CorporateFinancialReporting

Session8,9and10:PGP201719
PreparingandunderstandingBalanceSheet
 LearningGoals
ElementsofBalanceSheet
PreparationandUnderstandingofClassifiedBalanceSheet(orStatement
ofFinancialPosition)
Assets:
CurrentAssetsandNonCurrentAssets
Liabilities:
CurrentLiabilitiesandLongtermLiabilities
NetWorth,Preference&Equity,BonusShare,StockSplit&Buyback
CapitalEmployed,NetWorkingCapital
RealLifeBalanceSheets HindalcoandInfosys
Chemalite Inc.Case

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 ClassifiedBalanceSheet
Presents asnapshotatapointintime
TotalInvesting=TotalFinancing
=CreditorFinancing+OwnerFinancing
Toimproveunderstanding,companiesgroupsimilarassetsandliabilities
together

Longterm

3
US

Sequencing:OrderofLiquidity(US) 4
 ClassifiedBalanceSheet VerticalFormat
US

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IFRS Assets
1. Non-Current Assets
a. Property, Plant and Equipment
b. Intangible Assets
c. Investments and other Assets
2. Current Assets
a. Inventories
b. Trade and other Receivables
c. Prepaid Expenses
d. Cash and Cash Equivalents
Total Assets

Equity and Liabilities

1. Capital and Reserves
a. Issued Share Capital
b. Share premium
c. Retained Earnings
2. Non Current Liabilities
a. Interest bearing Borrowing
b. Deferred Tax
3. Current Liabilities
a. Trade and other Payables
b. Accrued Expenses
c. Short term borrowings
d. Current tax payable
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India Asper ScheduleIIIofCompaniesAct(Permitsonlyverticalformat) OLD
AssetsfollowtheEquity&Liabilities

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HINDALCO

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 India Asper REVISEDScheduleIIIof
CompaniesAct 2013
AssetsarefollowedbyEquity&Liabilities
ASSETS
1 Noncurrentassets EQUITYANDLIABILITIES
a Property,plantandequipment EQUITY
b Capitalworkinprogress Equitysharecapital
a
c InvestmentProperty
b Otherequity
d Goodwill
TotalEquity
e OtherIntangibleassets
f Intangibleassetsunderdevelopment LIABILITIES
g BiologicalAssetsotherthanbearerplants 1 Noncurrentliabilities
h Financialassets a Financialliabilities
i Investments i Borrowings
ii Tradereceivables ii Tradepayables
iii Loans Otherfinancialliabilities(otherthanthose
Iii
iv Others(tobespecified) specifiedinitem(b),tobespecified)
i Deferredtaxassets(net)
b Provisions
j Othernoncurrentassets
c Deferredtaxliabilities(net)
Totalnoncurrentassets
2 Currentassets d Othernoncurrentliabilities
a Inventories Totalnoncurrentliabilities
b Financialassets 2 Currentliabilities
i Investments a Financialliabilities
ii Tradereceivables i Borrowings
iii Cashandcashequivalents ii Tradepayables
iv Bankbalancesotherthan(iii)above Otherfinancialliabilities(otherthanthose
v Loans specifiedinitem(c)
iii
vi Others(tobespecified)
b Othercurrentliabilities
c CurrentTaxAssets(Net)
d Othercurrentassets c Provisions
Totalcurrentassets d Currenttaxliabilities(net)
TOTALASSETS Totalcurrentliabilities 9
TOTALEQUITYANDLIABILITIES
20072017 10
 ElementsofFinancialStatements(BS)
ASSETS
A(present)resourcecontrolled byan
entityasaresultofpastevents and
fromwhichfutureeconomicbenefits are
expectedtoflowtotheentity
1. FutureEconomicBenefitisprobable
toflowin(direct/indirectcashinflow)
2. Control:Righttousetheitemtothe
exclusionofothers
3. Resultofapastevent
IsInvestmentinsharesofacompany
whichvanishedafterIPOanasset?
IsSalarypaidtoemployeesanasset?
Isintentiontopurchaseanequipmentan
asset?
Arepatentsownedbyanentityanasset?
Ex:Building,PlantandMachinery,
Inventories,Accountsreceivables,Cash
LIABILITIES
Presentobligationoftheentityarisingfrompast
events,thesettlementofwhichisexpectedto
resultinanoutflowfromtheenterpriseof
resourcesembodyingeconomicbenefits
1. Economicbenefitisexpectedtoflowoutofthe
entitytosettletheliability
Settlementcanoccurthroughpaymentofcash,
transferofasset,replacementwithotherliability
2. Test:Norealisticalternativebuttosettlethe
obligation
3. Resultofpastobligatingevent
Canbe
Contractual(Borrowings,creditors),
Arisingfromoperationoflaw(taxpayable,
penaltyimposed)
Ex:Borrowings,Bonds/Debentures,Advances
fromcustomers,AccountsPayable,Wages
outstanding,Taxespayable 11
 ElementsofFinancialStatements(BS):ShareholdersEquity

