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Notes on the consolidated financial statements
for the year ended 31 March 2017
Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit or loss for the year ended 31
March 2016
1 Security deposits
Under Previous GAAP, the security deposits paid for lease rent are shown at the transaction value whereas under Ind
AS, the same are initially discounted and subsequently recorded at amortized cost at the end of every financial reporting
period. Accordingly, the difference between the transaction and discounted value of the security deposits paid towards
lease rent is recognized as deferred lease expense and is amortized over the period of the lease term. Further, interest is
accreted on the present value of the security deposits paid for lease rent.
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 or 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.
52 Reconciliation of profit or loss for the year ended 31 March 2016
(contd...)