred during construction/erection period is capitalized as part of the construction/erection cost to the extent such expenditure is related to construction or is incidental thereto. Subsequent expenditure incurred on existing property, plant and equipment is added to their book value only if such expenditure increases the future benefits from the existing assets beyond their previously assessed standard of performance Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Freehold land is not depreciated. The Company based on its technical assessment of usage pattern of assets believes that useful life of the following assets is different from those prescribed in Schedule II of the Companies Act, 2013 as given under: Asset Class Useful Life Buildings (other than factory buildings) other than RCC Frame Structure 5 to 30 years Buildings - Temporary Structure 5 years Runways, taxiways and aprons 3 - 30 years Roads 5 - 10 years Vehicles 11 Years Electrical Installations & Equipment 5 - 10 years Plant and Equipment 7 - 10 years Furniture and fittings 10 years Office Equipment - Mobile Phones 2 years Further depreciation on assets covered under definition of “Generating Station” as defined in “Central Electricity Regulatory Commission (Terms and Conditions of Tariff ) Regulations, 2014” is provided under Straight Line Method at the rates and the manner prescribed under the State Regulations if they prescribe rates and the manner of depreciation else on the basis of rates and manner prescribed in Central Regulations. 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. Spare parts, standby equipments and service equipments are recognised in accordance with Ind AS 16 ‘ Property, Plant and Equipment’, when they meet the definition of property, plant and equipment
|114| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts 9. HINDUSTAN CONSTRUCTION COMPANY LIMITED Accounting Policy: Property, Plant and Equipment (Tangible Assets Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will how to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognised in the Statement of Profit and Loss. Capital work-in-progress Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure Depreciation / amortisation Depreciation is provided for property, plant and equipment so as to expense the cost less residual value over their estimated useful lives on a straight line basis, except Building and sheds which is depreciated using WDV method. Intangible assets are amortised from the date they are available for use, over their estimated useful lives. The estimated useful lives are as mentioned below: Asset category Useful life (in years) Basis of determination of useful lives^ Building and sheds 3 to 60 Based on technical evaluation by management's expert. Plant and equipment 2 to 14 Based on technical evaluation by management's expert. Furniture and fixtures 10 Assessed to be in line with Schedule II to the Act. Heavy Vehicles 3 to 12 Based on technical evaluation by management's expert. Light Vehicles 8 to 10 Assessed to be in line with Schedule II to the Act. Office equipment 5 Assessed to be in line with Schedule II to the Act. Helicopter / Aircraft 12 to18 Based on technical evaluation by management's expert. Speed boat 13 Assessed to be in line with Schedule II to the Act. Computers 3 Assessed to be in line with Schedule II to the Act. Intangible (Computer software) 3 to 5 Assessed to be in line with Schedule II to the Act. ^ Useful lives of asset classes determined by management estimate, which are generally lower than those prescribed under Schedule II to the Act are supported by internal technical assessment of useful lives. The estimated useful life and residual values are reviewed at each financial year end and the effect of any change in the estimates of useful life/residual value is accounted on prospective basis. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Depreciation on additions is provided on a pro-rata basis, from the date on which asset is ready to use. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are accounted in the Statement of Profit and Loss under Other income and Other expenses
|115| Chap. 7 – Ind AS 16 — Property Plant and Equipment 10. INTERGLOBE AVIATION LIMITED (INDIGO) Recognition and measurement Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses, if any. The cost of an item of property, plant and equipment comprises: (a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; (b) any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate component of property, plant and equipment. The Group has recognised major inspection costs relating to engine and airframe overhauls and other heavy maintenance as separate components for owned aircraft and aircraft taken on finance lease (“Leased Aircraft”). The cost of improvements to aircraft taken on operating lease, if recognition criteria are met, have been capitalized and disclosed separately as leasehold improvement - aircraft. 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 property, plant and equipment (calculated as the difference between the net disposal proceeds and the carrying amount of property, plant and equipment) is included in the Consolidated Statement of Profit and Loss when property, plant and equipment is derecognised. The carrying amount of any component accounted as a separate component is derecognised, when replaced or when the property, plant and equipment to which the component relates gets derecognised. Subsequent costs Subsequent costs are included in the asset’s carrying amount or recognised as separate assets, as appropriate, only when it is probable that the future economic benefits associated with expenditure will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to Consolidated Statement of Profit and Loss at the time of incurrence. Depreciation Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values and is charged to Standalone Statement of Profit and Loss. Depreciation on property, plant and equipment, except aircraft (including aircraft taken on finance lease) and spare engine, rotables and nonaircraft equipment, leasehold improvements - aircraft and leasehold improvements, is provided on written down value method at the rates and in the manner provided in Schedule II of the Companies Act, 2013. Depreciation on aircraft (including aircraft taken on finance lease) and spare engine, rotables and non-aircraft equipment is provided on the straight-line method at the rates and in the manner prescribed in Schedule II of the Companies Act, 2013. Major inspection costs relating to engine and airframe overhauls and other heavy maintenance are identified as separate components for owned and Leased Aircraft and are depreciated over the expected lives between major overhauls and remaining useful life of the aircraft, whichever is lower. Depreciation has been charged based on the following useful lives: Asset Head Useful life in years Asset Head Useful life in years Owned and Leased Aircraft and owned spare engines - Aircraft and engine components including spare engines 20 - Major inspection and overhaul costs 2 - 12
|116| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Asset Head Useful life in years Asset Head Useful life in years Rotables and non-aircraft equipment 20 Furniture and fixtures 10 Computer - End user devices 3 - Server and networks 6 Office equipment - Office equipment 5 - Electrical equipment 10 Ground support equipment 15 Vehicles (including ground support vehicles) - Motor vehicles (ground support equipment) 8 - Motor vehicles 8 Expenditure incurred towards leasehold improvements - aircraft (other than asset recognised towards redelivery of aircraft taken on operating lease) is depreciated on a straight-line basis over the remaining period of the lease of the aircraft or 5 years, whichever is lower. Leasehold improvements - aircraft representing cost of redelivery of aircraft is amortised on a straight-line basis over the initial period of lease for which the asset is expected to be used. Leasehold improvements are depreciated on a straight-line basis over the period of the initial lease term or their estimated useful life, whichever is lower. The useful lives have been determined based on internal evaluation done by management and are in line with the estimated useful lives, to the extent prescribed by the Schedule II of the Companies Act, 2013, in order to reflect the technological obsolescence and actual usage of the asset. The residual values are not more than 5% of the original cost of the asset. Depreciation is calculated on a pro-rata basis for assets purchased/sold during the period. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed by management at each reporting date and adjusted prospectively, as appropriate. Capital work-in-progress Cost of property, plant and equipment not ready for use as at the reporting date are disclosed as capital work in progress. 11. KANSAI NEROLAC PAINTS LIMITED a) Significant Accounting Policies Property, Plant and Equipment Recognition and Measurement An item of Property, Plant and Equipment that qualifies for recognition as an asset is initially measured at its cost and then carried at the cost less accumulated depreciation and accumulated impairment, if any. The cost of an item of Property, Plant and Equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts, rebates and any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is included in the cost of an item of Property, Plant and Equipment.
|117| Chap. 7 – Ind AS 16 — Property Plant and Equipment The cost of a self-constructed item of Property, Plant and Equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located. Tangible Property, Plant and Equipment under construction are disclosed as Capital Work-in-progress. Item of Capital Work-in-progress is carried at cost using the principles of valuation of item of Property, Plant and Equipment till it is ready for use, the manner in which intended by management. Subsequent Measurement Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group. Depreciation The depreciable amount of an item of Property, Plant and Equipment is allocated on a systematic basis over its useful life. The Group provides depreciation on the straight line method. The Group believes that straight line method reflects the pattern in which the asset’s future economic benefits are expected to be consumed by the Group. The depreciation method is reviewed at least at each financial year- end and, if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset, the method is changed to reflect the changed pattern. Such a change is accounted for as a change in an accounting estimate in accordance with Ind AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is generally recognised in the Consolidated Statement of Profit and Loss unless it is included in the carrying amount of another asset. The residual value and the useful life of an asset is reviewed at least at each financial year-end and, if expectations differ from previous estimates, the change(s) is accounted for as a change in an accounting estimate in accordance with Ind AS 8 – Accounting Policies, Changes in Accounting Estimates and Errors. The estimated useful lives for the current and comparable periods are as follows: Asset Class Useful Lives (in years) – as per Companies Act, 2013 Useful Lives (in years) – as estimated by the Company Buildings 30-60 20-60 Plant and Equipments 10-20 10-25 Furniture and Fixtures 10 10-15 Vehicles 10 5-10 Office Equipments 5 5-10 Computers 3-6 3-6 Assets for Scientific Research 10-20 20 Assets on Operating Lease NA 5 Tools and Appliances 10 4 Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which asset is ready for use (disposed of). Leasehold lands and leasehold improvements are amortised over the primary period of lease. Disposal The carrying amount of an item of property, plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in Consolidated Statement of Profit and Loss when the item is derecognised.
