From Published Accounts

Accounting
and Disclosure under Ind AS for financial guarantees given by Holding company
for its subsidiaries, etc. (in standalone financial statements for year ended
31^st March 2017)

Suzlon Energy Limited

From Notes to Accounts

SBLC
facility and security given to AE Rotor Holding B.V. (’AERH’)

Suzlon Energy Limited and
its identified domestic subsidiaries (collectively ‘the Group’) and Suzlon
Generators Limited, a jointly controlled entity (‘SGL’) are obligors under the
Onshore Stand by letter of credit (‘SBLC’) Facility Agreement and have provided
security under the ‘Offshore SBLC Facility Agreement in connection with a SBLC
issued by State Bank of India of USD 655 Million for securing the credit
facility and covered bonds availed by AE Rotor Holding B.V. (AERH), a step-down
wholly owned subsidiary of the Company. The Group has classified the Onshore
facility availed amounting to USD 538 million as a financial guarantee
contract. AERH has a borrowing of USD 626 million as at March 31, 2017, which
is due for repayment in March 2018, as per original schedule. The Group has
obtained a No Objection Certificate from the SBLC lenders as well as approval
from Reserve Bank of India for extension of SBLC from April 2018 to April 2023.
The Group believes that based on the strength of extended SBLC, the outstanding
borrowing of AERH can be extended/refinanced by the existing lenders or by new
lenders. AERH and its subsidiaries are engaged in dealing of WTGs in
international markets and the cash-flows generated from these business
activities will be used for serving the finance cost as well as towards part
repayment of outstanding debt of AERH. The ability of AERH to repay the
outstanding debt is primarily dependent on generation of cash-flows from
business operations in overseas market. The Company management believes that
AERH has reasonable business forecast over the next few years and estimates
that AERH will be able to refinance the outstanding debt, if required and meet
the debt obligations as and when they fall due and hence they believe that the
financial guarantee obligation of USD 538 million is not required to be
recognised in financial statements and it has been disclosed as contingent
liability.

From Auditors’ Report

Emphasis
of Matter

We draw attention to Note 6
of accompanying standalone Ind AS financial statements, in relation to
accounting of financial guarantee provided by the Company (along with its three
Indian subsidiaries and a jointly controlled entity) in respect of borrowing
availed by one of its subsidiary based in The Netherlands and disclosure of the
same as contingent liability as more fully described therein. Our opinion is not
qualified in respect of this matter.

Oil and Natural Gas Corporation Limited
(ONGC)

 From Notes to Accounts

 Investments
in subsidiaries, associates and joint ventures

When the Company issues
financial guarantees on behalf of subsidiaries, initially it measures the
financial guarantees at their fair values and subsequently measures at the
higher of:

i.   the
amount of loss allowance determined in accordance with impairment requirements
of Ind AS 109 ‘Financial Instruments’; and

ii.  the
amount initially recognized less, when appropriate, the cumulative amount of
income recognised in accordance with the principles of Ind AS 18 ‘Revenue

The Company records the
initial fair value of financial guarantee as deemed investment with a
corresponding liability recorded as deferred revenue under financial guarantee
obligation. Such deemed investment is added to the carrying amount of
investment in subsidiaries. Deferred revenue is recognized in the Statement of
Profit and Loss over the remaining period of financial guarantee issued as
other income.

 Investments                                                                   (Rs. in million)

 Other
Investments                                                         (Rs. in million)

The amount of Rs.30.53 million
(Previous year Rs.26.05 million) shown as deemed equity investments denotes the
fair value of fees towards financial guarantee given for Mangalore Refinery and
Petrochemicals Limited without any consideration.

Vedanta Limited

 From Notes to Accounts

 Financial
Guarantees

Financial guarantees issued
by the Company on behalf of group companies are designated as ‘Insurance
Contracts’. The Company assess at the end of each reporting period whether its
recognized insurance liabilities (if any) are adequate, using current estimates
of future cash flows under its insurance contracts. If that assessment shows
that the carrying amount of its insurance liabilities is inadequate in the
light of the estimated future cash flows, the entire deficiency is recognised
in profit or loss.

The Company has issued
financial guarantees to banks on behalf of and in respect of loan facilities
availed by its group companies. In accordance with the policy of the Company
(refer note 3(j) the Company has designated such guarantees as ‘Insurance Contracts’.
The Company has classified financial guarantees as contingent liabilities.

Refer below for details of
the financial guarantees issued:

(Rs.in
Crore)

(list not
reproduced)

Wabag Limited

From Notes to Accounts

Financial guarantee
contracts issued by the Company are those contracts that require a payment to
be made to reimburse the holder for a loss it incurs because the specified
debtor fails to make a payment when due in accordance with the terms of a debt
instrument. Financial guarantee contracts are recognized initially as a
liability at fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is
measured at the higher of the amount of loss allowance determined as per impairment
requirements of Ind-AS 109 and the amount recognized less cumulative
amortisation.

Other
Financial Liabilities                                                       (Rs.  in lakhs)

Financial guarantee
obligation represents the loss allowance for expected credit losses on
financial guarantee provided by the Company to financial institutions for
banking facilities of its subsidiaries and joint venture.

Godrej Consumer Products Ltd.

From Notes to Accounts

Financial
Liabilities

Financial
guarantee contracts

Financial guarantee
contracts issued by the Company are those contracts that require specified
payments to be made to reimburse the holder for a loss it incurs because the
specified debtor fails to make a payment when due in accordance with the terms
of a debt instrument. Financial guarantee contracts are recognised initially as
a liability at fair value, adjusted for transaction costs that are directly
attributable to the issuance of the guarantee. Subsequently, the liability is
measured at the higher of the amount of loss allowance determined as per
impairment requirements of Ind-AS 109 and the amount recognised less cumulative
amortization. Where guarantees in relation to loans or other payables of
subsidiaries are provided for no compensation, the fair values are accounted
for as contributions and recognised as fees receivable under “other financial assets” or as a part of the cost of the
investment, depending on the contractual terms.

 Contingent
Liabilities                                                               (Rs. in Crores)

 DLF Ltd.

 From Notes to Accounts

 Financial
guarantee contracts

Financial guarantee
contracts are those contracts that require a payment to be made to reimburse
the holder for a loss it incurs because the specified party fails to make a
payment when due in accordance with the terms of a debt instrument. Financial
guarantee contracts are recognised as a financial liability at the time the
guarantee is issued at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequently, the
liability is measured at the higher of the amount of expected loss allowance
determined as per impairment requirements of Ind AS 109 and the amount
recognised less cumulative amortisation.

 Contingent
Liabilities and commitments                        (Rs.  in lakhs)