|405| Chap. 17 – Ind AS 33 — Earning Per Share Chapter 17 Ind AS 33 — Earning Per Share 1. AJANTA PHARMA LIMITED ACCOUNTING POLICY Earnings per share Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period. Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the 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. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented. Disclosure 41 Earnings Per Share (EPS) The numerator and denominator used to calculate Basic and Diluted Earnings Per Share: 31st March, 2017 31st March, 2016 Basic and Diluted Earnings Per Share: Profit attributable to Equity shareholders- for Basic EPS (` in cr.) (A) 499.81 421.95 Add: Dilutive effect on profit (` in cr.)* (B) Nil Nil Profit attributable to Equity shareholders for Diluted EPS (` in cr.) (C=A+B) 499.81 421.95 Weighted Average Number of Equity Shares outstanding-for Basic EPS (D) 88,004,688 87,996,438 Add: Dilutive effect of option outstanding-Number of Equity Shares * (E) 24,466 6,738 Weighted Average Number of Equity Shares for Diluted EPS (F=D+E) 88,029,154 88,003,176 Face Value per Equity Share (`) 2 2 Basic Earnings Per Share (`) (A/D) 56.79 47.95 Diluted Earnings Per Share (` ) (C/F) 56.78 47.95 *On account of Employee Stock Option Scheme (ESOS)-(Refer note 43). 2. BATA INDIA LIMITED ACCOUNTING POLICY Disclosure 29. Earnings Per Share (EPS) Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year. Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders of the Company by 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.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |406| The following reflects the income and share data used in the basic and diluted EPS computations: 31st March, 2017 31st March, 2016 Profit attributable to equity holders (in ` millions) 1,587.48 2,175.95 1,587.48 2,175.95 Weighted average number of equity shares in calculating basic EPS (refer note 12) 128,527,540 128,527,540 Weighted average number of equity shares in calculating diluted EPS 128,527,540 128,527,540 Earnings per equity share in INR Computed on the basis of profit for the year Basic 12.35 16.93 Diluted 12.35 16.93 3. BHARAT FORGE LIMITED ACCOUNTING POLICY 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. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such 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 34. Earnings per equity share Particulars Year ended March 31, 2017 Year ended March 31, 2016 Numerator for basic and diluted EPS Net profit after tax attributable to shareholders (in ` million) (A) 5,850.77 6,976.18 Denominator for basic EPS Weighted average number of equity shares for basic EPS (B) 232,794,316 232,794,316 Denominator for diluted EPS Weighted average number of equity shares for diluted EPS (C) 232,794,316 232,794,316 Basic earnings per share of face value of ` 2/- each (in `) (A/B) 25.13 29.97 Diluted earnings per share of face value of ` 2/- each (in `) (A/C) 25.13 29.97 4. BHARAT PETROLEUM CORPORATION LIMITED ACCOUNTING POLICY 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. 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.
|407| Chap. 17 – Ind AS 33 — Earning Per Share Disclosure Note 54 : Earnings Per Share (EPS) ` in Crores Particulars 2016-17 2015-16 i. Profit attributable to equity holders of the Corporation for basic and diluted earnings per share 8,039.30 7,056.36 ii. Weighted average number of ordinary shares Issued ordinary shares at 1st April (In Crores) 144.62 72.31 Effect of shares issued as Bonus shares * (In Crores) - 72.31 Less : Investment held by BPCL Trust for Investment in Shares* [Refer Note No. 45] (In Crores) (13.49) (13.49) Weighted average number of shares at 31st March for basic and diluted EPS (In Crores) 131.13 131.13 Basic and Diluted EPS (`) 61.31 53.81 *The Corporation has issued bonus shares in the ratio of 1:1 during financial year 2016-17. The EPS for the financial year 2015-16 has been appropriately adjusted. NOTE 45 As per the scheme of Amalgamation of the erstwhile Kochi Refineries Limited (“KRL”) with the Corporation approved by the Government of India, 3,37,28,737 equity shares of the Corporation were allotted (in lieu of the shares held by the Corporation in the erstwhile KRL) to a trust for the benefit of the Corporation in the financial year 2006-07. After the 1:1 Bonus issue in July 2012 and July 2016, presently the trust holds 13,49,14,948 equity shares of the Corporation. The cost of the original investment together with the additional contribution to the corpus of the trust made in 2014-15 has been reduced from the total equity of the Corporation. To the extent of the face value of the shares, the same has been reduced from the Paid up Share capital of the Corporation and the balance has been reduced from Other Equity under a separate reserve. Accordingly, the income received from the Trust during the financial years 2016-17 and 2015-16 has been recognised directly under Other Equity of the Corporation. 5. BIOCON LIMITED ACCOUNTING POLICY Basic earnings per share is computed using the weighted average number of equity shares outstanding during the period adjusted for treasury shares held. Diluted earnings per share is computed using the weightedaverage number of equity and dilutive equivalent shares outstanding during the period, using the treasury stock method for options and warrants, except where the results would be anti-dilutive. Disclosure 32. Earnings per share (EPS) March 31, 2017 March 31, 2016 Earnings Profit for the year 5,193 3,686 Shares Basic outstanding shares 200,000,000 200,000,000 Less: Weighted average shares held with the ESOP Trust (3,702,196) (3,697,436) Weighted average shares used for computing basic EPS 196,297,804 196,302,564 Add: Effect of dilutive options granted but not yet exercised/not yet eligible for exercise 1,376,487 167,870 Weighted average shares used for computing diluted EPS 197,674,291 196,470,434 Earnings per share Basic (in `) 26.45 18.78 Diluted (in `) 26.27 18.76
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |408| 6. CIPLA LIMITED ACCOUNTING POLICY Basic earnings per share is 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 earnings per share, the net profit attributable to equity shareholders and the weighted average number of shares outstanding are adjusted for the effect of all dilutive potential equity shares from the exercise of options on unissued share capital. The number of equity shares is the aggregate of the weighted average number of equity shares and the weighted average number of equity shares which are to be issued in the conversion of all dilutive potential equity shares into equity shares. Disclosure Note 52: Earnings Per Share (EPS) Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 Profit after Tax as per Statement of Profit and Loss (` in Crore) 974.94 1462.30 Basic Weighted Average No. of Shares Outstanding 803,979,037 803,140,466 Basic Earnings Per Share ` 12.13 ` 18.21 ESOSs Outstanding 1,338,647 2,278,511 Weighted Average Number of Equity Share Adjusted for the effect of Dilution 805,317,684 805,418,977 Diluted Earnings Per Share ` 12.11 ` 18.16 7. COLGATE PALMOLIVE (INDIA) LIMITED ACCOUNTING POLICY Basic Earnings Per Share Basic earnings per share is calculated by dividing: The profit attributable to owners of the Company by the weighted average number of equity shares outstanding during the financial year, adjusted for bonus elements in equity shares issued during the year. Diluted Earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account: the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares. Disclosure Note 35: Earnings Per Share (EPS) Year ended March 31, 2017 Year ended March 31, 2016 i) Basic and Diluted Earnings Per Share (`) Profit After Taxation (` Lacs) 577,43.24 581,17.18 Weighted average number of shares for Basic and Diluted EPS (Nos.) 27,19,85,634 27,19,85,634 Nominal Value of shares outstanding (`) 1 1 Basic and Diluted Earnings Per Share (`) 21.23 21.37 ii) Weighted average number of shares used as the denominator Opening Balance 27,19,85,634 13,59,92,817 Bonus Issue during the year (1:1) – 13,59,92,817 Weighted average number of shares used as the denominator for calculating basic and diluted earnings per share 27,19,85,634 27,19,85,634
|409| Chap. 17 – Ind AS 33 — Earning Per Share 8. DR. REDDY’S LABORATORIES LIMITED ACCOUNTING POLICY Earnings per share The Company presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which includes all stock options granted to employees. Disclosure 2.21 Earnings Per Share (EPS) Particulars For the year ended 31 March 2017 For the year ended 31 March 2016 Earnings Profit attributable to equity holders of the parent 13,841 13,743 Shares Number of shares at the beginning of the year 170,607,653 170,381,174 Add: Equity shares issued on exercise of vested stock options 211,564 226,479 Less: Buy back of equity shares (5,077,504) - Total number of equity shares outstanding at the end of the year 165,741,713 170,607,653 Weighted average number of equity shares outstanding during the year – Basic 166,648,943 170,547,643 Add: Weighted average number of equity shares arising out of outstanding stock options that have dilutive effect on the EPS 348,732 525,137 Weighted average number of equity shares outstanding during the year – Diluted 166,997,675 171,072,780 Earnings per share of par value ` 5/- – Basic (`) 83.05 80.59 Earnings per share of par value ` 5/- – Diluted (`) 82.88 80.34 9. HAVELLS INDIA LIMITED ACCOUNTING POLICY Earnings Per Share 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. The weighted average number of equity shares outstanding during the period is adjusted for events such 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 effect of all potentially dilutive equity shares. Note: There are no instruments issued by the Company which have effect of dilution of basic earning per share.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |410| Disclosure 13. Earnings per share (` in Crores) Year ended March 31, 2017 Year ended March 31, 2016 (a) Basic Earnings per share Numerator for earnings per share Profit after taxation 539.04 712.03 Denominator for earnings per share Weighted number of equity shares outstanding (Nos.) during the year 624,808,427 624,576,061 Earnings per share - Basic (one equity share of ` 1/- each) 8.63 11.40 (b) Diluted Earnings per share Numerator for earnings per share Profit after taxation 539.04 712.03 Denominator for earnings per share Weighted number of equity shares outstanding (Nos.) during the year 624,808,427 624,576,061 Earnings per share- Diluted (one equity share of ` 1/- each) 8.63 11.40 Note : There are no instruments issued by the Company which have effect of dilution of basic earning per share 10. HINDUSTAN CONSTRUCTION COMPANY LIMITED ACCOUNTING POLICY Basic earnings per share is computed by dividing the net profit or loss 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. Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company 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). The options granted to employees under the plan and the optionally convertible debentures do not qualify as potential equity shares outstanding during the periods, based on the present conditions prevalent, and hence have not been considered in the determination of diluted earnings per share. Disclosure Note 31 : Earnings per share (EPS) Basic and diluted EPS A. Profit computation for basic earnings per share of ` 1 each Net profit as per the Statement of Profit and Loss available for equity shareholders (` crore) 59.41 94.76 B. Weighted average number of equity shares for EPS computation (Nos.) 831,600,386 775,880,231 C. EPS - Basic and Diluted EPS (`) 0.71 1.22 The options granted to employees under the plan and the optionally convertible debentures do not qualify as potential equity shares outstanding during the periods, based on the present conditions prevalent, and hence have not been considered in the determination of diluted earnings per share.
