1) Corporate and general information:
Gati Limited (“the Company”) is a public limited company incorporated in 1995 under provisions of companies Act, 1956 having its Registered and Corporate Office at Plot no.20, Survey no. 12, Kothaguda, Kondapur Hyderabad - 500 084. Telangana, India. The company is primarily engaged in the business of E-commerce logistics, Integrated Freight Forwarding (Domestic and International) and running of fuel stations. The company is listed in the National Stock exchange (NSE) and Bombay Stock exchange (BSE).
a) Terms /Rights attached to Shareholders
The Company has only one class of issued shares i.e. Equity Shares having par value of H2 per share. Each holder of Equity Shares is entitled to one vote per share and ranks pari passu. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.
b) Equity Shares have been reserved for issue under options and contracts/commitments for the sale of shares/ disinvestment as at the Balance Sheet date:
i) 5,94,992 options (Equity Shares of H2 each) are reserved under employee stock option scheme as on 3IMarch, 2018 (Previous year 9,55,303 and 12,34,990 as on 3IMarch, 20I7 and 3IMarch 20I6 respectively) out of this 3,07,992 options, I,64,000 options and 1,23,000 options will vest/allotment in the year 20I8-I9, 20I9-20 & 2020-2I respectively
e) The company has neither allotted any equity shares for consideration other than cash nor has issued any bonus shares nor has bought back any shares during the period of five years preceding the date at which Balance Sheet is prepared.
f) No calls are unpaid by any directors or officers of the company during the year
A The Description, Nature and Purpose of each reserve within equity are as follows:
a) Equity part of FCCB -Compound Instruments: As per IND AS- 32, Foreign currency convertible bonds (FCCB’s) are treated as a compound Financial instrument, which requires segregation of liability and equity component. Therefore, the reserve has been created for equity component which is being utilised at the time of redemption/ conversion and transferred to the free reserves of Other Equity
b) Securities Premium Account: Securities premium account is used to record the premium on issue of equity shares. The same is utilised in accordance with the provisions ofThe Companies Act, 20I3.
c) Tonnage Tax Reserve (Utilised): The Reserve was a statutory reserve which was created and utilized in accordance with the provisions of Section II5VT of Income tax Act I96I to comply with the provisions of Tonnage Tax Scheme’ under Chapter XII-G
d) General Reserve: This reserve is the retained earnings of the company which are kept aside out of the Company’s profit to meet future (known or unknown) obligations.
e) Share option outstanding account: The share options outstanding account is used to record the value of equity- settled share based payment transactions with employees. The amount recorded in the share options outstanding account are transferred to securities premium reserve upon exercise of stock options by employees.
f) Special Reserve: The Hon’ble Andhra Pradesh High Court, approved the Scheme of Arrangement for amalgamation. (The Scheme) vide its order dated I9 March,, 20I3 which interalia, permits creation of a capital reserve to be called Special Reserve to which shall be credited excess of value of assets over value of liabilities on amalgamation of the subsidiaries amounting to H5555.4 Mn to be utilized by the Company to adjust therefrom any capital losses arising from transfer of assets and certain other losses, any balance remaining in the Special Reserve shall be available for adjustment against any future permanent diminution in the value of assets and exceptional items etc. as specified in the scheme as the Board of directors may deem fit.
g) Retained Earnings: Retained earnings comprise of net accumulated profit/(loss) of the company after declaration of dividend.
h) Other Comprehensive Income
i) Equity Instrument through OCI: The company has elected to recognise changes in the fair value of certain investments in equity securities in other comprehensive income. These changes are accumulated within the equity instruments through OCI shown under the head other equity. The company transfer amounts there from to retained earnings when the relevant equity securities are derecognised.
ii) Remeasurement of Defined benefit plan: It comprises of Actuarial losses /(gains) during the reporting period.