SHAREHOLDERSEQUITY:
Theownersfundsinvestedandearnedinthebusiness.
Itistheresidualinterestorclaimsoftheownersintheassetsoftheentity
afterdeductingallitsliabilities
ContributedCapital(Original+New)
+RetainedEarnings(ProfitslessDistributionstoequityholders)
RetainedEarnings:
Measureofundistributedprofitsofabusiness
RetainedEarningsbalance=
(Cumulativesumofprofitsearnedsinceinception)
(Cumulativesumofdividenddistributedsinceinception)
Dividends:Distributiontotheownersoutoftheprofitsearnedbythe
business
Revenues increaseRE,ExpensesandDividendsdecreaseRE.
Increaseinassets withoutanychangeinliabilities>increasesequity
Decreaseinassets withoutanychangeinliabilities>decreasesequity

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ASSETS

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 CurrentAssets
Definition:
Anentityshallclassifyanassetascurrent when
(a)itexpectstorealizetheasset,orintendstosellorconsumeit,initsnormaloperatingcycle;
(b)itholdstheassetprimarilyforthepurposeoftrading;
(c)itexpectstorealizetheassetwithintwelvemonthsafterthereportingperiod;or
(d)theassetiscashoracashequivalentunlesstheassetisrestrictedfrombeingexchangedor
usedtosettlealiabilityforatleasttwelvemonthsafterthereportingperiod.

Anentityshallclassifyallotherassetsasnoncurrent.

Cashandotherassetsreasonablyexpectedtobeconvertedtocash,consumed,orsold
withinoneyearorwithinitsnormaloperatingcycle,whicheverislonger
Current assets
Cash $41,440
Short-term investments 28,000
Notes receivable 32,000
Accounts receivable 141,200
Inventory 191,600
Prepaid insurance 26,400
Supplies 6,784
Total current assets $467,424
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 OperatingCycle

Manufacturing/MerchandisingCompany
CreditSales
Purchase Cash
Collect of
CashSales
Cashfrom Inventory Credit:
Customer Paymentof
(RM,Mer)
cashtoA/P
Customer
Service acceptsFG Usuallylessthan
Company oneyear.
Ifnotidentifiable,assumed
Deliverthe tobe12months
Cash product, Convert
Sendsales RMintoFG
invoice
Perform
A/R Services
Receive Storethe Inspect
Orderfrom productin FG
customer warehouse

Timebetweentheacquisitionofassetsforprocessingandtheirrealisation incashorcashequivalents.
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 HUL
CurrentAssets