|411| Chap. 17 – Ind AS 33 — Earning Per Share 11. HINDUSTAN UNILEVER LIMITED ACCOUNTING POLICY Earnings Per Share 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. Disclosure 37 Earnings Per Equity Share Refer Note 2.4 (p) for accounting policy on Earnings Per Share. Year ended 31st March, 2017 Year ended 31st March, 2016 Earnings Per Share has been computed as under: Profit for the year 4,490 4,137 Weighted average number of equity shares outstanding 2,16,42,12,891 2,16,37,96,723 Earnings Per Share (`) - Basic (Face value of ` 1 per share) ` 20.75 ` 19.12 Add: Weighted average number of potential equity shares on account of employee stock options/ performance share schemes 4,25,681 7,21,610 Weighted average number of Equity shares (including dilutive shares) outstanding 2,16,46,38,572 2,16,45,18,333 Earnings Per Share (`) - Diluted (Face value of ` 1 per share) ` 20.74 ` 19.11 12. INFOSYS LIMITED Disclosure 2.23 Reconciliation of basic and diluted shares used in computing earnings per share. The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share: Particulars Year ended March 31, 2017 2016 Basic earnings per equity share – weighted average number of equity shares outstanding 2,29,69,44,664 2,29,69,44,664 Effect of dilutive common equivalent shares – share options outstanding 2,15,006 – Diluted earnings per equity share – weighted average number of equity shares and common equivalent shares outstanding 2,29,71,59,670 2,29,69,44,664 For the year ended March 31, 2017, 77,942 options to purchase equity shares had an anti-dilutive effect. For the year ended March 31, 2016, no outstanding option to purchase equity shares had an anti-dilutive effect.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |412| 13. LARSEN & TOUBRO LIMITED Disclosure NOTE [52] Basic and Diluted Earnings per share [EPS] computed in accordance with Ind AS 33 “Earnings per Share”: Particulars 2016-17 2015-16 Basic earnings per share Profit after tax as per accounts (` crore) A 5453.74 4999.58 Weighted average number of equity shares outstanding B 93,23,49,030 93,07,61,648 Basic EPS (`) A/B 58.49 53.71 Diluted earnings per share Profit after tax as per accounts (` crore) A 5453.74 4999.58 Weighted average number of equity shares outstanding B 93,23,49,030 93,07,61,648 Add: Weighted average number of potential equity shares on account of employee stock options C 31,60,400 43,02,265 Weighted average number of equity shares outstanding for diluted EPS D=B+C 93,55,09,430 93,50,63,913 Diluted EPS (`) A/D 58.30 53.47 Face value per share (`) 2 2 The following potential 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 2016-17 2015-16 Weighted average number of potential equity shares on account of conversion of foreign currency convertible bonds 63,46,986 63,46,986 Note: On May 29, 2017, the Board of Directors has recommended for the approval of shareholders, the issue of bonus equity shares in the ratio of 1:2 (one bonus equity share of ` 2 each for every two equity shares of ` 2 each held). The effect of the said bonus issue will be given in the year 2017-18 post approval by shareholders. 14. MAHINDRA LIFESPACE DEVELOPERS LIMITED Disclosure 30) Earnings per Share Particulars For the year ended 31st March, 2017 For the year ended 31st March, 2016 ` ` Per Share Per Share Basic Earnings per share From continuing operations 11.92 19.08 From discontinuing operations - - Total basic earnings per share 11.92 19.08 Diluted Earnings per share From continuing operations 11.90 19.01 From discontinuing operations - - Total diluted earnings per share 11.90 19.01
|413| Chap. 17 – Ind AS 33 — Earning Per Share 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: Particulars For the year ended 31st March 2017 For the year ended 31st March, 2016 Profit / (loss) for the year attributable to owners of the Company 4,893.65 7,828.05 Less: Preference dividend and tax thereon - - Profit / (loss) for the year used in the calculation of basic earnings per share 4,893.65 7,828.05 Profit for the year on discontinued operations used in the calculation of basic earnings per share from discontinued operations - - Profits used in the calculation of basic earnings per share from continuing operations 4,893.65 7,828.05 Weighted average number of equity shares 41,040,742 41,021,975 Earnings per share from continuing operations - Basic (`) 11.92 19.08 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 Warrants, Stock options and Convertible bonds for the respective periods. Since, the effect of the conversion of Preference shares was anti-dilutive, it has been ignored. For the year ended 31st March 2017 For the year ended 31st March, 2016 Profit / (loss) for the year used in the calculation of basic earnings per share 4,893.65 7,828.05 Add: Interest expense and exchange fluctuation on convertible bonds (net) - adjusted for attributable taxes - - Profit / (loss) for the year used in the calculation of diluted earnings per share 4,893.65 7,828.05 Profit for the year on discontinued operations used in the calculation of diluted earnings per share from discontinued operations - - Profits used in the calculation of diluted earnings per share from continuing operations 4,893.65 7,828.05 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: For the year ended 31st March, 2017 For the year ended 31st March, 2016 Weighted average number of equity shares used in the calculation of Basic EPS 41,040,742 41,021,975 Add: Effect of Warrants ESOPs 95,490 145,784 Weighted average number of equity shares used in the calculation of Diluted EPS 41,136,232 41,167,759 Diluted earnings per share (`) 11.90 19.01
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |414| 15. NTPC LIMITED ACCOUNTING POLICY Basic earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the financial year. Diluted earnings per equity share is computed by dividing the net profit or loss attributable to equity shareholders of the Company by the 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. Basic and diluted earnings per equity share are also computed using the earning amounts excluding the movements in regulatory deferral account balances. Disclosure 59. Disclosure as per Ind AS 33 ‘Earnings per Share’ (i) Basic and diluted earnings per share (in `) March 31, 2017 March 31, 2016 From operations including regulatory deferral account balances (a) 11.38 13.06 From regulatory deferral account balances (b) 0.32 0.01 From operations excluding regulatory deferral account balances (a)-(b) 11.06 13.05 Nominal value per share 10.00 10.00 (ii) Profit attributable to equity shareholders (used as numerator) (` Crore) 31 March 2017 31 March 2016 From operations including regulatory deferral account balances (a) 9,385.26 10,769.60 From regulatory deferral account balances (b) 263.92 9.51 From operations excluding regulatory deferral account balances (a)-(b) 9,121.34 10,760.09 (iii) Weighted average number of equity shares (used as denominator) (Nos.) 31 March 2017 31 March 2016 Opening balance of issued equity shares 8,245,464,400 8,245,464,400 Effect of shares issued during the year, if any - - Weighted average number of equity shares for Basic and Diluted EPS 8,245,464,400 8,245,464,400 16. PVR LIMITED ACCOUNTING POLICY Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting dividend on preference shares and attributable taxes) by the 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 year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. Disclosure 28. Earning per Share (EPS) The following reflects the profit and shares data used in the basic and diluted EPS computations: (` in lakhs) March 31, 2017 March 31, 2016 Profit for the year 9,292 9,351 Total comprehensive income 9,150 9,371 Weighted average number of equity shares in calculating basic EPS:
|415| Chap. 17 – Ind AS 33 — Earning Per Share (` in lakhs) March 31, 2017 March 31, 2016 - Number of equity shares outstanding at the beginning of the year 46,686,938 41,528,888 - Number of equity shares issued on May 31, 2016 34,000 - - Number of equity shares issued on July 29, 2016 650 - - Number of equity shares issued on September 1, 2016 17,000 - - Number of equity shares issued on May 1, 2015 - 19,800 - Number of equity shares issued on July 22, 2015 - 5,000,000 - Number of equity shares issued on September 4, 2015 - 16,500 - Number of equity shares issued on January 29, 2016 - 92,750 - Number of equity shares issued on February 29, 2016 - 8,600 - Number of equity shares issued on March 31, 2016 - 20,400 Number of equity shares outstanding at the end of the year 46,738,588 46,686,938 Weighted number of equity shares of ` 10 each outstanding during the year 46,725,661 45,043,250 Weighted average number of equity shares in calculating diluted EPS: Number of equity shares outstanding at the beginning of the year 46,686,938 41,528,888 Number of equity shares outstanding at the end of the year 46,738,588 46,686,938 Weighted number of equity shares of ` 10 each outstanding during the year (as above) 46,725,661 45,043,250 Add: Effect of stock options vested and outstanding for Nil (March 31, 2016: 51,650) equity shares - 36,257 Weighted number of equity shares of ` 10 each outstanding during the year 46,725,661 45,079,507 EPS on profit for the year: Basic earnings per equity share (in `) 19.89 20.72 Diluted earnings per equity share (in `) 19.89 20.71 EPS on total comprehensive income: Basic earnings per equity share (in `) 19.58 20.74 Diluted earnings per equity share (in `) 19.58 20.72 17. SPICE JET LIMITED ACCOUNTING POLICY 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. Disclosure 36. 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 Company 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.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |416| 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 - - Number of equity shares outstanding at the end of the year 599,450,183 599,450,183 Weighted average number of shares a. Basic 599,450,183 599,450,183 Effect of dilution: Stock options granted under ESOP - 127,839 Equity shares expected to be issued upon conversion of share warrants - 189,091,378 b. Diluted 599,450,183 788,669,400 Profit / (Loss) for the year 3,921.74 3,860.94 Earnings per share : -- Basic earnings / (loss) per share (`) 7.19 7.50 -- Diluted earnings / (loss) per share (`) 7.19 5.70 Nominal value per share (`) 10.00 10.00 c. Having regard to the status of the matters relating to the allotment and conversion of share warrants, as stated in Note 44, it is not possible to determine the dilutive effect, if any, of those on Diluted Earnings Per Share calculations. Accordingly, diluted earnings per share for the year ended March 31, 2017 do not include the dilutive impact on the allotment and conversion of share warrants stated in Note 44. However, for the year ended March 31, 2016, diluted earnings per share considered dilutive potential ordinary shares arising from allotment and conversion of share warrants referred to in Note 44, into equity shares, based on management’s expectation of the outcome of such instruments, at the time of finalisation of financial statements for the comparative period. 18. SUZLON ENERGY LIMITED ACCOUNTING POLICY Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders of the parent (after deducting preference dividends and 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 are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors. 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 are adjusted for the effects of all dilutive potential equity shares. The number of equity shares and potentially dilutive equity shares are adjusted for bonus shares as appropriate. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issue data later date. Disclosure 37. Earnings per share (EPS) March 31, 2017 March 31, 2016 Basic Net profit after tax 355.69 377.53 Weighted average number of equity shares 5,022,862,081 4,787,544,853 Basic earnings per share of ` 2 each 0.71 0.79 Diluted Profit attributable to equity shareholders 355.69 377.53 Add: Interest on foreign currency convertible bonds (net of tax) 101.45 51.79
