1. RECENT ACCOUNTING PRONOUNCEMENTS Standards issued but not yet effective
I n March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7 - Statement of cash flows and Ind AS 102 - Share-based payment. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to Ind AS 7 - Statement of cash flows and Ind AS 102 - Share-based payment, respectively. The amendments are applicable from 1 April, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
Amendment to Ind AS 102:
The amendment to Ind AS 102 provides specific guidance to measurement of cash-settled awards, modification of cash-settled awards and awards that include a net settlement feature in respect of withholding taxes.
It clarifies that the fair value of cash-settled awards is determined on a basis consistent with that used for equity-settled awards. Market-based performance conditions and non-vesting conditions are reflected in the fair values, but non-market performance conditions and service vesting conditions are reflected in the estimate of the number of awards expected to vest. Also, the amendment clarifies that if the terms and conditions of a cash-settled share-based payment transaction are modified with the result that it becomes an equity-settled share-based payment transaction, the transaction is accounted for as such from the date of the modification. Further, the amendment requires the award that include a net settlement feature in respect of withholding taxes to be treated as equity-settled in its entirety. The cash payment to the tax authority is treated as if it was part of an equity settlement.
The requirements of the amendment have no impact on the financial statements as the standard is not applicable to the Company.
2. TRANSITION TO IND AS
The Company has prepared financial statements which comply with Ind AS applicable for period ending on 31 March, 2017, together with the comparative period data as at and for the year ended 31 March, 2016, as described in the summary of significant accounting policies (note 2 of the financial statements). In preparing these financial statements, the Company''''s opening Balance Sheet was prepared as at 1 April, 2015 (Transition Date''''), the Company''''s date of transition to Ind AS.
This note explains the principal adjustments made by the Company in restating its financial statements prepared on the basis of the Previous GAAP, including the Balance Sheet as at 1 April, 2015 and the financial statements as at and for the year ended 31 March, 2016 to Ind AS.
A. Optional exemptions availed:
In preparing the financial statements, the Company has applied the below mentioned optional exemptions as prescribed under Ind AS 101 - First-time Adoption of Indian Accounting Standards and applicable from the Transition date:
i Deemed cost
I nd AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its PPE as recognized in the financial statements as at the date of transition to Ind AS, measured as per the Previous GAAP and use that as its deemed cost after making necessary adjustments for decommissioning liabilities.
This exemption can also be used for Intangible assets covered under Ind AS 38 - Intangible Assets. Accordingly, the Company has opted to consider the carrying value of its PPE and intangible assets as recognized in the Previous GAAP on date of transition as deemed cost after adjusting decommissioning liabilities.
The Company has elected to recognize the decommissioning liability, within the scope of Ind AS 16 - Property, Plant and Equipment, by measuring the liability in accordance with Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets, as at the Transition date.
ii Investments in subsidiaries, joint venture and associates
The Company has elected to consider the carrying cost of equity investments in subsidiaries, joint venture and associates as per the Previous GAAP as the deemed cost as at the Transition date.
iii Designation of previously recognized financial instruments
Ind AS 101 permits an entity to designate particular equity investments (other than equity investments in subsidiaries, joint arrangements and associates) as FVTOCI based on facts and circumstances at the date of transition to Ind AS. The Company has opted to avail this exemption to designate certain equity investments as FVTOCI on the date of Transition.
Ind AS17 - Leases requires an entity to assess whether a contract or an arrangement is in the nature of a lease arrangement. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used Ind AS 101 exemption and recognized arrangements having embedded leases based on facts and circumstances existing as at the date of Transition.
An explanation of how the transition from the Previous GAAP to Ind AS has affected the Company''''s equity, Statement of Profit and Loss and other comprehensive income and Cash Flows is set out in the following tables and notes that accompany the tables.
B3 Explanation of material adjustments to
Statement of cash flow for the year ended 31 March, 2016:
There are no material adjustments to Statement of Cash Flows as reported under the Previous GAAP except for decrease in cash from financing activities and corresponding increase in cash from operating activities of '''' 505.00 crore for the year ended 31 March, 2016. Consequent to the classification of suppliers'''' credit as a part of borrowings, the cash flows arising in this regard have been classified as a part of ''''Cash flows used in financing activities''''.
