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154
2 Deferred tax assets
Previous GAAP requires deferred tax accounting using the profit and loss account approach, which focuses on differences
between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes
using the Balance Sheet approach, which focuses on temporary differences between the carrying amount of an asset or
liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred
tax on new temporary differences relating to various transition adjustments which are recognised in correlation to the
underlying transaction either in retained earnings as a separate component in equity.
3 Government grant - interest free loan
Under the previous GAAP, interest free loan from the government has been presented in the Balance Sheet by showing it
as a part of borrowings, Government grants related to assets,including non-monetary grants at fair value, are required to
be presented in the balance sheet by setting up the grant as deferred income in the liability side of balance sheet. The grant
set up as deferred income is recognised in profit & loss on a systematic basis over the useful life of the asset. Accordingly,
unamortised government grants till transition date is recognized as deferred government grant and is amortized.
4 Expected credit loss model
Under the previous GAAP, provision for bad debt was recognised for the doubtful debtors on a case to case basis.
However, under Ind AS, the Company assesses impairment based on expected credit losses (ECL) model for measurement
and recognition of impairment loss on the financial assets that are trade receivables accounting for both nonpayment and
delay of receivable. According to the past estimates, the Company has recognised 0.1% of good debtors as the additional
provision under ECL model.
Footnotes to the reconciliation of profit & loss for the year ended 31 March 2016
1 Sale of goods
Under Previous GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes
excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of
goods under Ind AS has increased with a corresponding increase in other expense. There is, however, no impact on profit
for the year on account of the same.
2 Other operating income :Sale of power from windmill
Under Previous GAAP, the windmill rental received from Maharashtra State Electricity Distribution Corporation was
recognised as income in the respective period. However, as per the arrangement contains a lease within the scope of Ind
AS 17. An asset (the facility) is explicitly identified in the arrangement and fulfilment of the arrangement is dependent on
the facility. Therefore, the management has estimated an amount of 5% of WDV as the rental income from finance lease.
3 Other income
Security Deposit Interest unwinding- Interest on present value of security deposit is recognised as income at the average
borrowing rate for the corresponding period. Impact of the same is
`
0.42 Crore.
4 Finance expense
Interest expense on interest free government loan has been recognised at the average borrowing rate of the Company.
Additional interest expense amounting to
`
0.0008 crore has been recognised for the year ended 31 March 2016
5 Rent expense
Rent expense: Deffered lease expense has been recognized on a straight line basis over the life of security deposits for the
term of the deposit. Impact
`
0.40 Crore for FY ended 31 March 2016.
6 Defined benefit liabilities
Both under Previous GAAP and Ind AS, the company recognised costs related to its post-employment defined benefit plan
on an actuarial basis. Under Previous GAAP, the entire cost, including actuarial gains and losses, are charged to profit &
loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, excluding amounts included in net interest
on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit
to retained earnings through OCI.
51 Reconciliation of profit or loss for the year ended 31 March 2016
(contd...)
Notes on the standalone financial statements
for the year ended 31 March 2017