1 CORPORATE INFORMATION
The financial statements comprise financial statements of Adani Ports and Special Economic Zone Limited (the “Company, APSEZL”) for the year ended March 31, 2017. The Company is a public company domiciled in India and is incorporated under the provisions of the Companies Act applicable in India. Its shares are listed on two recognized stock exchanges in India. The registered office of the Company is located at “Adani House”, Mithakhali Six Roads, Navrangpura, Ahmedabad-380009 The Company is in the business of development, operations and maintenance of port infrastructure (port services and related infrastructure development) and has linked multi product Special Economic Zone (SEZ) and related infrastructure contiguous to Port at Mundra. The initial port infrastructure facilities at Mundra including expansion thereof through development of additional port terminals and south port terminal infrastructure facilities are developed pursuant to the concession agreement with Government of Gujarat (GoG) and Gujarat Maritime Board (GMB) for 30 years period effective from February 17, 2001. At Mundra, the Company has expanded port infrastructure facilities through approved supplementary concession agreement (pending to be concluded) which will be effective till the year 2040, whereby port infrastructure has been developed at Wandh at Mundra to handle coal cargo. The said agreement is in the process of getting signed with GoG and GMB although Coal terminal at Wandh is recognized as commercially operational w.e.f, February 01, 2011.
The first Container terminal facilities (CT-1) developed at Mundra, was transferred under sub-concession agreement entered into on January 7, 2003 between Mundra International Container Terminal Limited (MICTL) (erstwhile Adani Container (Mundra) Terminals Limited) and the Company wherein the Company has given rights to MICTL to handle the container cargo for a period of 28 years i.e. up to February 17, 2031. The container terminal facilities developed at South Port location (CT-3) has been leased under approved sub concession agreement dated October 17, 2011 to (50:50) joint venture company, Adani International Container Terminal Private Limited (AICTPL), co-terminate with main concession agreement with GMB. The said sub-concession agreement is pending to be concluded with GOG and GMB. Another Container Terminal developed at south port location i.e. CT-4 has been developed in terms of (50:50) joint venture arrangement with CMA Terminals, France since July 30, 2014. The said container terminal is currently temporary operated, pending approval of sub concession agreement by the GMB.
The Multi Product Special Economic Zone developed at Mundra by the Company along with port infrastructure facilities is approved by the Government of India vide their letter no. F-2/11/2003/EPZ dated April 12, 2006 and subsequently amended from time to time till date. The Company has also set up Free Trade and Warehousing Zone at Mundra based on approval of Ministry of Commerce and Industry vide letter no.F.1/16/2011-SEZ dated January 04, 2012. The Company has also set up additional Multi Product Special Economic Zone at Mundra Taluka over an area of 1,856 hectares as per approval from Ministry of Commerce and Industry vide approval letter dated April 24, 2015. The Company has received single notification consolidating three notified SEZ in Mundra vide letter dated March 15, 2016 of Ministry of Commerce and Industry, Department of Commerce (SEZ Section).
The financial statements were authorised for issue in accordance with a resolution of the directors on May 24, 2017.
2 BASIS OF PREPARATION
2.1 The financial statements of the Company has been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended).
For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017
are the first the Company has prepared in accordance with Ind AS. Refer note 44 for information on how the Company adopted Ind AS.
The financial statements have been prepared on a historical cost basis, except for the following assets and liabilities which have been measured at fair value or revalued amount:
- Derivative financial instruments,
- Defined Benefit Plans - Plan Assets measured at fair value; and
- Certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).
In addition, the financial statements are presented in INR and all values are rounded to the nearest Crore (INR 00,00,000), except when otherwise indicated.
2.2 Significant accounting judgments, estimates and assumptions
The preparation of the Company’s Ind AS Financial Statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Company’s accounting policies, Management has made the following judgement, which has the most significant effect on the financial statements.
Proposed sale of Marine Business Undertaking under the Scheme of Arrangement:
On February 14, 2017, the Board of Directors announced its decision to demerge Marine Business Operations of piloting and movement of vessels using tugs, berthing and de-berthing of vessels using tugs, marine logistic support services, towage and transshipment within in-land waterways, in coastal waters and sea, through the proposed Scheme of Arrangement to a wholly owned subsidiary. The demerger transaction under the scheme is subject to the approval of creditors, shareholders and National Company Law Tribunal (“NCLT”) and said approval are pending at year end. Considering the above approvals to be substantive requirements, no adjustment has been made for the accounting treatment proposed in the aforesaid scheme, in the financial statements.
Carrying value of net assets of the Marine Business Operations as at March 31, 2017 is RS.397.16 crores (excluding borrowings of RS.111.21 crores). Also refer note 42(a).
Entity in which the Company holds less than a majority of voting rights (de facto control:)
The Company considers that it controls Dholera Infrastructure Private Limited (DIPL) even though it owns less than 50% of the voting rights. The Company is holding 49% equity interest in DIPL with the remaining 51% being held by another shareholder. Based on evaluation of terms and conditions of share purchase agreement, the Company is exposed and has rights to variable returns of DIPL and has ability to affect those returns through its power given under share purchase agreements.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Company is not yet committed to or significant future investments that will enhance the asset’s performance being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill with indefinite useful lives recognised by the Company. The key assumptions used to determine the recoverable amount for the CGU, are disclosed and further explained in note 3(b).
Deferred tax assets are recognised for unused tax credits to the extent that it is probable that taxable profit will be available against which the credits can be utilised. Significant management judgment is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with future tax planning strategies. Further details on taxes are disclosed in note 26.
