|376| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts The following reflects the profit and share data used in the basic and diluted EPS computation: 31st March, 2019 31st March, 2018 Earnings per share has been computed as under: Profit for the year as per statement of Profit and Loss (` in Crores): 902.54 806.26 Weighted average number of equity shares outstanding for basic EPS 624,084,486 624,084,486 Add: Weighted average number of potential equity shares on account of employee stock option schemes 8,972,124 7,999,253 Weighted average number of equity shares outstanding for dilutive EPS 633,056,610 632,083,739 Earnings Per Share (`) - Basic (Face value of ` 10 per share) 14.46 12.92 Earnings Per Share (`) - Diluted (Face value of ` 10 per share) 14.26 12.76 3. BAJAJ AUTO LIMITED Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Earnings considered in ascertaining the Company’s earnings per share are the net profitt for the period. The weighted average number of equity shares outstanding during the period and all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding without a corresponding change in resources. For calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares. Disclosures Earnings Per Share (EPS) For the year ended 31 March Particulars 2019 2018 a. Profit for the year (` In Crore) 4,927.61 4,218.95 Weighted average number of shares outstanding during the year (Nos) 289,367,020 289,367,020 b. Earnings per share (Basic and Diluted) ` 170.3 145.8 Face value per share ` 10.0 10.0 4. BHARAT PETROLEUM CORPORATION LIMITED Basic earnings per share is calculated by dividing the profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares. 5. CHAMBAL FERTILISERS AND CHEMICALS LIMITED Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders of the Company by the weighted average number of the equity shares outstanding during the year.
|377| Chap. 16 – Ind AS 33 — Earning Per Share For the purpose of calculating diluted earnings per share, net profit or loss for the year attributable to equity shareholders of the Company and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares. Disclosure EARNINGS PER SHARE (EPS) (i) Continuing Operations Net Profit as per Statement of Profit and Loss 54527.50 47649.37 Calculation of Weighted Average Number of Equity Shares - Number of Equity Shares at the beginning of the Year 416207852 416207852 - Total Equity Shares Outstanding at the end of the Year 416207852 416207852 - Weighted Average Number of Equity Shares Outstanding during the Year 416207852 416207852 Basic and Diluted Earnings Per Share (in `) 13.10 11.45 Nominal value of equity shares (in `) 10.00 10.00 (ii) Discontinued Operations Net Profit as per Statement of Profit and Loss — 367.72 Calculation of Weighted Average number of Equity Shares - Number of Equity Shares at the beginning of the Year 416207852 416207852 - Total Equity Shares Outstanding at the end of the Year 416207852 416207852 - Weighted average number of Equity Shares Outstanding during the Year 416207852 416207852 Basic and Diluted Earnings Per Share (in `) — 0.09 Nominal value of Equity Shares (in `) 10.00 10.00 (iii) Continuing and Discontinued Operations Net Profit as per Statement of Profit and Loss 54527.50 48017.09 Calculation of Weighted Average Number of Equity Shares - Number of Equity Shares at the beginning of the Year 416207852 416207852 - Total Equity Shares Outstanding at the end of the Year 416207852 416207852 - Weighted Average Number of Equity Shares Outstanding during the Year 416207852 416207852 Basic and Diluted Earnings Per Share (in `) 13.10 11.54 Nominal value of Equity Shares (in `) 10.00 10.00 Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 "Earnings per Share" : Particulars 2018-19 2017-18 Basic EPS Profit after tax as per accounts (crore) A 8905.13 7369.86 Weighted average number of equity shares outstanding B 1,40,20,87,033 1,40,06,13,951 Basic EPS (`) A/B 63.51 52.62 Diluted EPS Profit after tax as per accounts (crore) A 8905.13 7369.86 Weighted average number of equity shares outstanding B 1,40,20,87,033 1,40,06,13,951
|378| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Particulars 2018-19 2017-18 Add: Weighted average number of potential equity shares on account of employee stock options C 24,57,688 35,69,417 Weighted average number of equity shares outsta nding for diluted EPS D=B+C 1,40,45,44,721 1,40,41,8 3,368 Diluted EPS (`) A/D 63.40 52.49 Face value per share (`) 2.00 2.00 The following potential equity shares are anti-dilutive equity shares are anti-dilutive and are therefore excluded from the weighted average number of equity shares for the purpose of diluted earnings per share. Particulars 2018-19 2017-18 Weight average number of potential equity shares on account of conversion of foreign currency convertable bonds 95,20,455 95,20,455 6. DLF LIMITED Accounting Policy Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events as bonus issue, bonus element in a rights issue, share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares Disclosure Earnings per Share (“EPS”) is determined based on the net profit attributable to the shareholders of the Company. Basic earnings per share is computed using the weighted-average number of shares outstanding during the year. Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity shareholders (after adjusting for interest on the compulsorily convertible debentures) by the weighted-average number of equity shares outstanding during the year plus the weighted number of equity shares that would be issued on conversion of all the dilutive potential equity share into equity shares. (` in lakhs) Particulars 31 March 2019 31 March 2018 Net profit attributable to equity shareholders Net profit for the year 68,758.21 36,520.37 Nominal value of equity share (`) 2.00 2.00 Total number of equity shares outstanding at the beginning of the year 1,784,067,028 1,784,003,090 Total number of equity shares outstanding at the end of the year 2,207,221,948 1,784,067,028 Weighted average number of equity shares 1,787,766,903 1,784,047,170 Basic EPS (`) 3.85 2.05 Nominal value of equity share (`) 2.00 2.00 Weighted-average number of equity shares used to compute diluted earnings per share 2,199,983,465 1,890,008,529 Diluted EPS (`) 3.13 1.93
|379| Chap. 16 – Ind AS 33 — Earning Per Share Particulars 31 March 2019 31 March 2018 Weighted-average number of equity shares for basic EPS 1,787,766,903 1,784,047,170 Effect of dilution: Share options - 407,817 Compulsorily Convertible Debentures 377,694,122 96,757,413 Warrants 34,522,440 8,796,129 Weighted-average number of equity shares adjusted for the effect of dilution* 2,199,983,465 1,890,008,529 * There have been no other transactions involving equity shares or potential equity shares between the reporting date and the date of authorisation of these financial statements. 7. GODREJ PROPERTIES LIMITED Basic earnings per share is computed by dividing the profit / (loss) after tax attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax attributable to the equity shareholders as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares. 8. GVK POWER AND INFRASTRUCTURE LIMITED Earnings Per Share Basic earnings per share is calculated by dividing the net profit or loss for the financial year attributable to equity shareholders by the weighted average number of equity shares outstanding during the financial year. Diluted earnings per share is calculated by dividing the net profit or loss for the financial year attributable to equity shareholders by the weighted average number of equity shares outstanding including equity shares which would have been issued on the conversion of all dilutive potential equity shares unless they are considered anti-dilutive in nature 9. HINDUSTAN CONSTRUCTION COMPANY LIMITED Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the parent by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources. Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the parent and weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares) 10. HINDUSTAN PETROLEUM CORPORATION LIMITED Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any, and attributable taxes) by the weighted average number of equity shares outstanding during the period.
|380| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares 11. HINDUSTAN UNILEVER LIMITED Basic earnings per share is computed by dividing the net profit for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources. For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares. Disclosures EARNINGS PER EQUITY SHARE A. From Continuing operations Year ended 31st March, 2019 Year ended 31st March, 2018 Earnings Per Share has been computed as under: Profit for the year attributable to the owners of the Company 6,054 5,212 Weighted average number of equity shares outstanding 2,16,46,29,982 2,16,44,57,493 Earnings Per Share (`) - Basic (Face value of ` 1 per share) ` 27.97 ` 24.08 Add: Weighted average number of potential equity shares on account of employee stock options/performance share schemes 3,59,472 4,66,552 Weighted average number of Equity shares (including dilutive shares) outstanding 2,16,49,89,454 2,16,49,24,045 Earnings Per Share (`) - Diluted (Face value of ` 1 per share) ` 27.96 ` 24.07 (All amounts in ` crores, unless otherwise stated) B. From Discountinued operations Year ended 31st March, 2019 Year ended 31st March, 2018 Earnings Per Share has been computed as under: Profit/(Loss) for the year attributable to the owners of the Company 0 2 Weighted average number of equity shares outstanding 2,16,46,29,982 2,16,44,57,493 Earnings Per Share (`) - Basic (Face value of ` 1 per share) ` 0.00 ` 0.01 Add: Weighted average number of potential equity shares on account of employee stock options/performance share schemes 3,59,472 4,66,552 Weighted average number of Equity shares (including dilutive shares) outstanding 2,16,49,89,454 2,16,49,24,045 Earnings Per Share (`) - Diluted (Face value of ` 1 per share) ` 0.00 ` 0.01 12. MAHINDRA HOLIDAYS & RESORTS INDIA LIMITED Basic earnings per share is computed by dividing the profit after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax as adjusted for dividend, interest and other charges to expense or income relating to the
|381| Chap. 16 – Ind AS 33 — Earning Per Share dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. 13. MAHINDRA LIFESPACE DEVELOPERS LIMITED Accounting Policy Basic earnings per share is computed by dividing the profit/ (Loss) after tax by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for treasury shares, bonus issue and bonus element in a right issue to existing shareholders, share split and reverse share split. Diluted earnings per share is computed by diving the profit/ (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for arriving the basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares including the treasury shares held by the Group to satisfy the exercise of the share options by the employees. Disclosure 29 Earnings per Share Particulars For the year ended 31 March, 2019 For the year ended 31 March, 2018 ` ` Basic Earnings per share 11.41 10.48 Diluted earnings per share 11.39 10.46 Basic earnings per share The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: (` in lakh) Particulars For the year ended 31 March, 2019 For the year ended 31 March, 2018 ` ` Profit for the year 5,859.45 5,312.39 Less: Preference dividend and tax thereon - - Profits used in the calculation of basic earnings per share 5,859.45 5,312.39 Weighted average number of equity shares 51,339,730 50,692,093 Diluted earnings per share The diluted earnings per share has been computed by dividing the net profit after tax available for equity shareholders by the weighted average number of equity shares, after giving dilutive effect of the outstanding stock options for the respective periods.
