IND AS 1 - Anil

1. Ind AS 1 Presentation of Financial Statements

2. Scheme of presentation Part A : Objective & Scope Part B : General Features Part C : Financial Statements Part D : Notes & Disclosure Part E : Differences between Ind AS 1 and AS 1 Part F : Comparison with IAS -1 Part G : Some FAQ’s

3. Ind AS 1 Presentation of Financial Statements AS 1 Disclosure of Accounting Policies IAS 1 Presentation of Financial Statements

4. Objective: This Standard prescribes the basis for presentation of General purpose financial statements with the financial statements of other entities . entity’s financial statements of previous periods and to ensure comparability both with the It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. Scope: An entity shall apply this Standard in preparing and presenting General purpose financial statements Other Ind ASs set out the recognition, measurement and disclosure requirements for specific transactions and other events. Does not apply to the structure and content of condensed interim financial statements prepared in accordance with Ind AS 34 Interim Financial Reporting

5. General Features Presentation of true and fair view and compliance with Ind As’s Going Concern Accrual Basis of Accounting Materiality and Aggregation Offsetting Assets and liabilities, and income and expenses, may not be offset unless required or permitted by an Ind AS. Frequency of Reporting An entity should present a complete set of financial statements (including comparative information) at least annually. Comparative Information Consistency of Presentation

6. Financial Statements Financial statements are a structured representation of the financial position and financial performance of an entity. Financial statements provide information about an entity’s: Assets. Liabilities. Equity. Income and expenses, including gains and losses. Contributions by and distributions to owners in their capacity as owners. Cash flows.

7. Complete set Of Financial Statements A Balance Sheet as at the beginning of the earliest comparative period when an entity applies an accounting policy Retrospectively or makes a retrospective Restatements of items in its financial statements, or when it Reclassifies items in its financial statements.

8. Balance Sheet This Standard does not prescribe the order or format for presentation. Minimum line items to be included in the balance sheet: Property, plant and equipment. Investment property. Intangible assets. Financial assets (excluding amounts shown under (e), (h), and ( i )). Investments accounted for using the equity method. Biological assets. Inventories. Trade and other receivables. Cash and cash equivalents. The total of assets classified as held for sale and assets included in disposal groups Trade and other payables. Provisions. Financial liabilities (excluding amounts shown under (k) and (l)). Liabilities and assets for current tax, as defined in Ind AS 12. Deferred tax liabilities and deferred tax assets, as defined in Ind AS 12. Liabilities included in disposal groups classified as held for sale in accordance with Ind AS 105. Non-controlling interests, presented within equity. Issued capital and reserves attributable to owners of the parent.

9. Current/Non-Current distinction An entity should present current and non-current assets, and current and non-current liabilities, as separate classifications in its balance sheet except when a presentation based on liquidity provides information that is reliable and more relevant. Current Assets Current Liabilities Expects to realise the asset, or intends to sell or consume it, in its normal operating cycle. Holds the asset primarily for the purpose of trading . E xpects to realise the asset within twelve months after the reporting period. A sset is cash or a cash equivalent. All other assets shall be classified as Non-Current. Expects to settle the liability in its normal operating cycle. Holds the liability primarily for the purpose of trading. Liability is due to be settled within twelve months after the reporting period. Does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. All other Liabilities shall be classified as Non-Current.

10. Share Capital and Reserve Entity shall disclose the following, either in the balance sheet or in the statement of changes in equity which is part of the balance sheet, or in the notes : For each class of share capital: Number of shares authorised . Number of shares issued and fully paid , and issued but not fully paid . Par value per share, or that the shares have no par value. Reconciliation of the number of shares outstanding at the beginning and at the end of the period. Rights, preferences and restrictions attaching to that class including restrictions on the distribution of dividends and the repayment of capital. Shares in the entity held by the entity or by its subsidiaries or associates. Shares reserved for issue under options and contracts for the sale of shares, including terms and amounts. A description of the nature and purpose of each reserve .

11. Statement of Profit & Loss Entity should present, in a single statement of profit and loss, all items of income and expense including components of other comprehensive income. Minimum line items to be included: Revenue. Finance costs. Share of the profit or loss of associates and joint ventures accounted for using the equity method. Tax expense. A single amount comprising the total of The post-tax profit or loss of discontinued operations and The post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation. Profit or loss. Each component of other comprehensive income classified by nature (excluding amount in (h)). Share of the other comprehensive income of associates and joint ventures accounted for using the equity method. and Total comprehensive income.

12. An entity shall disclose the following items in the statement of profit and loss as allocations for the period: Profit or loss for the period attributable to: Non-controlling interests, and Owners of the parent. Total comprehensive income for the period attrib utable to: Non-controlling interests, and Owners of the parent. Circumstances that would give rise to the separate disclosure of items of income and expense , include: Write-downs of inventories to net realisable value or of property, plant and equipment to recoverable amount, as well as reversals of such write-downs. Restructurings of the activities of an entity and reversals of any provisions for the costs of restructuring. Disposals of items of property, plant and equipment. Disposals of investments. Discontinuing operations. Litigation settlements. Other reversals of provisions.