Defined benefit plans (gratuity benefits)
The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The underlying bonds are further reviewed for quality. Those having excessive credit spreads are excluded from the analysis of bonds on which the discount rate is based, on the basis that they do not represent high quality corporate bonds.
The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates for the respective countries.
Further details about gratuity obligations are given in note 29.
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. refer note 33 for further disclosures.
Provision for Decommissioning Liabilities
The management of the Company has estimated that there is no probable decommissioning liability under the condition/ terms of the concession agreement with the GMB.
Note 3(a) Property Plant and Equipment (contd.)
i) Depreciation of RS.71.11 crore (previous year RS.61.52 crore) relating to the project assets has been allocated to Capitalisation / Capital Work in progress.
ii) Freehold Land includes land development cost of RS.12.56 crore (previous year RS.12.56 crore).
iii) Plant and Equipment includes cost of Water Pipeline amounting to RS.6.65 crore (Gross) (previous year RS.6.65 crore), accumulated depreciation RS.4.07 crore (previous year RS.3.67 crore) which is constructed on land not owned by the Company.
iv) Buildings includes 612 residential flats (previous year 588 flats) and a hostel building valuing RS.139.94 crore (previous year RS.131.04 crore) at Samudra Township, Mundra, which are pending to be registered in Company’s name. Further an advance of RS.8.19 crores (previous year RS.22 crore) is also paid to purchase additional flats / hostel building.
v) As a part of concession agreement for development of port and related infrastructure at Mundra the Company has been allotted land on lease basis by Gujarat Maritime Board (GMB). The Company has recorded rights in the GMB Land at present value of future annual lease payments in the books and classified the same as lease hold land.
vi) Land development cost on leasehold land includes costs incurred towards reclaimed land of RS.202.21 crore (previous year RS.202.21 crore). The cost has been estimated by the management, being cost allocated out of the dredging activities approximate the actual cost.
vii) Reclaimed land measuring 1,271.58 hectare are pending to be registered in the name of the Company.
viii) Project Assets include dredgers and earth moving equipments.
ix) Land Development cost and Right to use on Leasehold Land includes Land taken on Finance Lease Basis:
Gross Block as at March 31, 2017 - RS.4.11 crore (previous year - RS.4.11 crore and April 01, 2015 - RS.4.11 crores)
Depreciation for the year: RS.0.26 crore (previous year - RS.0.27 crore)
Accumulated Deprecation as at March 31, 2017 - RS.0.53 crore (previous year - RS.0.27 crores and April 01, 2015 - NIL)
Net Block as at March 31, 2017 - RS.3.58 crores (previous year - RS.3.85 crores and April 01, 2015 - RS.4.11 crores)
x) Free hold Land includes Land given on Operating Lease Basis:
Gross Block as at March 31, 2017 - RS.7.02 crore (previous year - RS.6.68 crore and April 01, 2015 - RS.6.68 crores)
Accumulated Depreciation for the year: RS.0.43 crore (previous year - RS.0.37 crore and April 01, 2015 RS.0.31 crore)
Net Block as at March 31, 2017 - H 6.59 crores (previous year - RS.6.31 crores and April 01, 2015 - RS.6.37 crores)
Note 3(a) Intangible Assets
Goodwill acquired through business combination pertains to cash generating units (CGUs) which are part of ‘Port and SEZ activities segment. The goodwill is tested for impairment annually. As at March 31, 2017, March 31, 2016 and April 01, 2015, the goodwill is not impaired.
The recoverable amount of the CGUs are determined from value -in-use calculation. The key assumptions for the value-in-use calculations are those regarding the discount rate, growth rates and expected changes to direct costs during the year. Management estimates discount rate using pre-tax rates that reflect current market assessments of the time value of money.
The growth rate are based management’s forecasts . Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.
The Company prepares its forecasts based on the most recent financial budget approved by management with projected revenue growth rates raging from 6% to 20 % the rate used to discount the forecast is 8.5% p.a.
The management believe that any reasonable possible change in any these assumptions would not cause the carrying amount to exceed its recoverable amount.
a) Aggregate cost of unquoted investments as at March 31, 2017 RS.9,515.65 crore (previous year RS.5,184.77 crore and April 01, 2015 RS.4,889.33 crore).
b) Number of Share pledged with banks against borrowings by the respective companies as per below.
c) (i) The Company is carrying equity investment of RS.101.28 crore and has outstanding net term loan of RS.290.09 crore in a subsidiary, engaged in Port services under concession from one of the port trust authorities of the Government of India. This subsidiary company is temporarily not operating the port operations since January 2016 due to various operational bottlenecks, unviability of operating the port terminal, pending resolution to management’s representation to port regulatory authorities and Ministry of Shipping in the matter. The management of the subsidiary company expects to have early resolution to operational issues at Port terminal whereby long term sustainability of the operations is achievable with adequate cash flows. The subsidiary had incurred net cash loss in current year as well as previous year and has accumulated losses of RS.137.99 crores as at March 31, 2017, whereby subsidiary company’s net worth has become negative. The Company has undertaken to provide such financial support, as necessary, to enable the subsidiary company to meet the operational requirements as they arise and to meet its liabilities as and when they fall due and does not expect any impairment provision against its exposure. Accordingly, financial statements of the subsidiary company have been prepared on a ‘going concern’ basis, no provision/adjustments to the carrying value of the said investments/loans is considered necessary by the management as at March 31, 2017.
(ii) The Company is carrying equity investments of RS.122.50 crore and has outstanding net term loans and advances of RS.1,170.51 crore, in subsidiary companies engaged in Port services under concession agreement with the port trust authorities of Government of India and in business of development of integrated textile park at Mundra SEZ. The net worth of these Companies have been eroded based on the latest financial Statements.