|118| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts b) Key sources of Estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below: Useful lives of Property, Plant and Equipment As described in Note 1(3) (c), the Group reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment. c) Notes to Accounts Note 2: Property, Plant and Equipment Description Gross Block Accumulated Depreciation Net Block As at 1st April, 2018 Additions on Acquisition of Subsidiaries Additions Deductions Translation Difference As at 31st March, 2019 As at 1st April, 2018 Additions on Acquisition of Subsidiaries Additions Deductions Translation Difference As at 31st March, 2019 As at 31st March, 2019 Freehold Land 68.94 21.78 — — (0.03) 90.69 — — — — — — 90.69 (42.59) (—) (26.35) (—) (—) (68.94) (—) (—) (—) (—) (—) (—) (68.94) Leasehold Land 46.77 10.48 2.33 — — 59.58 3.12 0.06 0.69 — — 3.87 55.71 (46.77) (—) (—) (—) (—) (46.77) (2.64) (—) (0.48) (—) (—) (3.12) (43.65) Buildings 453.81 24.36 150.80 — (0.66) 628.31 108.97 5.59 17.14 — (0.09) 131.61 496.70 (436.78) (—) (17.03) (—) (—) (453.81) (95.58) (—) (13.39) (—) (—) (108.97) (344.84) Plant and Equipments 773.98 39.93 162.43 0.47 (0.47) 975.40 303.50 24.51 42.39 0.38 (0.18) 369.84 605.56 (704.12) (—) (69.86) (—) (—) (773.98) (270.98) (—) (32.52) (—) (—) (303.50) (470.48) Furniture and Fixtures 17.34 1.67 1.90 — (0.02) 20.89 13.68 1.09 0.87 — — 15.64 5.25 (16.12) (—) (1.23) (0.01) (—) (17.34) (12.99) (—) (0.70) (0.01) (—) (13.68) (3.66) Vehicles 2.94 6.14 0.27 1.06 (0.07) 8.22 1.82 2.25 1.21 0.60 (0.03) 4.65 3.57 (2.53) (—) (0.45) (0.04) (—) (2.94) (1.57) (—) (0.26) (0.01) (—) (1.82) (1.12) Office Equipments 11.13 2.11 1.46 0.02 (0.01) 14.67 9.24 1.32 0.82 0.02 (0.01) 11.35 3.32 (10.47) (—) (0.66) (—) (—) (11.13) (8.54) (—) (0.70) (—) (—) (9.24) (1.89) Computers 39.44 0.95 4.98 — (0.05) 45.32 30.14 0.77 5.20 — (0.01) 36.10 9.22 (36.95) (—) (4.06) (1.57) (—) (39.44) (27.71) (—) (4.00) (1.57) (—) (30.14) (9.30) Assets for Scientific Research* 26.25 — 46.67 — — 72.92 12.21 — 2.32 — — 14.53 58.39 (25.70) (—) (0.55) (—) (—) (26.25) (11.03) (—) (1.18) (—) (—) (12.21) (14.04) Assets on Operating Lease (Refer Note 2.6) 279.22 — 30.33 — — 309.55 207.12 — 27.21 — — 234.33 75.22 (246.35) (—) (32.87) (—) (—) (279.22) (183.71) (—) (23.41) (—) (—) (207.12) (72.10) Colourant Machine 0.70 — 1.47 1.65 0.01 0.53 — — — — — — 0.53 (0.48) (—) (1.49) (1.27) (—) (0.70) (—) (—) (—) (—) (—) (—) (0.70) Tools and Appliances — 0.69 0.01 0.22 (0.01) 0.47 — 0.04 0.11 0.03 (0.01) 0.11 0.36 (—) (—) (—) (—) (—) (—) (—) (—) (—) (—) (—) (—) (—) total tangible assets 1720.52 108.12 402.65 3.42 (1.32) 2226.55 689.80 35.63 97.96 1.03 (0.33) 822.03 1404.52 (1568.86) (—) (154.55) (2.89) (—) (1720.52) (614.75) (—) (76.64) (1.59) (—) (689.80) (1030.72) *Net block includes Buildings ` 25.88 Crores (2017-2018 ` 0.34 Crores), Plant and Equipment ` 26.83 Crores (2017-2018 ` 13.50 Crores) and Furniture and Fixtures ` 5.67 Crores (2017-2018 ` 0.20 Crores).