|417| Chap. 17 – Ind AS 33 — Earning Per Share March 31, 2017 March 31, 2016 Employee stock option scheme 1.46 11.89 Adjusted net profits after tax 458.60 441.21 Weighted average number of equity shares 5,022,862,081 4,787,544,853 Add: Potential weighted average equity shares that could arise on Conversion of foreign currency convertible bonds 966,952,190 969,310,857 Conversion of employee stock option 3,788,494 4,040,815 Weighted average number of equity shares for diluted EPS 5,993,602,765 5,760,896,525 Diluted earnings per share (`) of face value of ` 2 each 0.71* 0.77 *Since the earnings per share computation based on diluted weighted average number of shares is anti-dilutive, the basicand diluted earnings per share is the same. 19. TATA MOTORS LIMITED ACCOUNTING POLICY Basic earnings per share has been computed by dividing profit/loss for the year by the weighted average number of shares outstanding during the year. Partly paid up shares are included as fully paid equivalents according to the fraction paid up. Diluted earnings per share has been computed using the weighted average number of shares and dilutive potential shares, except where the result would be anti-dilutive. Disclosure 39. Earnings Per Share (“EPS”) Year ended March 31, 2017 2016 (a) Profit/(Loss) after tax ` crore (2,479.99) (62.30) (b) The weighted average number of Ordinary shares for Basic EPS Nos. 2,88,72,18,310 2,87,31,88,838 (c) The weighted average number of ‘A’ Ordinary shares for Basic EPS Nos. 50,84,83,714 50,60,63,234 (d) The nominal value per share (Ordinary and ‘A’ Ordinary) ` 2 2 (e) Share of profit/(loss) for Ordinary shares for Basic EPS ` crore (2,108.63) (52.97) (f ) Share of profit/(loss) for ‘A’ Ordinary shares for Basic EPS * ` crore (371.36) (9.33) (g) Earnings Per Ordinary share (Basic) ` (7.30) (0.18) (h) Earnings Per ‘A’ Ordinary share (Basic) ` (7.30) (0.18) (i) Profit after tax for Diluted EPS ` crore # # (j) The weighted average number of Ordinary shares for Basic EPS Nos. # # (k) Add: Adjustment for Options relating to warrants and shares held in abeyance Nos. # # (l) The weighted average number of Ordinary shares for Diluted EPS Nos. # # (m) The weighted average number of ‘A’ Ordinary shares for Basic EPS Nos. # # (n) Add: Adjustment for ‘A’ Ordinary shares held in abeyance Nos. # # (o) The weighted average number of ‘A’ Ordinary shares for Diluted EPS Nos. # # (p) Share of profit for Ordinary shares for Diluted EPS ` crore # # (q) Share of profit for ‘A’ Ordinary shares for Diluted EPS * ` crore # # (r) Earnings Per Ordinary share (Diluted) ` (7.30) (0.18) (s) Earnings Per ‘A’ Ordinary share (Diluted) ` (7.30) (0.18) * ‘A’ Ordinary Shareholders are entitled to receive dividend @ 5% points more than the aggregate rate of dividend determined by the Company on Ordinary Shares for the financial year. # Since there is a loss for the year ended March 31, 2017 and 2016, potential equity shares are not considered as dilutive and hence Diluted EPS is same as Basic EPS.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |418| 20. THE GREAT EASTERN SHIPPING COMPANY LIMITED ACCOUNTING POLICY Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to the equity shareholders 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, such as bonus issue, bonus element in a rights issue and shares split 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 the equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares. Disclosure Note 29 : Basic and Diluted Earnings Per Share Current year Previous year (a) Net Profit After Tax (` in crores) 601.39 618.28 (b) Number of Equity Shares (i) Basic Earning per Share Number of Equity Shares as at the beginning and end of the year 15,07,77,065 15,07,77,065 Weighted Average Number of Equity Shares during the year 15,07,77,065 15,07,77,065 (ii) Diluted Earning per Share Weighted Average Number of Equity Shares during the year 15,07,77,065 15,07,77,065 Add : Rights Shares kept in abeyance 2,94,130 2,94,130 Weighted Average Number of Equity Shares during the year 15,10,71,195 15,10,71,195 (c) Face Value of Equity Share ` 10 ` 10 (d) Earnings per Share - Basic ` 39.89 ` 41.01 - Diluted ` 39.81 ` 40.93 21. VEDANTA LIMITED ACCOUNTING POLICY The Company 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 year. 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. Disclosure 36 Earnings per equity share (` in Crore except as stated) Particulars Year ended March 31, 2017 Year ended March 31, 2016 Profit/(Loss) after tax and exceptional items 11,068.70 (11,906.23) Less: Notional Preference Dividend (Preference shares to be issued, Refer note 4) (271.71) (271.71) Profit/(Loss) after tax and exceptional items attributable to equity share holders for Basic and Diluted EPS 10,796.99 (12,177.94) Add: Exceptional items (net of tax) (1,237.06) 19,951.95 Profit after tax but before exceptional items attributable to equity share holders for Basic and Diluted EPS 9,559.93 7,774.01
|419| Chap. 17 – Ind AS 33 — Earning Per Share (` in Crore except as stated) Particulars Year ended March 31, 2017 Year ended March 31, 2016 No. of Equity shares outstanding 296.50 296.50 Add: Shares to be issued pursuant to merger (Refer Note 4) 75.25 75.25 Total Weighted Average no. of equity shares outstanding during the year for Basic and Dilutive EPS 371.75 371.75 Basic and Diluted Earnings/(Loss) per share after tax and exceptional items (in `) 29.04 (32.76) Basic and Diluted Earnings per share after tax but before exceptional items (in `) 25.72 20.91 Nominal value per share (in `) 1.00 1.00 ll
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |420| Chapter 18 Ind AS 36 — Impairment of Assets 1. ADANI POWER LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies At the end of each reporting period, the Company 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 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 Company 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. 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 or 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, 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 cashgenerating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss. Significant Judgments and Estimates Determining whether property, plant and equipment are impaired requires an estimation of the value in use of the relevant cash generating units. The value in use calculation is based on a Discounted Cash Flow model over the estimated useful life of the Power Plants. Further, the cash flow projections are based on estimates and assumptions relating to tariff, operational performance of the Plants, life extension plans, market prices of coal and other fuels, exchange variations, inflation, terminal value etc. which are considered reasonable by the Management. (refer note 40) 2. ASIAN PAINTS LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Assets that have an indefinite useful life, for example goodwill, are not subject to amortization and are tested for impairment annually and whenever there is an indication that the asset may be impaired. Assets that are subject to depreciation and amortization and assets representing investments in subsidiary and associate companies are reviewed for impairment, whenever events or changes in circumstances indicate that carrying amount may not be recoverable. Such circumstances include, though are not limited to, significant or sustained decline in revenues or earnings and material adverse changes in the economic environment.
|421| Chap. 18 – Ind AS 36 — Impairment of Assets An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit (CGU) exceeds its recoverable amount. The recoverable amount of an asset is the greater of its fair value less cost to sell and value in use. To calculate value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market rates and the risk specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the CGU to which the asset belongs. Fair value less cost to sell is the best estimate of the amount obtainable from the sale of an asset in an arm’s length transaction between knowledgeable, willing parties, less the cost of disposal. Impairment losses, if any, are recognized in the Statement of Profit and Loss and included in depreciation and amortization expense. Impairment losses are reversed in the Statement of Profit and Loss only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognized. Impairment of Goodwill Goodwill is tested for impairment on an annual basis and whenever there is an indication that the recoverable amount of a cash generating unit is less than its carrying amount based on a number of factors including operating results, business plans, future cash flows and economic conditions. The recoverable amount of cash generating units is determined based on higher of value-in-use and fair value less cost to sell. The goodwill impairment test is performed at the level of the cash- generating unit or groups of cashgenerating units which are benefitting from the synergies of the acquisition and which represents the lowest level at which goodwill is monitored for internal management purposes. Market related information and estimates are used to determine the recoverable amount. Key assumptions on which management has based its determination of recoverable amount include estimated long term growth rates, weighted average cost of capital and estimated operating margins. Cash flow projections take into account past experience and represent management’s best estimate about future developments. Consolidated financial statements Disclosures NOTE 39 : EXCEPTIONAL ITEM Year 2016-17 Year 2015-16 Impairment loss on Goodwill on Consolidation - 52.45 The Group had made an assessment of the fair value of investment made in its subsidiary, Sleek International Private Limited (Sleek) taking into account the past business performance, prevailing business conditions and revised expectations of the future performance given the understanding built up since acquisitions. Based on above factors and as a matter of prudence, the Group had recognised an impairment loss on the ‘Goodwill on Consolidation’ of ` 52.45 crores which was recognised on acquisition of Sleek in the year ended 31st March, 2016. The same is disclosed under “Exceptional items” in the consolidated Statement of Profit and Loss. 3. BHARTI AIRTEL LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Property, plant and equipment and Intangible assets PPE 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. 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 cash-generating-unit (‘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
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |422| exceeds their estimated recoverable amount and allocated on pro rata basis. Impairment losses, if any, are recognised in statement of profit and loss Reversal of impairment losses Impairment losses are reversed and the carrying value is increased to its revised recoverable amount provided that this amount does not exceed the carrying value that would have been determined had no impairment loss been recognised for the said asset in previous years. Consolidated Financial Statements 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, 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 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 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. The total impairment loss of a CGU is allocated first to reduce the carrying value of Goodwill allocated to that CGU and then to the other assets of that CGU -on pro-rata basis of the carrying value of each asset. Impairment reviews Goodwill is tested for impairment at-least on an annual basis and when events that occur changes in circumstances - indicate that the recoverable amount of the CGU is less than its carrying value. In calculating the value in use, the Group is required to make significant judgments, estimates and assumptions inter-alia concerning the growth in EBITDA, long-term growth rates; discount rates to reflect the risks involved. Also, judgment is involved in determining the CGU /grouping of CGUs for allocation of the goodwill. The Group mainly operates in developing markets and in such markets, the plan for shorter duration is not indicative of the long-term future performance. Considering this and the consistent use of such robust ten year information for management reporting purpose, the Group uses ten year plans for the purpose of impairment testing. Impairment review of goodwill The Group tests goodwill for impairment annually on December 31. The impairment assessment is based on value in use calculations except in case of Mobile Services - Bangladesh during the year ended March 31, 2016, where fair value less cost to sell was used in view of then impending merger of Airtel Bangladesh Limited with Robi Axiata Limited (refer Note 5(b)(i)).During the year ended March 31, 2017, 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: Particulars As of March 31, 2017 As of March 31, 2016 As of April 1, 2015 Mobile Services - India 39,676 39,527 39,524 Mobile Services - Bangladesh - 8,937 8,479 Airtel business 6,103 6,224 5,597 Mobile Services - Africa 291,959 373,349 360,879 Homes Services 344 344 344 338,082 428,381 414,823
|423| Chap. 18 – Ind AS 36 — Impairment of Assets The recoverable amount of the above CGUs are based on value-in-use (except in case of Mobile Services -Bangladesh during the year ended March 31, 2016),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. During the year ended March 31, 2016 the measurement of the fair value less cost to sell in case of Mobile Services – Bangladesh had been determined based on the fair value of stake (basis 10 year plan) to be received by the Group in the merged entity (i.e. combined entity after merger of Robi Axiata Limited and Airtel Bangladesh Limited) in consideration of contribution to merged entity. The key assumptions used in value-in-use calculations are as follows: • Earnings before interest and taxes margins (‘EBIT’) • Discount rate • Growth rates • Capital expenditures EBIT 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 initiatives driven by the Company; 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. Pre-tax discount rate used ranged from 10.28% to 21.98% for the year ended March 31, 2017 and ranged from 13.1% to 19.9% for the year ended March 31, 2016 (higher rate used for CGU group ‘Mobile Services – Africa’). Growth rates: The growth rates used are in line with 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 average growth rates used in extrapolating cash flows beyond the planning period ranged from 3.5% to 4.0% for March 31, 2017 and ranged from 3.5% to 4.0% for March 31, 2016. Capital expenditures: The cash flow forecasts of capital expenditure are based on past experience after considering the additional capital expenditure required. 4. DR. REDDY’S LABORATORIES LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies 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 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”).