As per the management, considering the gestation period required for break even for such infrastructure investment projects, expected higher cash flows based on future business projections prepared by the management and the strategic nature of these investments, no provision/adjustment to the carrying value of such investment project / loans is considered necessary by the management as at March 31, 2017.
d) During the year ended March 31, 2017, the Company has accounted for purchase of 31,213,000 and 30,131,014 numbers of equity shares in two subsidiaries, Adani Kandla Bulk Terminal Private Limited and Adani Murmugao Port Terminal Private Limited, respectively at total consideration of RS.61.34 crores. The equity shares has been purchased from the Adani Enterprises Limited, a group company whereby these entities have become wholly owned subsidiaries. As per the management, the transfer has been recorded based on Irrevocable Letter of Affirmation dated March 31, 2017 from the seller and acceptance by the Company although legal transfer of such equity share is still in process at year end.(Also refer note 31).
e) Reconciliation of Fair value measurement of the investment in unquoted equity shares
f) Value of Deemed Investment accounted in subsidiaries and jointly controlled entities in terms of fair valuation under Ind AS 109
g) Investment in Perpetual Non-convertible Debenture is redeemable at issuer’s option and redemption can be deferred indefinitely.
a) No trade or other receivable are due from directors or other officers of the Company either severally or jointly with any other person; nor any trade or other receivable are due from firms or private companies in which any director is a partner, a director or a member.
b) Generally, as per credit terms trade receivable are collectable within 30-180 days although the Company provide extended credit period with interest between 8% to 10% considering business and commercial arrangements with the customers including with the related parties. Receivable of RS.7.91 crore (previous year RS.16.09 crore and April 01, 2015 RS.35.52 crore) are contractually collectable on deferred basis.
c) The Carrying amounts of the trade receivables include receivables which are subject to a bills discounting arrangement. Under this arrangement, the Company has transferred the relevant receivables to the bank / financial institution in exchange of cash and is prevented from selling or pledging the receivables. The Cost of bill discounting has been to the customer’s account as per the arrangement. However, the Company has retained late payment and credit risk. The Company therefore continues to recognise the transferred assets in their entirety in its balance sheet. The amount repayable under the bills discounting arrangement is presented as unsecured borrowing.
a) The Company has granted interest bearing loans in the nature of inter-corporate loans and deposits aggregating NIL (previous year RS.2,325.84 crore and April 01, 2015 RS.2,137.87 crore)(including renewals on due dates) as at March 31, 2017 to its subsidiaries and other related parties, excluding loans / deposits granted to subsidiaries towards funding of development of specific ports and related infrastructure. The funds are advanced based on the business needs and exigencies and other cases to invest surplus fund or gave loans / deposits to avail future commercial benefits with an option to purchase underlying assets.
b) Further, the Company has also extended inter-corporate deposits aggregating RS.1,345.14 crore (previous year RS.1,217.37 and April 01, 2015 RS.1,261.35 crore) (Including renewals on due dates) to third parties. The deposits are given at prevailing market interest rates. The inter-corporate deposits have been approved by the Finance committee of the Board of Directors .
The Company has received adequate undertaking on record by its promotors’ company to safeguard the full recovery of this amount together with the interest. In the opinion of the Company, all these loans /deposits are considered good and realisable as at the year end.
a) Capital advance includes RS.79.10 crore (previous year RS.72.85 and April 01,2015 RS.64.87 crore) paid to various private parties and government authorities towards purchase of land.
b) The Company has received bank guarantees of RS.1.66 crore (previous year RS.119.86 crore and April 01,2015 RS.42.64 crore) against capital advances.
a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year
Terms/rights attached to equity shares
(i) The Company has only one class of equity share having par value of RS.2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees.
(ii) For the current financial year 2016-17, the Company has proposed dividend per share to equity shareholder of RS.1.30 (declared for the previous financial year interim dividend per share RS.1.10)
(iii) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
b) During the year ended March 31, 2016, the Company had given effect of composite scheme of arrangement w.e.f. April 01, 2015 as per sanction of Honorable High Court of Gujarat and filing of scheme with Registrar of Companies. In accordance with the terms of the scheme of arrangement, the Company has issued new equity shares to the equity shareholders of Adani Enterprises Limited (“AEL”) in the ratio of 14,123 equity shares having face value of RS.2 each for every 10,000 equity shares with a face value of RS.1 held by each of the equity shareholders of AEL on June 08, 2015 without payment being received in cash (refer note 42(b)).
c) Equity Component of convertible preference share
Terms of Non-cumulative redeemable preference shares
(i) The Company has outstanding 28,11,037 0.01 % Non-Cumulative Redeemable Preference Shares (‘NCRPS’) of RS.10 each issued at a premium of RS.990 per share. Each holder of preference shares has a right to vote only on resolutions placed before the company which directly affects the right attached to preference share holders. These shares are redeemable on March 28, 2024 at an aggregate premium of RS.278.29 crore (equivalent to RS.990.00 per share). In the event of liquidation of the Company, before redemption the holder of NCRPS will have priority over equity shares in the payment of dividend and repayment of capital. The preference shares carry fixed dividend which is non-discretionary.
(ii) Under Indian GAAP, the preference shares were classified as equity and dividend payable thereon was treated as distribution of profit. Under Ind AS, the Preference Shares issued by the company classifies as Compound Financial Instrument. These non-convertible preference shares are separated into liability and equity components based on the terms of the contract. Interest on liability component is recognised as interest expense using the effective interest method.
