notes to the consolidated financial · pdf filethe consolidated financial statements have been...
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1. GENERAL INFORMATION PiramalEnterprisesLimited(PEL),(theCompany),alongwithitssubsidiaries(collectivelyreferredtoastheGroup)isoneofIndia’slargediversified
Group,withapresenceinHealthcare,HealthcareInformationManagementandFinancialServicesInHealthcare,PELisoneoftheleadingplayersgloballyinCRAMS(customresearchandmanufacturingservices)aswellasinthecriticalcaresegmentofinhalationandinjectableanaesthetics.ItalsohasastrongpresenceintheOTCsegmentinIndia.PEL’sHealthcareInformationManagementbusiness,DecisionResourcesGroup,isamongstthetop20USmarketresearchorganizationswhichprovideinformationservicestothehealthcareindustry. InFinancialServices,PELprovidescomprehensivefinancingsolutionstorealestatecompanies.StructuredFinanceGroup(SFG)alsoprovidesseniorandmezzaninegrowthcapitaltovariousbusinessesacrossvariedsectorsthatareintegralpartofIndia’sgrowthstory.TheCompanyalsohasstrategicallianceswithtopglobalfundssuchasCPPIBCreditInvestmentInc.,APGAssetManagementandBainCapitalCredit.PELalsohaslongtermequityinvestmentsinShriramGroup,aleadingfinancialconglomerateinIndia.
PELislistedontheBSELimitedandtheNationalStockExchangeofIndiaLimitedinIndia.
2a. SIGNIFICANT ACCOUNTING POLICIES i) Basis of preparation Compliance with Ind AS TheConsolidatedfinancialstatementscomplyinallmaterialaspectswithIndianAccountingStandards(IndAS)notifiedunderSection133of
theCompaniesAct,2013(theAct)[Companies(IndianAccountingStandards)Rules,2015]andotherrelevantprovisionsoftheAct.
ThefinancialstatementsuptoyearendedMarch31,2016werepreparedinaccordancewiththeaccountingstandardsnotifiedunderCompanies(AccountingStandard)Rules,2006 (asamended)andother relevantprovisionsof theAct.Thesefinancial statementsare thefirstfinancialstatementsoftheCompanyunderIndAS.ReferNote56forthedetailsoffirst-timeadoptionexemptionsavailedbytheGroup.
TheSeparatefinancialstatementsarepresentedinadditiontotheconsolidatedfinancialstatementspresentedbytheGroup.
Historical Cost convention TheConsolidatedfinancialstatementshavebeenpreparedonthehistoricalcostbasisexceptforthefollowing:
a) certainfinancialinstrumentsandcontingentconsideration-measuredatfairvalue b) assetsclassifiedasheldforsale-measuredatfairvaluelesscosttosell c) cashsettledstockappreciationrights-measuredatfairvalue d) planassetsofdefinedbenefitplans,whicharemeasuredatfairvalue
ii) Principles of consolidation and equity accounting a) Subsidiaries: Subsidiariesareallentities(includingStructuredentities)overwhichthegrouphascontrol.ControlisachievedwhentheGrouphaspower
overtheinvestee,isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytouseitspowertoaffectitsreturns.Subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtothegroup.Theyaredeconsolidatedfromthedatethatcontrolceases.
Theacquisitionmethodofaccountingisusedtoaccountforbusinesscombinationsbythegroup.
Thegroupcombinesthefinancialstatementsoftheparentanditssubsidiarieslinebylineaddingtogetherlikeitemsofassets,liabilities,equity,incomeandexpenses.Intercompanytransactions,balancesandunrealisedgainsontransactionsbetweengroupcompaniesareeliminated.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentofthetransferredasset.Accountingpoliciesofsubsidiarieshavebeenchangedwherenecessarytoensureconsistencywiththepoliciesadoptedbythegroup.
Non-controlling interests in the resultsandequityof subsidiariesareshownseparately in theconsolidatedstatementofprofitand loss,consolidatedstatementofchangesinequityandbalancesheetrespectively.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSfortheyearendedMarch31,2017
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
b) Associates: AnassociateisanentityoverwhichtheGrouphassignificantinfluence.Significantinfluenceisthepowertoparticipateinthefinancialand
operatingpolicydecisionsoftheinvesteebutisnotcontrolorjointcontroloverthosepolicies.Investmentsinassociatesareaccountedforusingtheequitymethodofaccounting(see(d)below),afterinitiallybeingrecognisedatcost.
c) Joint Arrangements: Under IndAS111 JointArrangements, investments in joint arrangements are classifiedas either jointoperationsor joint ventures. The
classificationdependsonthecontractualrightsandobligationsofeachinvestor,ratherthanthelegalstructureofthejointarrangement.TheGrouphasbothjointoperationsandjointventures.
Ajointoperationisajointarrangementwherebythepartiesthathavejointcontrolofthearrangementhaverightstotheassetsandobligationsfortheliabilitiesrelatingtothearrangement.
Ajointventureisajointarrangementwherebythepartiesthathavejointcontrolofthearrangementhaverightstothenetassetsofthejointarrangement.Jointcontrolisthecontractuallyagreedsharingofcontrolofanarrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequireunanimousconsentofthepartiessharingcontrol.
TheGrouprecognisesitsdirectrighttotheassets,liabilities,revenuesandexpensesofjointoperationsanditsshareofanyjointlyheldorincurredassets,liabilities,revenuesandexpenses.Thesehavebeenincorporatedinthefinancialstatementsundertheappropriateheadings.
Interestsinjointventuresareaccountedforusingtheequitymethod(see(d)below),afterinitiallybeingrecognisedatcostintheconsolidatedbalance sheet.
d) Equity method: Undertheequitymethodofaccounting,theinvestmentsareinitiallyrecognisedatcostandadjustedthereaftertorecognisetheGroup’s
shareofpostacquisitionprofitsor lossesoftheinvesteeinprofitandloss,andthegroup’sshareofothercomprehensiveincomeoftheinvesteeinothercomprehensiveincome.Dividendsreceivedorreceivablefromassociatesorjointventuresarerecognisedasareductioninthecarryingamountoftheinvestment.
Unrealisedgainsontransactionsbetweenthegroupanditsassociatesandjointventuresareeliminatedtotheextentofthegroup’sinterestintheseentities.Unrealisedlossesarealsoeliminatedunlessthetransactionprovidesevidenceofanimpairmentoftheassettransferred.
ThecarryingamountofequityaccountedinvestmentsaretestedforimpairmentinaccordancewiththepolicymentionedinNote2a(vi)below.
e) Changes in ownership interests Thegrouptreatstransactionswithnon-controllingintereststhatdonotresultinlossofcontrolastransactionswithequityownersofthe
group.Achangeintheownership interestresults inanadjustmentbetweenthecarryingamountsofthecontrollingandnon-controllingintereststoreflecttheirrelativeinterestsinthesubsidiary.Anydifferencebetweentheamountoftheadjustmenttononcontrollinginterestsandanyconsiderationpaidorreceivedisrecognisedwithinequity.
iii) Business Combinations Theacquisitionmethodofaccountingisusedtoaccountforallbusinesscombinations,regardlessofwhetherequityinstrumentsorother
assetsareacquired.Theconsiderationtransferredfortheacquisitionofasubsidiarycomprisesthe:
-fairvaluesoftheassetstransferred; -liabilitiesincurredtotheformerownersoftheacquiredbusiness; -equityinterestsissuedbythegroup;and -fairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement. Identifiableassetsacquiredandliabilitiesandcontingentliabilitiesassumedinabusinesscombinationare,withlimitedexceptions,measured
initiallyattheirfairvaluesattheacquisitiondate.Thegrouprecognisesanynon-controllinginterestintheacquiredentityonanacquisition-by-acquisitionbasisatthenon-controllinginterest’sproportionateshareoftheacquiredentity’snetidentifiableassets.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Acquisition-relatedcostsareexpensedasincurred.
Theexcessofthe -considerationtransferred; -amountofanynon-controllinginterestintheacquiredentity,and -acquisition-datefairvalueofanypreviousequityinterestintheacquiredentity overthefairvalueofthenetidentifiableassetsacquiredisrecordedasgoodwill. Ifthoseamountsarelessthanthefairvalueofthenet
identifiableassetsofthebusinessacquired,thedifferenceisrecognisedinothercomprehensiveincomeandaccumulatedinequityascapitalreserveprovidedthereisclearevidenceoftheunderlyingreasonsforclassifyingthebusinesscombinationasabargainpurchase.Inothercases,thebargainpurchasegainisrecogniseddirectlyinequityascapitalreserve.
Wheresettlementofanypartofcashconsiderationisdeferred,theamountspayableinthefuturearediscountedtotheirpresentvalueasatthedateofexchange.Thediscountrateusedistheentity’sincrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtainedfromanindependentfinancierundercomparabletermsandconditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are subsequentlyremeasuredtofairvaluewithchangesinfairvaluerecognisedinprofitorloss.
Ifthebusinesscombinationisachievedinstages,theacquisitiondatecarryingvalueoftheacquirer’spreviouslyheldequityinterestintheacquireeisremeasuredtofairvalueattheacquisitiondate.Anygainsorlossesarisingfromsuchremeasurementarerecognisedinprofitorlossorothercomprehensiveincome,asappropriate.
Common control transactions Businesscombinationsinvolvingentitiesthatarecontrolledbythegroupareaccountedforusingthepoolingofinterestsmethodasfollows:
1) Theassetsandliabilitiesofthecombiningentitiesarereflectedattheircarryingamounts.
2) Noadjustmentsaremadetoreflectfairvalues,orrecogniseanynewassetsor liabilities.Adjustmentsareonlymadetoharmoniseaccountingpolicies.
3) Thebalanceof the retainedearningsappearing in thefinancial statementsof the transferor is aggregatedwith the correspondingbalanceappearinginthefinancialstatementsofthetransfereeorisadjustedagainstgeneralreserve.
4) Theidentityofthereservesarepreservedandthereservesofthetransferorbecomethereservesofthetransferee.
5) Thedifference,ifany,betweentheamountsrecordedassharecapitalissuedplusanyadditionalconsiderationintheformofcashorotherassetsandtheamountofsharecapitalofthetransferoristransferredtocapitalreserveandispresentedseparatelyfromothercapitalreserves.
6) Thefinancialinformationinthefinancialstatementsinrespectofpriorperiodsisrestatedasifthebusinesscombinationhadoccurredfromthebeginningoftheprecedingperiodinthefinancialstatements,irrespectiveoftheactualdateofcombination.However,wherethebusinesscombinationhadoccuredafterthatdate,thepriorperiodinformationisrestatedonlyfromthatdate.
iv) (a) Property, Plant and Equipment Freehold Land is carried at historical cost. All other items of Property Plant & Equipments are stated at cost of acquisition, less
accumulateddepreciationandaccumulatedimpairmentlosses,ifany.Directcostsarecapitaliseduntiltheassetsarereadyforuseandincludesfreight,duties,taxesandexpensesincidentaltoacquisitionandinstallationThecarryingamountofanycomponentaccountedforasaseparateassetisderecognisedwhenreplacedAllotherrepairsandmaintenancearechargedtoprofitorlossduringthereportingperiodinwhichtheyareincurred.SubsequentexpendituresrelatedtoanitemofPropertyPlant&EquipmentareaddedtoitscarryingvalueonlywhenitisprobablethatthefutureeconomicbenefitsfromtheassetwillflowtotheGroup&costcanbereliablymeasured. Lossesarisingfromtheretirementof,andgainsorlossesarisingfromdisposalofProperty,PlantandEquipmentarerecognisedintheConsolidatedStatementofProfitandLoss.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Depreciation Depreciation isprovidedonapro-ratabasison the straight linemethod (‘SLM’)over theestimateduseful livesof theassets specified in
Schedule II of the Companies Act, 2013 / estimated useful lives as determined by themanagement of respective subsidiaries based ontechnicalevaluation.Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.
OntransitiontoIndAS,thegrouphaselectedtocontinuewiththecarryingvalueofallofitsproperty,plantandequipmentrecognisedasat1April2015measuredasper thepreviousGAAPanduse that carryingvalueas thedeemedcostof theproperty,plantandequipment.
TheestimatedusefullivesofProperty,Plant&Equipmentareasstatedbelow:
Asset Class The Useful lifeBuildings 10years-60yearsCarpetedRoads 10yearsPlant&Machinery 3-20yearsContinuousProcessPlant 25yearsOfficeEquipment 3years-15yearsVehicles 4-8yearsHelicopter 20yearsShips/Yachts 13years/28YearsFurniture&fixtures 5-10years
(iv) (b) Non current assets held for sale Noncurrentassetsareclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasaletransactionrather
thanthroughcontinuinguseandasaleisconsideredhighlyprobable.Theyaremeasuredattheloweroftheircarryingamountandfairvalueslesscosttosell,exceptforassetssuchasdeferredtaxassets,assetsarisingfromemployeebenefitsandfinancialassetswhicharespecificallyexemptfromthisrequirement.
(v) (a) Intangible Assets Intangible assets are stated at acquisition cost, net of accumulated amortisation and accumulated impairment losses, if any.
GainsorlossesarisingfromtheretirementordisposalofanintangibleassetaredeterminedasthedifferencebetweenthedisposalproceedsandthecarryingamountoftheassetandarerecognisedasincomeorexpenseintheConsolidatedStatementofProfitandLoss.
Theresearchanddevelopment(R&D)costisaccountedinaccordancewithIndAS-38‘Intangibles’.
ResearchResearch costs, including patent filing charges, technical know-how fees, testing charges on animal and expenses incurred ondevelopmentofamoleculetillthestageofPre-clinicalstudiesandtillthereceiptofregulatoryapprovalforcommencingphaseItrialsaretreatedasrevenueexpensesandchargedofftotheStatementofProfitandLossofrespectiveyear.
DevelopmentDevelopmentcostsrelatingtodesignandtestingofnewor improvedmaterials,productsorprocessesarerecognizedas intangibleassetsandarecarriedforwardunderIntangibleAssetsunderDevelopmentuntilthecompletionoftheprojectwhentheyarecapitalisedasIntangibleassets,ifthefollowingconditionsaresatisfied:
itistechnicallyfeasibletocompletetheassetsothatitwillbeavailableforuse; managementintendstocompletetheassetanduseorsellit; thereisanabilitytouseorselltheasset; itcanbedemonstratedhowtheassetwillgenerateprobablefutureeconomicbenefits; adequatetechnical,financialandotherresourcestocompletethedevelopmentandtouseorselltheassetareavailable;and theexpenditureattributabletotheassetduringitsdevelopmentcanbereliablymeasured.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
OntransitiontoIndAS,theGrouphaselectedtocontinuewiththecarryingvalueofallofitsIntangibleAssetsrecognisedasat1April2015measuredasperthepreviousGAAPandusethatcarryingvalueasthedeemedcostoftheIntangibleAssets.
IntangibleAssetswithfiniteusefullivesareamortizedonastraightlinebasisoverthefollowingperiod:
BrandsandTrademarks 10-15yearsCopyrights,Know-how(includingqualifyingProductDevelopmentCost)andIntellectualpropertyrights 4-15yearsComputerSoftware 3-6yearsCustomerrelationships 8-14yearsTechnology 7years
Theassets’residualvaluesandusefullivesarereviewed,andadjustedifappropriate,attheendofeachreportingperiod.TrademarksareassessedasIntangibleAssetswithindefiniteusefullives.
(v) (b) Goodwill Goodwillonacquisitionofsubsidiaries is includedin intangibleassets.Goodwillandintangibleassetsthathavean indefiniteuseful
lifearenotsubjecttoamortisationandaretestedannuallyforimpairment,ormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired.Goodwilliscarriedatcostlessaccumulatedimpairmentlosses.
vi) Impairment of Assets TheGroupassessesateachBalanceSheetdatewhetherthereisanyindicationthatanassetmaybeimpaired.Forthepurposesofassessing
impairment,thesmallestidentifiablegroupofassetsthatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsfromotherassetsorgroupsofassets, isconsideredasacashgeneratingunit. Ifanysuchindicationexists,theGroupestimatestherecoverableamountoftheasset.Therecoverableamountisthehigherofanasset’sfairvaluelesscostsofdisposalandvalueinuse.Ifsuchrecoverableamountoftheassetortherecoverableamountofthecashgeneratingunit towhichtheassetbelongs is lessthan itscarryingamount,thecarryingamountisreducedtoitsrecoverableamount.ThereductionistreatedasanimpairmentlossandisrecognisedintheConsolidatedStatementofProfitandLoss.IfattheBalanceSheetdatethereisanindicationthatifapreviouslyassessedimpairmentlossnolongerexistsormayhavedecreased,therecoverableamountisreassessedandtheassetisreflectedattherecoverableamount.
vii) Financial instruments FinancialassetsandfinancialliabilitiesarerecognisedwhenaGroupentitybecomesapartytothecontractualprovisionsoftheinstruments.
Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisitionorissueoffinancialassetsandfinancialliabilities(otherthanfinancialassetsandfinancialliabilitiesatfairvaluethroughprofitorloss)areaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,asappropriate,oninitialrecognition.Transactioncostsdirectlyattributabletotheacquisitionoffinancialassetsorfinancialliabilitiesatfairvaluethroughprofitorlossarerecognisedimmediatelyinprofitorloss.
Investments and Other Financial assets Classification: TheGroupclassifiesitsfinancialassetsinthefollowingmeasurementcategories:
thosetobemeasuredsubsequentlyatfairvalue(eitherthroughothercomprehensiveincome,orthroughprofitorloss),and thosemeasuredatamortisedcost.
Theclassificationdependsontheentity’sbusinessmodelformanagingthefinancialassetsandthecontractualtermsofthecashflows. Forassetsmeasuredatfairvalue,gainsandlosseswilleitherberecordedinprofitorlossorothercomprehensiveincome.Forinvestments
indebtinstruments,thiswilldependonthebusinessmodelinwhichtheinvestmentisheld.Forinvestmentsinequityinstruments,thiswilldependonwhethertheGrouphasmadeanirrevocableelectionatthetimeofinitialrecognitiontoaccountfortheequityinvestmentatfairvaluethroughothercomprehensiveincome.
TheGroupreclassifiesdebtinvestmentswhenandonlywhenitsbusinessmodelformanagingthoseassetschanges.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Measurement Atinitialrecognition,theGroupmeasuresafinancialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofit
orloss,transactioncoststhataredirectlyattributabletotheacquisitionofthefinancialasset.Transactioncostsoffinancialassetscarriedatfairvaluethroughprofitorlossareexpensedinprofitorloss.
Financialassetswithembeddedderivativesareconsideredintheirentiretywhendeterminingwhethertheircashflowsaresolelypaymentofprincipalandinterest.
Debtinstruments SubsequentmeasurementofdebtinstrumentsdependsontheGroup’sbusinessmodelformanagingtheassetandthecashflowcharacteristics
oftheasset.Therearethreemeasurementcategoriesintowhichthegroupclassifiesitsdebtinstruments:
Amortised cost: Assetsthatareheldforcollectionofcontractualcashflowswherethosecashflowsrepresentsolelypaymentsofprincipalandinterestare
measuredatamortisedcost.Againorlossonadebtinvestmentthatissubsequentlymeasuredatamortisedcostandisnotpartofahedgingrelationshipisrecognisedinprofitorlosswhentheassetisderecognisedorimpaired.Interestincomefromthesefinancialassetsisincludedinfinanceincomeusingtheeffectiveinterestratemethod.
Fair value through other comprehensive income (FVTOCI): Assetsthatareheldforcollectionofcontractualcashflowsandforsellingthefinancialassets,wheretheassets’cashflowsrepresentsolely
paymentsofprincipalandinterest,aremeasuredatfairvaluethroughothercomprehensiveincome(FVTOCI).MovementsinthecarryingamountaretakenthroughOCI,exceptfortherecognitionofimpairmentgainsorlosses,interestrevenueandforeignexchangegainsandlosseswhicharerecognisedinprofitandloss.Whenthefinancialassetisderecognised,thecumulativegainorlosspreviouslyrecognisedinOCIisreclassifiedfromequitytoprofitorlossandrecognisedinothergains/(losses).Interestincomefromthesefinancialassetsisincludedinotherincomeusingtheeffectiveinterestratemethod.
Fair value through profit or loss: AssetsthatdonotmeetthecriteriaforamortisedcostorFVTOCIaremeasuredatfairvaluethroughprofitorloss.Againorlossonadebt
investmentthatissubsequentlymeasuredatfairvaluethroughprofitorlossandisnotpartofahedgingrelationshipisrecognisedinprofitorlossandpresentednetinthestatementofprofitandlosswithinothergains/(losses)intheperiodinwhichitarises.Interestincomefromthesefinancialassetsisincludedinotherincome.
Equityinstruments TheGroupsubsequentlymeasuresallequity investmentsatfairvalue.WheretheGroup’smanagementhaselectedtopresentfairvalue
gainsandlossesonequityinvestmentsinothercomprehensiveincome,thereisnosubsequentreclassificationoffairvaluegainsandlossestoprofitorloss.DividendsfromsuchinvestmentsarerecognisedinprofitorlosswhentheGroup’srighttoreceivepaymentsisestablished.
Changesinthefairvalueoffinancialassetsatfairvaluethroughprofitorlossarerecognisedintheconsolidatedstatementofprofitandloss.
Impairmentoffinancialassets TheGroupapplies theexpected credit lossmodel for recognising impairment lossonfinancial assetsmeasuredat amortised cost, loan
commitments,tradereceivablesandothercontractualrightstoreceivecashorotherfinancialasset.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are withinthe scope of Ind AS 18, the Group always measures the loss allowance at an amount equal to lifetime expected credit losses. Further,forthepurposeofmeasuringlifetimeexpectedcreditloss(“ECL”)allowancefortradereceivables,theGrouphasusedapracticalexpedientaspermittedunder IndAS109.Thisexpectedcredit lossallowance iscomputedbasedonaprovisionmatrixwhichtakes intoaccounthistoricalcreditlossexperienceandadjustedforforward-lookinginformation.
Theexpectedcreditlossisaproductofexposureatdefault,probabilityofdefaultandlossgivendefault.TheGrouphasdevisedaninternalmodeltoevaluatetheprobabilityofdefaultandlossgivendefaultbasedontheparameterssetoutinIndAS109.Accordingly,thefinancial
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
instrumentsareclassifiedintoStage1–StandardAssetswithzerotothirtydayspastdue(DPD),Stage2–SignificantCreditDeteriorationoroverduebetween31to90daysandStage3–DefaultAssetswithoverdueformorethan90days.TheGroupalsotakesintoaccountthebelowqualitativeparametersindeterminingtheincreaseincreditriskforthefinancialassets:
1) Significantnegativedeviationinthebusinessplanofthedeveloper 2) Internalratingdowngradefortheborrowerortheproject 3) Currentandexpectedfinancialperformanceofthedeveloper 4) Needforrefinanceofloanduetochangeincashflowoftheproject 5) Significantdecreaseinthevalueofcollateral 6) Changeinmarketconditionsandindustrytrends
Forrecognitionofimpairmentlossonotherfinancialassetsandriskexposure,theGroupdeterminesthatwhethertherehasbeenasignificantincreaseinthecreditrisksinceinitialrecognition.Ifcreditriskhasnotincreasedsignificantly,12-monthECLisusedtoprovideforimpairmentloss.However,ifcreditriskhasincreasedsignificantly,lifetimeECLisused.If,inasubsequentperiod,creditqualityoftheinstrumentimprovessuchthatthereisnolongerasignificantincreaseincreditrisksinceinitialrecognition,thentheentityrevertstorecognisingimpairmentlossallowancebasedon12-monthECL.LifetimeECLaretheexpectedcreditlossesresultingfromallpossibledefaulteventsovertheexpectedlifeofafinancialinstrument.The12-monthECLisaportionofthelifetimeECLwhichresultsfromdefaulteventsthatarepossiblewithin12monthsafterthereportingdate.
DefaultAssetswhereinthemanagementdoesnotexpectanyrealisticprospectofrecoveryarewrittenofftotheStatementofProfitandLoss.
Derecognitionoffinancialassets Afinancialassetisderecognisedonlywhen: TheGrouphastransferredtherightstoreceivecashflowsfromthefinancialassetor retainsthecontractualrightstoreceivethecashflowsofthefinancialasset,butassumesacontractualobligationtopaythecash
flowstooneormorerecipients.
Wheretheentityhastransferredanasset,theGroupevaluateswhetherithastransferredsubstantiallyallrisksandrewardsofownershipofthefinancialasset.Insuchcases,thefinancialassetisderecognised.Wheretheentityhasnottransferredsubstantiallyallrisksandrewardsofownershipofthefinancialasset,thefinancialassetisnotderecognised.
Foreignexchangegainsandlosses Thefairvalueoffinancialassetsdenominatedinaforeigncurrencyisdeterminedinthatforeigncurrencyandtranslatedatthespotrateat
theendofeachreportingperiod.ForforeigncurrencydenominatedfinancialassetsmeasuredatamortisedcostandFVTPL,theexchangedifferencesarerecognisedinprofitorlossexceptforthosewhicharedesignatedashedginginstrumentsinahedgingrelationship.
Financial liabilities and equity instruments Classificationasdebtorequity DebtandequityinstrumentsissuedbyaGroupentityareclassifiedaseitherfinancialliabilitiesorasequityinaccordancewiththesubstance
ofthecontractualarrangementsandthedefinitionsofafinancialliabilityandanequityinstrument.
EquityInstrument Anequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsofanentityafterdeductingallofitsliabilities.Equity
instrumentsissuedarerecognisedattheproceedsreceived,netofdirectissuecosts.
Financialliabilities AllfinancialliabilitiesaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethodoratFVTPL.
Financial liabilitiesareclassifiedasatFVTPLwhenthefinancial liability iseithercontingentconsiderationrecognisedbytheGroupasanacquirerinabusinesscombinationtowhichIndAS103appliesorisheldfortradingoritisdesignatedasatFVTPL.
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Financialliabilitiesthatarenotheld-for-tradingandarenotdesignatedasatFVTPLaremeasuredatamortisedcostattheendofsubsequentaccountingperiods.Thecarryingamountsoffinancialliabilitiesthataresubsequentlymeasuredatamortisedcostaredeterminedbasedontheeffectiveinterestmethod.
Theeffectiveinterestmethodisamethodofcalculatingtheamortisedcostofafinancial liabilityandofallocatinginterestexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactlydiscountsestimatedfuturecashpayments(includingallfeespaidorreceivedthatformanintegralpartoftheeffectiveinterestrate,transactioncostsandotherpremiumsordiscounts)throughtheexpectedlifeofthefinancialliability,or(whereappropriate)ashorterperiod,totheamortisedcostofafinancialliability.
BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthereportingperiod.Wherethereisabreachofamaterialprovisionofalong-termloanarrangementonorbeforetheendofthereportingperiodwiththeeffectthatthe liabilitybecomespayableondemandonthereportingdate,theGroupdoesnotclassifytheliabilityascurrent,ifthelenderagreed,afterthereportingperiodandbeforetheapprovalofthefinancialstatementsforissue,nottodemandpaymentasaconsequenceofthebreach.
Foreignexchangegainsandlosses Forfinancialliabilitiesthataredenominatedinaforeigncurrencyandaremeasuredatamortisedcostattheendofeachreportingperiod,
theforeignexchangegainsandlossesaredeterminedbasedontheamortisedcostoftheinstruments.
FinancialGuaranteeContracts Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincurs
becauseaspecifieddebtorfailstomakepaymentswhendueinaccordancewiththetermsofadebtinstrument.
FinancialguaranteecontractsissuedbytheGroupareinitiallymeasuredattheirfairvaluesandaresubsequentlymeasuredatthehigherof: theamountofthelossallowancedeterminedinaccordancewithIndAS109;and theamountinitiallyrecognisedless,whereappropriate,cumulativeamortisationrecognisedinaccordancewiththerevenuerecognition
policies.
Derecognitionoffinancialliabilities TheGroupderecognisesfinancial liabilitieswhen,andonlywhen, theGroup’sobligationsaredischarged, cancelledorhaveexpired.An
exchangebetweenwithalenderofdebtinstrumentswithsubstantiallydifferenttermsisaccountedforasanextinguishmentoftheoriginalfinancialliabilityandtherecognitionofanewfinancialliability.
Derivatives and hedging activities Derivativesareinitiallyrecognisedatfairvalueonthedateaderivativecontractisenteredintoandaresubsequentlyre-measuredtotheir
fairvalueattheendofeachreportingperiod.Theaccountingforsubsequentchangesinfairvaluedependsonwhetherthederivativeisdesignatedasahedginginstrument,andifso,thenatureoftheitembeinghedgedandthetypeofhedgerelationshipdesignated.
Thefullfairvalueofahedgingderivativeisclassifiedasanon-currentassetorliabilitywhentheremainingmaturityofthehedgeditemismorethan12months;itisclassifiedasacurrentassetorliabilitywhentheremainingmaturityofthehedgeditemislessthan12months.Tradingderivativesareclassifiedasacurrentassetorliability.
(i) Cashflowhedgesthatqualifyforhedgeaccounting: Theeffectiveportionofchangesinthefairvalueofderivativesthataredesignatedandqualifyascashflowhedgesisrecognisedin
theother comprehensive income in cashflowhedging reservewithinequity, limited to the cumulative change in fair valueof thehedgeditemonapresentvaluebasisfromtheinceptionofthehedge.Thegainorlossrelatingtotheineffectiveportionisrecognisedimmediatelyinprofitorloss,withinothergains/(losses).
(ii) Derivativesthatarenotdesignatedashedges: Thegroupentersintocertainderivativecontractstohedgeriskswhicharenotdesignatedashedges.Suchcontractsareaccountedforatfairvaluethroughprofitorloss.
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Embeddedderivatives DerivativesembeddedinahostcontractthatisanassetwithinthescopeofIndAS109arenotseparated.Financialassetswithembedded
derivativesareconsideredintheirentiretywhendeterminingwhethertheircashflowsaresolelypaymentofprincipalandinterest.
Derivativesembeddedinallotherhostcontractareseparatedonlyiftheeconomiccharacteristicsandrisksoftheembeddedderivativearenotcloselyrelatedtotheeconomiccharacteristicsandrisksofthehostandaremeasuredatfairvaluethroughprofitorloss.Embeddedderivativescloselyrelatedtothehostcontractsarenotseparated.
Offsetting Financial Instruments FinancialAssetsandLiabilitiesareoffsetand thenetamount is reflected in thebalancesheetwhere there isa legallyenforceable right
tooffsettherecognisedamountsandthereisanintentiontosettletheliabilitysimultaneously.Thelegallyenforceablerightmustnotbecontingentonfutureeventsandmustbeenforceableinthenormalcourseofbusinessandintheeventofdefault,insolvencyorbankruptcyoftheGrouporcounterparty.
viii) Trade Receivables Tradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,less
provisionforimpairment.
ix) Inventories Inventories comprise of Raw and Packing Materials, Work in Progress, Finished Goods (Manufactured and Traded) and Engineering
Stores. Inventoriesarevaluedatthe lowerofcostandthenetrealisablevalueafterprovidingforobsolescenceandother losses,whereconsidered necessary. Cost is determined onWeighted Average basis. Cost includes all charges in bringing the goods to their presentlocation and condition, including octroi and other levies, transit insurance and receiving charges. The cost of Work-in-progress andFinishedGoodscomprisesofmaterials,direct labour,otherdirectcostsandrelatedproductionoverheadsandExcisedutyasapplicable. Netrealizablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslesstheestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.
x) Employee Benefits (i) Short-term obligations Liabilitiesforwagesandsalaries,includingnon-monetarybenefitsthatareexpectedtobesettledwhollywithin12monthsaftertheend
oftheperiodinwhichtheemployeesrendertherelatedservicearerecognisedinrespectofemployees’servicesuptotheendofthereportingperiodandaremeasuredattheamountsexpectedtobepaidwhentheliabilitiesaresettled.Theliabilitiesarepresentedascurrentemployeebenefitobligationsinthebalancesheet.
(ii) Other long-term employee benefit obligations Theliabilitiesforearnedleavearenotexpectedtobesettledwhollywithin12monthsaftertheendoftheperiodinwhichtheemployees
rendertherelatedservice.Theyarethereforemeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicesprovidedbyemployeesuptotheendofthereportingperiodusingtheprojectedunitcreditmethod.Thebenefitsarediscountedusingthemarketyieldsattheendofthereportingperiodthathavetermsapproximatingtothetermsoftherelatedobligation.Remeasurementsasaresultofexperienceadjustmentsandchangesinactuarialassumptionsarerecognisedinprofitorloss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defersettlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur. LongTermServiceAwardsarerecognisedasaliabilityatthepresentvalueofthedefinedbenefitobligationasatthebalancesheetdate.
(iii) Post-employment obligations TheGroupoperatesthefollowingpost-employmentschemes: -DefinedContributionplanssuchasprovidentfund,superannuation,pension,employeestateinsuranceschemeandothersocial
securityschemesinoverseasjurisdictions -DefinedBenefitplanssuchasprovidentfundandGratuity,Pensionfund(incaseofasubsidiary)
Piramal Enterprises Limited Annual Report 2016-17272
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
IncaseofProvidentfund,contributionsaremadetoaTrustadministeredbytheGroup,exceptincaseofcertainemployees,wheretheContributionsaremadetotheRegionalProvidentFundOffice.
Defined Contribution Plans TheGroup’scontributiontoprovidentfund(incaseofcontributionstotheRegionalProvidentFundoffice),pensionandemployeestate
insuranceschemeandothersocialsecurityschemesinoverseasjurisdictionsareconsideredasdefinedcontributionplans,astheGroupdoesnotcarryanyfurtherobligationsapartfromthecontributionsmadeonamonthlybasisandarechargedasanexpensebasedontheamountofcontributionrequiredtobemade.Incaseof401(k)contributionplan(incaseofUSsubsidiaries),contributionbytheGroupisdiscretionary.AnycontributionmadeischargedtotheStatementofProfitandLoss.
Defined Benefit Plan Theliabilityorassetrecognisedinthebalancesheetinrespectofdefinedbenefitprovidentandgratuityplansisthepresentvalueofthe
definedbenefitobligationattheendofthereportingperiodlessthefairvalueofplanassets.Thedefinedbenefitobligationiscalculatedannuallybyactuariesusingtheprojectedunitcreditmethod.
Exceptincaseofanoverseassubsidiary,thepresentvalueofthedefinedbenefitobligationdenominatedinINRisdeterminedbydiscountingtheestimatedfuturecashoutflowsbyreferencetomarketyieldsattheendofthereportingperiodongovernmentbondsthathavetermsapproximatingtothetermsoftherelatedobligation.
Thenetinterestcostiscalculatedbyapplyingthediscountratetothenetbalanceofthedefinedbenefitobligationandthefairvalueofplanassets.Thiscostisincludedinemployeebenefitexpenseinthestatementofprofitandloss.Incaseofanoverseassubsidiary,wherepensionisclassifiedasaDefinedBenefitScheme,assetsaremeasuredusingmarketvaluesandliabilitiesaremeasuredusingaProjectedUnitCreditmethodanddiscountedusingmarketyieldsdeterminedbyreferencetohigh-qualitycorporatebondsthataredenominatedinthecurrencyinwhichbenefitswillbepaid,andthathavetermsapproximatingtothetermsoftherelatedobligation.Shortfall,ifany,isprovidedforinthefinancialstatements.
Remeasurementgainsandlossesarisingfromexperienceadjustments,changesinactuarialassumptionsandreturnonplanassets(excludinginterestincome)arerecognisedintheperiodinwhichtheyoccur,directlyinothercomprehensiveincome.Theyareincludedinretainedearnings in thestatementofchanges inequityand in thebalancesheet.Changes in thepresentvalueof thedefinedbenefitobligationresultingfromplanamendmentsorcurtailmentsarerecognisedimmediatelyinprofitorlossaspastservicecost.
BonusPlans-TheGrouprecognisesaliabilityandanexpenseforbonuses.Thegrouprecognisesaprovisionwherecontractuallyobligedorwherethereisapastpracticethathascreatedaconstructiveobligation.
xi) Provisions and Contingent Liabilities Provisionsarerecognisedwhenthereisapresentobligation(legalorconstructive)asaresultofapastevent,itisprobablethatanoutflow
ofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligationandthereisareliableestimateoftheamountoftheobligation.Whenaprovisionismeasuredusingthecashflowsestimatedtosettlethepresentobligation,itscarryingamountisthepresentvalueofthosecashflows(whentheeffectofthetimevalueofmoneyismaterial).Thediscountrateusedtodeterminethepresentvalueisapre-taxratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheliability.Theincreaseintheprovisionduetothepassageoftimeisrecognisedasinterestexpense.
Contingentliabilitiesaredisclosedwhenthereisapossibleobligationarisingfrompastevents,theexistenceofwhichwillbeconfirmedonlybytheoccurrenceornonoccurenceofoneormoreuncertainfutureeventsnotwhollywithinthecontroloftheGrouporapresentobligationthatarisesfrompasteventswhereitiseithernotprobablethatanoutflowofresourceswillberequiredtosettletheobligationorareliableestimateoftheamountcannotbemade.
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xii) Revenue recognition Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivable.
Sale of goods:Revenuefromthesaleofgoodsisrecognisedwhenthesignificantrisksandrewardsofownershipofthegoodshavepassedtothebuyer,basedontheapplicableincoterms.Amountsdisclosedasrevenueareinclusiveofexcisedutyandnetofreturns,tradeallowances,rebates,valueaddedtaxesandamountscollectedonbehalfofthirdparties.TheGrouprecognisesrevenuewhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomicbenefitswillflowtotheGroupandtherevenuerecognitioncriteriahavebeencomplied.
Sale of Services: In contracts involving the rendering of services/development contracts, revenue ismeasured using the proportionatecompletionmethodand is recognisednetof service tax (provided that it isprobable that theeconomicbenefitswillflow to theGroupandtheamountofincomecanbemeasuredreliably).AdvisoryfeesareaccountedonanaccrualbasisinaccordancewiththeInvestmentManagementAgreementandAdvisoryServicesAgreement.
Interest: InterestincomefromafinancialassetisrecognisedwhenitisprobablethattheeconomicbenefitswillflowtotheGroupandtheamountofincomecanbemeasuredreliably.Interestincomeisaccruedonatimebasis,byreferencetotheamortisedcostandattheeffectiveinterestrateapplicable.
Dividend:Dividendincomefrominvestmentsisrecognisedwhentheshareholder’srighttoreceivepaymenthasbeenestablished(providedthatitisprobablethattheeconomicbenefitswillflowtotheGroupandtheamountofincomecanbemeasuredreliably).
xiii) Foreign Currency Transactions InpreparingthefinancialstatementsofeachindividualCompanyentity,transactionsincurrenciesotherthantheentity’sfunctionalcurrency
(foreigncurrencies)arerecognisedattheratesofexchangeprevailingatthedatesofthetransactions.Attheendofeachreportingperiod,monetaryitemsdenominatedinforeigncurrenciesareretranslatedattheratesprevailingatthatdate.Non-monetaryitemscarriedatfairvaluethataredenominatedinforeigncurrenciesareretranslatedattheratesprevailingatthedatewhenthefairvaluewasdetermined.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyarenotretranslated.
Exchangedifferencesonmonetaryitemsarerecognisedinprofitorlossintheperiodinwhichtheyarise.
Forthepurposeofpresentingconsolidatedfinancialstatements,theassetsandliabilitiesoftheCompany’sforeignoperationsthathaveafunctionalcurrencyotherthanpresentationcurrencyi.e.IndianRupeesaretranslatedusingexchangeratesprevailingatthereportingdate.Incomeandexpenseitemsaretranslatedattheaverageexchangeratesfortheperiod.Exchangedifferencesarising,ifany,arerecognizedinothercomprehensiveincomeandheldinforeigncurrencytranslationreserve(FCTR),acomponentofequity,excepttotheextentthatthetranslationdifferenceisallocatedtonon-controllinginterest.Whenaforeignoperationisdisposedoff,therelevantamountrecognizedinFCTRistransferredtothestatementofincomeaspartoftheprofitorlossondisposal.Goodwillandfairvalueadjustmentsarisingontheacquisitionofaforeignoperationaretreatedasassetsandliabilitiesoftheforeignoperationandtranslatedattheexchangerateprevailingatthereportingdate.
Foreigncurrencydifferencesarisingfromtranslationofintercompanyreceivablesorpayablesrelatingtoforeignoperations,thesettlementofwhichisneitherplannednorlikelyintheforeseeablefuture,areconsideredtoformpartofnetinvestmentinforeignoperationandarerecognizedinFCTR.
xiv) Exceptional Items Whenitemsofincomeandexpensewithinprofitorlossfromordinaryactivitiesareofsuchsize,natureorincidencethattheirdisclosure
is relevant toexplain theperformanceof theenterprise for theperiod, thenatureandamountof such items isdisclosed separatelyasExceptionalitems.
xv) Excise Duty Theexcisedutyinrespectofclosinginventoryoffinishedgoodsisincludedaspartofinventory.ThematerialconsumedisnetofCentral
ValueAddedTax(CENVAT)credits.ThedifferencebetweentheExcisedutyonopeningstockandclosingstockischargedtotheConsolidatedStatementofProfitandLoss.
Piramal Enterprises Limited Annual Report 2016-17274
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
xvi) Government Grants Grantsfromthegovernmentarerecognisedattheirfairvaluewherethereisareasonableassurancethatthegrantwillbereceivedandthe
groupwillcomplywithallattachedconditions.
Governmentgrantsrelatingtoincomearedeferredandrecognisedintheprofitorlossovertheperiodnecessarytomatchthemwiththecoststhattheyareintendedtocompensateandpresentedwithinotherincome.
Governmentgrantsrelatingtopurchaseofproperty,plantandequipmentareincludedinnon-currentliabilitiesasdeferredincomeandarecreditedtoprofitorlossonastraightlinebasisovertheexpectedlivesoftherelatedassetsandpresentedwithinotherincome.
xvii) Leases Operating Leases Leases inwhich a significant portionof the risks and rewardsof ownership arenot transferred to theGroup as lessee are classified as
operatingleases.
Intheeventthatleaseincentivesarereceivedtoenterintooperatingleases,suchincentivesarerecognisedasaliability.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtoprofitorlossonastraight-linebasisovertheperiodoftheleaseunlessthepaymentsarestructuredtoincreaseinlinewithexpectedgeneralinflationtocompensateforthelessor’sexpectedinflationarycostincreases.
xviii) Taxes on Income Taxexpensefortheperiod,comprisingcurrenttaxanddeferredtax,areincludedinthedeterminationofthenetprofitorlossfortheperiod.
Current tax ismeasuredat theamountexpectedtobepaid tothetaxauthorities inaccordancewiththetaxation lawsprevailing in therespectivejurisdictions.
Deferredtaxisrecognisedontemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesintheseparatefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationoftaxableprofit.Deferredtaxliabilitiesaregenerallyrecognisedforalltaxabletemporarydifferences.Deferredtaxassetsaregenerallyrecognisedforalldeductibletemporarydifferencestotheextentthatitisprobablethat taxableprofitswill beavailableagainstwhich thosedeductible temporarydifferences canbeutilised. Suchdeferred taxassetsandliabilitiesarenotrecognisedifthetemporarydifferencearisesfromtheinitialrecognition(otherthaninabusinesscombination)ofassetsandliabilitiesinatransactionthataffectsneitherthetaxableprofitnortheaccountingprofit.Inaddition,deferredtaxliabilitiesarenotrecognisedifthetemporarydifferencearisesfromtheinitialrecognitionofgoodwill.
Thecarryingamountofdeferredtaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.
Deferredtaxliabilitiesandassetsaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.
Currentanddeferredtaxarerecognisedinprofitorloss,exceptwhentheyrelatetoitemsthatarerecognisedinothercomprehensiveincomeordirectly inequity, inwhichcase,thecurrentanddeferredtaxarealsorecognisedinothercomprehensiveincomeordirectly inequityrespectively.Wherecurrenttaxordeferredtaxarisesfromtheinitialaccountingforabusinesscombination,thetaxeffectisincludedintheaccountingforthebusinesscombination.
Currenttaxassetsandcurrenttaxliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetofftherecognisedamountsandthereisanintentiontosettletheassetandtheliabilityonanetbasis.Deferredtaxassetsanddeferredtaxliabilitiesareoffsetwhenthereisalegallyenforceablerighttosetoffassetsagainstliabilitiesrepresentingcurrenttaxandwherethedeferredtaxassetsandthedeferredtaxliabilitiesrelatetotaxesonincomeleviedbythesamegoverningtaxationlaws.
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Deferredtaxliabilitiesarenotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsinsubsidiaries,associatesandinterestinjointarrangementswherethegroupisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthedifferenceswillnotreverseintheforeseeablefuture.
Deferredtaxassetsarenotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsinsubsidiaries,associatesandinterestinjointarrangementswhereitisnotprobablethatthedifferenceswillreverseintheforeseeablefutureandtaxableprofitwillnotbeavailableagainstwhichthetemporarydifferencecanbeutilised.
xix) Cash and Cash Equivalents Inthecashflowstatement,cashandcashequivalentsincludescashonhand,demanddepositswithbanks,othershort-termhighlyliquid
investmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue,andbankoverdrafts.Bankoverdraftsareshownwithinborrowingsincurrentliabilitiesinthebalancesheet.
xx) Borrowing Costs Generaland specificborrowingcostsdirectlyattributable toacquisitionor constructionofqualifyingassets (i.e. thoseProperty,Plant&
Equipmentswhichnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduse)arecapitalised.Otherborrowingcostsarerecognisedasanexpenseintheperiodinwhichtheyareincurred.
xxi) Deferred Revenue and Unbilled Revenue Amountsreceivedfromcustomersorbilledtocustomers,inadvanceofservicesperformedarerecordedasdeferredrevenueunderOther
CurrentLiabilities.UnbilledrevenueincludedinOtherFinancialAssets,representsamountsrecognisedinrespectofservicesperformedinaccordancewithcontractterms,notyetbilledtocustomersasattheyearend.
xxii) Segment Reporting The Chairman has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, “Operating Segments.”
Operating segments are reported in amanner consistent with the internal reporting provided to the chief operating decisionmakers. TheaccountingpoliciesadoptedforsegmentreportingareinconformitywiththeaccountingpoliciesadoptedfortheGroup.Revenueandexpenseshavebeenidentifiedtosegmentsonthebasisoftheirrelationshiptotheoperatingactivitiesofthesegment.Income/CostswhichrelatetotheGroupasawholeandarenotallocabletosegmentsonareasonablebasis,havebeenincludedunderUnallocatedIncome/Costs.Interestincomeandexpensearenotallocatedtorespectivesegments(exceptincaseofFinancialServicessegment).
xxiii) Dividends Provisionismadefortheamountofanydividenddeclared,beingappropriatelyauthorisedandnolongeratthediscretionoftheentity,onor
beforetheendofthereportingperiodbutnotdistributedattheendofthereportingperiod.
xxiv) Share appreciation rights Liabilitiesforthegroup’sshareappreciationrightsarerecognisedasemployeebenefitexpenseovertherelevantserviceperiod.Theliabilities
areremeasuredtofairvalueateachreportingdateandarepresentedasemployeebenefitobligationsinthebalancesheet.
xxv) Rounding of amounts AllamountsdisclosedinthefinancialstatementsandnoteshavebeenroundedofftothenearestcroresaspertherequirementofSchedule
III,unlessotherwisestated.
xxvi) Standards issued but not yet effective InMarch2017,theMinistryofCorporateAffairsissuedtheCompanies(IndianAccountingStandards)(Amendments)Rules,2017,notifying
amendmentstoIndAS7,‘Statementofcashflows’andIndAS102,‘Share-basedpayment.’TheseamendmentsareinaccordancewiththerecentamendmentsmadebyInternationalAccountingStandardsBoard(IASB)toIAS7,‘Statementofcashflows’andIFRS2,‘Share-basedpayment,’respectively.TheamendmentsareapplicabletotheGroupfromApril1,2017.
Piramal Enterprises Limited Annual Report 2016-17276
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Amendment to Ind AS 7: Theamendmentto IndAS7requirestheentitiestoprovidedisclosuresthatenableusersoffinancialstatementstoevaluatechanges in
liabilitiesarisingfromfinancingactivities,includingbothchangesarisingfromcashflowsandnon-cashchanges,suggestinginclusionofareconciliationbetweentheopeningandclosingbalances in thebalancesheet for liabilitiesarising fromfinancingactivities, tomeet thedisclosurerequirement.
TheGroupisevaluatingtherequirementsoftheamendmentanditseffectontheconsolidatedfinancialstatements.
Amendment to Ind AS 102: TheamendmenttoIndAS102providesspecificguidancetomeasurementofcash-settledawards,modificationofcash-settledawardsand
awardsthatincludeanetsettlementfeatureinrespectofwithholdingtaxes.Itclarifiesthatthefairvalueofcash-settledawardsisdeterminedonabasisconsistentwiththatusedforequity-settledawards.Market-basedperformanceconditionsandnon-vestingconditionsarereflectedinthe‘fairvalues’,butnon-marketperformanceconditionsandservicevestingconditionsarereflectedintheestimateofthenumberofawardsexpectedtovest.Also,theamendmentclarifiesthatifthetermsandconditionsofacash-settledshare-basedpaymenttransactionaremodifiedwiththeresultthatitbecomesanequity-settledshare-basedpaymenttransaction,thetransactionisaccountedforassuchfromthedateofthemodification.Further,theamendmentrequirestheawardthatincludeanetsettlementfeatureinrespectofwithholdingtaxestobetreatedasequity-settledinitsentirety.Thecashpaymenttothetaxauthorityistreatedasifitwaspartofanequitysettlement.
TheGroupisevaluatingtherequirementsoftheamendmentandtheimpactontheconsolidatedfinancialstatementsisbeingevaluated.
2b. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTIES Fair Valuation: SomeoftheGroup’sassetsandliabilitiesaremeasuredatfairvalueforfinancialreportingpurposes.Inestimatingthefairvalueofanasset
andliability,theGroupusesmarketobservabledatatotheextentitisavailable.WhenLevel1inputsarenotavailable,theGroupengagesthirdpartyqualifiedexternalvaluerstoestablishtheappropriatevaluationtechniquesandinputstothevaluationmodel.
InformationaboutthevaluationtechniquesandinputsusedindeterminingthefairvalueofvariousassetsandliabilitiesaredisclosedinNote57.
Impairment of Goodwill (Refer Note 41) Determiningwhethergoodwillisimpairedrequiresanestimationofthevalueinuseofthecash-generatingunitstowhichgoodwillhasbeen
allocated.ThevalueinusecalculationrequirestheGrouptoestimatethefuturecashflowsexpectedtoarisefromthecash-generatingunitandasuitablediscountrateinordertocalculatethepresentvalue.Wheretheactualfuturecashflowsarelessthanexpected,amaterialimpairmentlossmayarise.
Expected Credit Loss: When determiningwhether the risk of default on a financial instrument has increased significantly since initial recognition, the Group
considersreasonableandsupportableinformationthatisrelevantandavailablewithoutunduecostoreffort.Thisincludesbothquantitativeandqualitativeinformationandanalysis,basedontheGroup’shistoricalexperienceandcreditassessmentandincludingforward-lookinginformation.
TheinputsusedandprocessfollowedbytheGroupindeterminingtheincreaseincreditriskhavebeendetailedinNote50(f).
Useful life of Assets: Property,plantandequipmentandIntangibleAssetsrepresentasignificantproportionoftheassetsoftheGroup.Depreciationisderived
afterdetermininganestimateofanasset’sexpectedusefullifeandtheexpectedresidualvalueattheendofitslife.TheusefullivesandresidualvaluesofGroup’sassetsaredeterminedbymanagementatthetimetheassetisacquiredandreviewedperiodically,includingateachfinancialyearend.Thelivesarebasedonhistoricalexperiencewithsimilarassetsaswellasanticipationoffutureevents,whichmayimpacttheirlife,suchaschangesintechnology.
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Deferred Taxes Deferredtaxisrecordedontemporarydifferencesbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamounts,attherates
thathavebeenenactedorsubstantivelyenactedatthereportingdate.Theultimaterealizationofdeferredtaxassetsisdependentuponthegenerationoffuturetaxableprofitsduringtheperiodsinwhichthosetemporarydifferencesandtaxlosscarry-forwardsbecomedeductible.TheGroupconsiderstheexpectedreversalofdeferredtaxliabilitiesandprojectedfuturetaxable incomeinmakingthisassessment.Theamountofthedeferredtaxassetsconsideredrealizable,however,couldbereducedintheneartermifestimatesoffuturetaxableincomeduringthecarry-forwardperiodarereduced.
Defined benefit plans: Thecostof thedefinedbenefitplansandthepresentvalueof thedefinedbenefitobligationarebasedonactuarialvaluationusing the
projectedunitcreditmethod.Anactuarialvaluationinvolvesmakingvariousassumptionsthatmaydifferfromactualdevelopmentsinthefuture.Theseincludethedeterminationofthediscountrate,futuresalaryincreasesandmortalityrates.Duetothecomplexitiesinvolvedinthevaluationanditslong-termnature,adefinedbenefitobligationishighlysensitivetochangesintheseassumptions.Allassumptionsarereviewedateachreportingdate.
Contingent Consideration (Refer Note 40) Inaccountingforbusinesscombinations,judgmentisrequiredindeterminingcontingentconsideration.Contingentconsiderationispayable
incaseofachievementofcertainmilestones. It iscalculatedbyapplyinganappropriatediscountratetotheprobabilityadjustedsales/margins.
Functional Currency (Refer Note 50(d)) FunctionalcurrencyisthecurrencyoftheprimaryeconomicenvironmentinwhichtheCompanyanditssubsidiariesoperate.TheGroup
assessesthefactorsasperINDAS21indeterminingthefunctionalcurrencyoftheCompanyanditssubsidiaries.Ifthereisanychangeinunderlyingtransactions,eventsandconditionsintheCompanyoritssubsidiary,theGroupreassessesthefunctionalcurrency.
Assessment of Significant influence (Refer Note 39 (c)) Irrespectiveofthevotingrightsinanentity,iftheGrouphasarighttoappointDirectorsorparticipatesinallsignificantfinancialandoperating
decisionsofaninvestee,thereisanexistenceofsignificantinfluenceandtheinvestmentisconsideredasanAssociate.
Assessment of Joint control (Refer Note 39 (b)) Irrespectiveofthevotingrightsinanentity,ifacontractualarrangementrequiresunanimousconsentfromallthepartiesfortherelevant
activitiesandifthereisaseparationofthelegalformofthestructure,thearrangementisaccountedasaJointventure.
Piramal Enterprises Limited Annual Report 2016-17278
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
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8.29
Ship
s1.04
- -
0.16
- 0
.88
0.10
- 0.09
0.02
- -
0.1
7 0
.71
0.94
Helicop
ter^
9.60
- -
- -
9.6
0 0.54
- 0.54
- -
- 1
.08
8.5
2 9.06
MotorVeh
icles
5.5
4 -
0.77
0.28
- 6
.03
0.79
- 0.84
0.17
- -
1.4
6 4
.57
4.75
Tota
l ( I
) 1,492
.75
124
.88
267
.44
45.91
(5
6.18
) 1
,782
.98
156
.90
- 205
.93
36.79
(8
.11)
- 3
17.9
3 1
,465
.05
1,335
.85
Inta
ngib
le A
sset
s ( A
cqui
red
)Cu
stom
erre
latio
ns93.03
4
5.46
-
- (3
.46)
135
.03
5.04
- 1
5.42
-
(0.62)
- 1
9.84
1
15.1
9 87.99
Favourab
lelease
1.3
5 -
- -
(0.03)
1.3
2 -
- 0.51
- -
- 0
.51
0.8
1 1
.35
Tech
nolo
gy2.67
- -
- (0
.06)
2.6
1 0.03
- 0.37
- -
- 0
.40
2.2
1 2
.64
Bran
dsand
Trade
marks*+
584
.24
2,263
.21
124
.68
- (9
4.17
) 2
,877
.96
57.77
-
92.32
-
(6.45)
- 1
43.6
4 2
,734
.32
526
.47
Copyrig
hts,Kn
owho
w
and
Intellectua
lprope
rtyrig
hts
21.27
86.74
-
- (2
.94)
105
.07
9.57
- 7.21
- (0
.20)
- 1
6.58
8
8.49
11.70
Compu
terS
oftware
96.79
0.49
130
.70
3.59
(6.45)
217
.94
25.02
-
59.75
1.82
(2.51)
- 8
0.44
1
37.5
0 71.77
In
tang
ible
Ass
ets
(Inte
rnal
ly G
ener
ated
)Prod
uctK
now-how
2.3
2 -
- -
- 2
.32
0.19
- 0.19
- -
- 0
.38
1.9
4 2
.13
Tota
l ( II
)801
.67
2,395
.90
255
.38
3.59
(107
.11)
3,3
42.2
5 97.62
-
175
.77
1.82
(9.78)
- 2
61.7
9 3
,080
.46
704
.05
Gra
nd T
otal
( I +
II )
2,294
.42
2,520
.78
522
.82
49.50
(1
63.29)
5,1
25.2
3 2
54.5
2 -
381
.70
38.61
(1
7.89
) -
579
.72
4,5
45.5
1 2,039
.90
STRATEGIC O
VERVIEWM
ANAG
EMEN
T DISCU
SSION
& AN
ALYSIS BO
ARD &
MAN
AGEM
ENT PRO
FILESFIN
ANCIAL STATEM
ENTS
STATUTO
RY REPORTS
279
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
3.
PRO
PERT
Y, P
LAN
T &
EQ
UIP
MEN
T A
ND
OTH
ER IN
TAN
GIB
LE A
SSET
S
(` inCrores)
Par
ticul
ars
GRO
SS C
ARRY
ING
AM
OU
NT
ACC
UM
ULA
TED
DEPR
ECIA
TIO
N /
AM
ORT
ISAT
ION
N
ET C
ARRY
ING
AM
OU
NT
Dee
med
Co
st A
s at
April
1,
2015
Acq
uisi
tion
Add
ition
s D
educ
tions
/
Adju
stm
ents
E
xcha
nge
Diffe
renc
e A
s at
Mar
ch 3
1,
2016
(A)
Ope
ning
A
s at
Apr
il 1,
20
15
Acq
uisi
tion
For
the
Yea
r #
Ded
uctio
ns /
Ad
just
men
ts
Exc
hang
e Di
ffere
nce
Impa
irmen
t @
@
As a
t M
arch
31,
20
16 (B
)
As a
t M
arch
31
, 201
6 (A
-B)
As a
t Ap
ril 1
, 20
15
Tang
ible
Ass
ets
Land
Freeh
old
105
.12
- -
7.41
2.6
4 100
.35
- -
0.13
- 0.02
- 0.15
100
.20
105
.12
Build
ings
228
.37
0.67
26.
52
4.83
5.20
255
.93
- -
16.82
0.36
0.82
- 17.28
238
.65
228
.37
Road
s1.05
- -
- -
1.05
- -
0.16
- -
- 0.16
0.89
1.05
Plan
t&Equ
ipmen
t752
.68
0.92
325
.39
33.
13
21.04
1,066
.90
- -
139
.29
17.44
4
.32
0.92
127
.09
939
.81
752
.68
Furnitu
re&fixtures
33.81
0.21
8.76
1.93
1.10
41.95
-
- 8.09
0.14
0.74
- 8.69
33.
26
33.81
OfficeEqu
ipmen
t 4
.53
- 6
.14
0.38
0.10
10.39
-
- 2
.32
0.22
- -
2.10
8.29
4.5
3 Sh
ips
1.04
- -
- -
1.04
- -
0.10
- -
- 0.10
0.94
1.04
Helicop
ter^
9.60
- -
- -
9.60
- -
0.54
- -
- 0.54
9.06
9.60
MotorVeh
icles
2.86
- 2.76
0.08
- 5
.54
- -
0.79
- -
- 0.79
4.75
2.86
Tota
l ( I
) 1,139
.06
1.80
369
.57
47.76
30.08
1,49
2.75
-
- 168
.24
18.16
5.90
0.92
156
.90
1,335
.85
1,139
.06
Inta
ngib
le A
sset
s (Ac
quire
d)
Custom
erre
latio
ns -
91.84
-
- 1.19
93.03
-
- 5.04
- -
- 5.04
87.99
-
Favourab
lelease
- 1.30
- -
0.05
1.3
5 -
- -
- -
- -
1.3
5 -
Tech
nolo
gy -
2.76
- -
(0.09)
2.67
- -
0.03
- -
- 0.03
2.6
4 -
Bran
dsand
Trade
marks*+
373
.24
23.90
176
.26
14.59
2
5.43
584
.24
- -
46.71
8.46
5.3
5 14.17
57.77
526
.47
373
.24
Copyrig
hts,Kn
owho
w
and
Intellectua
lprope
rtyrig
hts
20.54
-
0.53
- 0.20
21.27
-
- 9.55
- 0.02
- 9.57
11.70
20.54
Compu
terS
oftware
21.
66
0.40
74.23
1
.34
1.84
96.79
-
- 25.69
1
.15
0.48
- 25.02
71.77
2
1.66
In
tang
ible
Ass
ets
(Inte
rnal
ly G
ener
ated
)Prod
uctK
now-how
2.3
2 -
- -
- 2
.32
- -
0.19
- -
- 0.19
2.1
3 2
.32
Tota
l ( II
)417
.76
120
.20
251
.02
15.93
28.62
801
.67
- -
87.21
9.61
5.85
14.17
97.62
704
.05
417
.76
Gra
nd T
otal
( I +
II )
1,556
.82
122
.00
620
.59
63.69
58.70
2,294
.42
--
255
.45
27.77
11.75
15.09
2
54.5
2 2,039
.90
1,556
.82
*MaterialIntan
gibleAssetsaso
nMarch31,201
7:
Asse
t Cla
ssAs
set D
escr
iptio
nCa
rryi
ng V
alue
as a
t M
arch
31,
201
7Ca
rryi
ng V
alue
as a
t M
arch
31,
201
6Ca
rryi
ng V
alue
as a
t Ap
ril 1
, 201
5Re
mai
ning
use
ful l
ife a
s on
Mar
ch 3
1, 2
017
Bran
ds&Trade
marks
Registered
trad
emarks
323
.32
224
.60
64.37
7yearsto15
yea
rsBran
ds&Trade
marks
Internallydevelop
edbrand
200
.22
227
.24
234
.57
7years
Bran
ds&Trade
marks
Purcha
sedBran
ds(R
efer$and
Note40
A.(ii))
2,1
26.7
1 -
- 15
yea
rsCopyri
ghts
,Knowhow
andIntellectua
lprope
rtyrig
hts
Purcha
sedMan
ufacturin
gKn
ow-How
(Re
fer$
) 7
9.98
-
- 10
yea
rs
#De
preciatio
nforthe
yea
rinclude
sdep
reciati
onamou
nting
to`
9.34Crores(P
reviou
sYea
r` 5
.51Crores)o
nassetsusedforR
esea
rchan
dDe
velopm
ent.
+Ce
rtainBran
dsarein
theprocesso
fbeing
registered
inth
ena
meofth
eCo
mpa
ny,forwhichth
ene
cessaryap
plicati
onhasbee
nmad
ewith
trad
emarkregistry.
^Th
eCo
mpa
nyhasa25%
shareinjo
into
wne
rshipofHelicop
ter
@@Losso
nim
pairm
ento
fassetsinPiramalCriti
calC
areIta
liaSPA
-ReferNote37
(c).
ReferN
ote44
forthe
assetsm
ortgaged
ass
ecurity
againstborrowings.
ReferN
ote28
Bfo
rthe
con
tractualcap
italcom
mitm
entsfo
rpurchaseofPrope
rty,Plan
t&Equ
ipmen
t
$ Ac
quis
ition
of I
ntan
gibl
es fr
om Ja
nsse
n Ph
arm
aceu
tica
NV
OnOctob
er10,201
6,th
eGrou
pthroug
hitssu
bsidairy,P
iramalCriti
calC
areLimite
d,hasacquiredfivean
esthesiaand
painman
agem
entinjectableprod
uctsfrom
JanssenPh
armaceu
ticaNVfor`
1,069
.92crores(U
.S.$16
1.16
million)(inclusiveoftransactio
ncosts).T
heacquisiti
onis
expectedtostren
gthe
ntheCo
mpa
ny’spresen
cein
the
ane
sthe
siaand
painman
agem
entinjectab
leprodu
ctsform
ingpa
rtoftheCo
mpa
ny’sPh
armaceu
tical
man
ufacturin
gan
dservicesbusiness.
TheCo
mpa
nyre
corded
theacqu
isitio
nofth
esebran
dsand
technicalkno
whow
asp
rodu
ctin
tang
ibles.The
Com
panyestimated
thatth
eusefullifeofthe
sebrand
sis1
5yearsa
ndth
atoftechn
icalkno
whow
is10years.The
carrying
value
ofthe
seintang
iblesa
sonMarch31,201
7is`
1,011
.62crores.
Anearno
utcon
siderati
onuptoUSD
20Million(`
133
.10Crores)ispa
yableiftheprod
uctp
ortfo
lioachievescertainagreed
fina
ncialm
ileston
esoverthe
next3
0mon
ths.Thiswillberecorded
whe
nthepa
ymen
tisprob
able
infu
ture.
Piramal Enterprises Limited Annual Report 2016-17280
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
4 (A) INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in cro res)
Investments in Equity Instruments:A. In Joint Ventures (Unquoted) - At Cost:i. ConvergenceChemicalsPrivateLimited
InterestasatApril1 35,705,100 35.06 30,605,100 30.30 30,605,100 30.30Add-Additionalcapitalcontributionduringtheperiod - 5,100,000 5.10 - Add-Shareofprofit/(loss)fortheperiod (0.32) (0.34) -
34.74 35.06 30.30ii. ShrilekhaBusinessConsultancyPrivateLimited(ReferNoteAbelow)
InterestasatJanuary9,2017 62,234,605 2,540.42 - - Add-Shareofprofit/(loss)fortheperiod 17.00 - -
2,557.42 - - TOTAL (A) 2,592.16 35.06 30.30
B. In Associates :I Quoted - At Cost:
PiramalPhytocareLimitedInterestasatApril1 4,550,000 0.87 4,550,000 1.45 4,550,000 1.45 Add-Shareofprofit/(loss)fortheperiod 0.01 (0.58) -
TOTAL ( B (I) ) 0.88 0.87 1.45 II Unquoted - At Cost:a. AllerganIndiaPrivateLimited
InterestasatApril1 3,920,000 97.57 3,920,000 61.76 3,920,000 61.76Add-Shareofprofit/(loss)fortheperiod 28.11 35.81 - Add-Shareofothercomprehensiveincomefortheperiod (0.08) - - Less-Dividendreceived (19.60) - -
106.00 97.57 61.76b. ShriramCapitalLimited(ReferNoteAbelow)
InterestasatApril1 161,077,548 2,419.38 161,077,548 2,302.18 161,077,548 2,302.18Add-Shareofprofit/(loss)fortheperiod 129.00 153.26 - Less-Dividendreceived (8.30) (36.06) - Less: Impact of conversion from partnership firm to private limited company
(161,076,548) (2,540.07)
1,000 0.01 2,419.38 2,302.18c. BluebirdAeroSystemsLimited
InterestasatApril1 67,137 44.30 67,137 35.32 67,137 35.32 Add-Shareofprofit/(loss)fortheperiod (2.80) 6.06 - Add-Currencytranslationdifferences (3.12) 2.92 -
38.38 44.30 35.32 d. ContextMatters,Inc.
Costofinvestment 11,943,822 16.21 - - Add-Shareofprofit/(loss)fortheperiod (1.10) - -
15.11 - - TOTAL ( B(II) ) 159.50 2,561.25 2,399.26
Total equity accounted investments ( A+B(I)+B(II) ) 2,752.54 2,597.18 2,431.01Aggregate market value of quoted investments 37.65 32.21 15.81Aggregate carrying value of unquoted investments 2,751.66 2,596.31 2,429.56Aggregate amount of impairment in value of investments - - -
STRATEGIC O
VERVIEWM
ANAG
EMEN
T DISCU
SSION
& AN
ALYSIS BO
ARD &
MAN
AGEM
ENT PRO
FILESFIN
ANCIAL STATEM
ENTS
STATUTO
RY REPORTS
281
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Note AInvestment in Partnership firm - Shrilekha Financial Services
Name of Partners Share in profits (%)PiramalEnterprisesLimited 74.95ShriramOwnershipTrustanditsNominees 25.05Totalcapitalofthepartnershipfirm ` 8.30crores
TheGrouphas a 74.95% interest in a joint operation called Shrilekha Financial Serviceswhichwas set up as a partnership togetherwith ShriramOwnershipTrusttoinvestinShriramCapitalLimited.ShrilekhaFinancialServicesholds26.68%inShriramCapitalLimited,therebygivingtheGroupaneffectiveinterestof20%.
TheprincipalplaceofbusinessofthejointoperationisinIndia.
ShrilekhaFinancialServiceshasbeenconvertedintoaprivatelimitedcompany,ShrilekhaBusinessConsultancyPrivateLimitedfromJanuary9,2017.Hence,witheffectfromJanuary9,2017,theinvestmentinShrilekhaBusinessConsultancyPrivateLimitedisconsideredasinvestmentinJointVenture.
ShrilekhaFinancialServiceswasapartnershipfirmtillJanuary8,2017andwasaccountedasaJointoperation.Accordingly,theGrouprecogniseditsshareofinvestmentinShriramCapitalLimited,whichwasshownunderInvestmentinAssociates.AfterconversionofShrilekhaFinancialServicesintoaprivatelimitedcompany,ithasbecomeajointventure.Accordingly,investmentinShrilekhaBusinessConsultancyPrivateLimitedhasbeenshownundertheheadInvestmentinJointVenture,unlikeasdisclosedinearlieryears.
4 (B) INVESTMENTS Non-Current Investments:
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
Investments in Equity Instruments (fully paid-up)Other Body CorporatesQuoted-AtFVTOCI:i. ShriramCityUnionFinanceLimited 6,579,840 1,552.64 6,579,840 988.46 6,579,840 1,292.94ii. ShriramTransportFinanceCompanyLimited 22,600,000 2,436.28 22,600,000 2,154.11 22,600,000 2,542.27
3,988.92 3,142.57 3,835.21Unquoted-AtFVTPL:i. SearchlightHealthPrivateLimited - - 230,858 1.07 - - ii. NavayugaRoadProjectsPrivateLimited 4,114 * 4,114 * 4,114 *iii. PiramalGlassLimited - - 2,021,395 28.30 2,021,395 28.30iv. ShriramFinancialVenturesChennaiPrivateLimited - - 74,970 0.06 74,970 0.06
- 29.43 28.36Investments in Preference Shares (fully paid-up)Other Body CorporatesUnquoted-AtFVTPL:i. Procured,Inc. 354,108 1.70 135,296 0.66 135,296 0.63
1.70 0.66 0.63
*AmountsarebelowtheroundingoffnormadoptedbytheCompany
Piramal Enterprises Limited Annual Report 2016-17282
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
Investment in Debentures:Other Body Corporates (Refer Note 44):Quoted:RedeemableNon-ConvertibleDebentures-AtAmortisedCost:VGNDevelopersPrivateLimited 21,011 136.71 24,580 193.47 22,870 225.03HaamidRealEstatesPrivateLimited - - 5,500 20.30 5,500 47.46HaamidRealEstatesPrivateLimited-SR-II - - 1,700 12.07 - - InternationalLandDevelopersPrivateLimited - - - - 2,436 24.36 SPRConstructionPrivateLimited 11,600 43.48 1,170 94.82 1,000 100.16ThreeCGreenDevelopersPrivateLimited 6,168 20.71 8,812 86.92 22,500 199.26CenturyJointDevelopersPrivateLimited 19,000 172.27 - - ACMECleantechSolutionsPrivateLimited 216 220.02 - - - - RedeemableNon-ConvertibleDebentures-AtFVTPLGMRHoldingsPrivateLimited 4,500 577.11 4,500 487.05 - - Unquoted:RedeemableOptionallyConvertibleDebentures-AtAmortisedCost:NavayugaRoadProjectsPrivateLimitedSR-I - - 4,250 718.05 4,250 601.95ChitraHoldingsPrivateLimited - - 1,268 3.45 2,000 10.66AnilineConstructionCompanyPrivateLimited-II - - - - 2,500 22.46 RegenInfrastructurePrivateLimited 1,905 165.58 2,000 191.48 - - RedeemableNon-ConvertibleDebentures-AtFVTPL:OzoneUrbanaInfraDevelopersPrivateLimited-SR-II - - 1,500 184.04 - - EsselGreenEnergyLimited 15,000 171.48 75 75.92 - - SmaaashEntertainmentPrivateLimited 1,200,000 125.25 - - - - OzoneInfraDevelopersPrivateLimited 8,500 93.93 - - - - SPRConstructionPrivateLimited 600 6.59 - - - - RedeemableNon-ConvertibleDebentures-AtAmortisedCost:KeystoneRealtorsPrivateLimited - - - - 2 2.86OmkarCityDevelopmentPrivateLimited 769 764.31 750 742.22 - - OmkarRealtors&DevelopersPrivateLimited-I - - - - 2,910 24.42 BaashyaamConstructionsPrivateLimited-SR-I 300 2.99 7,110 43.13 7,000 60.38BaashyaamConstructionsPrivateLimited-SR-II 5,000 49.98 3,900 37.16 - - TrueValueHomes(India)PrivateLimited - - - - 2,000 152.65 OzoneDevelopersBangalorePrivateLimited - - - - 10,000 78.52DarodeJogRealitiesPrivateLimited - - - - 1,600,000 68.78CenturyJointDevelopmentsPrivateLimited-I - - - - 8,500 51.29CenturyJointDevelopmentsPrivateLimited-II - - 210 206.28 - - LandcraftDevelopersPrivateLimited-II - - 3,150 82.76 5,000 59.51LandcraftDevelopersPrivateLimited-I - - 10,450 6.18 6,200 31.07OzoneHomesPrivateLimited - - - - 3,800 19.17SkylarkArcadiaPrivateLimited - - - - 5,000 24.31 VijayGroupHousingPrivateLimited-I - - - - 6,000 27.52VijayGroupHousingPrivateLimited-II 13,440 99.39 10,560 113.65 - - UrbanizeDevelopers(India)PrivateLimited - - - - 2,000 15.26 AcmeHousingIndiaPrivateLimited - - 7,600 37.51 8,300 65.47KrishnaECampusPrivateLimited - - 520 46.87 450 39.68HaldharDevelopersPrivateLimited - - 1,000 99.04 1,000 98.60RajeshEstateandNirmanPrivateLimited-SR-I - - 10 3.98 20 8.75RajeshEstateandNirmanPrivateLimited-SR-II - - 80 39.07 120 59.23
STRATEGIC O
VERVIEWM
ANAG
EMEN
T DISCU
SSION
& AN
ALYSIS BO
ARD &
MAN
AGEM
ENT PRO
FILESFIN
ANCIAL STATEM
ENTS
STATUTO
RY REPORTS
283
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
VirgoPropertiesPrivateLimited - - - - 1,800 15.24 AdarshHavenPrivateLimited 1,240 131.15 951 46.67 1,070 93.20ArihantUnitechRealtyProjectLimited 3,358 26.12 4,827 43.53 2,500 22.32 NeelkanthMansionsAndInfrastructurePrivateLimited - - 13,763 121.86 13,800 136.26 NeelkanthVinayakRealtorsPrivateLimited 4,200 17.54 3,500 20.66 2,700 26.66 BestechIndiaPrivateLimited-I 8,250 45.11 8,250 80.03 7,500 72.47BestechIndiaPrivateLimited-II 18,700 182.60 17,329 156.54 - - BhaveshwarPropertiesPrivateLimited 2,460 13.76 2,300 20.17 1,000 9.69TridhaatuConstructionPrivateLimitedSR-I&II - - - - 1,500 74.99KothariAutoPartsManufacturersPrivateLimited-SR-A 200 103.24 159 95.76 - - KothariAutoPartsManufacturersPrivateLimited-SR-B 212 99.06 192 102.35 - - KothariAutoPartsManufacturersPrivateLimited-SR-C 290 142.16 280 28.00 - - OzoneUrbanaInfraDevelopersPrivateLimited-SR-I - - 4,250 426.90 - - EssemInfraPrivateLimited 19,230,000 131.06 22,500,000 192.09 - - WadhwaGroupHoldingsPrivateLimited 2,390 355.00 2,390 229.67 - - EktaHousingPrivateLimited 709 45.88 835 72.26 - - EktaParksvilleHomesPrivateLimited 1,171 76.27 1,376 119.34 - - LogixCityDevelopersPrivateLimited 12,500 77.11 11,850 116.77 - - ForumHomesPrivateLimited 106 60.44 60 58.72 - - WadhwaConstructions&InfrastructurePrivateLimited 2,000 106.59 1,550 146.26 - - NirmalLifestyleLimited 165 109.97 172 152.61 - - PhoenixHoduDevelopersPrivateLimited 9,500 66.88 9,500 93.63 - - NilkanthTechParkPrivateLimitedFacility1 13,069 98.30 7,800 77.06 - - NilkanthTechParkPrivateLimitedFacility2 5,876 43.22 6,000 59.65 - - ATSHomesPrivateLimited 34,175 311.22 32,175 322.52 - - RaghuleelaLeasingandConstructionsPrivateLimited 175 163.85 175 173.36 - - NirajKumarAssociatesPrivateLimited 6,061 59.61 3,200 30.41 - - GuardianPromoters&DevelopersPrivateLimited - - 6,900 65.58 - - ArunExcelloHomesPrivateLimited 2,394 215.11 1,995 193.47 - - ArunExcelloRealtyPrivateLimited 1,700 159.14 990 97.27 - - BoulevardProjectsPrivateLimited 22,500 206.69 22,500 211.03 - - FlagshipInfrastructurePrivateLimited 8,727 81.67 10,000 99.24 - - AmbeTradeCorpPrivateLimited - - 6,969 62.44 - - ParanjapeSchemesConstructionLimited 81,760 76.20 31,800 312.21 - - Emami Realty Limited 100 79.66 100 99.51 - - AkarshakRealtyPrivateLimited 15,000 147.11 15,000 146.86 - - MarvelMegaRealtorsPrivateLimited 1,244,200 121.53 100,000 102.22 - - KumarAgroProductsPrivateLimited 33,983,000 305.57 30,531,013 301.75 - - IdealRealEstatePrivateLimited 7,000 29.33 580 49.59 - - KanakiaKingStyleConstructionsPrivateLimited 8,604 86.02 7,400 74.03 - - OzoneInfraDevelopersPrivateLimited - - 8,500 84.66 - - EvieRealEstatePrivateLimited 12,530 120.02 21,000 190.91 - - KeystoneRealtorsPrivateLimited-I 79 59.85 63 62.97 - - KeystoneRealtorsPrivateLimited-II 173 141.84 160 159.99 - - VatikaInfraconPrivateLimited 25,862 268.36 16,673 166.98 - - ATSHeightsPrivateLimited 20,985 214.05 19,000 190.50 - - ValdelRealEstatePrivateLimited 28 27.96 70 64.73 - - NCLIndustriesLimited 22,000 219.94 400,000 40.00 - - SanghiIndustriesLimited 2,564,800 253.84 2,564,829 256.46 - -
Piramal Enterprises Limited Annual Report 2016-17284
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
CenturyRealEstateHoldingsPrivateLimitedSeries2 4,200 39.75 - - - - AlekhyaPropertyDevelopomentsPrivateLimited 163 160.79 - - - - LodhaDevelopersPrivateLimited 10,200 250.00 - - - - ShreeniwasCottonMillsPrivateLimited 8,950 895.00 - - - - VatikaOneonOnePrivateLimited 100 10.00 - - - - ATSRealEstateBuildersPrivateLimited 2,930 29.30 - - - - NobilityEstatesPrivateLimited 11,000 110.00 - - - - KingsCanyonPrivateLimitedLtd 2,095 204.38 - - - - LodhaDevelopersPrivateLimited 6,250 555.00 - - - - CenturyRealEstateHoldingsPrivateLimited 4,000 39.24 - - - - RustomjeeConstructionsPrivateLimited - - - - 2.85 28.57AkarshResidencyPrivateLimited 78 77.27 - - - - AksharSpacePrivateLimited 760 67.35 - - - - AkshayaPrivateLimited 9,220 74.74 - - - - AlekhyaPropertyDevelopmentsPrivateLimited 108 107.02 - - - - AtriaBrindavanPowerPrivateLimited 15,250 152.50 - - - - ATSRealEstateBuildersPrivateLimited 18,500 185.00 - - - - CenturyRealEstateHoldingsPrivateLimited 16,000 159.17 - - - - CenturyRealEstateHoldingsPrivateLimited 17,900 198.03 - - - - DostiRealtyLimited 9,650 95.66 - - - - GoldenHomesPrivateLimited 6,750 56.19 - - - - GoodEarthEcoDevelopmentPrivateLimited 7,000 66.18 - - - - JaykaliDevelopersPrivateLimited 6,000 58.44 - - - - KanakiaSpacesRealtyPrivateLimited 58 58.00 - - - - KanakiaSpacesRealtyPrivateLimited 70 10.80 - - - - ManjeeraRetailHoldingsPrivateLimited 15,671 142.66 - - - - ParanjapeSchemesConstructionLimited 21,223 207.34 - - - - Reliance Big Limited 15,899 146.75 - - - - SecurityandIntelligenceServices(India)Limited 80 64.63 - - - - WadhwaGroupHoldingsPrivateLimited 2,500 142.84 - - - - MantriDevelopersPrivateLimited 17,551 174.58 - - - - NorthTownEstatePrivateLimited 4,420 43.36 - - - - OmkarRealtors&DevelopersPrivateLimited-II 365 233.12 400 361.26 - - OmkarRealtorsandDevelopersPrivateLimited-III 1,527 145.17 - - - - OmkarRealtorsandDevelopersPrivateLimited-IV 22,69 225.15 - - - - OrnateSpacesPrivateLimited 18,910 194.02 - - - - PhoenixEmbassyTechZonePrivateLimited 5,267 51.11 - - - - PrateekInfraprojectsIndiaPrivateLimited 10,000 98.80 - - - - RDBuildtech&Developers(Karnataka)PrivateLimited 110 107.04 - - - - RunwalHomesPrivateLimited 12,126 108.00 - - - - SarvavasaBuildtechandFarmsPrivateLimited 9,318 92.16 - - - - SarvavasaBuildtechandFarmsPrivateLimited 21,270 210.85 - - - - ShreeniwasCottonMillsPrivateLimited 3,250 335.68 - - - - SiddhiRajHousingProjectsPrivateLimited 200 19.43 - - - - TridhaatuMumbaiStructurePrivateLimited 150 14.97 - - - - TridhaatuMumbaiStructurePrivateLimited 301 29.56 - - - - WisemoreAdvisoryPrivateLimited 209,800 209.89 - - - - VatikaOneOnOnePrivateLimited 1,950 195.00 - - - - ReliableExports(India)PrivateLimited 23,000 230.00 - - - -
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
BaashyaamConstructionsPrivateLimited 3,300 29.05 - - - - Less:ProvisionforImpairmentbasedonExpectedcreditlossmodel 283.72 207.07 61.55
14,757.08 9,698.83 2,536.66Investments in Alternative Investment Funds/Venture Capital FundsIn Others (Unquoted) - At FVTPL:ClassAUnitsofFaeringCapitalIndiaEvolvingFundII 250,000 25.00 150,000 15.00 - - ClassCunitsofIndiareitFundSchemeIV 1,401 27.57 1,975 32.94 2,293 35.26 ClassDunitsofIndiareitFundSchemeIV 18 0.02 24 0.02 28 0.03ClassA3unitsofIndiareitMumbaiRedevelopmentFund 2,025 23.80 2,775 33.45 2,625 32.41 ClassBunitsofIndiareitMumbaiRedevelopmentFund 12 0.01 37 0.04 50 0.05ClassCunitsofIndiareitFundSchemeV 4,957 61.76 5,625 53.35 2,813 27.82ClassDunitsofIndiareitFundSchemeV 25 0.03 50 0.05 50 0.05ClassAunitsofIIFLIncomeOpportunitiesFundSeries-SpecialSituations 50,000,000 48.27 50,000,000 55.75 27,500,000 28.44ClassCunitsofIIFLIncomeOpportunitiesFundSeries-SpecialSituations 4,500 - 7,500 0.01 7,500 0.01ClassAunitsofIndiareitApartmentFund 1,769 22.61 1,313 15.74 906 10.98ClassCunitsofIndiareitApartmentFund 60 - 100 0.00 - - ClassAunitsofLICHFLUrbanDevelopmentFund 7,287 7.29 7,848 7.21 - - ClassBunitsofredeemableparticipatingsharesIndiareitOffshoreFund 1,000,000 0.06 1,000,000 0.07 1,000,000 0.06ManagementsharesofIndiareitOffshoreFund 100 0.00 100 - 100 - ManagementsharesofIOF-IIIPte.Ltd. - - - - 1,000 0.01
216.42 213.63 135.12 TOTAL NON CURRENT INVESTMENTS 18,964.12 13,085.12 6,535.98
4 (B) INVESTMENTS Current Investments:
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
Investment in Debentures:In Other Body Corporates (Refer Note 44):Quoted :RedeemableNon-ConvertibleDebentures-AtAmortisedCost:VGNDevelopersPrivateLimited 21,011 81.00 24,580 49.87 - - InternationalLandDevelopersPrivateLimited - - - - 2,436 1.22 HaamidRealEstatesPrivateLimited - - 5,500 27.51 5,500 6.88HaamidRealEstatesPrivateLimited-SR-II - - 1,700 7.04 - - SPRConstructionPrivateLimited 11,600 72.50 1,170 20.97 - - ThreeCGreenDevelopersPrivateLimited 6,168 44.06 - - 22,500 22.50CenturyJointDevelopersPrivateLimited 19,000 15.00 - - - - RedeemableNon-ConvertibleDebentures-AtFVTPL:GMRHoldingsPrivateLimited - 13.50 - 11.24 - -
226.06 116.63 30.60Unquoted:RedeemableOptionallyConvertibleDebentures-AtAmortisedCostChitraHoldingsPrivateLimited - - 1,268 7.33 2,000 7.32AnilineConstructionCompanyPrivateLimited-I - - - - 7,700 46.09AnilineConstructionCompanyPrivateLimited-II - - - - 2,500 1.60AshviDevelopersPrivateLimited - - - - 13,591 135.91KohinoorPlanetConstructionsPrivateLimited - - 680 23.93 680 41.52
Piramal Enterprises Limited Annual Report 2016-17286
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
RegenInfrastructurePrivateLimited 1,905 26.72 2,000 10.08 - - NavayugaRoadProjectsPrivateLimitedSR-I 4,250 823.16 - - - - RedeemableNon-ConvertibleDebentures-AtFVTPLEsselGreenEnergyLimited - - - 0.19 - - RedeemableNon-ConvertibleDebentures-AtAmortisedCostOmkarRealtors&DevelopersPrivateLimited-I - - 320 32.60 2,910 261.08OmkarRealtors&DevelopersPrivateLimited-II 365 130.00 400 35.00 - - KothariAutopartManufacturersPrivateLimitedFacility2 - - - 0.03 - - VijayCitispacePrivateLimited - - - - 3,830 14.46 BaashyaamConstructionsPrivateLimited-SR-I - - 7,110 15.11 7,000 8.10BaashyaamConstructionsPrivateLimited-SR-II 3,300 3.67 - - - - TrueValueHomes(India)PrivateLimited - - - - 2,000 26.07OzoneDevelopersBangalorePrivateLimited - - - - 10,000 17.38DarodeJogRealitiesPrivateLimited - - 704,000 70.15 1,600,000 89.30CenturyJointDevelopmentsPrivateLimited-I - - - - 8,500 31.88CenturyJointDevelopmentsPrivateLimited-II - - 210 4.73 - - LandcraftDevelopersPrivateLimited-I - - 3,150 25.00 5,000 16.97LandcraftDevelopersPrivateLimited-II - - 10,450 19.70 - - OzoneHomesPrivateLimited - - - - 3,800 18.50SkylarkArcadiaPrivateLimited - - - - 5,000 25.00VijayGroupHousingPrivateLimited-I - - - - 6,000 23.00VijayGroupHousingPrivateLimited-II 13,440 43.20 10,560 3.40 - - UrbanizeDevelopers(India)PrivateLimited - - - - 2,000 5.18AcmeHousingIndiaPrivateLimited - - 7,600 38.00 8,300 16.60KrishnaECampusPrivateLimited - - 520 9.19 450 4.15 AdarshHavenPrivateLimited - - 951 47.47 1,070 11.89VirgoPropertiesPrivateLimited - - - - 1,800 2.25 BestechIndiaPrivateLimited-I 8,250 23.57 - - - - ArihantUnitechRealtyProjectLimited 3,358 5.58 4,827 3.76 - - NeelkanthMansionsAndInfrastructurePrivateLimited - - 13,763 29.51 - - NeelkanthVinayakRealtorsPrivateLimited 4,200 24.00 3,500 6.17 - - BhaveshwarPropertiesPrivateLimited 2,460 10.80 2,300 6.48 - - OzoneUrbanaInfraDevelopersPrivateLimited-SR-I - - 4,250 21.89 - - EssemInfraPrivateLimited 19,230,000 60.23 22,500,000 29.96 - - EktaHousingPrivateLimited 709 23.57 835 10.38 - - EktaParksvilleHomesPrivateLimited 1,171 38.44 1,376 16.93 - - NirmalLifestyleLimited 165 53.64 145 17.21 - - BoulevardProjectsPrivateLimited 22,500 57.32 22,500 8.44 - - AmbeTradeCorpPrivateLimited - - 6,969 6.69 - - IdealRealEstatePrivateLimited 7,000 40.00 5,800 7.25 - - EvieRealEstatePrivateLimited 12,530 8.03 21,000 19.10 - - KeystoneRealtorsPrivateLimited-I 79 17.62 63 0.06 - - ArunExcelloHomesPrivateLimited 2,394 26.39 - 1.65 - - ArunExcelloRealtyPrivateLimited 1,700 10.97 - 0.83 - - LogixCityDevelopersPrivateLimited 12,500 46.88 - - - - OzoneInfraDevelopersPrivateLimited - - - 1.78 - - ValdelRealEstatePrivateLimited - - 70 5.42 - - ParanjapeSchemesConstructionLimited 8,176 5.02 - - - - LodhaDevelopersPrivateLimited 10,200 794.87 - - - -
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
ShreeniwasCottonMillsPrivateLimited 8,950 26.48 - - - - KingsCanyonSEZPrivateLimited 2,095 3.94 - - - - CenturyRealEstateHoldingsPrivateLimited - 0.01 - - - - LodhaDevelopersPrivateLimited 6,250 70.00 - - - - MindSpaceRealtyPrivateLimited - - - - 850 8.50KeystoneRealtorsPrivateLimited - - - - 2 11.35 AksharSpacePrivateLimited 760 7.60 - - - - AkshayaPrivateLimited 9,220 16.20 - - - - ATSHomesPrivateLimited 15,000 41.75 - - - - BestechIndiaPrivateLimited 18,700 2.83 - - - - EmamiRealtyPrivateLimited 100 20.00 - - - - FlagshipInfrastructurePrivateLimited 8,727 5.03 - - - - ForumHomesPrivateLimited 106 44.94 - - - - GoldenHomesPrivateLimited 6,750 10.66 - - - - GoodEarthEcoDevelopmentPrivateLimited 7,000 4.00 - - - - HaldharDevelopersPrivateLimited 675 65.69 - - - - KanakiaSpacesRealtyPrivateLimited 70 58.00 - - - - KeystoneRealtorsPrivateLimited-I 173 28.75 - - - - KumarAgroProductsPrivateLimited 33,983,000 31.37 - - - - ManjeeraRetailHoldingsPrivateLimited 15,671 14.09 - - - - MarvelMegaRealtorsPrivateLimited 1,244,200 1.40 - - - - NilkanthTechParkPrivateLimited 13,069 30.92 - - - - NilkanthTechParkPrivateLimited 5,876 15.56 - - - - ParanjapeSchemesConstructionLimited 21,223 3.42 - - - - PheonixHoduDevelopersPrivateLimited 9,500 27.14 - - - - RaghuleelaLeasingandConstructionPrivateLimited 175 10.00 - - - - RajeshEstateandNirmanPrivateLimited 54 26.57 - - - - RajeshEstateandNirmanPrivateLimited 80 39.57 - - - - Reliance Big Limited 15,899 20.66 - - - - RunwalHomesPrivateLimited 12,126 13.26 - - - - SecurityandIntelligenceServices(India)Limited 80 13.33 - - - - TridhaatuMumbaiStructurePrivateLimited 18 1.82 - - - - WadhwaConstructions&InfrastructurePrivateLimited 2,000 93.33 - - - - WadhwaGroupHoldingsPrivateLimited 2,500 100.00 - - - - Less:ProvisionforImpairmentbasedonExpectedcreditlossmodel 75.67 23.88 24.14
3,272.39 628.17 830.56InvestmentinMutualFunds(Unquoted)-AtFVTPL:BirlaSunLifeCashPlus-DailyDividend-DirectPlan-Reinvest - - - - 1,996,993 20.01HDFC CashManagement Fund - Saving Plan - Direct Plan - Daily DividendReinvestment - Reinvestment
- - - - 14,106,891 15.00
ICICIPrudentialLiquid-DirectPlan-DailyDividend-Reinvestment - - - - 2,499,375 25.01RelianceLiquidFund-TreasuryPlan-DirectDailyDividendOption-Reinvest 98,139.76 15.00 - - 196,310 30.01
UTI-LiquidCashPlan-Institutional-DirectPlan-DailyDividend-Reinvestment - - - - 98,125 10.00
DSPBlackRockLiquidityFund-DirectPlan-DailyDividend-Reinvestment 249,841.78 25.00 - - - - FranklinIndiaTreasuryManagementAccount-SuperInstitutionalPlan-Direct- Daily Dividend Reinvestment
299,504.83 30.01 - - - -
Piramal Enterprises Limited Annual Report 2016-17288
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 Quantity (` in crores) Quantity (` in crores) Quantity (` in crores)
ICICI Prudential Money Market Fund - Direct Plan - Daily Dividend -Reinvestment
2,996,274.53 30.01 - - - -
KotakLiquidDirectPlanDailyDividend-Reinvestment 204,447.13 25.00 - - - - TataMoneyMarketFundDirectPlan-DailyDividend-Reinvestment 299,597.72 30.01 - - - - AxisLiquidFund-DailyDividendReinvestment 2,123.38 0.21 2,026 0.20 50,145 5.02DSPBlackRockLiquidityFund-InstitutionalPlan-DailyDividend 2,496.33 0.25 2,383 0.24 20,798 2.08L&TLiquidFund-RegularDailyDividendReinvestmentPlan 2,106.63 0.21 2,010 0.20 45,224 4.58RelianceLiquidFund-TreasuryPlan-DirectDaily 35,499.83 5.42 33,868 5.17 23,675 3.63 ReligareInvescoLiquidFund-DailyDividend - - - - 120,890 12.10HDFCLiquidFund-Dividend-DailyReinvestment 4,339 0.44 4,141 0.42 - - SBIPremierLiquidFundRegularPlanGrowth 19,646.46 5.00 - - - - TataMoneyMarketFundRegularPlan-Growth 19,583.84 5.00 - - - - RelianceLiquidFundTreasuryPlan-GrowthPlan-GrowthOption 12,649.27 5.00 - - - - BirlaSunlifeCashPlus-Growth 191,982.58 5.00 - - - - DSPBlackrockUltraShortTermFund-RegularPlan-Growth 4,229,152.39 5.00 - - - - KotakTreasuryAdvantageFund-Growth(RegularPlan) 1,920,034.41 5.00 - - - -
191.56 6.23 127.44Total Current Investments 3,463.95 634.40 958.00Aggregate market value of quoted investments -Non-Current 5,159.22 4,037.20 4,431.48-Current 226.06 116.63 30.60Aggregate carrying value of unquoted investments -Non-Current 14,088.62 9,254.99 2,166.05-Current 3,313.56 541.65 951.54Aggregate amount of impairment in value of investments 359.39 230.95 85.69ReferNote44forInvestmentsmortgagedassecurityagainstborrowings.