CashandCashequivalents:
CE:Shortterm(withmaturity<3Months),highlyliquidinvestmentsthatarereadilyconvertibleto
knownamountsofcash&whicharesubjecttoinsignificantriskofchangesinvalue,Likegovtsecurities
(Tbills)
ShortTermInvestments(orMarketableSecurities):(CurrentInvestments)
Investmentsingovt.bondsorcorporatestocks/bondswhichtheentityplanstoholdfora
relativelyshortperiod(<1year),Temporaryuseofidlecash
Notes/BillsReceivable:WrittenpromisestopaybyborrowersorothersintheformofBillsof
exchange,Promissorynote
AccountsReceivableorSundryDebtorsorTradeReceivable:
Amountsduefromothersthatgenerallyarisefromthesaleofgoodsorservices
ReportedafterdeductingProvisionfordoubtfuldebt NetAmountrealizable
Inventory:Assetsthatare
Heldforsaleinordinarycourseofbusiness(FG),
Inprocessofproductionforsale(WIP),or
Tobeconsumedinproductionofgoodsorservicestobesold(RM)
CostsinInventorygetsrecognizedinI.S.whenrelatedsalesoccur,measuredatLCM
Supplies:Papers,envelopesetc
PrepaidExpenses:AdvancepaymentsforservicesorgoodsnotyetreceivedlikePrepaid
insurance,PrepaidRent 16
 Inventoriesshallbeclassifiedas
2 Currentassets (a)Rawmaterials;(b)Workinprogress;(c)Finishedgoods;
a Inventories (d)Stockintrade(inrespectofgoodsacquiredfortrading);
Financialassets (e)Storesandspares;(f)Loosetools;and(g)Others(specifynature).
b
Investments Goodsintransitshallbedisclosedundertherelevantsubheadof
i
inventories.Modeofvaluationshallbestated.
ii Tradereceivables
iii Cashandcashequivalents Tradereceivablesshallbesubclassifiedas:
(a)Secured,consideredgood;
iv Bankbalancesotherthan(iii)above
(b)Unsecuredconsideredgood;and
v Loans (c)Doubtful.
vi Other financialassets (tobespecified) Allowanceforbadanddoubtfuldebtsshallbedisclosedunder
therelevantheadsseparately
c CurrentTaxAssets(Net)
Cashandcashequivalentsshallbeclassifiedas
d Othercurrentassets a.BalanceswithBanks(ofthenatureofcashandcashequivalents);
Totalcurrentassets b.Cheques,draftsonhand;
c.Cashonhand;and
Afinancialassetisanyassetthatis: d.Others(specifynature).
cash;oranequityinstrumentofanotherentity;or
acontractualright:toreceivecashoranotherfinancialasset Loans shallbeclassifiedas
fromanotherentity;or (a)SecurityDeposits;
toexchangefinancialassetsorfinancialliabilitieswith (b)Loanstorelatedparties(givingdetailsthereof)and
anotherentityunderconditionsthatarepotentially (c)Otherloans(specifynature).
favourable totheentity;or
acontractthatwillormaybesettledintheentitysown
equityinstrumentsundercertaincircumstances
Othercurrentassetsincludes Advancesotherthancapitaladvances
Investments shallbeclassifiedas: UnbilledRevenue:FinancialAsset
(a)InvestmentsinEquityInstruments; Prepaidrent:NotaFA OtherCurrentAssets
(b)InvestmentsinPreferenceShares; Undereachclassification,detailsshallbe
(c)InvestmentsinGovernmentortrust givenofnamesofthebodiescorporate Thefollowingshallalsobedisclosed:
securities; thatare (a)Aggregateamountofquotedinvestmentsand
(d)Investmentsindebenturesorbonds; (i)subsidiaries, marketvaluethereof;
(e)InvestmentsinMutualFunds; (ii)associates, (b)Aggregateamountofunquotedinvestments;and
(f)Investmentsinpartnershipfirms;or (iii)jointventures,or (c)Aggregateamountofimpairmentinvalueof17
(g)Otherinvestments(specifynature). (iv)structuredentities, investments.
CurrentAssets Infosys

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 2.5Investments 2017 2016
Noncurrentinvestments 2.6Loans 2017 2016

