From Published Accounts

Asian Paints Ltd.

From Notes to Financial Statements

Merger of Asian Paints (International) Limited, Mauritius with the company

During the year, the National Company Law Tribunal had approved the scheme of amalgamation (‘The Scheme’) between the Company and Asian Paints (International) Limited (‘APIL’), Mauritius, a wholly owned subsidiary of the Company.   The    Scheme   became effective from 15^th January, 2018 on completion of all regulatory formalities.  In accordance with Ind AS 103-Business combination, the financial statements of the Company for the previous financial year 2016-17 have been restated with effect from 1^st April, 2016 (being the earliest period presented).

APIL was an investment holding company which ‘interalia’ held investments in Asian Paints International Private Limited (‘APIPL’) (formerly known as Berger International Private Limited), a subsidiary of the Company.  As per the Scheme, all assets, liabilities and reserves of APIL appearing as at 1^st April, 2016 are recognised in the books of the Company at their respective carrying values, as detailed below.  On account of this merger, APIPL is now direct subsidiary of the Company (Refer Note 4).

The impact of the merger on the Statement of Profit and Loss of the Company for the current year and previous year is not material.

Sasken Network Engineering Limited

From Notes to Financial Statements

Amalgamation

Background

Sasken Network Engineering Limited (‘SNEL’), was a wholly owned subsidiary of Sasken Technologies Limited (‘STL’) and was engaged in the business of developing embedded communication software for companies across the communication value chain.

The business activities of SNEL and STL complimented each other. Therefore, in order to achieve economies of scale, efficiencies and to simplify contracting and vendor management, the Board of Directors of each of these companies approved the Scheme of Amalgamation (‘the Scheme’) for the transfer of the business and undertaking of SNEL to STL.

The Scheme was approved by the National Company Law Tribunal, Bengaluru Bench (‘NCLT’) vide its order dated August 31, 2017, the appointed date of the Scheme being April 1, 2015.

Accounting

The amalgamation qualifies as a ‘common control transaction’ as per Appendix ‘C’ of Ind AS 103, Business Combinations. Consequently, the amalgamation has been accounted for using the pooling of interest method and the financial information in respect of prior periods has been restated as if the amalgamation had occurred from the beginning of the preceding period, i.e. April 1, 2016.  This accounting treatment is also in compliance with the Scheme approved by the NCLT.

The following table represents the particulars of assets and liabilities (after elimination of inter-company balances), transferred by SNEL to STL as a consequence of the amalgamation:

The extracts of balance sheets of STL (to the extent there were amalgamation adjustments) as reported as at April 1, 2016 and March 31, 2017, the impact of the amalgamation and the resultant post amalgamation balance sheet extracts as at those dates have been presented below:

*after eliminating inter-company balances.

The Statement of Profit and Loss for the quarter and year ended March 31, 2017 as reported and ad adjusted to give effect to the amalgamation are as follows:

Hindustan Unilever Limited

From Notes to Financial Statements

BUSINESS COMBINATION

Acquisition of Indulekha Brand

On April 07, 2016, the Company completed the acquisition of the flagship brand ‘Indulekha’ from Mosons Extractions Private Limited [‘MEPL’) and Mosons Enterprises (collectively referred to as ‘Mosons’ and acquisition of the specified intangible assets referred to as the ‘Business acquisition’). The deal envisaged the acquisition of the trademarks ‘Indulekha’ and ‘Vayodha’, intellectual property, design and knowhow for a total cash consideration of Rs. 330 crore (excluding taxes) and a deferred consideration of 10% of the domestic turnover of the brands each year, payable annually for a 5-year period commencing financial year 2018-19.

Basis the projection of the domestic turnover of the brand, the contingent consideration is subject to revision on a yearly basis. As at 31^st March 2017, the fair value of the contingent  consideration was Rs. 49 crore which was classified as other financial liability.

Deferred contingent consideration

Based    on   the   actual   performance   in financial year 2017-18 and current view of future  projections for the brand, the Company has reviewed and fair valued the deterred   contingent    consideration   so   payable. As at 31^st March 2018, the fair value of the contingent  consideration is Rs. 104 crore which is classified as other financial liability.

The determination of the fair value as at Balance Sheet date is based on discounted cash  flow method. The key model inputs used in determining the fair value of deferred  contingent consideration were domestic turnover projections of the brand and weighted  average cost of capital.