C Notes to reconciliations: 1 Fair valuation of investments FVTOCI Investments
In respect of FVTOCI investments, fair value adjustment under Ind AS has resulted in an increase in equity under Ind AS by Rs, 1,425.98 crore and Rs, 1,666.89 crore as of 31 March, 2016 and 1 April, 2015, respectively.
In respect of FVTPL investments, fair value adjustment under Ind AS has resulted in an increase in profit before tax under Ind AS by Rs, 56.31 crore for the year ended 31 March, 2016.
3 Fair valuation of derivative contracts
Under Ind AS, all derivative contracts need to be recognized at fair values, with changes in fair value, recognized in the profit or loss or in the OCI depending upon whether the derivative contract has been designated under hedging relationship. Under the Indian GAAP, only derivatives which were within the scope of AS 11 were recognized.
This difference has resulted in a decrease in equity under Ind AS by Rs, 17.00 crore and Rs, 19.67 crore as of 31 March, 2016 and 1 April, 2015, respectively.
4 Proposed dividend and dividend tax thereof
Under the Previous GAAP, proposed dividends including Dividend Distribution Tax are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind
AS, a proposed dividend is recognized as a liability in the period in which it is declared by the Company (usually when approved by share holders in a general meeting) or paid.
In case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of Rs, 382.02 crore for the year ended on 31 March, 2015 recorded for proposed dividend has been derecognized against retained earnings on 1 April, 2015. The proposed dividend for the year ended on 31 March, 2016 of Rs, 301.67 crore recognized under Indian GAAP was reduced from other payables with a corresponding impact in the retained earnings.
5 Remeasurements of defined benefit plans
Under the Previous GAAP, actuarial gains and losses, are charged to profit or loss, however under Ind AS, they form part of remeasurement of defined benefit liability/asset and are recognized in OCI. As a result Rs, 8.95 crore have been recognized in the OCI net of tax, for the year ended 31 March, 2016.
6 Provisions/Asset retirement obligation liability
The provision amount of asset retirement obligation is discounted to present value under Ind AS.
7 Arrangements in the nature of lease
The Company has identified certain arrangements in the nature of lease which have an element of finance lease. Under the Previous GAAP, in the absence of any specific guidance, the Company did not identify leases contained in such arrangements.
These differences mentioned above in note 5 and note 6 have resulted in a decrease in equity under Ind AS by Rs, 28.01 crore and Rs, 33.68 crore as of 31 March, 2016 and 1 April, 2015, respectively.
8 Deferred tax
Various transitional adjustments resulted in temporary differences between taxable profits and accounting profits. Tax adjustments includes deferred tax impact on account of difference between the Previous GAAP and Ind AS on the adjustments discussed above in notes 1 to 6.
(i) Loans to employees includes Rs, *(2016 and 2015: Rs, *) due from officer of the Company. Maximum balance outstanding during the year is Rs, *(previous Rs, *).
* value below Rs, 50,000
(ii) The Company had extended an unsecured subordinate loan to Tata Power Renewable Energy Limited (''''TPREL'''') for the purpose of setting up a 25 MW photovoltaic solar power plant and associate infrastructure at Mithapur, Gujarat. The loan carries an interest rate based on State Bank of India base rate plus 1.25%. In the year 2015-16, TPREL has repaid the entire loan along with the accrued interest.
(ii) The cost of inventories recognized as an expense in form of raw material consumption, stores consumption, trading purchases, packing materials consumption and power and fuel consumption during the year in respect of the continuing operations was Rs, 3,800.59 crore (previous year: Rs, 5,674.69 crore)
(iii) The cost of inventories recognized as an expense includes Rs, 35.47 crore (previous year: Rs, 37.06 crore) in respect of write-down of inventories to net realizable value and has been reduced by Rs, 2.55 crore (previous year: Rs,1.53 crore) in respect of reversal of such write-down. Reversal of previous write-downs have been largely as a result of increased selling prices of certain products.
(iv) Inventories have been offered as security against the working capital loans provided by the bank.
(ii) Terms/ rights attached to equity shares
The Company has issued one class of ordinary shares at par value of Rs, 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting except in the case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential accounts, in proportion to their shareholding.