Details of Total Investments: (ii) Financialassetscarriedatfairvaluethroughprofitorloss(FVTPL)
MandatorilymeasuredatFVTPLEquity - 29.43 28.36PreferenceShares 1.70 0.66 0.63Mutual Funds 191.56 6.23 127.44Debentures 987.86 758.44 - AlternativeInvestmentFund/VentureCapitalFunds 216.42 213.63 135.12
1,397.54 1,008.39 291.55(iii) Financialassetscarriedatamortisedcost
Debentures 17,041.61 9,568.56 3,367.22 17,041.61 9,568.56 3,367.22
(iv) FinancialassetsmeasuredatFVTOCIEquityinstruments-EquityShares 3,988.92 3,142.57 3,835.21
3,988.92 3,142.57 3,835.21TOTAL 22,428.07 13,719.52 7,493.98
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
5. LOANS - NON-CURRENT
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015 ` in Crores
Loans (Secured and Considered Good) - at Amortised Cost TermLoans(Refernote44) 5,865.52 631.13 436.94Less:Provisionforexpectedcreditloss 110.00 25.41 3.70
5,755.52 605.72 433.24 InterCorporateDeposits(Refernote44) 43.78 1,487.56 581.91Less:Provisionforexpectedcreditloss 0.73 33.04 13.84
43.05 1,454.52 568.07 Loans (Secured and Considered Doubtful) - at Amortised Cost TermLoans 60.47 24.09 57.46Less:Provisionforexpectedcreditloss 23.89 10.55 35.57
36.58 13.54 21.89 TOTAL 5,835.15 2,073.78 1,023.20
6. OTHER FINANCIAL ASSETS - NON-CURRENT
Bankdepositswithmorethan12monthsmaturity(ReferNote44) - 20.00 - Advancesrecoverable 1.00 1.71 - Claims Receivable - 0.18 - SecurityDeposits 38.10 39.87 33.68RestrictedDeposit-EscrowAccount(Refernotebelow) 12.80 45.99 -
TOTAL 51.90 107.75 33.68Note:AmountslyinginEscrowdepositrepresenttheamountstobeinvestedinSearchlightHealthPrivateLimited(formerlyknownasHealthSuperHiwayPrivateLimited),pendingfulfilmentofConditionsprecedentforeachtrancheofinvestment.
7. DEFERRED TAX ASSETS (NET)
(a) Deferred Tax Assets on account of temporary differences -Measurementoffinancialassetsatamortisedcost/fairvalue 82.46 53.07 51.78- Provision for expected credit loss on financial assets (includingcommitments)
177.91 129.96 26.34
-OtherProvisions 7.41 4.77 15.15 -UnusedTaxCredit/losses 459.46 236.30 103.41-Amortisationofexpenseswhichareallowedincurrentyear 2.56 3.67 5.12 -Expensesthatareallowedonpaymentbasis 39.93 34.62 25.69-Effectofrecognitionofleaserentexpenseonstraightlinebasis 2.50 2.74 - -Unrealisedprofitmarginoninventory 40.32 - - -Othertemporarydifferences 4.60 0.27 0.90
817.15 465.40 228.39(b) Deferred Tax Liabilities on account of temporary differences
-Property,PlantandEquipmentandIntangibleassets (167.42) (140.11) (132.09)-Measurementoffinancialliabilitiesatamortisedcost (18.65) (4.29) (1.47)-Fairvaluemeasurementofderivativecontracts (2.41) (3.07) (2.99)-Othertemporarydifferences (3.46) - -
(191.94) (147.47) (136.55) TOTAL 625.21 317.93 91.84
DeferredTaxAssetsandDeferredTaxLiabilitiesoftherespectiveentityhavebeenoffsetastheyrelatetothesamegoverningtaxationlaws.ReferNote54formovementsduringtheyear.
Piramal Enterprises Limited Annual Report 2016-17290
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
8. OTHER NON-CURRENT ASSETS
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores Advance Tax [Net of Provision of ` 4,615.44 Crores at March 31, 2017, ` 4,426.35CroresasatMarch31,2016and` 3,883.24CroresasatApril1,2015]
282.02 295.71 235.06
Advancesrecoverable 87.89 92.62 60.02Unamortizeddistributionfees 10.81 17.60 26.87Prepayments 6.38 6.57 6.92Capital Advances 6.06 7.00 10.60PensionAssets(ReferNote42) 5.89 5.33 3.84BalancewithGovernmentAuthorities 0.09 - -
TOTAL 399.14 424.83 343.31
9. INVENTORIES
RawandPackingMaterials[includesinTransitof` 7.40CroresasonMarch31,2017,` 4.79CroresasonMarch31,2016,` 6.98CroresasatApril1,2015]
243.53 254.82 248.53
Work-in-Progress 270.53 256.54 221.02FinishedGoods 115.40 148.19 129.48Stock-in-trade[includesinTransitofNILasonMarch31,2017,` 2.77CroresasonMarch31,2016,` 4.49CroresasatApril1,2015]
48.08 18.79 6.35
StoresandSpares 45.53 45.43 50.67 TOTAL 723.07 723.77 656.05
1.ReferNote44fortheinventorieshypothecatedassecurityagainstborrowings. 2.Thecostofinventoriesrecognisedasanexpenseduringtheyearwas` 1,530.94crores(Previousyear` 1,423.30Crores). 3.Thecostofinventoriesrecognisedasanexpenseincludesareversalof` 0.26Crores(Previousyearchargeof` 1.17Crores)inrespectofwritedownsofinventorytonetrealisablevalueand` 9.19crores(Previousyear` 5.42Crores)inrespectofprovisionsforslowmoving/nonmoving/expired/nearexpiryproducts.
10. TRADE RECEIVABLES
Secured-ConsideredGood 0.20 0.20 0.20Unsecured-ConsideredGood 1,109.32 973.17 822.99Unsecured-ConsideredDoubtful 38.34 31.53 22.40Less:ExpectedCreditLossonTradeReceivables (40.12) 1,107.74 (34.09) 970.81 (26.30) 819.29
TOTAL 1,107.74 970.81 819.29
InthePharmaceuticalsManufacturingandServicesbusiness,thecreditperiodonsaleofgoodsrangesfrom7to150days;intheInformationManagementbusiness,theaveragecreditperiodallowedtocustomersis42days.
TheGrouphasadocumentedCreditRiskManagementPolicyforitsPharmaceuticalsManufacturingandServicesbusiness.Foreverynewcustomer(exceptestablishedlargepharmacompanies),thegroupperformsacreditratingcheckusinganexternalcreditagency.Ifacustomerclearsthecreditrating check, the credit limit for that customer is derivedusing internally documented scoring systems. The credit limits for all the customers arereviewedonanongoingbasis.
IntheInformationManagementbusiness,thecustomerbaseismainlycomprisedofthetopbio-techcompanieswithnohistoryoffailingtopayforproductsorderedorservicesrendered.Intheeventthatnewinformationarisesaboutacustomer’sfinancialconditionwhichwouldimpacttheirabilitytopayandmanagementbelievesthatthereisanexposure,aprovisionisestablishedforthesepotentialcreditlosses.Todate,theselosseshavebeenwithinmanagement’sexpectations.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
TheGrouphasusedapracticalexpedientbycomputingtheexpectedcreditlossallowanceforExternalTradeReceivablesbasedonaprovisionmatrix.Theprovisionmatrixtakesintoaccounthistoricalcreditlossexperienceandadjustedforforward-lookinginformation.Theexpectedcreditlossallowanceisbasedontheageingofthedaysthereceivablesaredueandtheratesasgivenintheprovisionmatrix.Theprovisionmatrixattheendofthereportingperiodisasfollows:
Ageing - Pharmaceuticals Manufacturing and Services business Expected credit loss (%) - For external customers
Lessthan150days 0.30% 151 days to 365 days 0.30%Morethan365days 100.00%
Ageing - Information Management business Expected credit loss (%) - For external customers
Less than 42 days - Morethan42days 1.00%
`incroresAgeing Expectedcreditloss
March 31, 2017 March 31, 2016 April 1, 2015Within due date 1.89 1.84 1.65 AfterDuedate 38.23 32.25 24.65
`incrores Ageing of receivables
March 31, 2017 March 31, 2016 April 1, 2015 Less than 365 days 1,103.00 968.79 805.56Morethan365days 44.86 36.11 40.03
TOTAL 1,147.86 1,004.90 845.59
Ifthetradereceivables(discounted)arenotpaidatmaturity,thebankhasrighttorequesttheGrouptopaytheunsettledbalance.AstheGrouphasnottransferredtherisksandrewardsrelatingtothesecustomers,itcontinuestorecognizethefullcarryingamountofthereceivablesandhasrecognizedthecashreceivedonthetransferasasecuredborrowing(ReferNote23).
Attheendofthereportingperiod,thecarryingamountofthetradereceivablesthathavebeentransferredbuthavenotbeende-recognizedamountedto ` 20.59Crores(Previousyear` 66.30Crores)andthecarryingvalueofassociatedliabilityis` 20.59Crores(Previousyear` 66.30Crores)(ReferNote23).
`incrores Movement in Expected Credit Loss Allowance: Year ended
March 31, 2017 Year ended
March 31, 2016
Balanceatthebeginningoftheyear 34.09 26.30Add:Expectedcreditlossacquiredonbusinesscombination 0.39 0.37Add:Movementinexpectedcreditlossallowanceontradereceivablescalculatedatlifetimeexpectedcreditlosses 7.87 8.65Less:Baddebtswrittenoff (3.30) (1.23)Add:Effectoftranslationdifferences 1.07 - Balanceattheendoftheyear 40.12 34.09ReferNote44forthereceivableshypothecatedassecurityagainstborrowings.
Piramal Enterprises Limited Annual Report 2016-17292
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
11. CASH AND CASH EQUIVALENTS
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015 ` in Crores
Cash and Cash equivalents i. BalancewithBanks
-CurrentAccounts 264.52 290.82 27.18-DepositAccount(lessthan3monthsoriginalmaturity) 1,225.44 1,489.96 - 290.82 - 278.08
ii. Cash on Hand 0.48 7.16 0.63 TOTAL 1,490.44 297.98 278.71
TherearenorepatriationrestrictionswithregardtoCashandCashEquivalentsasattheendofthereportingperiodandpriorperiods
12. OTHER BANK BALANCES
i. Earmarkedbalanceswithbanks- Unclaimed Dividend Account 15.94 19.46 13.05-Others 0.02 0.04 0.02
15.96 19.50 13.07 ii. MarginMoney 13.01 12.28 0.05iii. Deposit Account (more than 3 months original maturity but less
than 12 months) 21.49 36.18 131.86
TOTAL 50.46 67.96 144.98
13. LOANS - CURRENT
Loans Secured and Considered Good - at amortised cost: TermLoans 575.49 252.57 276.84Less:Allowanceforexpectedcreditloss 11.57 23.72 0.69
563.92 228.85 276.15InterCorporateDeposits - 377.07 54.80Less:Allowanceforexpectedcreditloss - 8.32 1.34
- 368.75 53.46 Loans Secured and Considered Doubtful - At Amortised Cost:
TermLoans 47.08 8.28 58.44Less:Allowanceforexpectedcreditloss 18.58 3.62 41.63
28.50 4.66 16.81
Loans to Related Parties Unsecured and Considered Good - At amortised Cost
27.79 7.19 -
Inter Corporate Deposits - Unsecured and Considered Good - - At amortised Cost
880.37 850.00 1,275.00
Inter Corporate Deposits Unsecured and Considered Doubtful - InterCorporateDeposits 8.30 8.30 8.30Less:Allowanceforexpectedcreditloss 8.30 - 8.30 - 8.30 -
TOTAL 1,500.58 1,459.45 1,621.42
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14. OTHER FINANCIAL ASSETS - CURRENT
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores SecurityDeposits 21.51 12.66 12.19Advancesrecoverable 14.33 6.91 6.01DerivativeFinancialAssets 14.69 11.47 12.77ConsiderationReceivable - 70.00 5.20OtherReceivablefromrelatedparties 0.28 - - Unbilledrevenues 99.13 25.20 20.07Bankdeposits(ReferNote44) 20.00 - - InterestAccrued 3.90 2.82 1.71Others 9.78 8.72 2.84
TOTAL 183.62 137.78 60.79
15. OTHER CURRENT ASSETS
Unsecured and Considered Good (Unless otherwise stated) Advances : UnsecuredandConsideredGood 92.29 109.37 153.90ConsideredDoubtful 0.08 0.08 0.08
92.37 109.45 153.98Less:ProvisionforDoubtfulAdvances 0.08 0.08 0.08
92.29 109.37 153.90Prepayments 55.02 14.75 11.56 Unamortizeddistributionfees 15.06 9.96 10.67BalancewithGovernmentAuthorities 43.91 54.14 44.20Claims Receivable 16.92 12.45 10.51
TOTAL 223.20 200.67 230.84
16. SHARE CAPITAL
Authorised Share Capital 250,000,000(250,000,000)EquitySharesof` 2/-each 50.00 50.00 50.003,000,000(3,000,000)PreferenceSharesof` 100/-each 30.00 30.00 30.0024,000,000(24,000,000)PreferenceSharesof` 10/-each 24.00 24.00 24.00105,000,000(105,000,000)UnclassifiedSharesof` 2/-each 21.00 21.00 21.00
TOTAL 125.00 125.00 125.00
Issued, Subscribed and paid up 172,563,100(172,563,100)EquitySharesof` 2/-each(fullypaidup) 34.51 34.51 34.51
TOTAL 34.51 34.51 34.51
Piramal Enterprises Limited Annual Report 2016-17294
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Particulars As at March 31, 2017 As at March 31, 2016 As at April 1, 2015 No. of shares ` In Crores No. of shares ` In Crores No. of shares ` In Crores
(i) Movement in Equity Share Capital Atthebeginningoftheyear 172,563,100 34.51 172,563,100 34.51 172,563,100 34.51 Add:Issuedduringtheyear - - - - - - Less:Sharescancelledduringtheyear - - - - - - At the end of the year 172,563,100 34.51 172,563,100 34.51 172,563,100 34.51
(ii) Details of shareholders holding more than 5% shares in the Company
No. of shares ` In Crores No. of shares ` In Crores No. of shares ` In Crores TheSriKrishnaTrustthroughitsTrustees,Mr.AjayPiramalandDr.(Mrs.)SwatiA.Piramal(PreviouslyheldthroughitsCorporateTrustees,PiramalManagementServicesPrivateLimited)
75,458,452 43.73% 83,905,941 48.62% 84,120,694 48.75%
AberdeenGlobalIndianEquity(Mauritius)Limited 4,185,039 2.43% 7,600,000 4.40% 10,237,882 5.93%
(iii) Aggregate number of shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the current financial year:
Particulars Financial Year No. of shares i. EquitySharesallottedasfullypaid-uppursuanttomergerofPHLHoldingsPrivateLimitedintotheCompany 2013-14 84,092,879ii. EquitySharesallottedasfullypaid-uppursuanttodemergerofR&DNCEdivisionofPiramalPhytocareLimited
(PPL)(formerlyknownasPiramalLifeSciencesLimited)intotheCompany2011-12 5,352,585
iii. EquitysharesboughtbackbytheCompany 2011-12 705,529iv. EquitysharesboughtbackbytheCompany 2010-11 41,097,100
(iv) Terms and Rights attached to equity shares
Equity Shares: TheCompanyhasoneclassofequityshareshavingaparvalueof` 2/-pershare.Eachshareholderiseligibleforonevotepershareheld.ThedividendproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting,exceptincaseofinterimdividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of allpreferentialamounts,inproportiontotheirshareholding.
17. OTHER EQUITY
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores CapitalReserve 56.66 56.66 56.66 CapitalRedemptionReserve 61.73 61.73 61.73DebentureRedemptionReserve 655.79 524.00 85.42GeneralReserve 5,637.18 5,683.55 5,690.99ForeignCurrencyTranslationReserve (68.13) 97.78 - ReserveFundU/S45-IC(1)OfReserveBankOfIndiaAct,1934 85.32 38.95 31.51 FVTOCI-EquityInstruments 1,552.23 705.88 1,398.52CashFlowHedgingReserve 3.07 - - RetainedEarnings 6,864.21 5,745.29 6,066.14
TOTAL 14,848.06 12,913.84 13,390.97
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores Capital Reserve Atthebeginningoftheyear 56.66 56.66
56.66 56.66 ThisreserveisoutcomeofpastBusinessCombinations.
Capital Redemption Reserve Atthebeginningoftheyear 61.73 61.73
61.73 61.73This reservewas created asper requirementsof CompaniesAct pursuant tobuybackof equity shares andredemptionofpreferenceshares.
Debenture Redemption Reserve Atthebeginningoftheyear 524.00 85.42Add:Transferduringtheyear 131.79 438.58
655.79 524.00TheDebentureredemptionreserveiscreatedaspertherequirementsofRule18(7)oftheCompanies(ShareCapitalandDebentures)Rules,2014.Theamountrepresents25%oftheamountpayableonredemptionofdebentures.DebentureredemptionreservehasnotbeencreatedinrespectofNBFCsubsidiarywhichhasprivatelyplaceddebenturesinaccordancewiththeCompanies(ShareCapitalandDebentures)Rules,2014.General Reserve Atthebeginningoftheyear 5,683.55 5,690.99Less:TransferredtoReserveFundu/s45-IC(1)oftheReserveBankofIndiaAct,1934 46.37 7.44
5,637.18 5,683.55Foreign Currency Translation Reserve Atthebeginningoftheyear 97.78 - Add:Othercomprehensiveincomefortheyear (217.48) 97.78Less:Incometaximpactontheabove 51.57 -
(68.13) 97.78Exchangedifferencesarisingontranslationofforeignoperationsarerecognisedinothercomprehensiveincomeandaccumulatedinaseparatereservewithinequity.Thecumulativeamountisreclassifiedtoprofitorlosswhenthenetinvestmentisdisposedoff.Reserve fund u/s 45-IC(1) of Reserve Bank of India �ct, 1934 Atthebeginningoftheyear 38.95 31.51 Add:AmounttransferredfromGeneralReserve 46.37 7.44
85.32 38.95ReserveFundisrequiredtobemaintainedu/s45-IC(1)oftheReserveBankofIndiaAct,1934forNonBankingFinancialCompanies.DuringthecurrentyearendedMarch31,2017,PHLFininvestPrivateLimitedandPiramalFinanceLimitedhavetransferredanamountof`7.71Crores(PreviousYear` Nil) and `38.66Crores(PreviousYear`7.44Crores)respectively,being20%ofProfitafterTaxdeterminedinaccordancewithStatutoryfinancialstatements.FVTOCI - Equity Instruments Atthebeginningoftheyear 705.88 1,398.52Add:ChangesinFairvalueofFVTOCIEquityinstruments 846.35 (692.64)
1,552.25 705.88TheGrouphaselectedtorecognisechangesinthefairvalueofcertaininvestmentsinequitysecuritiesinothercomprehensiveincome.ThesechangesareaccumulatedwithintheFVOCIequityinvestmentsreservewithinequity.TheGrouptransfersamountsfromthisreservetoretainedearningswhentherelevantequitysecuritiesarederecognised.Cash Flow Hedging Reserve Atthebeginningoftheyear - - Add:Transferduringtheyear 3.07 -
3.07 - TheGroupuseshedging instrumentsaspartof itsmanagementof foreigncurrency riskassociatedwith itsForeignCurrencyNon-repatriableloans.Totheextentthesehedgesareeffective,thechangeinthefairvalueofhedginginstrumentisrecognisedinthecashflowhedgingreserve.
Piramal Enterprises Limited Annual Report 2016-17296
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores Retained Earnings Atthebeginningoftheyear 5,745.29 6,066.14Add:Profitfortheyear 1,252.04 904.74Less:RemeasurementofPostEmploymentBenefitObligations 1.62 8.15Less:DebentureRedemptionReserve 131.79 438.58Add:TransactionswithNonControllinginterest 0.29 - Less:Dividendspaid - 778.86
6,864.21 5,745.29 TOTAL 14,848.06 12,913.84
OnAugust17,2015,adividendof` 20pershare(totaldividend` 345.13Croresanddividenddistributiontaxof` 70.26crores)waspaidtoholdersoffullypaidequityshares.OnMarch21,2016,adividendof` 17.50pershare(totaldividendof` 301.99Croresanddividenddistributiontaxof` 61.48crores)waspaidtoholdersoffullypaidequityshares.
ADividendof` 21perequityshare(1050%ofthefacevalueof` 2/-each)amountingto`362.38Crores(DividendDistributionTaxthereonof`73.78Crores)hasbeenrecommendedbytheBoardofDirectorswhichissubjecttoapprovaloftheShareholders.
18. NON CURRENT BORROWINGS As at
March 31, 2017 ` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015 ` in Crores
Secured - at amortized cost TermLoanFromBanksRupee Loans 5,532.19 1,593.40 458.10ForeignCurrencyNonRepatriableLoans 483.83 - - Others 856.06 907.59 1,002.34
6,872.08 2,500.99 1,460.44TermLoanfromOthers 1,743.33 - - RedeemableNonConvertibleDebentures 3,098.71 598.27 - TermLoanFromfinancialinstitutions 0.04 0.13 0.21
Unsecured - at amortized cost TermLoanFromBanks:Rupee Loans - 299.31 - ForeignCurrencyNonRepatriableLoans - 398.24 - Others 1,382.15 881.90 1,371.73
1,382.15 1,579.45 1,371.73RedeemableNonConvertibleDebentures 1,399.38 2,795.16 854.89
TOTAL 14,495.69 7,474.00 3,687.27
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Terms of repayment, nature of security & rate of interest in case of Secured Loans:A. Secured Term Loans from Banks (Rupee Loans and Others)
(`inCrores) Nature of Security Terms of repayment Principal
Outstanding as at March 31,
2017
Principal Outstanding as
at March 31, 2016
Principal Outstanding as at April 1, 2015
First Charge on the present and future Property Plant &Equipmentsofthecompanywithaminimumsecuritycoverof1.15times.
Repaymentin10semiannualinstalments 174.99 244.99 303.33
FirstPariPassuChargeonallmovableandimmovablePropertyPlant & Equipments of the borrower for `100 crores with aminimumFinancialAssetCover(FACR)of1.15times.
Repayment in seven semi annual instalments 71.43 100.00 100.00
Hypothecationofreceivablesarisingoutof identifiedfinancialassets i.e.Borrower’s investment (a) IndebenturespertainingtoRealEstateSector&(b) Inter-corporatedepositspertainingtoRealEstateSectorwithaminimumassetcoverof1.10timesforoverallfacilities.
Repaymentin12equalquarterlyinstalments.1st instalment first day of the 27thmonth.Final Maturity 5 years from date of eachdrawdown.
- 500.00 -
Firstparipassuchargebywayofhypothecationof receivablesarising out of identified financial assets i.e. investment inDebentures&inter-corporatedepositspertainingtoRealEstateSectorwithaminimumassetcoverof1.10timesfortheoverallfacilities.
Repaymentin3equaltranchesattheendof24,30and36monthsfromthedateoffirstdisbursement
- 250.00 -
Hypothecation of allmovable properties of the Company i.e.plant andmachinery (excludingCurrentAssets and IntangibleAssets) both present and future at the below locations:(a)Pithampur, Madhya Pradesh (b) Ennore, Chennai (c ) DigwalVillage,Medak District, Andhra Pradesh (d) Mahad DistrictRaigad, Maharashtra and the Equitable Mortgage of all theimmovable properties, both LeaseHold and FreeHold of theCompany, both present and future .The charge will be onpari-passu basis with existing Term Lenders with a minimumFinancialAssetCover(FACR)of1.15times.
Repaymentin5HalfYearlyinstalmentsof` 40Croreseachcommencing24monthsafterthefirstdisbursement
200.00 200.00 -
Firstparipassuchargebywayofhypothecationorreceivablesarisingoutof identifiedfinancial assets (to the satisfactionofthe Lender) covered under loan agreements of the Borrowerwith a minimum asset cover of 1.10 times for the overallfacilities.Atanypointoftime,suchassetswillnotincludethoseassetswherein the scheduled repayment isoverdue formorethan120daysorsuchotherdaysofNPArecognitionaspertheRBIguidelines,whicheverislower.
Repayment in 14 unequal quarterlyinstalments. The first of such instalment ofrepayment shall fall dueon thefirstdayofthe 21st month from the date of the firstdrawdown.
- 250.00 -
Repayment in 14 unequal quarterlyinstalments after moratorium period of 18months
- 100.00 -
Firstparipassuchargebywayofhypothecationoverreceivablesof entire secured financial services investments of borrower(excluding investments in Shriram group) whether current orinfuturewithaminimumcoverof1.10xoftheprincipalandaccruedinterest.
Moratoriumof18monthsandrepaymentin2equalquarterlyinstalments
150.00 - -
Chargeonbrandsacquiredonexclusivebasis TotalTenorof30months fromdateoffirstdrawdown with 1 year moratorium andthereafterpayableinthreeequalhalfyearlyinstalments
175.00 - -
Chargeonbrandsacquiredonexclusivebasis Total Tenor of 30 months with 1 yearmoratoriumandthereafterpayableinthreeequalhalfyearlyinstalments
100.00 - -
Firstpari-passuchargeonthereceivablespresentandfuture Repayable quartely installments startingafter twelve months from inital drawdowndate
31.25 43.75 50.00
Piramal Enterprises Limited Annual Report 2016-17298
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores) Nature of Security Terms of repayment Principal
Outstanding as at March 31,
2017
Principal Outstanding as
at March 31, 2016
Principal Outstanding as at April 1, 2015
Firstpari-passuchargeonthereceivablespresentandfuture Repayable quartely installments startingafter twelve months from inital drawdowndate
20.00 20.00 70.00
Firstpari-passuchargeonthereceivablespresentandfuture Repayable in ten equal half yearlyinstallmentswithmoratoriumperiodofoneyearfromdrawdowndate
150.00 - -
Firstpari-passuchargeonthestandardmoveableassetincludingreceivablesandbookdebtspresentandfuture
RepayableinFifteenmonthsfromdrawdowndate
150.00 - -
Firstpari-passuchargeonthestandardmovableassetsincludingreceivablespresentandfuture.
Repayable in twelve equal quarterlyinstalmentscommencing from27monthofinitialdrawdowndate
250.00 - -
Firstpari-passuchargeonthestandardmovableassetsincludingreceivablesandbookdebtspresentandfuture
Repayable in four equal quarterlyinstalments commencing from 5th quarterfromdrawdowndate
250.00 - -
Firstpari-passuchargeonthestandardmovableassetsincludingreceivablesandbookdebtspresentandfuture
Repayable in twelve equal monthlyinstalmentsafter themoratoriumperiodof24monthfromthedateoffirstdisbursement
250.00 - -
Firstpari-passuchargeonthestandardassetsreceivables RepayableinFifteenmonthsfromdrawdowndate
2,000.00 - -
Firstpari-passuchargebywayofhypothecationonthestandardmoveableassetsincludingreceivablesandbookdebtspresentandfuture
Repayableintenequalquarterlyinstalmentscommencingfrom21stmonthfromdateofeachdrawdown
750.00 - -
Firstpari-passuchargeonthestandardmovableassetsincludingreceivablesandbookdebtspresentandfuture
Repayable in three years from drawdowndate
700.00 - -
Firstpari-passuchargebywayhypothecationonthestandardmovable assets including receivables and book debts presentandfuture
Repayableinfourequalquarterlyinstalmentscommencingafteroneyearfromthedateoffirstdisbursement
300.00 - -
Hypothecationofimmovableproperties,equipment,intellectualproperty,inventory,receivablesandothermovableproperty.
Repayable in 14 quarterly instalmentscommencingfromdateofdisbursement
- 77.09 99.24
Fixed and floating charges over the freehold and leaseholdpropertyandallotherassetsownedbythecompany.
Repayablein20quarterlyinstalmentsfromdateofdisbursement
69.82 92.97 92.35
FirstChargeonall tangibleand intangibleassetsbothpresentandfutureofasubsidiary
Repayable in 11 semi annual instalments fromdateofdisbursement
843.07 925.96 918.80
Collateralizedbyalltheassetsofthesubsidiary Repayablein16quarterlyequalinstalmentsfromdateofdisbursement
95.66 - -
Theeffectivecostsfortheaboveloansareintherangeof2.44%[GBPLIBOR+2.21%]to10.15%perannum(PreviousYear3.00%[USDLIBOR+2.65%]to10.75%perannum)Satisfactionofchargesinrespectofcertainrepaidloansarestillawaited.Creationofchargesinrespectofcertainloansareinprocess.ReferNote44forassetshypothecated/mortgagedassecuritiesagainsttheSecuredBorrowings
B. Foreign Currency Non Repatriable Loans:(`inCrores)
Nature of Security Terms of repayment Principal Outstanding as at
March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015Firstpari-passuchargeonthemovableassets includingreceivablespresentandfuture
Repayable in two years from drawdowndate
250.00 - -
Firstpari-passuchargeonthestandardassets includingreceivablespresentandfuture
Repayable in two years from drawdowndate
250.00 - -
Theeffectivecostsfortheaboveloansareintherangeof9.60%to9.75%perannum
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C. Term Loan from others:(`inCrores)
Nature of Security Terms of repayment Principal Outstanding as at
March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015Firstpari-passuchargeonhypothecationof receivablespresentandfuture
Repayable in five equal quarterlyinstalments commencing24Month fromthedateoffirstdisbursement
250.00 - -
Firstpari-passuchargeonhypothecationof receivablespresentandfuture
Repayable in 21 months from drawdowndate
1,500.00 - -
Theeffectivecostsfortheaboveloansareintherangeof9.65%to10%perannum
D. Secured Debentures:
(`inCrores)Particulars Nature of Security Terms of
Repayment Principal
Outstanding as at March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015 5000(payableannually)9.25% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
Secured by First Pari Passu non exclusivechargebyhypothecationoverthespecifiedidentified receivables and a first rankingpari passu mortgage over SpecificallyMortgagedPremisesorsuchotherpropertyasmaybeidentifiedbytheCompanyassetout in the Debenture Trust Deed and theDeedofHypothecation.
Series A - ` 250 Croresredeemable at par at theend of 730 days from thedateofallotmentandSeriesB - ` 250Croresredeemableatparattheendof762daysfromthedateofallotment
500.00 500.00 -
1000(payableannually)9.40% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
Option I - ` 50 Croresredeemableatparattheendof729daysfromthedateofallotment andOption II -` 50Croresredeemableatparattheendof1094daysfromthedateofallotment
100.00 100.00 -
400 (payable annually)9.383% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of ` 40 Croresredeemable at par at theend of 561 days from thedateofallotment
40.00 - -
400 (payable annually)9.57% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of ` 40 Croresredeemable at par at theendof 1093days from thedateofallotment
40.00 - -
250 (payable annually)9.57% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of ` 25 Croresredeemable at par at theendof 1093days from thedateofallotment
25.00 - -
350 (payable annually)9.75% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of ` 35 Croresredeemable at par at theendof 3652days from thedateofallotment
35.00 - -
Piramal Enterprises Limited Annual Report 2016-17300
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores)Particulars Nature of Security Terms of
Repayment Principal
Outstanding as at March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015 1500(payableannually)9.45% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
Option I - ` 50 Croresredeemableatparattheendof 1092days from thedateofallotmentandOption II -` 100Croresredeemableatparattheendof1107daysfromthedateofallotment
150.00 - -
100 (payable annually)9.57% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
Theamountof` 10Croresredeemable at par at theendof 1826days from thedateofallotment
10.00 - -
50 (payable annually)9.75% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of ` 5 Croresredeemable at par at theendof 3650days from thedateofallotment
5.00 - -
3000(payableannually)9.45% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
Series 1 - The amount of ` 150Croresredeemableatparattheendof1050daysfrom thedateof allotment.Series II -The amount of ` 150Croresredeemableatthe end of 1090 days fromthedateofallotment
300.00 - -
2000(payableannually)9.38% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
Theamountof` 200Croresredeemable at par at theendof 1095days from thedateofallotment
200.00 - -
150 (payable annually)9.38% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredbyaFirstPariPassumortgageoverspecificallyMortgagedPremisesandafirstpari passuhypothecationoverportionsofspecificidentifiedReceivablesassetoutintheDebentureTrustDeedandtheDeedofHypothecation.