2. Disclosure as required under Ind As 19 on Employee Benfits:
Defined contribution
The expense for defined contribution plans amounted to RS. 8.16 Mn and RS. 10.29 Mn for the year ended 31 March, 2018 and 31 March, 2017 respectively Out of these, RS. 9.72 Mn (31 March, 2017 RS. 9.4 Mn) pertains to provident / pension funds and H.0.21 Mn (31 March, 2017 RS. 0.23 Mn) pertains to superannuation fund plan.
Defined benefits - Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the company makes contributions to recognised funds in India.
These defined benefit plans expose the Company to actuarial risks, such as currency risk, interest risk and market (investment) risk.
The Company expects not to contribute to Gratuity Fund in the next year as the company has surplus balance Inherent risk
The plan is defined benefit in nature which is sponsored by the Company and hence it underwrites all the risk pertaining to the plan. In particular this exposes the Company to actuarial risk such as adverse salary growth, change in demographic experience, inadequate return on underlying plan assets. This may result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature, the plan is not subject to longevity risk.
The following tables analyse present value of defined benefit obligations, expense recognised in Statement of Profit and Loss, actuarial assumptions and other information.
(IX) Sensitivity analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligations by the amounts shown below:
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. There are no dues unpaid to Micro and Small Enterprises as on 3IMarch, 2018 (Previous year 31 March, 2017)
3. Dividend
Proposed Dividend:
The Board of Directors at its meeting held on 29-05-2018 have recommended a payment of final dividend of H0.90 per equity share of face value of H2 each for the financial year ended 3IMarch, 2018. The same amounts to H97.5I Mn. The liability to be adjusted against retained earnings.
The above is subject to approval at the ensuing Annual General Meeting of the Company and hence not recognised as a liability
B. Measurement of fair values
i. Valuation techniques and significant unobservable inputs
The fair value of cash and cash equivalents, bank balances, trade receivables, loans, investments in Debt instrument, borrowings, trade payables and other financial assets and liabilities approximate their carrying amount largely due to the short-term nature of these instruments. The Company’s loans have been contracted at market rates of interest. Accordingly, the carrying value of such loans approximate fair value.
Investments in equity instruments, which are classified as FVOCI are based on market price at the respective reporting date.
ii. Level 1 fair values
The following table shows a reconciliation from the opening balance to the closing balance for Level I fair values.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
(i) Credit risk
(ii) Liquidity risk
(iii) Market risk
Risk management framework
The Company’s principal financial liabilities includes borrowings, trade payable and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations. The Company’s principal financial assets include trade receivables, cash and cash equivalents and other financial assets that derive directly from its operations.
The Company’s activities expose it to credit risk, liquidity risk and market risk. The Company’s primary risk management focus is to minimise potential adverse effects of market risk on its financial performance.The Company’s exposure to credit risk is influenced mainly by the individual characteristic of each customer and the concentration of risk from the top few customers. The Company’s risk management assessment and policies and processes are established to identify and analyse the risks faced by the Company to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company’s activities.
The major part of company’s profit is dependent upon the dividend income from a subsidary which is related to performance of the subsidiary and dividend distributable by them.
(i) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s receivables from customers and loans given. Credit risk arises from cash held with banks and financial institutions, as well as credit exposure to customers, including outstanding accounts receivables. The maximum exposure to credit risk is equal to the carrying value of the financial assets. The objective of managing counterparty credit risk is to prevent losses in financial assets. The Company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Trade receivables and loans
As per simplified approach, the Company makes provision of expected credit losses on trade receivables using a provision matrix to mitigate the risk of default payments and makes appropriate provisions at each reporting date whenever is for longer period and involves higher risk. On account of adoption of Ind AS I09, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the credit loss allowance for trade receivables.
(ii) Liquidity risk
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time or at reasonable price. Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of credit facilities to meet obligations when due. The Company’s finance team is responsible for liquidity funding as well as settlement management. In addition, processes and policies related to such risks are overseen by senior management. Management monitors the Company’s liquidity position through rolling forecasts on the basis of expected cash flows. Besides , it generally has certain undrawn credit facilities which can be accessed as and when required ; such credit facilities are reviewed at regular intervals. Thus , no liquidity risk is perceived at present.
