By Himanshu V. Kishnadwala
Chartered Accountant
Accounting and disclosure regarding application of Ind AS by
companies in the Non-Banking Financial Sector (NBFC) for the quarter ended 30th
June 2018
Compilers’
Note: As per
the transition notification of Ministry of Company Affairs (MCA), Ind AS became
applicable to Non-Banking Financial Companies (NBFCs) with effect from 1st
April 2018 with a transition date of 1st April 2017. Given below are the disclosures in unaudited results
of Quarter ended 30th June 2018 by few NBFCs.
Bajaj Finance Ltd
1. The company has adopted Indian Accounting
Standards (‘IndAS’) notified u/s. 133 of the Companies Act, 2013 (“the Act”)
read with the Companies (Indian Accounting Standards) Rules, 2015, from 1st April, 2018 and the effective
date of such transition is 1st
April, 2017. Such transition has been carried out from the erstwhile Accounting
Standards notified under the Act, read with relevant rules issued thereunder
and guidelines issued by the Reserve Bank of India (‘RBI’) (collectively
referred to as “The Previous GAAP”). Accordingly, the impact of transition has
been recorded in the opening reserves as at 1st April, 2017 and the corresponding figures presented
in these results have been restated/ reclassified.
There is a
possibility that these financial results for the current and previous periods
may require adjustments due to changes in financial reporting requirements
arising from new standards, modifications to the existing standards, guidelines
issued by the Ministry of Corporate Affairs and RBI or changes in the use of
one or more options exemptions from full retrospective application of certain
IndAS permitted under IndAS-101.
2. As required by paragraph 32 of IndAS 101, net
profit reconciliation between the figures reported under previous GAAP and
IndAS is as follows:
|
(Rs.in Crore)
|
|
Particulars
|
Quarter Ended
|
Year ended
|
|
31.03.2018 (reviewed)
|
30.06.2017 (reviewed)
|
31.03.2018 (reviewed)
|
|
Net profit after tax as reported under Previous GAAP
|
720.95
|
602.04
|
2646.7
|
|
Adjustments increasing/ (decreasing) net
profit after tax as reported under previous GAAP:
|
|
|
|
|
Adoption of EIR* for amortisation of income and expenses-
financial assets at amortised cost
|
13.51
|
(122.11)
|
(118.03)
|
|
Adoption of EIR for amortisation of expenses- financial
liabilities at amortised cost
|
(1.91)
|
3.37
|
6.6
|
|
Expected Credit Loss
|
20.4
|
(8.4)
|
(0.92)
|
|
Fair Valuation of Stock options as per IndAS 102
|
(12.26)
|
(8.75)
|
(45.01)
|
|
Actuarial Loss on employee defined benefit plan recognised in
‘Other comprehensive income’ as per IndAS 19
|
5.23
|
–
|
5.23
|
|
Fair valuation of Financial Assets at Fair value through
profit
and loss
|
(3.14)
|
(9.75)
|
(10.06)
|
|
Net Profit after tax as per IndAS
Other comprehensive income, net of tax
|
742.78
(7.59)
|
456.4
3.03
|
2484.51
(17.62)
|
|
Total Comprehensive Income
|
735.19
|
459.43
|
2466.89
|
*EIR = Effective
Interest Rate
Mahindra & Mahindra Financial Services
Ltd
1. The financial results of the company have
been prepared in accordance with Indian Accounting Standards (‘IndAS’) notified
under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the
Companies (Indian Accounting Standards) Rules, 2016.
The Company has
adopted IndAS from 1st
April, 2018 with effective transition date of 1st April, 2017 and accordingly, these financial results
together with the results for the comparative reporting period have been
prepared in accordance with the recognition and measurement principles as laid down
in IndAS 34- Interim Financial Reporting, prescribed u/s. 133 of the Companies
Act, 2013 (‘the Act’) read with relevant rules issued thereunder and the other
accounting principles generally accepted in India.
The transition to
IndAS has been carried out from the erstwhile Accounting Standards notified
under the Act, read with Rule 7 of Companies (Accounts) Rules, 2014 (as
Amended) guidelines issued by the Reserve Bank of India (‘the RBI’) and other generally accepted accounting principles in
India (collectively referred to as ‘the Previous GAAP’).
Accordingly, the
impact of transition has been recorded in the opening reserves as at 1st April, 2017 and the
corresponding adjustments pertaining to comparative previous period/ quarter as
presented in these financial results have been restated/ reclassified in order
to conform to current period presentation.
The financial
results have been drawn up on the basis of IndAS that are applicable to the
Company as at 30th June 2018 based on the Press Release issues by
the Ministry of Corporate Affairs (“MCA”) on 18th January, 2016. Any
application guidance/ clarifications/ directions issued by RBI or other
regulators are implemented as and when they are issued/ applicable.