The amount of `15 Croresredeemable at par at theendof 1109days from thedateofallotment
15.00 - -
1000(payableannually)9.25% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredthroughaFirstPariPassuchargeby hypothecation over specific identifiedReceivables and a first ranking pari passumortgage over specifically mortgagedpremisesorsuchotherpropertyasmaybeidentifiedbythecompanyassetoutintheDebentureTrustdeed
Theamountof` 100Croresredeemable at par at theend of 728 days from thedateofallotment
100.00 - -
1000(payableannually)9.264% Secured RatedListed Redeemable Non Convertible Debenturesof` 1,000,000each
SecuredthroughaFirstPariPassuchargeby hypothecation over specific identifiedReceivables and a first ranking pari passumortgage over specifically mortgagedpremises or such other property as maybe identified by the company as set outin theDebenture Trust deed andDeed ofHypothecation
Theamountof` 100Croresredeemable at par at theend of 970 days from thedateofallotment
100.00 - -
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores)Particulars Nature of Security Terms of
Repayment Principal
Outstanding as at March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015 100 (payable annually)9.267% Secured RatedListed Redeemable Non Convertible Debenturesof`1,000,000each
SecuredthroughaFirstPariPassuchargeby hypothecation over specific identifiedReceivables and a first ranking pari passumortgage over specifically mortgagedpremises or such other property as maybe identified by the company as set outin theDebenture Trust deed andDeed ofHypothecation
The amount of ` 10 Croresredeemable at par at theend of 963 days from thedateofallotment
10.00 - -
200 (payable annually)9.267% SecuredRatedListed Redeemable Non Convertible Debenturesof`1,000,000each
SecuredthroughaFirstPariPassuchargeby hypothecation over specific identifiedReceivables and a first ranking pari passumortgage over specifically mortgagedpremises or such other property as maybe identified by the company as set outin theDebenture Trust deed andDeed ofHypothecation
The amount of `20 Croresredeemable at par at theend of 962 days from thedateofallotment
20.00 - -
500 (payable annually)8.95 % Secured RatedListed Redeemable Non Convertible Debenturesof`1,000,000each
SecuredthroughaFirstPariPassuchargeby hypothecation over specific identifiedReceivables and a first ranking pari passumortgage over specifically mortgagedpremises or such other property as maybe identified by the company as set outin theDebenture Trust deed andDeed ofHypothecation
The amount of `50 Croresredeemable at par at theend of 646 days from thedateofallotment
50.00 - -
10,000Secured ,Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 1093 daysfrom thedateof allotment.;withputoption
1,000.00 - -
250 Secured , Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 1093 daysfromthedateofallotment.
25.00 - -
3,000 Secured Rated,Unlisted, RedeemableNon ConvertibleDebentures (NCD’s)each having face valueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 1001 daysfromthedateofallotment.
300.00 - -
3,500 Secured , Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 728 daysfromthedateofallotment.
350.00 - -
50 Secured Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 2555 daysfromthedateofallotment.
5.00 - -
2,000 Secured Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 1152 daysfromthedateofallotment
200.00 - -
Piramal Enterprises Limited Annual Report 2016-17302
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores)Particulars Nature of Security Terms of
Repayment Principal
Outstanding as at March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015 1,500 Secured Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalue of ` 1,000,000 ;with50%partlypaidandissued
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 1093 daysfromthedateofallotment;withaputoption
750.00 - -
3,000 Secured Rated,Listed,RedeemableNonConvertible Debentures(NCD’s)eachhavingfacevalueof`1,000,000
First pari-passu charge by hypothecationoverthemovableassetsandafirstrankingpari passu mortgage over SpecificallyMortgagedProperty
Repayable after 549 daysfromthedateofallotment
300.00 - -
Theeffectivecostsfortheaboveloansareintherangeof7.75%to9.57%perannum(Previousyear9.25-9.40%) Creationofchargesinrespectofcertaindebenturesareinprocess. ReferNote44forassetshypothecated/mortgagedassecuritiesagainsttheSecuredBorrowings
E. Term loans from financial institutions(`inCrores)
Nature of Security Terms of repayment Principal Outstanding as at
March 31, 2017
Principal Outstanding as at
March 31, 2016
Principal Outstanding as at
April 1, 2015Firstparipassuchargeonmotorcarsofasubsidiary. Repayable in 48 equal monthly
instalments commencing from October10, 2014. Interest to be paid@ 10.23%p.a.
0.12 0.21 0.27
Terms of repayment & rate of interest in case of Unsecured Loans:A. Unsecured Term Loans
(` inCrores)Particulars Payment Terms As at
March 31, 2017As at
March 31, 2016As at
April 1, 2015Long term Unsecured loans frombanks
Repaymentfromthedateofdisbursementrepaymentattheendof15thmonthfor` 75Crores,attheendof16thmonthfor` 75Croresandattheendof17thmonthfor` 100Crores
- 250.00 -
RepaymentonSeptember4,2017foranamountof` 100Crores 100.00 100.00 - RepaymentonApril10,2017foranamountof` 200Crores - 200.00 - Repayablein6semiannualinstalmentsfromdateofdrawdown 43.45 132.65 208.39Repayablein7semiannualinstalmentsfromdateofdrawdown 20.34 71.58 115.45 Repayablein6semiannualinstalmentsfromdateofdrawdown## 118.74 193.98 201.37RepaymentonOctober11,2017 1040.87 - - RepaymentonFebruary26,2018 291.83 - - Repayablein8halfyearlyinstalmentsfromdateofdrawdown - 1,093.27 1,343.86Repayablein6monthlyequalinstalmentsfromdateofdrawdown - - 41.71
Long term Unsecured foreigncurrency Non Repatriable loansfrombanks
RepaymentonJune30,2017foranamountof` 250Crores 249.47 249.47 - RepaymentonAugust21,2017foranamountof` 150Crores - 149.46 -
Theeffectivecostsfortheaboveloansareintherangeof3.48%[GBPLIBOR+2.63%]to10%perannum(PreviousYear3.45%[GBPLIBOR+2.63%]to10%perannum) ##Subsequenttotheyearend,thisloanhasbeenrepaidvoluntarilyaheadofthescheduledrepaymentdates.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Unsecured DebenturesParticulars Terms of Repayment As at
March 31, 2017As at
March 31, 2016As at
April 1, 20153,500 9.66% (payable annually) UnsecuredRedeemable Non Convertible Debentures of ` 1,000,000each
Redeemable at par at the end of 5th year from theallotment date. The same has been redeemed on February8,2016
- - 350.00
5,000 9.43% Unsecured Redeemable NonConvertibleDebenturesof` 1,000,000each*
SeriesA-` 350Croresredeemableatparattheendof731daysfromthedateofallotmentandSeriesB-` 100Croresredeemableatparattheendof1095daysfromthedateofallotment,SeriesC-` 50Croresredeemableatparattheendof1095daysfromthedateofallotment
150.00 500.00 500.00
4,000 9.15% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
SeriesA-`150Croresredeemableatparattheendof711daysfromthedateofallotmentandSeriesB-` 150Croresredeemableatparattheendof746daysfromthedateofallotmentandSeriesC-` 100Croresredeemableatparattheendof767daysfromthedateofallotment
400.00 400.00 -
1,000 9.25% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
SeriesD-` 100Croresredeemableatparattheendof1096daysfromthedateofallotment
100.00 100.00 -
2,350 9.13% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
SeriesA-`235Croresredeemableatparattheendof731daysfromthedateofallotment
235.00 235.00 -
3,850 9.22% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
SeriesB-`100Croresredeemableatparattheendof1092daysfromthedateofallotmentandSeriesC-`285Croresredeemableatparattheendof1096daysfromthedateofallotment
385.00 385.00 -
1,550 9.18% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
Series I -`75Crores redeemableatparat theendof532days fromthedateofallotmentandSeries II -`15Croresredeemableatparattheendof644daysfromthedateofallotmentandSeriesIII-`65Croresredeemableatparattheendof731daysfromthedateofallotment
80.00 155.00 -
2,500 9.27% (payable annually) UnsecuredRedeemable Non Convertible Debentures of ` 1,000,000each
SeriesI-`250Croresredeemableatparattheendof581daysfromthedateofallotment
- 250.00 -
2,450 9.27% (payable annually) UnsecuredRedeemable Non Convertible Debentures of`1,000,000each
SeriesIV-`21Croresredeemableatparattheendof974daysfromthedateofallotmentandSeriesV-`224Croresredeemableatparattheendof1112daysfromthedateofallotment
245.00 245.00 -
2,000 9.35% (payable annually) UnsecuredRedeemable Non Convertible Debentures ` 1,000,000each
SeriesII-`200Croresredeemableatparattheendof731daysfromthedateofallotment
200.00 200.00 -
2,000 9.40% (payable annually) UnsecuredRedeemable Non Convertible Debentures`1,000,000each
SeriesIII-`200Croresredeemableatparattheendof1092daysfromthedateofallotment
200.00 200.00 -
7,000 9.40% (payable monthly) UnsecuredRedeemable Non Convertible Debentures`1,000,000each
OptionI-`400Croresredeemableatparattheendof1103daysfromthedateofallotmentandOptionII-`300Croresredeemableatparattheendof 1132daysfromthedateofallotment
- 700.00 -
1,000 9.33% (payable annually) UnsecuredRedeemable Non Convertible Debentures`1,000,000each
Theamountof`100Croresredeemableatparattheendof517daysfromthedateofallotment
100.00 100.00 -
5,000 Unsecured, Subordinated, Tier II,Rated, Listed, Redeemable Non ConvertibleDebentures (NCDs) each having face value of `1,000,000
The NCDs are repayable after 10 years from the date ofallotment
500.00 - -
500 Unsecured, Unlisted, Redeemable NonConvertible Debentures (NCDs) each havingfacevalueof`1,000,000
TheNCDsarerepayableon12March2016. - - 50.00
Theeffectivecostsfortheaboveloansareintherangeof9.13%to10.65%perannum *InterestonSeriesA&Bispayableannually.InterestonSeriesCispayableatmaturity
Piramal Enterprises Limited Annual Report 2016-17304
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
19. OTHER FINANCIAL LIABILITIES - NON-CURRENT
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores DerivativeFinancialLiabilities - 4.03 - LeaseEqualisationLiability 5.79 7.15 0.25Employeerelatedliabilities - - 0.64Contingentconsideration 141.79 35.98 - Deposits Received 2.90 - 1.64
TOTAL 150.48 47.16 2.53
20. NON-CURRENT PROVISIONS
Provisionforemployeebenefits(ReferNote42) 34.95 23.11 19.92Provisionforgrants-committed* 4.91 15.58 24.29ProvisionforOnerouscontracts* 4.25 10.08 1.06Provisionforincentive* 29.48 22.60 - Others - - 3.73
TOTAL 73.59 71.37 49.00*ReferNote51formovementsduringtheyear
21. DEFERRED TAX LIABILITIES (NET)
(a) Deferred Tax Liabilities on account of temporary differences -FairValuationofInvestment 15.43 8.21 7.28-UnamortisedDistributionExpenses 6.70 9.54 12.83-Shareofundistributedearningsofassociates 11.60 10.75 6.70-Others 0.85 6.18 9.62
34.58 34.68 36.43 (b) Deferred Tax Asset on account of temporary differences
-Unusedtaxcredits/losses - - (0.39)-Property,PlantandEquipmentandIntangibleassets (0.97) (0.65) (0.31)-Expensesthatareallowedonpaymentbasis (1.68) (3.77) (1.92)-Others (1.18) - -
(3.83) (4.42) (2.62) TOTAL 30.75 30.26 33.81
22. OTHER NON-CURRENT LIABILITIES
DeferredGovernmentgrantrelatedtoassets 4.06 5.03 3.50Othergrantsrelatedtoassets 28.30 22.98 - DeferredRevenue 2.87 0.29 0.92
TOTAL 35.23 28.30 4.42
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
23. CURRENT BORROWINGS
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores Secured - at amortised cost
Loansfrombanks-WorkingcapitalDemandLoan 35.05 134.60 121.61 -Overdraftwithbanks 175.70 131.93 89.92-CollaterizedDebtObligations(ReferNote10) 20.59 66.30 -
231.34 332.83 211.53 Unsecured - at amortised cost
LoansfrombanksRupee Loans
- Repayable on demand 1,147.06 526.38 537.01-Others 1.01 13.42 8.38
ForeignCurrencyNonrepatriableLoans 146.29 - - Others 1,039.12 - -
CommercialPapers 9,514.66 5,951.30 2,039.62Loansfromrelatedparties(ReferNote43) - 5.00 -
11,848.14 6,496.10 2,585.01 TOTAL 12,079.48 6,828.93 2,796.54
Note:
Description of loan Terms of repayment Rate of Interest Secured Loans: WorkingcapitalDemandLoan At Call 10.45%paOverdraftwithbanks At Call 4.25%to13%paCollaterizedDebtObligations Attheendofcreditperiod(maximum60daysfromthedateofsale) 0.80%to1.50%paUnsecured Loans: CommercialPapers Repayablewithin365daysfromdateofdisbursement 7.45%to9.25%paLoansfromrelatedparties At Call 8.76%paRupee Loans At Call 8.10%to9.00%paForeignCurrencyLoans Repayablewithin365daysfromdateofdisbursement 9.40%to9.80%paOthers(LoansfromBanks) Repayablewithin365daysfromdateofdisbursement 2.13%to4.41%paOthers(PCFC) At Call 0.80%to1.50%pa
ReferNote44forassetshypothecated/mortgagedassecuritiesagainsttheSecuredBorrowings
Piramal Enterprises Limited Annual Report 2016-17306
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
24. OTHER FINANCIAL LIABILITIES - CURRENT
As at March 31, 2017
` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores Currentmaturitiesoflong-termdebt(ReferNote18) 3,875.81 1,975.86 702.53DeferredConsideration(ReferNote40) 998.72 73.55 - UnpaidDividend(ReferNotebelow) 15.94 19.46 13.05LeaseEqualisation 1.46 0.82 - Employeerelatedliabilities 142.84 161.36 87.25CapitalCreditors 42.74 8.49 5.91Retentionmoney - 1.50 - SecurityDepositsReceived 1.44 4.21 1.25 DerivativeFinancialLiabilities 30.73 - - Otherpayables 2.93 1.97 5.32
TOTAL 5,112.61 2,247.22 815.31
TherearenoamountsdueandoutstandingtobecreditedtoInvestorEducationandProtectionFundasattheyearend.
25. OTHER CURRENT LIABILITIES
AdvanceFromCustomers 124.78 47.43 45.42 Incomereceivedinadvance - 1.65 - DeferredRevenue 273.92 366.73 300.18DeferredGovernmentgrantrelatedtoassets 0.20 - - Deferredrent 6.95 4.80 - StatutoryDues 44.66 38.31 52.64
TOTAL 450.51 458.92 398.24
26. CURRENT PROVISIONS
Provisionforemployeebenefits(ReferNote42) 85.32 44.76 18.44ProvisionforExpectedCreditLossonLoanCommitments(ReferNote50(f)) 6.36 39.93 25.34 ProvisionforWealthTax 0.21 0.21 0.21ProvisionforOnerouscontracts* 5.11 7.11 35.49Provisionforgrants-committed* 12.97 13.25 - ProvisionforLitigations&Disputes* 3.50 13.39 26.42
TOTAL 113.47 118.65 105.90*ReferNote51formovementsduringtheyear
27. CURRENT TAX LIABILITIES (NET)
Provision for Income Tax [Net of Advance Tax of ` 404.44 Crores as on March31,2017,`162.12CroresasonMarch31,2016and` 442.25CroresasonApril1,2015]
37.48 23.87 15.91
TOTAL 37.48 23.87 15.91
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
28 CONTINGENT LIABILITIES AND COMMITMENTS As at
March 31, 2017 ` in Crores
As at March 31, 2016
` in Crores
As at April 1, 2015
` in Crores A Contingent liabilities 1 ClaimsagainsttheCompanynotacknowledgedasdebts:
-DemanddatedJune5,1984theGovernmenthasaskedforpaymenttothecreditoftheDrugsPricesEqualisationAccount,thedifferencebetweenthecommonsalepriceandtheretentionpriceonproductionofVitamin‘A’Palmitate(OilyForm)fromJanuary28,1981toMarch31,1985notacceptedbytheCompany.TheCompanyhas been legally advised that the demand is untenable.
0.61 0.61 0.61
2 Guaranteesissued(OtherthanFinancialGuarantees) 7.69 9.06 5.54 3 LetterofComfortissuedbyasubsidiary 14.00 - - 4 Others
i. Appealsfiledinrespectofdisputeddemands: IncomeTax -wheretheCompanyisinappeal 683.86 732.45 744.39 -wheretheDepartmentisinappeal 142.23 144.25 144.25 SalesTax 17.66 14.43 15.41 Central/StateExcise 22.08 10.36 18.29 LabourMatters 0.16 0.39 0.42 Stamp Duty 4.05 4.05 4.05 Legal Cases 8.50 8.50 8.50ii. UnexpiredLettersofCredit 8.07 12.61 10.58
5 DividendpayableonCompulsorilyConvertiblePreferenceSharesandtaxthereon 9.76 - - Note:Futurecashoutflowsinrespectof1and4(i)abovearedeterminableonlyonreceiptofjudgments/decisionspendingwithvariousforums/authorities.
B Commitments a. Estimatedamountofcontractsremainingtobeexecutedoncapitalaccount
andnotprovidedfor 210.10 57.85 63.08
b. OtherCommitments CommitmenttoInvestinNonConvertibleDebentures 106.45 1,257.45 798.94 Loan Commitments 230.40 115.50 110.00 CommitmenttoinvestinInterCompanyDeposits - 439.95 60.00 CommitmenttoinvestinOptionallyConvertibleDebentures - - 100.00 CommitmenttoinvestinAlternativeInvestmentFunds 75.00 85.00 - TheCompanyhasimportedrawmaterialsatconcessionalrates,underthe
Advance License Schemeof theGovernment of India, to fulfil conditionsrelatedtoquantifiedexportsinstipulatedperiod
9.38 15.44 21.64
Piramal Enterprises Limited Annual Report 2016-17308
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
29. REVENUE FROM OPERATIONS Year ended
March 31, 2017 ` in Crores
Year ended March 31, 2016
` in Crores Saleofproducts(includingexciseduty) 3,473.84 3,062.28SaleofServices 1,813.85 1,643.27Incomeoffinancingactivities:Interestincomeoninstrumentsmeasuredatamortisedcost 2,929.41 1,498.91IncomeoninstrumentsmandatorilymeasuredatFVTPL 208.65 86.32DividendincomeoninstrumentsdesignatedatFVTOCI(referNotebelow) 32.47 32.80Others 22.91 33.22
8,481.13 6,356.80OtheroperatingrevenuesProcessingChargesReceived 2.88 2.89Miscellaneous Income 62.74 21.79
65.62 24.68 TOTAL 8,546.75 6,381.48
AlldividendsfromequityinvestmentsdesignatedasatFVTOCIrecognisedforboththeyearsrelatetoinvestmentsheldattheendofeachreportingperiod.Therewasnodividendincomerelatingtoinvestmentsderecognizedduringthereportingperiod.
30. OTHER INCOME (NET)
InterestIncomeonFinancialAssets-OnLoansandBankDeposits(atamortisedcosts) 99.80 104.49
Dividend Income-OncurrentinvestmentsatFVTPL 18.12 7.31
GainonsaleofinvestmentsmeasuredatFVTPL 24.23 1.94
OtherGains&Losses:-ExchangeGain(Net) 45.46 102.39 Rent Received 1.79 1.54 Miscellaneous income 44.35 33.99
TOTAL 233.75 251.66
31. COST OF MATERIALS CONSUMED
OpeningInventory 254.82 248.53Add:Inventoryacquiredonbusinesscombination(Refernote40) 17.06 - Add:Purchases 1,093.67 1,267.77Less:ClosingInventory 243.53 254.82
TOTAL 1,122.02 1,261.48
32. PURCHASES OF STOCK-IN-TRADE
TradedGoods 268.64 109.13TOTAL 268.64 109.13
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33. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE
Year Ended March 31, 2017
` in Crores
Year Ended March 31, 2016
` in CroresOpening Stocks :
Work-in-Progress 256.54 221.02FinishedGoods 148.19 129.48Stock-in-trade 18.79 6.35 Less:ExciseDuty 3.34 1.34
420.18 355.51 Add: Inventory Acquired on Business Combination (Refer Note 40)
Work-in-Progress 19.15 - FinishedGoods 2.01 - Less:ExciseDuty - -
21.16 -Closing Stocks :
Work-in-Progress 270.53 256.54 FinishedGoods 115.40 148.19Stock-in-trade 48.08 18.79Less:ExciseDuty 3.11 3.34
430.90 420.18TOTAL 10.44 (64.67)
34. EMPLOYEE BENEFITS EXPENSE
SalariesandWages 1,604.59 1,517.97ContributiontoProvidentandOtherFunds 81.54 68.76GratuityExpense 3.61 2.76StaffWelfare 104.13 93.56
TOTAL 1,793.87 1,683.05
35. FINANCE COSTS
FinanceChargeonfinancialliabilitiesmeasuredatamortisedcost 2,000.62 953.69InterestonIncomeTax - 0.02Otherborrowingcosts 30.36 5.36
TOTAL 2,030.98 959.07
Duringtheyear,theCompanyhascapitalizedborrowingcostsof` 14.26Crores(Previousyear` NIL)relatingtoprojects,includedinCapitalWorkinProgress.ThecapitalisationrateusedtodeterminetheamountofborrowingcoststobecapitalisedistheweightedaverageinterestrateapplicabletotheCompany’sgeneralborrowingsduringtheyear,inthiscase9.00%(PreviousyearNIL).
Piramal Enterprises Limited Annual Report 2016-17310
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
36. OTHER EXPENSES Year ended
March 31, 2017 ` in Crores
Year ended March 31, 2016
` in Crores ProcessingCharges 35.76 8.87ConsumptionofStoresandSparesParts 86.74 77.39ConsumptionofLaboratorymaterials 27.03 28.36Power,FuelandWaterCharges 101.03 98.73RepairsandMaintenance
Buildings 30.54 28.52PlantandMachinery 64.34 61.90Others 25.58 17.18
120.46 107.60Rent
Premises 85.66 79.16Leasehold Land 0.13 0.07OtherAssets 20.27 21.06
106.06 100.29Rates&Taxes(includesexciseduty) 77.42 62.25 Insurance 27.87 27.20TravellingExpenses 107.46 93.60Directors’Commission 1.84 1.80Directors’SittingFees 0.92 0.87CapitalWorkinProgresswrittenoff - 4.72ExpectedCreditLossonTradeReceivables(ReferNoteno10) 7.87 8.65ExpectedCreditLossonFinancialAssets(includingCommitments)(ReferNoteno50(f)) 154.98 167.74LossonSaleofNonCurrentInvestments(Net) - 0.48Advanceswrittenoff 0.01 0.21Property,Plant&EquipmentsWrittenOff - 6.21 LossonSaleofPropertyPlant&Equipments(Net) 7.16 2.29AdvertisementandBusinessPromotionExpenses 179.62 149.30Donations 2.43 15.34 ExpendituretowardsCorporateSocialResponsibilityactivities 39.47 25.86ContributiontoElectoralTrust 24.60 - Freight 47.74 39.08Exportexpenses 3.70 3.85ClearingandForwardingExpenses 35.11 13.54 CommunicationandPostage 33.95 30.91PrintingandStationery 15.84 15.37Claims 3.79 3.87LegalCharges 14.71 11.72ProfessionalCharges 170.47 170.75RoyaltyExpense 31.19 34.82ServiceCharges 1.92 0.58InformationTechnologyCosts 68.73 51.08Marketresearch 104.67 113.14 R&DExpenses(Net) 100.75 144.62 Commissiononfundraising 14.47 15.01MiscellaneousExpenses 53.77 39.18
TOTAL 1,809.54 1,675.28
Note
DetailsinrespectofCorporateSocialResponsibilityExpenditure:Grossamountrequiredtobespentduringtheyear–` 10.81croresAmountspentduringtheyearonRevenueExpenditure–` 39.47croresAmountspentduringtheyearonCapitalExpenditure-` Nil
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37. EXCEPTIONAL ITEMS INCOME /(EXPENSES) (NET) Year ended
March 31, 2017 ` in Crores
Year ended March 31, 2016
` in Crores Gainonsaleofproperties(Refernote37(a)) - 70.23IncomeassociatedwithR&Dscaledown(Refernote47(a)) - 2.56 LossonSaleofPiramalClinicalResearchBusiness(Refernote37(b)) - (2.60)Lossonimpairmentofassets(Refernote37(c)) - (15.09)Onerouscontractexpenses(net)(Refernote37(d)) - (0.16)EmployeeSeverancecosts(Refernote37(e)) (9.95) (9.28)
TOTAL (9.95) 45.66
a) Duringthepreviousyear,theCompanyhadsoldcertainpropertieshavingawrittendownvalueof` 11.07croresfor`81.30croresresultinginagainof` 70.23crores.
b) Duringthepreviousyear,theCompanysolditsclinicalresearchbusinessknownasPCRbusiness.PropertyPlant&Equipmentsofthisdivisionalongwiththeemployeesweretransferredonaslumpsalebasisasapartofthetransactionforaconsiderationof`4.64crores,resultinginalossof`
2.60crores.
c) Losson impairmentof assets comprises impairmentof certain tangible assets andAltaselect brand inPiramalCritical Care Italia S.P.A in thepreviousyear.
d) Duringthepreviousyear,PiramalHealthcareCanadaLimitedsolditsbrandBSTCargeltoSmith&NephewOrthopaedicsAGforaconsiderationofUSD5Million(equivalent`33.13crores).Theresultantlossof`0.16Croreshasbeendisclosedunderexceptionalexpensesabove.
e) EmployeeSeverancecostsconsistsofamountspaidtoemployeesasapartofmanagementseparationprogramme.
38. OTHER COMPREHENSIVE INCOME/(EXPENSE)
OtherComprehensiveIncome/(Expense)relatedto:FairValuationofEquityinvestments 846.35 (692.64)Remeasurementofpost-employmentbenefitobligations (1.54) (8.15)Shareofothercomprehensiveincomeofassociatesaccountedforusingtheequitymethod (0.08) - Deferredgains/(losses)oncashflowhedges 3.07 - Exchangedifferencesontranslationofforeignoperations (165.91) 97.78
TOTAL 681.89 (603.01)
Piramal Enterprises Limited Annual Report 2016-17312
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
39 INTERESTS IN OTHER ENTITIES (a) Subsidiaries TheGroup'ssubsidiariesatMarch31,2017aresetoutbelow. Unlessotherwisestated,theyhavesharecapitalconsistingsolelyofequitysharesthatarehelddirectlybythegroup,andtheproportionof
ownershipinterestsheldequalsthevotingrightsheldbythegroup. Thecountryofincorporationorregistrationisalsotheirprincipalplaceofbusiness.
Sr. No.
Name of the Company Principal place of business / Country of
incorporation
Ownership interest held by
the group
Ownership interest held by non-controlling
interests
Principal Activity
% voting power held as at
March 31, 2017
% voting power held as at
March 31, 2017 1 PHLFininvestPrivateLimited India 100% - FinancialServices 2 SearchlightHealthPrivateLimited (w.e.f.December23,
2016) (formerly known as Health Superhiway PrivateLimited)
India 51% 49% InformationManagement
3 PiramalInternational Mauritius 100% - Holding Company 4 PiramalHoldings(Suisse)SA Switzerland 100% - Holding Company 5 PiramalImagingSA* Switzerland 98.34% 1.66% Pharmaceuticalmanufacturingandservices 6 PiramalImagingGmbH* Germany 100% - Pharmaceuticalmanufacturingandservices7 PiramalImagingLimited* U.K. 100% - Pharmaceuticalmanufacturingandservices8 PiramalCriticalCareItalia,S.P.A** Italy 100% - Pharmaceuticalmanufacturingandservices9 PiramalCriticalCareDeutschlandGmbH** Germany 100% - Pharmaceuticalmanufacturingandservices10 PiramalCriticalCareLimited** U.K. 100% - Pharmaceuticalmanufacturingandservices 11 PiramalHealthcare(Canada)Limited** Canada 100% - Pharmaceuticalmanufacturingandservices 12 PiramalHealthcareUKLimited** U.K. 100% - Pharmaceuticalmanufacturingandservices 13 PiramalHealthcarePensionTrusteesLimited** U.K. 100% - Pharmaceuticalmanufacturingandservices 14 Piramal Critical Care South Africa (Pty) Ltd ** (w.e.f.
November16,2016)SouthAfrica 100% - Pharmaceuticalmanufacturingandservices
15 PiramalDutchHoldingsN.V. Netherlands 100% - Holding Company 16 PiramalHealthcareInc.** U.S.A 100% - Holding Company17 PiramalCriticalCare,Inc.** U.S.A 100% - Pharmaceuticalmanufacturingandservices18 PiramalPharmaInc.** U.S.A 100% - Pharmaceutical manufacturing
andservices19 Piramal Pharma Solutions Inc. (formerly known as
ColdstreamLaboratoriesInc.)**U.S.A 100% - Pharmaceuticalmanufacturingandservices
20 PELPharmaInc.**(w.e.f.July26,2016) U.S.A 100% - Pharmaceuticalmanufacturingandservices 21 AshStevensLLC**(w.e.f.August31,2016) U.S.A 100% - Pharmaceuticalmanufacturingandservices 22 DRGHoldcoInc.$ U.S.A 100% - Holding Company 23 PiramalIPPHoldingsLLC$ U.S.A 100% - Holding Company 24 DecisionResourcesInc.$ U.S.A 100% - InformationManagement 25 DecisionResourcesInternational,Inc.$ U.S.A 100% - InformationManagement 26 DR/DecisionResources,LLC$ U.S.A 100% - InformationManagement27 DR/MRGHoldings,LLC# U.S.A 100% - InformationManagement28 MillenniumResearchGroupInc.$ Canada 100% - InformationManagement29 DecisionResourcesGroupAsiaLtd$ HongKong 100% - InformationManagement30 DRGUKHoldcoLimited$ U.K. 100% - Holding Company 31 DecisionResourcesGroupUKLimited$ U.K. 100% - Holding Company 32 SigmaticLimited$ U.K. 100% - InformationManagement 33 ActivateNetworksInc.$ U.S.A 100% - InformationManagement 34 DRGAnalytics&InsightsPrivateLimited$ India 100% - InformationManagement 35 DRGSingaporePteLtd$(w.e.f.July21,2016) Singapore 100% - InformationManagement 36 PiramalDutchIMHoldcoB.V. Netherlands 100% - InformationManagement37 PEL-DRGDutchHoldcoB.V.$ Netherlands 100% - InformationManagement38 PiramalFundManagementPrivateLimited India 100% - FinancialServices
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Sr. No.
Name of the Company Principal place of business / Country of
incorporation
Ownership interest held by
the group
Ownership interest held by non-controlling
interests
Principal Activity
% voting power held as at
March 31, 2017
% voting power held as at
March 31, 201739 Piramal Finance Limited (formerly known as
PiramalFinancePrivateLimited)India 100% - FinancialServices
40 Piramal Housing Finance Private Limited ## (w.e.fFebruary10,2017)
India 100% - FinancialServices
41 PiramalInvestmentAdvisoryServicesPrivateLimited India 100% - FinancialServices 42 PiramalInvestmentOpportunitiesFund India 100% - FinancialServices 43 INDIAREITInvestmentManagementCo.$$ Mauritius 100% - FinancialServices 44 PiramalAssetManagementPrivateLimited$$ Singapore 100% - FinancialServices 45 PiramalSystems&TechnologiesPrivateLimited India 100% - Holding Company 46 PiramalTechnologiesSA@ Switzerland 100% - Holding Company47 PELFinholdPrivateLimited India 100% - Holding Company48 PELAssetResurgenceAdvisoryPrivateLimited India 100% - FinancialServices49 PiramalConsumerProductsPrivateLimited India 100% - Holding Company50 PiramalCapitalLimited(w.e.f.July26,2016) India 100% - Holding Company 51 PiramalAssetReconstructionPrivateLimited India 100% - FinancialServices 52 HealthcareBusinessInsightsLLC@@ U.S.A 100% - InformationManagement 53 Cost&QualityAcademy,LLC@@ U.S.A 100% - InformationManagement 54 InformationTechnologyAcademy,LLC@@ U.S.A 100% - InformationManagement 55 Labor&ProductivityAcademy,LLC@@ U.S.A 100% - InformationManagement 56 SupplyChainAcademy,LLC@@ U.S.A 100% - InformationManagement57 SolutionProviderAcademy,LLC@@ U.S.A 100% - InformationManagement58 RevenueCycleAcademy,LLC@@ U.S.A 100% - InformationManagement59 RevenueCycle360,LLC@@ U.S.A 100% - InformationManagement
*heldthroughPiramalHoldings(Suisse)SA**heldthroughPiramalDutchHoldingsN.V.@heldthroughPiramalSystems&TechnologiesPrivateLimited $heldthroughPiramalDutchIMHoldcoB.V. $$heldthroughPiramalFundManagementPrivateLimited #mergedintoDR/DecisionResources,LLCw.e.f.January17,2017 @@mergedintoDecisionResourcesIncw.e.f.October3,2016 ##heldthroughPiramalFinanceLimited
CSR(CorporateSocialResponsibilities)subsidiaries: PiramalUdgamDataManagementSolutions(Udgam)### PiramalFoundationforEducationalLeadership(PFEL)### PiramalSwasthyaManagementandResearchInstitute(formerlyknownas“HealthManagementandResearchInstitute”)(PSMRI) PiramalHealthcareFoundation###TheseCSRcompanies(###)incorporatedundersection25oftheCompaniesAct,1956(Section8oftheCompaniesAct,2013),beinglimitedbyguarantee(nothavingsharecapital)andPSMRI(beingasociety)areengagedinCorporateSocialResponsibilityactivities.Basedonthecontrolassessmentcarriedoutbythecompany,thesameisnotconsolidatedasperIndAS110.
Piramal Enterprises Limited Annual Report 2016-17314
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
TheGroup’ssubsidiariesatMarch31,2016andApril1,2015aresetoutbelow.
Sr. No.
Name of the Company Principal place of business / Country
of incorporation
Ownership interest held by the group
Ownership interest held by non-controlling interests
Principal Activity
% voting power held as at
March 31, 2016
% voting power held as at
April 1, 2015
% voting power held as at
March 31, 2016
% voting power held as at
April 1, 2015 1 PHLFininvestPrivateLimited India 100% 100% - - FinancialServices 2 PiramalInternational Mauritius 100% 100% - - Holding Company 3 PiramalHoldings(Suisse)SA Switzerland 100% 100% - - Holding Company 4 PiramalImagingSA* Switzerland 98.34% 98.34% 1.66% 1.66% Pharmaceutical manufacturing
andservices 5 PiramalImagingGmbH* Germany 100% 100% - - Pharmaceutical manufacturing
andservices 6 PiramalImagingLimited* U.K. 100% 100% - - Pharmaceutical manufacturing
andservices7 PiramalCriticalCareItalia,S.P.A* Italy 100% 100% - - Pharmaceutical manufacturing
andservices8 PiramalCriticalCareDeutschland
GmbH##Germany 100% 100% - - Pharmaceutical manufacturing
andservices9 Piramal Critical Care Limited
(formerly known as Piramal LifeSciences(UK)Limited)###
U.K. 100% 100% - - Pharmaceutical manufacturingandservices
10 Piramal Healthcare (Canada)Limited ##
Canada 100% 100% - - Pharmaceutical manufacturingandservices
11 PiramalHealthcare (UK) Limited##
U.K. 100% 100% - - Pharmaceutical manufacturingandservices
12 Piramal Healthcare PensionTrusteesLimited##
U.K. 100% 100% - - Pharmaceutical manufacturingandservices
13 PiramalDutchHoldingsN.V. Netherlands 100% 100% - - Holding Company 14 PiramalHealthcareInc.** U.S.A 100% 100% - - Holding Company 15 PiramalCriticalCare,Inc.** U.S.A 100% 100% - - Pharmaceutical manufacturing
andservices 16 PiramalPharmaInc.** U.S.A 100% 100% - - Pharmaceutical manufacturing
andservices17 ColdstreamLaboratoriesInc.** U.S.A 100% 100% - - Pharmaceutical manufacturing
andservices18 DRGHoldcoInc.**(w.e.fAugust
26,2015)U.S.A 100% - - - Holding Company
19 Piramal IPP Holdings LLC **(w.e.fNovember6,2015)
U.S.A 100% - - - Holding Company
20 DecisionResourcesInc.** U.S.A 100% 100% - - InformationManagement 21 DecisionResourcesInternational,
Inc.**U.S.A 100% 100% - - InformationManagement
22 DR/DecisionResources,LLC** U.S.A 100% 100% - - InformationManagement 23 DR/MRGHoldings,LLC** U.S.A 100% 100% - - InformationManagement 24 MillenniumResearchGroup Inc.
**Canada 100% 100% - - InformationManagement
25 Decision Resources Group AsiaLtd**
HongKong 100% 100% - - InformationManagement
26 DRGUKHoldcoLimited** U.K. 100% 100% - - Holding Company27 Decision Resources Group UK
Limited**U.K. 100% 100% - - Holding Company
28 SigmaticLimited** U.K. 100% 100% - - InformationManagement29 ActivateNetworksInc.** U.S.A 100% 100% - - InformationManagement30 Healthcare Business Insights
LLC**(w.e.f.May14,2015)U.S.A 100% - - - InformationManagement
31 DRGAnalytics& InsightsPrivateLimited**(w.e.fMay11,2015)
India 100% - - - InformationManagement
32 Piramal Dutch IMHoldco B.V.**(w.e.f.March7,2016)
Netherlands 100% - - - InformationManagement
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Sr. No.
Name of the Company Principal place of business / Country
of incorporation
Ownership interest held by the group
Ownership interest held by non-controlling interests
Principal Activity
% voting power held as at
March 31, 2016
% voting power held as at
April 1, 2015
% voting power held as at
March 31, 2016
% voting power held as at
April 1, 2015 33 PEL-DRG Dutch Holdco B.V.**
(w.e.f.March7,2016)Netherlands 100% - - - InformationManagement
34 Piramal Fund ManagementPrivateLimited
India 100% 100% - - FinancialServices
35 PiramalFinancePrivateLimited India 100% 100% - - FinancialServices 36 Piramal Investment Advisory
ServicesPrivateLimitedIndia 100% 100% - - FinancialServices
37 INDIAREIT Investment ManagementCo.$$
Mauritius 100% 100% - - FinancialServices
38 Piramal Asset ManagementPrivateLimited$$
Singapore 100% 100% - - FinancialServices
39 Piramal Systems& TechnologiesPrivateLimited
India 100% 100% - - Holding Company
40 PiramalTechnologiesSA@ Switzerland 100% 100% - - Holding Company 41 Piramal Investment
OpportunitiesFundIndia 99.16% 99.71% 0.84% 0.29% FinancialServices
42 PELFinholdPrivateLimited India 100% 100% - - Holding Company 43 PEL Asset Resurgence Advisory
Private Limited (w.e.f. February22,2016)
India 100% - - - FinancialServices
44 Piramal Consumer ProductsPrivateLimited(w.e.f.March23,2016)
India 100% - - - Holding Company
45 Piramal Asset ReconstructionPrivate Limited (w.e.f. January29,2016)
India 100% - - - FinancialServices
46 Cost & Quality Academy, LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
47 Information TechnologyAcademy, LLC** (w.e.f. May 14,2015)
U.S.A 100% - - - InformationManagement
48 Labor & Productivity Academy,LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
49 Supply Chain Academy, LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
50 Solution Provider Academy,LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
51 Revenue Cycle Academy, LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
52 RevenueCycle360,LLC**(w.e.f.May14,2015)
U.S.A 100% - - - InformationManagement
*heldthroughPiramalHoldings(Suisse)SA ##heldthroughPiramalHoldings(Suisse)SAtillMarch22,2016;AfterMarch22,2016,heldthroughPiramalDutchHoldingsN.V. ###heldthroughPiramalHoldings(Suisse)SAtillDecember1,2015;AfterDecember1,2015,heldthroughPiramalDutchHoldingsN.V. **heldthroughPiramalDutchHoldingsN.V. $$heldthroughPiramalFundManagementPrivateLimited @heldthroughPiramalSystems&TechnologiesPrivateLimited
CSR(CorporateSocialResponsibilities)subsidiaries: PiramalUdgamDataManagementSolutions(Udgam)### PiramalFoundationforEducationalLeadership(PFEL)### PiramalSwasthyaManagementandResearchInstitute(formerlyknownas“HealthManagementandResearchInstitute”)(PSMRI) PiramalHealthcareFoundation###
Piramal Enterprises Limited Annual Report 2016-17316
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
TheseCSRcompanies(###)incorporatedundersection25oftheCompaniesAct,1956(Section8oftheCompaniesAct,2013),beinglimitedbyguarantee(nothavingsharecapital)andPSMRI(beingasociety)areengagedinCorporateSocialResponsibilityactivities.Basedonthecontrolassessmentcarriedoutbythecompany,thesameisnotconsolidatedasperIndAS110.
TheGroupundertookthefollowingcommoncontroltransactions.Thesetransactionshavenoimpactontheconsolidatedfinancialstatements.
March 2017 (a)PiramalHealthcareIncsolditsinvestmentinPiramalPharmaSolutionsInc.(erstwhileColdstreamLaboratoriesInc.)toPELPharmaInc.(b)PiramalHoldings(Suisse)SAsolditsinvestmentinPiramalCriticalCareItaliaS.P.AtoPiramalDutchHoldingsN.V.(c)DRGUKHoldcoLimitedsolditsinvestmentinDecisionResourcesGroupUKLimitedtoPEL-DRGDutchHoldcoB.V.(d)DR/MRGHoldings,LLCsolditsinvestmentinMilleniumResearchGroupInctoPEL-DRGDutchHoldcoB.V.(e)PiramalDutchHoldingsN.V.solditsinvestmentinPEL-DRGDutchHoldcoB.V.toPiramalDutchIMHoldcoB.V.
March 2016 (a)PiramalHealthcareInc.distributeddividendsbywayoftransferofits90%holdinginDRGHoldcoInctoPiramalDutchHoldingsN.V.(b)PiramalHoldings(Suisse)SAsolditsinvestmentsinPiramalHealthcareUKLimited,PiramalHealthcare(Canada)LimitedandPiramalCriticalCareDeutschlandGmbHtoPiramalDutchHoldingsN.V. (c)PiramalHealthcare(Canada)LimitedsolditsinvestmentinPiramalCriticalCareLimited[formerlyknownasPiramalLifeSciences(UK)Limited]toPiramalDutchHoldingsN.V.
(b) Interest in Joint Ventures / Joint operations
Principal place of business
Carrying Amount (` In Crores) % of ownership interest Sr. No. Name of the Company March 31 2017 March 31 2016 April 1 2015
1 ConvergenceChemicalsPrivateLimited(Jointventure) India 34.74 35.06 30.30 51% 2 Shrilekha Business Consultancy Private Limited (Joint venture)
(incorporated on January 9, 2017) (was partneship firm ShrilekhaFinancialServicesuptoJanuary8,2017)
India 2,557.42 - - 74.95%
3 ShrilekhaFinancialServices(includesshareofassetsinShriramCapitalLimited)(Jointoperation)
India - 2,419.73 2,302.81 74.95%
Theabove investments in jointventuresareaccounted forusingEquityMethod.Theseare unlisted investmentsandhencequotedpricesarenotavailable.
Significant judgement: classification of joint venture Convergence Chemicals Private Limited ConvergenceChemicalsPrivateLimitedisajointventuresetuptodevelop,manufactureandsellspecialityfluorochemicals.TheCompanyhasnotcommencedmanufacturingactivitiesasobtainingrequisiteregulatoryapprovalsandlicensesisunderwayandislikelytobecompletedduringthenextfinancialyear. TheGroupowns51%equitysharesofConvergenceChemicalsPrivateLimited.ThecontractualarrangementstatesthatPELandtheothershareholdershallnominatetwodirectorseachtotheboardandforanymeetingoftheboardthequorumshallbetwodirectorsprovidedthatonedirectorfromeachpartyispresent.ThisgivesboththepartiesajointcontroloverConvergenceChemicalsPrivateLimited.ConvergenceChemicalsPrivateLimitedisaPrivateLimitedCompanywhoselegalformconfersseparationbetweenthepartiestothejointarrangementandtheCompanyitself.Accordingly,thelegalformofConvergenceChemicalsPrivateLimitedandthetermsofthecontractualarrangementindicatethatthearrangementisaJointVenture. Accordingly,siginificantfinancialinformationforConvergenceChemicalsPrivateLimitedhasbeenprovidedbelowfromthedatethejointarrangementisaccountedasaJointventure.
