Note 1: Notes forming part of the financial statements
Corporate Overview
Darjeeling Ropeway Co Limited, incorporated on 16/10/1936, having its registered office at Office no. GF17, Ground floor, HDIL Harmony Mall, 1A/58, New Link Road, Goregaon-west, Mumbai- 400104.
Note: 2 Explanation of Transition to Ind AS
The transition as at April 1, 2017 to Ind AS was carried out from the previous GAAP. The exemptions and exceptions applied by the Company in accordance with Ind AS 101 - First Time Adoption of Indian Accounting Standards.
Financial Instruments
(a) Financial Assets
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, a financial asset is recognised at fair value. In case of Financial assets which are recognised at fair value through profit and loss (FVTPL), its transaction cost are recognised in the statement of profit and loss. In other cases, the transaction cost are attributed to the acquisition value of the financial asset. Financial assets are subsequently classified and measured at
- amortised cost
- fair value through profit and loss (FVTPL)
- fair value through other comprehensive income (FVOCI).
Financial assets are not reclassified subsequent to their recognition, except if and in the period the Company changes its business model for managing financial assets.
(b) Financial Liabilities
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expires.
Explanation to treatment of Change in Fair Value of Investments
As per previously applied GAAP, the Quoted securities were valued as Cost or Net Realisable Value whichever is lower.
As per Ind AS, the Investments can be valued as per Fair Value through Profit & Loss (FVTPL) or Fair Value through Other Comprehensive Income (FVTOCI) or Ammortised Cost.
We have treated the investments at FVTPL, so both the realized/ unrealized profit/ loss will be shown in the profit & loss account. It is to note that the current tax implication will only be on the realized Profit/ Loss and not on unrealized Profit/Loss whereas deferred tax will be created for the unrealized portion.
The other income of the current year includes Rs 651,486/- on account of unrealized profit due to the change in Fair Value of Investments. Deferred Tax adjustment against the same is done.
Alternatively, the investments could be passed through OCI, where the unrealized profit/loss would have been reflected as below the line item and the realized profit/loss as above the line item.
The PBT as per FVTPL is Rs. 68,92,011/- whereas if the investment would have been considered though OCI the PBT would have been Rs. 62,76,525/- The difference is Rs. 651,486/- which is on account of Change in Fair value of Investment, due to unrealized profit on account of change in fair value of investment passed though Profit and Loss Account. The PAT remains same under both the methods.
The reconciliation of equity and total comprehensive income in accordance with Previous GAAP to Ind AS are explained below.
Reconciliation between Previous GAAP and Ind AS
iii. Reconciliation of Statement of Cash Flow
There are no material adjustments to Statement of Cash Flows as reported under the Previous GAAP.
Note: "Previous Year's figure have been regrouped rearranged wherever considered necessary".
(ii) Rights, preferences and restrictions attached to Shares
The Company has only one class of equity shares having a par value of Rs 10 each. Each shareholder is eligible for one vote per share held.
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