13. Statement of Change in Equity For each component of equity, the effects of retrospective application or retrospective restatement recognised in accordance with Ind AS 8. For each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing each changes resulting from: Profit or loss. Each item of other comprehensive income. Transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners and changes in ownership interests in subsidiaries that do not result in a loss of control. Any item recognised directly in equity such as amount recognised directly in equity as capital reserve in accordance with Ind AS 103. Statement of Changes in Equity to be shown as a PART of the Balance Sheet

14. Statement of Cash Flows Information on cash flows provides a basis to assess an entity's ability to generate cash, and the utilization of those cash flows. All entities are required to provide a cash flow statement regardless of their size and the industry they operate in. There are no exemptions for subsidiaries whose parents have also published a cash flow statement Major Components – operating cash flows – investing cash flows – financing cash flows

15. Notes to Financial Statements The notes should: Present information about the basis of preparation of the financial statements and the specific accounting policies used. Disclose any information required by Ind ASs that is not presented elsewhere in the financial statements. Provide information that is not presented elsewhere in the financial statements but is relevant to an understanding of them. An entity should cross-reference each item in the financial statements to the related information in the relevant note. Entity should give disclosure of the measurement bases and the accounting policies an entity uses The entity's accounting policies should be clearly stated and presented The disclosure given in respect of an accounting policy should be sufficiently detailed that it is understandable Disclosure of Accounting Policies

16. In addition to the distributions information in the statement of changes in equity ( part of B/S), the following must be disclosed in the notes “The amount of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to wners during the period, and the related amount per share and the amount of any cumulative preference dividends not recognised ” Disclosure about Dividend

17. Capital Disclosure An entity shall disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital . To comply with this, the disclosures include : Qualitative information about the entity's objectives, policies and processes for managing capital, including – Description of capital it manages – Nature of external capital requirements, if any – How it is meeting its objectives Quantitative data about what the entity regards as capital Changes from one period to another Whether the entity has complied with any external capital requirements and If it has not complied, the consequences of such non-compliance.

18. The following additional disclosures if an entity has a puttable instrument that is classified as an equity instrument ( to the extent not disclosed elsewhere ) : Summary quantitative data about the amount classified as equity The entity's objectives, policies and processes for managing its obligation to repurchase or redeem the instruments when required to do so by the instrument holders, including any changes from the previous period The expected cash outflow on redemption or repurchase of that class of financial instruments and Information about how the expected cash outflow Disclosures about Puttable Financial Instruments

19. Differences between Ind AS 1 and Existing AS 1 Ind AS 1 generally deals with presentation of financial statements, whereas existing AS 1 (issued1979) deals only with the disclosure of accounting policies. The scope of Ind AS 1 is thus much wider and line by line comparison of the difference with the present standard is not possible. However, the major requirements as laid down in Ind AS 1 are as follows: An enterprise shall make an explicit statement in the financial statements of compliance with all the Indian Accounting Standards. Further, Ind AS 1 allows deviation from a requirement of an accounting standard in case the management concludes that compliance with Ind ASs will be misleading and if the regulatory framework requires or does not prohibit such a departure. Ind AS 1 requires presentation and provides criteria for classification of Current / Non- Current assets / liabilities. Ind AS 1 prohibits presentation of any item as extraordinary item in the statement of profit and loss or in the notes.

20. Ind AS 1 requires disclosure of judgments made by management while framing of accounting policies. Also, it requires disclosure of key assumptions about the future and other sources of measurement uncertainty that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within next financial year. Ind AS 1 requires classification of expenses to be presented based on nature of expenses. Ind AS 1 requires presentation of balance sheet as at the beginning of the earliest period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in the financial statements, or when it reclassifies items in its financial statements. In respect of reclassification of items, Ind AS 1 requires disclosure of nature, amount and reason for reclassification in the notes to financial statements. Ind AS 1 requires the financial statements to include a Statement of Changes in Equity to be shown as a part of the balance sheet which, inter alia, includes reconciliation between opening and closing balance for each component of equity.

21. Comparison with IAS -1 IAS 1 IND AS 1 Option either to follow the single statement approach or to follow the two statement approach . Statement of Changes in Equity is a separate statement . Term ‘Statement of financial position’ and ‘Statement of Profit and Loss’ is used. Gives the option to individual entities to follow different terminology for the titles of financial statements. Requires an entity to present an analysis of expenses recognized in profit or loss using a classification based on either their nature or their function. Allows only the single statement approach . Statement of changes in equity to be shown as a part of the balance sheet. The term ‘balance sheet’ and ‘Statement of profit and loss and other comprehensive income’ is used. Remove alternatives by giving one terminology to be used by all entities. Requires only nature-wise classification of expenses.