|119| Chap. 7 – Ind AS 16 — Property Plant and Equipment 2.1. Figures in the brackets are the corresponding figures in respect of the previous year. 2.2. Term loans from Banks (Refer Note 18) is secured by hypothecation of Vehicles in above consist net block amounting to ` 3.07 Crores (2017-18 ` Nil). 2.3. Borrowings from Banks (Refer Note 21) is secured by Pledge of assets in above amount consist of net block for Freehold Land- ` 21.78 Crores (2017-18 ` Nil), Buildings ` 9.16 Crores (2017-18 ` Nil). 2.4. Nil amount of borrowing costs is capitalised during the financial year. 2.5. Nil amount of impairment loss is recognised during the financial year. 2.6. The Group has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as follows: (a) (i) The gross carrying amount and the accumulated depreciation at the Consolidated Balance Sheet date are ` 309.55 Crores (2017-2018 ` 279.22 Crores) and ` 234.33 Crores (2017-2018 ` 207.12 Crores) respectively. (ii) Depreciation recognised in the Consolidated Statement of Profit and Loss is ` 27.21 Crores (2017- 2018 ` 23.41 Crores). (b) The Group enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered as ` Nil. Accordingly, the disclosure of the present value of minimum lease payments receivable at the Balance Sheet date is not made. 12. KEWAL KIRAN CLOTHING LIMITED Notes to accounts disclosure a) Significant Accounting Policies Property, Plant and Equipment (PPE): The initial cost of PPE comprises its purchase price, including import duties and non -refundable purchase taxes, and any directly attributable costs of bringing an asset to working condition and location for its intended use, including relevant borrowing costs and any expected costs of decommissioning. Following initial recognition, items of PPE are carried at its cost less accumulated depreciation and accumulated impairment losses, if any. Gross carrying amount of all PPE are measured using cost model. Expenditure incurred after the PPE have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit and Loss in the period in which the costs are incurred. PPE are eliminated from financial statement either on disposal or when retired from active use. Capital work-in-progress comprises of cost incurred on property, plant and equipment under construction / acquisition that are not yet ready for their intended use at the Balance Sheet Date If significant parts of an item of PPE have different useful lives, then they are accounted for as separate items (major components) of PPE. Material items such as spare parts, stand-by equipment and service equipment are classified as PPE when they meet the definition of PPE as specified in Ind AS 16 – Property, Plant and Equipment. Expenditure during construction period: Expenditure / Income during construction period (including financing cost related to borrowed funds for construction or acquisition of qualifying PPE) is included under Capital Work-in-Progress and the same is allocated to the respective PPE on the completion of their construction. Advances given towards acquisition or construction of PPE outstanding at each reporting date are disclosed as Capital Advances under “Other non-current Assets”. Property, plant and equipment are eliminated from financial statement either on disposal or when retired from active use. Assets held for disposal are stated at net realizable value. Losses arising in case of
|120| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts retirement of property, plant and equipment and gains or losses arising from disposal of property, plant and equipment are recognized in the statement of profit and loss in the year of occurrence. Depreciation: Depreciation on the property, plant and equipment (other than freehold land and capital work in progress) is provided on a straight-line method (SLM) over their useful lives which is in consonance of useful life mentioned in Schedule II to the Act except certain class of assets specified in table below, based on internal assessment estimated by the management of The Group, where the useful life is lower than as mentioned in said Schedule II. Assets where useful life is lower than useful life mentioned in Schedule II Assets Estimated useful life depreciated on SLM basis Furniture & fittings at retail stores 5 years Second hand factory / office building (RCC frame structure) 30 years Second hand factory / office building (other than RCC frame structure) 5 years Individual assets whose cost does not exceed ` 5,000 Fully depreciated in the year of purchase The range of useful lives of the property, plant and equipment not covered in table above and are in accordance with Schedule II are as follows: Particulars Useful life Factory buildings 30 years Other buildings (RCC structure) 60 years Other Plant and Machinery 15 years Computers 3 years Furniture & fittings 10 years Motor vehicles 8 years Windmill 22 years In case of assets purchased, sold or discarded during the year, depreciation on such assets is calculated on pro-rata basis from the date of such addition or as the case may be, up to the date on which such asset has been sold or discarded. Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted prospectively. Leasehold lands are amortized over the period of lease or useful life whichever is lower. Buildings constructed on leasehold land are depreciated over its useful life which matches with the useful life mentioned in Schedule II. In cases where building is having useful life greater than the period of lease (where the Parent Company does not have right of renewal), the same is amortized over the lease period of land. b) Key Accounting Estimates and Judgments Property, Plant and Equipment: Property, Plant and Equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset’s expected useful life. The useful lives of the Company’s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand of the product or service output of the asset.
|121| Chap. 7 – Ind AS 16 — Property Plant and Equipment 13. OIL AND NATURAL GAS CORPORATION LIMITED Accounting Policy The Group (except for ONGC Videsh Ltd where due to change in functional currency, this exemption is not available as per para D7AA of Ind AS 101) has elected to continue with the carrying value of all of its Property Plant and Equipment recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and use that carrying value as its deemed cost as of the transition date except adjustment related to decommissioning liabilities. Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the Balance Sheet at cost less accumulated depreciation and impairment losses, if any. Freehold land and land under perpetual lease are not depreciated. Property, Plant and Equipment (PPE) in the course of construction for production, supply or administrative purposes are carried at cost, less any recognised impairment loss. The cost of an asset comprises its purchase price or its construction cost (net of applicable tax credits), any cost directly attributable to bring the asset into the location and condition necessary for it to be capable of operating in the manner intended by the Management and decommissioning cost as per note 3.17. It includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting policy. Such properties are classified to the appropriate categories of PPE when completed and ready for intended use. Parts of an item of PPE having different useful lives and significant value and subsequent expenditure on Property, Plant and Equipment arising on account of capital improvement or other factors are accounted for as separate components. Expenditure on dry docking of rigs and vessels are accounted for as component of relevant assets. The estimated useful lives, residual values and depreciation method are reviewed on an annual basis and if necessary, changes in estimates are accounted for prospectively. Depreciation on subsequent expenditure on PPE arising on account of capital improvements or other factors is provided for prospectively over the remaining useful life. Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets. Depreciation on additions/deletions to PPE during the year is provided for on a pro-rata basis with reference to the date of additions/ deletions except low value items not exceeding 5,000/- which are fully depreciated at the time of addition of Assets related to operations in India and items not exceeding US$ 100 which are fully depreciated at the time of addition of Assets related to operations outside India. An item of PPE is de-recognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the consolidated Statement of Profit and Loss. Depreciation of these PPE commences when the assets are ready for their intended use. The Group account for their depreciation on following basis:- Depreciation- PPE of Exploration & Production (E&P) (other than freehold land, Oil and Gas Assets and properties under construction) Depreciation is provided on the cost of PPE of E&P operations less their residual values, using the written down value method (except for components of dry docking capitalised) over the useful life of PPE as stated in the Schedule II to the Companies Act, 2013 or based on technical assessment by the Company. In case of PPE pertaining to overseas blocks where the license period is less than the useful life of PPE, the company writes off the PPE in the financial year in which the license is expired or the block is surrendered, if no future economic benefits from the PPE are expected. Estimated useful lives of these assets are as under:
|122| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Description Useful life in years Building & Bunk Houses 3 to 60 Plant &Machinery 2 to 40 Furniture and Fixtures 3 to 15 Vehicles 5 to 20 Office Equipment 2 to 20 Depreciation on refurbished/revamped PPE which are capitalized separately is provided for over the reassessed useful life which is not more than the life specified in Schedule II to the Companies Act, 2013. Depreciation on expenditure on dry docking of rigs and vessels capitalized as component of relevant rig / vessels is charged over the dry dock period on straight line basis. Depreciation on PPE including support equipment and facilities used for exploratory/development drilling is initially capitalised as part of drilling cost and expensed/depleted as per Note 3.15. Depreciation on equipment/ assets deployed for survey activities is charged to the Consolidated Statement of Profit and Loss. Depreciation- PPE of Refining & Marketing, Crude oil Transportation business (other than freehold land and properties under construction) Depreciation is provided on the cost of PPE less their residual values of asset associated with Refinery, Petrochemical, Crude oil Transportation, using Straight Line Method, over the useful life as specified in Schedule II to the Companies Act, 2013, except in case of certain components of the Plant and Equipment whose useful lives are determined based on technical evaluation. Useful lives are as follows:- Asset categories Useful life in years Buildings 1-60 Plant & Machinery 2-40 Furniture 3-10 Office equipment 3-15 Vehicles 4-8 In respect of refining & marketing business, the useful lives of following assets are based on internal technical assessment: Asset categories Useful life in years Plant and Machinery relating to Retail Outlets (other than Storage tanks and related equipment) 15 years Cavern Structure 60 years LPG cylinders & regulators (excluding cylinders held for sale) 15 years Expenditure on overhaul and repairs on account of planned shutdown which are of significant value (5% of the value of particular assets) is capitalized as component of relevant items of PPE and is depreciated over the period till next shutdown on straight line basis. Catalyst whose life is more than one year is capitalised as property, plant and equipment and depreciated over the guaranteed useful life as specified by the supplier when the catalyst is put to use.
|123| Chap. 7 – Ind AS 16 — Property Plant and Equipment Disclosure: 7. Other Property, Plant and Equipment Carrying amount of: Year ended March 31, 2019 Year ended March 31, 2018 Freehold Land 17,741.73 16,615.84 Perpetual Leasehold Land (Refer note 7.3.1 and 7.3.2) 5,639.29 5,418.30 Building & bunk Houses (Refer note 7.2.3) 101,974.84 93,589.85 Plant & equipment (Refer note 7.2.4, 7.3.3 and 7.3.4) 559,638.15 539,250.93 Furniture & fixtures 4,972.47 5,645.69 Office equipments 20,010.09 16,028.77 Vehicles, Ships & Boats 5,031.96 4,791.18 Total 715,008.53 681,340.56 Cost or deemed cost Freehold Land Perpetual Leasehold Land Buildings & Bunk Houses Plant & Equipments Furniture & Fixtures Office Equipments Vehicles, Ships & Boats Total Balance at April 1, 2017 14,377.48 5,414.89 106,613.16 659,568.24 10,614.34 29,807.78 8,314.89 834,710.80 Additions (Refer Note 7.3.5) 2,241.34 0.20 11,459.81 49,604.82 4,411.19 5,193.19 2,509.06 75,419.62 Disposals/adjustments (2.99) — (752.19) (8,727.65) (870.91) (376.22) (68.50) (10,798.46) Effect of exchange difference (Refer note 7.4.1) — 3.21 14.52 37.88 2.69 7.86 (7.92) 58.24 Balance at March 31, 2018 16,615.84 5,418.30 117,335.31 700,483.30 14,157.31 34,632.61 10,747.53 899,390.20 Additions (Refer Note 7.3.5) 1,126.12 27.02 15,844.00 67,251.93 1,641.83 9,451.90 2,795.70 98,138.51 Disposals/adjustments (0.50) — 647.04 3,324.15 120.33 (1,055.68) 215.78 3,251.12 Effect of exchange difference (Refer note 7.4.1) 0.27 196.36 759.79 2,915.11 365.18 485.00 47.48 4,769.19 Balance at March 31, 2019 17,741.73 5,641.69 134,586.14 773,974.48 16,284.65 43,513.83 13,806.49 1,005,549.01 Accumulated depreciation and impairment Freehold Land Perpetual Leasehold Land Buildings & Bunk Houses Plant & Equipments Furniture & Fixtures Office Equipments Vehicles, Ships & Boats Total Balance at April 1, 2017 — — 17,272.65 123,965.87 7,369.14 14,676.00 3,978.00 167,261.68 Depreciation expense — — 7,243.49 45,236.75 1,901.53 4,241.72 2,016.39 60,639.88 Impairment loss recognised in profit or loss — Eliminated on disposal/adjustments of assets — — (762.56) (7,954.48) (766.12) (323.12) (52.81) (9,859.09) Impairment loss recognized back during the year — — (18.20) (73.31) - - - (91.51) Effect of exchange difference (Refer Note 7.4.1) — — 6.71 38.38 3.97 8.27 14.72 72.05 Balance at March 31, 2018 — — 23,745.46 161,232.37 8,511.62 18,603.84 5,956.35 218,049.64 Depreciation expense — — 7,842.21 45,641.00 2,092.56 5,384.39 2,729.92 63,690.08 Impairment loss recognised in profit or loss — 2.40 — 17.48 2.72 2.79 2.63 28.02 Eliminated on disposal/adjustments of assets — — 728.35 4,860.65 347.66 (933.27) 40.22 5,043.61