|382| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts (` in lakh) Particulars For the year ended 31 March, 2019 For the year ended 31 March, 2018 ` ` Profit for the year used in the calculation of diluted earnings per share 5,859.45 5,312.39 The weighted average number of ordinary shares for the purpose of diluted earnings per share reconciles to the weighted average number of ordinary shares used in the calculation of basic earnings per share as follows: Particulars For the year ended 31 March, 2019 For the year ended 31 March, 2018 ` ` Weighted average number of equity shares used in the calculation of Basic EPS 51,339,730 50,692,093 Add: Options outstanding under Employee Stock Option Plan 89,828 109,768 Weighted average number of equity shares used in the calculation of Diluted EPS 51,429,558 50,801,861 14. SPICEJET LIMITED Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating Diluted EPS, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. Disclosures Earnings per share (‘EPS’) a. Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders by the weighted average number of Equity shares outstanding during the year. b. Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares. The following reflects the income and share data used in the basic and diluted EPS computations: Number of equity shares outstanding at the beginning of the year 599,450,183 599,450,183 Number of equity shares issued 268,173 - Number of equity shares outstanding at the end of the year 599,718,356 599,450,183 Weighted average number of shares a. Basic 599,489,123 599,450,183 Effect of dilution: 863,872 158,448 b. Diluted 600,352,995 599,608,631 Profit/ (Loss) for the year (3,024.11) 5,572.06 Earnings per share : -- Basic earnings/ (loss) per share (`) (5.04) 9.30 -- Diluted earnings/ (loss) per share (`) (5.04) 9.29 Nominal value per share (`) 10.00 10.00
|383| Chap. 16 – Ind AS 33 — Earning Per Share c. In view of the uncertainties prevailing at the relevant time with regard to the proposed allotment of certain securities in the previous periods, it was not possible to determine the effect thereof, if any, on Diluted Earnings per share calculation for such periods. Considering the current status of the matter as described further in note 46, no further effect on this matter to the dilutive earnings per share calculations has been considered. 15. VEDANTA LIMITED Accounting Policies (T) Earnings per share The Group presents basic and diluted earnings per share (“EPS”) data for its equity shares. Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares. Disclosures 35. EARNINGS PER EQUITY SHARE (EPS) (` in Crore except otherwise stated) Particulars Year ended March 31, 2019 Year ended March 31, 2018 Profit after tax and exceptional items attributable to equity share holders for Basic and Diluted EPS A 7,065 10,342 Profit after tax but before exceptional items attributable to equity share holders for Basic and Diluted EPS B 6,857 9,561 Computation of weighted average number of shares (in Crore) Weighted average number of ordinary shares outstanding during the year excluding shares acquired for ESOP for basic earnings per share C 370.55 365.41 Effect of dilution : Potential ordinary shares relating to share option awards 1.59 0.77 Adjusted weighted average number of shares of the Company in issue D 372.14 366.18 Basic earnings per equity share after exceptional items (`) A / C 19.07 28.30 Diluted earnings per equity share after exceptional items (`) A / D 1 8.98 28.24 Basic earnings per equity share before exceptional items (`) B / C 18.50 26.17 Diluted earnings per equity share before exceptional items (`) B / D 18.43 26.11 Nominal Value per Share (`) 1/- 1/- 16. VODAFONE IDEA LIMITED Accounting policies u) Earnings per share The earnings considered in ascertaining the Group’s Earnings per share (EPS) is the net profit after tax. EPS is disclosed on basic and diluted basis. Basic EPS is computed by dividing the profit / loss for the period attributable to the shareholders of the Company by the weighted average number of shares outstanding during the period. The diluted EPS is calculated on the same basis as basic EPS, after adjusting
|384| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts for the effects of potential dilutive equity shares unless the effect of the potential dilutive equity shares is anti-dilutive. Disclosures 58 BASIC & DILUTED EARNINGS/(LOSS) PER SHARE Particulars For the year ended March 31, 2019 For the year ended March 31, 2018 Nominal value of per equity share (`) 10/- 10/- Loss after Tax(1) (` Mn) (146,286) (41,966) Loss attributable to equity shareholders(1) (` Mn) (146,286) (41,966) Weighted average number of equity shares outstanding during the year 6,913,183,650 3,692,852,565 Basic earnings per share (`) (21.16) (11.36) Dilutive effect on weighted average number of equity shares outstanding during the year * * Weighted average number of diluted equity shares 6,913,183,650 3,692,852,565 Diluted earnings per share (`) (21.16) (11.36) (1) Adjusted for Group’s share of additional depreciation debited to other equity by joint venture pursuant to scheme. * As the Group has incurred loss during the year, dilutive effect on weighted average number of shares would have an anti-dilutive impact and hence, not considered. 17. WESTLIFE DEVELOPMENT LIMITED Basic earnings per share is calculated by dividing net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, except where the results would be anti-dilutive. Disclosures Earnings per share: Particulars As at March 31, 2019 As at March 31, 2018 Profit after tax (` million) 403.02 128.57 Weighted average number of equity shares for computing EPS Shares for basic earnings per share 155,599,240 155,578,963 Add : potential diluted equity shares on account of ESOP 125,024 279,975 Shares for diluted earnings per share 155,724,264 155,858,938 Earnings per share Nominal Value per share 2 2 Basic (in `) 2.59 0.83 Diluted (in `) 2.58 0.83 ll
|385| Chap. 17 – – Ind AS 36 — Impairment of Assets Chapter 17 Ind AS 36 – Impairment of Assets 1. ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED Impairment of non-financial assets The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year. Impairment losses including impairment on inventories, are recognised in the statement of profit and loss. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. Goodwill is tested for impairment annually as at every year end and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Intangible assets with indefinite useful lives are tested for impairment annually as at year end at the CGU level, as appropriate, and when circumstances indicate that the carrying value may be impaired. 2. ADITYA BIRLA FASHION AND RETAIL LIMITED (XI) Impairment of non-financial assets The carrying amount of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal/ external factors. An impairment loss, if any, is charged to the Statement of
|386| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Profit and Loss in the year in which an asset is identified as impaired. An asset’s recoverable amount is higher of an asset’s or cash-generating unit’s (CGUs) fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rates, that reflects current market assessment of the time value of money and the risks specific to the asset for which estimates of future cash flows have not been adjusted. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss. Reversal of impairment losses recognised in the prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased. Goodwill is tested for impairment annually as at March 31 and when circumstances indicate the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU or group of CGUs to which the goodwill relates. When the recoverable amount of the CGU is less than its carrying amount, an impairment loss is recognised. Disclosure IMPAIRMENT TESTING OF GOODWILL Goodwill acquired through various business combinations has been allocated to the three Cash-Generating Units (CGUs) as below: 1. Pantaloons CGU 2. Madura Fashion & Lifestyle CGU 3. Forever 21 CGU Pantaloons CGU During the year ended March 31, 2013, the Company acquired the Pantaloons format business (‘Pantaloons business’) from Future Retail Limited (“FRL”), which consisted of fashion retail business operating under the brand name “Pantaloons”. Pantaloons is a leading large format fashion retailer engaged in retailing of apparel and accessories. The business thus acquired is Pantaloons CGU. Madura Fashion & Lifestyle CGU Pursuant to the Composite Scheme of Arrangement amongst the Company, Aditya Birla Nuvo Limited (“ABNL”), Madura Garments Lifestyle Retail Company Limited (“MGLRCL”) and their respective shareholders and creditors (“Composite Scheme”), Madura Undertaking of ABNL and MGL Retail Undertaking of MGLRCL (“demerged undertakings”) were transferred to the Company on a going concern basis, w.e.f. April 1, 2015. Madura Undertaking is a leading premium branded apparel player in India with brands like Louis Philippe, Van Heusen, Allen Solly and Peter England, and MGL Retail Undertaking is primarily engaged in promoting lifestyle brands and having licences to retail various international brands like Armani Collezioni, Hugo Boss, Versace Collection and many more under one roof, ‘The Collective’. Both these divisions jointly comprise the Madura Fashion & Lifestyle CGU. Forever 21 CGU Effective July 1, 2016, the Company has acquired exclusive franchise rights for the Indian market of Forever 21 business comprising of operating retail stores in India for the sale of clothing, artificial jewellery, accessories and related merchandise under the brand name “Forever 21” (“F21”), and is considered as a separate CGU. For the purpose of Segment reporting, Madura Fashion & Lifestyle and Forever 21 CGUs have been aggregated to form one segment in accordance with Ind AS 108. Carrying amounts of Goodwill allocated to each of the CGUs are as below:
|387| Chap. 17 – – Ind AS 36 — Impairment of Assets ` in Crores As at March 31, 2019 As at March 31, 2018 Pantaloons CGU 1,167.55 1,167.55 Madura Fashion & Lifestyle CGU 627.67 627.67 Forever 21 CGU 64.38 64.38 Total 1,859.60 1,859.60 Disclosures with respect to Goodwill allocated to the CGUs which is significant with the entity’s total carrying amount of goodwill Value in use calculation of CGUs The recoverable amount of the CGUs as at March 31, 2019, has been determined based on value in use using cash flow projections from financial budgets approved by senior management covering a three year period. The pre-tax discount rate is applied to cash flow projections for impairment testing during the current year. The Company has estimated Free Cash Flow for the year ending March 31, 2022, and then have considered that as a base to arrive at the value of perpetuity beyond March 31, 2022, based on the H model. It was concluded that the fair value less costs of disposal does not exceed the value in use. As a result of this analysis, the management did not identify impairment for these CGUs. Key assumptions used for value in use calculations Discount rates: Discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value of money and individual risks of the underlying assets that have not been incorporated in the cash flow estimates. The discount rate calculation of each CGU is derived from its Weighted Average Cost of Capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on investment by the Company’s investors. The cost of debt is based on the interest-bearing borrowings of the Company. Adjustments to the discount rate are made to factor in the specific amount and timing of the future tax flows in order to reflect a pre-tax discount rate. As at March 31, 2019 As at March 31, 2018 Pantaloons CGU Madura Fashion & Lifestyle CGU Forever 21 CGU Pantaloons CGU Madura Fashion & Lifestyle CGU Forever 21 CGU Pre-tax discount rate 15.24% 17.92% 19.37% 15.22% 18.94% 14.25% Growth rate estimates: Rates are based on published industry research. Growth rate is based on the Company’s projection of business and growth of the industry in which the Company is operating. The growth rate is in line with the long-term growth rate of the industry except for Forever 21 CGU. The growth rate of Forever 21 CGU considers the Company‘s plan to launch new stores/ expected same store growth and change in merchandise. 3. BHARAT PETROLEUM CORPORATION LIMITED Impairment of Non-financial Assets I Non-financial assets other than inventories, deferred tax assets and non-current assets classified as held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. The recoverable amount is the higher of the asset’s or Cash-Generating Units’ (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets.
|388| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts II Goodwill arising from business combination is allocated to CGUs or Groups of CGUs that are expected to benefit from the synergies of the combination. III When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment of financial assets In accordance with Ind-AS 109, the Group applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortized cost and debt instruments measured at FVOCI. Loss allowances on receivables from customers and LPG consumers are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date. In respect of other financial assets such as debt securities and bank balances, the loss allowance is measured at 12 month ECL only if there is no significant deterioration in the credit risk since initial recognition of the asset or asset is determined to have a low credit risk at the reporting date. 4. BHARTI AIRTEL LIMITED Accounting policy 2.9 Impairment of non-financial assets a. Goodwill Goodwill is tested for impairment, at-least annually and whenever circumstances indicate that it may be impaired. For the purpose of impairment testing, the goodwill is allocated to a cash-generating-unit (‘CGU’) or group of CGUs (‘CGUs’), which are expected to benefit from the acquisition-related synergies and represent the lowest level within the entity at which the goodwill is monitored for internal management purposes, within an operating segment. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying value of a CGU / CGUs including the goodwill, exceeds the estimated recoverable amount of the CGU / CGUs. The recoverable amount of a CGU / CGUs is the higher of its fair value less costs to sell and its value in use. Value-in use is the present value of future cash flows expected to be derived from the CGU / CGUs. The total impairment loss of a CGU / CGUs is allocated first to reduce the carrying value of Goodwill allocated to that CGU / CGUs and then to the other assets of that CGU / CGUs - on pro-rata basis of the carrying value of each asset. b. PPE, intangible assets and intangible assets under development PPE (including CWIP) and intangible assets with definite lives, are reviewed for impairment, whenever events or changes in circumstances indicate that their carrying values may not be recoverable. Intangible assets under development is tested for impairment, at-least annually and whenever circumstances indicate that it may be impaired. For the purpose of impairment testing, the recoverable amount (that is, higher of the fair value less costs to sell and the value-in-use) is determined on an individual asset basis, unless the asset does not generate cash flows that are largely independent of those from other assets, in which case the recoverable amount is determined at the CGU level to which the said asset belongs. If such individual assets or CGU are considered to be impaired, the impairment to be recognised in the statement of profit and loss is measured by the amount by which the carrying value of the asset / CGU exceeds their estimated recoverable amount and allocated on pro-rata basis. Reversal of impairment losses Impairment loss in respect of goodwill is not reversed. Other impairment losses are reversed in the statement of profit and loss and the carrying value is increased to its revised recoverable amount provided that this
|389| Chap. 17 – – Ind AS 36 — Impairment of Assets amount does not exceed the carrying value that would have been determined had no impairment loss been recognised for the said asset / CGU in previous years. Disclosure 7. Impairment review of goodwill The Group tests goodwill for impairment annually on December 31. During the year ended March 31, 2019, the testing did not result in any impairment in the carrying amount of goodwill. The carrying amount of goodwill is attributable to the following CGU / group of CGUs: As of March 31, 2019 As of March 31, 2018 Mobile Services - Africa 285,327 281,182 Mobile Services - India 40,413 40,413 Airtel business 6,478 6,131 Homes Services 344 344 332,562 328,070 The recoverable amount of the above CGUs are based on value-in-use, which is determined based on ten year business plans that have been approved by management for internal purposes. The said planning horizon reflects the assumptions for short-to-mid term market developments. The cash flows beyond the planning period are extrapolated using appropriate terminal growth rates. The terminal growth rates used do not exceed the long term average growth rates of the respective industry and country in which the entity operates and are consistent with the internal / external sources of information. The key assumptions used in value-in-use calculations are as follows: • EBITDA margins • Discount rate • Growth rates • Capital expenditures EBITDA margins: The margins have been estimated based on past experience after considering incremental revenue arising out of adoption of valued added and data services from the existing and new customers, though these benefits are partially offset by decline in tariffs in competitive scenario. Margins will be positively impacted from the efficiencies and cost rationalisation / others initiatives driven by the Group; whereas, factors like higher churn, increased cost of operations may impact the margins negatively. Discount rate: Discount rate reflects the current market assessment of the risks specific to a CGU or group of CGUs and estimated based on the weighted average cost of capital for respective CGU / group of CGUs. Pretax discount rates used are 21.61% / 13.39% for Mobile Services – Africa / other CGUs respectively, for the year ended March 31, 2019 and 24.15% / 12.75% for Mobile Services – Africa / other CGUs respectively, for the year ended March 31, 2018 Growth rates: The growth rates used are in line with the longterm average growth rates of the respective industry and country in which the entity operates and are consistent with the internal / external sources of information. The average growth rates used in extrapolating cash flows beyond the planning period ranged from 3.5% to 4.0% for March 31, 2019 and ranged from 3.5% to 4.0% for March 31, 2018. Capital expenditures: The cash flow forecasts of capital expenditure are based on past experience after considering the additional capital expenditure required for roll out of incremental coverage and capacity requirements and to provide enhanced voice and data services. Sensitivity to changes in assumptions With regard to the assessment of value-in-use for Homes Services and Airtel Business, no reasonably possible change in any of the above key assumptions would have caused the carrying amount of these units to exceed their recoverable amount.