This reserve represents the cumulative gains and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income, net of amounts reclassified to retained earnings when those assets have been disposed off._
Details of term loans and other borrowings as at 31 March, 2017 are stated below:
(i) Unsecured redeemable Non-convertible debentures having face value of Rs, 10 lakh each are redeemable at par on 2 July, 2019 and bears interest rate of 10% per annum.
(ii) The External Commercial Borrowings (ECB) are due for repayments on 22 October, 2018 Rs, 410.31 crore (2016: Rs, 419.20 crore and 2015: Rs, 395.44 crore) (USD 63.27 million) and on 21 October, 2019 Rs, 411.54 crore (2016: Rs, 420.45 crore and 2015: Rs, 396.65 crore)(USD 63.46 million) and bear interest of LIBOR plus spread of 1.95%, payable semiannually.
Current portion due for repayment within one year is Rs, 410.31 crore (USD 63.27 million) (2016: Rs, 397 crore (USD 60 million) and 2015: Rs, NIL) and bears interest of LIBOR plus spread of 1.95% (2016: LIBOR plus spread of 1.65%), payable semiannually. This has been disclosed in note 17 within the heading current maturity of long term debt under other financial liabilities (current).
(iii) The Company has entered into an agreement with the Department of Biotechnology (DBT) for a project on boosting crop health and yield. DBT has approved a loan of Rs, 0.15 crore (2016: Rs, 0.15 crore). The Company has received three installments of this loan aggregating to Rs, 0.11 crore (2016: Rs, 0.11 crore). The loan bears interest of 2% per annum repayable in 10 equal half yearly installments. Current portion has been disclosed in note 17. The entire loan amount has been repaid during the current year.
(i) Loans from banks on Cash Credit and Working Capital Demand Loan are secured by way of hypothecation of stocks of raw materials, finished products, stores and work-in-progress as well as book debts.
(ii) Buyer''''s credit due for payment within 180 days bears interest of ''''LIBOR plus spread'''' of 1.26% per annum (2016 : 0.87% per annum and 2015: 0.75 % per annum) secured against current assets.
(iii) Suppliers'''' credit due for payment within 180 days bears interest of ''''LIBOR plus spread'''' of 1.31% per annum (2016 : 0.81% per annum and 2015: 0.72 % per annum) secured against current assets.
(iv) During the year 2017, unsecured working capital demand loan of '''' 50 crore was availed by the Company which would be repaid in May 2017. The loan bears interest of one month T-bill 0.05% per annum..
(v) The Department of Fertilizers, Government of India, has notified ''''Special Banking Arrangement'''' scheme to address the concern of delay in subsidy disbursement. This arrangement has been made by the Government with the State Bank of India Consortium (SBI Consortium). Loans under this scheme are secured by hypothecation of subsidy receivables.
Fixed interest rate of 8.00% per annum out of which 6.25% per annum shall be borne by the Government and repaid in April 2017. The remaining 1.75% per annum shall be borne by the Company and will be recovered upfront for 60 days from the company at the time of disbursement of the facility.
(i) The External Commercial Borrowing (ECB) is due for repayments on 23 October, 2017 Rs, 410.31 crore (USD 63.27 million) and bear interest of LIBOR plus spread of 1.95%, payable annually.
(ii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company except for Rs,.0.53 crore (2016 : Rs, 0.44 crore and 2015 Rs,.0.33 crore), wherein legal disputes with regards to ownership have remained unresolved.
Nature of provisions :
1) Assets retirement obligation includes provision towards site restoration expense and decomissioning charges.
2) Warranty: The Company gives warranties on certain products that fail to perform satisfactorily during the warranty period. Provision made as at 31 March, 2017 represents the amount of the expected cost of meeting such obligations of rectification/replacement. The timing of the outflows is expected to be within a period of one year from the date of Balance Sheet.
3) Provision for others represents management''''s best estimate of outflow of economic resources in respect of water charges, entry tax, land revenue and other disputed items including direct taxes, indirect taxes and other claims.
(i) For details relating to discontinued operation (urea and customized fertilizer business at Babrala, Uttar Pradesh) refer note 31.
