INDIAN ACCOUNTING STANDARDS (IND AS)

1 INDIAN ACCOUNTING STANDARDS . ( ind as ). 1 Titre de la pr sentation AGENDA. Stepping into ind as . Key Implementation Challenges Clarifications provided by ITFG. Learning from global peers 01. STEPPING INTO ind as . Titre de la pr sentation Date ind as VS. IFRS. IAS/IFRS Title ind as . IAS 1 Presentation of Financial Statement 1. IAS 2 Inventories 2. IAS 7 Statement of Cash Flows 7. IAS 8 ACCOUNTING Policies, Changes in ACCOUNTING Estimates and Errors 8. IAS 10 Events after the Reporting Period 10. IAS 11 Construction Contracts 11. IAS 12 Income Taxes 12. IAS 16 Property, Plant and Equipment 16. IAS 17 Leases 17. IAS 18 Revenue 18. IAS 19 Employees Benefits 19. IAS 20 ACCOUNTING for Governments Grants and disclosure of 20. Government Assistance IAS 21 The Effects if Changes in Foreign Exchange Rates 21. IAS 23 Borrowing Costs 23. IAS 24 Related Party Disclosures 24. IAS 27 Separate Financial Statements 27. IAS 28 Investments in Associates and Joint Ventures 28. IAS 29 Financial Reporting in Hyperinflationary Economics 29.

2 IAS 32 Financial Instruments: Presentation 32. IAS 33 Earnings Per Share 33. ind as VS. IFRS. IAS/IFRS Title ind as . IAS 34 Interim Financial Reporting 34. IAS 36 Impairment of Assets 36. IAS 37 Provisions, Contingent Liabilities and Contingent Assets 37. IAS 38 Intangible Assets 38. IAS 40 Investment Property 40. IAS 41 Agriculture 41. IFRS 1 First-time adoption of INDIAN ACCOUNTING STANDARDS 101. IFRS 2 Share-Based Payments 102. IFRS 3 Business Combinations 103. IFRS 4 Insurance Contracts 104. IFRS 5 Non-Current Assets Held for Sale and Discontiunued 105. Operations IFRS 6 Exploration for and Evaluation of Mineral Resources 106. IFRS 7 Financial Instruments: Disclosures 107. IFRS 8 Operating Segments 108. IFRS 9 Financial Instruments 109. IFRS 10 Consolidated Financial Statements 110. IFRS 11 Joint Arrangements 111. IFRS 12 Disclosure of Interests in Other Entities 112. IFRS 13 Fair Value Measurement 113. IFRS 14 Regulatory Deferral Accounts 114. 5. ind as VS. IFRS. Note-1. ind as 11 and ind as 18 were replaced by ind as 115, on issue of ind as Rules, 2015 by MCA.

3 However, in view of the future applicability of IFRS 15, MCA has recently deferred ind as 115. Consequently, ind as 11 and 18 are revived in the intervening period. Note-2. Though IFRS 9 would apply to an annual reporting periods beginning on or after 1 January 2018; however ind as 109 is applicable earlier to it. PRESENTATION OF FINANCIAL STATEMENTS ( ind as . 1). Format Format not prescribed Prescribes components of FS, minimum disclosure requirements on the face of the balance sheet, statement of profit and loss and statement of changes in equity. Requires additional line items, headings and subtotals to be presented in the FS to enhance understanding of the financial position. MD&A, other reports presented by management along with the FS, are outside scope of Ind ASs Sch III(R) prescribes the format for presentation of FS. PRESENTATION OF FINANCIAL STATEMENTS ( ind as . 1). A complete set of financial statements comprises: a balance sheet as at the end of the period;. a statement of profit and loss for the period.

4 Statement of changes in equity for the period;. a statement of cash flows for the period;. notes, comprising a summary of significant ACCOUNTING policies and other explanatory information;. comparative information; and balance sheet as at the beginning of the preceding period when an entity: - applies an ACCOUNTING policy retrospectively; or - makes a retrospective restatement of items in its financial statements; or - when it reclassifies items in its financial statements ind as FINANCIAL STATEMENTS- BALANCE SHEET. ind as FINANCIAL STATEMENTS- BALANCE SHEET. ind as FINANCIAL STATEMENTS- STATEMENT OF. PROFIT AND LOSS. The statement of profit and loss shall present: (a) profit or loss;. (b) total other comprehensive income;. (c) Total comprehensive income for the period, being the total of (a) and (b). The sections (a) and (b) shall further be disclosed as attributable to: non-controlling interests (minority interest), and owners of the parent. OCI comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other Ind ASs.