|124| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Accumulated depreciation and impairment Freehold Land Perpetual Leasehold Land Buildings & Bunk Houses Plant & Equipments Furniture & Fixtures Office Equipments Vehicles, Ships & Boats Total Impairment loss recognized back during the year — — 1.40 (2.97) 15.23 5.20 15.49 34.35 Effect of exchange difference (Refer Note 7.4.1) — — 293.88 2,587.80 342.39 440.79 29.92 3,694.78 Balance at March 31, 2019 — 2.40 32,611.30 214,336.33 11,312.18 23,503.74 8,774.53 290,540.48 7.1 Except for subsidiary OVL, the Group has elected to continue with the carrying value of its other Property Plant and Equipment (PPE) recognised as of April 1, 2015 (transition date) measured as per the Previous GAAP and used that carrying value as its deemed cost as on the transition date as per Para D7AA of Ind AS 101 except for decommissioning provisions included in the cost of other PPE which has been adjusted in terms of para D21 of Ind AS 101 ‘First –time Adoption of Indian Accounting Standards’. The deemed cost is further reduced for the unamortised transaction cost on borrowings as at April 1, 2015, which were earlier capitalised with PPE. 7.2 In respect of the Company, 7.2.1 Land includes 3 numbers (Previous year 4) of lands in respect of certain units amounting to ` 58.17 million (Previous year ` 58.21 million) for which execution of conveyance deeds is in process. 7.2.2 Registration of title deeds in respect of 6 numbers (Previous year 6) buildings is pending execution having carrying amount of ` 54.34 million (Previous year ` 57.65 million). 7.2.3 Building includes cost of undivided interest in land. 7.2.4 Includes ` 2,846.59 million transferred from CWIP on commencement of commercial production during the year, in respect of Tapti A series plant and machinery which were part of the assets of PMT Joint Operation (JO) and surrendered by the JO to the Government of India (GoI) as the terms of JO agreement. These assets were transferred by GoI to the company free of cost as its nominee in 2016- 17. The company had assessed the fair value of said plant and machinery at ` 2,846.59 million based on the valuation report by a third party agency, which has been accounted as plant and machinery with a corresponding liability as deferred government grant in 2016-17. While transferring these assets to the Company, the decommissioning obligation was delinked by Government of India. The same will be considered as and when decided by the Government of India. However decommissioning provision towards 40% share being partner in the JO is being carried in the financial statements. 7.3 In respect of subsidiary MRPL, 7.3.1 Leasehold lands are considered as finance lease in nature as the ownership will be transferred to the company at the end of the lease period. These leasehold lands are not depreciated. 7.3.2 Land under lease includes land value ` 265.06 million (As at March 31, 2018 ` 36.56 million), which is in possession of the company towards which formal lease deeds are yet to be executed. 7.3.3 Plant and equipment includes ` 39.15 million (As at March 31, 2018: ` 39.15 million) being Company’s share of an asset jointly owned with another company. 7.3.4 External commercial borrowing are secured by first pari passu charge over immovable property, plant and equipment and first ranking pari passu charge over movable property, plant and equipment (including but not limited to plant & machinery, spares, tools, furniture, fixtures, vehicles and all other movable property, plant & equipment) both present and future. Working capital borrowings from consortium banks are secured by way of first ranking pari passu charge by way of hypothecation of Company’s stocks of Raw material, Finished goods, stock-in-process, stores, spares, components, trade receivables, outstanding money receivables, claims, bills, contract, engagements, securities both present and future and further secured by second ranking pari passu charge over companies movable and immovable property (all property, plant & equipment) both present and future.. [Refer Note 28.10].