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Shrilekha Business Consultancy Private Limited (Earlier known as Shrilekha Financial Services) ThejointventureagreementinrelationtoShrilekhaFinancialServices(PartnershipFirm)requiredunanimousconsentfromallpartiesforallrelevantactivities.TheGrouphasa74.95%interestinajointoperationcalledShrilekhaFinancialServiceswhichwassetupasapartnershiptogetherwithShriramOwnershipTrusttoinvestinShriramCapitalLimited.ShrilekhaFinancialServicesholds26.68%inShriramCapitalLimited.ThiswasapartnershipfirmtillJanuary8,2017,wherethepartnershaddirectrightstotheassetsofthepartnershipandwerejointlyandseverallyliablefortheliabilitiesincurredbythepartnership.Accordingly,thisjointarrangementwastreatedasaJointOperation.TheGrouprecogniseditsshareofinvestmentinShriramCapitalLimited,whichwasshownunderInvestmentinAssociates.
Thispartnershipfirmwas converted intoaPrivate LimitedCompany,whereby theunanimous consentof theGroupand theother shareholder isrequiredforfundamental issues.Sincethereisseparationofthelegalformofthestructure,thejointarrangement isaccountedasaJointventure. InvestmentinShrilekhaBusinessConsultancyPrivateLimitedhasbeenshownundertheheadInvestmentinJointVenture,unlikeasdisclosedinearlieryears. SiginificantfinancialinformationforShrilekhaBusinessConsultancyPrivateLimitedhasbeenprovidedbelowfromthedatethejointarrangementisaccountedasaJointventure.Significant financial information for joint ventures Convergence Chemicals Private LimitedSummarised Balance sheet
(`inCrores)Particulars March 31, 2017 March 31, 2016 April 1, 2015Currentassets 13.92 0.51 0.72Non-currentassets 168.38 148.06 92.93Currentliabilities (33.69) (27.51) (2.24)Non-currentliabilities (80.49) (52.32) (32.00)Net Assets 68.12 68.74 59.41The above amounts of assets and liabilities include the following:Cashandcashequivalents 13.56 0.41 0.72Currentfinancialliabilities(excludingtradeandotherpayablesandprovisions) (25.64) (24.56) -Non-currentfinancialliabilities(excludingtradeandotherpayablesandprovisions) (80.46) (52.32) (32.00)
Summarised statement of profit and loss
(`inCrores)Particulars March 31, 2017 March 31, 2016Revenue - - Interestincome - - Depreciationandamortisation - - Interestexpense - - Incometaxexpense (0.01) - Profit for the year (0.62) (0.67)Othercomprehensiveincome - - Total comprehensive income (0.62) (0.67)Dividendsreceived - -
Piramal Enterprises Limited Annual Report 2016-17318
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Reconciliation to carrying amounts(`inCrores)
Particulars March 31, 2017 March 31, 2016Opening net assets 68.74 59.41Profitfortheyear (0.62) (0.67)Othercomprehensiveincome - - Dividends paid - - CapitalContribution - 10.00Closing net assets 68.12 68.74Group'ssharein% 51% 51%Proportion of the Group’s ownership interest 34.74 35.06Carryingamount 34.74 35.06
Commitments(`inCrores)
Convergence Chemicals Private LimitedParticulars March 31, 2017 March 31, 2016 April 1, 2015Shareofjointventure'scommitments-Estimatedamountofcontractsremainingtobeexecutedoncapitalaccountandnotprovidedfor
0.01 - -
TOTAL COMMITMENTS 0.01 - -
Shrilekha Business Consultancy Private LimitedSummarised Balance sheet
(`inCrores)Shrilekha Business Consultancy Private Limited
Particulars March 31, 2017Currentassets 8.12 Non-currentassets 2,661.29 Currentliabilities (0.06)Net Assets 2,669.35 The above amounts of assets and liabilities include the following:Cashandcashequivalents 0.11 Currentfinancialliabilities(excludingtradeandotherpayablesandprovisions) (0.06)
Summarised statement of profit and loss(`inCrores)
Shrilekha Business Consultancy Private LimitedParticulars For the period January 9, 2017 to March 31, 2017Revenue - Interestincome - Depreciationandamortisation - Interestexpense - Incometaxexpense - Shareofprofitfromassociate 22.67 Profit for the year 22.67 Othercomprehensiveincome - Total comprehensive income 22.67 Dividendsreceived -
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Shrilekha Business Consultancy Private LimitedParticulars March 31, 2017NetassetsasonMarch31,2017 2,669.35 Closing net assets 2,669.35 Group'ssharein% 74.95%ProportionoftheGroup’sownershipinterest 2,000.68 Goodwill 556.74 UnpaidDividendandDividenddistributiontaxthereon - Carrying amount 2,557.42
Shrilekha Financial Services (partnership firm accounted as a Joint operation) Summarised Balance sheet
(`inCrores)Shrilekha Financial Services
Particulars March 31, 2016 April 1, 2015Currentassets 0.55 0.91Non-currentassets 2,485.18 2,328.80Currentliabilities (0.08) (0.06)Net Assets 2,485.65 2,329.65The above amounts of assets and liabilities include the following:Cashandcashequivalents 0.55 0.82Currentfinancialliabilities(excludingtradeandotherpayablesandprovisions) (0.08) (0.06)
Summarised statement of profit and loss(`inCrores)
Shrilekha Financial ServicesParticulars Period April 1 2016
to January 8, 2017March 31, 2016
Revenue - - Interestincome - - Depreciationandamortisation - - Interestexpense - - Incometaxexpense - - Shareofprofitfromassociate 172.12 204.12Profit for the year 172.06 204.11Othercomprehensiveincome - - Total comprehensive income 172.06 204.11Dividendsreceived 8.30 36.06
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(c) Interest in Associates
Principal place of business
Carrying Amount (` In Crores) % of ownership interest Sr. No. Name of the Company March 31 2017 March 31 2016 April 1 2015
1 AllerganIndiaPrivateLimited India 106.00 97.57 61.76 49%
AllerganIndiaPrivateLimitedismainlyengagedintradingofopthalmicproducts.
Allergan India Private Limited Significant judgement: classification of associate TheGroupowns49%equitysharesofAllerganIndiaPrivateLimited.AsperthetermsofthecontractualagreementwithAllerganPharmaceuticals(Ireland)Limited,thecompanybyvirtueofitsshareholdingneitherhasthepowertodirecttherelvantactivitiesofthecompany,norhastherighttoappointmajorityoftheDirectors.Thecompanyonlyhasarighttoparticipateinthepolicymakingprocesses.AccordinglyAllerganIndiaPrivateLimitedhasbeenconsideredasanAssociate.
Significant financial information for associateSummarised Balance sheet
(`inCrores)
Allergan India Private LimitedParticulars March 31, 2017 March 31, 2016 April 1, 2015Currentassets 225.83 228.86 146.97Non-currentassets 28.10 13.90 19.55Currentliabilities (46.01) (91.78) (40.48)Non-currentliabilities - - - Net Assets 207.92 150.98 126.04
Summarised statement of profit and loss
(`inCrores)
Allergan India Private LimitedParticulars March 31, 2017 March 31, 2016Revenue 329.11 337.34Profitfortheyear 57.38 70.16Othercomprehensiveincome (0.17) - Totalcomprehensiveincome 57.20 70.16Dividendsreceived 19.60 -
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(`inCrores)
Allergan India Private LimitedParticulars March 31, 2017 March 31, 2016Opening net assets 150.98 126.04Profitfortheyear 57.38 70.16Othercomprehensiveincome (0.17) - Shareoptionsoutstanding (0.27) 2.92Dividendandtaxthereon - (48.14)Closing net assets 207.92 150.98Group'ssharein% 49% 49%ProportionoftheGroup’sownershipinterest 101.88 73.98Dividendsreceivedsubsequently - 23.59Others 4.11 - Carrying Amount 106.00 97.57
Contingent liabilities
(`inCrores)
Allergan India Private LimitedParticulars March 31, 2017 March 31, 2016 April 1, 2015Shareofassociate'scontingentliabilities-Claimsagainstthecompanynotacknowledgedasdebt 1.43 1.43 - -Disputeddemandsforincometax,salestaxandservicetaxmatters 11.15 12.29 10.31
TOTAL CONTINGENT LIABILITIES 12.58 13.72 10.31
(d) Individually immaterial associates Thegrouphasinterestsinthefollowingindividuallyimmaterialassociatesthatareaccountedforusingtheequitymethod:
Sr. No. Name of the Company Principal place of business
% of ownership interest
1 PiramalPhytocareLimited(PPL) India 17.53%2 BluebirdAeroSystemsLimited Israel 27.83%3 ContextMattersInc(w.e.fSeptember22,2016) U.S.A 22.73%
(`inCrores)Particulars March 31, 2017 March 31, 2016Aggregatecarryingamountofindividuallyimmaterialassociates 54.37 45.17Aggregateamountsofthegroup’sshareof:Profit/(loss)fromcontinuingoperations (3.89) 5.48Othercomprehensiveincome - - Total comprehensive income (3.89) 5.48
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Significant judgement: classification of associate Thegrouphas17.53%shareholdinginPPL.ThegrouphastheabilitytoappointdirectorsontheBoardofPPLgivingitthepowertoparticipateinthefinancialandoperatingpolicydecisions.ThusthegrouphassignificantinfluenceoverPPLmakingitanassociate.
(e) Share of profits from Associates and Joint Venture
(`inCrores)Particulars March 31 2017 March 31 2016ShareofprofitsfromJointVentures 16.68 (0.34)ShareofprofitsfromAssociates 153.22 194.55Total share of profits from Associates and Joint Venture 169.90 194.21
40 BUSINESS COMBINATIONSA. Summary of acquisitions during the current year(i) Acquisition of Ash Stevens OnAugust31,2016,theGroupthroughitssubsidiary,PELPharmaInc.acquired100%ofissuedandoutstandingmembershipinterestsinAsh
StevensLLC,formerlyknownasAshStevensInc.AshStevensisafull-servicepharmaceuticalcontractmanufacturer(CMO)withoverfivedecadesofexperiencedevelopingdrugsubstancesandmanufacturingactivepharmaceuticalingredients(APIs).Italsoprovidesresearchanddevelopmentservicestovariousdrugmanufacturersincludinggovernmentagencies. TheacquisitionisexpectedtobesynergeticwiththeGroup’santibodydrugconjugatesandinjectiblebusinessandexpanditspresenceinNorthAmerica.
(a) Detailsofpurchaseconsideration
Ash StevensParticulars USD in Million ` In CroresCash paid 44.8 300.34Total Purchase Consideration 44.8 300.34
(b) Theassetsandliabilitiesrecognisedasaresultoftheacquisitionareasfollows:
Particulars USD in Million ` In CroresAssetsAccountsreceivable,net 2.1 14.12 Cashandcashequivalents 1.1 7.33Inventories 1.2 7.87Contractsinprocess 1.6 10.50Prepaidexpenses 0.9 6.10PropertyPlantandEquipment 18.6 124.74ComputerSoftware 0.1 0.49Customerrelationship 6.8 45.46 Tradename 4.5 30.19
TOTAL ASSETS 36.9 246.80Liabilities Tradepayable 0.5 3.51 Advancefromcustomers 1.9 12.51 Accruedexpenses 0.3 2.13 Securitydeposit 0.1 0.34
TOTAL LIABILITIES 2.8 18.49Net identificable assets acquired 34.1 228.31
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Theinitialaccountingforbusinesscombinationisincompleteforthefairvaluationofproperty,plantandequipmentandhencetheamountreportedisprovisional.
(c) Calculationofgoodwill
Particulars USD in Million ` In CroresConsiderationtransferred 44.8 300.34Less:Netidentifiableassetsacquired 34.1 228.31Goodwill 10.7 72.03
Thegoodwillisattributabletotheworkforceandtheexpectedhighprofitabilityoftheacquiredbusiness.
Goodwillisfullydeductiblefortaxpurposesoveraperiodof15years.
(d) AcquiredReceivables
Particulars USD in Million ` In CroresFairvalueofacquiredtradereceivables 2.1 14.12 Grosscontractualamountfortradereceivables 2.1 14.22 Contractualcashflowsnotexpectedtobecollected * 0.10
*belowroundingoffnormsadoptedbytheGroup
(e) Revenueandprofitcontribution TheAshStevensbusinesscontributedrevenuesandprofitstothegroupfortheperiodMarch312017asfollows:
Particulars USD in Million ` In CroresRevenue 11.7 78.66Profit/(loss)beforetax (0.4) (2.42)
(f) AcquisitioncostschargedtoP&L Acquisitioncostsof` 5.50Crores(USD0.8million)werechargedtoconsolidatedstatementofprofitandlossundertheheadOtherExpenses.
(g) Purchaseconsideration-cashoutflow
Particulars USD in Million ` In CroresOutflowofcashtoacquiresubsidiary,netofcashacquiredCashconsideration 44.8 300.34Less:BalancesacquiredCashandcashequivalents 1.1 7.33Net outflow of cash - investing activities 43.7 293.01
(ii) Purchase of intrathecal spasticity and pain management business from Mallinckrodt LLC TheGroupthroughitssubsidiary,PiramalCriticalCareLimited,hasenteredintoanagreementtoacquireaportfolioofintrathecalspasticityand
painmanagementdrugsfromMallinckrodtLLCinanallcashdealonJanuary30,2017foraconsiderationof` 1,164.17crores(USD171Million).ThistransactionwasconsummatedonMarch20,2017.Thistransactionisastepfurthertoexpandthegroup’spresenceinglobalgenerichospitaldrugmarket.Oftheaboveconsideration,`114.02crores(USD17million)waspaidupfrontandthebalance`998.72crores(USD154Million)ispayableinFebruary2018.Apartfromtheaboveconsideration,`4.49crores(USD0.67Million)waspaidforfinalinventoryadjustments.
Piramal Enterprises Limited Annual Report 2016-17324
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
ThetransactionisaccountedforasabusinesscombinationasperIndAS103,Businesscombinations.Theinitialaccountingforbusinesscombinationisincompleteasthetransactionwasconsummatedneartotheyearendandthemeasurementperiodofoneyearisnotover.Outofthetotalamountof`118.51crores(USD17.67Million)paid,`19.85crores(USD2.95Million)isaccountedforunderinventoriesandthebalanceamountpaidisaccountedunderintangibleassetsprovisionally.Thiswillbeallocatedtotheidentifiableintangiblesoverthemeasurementperiod.
Theagreementalsoprovidesforanadditional`207.53crores(USD32Million)payabledependingonachievementofcertainfinancialmilestonesbytheacquiredbusinessoverthenext3years.
Thefairvalueofcontingentconsiderationof`103.76crores(USD16Million)wasestimatedbyallocatingprobabilitytotheachievementofthefinancialmilestones.Theestimatesarebasedondiscountrateof10.31%.
Acquisitioncostsof`22.02crores(USD3.3Million)werechargedtoconsolidatedstatementofprofitandlossundertheheadOtherExpenses.
(iii) Acquisition of majority stake in Searchlight Health Private Limited Duringthepreviousyear,pursuanttoInvestmentAgreement,theCompanyhadinvested` 1.07lakhsforaminoritystakeinSearchlightHealth
Private Limited, a healthcare analytics company. The company had committed to invest an additional amount of ` 44.20 crores subject toachievementofcertainmilestonesbySearchlightHealthPrivateLimited.
Duringthecurrentyear,uponthesecondtrancheofinvestment,theCompanyhaswaivedoffcertainclosingconditionsandconditionsprecedentundertheInvestmentAgreementbywhichithasraisedthestakeinSearchlightHealthPrivateLimitedto51%onafullydilutedbasis.
(a) Detailsofpurchaseconsideration
Particulars ` In CroresCashpaidinthepreviousyear 1.07Cashpaidinthecurrentyear 31.40
TOTAL PURCHASE CONSIDERATION 32.47
(b) TheassetsandliabilitiesasatDecember23,2016recognisedasaresultoftheacquisitionareasfollows:
Particulars ` In CroresAssetsTradereceivables 0.51Cashandcashequivalents 31.45PropertyPlantandEquipment 0.14OtherNoncurrentfinancialassets 0.19OtherNoncurrentassets 0.32Othercurrentassets 0.15
TOTAL ASSETS 32.76Liabilities Noncurrentprovisions 0.02CurrentBorrowings 3.20TradePayables 1.39Othercurrentliabilities 0.60
TOTAL LIABILITIES 5.21 Net identificable assets acquired 27.55Company’s stake 14.05
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(c) Calculationofgoodwill
Particulars ` In CroresConsiderationtransferred 32.47Less:Netidentifiableassetsacquired 14.05Goodwill 18.42
Goodwillisnotdeductibleforincometaxpurposes.
FairvalueofNon-controllinginterestsasontheacquisitiondateis`13.50crores.Thisismeasuredatthenoncontrollinginterest’sproportionateshareoftheSearchlightHealthPrivateLimited’snetidentifiableassets.
Theinitialaccountingforbusinesscombinationisincompleteasthetransactionwasconsummatedneartotheyearendandthemeasurementperiodofoneyearisnotover.Postacquisition,thisbusinesscontributed`1.19croresinrevenueandalossof`0.60crorestothegroup. Thepro-formaeffectsoftheaboveacquisitionontheGroup’sresultswerenotmaterial.
(d) Purchaseconsideration-cashoutflow
Particulars ` In CroresOutflowofcashtoacquiresubsidiary,netofcashacquiredCashconsideration 32.47Less:BalancesacquiredCashandcashequivalents 31.45 Net outflow of cash - investing activities 1.02
B. Summary of acquisitions during the previous year Healthcare Business Insights Inc. (HBI) OnMay14,2015,theGroupthroughitssubsidiary,DecisionResourcesInc.acquired100%ofissuedandoutstandingmembershipinterestsinHBI,
trustedproviderofbestpracticeresearch,trainingandservicestomorethan1,400hospitalsacrosstheU.S.ThisacquisitionwillenablethegrouptoenterintotheproviderspaceintheUnitedStatesofAmerica.
Adaptive Software, LLC and AdaptiveRX LLC (Adaptive) OnFebruary19,2016,theGroupthrough itssubsidiary,DR/DecisionResourcesLLCacquiredtheassetsofAdaptiveSoftwareLLCandentire
controlandownershipof itswhollyownedsubsidiary,AdaptiveRxLLC.AdaptiveSoftwareLLCisengagedinthebusinessofprovidingbusinessprocessmanagementsolutionstothepharmacybenefitmanagementandhealthinsuranceindustry.ThisacquisitionenablestheGroupadirectentryintothehealthcarepayerecosystem.
(a) Detailsofpurchaseconsideration
Particulars HBI AdaptiveUSD in Million ` In Crores USD in Million ` In Crores
Cash paid 30.0 191.87 7.3 50.03Deferredconsideration - - 11.1 75.92ContingentConsideration 2.1 13.54 5.4 37.14Total Purchase Consideration 32.1 205.41 23.8 163.09
Piramal Enterprises Limited Annual Report 2016-17326
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(b) Theassetsandliabilitiesrecognisedasaresultoftheacquisitionareasfollows:
Particulars HBI AdaptiveUSD in Million ` In Crores USD in Million ` In CroresFairvalue Fairvalue Fairvalue Fairvalue
AssetsBuilding 0.1 0.67 - - Plant&Equipment 0.1 0.92 - - Furniture&fixtures 0.0 0.13 0.0 0.08Intangibleassets-CustomerRelations 7.5 47.84 6.4 44.00Intangible assets - Developed Technology - - 0.4 2.76Intangibleassets-Trademarks 3.4 21.70 0.3 2.20Intangibleassets-ComputerSoftware 0.1 0.40 - - Intangibleassets-FavorableLease 0.2 1.30 - - Tradereceivables 2.3 14.77 0.4 2.75Cashandcashequivalents 0.2 1.53 - - Othercurrentfinancialassets - - 0.0 0.02Othercurrentassets 0.1 0.32 - -
TOTAL ASSETS 14.0 89.58 7.5 51.81Liabilities Tradepayable 0.3 1.73 - - Deferredrevenue 3.4 22.00 1.1 7.33Accruedliabilties 0.3 1.84 - -
TOTAL LIABILITIES 4.0 25.57 1.1 7.33Net identifiable assets acquired 10.0 64.01 6.4 44.48
(c) Calculationofgoodwill:
Particulars HBI AdaptiveUSD in Million ` In Crores USD in Million ` In Crores
Considerationtransferred 32.1 205.41 23.8 163.09Less:Netidentifiableassetsacquired 10.0 64.01 6.4 44.48Goodwill 22.1 141.40 17.4 118.61
Thegoodwillisattributabletotheworkforceandthehighprofitabilityoftheacquiredbusiness.
Goodwillisfullydeductiblefortaxpurposesoveraperiodof15years.
(d) Significantestimate:contingentconsideration (i) HBI In theevent that certainpre-determinedAcademyRevenueandCompanyRevenue targets are achievedbyHBI for the calendar yearended
December31,2015,additionalconsiderationofupto`130.91crores(USD20Million)maybepayableincashbyNovember16,2016.
Thefairvalueofthecontingentconsiderationof`13.75crores(USD2.1Million)wasestimatedbycalculatingthepresentvalueofprobabilityweighedearnoutpaymentsbasedonadiscountrateof15.78%incaseofHBI.Asthetargetswerenotmet,thecontingentconsiderationwaswrittenbacktoconsolidatedstatementofprofitandlossfortheyearendedMarch31,2016undertheheadOtherexpenses.
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(ii) Adaptive Contingentconsiderationupto`39.76crores(USD6Million)ispayableiftheeligiblesalesrevenuetargetsaremetincaseofAdaptiveovera
periodoftwoyears.Thefairvalueofthecontingentconsiderationof`35.98crores(USD5.4Million)wasestimatedbycalculatingtheweightageaverageprobableearnings.
AsatMarch31,2017,lossonremeasurementofcontingentconsiderationof`2.05croreshasbeenchargedofftotheconsolidatedstatementofprofitandlossundertheheadOtherExpenses.
(e) AcquiredReceivables
Particulars HBI AdaptiveUSD in Million ` In Crores USD in Million ` In Crores
Fairvalueofacquiredtradereceivables 2.3 14.77 0.4 2.75Grosscontractualamountfortradereceivables 2.4 15.14 0.4 2.75Contractualcashflowsnotexpectedtobecollected 0.1 0.36 - -
(f) RevenueandprofitcontributionTheHBIbusinesscontributedrevenuesandprofitstothegroupfortheperiodMarch312016asfollows:
Particulars USD in Million ` In CroresRevenue 9.1 59.55Profitbeforetax 2.7 17.40
SincetheacquisitionofAdaptiveoccurredonFebruary29,2016,theimpactonGroup’srevenueandprofitisnotmaterial.
Thepro-formaeffectsofbothoftheaboveacquisitionsontheGroup’sresultswerenotmaterial.
(g) AcquisitioncostschargedtoP&L Acquisitioncostsof`2.28Crores(USD0.3million)and`2.25Crores(USD0.3million)werechargedtoconsolidatedstatementofprofitandloss
fortheyearendedMarch31,2016inrelationtotheacquisitionofHBIandAdaptiverespectivelyundertheheadOtherexpenses.
(h) Purchaseconsideration-cashoutflow
Particulars HBI AdaptiveUSD in Million ` In Crores USD in Million ` In Crores
Outflowofcashtoacquiresubsidiaries,netofcashacquiredCashconsideration 30.0 191.87 7.3 50.03Less:BalancesacquiredCashandcashequivalents 0.2 1.53 - - Net outflow of cash - investing activities 29.8 190.34 7.3 50.03
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
41 GOODWILL MovementinGoodwillonConsolidationduringtheyear:
`incroresParticulars As at
March 31, 2017As at
March 31, 2016
Opening balance 5,485.38 4,943.69Add:Additionsduringtheyear 90.45 261.30Add:Currencytranslationdifferences (148.64) 280.39Closing balance 5,427.19 5,485.38
Asegmentlevelsummaryofthegoodwillallocationispresentedbelow: :
`incroresParticulars As at
March 31, 2017As at
March 31, 2016As at
April 1, 2015
InformationManagement 4,541.09 4,646.08 4,145.32Pharmaceuticalsmanufacturingandservices 645.49 595.53 563.01FinancialServices 240.61 243.77 235.36
TOTAL 5,427.19 5,485.38 4,943.69
GoodwillistestedforimpairmentatleastannuallyinaccordancewiththeGroup’sprocedurefordeterminingtherecoverablevalueofsuchassets.
TherecoverableamountoftheInformationmanagementsegmentisdeterminedonthebasisofFairValueLessCostToSell(FVLCTS).TheFVLCTSisdeterminedbasedonthemarketcapitalizationapproach,usingtheenterprisevaluetoearningsbeforeinterest,tax,depreciationandamortisationmultiplesderivedfromobservablemarketdata.Thefairvaluemeasurementiscategorizedasalevel2fairvaluebasedontheinputsinthevaluationtechniquesused.
The carrying value of goodwill for the pharmaceutical manufacturing and services (arising from various acquisitions across the globe) andfinancial services are not relatively significant. The recoverable value of these segments were determined using value-in-use (VIU). TheVIU is based on internal forecasts, considering the current economic conditions, growth rates and anticipated future economic conditions. Appropriategrowthratesareusedtoextrapolatecashflowsbeyondthebudgetperiod.Theratesareconsistentwithforecastsincludedinindustryreports. Discountratesusedare in therangeof7%to16%whichreflectspecificrisksrelatingtotherelevantsegmentsandthecountries inwhichtheyoperate.
Basedontheabove,noimpairmentwasidentifiedasofMarch31,2017,March31,2016andApril1,2015astherecoverablevalueofthesegmentsexceededthecarryingvalues.
Themanagementbelievesthatanypossiblechangesinthekeyassumptionswouldnotcausethecarryingamounttoexceedtherecoverableamountofcashgeneratingunit.
42 EMPLOYEE BENEFITS : Brief description of the Plans: Other Long Term Employee Benefit Obligations Leave Encashment, which are expected to be availed or encashed beyond 12 months from the end of the year are treated as
other long term employee benefits. The Group’s liability is actuarially determined (using the Projected Unit Credit method) atthe end of each year. Actuarial losses/ gains are recognised in the Statement of Profit and Loss in the year in which they arise. LongTermServiceAwardsarerecognisedasaliabilityatthepresentvalueofthedefinedbenefitobligationasatthebalancesheetdate.
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Defined Contribution plans TheGroup’sdefinedcontributionplansareProvidentFund (incaseof certainemployees),Superannuation,OverseasSocial SecurityPlans,
EmployeesStateInsuranceFundandEmployees’PensionScheme(undertheprovisionsoftheEmployees’ProvidentFundsandMiscellaneousProvisions Act, 1952) and 401(k) plan contribution (in case of US subsidiaries). The Group has no further obligation beyondmaking thecontributionstosuchplans.
Post-employment benefit plans: GratuityforemployeesinIndiaispaidasperthePaymentofGratuityAct,1972.Employeeswhoareincontinuousserviceforaperiodof5
yearsareeligibleforgratuity.Theamountofgratuitypayableonretirement/terminationistheemployeeslastdrawnbasicsalarypermonthcomputedproportionatelyforthenumberofyearsofservice.TheGrouphasbothfundedandnonfundedplansandmakescontributionstorecognisedfundsinIndiaincaseoffundedplans.TheGroup’sGratuityPlanisadministeredbyaninsurerandtheInvestmentsaremadeinvariousschemesofthetrust.TheGroupfundstheplanonaperiodicalbasis.
Incaseofcertainemployees,theProvidentfundisadministeredthroughanin-housetrust.Periodiccontributionstothetrustareinvestedinvariousinstrumentsconsideringthereturn,maturity,safety,etc.,withintheoverallambitoftheProvidentFundTrustRulesandinvestmentpatternnotifiedthroughtheMinistryofLabourinvestmentguidelinesforexemptedprovidentfunds.
In case of a foreign subsidiary, the subsidiary sponsors a defined benefit retirement plan. The benefits are based on employees’ years ofexperienceandfinalremuneration.Theplanisfundedthroughaseparatetrustee-administeredfund.Thepensioncostforthemaindefinedplansisestablishedinaccordancewiththeadviceofindependentqualifiedactuary.
TheseplanstypicallyexposetheGrouptoactuarialriskssuchas:investmentrisk,interestraterisk,longevityriskandsalaryrisk.
Investment risk Thepresentvalueofthedefinedbenefitplanliability iscalculatedusingadiscountratewhichisdeterminedbyreferencetomarketyields
attheendofthereportingperiodongovernmentbonds.Planinvestmentisamixofinvestmentsingovernmentsecurities,andotherdebtinstruments.
Interest risk Adecreaseinthebondinterestratewillincreasetheplanliability;however,thiswillbepartiallyoffsetbyanincreaseinthereturnontheplan’s
debt investments.
Longevity risk Thepresentvalueofthedefinedbenefitplanliabilityiscalculatedbyreferencetothebestestimateofthemortalityofplanparticipantsboth
duringandaftertheiremployment.Anincreaseinthelifeexpectancyoftheplanparticipantswillincreasetheplan’sliability.
Salary risk Thepresentvalueofthedefinedbenefitplanliabilityiscalculatedbyreferencetothefuturesalariesofplanparticipants.Assuch,anincrease
inthesalaryoftheplanparticipantswillincreasetheplan’sliability.
TheGrouphasbothfundedandnonfundedplansandmakescontributionstorecognisedfundsinIndiaincaseoffundedplans.TheGroupdoesnotfullyfundtheliabilityandmaintainsatargetleveloffundingtobemaintainedoveraperiodoftimebasedonestimationsofexpectedgratuitypayments.Inrespectofcertainemployees,ProvidentFundcontributionsaremadetoaTrustadministeredbytheGroup.Thecontributionsmadetothetrustarerecognisedasplanassets.PlanassetsintheProvidentfundtrustaregovernedbylocalregulations,includinglimitsoncontributionsineachclassofinvestments.
TheGroupactivelymonitorshowthedurationandtheexpectedyieldoftheinvestmentsarematchingtheexpectedcashoutflowsarisingfromtheemployeebenefitobligations,withtheobjectivethatassetsofthegratuity/providentfundobligationsmatchthebenefitpaymentsastheyfalldue.Investmentsarewelldiversified,suchthatthefailureofanysingleinvestmentwouldnothaveamaterialimpactontheoveralllevelofassets.
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CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
A largeportionofassetsconsistsofgovernmentandcorporatebonds,althoughtheGroupalso invests inequities,cashandmutual funds.TheplanassetmixisincompliancewiththerequirementsoftheregulationsincaseofProvidentfund.Incaseofanoverseassubsidiary,thepensionplansarefundedthroughaseparatetrustee-administeredfund.Thesubsidiaryemploysabuildingblockapproachindeterminingthelongtermrateofreturnonpensionplanassets.Historicalmarketsarestudiedandassetswithhighervolatilityareassumedtogeneratehigherreturnsconsistentwithwidelyacceptedcapitalmarketprinciples.
I. Charge to the Statement of Profit and Loss based on Defined Contribution Plans:
` in CroresParticulars Year Ended
March 31, 2017 Year Ended
March 31, 2016
Employer’scontributiontoRegionalProvidentFundOffice 4.02 2.28Employer’scontributiontoSuperannuationFund 0.41 0.49Employer’scontributiontoEmployees’StateInsurance 0.61 0.35Employer’scontributiontoEmployees’PensionScheme1995 4.28 3.85ContributiontoPensionFund 38.05 43.72401(k)Plancontribution 30.26 14.36
IncludedinContributiontoProvidentandOtherFundsandR&DExpensesdisclosedunderOtherExpenses(ReferNote34and36)
II. Disclosures for defined benefit plans based on actuarial valuation reports as on March 31, 2017.A. ChangeinDefinedBenefitObligation
(`inCrores)(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund GratuityYear Ended March 31, Year Ended March 31, Year Ended March 31, Year Ended March 31,
2017 2016 2017 2016 2017 2016 2017 2016Present Value of Defined Benefit Obligation as atbeginningoftheyear
39.30 35.08 501.07 511.50 151.69 133.56 3.62 2.62
InterestCost 3.09 2.79 13.83 19.40 12.92 10.61 0.28 0.20CurrentServiceCost 3.92 3.29 0.95 1.42 9.68 8.56 0.47 0.31PastServiceCost - - - - - - 0.08 -Contributionsfromplanparticipants - - - - 15.31 13.49 - - LiabilityTransferredInforemployeesjoined - - - - 5.56 7.07 - - LiabilityTransferredOutforemployeesleft - - - - (4.96) (7.72) - - Liabilityacquiredonacquisitionofasubsidiary 0.02 - - - - - - - BenefitsPaid (2.53) (3.78) (11.19) (17.49) (8.81) (13.88) (0.05) - Actuarial(Gains)/loss-duetochangeinDemographicAssumptions
- (0.92) - (31.29) - - 0.17 (0.01)
Actuarial (Gains)/loss - due to change in FinancialAssumptions
1.58 0.32 53.76 - - - 0.10 (0.01)
Actuarial(Gains)/loss-duetoexperienceadjustments 1.07 2.52 31.60 - - - 1.73 0.51ExchangeDifferencesonForeignPlans - - (82.56) 17.53 - - - - Present Value of Defined Benefit Obligation as at the end of the year
46.45 39.30 507.46 501.07 181.39 151.69 6.40 3.62
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B. ChangesintheFairValueofPlanAssets
(`inCrores)(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund GratuityYear Ended March 31, Year Ended March 31, Year Ended March 31, Year Ended March 31,
2017 2016 2017 2016 2017 2016 2017 2016FairValueofPlanAssetsasatbeginningoftheyear 28.30 25.58 627.59 610.85 151.69 133.56 - - InterestIncome 2.23 2.04 13.97 21.29 12.92 10.61 - - Contributionsfromemployer 0.96 5.00 1.24 7.17 9.68 8.56 - - Contributionsfromplanparticipants - - - 15.31 13.49 - - AssetsTransferredInforemployeesjoined 0.04 - - - 5.56 7.07 - - AssetsTransferredoutforemployeesleft - - - - (4.96) (7.72) - - Assetacquiredonacquisitionofasubsidiary 0.05 - - - - - - - BenefitsPaidfromthefund (2.53) (3.78) (11.19) (17.49) (8.81) (13.88) - - ReturnonPlanAssets,ExcludingInterestIncome 0.71 (0.54) 95.04 (14.15) - - ExchangeDifferencesonForeignPlans - - (102.41) 19.92 - - - - Fair Value of Plan Asset as at the end of the year 29.76 28.30 624.24 627.59 181.39 151.69 - -
C. AmountrecognisedintheBalanceSheet
(`inCrores)
(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund Gratuity
Year Ended March 31, As at April 1, Year Ended March 31, As at April 1, Year Ended March 31, As at April 1, Year Ended March 31, As at April 1,
2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015
PresentValueofDefinedBenefit Obligation as attheendoftheyear
46.45 39.30 35.08 507.46 501.07 511.50 181.39 151.69 133.56 6.40 3.62 2.62
FairValueofPlanAssetsAsatendoftheyear
29.76 28.30 25.58 624.24 627.59 610.85 181.39 151.69 133.56 - - -
Funded Status - - - (116.78) (126.52) (99.35) - - - - -
Asset Ceiling - - - 110.87 118.87 95.51 - - - - -
Effect of currencytransalations
- - - 0.02 2.32 - - - - - -
Net Liability/(Asset) recognised in the Balance Sheet (Refer Notes 8, 20 and 26)
16.69 11.00 9.50 (5.89) (5.33) (3.84) - - - 6.40 3.62 2.62
Recognised under:
Non Current provision (Refer Note 20)
6.38 1.89 1.74 - - - - - - 5.71 2.99 2.26
Current provision (Refer Note 26)
10.31 9.11 7.76 - - - - - - 0.69 0.63 0.36
Other Non-current assets (Refer Note 8)
- - - (5.89) (5.33) (3.84) - - - - - -
TheProvidentFundhasasurplusthat isnotrecognisedonthebasisthatfutureeconomicbenefitsarenotavailabletotheGroupintheformofareductioninfuturecontributionsoracashrefundduetolocalregulations.
Surplusinpensionfundincaseofanoverseassubsidiaryisrecognisedtotheextent,futureeconomicbenefitsareavailabletotheGroupintheformofareductioninfuturecontibutions.
TheGrouphasnolegalobligationtosettlethedeficitinthefundedplan(Gratuity)withanimmediatecontributionoradditionaloneoffcontributions.TheGroupintendstocontinuetocontributethedefinedbenefitplansinlinewiththeactuary’slatestrecommendations.
Piramal Enterprises Limited Annual Report 2016-17332
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
D. ExpensesrecognisedinConsolidatedStatementofProfitandLoss
(`inCrores)(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund GratuityYear Ended March 31, Year Ended March 31, Year Ended March 31, Year Ended March 31,
2017 2016 2017 2016 2017 2016 2017 2016CurrentServiceCost 3.92 3.29 0.95 1.42 9.68 8.56 0.47 0.31PastServiceCost - - - - - - 0.08 - NetinterestCost 0.86 0.75 (0.15) (1.89) - - 0.28 0.20Total Expenses / (Income) recognised in the Statement of Profit And Loss*
4.78 4.04 0.80 (0.47) 9.68 8.56 0.83 0.51
*Included in Salaries and Wages, Contribution to Provident and Other Funds, Gratuity Fund and Research and Development Expenses (ReferNote34and36)
E. ExpensesRecognizedintheOtherComprehensiveIncome(OCI)
(`inCrores)(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund GratuityYear Ended March 31, Year Ended March 31, Year Ended March 31, Year Ended March 31,
2017 2016 2017 2016 2017 2016 2017 2016Actuarial(Gains)/LossesonObligationForthePeriod-Duetochangesindemographicassumptions
- (0.92) - - - - 0.17 (0.01)
Actuarial(Gains)/LossesonObligationForthePeriod-Duetochangesinfinancialassumptions
1.58 0.32 53.76 (31.29) - - 0.10 (0.01)
Actuarial(Gains)/LossesonObligationForthePeriod-Duetoexperienceadjustment
1.07 2.52 31.60 - - - 1.73 0.51
ReturnonPlanAssets,ExcludingInterestIncome (0.71) 0.54 (95.04) 14.15 - - - - Change in Asset Ceiling - - 8.64 23.36 - - - - Net (Income)/Expense For the Period Recognized in OCI 1.94 2.46 (1.04) 6.22 - - 2.00 0.49
F. SignificantActuarialAssumptions:
(Figuresin%)
(Funded) (Non-Funded)
Particulars Gratuity Pension Provident Fund Gratuity
As at March 31, As at March 31, As at March 31, As at March 31,
2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015
Discount Rate (perannum)
6.85-8.00 7.80 7.96 2.20 3.00 3.55 7.09 7.56 7.96 7.22 7.72 7.89
Salaryescalationrate 7.00-11.00 7.00 7.00 1.20 1.20 1.20 7.00 7.00 7.00 9.00 9.00 9.00
ExpectedRateofreturnon Plan Assets (perannum)
6.85-8.00 7.80 7.96 2.20 3.00 3.55 7.09 7.56 7.96 - - -
Theexpectedrateofreturnonplanassetsisbasedonmarketexpectationsatthebeginningoftheyear.Therateofreturnonlong-termgovernmentbondsistakenasreferenceforthispurpose.
Incaseofcertainemployees,theProvidentFundcontributionismadetoaTrustadministeredbytheGroup.IntermsoftheGuidancenoteissuedbytheInstituteofActuariesofIndia,theactuaryhasprovidedavaluationofProvidentfundliabilitybasedontheassumptionslistedaboveanddeterminedthatthereisnoshortfallattheendofeachreportingperiod.
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G. Movementsinthepresentvalueofnetdefinedbenefitobligationareasfollows:
(`inCrores)(Funded) (Non-Funded)
Particulars Gratuity Pension GratuityAs at March 31, As at March 31, As at March 31,
2017 2016 2017 2016 2017 2016OpeningNetLiability/(asset) 11.00 9.50 (5.33) (3.84) 3.62 2.62 ExpensesRecognizedinStatementofProfitorLoss 4.78 4.04 0.80 (0.47) 0.83 0.51ExpensesRecognizedinOCI 1.94 2.46 (1.04) 6.22 2.00 0.49ExchangeFluctuation - - 0.92 (0.07) - - NetLiability/(Asset)TransferIn (0.04) - - - - - Net(Liability)/AssetTransferOut - - - - - - Netassetaddedonacquisitionofsubsidiary (0.03) - - - - -BenefitPaidDirectlybytheEmployer - - - - (0.05) - Employer'sContribution (0.96) (5.00) (1.24) (7.17) - - Net Liability/(Asset) Recognized in the Balance Sheet 16.69 11.00 (5.89) (5.33) 6.40 3.62
H. CategoryofAssets
(`inCrores)(Funded)
Particulars Gratuity Pension Provident FundAs at March 31, As at March 31, As at March 31,
2017 2016 2015 2017 2016 2015 2017 2016 2015GovernmentofIndiaAssets (Central&State)
12.97 15.32 11.43 - - - 73.84 56.75 48.27
PublicSectorUnitBonds - - - - - - 41.75 49.10 46.87DebtInstruments - - - 474.42 478.22 466.08 - - - CorporateBonds 11.19 10.26 11.41 - - - 33.90 15.88 9.50Fixed Deposits under Special DepositSchemesofCentralGovernment*
1.34 - - - - - 27.05 28.75 28.92
Insurancefund 0.63 - - - - - - - - Asset-BackedSecurities - - - - - - - - - StructuredDebt - - - - - - - - - EquitySharesofListedEntities 3.58 2.73 2.74 - - - 4.75 1.21 - GlobalEquities - - - 149.82 149.37 144.77 - - - Others 0.04 - - - - - 0.10 - -
TOTAL 29.76 28.30 25.58 624.24 627.59 610.85 181.39 151.69 133.56
*Exceptthis,alltheotherinvestmentsarequoted.
Piramal Enterprises Limited Annual Report 2016-17334
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
I. OtherDetails: Funded Gratuity
Particulars As at March 31, 2017
As at March 31, 2016
NoofActiveMembers 4,100 3,783PerMonthSalaryForActiveMembers 9.46 9.11AverageExpectedFutureService(Years) 7-9 years 8ProjectedBenefitObligation(PBO)(`Incrores) 46.45 39.30Prescribed Contribution For Next Year (12 Months) (` In crores) 11.12 9.11
J. CashFlowProjection:FromtheFund:
(`inCrores)Projected Benefits Payable in Future Years From the Date of Reporting Estimated for the year
ended March 31, 2018Estimated for the year ended March 31, 2017
1stFollowingYear 14.52 12.96 2ndFollowingYear 2.42 2.44 3rdFollowingYear 2.94 2.69 4thFollowingYear 3.11 3.39 5thFollowingYear 3.23 3.82 Sum of Years 6 To 10 17.66 27.22
TheGroup’sGratuityPlanisadministeredbyaninsurerandtheInvestmentsaremadeinvariousschemesofthetrust.TheGroupfundstheplanonaperiodicalbasis.