|390| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts In case of Mobile Services - India CGU group, the recoverable amount exceeds the carrying amount by ` 3,38,681 (22.99%) as of December 31, 2018 and ` 3,49,671 (25.53%) as of December 31, 2017. An increase of 1.76% (December 31, 2017: 1.78%) in pre-tax discount rate shall equate the recoverable amount with the carrying amount of the Mobile Services – India CGU group as of December 31, 2018. Further, no reasonably possible change in the terminal growth rate beyond the planning horizon would cause the carrying amount to exceed the recoverable amount. In case of Mobile Services - Africa CGU group, the recoverable amount exceeds the carrying amount by ` 1,53,714 (39.39%) as of December 31, 2018 and ` 54,087 (15.20%) as of December 31, 2017. An increase of 5.67% (December 31, 2017: 2.37%) in pre-tax discount rate shall equate the recoverable amount with the carrying amount of the Mobile Services – Africa CGU group as of December 31, 2018. Further, no reasonably possible change in the terminal growth rate beyond the planning horizon would cause the carrying amount to exceed the recoverable amount. Mobile Services Africa Segment During March 2019, due to revision in organisational structure of Mobile Services Africa segment, goodwill has been re-allocated to the following clusters based on implicit goodwill approach as an alternative to the relative fair value method. Implicit goodwill has been determined as the difference between value in use and carrying value of each segment relative to the total implicit goodwill. This is similar to the approach used for deriving goodwill using a purchase price allocation method in the case of a business combination. At the date of implementation of the new organisational structure; goodwill allocated to the three clusters is given in the table below: As of March 31, 2019 Nigeria 104,063 East Africa 135,536 Rest of Africa 50,414 290,013 On reallocation of goodwill, impairment tests by Mobile Services Africa Segment for the above clusters did not result in any impairment. 5. DLF LIMITED Impairment of non-financial assets At each reporting date, the Group assesses whether there is any indication based on internal/ external factors, that an asset may be impaired. If any such indication exists, the Group estimates the recoverable amount of the asset. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount and the impairment loss is recognised in the statement of profit and loss. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecast calculation. These budgets and forecast calculations generally cover a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.
|391| Chap. 17 – – Ind AS 36 — Impairment of Assets If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss. Impairment of financial assets In accordance with Ind AS 109, the Group applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets. ECL is the weighted average of difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Group is required to consider: • All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets. • Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. Trade receivables In respect of trade receivables, the Group applies the simplified approach of Ind AS 109, which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. Other financial assets In respect of its other financial assets, the Group assesses if the credit risk on those financial assets has increased significantly since initial recognition. If the credit risk has not increased significantly since initial recognition, the Group measures the loss allowance at an amount equal to 12-month expected credit losses, else at an amount equal to the lifetime expected credit losses. When making this assessment, the Group uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Group compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Group assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date. 6. DR. REDDY’S LABORATORIES LIMITED Non-financial assets The carrying amounts of the Company’s non-financial assets, other than inventories and deferred tax assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite lives or that are not yet available for use, an impairment test is performed each year at 31 March. The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or the cash-generating unit. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generate cash inflows from continuing use that are largely independent of the cash infl ows of other assets or groups of assets (the “cash-generating unit”). The goodwill acquired in a business combination is, for the purpose of impairment testing, allocated to cash-generating units that are expected to benefit from the synergies of the combination.
|392| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts An impairment loss is recognised in the consolidated statement of profit and loss if the estimated recoverable amount of an asset or its cash-generating unit is lower than its carrying amount. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit on a pro-rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Goodwill that forms part of the carrying amount of an investment in an associate is not recognised separately, and therefore is not tested for impairment separately. Instead, the entire amount of the investment in an associate is tested for impairment as a single asset when there is objective evidence that the investment in an associate may be impaired. An impairment loss in respect of equity accounted investee is measured by comparing the recoverable amount of investment with its carrying amount. An impairment loss is recognised in the consolidated statement of profit and loss, and reversed if there has been a favourable change in the estimates used to determine the recoverable amount. 7. GMR INFRASTRUCTURE LIMITED Impairment of non-financial assets, investments in joint ventures and associates As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment properties, intangible assets and investments in associates and joint ventures determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the said assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined: • in case of an individual asset, at the higher of the net selling price and the value in use; and • in case of a cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of the cash generating unit’s net selling price and the value in use. • (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably adjusted for risks specified to the estimated cash flows of the asset). • For this purpose, a cash generating unit is ascertained as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. • If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the consolidated statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a prorata basis. • When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the consolidated statement of profit and loss
|393| Chap. 17 – – Ind AS 36 — Impairment of Assets Impairment of financial assets, excluding investments in joint ventures and associates Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and fair value through profit or loss. The Group recognises impairment loss on trade receivables using expected credit loss model, which involves use of provision matrix constructed on the basis of historical credit loss experience as permitted under Ind AS 109 – Financial instruments. For financial assets whose credit risk has not significantly increased since initial recognition, loss allowance equal to twelve months expected credit losses is recognised. Loss allowance equal to the lifetime expected credit losses is recognised if the credit risk on the financial instruments has significantly increased since initial recognition. 8. GRASIM INDUSTRIES LIMITED Impairment of Non-Financial Assets: At the end of each reporting period, the Group reviews the carrying amounts of non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units, for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication then the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but, so that, the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in the prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. 9. HINDUSTAN PETROLEUM CORPORATION LIMITED Impairment of Non-Financial Assets Non-financial assets other than inventories, deferred tax assets and non-current assets classified as held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. An impairment loss is recognised whenever the carrying amount of assets of cash generating unit (CGU) exceeds their recoverable amount.
|394| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Impairment of financial assets In accordance with Ind-AS 109, the Corporation applies Expected Credit Loss (“ECL”) model for measurement and recognition of impairment loss on the financial assets measured at amortised cost. Loss allowances on trade receivables are measured following the ‘simplified approach’ at an amount equal to the lifetime ECL at each reporting date 10. INDIAN HOTEL COMPANY LIMITED Goodwill which has an indefinite useful life is not subject to amortisation and is tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Statement of Profit and Loss. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the Statement of Profit and Loss. 11. INFOTECH LIMITED Financial assets (other than at fair value) The Group assesses at each date of Balance sheet whether a financial asset or a Group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. The Group recognises lifetime expected losses for all contract assets and/or all trade receivables that do not constitute a financing transaction. For all other financial assets, expected credit losses are measured at an amount equal to the 12 month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk or the financial asset has increased significantly since initial recognition. 12. JAGRAN PRAKASHAN LIMITED Assets, other than goodwill are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period. 13. LARSEN & TOUBRO LIMITED As at the end of each accounting year, the Group reviews the carrying amounts of its PPE, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:
|395| Chap. 17 – – Ind AS 36 — Impairment of Assets (i) in the case of an individual asset, at the higher of the net selling price and the value in use; and (ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unit’s net selling price and the value in use. (The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset). If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis. When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss. 14. MAHINDRA LIFESPACE DEVELOPERS LIMITED Impairment of assets At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to sell, of the asset or cash generating unit, as the case may be, is estimated and the impairment loss (if any) is recognised and the carrying amount is reduced to its recoverable amount. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. Impairment of financial assets The Group applies the expected credit loss (ECL) model for recognising impairment loss on financial assets. With respect to trade receivables, the Group measures the loss allowance at an amount equal to lifetime expected credit losses. Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. For debt securities at FVTOCI, the loss allowance is recognised in OCI and is not reduced from the carrying amount of the financial asset in the balance sheet. The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write- off. However, financial assets that are written off could still be subject to
|396| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts enforcement activities under the Group’s recovery procedures, taking into account legal advice where appropriate. Any recoveries made are recognised in profit or loss 15. MINDTREE LIMITED Financial assets In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss. The Company follows ‘simplified approach’ for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition. For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If in subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL. Lifetime ECLs are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12-months after the reporting date. ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider: • All contractual terms of the financial instrument (including prepayment, extension etc.) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument. • Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. As a practical expedient, the Company uses a provision matrix to determine impairment loss on portfolio of its trade receivable. The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward-looking estimates. At regular intervals, the historically observed default rates are updated and changes in forward-looking estimates are analysed. ECL impairment loss allowance (or reversal) is recognised as an income/expense in the statement of profit and loss during the period. The balance sheet presentation for various financial instruments is described below: Financial assets measured at amortised cost, contractual revenue receivable: ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write off criteria, the Company does not reduce impairment allowance from the gross carrying amount. Non-financial assets The Company assesses at each reporting date whether there is any objective evidence that a non financial asset or a group of non financial assets is impaired. If any such indication exists, the Company estimates the amount of impairment loss.
|397| Chap. 17 – – Ind AS 36 — Impairment of Assets An impairment loss is calculated as the difference between an asset’s carrying amount and recoverable amount. Losses are recognised in the statement of profit and loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss. The recoverable amount of an asset or cash-generating unit (as defined below) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). Goodwill is tested for impairment on an annual basis and whenever there is an indication that goodwill may be impaired, relying on a number of factors including operating results, business plans and future cash flows. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to the Group’s cash generating units (CGU) or groups of CGU’s expected to benefit from the synergies arising from the business combination. A CGU is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets. Impairment occurs when the carrying amount of a CGU including the goodwill, exceeds the estimated recoverable amount of the CGU. The recoverable amount of a CGU is the higher of its fair value less cost to sell and its value-in-use. Value-in-use is the present value of future cash flows expected to be derived from the CGU. Total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU prorata on the basis of the carrying amount of each asset in the CGU. An impairment loss on goodwill is recognised in statement of profit and loss and is not reversed in the subsequent period 16. OIL AND NATURAL GAS CORPORATION LIMITED Accounting Policies 3.13 Impairment of tangible and intangible assets other than goodwill The Group reviews the carrying amount of its tangible and intangible assets (Oil and Gas Assets, Development Wells in Progress (DWIP), and Property, Plant and Equipment (including Capital Works in Progress) of a “Cash Generating Unit” (CGU) at the end of each reporting period to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Intangible assets with indefinite useful lives such as “Right of way” and intangible assets not yet available for use are tested for impairment at least annually or whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the Consolidated Statement of Profit and Loss. An assessment is made at the end of each reporting period to see if there are any indications that impairment losses recognized earlier may no longer exist or may have come down. The impairment loss is reversed, if there has been a change in the estimates used to determine the asset’s recoverable amount since
|398| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts the previous impairment loss was recognized. If it is so, the carrying amount of the asset is increased to the lower of its recoverable amount and the carrying amount that have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. After a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. Reversals of Impairment loss are recognized in the Consolidated Statement of Profit and Loss. Exploration and Evaluation assets are tested for Impairment when further exploration activities are not planned in near future or when sufficient data exists to indicate that although a development is likely to proceed, the carrying amount of the exploration asset is unlikely to be recovered in full from successful development or by sale. Impairment loss is reversed subsequently, to the extent that conditions for impairment are no longer present. Disclosures 54. Disclosure under Indian Accounting Standard 36 – Impairment of Assets 54.1 The Company is engaged mainly in the business of oil and gas exploration and production in Onshore and Offshore. In case of onshore assets, the fields are using common production/transportation facilities and are sufficiently economically interdependent to constitute a single cash generating unit (CGU). Accordingly, impairment test of all onshore fields is performed in aggregate of all those fields at the Asset Level. In case of Offshore Assets, a field is generally considered as CGU except for fields which are developed as a Cluster, for which common facilities are used, in which case the impairment testing is performed in aggregate for all the fields included in the cluster. 54.2 The Value in Use of producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under the circumstances where further development of the fields in the CGUs is under progress and where the carrying value of the CGUs is not likely to be recovered through exploitation of proved developed reserves alone, the Proved and probable reserves (2P) of the CGUs are also taken for the purpose of estimating future cash flows. In such cases, full estimate of the expected cost of evaluation/development is also considered while determining the value in use. 54.3 In assessing value in use, the estimated future cash flows from the continuing use of assets and from its disposal at the end of its useful life are discounted to their present value. The present value of cash flows has been determined by applying discount rates of 14.71% (as at March 31, 2018 - 14.48%) for Rupee transactions and 9.79% (as at March 31, 2018- 9.68%) for crude oil and value added products revenue, which are measured in US$. Future cash inflows from sale of crude oil and value added products have been computed using the future prices, on the basis of market-based average prices of dated Brent crude oil as per ‘Platt’s Crude oil market wire’ and its Co-relations with benchmark crude and other petroleum products. Future cash flows from sale of natural gas are also computed based on the expected future prices on the basis of notification issued by the Government of India and discounted applying the rate applicable to the cash flows measured in US$ in view of the new pricing guidelines issued by GOI. (Refer Note 35.2) 54.4 The company has assessed the impairment as at March 31, 2019 for its CGUs During the year, ` 3,827.50 million (As on 31 March, 2018: ` 1,342.92 million) has been provided for impairment loss mainly consisting of Offshore CGUs WO-16 at Mumbai offshore (` 1,415.96 million: note no. 54.5), Offshore Pre-NELP block CY-OS-90/1 (` 746.46 million), NELP Joint Venture block KG-OSN-2004/1 (` 431.37 million), onshore CGUs Silchar and Jodhpur (` 755.06 million) and Onshore NELP block CY –ONN-2004/2 (` 365.48 million). 54.5 During the year the Company has migrated from classification of Reserves under SPE-1997 guidelines to Petroleum Resource Management System (PRMS) for estimating the reserves as on March 31, 2019. Consequent to its implementation, there is a shift in ultimate reserves to contingent resource category. As a result of this change, there has been an impairment loss amounting to ` 1,415.96 million for offshore CGU WO-16 Cluster and ` 365.48 million for Onshore NELP block CY –ONN-2004/2.