The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.
The table below provides details regarding the remaining contractual maturities of financial liabilities at the reporting date based on contractual undiscounted payments.
(iii) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company exposure to the risk of changes in market interest rates relates primarily to the Company’s long term and short term borrowing with floating interest rates. The Company constantly monitors the credit markets and rebalances its financing strategies to achieve an optimal maturity profile and financing cost.
Sensitivity analysis
Fixed rate instruments that are carried at amortised cost are not subject to interest rate risk for the purpose of sensitive analysis.
A reasonably possible change of I00 basis points in variable rate instruments at the reporting dates would have increased or decreased profit or loss by the amounts shown below:
The sensitivity analysis above has been determined for borrowings assuming the amount of borrowings outstanding at the end of the reporting period was outstanding for the whole year
Equity risk
The Company’s quoted equity instruments are susceptible to market price risk arising from uncertainties about future values of the investment securities. The reports on the equity portfolio are submitted to the Company’s senior management on a regular basis.The senior management reviews and approves all equity investment decisions.
Sensitivity analysis
Investment in equity instruments of the Company are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The table below summaries the impact of increase/decrease of the Nifty 50 index on the Company’s equity and profit for the period. The analysis is based on the assumption that the NSE nifty 50 equity index had increased/decreased by 10% with all other variables held constant, and that all the Company’s equity instruments moved in line with the index.
4. Capital management
The Company’s policy is to maintain a stable and strong capital structure with a focus on total equity so as to maintain investors, creditors and market confidence and to sustain future development and growth of its business. In order to maintain the capital structure the Company monitors the return on capital, as well as the level of dividends to equity shareholders. The Company aims to manage its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns to all its shareholders. For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity holders and debt includes borrowings.
5. Explanation of Transition to IND AS
As stated in Note 2, the Company has prepared its first financial statements in accordance with Ind AS. For the year ended 3I March, 20I7, the Company had prepared its financial statements in accordance with Companies (Accounting Standards) Rules, 2006, notified under Section I33 of the Act and other relevant provisions of the Act (‘previous GAAP’).
The accounting policies set out in Note 2 have been applied in preparing the financial statements for the year ended 3I March, 20I8 including the comparative information for the year ended 3I March, 20I7 and the opening Ind AS balance sheet on the date of transition i.e. I April 20I6.
In preparing its Ind AS balance sheet as at I April 20I6 and in presenting the comparative information for the year ended 3I March, 20I7, the Company has adjusted amounts reported previously in financial statements prepared in accordance with previous GAAP This note explains the principal adjustments made by the Company in restating its financial statements prepared in accordance with previous GAAP and how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows.
Optional exemptions availed and mandatory exceptions
In preparing the financial statements, the Company has applied the below mentioned optional exemptions and mandatory exceptions.
A. Optional exemptions availed
(i) Property, plant and equipment and intangible assets
As per Ind AS I0I an entity may elect to:
(i) measure an item of property, plant and equipment at the date of transition at its fair value and use that fair value as its deemed cost at that date;
(ii) use a previous GAAP revaluation of an item of property plant and equipment at or before the date of transition as deemed cost at the date of revaluation, provided the revaluation was, at the date of revaluation, broadly comparable to:
- fair value
- or cost or depreciated cost under Ind AS adjusted to reflect.
The elections under (i) and (ii) above are also available for intangible assets that meets the recognition criteria in Ind AS 38, Intangible Assets, (including reliable measurement of original cost); and criteria in Ind AS 38 for revaluation (including the existence of an active market). The company has elected to measure certain items of property plant and equipment. At its fair value and use that fair value as its deemed cost at the date of transition to Ind AS. Other items of property plant and equipment have been measured, as for Ind As I6.