Incaseofcertainemployees,theProvidentfundisadministeredthroughanin-housetrust.Periodiccontributionstothetrustareinvestedinvariousinstrumentsconsideringthereturn,maturity,safety,etc.,withintheoverallambitoftheProvidentFundTrustRulesandinvestmentpatternnotifiedthroughtheMinistryofLabourinvestmentguidelinesforexemptedprovidentfunds.
Weightedaveragedurationofthedefinedbenefitobligationisintherangeof7-9years(Previousyear6years)
K. SensitivityAnalysis
(`inCrores)Projected Benefits Payable in Future Years From the Date of Reporting
Gratuity - Funded Pension - Funded Gratuity - Non Funded As at
March 31, 2017As at
March 31, 2016As at
March 31, 2017As at
March 31, 2016As at
March 31, 2017As at
March 31, 2016
Impactof+1%ChangeinRateofDiscounting (2.34) (1.89) (39.43) (36.30) 6.39 (0.15)Impactof-1%ChangeinRateofDiscounting 2.65 2.13 51.05 46.51 (0.41) 0.16Impactof+1%ChangeinRateofSalaryIncrease 2.61 2.12 14.30 13.01 0.45 0.15Impactof-1%ChangeinRateofSalaryIncrease (2.35) (2.05) (11.04) (10.17) (0.40) (0.14)
Theabovesensitivityanalysesarebasedonchangeinanassumptionwhileholdingallotherassumptionsconstant.Inpractice,thisisunlikelytooccur,andchangesinsomeoftheassumptionsmaybecorrelated.Whencalculatingthesensitivityofthedefinedbenefitobligationtosignificantactuarialassumptions thesamemethod (presentvalueof thedefinedbenefitobligationcalculatedwith theprojectedunitcreditmethodat theendof thereportingperiod)hasbeenappliedaswhencalculatingthedefinedbenefitliabilityrecognisedinthebalancesheet.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Theestimatesoffuturesalaryincreases,consideredinactuarialvaluation,takeaccountofinflation,seniority,promotionandotherrelevantfactors,suchassupplyanddemandintheemploymentmarket.
TheliabilityforLongtermServiceAwards(Non–Funded)asatyearendis 2.09crores(AsatMarch31,2016- 1.97crores,AsatApril1,2015-Previousyear`0.88Crores)
TheliabilityforLeaveEncashment(Non–Funded)asatyearendis`38.67Crores(Previousyear`30.03Crores,AsatApril1,2015-`25.28Crores)
43 Information in accordance with the requirements of Indian Accounting Standard 24 on Related Party Disclosures.1. List of related partiesA. Controlling Entities TheAjayG.PiramalFoundation@ PiramalLifeSciencesLimited-SeniorEmployeesStockOptionTrustthroughitsTrustee,Mr.AjayGPiramal@ The Sri Krishna Trust through its Trustees, Mr.Ajay Piramal and Dr.(Mrs.) Swati A. Piramal (Previously held through its CorporateTrustees,PiramalManagementServicesPrivateLimited)@ AasanInfoSolutions(India)PrivateLimited@ PiramalWelfareTrust(FormerlyknownasThePiramalEnterpriseExecutivesTrust)throughitsTrustee, PiramalCorporateServicesLimited@ PRLRealtorsLLP@
B. Subsidiaries - Refer Note 39 (a) for list of subsidiaries.
C. Other related parties EntitiescontrolledbyKeyManagementPersonnel AasanCorporateSolutionsPrivateLimited(FormerlyknownasAasanDevelopersand ConstructionsPrivateLimited)(DemergedfromPiramalEstates)(AasanDevelopers) GopikrishnaPiramalMemorialHospital(GPMH) PiramalCorporateServicesLimited(PCSL) PiramalEstatesPrivateLimited(PiramalEstates) PiramalGlassLimited(PGL) PiramalGlassUSAInc. PiramalRealtyPrivateLimited@ PiramalWaterPrivateLimited IndiaVentureAdvisorsPrivateLimited(IndiaVenture) PiramalForgingPrivateLimited(PiramalForging)@ PiramalSecurityPrivateLimited(PiramalSecurity)@ PiramalHospitalityPrivateLimited(PiramalHospitality)@ TopzoneMercantileCompanyLLP(Topzone)@ PRLDevelopersPrivateLimited(PRL) PRLAgastyaPrivateLimited TheSriHariTrust EmployeeBenefitTrusts
StaffProvidentFundofPiramalHealthcareLimited(PPFT) PiramalHealthcareLimitedEmployeesGroupGratuityAssuranceScheme @Therearenotransactionsduringtheyear.
Piramal Enterprises Limited Annual Report 2016-17336
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
D. Associates and its intermediatesShriramCapitalLimited ShriramTransportFinanceCompanyLimited(ShriramTransport)(w.e.f.July21,2015) ShriramCityUnionFinanceLimited(ShriramCityUnion)(w.e.f.July21,2015) ShriramLifeInsuranceCompanyLimited(ShriramLife)(w.e.f.July21,2015) ShriramGeneralInsuranceCompanyLimited(w.e.f.July21,2015)@ShriramCreditCompanyLimited(w.e.f.July21,2015)@BharatRe-insuranceBrokersPrivateLimited(w.e.f.July21,2015)@ShriramOverseasInvestmentPrivateLimited(w.e.f.July21,2015)@ShriramInvestmentsHoldingsLimited(w.e.f.July21,2015)@BluebirdAeroSystemsLimited@PiramalPhytocareLimited(PPL)AllerganIndiaPrivateLimited(Allergan)ContextMattersInc.(w.e.fSeptember22,2016)
E. Jointly controlled entities ConvergenceChemicalsPrivateLimited(Convergence) ShrilekhaFinancialServices(partnershipfirm)(uptoJanuary8,2017) ShrilekhaBusinessConsultancyPrivateLimited(w.e.f.January9,2017)@ NovusCloudSolutionsPrivateLimited(uptoApril1,2015)@ ZebraManagementServicesPrivateLimited(w.e.fApril1,2015)@
F. Key Management Personnel and their relatives Mr.AjayG.Piramal Dr.(Mrs.)SwatiA.Piramal Ms.NandiniPiramal Mr.VijayShah Mr.PeterDeYoung[husbandofMs.NandiniPiramal]
G. Non Executive/Independent Directors Dr.R.A.Mashelkar Mr.GautamBanerjee Mr.GoverdhanMehta Mr.N.Vaghul Mr.S.Ramadorai Mr.DeepakSatwalekar Mr.KekiDadiseth Mr.SiddharthNMehta @Therearenotransactionsduringtheyearwiththeabovecompanies
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2. Details of transactions with related parties. (`inCrores)
Details of Transactions Jointly Controlled Entities
Associates & Intermediates
Other Related Parties
Total
2017 2016 2017 2016 2017 2016 2017 2016Purchase of Goods-PGL - - - - 4.70 4.12 4.70 4.12-PiramalGlassUSAInc. - - - - 4.91 8.54 4.91 8.54
TOTAL - - - - 9.61 12.66 9.61 12.66Sale of Goods-PiramalGlassUSAInc. - - - - 1.09 - 1.09 --Allergan - - 65.69 59.24 - - 65.69 59.24
TOTAL - - 65.69 59.24 1.09 - 66.78 59.24Amenities Charges-PiramalEstates - - - - - 1.52 - 1.52-AasanDevelopers - - - - 1.47 0.28 1.47 0.28
TOTAL - - - - 1.47 1.80 1.47 1.80Rendering of Services-Allergan - - 0.53 0.94 - - 0.53 0.94-Others - - - - - 0.01 - 0.01
TOTAL - - 0.53 0.94 - 0.01 0.53 0.95Royalty Expense- PCSL - - - - 21.75 30.00 21.75 30.00
TOTAL - - - - 21.75 30.00 21.75 30.00Rent Expense-GPMH - - - - 0.01 - 0.01 --PiramalEstates - - - - - 10.54 - 10.54-AasanDevelopers - - - - 15.80 2.00 15.80 2.00-Others - - - - 1.16 0.54 1.16 0.54
TOTAL - - - - 16.97 13.08 16.97 13.08Reimbursements of expenses recovered-PGL - - - - 1.65 - 1.65 --PiramalEstates - - - - - 0.36 - 0.36- PPL - - 0.05 0.12 - - 0.05 0.12-ConvergenceChemicalsPrivateLimited 0.19 - - - - - 0.19 -- PRL - - - - 0.22 - 0.22 --Others - - - - - 0.27 - 0.27
TOTAL 0.19 - 0.05 0.12 1.87 0.63 2.11 0.75Reimbursements of expenses paid-PiramalGlassUSAInc - - - - 0.18 1.06 0.18 1.06-GPMH - - - - - 1.52 - 1.52-AasanDevelopers - - - - 0.55 - 0.55 -
TOTAL - - - - 0.73 2.58 0.73 2.58Donation Paid-PiramalWaterPrivateLimited - - - - 0.02 - 0.02 -
TOTAL - - - - 0.02 - 0.02 -Purchase of Fixed Assets-PRLAgastyaPrivateLimited - - - - 408.03 - 408.03 -
TOTAL - - - - 408.03 - 408.03 -Security deposit placed - --AasanDevelopers - - - - 0.73 - 0.73 -
TOTAL - - - - 0.73 - 0.73 -
Piramal Enterprises Limited Annual Report 2016-17338
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores)Details of Transactions Jointly Controlled
EntitiesAssociates &
Intermediates Other Related
Parties Total
2017 2016 2017 2016 2017 2016 2017 2016Refund of Security Deposit-PiramalEstates - - - - - 0.22 - 0.22
TOTAL - - - - - 0.22 - 0.22Sale of Assets-Topzone - - - - - 70.00 - 70.00
TOTAL - - - - - 70.00 - 70.00Purchase of Securities-PiramalForging - - - - - 0.01 - 0.01-PiramalSecurity - - - - - * - *-PiramalHospitality - - - - - * - *
TOTAL - - - - - 0.01 - 0.01Dividend Income-ShriramCapital - - 8.30 36.06 - - 8.30 36.06-ShriramTransport - - 22.60 22.60 - - 22.60 22.60-ShriramCityUnion - - 9.87 10.20 - - 9.87 10.20-Allergan - - 19.60 - - - 19.60 -
TOTAL - - 60.37 68.86 - - 60.37 68.86*-BelowtheroundingoffthresholdappliedbytheGroup
Finance granted/(repayments)-Convergence 16.91 12.29 - - - - 16.91 12.29
TOTAL 16.91 12.29 - - - - 16.91 12.29
Loan Taken /(repayments) - Net-ShriramLife - - (5.00) 5.00 - - (5.00) 5.00
TOTAL - - (5.00) 5.00 - - (5.00) 5.00Interest received on loans/investments-Convergence 3.74 - - - - - 3.74 --Others - 0.02 - - - - - 0.02
TOTAL 3.74 0.02 - - - - 3.74 0.02Interest paid on loans-ShriramLife - - 0.21 0.02 - - 0.21 0.02
TOTAL - - 0.21 0.02 - - 0.21 0.02Sale of Investments-TheSriHariTrust - - - - 55.59 - 55.59 -
TOTAL - - - - 55.59 - 55.59 -Contribution to Funds- PPFT - - - - 24.98 29.06 24.98 29.06-PiramalHealthcareLimitedEmployeesGroup GratuityAssuranceScheme
- - - - - 5.00 - 5.00
TOTAL - - - - 24.98 34.06 24.98 34.06
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Apart from the above, the Group has transacted with the following subsidiaries which have not been consolidated (Refer note 39 (a)):
(`inCrores)Particulars 2017 2016Expenditure towards Corporate Social Responsibility activities- PFEL 20.89 18.76- PSMRI 9.14 12.71- Udgam 0.21 0.57
TOTAL 30.24 32.04Donation Paid- PFEL 1.50 - - PSMRI 7.49 0.52
TOTAL 8.99 0.52 Finance granted /(repayments) - Net (including loans and Equity contribution in cash or in kind) - PSMRI 1.50 -
TOTAL 1.50 - Interest Received on Loans/Investments - PSMRI 0.32 -
TOTAL 0.32 -
Allthetransactionsweremadeonnormalcommercialtermsandconditionsandatmarketrates.
Compensation of key managerial personnel Theremunerationofdirectorsandothermembersofkeymanagerialpersonnelduringtheyearwasasfollows:
(`inCrores)Particulars 2017 2016Short-termemployeebenefits 19.93 17.41Post-employmentbenefits 3.26 2.78Otherlong-termbenefits 0.85 0.74Commissionandotherbenefitstonon-executive/independentdirectors 2.76 2.67
TOTAL 26.80 23.60
PaymentsmadetothedirectorsandothermembersofkeymanagerialpersonnelareapprovedbytheNomination&RemunerationCommittee
3. Balances of related parties.
(`inCrores)Account Balances Jointly Controlled Entities Associates &
Intermediates Other Related Parties Total
2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015Trade Receivables-PGL - - - - - - - - 0.81 - - 0.81-PiramalGlassUSAInc - - - - - - 0.08 0.17 - 0.08 0.17 - -PiramalEstates - - - - - - 0.83 0.83 - 0.83 0.83 - -AasanDevelopers - - - - - - 1.30 0.56 - 1.30 0.56 - -Others - - - - - - - 0.05 0.01 - 0.05 0.01
TOTAL - - - - - - 2.21 1.61 0.82 2.21 1.61 0.82Advance from Customer-Allergan - - - - 2.87 - - - - - 2.87 -
TOTAL - - - - 2.87 - - - - - 2.87 - Consideration Receivable-Topzone - - - - - - - 70.00 - - 70.00 -
TOTAL - - - - - - - 70.00 - - 70.00 -
Piramal Enterprises Limited Annual Report 2016-17340
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(`inCrores)Account Balances Jointly Controlled Entities Associates &
Intermediates Other Related Parties Total
2017 2016 2015 2017 2016 2015 2017 2016 2015 2017 2016 2015Loans from Related Parties-ShriramLife - - - - 5.00 - - - - - 5.00 -
TOTAL - - - - 5.00 - - - - - 5.00 - Long-Term Financial Assets-AasanDevelopers - - - - - - 7.28 7.28 - 7.28 7.28 - -PiramalEstates - - - - - - - - 7.78 - - 7.78-ConvergenceChemicalsPrivateLimited 24.10 7.19 - - - - - - - 24.10 7.19 -
TOTAL 24.10 7.19 - - - - 7.28 7.28 7.78 31.38 14.47 7.78Trade Payables-PiramalGlassUSAInc - - - - - - 0.38 0.21 0.09 0.38 0.21 0.09-PiramalEstates - - - - - - - - 0.56 - - 0.56-PGL - - - - - - 0.15 0.65 - 0.15 0.65 - - PCSL - - - - - - 3.71 11.45 12.65 3.71 11.45 12.65 -AasanDevelopers - - - - - - 0.30 - - 0.30 - - -Others - - - - - - - 0.07 0.01 - 0.07 0.01
TOTAL - - - - - - 4.54 12.38 13.31 4.54 12.38 13.31 Payable for Purchase of Assets-PRLAgastyaPrivateLimited - - - - - - 36.38 - - 36.38 - -
TOTAL - - - - - - 36.38 - - 36.38 - - Current Account balances with related parties- PCSL - - - - - - 0.03 - - 0.03 - - -PGL - - - - - - 1.71 - - 1.71 - - - PPL - - - 0.01 - - - - - 0.01 - - -Convergence 2.20 - - - - - - - - 2.20 - - - PRL - - - - - - 0.22 - - 0.22 - -
TOTAL 2.20 - - 0.01 - - 1.96 - - 4.17 - -
Apart from the above, the Group has balances outstanding with the following subsidiaries which have not been consolidated (Refer note 39 (a)):
`incroresLoans to related parties - Unsecured (at amortised cost) 2017 2016 2015- PSMRI 1.50 - -
TOTAL 1.50 - -
Alloutstandingbalancesareunsecuredandarerepayableincash
44 Property,Plant&Equipment,CapitalWorkInProgress,NonConvertibleDebentures,Loans,BrandsandTrademarks,InterCorporateDepositsandOtherFinancialAssetsamountingto` 13,693.18Crores(Ason31stMarch2016` 3,596.51Croresandason1stApril20151,694.22Crores)aremortgaged/hypothecatedasasecurityagainstlongtermsecuredborrowingsasatMarch31,2017.
InventoriesandTradereceivablesamounting`231.34Crores(Ason31stMarch2016` 332.83Croresandason1stApril2015211.53Crores)arehypothecatedasasecurityagainstshorttermsecuredborrowingsasatMarch31,2017.
45 The Group’s significant operating lease arrangements are mainly in respect of residential / office premises, computers, motor vehicles andvaporizers.Theaggregateleaserentalspayableontheseleasingarrangementsarechargedasrentunder“OtherExpenses”inNote36.
Theseleasearrangementsareforaperiodrangingfromoneyeartofifteenyearsandareinmostcasesrenewablebymutualconsent,onmutuallyagreeableterms.
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`incroresPayable As at
March 31, 2017As at
March 31, 2016As at
April 1, 2015
NotLaterthanoneyear 68.35 72.25 77.35Laterthanoneyearbutnotlaterthanfiveyears 180.87 213.85 157.63Laterthanfiveyears 43.80 37.30 30.20
Rentexpenses,recognisedunderOtherExpenses(ReferNote36)pertainstominimumleasepaymentonly.
46 EarningsPerShare(EPS)-EPSiscalculatedbydividingtheprofitattributabletotheequityshareholdersbytheweightedaveragenumberofequitysharesoutstandingduringtheyear.Numbersusedforcalculatingbasicanddilutedearningsperequityshareareasstatedbelow:
`incrores
For the Year Ended March 31, 2017
For the Year Ended March 31, 2016Particulars
1.ProfitattributabletoownersofPiramalEnterprisesLimited(`inCrores) 1,252.33 904.742.WeightedNumberofShares(Nos.) 172,563,100 172,563,1003.Earnings/(Loss)pershare-BasicandDiluted(`) 72.6 52.4
4.Facevaluepershare(`) 2.00 2.00
47 (a) The Company conducts research and development to find new sustainable chemical routes for pharmaceutical& herbal products. ThecompanyisundertakingdevelopmentactivitiesforOralSolidsandSterileInjectables,apartfromotherActivePharmaceuticalIngredients. TheCompanyhasresearchanddevelopmentcentresinMumbai,EnnoreandAhmedabad.
DetailsofadditionstoPropertyPlant&Equipments&IntangiblesunderDevelopmentandqualifyingRevenueExpenditureforDepartmentofScientific&IndustrialResearch(DSIR)approvedresearchanddevelopmentfacilities/divisionoftheCompanyatMumbai,EnnoreandAhmedabad(witheffectfromSeptember23,2016)fortheyearareasfollows;
`incrores
For the Year Ended March 31, 2017
For the Year Ended March 31, 2016Description
Revenue Expenditure 43.39 35.36 Capital Expenditure, NetAdditionstoPropertyPlant&Equipments 7.11 30.28AdditionstoIntangiblesunderDevelopment 11.55 - Less:SaleproceedsoftheassetsandTransferoftheAssets - 3.75Less:CreditfortransferofR&DassetsoutofR&Dcenter - 6.74
TOTAL 18.66 19.79
During the yearendedMarch31, 2015, theCompanyhaddecided to curtail investments inNewChemical Entity research.Accordingly,Costs andwrite-downsassociatedwiththescale-downincurredduringthepreviousyear,disclosedunderExceptionalIncome/(Expenses)(ReferNote37),arementionedbelow:
`incrores
For the Year Ended March 31, 2016Description
(Gain)/LossonsaleofPropertyPlant&Equipment (2.56)TOTAL (2.56)
Piramal Enterprises Limited Annual Report 2016-17342
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
(b) TheGroup through its subsidiary Piramal Imaging SAhas invested in the followingmolecules: - FSPG - targeting ametabolic pathwaywhichbalancesoxidativestressincancerandprovidesanadditionalgrowthadvantageforavarietyoftumors.
-Bombesin-targetingaccurateandearlierdetectionofprostatecancerandimprovedstagingofthedisease -GP1-a18F-labeledPETtracerthatbindsspecificallytothekeyreceptorinvolvedinplateletaggregationandthrombiformation.
48 TheConsolidated results for theyearendedMarch31,2017 includes the results forPiramalCriticalCare ItaliaS.P.A,PiramalHoldings (Suisse)SA,PiramalTechnologiesSAandPiramalCriticalCareDeutschlandGmbHbasedonauditedaccountsuptotheirrespectivefinancialyearendingDecember31,2016andmanagementestimatespreparedbyrespectiveCompany’sManagementfortheinterimperiodendingMarch31,2017.TheresultsofPiramalDutchHoldingsN.V.,BluebirdAeroSystemsLimited,PiramalCriticalCareSouthAfrica(Pty)LtdandPiramalHealthcarePensionTrusteesLimitedarebasedonmanagementestimatesfortheyearendedMarch31,2017asauditedresultswereunavailable.ThepercentageofcombinedRevenuesfromoperationsfortheyearendedMarch31,2017foralltheabovecompaniestotheConsolidatedRevenueis0.34%.Thepercentageofcombinedprofit/(loss)fortheyearendedMarch31,2017foralltheabovecompaniestotheConsolidatedProfitandLossis(1.44)%.
49 CAPITAL MANAGEMENT TheGroupmanagesitscapitaltoensurethatitwillbeabletocontinueasgoingconcernwhilemaximisingthereturntostakeholdersthroughthe
optimisationofthedebtandequitybalance.ThecapitalstructureoftheGroupconsistsofnetdebt(borrowingsasdetailedinnotes18,23and24offsetbycashandbankbalances)andtotalequityoftheGroup.
TheGroupdeterminestheamountofcapitalrequiredonthebasisofannualaswellaslongtermoperatingplansandotherstrategicinvestmentplans.Thefundingrequirementsaremetthroughnonconvertibledebtsecuritiesorotherlong-term/short-termborrowings.TheGroupmonitorsthecapitalstructureonthebasisoftotaldebttoequityratioandmaturityprofileoftheoveralldebtportfoliooftheGroup.
ThecapitalcomponentsoftheGroupareasgivenbelow:
`incrores
As at March 31, 2017 March 31, 2016 April 1, 2015
Total Equity 14,895.78 12,948.47 13,425.60Borrowings-Current 12,079.48 6,828.93 2,796.54Borrowings-NonCurrent 14,495.69 7,474.00 3,687.27CurrentMaturitiesofLongTermDebt 3,875.81 1,975.86 702.53Total Debt 30,450.98 16,278.79 7,186.34Cash&Cashequivalents (1,490.44) (297.98) (278.71)Net Debt 28,960.54 15,980.81 6,907.63Debt/Equity Ratio 1.94 1.23 0.51
ThetermsoftheSecuredandunsecuredloansandborrowingscontaincertainfinancialcovenantsprimarilyrequiringtheCompanyandit’ssubsidiariestomaintaincertainfinancialratioslikeTotalDebttoTotalNetWorth,InterestCoverageRatio,FixedAssetCoverratio,Minimumnetworthconditions,etc.TheCompanyandit’ssubsidiariesarebroadlyincompliancewiththesaidcovenantsandbankshavegenerallywaived/condonedsuchcovenants.
50 RISK MANAGEMENT TheGroup’sactivitiesexposeittomarketrisk,liquidityriskandcreditrisk. The Group has an independent and dedicated Enterprise Risk Management (ERM) system to identify, manage and mitigate business risks.
BoardhasapprovedtheAssetLiabilityManagementPolicyandtheformationofAssetLiabilityManagementCommittee(ALCO).TheALCOincludestheGroup’s seniormanagement and an external industry expert. It defines the strategy formanaging liquidity and interest rate risks in thebusiness.
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Thisnoteexplainsthesourcesofriskwhichthegroupisexposedtoandhowthegroupmanagestheriskandtheimpactofhedgeaccountinginthefinancialstatements.
Risk Exposure arising from ManagementLiquidityrisk Borrowingsandotherliabilities ALCOdeliberatesonthestaticliquiditygapstatement,futureassetgrowthplans,tenorofassets,
marketliquidityandpricingofvarioussourcesoffunds.Itdecidesontheoptimalfundingmixtakingintoconsiderationtheassetstrategyandafocusondiversifyingsourcesoffunds.
Marketrisk-Interestrate Long-term borrowings atvariablerates
ALCO reviews the interest rate gap statement and themix of floating and fixed rate assets andliabilities.TheRiskManagementGrouphasalsoinitiatedascenarioanalysistoassesstheshort-termimpactofinterestratesonnetinterestincome(NII).
Market risk - Securities pricerisks
Sensitivityanalysis TheGroupcontinuetoeffectivelyevaluatevariousrisksinvolvedinunderlyingassets,beforeandaftermakinganysuchstrategicinvestments.
Marketrisk-Foreignexchange Sensitivityanalysis The centralised treasury function aggregates the foreign exchange exposure and takes prudentmeasurestohedgetheexposurebasedonprevalentmacroeconomicconditions.
Creditrisk Cashandcashequivalents,tradereceivables, derivative financialinstruments, financial assetsmeasuredatamortisedcost.
Diversificationofbankdeposits,creditlimitsandlettersofcredit.Each investment in financial services is assessed by the investment team as well as independentrisk team on the risk-return framework. The combined analysis of these teams is presented tothe Investment Committee for investment decision. The risk is being partly mitigated by settingup a concentration risk framework, which incentivises business units to diversify portfolio acrosscounterparties,sectorsandgeographies.
a. Liquidity Risk Management LiquidityRiskreferstoinsufficiencyoffundstomeetthefinancialobligations.LiquidityRiskManagementimpliesmaintenanceofsufficientcash
andmarketablesecuritiesandtheavailabilityoffundingthroughanadequateamountofcommittedcreditlinestomeetobligationswhendue.
The Group has formulated an Asset Liability Management Policy. The Asset Liability Management Committee (ALCO) is responsible for themanagement of the Group’s short-term,medium-term and long-term funding and liquiditymanagement requirements. The Groupmanagesliquidityriskbymaintainingadequatereserves,bankingfacilitiesandbycontinuouslymonitoringforecastandactualcashflows,andbyassessingthematurityprofilesoffinancialassetsandliabilities.TheGrouphasaccesstoundrawnborrowingfacilitiesattheendofeachreportingperiod,asdetailedbelow:
TheGrouphasthefollowingundrawncreditlinesavailableasattheendofthereportingperiod.
`incrores
As at Particulars March 31, 2017 March 31, 2016 April 1, 2015-Expiringwithinoneyear 9,324.28 3,544.15 3,887.95-Expiringbeyondoneyear - - -
9,324.28 3,544.15 3,887.95
ThefollowingtablesdetailtheGroup’sremainingcontractualmaturityforitsnon-derivativefinancialliabilitieswithagreedrepaymentperiods.ThetableshavebeendrawnupbasedontheundiscountedcashflowsoffinancialliabilitiesbasedontheearliestdateonwhichtheGroupcanberequiredtopay.Thetablesincludebothinterestandprincipalcashflows.Totheextentthatinterestflowsarefloatingrate,therateapplicableasofreportingperiodendsrespectivelyhasbeenconsidered.ThecontractualmaturityisbasedontheearliestdateonwhichtheGroupmayberequiredtopay.
Piramal Enterprises Limited Annual Report 2016-17344
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
`incrores
March 31, 2017Maturities of Financial Liabilities Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Borrowings 16,209.51 15,915.83 2,419.56 1,056.29 TradePayables 764.29 - - - DerivativeFinancialLiabilities 30.73 - - - OtherFinancialLiabilities 1,206.07 149.74 0.74 -
18,210.60 16,065.57 2,420.30 1,056.29
`incrores
March 31, 2016Maturities of Financial Liabilities Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Borrowings 9,350.60 7,119.92 1,290.64 -TradePayables 702.56 - - -DerivativeFinancialLiabilities - 4.03 - -OtherFinancialLiabilities 271.36 39.57 3.56 -
10,324.52 7,163.52 1,294.20 -
`incrores
April 1, 2015Maturities of Financial Liabilities Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Borrowings 3,718.75 3,139.05 1,031.42 21.03TradePayables 668.04 - - - OtherFinancialLiabilities 112.78 2.53 - -
4,499.57 3,141.58 1,031.42 21.03
ThefollowingtabledetailstheGroup’sexpectedmaturityfor itsnon-derivativefinancialassets.Thetablehasbeendrawnupbasedontheundiscountedcontractualmaturitiesofthefinancialassetsincludinginterestthatwillbeearnedonthoseassets.Theinclusionofinformationonnon-derivativefinancialassetsisnecessaryinordertounderstandtheGroup’sliquidityriskmanagementastheliquidityismanagedonanetassetandliabilitybasis.Hence,maturitiesoftherelevantassetshavebeenconsideredbelow.
`incrores
March 31, 2017Maturities of Financial Assets Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Investments&Loans 5,573.46 13,930.32 6,792.19 2,102.99 TradeReceivables 1,147.86 - - -
6,721.32 13,930.32 6,792.19 2,102.99
`incrores
March 31, 2016Maturities of Financial Assets Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Investments&Loans 3,882.11 10,820.71 5,103.84 837.46TradeReceivables 1,004.90 - - -
4,887.01 10,820.71 5,103.84 837.46
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`incrores
April 1, 2015Maturities of Financial Assets Upto 1 year 1 to 3 years 3 to 5 years 5 years & above Investments&Loans 3,307.33 4,360.28 1,015.95 92.52TradeReceivables 845.59 - - -
4,152.92 4,360.28 1,015.95 92.52
Thebalancesdisclosedinthetableabovearethecontractualundiscountedcashflows.Balancesduewithin12monthsequaltheircarryingbalancesastheimpactofdiscountingisnotsignificant
Incaseofloancommitments,theexpectedmaturitiesareasunder:
`incrores
March 31, 2017 March 31, 2016 April 1, 2015Within 1 year Within 1 year Within 1 year
Commitmenttoinvestinnon-convertibledebentures 106.45 1,257.45 798.94CommitmenttoinvestinInterCompanyDeposits/Loans 230.40 555.45 170.00CommitmenttoinvestinOptionallyConvertibleDebentures - - 100.00
TOTAL 336.85 1,812.90 1,068.94
`incrores
March 31, 2017 March 31, 2016 April 1, 20151 to 3 years 1 to 3 years 1 to 3 years
Commitment to invest in AIF 75.00 85.00 -TOTAL 75.00 85.00 -
b. Interest Rate Risk Management TheGroupisexposedtointerestrateriskasithasassetsandliabilitiesbasedonfloatinginterestratesaswell.TheGrouphasanapprovedAssetand
LiabilityManagementPolicywhichempowerstheAssetandLiabilityManagementCommittee(ALCO)toassesstheinterestrateriskrunbyitandprovideappropriateguidelinestotheTreasurytomanagetherisk.TheALCOreviewstheinterestrateriskonperiodicbasisanddecidesontheassetprofileandtheappropriatefundingmix.TheALCOreviewstheinterestrategapstatementandtheinterestratesensitivityanalysis.
TheexposureoftheCompany’sborrowingstotheinterestrateriskattheendofthereportingperiodismentionedbelow:
`incrores
As at Particulars March 31, 2017 March 31, 2016 April 1, 2015Variablerateborrowings 11,541.91 5,536.55 3,623.55Fixedrateborrowings 18,712.80 10,668.76 3,686.27
30,254.71 16,205.31 7,309.82
Thesensitivityanalysisbelowhavebeendeterminedbasedontheexposuretointerestratesforassetsandliabilitiesattheendofthereportingperiod.Forfloatingrateassetsandliabilities,theanalysisispreparedassumingtheamountoftheliabilities/assetsoutstandingattheendofthereportingperiodwasoutstandingforthewholeyearandtheratesareresetaspertheapplicableresetdates.Thebasisriskbetweenvariousbenchmarksusedtoresetthefloatingrateassetsandliabilitieshasbeenconsideredtobeinsignificant.
Piramal Enterprises Limited Annual Report 2016-17346
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Ifinterestratesrelatedtoborrowingshadbeen100basispointshigher/lowerandallothervariableswereheldconstantfortheCompanyanditssubsidiariesinIndia,theGroup’s
-Profitbeforetaxfortheyearended/OtherEquity(pretax)asonMarch31,2017woulddecrease/increaseby 78.68Crores(Previousyear 28.95Crores).ThisismainlyattributabletotheGroup’sexposuretoborrowingsatfloatinginterestrates.
Ifinterestratesrelatedtoborrowingshadbeen25basispointshigher/lowerandallothervariableswereheldconstantfortheCompany’ssubsidiarieslocatedoutsideIndia,theGroup’s
-Profitbeforetaxfortheyearended/OtherEquity(pretax)asonMarch31,2017woulddecrease/increaseby` 9.19Crores(Previousyear` 6.60Crores).ThisismainlyattributabletotheGroup’sexposuretoborrowingsatfloatinginterestrates.
Ifinterestratesrelatedtoloansgiven/debenturesinvestedhadbeen100basispointshigher/lowerandallothervariableswereheldconstant,theGroup’s
-Profitbeforetaxfortheyearended/OtherEquity(pretax)asonMarch31,2017woulddecrease/increaseby`68.38Crores(Previousyear` 7.76Crores).ThisismainlyattributabletotheGroup’sexposuretolendingsatfloatinginterestrates.
c. Other price risks TheGroupisexposedtoequitypricerisksarisingfromequityinvestmentsandclassifiedinthebalancessheetatfairvaluethroughOtherComprehensive
Income.
Equity price sensitivity analysis: Thetablebelowsummarisestheimpactofincreases/decreasesontheGroup’sEquityandOCIfortheperiod.Analysisisbasedontheassumptionthat
equityindexhadincreased/decreasedby5%withalltheothervariablesheldconstant,andtheseinvestmentsmovedinthelinewiththeindex.
`incrores
Impact on OCIParticulars March 31, 2017 March 31, 2016NSENifty100,Increaseby5% 199.46 157.13NSENifty100,Decreaseby5% (199.46) (157.13)
TheGrouphasdesignatedthefollowingsecuritiesasFVTOCIInvestments: ShriramCityUnionFinanceLimited ShriramTransportFinanceCompanyLimited
TheGroupchosethispresentationalternativebecausetheinvestmentweremadeforstrategicpurposesratherthanwithaviewtoprofitonsubsequentsale,andtherearenoplanstodisposeoftheseinvestments.
50 (d) FOREIGN CURRENCY RISK MANAGEMENT The Group is exposed to Currency Risk arising from its trade exposures and Capital receipt / payments denominated, in other than the
FunctionalCurrency.TheGrouphasadetailedpolicywhichincludessettingoftherecognitionparameters,benchmarktargets,theboundarieswithinwhich the treasury has to perform and also lays down the checks and controls to ensure the effectiveness of the treasury function. TheGrouphasdefinedstrategiesforaddressingtherisksforeachcategoryofexposures(e.g.forexports,forimports,forloans,etc.).Thecentralisedtreasuryfunctionaggregatestheforeignexchangeexposureandtakesprudentmeasurestohedgetheexposurebasedonprevalentmacro-economicconditions.
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i) Derivatives outstanding as at the reporting datei. Firm commitment and highly probable forecast transaction
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
ForwardcontractstosellUSD/INR 5.38 351.54 3.90 267.17 7.28 473.92ForwardcontractstosellEUR/USD 0.50 37.51 1.20 91.38 - - ForwardcontractstosellGBP/USD 0.19 19.02 1.20 114.57 0.95 87.28
ii. Receivable of Loan to related parties
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
ForwardcontractstosellUSD 4.18 271.70 4.33 296.94 3.07 194.36
iii. Loans payable to banks
As at March 31, 2017 As at March 31, 2016 As at April 1, 2015FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
CrosscurrencyinterestrateswapUSD/INR 3.77 244.18 6.02 398.93 - -
ii) Particulars of foreign currency exposures as at the reporting dateCurrencies March 31, 2017 March 31, 2016 As at April 1, 2015
Advances from customers Trade receivables Advances from customers Trade receivables Advances from customers Trade receivables
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
EUR 0.04 2.96 1.92 133.05 0.04 2.73 0.57 42.97 0.01 0.91 1.01 67.36
USD 0.62 39.96 4.80 311.33 0.46 30.56 3.72 246.70 0.28 17.53 3.41 213.40
GBP 0.12 9.45 1.51 122.54 * 0.14 0.73 69.31 0.01 0.65 0.76 70.61
AUD - - 0.01 0.35 - - - - * 0.09 0.01 0.64
CHF - - - - - - * 0.17 - - - -
CAD - - - - - - 0.02 0.78 - - - -
SGD - - 0.01 0.35 - - * 0.16 - - * -
Currencies March 31, 2017 March 31, 2016 As at April 1, 2015Advances to vendors Trade payables Advances to vendors Trade payables Advances to vendors Trade payables
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
CHF * 0.25 0.06 3.81 0.10 7.12 0.03 2.04 * 0.31 0.05 2.94EUR 0.06 4.13 1.13 78.48 1.16 86.71 0.35 26.07 1.22 82.22 0.25 16.64 GBP 0.01 0.58 0.10 7.93 0.04 3.43 0.03 3.16 0.02 1.96 0.06 5.87JPY 0.15 5.34 0.13 7.49 0.03 0.02 0.07 0.04 0.05 0.03 0.13 0.08SEK 0.13 1.01 0.04 0.27 0.13 1.03 0.04 0.28 0.13 0.97 0.04 0.26USD 0.19 12.34 1.19 76.86 0.44 29.00 2.26 149.27 0.22 13.89 1.75 109.41INR - - 0.17 0.17 - - - - - - 0.12 0.12HKD - - - - - - - - - - * 0.03THB 0.04 0.07 - - 0.04 0.07 - - 0.04 0.04 - - AUD - - - - - - * 0.08 - - - - CAD - - - - - - * 0.05 * * * 0.02SGD - - - - * * - - - - - - NZD - - - - - - * * - - * *
*-BelowtheroundingoffthresholdappliedbytheGroup
Piramal Enterprises Limited Annual Report 2016-17348
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Currencies March 31, 2017 March 31, 2016 As at April 1, 2015Loan from Banks Loan from Banks Loan from Banks
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In CroresUSD 7.53 488.37 1.12 73.94 0.85 52.94EUR 1.71 118.74 - - - -GBP 0.25 20.44 - - - -
Currencies March 31, 2017 March 31, 2016 As at April 1, 2015
Loans and interest receivable
Current Account Balances
Loans and interest receivable
Current Account Balances
Loans and interest receivable
Current Account Balances
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In Crores
USD 44.00 2,853.94 0.07 4.39 33.74 2,236.05 (0.02) (0.13) 19.68 1,207.79 0.07 4.47
GBP 5.32 430.33 0.02 1.47 1.06 101.14 0.17 16.15 0.64 59.71 0.13 12.05
EUR 11.87 822.80 (0.13) (9.23) 0.33 24.96 (0.32) (24.40) 0.22 14.69 0.06 3.91
CHF 0.25 16.39 - - 0.32 22.08 - - 0.28 18.22 * 0.06
Currencies March 31, 2017 March 31, 2016 As at April 1, 2015Loans taken and interest payable Loans taken and interest payable Loans taken and interest payable
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In CroresEUR 7.84 543.25 2.93 220.59 3.13 209.89USD 6.44 417.78 1.67 110.85 4.67 292.03GBP 4.77 385.73 1.96 186.61 1.26 116.07CHF - - 10.38 716.72 - - CAD - - * 0.07 - -
Currencies March 31, 2017 March 31, 2016 As at April 1, 2015Other Current liabilities Other Current liabilities Other Current liabilities
FC in Crores ` In Crores FC in Crores ` In Crores FC in Crores ` In CroresUSD - - 0.15 10.00 - -
*-BelowtheroundingoffthresholdappliedbytheGroup
Oftheabove,theGroupismainlyexposedtoUSD,GBP,EUR&CHF.HencethefollowingtableanalysestheGroup’sSensitivitytoa5%increaseanda5%decreaseintheexchangeratesofthesecurrenciesagainstINR.
For the year ended March 31, 2017 For the year ended March 31, 2016 Currencies Increase/
DecreaseTotal Assets
in FCTotal
Liabilities in FC
Change in exchange rate
Impact on Profit or Loss/Other
Equity for the year
Total Assets in FC
Total Liabilities
in FC
Change in exchange rate
Impact on Profit or Loss/Other Equity
for the yearUSD Increase by 5%# 49.07 15.78 3.24 107.86 37.87 5.52 3.31 107.08USD Decrease by 5%# 49.07 15.78 (3.24) (107.86) 37.87 5.52 (3.31) (107.08)GBP Increase by 5%# 6.85 5.24 4.05 6.52 1.99 1.99 4.77 (0.00)GBP Decrease by 5%# 6.85 5.24 (4.05) (6.52) 1.99 1.99 (4.77) 0.00EUR Increase by 5%# 13.85 10.86 3.46 10.35 2.05 3.31 3.77 (4.75)EUR Decrease by 5%# 13.85 10.86 (3.46) (10.35) 2.05 3.31 (3.77) 4.75CHF Increase by 5%# 0.25 0.06 3.24 0.62 0.42 0.03 3.45 1.35 CHF Decrease by 5%# 0.25 0.06 (3.24) (0.62) 0.42 0.03 (3.45) (1.35)
#Holdingalltheothervariablesconstant
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iii) During the year, the functional currencies of the following subsidiaries were reassessed and changed: A. PiramalCriticalCareLimitedhadGreatBritainpoundsasitsfunctionalcurrency.HoweverafterOctober2016,theentityhadmajorityassets
andliabilitiesdenominatedinUSDandduetooverseasacquisitionwhereinmajorityofrevenuewouldbedenominatedinUSD,thefunctionalcurrencywaschangedtoUSD.
B. PiramalDutchHoldingsN.V.hadEUROasitsfunctionalcurrency.SinceOctober2016,theentityhadmajorityassetsandliabilitiesdenominatedinUSDandhencethefunctionalcurrencywaschangedtoUSD.
50 (e) ACCOUNTING FOR CASH FLOW HEDGE TheGrouphastakenforeigncurrencyfloatingrateborrowingswhicharelinkedtoLIBOR.Formanagingtheforeigncurrencyriskandinterestrate
riskarisingfromchangesinLIBORonsuchborrowings,theGrouphasenteredintocross-currencyinterestrateswap(CCIRS)fortheentireloanliability.TheGrouphasdesignatedtheCCIRS(hedginginstrument)andtheborrowing(hedgeditem)intoahedgingrelationshipandapplieshedgeaccounting.
UnderthetermsoftheCCIRS,theGrouppaysinterestatthefixedratetotheswapcounterpartyinINRandreceivesthefloatinginterestpaymentsbasedonLIBORinforeigncurrency.Asthecriticaltermsofthehedgeditemandthehedginginstrument(notional,interestperiods,underlyingandfixedrates)arematchingandtheinterestcashflowsareoff-setting,aneconomicrelationshipexistsbetweenthetwo.Thisensuresthatthehedginginstrumentandhedgeditemhavevaluesthatgenerallymoveintheoppositedirection.
HedgeEffectiveness Testing is assessed at designationdateof thehedging relationship, andon anongoingbasis. Theongoing assessment isperformedataminimumateachreportingdateoruponasignificantchangeincircumstancesaffectingthehedgeeffectivenessrequirements,whichevercomesfirst.
ThedateonwhichCCIRSandtheborrowingsweredesignatedintohedgingrelationshipislaterthanthedateonwhichtherespectivecontractswereenteredinto.Thistimingdifferencehascausedhedgeineffectivenesstoacertainextent,theeffectofwhichhasbeenrecognisedinprofitorlossundertheheadExchangegain/losses.