Equityinstrumentsofsubsidiaries 7,305 6,901

Noncurrent
Debenturesofsubsidiary 2,129 2,549 Unsecured,consideredgood
Preferencesecurities,equityinvestments 132 93 Otherloans
Others 3 Loanstoemployees 5 5
Taxfreebonds 1,833 1,533 5 5
Fixedmaturityplansecurities 357 Unsecured,considereddoubtful
Loanstoemployees 17 13
Nonconvertibledebentures 3,575
22 18
15,334 11,076 Less:Allowancefordoubtfulloanstoemploye 17 13
Currentinvestments 5 5
Liquidmutualfundunits 1,755 Current
Fixedmaturityplansecurities 151 Unsecured,consideredgood
Certificatesofdeposit 7,635 Loanstosubsidiaries(RefertoNote2.25) 69 91
Otherloans
Governmentbonds 2
Loanstoemployees 241 264
Nonconvertibledebentures 102 310 355
9,643 2 Totalloans 315 360
Totalcarryingvalue 24,977 11,078
Currentassets 2017 2016
2.7OtherFinancialAssets 2017 2016 Financialassets
Noncurrent
Investments 2.5 9,643 2
Securitydeposits(1) 81 73
Rentaldeposits(1)(4) 135 119 Tradereceivables 2.8 10,960 9,798
216 192 Cashandcashequivalents 2.9 19,153 29,176
Current Loans 2.6 310 355
Securitydeposits(1) 2 1
Otherfinancialassets 2.7 5,403 4,801
Rentaldeposits(1) 2 2
Restricteddeposits 1,309 1,154 Othercurrentassets 2.1 2,213 1,965
Unbilledrevenues 3,200 2,673 Totalcurrentassets 47,682 46,097
Interestaccruedbutdue(1) 514 696
Foreigncurrencyforwardandoptionscontracts 268 109
Others(1)(6) 108 166 NotesReceivable > Otherfinancialassets
5403 4801 PrepaidExpenses >OtherCurrentAssets
Total 5619 4993 19
 2.10Otherassets 2017 2016
2.8Tradereceivables 2017 2016 Noncurrent
Current Capitaladvances 562 333
Unsecured Advancesotherthancapitaladvance
Consideredgood(2) 10,960 9,798 Prepaidgratuity(RefertoNote2.22) 56 2
Considereddoubtful 289 249 Others
11,249 10,047 Prepaidexpenses 95 87
Deferredcontractcost 283 333
Less:Allowancesforcreditlosses 289 249
996 755
10,960 9,798
Current
1)Includesduesfromcompanieswhere
Advancesotherthancapitaladvance
directorsareinterested 1 1
Paymenttovendorsforsupplyofgoods 87 58
2)Includesduesfromsubsdiaries(Referto
Prepaidexpenses(1) 387 209
Note2.25) 235 244 Deferredcontractcost 74 48
Withholdingtaxesandothers 1,665 1650
2.9Cashandcashequivalents 2017 2016 2213 1965
Balanceswithbanks TotalotherAsset 3209 2720
Incurrentanddepositaccounts 12,222 24,276 Currentassets 2017 2016
CashonhandOthers Financialassets
Depositswithfinancialinstitution 6,931 4,900
Investments 2.5 9,643 2
19,153 29,176 Tradereceivables 2.8 10,960 9,798
Balanceswithbanksinunpaiddividend Cashandcashequivalents 2.9 19,153 29,176
accounts 17 5 Loans 2.6 310 355
Depositwithmorethan12monthsmaturity 6,765 237 Otherfinancialassets 2.7 5,403 4,801
Balanceswithbanksheldasmarginmoney
Othercurrentassets 2.1 2,213 1,965
depositsagainstguarantees 394 336
Totalcurrentassets 47,682 46,097
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 CurrentAssets HINDALCO

Current Assets 2016 2015

Current Investments 17 7,669.53 6,468.93
Inventories 18 8,412.11 8,821.23
Trade Receivables 19 2,018.52 1,832.18
Cash and Bank Balances 20 217.82 984.18
Short-term Loans and Advances 21 4,300.87 3,879.67
Other Current Assets 22 1,533.27 943.01
24,152.12 22,929.20
76,126.69 76,000.64

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17.Current Investments: 2016 2015 19. Trade Receivables: 2016 2015
Investment in Preference Shares
Outstanding for a period exceeding six months
8.75% L&T Finance Holdings Ltd. - 12.18
Investments in Debentures and Bonds
Secured, Considered Good 0 0
Investment in Associate Unsecured, Considered Good 64.69 60.17
9.45% NCD of IDEA Cellular Limited 10.13 10.04 Unsecured, Considered Doubtful 34.66 34.84
Investment in Other Entities: Less: Provision for Doubtful Amount -34.66 -34.84
1,821.26 928.99 64.69 60.17
Investment in Government Securities
Outstanding for a period less than six months:
274.02 246.76
Investments in Commercial Papers Secured, Considered Good 3.12 3.29
657.57 577.37 Unsecured, Considered Good 1,950.71 1,768.72
Investments in Certificate of Deposits 1,953.83 1,772.01
827.87 458.99 2,018.52 1,832.18
Investment in Mutual Funds
Investment in Debt Schemes of Mutual Fund -(b) 4,088.81 4,244.64
CurrentAssets HINDALCO
7,669.53 6,468.93