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |424| 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. An impairment loss is recognised in the 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 cashgenerating 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 statement 5. MAHINDRA LIFESPACE DEVELOPERS LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies At the end of each reporting period, the Company 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 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 Company 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. 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 recognized immediately in profit or 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, 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.
|425| Chap. 18 – Ind AS 36 — Impairment of Assets 6. ONGC LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies The Company 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 Company estimates the recoverable amount of the cash generating unit to which the asset belongs. 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 cashgenerating unit) is reduced to its recoverable amount and impairment loss is recognised in the Statement of Profit and Loss. Evaluation of indicators for impairment of Oil and Gas Assets The evaluation of applicability of indicators of impairment of assets requires assessment of external factors (significant decline in asset’s value, significant changes in the technological, market, economic or legal environment, market interest rates etc.) and internal factors (obsolescence or physical damage of an asset, poor economic performance of the asset etc.) which could result in significant change in recoverable amount of the Oil and Gas Assets. Determination as to whether, and by how much, a CGU is impaired involves Management estimates on uncertain matters such as future prices, the effects of inflation on operating expenses, discount rates, production profiles for crude oil, natural gas and value added products. For Oil and Gas assets, the expected future cash flows are estimated using Management’s best estimate of future crude oil and natural gas prices, production and reserves volumes. The present values of cash flows are determined by applying pre taxdiscount rates of 14.88% (previous year 19.06 %) for Rupee transactions and 10.57% (previous year 13.37 %) for crude oil and value added products revenue, which are measured in USD. Future cash inflows from sale of crude oil and value added products are computed using the future prices, on the basis of marketbased average prices of the Dated Brent crude oil as per assessment by ‘Platt’s Crude Oil Market wire’ and its co-relations with benchmark crudes 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 the notification issued by the Government of India and discounted applying the rate applicable to the cash flows measured in USD in view of the new pricing guidelines issued by GoI. The discount rate used is based upon the cost of capital from an established model. The Value in use of the producing/developing CGUs is determined under a multi-stage approach, wherein future cash flows are initially estimated based on Proved Developed Reserves. Under circumstances where the further development of the fields in the CGUs 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. The discount rates applied in the assessment of impairment calculation are re-assessed each year.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |426| 7. PVR LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies The Company 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 Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s net selling price and its value in use. The 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 Company’s of assets. Where the carrying amount of an asset 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 pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses, if any 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 Company estimates the asset’s or CGU’s recoverable amount. A previously recognized 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 or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. Notes to accounts - Notes below notes to accounts Our recorded goodwill is Rs. 42,660 lakhs and Rs. 8,060 lakhs as of March 31, 2017 and March 31, 2016, respectively. We evaluate goodwill for impairment annually or any time an event occurs or circumstances change that would more likely than not reduce the fair value for a reporting unit below its carrying amount. Our goodwill is related to theatrical exhibition business, which is core business for purposes of evaluating recorded goodwill for impairment. Goodwill arising from business combination is tested for impairment, considering the integrated business of PVR (Theatrical exhibition unit), as practically it is impossible to allocate to specific cinema, considering various synergies in terms of pricing of ticket, advertisement income, purchasing power and other commercial aspects. If the carrying value of the reporting unit exceeds its fair value, we are required to reallocate the fair value of the reporting unit as if the reporting unit had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the reporting unit. At March 31, 2017 and March 31, 2016, we assessed qualitative factors and reached a determination that it is not more likely than not that the fair value of our reporting unit is less than its carrying value and therefore the two step method, as described in standard, is not necessary. Factors considered in determining this conclusion include but are not limited to the excess fair value of our equity as determined by Companies closing stock price on March 31, 2017 over our carrying value as of March 31, 2016 and our Adjusted EBITDA improvement from last year. At March 31, 2017, the fair value of our total stockholders’ equity exceeded the carrying value and hence, there was no goodwill impairment as of March 31, 2017 and March 31, 2016.
|427| Chap. 18 – Ind AS 36 — Impairment of Assets 8. TATA COMMUNICATIONS LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies The carrying values of assets / cash generating units (“CGU”) at each balance sheet date are reviewed for impairment, if any indication of impairment exists. The following intangible assets are tested for impairment at the end of each financial year even if there is no indication that the asset is impaired: i. an intangible asset that is not yet available for use; and ii. an intangible asset with indefinite useful lives. If the carrying amount of the assets exceed the estimated recoverable amount, impairment is recognised for such excess amount. The impairment loss is recognised as an expense in the Statement of Profit and Loss, unless the asset is carried at a revalued amount, in which case any impairment loss of the revalued asset is treated as a revaluation decrease to the extent a revaluation reserve is available for that asset. The recoverable amount is the greater of the net selling price and the value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset (other than a revalued asset) in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, to the extent the amount was previously charged to the Statement of Profit and Loss. In case of revalued assets such reversal is not recognised. 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. The Company bases its impairment calculation on detailed budgets and forecast calculations, which are prepared separately for the Company as a CGU. These budgets and forecast calculations generally cover a significant period. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the significant period. 9. THE INDIAN HOTELS COMPANY LIMITED CONSOLIDATED FINANCIAL STATEMENTS Judgments and estimates Property, plant and equipment and Intangible assets that are subject to amortisation/ depreciation are tested for impairment when events occur or changes in circumstances indicate that the recoverable amount of the cash generating unit is less than its carrying value. The recoverable amount of cash generating units is higher of value-in-use and fair value less cost to sell. The calculation involves use of significant estimates and assumptions which includes turnover and earnings multiples, growth rates and net margins used to calculate projected future cash flows, risk-adjusted discount rate, future economic and market conditions. Significant accounting policies 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 recognized 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
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |428| 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 recognized for the asset (or cashgenerating unit) in prior years. A reversal of an impairment loss is recognized immediately in Statement of Profit and Loss. 10. VEDANTA LIMITED CONSOLIDATED FINANCIAL STATEMENTS Significant Accounting Policies Impairment charges and reversals are assessed at the level of cash-generating units. A cash-generating unit (CGU) is the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or group of assets. The Company assess at each reporting date, whether there is an indication that an asset may be impaired. The Company conducts an internal review of asset values annually, which is used as a source of information to assess for any indications of impairment or reversal of previously recognised impairment losses. External factors, such as changes in expected future prices, costs and other market factors are also monitored to assess for indications of impairment or reversal of previously recognised impairment losses. If any such indication exists then an impairment review is undertaken and the recoverable amount is calculated, as the higher of fair value less costs of disposal and the asset’s value in use. Fair value less costs of disposal is the price that would be received to sell the asset in an orderly transaction between market participants and does not reflect the effects of factors that may be specific to the entity and not applicable to entities in general. Fair value for mineral and oil and gas assets is generally determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset, including any expansion prospects, and its eventual disposal, using assumptions that an independent market participant may take into account. These cash flows are discounted at an appropriate post tax discount rate to arrive at the net present value. Value in use is determined as the present value of the estimated future cash flows expected to arise from the continued use of the asset in its present form and its eventual disposal. The cash flows are discounted 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 estimates of future cash flows have not been adjusted. Value in use is determined by applying assumptions specific to the company’s continued use and cannot take into account future development. These assumptions are different to those used in calculating fair value and consequently the value in use calculation is likely to give a different result to a fair value calculation. The carrying amount of the CGU is determined on a basis consistent with the way the recoverable amount of the CGU is determined. 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 recognized in the statement of profit and loss. Any reversal of the previously recognised impairment loss is limited to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined if no impairment loss had previously been recognised. Carrying value of developing/producing oil and gas assets Management perform impairment tests on the Company’s developing/producing oil and gas assets where indicators of impairment are identified in accordance with Ind AS 36. The impairment assessments are based on a range ofestimates and assumptions, including: Estimates/assumptions Basis Future production proved and probable reserves resource estimates and in certain cases, expansion projects Commodity prices management’s best estimate benchmarked with external sources of information, to ensure they are within the range of available analyst forecast Discount to price management’s best estimate based on historical prevailing discount Extension of PSC assumed that PSC for Rajasthan block would be extended till 2030 on the expected commercial terms Discount rates cost of capital risk-adjusted for the risk specific to the asset/CGU
|429| Chap. 18 – Ind AS 36 — Impairment of Assets Any subsequent changes to cash flows due to changes in the above mentioned factors could impact the carrying value of the assets. Details of carrying values and impairment charge/reversal and the assumptions used are disclosed in Notes 5 and 34. Mining properties and leases The carrying value of mining property and leases is arrived at by depreciating the assets over the life of the mine using the unit of production method based on proved and probable reserves. The estimate of reserves is subject to assumptions relating to life of the mine and may change when new information becomes available. Changes in reserves as a result of factors such as production cost, recovery rates, grade of reserves or commodity prices could thus impact the carrying values of mining properties and leases and environmental and restoration provisions. Management performs impairment tests when there is an indication of impairment. The impairment assessments are based on a range of estimates and assumptions, including: Estimates/assumptions Basis Future production Proved and probable reserve, resource estimates (with an appropriate conversion factor) considering the expected permitted mining volumes and, in certain cases, expansion projects Commodity prices management’s best estimate benchmarked with external sources of information, to ensure they are within the range of available analyst forecast Exchange rates management best estimate benchmarked with external sources of information Discount rates cost of capital risk-adjusted for the risk specific to the asset/CGU Details of carrying values and impairment charge are disclosed in note 5 and 36. Useful economic lives and impairment of other assets Property, plant and equipment other than mining properties, oil and gas assets, and leases as disclosed in note 5 are depreciated over their useful economic lives. Management reviews the useful economic lives at least once a year and any changes could affect the depreciation rates prospectively and hence the asset carrying values. The Company also reviews its property, plant and equipment, for possible impairment if there are events or changes in circumstances that indicate that carrying values of the assets may not be recoverable. In assessing the property, plant and equipment for impairment, factors leading to significant reduction in profits such as changes in commodity prices, the Company’s business plans and changes in regulatory environment are taken into consideration. The carrying value of the assets of a cash generating unit (CGU) is compared with the recoverable amount of those assets, that is, the higher of fair value less costs of disposal and value in use. Recoverable value is based on the management estimates of commodity prices,market demand and supply, economic and regulatory climates, long-term plan, discount rates and other factors. Any subsequent changes to cash flow due to changes in the above mentioned factors could impact the carrying value of the assets. Assessment of impairment at Lanjigarh Refinery During the previous year, the Company has received the necessary approvals for expansion of the Lanjigarh refinery to 4 million tonnes per annum (MTPA). Approval for expansion from 4 MTPA to 6 MTPA is dependent upon certain conditions. Accordingly, second stream operation has commenced in Alumina refinery from April 2016 thus, taking it to the debottlenecked capacity of 1.7 - 2.0 MTPA (contingent on bauxite quality). Further ramp up to 4 MTPA will be considered after tying up the local bauxite sources. The Company has considered the delay in tying up local bauxite sources as an indication of impairment. Hence, the Company has reviewed the carrying value of its property, plant and equipments at Lanjigarh as at balance sheet date, estimated the recoverable amounts of these assets and concluded that there was no impairment because the recoverable amount (estimated based on fair value less cost of disposal)exceeded the carrying amounts. The key assumptions and estimates used in determining the fair value less cost of disposal of these assets were:
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |430| - The State of Odisha has abundant bauxite resources and given the initiatives by the Government of Odisha, management is confident that bauxite will be made available in the short to medium term. The company has entered into agreements with various suppliers internationally and domestically to ensure the availability of bauxite to run its refinery. In the initial years, the Company has assumed that bauxite will be purchased from third party suppliers in India and other countries, till the bauxite is sourced from own mines. - The State of Odisha has taken certain measures including reservation of areas for mining operations or undertaking prospecting and constitution of Ministerial Committee for formulation of policy for supply of ores to Odisha based industries on long term basis. GOI has amended the existing Mines and Minerals Development and Regulation Act (MMDR). The major change is in the process of grant of concessions i.e. from First come First serve basis to more transparent process of auction and to expedite the grant process. - Management expects that the conditions for construction of the alumina refinery beyond 4 MTPA will be fulfilled and it is assumed that the final unconditional approval for the expansion of the refinery would be received for commencement of production by fiscal 2020. The government of Odisha has cancelled all the old reservations for mine allotment and has formed a more transparent process of auction of mines under the Mines and Minerals (Development and Regulation) Act, which will improve the chances of local bauxite availability. Management expects that the mining approvals for various local bauxite mines will be received. The Company has carried out a sensitivity analysis on the key variables including delay in obtaining bauxite mining approval, depreciation of US dollar against Rupee, discount rate and London Metal Exchange aluminium prices. The most significant variable is the estimated timeframe for obtaining regulatory approval for the mining and/or gaining access to local bauxite. The sensitivity analysis indicates that even if regulatory approvals for mines /access to local bauxite are delayed by a year, the recoverable amount is still expected to exceed the carrying value and costs. The carrying amounts of property plant and equipment related to alumina refinery operations at Lanjigarh and related mining assets as at March 31, 2017 is ` 8,803.00 Crore, March 31, 2016 is ` 9,065.43 Crore and April 01, 2015 is ` 7,234.58 Crore. Assessment of Impairment of Karnataka and Goa iron ore mines: Karnataka mining The mining ban in Karnataka was lifted on 17 April 2013 and the mining operations resumed in December 2013. The mining operations were suspended since August 2014 pending environment clearances. On execution of Mining Lease Deed and final forest clearance, the operations were resumed towards the end of February 2015. Currently the permissible extraction capacity is fixed at 2.29 MTPA which is based on lowest of Reserves and Resources (R & R) capacity, dumping capacity and road capacity as assessed by Indian Council of Forestry Research and Education. Subsequently, based on reassessment of R & R and other factors, the modified mining plan has been submitted to Indian Bureau of Mines in March 2016 for enhancement of production to 6 MTPA. Management has estimated the recoverable amounts of these assets considering the increase in the extraction capacity in FY 2018. A delay of one year in increase in the allocated capacity would result in reduction in the recoverable amount by approximately 1% and the recoverable amount would continue to be sufficiently in excess of the carrying value. The carrying value of assets as at March 31, 2017 is ` 123.93 Crore, March 31, 2016 is ` 134.20 Crore and April 01, 2015 is ` 141.82 Crore. Goa mining The Ministry of Environment and Forest revoked its earlier order which had kept the environment clearances for iron ore mines in Goa in abeyance. The State Government has issued a mining policy and has lifted the ban on Iron ore mining in Goa. The Company has been allocated with an interim annual mining quantity of 6.9 million tonnes per annum (MTPA) (out of the total interim mining cap of 20 MTPA for FY 2016) of saleable ore. The Expert Committee, constituted by the Supreme Court of India for conducting the Macro-Environmental Impact Assessment study on the ceiling of annual extraction of iron ore mining
|431| Chap. 18 – Ind AS 36 — Impairment of Assets in Goa has recommended the enhancement of mining cap to 30 MTPA. This has been recommended to be further enhanced to 37 MTPA after the review of Macro Environment Impact Assessment and augmenting the carrying capacity. The report is pending for consideration of Supreme Court. Post the Supreme Court clearance, the State Government will allocate the limits. It has been assumed that the allocation will be made based on the proportionate share of the current EC limits. The mining operations resumed in October, 2015. Management has estimated the recoverable amounts of these assets considering the mining cap of 30 MTPA in FY 2018 and 37 MTPA from FY 2019 and onwards. A delay of one year in increase in the mining cap to 30 MTPA and 37 MTPA would result in a reduction in the recoverable amount by approximately 4% and the recoverable amount would continue to be sufficiently in excess of the carrying value. The carrying value of assets as at March 31, 2017 is ` 1,140.34 Crore, March 31, 2016 is ` 1,298.69 Crore and April 01, 2015 is ` 1,439.85 Crore. Management has reviewed the carrying value of Karnataka and Goa mining assets as at the balance sheet date, estimated the recoverable amounts of these assets and concluded that there was no impairment as the recoverable amount (estimated based on fair value less costs of disposal) exceeded the carrying amounts. The Company has also carried out a sensitivity analysis on key variables including delay in increase in the mining cap, movement in iron ore prices, discount rate and appreciation of rupee against US dollar. Based on the sensitivity analysis, the recoverable amount is still expected to exceed the carrying value. ll
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |432| Chapter 19 Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 1. APOLLO TYRES LIMITED ACCOUNTING POLICY Provisions and Contingencies A provision is recognised when the Company has a present obligation (legal/constructive) as a result of past events 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. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material). Contingent liability is disclosed for (i) Possible obligation which will be confirmed only by future events not wholly within the control of the Company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. Provisions for the expected cost of sales related obligations under local sale of goods legislation are recognised at the date of sale of the relevant products, at the management’s best estimate of the expenditure required to settle the Company’s obligation. Disclosure 19 Contingent Liabilities ` Million Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Sales tax 39.64 40.05 76.17 Income tax# 265.80 392.90 451.30 Claims against the Company not acknowledged as debts – Employee related 58.18 58.18 48.64 – Others 61.69 49.00 43.00 Provision for security (bank deposits pledged with a bank against which working capital loan has been availed by Apollo Finance Ltd, a company in which directors are interested) – – 37.97 Excise Duty* 137.50 137.61 57.93 # Excludes amount of ` 441.66 Million (` 441.66 Million as at March 31,2016 and ` 441.66 Million as at March 31, 2015) in appeals which have been decided by Appellate authorities in Company’s favour but on which the department has gone for further appeal and a demand of ` 663.70 Million relating to the adjustments made in MAT computation, which in the opinion of the Company, is not sustainable and the probability of cash outflow is considered remote.
|433| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets * Excludes demand of ` 532.12 Million (` 532.12 Million as at March 31, 2016 and ` 532.12 Million as at March 31, 2015) raised on one of the Company’s units relating to issues which have been decided by the Appellate Authority in Company’s favour in appeals pertaining to another unit of the Company. Showcause notices received from various Government Agencies pending formal demand notices have not been considered as contingent liabilities. In the opinion of the management, no provision is considered necessary for the disputes mentioned above on the ground that there are fair chances of successful outcome of appeals. 20 Capital Commitments ` Million Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Estimated amount of contracts remaining to be executed on capital account and not provided for* 4,450.95 3,980.32 800.14 Other commitments: Non-disposal of investments in indirect subsidiary, Apollo Tyres (Middle East) FZE, through Apollo Tyres Co-operatief U.A., Netherlands, Value of investment as at March 31, 2017 is ` 35.19 Million (` 36.09 Million as at March 31, 2016 and ` 34.14 Million as on April 1, 2015) The Company has provided financial support commitments to certain subsidiaries. TOTAL 4,450.95 3,980.32 800.14 *Includes ` 4.03 Million payable to NSL Wind Power Company towards additional 402,805 shares allotted and ` 0.06 Million payable to OPGS Power Gujarat Pvt. Ltd. towards additional 310,000 shares allotted under Group Captive Scheme. All the additional shares were allotted during FY 2016-17 but payments for additional shares are made after March 31, 2017. Total investment by the Company is 598,805 shares of NSL Wind Power Company and 930,000 shares of OPGS Power Gujarat Pvt. Ltd. as at March 31, 2017. 2. ASIAN PAINTS LIMITED ACCOUNTING POLICY Provisions and Contingencies The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated. If the effect of 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. 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 embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made. Disclosure (` in Crore) a. Contingent Liabilities As at 31.03.2017 As at 31.03.2016 As at 01.04.2015 1. Letters of comfort issued to banks on behalf of some of its operating subsidiary companies 6.90 18.16 37.29 2. Claims against the Company not acknowledged as debts i. Tax matters in dispute under appeal 237.15 150.02 98.37 ii. Others 16.96 16.25 12.99
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |434| (` in Crores) b. Commitments As at 31.03.2017 As at 31.03.2016 As at 01.04.2015 1. Estimated amount of contracts remaining to be executed on capital account and not provided for i. Towards Property, Plant and Equipment 1,145.04 112.83 372.44 ii. Towards Intangible Assets 2.65 0.65 0.67 1,147.69 113.48 373.11 2. Letters of Credit and Bank guarantees issued by bankers and outstanding as on 31st March, 2017. [Pertaining to capital goods - ` 0.98 crore as at 31st March, 2017 (` 2.98 crore as at 31st March, 2016 and ` 35.58 crores as at 1st April, 2015)] 54.94 53.29 76.52 3. For Lease commitments, Refer Note 39B(b) 4. For derivative contract related commitments, Refer Note 37(a) 3. BHARTI AIRTEL LIMITED AUDIT REPORT Emphasis of Matter We draw attention to Note 22(i)(f)(v) to the standalone Ind AS financial statements which describes the uncertainties related to the legal outcome of the Department of Telecommunications’ demand with respect to One Time Spectrum Charge. Our opinion is not qualified in respect of this matter. Accounting Policy Provisions a. General Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of 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 Obligation (‘ARO’) ARO are recognised for those operating lease arrangements where the Company 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. 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. Disclosure (i) Contingent liabilities Claims against the company not acknowledged as debt:
|435| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets Particulars As of March 31, 2017 As of March 31, 2016 As of April 1, 2015 (i) Taxes, Duties and Other demands (under adjudication/appeal/dispute) -Sales Tax and Service Tax 11,245 11,259 11,120 -Income Tax 12,527 16,282 16,335 -Customs Duty 4,317 4,254 4,254 -Entry Tax 5,509 5,061 4,221 -Stamp Duty 404 404 411 -Municipal Taxes 121 122 122 -Department of Telecom (‘DoT’) demands 36,540 4,809 4,766 -Other miscellaneous demands 962 818 59 (ii) Claims under legal cases including arbitration matters -Access Charges/Port Charges 8,733 8,196 6,952 -Others 599 610 562 80,957 51,815 48,802 Further, refer Notes f(iv), f(v) and f(vi) below for other DoT matter. The category wise detail of the contingent liability has been given below:- a) Sales and Service Tax The claims for sales tax comprised of cases relating to the appropriateness of declarations made by the Company 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 Company 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. b) Income Tax demand Income tax demands mainly include the appeals filed by the Company before various appellate authorities against the disallowance by income tax authorities of certain expenses being claimed, non-deduction of tax at source with respect to dealers/distributor’s margin and payments to international operators for access charges. c) Access charges (Interconnect Usage 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 filed a petition against the demand with the TDSAT which allowed payments by the Company based 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
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |436| 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. The view of the Company 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 Company, the Hon’ble Central Excise and Service Tax Appellate Tribunal (‘CESTAT’) has passed an order in favour of the custom authorities. The Company 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 Company 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 Company, the material proposed to be taxed is not covered under the specific category. 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 Company has decided to maintain status-quo on its position and hence continued to disclose it as contingent liability. f) DoT Demands (i) DoT demands include 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. However, the Hon’ble High Courts vide interim orders in 2012 had permitted the Company to continue paying license fee on similar basis as the Company has been paying throughout the period of the license. Further, 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 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 2006-07, 2007-08, 2008-09 and 2009-10. (ii) DoT demands also include the contentious matters in respect of subscriber verification norms and regulations including validity of certain documents allowed as proof of address/identity. (iii) 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 based on legal advice, the Company 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: (iv) 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