(iii) The equity component of convertible preference shares includes the securities premium amount received on issue of preference shares and the preference share capital, redemption premium reserve being created in compliance of the Companies Act, 2013.
d) Details of shareholders holding more than 5% shares in the company
5 LONG TERM BORROWINGS
a) Debentures include Secured Non-Convertible Redeemable Debentures amounting to RS.2,410.15 crore (previous year RS.2,583.49 crore and April 01, 2015 RS.1989.10 crore) are secured by first Pari-passu charge on all the immovable and movable assets of Multi-purpose Terminal, Terminal-II and Container Terminal -II project assets and specific charge over land (valued at market value)
b) Debentures include Secured Non-Convertible Redeemable Debentures aggregating to RS.93.68 crore (previous year RS.148.64 crore and April 01, 2015 RS.634.13 crore) are secured by exclusive mortgage and charge on entire Single Point Mooring (SPM) facilities serving Indian Oil Corporation Limited - Mundra and the first charge over receivables from Indian Oil Corporation Limited.
c) (i) Debentures include Secured Non-Convertible Redeemable Debentures aggregating to NIL (previous year RS.400.00 crore and April 01, 2015 RS.1,000.00) are secured by first specific charge over 138 hectares land situated at Navinal Island, Mundra Taluka Kutch District, Gujarat (valued at market value).
(ii) Debentures include Secured Non-Convertible Redeemable Debentures aggregating to NIL (previous year RS.500.00 crore and April 01, 2015 RS.500.00) are secured by first specific charge over 79 hectares land situated at Mundra Taluka, Kutch District, Gujarat (valued at market value).
d) Debentures include Secured Non-Convertible Redeemable Debentures aggregating to RS.1,750.06 crore (previous year NIL and April 01, 2015 NIL) are secured by first pari-passu charge on all the movable and immovable assets pertaining to coal terminal project assets at Wandh.
e) Debentures include Secured Non-Convertible Redeemable Debentures aggregating to RS.1,300 crore (previous year NIL and April 01, 2015 NIL) are secured by first pari-passu charge on specified assets of certain subsidiary companies arrangements as per Debenture Trust Deed.
f) Foreign currency loan aggregating to RS.168.38 crore (previous year RS.233.37 crore and April 01, 2015 RS.255.84 crore) carries interest @ 6 months Euribor plus basis point in the range of 95 to 140. Further, out of the above loan is repayable in 11 Semi-annual instalment of RS.15.31 crore from the balance sheet date. The loan is secured by exclusive charge on the Dredgers procured under the facility.
g) Foreign Currency loan aggregating to NIL crore (previous year RS.16.40 crore and April 01, 2015 RS.30.45 crore) carries interest @ 6 months libor plus 225 basis point. The loan is repaid during the year. The loan was secured by exclusive charge on the dredgers and is further secured by way of second pari passu charge on the entire movable and immovable assets pertaining to Multi purpose Terminal, Terminal-II and Container Terminal -II project assets and Single Point Mooring.
h) Foreign currency loans aggregating to RS.75.13 crore (previous year RS.98.14 crore and April 01, 2015 RS.102.07 crore) carries interest @ 6 months Euribor plus 75 basis point. The loan is repayable in 10 semi annually equal instalments of approx. RS.7.51 crore from the balance sheet date. The loan is secured by exclusive charge on the Cranes purchased under the facility
i) Foreign Currency Loans from Banks aggregating to NIL (previous year NIL and April 01, 2015 RS.1,873.86 crore) was secured by the first pari passu charge on all the immovable and movable assets pertaining to Multi purpose terminal, Terminal II, Container Terminal II, project assets of the company and carry interest @ 3 to 6 Months libor plus basis point in range of 260 to 380. The Loan is repaid during the year 2015-16.
j) Foreign currency Loans from bank aggregating to NIL (previous year NIL and April 01, 2015 RS.274.95 crore) was secured by first pari passu charge on all the movable and immovable assets pertaining to Coal terminal project assets at Wandh and carries interest @ 3 Months libor plus 330 basis point. The Loan is repaid during the year 2015-16.
k) Foreign currency Loans from bank aggregating to NIL (previous year NIL and April 01, 2015 RS.1,850.42 crore) carries interest @ 3 months libor plus basis point in range of 310 to 370, These loans were secured by first pari passu charge on all the movable and immovable assets pertaining to Coal Terminal project assets at Wandh and specific charge over land admeasuring to 175 hectares situated at Mundra Taluka, Kutch district, Gujarat. The Loan is repaid during the year 2015-16.
l) Foreign Currency Loans from banks aggregating to NIL (previous year RS.93.25 crore and April 01, 2015 RS.94.49 crore) carries interest @ 4.6% p.a. The Loan is repaid during the year. These loans were secured by exclusive charge on the Tug assets.
m) Foreign currency loan aggregating to NIL (previous year RS.130.62 crore and April 01, 2015 RS.344.00 crore) carries interest @ 3 to 6 months Libor plus 310 basis point and 6 months Euribor plus a margin of 290 basis point. The loans were secured by first Pari-passu charge on all the immovable and movable assets of Multi purpose terminal, Terminal-II and Container Terminal -II project assets. The Loan is repaid during the year 2015-16 and 2016-17.
n) Foreign currency Loans from bank aggregating to NIL (previous year RS.388.64 crore and April 01, 2015 RS.554.46 crore) is secured by first pari passu charge on all the movable and immovable assets pertaining to Coal terminal project assets at Wandh and carries interest @ 3 months Libor plus basis point in the range of 225 to 305. The Loan is repaid during the year 2015-16 and 2016-17.
o) Foreign Currency Loan aggregating to RS.878.22 crore (previous year RS.1,001.17 crore and April 01, 2015 NIL) carries interest at 6 month libor plus 180 basis point. The Loan is repayable in 3 annual instalment of RS.206.64 crore and an instalment of RS.258.29 crore at balance sheet date. This loan is secured by first pari-passu charge on all the immovable and movable assets of Multi-purpose Terminal, Terminal-II and Container Terminal-II project assets.