18. Inventories: As at 31/03/2016 As at 31/03/2015

In Hand Transit Total In Hand Transit Total
Raw Materials 1,847.11 1,522.87 3,369.98 1,010.95 2,170.43 3,181.38
Finished Goods 849.8 - 849.8 556.13 0.81 556.94
Work -in-progress 3,355.74 - 3,355.74 3,842.98 - 3,842.98
Stores and Spares 425.79 13.41 439.2 372.19 10.54 382.73
Coal and Fuel 380.47 16.92 397.39 490.14 367.06 857.2
6,858.91 1,553.20 8,412.11 6,272.39 2,548.84 8,821.23
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20. Cash and Bank Balances: 2016 2015 22 Other Current Assets: 2016 2015
Cash and Cash Equivalents
Balance with Banks: Accrued Interest 106.48 96.86
Deposits with less than 3 months initial Accrued Export and Other Incentives 220.08 234.23
maturity 0.05 200
Dividend Receivables 3.55 -
Current Accounts 60.95 88.37
Cheques and drafts on hand - (a) 52.51 14.81 Derivative Assets (refer Note No. 49 (c) 1,113.80 511.12
Cash on hand 0.47 0.39 Assets held for Sale 69.96 79.68
113.98 303.57
Other Receivables 19.4 21.12
Other Balances
Balance with Banks: 1,533.27 943.01
Earmarked Balances 12.4 6.85 Unsecured, Considered Doubtful 1.11 1.11
Deposits with more than 3 months initial matur 91.44 673.76
103.84 680.61
Less: Provision for Doubtful Amount -1.11 -1.11
217.82 984.18 1,533.27 943.01
21. Short-term Loans and Advances: 3/31/2016 3/31/2015
Loans, Advances and Deposits to Related Parties 27.76 20.28
Security Deposits:
Unsecured, Considered Good 23.19 24.93 CurrentAssets
Unsecured, Considered Doubtful 0.25 0.25
Less: Provision for doubtful amount -0.25 -0.25
HINDALCO
23.19 24.93
Advances recoverable in cash or in kind
Unsecured, Considered Good 1,427.56 2,097.61
Doubtful 66.48 42.04
Less: Provision for doubtful amount -66.48 -42.04
1,427.56 2,097.61
Other Advances and Balances
Balance with Government Authorities 58.52 75.62
Prepaid Expenses 32.46 22.33
Others - (a) 2,731.38 1,638.90
4,300.87 3,879.67
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 NonCurrentAssets
Assetswhichareexpectedtoprovidebenefitsbeyondoneyear.Includes:
LongTermInvestments,Property,PlantandEquipment,IntangibleAssets
Investments - Long Term
Land held for future use 50,000
Property, plant, and equipment
Land $18,000
Building $82,600
Less: Accumulated depreciation 34,560 48,040
Equipment $108,000
Less: Accumulated depreciation 57,800 50,200
Total property, plant, and equipment 116,240
Intangible assets
Trademark 2,000
Total assets $635,664

Non-Current Assets HINDALCO 2016 2015

Fixed Assets:
Tangible Assets 12 32,700.57 26,035.87
Intangible Assets 13 112.91 24.02
Capital Work-in-Progress 3,083.27 10,743.61
Intangible Assets under Development 0.33 0.02
35,897.08 36,803.52
Non-Current Investments 14 14,797.33 14,781.75
Long-term Loans and Advances 15 1,200.08 1,454.73
Other Non-Current Assets 16 80.08 31.44
51,974.57 53,071.44
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 Property,Plant,&EquipmentandIntangibleassets

PPE:Longtermtangibleassetslikelandandbuildingsusedincontinuingoperations,
saytoproduce,sellanddelivergoodsorservices
Depreciation*: Systematicallocationofdepreciableamountoverusefullife
BasedonEst.usefullives,Est.ResidualValue,Choiceofmethod
India CompaniesAct:Usefullife(ScheduleIIofCompaniesAct2013)
IncludesNaturalresourcesownedlikeCoalMinesifusedinnormalcourse
ofbusiness(OtherwisecategorizedasInvestment)
IntangibleAssets:Longtermassetswithnophysicalsubstancebuthelpinproduction
orsupplyofgoodsorservicesthrough rightsandprivilegesassociatedwiththeir
possessionlikecopyrights,goodwill,franchises,patents
RecognizedatCost,Amortizedexceptgoodwill(reviewedforimpairment)
Property, plant, and equipment
Land $18,000
Building $82,600
Less accumulated depreciation 34,560 48,040
Equipment $108,000
Less accumulated depreciation 57,800 50,200
Total property, plant, and equipment 116,240
Intangible assets
Trademark 2,000
* AverageAgeofAssets=AccumulatedDepreciation/Depreciation 25
 LongtermInvestments