(ii) The Company has identified assets relating to non-current assets to be disposed of and classified the same as assets held for sale. No impairment loss has been recognized on the date of classification or as at reporting date. The Company expects that the fair value (estimated based on the recent market prices of similar assets in similar locations) less costs to sell is higher than the carrying amount.
NOTE 9: GRATUITY AND OTHER POST-EMPLOYMENT BENEFIT PLANS
(a) The Company makes contribution towards provident fund, in substance a defined contribution retirement benefit plan and towards pension fund, superannuation fund, a defined contribution retirement plan for qualifying employees. The provident fund is administered by the Trustees of the Tata Chemicals Limited Provident Fund and the superannuation fund is administered by the Trustees of the Tata Chemicals Limited Superannuation Fund. The Company is liable to pay to the provident fund to the extent of the amount contributed and any shortfall in the fund assets based on government specified minimum rates of return relating to current services. The Company recognize such contribution and shortfall if any as an expense in the year incurred.
On account of the above contribution plans, a sum of Rs, 15.00 crore (previous year Rs, 14.28 crore) has been charged to the Statement of Profit and Loss.
(b) The Company makes annual contributions to the Tata Chemicals Employees'''' Gratuity Trust and to the Employees'''' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India, for funding the defined benefit plans for qualifying employees. The scheme provides for lump sum payment to vested employees at retirement or death while in employment or on termination of employment. Employees, upon completion of the vesting period, are entitled to a benefit equivalent to either half month, three fourth month and full month salary last drawn for each completed year of service depending upon the completed years of continuous service in case of retirement or death while in employment. In case of termination, the benefit is equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972. Vesting occurs upon completion of five years of continuous service.
The Company also provides post retirement medical benefits to eligible employees under which employees at Mithapur who have retired from service of the Company are entitled for free medical facility at the Company hospital during their lifetime. Other employees are entitled to domiciliary treatment exceeding the entitled limits for the treatments covered under the Health Insurance Scheme up to slabs defined in the scheme. The floater medic aim policy also covers retired employees based on eligibility, for such benefit.
The Company provides pension, housing / house rent allowance and medical benefits to retired Managing and Executive Directors who have completed ten years of continuous service in Tata Group and three years of continuous service as Managing Director/Executive Director or five years of continuous service as Managing Director/Executive Director. The directors are entitled up to seventy five percent of last drawn salary for life and on death 50% of the pension is payable to the spouse for the rest of his/her life.
Family benefit scheme is applicable to all permanent employees in management, officers and workmen who have completed one year of continuous service. In case of untimely death of the employee, nominated beneficiary is entitled to an amount equal to the last drawn salary (Basic Salary, DA and FDA) till the normal retirement date of the deceased employee.
The most recent actuarial valuations of plan assets and the present values of the defined benefit obligations were carried out at 31 March, 2017. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
The following tables set out the funded status and amounts recognized in the Company''''s financial statements as at 31 March, 2017 for the Defined Benefit Plans.
10 Risk exposure :
Through its defined benefit plans, the Company is exposed to a number of risks, the most significant of which are detailed below :
Investment risk: If future investment returns on assets are lower than assumed in valuation, the scheme''''s assets will be lower, and the funding level higher, than expected:
Changes in bond yields: A decrease in yields will increase plan liabilities, although this will be partially offset by an increase in the value of the plans'''' bond holdings:
Longevity risk: If improvements in life expectancy are greater than assumed, the cost of benefits will increase because pensions are paid for longer period than expected. This will mean the funding level will be higher than expected:
Inflation risk: I f inflation is greeted than assumed, the cost of benefits will increase as pension increases and deferred revaluations are linked to inflation:
(a) Discount rate is based on the prevailing market yields of Indian Government securities as at the Balance Sheet date for the estimated term of the obligations.
(b) The estimates of future salary increases, considered in actuarial valuation, take into account the inflation, seniority, promotion and other relevant factors.
(c) Valuation technique to determine fair value
The following methods and assumptions were used to estimate the fair values of financial instruments:
(i) The management assesses that fair value of cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current financial assets and liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments.
(ii) The fair values of the equity investment which are quoted, are derived from quoted market prices in active markets. The Investments measured at fair value and falling under fair value hierarchy Level 3 are valued on the basis of valuation reports provided by external valuers with the exception of certain investments, where cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair values within that range. The carrying value of those investments are individually immaterial.
