From Published Accounts

Compilers’ Note
As per the roadmap issued by the Ministry of Company Affairs (MCA), listed and other companies with a net worth of over Rs. 500 crore (as on 31st March 2014) have to adopt ‘Ind AS’ set of standards as notified by the Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) Amendment Rules, 2016.

Given below are disclosures by 2 large listed companies for the quarter ended 30th June 2016 who have adopted Ind AS.

Reliance Industries Ltd
Transition to Ind-AS:
The Company has adopted Ind AS with effect from 1st April 2016 with comparatives being restated. Accordingly the impact of transition has been provided in the Opening Reserves as at 1st April 2015 and all the periods presented have been restated accordingly.

RECONCILATION OF PROFIT AND RESERVE BETWEEN IND AS AND PREVIOUS INDIAN GAAP FOR EARLIER PERIOD AND AS AT MARCH 31, 2016

Notes:
I. Change in accounting policy for Oil & Gas Activity – From Full cost method (FCM) to Successful Efforts Method (SEM): The impact on account of change in accounting policy from FCM to SEM is recognised in the Opening Reserves on the date of transition and consequential impact of depletion and write offs is recognised in the Profit and Loss Account. Major differences impacting such change of accounting policy are in the areas of;

– Expenditure on surrendered blocks, unproved wells, abandoned wells, seismic and expired leases and licenses which has been expensed under SEM.

– Depletion on producing property in SEM is calculated using Proved Developed Reserve, as against Proved Reserve in FCM.

II. Fair valuation as deemed cost for Property, Plant and Equipment: The Company and its subsidiaries have considered fair value for property, viz land admeasuring over 33000 acres, situated in India, with impact of Rs. 51,101 crore and gas producing wells in USA Shale region with impact of Rs.(-) 5,829 crore in accordance with stipulations of Ind AS 101 with the resultant impact being accounted for in the reserves. The consequential impact on depletion and reversal of impairment is reflected in the Profit and Loss Account.

III. Fair valuation for financial Assets: The Company has valued financial assets (other than investment in subsidiaries, associate and joint ventures which are accounted at cost), at fair value. Impact of fair value changes as on the date of transition, is recognised in opening reserves and changes thereafter are recognised in Profit and Loss Account or Other Comprehensive Income, as the case may be.

IV. Deferred Tax:
The impact of transition adjustments together with Ind AS mandate of using balance sheet approach (against profit and loss approach in the previous GAAP) for computation of deferred taxes has resulted in charge to the Reserves, on the date of transition, with consequential impact to the Profit and Loss account for the subsequent periods.

V. Others: Other adjustments primarily comprises of:
a. Attributing time value of money to Assets Retirement Obligation: Under Ind AS, such obligation is recognised and measured at present value. Under previous Indian GAAP it was recorded at cost. The impact for the period subsequent to the date of transition is reflected in the Profit and Loss account.

b. Loan processing fees / transaction cost: Under Ind AS such expenditure are considered for calculating effective interest rate. The impact for the periods subsequent to the date of transition is reflected in the Profit and Loss account.

Tech Mahindra Ltd
The Company has prepared its first Ind AS compliant Financial Statements for the periods commencing April 1, 2016 with restated comparative figures for the year ended March 31, 2016 in compliance with Ind AS. Accordingly, the Opening Balance Sheet, in line with Ind As transitional provisions, has been prepared as at April 1, 2015, the date of company’s transition to Ind AS. In accordance with Ind AS 101 First-time Adoption of Ind AS, the Company has presented a reconciliation from the presentation of financial statements under Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (“Previous GAAP”) to equity under Ind AS as at March 31, 2016, June 30, 2015 and April 1, 2015 and of the total comprehensive income for the quarter ended June 30, 2015.

The principal adjustments made by the Company in restating its “Previous GAAP” statement of profit and Loss for the quarter and year ended March 31, 2016 and quarter ended June 30, 2015 are as mentioned below:

Footnotes to the reconciliation between “Previous GAAP” and Ind AS.

i) Fair Value Through Other Comprehensive Income (FVTOCI) Financial assets:
Under “Previous GAAP”, the Group accounted for long term investments in unquoted and quoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments. Under Ind AS, the Group has designated such investments (other than subsidiary and associate) as FVTO CI investments. Ind AS requires FVTO CI investments to be measured at fair value. Due to difference between the investments fair value and “Previous GAAP” carrying amount, total comprehensive income has been increased by an amount of Rs.1160 Lakh for quarter ended June 30, 2015 and decreased by an amount of Rs.2785 Lakh and Rs.546 Lakh for quarter and year ended March 31, 2016 respectively.

The Group, under the “Previous GAAP” had made provision for diminution in value of quoted investments in earlier years, now since investments are accounted at fair value, provision for diminution, no longer required has been reversed by the company and corresponding effect has been given by crediting retained earnings Rs. 2515 Lakh as at transition date. During the quarter ended June 2015, company had already reversed the amount of provision for diminution in value of quoted investment of Rs.2435 Lakh in “Previous GAAP” financials and on reversal on transition date, the profit under Ind As has been decreased by an amount of Rs.2435 Lakh for quarter ended June 30, 2015 and year ended March 31, 2016.

ii) Share based payments:
Under “Previous GAAP”, the Group recognised stock compensation cost based on intrinsic value method. Ind AS 102, Share-based Payment, requires compensation cost to be recognised on fair value as at grant date to be determined using an appropriate pricing model over the vesting period. Accordingly, profit has been decreased (excess of cost determined on fair value basis over intrinsic value basis) by an amount of Rs.1051 Lakh, Rs.860 Lakh and Rs.3269 Lakh for quarter ended June 30, 2015, quarter and year ended March 31, 2016 respectively.

iii) Foreign currency translations:
In “Previous GAAP”, fixed assets of integral foreign operations were carried at historical exchange rate and now in accordance with Ind AS 21, Property, Plant and Equipment of integral foreign operations has been restated at closing rate and other comprehensive income has been increased by an amount of Rs.149 Lakhs, Rs.600 Lakh and Rs.600 Lakh for quarter ended June 30, 2015, quarter and year ended March 31, 2016 respectively.

iv) Fair Value Through profit or loss in respect of Financial assets:
Under “Previous GAAP”, the company accounted for current investment in mutual funds on the basis of cost or Net realizable value whichever is lower. Ind AS requires the same to be measured at fair value. Accordingly, current investment in mutual funds have been measured at fair value and profit has been decreased by an amount of Rs, 91 Lakh for quarter ended June 30, 2015 and increased by an amount of Rs.167 Lakh and Rs.230 Lakh for quarter and year ended March 31, 2016.

v) Deferred tax:
Certain translation adjustments lead to temporary differences and accordingly, the group accounted for deferred tax, as applicable on such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity.

These adjustments have resulted in decrease in profit by an amount of Rs. 435 lakh and Rs.2349 Lakh for quarter ended June 30, 2015 and March 31, 2016 respectively and increased by an amount of Rs. 4183 Lakh for year ended March 31, 2016.

Tax adjustments are primarily on account of deferred taxes recognised for undistributed earnings of subsidiaries.

vi) Other Comprehensive Income:
Under the “Previous GAAP”, the Group has not presented other comprehensive income (OCI) separately. Now, under Ind AS, actuarial gain/loss on defined benefit liability, effective portion of cash flow hedges (amounting to loss of Rs.14984 Lakh for quarter ended June 30, 2015 and gain of Rs.10890 Lakh and Rs.11741 Lakh for quarter and year ended March 31, 2016 respectively) and currency translation reserve has been shown separately and routed through OCI.