|399| Chap. 17 – – Ind AS 36 — Impairment of Assets 54.6 During the year ` 503.28 million (previous year ` 6,985.33 million) of impairment loss has been reversed. This mainly pertains to Tapti field amounting to ` 500.12 million. 54.7 The following 2P reserves for respective CGU were considered as a basis for the impairment testing as at March 31, 2019: Name of the CGU Quantity of Reserves used for Impairment Assessment (In MMT) G1 GS 15 4.65 Silchar Onshore Asset 0.31 Jodhpur 0.71 RJ-ON-90/1 (Pre NELP PSC Block) 16.09 Sibsagar Onshore Asset 39.32 WO 16 3.34 Rajahmundry Onshore 12.53 Ankleshwar Asset 11.87 B-127 1.96 Ratna 8.37 KG-OSN-2001/3 23.50 54.8 Impairment testing of assets under exploratory phase (Exploratory wells in progress) has been carried out as on March 31, 2019 and an amount of ` 8,839.71 million (year ended March 31, 2018 ` 1,820.94 million) has been provided during the year 2018-19 as impairment loss. Further, ` 223.58 million (year ended March 31, 2018 ` 1,065.43 million) impairment losses has been reversed as exploratory phase assets have been written off at Jodhpur and transferred to Oil & Gas Asset in DVP Jorhat. 54.8 The subsidiary, OVL carried out impairment test as at March 31, 2019 in respect of its Cash Generating Units (CGUs) based on value in use method. The Company identified impairment in respect of two CGUs and provided for impairment of ` 15,762.16 million during the year ended March 31, 2019 (for the year ended March 31, 2018 net impairment write back of ` 2,740.12 million was recognised including write back of impairment in respect of two CGUs and impairment in respect of three CGUs). The current year provision for impairment is considered as exceptional item. Refer note 42.2. No CGU Proved and Probable Reserves (MMToe) 1 Imperial, Russia 95.744 2 GNPOC, Sudan 6.917 3 Block-5A, South Sudan 6.311 4 MECL, Colombia 1.728 5 Block BC-10, Brazil 4.079 6 PIVSA, Venezuela 7.937 7 Carabobo-1, Venezuela 52.385 8 ACG, Azerbaijan 10.553 9 Area-1,Mozambique 214.785 54.9 The subsidiary, OVL has considered the loans and accrued interest to its wholly owned subsidiary Imperial Energy as deemed investment for the purpose of impairment assessment. The cash flows for estimating value in use have considered the estimated life of block till 2060 based on the reserves and associated revenue estimates report of DeGolyer and MacNaughton as well as the existing provision in the Russian sub soil law stating that “The time lines of use of a subsoil area can be extended at the initiative of the subsoil user in case it is necessary to complete prospecting and appraisal or development of a mineral deposit or carry out abandonment/liquidation measures subject to absence of violations of the license terms by this subsoil user. 54.9 In respect of subsidiary HPCL, considering the Government policies and modalities of compensating the oil marketing companies towards under-recoveries, future cash flows have been worked out based
|400| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts on the desired margins for deciding on impairment of related Cash Generating Units. Since there is no indication of impairment of assets as at Balance Sheet date as per the assessment carried out, no impairment has been considered. In view of assumptions being technical, peculiar to the industry and Government policy, the auditors have relied on the same. 9. Goodwill (including Goodwill on consolidation) 9.1 Goodwill on asset purchased (` in million) Particulars As at March 31, 2019 As at March 31, 2018 Cost or deemed cost (Refer note 9.2) 4.04 4.04 Accumulated impairment losses - - Carrying amount of goodwill (A) 4.04 4.04 9.2 Goodwill represents excess of consideration paid over net assets acquired for acquisition of nitrogen plant. Goodwill on consolidation. (` in million) Particulars As at March 31, 2019 As at March 31, 2018 Cost or deemed cost Opening balance 205,586.19 205,395.85 Additions during the year - - Effect of exchange differences 12,976.02 190.34 Total 218,562.21 205,586.19 Less: Accumulated amortisation Opening balance 63,564.77 63,496.23 Additions during the year 10,022.94 - Effect of exchange differences 4,095.01 68.54 Total 77,682.72 63,564.77 Carrying amount of goodwill on consolidation (B) 140,879.49 142,021.42 Carrying amount of total goodwill (A+B) 140,883.53 142,025.46 9.3 Allocation of goodwill on consolidation to cash generating units is carried out in accordance with the accounting policy mentioned at note 3.6. 9.4 Group’s subsidiary ONGC Videsh Limited has determined its functional currency as US$. Above foreign exchange difference represents differences on account of translation of the financial statements of the ONGC Videsh Limited from US$ to Group’s presentation currency “`”. Refer note 3.21 and 5.1 (a). 17. ONE97 COMMUNICATION LIMITED Accounting Policies 2.2 Business Combination and Goodwill Goodwill is tested for impairment annually or more frequently it events or changes in circumstances indicate that they might be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquire are assigned to those units.
|401| Chap. 17 – – Ind AS 36 — Impairment of Assets A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised in statement of profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. J. Impairment of non-financial assets For all non-financial assets, Group assesses whether there are indicators of impairment. If such an indicator exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss if any. Where the asset does not generated cash flows that are independent from order assets, the Group estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. The recoverable amount for an asset or CGU is the higher of its value in use and fair value less costs of disposal. If the recoverable amount of an asset CGU is estimated to be less than its carrying amount or CGU the asset is considered impaired and the carrying amount of the asset or CGU is reduced to its recoverable amount. An impairment loss is recognised immediately in the consolidated statement of profit and loss. In assessing value in use. the estimated future cash flows of the asset or CGU are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicity traded companies or other available fair value indicators. The Group bases its impairment calculation on detailed budgets and forecast calculations. These budgets and forecast calculations generally cover a period of five years. For longer periods. a long-term growth rate is calculated and applied to project future cash flows after the fifth year. To estimate cash flow projections beyond periods covered by the most recent budgets/forecast, the Group extrapolates cash flow projections in the budget using a steady or declining growth rate for subsequent years, unless an increasing rate can be justified. In any case, this growth rate does not exceed the long-term average growth rate for the products industries, or country or countries in which the entity operates, or for the market in which the asset is used. An assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s or CGU’s recoverable amount since the last impairment loss was recognised . The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recogninesd for the asset in prior years. Such reversal is recognised in the consolidated statement of profit or loss. Disclosure 38. Impairment review of goodwill arising on Consolidation The Group during the year has acquired entities (Refer Note 23 and 37) for enhancing its payment service business. The Group monitors the business of the respective acquisitions independently and thus considers each acquisition as a separate Cash Generating Unit (‘CGU’). Carrying amount of Goodwill (net of impairment) Cash Generating Unit As at March 31, 2019 As at March 31, 2018 Little Internet Private Limited 230.87 281.87 Orbgen Technologies Private Limited 31.81 - Wasteland Entertainment Private Limited 20.19 20.19 Mobiquset Mobile Technologies Private Limited 6.80 6.80
|402| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Cash Generating Unit As at March 31, 2019 As at March 31, 2018 Urja Money Private Limited - - Balance Technology Private Limited - - Cube 26 Software Private Limited - - 293.02 312.21 The Group reviews the goodwill for any impairment at the CGU level. The recoverable amount of the above CGUs are based on value-in -use, which is determined based on five year business plans that have been approved by the management for internal purpose. The said planning horizon of five years reflects the assumptions for short to medium-term market developments. The cash flows beyond the planning period are extrapolated using appropriate terminal growth rates used do not exceed the long term average growth rates of the respective industry and country in which the entity operates and are consistent with the internal/ external sources of information. The Key assumptions used in value-in-use calculations are as follows: • Earnings before interest and taxes margings (‘EBIT’) • Discount rate • Growth rates EBIT margins: The margins have been estimated based on past experience after considering incremental revenue arising out of increase in payment business from the existing and new customers. Margins will be positively impacted from the efficiencies and initiatives driven by the Company ; whereas factors like increased cost of operations may impact the margins negatively. Discount rate: Discount rate reflects the current market assessment of the risks specific to the CGU estimated based on the weighted average cost of capital. Pre-tax discount rate used ranged from 14% to 15.00% for the year ended March 31,2019 which in the opinion of management are consistent with companies in similar business. Growth rates: The terminal growth rates used are in the opinion of management in line with the long-term average growth rates of the respective industry in which the entity operates and are consistent with the internal/external sources of information. The terminal growth rates used in extrapolating cash flows beyond the planning period, range from 1.28 to 3.5 times of revenue for the terminal year. Goodwill Impairment - During the year ended March 31,2019, the goodwill on consolidation has been impaired based on above mentioned analysis. Below is the table showing the value of goodwill impaired for the subsidiaries. Particulars As at March 31,2019 As at March 31, 2018 Little Internet Private Limited 51.00 - Orbgen Technologies Private Limited 67.43 - Balance Technology Private Limited 01.51 - Cube 26 Software Private Limited 0.23 - Total 120.17 - 18. POLY MEDICURE LIMITED At each reporting date, the company assesses whether there is any indication that a non-financial asset may be impaired. If any such indication exists, the recoverable amount of the non-financial asset is estimated in order to determine the extent of the impairment loss, if any. Recoverable amount is determined: • In the case of an individual asset, at the higher of the Fair Value less cost to sell and the value in use. • In the case of cash generating unit (a group of assets that generates identified, independent cash flows) at the higher of cash generating unit’s fair value less cost to sell and the value in use.
|403| Chap. 17 – – Ind AS 36 — Impairment of Assets Where it is not possible to estimate the recoverable amount of an individual non-financial asset, the company estimates the recoverable amount of the smallest cash generating unit to which the non-financial asset belongs. The recoverable amount is the higher of an asset’s or cash generating unit’s fair value less costs of disposal and its value in use. If the recoverable amount of a non-financial asset or cash generating unit is estimated to be less than its carrying amount, the carrying amount of the non-financial asset or cash generating unit is reduced to its recoverable amount. Impairment losses are recognized immediately in the statement of Profit and Loss. Where an impairment loss subsequently reverses, the carrying amount of the non-financial asset or cash generating unit is increased to the revised estimate of its recoverable amount. However, this increased amount cannot exceed the carrying amount that would have been determined had no impairment loss been recognized for that non-financial asset or cash generating unit in prior periods. A reversal of an impairment loss is recognized immediately in the statement of Profit and Loss. 19. TATA CONSULTANCY SERVICES LIMITED Financial assets (other than at fair value) The Group assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In determining the allowances for doubtful trade receivables, the Group has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition. Non-financial assets Tangible and other intangible assets Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss. Goodwill CGUs to which goodwill has been allocated are tested for impairment annually, or more frequently when there is indication for impairment. If the recoverable amount of a CGU is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis of the carrying amount of each asset in the unit. 20. THYROCARE TECHNOLOGIES LIMITED Impairment of financial instruments The Group recognises loss allowances for expected credit losses on: - Financial assets measured at amortised cost; and At each reporting date, the Group assesses whether Financial assets carried at amortised cost. A Financial asset is ‘credit- impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the Financial asset have occurred. Evidence that a Financial asset is credit- impaired includes the following observable data: - significant Financial difficulty of the borrower or issuer;
|404| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts - a breach of contract such as a default or being past due for 90 days or more; - it is probable that the borrower will enter bankruptcy or other Financial reorganisation; or - the disappearance of an active market for a security because of Financial difficulties. The Group measures loss allowances at an amount equal to lifetime expected credit losses. Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument. 12-month expected credit losses are the portion of expected credit losses that result from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). In all cases, the maximum period considered when estimating expected credit losses is the maximum contractual period over which the Group is exposed to credit risk. When determining whether the credit risk of a Financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward- looking information. Write-off The gross carrying amount of a Financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write off. However, Financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due. ii. Impairment of non-financial assets The Group’s non-Financial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment. For impairment testing, assets that do not generate independent cash inflows are Companyed together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset). The Group’s corporate assets (e.g., central office building for providing support to various CGUs) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs. The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset). The Group’s corporate assets (e.g., central office building for providing support to various CGUs) do not generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is determined for the CGUs to which the corporate asset belongs. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss.