|437| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 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. Further as stated in point (i) above, the interpretation as to the components of AGR (including the above component) is subject to litigation and the Hon’ble High Courts vide interim orders in 2012 had permitted the Company to continue paying license fee on similar basis as the Company has been paying throughout the period of the license. The matter is currently pending adjudication of the matter by Hon’ble Supreme Court. (v) On January 8, 2013, DoT issued a demand on the Company for ` 51,353 towards levy of one time spectrum charge. The demand includes a retrospective charge of ` 8,940 for holding GSM Spectrum beyond 6.2 MHz for the period from July 1, 2008 to December 31, 2012 and also a prospective charge of ` 42,413 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, 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, 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 next date of hearing is awaited. The Company, based on independent legal opinions, till date has not given any effect to the above demand. (vi) 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 and upon various rounds of litigations, 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, 2017, March 31, 2016 and April 1, 2015 amounting to ` 123,614, ` 99,911 and ` 101,379, respectively have been issued by banks and financial institutions on behalf of the Company. These guarantees include certain financial bank guarantees which have been given for sub-judice matters and in compliance with licensing conditions, the amount with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable, in compliance with the applicable accounting standards. (ii) Commitments Capital commitments Estimated amount of contracts to be executed on capital account and not provided for (net of advances) ` 69,623, ` 45,115 and ` 274,832 (including ` Nil, ` 10,970 and ` 244,040 towards spectrum) as of March 31, 2017, March 31, 2016 and April 1, 2015, respectively. Lease Commitments a) Operating Lease As per the agreements maximum obligation on longterm non-cancellable operating leases are as follows: Note: Lease disclosures are not reproduced
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |438| 4. BIOCON LIMITED ACCOUNTING POLICY Provisions (other than for employee benefits) A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for. Onerous contracts A contract is considered to be onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision for an onerous contract is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before such a provision is made, the Company recognises any impairment loss on the assets associated with that contract. Disclosure 36. Contingent liabilities and commitments (to the extent not provided for) March 31, 2017 March 31, 2016 April 01, 2015 (i) Contingent liabilities: (a) Claims against the Company not acknowledged as debt 2,893 3,041 1,241 The above includes: (i) Direct taxation 1,950 2,050 297 (ii) Indirect taxation (includes matters pertaining to disputes on central excise, custom duty and service tax) 550 594 552 (iii) Other litigations 393 397 392 The Company is involved in taxation and other disputes, lawsuits, proceedings etc. including patent and commercial matters that arise from time to time in the ordinary course of business. Management is of the view that above claims are not tenable and will not have any material adverse effect on the Company’s financial position and results of operations (b) Guarantees (i) Corporate guarantees given in favour of the Central Excise Department in respect of certain performance obligations of the subsidiaries Syngene International Limited 148 148 242 (ii) Corporate guarantees given in favour of banks towards loans obtained by subsidiaries/step-down subsidiaries Biocon Research Limited - - 685 Biocon Sdn. Bhd. 12,330 10,760 8,096 Biocon Pharma Limited 1,296 1,362 - 13,626 12,122 8,781 (iii) Guarantees given by banks on behalf of the Company for contractual obligations of the Company. The necessary terms and conditions have been complied with and no liabilities have arisen 18 18 63 (ii) Commitments: (a) Estimated amount of contracts remaining to be executed on capital account and not provided for, net of advances 401 1,114 824
|439| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets March 31, 2017 March 31, 2016 April 01, 2015 (b) Operating lease commitments Where the Company is a lessee: (i) Vehicles The Company has taken vehicles for certain employees under operating leases, which expire over a period up to January, 2020. Gross rental expenses for the year aggregate to ` 16 (March 31, 2016 - ` 16). The committed lease rentals in future are as follows: March 31, 2017 March 31, 2016 April 01, 2015 Not later than one year 19 15 12 Later than one year and not later than five years 22 26 24 (c) As at March 31, 2016 and 2015, the Company had committed to provide financial support to Biocon Research Limited with regard to the operations of such company. 5. HAVELLS INDIA LIMITED ACCOUNTING POLICIES Provisions and Contingent Liabilities Provisions A provision is recognised when the Company has a present obligation (legal or constructive) as a result of 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. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. 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. Warranty Provisions Provision for warranty-related costs are recognised when the product is sold or service is provided to customer. Initial recognition is based on historical experience. The Company periodically reviews the adequacy of product warranties and adjust warranty percentage and warranty provisions for actual experience, if necessary. The timing of outflow is expected to be with in one to two years. 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 recognised 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 recognised because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote. Provisions, contingent liabilities, contingent assets and commitments are reviewed at each balance sheet date.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |440| Disclosure 31. Commitments and Contingencies (` in Crore) As At March 31, 2017 As At March 31, 2016 As At April 1, 2015 A Contingent liabilities (to the extent not provided for) a Claims/Suits filed against the Group not acknowledged as debts 5.68 5.61 5.21 b Liability towards banks against receivable buyout facilities {refer point (i)} - 132.50 106.30 c Bonds to excise department against export of excisable goods/ purchase of goods without payment of duty (to the extent utilised) 0.69 0.53 3.30 d Disputed tax liabilities in respect of pending cases before appellate authorities {Amount deposited under protest ` 22.08 crores (March 31, 2016: ` 19.05 crores) (April 1, 2015: ` 20.65 crores)} {refer point (ii)} 68.10 100.55 100.80 e Demand raised by Uttarakhand Power Corporation Limited contested before Hon’ble High Court of Uttarakhand, Nainital {Amount deposited under protest ` 1.00 crore (March 31, 2016: ` 1.00 crore) (April 1, 2015 : ` 1 crore)} 1.00 1.00 1.00 f Custom duty payable against export obligation {refer point (iii)} 8.57 8.88 12.14 Notes: i) a) The holding company has availed Receivable Buyout facility from banks against which a sum of ` 445.38 crores (March 31, 2016: ` 438.35 crores) (April 1, 2015 : ` 418.77 crores) has been utilized as on the date of Balance Sheet. The holding company has assigned all its rights and privileges to the bank and there is no recourse on the holding company. Accordingly the amount of utilization has been reduced from trade receivable. A sum of ` 28.59 crores (March 31, 2016: ` 29.42 crores) on account of charges paid for this facility has been debited to the trade receivables factoring charges account. b) The Group has arranged Channel Finance facility for its customers from banks against which a sum of ` 424.13 crores (March 31, 2016: ` 370.64 crores) (April 1, 2015 : ` 371.94 crores) has been utilized as on the date of Balance Sheet and correspondingly, the trade receivables stand reduced by the said amount as there is no recourse on the Group. ii) The various disputed tax litigations are as under : (` in Crore) Sl. Description Period to which relates Disputed amount March 31, 2017 March 31, 2016 April 1, 2015 a) Excise/Customs/Service Tax Show cause notices/demands raised by Excise and Custom department pending before various appellate authorities. 2003-04 to 2014-15 3.65 19.41 30.21 b) Income Tax Disallowances/additions made by the income tax department pending before various appellate authorities. 2004-05 to 2013-14 45.27 40.28 42.33 c) Sales Tax/VAT Show cause notices/demands raised by Sales tax/VAT department pending before various appellate authorities 2005-06 to 2015-16 19.03 40.59 28.11
|441| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets (` in Crore) Sl. Description Period to which relates Disputed amount March 31, 2017 March 31, 2016 April 1, 2015 d) Others Demand of local area development tax by the concerned authorities. 2001-02 0.12 0.12 0.12 Demand of octroi alongwith penalty in the state of Maharashtra by the concerned authorities. 2010-11 0.03 0.03 0.03 Demand of Advertisement Tax by Municipal Corporation of Indore, M.P. 2014-15 - 0.12 - 68.10 100.55 100.80 The Group is contesting the demands and the management, including its tax advisors, believe that its position will likely to be upheld in the appellate process and accordingly no provision has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the Group’s financial position and results of operations. iii) a) The Group has fulfilled its obligation to export goods within a period of eight years from the date of issue of EPCG licenses issued in terms of para 5.2 of Foreign Trade Policy 2009-2014. As on the date of balance sheet, the Group is yet to file Export Obligation Discharge Certificates (EODC) worth ` 64.05 crores (March 31, 2016: ` 64.05 crores) (April 1, 2015: ` 68.39 crores) with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against said obligation is ` 8.00 crores (March 31, 2016: ` 8.00 crores) (April 1, 2015: ` 8.55 crores). b) The Group has fulfilled its obligation to export goods in respect of duty free imports made by the Group against Advance Licenses. As on the date of balance sheet, the Group is yet to file Export Obligation Discharge Certificates (EODC) worth ` 9.76 crores (March 31, 2016: ` 13.23 Crores) (April 1, 2015: ` 55.48 crores) with the Director General Foreign Trade (DGFT) within the stipulated time. Custom duty payable against said obligation is ` 0.57 crore (March 31, 2016: ` 0.88 crore) (April 1, 2015: ` 3.59 crores). B Commitments (` in Crore) March 31, 2017 March 31, 2016 April 1, 2015 a) Estimated amount of capital contracts remaining to be executed and not provided for (net of advances) 20.77 21.21 63.87 b) Corporate Social Responsibility commitment to Ashoka University, Haryana. - 3.00 6.00 20.77 24.21 69.87 C Undrawn committed borrowing facility (a) The Havells India Ltd. has availed working capital limits amounting to ` 200 crores from banks under consortium of Canara Bank, IDBI Bank Limited, State Bank of India, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and The Hong Kong and Shanghai Banking Corporation Limited. An amount of ` 150 crores remain undrawn as at March 31, 2017. Working capital limit availed is secured by way of: i) pari-passu first charge with consortium banks by way of hypothecation on stocks of raw materials, semi-finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |442| ii) pari-passu first charge with consortium banks by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad. iii) pari-passu second charge with consortium lenders by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations on which first charge was held by HSBC bank (Mauritius) Limited against External Commercial Borrowings. (b) The Havells India Limited has a debit balance in cash credit accounts as on the date of balance sheet except in case of Canara Bank where the company has availed a working capital demand loan of ` 50 crores represented under borrowing. (refer Note No. 18(A)) (c) The Promptec Renewable Energy Solutions Private Limited has availed working capital limits amounting to ` 10.28 crores from Yes Bank Limited. An amount of ` 9.72 crores remain undrawn as at March 31, 2017. The Working capital limit from Yes Bank is secured by way of:— i) Whole of the Current Assets of the Company’s stocks including raw material, semi-finished and finished goods, stores and spares relating to plant and machinery (consumable stores and spares), Bills receivables and book debts and all other receivables and movables (both present and future). ii) Whole of the Movable Fixed Assets of the Company. iii) All the book debts and receivables (both present and future) of the Company including outstanding monies receivable claims and bills which are now due and owing or which may at any time hereafter during the continuance of this security become due and owing to the Company in the course of its business. Non- disposable undertaking from Havells India Limited to maintain 51% shareholding in the Company. D Other Litigations (i) The Group has some entry tax and other tax related litigation of ` 50.85 crores (March 31, 2016: ` 41.11 crores) (April 1, 2015 : ` 43.53 crores) against which liability has been assessed as probable and adequate provisions have been made with respect to the same. Out of this liability, ` 25.86 crores pertaining to Brazil has been classified to disposal group {refer Note Nos. 20(b) and 32(3)}. (ii) Various litigation claims are ongoing against the Group as on March 31, 2017 out of which claim amounting to ` 50.63 crores (March 31, 2016 : ` 46.42 crores) (April 1, 2015 : ` 45.34 crores) are considered remote by the group. Accordingly the same are not considered in the above contingent liability disclosure. E Lease disclosures are not reproduced. F Contingent Assets The Government of India vide its office memorandum dated April 01, 2007 has announced fiscal incentives and concessions for North East Region viz. the NEIIP 2007. Incentives were available to all industrial units commencing their operations in this area by specified date. The Group has set up a plant in Guwahati and started production during the year. A subsidy of 30% of total investment in Plant and Machinery was available as capital investment subsidy. Subsidy will be disbursed after fulfilment of specified conditions and submission of application to the Government. Subsidy will be granted once the agency appointed by Government completes its verification and issues order in this regard. The Group has invested total sum of ` 5.85 crores (Excluding Pre-Operative expenses) in Plant and Machinery and is accordingly eligible for subsidy. The company is in process of making an application for claim of subsidy and expects that an amount of ` 1.76 crores will be sanctioned by Government in this regard on submission of application and approval accorded by the competent authority.
