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151
Transition to Ind AS
(continued)
h)
Hedge accounting
i)
The Company has decided to avail the option of continuing the accounting of long-term foreign currency
monetary items under the option of para D13AA of Ind AS 101 for items outstanding as on the adoption
date. On availment of the option, the Company has no corresponding foreign currency exposure that affects
profit or loss as it capitalises the exchange differences to the cost of the asset. In view of the above, hedge
accounting is not applicable to foreign currency swaps. Such foreign currency swaps are considered as held
for trading and any change in fair value has been recorded in the Statement of Profit and Loss under Ind AS.
Further, the consequential impact on depreciation and deferred tax has been taken to the Statement of Profit
and Loss under Ind AS.
ii) The contracts, which were designated as hedging instruments under IGAAP, have been designated as at the
date of transition to Ind AS as hedging instrument in cash flow hedges of either expected future sales for
which the Company has firm commitments or expected purchases from suppliers that are highly probable.
The corresponding adjustment has been recognised as a cash flow hedge reserve. On the date of transition,
cash flow hedge reserve was recognised in Other Comprehensive Income net of tax.
i)
Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements that is actuarial gains and losses and the return on plan assets, excluding amounts
included in the net interest expense on the net defined benefit liability are recognised in Other Comprehensive
Income instead of profit or loss. Under the IGAAP, these remeasurements were forming part of the profit or loss
for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by
`
2.00 cr. There
is no impact on the total equity as at March 31, 2016.
j)
Cash Discount
Under IGAAP, revenue from sale of products was measured at transaction price. Under Ind AS, revenue from sale
of goods is measured at fair value of consideration received or receivable. Hence, cash discount is reduced from
revenue to present the same at its fair value. This change has resulted in a decrease in total revenue and total
expenses for the year ended March 31, 2016 by
`
9.85 cr. There is no impact on the total equity and profit.
k)
Deferred discount on issuance of Commercial Paper
Under the IGAAP, deferred discount on issuance of Commercial Paper were presented as part of current assets.
Under Ind AS, in order to reflect Commercial Paper at amortised cost, the deferred discount on issuance is presented
within the borrowings by netting off. There is no impact on the total equity or profit as a result of this adjustment.
l)
Retained earnings
Retained earnings as at April 01, 2015 have been adjusted consequent to the above Ind AS transition adjustments.
m) Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in a period are to be included in profit or loss for the
period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in
profit or loss, but are shown in the Statement of Profit and Loss as Other Comprehensive Income which includes
remeasurement of defined benefit plans, effective portion of gain | (loss) on cash flow hedging instruments and
fair value gain | (loss) on FVOCI equity instruments. The concept of Other Comprehensive Income did not exist
under IGAAP.
Notes
to the Financial Statements
As per our attached report of even date
For Dalal & Shah Chartered Accountants LLP
Firm Registration Number: 102020W | W-100040
R A Shah
S S Baijal
B S Mehta
H S Shah
S M Datta
V S Rangan
M M Chitale
S A Panse
B R Arora
Directors
For and on behalf of the Board of Directors
S S Lalbhai
Chairman and Managing Director
S A Lalbhai
Managing Director
Mumbai
May 05, 2017
S Venkatesh
Partner
Membership Number: 037942
Mumbai
May 05, 2017
T R Gopi Kannan
Whole-time Director and CFO
L P Patni
Company Secretary
B N Mohanan
Whole-time Director
and President - U&S