|405| Chap. 17 – – Ind AS 36 — Impairment of Assets Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Group reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 21. ZEE ENTERTAINMENT ENTERPRISES LIMITED Accounting Policies Impairment of property, plant and equipment / other intangible assets / investment property The carrying amounts of the Group’s property, plant and equipment and intangible assets are reviewed at each reporting date to determine whether there is any indication that those assets have suffered an impairment loss. If there are indicators of impairment, an assessment is made to determine whether the asset’s carrying value exceeds its recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. An impairment loss is recognised in consolidated statement of profit and loss whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing the value in use, the estimated future cash flows are discounted to the present value using a pre- tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets for which the estimates of future cash flows have not been adjusted. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash generating unit) in prior years. Reversal of an impairment loss is recognised immediately in profit or loss. Disclosures 7. Goodwill and other intangible assets (` Millions) Description of Assets Goodwill Trademark Customer list and websites Software Channels Total I. Cost As at 1 April 2017 2,676 291 - 545 202 3,714 Additions 2,791 31 1,081 788 - 4,691 Transfer on acquisition - - - 1 - 1 Disposals - - - - 30 30 Translation - - - 12 - 12 As at 31 March 2018 5,467 322 1,081 1,346 172 8,388 Additions - - - 517 - 517 Disposals - - - 22 - 22 Translation 3 - - 23 - 26 As at 31 March 2019 5,470 322 1,081 1,864 172 8,909
|406| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts Description of Assets Goodwill Trademark Customer list and websites Software Channels Total II. Accumulated amortisation As at 1 April 2017 - 77 - 436 67 580 Amortisation for the year - 128 250 183 62 623 Transfer on acquisition - - - 1 - 1 Disposals - - - - 18 18 Translation - - - 1 - 1 Up to 31 March 2018 - 205 250 621 111 1,187 Amortisation for the year - 86 360 411 26 883 Impairment 218 - - - - 218 Disposals - - - 22 - 22 Translation - - - 8 - 8 Upto 31 March 2019 218 291 610 1,018 137 2,274 Net book value As at 31 March 2019 5,252 31 471 846 35 6,635 As at 31 March 2018 5,467 117 831 725 61 7,201 Net book value Mar-19 Mar-18 Goodwill 5,252 5,467 Other intangible assets 1,383 1,734 Intangibles assets under development 478 139 ‘0’ (zero) denotes amounts less than a million. The carrying amount of goodwill which is tested for impairment is allocated to following cash generating units: Cash generating unit Mar-19 Mar-18 Regional Channel in India 621 621 International business 2013 2013 Online media business 2,397 2,615 Regional Channel in India and International business The recoverable amount of this Cash Generating Unit (CGU) is determined based on a value in use. The estimated value in use of this CGU is based on the future cash flows using a 2% terminal growth rate for periods subsequent to the 5 years and discount rate of 16.2%. An analysis of the sensitivity of the computation to a change in key parameters (operating margin, discount rate and long term growth rate), based on a reasonably probable assumptions, did not identify any probable scenario in which the recoverable amount of the CGU would decrease below its carrying amount. Online media business As at 31 March 2019, the Company assessed the recoverable amount of goodwill allocated to the Online Media Business as per the requirement of Ind AS 36 on Impairment of assets. The recoverable amount of this CGU is determined based on the fair value less cost of disposal using revenue multiples which is based on international valuation standards by an independent valuer. The excess of carrying value of CGU over the recoverable amount has been accounted as an impairment charge of ` 218 millions which is disclosed as exceptional item. Due to use of significant unobservable inputs to compute the fair value, it is classified as level 3 in the fair value hierarchy as per the requirement of Ind AS 113 on Fair value measurement. ll
|407| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets Chapter 18 Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets 1. ADANI PORTS AND SPECIAL ECONOMIC ZONE LIMITED General Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and loss. Contingent liabilities are not recognised but disclosed unless the probability of an outflow of resources is remote. Contingent assets are disclosed where inflow of economic benefits is probable. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Operational Claim provisions Provisions for operational claims are recognised when the service is provided to the customer. Further recognition is based on historical experience. The initial estimate of operational claim related cost is revised annually. 35 Contingent Liabilities not provided for ` in crore Sr. No. Particulars March 31, 2019 March 31, 2018 a Corporate Guarantees given to banks and financial institutions against credit facilities availed by the joint venture entities. Amount outstanding there against ` 146.33 crore (previous Year ` 659.52 crore). 345.78 773.88 b Corporate Guarantee given to a bank for credit facility availed by erstwhile subsidiary company, Mundra Port Pty Limited, Australia read with note (t) below. (Amount outstanding there against ` Nil (previous year ` 1,877.04 crore) Refer note (u) below Refer note (u) below c Certain facilities availed by the joint venture entities and other group company against credit facilities sanctioned to the company. 1,152.33 240.08 d Bank Guarantees given to government authorities and bank (also includes DSRA bank guarantees given to Bank on behalf of subsidiaries and erstwhile subsidiaries.) 173.37 134.30 e Civil suits filed by the Customers for recovery of damages against certain performance obligations. The said civil suits are currently pending with various Civil Courts in Gujarat. The management is reasonably confident that no liability will devolve on the Company in this regard and hence no provision is made in the books of accounts towards these suits. 0.94 0.94 f Show cause notices from the Custom Authorities against duty on port related cargo. The Company has given deposit of ` 0.05 crore (previous year ` 0.05 crore) against the demand. The management 0.14 0.14
|408| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts ` in crore Sr. No. Particulars March 31, 2019 March 31, 2018 is reasonably confident that no liability will devolve on the Company and hence no liability has been recognised in the books of accounts. g Customs department notice for wrongly availing duty benefit exemption under DFCEC Scheme on import of equipment. The Company has filed its reply to the show cause notice with Deputy Commissioner of Customs, Mundra and Commissioner of Customs, Mumbai against order in original. The management is of view that no liability shall arise on the Company. 0.25 0.25 h Various show cause notices received from Commissioner/ Additional Commissioner/ Joint Commissioner/ Deputy Commissioner of Customs and Central Excise, Rajkot and Commissioner of Service Tax, Ahmedabad and appeal there of, for wrongly availing of Cenvat credit/ Service tax credit and Education Cess credit on input services and steel, cement and other fixed assets during financial year 2006-07 to 2014-15. In similar matter, the Excise department has demanded recovery of the duty along with penalty and interest thereon. The Company has given deposit of ` 4.50 crore (previous Year ` 4.50 crore) against the demand. These matters are pending before the Supreme Court, the High Court of Gujarat, Commissioner of Central Excise (Appeals), Rajkot and Commissioner of Service Tax, Ahmedabad. The Company has taken an external opinion in the matter based on which the management is of the view that no liability shall arise on the Company. Further, during the earlier year, the Company has received favourable order from High Court of Gujarat against demand in respect of dispute relating to financial year 2005-06 and favourable order from CESTAT against similar demand in respect of dispute relating to FY 2005-06 to FY 2010 -11 (up to Sept 2011). 36.49 36.49 i Show cause notices received from Commissioner of Customs and Central Excise, Rajkot and appeal thereof in respect of levy of service tax on various services provided by the Company and wrong availment of CENVAT credit by the Company during financial year 2009-10 to 2011-12. These matters are currently pending at High Court of Gujarat ` 6.72 crore (previous Year ` 6.72 crore); and Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad ` 0.15 crore (previous Year ` 0.15 crore) and Commissioner of Service Tax Ahmedabad ` 0.03 crore (previous Year ` 0.03 crore). The Company has taken an external opinion in the matter based on which the management is of the view that no liability shall arise on the Company. 6.90 6.90 j Commissioner of Customs, Ahmedabad has demanded vide letter no.4/Comm./ SIIB/2009 dated 25/11/2009 for recovery of penalty in connection with import of Air Craft which is owned by Karnavati Aviation Private Limited (Formerly Gujarat Adani Aviation Private Limited), subsidiary of the Company. Company has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal against the demand order, the management is reasonably confident that no liability will devolve on the Company and hence no liability has been recognized in the books of accounts. 2.00 2.00
|409| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets ` in crore Sr. No. Particulars March 31, 2019 March 31, 2018 k In terms of the Show Cause Notice issued to a subsidiary company by the Office of the Commissioner of Customs for a demand of ` 18.33 crore along with applicable interest and penalty thereon for the differential amount of Customs Duty in respect of import of Bombardier Challenger CI-600 under Non-Scheduled Operation Permit (NSOP) has been raised on the Company. 18.33 18.33 l In terms of the Show Cause cum Demand Notice issued to subsidiary company by the Office of the Commissioner of Customs Preventive Section dated 27/02/2009, a demand of ` 14.67 crore along with applicable interest and penalty thereon for the differential amount of Customs Duty in respect of import of Aircraft Hawker 850 XP under Non-Scheduled Operation Permit (NSOP) has been raised on the Company. 14.53 14.53 m Notice received from Superintendent / Commissioner of Service Tax Department and show cause from Directorate General of Central Excise Intelligence for wrong availing of Cenvat Credit / Service tax credit and Education Cess on input services steel and cement on some of the subsidiary companies. The management is of the view that no liability shall arise on the subsidiaries companies. 99.86 38.98 n Show cause notice received from Directorate General of Central Excise Intelligence for Non-Payment of Service Tax on Domestic Journey and on certain Foreign Service on reverse charge mechanism amounting to ` 3.03 crore. The subsidiary company had filed appeal with Commissioner of Service Tax & received order for the same. The subsidiary company has filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal against the order of Commissioner for confirmation of tax liability of ` 3.71 crore (including Penalty). The subsidiary company has taken an external opinion in the matter based on which the management is of the view that no liability shall arise. The subsidiary company has paid ` 0.35 crore under protest. 3.71 3.71 o During the Current year, a subsidiary company has received an adjudication order from Additional Superintendent from Stamps, demanding stamp duty of ` 22.16 crore, under the provisions of the Gujarat Stamps Act, 1950 (‘the Act’), payable on acquisition of Marine Business Undertaking pursuant to the scheme of arrangement approved by the National Company Law Tribunal (NCLT) in previous year. Against the said order the Company has filed Special Civil Application (SCA) and Letters Patent Appeal (LPA) with Gujarat High Court which is disposed of by the High Court during the year and subsequent to the year-end respectively on the grounds to prefer appeal with appropriate appellate authority under the provisions of the Act. After the balance sheet date, the Company has filed an appeal with the Chief Controlling Revenue Authority and deposited ` 5.54 crore under protest for filling an appeal. As per the management’s estimate, on the basis of advise from the legal experts, the Company has provided ` 4.43 crore in the current year in accordance with the provisions of the act and also doesn’t expect any additional demand. 17.73 –
|410| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts ` in crore Sr. No. Particulars March 31, 2019 March 31, 2018 p The Company has received demand notice of ` 1.82 crore (including Penalty of ` 1.51 crore) from Government of Andhra Pradesh, Department of Mines and Geology for evasion of Seigniorage fee of ` 0.30 crore on utilization of Earth / Gravel in development of East Quay – 1 (EQ-1) in Vishakhapatnam Port Trust. The management is reasonably confident that no liability will devolve on the Company and hence no liability has been recognised in the books of accounts. 1.82 - q Revenue sharing on the storage income of subsidiary company as per concession arrangement for the Financial Year 2017-2018 & 2018- 2019. 46.01 - r Various matters of subsidiaries companies pending with Income Tax Authorities. 6.05 1.29 s Statutory claims not acknowledged as debts. 0.46 0.46 t The Company’s tax assessments is completed till assessment year 2015-16, pending appeals with Appellate Tribunal for Assessment Year 2011-12 and CIT (Appeals) for Assessment Year 2012-13 to 2015-16. During the year, the Company has received a favourable order from Appellate Tribunal for assessment year 2009-10 and 2010-11. The management is reasonably confident that no liability will devolve on the Company. u The Company had initiated and recorded the divestment of its entire equity holding in Adani Abbot Point Terminal Holdings Pty Limited ("AAPTHPL") and entire Redeemable Preference Shares holding in Mundra Port Pty Limited ("MPPL") representing Australia Abbot Point Port operations to Abbot Point Port Holdings Pte Limited, Singapore during the year ended March 31, 2013. The sale of securities transaction was recorded as per Share Purchase Agreement ('SPA') entered on March 30, 2013 including subsequent amendments thereto, with a condition to have regulatory and lenders approvals. The Company has all the approvals except in respect of approval from one of the lenders who has given specific line of credit to MPPL. The Company received entire sale consideration except AUD 17.17 Million as on reporting date. The Company expects to receive the said amount in next year. The Company had an outstanding corporate guarantee to a lender of USD 800 million against line of credit to MPPL, which was repaid in full during the year hence the same guarantee is not effective as on reporting date. The Company had also pledged its entire equity holding of 1,000 equity shares of AUD 1 each in MPPL in favour of lender which are in the process of getting released at the reporting date. Outstanding loan against said corporate guarantee as on March 31, 2019 is Nil (previous year USD 288.00 million). Since financial year 2013-14, the Company has received corporate guarantee (’Deed of Indemnity’) against above outstanding corporate guarantee from Abbot Point Port Holding Pte Limited, Singapore which is effective till discharge of underlying liability and as at reporting date is no longer effective. v There has been a Supreme Court (SC) judgement dated 28th February 2019, relating to components of salary structure that need to be taken into account while computing the contribution to provident fund under the EPF Act. There are interpretative aspects related to the Judgement including the effective date of application. The Group will continue to assess any further developments in this matter for the implications on financial statements, if any. 2. AJANTA PHARMA LIMITED Provisions (legal and constructive) are recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits and compensated absences) are not discounted to its present value and are determined based on
|411| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. If there is any expectation that some or all of the provision will be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any virtually certain reimbursement If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risk specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent liability is disclosed in the case of: • A present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; • A present obligation arising from past events, when no reliable estimates is possible; • A possible obligation arising from past events, unless the probability of outflow of resources is remote. Contingent liabilities are not recognized but disclosed in the Consolidated Financial Statements. Contingent assets are neither recognised nor disclosed in the Financial Statements. Commitments include the amount of purchase order (net of advances) issued to parties for completion of assets and Non-cancellable operating lease. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date. Asset Retirement Obligation Asset retirement obligations (ARO) are provided for those operating lease arrangements where the Company has a binding obligation at the end of the lease period to restore the leased premises in a condition similar to inception of lease. ARO are provided at the present value of expected costs to settle the obligation using discounted cash flows and are recognised as part of the cost of that particular asset. The cash flows are discounted at a current pre-tax rate that reflects the risks specific to the decommissioning liability. The unwinding of the discount is recognised in the income statement as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset. 3. BHARAT PETROLEUM CORPORATION LIMITED Provisions are recognized when there is a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expenses relating to a provision is presented in the Consolidated Statement of Profit and Loss net of reimbursements, if any. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost. Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within the control of the Group or present obligations where it is not probable that an outflow of resources will be required or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of economic resources is considered remote. Contingent liabilities and Capital Commitments disclosed are in respect of items which in each case are above the threshold limits.