2. As required by Para 32 of IndAS 101, the profit reconciliation between the figures previously reported under Previous
GAAP and restated as per IndAS is as follows:
|
(Rs.in Lakhs)
|
|
|
Quarter ended 30th June 2017
|
|
Profit after tax as reported under Previous GAAP
|
4738.5
|
|
Adjustments resulting in increase/
(decrease) in profit after tax as reported under Previous GAAP
|
(7257.72)
29573.51
981.24
194.63
55.24
(8149.11)
|
|
i) Impact on recognition of fixed assets and financial
liabilities at amortised cost by application of effective interest rate
method
|
|
ii) Impact on application of Expected Credit Loss method for
loan loss provisions
|
|
iii) Impact on reconciliation of securitised loan portfolio
(derecognised in Previous GAAP)
|
|
iv) Reclassification of Actuarial Loss to Other Comprehensive
Income
|
|
v) Others
|
|
vi) Tax Impact on above adjustments
|
|
Profit after tax as reported under IndAS
|
20136.37
(127.27)
|
|
Other Comprehensive Income/ (Loss) (Net of Tax)
|
|
Total Comprehensive Income (After Tax) as reported under
IndAS
|
20009.10
|
Housing Development
Finance Corporation Ltd
1. The corporation has adopted Indian
Accounting Standards (‘IndAS’) notified u/s. 133 of the Companies Act, 2013
(“the Act”) read with the Companies (Indian Accounting Standards) Rules, 2015,
from 1st April,
2018 and the effective date of such transition is 1st April, 2017. Such transition
has been carried out from the erstwhile Accounting Standards notified under the
Act, read with relevant rules issued thereunder and guidelines issued by the
National Housing Bank (‘NHB’) (collectively referred to as “The Previous
GAAP”). Accordingly, the impact of transition has been recorded in the opening
reserves as at 1st
April, 2017. The corresponding figures presented in these results have been
prepared on the basis of the previously published results under previous GAAP
for the relevant periods, duly restated to IndAS. These IndAS adjustments have
been reviewed by the Statutory Auditors.
These financial
results have been drawn up on the basis of IndAS Accounting Standards that are
applicable to the corporation as at 30th June, 2018 based on MCA
Notification G.S.R. 111 (E) and G.S.R. 365 (E) dated 16th February, 2015 and 30th March, 2016 respectively.
Any application guidance/ clarifications/ directions issued by NHB or other regulators
are adopted/ implemented as and when they are issued/ applicable.
2. As required by Paragraph 32 of IndAS 101,
net profit reconciliation between the figures reported, net of tax, under
previous GAAP and IndAS is give below:
|
(Rs.in Crore)
|
|
|
Quarter ended 30th June 2017
|
|
Profit after tax as per Previous GAAP
|
1552.42
|
|
|
|
|
Adjustment
on account of effective interest rate/ forex valuation/ net interest on
credit impaired loans
|
(106.31)
|
|
Adjustment
on account of expected credit loss
|
(50.55)
|
|
Adjustment
due to fair valuation of employee stock options
|
(95.16)
|
|
Fair
value change in investments
|
17.49
|
|
Reversal
of Deferred tax Liability on 36(1)(viii) for the quarter
|
105.21
|
|
Other
Adjustments
|
1.37
|
|
|
|
|
Profit after tax as per IndAS
|
1424.47
|
|
Other
Comprehensive Income (Net of Tax)
|
(14.56)
|
|
Total Comprehensive Income (Net of Tax) as per IndAS
|
1409.91
|
LIC Housing Finance Ltd
1. The company has adopted Indian Accounting
Standards (‘IndAS’) notified u/s. 133 of the Companies Act, 2013 (“the Act”) read
with the Companies (Indian Accounting Standards) Rules, 2015, from 1st
April, 2018 and the effective date of such transition is 1st April,
2017. Such transition has been carried out from the erstwhile Accounting
Standards notified under the Act, read with relevant rules issued thereunder
and guidelines issued by the National Housing Bank (‘NHB’) (collectively
referred to as “The Previous GAAP”). Accordingly, the impact of transition has
been recorded in the opening reserves as at 1st April, 2017. The
figures for the corresponding period presented in these results have been
prepared on the basis of the published results under previous GAAP for the
relevant periods, duly restated to IndAS. These IndAS adjustments have been
reviewed by the Statutory Auditors.
These financial
results have been drawn up on the basis of IndAS that are applicable to the
company based on MCA Notification G.S.R. 111 (E) and G.S.R. 365 (E) dated 16th
February, 2015 and 30th March, 2016 respectively. Any
guidance/ clarifications/ directions issued by NHB or other regulators are
adopted/ implemented as and when they are issued/ applicable.