FollowingtableprovidesquantitativeinformationregardingthehedginginstrumentasonMarch31,2017:
`incroresType of hedge and risks
Nominal value Carrying amount of hedging instruments
(included under “other current and non-current
financial liabilities”)
Maturity date
Hedge ratio Average contracted
fixed interest rate
Changes in fair value of hedging instrument
used as the basis for recognising hedge
effectiveness
Changes in the value of hedged item
used as the basis for recognising hedge
effectiveness(Liabilities) (Liabilities)
Cash Flow HedgeForeign currency andInterestraterisk
900.00
37.71 June2017toJune2018
1:1 9.46% (51.23) 51.23
FollowingtableprovidestheeffectsofhedgeaccountingonfinancialperformancefortheyearendedMarch31,2017:
`incroresType of hedge Changes in the value
of hedging instruments recognised in Other
comprehensive income
Hedge ineffectiveness recognised in profit or loss
Amount reclassified from cash flow hedge reserve to
profit or loss
Line-item affected in statement of profit or loss because of reclassification
Cash flow hedgeInterestRateriskandForeignExchangeRisk 51.23 - 28.27 Finance Cost
(27.66) ForeignExchange(gain)/loss
Piramal Enterprises Limited Annual Report 2016-17350
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Movementincashflowhedgingreserve: `incrores
Particulars AmountAsonMarch31,2016 - ChangesinfairvalueofCCIRS (51.23)Amountsreclassifiedtoprofitorloss 55.93Deferredtaxesrelatedtoabove (1.63)AsonMarch31,2017 3.07
50 (f) CREDIT RISK Typically,thereceivablesoftheGroupcanbeclassifiedin2categories: 1.PharmaandInformationManagementTradeReceivables 2.FinancialServicesbusinessLoanBookprimarilycomprisingofRealestatedevelopers,InfrastructureCompaniesandOthers.PleasereferNote10
forriskmitigationtechniquesfollowedforPharmaandInformationManagementTradeReceivables.RiskmitigationmeasuresforFinancialServicesbusinessprimarilycomprisingofRealEstateDevelopersandStrategicInvestmentGroupsareexplainedinthenotebelow.
CreditriskreferstotheriskthatcounterpartywilldefaultonitscontractualobligationsresultinginfinanciallosstotheGroup.TheGrouphasadoptedapolicyofdealingwithcreditworthycounterpartiesandobtainingsufficientcollateral,whereappropriate,asameansofmitigatingtheriskoffinanciallossfromdefaults.TheRiskmanagementteamhasdevelopedproprietaryinternalratingmodelstoevaluateriskreturntrade-offforthe loansand investmentsdonebytheGroup.Theoutputoftraditionalcreditratingmodel isanestimateofprobabilityofdefault.Thesemodelsaredifferent fromthe traditionalcredit ratingmodelsas they integratebothprobabilityofdefaultand lossgivendefaultintoasinglemodel.
Thelendingexposureincludeslendingtothebelowsectors
Exposure as atSectors March 31, 2017 March 31, 2016 April 1, 2015Real Estate 87.58% 85.96% 83.24%Infrastructure 3.59% 6.71% 8.97%Others 8.83% 7.33% 7.79%
Credit Risk Management Creditriskmanagementisachievedbyconsideringvariousfactorslike: • Cashflowatrisk–Thisisanassessmentofthestandaloneprojectorbusinessfromwhichinterestservicingandprincipalrepaymentisexpectedtobe
done. • Securitycover–Thisisanassessmentofthevalueofthesecurityunderstressscenariowhichisfurtheradjustedforfactorslikeliquidity,enforceability,
transparencyinvaluationetc.ofthecollateral. • Promoterstrength–Thisisanassessmentofthepromoterfromfinancial,managementandperformanceperspective. • Exit–Thisisanassessmentoftheliquidityoftheloanorinvestment. Theoutputfromeachoftheanalysisisconvertedtoariskweightequivalent.Eachofthefourcomponentsoftheriskanalysisareassignedaspecificweight
whichdifferbasedontypeofinvestment.Theriskweightisthenconvertedintocapitalrequirement.Therequiredcapitalandthereturniscombinedtocreateametricwhichisusedfordealassessment.
BasedontheaboveassessmenttheriskteamcategorisesthedealsintothebelowRiskGrades
-Good Dealswithveryhighriskadjustedreturns-InvestmentGrade Dealswithhighriskadjustedreturns-ManagementReviewGrade Dealswithriskadjustedreturnsrequiredasperlendingpolicy-NotAdvisableGrade Dealswithlowerthanrequiredriskadjustedreturns
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Further,aperiodicreviewoftheperformanceoftheportfolioisalsocarriedoutbytheRiskGroup.TheRiskGroupadjuststhestresscaseconsideredduring the initial approval based on actual performanceof the deal, developments in the sector, regulatory changes etc. The deal level output iscombinedtoformaportfoliosnapshot.Thetrendsfromportfolioareusedtoprovidestrategicinputstothemanagement.
Thecreditriskonliquidfundsandotherfinancialinstrumentsislimitedbecausethecounterpartiesarebankswithhighcredit-ratingsassignedcredit-ratingagenciesormutualfunds.
Provision for Expected Credit Loss TheGroupconsiderstheprobabilityofdefaultuponinitialrecognitionofassetandwhethertherehasbeenasignificantincreaseincreditriskonanongoingbasisthroughouteachreportingperiod.ToassesswhetherthereisasignificantincreaseincreditrisktheGroupcomparestheriskofadefaultoccurringontheassetasatthereportingdatewiththeriskofdefaultasatthedateofinitialrecognition.Itconsidersavailablereasonableandsupportiveforward-lookingparameters,whicharebothqualitativeandquantitative.TheseparametershavebeendetailedinNoteno.viiofSignificantAccountingPolicies.BasedontheresultyieldedbytheaboveassessmenttheFinancialassetsareclassifiedinto(1)Standard(Performing)Asset,(2)SignificantCreditDeteriorated(Under-Performing)Asset(3)Default(Non-Performing)Asset(CreditImpaired).Macroeconomicinformation(suchasregulatorychanges,marketinterestrateorgrowthrates)isincorporatedaspartoftheinternalratingmodel.Ingeneral,itispresumedthatcreditriskhassignificantlyincreasedsinceinitialrecognitionifthepaymentsaremorethan30dayspastdue.ForthepurposeofexpectedcreditlossanalysistheGroupdefinesdefaultasanyassetwithmorethan90daysoverdues.Thisisalsoaspertherebuttablepresumptionprovidedbythestandard.
TheGroupprovidesforexpectedcreditlossbasedonthefollowing:
Category - Description Basis for Recognition of Expected Credit LossStage1-Standard(Performing)Assets 12 month ECLStage2-SignificantCreditDeterioratedAssets LifetimeECLStage3-Default(Non-Performing)Assets(CreditImpaired) LifetimeECL
AsatApril1,2015,acombinationofbothinternalandexternalProbabilityofDefault(PD)hasbeenusedbytheGroupsincetheassetportfoliowasataverynascentstage.TheinternalPDhasbeencomputedbydividingthedefaultobservedduringtheyearwiththenumberofinvestmentspresentonthebookatthestartoftheyear.ForExternalPDtheGrouphasrelieduponthe10yearPDdatafromexternalratingagency.ForLossgivendefault(LGD),theGrouphasreliedoninternalandexternalinformation.
FortheyearendedMarch31,2017andMarch31,2016theGrouphasdevelopedaPDMatrixafterconsideringsomeparametersasstatedbelow:
(1)BorrowerGrade(2)PastOverdueHistory(3)RepeatDealwithBorrower(4)StatusfrommonthlyAssetMonitoringreport(5)DealIRR(6)DealTenureremaining.BasedontheseparameterstheGrouphascomputedthePD.TheGrouphasalsobuilt inmodelscorecardstodeterminethe internalLGD.However,sincetherehasbeennodefaulthistorytosubstantiatetheinternalLGD,theGrouphasmadeuseofacombinationofbothinternalaswellasexternalLGD.
Expected Credit Loss as at the Reporting period:
`inCrores
As at March 31, 2017Particulars Asset Group Gross Carrying
Amount at DefaultExpected
Credit LossCarrying Amount net of impairment provision
VeryHighqualityliquidassets Other Financial Assets and Loans 1,143.68 - 1,143.68 Assets for which credit risk has not significantlyincreasedfrominitialrecognition
Investments at amortised cost 17,172.72 327.40 16,845.32Loans 6,440.17 119.97 6,320.20
Assets forwhich credit riskhas increased significantlybutnotcreditimpaired
Investments at amortised cost 163.61 5.68 157.93Loans 44.64 2.33 42.31
Assets forwhich credit riskhas increased significantlyandcreditimpaired
Investments at amortised cost 64.66 26.30 38.36Loans 115.85 50.78 65.07
TOTAL 25,145.33 532.46 24,612.87
Piramal Enterprises Limited Annual Report 2016-17352
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
`inCrores
As at March 31, 2016Particulars Asset Group Gross Carrying
Amount at DefaultExpected
Credit LossCarrying Amount net of impairment provision
VeryHighqualityliquidassets OtherFinancialAssetsandLoans 1,102.72 - 1,102.72Assets for which credit risk has not significantlyincreasedfrominitialrecognition
Investmentsatamortisedcost 9,775.59 220.44 9,555.15Loans 2,632.02 58.92 2,573.10
Assets forwhich credit riskhas increased significantlybutnotcreditimpaired
Loans 53.41 4.02 49.39
Assets forwhich credit riskhas increased significantlyandcreditimpaired
Investmentsatamortisedcost 23.93 10.51 13.42
Loans 103.57 50.02 53.55
TOTAL 13,691.24 343.91 13,347.33
`inCrores
As at April 1, 2015Particulars Asset Group Gross Carrying
Amount at DefaultExpected
Credit LossCarrying Amount net of impairment provision
VeryHighqualityliquidassets OtherFinancialAssetsandLoans 1,369.47 - 1,369.47Assets for which credit risk has not significantlyincreasedfrominitialrecognition
Investmentsatamortisedcost 3,430.62 74.58 3,356.04Loans 1,350.49 38.81 1,311.68
Assets forwhich credit riskhas increased significantlyandcreditimpaired
Investmentsatamortisedcost 22.31 11.11 11.20Loans 124.21 66.26 57.95
TOTAL 6,297.10 190.76 6,106.34
a) Reconciliation of Loss Allowance
`inCrores
For the year ended March 31, 2017 Investments and Loans Loss allowance
measured at 12 month expected losses
Loss allowance measured at life-time expected losses Financial assets for which credit
risk has increased significantly and not credit-impaired
Financial assets for which credit risk has increased significantly and
credit-impaired Balanceatthebeginningoftheyear 279.35 4.02 60.54 Transferredto12-monthECL - - - TransferredtoLifetimeECLnotcreditimpaired - - - TransferredtoLifetimeECLcreditimpaired-collectiveprovision - - - TransferredtoLifetimeECLcreditimpaired-specificprovision (2.90) - 2.90 Charge to Statement of Profit and Loss OnAccountofRateChange (51.68) - (2.86) OnAccountofDisbursements 306.07 5.68 39.59 OnAccountofRepayments (83.47) (1.69) (23.09)
Balance at the end of the year 447.37 8.01 77.08
Thereasonforincreaseinprovisionisduetoincreaseintheloans&investmentswhichispartiallyoffsetbyareductioninrateofECL.
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`inCrores
For the year ended March 31, 2016 Investments and Loans Loss allowance
measured at 12 month expected losses
Loss allowance measured at life-time expected losses Financial assets for which credit
risk has increased significantly and not credit-impaired
Financial assets for which credit risk has increased significantly and
credit-impaired
Balanceatthebeginningoftheyear 113.38 - 77.38Transferredto12-monthECL - - - TransferredtoLifetimeECLnotcreditimpaired (1.36) 1.36 - TransferredtoLifetimeECLcreditimpaired-collectiveprovision (1.00) - 1.00Charge to Statement of Profit and Loss OnAccountofRateChange (3.46) 2.66 3.61 OnAccountofDisbursements 234.50 - - OnAccountofRepayments (62.71) - (21.45)
Balance at the end of the year 279.35 4.02 60.54
Thereasonforincreaseinprovisionisduetoincreaseintheloans&investmentswhichispartiallyoffsetbyareductioninrateofECL.
b) Movement in Expected Credit Loss on undrawn loan commitments:
`incrores
Expected Credit Loss on Loan CommitmentsParticulars March 31, 2017 March 31, 2016Balancesasatthebeginningoftheyear 39.93 25.34 Additions 5.96 16.54 Rate change (0.33) (0.14)Amount used (39.20) (1.81)Balances as at the end of the year 6.36 39.93ClassifiedasNon-current(Refernote20) - - ClassifiedasCurrent(Refernote26) 6.36 39.93
TOTAL 6.36 39.93
c) TheamountsofFinancialAssetsoutstandingintheBalanceSheetalongwiththeundrawnloancommitments(refernote28)asattheendofthereportingperiodrepresentthemaximumexposuretocreditrisk.
DescriptionofCollateralheldassecurityandothercreditenhancements Thecredit riskmanagementpolicyof theGroupprescribesa security coverof200%of theproposed facilityamount.TheGroupperiodically
monitorsthequalityaswellasthevalueofthesecuritytomeettheprescribedlimits.ThecollateralheldbytheGroupvariesoncasetocasebasisandincludes:
i) First/SubservientchargeontheLandand/orBuildingoftheprojectorotherprojects ii) First/Subservientchargeonthefixedandcurrentassetsoftheborrower iii) Hypothecationoverreceivablesfromfundedprojectorotherprojectsoftheborrower iv) PledgeonSharesoftheborrowerortheirrelatedparties v) GuaranteesofPromoters/PromoterUndertakings vi) Postdated/Undatedcheques
Asatthereportingdate,theratioofvalueofthecollateralheldassecurityforthecreditimpairedfinancialassetstotheexposureatdefaultfortheseassetsishigherthan1.
Piramal Enterprises Limited Annual Report 2016-17354
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
d) Thecreditimpairedassetsasatthereportingdatesweresecuredbychargeonlandandbuildingandprojectreceivablesamountingto:
`incroresSectors March 31, 2017 March 31, 2016 April 1, 2015ValueofSecurity 105.36 66.97 69.15
Collateral taken over by the Group against recovery on credit impaired asset: TheGrouphastakenpossessionofaresidentialpropertywhichwasmortgagedascollateraltorecoverduesonacreditimpairedasset.Thecarrying
valueofthecollateralis`15.91croresandaccountedforasassetheldforsale.
51 MOVEMENT IN PROVISIONS :
`incroresParticulars Litigations / Disputes Provisions for Grants -
CommittedOnerous Contracts Incentive
As at As at As at As atMarch 31,
2017March 31,
2016March 31,
2017March 31,
2016March 31,
2017March 31,
2016March 31,
2017March 31,
2016
Balancesasatthebeginningoftheyear 13.39 26.42 28.83 24.29 17.19 36.55 22.60 - Additions - - - - - 17.59 7.62 22.60UnwindingofDiscount - - 2.72 3.05 - - - - Amount used - - (13.25) - (6.12) (35.94) - - Revaluationofclosingbalances - - (0.42) 1.49 (0.65) (1.01) (0.74) - Unusedamountsreversed (9.89) (13.03) - - (1.06) - - - Balances as at the end of the year 3.50 13.39 17.88 28.83 9.36 17.19 29.48 22.60ClassifiedasNon-current(Refernote20) - - 4.91 15.58 4.25 10.08 29.48 22.60ClassifiedasCurrent(Refernote26) 3.50 13.39 12.97 13.25 5.11 7.11 - -
TOTAL 3.50 13.39 17.88 28.83 9.36 17.19 29.48 22.60
Provisionforlitigation/disputesrepresentsclaimsagainsttheGroupnotacknowledgedasdebtsthatareexpectedtomaterialiseinrespectofmattersunderlitigation.Futurecashoutflowsaredeterminableonlyonreceiptofjudgments/decisionspendingwithvariousforums/authorities.
ProvisionforOnerouscontractsrepresentstheamountsprovidedforcontractswheretheunavoidablecostsofmeetingtheobligationsunderthecontractexceedtheeconomicbenefitsexpectedtobereceivedunderit.
ProvisionforgrantsrepresentexpectedcontributionstobepaidinFY2017-18and2018-19.
Provisionforincentiverepresentstock-basedcompensationforcertainemployeesinasubsidiary.
52 ThedetailsofSpecifiedBankNotes(asdefinedintheMCAnotificationGSR308(E)datedMarch31,2017)heldandtransactedduringtheperiodfromNovember8,2016toDecember30,2016areasfollows:
(`incrores)Particulars Specified Bank
Notes (SBN)Other Denomination
NotesTotal
Closingcashinhandason08.11.2016 0.06 0.04 0.10 (+)Permittedreceipts@ 0.03 0.27 0.30 (-)Permittedpayments - 0.23 0.23 (-)AmountdepositedinBanks 0.09 - 0.09 Closing cash in hand as on 30.12.2016 - 0.08 0.08
@ForSBN,itrepresentsunspentadvancelyingwithemployeesubsequentlyreturnedtoemployer.
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53 TheChiefOperatingDecisionmakeroftheCompanyexaminestheGroup’sperformancebothfromaproductandfromageographicperspective.Fromaproductperspective,themanagementhasidentifiedthefollowingreportablesegments:
1.PharmaceuticalsManufacturingandServices 2.FinancialServices 3.InformationManagement
1.PharmaceuticalsManufacturingandServices:Inthissegment,theGrouphasastrongpresenceinPharmaSolutions,CriticalCare,ConsumerProductsServicesandImaging.TheCompanyandcertainsubsidairiesactasaContractDevelopmentandmanufacturingorganizationofferingbothAPIsandformulations.TheGroup’scriticalcarebusinessdealsintheinhalationanesthesiamarket.Thegroup’sconsumerproductsbusinessisprimarilyan India-centricconsumerhealthcarebusinesswithstrongbrandsportfolio.TheGroupalsohasapresence in Imagingbusiness;asubsidiaryhasUSFDAandEuropeanCommissionapprovalforthecommercialsaleofitsdiagnosticimagingagent.
2.FinancialServices:Company’sfinancialservicessegmentoffersacompletesuiteoffinancialproductstomeetthediverseneedsofitscustomers.TheCompanylendstovariousrealestatedevelopersandunderspecialsituationopportunitiesinvarioussectorsandhasinvestmentsinShriramGroup,throughwhichtheCompanyhasexposuretoretailfinancingsegments.
3. InformationManagement: PEL’s InformationManagementbusiness,DecisionResourcesGroup (DRG), is amarket-leadingdecision-supportplatform in the healthcare information services space. DRG provides indispensable insights to life sciences companies as well as healthcareprovidersandpayersthroughavarietyofhighvalue-addeddataandanalytics,researchreports,andknowledge-basedservices.Theseofferingsenablecustomerstomakeinformedinvestment,costcontainmentandstrategicbusinessdecisionsintheirchosenmarkets.
`incroresParticulars Pharmaceuticals
manufacturing and services
Financial services Information Management
Eliminations Total
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
Revenue from operations 3,972.87 3,485.92 3,351.50 1,739.72 1,222.38 1,155.92 - 0.08 8,546.75 6,381.48Segment Results 333.41 170.04 1,421.55 815.91 104.03 176.89 - - 1,858.99 1,162.84Add:ExchangeGain,Net 45.46 101.26Add:UnallocatedIncome/(Netofunallocated cost)
(157.69) (130.72)
Less:FinanceCost 436.50 373.34Profit before share of net profits of investments accounted for using equity method and tax
1,310.26 760.04
Add:Shareofnetprofitofassociatesandjointventuresaccountedforusingtheequitymethod
169.90 194.21
Less:TaxExpenses 228.12 49.51
Net Profit before Non controlling interest
1,252.04 904.74
Piramal Enterprises Limited Annual Report 2016-17356
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Included in the above Segment results, are the Exceptional Items as mentioned below:
`incroresParticulars Pharmaceuticals
manufacturing and servicesInformation Management Total
March 2017 March 2016 March 2017 March 2016 March 2017 March 2016Gainonsaleofproperties - 70.23 - - - 70.23Costs/(Income)associatedwithR&Dscaledown - 2.56 - - - 2.56 LossonSaleofPiramalClinicalResearchBusiness - (2.60) - - - (2.60)Lossonimpairmentofassets - (15.09) - - - (15.09)LossonsaleofBST-Cargel - (0.16) - - - (0.16)SeverancePay (9.95) - - (9.28) (9.95) (9.28)
TOTAL (9.95) 54.94 - (9.28) (9.95) 45.66
Other Information
`incroresParticulars Pharmaceuticals
manufacturing and servicesFinancial services Information
Management Eliminations Total
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
March 2017
March 2016
Segment Assets 7,086.32 4,729.00 33,003.70 19,248.18 5,846.02 5,466.75 - - 45,936.04 29,443.93UnallocableCorporateAssets 2,303.32 1,535.78Total Assets 48,239.36 30,979.71SegmentLiabilities 1,565.22 881.73 22,478.04 10,718.35 1,086.20 607.95 - - 25,129.46 12,208.03UnallocableCorporateLiabilities 8,227.33 5,823.33Total Liabilities 33,356.79 18,031.36CapitalExpenditure 3,104.05 578.75 31.26 8.18 114.59 499.02 - - 3,249.90 1,085.95UnallocableCapitalExpenditure 408.80 - Depreciationandamortisation 290.41 211.51 2.38 2.55 88.90 41.39 - - 381.70 255.45 NonCashexpenditureotherthandepreciationandamortisation
6.76 15.35 155.01 167.96 1.11 4.23 - - 162.88 187.54
The above segment assets and unallocatedassetsinclude:Investmentinassociatesandjointventuresaccountedforbytheequitymethod
2,752.54 2,597.18
Summary of Segment Assets and Liabilities as at April 1, 2015
(`incrores)
Assets Liabilities Pharmaceuticalsmanufacturingandservices 4,227.99 828.35Financialservices 11,495.90 211.50Informationmanagement 4,585.43 407.36Unallocated 1,693.25 7,129.88
TOTAL 22,002.57 8,577.09
Geographical Segments
`incroresDetails Within India Outside India Eliminations Total
March 2017 March 2016 March 2017 March 2016 March 2017 March 2016 March 2017 March 2016Revenuefromoperations 4,234.18 2,473.76 4,585.12 4,220.38 (272.55) (312.66) 8,546.75 6,381.48CarryingamountofNoncurrentAssets* 2,138.08 1,536.14 9,113.11 6,899.29 0.27 (130.30) 11,251.46 8,305.13
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Geographical Segments as on April 1, 2015
`incroresDetails Within India Outside India Eliminations TotalCarryingamountofNoncurrentAssets* 1,236.03 5,811.60 69.16 7,116.78
*OtherthanFinancialinstruments,deferredtaxassetsandpost-employmentbenefitassetsNocustomercontributedmorethan10%ofthetotalrevenueoftheGroup
54) INCOME TAXES RELATING TO OPERATIONS
a) Income tax recognised in profit or loss
(`inCrores)
Year ended March 31, 2017
Year ended March 31, 2016
Current taxInrespectofthecurrentyear 440.52 298.48Inrespectofprioryears 44.94 (0.06)
485.46 298.42Deferred taxInrespectofthecurrentyear (257.34) (248.91)Total income tax expense recognised 228.12 49.51
b) Income tax recognised in other comprehensive income
(`inCrores)
Year ended March 31, 2017
Year ended March 31, 2016
Current tax - -Deferred taxArisingonincomeandexpensesrecognisedinothercomprehensiveincome:ExchangelossonlongtermloanstransferredtoOCI (51.57) - Fairvalueremeasurementofhedginginstrumentsenteredintoforcashflowhedges 1.63 - Remeasurementofdefinedbenefitobligation (1.41) (1.02)Total income tax recognised in other comprehensive income (51.35) (1.02)
c) Deferred tax balances
Thefollowingistheanalysisofdeferredtaxassets/(liabilities)presentedintheconsolidatedstatementoffinancialposition:
(`inCrores)
March 31, 2017 March 31, 2016 April 1, 2015Deferredtaxassets(net) 625.21 317.93 91.84Deferredtaxliabilities(net) (30.75) (30.26) (33.81)
594.46 287.67 58.03
Deferredtaxassetsandliabilitiesarerecognizedforthefuturetaxconsequencesoftemporarydifferencesbetweenthecarryingvaluesofassetsandliabilitiesandtheirrespectivetaxbases,andunutilizedbusinesslossanddepreciationcarry-forwardsandtaxcredits.Deferredtaxassetsarerecognizedtotheextentthat it isprobablethatfuturetaxable incomewillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtax losses,depreciationcarry-forwardsandunusedtaxcreditscouldbeutilized.
Piramal Enterprises Limited Annual Report 2016-17358
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Movement of Deferred Tax during the year ended March 31, 2017
(`incrores)Particulars Opening
balanceRecognised in
profit or lossUtilized during
the yearRecognised in other
comprehensive income
Closing balance
Deferred tax (liabilities)/assets in relation to: Measurementoffinancialassetsatamortisedcost/fairvalue 53.07 29.39 - - 82.46Provision for expected credit loss on financial assets (includingcommitments)
129.96 47.95 - - 177.91
OtherProvisions 4.77 2.64 - - 7.41Amortisationofexpenseswhichareallowedincurrentyear 3.67 (1.11) - - 2.56 Disallowancesforitemsallowedonpaymentbasis 38.39 1.81 - 1.41 41.61 Effectofrecognitionofleaserentexpenseonstraightlinebasis 2.74 (0.24) - - 2.50Unrealisedprofitmarginoninventory - 40.32 - - 40.32Property,PlantandEquipmentandIntangibleassets (139.46) (26.99) - - (166.45)Measurementoffinancialliabilitiesatamortisedcost (4.29) (14.36) - - (18.65)Fairvaluemeasurementofderivativecontracts (3.07) 0.66 - - (2.41)FairValuationofInvestment (8.21) (7.22) - - (15.43)UnamortisedDistributionExpenses (9.54) 2.84 - - (6.70)Shareofundistributedearningsofassociates (10.75) (0.85) - - (11.60)Othertemporarydifferences (5.90) 10.90 - (1.90) 3.10Cashflowhedges - - - (1.63) (1.63)Deferred tax on exchange differences on long term loansdesignatedasnetinvestmentstransferredtoOCI
- (51.57) - 51.57 -
Broughtforwardlosses - 76.35 - - 76.35Unusedtaxcredit(MATcreditentitlement) 236.29 146.82 - - 383.11
TOTAL 287.67 257.34 - 49.45 594.46
Movement of Deferred Tax during the year ended March 31, 2016
(`incrores)Particulars Opening
balanceRecognised in
profit or lossUtilized during
the yearRecognised in other
comprehensive income
Closing balance
Deferred tax (liabilities)/assets in relation to: Measurementoffinancialassetsatamortisedcost/fairvalue 51.78 1.29 - - 53.07Provision for expected credit loss on financial assets (includingcommitments)
26.34 103.62 - - 129.96
OtherProvisions 15.15 (10.38) - - 4.77Amortisationofexpenseswhichareallowedincurrentyear 5.12 (1.45) - - 3.67Disallowancesforitemsallowedonpaymentbasis 27.61 9.76 - 1.02 38.39Effectofrecognitionofleaserentexpenseonstraightlinebasis - 2.74 - - 2.74Property,PlantandEquipmentandIntangibleassets (131.78) (7.68) - - (139.46)Measurementoffinancialliabilitiesatamortisedcost (1.47) (2.82) - - (4.29)Fairvaluemeasurementofderivativecontracts (2.99) (0.08) - - (3.07)FairValuationofInvestment (7.28) (0.93) - - (8.21)UnamortisedDistributionExpenses (12.83) 3.29 - - (9.54)Shareofundistributedearningsofassociates (6.70) (4.05) - - (10.75)Othertemporarydifferences (8.72) 2.07 - 0.75 (5.90)Broughtforwardlosses 76.69 (76.69) - - 0.00Unusedtaxcredit(MATcreditentitlement) 27.11 230.22 (21.04) - 236.29
TOTAL 58.03 248.91 (21.04) 1.77 287.67
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Theincometaxexpensefortheyearcanbereconciledtotheaccountingprofitasfollows:
(`inCrores)Particulars For the year ended
March 31, 2017For the year ended
March 31, 2016
Consolidated Profit before tax 1,310.26 760.04Income tax expense calculated at 34.608% (2015-16: 34.608%) 453.45 263.03Effectofexpensesthatarenotdeductibleindeterminingtaxableprofit 77.50 48.84Utilisationofpreviouslyunrecognisedtaxlosses (323.79) (392.10)Effectofincomeswhicharetaxedatdifferentrates (11.09) 50.69Profitonsaleofproperty,plant,andequipment - (3.70)Effectofincomeswhichareexemptfromtax (24.73) (19.48)Effectofexpensesforwhichweighteddeductionundertaxlawsisallowed (18.18) (21.57)Effectofpreviouslyunrecognisedtaxlossesusedtoreducedeferedtaxexpense (76.35) - Taxprovisionforearlieryears 44.94 (0.06)Taxlossesforwhichnodeferredincometaxisrecognised 83.34 75.45Temporarydifferencesforwhichnodeferredincometaxwasrecognised 8.14 2.25 Chargeforpreviouslyrecogniseddeferredtaxassets - 20.09Unrealisedprofitmarginoninventory (40.32) - Dividendreceivedfromoverseassubsidiary - 16.37DeferredtaxonexchangedifferencesonlongtermloansdesignatedasnetinvestmentstransferredtoOCI 51.57 - Shareofundistributedearningsofassociates 0.85 4.05Others 2.79 5.63 Income tax expense recognised in consolidated statement of profit or loss 228.12 49.51
Thetaxrateusedforthereconciliationsaboveisthecorporatetaxrateof34.608%(fortheyear2016-17and2015-16)payablebycorporateentitiesinIndiaontaxableprofitsundertaxlawinIndianjurisdiction.
Inassessingtherealizabilityofdeferredtaxassets,theGroupconsiderstheextenttowhichitisprobablethatthedeferredtaxassetwillberealized.Theultimaterealizationofdeferredtaxassets isdependentuponthegenerationoffuturetaxableprofitsduringtheperiodsinwhichthosetemporarydifferencesandtaxlosscarry-forwardsbecomedeductible. TheGroup considers theexpected reversal ofdeferred tax liabilities, projected future taxable incomeand taxplanning strategies inmaking thisassessment.
Based on this, the Group believes that it is probable that the Groupwill realize the benefits of these deductible differences. The amount of deferred tax assetconsidered realizable, however, could be reduced in the near term if the estimates of future taxable income during the carry-forward period are reduced.
AsatMarch31,2017,theGrouphasrecognizedDeferredTaxAssetof` 76.35Croresonunusedtax losses,consideringprofits inthepast2yearsandreasonablecertaintyofrealisationofsuchdeferredtaxassetinthefutureyears.
Deferredtaxassetamountingto` 677.08crores,` 927croresand`1,158.42crores(excludingtheamountalreadyrecognisedtotheextentofDeferredTaxLiabiltiesamountingto` 57.49Crores)asatMarch31,2017,March31,2016andApril1,2015,respectivelyinrespectofunusedtaxlosseswasnotrecognizedbytheGroup,considering that theCompanyand its subsidiarieshadahistoryof tax losses for recentyears.UnrecognizedDeferred taxof`198.41crores,`206.91croresand`176.14croresasatMarch31,2017,March31,2016andApril1,2015areattributabletocarryforwardtaxlosseswhicharenotsubjecttoexpirationdates.Theremainingunrecognizeddeferredtaxof`478.67crores,`720.09croresand`982.28croresasatMarch31,2017,March31,2016andApril1,2015,respectivelyareattributabletocarryforwardtaxlosseswhichexpiresinvariousyearsthroughfiscal2037.
TheCompanyhascalculateditstaxliabilityforcurrentdomestictaxesafterconsideringMAT.TheexcesstaxpaidunderMATprovisionsoverandabovenormaltaxliabilitycanbecarriedforwardandset-offagainstfuturetax liabilitiescomputedundernormaltaxprovisions.TheCompanywasrequiredtopayMATduringthecurrentandpreviousyearandaccordingly,adeferredtaxassetof` 236.29croresand`146.82croreshasbeenrecognizedinthestatementoffinancialpositionasatMarch31,2016and2017respectively,whichcanbecarriedforwardforaperiodof10years(15yearsw.e.f.currentyear)fromtheyearofrecognition.
Piramal Enterprises Limited Annual Report 2016-17360
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
55 (A) DISCLOSURES MANDATED BY SCHEDULE III BY WAY OF ADDITIONAL INFORMATION
Name of the entity Net Assets (total assets minus total liabilities)
Share in Profit or (loss) Share in Other Comprehensive Income
Share in Total Comprehensive Income
As a % of Consolidated
net assets
Amount (` Crores)
As a % of Consolidated profit or loss
Amount (` Crores)
As a % of Consolidated
Other Comprehensive
Income
Amount (` Crores)
As a % of Consolidated
Total Comprehensive
Income
Amount (` Crores)
ParentPiramalEnterprisesLimited 22.41% 3,331.89 46.44% 581.55 107.34% 731.90 67.92% 1,313.44SubsidiariesIndianPHLFininvestPrivateLimited 0.32% 47.11 1.71% 21.47 0.00% - 1.11% 21.47SearchlightHealthPrivateLimited 0.30% 45.35 (0.18)% (2.20) 0.00% - (0.11)% (2.20)PiramalCapitalLimited 0.01% 2.00 0.00% - 0.00% - 0.00% - PiramalFundManagementPrivateLimited 2.02% 300.74 4.21% 52.67 (0.72)% (4.88) 2.47% 47.79INDIAREIT Investment Management Co. 1.13% 167.53 0.56% 6.96 0.00% - 0.36% 6.96PiramalAssetManagementPrivateLimited 0.00% 0.08 (0.03)% (0.32) 0.00% - (0.02)% (0.32)PiramalFinanceLimited 22.79% 3,391.24 21.71% 271.85 0.31% 2.08 14.16% 273.94PELFinholdPrivateLimited 0.00% 0.01 0.00% - 0.00% - 0.00% - Piramal Investment Advisory Services PrivateLimited
0.00% 0.66 0.00% 0.02 0.00% - 0.00% 0.02
PiramalConsumerProductsPrivateLimited 0.00% 0.01 (0.00)% (0.00) 0.00% - (0.00)% (0.00)PiramalSystems&TechnologiesPrivateLimited 0.26% 38.52 (0.12)% (1.53) 0.00% - (0.08)% (1.53)PiramalTechnologiesSA 0.00% 0.02 (0.00)% (0.04) (0.09)% (0.63) (0.03)% (0.67)PiramalInvestmentOpportunitiesFund 0.12% 18.30 0.14% 1.70 0.00% - 0.09% 1.70PiramalAssetReconstructionPrivateLimited 0.01% 2.02 (0.00)% (0.01) 0.00% - (0.00)% (0.01)PELAssetResurgenceAdvisoryPrivateLimited 0.04% 6.39 (0.16)% (2.01) 0.00% - (0.10)% (2.01)ForeignPiramalInternational 0.00% - 0.00% - 0.00% - 0.00% - PiramalHoldings(Suisse)SA (0.78)% (116.76) (0.33)% (4.18) (1.26)% (8.57) (0.66)% (12.75)PiramalImagingSA 4.34% 646.35 (3.17)% (39.70) 6.74% 45.99 0.33% 6.29PiramalImagingGmbH 0.00% 0.27 0.83% 10.36 (0.09)% (0.63) 0.50% 9.74PiramalImagingLimited (1.53)% (228.25) (1.49)% (18.62) 0.99% 6.73 (0.62)% (11.89)PiramalDutchHoldingsN.V. 4.20% 625.03 (1.61)% (20.18) 2.16% 14.72 (0.28)% (5.46)PiramalHealthcareInc. 2.51% 373.07 (3.65)% (45.68) (4.49)% (30.65) (3.95)% (76.34)PiramalCriticalCare,Inc. 3.19% 474.92 23.51% 294.38 0.00% - 15.22% 294.38PiramalPharmaInc. 0.12% 17.73 (4.21)% (52.68) 0.00% - (2.72)% (52.68)PELPharmaInc. (4.89)% (727.13) (1.12)% (14.06) 0.08% 0.57 (0.70)% (13.49)Ash Stevens LLC 1.94% 288.18 (0.14)% (1.80) 0.00% - (0.09)% (1.80)PiramalPharmaSolutionsInc. 1.82% 271.12 0.23% 2.93 0.00% - 0.15% 2.93PiramalCriticalCareItalia,S.P.A 0.13% 19.34 0.95% 11.90 (0.13)% (0.86) 0.57% 11.04PiramalCriticalCareDeutschlandGmbH 0.05% 7.02 (0.20)% (2.56) (0.10)% (0.68) (0.17)% (3.24)PiramalHealthcare(UK)Limited 2.44% 363.88 5.16% 64.57 (5.08)% (34.62) 1.55% 29.95PiramalHealthcarePensionTrusteesLimited 0.00% - 0.00% - 0.00% - 0.00% - PiramalCriticalCareLimited 0.18% 27.41 (8.85)% (110.79) (3.53)% (24.10) (6.97)% (134.89)PiramalHealthcare(Canada)Limited 0.78% 115.65 4.83% 60.45 (0.89)% (6.04) 2.81% 54.41 PiramalCriticalCareSouthAfrica(Pty)Ltd (0.00)% (0.11) (0.01)% (0.11) 0.00% - (0.01)% (0.11)PiramalDutchIMHoldcoB.V. 0.45% 67.33 0.27% 3.42 (1.23)% (8.36) (0.26)% (4.94)PEL-DRGDutchHoldcoB.V.(andSubsidaries) 17.24% 2,566.33 1.17% 14.67 0.00% - 0.76% 14.67
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Name of the entity Net Assets (total assets minus total liabilities)
Share in Profit or (loss) Share in Other Comprehensive Income
Share in Total Comprehensive Income
As a % of Consolidated
net assets
Amount (` Crores)
As a % of Consolidated profit or loss
Amount (` Crores)
As a % of Consolidated
Other Comprehensive
Income
Amount (` Crores)
As a % of Consolidated
Total Comprehensive
Income
Amount (` Crores)
Non-controlling Interests in all subsidiaries (0.09)% (13.21) (0.02)% (0.29) 0.00% - (0.01)% (0.29)Associates (Investment as per the equity method)IndianAllerganIndiaPrivateLimited 0.71% 106.00 2.25% 28.11 (0.01)% (0.08) 1.45% 28.03PiramalPhytocareLimited 0.01% 0.88 0.00% 0.01 (0.00)% (0.00) 0.00% 0.01ShriramCapitalLimited(ReferNote4(a)) 0.00% - 10.30% 129.00 (0.00)% (0.00) 6.67% 129.00Foreign BluebirdAeroSystemsLimited 0.26% 38.38 (0.22)% (2.80) 0.00% - (0.14)% (2.80)ContextMattersInc 0.10% 15.11 (0.09)% (1.10) 0.00% - (0.06)% (1.10)Joint venture (Investment as per the equity method)IndianConvergenceChemicalsPrivateLimited 0.23% 34.74 (0.03)% (0.32) 0.00% - (0.02)% (0.32)Shrilekha Business Consultancy Private Limited(ReferNote4(a))
17.18% 2,557.42 1.36% 17.00 0.00% - 0.88% 17.00
TOTAL 100.00% 14,882.57 100.00% 1,252.04 100.00% 681.89 100.00% 1,933.93
55 (B) DISCLOSURES MANDATED BY SCHEDULE III BY WAY OF ADDITIONAL INFORMATION FOR THE YEAR ENDED MARCH 31, 2016
Name of the entity Net Assets (total assets minus total liabilities)
Share in profit or (loss) Share in Other Comprehensive Income
Share in Total Comprehensive Income
As a % of Consolidated
net assets
Amount (` In
Crores)
As a % of Consolidated profit or loss
Amount (` In
Crores)
As a % of Consolidated
Other Comprehensive
Income
Amount (` In
Crores)
As a % of Consolidated
Total Comprehensive
Income
Amount (` In
Crores)
ParentPiramalEnterprisesLimited 37.22% 4,819.97 73.12% 661.55 115.66% (697.43) (11.87)% (35.88)SubsidiariesIndianPHLFininvestPrivateLimited 0.27% 35.43 (0.01)% (0.10) 0.00% - (0.03)% (0.10)PiramalFundManagementPrivateLimited 2.45% 317.13 0.97% 8.78 (1.81)% 10.90 6.52% 19.68PHLFinancePrivateLimited 4.09% 528.99 9.15% 82.81 0.02% (0.13) 27.40% 82.68PiramalInvestmentAdvisoryServicesPrivateLimited 0.02% 3.07 0.00% 0.02 0.00% - 0.01% 0.02PiramalSystems&TechnologiesPrivateLimited (0.01)% (1.16) 0.31% 2.83 (0.12)% 0.73 1.18% 3.56 PELFinholdPrivateLimited 0.00% 0.01 0.00% - 0.00% - 0.00% - PELAssetResurgenceAdvisoryPrivateLimited 0.04% 5.01 (0.01)% (0.05) 0.00% - (0.02)% (0.05)PiramalConsumerProductsPrivateLimited 0.00% 0.02 0.00% - 0.00% - 0.00% - PiramalAssetReconstructionPrivateLimited 0.02% 2.03 (0.00)% (0.04) 0.00% - (0.01)% (0.04)PiramalInvestmentOpportunitiesFund 0.12% 15.00 0.00% - 0.00% - 0.00% - ForeignPiramalInternational 0.00% - 0.00% - 0.00% - 0.00% - PiramalHoldings(Suisse)SA (3.09)% (400.60) (7.40)% (66.97) (2.64)% 15.90 (16.93)% (51.07)PiramalImagingSA 2.78% 359.35 (2.36)% (21.39) 3.30% (19.89) (13.68)% (41.28)PiramalImagingGmbH (0.01)% (1.56) (5.25)% (47.50) 0.00% - (15.74)% (47.50)PiramalCriticalCareItalia,S.P.A 0.17% 22.01 (1.38)% (12.49) (0.29)% 1.73 (3.57)% (10.76)PiramalCriticalCareDeutschlandGmbH 0.02% 2.80 (0.14)% (1.25) (0.20)% 1.18 (0.02)% (0.07)PiramalCriticalCareLimited 1.15% 149.03 (0.01)% (0.10) (0.67)% 4.06 1.31% 3.96
Piramal Enterprises Limited Annual Report 2016-17362
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
Name of the entity Net Assets (total assets minus total liabilities)
Share in profit or (loss) Share in Other Comprehensive Income
Share in Total Comprehensive Income
As a % of Consolidated
net assets
Amount (` In
Crores)
As a % of Consolidated profit or loss
Amount (` In
Crores)
As a % of Consolidated
Other Comprehensive
Income
Amount (` In
Crores)
As a % of Consolidated
Total Comprehensive
Income
Amount (` In
Crores)
PiramalImagingLimited 0.43% 55.95 (8.09)% (73.23) 0.00% - (24.27)% (73.23)PiramalHealthcare(Canada)Limited (0.13)% (17.14) 4.31% 39.04 (0.35)% 2.13 13.65% 41.17PiramalHealthcare(UK)Limited 2.41% 312.25 2.61% 23.63 0.01% (0.08) 7.81% 23.55 PiramalHealthcarePensionTrusteesLimited 0.00% - 0.00% - 0.00% - 0.00% - PiramalDutchHoldingsN.V. 0.27% 35.16 1.46% 13.18 0.35% (2.09) 3.68% 11.09PiramalHealthcareInc. (8.15)% (1,054.86) (10.35)% (93.60) (16.41)% 98.97 1.78% 5.37PiramalCriticalCare,Inc. 7.48% 969.02 14.75% 133.48 0.00% - 44.24% 133.48PiramalPharmaInc. (0.00)% (0.19) (5.69)% (51.46) 0.00% - (17.06)% (51.46)ColdstreamLaboratoriesInc. 1.87% 241.64 (0.63)% (5.66) 0.00% - (1.88)% (5.66)DRGHoldcoInc. (14.51)% (1,878.23) (2.47)% (22.33) 0.00% - (7.40)% (22.33)PiramalIPPHoldingsLLC 13.25% 1,716.11 0.00% - 0.00% - 0.00% - DecisionResourcesIncanditssubsidiaries 30.26% 3,918.24 14.98% 135.54 3.15% (18.99) 38.63% 116.55 PiramalDutchIMHoldcoB.V. (0.00)% (0.04) (0.00)% (0.04) 0.00% - (0.01)% (0.04)PEL-DRGDutchHoldcoB.V. (0.00)% (0.04) (0.00)% (0.04) 0.00% - (0.01)% (0.04)INDIAREIT Investment Management Co. 1.52% 197.42 0.82% 7.41 0.00% - 2.46% 7.41PiramalAssetManagementPrivateLimited (0.00)% (0.54) (0.15)% (1.39) 0.00% - (0.46)% (1.39)PiramalTechnologiesSA 0.00% 0.01 (0.01)% (0.10) 0.00% - (0.03)% (0.10)Non-controlling Interests in all subsidiaries (0.00)% (0.12) 0.00% - 0.00% - 0.00% - Associates (Investment as per the equity method)IndianShriramCapitalLimited 18.68% 2,419.38 16.94% 153.26 0.00% - 50.79% 153.26 AllerganIndiaPrivateLimited 0.75% 97.57 3.96% 35.81 0.00% - 11.87% 35.81PiramalPhytocareLimited 0.01% 0.87 (0.06)% (0.58) 0.00% - (0.19)% (0.58)Foreign BluebirdAeroSystemsLimited 0.34% 44.30 0.67% 6.06 0.00% - 2.01% 6.06Joint ventures (Investment as per the equity method)IndianConvergenceChemicalsPrivateLimited 0.27% 35.06 (0.04)% (0.34) 0.00% - (0.11)% (0.34)
TOTAL 100.00% 12,948.35 100.00% 904.74 100.00% (603.01) 100.00% 301.73
56 (A) TRANSITION TO Ind AS Overall principle Theaccountingpoliciessetoutinnote2havebeenappliedinpreparingthefinancialstatementsfortheyearended31March2017,thecomparative
informationpresentedinthesefinancialstatementsfortheyearended31March2016andinthepreparationofanopeningIndASbalancesheetat1April2015(theGroup’sdateof transition). Inpreparing itsopening IndASbalancesheet, theGrouphasadjustedtheamounts reportedpreviouslyinfinancialstatementspreparedinaccordancewiththeaccountingstandardsnotifiedunderCompanies(AccountingStandards)Rules,2006(asamended)andotherrelevantprovisionsoftheAct(previousGAAPorIndianGAAP).AnexplanationofhowthetransitionfrompreviousGAAPtoIndAShasaffectedtheGroup’sfinancialposition,financialperformanceandcashflowsissetoutinthefollowingtablesandnotes.