|412| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts NOTE 34 PROVISIONS (CONSOLIDATED) ` in Crores Particulars As at 31/03/2019 As at 31/03/2018 Provision for employee benefits [Refer Note No. 48 and 51] 1,280.27 ,013.74 Provision for CSR Expenditure 172.25 146.88 Others [Refer Note No. 57]* 576.06 648.90 Total 2,028.58 1,809.52 *Above includes deposits/ claims made in respect of the Corporation of ` 123.66 Crores (Previous year: ` 123.66 Crores) netted off against provisions NOTE 57 PROVISIONS(CONSOLIDATED) In compliance of Ind AS 37 on “Provisions, Contingent Liabilities and Contingent Assets”, the required information is as under: ` in Crores Nature Opening balance Additions during the year Utilisation during the year Reversals during the year Closing balance Excise 111.05 0.02 - 91.07 20.00 Customs 2.51 0.73 - - 3.24 Service Tax 1.56 0.87 0.06 - 2.37 VAT/ Sales Tax/ Entry Tax 502.29 30.40 0.10 6.97 525.62 Property Tax/Legal Cases 53.93 12.09 13.23 10.23 42.56 Total 671.34 44.11 13.39 108.27 593.79 Previous year 834.90 77.70 8.91 232.35 671.34 The above provisions are made based on estimates and the expected timing of outflows is not ascertainable at this stage. Above includes provision of ` 123.66 Crores (Previous year ` 123.66 Crores) for which deposits/claims have been made. In case of BPRL, the non current and current provisions for Liquidated Damages and Abandonment is `124.96 Crores (Previous year: ` 119.47 Crores). Liquidated Damages: In respect of blocks held in India, as per the Production Sharing Contracts (PSC) signed by BPRL with the Government of India (GoI), it is required to complete Minimum Work Programme (MWP) within stipulated time. In case of delay, Liquidated Damages (LD) is payable for extension of time to complete MWP. Further, in case it does not complete MWP or surrender the block without completing the MWP, an amount as agreed in PSC is required to be paid to the GoI for incomplete portion of the MWP. Accordingly, BPRL has provided ` 102.72 Crores towards liquidated damages as on 31st March 2019 (31st March 2018 ` 98.54 Crores) in respect to various blocks. A provision of Nil has been made in FY 2018-19 (31st March 2018: ` 1.92 Crores) in respect of block CB 2010/11. Abandonment: BPRL has Participating Interest in various oil and gas blocks along with other consortium partners. It has made a provision of ` 22.24 Crores as on 31st March 2019 (31st March 2018 ` 20.93 Crores) in respect of its share of the abandonment obligation.
|413| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets 4. BHARTI AIRTEL LIMITED Accounting policies 2.17 Provisions a. General Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources will be required to settle the said obligation, and the amounts of the said obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the relevant obligation, using a pre-tax rate that reflects current market assessments of the time value of money (if the impact of discounting is significant) and the risks specific to the obligation. The increase in the provision due to un-winding of discount over passage of time is recognised within finance costs. b. Asset retirement obligations (‘ARO’) ARO are recognised for those operating lease arrangements where the Group has an obligation at the end of the lease period to restore the leased premises in a condition similar to inception of lease. ARO are provided at the present value of expected costs to settle the obligation and are recognised as part of the cost of that particular asset. The estimated future costs of decommissioning are reviewed annually and any changes in the estimated future costs or in the discount rate applied are adjusted from the cost of the asset. 2.18 Contingencies A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent assets are not recognised and disclosed only where an inflow of economic benefits is probable. Disclosures Notes to Consolidated Financial Statements 22. Provisions Non-current As of March 31, 2019 As of March 31, 2018 Asset retirement obligations 3,858 4,523 Gratuity 2,611 2,474 Other employee benefit plans 354 215 Current As of March 31, 2019 As of March 31, 2018 Gratuity 696 782 Other employee benefit plans 1,501 1,602 2,197 2,384
|414| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts The movement of provision towards asset retirement obligations is as below: For the year ended March 31, 2019 For the year ended March 31, 2018 Opening balance 4,523 5,359 Net reversal (590) (868) Interest cost (75) 37 Disposal of subsidiries / tower operations (refer note 5) - (5) Closing balance 3,858 4,523 Refer note 27 for movement of provision towards various employee benefits. The movement of provision towards subjudice matters is as below: For the year ended March 31, 2019 For the year ended March 31, 2018 Opening balance 151,799 131,061 Net (reversal) / additions (17,667) 20,738 Closing balance 134,132 151,799 The said provision has been disclosed under: As of March 31, 2019 As of March 31, 2018 Other non-financial assets (refer note 15) 59,330 53,910 Other non-financial liabilities (refer note 23) 4,801 4,685 Trade payables 70,001 93,204 134,132 151,799 The said provisions pertain to payable / paid under protest spectrum usage charges / licenses fees (trade payable / other nonfinancial assets) and payable for certain levies (other non-financial liabilities). 24. Contingent liabilities and commitments (i) Contingent liabilities Claims against the Company not acknowledged as debt: As of March 31, 2019 As of March 31, 2018 (i) Taxes, duties and other demands (under adjudication / appeal / dispute) - Sales Tax and Service Tax 13,810 31,560 - Income Tax 14,088 15,712 - Customs Duty 6,684 7,646 - Entry Tax 9,951 9,878 - Stamp Duty 596 596 - Municipal Taxes 1,663 1,488 - Department of Telecom ('DoT') demands 97,794 40,778 - Other miscellaneous demands 5,545 5,164 (ii) Claims under legal cases including arbitration matters - Access charges / Port charges 12,640 10,733 - Others 2,816 2,708 165,587 126,263 Further, refer note f (v), (vi) and (vii) other DoT matter.
|415| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets In addition to the above, the Group’s share of joint ventures and associates contingent liabilities is H 28,089 and H 21,816 as of March 31, 2019 and March 31, 2018 respectively. The category wise detail of the contingent liability has been given below:- a) Sales and Service Tax and GST The claims for sales tax comprised of cases relating to the appropriateness of declarations made by the Group under relevant sales tax legislations which were primarily procedural in nature and the applicable sales tax on disposals of certain property and equipment items. Pending final decisions, the Group has deposited amounts under protest with statutory authorities for certain cases. The service tax demands relate to cenvat claimed on tower and related material, levy of service tax on SIM cards and employee talk time, cenvat credit disallowed for procedural lapses and usage in excess of 20% limit. The Goods and Services Tax (GST) demand relates to procedural compliance in regard to ewaybills. b) Income Tax demand Income tax demands mainly include the appeals filed by the Group before various appellate authorities against the disallowance by income tax authorities of certain expenses being claimed and non-deduction of tax at source with respect to pre-paid dealers / distributor’s margin. c) Access charges / Port charges (i) Despite the interconnect usage charges (‘IUC’) rates being governed by the Regulations issued by Telecom Regulatory Authority of India (‘TRAI’); BSNL had raised a demand for IUC at the rates contrary to the regulations issued by TRAI in 2009. Accordingly, the Company and one of its subsidiaries filed a petition against the demand with the TDSAT which allowed payments to be on the existing regulations. The matter was then challenged by BSNL and is currently pending with the Hon’ble Supreme Court. (ii) The Hon’ble TDSAT allowed BSNL to recover distance based carriage charges. The private telecom operators have jointly filed an appeal against the said order and the matter is currently pending before the Hon’ble Supreme Court. (iii) BSNL challenged before TDSAT the port charges reduction contemplated by the regulations issued by TRAI in 2007 which passed its judgment in favour of BSNL. The said judgment has been challenged by the private operators in Hon’ble Supreme Court. Pending disposal of the said appeal, in the interim, private operators were allowed to continue paying BSNL as per the revised rates i.e. TRAI regulation issued in 2007, subject to the bank guarantee being provided for the disputed amount. The rates were further reduced by TRAI in 2012 which was challenged by BSNL before the Hon’ble Delhi High Court. The Hon’ble Delhi High Court, in the interim, without staying the rate revision, directed the private operators to secure the difference between TRAI regulation of 2007 and 2012 rates by way of bank guarantee pending final disposal of appeal. d) Customs Duty The custom authorities, in some states, demanded custom duty for the imports of special software on the ground that this would form part of the hardware on which it was pre-loaded at the time of import. The view of the Group is that such imports should not be subject to any custom duty as it is operating software exempt from any custom duty. In response to the application filed by the Group, the Hon’ble Central Excise and Service Tax Appellate Tribunal (‘CESTAT’) has passed an order in favour of the custom authorities. The Group has filed an appeal with Hon’ble Supreme Court against the CESTAT order. e) Entry Tax In certain states, an entry tax is levied on receipt of material from outside the state. This position has been challenged by the Group in the respective states, on the grounds that the specific entry tax is ultra vires the Constitution. Classification issues have also been raised, whereby, in view of the Group, the material proposed to be taxed is not covered under the specific category.