(iii) The Company enters into derivative financial instruments with various counterparties, principally banks. The fair value of derivative financial instruments is based on observable market inputs including currency spot and forward rate, yield curves, currency volatility, credit quality of counterparties, interest rate and forward rate curves of the underlying instruments etc. and use of appropriate valuation models.
(iv) The fair value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will not be significantly different from their carrying amounts as there is no significant change in the under-lying credit risk of the Company (since the date of inception of the loans).
(v) The fair values of the 10% unsecured redeemable nonconvertible debentures (included in long term borrowings) are derived from quoted market prices. The Company has no other long-term borrowings with fixed-rate of interest.
(d) Financial risk management objectives
The Company is exposed to market risk (including currency risk, interest rate risk and other price risk), credit risk and liquidity risk. The Company''''s risk management strategies focus on the un-predictability of these elements and seek to minimize the potential adverse effects on its financial performance. The Company''''s senior management which is supported by a Treasury Risk Management Group (''''TRMG'''') manages these risks. TRMG that advises on financial risks and the appropriate financial risk governance framework for the Company and provides assurance to the Company''''s senior management that the Company''''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''''s policies and risk objectives.
All hedging activities are carried out by specialist teams that have the appropriate skills, experience and supervision. The Company''''s policy is not to trade in derivatives for speculative purposes.
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: currency risk, interest rate risk and other price risk, such as equity price risk and commodity risk. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates, equity price fluctuations, liquidity and other market changes. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.
Foreign currency risk management
Foreign exchange risk arises on future commercial transactions and on all recognized monetary assets and liabilities, which are denominated in a currency other than the functional currency of the Company. The Company''''s management has set policy wherein exposure is identified, benchmark is set and monitored closely, and accordingly suitable hedges are undertaken. Policy also includes mandatory initial hedging requirements for exposure above a threshold.
The Company''''s foreign currency exposure arises mainly from foreign exchange imports, exports and foreign currency borrowings, primarily with respect to USD.
Based on the movements in the foreign exchange rates historically and the prevailing market conditions as at the reporting date, the Company''''s Management has concluded that the above mentioned rates used for sensitivity are reasonable benchmarks.
The Company''''s exposure to foreign currency changes for all other currencies is not material.
Interest rate risk management
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 rates. The Company''''s exposure to the risk of changes in market rates relates primarily to the Company''''s long-term debt obligations with floating interest rates.
The Company''''s policy is generally to undertake long-term borrowings using facilities that carry floating-interest rate. The Company manages its interest rate risk by entering into interest rate swaps, in which it agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts calculated by reference to an agreed-upon notional principal amount.
Moreover, the short-term borrowings of the Company do not have a significant fair value or cash flow interest rate risk due to their short tenure.
As the Company does not have exposure to any floating-interest bearing assets, or any significant long-term fixed-interest bearing assets, its interest income and related cash inflows are not affected by changes in market interest rates.
Interest rate sensitivity
No sensitivity analysis is prepared as the Company does not expect any material effect on the Company''''s results arising from the effects of reasonably possible changes to interest rates on interest bearing financial instruments at the end of the reporting period.
Equity price risks management
Equity price risk is related to the change in market price of the investments in quoted equity securities. The Company''''s exposure to equity price risk arises from investment held by the Company and classified as FVTOCI. In general, these investments are strategic investments and are not held for trading purposes. Reports on the equity portfolio are submitted to the Company''''s senior management on a regular basis.
Equity price sensitivity analysis
If prices of quoted equity securities had been 5% higher / (lower), the Other Comprehensive Income for the year ended March 31, 2017 and 2016 would increase / (decrease) by Rs, 82.70 crore and Rs, 63.19 crore respectively.
Credit risk management
Credit risk is the risk that a 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 from its financing activities, including deposits with banks and financial institutions, investment in mutual funds, foreign exchange transactions and other financial instruments.
The carrying amount of financial assets represents the maximum credit exposure, being the total of the carrying amount of balances with banks, short term deposits with banks, short term investment, trade receivables and other financial assets excluding equity investments.