p) Rupee Term Loan from bank aggregating to NIL (previous year NIL and April 01, 2015 RS.102.00 crore) was secured by first pari passu charge on all the movable and immovable assets pertaining to Agripark project assets and carries interest @ 10.50% p.a. The loan was repaid during the year 2015-16.
q) Rupee term loan amounting to NIL (previous year NIL and April 01, 2015 RS.448.93 crore) carrying interest rate at 11.45% p.a were secured by exclusive charge on land parcel of 90 hectares situated at Mundra Taluka Kutch District, Gujarat. The loan is repaid during the year 2015-16.
r) Rupee term loan amounting to NIL (previous year NIL and April 01, 2015 RS.200.00 crore) carrying interest rate at 9.70% p.a was secured by first pari passu charge on Multi purpose Terminal, Terminal II and Container Terminal II .The Loan is repaid during the year 2015-16.
s) Suppliers bills accepted under foreign currency letters of credit aggregating to RS.555.11 (previous year RS.82.65 and April 01, 2015 RS.121.59 crore) carries interest @ 3 to 12 months libor plus basis point in range of 16 to 215 and 6 to 12 months Euribor plus basis point in the rage of 30 to 35. Loan of RS.121.59 crore and RS.82.65 crore repaid on maturity the year 2015-16 and 2016-17 respectively and RS.555.11 payable on maturity from 2017-18 to 2019-20. The loan was secured against exclusive charge on assets purchased under the facility,
t) Unsecured Loan
(i) 5 years Foreign Currency Bond of USD 650 million equivalent to RS.4,215.25 crore (previous year RS.4,306.58 crore and April 01, 2015 NIL) carries interest @ 3.50 % p.a. with bullet repayment in the year 2020.
(ii) 5 years Foreign Currency Bond of USD 500 million equivalent to RS.3,207.56 crore (previous year NIL and April 01, 2015 NIL) carries interest rate at 3.95% p.a. with bullet repayment in the year 2022.
(iii) Foreign Currency loan NIL (previous year RS.993.83.crore and April 01, 2015 NIL) carries interest rate at 1.95% p.a. to 2.30 % for six months is paid during the year 2016-17.
(iv) Foreign Currency loan of RS.226.98 crores (previous year RS.231.89 crore and April 01, 2015 NIL) carries basis overnight libor plus 120 basis point repayable at maturity during the year 2017-18.
(v) Foreign Currency Loan aggregating to RS.1034.68 crore (previous year RS.1,057.10 crore and April 01, 2015 NIL) carries interest at 2.85% fixed for 18 months and than after 6 months Libor plus 2.2%. is repayment in the year 2021.
(vi) Foreign Currency Loan aggregating of RS.12.31 crore (previous year RS.16.69 crore and April 01, 2015 RS.18.44 crore) carry interest at 2.12 % p.a. The outstanding loan amount is repayable in 6 semi- annual equal instalment of RS.2.05 crore from the balance sheet date.
(vii) Suppliers bills accepted under foreign currency letters of credit aggregating to RS.31.47 crore (previous year RS.14.55 crore and April 01, 2015 NIL) carries interest at 6 months Libor plus basis point in range of 10 to 51 and 12 months Euribor plus basis point in the range of 35 to 75 basis points. Loan of RS.14.55 crore repaid on maturity in the year 2016-17 and RS.31.47 payable on maturity from 2017-18 to 2019-20.
(viii) Foreign currency loan aggregating to RS.483.45 crore (previous year NIL and April 01, 2015 NIL) carried interest 6 months Libor plus 204 basis point .The loan is repayable in 3 annual instalments of RS.128.92 crore, RS.161.15 crore and Rs. 193.38 crore from the balance sheet date.
(ix) Foreign currency loan aggregating to RS.483.23 crore (previous year NIL and April 01, 2015 NIL) carried interest 3 months Libor plus 200 basis point .The loan has bullet repayment in the year 2021.
a) Suppliers bills accepted under foreign currency letters of credit aggregating to NIL (previous year NIL and April 01, 2015 RS.119.85 crore) carries interest @ 6 months Libor plus basis point in range of 35 to 40 which was paid on maturity in year 2015-16. The loan was secured against exclusive charge on assets and materials purchased under the facility.
b) Supplier Bills aggregating to NIL (previous year NIL and April 01, 2015 RS.35.03 crore) carries interest @ 6 Months Libor plus basis point in range of 35 to 65 which was paid on maturity in 2015-16 The loan was secured against subservient charge on movable assets and current assets except those secured by exclusive charge in favour of other lenders .
c) Suppliers bills accepted under foreign currency letters of credit aggregating to RS.2.47 crore (previous year RS.15.91 crore and April 01, 2015 NIL) carries interest at 1 -12 months Libor plus basis point in the range of 15 to 75 and 6 to 12 Months Euribor plus basis point in range of 38 to 40. The loan is repaid on maturity in the year 2016-17. The loan was secured against material purchased under the facilities.
d) Suppliers bills accepted under foreign currency letters of credit aggregating to NIL (previous year RS.2.25 crore and April 01, 2015 NIL) carries interest at 6 months Libor plus 45 basis point and 12 month Euribor plus 38 basis point. The loan is unsecured and paid during the year.
e) Commercial Paper (CP) aggregating RS.2,531. 42 crore (previous year RS.3,115.65 crore and April 01, 2015 RS.1,133.13 crore) carries interest rate in range of 6.75 % to 10 % pa. The CP has maturity period of 1 to 9 months period.