|416| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts During the year ended March 31, 2017, the Hon’ble Supreme Court of India upheld the constitutional validity of entry tax levied by few States. However, Supreme Court did not conclude certain aspects such as present levies in each State is discriminatory in nature or not, leaving them open to be decided by regular benches of the Courts. Pending disposition by the regular benches, the Group has decided to maintain statusquo on its position and hence continues to disclose it as contingent liability. f) DoT demands (i) Demand for license fees pertaining to computation of Adjusted Gross Revenue (‘AGR’) and the interest thereon, due to difference in its interpretation. The definition of AGR is sub-judice and under dispute since 2005 before the TDSAT. TDSAT had pronounced its judgment in 2015, quashed all demands raised by DoT and directed DoT to rework the demands basis the principles enunciated in its judgment. Subsequently, the Union of India (‘UOI’) and the Company and of its subsidiaries along with various other operators have filed appeals / cross appeals before the Hon’ble Supreme Court of India against the TDSAT judgment. In 2016, all the appeals were tagged together and Hon’ble Supreme Court has permitted DOT to raise demands with a direction not to enforce any demand till the final adjudication of the matter by Hon’ble Supreme Court. Accordingly, DoT has raised the demand basis special audit done by DoT and Comptroller and Auditor General of India. The contingent liability includes such demand and interest thereto (excluding certain contentious matters, penalty and interest thereto) for the financial years for which demand have been received. (ii) DoT had enhanced the microwave rates by introducing slab-wise rates based on the number of carriers vide circulars issued in 2006 and 2008 from erstwhile basis being allocated frequency. The Company had challenged the matter in TDSAT wherein TDSAT set aside the circular. In 2010, DOT had challenged the order of TDSAT before the Hon’bleSupreme Court which is yet to be listed for hearing. Further, TDSAT pronounced its judgment in March 2019 in relation to Unified Licenses which provides for manner of determination of such levies and dates from which such levies can be made applicable. The Company and one of its subsidiaries had made a provision of ` 21,676 until December 2018 for the period from FY 2007-08 to FY 2018-19. Subsequently, basis the recent judgment and external legal opinion the matter has been assessed to be a contingent liability and accordingly, the said provision has been reversed. (iii) Demands for the contentious matters in respect of subscriber verification norms and regulations including validity of certain documents allowed as proof of address / identity. (iv) Penalty for alleged failure to meet certain procedural requirements for EMF radiation self-certification compliance. The matters stated above are being contested by the Company and one of its subsidiaries and based on legal advice, the Company and one of its subsidiaries believes that it has complied with all license related regulations and does not expect any financial impact due to these matters. In addition to the amounts disclosed in the table above, the contingent liability on DOT matters includes the following: (v) Post the Hon’ble Supreme Court judgment in 2011, on components of AGR for computation of license fee, based on the legal advice, the Company believes that the foreign exchange gain should not be included in AGR for computation of license fee thereon. Further as per TDSAT judgement in 2015, foreign exchange fluctuation does not have any bearing on the license fees. Accordingly, the license fee on foreign exchange gain has not been provided in the financial statements. Also, due to ambiguity of interpretation of ‘foreign exchange differences’, the license fee impact on such exchange differences is not quantifiable. The matter is currently pending adjudication by Hon’ble Kerala High Court, Hon’ble Tripura High Court and Hon’ble Supreme Court. (vi) On January 8, 2013, DoT issued a demand on the Company and one of its subsidiaries for ` 52,013 towards levy of one time spectrum charge which was further revised on June 27, 2018 to ` 84,140. The demand includes a retrospective charge of ` 9,090 for holding GSM spectrum beyond 6.2 MHz
|417| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of ` 75,050 for GSM spectrum held beyond 4.4 MHz for the period from January 1, 2013, till the expiry of the initial terms of the respective licenses. In the opinion of the Company and one of its subsidiaries, inter-alia, the above demand amounts to alteration of financial terms of the licenses issued in the past. Based on a petition filed by the Company and one of its subsidiaries, the Hon’ble High Court of Bombay, vide its order dated January 28, 2013, has directed the DoT to respond and not to take any coercive action until the next date of hearing. The DoT has filed its reply and the matter is currently pending with Hon’ble High Court of Bombay. The Company and one of its subsidiaries, based on independent legal opinions, till date has not given any effect to the above demand. (vii) DoT had issued notices to the Company (as well as other telecom service providers) to stop provision of services (under 3G Intra Circle Roaming (‘ICR’) arrangements) in the service areas where such service providers had not been allocated 3G spectrum and levied a financial penalty of ` 3,500 on the Company. The Company contested the notices, in response to which TDSAT in 2014 held 3G ICR arrangements to be competent and compliant with the licensing conditions and quashed the notice imposing penalty. The DoT has challenged the order of TDSAT before the Hon’ble Supreme Court which is yet to be listed for hearing. Guarantees Guarantees outstanding as of March 31, 2019 and March 31, 2018 amounting to ` 107,689 and ` 129,565 respectively, have been issued by banks and financial institutions on behalf of the Group. These guarantees include certain financial bank guarantees which have been given for subjudice matters / compliance with licensing requirements, the amount with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable, in compliance with the applicable accounting standards. In addition to the above the Group’s share of guarantees of joint ventures and associates is 901 and ` 891 as of March 31, 2019 and March 31, 2018 respectively. 5. GVK POWER AND INFRASTRUCTURE LIMITED a) Significant accounting policies Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent Assets and Contingent Liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
|418| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts The Group does not recognize a contingent asset but discloses its existence in the financial statements if the inflow of economic benefits is probable. c) Notes to Accounts Contingent Liabilities A. Parent Company 1. Direct and Indirect Taxes Particulars March 31, 2019 As of March 31, 2018 Claims not acknowledged as debts by the company Income tax 200 344 Service tax 1,620 1,620 (i) Income tax demand for assessment year 2009-10 may come of ` 199.74 (March 31, 2018: ` 10), for assessment year 2010-11 for ` NIL (March 31, 2018: ` 279), for assessment year 2011-12 for ` NIL (March 31, 2018: ` 11) and for assessment year 2012-13 ` NIL (March 31, 2018: 44). 2. Security against loan taken by others (i) The Company had provided security by way of pledge of 230,960,770 (March 31, 2018: 230,960,770) shares of GVK Energy Limited for loans taken by the aforesaid joint venture entity. (ii) The Company has provided security by way of corporate guarantees amounting to ` 228,227 lakhs (March 31, 2018: ` 209,445 lakhs) to subsidiaries and joint ventures and ` 383,816 lakhs to an associate (March 31, 2018: ` 368,519 lakhs) for various fund and nonfund based facility availed by them. Management is of the opinion that the aforesaid companies will be able to meet their obligations as they arise and consequently no adjustment is required to be made to the carrying value of the security and guarantees provided. B. Subsidiary companies I. GVK Airport Developers Limited (GVKADL) GVKADL has pledged 79,999,968 (March 31, 2018: 79,999,968) equity shares of GVKAHL for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an associate entity. Management is of the opinion that the aforesaid company will be able to meet its obligation as they arise and consequently no adjustment is required to be made to the carrying value of the security. II. Mumbai International Airport Limited (MIAL) A) Claims against MIAL not acknowledged as debts: Income tax amounting to ` 14,375 lakhs (March 31, 2018: ` 13,943 lakhs) exclusive of interest and penalty, if determined to be payable, as demanded by the concerned authorities in respect of expense disallowed/ taxation of interest income and capital gain adjusted against Capital Work in progress, for assessment years starting from AY 2010-11 and up to AY 2014-15. MIAL has contested such demand and preferred appeals which are pending for decision either by Hon’ble High Court/Income Tax Appellate Tribunal/Commissioner of Income Tax(Appeals), Mumbai. Further, In view of availability of MAT credit available for setoff and carry forward of the same to subsequent years, MIAL is expecting no tax demand to be ultimately payable for the years under review. Demand on account of disallowance Cenvat Credit availed in relation to construction activities, and other input credit being availed by the company for ` 9,813 lakhs (March 31, 2018: ` 3,680 lakhs), for the period October 2007 to March 2013 as confirmed by Commissioner of GST and
|419| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets Central Excise has been contested by MIAL by preferring an appeal before CESTAT and paid ` 736 lakhs under protest. MIAL contends that restriction of availment of Cenvat Credit availed in relation to construction activities are not applicable to Airport Services as defined under clause (zzm) of Section 65 (105) of the Finance Act, 1994. iii. MIAL has received refund of ` 2,390 lakhs from Assistant commissioner of Service tax, on account of service tax paid to contractors on account of Construction of Airport which has been exempted with retrospective effect. The department has filed appeal before Commissioner Appeals, on direction of commissioner of service tax. MIAL is contesting the same. iv. The Ministry of Civil Aviation issued a Order No. AV. 13024/03/2011-AS dated February 18, 2014 regarding expenditure out of Passenger Service Fee (Security Component) [PSF (SC)] wherein all airport operators were directed to reverse/reimburse back to the PSF(SC) the total amount spent on capital costs/expenditure towards procurement and maintenance of security system/ equipment and on creation of fixed assets out of PSF(SC). During current financial year, MIAL has reversed and reimbursed ` 2,069 lakhs represents amount spent on capital expenditure out of PSF(SC) fund from the date of aforesaid order till March 31, 2018. Up to March 31, 2019 the funds spent on such expenditure by the company is ` 31,036 lakhs (March 31, 2018: ` 31,547 lakhs). MIAL has challenged the said order before the Hon’ble Bombay High Court by way of writ petition. Hon’ble Bombay High Court vide its order dated April 17, 2014, has stayed the recovery against the Company Meanwhile, by way of Hon’ble Supreme Court’s Order dated March 05, 2018 in the Transfer Petition no. 124-131/2018 filed by Union of India (UoI), directed that instead of transferring all the matters, one petition i.e. W.P. 1696/2014 – DIAL v. UOI shall be heard expeditiously and other High Courts shall await the same. MIAL filed Transfer Petition no. 1109 of 2018 in the Supreme Court to transfer Bombay High Court matter WP no. 2443/2014 to Delhi High Court (DHC) and tag it with WP 1696/2014- DIAL v. UoI. Vide order dated July 24, 2018, Supreme Court modified its earlier order dated March 05, 2018 partially and allowed MIAL and other similarly situated parties to intervene in WP 1696/2014 i.e. DIAL v. UoI pending before DHC. Accordingly, MIAL has filed an Intervention Application in the Delhi High Court and the same is pending for hearing. Based on an internal assessment and aforesaid order of Hon’ble Bombay High Court, the management is confident that no liability in this regard would be payable and as such no provision has been made in these financial statements. v. a) Other claims from Airports Authority of India of ` 12,831 lakhs (March 31, 2018: ` 12,349 lakhs) and from Customer and Others ` 842 lakhs (March 31, 2018: ` 569 lakhs) respectively. b) MIAL is a party to various land litigations with respect to the land demised to it pursuant to entering into OMDA and Lease Deed with AAI. Based on the internal legal assessment, the Management is confident that these litigations would not result into any liability to MIAL and as such no provision has been made in these financial statements. vi. Income tax authorities have preferred appeal before Hon’ble High Court/Income Tax Appellate Tribunal in respect of relief granted to MIAL for additions on account of taxation of Development Fees, expenses disallowed as revenue expenditure, Penalty waiver and other tax relief granted for ` 36,134 lakhs (Net of MAT credit available for set off ` 11,379 lakhs) plus interest payable. MIAL has contested such an action and based on fact of the case and legal precedence available MIAL is of the opinion that there is remote possibility of ultimate demand that would be payable. vii. The service tax department has preferred appeal before Hon’ble High Court in respect of relief granted by CESTAT for service tax demand of ` 6,005 lakhs on Development Fee & interest payable on the same. MIAL has contested the same and based on the facts of the case and legal precedence available, is of the opinion it would not be materialised.
|420| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts viii. Service tax department has issued a show cause notice for service tax demand for ` 257 lakhs payable on license fee. MIAL has contested the same and based on the facts of the case and legal precedence available, is of the opinion it would not be materialised. III. GVK Jaipur Expressway Private Limited (GJEPL) March 31, 2019 March 31, 2018 Disputed income tax demands* 9,730 6,887 Claim made by NHAI for share in revenue shortage which is disputed by GJEPL and not acknowledged as debt, GJEPL has filed petition with the arbitration tribunal at Delhi and the case is under process. 927 959 * Amount paid/ adjusted under protest ` 5,711 lakhs (March 31, 2018: ` 5,411 lakhs). IV. GVK Deoli Kota Expressway Private Limited (GVKDEPL) On April 22, 2019 the company has informed NHAI about the breaches in its performance as per Article 37.2 of Concession Agreement dated May 17, 2010. In response to the said letter, NHAI vide letter No NHAI/11012/BOT-DBFO/01/2007/134366 dated May 4, 2019 had denied all the breaches that the company has made and in turn raised demand on the company to the tune of ` 4,666 lakhs towards damages and penalties. The company has denied all the claims through its several letters as and when the claims were raised by NHAI and also currently the Company is in the process of replying NHAI letter dated May 04, 2019. V. GVK Shivpuri Dewas Expressway Private Limted (GVKSDEPL) March 31, 2019 March 31, 2018 Bank guarantee given to NHAI* 2,815 2,815 GVKSDEPL has has filed an application before the Honorable Delhi High Court, praying for relief from possible invocation of the performance security by NHAI and the Honorable Delhi High Court has granted interim injunction against invocation and encashment of performance security and referred the matter for Arbitration under the provisions of the concession agreement.The proceedings before the Arbitral Tribunal are in progress. The interim orders of the Honorable High Court of Delhi to maintain status quo on the performance security is in force as on the date of the balance sheet. As requested by NHAI, without prejudice to the pending litigation, the subsidiary company submitted a proposal to NHAI asking for various concessions and reliefs which include compensation for increase in capital cost, site mobilization cost, tolling the existing 2-lane highway during construction period, premium re-schedulement etc. if the subsidiary company were to take up the project. Pending proceedings before the Arbitration tribunal, the subsidiary company is yet to receive response from NHAI on the said proposal. NHAI has also filed its statement of defense along with counter claim of ` 45,374 lakhs as against the Subsidiary Company’s claim statement of ` 4,551 lakhs and demand for return of performance security. The subsidiary company’s application for revision of its claim statement was allowed by the Tribunal vide Order dated September 29, 2015 and accordingly the subsidiary company filed its revised claim statement totaling to ` 55,058 lakhs. NHAI filed application expressing its intention to revise their claims against the Subsidiary Company, which is yet to be heard by the Tribunal. The subsidiary company is confident that the matter will be decided in its favour. vi. GVK Transport Private Limited (GVKTPL) March 31, 2019 March 31, 2018 Disputed income tax demands* 657 657 Service tax - 55 * Management based on its internal assessment and/or legal advise is confident that the matter will be decided in its favour
|421| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets c) Joint Ventures (to the extent of shareholding therein) a) GVK Industries Limited (GVKIL) March 31, 2019 March 31, 2018 On account of Guarantees issued by banks - 80 Service tax demand on operator of the power plant* 285 - Income tax demands pending in appeals* 4,652 4,652 Claims not acknowledged as debts- electricity duty* 1,171 1,171 Refund of duty drawback under deemed export scheme* 941 941 Towards difference in import of energy charges* 89 89 * Management based on its internal assessment and/or legal advice is confident that the matter will be decided in the GVKIL’s favour. i) AP Transco has filed petition before APERC to consider interest on working capital charged by State Bank of India to its most credit worthy customers for the purpose of determining tariff for the year 2003-04. GVKIL is contesting the contention of AP Transco and is confident that the matter will be decided in its favour. ii) As per the terms of contract with Bharat Petroleum Corporation Limited (BPCL) for supply of Naphtha, GVKIL has to pay for 80,000 MT @ ` 38.45 as ‘Minimum off Take charges. GVKIL is negotiating with BPCL to reduce the Minimum off Take quantity from 80,000 MT to 40,000 MT, which is under consideration by BPCL. Pending such acceptance by BPCL, no provision is made in the books for the requested reduction of 40,000 MT. The contract with BPCL expired on January 29, 2012. Liability on account of this works out to ` 74 lakhs as at year ended March 31, 2019 and up to March 31, 2018 ` 74 lakhs. iii) Andhra Pradesh State Load Dispatch Centre (APSLDC) has filed petitions before the Andhra Pradesh Electricity Regulatory Commission (APERC) for appointment of adjudicating officer for assessment of charges to be levied for non-adherence to backing down instructions by the Company, operator of the power plant of GVKIL. APSLDC has claimed an amount of ` 829 lakhs (March 31, 2018: ` 829 lakhs) for the aforesaid non- compliance. APERC has appointed adjudicating officer to conduct an enquiry into the matter. Management based on its internal assessment is confident that the matter will be decided in GVKIL’s favour. iv) GVKIL approached AP Transco for new connection while constructing its new power plant upon which AP Transco raised demand of ` 256 lakhs (March 31, 2018: ` 256 lakhs) towards minimum monthly charges regarding electricity connection taken earlier which was surrendered on October 7, 1996. GVKIL filed petition before the APERC claiming levy of demand as arbitrary, which was disposed directing GVKIL to approach Consumer Grievance Redressal Cell as dispute is not in connection with power purchase agreement. GVKIL has filed a writ petition before the High Court of Andhra Pradesh contesting that the matter is within ambit of PPA. The High Court of Andhra Pradesh has issued stay on demand. Management based on its internal assessment/ legal advice is confident that the matter will be decided in GVKIL’s favour. b) Alaknanda Hydro Power Company Limited (AHPCL) March 31, 2019 March 31, 2018 Disputed income tax demands (` 40 lakhs paid under protest)* 116 116 Claims not acknowledged as debts 6,176 6,944 * Management based on its internal assessment and/or legal advice is confident that the matter will be decided in the AHPCL’s favour.
