Vedanta Ltd. - Quarterly/Annual Result Disclosures and Notes dated 31 Dec 2018
Auditor and Management Disclosures and Notes for the quarterly results dated 31 Dec 2018
1. The above results of Vedanta Limited ("the Company"), for the quarter and nine months ended December 31, 2018 have been reviewed by the Audit Committee at its meeting held on January 30, 2019 and approved by the Board of Directors in its meeting held on January 31, 2019. The statutory auditors have carried out a limited review of the same.
2. The Government of India, acting through the Directorate General of Hydrocarbons, Ministry of Petroleum and Natural Gas (the "GoI"), in October 2018, has granted its approval for an extension of the Production Sharing Contract (PSC) for the Rajasthan Block, RJ-ON-90/1 (the "RJ Block"), for a period of ten years with effect from May 15, 2020. Such extension has been granted by the GoI, pursuant to its policy dated April 07, 2017 for extension of Pre-New Exploration Licensing Policy ("Pre-NELP") Exploration Blocks PSCs signed by the GoI (the "Pre-NELP Extension Policy"), subject to certain conditions. The applicability of the Pre-NELP Extension Policy to the RJ Block PSC is currently sub judice. The effects of the same have been accounted for from the date of approval and the same has no material effect on the profit for the current period.
3. Other income includes Rs. 5,486 Crore, Rs. 549 Crore and Rs. 2,195 Crore for the quarter and nine months ended December 31, 2018, December 31, 2017 and year ended March 31, 2018 respectively on account of dividend income from a subsidiary.
4. Exceptional items comprises of the following :
(Rs. in Crore)
Particulars Quarter ended Nine Months ended Year ended
- relating to investment in subsidiary- Cairn India Holdings Limited - - 75 52 656 3,358
- relating to property, plant & equipment and exploration assets-
Oil & gas segment - 261 - 261 (109) 3,513
- relating to assets in Goa - Iron ore segment - - - - - (452)
- relating to investment in subsidiary- Sesa Resources Limited (48) - - (48) - (648)
Reversal/(Charge) pursuant to arbitration order/ Supreme court order - 59 (113) 59 (113) (113)
Loss relating to non-usable items of CWIP - - - - - (251)
Net exceptional gain/(loss) (48) 320 (38) 324 434 5,407
Tax (expense)/benefit on above - (112) 39 (112) 77 (942)
Net exceptional gain/(loss) (net of tax) (48) 208 1 212 511 4,465
5. The Company’s application for renewal of Consent to Operate (CTO) for existing copper smelter was rejected by Tamil Nadu Pollution Control Board (TNPCB) in April 2018. Subsequently the Government of Tamil Nadu issued directions to seal the existing copper smelter plant permanently.
The National Green Tribunal (NGT), Principal Bench vide its order on December 15, 2018 has set aside the impugned orders and directed the TNPCB to pass fresh orders of renewal of consent and authorization to handle hazardous substances, subject to appropriate conditions for protection of environment in accordance with law within three weeks from this order. The order, which has been challenged before the Hon’ble Supreme Court, is subject to complying with certain directions as specified in the order. Meanwhile, the order of the Madurai bench of Madras High Court on maintaining ‘Status quo’ has been stayed by the Hon’ble Supreme Court vide its order dated January 8, 2019.
Further, the High Court of Madras in a Public Interest Litigation held that the application for renewal of the Environmental Clearance (EC) for the Expansion Project shall be processed after a mandatory public hearing and in the interim ordered the Company to cease construction and all other activities on the site with immediate effect. Ministry of Environment and Forests (MoEF) has delisted the expansion project since the matter is sub judice. However, in the meanwhile, SIPCOT cancelled the land allotted for the proposed Expansion Project and TNPCB issued order directing the withdrawal of the Consent to Establish (CTE) which was valid till March 31, 2023. The Company approached Madras High Court by way of writ petition challenging the cancellation of lease deeds by SIPCOT pursuant to which an interim stay has been granted. The Company has also filed Appeals before the TNPCB Appellate Authority challenging withdrawal of CTE by the TNPCB and the same is scheduled for hearing on February 05, 2019.
As per the Company’s assessment, it is in compliance with the applicable regulations and hence does not expect any material adjustments to these financial results as a consequence of the above actions.
6. Effective April 01, 2018, the Company has adopted Ind AS 115 Revenue from Contracts with customers under the modified retrospective approach without adjustment of comparatives. The Standard is applied to contracts that remain in force as at April 01, 2018. The application of the standard did not have any significant impact on the retained earnings as at April 01, 2018 or on these financial results.
7. With effect from July 01, 2017, Goods and Service tax ('GST') has been implemented which has replaced several indirect taxes including excise duty. While Ind-AS required excise duty to be included while computing revenues, GST is required to be excluded from revenue computation. Accordingly 'Revenue from Operations (Net of excise duty)' has been additionally disclosed in these results to enhance comparability of financial information.
8. Previous period/year figures have been re-grouped/rearranged, wherever necessary.