Trade receivables of the Company are typically unsecured and derived from sales made to a large number of independent customers. Customer credit risk is managed by each business unit subject to established policies, procedures and control relating to customer credit risk management. Before accepting any new customer, the Company has appropriate level of control procedures to assess the potential customer''''s credit quality. The credit-worthiness of its customers are reviewed based on their financial position, past experience and other relevant factors. The credit period provided by the Company to its customers generally ranges from 0-60 days. Outstanding customer receivables are reviewed periodically .
The credit risk related to the Trade receivables is mitigated by taking security deposits / bank guarantee / letter of credit - as and where considered necessary, setting appropriate credit terms and by setting and monitoring internal limits on exposure to individual customers.
There is no substantial concentration of credit risk as the Revenue / Trade receivables pertaining to any of the single customer do not exceed 10% of Company revenue.
Financial instruments and cash deposits
Credit risk from balances/investments with banks and financial institutions is managed in accordance with the Company''''s treasury risk management policy. Investments of surplus funds are made only with approved counterparties and within limits assigned to each counterparty. The limits are assigned based on corpus of investable surplus and corpus of the investment avenue. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''''s potential failure to make payments.
Financial guarantees disclosed in note 41.1 (b) have been provided as corporate guarantees to financial institutions and banks that have extended credit facilities to the Company''''s subsidiaries. In this regard, the Company does not foresee any significant credit risk exposure.
All the derivative financial liabilities are included in the above analysis, as their contractual maturity dates are essential for the understanding of the timing of the under-lying cash flows.
NOTE 38: CAPITAL MANAGEMENT
The capital structure of the Company consists of net debt and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximizing the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company''''s risk management committee reviews the capital structure of the Company considering the cost of capital and the risks associated with each class of capital.
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as and when required.
The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. The Company invests its surplus funds in bank fixed deposit and liquid schemes of mutual funds, which carry no/negligible mark to market risks.
The below table analyses the Company''''s non-derivative financial liabilities as at the reporting date, into relevant maturity groupings based on the remaining period (as at that date) to the contractual maturity date. The amounts disclosed in the below table are the contractual un-discounted cash flows.
NOTE 11: RELATED PARTY DISCLOSURE
(a) Related parties and their relationship (as defined under IndAS-24 Related Party Disclosures)
1 Rallis India Limited, India
2 Bio Energy Venture - 1 (Mauritius) Pvt. Ltd, Mauritius Indirect
1 Rallis Chemistry Exports Limited, India
2 Met helix Life Sciences Limited, India
3 Zero Waste Agro Organics Limited (ZWAOL), India
4 PT Met helix Life sciences Indonesia (PTLI), Indonesia @
5 Valley Holdings Inc., United States of America
6 Tata Chemicals North America Inc., United States of America
7 General Chemical International Inc., United States of America
8 NHO Canada Holdings Inc., United States of America
9 Tata Chemicals (Soda Ash) Partners (TCSAP), United States of America **
10 Tata Chemicals (Soda Ash) Partners Holdings(TCSAPH), United States of America **
11 TCSAP LLC,United States of America
12 General Chemical Canada Holding Inc., Canada *
13 General Chemical (Great Britain) Limited, United Kingdom
14 Home field Pvt UK Limited, United Kingdom
15 Homefield 2 UK Limited, United Kingdom
16 Tata Chemicals Africa Holdings Limited, United Kingdom
17 Tata Chemicals Europe Holdings Limited, United Kingdom
18 Tata Chemicals Europe Limited, United Kingdom
19 Winning ton CHP Limited, United Kingdom