|422| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts c) GVK Power (Goindwal Sahib) Limited (GVKPGSL) March 31, 2019 March 31, 2018 On account of Guarantees issued by banks - 904 Claims against the Company not acknowledged as debts* 2,894 3,056 On account of Interest to banks 569 - * Management based on its internal assessment and/or legal advice is confident that the matter will be decided in the GVKPGSL’s favour. d) GVK Gautami Power Limited (GVKGPL) March 31, 2019 March 31, 2018 Service tax demand on operator of the power plant* 269 269 Claims not acknowledged as debts- electricity duty* 1,384 1,385 Claims against the company not acknowledged as debts* 251 175 Disputed income tax demands* - 1,133 Disputed Entry Tax 19 - * Management based on its internal assessment and/or legal advice is confident that the matter will be decided in GVKGPL’s favour. Other litigations 1. GVK Energy Limited (GVKEL) has pending litigations with service tax authorities amounting to ` 350 lakhs (March 31, 2018 ` 454 lakhs) 2 GVK Power (Goindwal Sahib) Limited (GVKPGSL) a) There are claims and counter claims between GVK Power (Goindwal Sahib) Limited (“”GVKPGSL””) and Bharat Heavy Electricals Limited (“”BHEL””) and also between (“”GVKPGSL””) and Punj Lloyd Limited (“”PLL””). GVKPGSL engaged BHEL for execution of BTG works along with associated Auxiliaries, control & instrumentation works and Electrical package in respect of Goindwal Sahib project (“Works”). In execution of Works certain disputes arised between parties. Whilst the discussions for settlement of disputes are going on, GVKPGSL sought BHEL to renew the bank guarantees, worth approximately Rs. 11,000 lakhs. BHEL filed the captioned petition u/s 9 of the Arbitration and Conciliation Act,1996 before Commercial Court, Hyderabad and obtained stay against GVKPGSL from invoking the BGs. BHEL has extended the bank guarantees till July 28, 2019. Subsequently, BHEL has initiated arbitration proceedings. A three members arbitration tribunal was constituted. The hearings are in progress with Arbitration. b) GVKPGSL engaged PLL for execution of Balance of Plant works in respect of Goindwal Sahib project (“Works”). In execution of Works certain disputes arised between parties. GVKPGSL issued a notice dated December 24, 2014 to PLL levying liquidated damages and other claims for (a) defaults committed by PLL under the agreement for supply (steel & cement), agreement for supply (ex-works) and an agreement for services, September 14, 2009 and (b) for delays caused by it in completion of the project on time. PLL and GVKPGSL had nominated their choices of arbitrators. But, the presiding arbitrator could not be appointed due to non-cooperation of PLL. Subsequently, PLL had filed three Applications u/s. 11(5) & (6) of the Arbitration & Conciliation Act, 1996 bearing Nos. 146/17, 147/17 & 148/17 seeking the Court to appoint a Presiding Arbitrator so as to complete the constitution of a three (03) members Arbitral Tribunal to adjudicate the claims and disputes between GPGSL and PLL arising out of the above referred agreements. Matters are yet to be listed for hearing. Management based on its internal assessment and/or legal advice is confident that the matter will be decided in GVKPGSL’s favour. 3. GVKRHEPPL has initiated an arbitration process in respect of hydro power project being executed by the Company and the process is in its initial stages. In the arbitration GVKRHEPPL has made a claim of ` 518,963 lakhs and J&K Power Development Department (JKPDD) has made a counter claim of
|423| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets ` 540,000 lakhs. Refer note 50 for further details. 4. Gujarat State Road Development Corporation (GSRDC) has issued a termination and arbitration notice as per which GSRDC has terminated the concessionaire agreement and also has claimed an amount of ` 54,092 lakhs. In response to such notice GVK BVEPL has written to GSRDC denying the claim from GSRDC and termination of agreement and has also stated that the delay is due to the default from GSRDC. Refer note 49 for further details. Group is in the process of evaluating the impact of the recent Supreme Court Judgment in case of “Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal” and the related circular (Circular No. C-I/1(33)2019/ Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employees’ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of “basic wages” of the relevant employees for the purposes of determining contribution to provident fund under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952. As a matter of caution, the Group has made a provision on a prospective basis from the date of the SC order. Group will update its provision, on receiving further clarity on the subject. Capital Commitments A) Parent Company Other Commitments a) GVKPIL has given undertaking to infuse equity aggregating to ` 400,819 lakhs (March 31, 2018: ` 383,561 lakhs) in GVK Coal Developers (Singapore) Pte. Limited, towards shortfall, if any, of its loan repayment obligations. Further, the Company has pledged 155,587,500 (March 31, 2018: 155,587,500), 22,495,000 (March 31, 2018: 22,495,000) and 48,000,000 (March 31, 2018: 48,000,000) shares of GVK Energy Limited, GVK Transportation Private Limited and GVK Airport Developers Limited respectively for securing loan obtained by GVK Coal Developers (Singapore) Pte. Limited, an associate entity in which Company has 10% stake. Management believes that GVK Coal Developers (Singapore) Pte. Limited will be able to meet its obligations. b) During the year ended March 31, 2011, the Company, GVK Energy Limited (jointly controlled entity) and certain private equity investors (‘investors’) had entered into an investment agreement pursuant to which the Company has undertaken to conduct an initial public offering of the GVK Energy Limited’s equity shares (‘Qualified IPO’ or ‘QIPO’) within 72 months from the date of investment agreement (preferred listing period). If the GVK Energy Limited does not make a QIPO during the preferred listing period and no offer for sale or demerger takes place within 12 months of the preferred listing period, then, at any time thereafter, the investors will have a put option with respect to all of the securities held by the Investor (“Put Right”) on the Company and the GVK Energy Limited at the higher of i) 20% IRR from the date of investment to the date of receipt of proceeds from the investor (“Put IRR”) and ii) the fair market value of the investor’s shares. Provided the Put IRR shall be reduced to 15%, if at least 3 private sector initial public offerings with an issue size of ` 100,000 lakhs or more each have not taken place in India between the 48th month to the 72nd month from date of investment agreement. The Company based on legal advice believes that the put option with guaranteed return is not enforceable/ in view of the regulations of Reserve Bank of India and hence no liability towards the same has been accounted in the financial statements. B) Subsidiary companies i) As at March 31, 2019 the estimated amount of contracts (to the extent purchase orders issued) remaining to be executed on capital account, net of advances is ` 54,824 lakhs (March 31, 2018: ` 46,390 lakhs). ii) During the current financial year, the subsidiary Navi Mumbai International Airport Private Limited (NMIA) has entered into a concession agreement with City and Industrial Development Corporation (CIDCO) to undertake the implementation, operation and maintenance of the NMIA.
|424| Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts iii) As at March 31, 2019 the Group’s subsidiary has commitment towards repayment of soft loan towards pre-development works carried out by CIDCO amounting to ` 205,709 lakhs and towards allotment of ` 1,120 lakhs equity shares of face value of ` 10 each amounting to ` 11,202 lakhs towards predevelopment works to be carried out by CIDCO pursuant to clause 12.9 and 5.4 of the Concession agreement respectively (March 31, 2018: Nil) c) Joint Ventures (to the extent of shareholding therein) As at March 31, 2019 the estimated amount of contracts (to the extent purchase orders issued) remaining to be executed on capital account, net of advances is ` 237 lakhs (March 31, 2018: ` 237 lakhs). 6. JET AIRWAYS INDIA LIMITED Provisions are recognised when the Company has a present obligation (legal or constructive), as a result of past events, and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimated. The expense relating to a provision is presented in the statement of profit and loss. Onerous contracts Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist where the Company has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received from the contract. Contingent liabilities and assets Contingent liabilities are possible obligations that arise from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow of economic benefits is remote. Contingent assets are possible assets that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Disclosure Note 22: Provisions Particulars As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 Provision for employee benefits Gratuity 18,755 17,406 11,090 Compensated Absences 6,232 6,451 4,528 Others Redelivey Provision (Refer Note below) 21,443 18,046 13,607 46,430 41,903 29,225 Redelivery Provision The schedule of provision as required to be disclosed in compliance with Ind AS 37 on ‘Provisions, Contingent Liabilities and Contingent Assets’ is as under: Particulars For the year ended 31 March 2018 For the year ended 31 March 2017 Balance as at beginning of the year 18,046 15,351 Provisions created during the year 3,031 2,548
|425| Chap. 18 – Ind AS 37 – Provisions, Contingent Liabilities and Contingent Assets Particulars For the year ended 31 March 2018 For the year ended 31 March 2017 Interest accretion on provisions during the year 1,829 1,344 Amounts Utilised during the year (299) (795) Exchange loss / (gain) adjustment 110 (402) Balance as at end of the year 22,717 18,046 The Company has in its fleet certain aircraft on operating lease. Per the terms of the lease agreements, the aircraft have to be redelivered to the lessors at the end of the lease term in certain stipulated technical condition. Such redelivery conditions would entail costs for technical inspection, maintenance checks, repainting costs prior to its redelivery and the cost of ferrying the aircraft to the location as stipulated in the lease agreements. The measurement of the provision for redelivery cost includes assumptions primarily relating to expected costs and discount rates commensurate with the expected obligation maturity schedules. An estimate is therefore made to ensure that the provision corresponds to the present value of the expected costs to be borne by the Company. Judgement is exercised by management given the long-term nature of assumptions that go into the determination of the provision. The assumption made in relation to the current year are consistent with those in the previous year. Expected timing of resulting outflow of economic benefit is financial year 2018-2019 to 2025-2026. Note 27: Provisions Particulars As at 31 March 2018 As at 31 March 2017 As at 1 April 2016 Provision for employee benefits Gratuity 1,253 1,117 814 Compensated Absences 2,411 2,386 1,080 Other provision : Redelivery Provision (Refer note 22) 1,274 - 1,744 Wealth Tax 16 16 16 4,954 3,519 3,654 Note 45: Contingent liabilities and commitments (to the extent not provided for) 31 March 2018 31 March 2017 1 April 2016 A. Contingent liabilities a) Guarantees i. Letters of Credit Outstanding 314,664 285,798 238,073 ii. Bank Guarantees outstanding 141,063 122,885 133,320 iii. Corporate Guarantee given to Banks and Financial Institutions against credit facilities and to Lessors/ service provider against financial obligations extended to Subsidiary Company. - Amount of Guarantee 17,678 16,441 22,045 - Outstanding Amounts against the Guarantee 17,678 16,441 22,045 b) Claims against the Company not acknowledged as debt i. Service Tax demands in appeals 165,908 122,403 145,307 ii. Fringe Benefit Tax demand in appeals 1,736 1,736 1,735 iii. Pending Civil and Consumer Suits 13,807 14,988 16,968 iv. Inland Air Travel Tax demands under appeal 426 426 426 Amount deposited with the Authorities for the above demands 105 105 105