(ii) Designation of previously recognised financial instruments
Ind AS I0I permits an entity to designate particular equity investments (other than equity investments in subsidiaries, associates and joint arrangements) as at fair value through other comprehensive income (FVOCI) based on facts and circumstances at the date of transition to Ind AS (rather than at initial recognition). Other equity investments are classified at fair value through profit or loss (FVTPL).
The Company has opted to avail this exemption to designate certain equity investments as FVOCI on the date of transition i.e. I April 20I6 on the basis of facts and circumstances existed at the date of transition to Ind AS.
(iii) Business combinations
Ind AS I0I provides the option to apply Ind AS I03 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.
The Company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated, accordingly Company has elected not to apply Ind-AS I03.
(iv) Investments in Subsidiaries and Associates
The Company has elected either the Indian GAAP carrying amount or fair value at the date of transition as deemed cost for its investment in each subsidiary and associates
(v) Cumulative translation difference
The Company has availed the option of not to adopt policy for maintaining Foreign currency monetary item translation difference (FCMITDA) account. The balance in FCMITD account on the date of transition has been transferred to retained earnings.
(vi) Fair value measurement of financial assets or liabilities at initial recognition
The Company has applied the requirements of Ind AS 109, “Financial Instruments: Recognition and Measurement”, wherever applicable.
B. Mandatory Exceptions
(a) Estimates
As per Ind AS 101, where application of Ind AS requires an entity to make certain estimates that were not required under previous GAAP those estimates should be made to reflect conditions that existed at the date of transition (for preparing opening Ind AS balance sheet) or at the end of the comparative period (for presenting comparative information as per Ind AS).
- Investment in equity instruments carried at FVPL or FVOCI.
- Investment in debt instruments carried at FVPL and,
- Impairment of financial assets based on expected credit loss model.
The Company’s estimates under Ind AS are consistent with the above requirement.
(b) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification of financial assets on the basis of facts and circumstances existing as on the date of transition. Further, the standard permits measurement of financial assets accounted at amortised cost based on facts and circumstances existing at the date of transition if retrospective application is impracticable.
Accordingly, the Company has determined the classification of financial assets based on facts and circumstances that exist on the date of transition. Measurement of the financial assets accounted at amortised cost has been done retrospectively.
G. Notes to the reconciliations of equity as at 1 April 2016 and 31 March, 2017 and total comprehensive income for the year ended 31 March, 2017
1) Borrowings
The Company recognised the transaction costs pertaining to the borrowings on a straight line basis over the term of the loan under IGAAP The unamortised portion of such cost was recognised as part of ‘Prepaid expense’ which amounted to RS. 3.74 Mn on the date of transition to IND AS. As per IND AS I09, borrowings are measured at amortised cost and hence, unamortised portion of transaction costs has been adjusted against the amount of borrowings
2) Investments in Subsidiaries and Associate
The Company has availed the option to value investments in subsidiaries and associate as Ind As cost. The Ind As cost has been derived by impairing value of investment as on the date of transition to IND AS separate financial statements from previous GAAP under IGAAP the company has practice of providing provision on investment under permanent dimunision valuation method, on transition to Ind As management has decided to impair the investment based on the report provided from independent valuer
a) Further, on the transition date, Equity and other financial instruments in subsidiary company, has been impaired as per the Independent valuer report and adjusted against retained earnings of H400 Mn.
b) As per requirement of Ind As impairment test should be made at the end of each financial year Further based on the progress of Investee Company’s provision will be adjusted accordingly by taking into account of the progress made by said companies going forward.
3) Discounting of financial asset
Under IGAAP the Company accounted for Security deposit and other receivable balances as Loans and advances measured at cost. Under IND AS, such balances are classified and measured at amortised cost using effective interest rate method. At the date of transition to IND AS, the difference between amortised cost and the IGAAP carrying amount has been recognised in other equity (net of related deferred tax).