20 Brunner Mond Group Limited, United Kingdom
21 Brunner Mond Limited , United Kingdom
22 Tata Chemicals Magadi Limited, United Kingdom
23 Northwick Resource Management Limited, United Kingdom
24 Brunner Mond Generation Company Limited , United Kingdom
25 Goshutes Holdings (UK) Limited, United Kingdom
26 TCNA (UK) Limited, United Kingdom
27 British Salt Limited, United Kingdom
28 Cheshire Salt Holdings Limited, United Kingdom
29 Cheshire Salt Limited, United Kingdom
30 Brine field Storage Limited, United Kingdom
31 Cheshire Cavity Storage 2 Limited, United Kingdom
32 Cheshire Compressor Limited, United Kingdom
33 Irish Feeds Limited, United Kingdom
34 New Cheshire Salt Works Limited, United Kingdom
35 Grown Energy Zambeze Holdings Pvt. Ltd, Mauritius #
36 Tata Chemicals International Pte. Limited, Singapore
37 Tata Chemicals (South Africa) Proprietary Limited, South Africa
38 Grown Energy (Pty) Limited, South Africa #
39 Magadi Railway Company Limited, Kenya
40 Grown Energy Zambeze Limited, Mozambique #
41 Alcad, United States of America **
Joint Ventures Direct
1 Indo Maroc Phosphor S.A., Morocco
1 The Block Salt Company Limited, United Kingdom (Holding by New Cheshire Salt Works Limited)
2 JOil (S) Pte. Ltd and its subsidiaries (Holding by Tata Chemicals International Pte. Limited)
3 Natronx Technologies LLC, United States of America (Holding by TCSAP)
1 Crystal Peak Minerals Inc., Canada (Upton 24 May, 2016)
Other related parties
1 Tata Chemicals Ltd Provident Fund
2 Tata Chemicals Ltd Emp Pension Func
3 Tata Chemicals Superannuation Fund
4 Tata Chemicals Employees Gratuity Trust
5 TCL Employees Gratuity Fund
Key Management Personnel
1 Mr. R. Mukundan, Managing Director and CEO
2 Mr P K Ghose , Executive Director and CFO ( Up to 30 September, 2015)
Tata Sons Limited, India
List of subsidiaries and joint ventures of Tata Sons Limited @@
1 Advinus Therapeutics Limited
2 Indian Rotorcraft Limited
3 TATA AIG General Insurance Company Limited
4 Tata Auto comp Systems Limited
5 Tata Auto comp Hendrickson
6 Tata Capital Forex Limited
7 Tata Capital Financial Services Limited
8 TC Travel and Services Limited
9 Tata International Limited
10 Tata International Singapore Pte Limited
11 Tata Consultancy Services Limited
12 Tata Interactive Systems (Division of Tata Industries Limited)
13 TATA AIA Life Insurance Company Limited
14 Tata Business Support Services Limited
15 Tata Consulting Engineers Limited
16 Infiniti Retail Limited
17 TASEC Limited (formerly TAS-AGT Systems Limited)
18 Tata Strategic Management Group (Division of Tata Industries Limited)
19 Tata Industries Limited
20 Tata Undistorted Limited (formerly Tata Industrial Services Limited)
21 Tata Teleservices Limited
22 Ecofirst Services Limited
23 Tata Realty and Infrastructure Limited
24 Tata Investment Corporation Limited
25 Ewart Investments Limited
26 Simto Investment Company Limited
27 Tata International Limited
@@ The above list includes the Companies with whom Tata Chemicals Limited has entered into the transactions during the course of the year.
* General Chemical Canada Holding Inc. has been dissolved during the year ended 31 March, 2017.
** A general partnership formed under the laws of the State of Delaware (USA).
*** General Chemical (Great Britain) Limited has been dissolved during the year ended 31 March, 2016.
@ PT Met helix Life sciences Indonesia was incorporated in the year 2016-17.
# During the year ended 31 March, 2016, the Company''''s wholly owned subsidiary Bio Energy Venture - 1 (Mauritius) Pvt. Ltd, had entered into an agreement for sale of its entire stake in Grown Energy Zambeze Holdings Pvt. Ltd. and its subsidiaries. The administrative approvals in the respective jurisdictions for effecting the proposed sale are awaited.
The above contingent liability include Rs, 0.78 crore (2016 : Rs, 0.90 crore and 2015: Rs, 1.75 crore) relating to assets held for discontinued operation.
(b) Guarantees provided by the Company to third parties on behalf of subsidiaries aggregates USD 408.40 million & GBP 2.76 million (Rs, 2670.77 crore) [2016 : USD 408.40 million & GBP 2.76 million (Rs, 2,732.17 crore)] [2015 : USD 360.40 million and GBP 2.76 million (Rs, 2,277.99 crore)].
NOTE 12: APPROVAL OF FINANCIAL STATEMENTS
These financial statements were approved for issue by the Board of Directors on 26 May, 2017.