Mindtree Limited

From Notes to Financial Statements

The Board of Directors at its meeting held on October 06, 2017, have approved the Scheme of Amalgamation (“the Scheme”) of its wholly owned subsidiary. Magnet 360, LLC (“Transferor Company”) with Mindtree Limited (“Transferee Company”) with an appointed date of April 01, 2017. During the year, the Company has filed an application with the National Company Law Tribunal (NCLT), Bengaluru Bench. Pending the required approvals, the effect of the Scheme has not been given in the financial statements.

During the quarter ended September 30, 2017 the Reserve Bank of India approved the proposal to transfer the business and net assets (“the Scheme”) of the Company’s wholly owned subsidiary, Bluefin Solutions Limited, UK (Bluefin’) to the Company against the cancellation and extinguishment of the Company’s investment in Bluefin.  The Company has given effect to this scheme during the quarter ended September 30, 2017 and has accounted it under the ‘pooling of interests’ method based on the carrying value of the assets and liabilities of Bluefin as included in the consolidated Balance Sheet of the Company for the comparative periods.

During the quarter ended June 30, 2017, the National Company Law Tribunal (NCLT) approved the Composite Scheme of Amalgamation (“the Scheme”) of Discoverture Solutions LLC. (‘Discoverture’) and Relational Solutions Inc. wholly owned subsidiaries of the Company (together “the Transferor Companies”), with the Company with an appointed date of April 1, 2015. The Company has given effect to the Scheme during the quarter ended June 30, 2017 and the merger has been accounted under the ‘pooling of interests’ method based on the carrying value of the assets and liabilities of the Transferor Companies as included in the consolidated Balance Sheet of the Company as at the beginning of April 1, 2015.

Since both the above transactions result in a common control business combination, considering the requirements of Ind AS 103 – Business Combinations, the accounting for the transactions has been given effect retrospectively by the Company. Accordingly, the financial statements for the corresponding periods in 2016-17 and year ended March 31, 2017 have been restated to give effect to the above Schemes.

*The subsidiaries of the Company were in to the business of Information Technology services.

Ultratech Cement Limited

From Notes to Financial Statements

Acquisition of identified cement units of JAL AND JCCL [Ind AS 103]:

(A) Pursuant to the Scheme of Arrangement between the Company, JAL, JCCL and their respective shareholders and creditors (“the Scheme”), the Company has acquired identified cement units of JAL and JCCL on June 29, 2017 at an enterprise valuation of Rs. 16,189.00 Crore having total cement capacity of 21.2 MTPA including 4 MTPA under construction. The acquisition provides the Company a geographic market expansion with entry into high growth markets where it needed greater reinforcement and creating synergies in manufacturing, distribution and logistics which offers many advantages.  This will also create value for shareholders with the ready to use assets reducing time to markets, availability of land, mining leases, fly ash and railway infrastructure leading to overall operating costs advantage.

(B) Fair Value of the Consideration transferred:

Against the total enterprise value of Rs.16,189.00 Crores, the Company has taken over borrowings of Rs.10,189.00 Crore and negative working capital of Rs.1,375.00 Crore from JAL and JCCL. After taking these liabilities into account, effective purchase consideration of Rs. 4,625.00 Crore has been discharged as under:

*Redemption is linked with fulfilment of certain conditions.  Out of that, Rs. 500 Crore have already been redeemed till the reporting date.

(C) Acquired Receivables:

As on the date of acquisition, gross contractual amount of acquired Trade Receivables and Other Financial Assets was Rs.17.07 Crore against which no provision has been considered since fair value of the acquired receivables are equal to carrying value as on the date of acquisition.

Rs. in Crores

(D) The Fair Value of identifiable assets acquired and liabilities assumed as on the acquisition date:

(E) Amount recognised directly in other equity [Capital Reserve]:

(F) Acquisition related costs:

Acquisition related costs of Rs. 5.57 Crore (March 31, 2017 Rs.14.33 Crore) have been recognised under Miscellaneous Expenses and Rates and Taxes in the Statement of Profit and Loss. The stamp duty paid/payable on transfer of the assets Rs. 226.28 Crore has been charged to the Statement of Profit and Loss has been shown as an exceptional item.

(G) The Company runs as integrated operation with material movement across geographies and a common sales organisation responsible for existing business as well as acquired business. Therefore, separates sales information for the acquired business is not exactly available and accordingly disclosures for revenue and profit/loss of the acquired business since acquisition date have not been made.