4) Deferred tax
IGAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. IND AS 12 requires entities to account for deferred tax using balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. This has resulted in recognition of deferred tax on new temporary difference which was not required under IGAAP In addition, the various transitional adjustments leads to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in other equity or a separate component of equity.
5) Provisions
Under IGAAP proposed dividends including dividend distribution tax (DDT) are recognised as liability in the period in which they relate, irrespective of when they are declared. Under IND AS, a proposed dividend is recognised as a liability by the company in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid.
In case of the Company the declaration of dividend occurs after the period end. Therefore, the liability of RS. 87.72 Mn for the year ended on 31 March, 2016 recorded for dividend has been derecognised against other equity on I April, 2016. Proposed dividend amounting RS. 87.72 Mn which was derecognised as on the transition date. has been recognised in other equity during the year ended 31 March, 2017 as declared and paid.
6) Defined benefit liabilities
Both under IGAAP and IND AS, the Company recognised costs related to its post employment defined benefit plan on an actuarial basis. Under IGAAP the entire cost, including actuarial gains and losses, are charged to the statement of profit and loss. Under IND AS, remeasurements (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to other comprehensive income (OCI).
7) Trade Receivables
Under IGAAP the Company has created provisions for impairment of receivables which consist only in respect of specific amount for probable losses. Under IND AS 109, requires to recognise allowance on trade receivables and other financial assets of the company ,at an amount equal to the life time expected credit loss or the 12 months expected credit loss based on increase in credit risk. On transition date, impairment for trade receivables made as per Expected credit loss method (ECLM) is 168.9 Mn has been adjusted against retained earnings.
8) Financial Assets
Under IGAAP the Company accounted for long term investments in quoted and unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under IND AS, the company has designated certain investments as FVTOCI. At the date of transition to IND AS, difference between the instruments at fair value and IGAAP carrying amount has been recognised as a separate component of equity in the FVTOCI reserve, net of related deferred taxes. On 31 March, 2017 fair value on FVTOCI instruments has been routed through OCI. The gain/loss on any future extinguishment of such equity investments will not be reflected in the statement of Profit and loss.
9) Corporate Guarantee
For Subsidiary: Under IGAAP the Company was disclosing the corporate guarantee as Contingent Liability Under IND AS, the Company has recognised the fair value of Corporate Guarantee provided to its subsidiary companies. The fair value of such guarantee as on I April, 2016 been recognised as additional capital investment in its subsidiaries, and is amortised over the period of the guarantee. The impact of amortisation of such fair value of guarantee has been recognised in the statement of profit and loss as interest income for the year ended 3I March, 20I7.
For Other Entity: The Company has recognised the fair value of Corporate guarantee provided to other than subsidiary as ‘guarantee obligation’ as on I April, 20I6 is amortised over the period of the guarantee in subsequent years
10) Share Based Payments
Under IGAAP the Company had recognised the cost of equity settled employee share based payments using the intrinsic value method. Under IND AS, the cost of equity settled share based plan is recognised based on the fair value of the options as at the grant date. Adjustments has been done in to take the additional charge arising due to change from intrinsic value to fair value of ESOS outstanding
11) Foreign Currency Convertible Bond
Foreign currency convertible bonds (FCCB’s) are treated as a compound financial instrument under Ind AS, which contains liability and equity component. This bonds has been spited between liability and equity component. Amortisation of redemption premium and Foreign exchange difference on date of transition, is recognised in opening reserves and changes thereafter are recognised in statement of profit and loss, earlier under IGAAP Redemption premium on FCCB charged to Securities Premium account. (Refer Note 47)
12) Loans
Under IGAAP the Company accounted for interest free loans given to subsidiary as Long term loans and advances measured at cost. Under IND AS, such interest free loans are classified and measured at fair value. The difference between fair value and the IGAAP carrying amount has been recognised as Investments in Subsidiaries on the transition date.