f) Factored receivables of RS.663.48 crore (previous year RS.379.79 crore and April 01, 2015 RS.449.67 crore) have recourse to the Company and interest liability on amount of bill discounted is borne by the customer. The maturity period of the transfer is 1 to 12 months period.
a) Assets taken under Operating Leases - an office space and residential houses for staff accommodation are generally obtained on operating leases except that stated under note (b) below. The lease rent terms are generally for an eleven months period and are renewable by mutual agreement. There are no sub-leases and leases are cancellable in nature except that mentioned under note (b) below. There are no restrictions imposed by the lease arrangements. There is no contingent rent in the lease agreements and there is no escalation clause in the lease agreements except that mentioned under note (b) below. Expenses of RS.4.24 crore (previous year RS.4.09 crore) incurred under such leases have been expensed in the statement of profit & loss.
b) Assets taken under Operating Leases
i) an office premises have been taken on operating leases. The lease rent terms are for the period of 15 years and are renewable by mutual consent. The Company has given deposit of RS.100 crore as per the terms one of the lease transaction. The lease agreement entered is non-cancellable for the period of first 3 years of the lease agreement. As per the lease agreement lease rental is escalated by 10% at every 5 years. There is no contingent rent, no sub-leases and no restrictions imposed by the lease arrangements. Expenses of RS.0.10 crore (previous year RS.0.10 crore) incurred under such lease have been expensed in the statement of profit and loss.
ii) Land for purpose of constructing corporate office has been taken on operating lease basis during the year. The lease term is for the period of 20 years and is renewable by the mutual consent. The lease agreement entered is non-cancellable for the period of first 5 years of the lease agreement. There is no contingent rent, no sub-leases and no restrictions imposed by lease arrangements. Rental charges of RS.3.54 crore incurred under such lease have been expensed in the statement of profit and loss.
iii) The Company has taken parcel of Land aggregating to 49,416 Sq. Mtrs on lease basis. The lease shall be for an initial period of 20 years with annual lease rent of RS.7 crore. A lease rent expenses of RS.3.50 crore (previous year NIL) has been expensed in the statement of profit and loss and the Company has also paid advance of RS.140 crore as per terms of agreement,
c) Payment to Auditors
* Note- Professional fee of RS.0.37 crore paid for the services rendered in respect of the Bond issued by the Company has been accounted as transaction cost in accordance with Ind AS 109 for the year ended March 31, 2017 and fee of RS.0.26 crore paid during the previous year ended March 31, 2016 has been adjusted against securities premium in accordance with section 52 of the Companies Act 2013.
d) Details of Expenditure on Corporate Social Responsibilities
g) The Company has been availing tax holiday benefit u/s 80IAB of the Income Tax Act, 1961 on the taxable income. However, in view of the amendment in Income Tax Act, 1961 w.e.f. April 1, 2011 by Finance Act 2011, the Company is liable to pay Minimum Alternate Tax (MAT) on income from the financial year 2011-12. Based on the amendment, the Company has made provision of RS.704.24 crore (previous year RS.624.34 crore) for current taxation based on its book profit for the financial year 2016-17 and has recognised MAT credit of RS.571.28 crore (previous year RS.607.82 crore) (read with note 38(l)) as the management believes, in view of strategic volumes of cargo available with the Company and higher depreciation charge for accounting purposes than the depreciation for income tax purposes in the future period, it is possible that the MAT credit will be utilized post tax holiday period w.e.f. financial year 2017-18.
h) The Company has following unutilised MAT credit under the Income Tax Act, 1961 for which deferred tax assets has been recongnised in the Balance Sheet at.
i) During the year ended March 31, 2016, the Company has paid dividend to its shareholders. This has resulted in payment of Dividend Distribution Tax (DDT) to the taxation authorities. The Company believes that DDT represents additional payment to taxation authority on behalf of the shareholders. Hence DDT paid is charged to equity.
6 DISCLOSURES AS REQUIRED BY IND AS - 19 EMPLOYEE BENEFITS
a) The company has recognised, in the Statement of Profit and Loss for the current year, an amount of RS.7.70 crore (previous year RS.6.41 crore) as expenses under the following defined contribution plan.
b) The company has a defined gratuity plan (funded) and is governed by the Payment of Gratuity Act, 1972. Under the Act, every employee who has completed at least five year of service is entitled to gratuity benefits on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with Life Insurance Company of India (LIC) in form of a qualifying insurance policy with effect from September 01, 2010 for future payment of gratuity to the employees.
Each year, the management reviews the level of funding in the gratuity fund. Such review includes the assets-liability matching strategy. The management decides its contribution based on the results of this review. The management aims to keep annual contributions relatively stable at a level such that no plan deficits (based on valuation performed) will arise.
The following tables summarise the component of the net benefits expense recognised in the statement of profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plan.
The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled. There has been significant change in expected rate of return on assets due to change in the market scenario.
7 SEGMENT INFORMATION
The Company is primarily engaged in one business segment, namely developing, operating and maintaining the Ports services, Ports related Infrastructure development activities and development of infrastructure at contiguous Special Economic Zone at Mundra, as determined by chief operational decision maker, in accordance with Ind-AS 108 “Operating Segment”.
Considering the inter relationship of various activities of the business, the chief operational decision maker monitors the operating results of its business segment on overall basis. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements.
Terms and conditions of transactions with related parties
(i) Outstanding balances of related parties at the year-end are unsecured and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended March 31, 2017, the Company has not recorded any impairment of receivables relating to amounts owed by related parties except provision has been made for loans given to subsidiaries of RS.15.51 crore (March 31, 2016 - NIL, April 01, 2015 - NIL). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.