Further, it is impracticable to provide revenue and profit/loss of the combined entity for the current year as though the acquisition date had been April 01, 2017 since these amounts relating to the acquired business for the period prior to the acquisition date are not readily available with the Company.

Indian Hotels Company Limited

From Notes to Financial Statements

Accounting and Disclosures for Scheme of Amalgamation

During the year, the National Company Law Tribunal (“NCLT”), Mumbai bench vide its Order dated March 8, 2018 has approved the Scheme of Amalgamation of TIFCO Holdings Ltd (“TIFCO”), a wholly owned investment holding subsidiary, with the Company. The Scheme was approved by the Board of Directors on May 26, 2017. Consequent to the said Order and filing of the final certified Orders with the Registrar of the Companies, Maharashtra on April 11, 2018, the Scheme has become effective upon the completion of the filing with effect from the Appointed Date of April 1, 2017.

Upon coming into effect of the Scheme, the undertaking of TIFCO stands transferred to and vested in the Company with effect from the Appointed Date.

As this is a business combination of entity under common control, the amalgamation has been accounted using the ‘pooling of interest’ method (in accordance with the approved Scheme). The figures for the previous periods have been recast as if the amalgamation had occurred from the beginning of the preceding period to harmonise the accounting for the Scheme with the requirements of Appendix C of Ind AS 103 on Business Combinations. The following Assets and Liabilities and Income and Expense are included (after eliminating the intercompany balances) in the financial statements of the Company for the periods presented below:

All equity shares of TIFCO held by the Company were cancelled without any further application, act or deed. Accordingly, the investment held by the Company in TIFCO aggregating to Rs. 81.50 crore has been eliminated and the reserves and surplus of TIFCO aggregating to Rs. 159.76 crore and Rs. 151.30 crore for years ended March 31, 2018 and March 31, 2017 respectively were added on line by line basis with the respective reserves of the Company after considering the impact of the difference of accounting policies. This amalgamation did not involve any cash outflow (except for the transaction costs which was expensed out) as TIFCO was a wholly owned subsidiary and the amalgamation has been accounted using the ‘pooling of interest’ method. Opening cash balances aggregating to Rs. 0.31 crore were transferred to the Company.

HDFC Ltd.

From Notes to Financial Statements

Amalgamation of Grandeur Properties Pvt. Ltd., Haddock Properties Pvt. Ltd., Pentagram Properties Pvt. Ltd., Windermere Properties Pvt. Ltd., Winchester Properties Pv.t Ltd. with the Corporation

The National Company Law Tribunal, Mumbai Bench approved the merger of erstwhile Grandeur Properties Pvt. Ltd. (eGPPL), erstwhile Haddock Properties Pvt. Ltd. (eHPPL), erstwhile Pentagram Properties Pvt. Ltd. (ePPPL), erstwhile Windermere Properties Pvt. Ltd. (eWPPL), erstwhile Winchester Properties Pvt. Ltd. (eWtPPL) (Transferor Companies) into and with the Corporation vide its order dated March 28, 2018, having appointed date as April 1, 2016. The said order was filed with the Registrar of Companies on April 27, 2018. The entire business with all the assets, liabilities, reserves and surplus of Transferor Companies were transferred to and vested in the Corporation, on a going concern basis with effect from appointed date of April 1, 2016, while the Scheme has become effective from April 27, 2018. Since the Scheme received all the requisite approvals after the financial statements for the years ending March 31, 2017 were adopted by the shareholders, the impact of amalgamation has been given in the current financial year with effect from the appointed date. 

The Amalgamation has been accounted as per “Pooling of Interest” method as prescribed by the Accounting Standard 14 “Accounting for Amalgamations”. Accordingly, the accounting treatment has been given as under:

The assets and liabilities as at April 1, 2017 of eGPPL, eHPPL, ePPPL, eWPPL and eWtPPL were incorporated in the financial statement of the Corporation at its book value.

In terms of the Scheme, assets acquired and liabilities discharged are as under:

Operations of eGPPL, eHPPL, ePPPL, eWPPL and eWtPPL from April 1, 2017 to March 31, 2018 as detailed below, have been accounted for in the current year’s Statement of Profit and Loss, after the profit for the year before impact of the scheme of amalgamation.

The depreciation of tangible assets includes adjustment on account of alignment of accounting policy arising from the amalgamation.

Further, pursuant to the merger of Transferor Companies, the authorised share capital of the Corporation has further increased to Rs. 457.61 crore comprising 228,80,50,000 equity shares of Rs. 2 each.