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h)
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 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
`
1.92 cr. There is no
impact on the total equity as at March 31, 2016.
i)
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
`
8.95 cr. There is no impact on the total equity and profit.
j)
Retained earnings
Retained earnings as at April 01, 2015 have been adjusted consequent to the above Ind AS transition adjustments.
k)
Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in a period are to be included in the Consolidated
Statement of Profit and 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 Consolidated Statement of Profit and
Loss as Other Comprehensive Income which includes remeasurements of defined benefit plans, foreign exchange
differences arising on translation of foreign operations, effective portion of gain | (loss) on cash flows hedging
instruments and fair value gain | (loss) on FVOCI equity instruments. The concept of Other Comprehensive Income
did not exist under IGAAP.
l)
Investments in debt instruments – Redeemable Preference share and loans to Related Parties
Under IGAAP, current investments were measured at cost or fair value, whichever is lower. Long-term investments
were carried at cost less provision for other than temporary decline in the value of such investments. The Redeemable
Preference shares and loans given to Related Parties were long-term in nature and measured at cost less provision
for other than temporary decline in the value of such investments.
Ind AS requires all financial instruments to be measured on initial recognition at fair value. Where a loan is advanced
on normal commercial terms (both in terms of principal and interest), the fair value at inception will usually equal
the loan amount. In case of loans advanced to Related Parties, the terms are either not on normal commercial terms
or they are forced. On initial recognition the fair value of loans and Redeemable Preference shares to Related Parties
has been estimated by discounting the future loan repayments using the rate the borrower may pay to an unrelated
lender for a loan | Preference share with otherwise similar conditions (for example, amount, duration, currency,
ranking and any security). Having separated the ‘off-market’ element of the transaction, the remaining part of the
loan receivable is accounted for as a financial instrument at amortised cost or FVPL.
Accordingly, the difference between the transaction amount and its fair value at the date of transaction has been
recorded as an investment in equity of the related entity in the Consolidated Financial Statements (as a component
of the overall investment) with a corresponding impact to the investment in Preference share and loans. Going
forward, the interest income and fair value changes in the instruments are recognised in the Consolidated Statement
of Profit and Loss.
m) 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.
n)
Fair valuation of biological assets other than bearer plants
Under Ind AS, biological assets are measured at fair value less cost to sell and presented separately. The Group has
recognised the biological assets of
`
8.49 cr as at March 31, 2016 and
`
7.24 cr as at April 01, 2015. Changes in
fair value of biological assets are recognised in the Consolidated Statement of Profit and Loss during the period. As
a result of this change, the profit for the year ended March 31, 2016 increased by
`
1.24 cr.
o)
Foreign currency translation reserve
The Group elected to reset the balance appearing in the foreign currency translation reserve to zero as at April 01,
2015. Accordingly, translation reserve balance under IGAAP of
`
9.91 cr has been transferred to retained earnings.
There is no impact on total equity as a result of this adjustment.
Transition to Ind AS
(continued)
Notes
to the Consolidated Financial Statements