5 Total comprehensive income is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners. ind as FINANCIAL STATEMENTS- STATEMENT OF. PROFIT AND LOSS. OCI Include Changes in revaluation surplus Re-measurements of defined benefit plans Gains and losses arising from translating the financial statements of a foreign operation Gains and losses on financial assets measured at fair value through OCI. The items of OCI shall be grouped into the following: will not be reclassified subsequently to profit or loss (together with tax impact); and will be reclassified subsequently to profit or loss (together with tax impact). ind as FINANCIAL STATEMENTS- STATEMENT OF. PROFIT AND LOSS. ind as FINANCIAL STATEMENTS- STATEMENT OF. PROFIT AND LOSS. ind as FINANCIAL STATEMENTS- STATEMENT OF. PROFIT AND LOSS. ind as FINANCIAL STATEMENTS- STATEMENT OF. CHANGE IN EQUITY. Information to be presented on the face of the statement of changes in equity For each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period separately disclosing each change.

6 Total comprehensive income for the period, showing separately the total amounts attributable to owners of the parent and to minority interest;. Transactions with owners showing separately contributions by and distributions to owners ind as FINANCIAL STATEMENTS- STATEMENT OF. CHANGE IN EQUITY. FIRST TIME ADOPTION OF ind as . Primary objectives: Consistent starting point for ind as . Specific requirements and detailed disclosures Clearly convey to financial statement users the impact of converting from INDIAN GAAP to ind as . Use of Ind-AS. A company is required to use Ind-AS for the following: First Ind-AS compliant FS; and Each interim financial report for part of the period covered by its first Ind-AS FS. An entity's first ind as FS are the first annual FS in which the entity adopts Ind ASs, in accordance with Ind ASs notified under the Companies Act, 2013 and makes an explicit and unreserved statement in those FS of compliance with Ind ASs. FIRST TIME ADOPTION OF ind as . ind as 101- provides guidance on first-time application of ind as .

7 Generally retrospective application of all Ind ASs effective at the end of first ind as reporting period (although some voluntary and mandatory exceptions). Requires one year of comparative financial information Transition adjustments recognised in retained earnings Disclosures and reconciliation to INDIAN GAAP to explain effect of transition to ind as . Transitional date Starting point for ind as . Is the beginning of the earliest period for which an entity presents full comparative information under ind as in its first ind as financial statements FIRST TIME ADOPTION OF ind as . Components of first ind as financial statements The first ind as FS shall include at least: Three Balance Sheets Two Statements of Profit and Loss Two Statements of cash flows Two Statements of changes in equity Related notes including summary of ACCOUNTING policies and other explanatory information Phase-I companies shall prepare: Opening ind as -BS at 1 April 2015;. BS for 31 March 2017 (with comparatives for the year ended 31 March 2016).

8 Statement of profit and loss, SOCE and statement of cash flows for the year to 31. March 2017 (with comparatives for the year ended 31 March 2016); and Disclosures (including comparative information for the year ended 31 March 2016). FIRST TIME ADOPTION OF ind as . Exemptions provided by Ind-AS 101. Two types of exemptions- mandatory or voluntary exemptions. In case a company is not eligible for these exemptions, then all applicable Ind ASs are to be applied retrospectively. Key exemptions- Mandatory Estimates Hedge ACCOUNTING Impairment of financial assets Classification and measurement of financial assets De-recognition of financial instruments Non-controlling interests Embedded derivatives Government loan FIRST TIME ADOPTION OF ind as . Key exemptions- Optional Business combinations Non-current assets held for sale and discontinued operations Long term foreign currency monetary items Leases Deemed cost Share-based payment transactions Presentation and Disclosure No exemption from the presentation and disclosure requirements of other Ind-ASs.

9 02. KEY IMPLEMENTATION. CHALLENGES. Titre de la pr sentation Date KEY CHALLENGES ON TRANSITION. Impacts of ind as conversion to be addressed with all stakeholders Fair value concept to be embedded in the Company's business processes New standard issued without international precedence Use of more judgment in selection of ACCOUNTING policies Incremental disclosures ind as compliance not equal to IFRS compliance Alignment with various legislations Emphasis on substance over form Complete review and modification to contracts containing financial covenants FOCUS AREAS. Financial reporting factors ACCOUNTING Practices Differences resulting from these changes are timely identified and corresponding new ACCOUNTING policies and practices are developed. Tax implications Significant tax implications on adoption of ind as , given the current tax structure we have in India. Group policies Due to the geography of the group and its members it is obvious to have differences in ACCOUNTING policies. The Industry peers The ACCOUNTING practices adopted by the industry peers will have significant bearing on any company, while choosing its own set of ACCOUNTING policies.

10 Management strategies The conversion would momentously impact the way the management strategies are being formed and how the decision making and financial communication model works. FOCUS AREAS. Non-financial reporting factors Company personnel Cos needs to create a project team and work streams, set timescales and accountabilities. Training needs Cos. needs to develop & execute training programmes for employees, including KPMs across functions & locations. IT system Need to be modified to meet the revised needs to the current financial reporting systems and the desired reports. Human resources system This conversion process will surely impact other systems like human resources systems. FOCUS AREAS. Non-financial reporting factors Treasury and finance function With the revised ratios and other statistics, the treasury or finance department is most likely to be impacted, having the responsibility for managing sources of financing of the entity. Stakeholder expectations Cos. to ensure stakeholder's expectations in a satisfactory and timely manner.