(ii) All loans are given on interest bearing within the range of 7.50 % to 11.50% except loan to Adani Logistics Limited; The Dhamra Port Company Limited; Dholera Infrastructure Private Limited; Dholera Port & Special Economic Zone Limited;Karnavati Aviation Private Limited; Adani Hospitals Mundra Private Limited whereby loan transaction amounting to RS.1,519.58 crore (previous year RS.1,005.14 crore) are interest free. During the year Company has granted relinquish current year on payment of interest on loan amounting to RS.2,671.64 crore given to certain subsidiaries, in earlier period and outstanding as at April 01,2016 i.e. Adani Ennore Container Terminal Private Limited; Adani Hazira Port Private Limited; Adani Kandla Bulk Terminal Private Limited; Adani Kattupalli Port Private Limited; Adani Murmugao Port Terminal Private Limited; Adani Vizag Coal Terminal Private Limited; Mundra SEZ Textile and Apparel Park Private Limited; Shanti Sagar International Dredging Private Limited and The Dhamra Port Company Limited to support the operation of these subsidiaries.
(i) The names of the related parties and nature of the relationships where control exists are disclosed irrespective of whether or not there have been transactions between the related parties. For others, the names and the nature of relationships is disclosed only when the transactions are entered into by the Company with the related parties during the existence of the related party relationship.
(ii) Aggregate of transactions for the year ended with these parties have been given below.
8.1 Financial Risk objective and policies
The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations/ projects and to provide guarantees to support its operations and its subsidiaries and jointly controlled entities. The Company’s principal financial assets include loans, investment including mutual funds, trade and other receivables, and cash and cash equivalents that derive directly from its operations. The Company also holds FVTOCI investments and enters into derivative transactions.
In the ordinary course of business, the Company is mainly exposed to risks resulting from exchange rate fluctuation (currency risk), interest rate movements (interest rate risk) collectively referred as Market Risk, Credit Risk, Liquidity Risk and other price risks such as equity price risk. The Company’s senior management oversees the management of these risks. It manages its exposure to these risks through derivative financial instruments by hedging transactions. It uses derivative instruments such as Cross Currency Swaps, Full Currency swaps, Interest rate swaps, foreign currency future options and foreign currency forward contract to manage these risks. These derivative instruments reduce the impact of both favourable and unfavourable fluctuations.
The Company’s risk management activities are subject to the management, direction and control of Central Treasury Team of the Company under the framework of Risk Management Policy for Currency and Interest rate risk as approved by the Board of Directors of the Company. The Company’s central treasury team ensures appropriate financial risk governance framework for the Company through appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken.
The decision of whether and when to execute derivative financial instruments along with its tenure can vary from period to period depending on market conditions and the relative costs of the instruments. The tenure is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. The Company is exposed to losses in the event of non-performance by the counterparties to the derivative contracts. All derivative contracts are executed with counterparties that, in our judgment, are creditworthy. The outstanding derivatives are reviewed periodically to ensure that there is no inappropriate concentration of outstanding to any particular counterparty.
Further, all currency and interest risk as identified above is measured on a daily basis by monitoring the mark to market (MTM) of open and hedged position. The MTM is derived basis underlying market curves on closing basis of relevant instrument quoted on Bloomberg/Reuters. For quarter ends, the MTM for each derivative instrument outstanding is obtained from respective banks. All gain / loss arising from MTM for open derivative contracts and gain / loss on settlement / cancellation / roll over of derivative contracts is recorded in statement of profit and loss.
a) Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans and borrowings, deposits, FVTOCI investments, short term Investments and derivative financial instruments.
The sensitivity analyses in the following sections relate to the position as at March 31, 2017 and March 31, 2016.
The sensitivity analyses have been prepared on the basis that the amount of net debt, the ratio of fixed to floating interest rates of the debt and derivatives and the proportion of financial instruments in foreign currencies are all constant as at March 31, 2017. The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions.
The following assumptions have been made in calculating the sensitivity analyses:
The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016.
(i) Interest rate risk
The Company is exposed to changes in market interest rates due to financing, investing and cash management activities. The Company’s exposure to the risk of changes in market interest rates relates primarily to The Company’s long-term debt obligations with floating interest rates and period of borrowings. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company enters into interest rate swap contracts or interest rate future contracts to manage its exposure to changes in the underlying benchmark interest rates.
Interest rate sensitivity
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. With all other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, as follows:
If interest rates had been 50 basis points higher / lower and all other variables were held constant, the Company’s profit for the year ended March 31, 2017 would decrease / increase by RS.39.49 crore (previous year RS.19.76 crore). This is mainly attributable to interest rates on variable rate long term borrowings.
(ii) Foreign currency risk
Exchange rate movements, particularly the United States Dollar (USD) and Euro (EUR) against Indian Rupee (INR), have an impact on the Company’s operating results. The Company manages its foreign currency risk by entering into currency swap for converting INR loan into other foreign currency for taking advantage of lower cost of borrowing in stable currency environment. The Company also enters into various foreign exchange contracts to mitigate the risk arising out of foreign exchange rate movement on foreign currency borrowings or trade payables. Further, to hedge foreign currency future transactions in respect of which firm commitment are made or which are highly probable forecast transactions (for instance, foreign exchange denominated income) the Company has entered into foreign currency forward contracts as per the policy of the Company,
The carrying amounts of the Company’s foreign currency denominated monetary items are as follows:
The above table represents total exposure of the Company towards foreign exchange denominated liabilities (net). The details of exposures hedged using forward exchange contracts are given as a part of Note 32(a) and the details of unhedged exposures are given as part of Note 32(b).