|443| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 6. HINDUSTAN UNILEVER LIMITED ACCOUNTING POLICIES Provisions and Contingent Liabilities 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. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which 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 or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made. Disclosure 25 Contingent Liabilities and Commitments Refer Note 2.4(h) for accounting policy on Contingent Liabilities. As at 31st March, 2017 As at 31st March, 2016 As at 1st April, 2015 A. CONTINGENT LIABILITIES Claims against the Company not acknowledged as debts Income tax matters 581 641 559 Sales tax matters 122 60 61 Excise duty, service tax and customs duty matters 193 236 203 Other matters including claims related to employees /ex-employees, property related demands, etc. 83 81 78 (i) It is not practicable for the Company to estimate the timings of cash outflows, if any, in respect of the above pending resolution of the respective proceedings as it is determinable only on receipt of judgments/decisions pending with various forums/authorities. (ii) The Company does not expect any reimbursements in respect of the above contingent liabilities. (iii) The Company’s pending litigations comprise of claims against the Company by employees and pertaining to proceedings pending with Income Tax, Excise, Custom, Sales/VAT tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results. (iv) The Company has given Bank Guarantees in respect of certain contingent liabilities included above. B. COMMITMENTS i) Para for operating lease not reproduced ii) Capital commitments Estimated value of contracts in capital account remaining to be executed and not provided for (net of capital advances) 254 140 163 254 140 163
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |444| iii) Other commitments During the year, the Company has issued letters of undertakings to the bankers of its below mentioned fully owned subsidaries to provide need based financial support : i) Lakme Lever Private Limited ii) Daverashola Estates Private Limited iii) Jamnagar Properties Private Limited 7. IDEA CELLULAR INDIA LIMITED ACCOUNTING POLICIES Provisions and Contingent Liabilities 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. 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. i. Asset Retirement Obligation (ARO) ARO is provided for those lease arrangements where the Company has a binding obligation to restore the said location/premises at the end of the period in a condition similar to inception of the arrangement. The restoration and decommissioning costs are provided at the present value of expected costs to settle the obligation using estimated cash flows and are recognised as part of the cost of the 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 expensed as incurred and recognised in the statement of profit and loss as a finance cost. The estimated future costs of decommissioning are reviewed annually and adjusted as appropriate. Changes in the estimated future costs or in the discount rate applied are added to or deducted from the cost of the asset. ii. Contingent Liabilities A Contingent Liability is disclosed where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Contingent Assets are not recognised. Information on contingent liabilities is disclosed in the notes to Financial Statements unless the possibility of an outflow of resources embodying economic benefits is remote. Disclosure 42. Capital and other Commitments: Estimated amount of commitments are as follows: • Spectrum won in auctions ` 3,312.07 Mn. (Previous year: ` Nil, Transition date: ` 282,025.25 Mn.) • Contracts remaining to be executed for capital expenditure (net of advances) and not provided for are ` 20,097.43 Mn. (Previous year: ` 19,815.03 Mn. Transition date: ` 27,661.71 Mn.) • Long-term contracts remaining to be executed including early termination commitments (if any) are ` 17,600.26 Mn. (Previous year: ` 14,800.13 Mn. Transition date: ` 17,866.22 Mn.)
|445| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 43. Contingent Liabilities: A) Licensing Disputes: i. One Time Spectrum Charges: In Financial year 2012-13, DoT had issued demand notices towards one time spectrum charges - For spectrum beyond 6.2 MHz in respective service areas for retrospective period from July 1, 2008 to December 31, 2012, amounting to ` 3,691.30 Mn., and - For spectrum beyond 4.4 MHz in respective service areas effective January 1, 2013 till expiry of the period as per respective licenses amounting to ` 17,443.70 Mn. In the opinion of Company, inter-alia, the above demands amount to alteration of financial terms of the licenses issued in the past. The Company had therefore, petitioned the Hon’ble High Court of Bombay, where the matter was admitted and is currently sub-judice. The Hon’ble High Court of Bombay has directed the DoT, not to take any coercive action until the matter is further heard. No effects have been given in the financial statements for the above. ii. Other Licensing Disputes - ` 58,318.18 Mn. (Previous year: ` 30,501.90 Mn., Transition date: ` 35,520.91 Mn.): - Demands due to difference in interpretation of definition of adjusted gross revenue (AGR) and other license fee assessment related matters. Most of these demands are currently before the Hon’ble TDSAT, Hon’ble High court and Hon’ble Supreme Court. - Disputes relating to alleged non-compliance of licensing conditions & other disputes with DoT, either filed by or against the Company and pending before Hon’ble Supreme Court/ TDSAT. - Demands on account of alleged violations in license conditions relating to amalgamation of erstwhile Spice Communications Limited currently sub-judice before the Hon’ble TDSAT. - Demand with respect to upfront spectrum amounts for continuation of services from February 2, 2012 till various dates in the service areas where the licenses were quashed following the Hon’ble Supreme Court Order. B) Aditya Birla Telecom Limited (“ABTL”) has an obligation to buy the equity shares of Indus held by P5 Asia Holdings Investments (Mauritius) Limited (P5) at fair value if: i. ABTL sells its stake in Indus before P5 and P5 is not able to find a buyer for their stake in Indus, or ii. Aditya Birla Group companies collectively cease to be the single largest shareholder of the Company before P5 is able to sell its stake in Indus. In the event ABTL is not able to fulfil its obligation, the same will devolve on the company. C) Other Matters ` in Mn Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Income tax matters not acknowledged as debts (see note i below) 73,969.18 63,676.98 66,566.75 Sales tax and entertainment tax matters not acknowledged as debts (see note ii below) 1,684.32 1,508.10 994.34 Service tax matters not acknowledged as debts (see note iii below) 3,041.46 3,800.83 1,364.22 Entry tax and customs matters not acknowledged as debts (see note iv below) 332.70 302.24 386.57 Other claims not acknowledged as debts (see note ` below) 2,473.84 2,404.74 2,370.12
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |446| i. Income Tax Matters - Appeals filed by the Company against the demands raised by Income Tax Authorities which are pending before Appellate Authorities include mainly disputes on account of incorrect disallowance of revenue share license fee, disputes on non- applicability of tax deduction at source on prepaid margin allowed to prepaid distributors & roaming settlements, disallowance of interest proportionate to interest free advances given to wholly owned subsidiaries etc. - Appeal filed for tax demand on difference between revalued figures of Investment in Indus held through a wholly owned subsidiary and book value of Passive Infrastructure assets transferred to step down subsidiary through a High Court approved scheme. ii. Sales Tax and Entertainment Tax - Sales Tax demands mainly relates to the demands raised by the VAT/Sales Tax authorities of few states on Broadband Connectivity, SIM cards etc. on which the Company has already paid Service Tax. - Demand of tax for non-submission of Declaration forms viz. C forms & F forms in stipulated time limit. - In one State entertainment tax is being demanded on revenue from value added services. However, the Company has challenged the constitutional validity of the levy. - Amounts in respect of Jammu & Kashmir General Sales Tax Amnesty scheme pending clarification/ notification. iii. Service Tax Service Tax demands mainly relates to the following matters: - Interpretation issues arising out of Rule 6(3) of the CENVAT Credit Rules, 2004. - Denial of Cenvat credit related to Towers and Shelters. - Demand raised on services provided by foreign telecom operators stating that it is liable to Service tax under reverse charge. - Disallowance of Cenvat Credit on input services viewed as not related to output service. - Demand of tax on telecommunication services provided to employees. - Demand of interest on the credit availed but not utilized. iv. Entry Tax - Entry Tax disputes pertains to classification/valuation of goods. v. Other claims not acknowledged as debts - Mainly include consumer forum cases, miscellaneous disputed matters with local Municipal Corporation, Electricity Board and others. 8. INFOSYS LIMITED ACCOUNTING POLICIES Provisions A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
|447| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets a. Post-sales client support The Company provides its clients with a fixed-period post-sales support for corrections of errors and support on all its fixed-price, fixed-timeframe contracts. Costs associated with such support services are accrued at the time related revenues are recorded in the Statement of Profit and Loss. The Company estimates such costs based on historical experience and estimates are reviewed on a periodic basis for any material changes in assumptions and likelihood of occurrence. b. Onerous contracts Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract. Disclosure Particulars As at March 31, April 1, 2017 2016 2015 Contingent liabilities Claims against the Company, not acknowledged as debts (2) [Net of amount paid to statutory authorities ` 4,694 crore (` 4,386 crore)] 1,902 188 167 Commitments Estimated amount of contracts remaining to be executed on capital contracts and not provided for (net of advances and deposits) 1,094 1,295 1,272 Other commitments (1) 37 – – (1) Uncalled capital pertaining to investments (2) Claims against the Company not acknowledged as debts as on March 31, 2017 include demand from the Indian income tax authorities for payment of tax of ` 6,122 crore (` 4,135 crore), including interest of ` 1,885 crore (` 1,224 crore) upon completion of their tax assessment for fiscals 2007, 2008, 2009, 2010, 2011, 2012 and 2013. Demands were paid to statutory tax authorities in full except for fiscals 2009, 2011, 2012 and 2013. Demand for fiscals 2007, 2008 and 2009 includes disallowance of a portion of the deduction claimed by the Company under Section 10A of the Income-tax Act as determined by the ratio of export turnover to total turnover. The disallowance arose from certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover. Demand for fiscals 2007, 2008, 2009, 2010 and 2011 also includes disallowance of portion of profit earned outside India from the STP units under Section 10A of the Income-tax Act and disallowance of profits earned from SEZ units under Section 10AA of the Income-tax Act. Demand for fiscals 2012 and 2013 includes disallowance of certain expenses incurred in foreign currency being reduced from export turnover but not reduced from total turnover and disallowance of profits earned from SEZ units which commenced operations before April 1, 2009 under Section 10AA of the Income-tax Act and also others. The matters for fiscals 2007, 2008, 2009 and 2013 are pending before the Commissioner of Income Tax (Appeals), Bengaluru. The matter for fiscals 2010, 2011 and 2012 is pending before the Hon’ble Income Tax Appellate Tribunal (ITAT), Bengaluru. The Company is contesting the demand and the Management, including its tax advisors believes that its position will likely be upheld in the appellate process. The Management believes that the ultimate outcome of these proceedings will not have a material adverse effect on the Company’s financial position and results of operations. The Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Company’s management does not reasonably expect that these legal actions, when ultimately concluded and determined, will have a material and adverse effect on the Company’s results of operations or financial condition. 9. LARSEN & TOUBRO LIMITED ACCOUNTING POLICIES Provisions, contingent liabilities and contingent assets Provisions are recognised only when: a) the company has a present obligation (legal or constructive) as a result of a past event; b) it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |448| c) a reliable estimate can be made of the amount of the obligation. Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received. Contingent liability is disclosed in case of: a) a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and b) a present obligation arising from past events, when no reliable estimate is possible. Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date. Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision Disclosure NOTE [29] Contingent liabilities Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 ` crore ` crore ` crore (a) Claims against the Company not acknowledged as debts 1743.95 1025.52 883.06 (b) Sales tax liability that may arise in respect of matters in appeal 141.50 156.72 132.13 (c) Excise duty/service tax/customs duty liability that may arise including those in respect of matters in appeal/challenged by the Company in Writ 69.20 60.73 55.41 (d) Income tax liability that may arise in respect of which the Company is in appeal 460.55 531.84 826.44 (e) Corporate guarantees for debt given on behalf of subsidiary companies/joint venture companies 8450.61 7327.31 8723.55 (f) Corporate and bank guarantees for performance given on behalf of subsidiary companies 16384.12 8847.53 9201.96 (g) Contingent liabilities, if any, incurred in relation to interests in joint operations 7018.24 4170.76 3248.49 (h) Share in contingent liabilities of joint operations for which the Company is contingently liable 53.24 58.18 80.13 (i) Contingent liabilities in respect of liabilities of other joint operators of joint operations 6230.96 8006.19 10840.81 Notes: 1. The Company does not expect any reimbursements in respect of the above contingent liabilities.
