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Deccan Cements

BSE: 502137|NSE: DECCANCE|ISIN: INE583C01021|SECTOR: Cement - Mini
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Notes to Accounts Year End : Mar '18

D. Notes to first-time adoption of Ind AS:

1) Borrowings

The benefit of a government loan at below current market rate of interest is treated as a government grant. The loan is recognised and measured in accordance with Ind AS 109. The benefit of the below market rate of interest is measured as the difference between the initial carrying value of the loan determined in accordance with Ind AS 109 (at fair value) and the proceeds received. Government grant is recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses, the related costs for which the grants are intended to compensate. As a result other income has increased by Rs.96.70 Lakhs towards government grant amortisation and finance cost has increased by Rs 77.18 lakhs towards interest expense on government loan and accordingly the overall net profit has increased by Rs 19.52 lakhs for the year ended 31 March 2017. Consequently the borrowings have been restated to Rs.4501.37 lakhs and Rs 2618.19 lakhs as at 1 April 2016 and 31 March 2017 respectively.

2) Expenses directly attributable to revenue

Under the previous GAAP, cash discounts, sales promotion expenses and breakages and damages amounting to Rs 6241.66 lakhs directly attributable to sales were recognized as part of other expenses which have been adjusted against the revenue from sale of goods under Ind AS during the year ended 31 March 2017 . There is no impact on the total equity and profit.

3) Excise duty

Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 March 2017 by Rs 9047.92 lakhs. There is no impact on the total equity and profit.

4) Remeasurements of post-employment benefit obligations

Under Ind AS, remeasurements i.e. 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 previous GAAP, these remeasurements were forming part of the profit or loss for the year. There is no impact on the total equity as at 31 March 2017.

5) Proposed Dividend

Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as an adjusting event. Accordingly, provision for proposed dividend and corporate dividend tax was recognised as liability. Under Ind AS, such dividends are recognised when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend and corporate dividend tax of Rs 505.78 lakhs included under provisions as at 31 March 2017 has been reversed with corresponding adjustments to retained earnings. Consequently the total equity increased by an equivalent amount.

6) Other equity

Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments on the date of transition.

The company has transferred on April 1,2016 an amount of Rs 99.28 lakhs from power subsidy to general reserve and Rs 40.24 lakhs from other current liabilities to general reserve as the conditions attached to it are fulfilled as at the date of transition. However there is impact on other equity on account of the adjustment of other current liabilities(capital subsidy) of Rs 40.24 lakhs.

7) Other comprehensive income

Under Ind AS, all items of income and expense recognized in a period should be included in the 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 or loss as ''other comprehensive income'' includes remeasurements of defined benefit plans. The concept of ''other comprehensive income'' did not exist under previous GAAP.

8) Cash flow from financing activities

Other bank balances (disclosed under Note 7.3) and financial assets( disclosed under Note 4.2) are not considered as part of cash and cash equivalents under Ind AS and their movement amounting to Rs 30.68 lakhs is the variance in net increase/decrease in cash and cash equivalents as at 31 March 2017.

9) Investment properties:

Under previous GAAP, investment in land of Rs. 8.12 lakhs is shown in investments. As on transition date, the Company has identified land & Buildings of Rs. 199.73 Lakhs which was grouped under property .plant and equipment in previous GAAP. These two amounts are classified as investment properties on the face of the balance sheet as per Ind AS 40- Investment properties.

10) Investments

Under Ind AS, the financial assets and liabilities have to be shown at fair value. Accordingly, the company has restated the investments in equity instruments of TCS at fair value.

11) Trade receivables

Under Ind AS, trade receivables have to be adjusted for the effect of expected credit loss. Accordingly, the company has made a provision for the doubtful debts of ?11.92 lakhs and ? 2.06 lakhs as on 01.04.2016 and 31.03.2017 respectively.

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For and on behalf of the Board

for M. Anandam & Co.,

Chartered Accountants

Firm Registration Number: 000125S

M.V. Ranganath

Partner Membership Number: 028031

M B Raju

Executive Chairman DIN: 00016652

P Parvathi

Managing Director DIN: 00016597

Place : Hyderabad

R V A Narasimha Rao

S K Mishra

Date : 29.05.201 8

Chief Financial Officer

Company Secretary

FCS 8555

Source : Dion Global Solutions Limited
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