22. Ind AS 1 does not prescribe any format for presentation of general purpose financial statements but prescribes the minimum disclosures required to be made. Ind AS 27 , Consolidated and Separate Financial Statements, lays down the formats of consolidated financial statements for companies. Formats for presentation will be governed by the applicable laws and regulations. (Companies Act 2013)

23. Note No. Current Year Previous Year EQUITY AND LIABILITIES Equity Equity Share Capital Reserves Other Components of Equity Equity attributable to Owners/Shareholders Non Controlling Interest Liabilities Non Current Liabilities Financial Liabilities - Long term borrowings - Other financial liabilities Trade and other payables Long term provisions Deferred tax liabilities (Net) Other Non current liabilities Current Liabilities Financial Liabilities - Short term borrowings - Other financial liabilities Trade and other payables Short term provisions Liabilities for current tax (Net) Other current liabilities TOTAL Contd …. THE SUPREME INDUSTRIES LIMITED BALANCE SHEET AS ON …..

24. Note No. Current Year Previous Year ASSETS Non Current Assets Property, plant and equipment Capital work-in-progress Investment property Goodwill Intangible assets under development Biological assets other than bearer plants Financial assets - Non-Current investments - Long-term loans and advances - Others Deferred tax assets (Net) Other non-current assets Current Assets Inventories Financial assets - Current investments - Trade and other receivables - Cash and Cash equivalents - Short term loans and advances Assets for current tax (net) Other current assets Non-current assets classified as held for sale TOTAL

25. THE SUPREME INDUSTRIES LIMITED Statement of Profit and Loss for the period ended……….. Note No. For Current Year ended For Previous Year ended Revenue from operations Other income Total revenue Expenses Cost of materials consumed Purchase of stock-in-trade Emloyee benefit expense Finance cost Foreign exchange (gain)/loss (net) Depreciation and amortisation expense Other expense Total expenses Profit/ (loss) before exceptional items and tax Exceptional items Profit/ (loss) before tax Tax expense a) Current tax b) Deferred tax Contd ……

26. Note No. For Current Year ended For Previous Year ended Profit/ (loss) after tax Attributable to: Owners/Shareholders Non controlling interests Earnings per equity share a) Basic b) Diluted Other comprehensive income - Items that will not be reclassified to profit or loss - Income tax relating to Items that will not be reclassified to profit or loss - Items that will be reclassified to profit or loss - Income tax relating to Items that will be reclassified to profit or loss Total comprehensive income for the period Attributable to: Owners/Shareholders Non controlling interests Profit/ loss + other comprehensive income

27. It will be appropriate to present separately from the balance sheet, a statement titled “statement of changes in equity forming part of balance sheet”.

28. THE SUPREME INDUSTRIES LIMITED Statement of changes in equity for the period ended……. Equity share capital Opening balance as at 1 Apr 20XX Changes in equity share capital during the year Closing balance as at 31 Mar 20XX xxxx Equity shares of Rs.xxxx each       Other Equity Opening balance as at 1 Apr 20XX Changes in accounting policy/ prior period errors Restated balance as at 1 Aprl 20XX Total comprehensive income for the year Dividends Transfer to retained earnings Any other change (to be specified) Closing balance as at 31 Mar 20XX Equity component of other financial instrument Retained Earnings @ Reserves Reserves representing unrealised gains/ losses - Debt instruments through other comprehensive income - Equity instruments through other comprehensive income - Effective portion of cash flow hedges - Revaluation surplus - Remeasurements of the net defined benefit plans - Exchange differences on translating the financial statements of a foreign operation - Others Other reserves (to be specified separately) Total reserves               Money received against share warrants Others

29. It will be appropriate to present separately from the balance sheet, a statement titled “statement of changes in equity forming part of balance sheet”. An entity shall not describe financial statements as complying with Ind ASs unless they comply with all the requirements of Ind ASs. Therefore, unless all the requirements of Ind ASs are complied with, the entity cannot claim compliance with the Ind ASs.

30. Other comprehensive income 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. The components of other comprehensive income include: Changes in revaluation surplus (see Ind AS 16 Property, Plant and Equipment and Ind AS 38 Intangible Assets). Actuarial gains and losses on defined benefit plans recognised in accordance with paragraph 92 and 129A of Ind AS 19 Employee Benefits. Gains and losses arising from translating the financial statements of a foreign operation (see Ind AS 21 The Effects of Changes in Foreign Exchange Rates). Gains and losses on remeasuring available-for-sale financial assets (see Ind AS 39 Financial Instruments: Recognition and Measurement). The effective portion of gains and losses on hedging instruments in a cash flow hedge (see Ind AS 39).

31. References to matters contained in other Indian Accounting Standards Distributions of Non-cash Assets to Owners contained in Ind AS 10 Events after the Reporting Period. Changes in Existing Decommissioning, Restoration and Similar Liabilities contained in Ind AS 16, Property, Plant and Equipment IAS 19—The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction contained in Ind AS 19 Employee Benefits. Intangible Assets—Web Site Costs contained in Ind AS 38, Intangible Assets. Extinguishing Financial Liabilities with Equity Instruments contained in Ind AS 39 Financial Instruments: Recognition and Measurement.

32. thank you C A Anil Soni The Supreme Industries Ltd. (XF Division) Ph. 9601040709 Email – [email protected]