The Company is mainly exposed to changes in USD, EURO, AUD and JPY. The below table demonstrates the sensitivity to a 1% increase or decrease in the respective foreign currency rates against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents management’s assessment of reasonably possible change in foreign exchange rate.
(III) Equity price risk
The Company’s non-listed equity securities are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company manages the equity price risk through diversification and by placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves all equity investment decisions.
The Company has given corporate guarantees and pledged part of its investment in equity in order to fulfil the collateral requirements of the subsidiaries and jointly controlled companies. The counterparties have an obligation to return the guarantees/ securities to the Company. There are no other significant terms and conditions associated with the use of collateral.
b) Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables and other financial assets) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Customer credit risk is managed by the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive evaluation and individual credit limits are defined in accordance with this assessment.
An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data.
Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed by the Company’s Board of Directors on an annual basis, and may be updated throughout the year subject to approval of the Company’s Finance Committee. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty’s potential failure to make payments.
Concentrations of Credit Risk form part of Credit Risk
Considering that the Company operates the port services and related infrastructure contiguous to Port at Mundra, the Company is significantly dependent on cargo from or to such large port user customer located at Mundra. Out of total revenue, the Company earns RS.2,102.22 crore of revenue during the year ended March 31, 2017 (previous year RS.1,692.66 crore) from such port users which constitute 66% (previous year 60%). Accounts receivable from such customer approximated RS.744.31 crore as at March 31, 2017 and RS.707.93 crore as at March 31, 2016. A loss of these customer could adversely affect the operating result or cash flow of the Company,
c) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company has an established liquidity risk management framework for managing its short term, medium term and long term funding and liquidity management requirements. The Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents. The Company also has adequate credit facilities agreed with banks to ensure that there is sufficient cash to meet all its normal operating commitments in a timely and cost-effective manner.
The table below analysis derivative and non-derivative financial liabilities of the Company into relevant maturity groupings based on the remaining period from the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.
8.2 Capital management
For the purposes of the company’s capital management, capital includes issued capital and all other equity. The primary objective of the company’s capital management is to maximize shareholder value. The company manages its capital structure and makes adjustments in the light of changes in economic environment and the requirements of the financial covenants.
The company monitors capital using gearing ratio, which is net debt (total debt less cash and bank balance) divided by total capital plus net debt.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.
9 Information required to be furnished as per Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) and Schedule III the Companies Act, 2013 for the year ended March 31, 2017. This information has been determined to the extent such parties have been identified on the basis of information available with the Company and relied upon by auditors.
10 Detail of Capital Work in Progress including certain expenses of revenue nature allocable to New Projects and Capital Inventory, consequently expenses disclosed under the respective notes are net of such amount.
11 CAPITAL COMMITMENTS AND OTHER COMMITMENTS
a) The port projects of subsidiary companies viz. Adani Hazira Port Private Limited, Adani Petronet (Dahej) Port Private Limited, Adani Murmugao Port Terminal Private Limited (“AMPTPL’), Adani Vizag Coal Terminal Private Limited, The Dhamra Port Company Limited (“DPCL”) and jointly controlled entity Adani International Container Terminal Private Limited (“AICTPL”) have been funded through various credit facility agreements with banks. Against the said facilities availed by the aforesaid entities from the banks, the Company has executed a Sponsor Undertaking and Pledge Agreements whereby 51% of the holding would be retained by the Company (In case of AICTPL jointly with the Joint Venture partner) at all points of time. Further, the Company is also required to pledge 30% (26% from the date of commencement of the operation) of its shareholding in the respective entities. (In case of AICTPL, jointly with Joint Venture partner of which 12.98% share held by Joint Venture partner are yet to be pledged with bank).
b) Contract/ Commitment for purchase of certain supplies. Advance given RS.251.81 crore (previous year RS.300 crore)
c) The Company has, through its subsidiary Adani Kattupalli Port Private Limited (AKPPL), entered into an in principle agreement on November 01, 2015 for strategic acquisition of the Kattupalli Port in Tamil Nadu from L&T Shipbuilding Limited (LTSB) a subsidiary of Larsen & Toubro Limited. The transaction is subject to receiving the necessary government and regulatory approvals and the port business being demerged from LTSB. While awaiting all the necessary approvals, APSEZ through its subsidiary AKPPL has an arrangement to operate the Port w.e.f November 01, 2015 through AKPPL.
12 ASSETS HELD FOR SALE
The Board of Directors of the Company in their meeting held on February 14, 2017 has approved to transfer Maintenance Dredging Operations of the Company consisting of fleet of dredgers and relevant support facilities to Shanti Sagar International Dredging Private Limited, a wholly owned subsidiary. The Business Transfer Agreement has been entered between the parties on April 1, 2017 to transfer the following assets and liabilities of the Maintenance Dredging Operations to the subsidiary at a consideration of RS.96.00 crore:
Considering the management’s consideration to transfer the aforesaid assets to its wholly owned subsidiary, the relevant property, plant and equipment of RS.93.12 crore has been classified as ‘Asset Held for Sale’ (refer note 8).
13 The following are the details of loans and advances in the nature of loans given to subsidiaries, associates and other entities in which directors are interested in terms of regulation 53 (F) read together with para A of Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
14 a) The Company has entered into preliminary agreement with one of the party for development and maintenance of Liquefied Natural Gas (LNG) terminal infrastructure facilities at Mundra (Mundra LNG Project) vide agreement dated September 30, 2014. The Company had during the quarter ended September 30, 2014, recognised project service revenue of RS.200 crore pending conclusion of definitive agreement towards land reclamation based on the activities completed. Based on the agreement the Company and the party are still in the process of concluding a definitive agreement for Mundra LNG Project relating to development and lease of infrastructure facilities (including lease of land)