|449| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 2. It is not practicable to estimate the timing of cash outflows, if any, in respect of matters at (a) to (d) above pending resolution of the arbitration/appellate proceedings. Further, the liability mentioned in (a) to (d) above excludes interest and penalty in cases where the company has determined that the possibility of such levy is remote. 3. In respect of matters at (e), the cash outflows, if any, could generally occur up to ten years, being the period over which the validity of the guarantees extends except in a few cases where the cash outflows, if any, could occur any time during the subsistence of the borrowings to which the guarantees relate. 4. In respect of matters at (f), the cash outflows, if any, could generally occur up to three years, being the period over which the validity of the guarantees extends. 5. In respect of matters at (g) to (i), the cash outflows, if any, could generally occur upto completion of projects undertaken by the respective joint operations. Commitments ` in crore Sr. no. Particulars As at 31-3-2017 As at 31-3-2016 As at 1-4-2015 (a) Estimated amount of contracts remaining to be executed on capital account (net of advances) 533.49 196.72 294.40 (b) Funding committed by way of equity/loans to subsidiary/joint venture companies 1063.20 1281.00 2738.00 (c) Share in capital commitments, of joint operations for which the company is contingently liable – 2.61 159.34 10. NTCP LIMITED ACCOUNTING POLICIES Provisions and contingent liabilities A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and 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. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. The expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. 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 future events not wholly within the control of the Company. 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 liabilities are disclosed on the basis of judgment of the management/independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |450| Disclosure 61. Disclosure as per Ind AS 37 ‘Provisions, Contingent Liabilities and Contingent Assets’ Movements in provisions: ` in Crore Particulars Provision for obligations incidental to land acquisition Provision for tariff adjustment Others Total 31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016 31 March 2017 31 March 2016 Carrying amount at the beginning of the year 3,736.84 3,098.72 1,234.41 1,243.64 563.66 505.02 5,534.91 4,847.38 Additions during the year 429.68 965.37 98.88 145.28 156.03 259.12 684.59 1,369.77 Amounts used during the year (440.19) (274.14) - - (6.69) (48.86) (446.88) (323.00) Reversal/adjustments during the year (30.55) (53.11) (162.50) (154.51) (2.70) (151.62) (195.75) (359.24) Carrying amount at the end of the year 3,695.78 3,736.84 1,170.79 1,234.41 710.30 563.66 5,576.87 5,534.91 i) Provision for obligations incidental to land acquisition Provision for obligations incidental to land acquisition includes expenditure on rehabilitation & resettlement (R&R) including the amounts payable to the project affected persons (PAPs) towards land, expenditure for providing community facilities and expenditure in connection with environmental aspects of the project. The Company has estimated the provision based on the Rehabilitation Action Plan (RAP) approved by the board/competent authority or agreements/directions/demand letters of the local/government authorities. The outflow of said provision is expected to be incurred immediately on fulfilment of conditions by the land oustees/receipts of directions of the local/government authorities. ii) Provision for tariff adjustment The Company aggrieved over many of the issues considered by the CERC in the tariff orders for its stations for the period 2004-09 had filed appeals with the Appellate Tribunal for Electricity (APTEL). The APTEL disposed off the appeals favourably directing the CERC to revise the tariff orders as per directions and methodology given. Some of the issues decided in favour of the Company by the APTEL were challenged by the CERC in the Hon’ble Supreme Court of India. Subsequently, the CERC has issued revised tariff orders for all the stations except one for the period 2004-09, considering the judgment of APTEL subject to disposal of appeals pending before the Hon’ble Supreme Court of India. Towards the above and other anticipated tariff adjustments, provision of ` 98.88 crore (31 March 2016: ` 145.28 crore, 1 April 2015: ` 148.10 crore) has been made during the year and in respect of some of the stations, an amount of ` 162.49 crore (31 March 2016: ` 154.51 crore, 1 April 2015: ` 180.16 crore) has been written back. iii) Others Provision for others comprise ` 68.24 crore (31 March 2016: ` 65.35 crore, 1 April 2015: ` 58.64 crore) towards cost of unfinished minimum work programme demanded by the Ministry of Petroleum and Natural Gas (MoP&NG) including interest thereon in relation to block AA-ONN-2003/2 [Refer Note 63 (b)], ` 640.25 crore (31 March 2016: ` 496.44 crore, 1 April 2015: ` 440.35 crore) towards provision for cases under litigation and ` 1.81 crore (31 March 2016: ` 1.87 crore, 1 April 2015: ` 6.03 crore) towards provision for shortage in property, plant and equipment on physical verification pending investigation. iv) In respect of provision for cases under litigation, outflow of economic benefits is dependent upon the final outcome of such cases. v) In all these cases, outflow of economic benefits is expected within next one year.
|451| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets vi) Sensitivity of estimates on provisions: The assumptions made for provisions relating to current period are consistent with those in the earlier years. The assumptions and estimates used for recognition of such provisions are qualitative in nature and their likelihood could alter in next financial year. It is impracticable for the Company to compute the possible effect of assumptions and estimates made in recognizing these provisions. vii) Contingent liabilities and contingent assets Disclosure with respect to claims against the Company not acknowledged as debts and contingent assets are made in Note 71. 11. RAYMOND LIMITED ACCOUNTING POLICIES Provisions and contingent liabilities Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made. Disclosure i) Contingent Liabilities (` in lakhs) Particulars As at 31st March, 2016 As at 31st March, 2017 As at 1st April, 2015 (a) Claims against the Company not acknowledged as debts in respect of past disputed liabilities of the Cement and Steel Divisions divested during the year 2000-01 and Denim Division divested during the year 2006-07 (interest thereon not ascertainable at present) Sales Tax 98.54 98.54 98.54 Royalty 2,201.94 2,201.94 2,201.94 Other Matters 211.48 247.08 247.08 2,511.96 2,547.56 2,547.56 (b) claims against the company not acknowledged as debts in respect of other divisions. Sales tax* 1,814.97 1,774.97 1,762.20 Compensation for premises 1,615.58 1,559.07 1,515.37 Electricity duty 673.31 658.83 508.79 Water charges 156.18 149.86 131.61 Other matters 134.28 126.45 60.44 4,394.32 4,269.18 3,978.41 * Includes contingent liability amounting to ` 40 lakhs pertaining to Raymond Woollen Outerwear Ltd. (Demerged division of Raymond Limited) for the year 2011-12.
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |452| (` in lakhs) Particulars As at 31st March, 2016 As at 31st March, 2017 As at 1st April, 2015 (c) On account of corporate guarantee to the bankers on behalf of subsidiaries for facilities availed by them (amount outstanding at close of the year) 282.00 973.00 553.00 (d) Disputed demands in respect of Income-tax, etc. (Interest thereon not ascertainable at present) 3,907.91 3,880.22 3,880.22 (e) Disputed Excise/Custom Duty 2,549.09 2,063.01 2,126.35 (f) Liability on account of jute packaging obligation upto 30th June, 1997, in respect of the Company’s erstwhile Cement Division. Under the jute Packaging Materials (Compulsory use in Packing Commodities) Act, 1987. Amount not determinable Amount not determinable Amount not determinable (g) Company’s liabilities/obligations pertaining to the period upto the date of transfer of the Company’s erstwhile Steel, Cement and Denim Division in respect of which the Company has given undertakings to the acquirers. Amount not determinable Amount not determinable Amount not determinable It is not practicable for the Company to estimate the timing of cash outflows, if any, in respect of the above (a), (b), (d to g) pending resolution of the respective proceedings. The Company does not expect any reimbursements in respect of the above contingent liabilities. ii) Contingent Assets Freehold land at Thane, acquired by Thane Municipal Corporation for the purpose widening of Municipal Road, included in Property, Plant and Equipment (Refer Note 2A(iii)). Note:- 39 - Commitments Capital Commitments Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows: (` in lakhs) Particulars As at 31st March, 2017 As at 31st March, 2016 As at 1st April, 2015 (i) Property, plant and equipment 1,244.35 3,261.48 6,089.81 Less: Capital advances (Refer Note 8) (94.67) (216.48) (474.13) Net Capital commitments 1,149.68 3,045.00 5,615.68 12. STERLITE TECHNOLOGIES LIMITED ACCOUNTING POLICIES Provisions a. 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. When the Company 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 or 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
|453| Chap. 19 – Ind AS 37 — Provisions, Contingent Liabilities and Contingent Assets 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. b. Warranty provisions Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer. The initial estimate of warranty-related costs is revised annually. Disclosure Note 39: Capital and Other Commitments a] Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) are ` 77.03 crores (31 March 2016: ` 59.78 crores, 1 April 2015: ` 120.52 crores) b] As on March 31, 2017, the Company has commitments of ` Nil (31 March 2016: ` 17.33 crores, 1 April 2015: ` 22.85 crores) relating to further investment in subsidiaries. c] For commitments relating to lease arrangments please refer note 38. d] The Company has entered into agreements with the lenders of following subsidiaries wherein it has committed to hold directly or indirectly at all times at least 51% of equity share capital of below mentioned subsidiaries and not to sell, transfer, assign, pledge or create any security interest except pledge of shares to the respective lenders as covered in respective agreements with lenders. 31 March 2017 31 March 2016 1 April 2015 Maharashtra Transmission Communication Infrastructure Limited Speedon Network Limited Speedon Network Limited Maharashtra Transmission Communication Infrastructure Limited Maharashtra Transmission Communication Infrastructure Limited Note 40: Contingent Liabilities 31 March 2017 31 March 2016 1 April 2015 (` in crores) (` in crores) (` in crores) 1 Disputed liabilities in appeal a) Sales tax 0.43 0.43 0.43 b) Excise duty [Including excise duty case in Supreme Court, refer Note 8 and Note 53] 262.25 259.84 262.91 c) Customs duty 75.38 73.54 69.60 d) Service tax 0.63 0.63 - e) Income tax 25.32 22.77 21.20 f) Claims lodged by a bank against the Company (*) 18.87 18.87 18.87 g) Claims against the Company not acknowledged as debt 1.11 1.11 23.23 2 Outstanding amount of export obligation against advance licence 70.32 2.74 6.95 3 Corporate guarantee to the income tax department on behalf of group companies. 114.00 114.00 114.00 4 Corporate guarantees given on behalf of its subsidiaries for loans and hedging facilities taken from bank/financial institution (to the extent of loans and hedging facilities outstanding as at balance sheet date) [(The total amount of corporate guarantees is ` 4.71 crores (31 March 2016: ` 58.13 crores, 1 April 2015: ` 100.45 crores)] 4.71 26.14 75.57
Mandatory Accounting Standards (Ind AS) — Extracts from Published Accounts |454| The Company has not provided for disputed sales tax, excise duty, customs duty and service tax arising from disallowances made in assessments which are pending with appellate authorities for its decision. The Company is contesting the demands and the management, including its tax advisors, believe that its position will likely be upheld in the appellate process. No tax expense has been accrued in the financial statements for the tax demand raised. The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company’s financial position and results of operations. In respect of the claims against the Company not acknowledged as debts as above, the management does not expect these claims to succeed. Accordingly, no provision for the contingent liability has been recognized in the financial statements. It is not practicable to indicate the uncertainties which may affect the future outcome and estimate the financial effect of the above liabilities. * In an earlier year, one of the Bankers of the Company had wrongly debited an amount of ` 18.87 crores, towards import consignment under letter of credit not accepted by the Company, owing to discrepancies in the documents. Thereafter, the bank filed claim against the Company in the Debt Recovery Tribunal (DRT). Against the DRT Order dated 28-Oct-2010, the parties had filed cross appeals before the Debt Recovery Appellate Tribunal. The Debt Recovery Appellate Tribunal vide its Order dated 28-Jan-2015 has allowed the appeal filed by the company and has dismissed the appeal filed by the bank. The bank has challenged the said order in WRIT before the Bombay High Court. The management doesn’t expect the claim to succeed. 13. SUN PHARMACEUTICAL INDUSTRIES LIMITED ACCOUNTING POLICIES Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of 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 obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. Restructuring: A provision for restructuring is recognised when the Company has a detailed formal restructuring plan and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision includes only the direct expenditure arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the entity. 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 benefit expected to be received from the contract. Contingent liabilities and contingent assets: Contingent liability is disclosed for, (i) Possible obligations which will be confirmed only by future events not wholly within the control of the Company, or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.