13) Other Comprehensive Income
Under IND AS, all items of income and expenses recognised in a period should be included in profit or loss for the period, unless a standard require or permits otherwise. Items of income and expenses that are not recognised in the statement of Profit or loss but are shown in the Statement of Profit or loss as “Other Comprehensive Income”. Net profit along with Other Comprehensive Income constitutes Total Comprehensive Income. The concept of Other Comprehensive Income did not exist under the IGAAP
14) Fair valuation of Investments
Under Indian GAAP, investments in unquoted and quoted equity shares and debt instrument as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, such investments as FVTPL investments and Amortised cost. Ind AS requires FVTPL investments and Amortised cost investments to be measured at fair value. At the date of transition to Ind AS and as on 3I March, 20I7, difference between the instrument’s fair value and Indian GAAP carrying amount has been recognised in the Retained earning and Statement of Profit and Loss net of related deferred taxes.
a) On the transition date, Equity and other financial instruments in promoter companies i.e. other than subsidiary companies, have been impaired based on Independent valuer report and adjusted against retained earnings of RS. 790.I9 Mn
b) As per requirement of Ind As impairment test should be made at the end of each financial yean Further based on the progress of Investee Company’s provision will be adjusted accordingly by taking into account of the progress made by said companies going forward.
15) Fair Valuation of Property,Plant and Equipment
The Company has elected to measure certain items of propetyplant and equipment at its fair value and use that value as it deemed cost at the date of transition to Ind as. Others items of propety, plant and equipment have been measured as per Ind As I6 respectively (Refer note 3d)
6 Advance receivable includes RS. 4I mn due from Air India Limited . The matter was referred to arbitration of the arbitral tribunal and the arbitral tribunal passed an award dated I7 September 20I3 , directing Air India Limited to pay an amount of RS. 266 Mn to the company and to pay interest @I8 % per annum on the awarded amount . Air India preferred an application before the Hon’ble Delhi High court seeking setting aside of award who directed Air India to deposit RS. 225 Mn which as been paid to the company ,pending adjudication of Cross Appeals before the Division Bench of the said Hon’ble High Court at New Delhi. Necessary adjustments, if any will be made in the accounts upon the decision of the Hon’ble High Court of New Delhi. In the circumstances , the dues from air India limited of RS. 4I Mn included in advances receivable are considered good for recovery by the management.
7 Foreign Currency Convertible Bonds :
On 12 December, 201 I, the Company issued 22, I 82 Zero Coupon Unsecured Foreign Currency Convertible Bonds (FCCBs) of US$ I,000 each for an amount of US$ 22.I8 Mn at an redemption price of I32.834I percent of principal amount. On I4 June 20I7 and 08th August 20I7, the Company allotted 1,98,74,225 equity shares of H2/- each against I4,654 FCCBs as per settlement agreement with FCCB holders (Allotment price per share is H38.52/- at an exchange rate of H52.2285/$)and the balance 7,528 FCCBs has been redeemed for an amount of H643.70 Mn as on I4 June 20I7. Expenses related to the issue of shares amounting to H29.56 Mn have been adjusted against Securities Premium. Further liability no longer required against FCCBs and the gain of RS. 487.43Mn (Foreign exchange gain of HI78.20 Mn and Redemption premium part H309.20 Mn ) recognised due to conversion of FCCBs into equity shares.
As per IND AS- 32, Foreign currency convertible bonds (FCCB’s) are treated as a compound Financial instrument, which requires segregation of liability and equity component. Therefore, the reserve has been created for equity component which is being utilised at the time of redemption/ conversion and transferred to the free reserves of Other Equity
8 Previous GAAP figures have been reclassified/ regrouped to conform to the presentation requirements under IND AS and the requirements laid down in Division-II to the Schedule-III of the Companies Act, 20I3
9 The financial statement are approved for issue by the Audit Committee at its meeting held on 28 May, 20I8 and by the Board of Directors at its meeting held on 29 May 20I8.
The accompanying notes are an integral part of the Financial Statements
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