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NOTES TO ACCOUNTS

Aarey Drugs & Pharmaceuticals Ltd.

You can view the entire text of Notes to accounts of the company for the latest year
Market Cap. (₹) 42.09 Cr. P/BV 0.49 Book Value (₹) 37.11
52 Week High/Low (₹) 51/16 FV/ML 10/1 P/E(X) 6.44
Bookclosure 14/12/2018 EPS (₹) 2.80 Div Yield (%) 0.56
Year End :2018-03 

NOTE3

First Time Adoption TRANSITIONTOINDAS

These are the First Financial Statements of the Company prepared in accordance with IndAS.

The Accounting Policies set out in Note 1 have been applied in preparing the Financial Statements for the year ended March 31, 2018, the comparative information presented in these Financial Statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet as at April 1, 2016 (the date of transition). In preparing its opening IndAS Balance Sheet, the Company has adjusted the amounts reported previously in Financial Statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Previous GAAP). An explanation of how the transition from Previous GAAP to IndAS has affected the financial position, financial performance and cash flows of the Company is set out in the following tables and notes:

(A) :-EXEMPTIONSAND EXCEPTIONSAVAILED

In preparing these IndAS Financial Statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards, as explained below. The resulting difference between the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and Previous GAAP have been recognized directly in equity (retained earnings or another appropriate category of equity). This Note explains the adjustments made by the Company in restating its Previous GAAP Financial Statements, including the Balance Sheet as at April 1, 2016 and the Financial Statements as at and for the year ended March 31,2017.

a) IndAS optional exemptions

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Previous GAAP to IndAS. i) Deemed cost

The Company has elected to measure all items of property, plant and equipment and intangible assets at its carrying value at the transition date.

b) IndAS mandatory exceptions

The Company has applied the following exceptions from full retrospective application of IndAS as mandatorily required under IndAS 101: i) Estimates

Estimates in accordance with IndAS at the transition date will be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in Accounting Policies) unless there is objective evidence that those estimates were in error.

IndAS estimates as atApril 1,2016 are consistent with the estimates as at the same date made in conformity with Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Previous GAAP:

1) Investment in equity instruments carried at FVPL or FVOCI

ii) Classification and measurement of financial assets

IndAS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to IndAS.

Note 3.2

NOTESTO RECONCILIATION BETWEEN IGAAPAND INDAS a) Property, plant and equipment, and Intangible assets

The Company has elected to measure all items of property, plant and equipment and intangible assets at its carrying value at the transition date.

b) Leasehold land

In terms of Ind AS, the Company has identified, classified and presented transaction of leasehold land as finance lease upon the terms and conditions in existence as on date of transition to IndAS.

c) Investments in debt instruments - interest free loans

Loans given is a financial asset, which needs to be measured at amortized cost. As per Previous GAAP interest free loans was measured at transaction amount. In accordance with Ind AS 109 Finance Instruments, the Company has measured the loan given retrospectively at amortized cost on the date of transition.

Accordingly, the difference between the transaction amount and its fair value at the date of transaction has been recorded as deferred interest expense with a corresponding impact to the loans.

d) Deferred tax

Under Previous GAAP, deferred tax were accounted for using the income statement approach which focuses on differences between taxable profit and accounting profit for the period. IndAS 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 taxes on temporary differences which were not required to be recorded under Previous GAAP.

In addition, the various transitional adjustments have led to deferred tax implications which the Company has accounted for. Deferred tax adjustments are recognized in correlation to the underlying transaction either in Retained earnings or Other
Comprehensive Income on the date of transition.

e) Retained earnings

Retained earnings as at April 1, 2016 have been adjusted consequent to the above IndAS transition adjustments.

f) Other Comprehensive Income

Under IndAS, all items of income and expense recognized in a period are to be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss, but are shown in the Statement of Profit and Loss as Other Comprehensive Income which includes measurement of defined benefit plans, effective portion of gain | (loss) on cash flow hedging instruments and fair value gain | (loss) on FVOCI equity instruments. The concept of Other i Comprehensive Income did not exist under Previous GAAP.

(c) Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share .Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of directors is subject to the approval of the shareholders in ensuing Annual General Meeting. In event of liquidation of the Company the holders of equity shares would be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The Distribution will be in proportion to V the number of equity shares held by the shareholders.

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