2. As required by Paragraph 32 of IndAS 101,
net profit reconciliation between the figures reported, net of tax, under
previous GAAP and IndAS is give below:
(Rs.in Crore)
|
|
Quarter ended 30th June 2017
|
|
Net Profit after tax as per Previous
GAAP
|
470.06
|
|
|
|
|
Adjustment on account of effective
interest rate for financial assets and liabilities recognised at amortised
cost / net interest on credit impaired loans
|
23.14
|
|
Adjustment on account of expected credit
loss
|
(65.07)
|
|
Reversal of Deferred tax Liability on 36(1)(viii)
for the quarter
|
51.37
|
|
Other Adjustments
|
0.15
|
|
|
|
|
Net Profit after tax as per IndAS
|
479.65
|
|
Other Comprehensive Income (Net of Tax)
|
(0.47)
|
|
Total Comprehensive Income (Net of Tax)
as per IndAS
|
479.18
|
TATA Investment Corporation Ltd
1. The company has adopted Indian Accounting
Standards (‘IndAS’) as notified under of the Companies Act, 2013 (“the Act”),
from 1st April, 2018 with the effective date of such transition
being 1st April, 2017. Such transition had been carried out from the
erstwhile Accounting Standards as notified (referred to as ‘the Previous
GAAP’). Accordingly, the impact of transition has been recorded in the opening
reserves as at 1st April, 2017 and the corresponding figures
presented in these results have been restated/ reclassified.
2. As required by Paragraph 32 of IndAS 101,
net profit reconciliation between Indian GAAP and IndAS for the quarter ended
30-06-2017 is as follows:
(Rs.in Crore)
|
Particulars
|
Quarter ended 30th June 2017
|
|
Unaudited
|
|
Net Profit as per Indian GAAP
|
45.3
|
|
IndAS Adjustments
|
|
|
Gain on equity
instruments classified as fair valued through Other Comprehensive Income
(OCI)
|
(36.97)
|
|
Changes in fair value of mutual funds/ venture capital funds
|
2.25
|
|
Taxes impacts (Current Tax and Deferred Tax)
|
7.41
|
|
Decrease in Interest Income by using Effective Interest rate
|
(0.01)
|
|
Total Effect of Transition to IndAS
|
(27.32)
|
|
|
|
|
Net Profit after tax as per IndAS (transfer to retained
earnings)
|
17.98
|
|
|
|
|
Other Comprehensive Income (OCI) as per IndAS
|
|
|
(a) Items that will not be reclassified
to Profit and Loss account:
|
|
|
Changes in Fair valuation of equity instruments
|
291.58
|
|
Tax Impacts on above
|
(62.23)
|
|
(b) Items that will be reclassified to
Profit and Loss account:
|
|
|
Changes in Fair value of Bonds/ Debentures
|
5.2
|
|
Tax Impacts on above
|
(1.11)
|
|
|
|
|
Total Other Comprehensive Income
|
233.44
|
|
|
|
|
Total Comprehensive Income as per IndAS
|
251.42
|
Max Financial Services Ltd
1. The financial results of the company have
been prepared in accordance with Indian Accounting Standards (‘IndAS’) notified
under section 133 of the Companies Act, 2013 read with relevant rules issues
thereunder (‘IndAS’). Beginning 1st April, 2018, the company has for
the first time adopted IndAS with the transition date of 1st April, 2017. These financial results
(including the period presented in accordance with IndAS-101 First time
adoption of the Indian Accounting Standards) have been prepared in accordance
with the recognition and measurement principles in IndAS 34- Interim Financial
Reporting, prescribed u/s. 133 of the Companies Act, 2013 read with relevant
rules issued thereunder and other accounting principles generally accepted in
India.
There is a
possibility that these financial results for the current and previous period
may require adjustments due to changes in financial reporting requirements
arising from new standards, modifications to the existing standards, guidelines
issued by the Ministry of Corporate Affairs or changes in the use of one or
more optional exemptions from full retrospective application of certain IndAS
provisions permitted under IndAS 101 which may arise upon finalisation of the
financial statements as at and for the year ending 31st March, 2019
prepared
under IndAS.
2. Reconciliation of net profit between Indian
GAAP as previously reported and Total Comprehensive Income as per IndAS is as
follows:
(Rs. in Crores)
|
Sr. No.
|
Nature of Adjustments
|
Corresponding 3 months ended 30.06.2017
|
|
|
Net Profit after tax as per erstwhile Indian GAAP (prior GAAP)
|
66.58
|
|
a)
|
Effect of Fair value of Investments in Mutual Funds
|
0.64
|
|
b)
|
Effect of measuring financial instruments at amortised cost*
|
–
|
|
c)
|
Effect of recognising Employee Stock Options and phantom
stock options cost at fair value
|
(1.75)
|
|
d)
|
Effect of recognising actuarial (gain)/ loss on Employee
defined benefit liability under Other Comprehensive Income
|
0.01
|
|
e)
|
Effect of fair value of financial instruments carried at fair
value through Profit or loss (FVTPL)
|
1.71
|
|
|
Net Profit after tax as per IndAS (A)
|
67.19
|
|
|
Other Comprehensive Income/ (loss) (B)
|
(0.01)
|
|
|
Total Comprehensive Income as per IndAS (A+B)
|
67.18
|
*Amount is Rs. 0.29 lakhs.