|125| Chap. 7 – Ind AS 16 — Property Plant and Equipment 7.3.5 Additions to property, plant and equipment includes ` 2,147.04 million (for the year ended March 31, 2018 ` 100.71 million) in relation to foreign exchange differences as borrowing costs capitalized. Asset class wise addition details are disclosed below: Year For the year ended March 31, 2019 For the year ended March 31, 2018 Asset class Exchange differences Exchange differences Buildings 13.97 0.28 Plant and equipment 2,133.07 100.43 Total 2,147.04 100.71 7.3.6 During the previous year, the Company has prepaid unutilised External Commercial Borrowings of ` 2,959.33 million. Consequent to the same, the Borrowing costs (net of interest income) and exchange rate variation amounting to ` 25.57 million (net) has been adjusted against the Property plant and equipment during the previous year. 7.3.7 The Company is eligible for certain economic benefits such as exemptions from entry tax, custom duty, etc. on import/local purchase of capital goods in earlier years. The Company has accounted benefits received for custom duty and entry tax on purchase of property, plant and equipment as government grants. In the current year, the Company has adjusted the cost of property, plant and equipment as at April 1, 2017 and credited deferred government grant amounting to ` 3,618.21 million. The deferred government grant is amortised over the remaining useful life of the property, plant and equipment. (Refer Note 32). 7.3.8 The Subsidiary OMPL, external commercial borrowings and non-convertible debentures (NCD) are secured by first pari passu charge over immovable property, plant and equipment. Working capital loan from a bank is secured by way of hypothecation of Company’s current assets both present and future. Working capital lenders are to be secured by second ranking pari passu charge over Company’s immovable property, plant and equipment both present and future on receipt of No Objection Certificate from NCD holders. 7.4 In respect of subsidiary, OVL, 7.4.1 Subsidiary company ONGC Videsh Limited has determined its functional currency as US$. Adjustments includes net effect of exchange differences of ` 1,074.41 million (as at March 31, 2018: ` (13.81) million) on account of translation of the financial statements of the ONGC Videsh Limited from US$ to Group’s presentation currency “`”. Refer note 3.21 and 5.1 (a). 7.4.2 The Company carries on its business in respect of exploration, development and production of hydrocarbons under agreements with host governments directly or in consortium with other partners (Consortium). Several of these agreements, governing Company’s activities in the fields/projects, provide that the title to the property, plant and equipment and other ancillary installations shall pass to host Government or its nominated entities either upon acquisition/first use of such assets or upon 100% recovery of such costs through allocation of “Cost Oil” and “Cost Gas” or upon relinquishment of the relevant contract areas or termination of the relevant agreement. However, as per the terms of the agreements, the Consortium and/or operator have custody of all such assets and is entitled to use, free of charge all such assets for petroleum operations throughout the term of the respective agreements. The Consortium also has the custody and maintenance of such assets and bears all risks of accidental loss and damage and all costs necessary to maintain such assets and to replace or repair such damage or loss. Under the circumstances, such assets are kept in the records of the Company during the currency of the respective agreements. 7.4.3 ONGC Videsh Atlantic Inc. (OVAI) uses straight line method to charge depreciation on its Property, Plant and Equipment. The total depreciation charge of OVAI for the year ended March 31, 2019