Exemptions and Exceptions availed: SetoutbelowaretheapplicableIndAS101optionalexemptionsandmandatoryexceptionsappliedinthetransitionfrompreviousGAAPtoIndAS.
Ind AS Optional Exemptions: Deemed cost for property, plant and equipment and other intangible assets IndAS101permitsafirst-timeadoptertoelecttocontinuewiththecarryingvalueforallofitsproperty,plantandequipmentasrecognisedinthe
financialstatementsasatthedateoftransitiontoIndAS,measuredasperthepreviousGAAPandusethatasitsdeemedcostasatthedateoftransitionaftermakingnecessaryadjustmentsforde-commissioningliabilities.ThisexemptioncanalsobeusedforintangibleassetscoveredbyIndAS38IntangibleAssets.
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Accordingly,theGrouphaselectedtomeasureallofitsproperty,plantandequipmentandintangibleassetsattheirpreviousGAAPcarryingvalue.
Designation of previously recognized financial instruments IndAS101allowsanentitytodesignateinvestmentsinequityinstrumentsatFVTOCIonthebasisofthefactsandcircumstancesatthedateof
transitiontoIndAS.TheGrouphasdesignatedcertaininvestmentsinequityshareasheldatFVTOCIonthebasisofthefactsandcircumstancesthatexistedatthetransition.
Determining whether an arrangement contains a lease AppendixC to IndAS17 requiresanentity toassesswhetheracontractorarrangementcontainsa lease. Inaccordancewith IndAS17, this
assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option tomake this assessmenton the basis of facts and circumstances existing at the date of transition to IndAS, exceptwhere the effect is expected to be notmaterial. TheGrouphaselectedtoapplythisexemptionforsuchcontracts/arrangements.
Business Combinations IndAS101providestheoptiontoapplyIndAS103prospectivelyfromthetransitiondateorfromaspecificdatepriortothetransitiondate.This
providesrelieffromfullretrospectiveapplicationthatwouldrequirerestatementofallbusinesscombinationspriortothetransitiondate.
ThegroupelectedtoapplyIndAS103prospectivelytobusinesscombinationsoccurringafteritstransitiondate.Businesscombinationsoccurringpriortothetransitiondatehavenotbeenrestated.Thegrouphasappliedsameexemptionforinvestmentinassociatesandjointventures.
Prospective application of Ind AS 21 to business combinations Ind AS 101 allows a first-time adopter not to apply Ind AS 21 Effects of changes in Foreign Exchange Rates retrospectively for business
combinations thatoccurredbefore thedateof transition to IndAS. In suchcases,where theentitydoesnotapply IndAS21 retrospectivelyto fair value adjustments and goodwill, the entity treats them as assets and liabilities of the acquirer entity and not as the acquiree. Thegrouphaselectedtoapplythisexemption.
Cumulative translation differences IndAS101permitscumulativetranslationgainsandlossestoberesettozeroatthetransitiondate.Thisprovidesrelieffromdeterminingcumulative
currencytranslationdifferencesinaccordancewithIndAS21fromthedateasubsidiaryorequitymethodinvesteewasformedoracquired.
Thegroupelectedtoresetallcumulativetranslationgainsandlossestozerobytransferringittoopeningretainedearningsatitstransitiondate.
Ind AS Mandatory Exceptions: Estimates: Anentity’sestimatesinaccordancewithIndASsatthedateoftransitiontoIndASshallbeconsistentwithestimatesmadeforthesamedatein
accordancewithpreviousGAAP(afteradjustmentstoreflectanydifferenceinaccountingpolicies),unlessthereisobjectiveevidencethatthoseestimateswereinerror.IndASestimatesasat1April2015areconsistentwiththeestimatesasatthesamedatemadeinconformitywithpreviousGAAP.TheGroupmadeestimatesforfollowingitemsinaccordancewithIndASatthedateoftransitionasthesewerenotrequiredunderpreviousGAAP: A.InvestmentindebtinstrumentscarriedatFVTPL;and
B.Impairmentoffinancialassetsbasedonexpectedcreditlossmodel.
Derecognition of financial assets and financial liabilities Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or
afterthedateoftransitionto IndAS.However, IndAS101allowsafirst-timeadoptertoapplythede-recognitionrequirements in IndAS109retrospectivelyfromadateoftheentity’schoosing,providedthattheinformationneededtoapplyIndAS109tofinancialassetsandfinancialliabilitiesderecognisedasaresultofpasttransactionswasobtainedatthetimeofinitiallyaccountingforthosetransactions.Thegrouphaselectedtoapplythede-recognitionprovisionsofIndAS109prospectivelyfromthedateoftransitiontoIndAS.
Classification and measurement of financial assets IndAS101requiresanentitytoassessclassificationandmeasurementoffinancialassets(investmentindebtinstruments)onthebasisofthefactsand
circumstancesthatexistatthedateoftransitiontoIndAS.TheGrouphasdeterminedtheclassificationofFinancialAssetsintermsofwhetherthey
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meettheamortizedcostcriteria,FVTPLcriteriaorFVOTCIcriteriabasedonthefactsandcircumstancesthatexistedasoftransitiondate.
Impairment of financial assets: TheGrouphasappliedtheimpairmentrequirementsofIndAS109retrospectively;however,aspermittedbyIndAS101,ithasusedreasonable
andsupportableinformationthatisavailablewithoutunduecostorefforttodeterminethecreditriskatthedatethatfinancialinstrumentswereinitiallyrecognisedinordertocompareitwiththecreditriskatthetransitiondate.
56 (B) RECONCILIATION OF TOTAL EQUITY AS AT MARCH 31, 2016 AND APRIL 1, 2015`incrores
Particulars Notes As at March 31, 2016 (End of last period
presented under previous GAAP)
As at April 1, 2015 (Date of transition)
Total equity (shareholders’ funds) under previous GAAP 12,422.10 11,735.93FairvaluationgainoninvestmentsheldthroughOCI a 705.88 1,398.52Measurementoffinancialassetsatamortisedcost b (175.20) (64.26)MeasurementoffinancialassetsatFVTPL b 38.42 44.18Expectedcreditlossallowanceoninvestments,loansandcommitments c (105.50) (107.19)ReversalofamortisationofgoodwillunderIndAS d 76.07 - Remeasurementofnetpensionassets e (118.88) (95.51)Amortisationofdistributionfees f 27.64 37.54Measurementofforwardexchangecontractsatfairvalue g 8.86 7.73Measurementoffinancialliabilitiesatamortisedcost h 59.78 77.08Recognitionofconstructiveobligation i (28.84) (24.29)Recognitionofleaserentexpenseonstraight-linemethod j (7.94) - DividendsnotrecognisedasliabilityuntildeclaredunderIndAS k - 415.39Impactofequitymethodofaccountingbeingfollowedforassociates/jointventures l 0.62 (3.10)ApplicationofacquisitionmethodofaccountingforBusinessCombinationsunderIndAS103 m 5.98 - Others 0.23 (1.95)Effectofforeigncurrencytranslation n (1.26) - NetDeferredTaximpactonalltheIndASadjustments o 40.39 5.41 Total adjustments to equity 526.25 1,689.55Total Equity Under Ind AS 12,948.35 13,425.48
Reconciliation of total comprehensive income for the year ended March 31, 2016:
`incroresParticulars Notes Year ended March 31, 2016
(latest period presented under previous GAAP)
Profit as per previous GAAP 950.60Adjustments:Measurementoffinancialassetsatamortisedcost b (110.94)MeasurementoffinancialassetsatFVTPL b (5.76)Measurementoflossallowanceoncertainfinancialassetsusingtheexpectedcreditlossmodel c 1.69ReversalofamortisationofgoodwillunderIndAS d 76.07Remeasurementofnetpensionassets e (17.14)Amortisationofdistributionfees f (9.90)Measurementofforwardexchangecontractsatfairvalue g 1.13 Measurementoffinancialliabilitiesatamortisedcost h (17.31)Unwindingofdiscountingofprovisions i (4.55)
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`incroresParticulars Notes Year ended March 31, 2016
(latest period presented under previous GAAP)
Recognitionofleaserentexpenseonstraight-linemethod j (7.94)Impactofequitymethodofaccountingbeingfollowedforassociates/jointventures l 3.72ApplicationofacquisitionmethodofaccountingforbusinesscombinationsunderIndAS103 m 5.98Remeasurementofdefinedbenefitobligationtransferredtoothercomprehensiveincomeand(expense) p 2.02Others 2.10NetDeferredTaximpactonalltheIndASadjustments o 34.97Total effect of transition to Ind AS (45.86)Profit for the year as per Ind AS 904.74Othercomprehensiveincomefortheyear(netoftax) a,e,n,p (603.01)Total comprehensive income under Ind AS 301.73
Notes
a) UnderpreviousGAAP,longterminvestmentsweremeasuredatcostlessdiminutioninvaluewhichisotherthantemporary.UnderIndAS,thesefinancialassetshavebeendesignatedasmeasuredatFVTOCI.OnthedateoftransitiontoIndAS,thesefinancialassetshavebeenmeasuredattheirfairvaluewhichishigherthanthecostasperpreviousGAAP,resultinginanincreaseinthecarryingamountby`705.88croresasatMarch31,2016andby`1,398.52croresasatApril1,2015.FairvaluechangeswithrespecttoinvestmentsinequityinstrumentsdesignatedasatFVTOCIhavebeenrecognisedinFVTOCI–EquityinvestmentsreserveasatthedateoftransitionandsubsequentlyintheothercomprehensiveincomefortheyearendedMarch31,2016.Thisincreasedotherreservesby`705.88croresasatMarch31,2016andby`1,398.52croresasatApril1,2015andOtherComprehensiveIncomefortheyearendedMarch31,2016decreasedby`692.64crores.
b) UnderpreviousGAAP,investments,termloansandinter-corporatedepositswerecarriedatcostwhereasunderIndAS,thesearemeasuredbasedonentity’sbusinessmodelformanagingthefinancialassetsandcontractualcashflowcharacteristicsofthefinancialasset.Theinvestments,termloansandinter-corporatedepositsthatmeetthebusinessmodelandcontractualcashflowtestsaremeasuredatamortisedcostandinterestincomeisrecognisedaspertheeffectiveinterestratemethod.Thosethatdonotmeetthesetestsaremeasuredatfairvalue.Consideringtheabovecriteriatheinvestments,termloansandinter-corporatedepositshavedecreasedby`136.78croresasatMarch31,2016and`20.08croresasatApril1,2015.Thetotalequitydecreasedbyanequivalentamount.TheprofitfortheyearendedMarch31,2016decreasedby 116.70croresonaccountofthesame.
c) UnderpreviousGAAP,provisionfordoubtfulloansandreceivableswascalculatedusingincurredlossmodel.UnderIndAS,theprovisiononfinancialassets and commitments, including trade receivablesneeds tobe calculatedusing theexpected credit lossmodel.Accordingly, an additionalprovisionfor`105.50croreswasrecognizedasatMarch31,2016and`107.19croresasrecognisedatApril1,2015.Thetotalequitydecreasedbyequivalentamount.TheprofitfortheyearendedMarch31,2016increasedby`1.69crores.
d) UnderthepreviousGAAP,goodwillonacquisitioninInformationManagementsegmentwasamortisedoveraperiodof10years.UnderIndAS,goodwillcannotbeamortised,buttestedforimpairment.Accordingly,amortisationof`76.07croreshasbeenwrittenbackinthestatementofprofitandlossfortheyearendedMarch31,2016resultinginanincreaseintheprofitandtotalequityasonthatdate.
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e) UnderpreviousGAAP,thesurplusinthedefinedbenefitplaninanoverseassubsidiarywasrecognisedasanasset.UnderIndAS,suchsurplusisrestrictedtotheextentofthepresentvalueofanyeconomicbenefitsavailableintheformofrefundsfromtheplanorreductionsinfuturecontributionstotheplan.OnthedateoftransitiontoIndAS,thegrouphaswrittenoffthesurplusassetsthusresultinginadecreaseinthetotalequityby`118.88croresasatMarch31,2016andby`95.51croresasatApril1,2015.Thechangesintheeffectoflimitinganetdefinedbenefitassettotheassetceilinghasbeenchargedtoothercomprehensiveincomeresultinginadecreaseof`6.23croresfortheyearendedMarch31,2016.TheprofitfortheyearendedMarch31,2016hasdecreasedby`17.14crores.
f) UnderpreviousGAAP,expensesfordistributionfeeswererecognisedasexpenseasandwhenincurred.AsperIndAS,theseexpensesarerecognisedasassetandamortizedonasystematicbasisthatisconsistentwiththetransferofinvestmentmanagementservicestothecustomer.ThishasresultedintherecognitionofassetasatMarch31,2016of`27.64croresandasatApril1,2015of`37.54croreswithanequivalentincreaseinthetotalequity.TheprofitfortheyearendedMarch31,2016hasdecreasedby`9.90crores.
g) UnderpreviousGAAP,premiumpaidforderivativecontractswasamortizedoverthetermofthederivativecontractswhereasunderIndASthederivativecontractsaremeasuredatFVTPL.Thus,theunamortizedpremiumasonApril1,2015andasonMarch31,2016hasbeenchargedofftoretainedearningsandtotheStatementofProfitandLossrespectivelyandderivativecontractshavebeenrecognisedatfairvalue.ThishasresultedintonetincreaseintotalequityasonMarch31,2016by`8.86CroresandasonApril1,2015by`7.73crores.TheprofitfortheyearendedMarch31,2016increasedby`1.13croresonaccountofthesame.
h) UnderpreviousGAAP,borrowingswererecordedatcostandtransactioncostswerechargedtoStatementofProfitandLossasandwhenincurred.UnderIndAS,transactioncostincurredtowardsoriginationofborrowingsisrequiredtobedeductedfromthecarryingamountofborrowingsoninitialrecognition.ThesecostsarerecognisedintheStatementofProfitandLossoverthetenureoftheborrowingaspartofinterestexpensebyapplyingeffectiveinterestratemethod.Accordingly,borrowingsasatMarch31,2016havebeenreducedby`59.78croresand`77.08croresasatApril1,2015.ThetotalequityincreasedbyanequivalentamountandtheprofitfortheyearendedMarch31,2016decreasedby`17.31crores.
i) UnderpreviousGAAP,noprovisionwasaccountedforConstructiveobligations.UnderIndAS,provisionsneedtoberecognised(atdiscountedvalue)forthetheseobligations.Accordingly,anadditionalprovisionwasrecognisedat`28.84croresasatMarch31,2016and`24.29croresasatApril1,2015.Thetotalequitydecreasedbyequivalentamount.Theunwindingofdiscountsinthiscaseamounted`4.55croresduringtheyearendedMarch31,2016resultingindecreaseinprofittothatextent.
j) UnderpreviousGAAP,therewasnoclearguidanceontreatmentofleaseincentives.UnderIndAS,intheeventthatleaseincentivesarereceivedtoenterintooperatingleases,suchincentivesarerecognisedasaliability.Paymentsmadeunderoperatingleases(netofanyincentivesreceivedfromthelessor)arechargedtoprofitorlossonastraight-linebasisovertheperiodoftheleaseunlessthepaymentsarestructuredtoincreaseinlinewithexpectedgeneralinflationtocompensateforthelessor’sexpectedinflationarycostincreases.Accordingly,thetotalequityasonMarch31,2016andtheprofitfortheyearendedMarch31,2016decreasedby`7.94crores.
k) UnderpreviousGAAP,dividendsonequitysharesrecommendedbytheBoardofDirectorsaftertheendofthereportingperiodbutbeforethefinancialstatementwereapprovedforissuewererecognisedinthefinancialstatementasaliability.UnderIndAS,suchdividendsarerecognisedwhenapprovedbythemembersinageneralmeeting.TheeffectofthischangeisanincreaseintotalequityasatMarch31,2016of` Nil and `415.39croresasatApril1,2015butdoesnotaffecttheprofitfortheyearendedMarch31,2016.
l) UnderpreviousGAAP,PiramalPhytocareLimited (PPL)wasconsideredas longterm investmentandmeasuredatcost.Thegrouphas17.53%shareholding inPPL.Thegrouphas theability toappointdirectorsontheBoardofPPLgiving it thepowertoparticipate in thefinancialandoperatingpolicydecisions.ThusthegrouphassignificantinfluenceoverPPLmakingitanassociate.Accordingly,underIndAS,theinvestmentinPPLhasbeenaccountedusingtheequitymethodresultingintoadecreaseinthetotalequityby`3.68croreasonMarch31,2016andby `3.10croresasonApril1,2015.Profitfortheyearhasreducedby`0.58crores.Apartfromthis,reversalofdividenddistributiontaxandotherconsolidationadjustmentsinanassociatehasincreasedtheprofitfortheyearendedMarch31,2016by`4.30crores.
m) TheGrouphaselectednottoapplyIndAS103BusinessCombinationsretrospectivelytopastbusinesscombinationsthatoccurredbeforethetransitiondateofApril1,2015,thusnothavinganyimpactontotalequityasonthatdate.TheapplicationofIndAS103foracquisitionsafterApril1,2015hasresultedinaincreaseinthetotalequityandtheprofitfortheyearendedMarch31,2016by`5.98crores.
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n) Impactsof the changes in the foreign currency translationson theadjustmentsmadeon transition to IndAShavebeen recognised inothercomprehensiveincome.
o) DeferredtaxeshavebeenrecognisedonadjustmentsmadeontransitiontoIndAS.
p) UnderIndAS,remeasurementsi.e.actuarialgainsandlossesandthereturnonplanassets,excludingamountsincludedinthenetinterestexpenseonthenetdefinedbenefitliabilityarerecognisedinothercomprehensiveincomeinsteadofprofitorlossasunderthepreviousGAAP.Asaresultofthischange,theprofitfortheyearendedMarch31,2016increasedby`2.02crores.ThereisnoimpactonthetotalequityasatMarch31,2016.
q) ThegrouphaselectedtoresetthebalanceappearingintheforeigncurrencytranslationreservetozeroasatApril1,2015.Accordingly,translationreservebalanceunderpreviousGAAPof`266.15croreshasbeentransferredtoretainedearnings.Thereisnoimpactontotalequityasaresultofthisadjustment.
r) UnderIndAS,allitemsofincomeandexpenserecognisedinaperiodshouldbeincludedinprofitorlossfortheperiod,unlessastandardrequiresorpermitsotherwise.Itemsofincomeandexpensethatarenotrecognisedinprofitorlossbutareshowninthestatementofprofitandlossas‘othercomprehensiveincome’includesremeasurementsofdefinedbenefitplans,fairvaluegainsor(losses)onFVTOCIequityinstruments,deferredgainsandlossesoncashflowhedgeandeffectofcurrencytranslationofforeignoperations.TheconceptofothercomprehensiveincomedidnotexistunderpreviousGAAP.
s) Associate Allergan India Private Limited AllerganIndiaPrivateLimitedwasaccountedforusingtheproportionateconsolidationmethodunderpreviousGAAPwhereasitbeinganassociate
needstobeaccountedusingtheequitymethodunderIndAS.Therefore: Onthetransitiondate,theGrouphasrecognisedinvestmentinAllerganIndiaPrivateLimitedbymeasuringitattheaggregateofthecarrying
amountoftheassetsandliabilitiesthattheGrouphadproportionatelyconsolidatedunderpreviousGAAPasofthetransitiondate; Thisinvestmentamounthasbeendeemedtobethecostofinvestmentatinitialrecognition; TheGrouphastestedtheinvestmentinAllerganIndiaPrivateLimitedforimpairmentasofthetransitiondate; After initial recognition at the transition date, the Group has accounted for Allergan India Private Limited using the equitymethod in
accordancewithIndAS28;and Thebreak-downoftheassetsandliabilitiesofAllerganIndiaPrivateLimitedthatwerepreviouslyaggregatedintothesinglelineinvestment
balanceatthetransitiondateisbelow:`incrores
Particulars April 1, 2015Non-current assetsProperty,plantandequipment 1.71Otherintangibleassets 0.55Financial assets 3.68DeferredTaxAssets(Net) 1.72Othernoncurrentassets 1.91Current assets Cashandcashequivalents 37.00Inventories 18.91Otherfinancialassets 11.94Othercurrentassets 4.17Current liabilities Currentfinancialliabilities (14.85)Provisions (2.42)Othercurrentliabilities (2.56)Net assets derecognised 61.76Share of net assets recognised under equity method 61.76
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t) Joint Venture Convergence Chemicals Private Limited ConvergenceChemicalsPrivateLimitedwasaccountedforasasubsidiaryusingthefullconsolidationmethodunderpreviousGAAPwhereasit
needstobeaccountedforasajointventureusingtheequitymethodunderIndAS.Therefore: Theinvestmentamounthasbeendeemedtobethecostofinvestmentatinitialrecognition; TheGrouphastestedtheinvestmentinConvergenceChemicalsPrivateLimitedforimpairmentasofthetransitiondate; Afterinitialrecognitionatthetransitiondate,theGrouphasaccountedforConvergenceChemicalsPrivateLimitedusingtheequitymethod
inaccordancewithIndAS28;and Thebreak-downoftheassetsandliabilitiesofConvergenceChemicalsPrivateLimitedthatwillhavetobedisaggregatedfromthesingleline
investmentbalanceatthetransitiondateisbelow.
`incroresParticulars April 1, 2015 (Date of
transition) (amounts as reported in previous GAAP)
Non-current assetsProperty,plantandequipment -CapitalWorkinprogress 4.11 Othernoncurrentassets 88.82Current assets Cashandcashequivalents 0.72Non-current Liabilities Borrowings (32.00)CurrentliabilitiesPayables (2.24)Net assets derecognised 59.41Share of net assets recognised under equity method 30.30
u) Impact of Ind AS adoption on the Statement of Cash Flow for the year ended March 31, 2016:
` inCroresParticulars Previous GAAP Adjustments Ind ASNetCashflowfromOperatingActivities (6,777.33) (178.86) (6,956.19)NetCashflowfromInvestingActivities (876.78) 272.74 (604.04)NetCashflowfromFinancingActivities 7,619.87 (75.97) 7,543.90Net Increase/(decrease) in cash and cash equivalents (34.24) 17.91 (16.33)
TheadjustmentsareprimarilyonaccountofBankoverdraftnowconsideredasCashandCashEquivalents,deconsolidationofConverganceChemicalsPrivateLimited,discontinuanceofproportionateconsolidationofAllerganIndiaPrivateLimited,consolidationofPiramalInvestmentOppotunitiesFundandotherIndASreclassifications.
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57 FAIR VALUE MEASUREMENT Financial Instruments by category:a) Categories of Financial Instruments:
`inCroresMarch 31, 2017 March 31, 2016 April 1, 2015
Particulars FVTPL FVTOCI Amortised Cost
FVTPL FVTOCI Amortised Cost
FVTPL FVTOCI Amortised Cost
Financial AssetsInvestments 1,397.54 3,988.92 17,041.61 1,008.39 3,142.57 9,568.56 291.55 3,835.21 3,367.22Loans - - 7,335.73 - - 3,533.23 - - 2,644.62Cash&BankBalances - - 1,540.90 - - 365.94 - - 423.69TradeReceivables - - 1,107.74 - - 970.81 - - 819.29OtherFinancialAssets 14.69 - 220.83 11.47 - 234.06 12.77 - 81.70
1,412.23 3,988.92 27,246.81 1,019.86 3,142.57 14,672.60 304.32 3,835.21 7,336.52Financial liabilities
Borrowings (including CurrentMaturitiesofLongTermDebt)
- - 30,450.98 - - 16,278.79 - - 7,186.34
TradePayables - - 764.29 - - 702.56 - - 668.04OtherFinancialLiabilities 172.52 - 1,214.76 40.01 - 278.51 - - 115.31
172.52 - 32,430.03 40.01 - 17,259.86 - - 7,969.69
b) Fair Value Hierarchy and Method of Valuation Thissectionexplainsthejudgementsandestimatesmadeindeterminingthefairvaluesofthefinancialinstrumentsthatare(a)recognisedand
measuredat fair valueand (b)measuredatamortisedcostand forwhich fair valuesaredisclosed in thefinancial statements. Toprovideanindicationaboutthereliabilityoftheinputsusedindeterminingfairvalue,thegrouphasclassifieditsfinancialinstrumentsintothethreelevelsprescribedundertheaccountingstandard.Anexplanationofeachlevelfollowsunderneaththetable.
`InCroresFinancial Assets March 31, 2017
Notes Carrying Value
Level 1 Level 2 Level 3 Total
Measured at FVTPL - Recurring Fair Value MeasurementsInvestments
InvestmentsinPreferenceShares 1.70 1.70 1.70 Investmentsindebenturesorbonds
RedeemableNon-ConvertibleDebentures i. 987.86 987.86 987.86 Investments in Mutual Funds ii. 191.56 191.56 191.56 InvestmentinAlternativeInvestmentFund/VentureCapitalFunds vi. 216.42 216.42 216.42
Other Financial AssetsDerivativeFinancialAssets iii. 14.69 14.69 14.69
Measured at FVTOCIInvestmentsinEquityInstruments ii. 3,988.92 3,988.92 3,988.92 Measured at Amortised Cost for which fair values are disclosedInvestmentsInvestmentsindebenturesorbonds(GrossofExpectedCreditLoss) iv. 17,401.00 17,317.67 17,317.67 LoansTermLoans(GrossofExpectedCreditLoss) iv. 6,548.59 7,039.98 7,039.98 IntercorporateDeposits(GrossofExpectedCreditLoss) iv. 43.78 41.39 41.39 Financial LiabilitiesMeasured at FVTPL - Recurring Fair Value MeasurementsContingentConsideration vii. 141.79 141.79 141.79 DerivativeFinancialLiabilities iii. 30.73 30.73 30.73 Measured at Amortised Cost for which fair values are disclosed
Borrowings(includingCurrentMaturitiesofLongTermDebt) v. 30,450.98 30,720.32 30,720.32
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`InCroresFinancial Assets March 31, 2016
Notes Carrying Value
Level 1 Level 2 Level 3 Total
Measured at FVTPL - Recurring Fair Value MeasurementsInvestments
InvestmentsinEquityInstruments 29.43 29.43 29.43InvestmentsinPreferenceShares 0.66 0.66 0.66Investmentsindebenturesorbonds
RedeemableNon-ConvertibleDebentures i. 758.44 758.44 758.44Investments in Mutual Funds ii. 6.23 6.23 6.23 InvestmentinAlternativeInvestmentFund/VentureCapitalFund vi. 213.63 213.63 213.63
Other Financial AssetsDerivativeFinancialAssets iii. 11.47 11.47 11.47
Measured at FVTOCIInvestmentsinEquityInstruments ii. 3,142.57 3,142.57 3,142.57
Measured at Amortised Cost for which fair values are disclosedInvestmentsInvestmentsindebenturesorbonds(GrossofExpectedCreditLoss) iv. 9,799.51 10,148.72 10,148.72LoansTermLoans(GrossofExpectedCreditLoss) iv. 916.08 896.76 896.76IntercorporateDeposits(GrossofExpectedCreditLoss) iv. 1,864.63 1,856.52 1,856.52Financial LiabilitiesMeasured at FVTPL - Recurring Fair Value MeasurementsContingentConsideration vii. 35.98 35.98 35.98DerivativeFinancialLiabilities iii. 4.03 4.03 4.03Measured at Amortised Cost for which fair values are disclosed
Borrowings(includingCurrentMaturitiesofLongTermDebt) v. 16,278.79 16,278.79 16,278.79
`InCroresFinancial Assets April 1, 2015
Notes Carrying Value
Level 1 Level 2 Level 3 Total
Measured at FVTPL - Recurring Fair Value MeasurementsInvestments
InvestmentsinEquityInstruments 28.36 28.36 28.36InvestmentsinPreferenceShares 0.63 0.63 0.63Investmentsindebenturesorbonds
RedeemableNon-ConvertibleDebentures i. - - - Investments in Mutual Funds ii. 127.44 127.44 127.44InvestmentinAlternativeInvestmentFund vi. 135.12 135.12 135.12
Other Financial AssetsDerivativeFinancialAssets iii. 12.77 12.77 12.77
Measured at FVTOCIInvestmentsinEquityInstruments ii. 3,835.21 3,835.21 3,835.21
Measured at Amortised Cost for which fair values are disclosedInvestmentsInvestmentsindebenturesorbonds(GrossofExpectedCreditLoss) iv. 3,452.91 3,595.56 3,595.56LoansTermLoans(GrossofExpectedCreditLoss) iv. 829.69 789.82 789.82IntercorporateDeposits(GrossofExpectedCreditLoss) iv. 636.71 789.52 789.52Financial LiabilitiesMeasuredatAmortisedCostforwhichfairvaluesaredisclosed
Borrowings(includingCurrentMaturitiesofLongTermDebt) v. 7,186.34 7,186.34 7,186.34
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Except for thosefinancial instruments forwhich thecarryingamountsarementioned in theabove table, theCompanyconsiders that thecarryingamountsrecognisedinthefinancialstatementsapproximatetheirfairvalues.
Forfinancialassetsthataremeasuredatfairvalue,thecarryingamountsareequaltothefairvalues.
Level1:Level1hierarchyincludesfinancialinstrumentsmeasuredusingquotedprices.Thisincludeslistedequityinstruments,tradedbondsandmutualfundsthathavequotedprice.Thefairvalueofallequityinstruments(includingbonds)whicharetradedinthestockexchangesisvaluedusingtheclosingpriceasatthereportingperiod.ThemutualfundsarevaluedusingtheclosingNAV.
Level2:The fairvalueoffinancial instruments thatarenot traded inanactivemarket (forexample, tradedbonds,over-thecounterderivatives) isdeterminedusingvaluationtechniqueswhichmaximisetheuseofobservablemarketdataandrelyaslittleaspossibleonentity-specificestimates.Ifallsignificantinputsrequiredtofairvalueaninstrumentareobservable,theinstrumentisincludedinlevel2.
Level3:Ifoneormoreofthesignificantinputsisnotbasedonobservablemarketdata,theinstrumentisincludedinlevel3.Thisisthecaseforunlistedequitysecurities,contingentconsideration,Debentures,TermLoansandICDsincludedinlevel3.
Valuation techniques used to determine the fair values:i. Discountedcashflowmethodhasbeenusedtodeterminethefairvalue.Theyieldusedfordiscountinghasbeendeterminedbasedontrades,
marketpolls,levelsforsimilarissuerwithsamematurity,spreadovermatrices,etc.ForinstrumentswherethereturnsarelinkedtothesharepriceoftheinvesteecompanytheequitypricehasbeenderivedusingMonteCarlosimulationandlocalvolatilitymodelusingtheinputslikespotrate,volatilitysurface,termstructuresandriskfreeratesfromgloballyaccepted3rdpartyvendorforthesedata.
ii. ThisincludeslistedequityinstrumentsandmutualfundswhicharefairvaluedusingquotedpricesandclosingNAVinthemarket.
iii. Thisincludesforwardexchangecontractsandcrosscurrencyinterestrateswap.Thefairvalueoftheforwardexchangecontractisdeterminedusingforwardexchangerateatthebalancesheetdate.Thefairvalueofcrosscurrencyinterestrateswapiscalculatedasthepresentvalueoffuturecashflowbasedonobservableyieldcurvesandforwardexchangerates.
iv. Discountedcashflowmethodhasbeenusedtodeterminethefairvalue.ThediscountingfactorusedhasbeenarrivedatafteradjustingtherateofinterestforthefinancialassetsbythedifferenceintheGovernmentSecuritiesratesfromdateofinitialrecognitiontothereportingdates.
v. Fairvaluesofborrowingsarebasedondiscountedcashflowusingacurrentborrowingrate.TheyareclassifiedasLevel3valueshierarchyduetotheuseofunobservableinputs,includingowncreditrisk.
vi. Discountedcashflowmethodhasbeenusedtodeterminethefairvalue.Thediscountingfactorhasbeencomputedusingamixofpasttrendsaswellaslikelyrateofreturnoftheunderlyingprojects.
vii. Discountedcashflowmethodhasbeenusedtodeterminethefairvalueofcontingentconsideration.
Piramal Enterprises Limited Annual Report 2016-17372
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
c) Fair Value measurements use significant unobservable inputs (level 3) Thefollowingtablepresentsthechangesinlevel3itemsfortheperiodendedMarch31,2017andMarch31,2016
Debentures Alternative Investment
Fund/Venture Capital Fund
Equity Instruments
Preference Shares
Contingent Consideration
Total
As at April 1, 2015 - 135.12 28.36 0.63 - 164.11Acquisitions/Additions 675.00 88.98 1.07 - 35.98 801.03Gains/(Losses)recognisedinprofitorloss 83.65 2.67 - - - 86.32Gains/(Losses)recognisedinothercomprehensiveincome - - - 0.03 - 0.03Realisations (0.22) (13.14) - - - (13.36)As at March 31, 2016 758.43 213.63 29.43 0.66 35.98 1,038.13Acquisitions 304.55 17.73 - 1.04 103.76 427.08Lossesrecognisedinprofitorloss - - - - 2.05 2.05Gains/(Losses)recognisedinprofitorloss 160.48 20.88 27.29 - - 208.65Gains/(Losses)recognisedinothercomprehensiveincome - - - - - - Transferoutduringtheyear - - - - - - Realisations (235.60) (35.82) (56.72) - - (328.14)As at March 31, 2017 987.86 216.42 - 1.70 141.79 1,347.77
d) Valuation Process TheCompanyengagesexternalvaluationconsultantstofairvaluefinancialinstrumentsmeasuredatFVTPLandFVTOCI.Themainlevel3inputsused
forunlistedequitysecurities,preferenceshares,investmentinAIF/Venturecapitalfund,contingentconsiderationanddebenturesareasfollows:
1)ForNonConvertibleDebentures,WaterfallapproachhasbeenusedtoarriveattheyieldsforsecuritiesheldbytheCompany.FordeterminingtheequitypricesMonteCarlosimulationsandlocalvolatilitymodelusingtheinputslikespotrate,volatilitysurface,termstructuresandriskfreeratesfromgloballyacceptedthirdpartyvendorforthesedatahavebeenused.
2)ForAlternativeInvestmentFund/VentureCapitalFund,Discountedcashflowmethodhasbeenusedtodeterminethefairvalue.Thediscountingfactorhasbeencomputedusingamixofpasttrendsaswellaslikelyrateofreturnoftheunderlyingprojects.
3)ForContingentconsideration,fairvaluehasbeenestimatedbyallocatingprobabilitytoachievementoffinancialmilestones.DiscountrateisdeterminedusingCapitalAssetPricingModel.
e) Sensitivity for instruments:
`inCroresNature of the instrument Fair value As
on March 31, 2017
Fair value As on March 31, 2016
Fair value As on April 1, 2015
Significant unobservable inputs*
Increase / Decrease in the
unobservable input
Sensitivity Impact for the year ended March 31, 2017
Sensitivity Impact for the year ended March 31, 2016
FV Increase/(Decrease)
FV Increase/(Decrease)
FVIncrease/(Decrease)
FVIncrease/(Decrease)
NonConvertibleDebentures 987.86 758.45 - Discountrate 1% (24.23) 25.05 (27.98) 29.22Equitycomponent(projections)
5% - - - -
Alternative Investment Fund/VentureCapitalFund
216.42 213.63 135.12 Discountrate 1% (1.03) 1.01 (1.57) 1.53 CashFlow 5% (6.71) 6.71 (6.67) 6.67
ContingentConsideration 141.79 35.98 - Discountrate 1% 2.59 (2.59) 0.54 (0.54)
ExpectedCashOutflow
10% 9.79 (9.79) 3.60 (3.60)
*Therewerenosignificantinter-relationshipsbetweenunobservableinputsthatmateriallyaffectfairvalues.
f) Management uses its best judgment in estimating the fair value of its financial instruments. However, there are inherent limitations in anyestimationtechnique.Therefore,forsubstantiallyallfinancialinstruments,thefairvalueestimatespresentedabovearenotnecessarilyindicative
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STATUTO
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373
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTD.) for the year ended March 31, 2017
ofalltheamountsthattheCompanycouldhaverealizedorpaidinsaletransactionsasofrespectivedates.Assuch,thefairvalueofthefinancialinstrumentssubsequenttotherespectivereportingdatesmaybedifferentfromtheamountsreportedateachyearend.
58 (a) TheGroupoperatesanincentiveplanarrangementforcertainemployeesofcertainsubsidiaries.TheschemeprovidesacashpaymenttotheemployeesbasedonaspecificnumberofphantomsharesatgrantandsharepriceofPiramalEnterprisesLimited,theultimateparentcompanyatthevestingdate.TheCashpaymentisdependentontheperformanceoftheunderlyingsharesofPiramalEnterprisesLimitedandcontinuedemploymentonvestingdate.ThefairvaluesoftheawardiscalculatedusingtheBlackScholesmodelatthegrantdate.Thefairvalueisupdatedateachreportingdateastheawardsareaccountedascashsettledplan.TheinputstothemodelsarebasedonthePiramalEnterprisesLimitedhistoricdata,theriskfreerateandtheweightedaveragefairvalueofsharesintheschemeatthereportingdate.Theamountexpensedinthecurrentyearrelatingtotheplanis` 2.43Crores.TheGroupconsiderstheseamountasnotmaterialandaccordinglyhasnotprovidedfurtherdisclosuresasrequiredbyIndAS102“ShareBasedPayments”.
58 (b) AsubsidiaryhasissuedcertainoptionsundertheSchemetitled“HealthSuperhiwayEmployeesStockOptionPlan-2011”(ESOPPlan)toitsemployees.Eachoptioncomprisesoneunderlyingequityshareofthesubsidiary.Theexercisepriceofeachoptionshallbe`54.10.TheoptionsgrantedvestsoveraperiodoffouryearsfromthedateofgrantinproportionsspecifiedintheScheme.Optionsmaybeexercisedwithinthreeyearsofvesting.Sincetheexercisepriceofthesharesismuchhigherthanthebookvalueoftheshareofthesubsidiary,thereisnoimpactontheearnings.
59 Duringthepreviousyear,theCompanyidentifiedafraudcommittedbyanemployeeinoneofitsdivisions.TheCompanyinitiatedaninternalinvestigationinthematter.Basedontheresultsoftheinvestigation,itwasconcludedthattheemployeehadmisrepresentedtovariouscustomersandraisedforgedinvoicesandcreditnotestotheextentof` 3.18croresduringthepreviousyear.TheCompanyhadfiledacriminalcomplaintwithappropriateauthoritiesand ispursuing thematter further.TheCompanyhadtakenappropriatemeasuresandhad furtherstrengthenedinternalprocessesandcontrolstopreventsuchcases.Duringthecurrentyear,theCompanyhasrecoveredanamountof` 1.80croresfromsuchcustomers.
60 ThefinancialstatementsfortheyearendedMarch31,2017includetheresultsandfinancialpositionofassociatestowhomIndASdoesnotapplycurrentlyandhence,theresultsareaccountedbasedoncurrentlyapplicableIndianGAAP.
61 Subsequenttotheyearend,onApril6,2017,theGroupthroughitssubsidiary,SigmaticLimited,acquiredUKbasedSharpInsightLimitedforUSD1.45millionequivalentto` 9.42Crores.
62 TheBoardofDirectorsattheirmeetingheldonMay12,2017haveapprovedtheissuanceofequitysharesand/orconvertiblesecuritiesforanaggregateamountnotexceeding` 5000croresoranequivalentamountthereofinoneormoreforeigncurrencies,includingapprovalofthepostalballotnoticeforobtainingshareholders’approval.
63 ThefinancialstatementswereapprovedbyboardofdirectorsonMay12,2017.
Signaturetonote1to63offinancialstatements.
ForPrice Waterhouse ForandonbehalfoftheBoardofDirectorsFirmRegistrationNumber:301112ECharteredAccountants
Ajay G. Piramal Chairman
Jeetendra Mirchandani Rajesh Laddha Leonard D’Souza Partner ChiefFinancialOfficer CompanySecretaryMembershipNumber:048125
Mumbai,May12,2017 Mumbai,May12,2017