Assetsnotusedinnormaloperationsofbusiness.Managementdoesnot
plantoconverttocashinnextyear.
FinancialAssets:Investmentsinstocks andbonds ofothercompaniesthat
areheldformorethanoneyear
toearnincomebywayofDividend,Interest,orCapitalappreciation,
or
forthepurposeofcontrollingtheinvesteecompany
Specialfundsestablishedtopayoffadebt(likepensionfund)orbuya
building
Investmentsinlongtermassets suchaslandorbuildingsheldinorderto
earnrentals/forcapitalappreciationpurposesorboth
andisnotintendedtobeusedforproduction/administrativepurposes
orforsaleintheordinarycourseofbusiness(heldforfutureuse)
(calledInvestmentProperty ShownseparatefromInvestmentsinrevisedIndianBS)

ClassificationintoLongtermandCurrent:Basedonmanagementsintended
periodofholdingthem,atthetimeofpurchase 26
1 Noncurrentassets
a Property,plantandequipment
b Capitalworkinprogress
c InvestmentProperty
d Goodwill
e OtherIntangibleassets
f Intangibleassetsunderdevelopment
g BiologicalAssetsotherthanbearerplants
h Financialassets
i Investments
ii Tradereceivables
iii Loans
iv Other FinancialAssets(tobespecified)
i Deferredtaxassets(net)
j Othernoncurrentassets
Totalnoncurrentassets
Biologicalassetsrelatestoagriculturalactivity.
Bearerplants(fruitbearingplants)comeunderPPE
(butfruits,theproducedont)
Areconciliationofthegrossandnetcarrying
amounts ofeachclassofassetsatthebeginning
andendofthereportingperiodshowing
additions,disposals,acquisitionsthroughbusiness
combinationsandotheradjustmentsandthe
relateddepreciationandimpairmentlossesor
reversalsshallbedisclosedseparately.
PPEClassificationshallbegivenas:
(a)Land(b)Buildings(c)PlantandEquipment
(d)FurnitureandFixtures(e)Vehicles(f)Officeequipment
(g)BearerPlants(h)Others(specifynature)(ii)Assetsunder
leaseshallbeseparatelyspecifiedundereachclassofassets
CapitalWorkinProgress:PPEunderconstructionornotyet
installedonBSdate
Nodepreciationcharged
IntangibleassetsClassificationshallbegivenas:
(a)Brandsortrademarks(b)Computersoftware
(c)Mastheadsandpublishingtitles(d)Miningrights
(e)Copyrights,patents,otherintellectualpropertyrights,
servicesandoperatingrights
(f)Recipes,formulae,models,designsandprototypes
(g)Licensesandfranchises(h)Others(specifynature)
Bankdepositswithmorethan12monthsmaturityshallbe
disclosedunderOtherfinancialassets
Othernoncurrentassetsshallbeclassifiedas
(i)CapitalAdvances;and
(ii)Advancesotherthancapitaladvances theseshallbe
classifiedas:
(a)SecurityDeposits;
(b)Advancestorelatedparties(givingdetails
thereof);and(c)Otheradvances(specifynature).
27
Non CurrentAssets Infosys

28
 INFOSYS Land Land Buildin Plant& Office Computer Furnitur Vehicl
2.3Property,Plantandequipment freehold Leasehol gs Machiner equipmen Equipmen e es Total

GrossCarryingvaluesasofApril1,2016 970 638 6173 1679 679 3481 1070 19 14709

Additions 123 21 310 344 122 654 237 6 1817
Deletions 0 0 0 4 32 249 30 1 316
GrossCarryingvaluesasofApril1,2017 1093 659 6483 2019 769 3886 1277 24 16210

AccumlateddepreciationasofApril,2016 0 21 2150 1044 369 2195 671 11 6461

Depreciation 0 5 227 250 111 572 162 4 1331
Accumlateddepreciationondeletions 0 0 0 4 8 164 10 1 187
AccumlateddepreciationasofMarch31,2017 0 26 2377 1290 472 2603 823 14 7605

CarryingvalueasofMarch31,2017 1093 633 4106 729 297 1283 454 10 8605

CarryingasofApril,12016 970 617 4023 635 310 1286 399 8 8248

Noncurrentassets 2017 2016
SubContracting Property,plantandequipment 2.3 8,605 8,248
2.4IntangibleAsset Others Total
rightsrelated
Capitalworkinprogress 1,247 934
GrosscarryingvalueasofApril1,2016 21 9 30 Intangibleassets 2.4 0 0
Additions 0 0 0
Financialassets
Deletion 0 0 0
Investments 2.5 15,334 11,076
GrosscarryingvalueasofMarch31,2017 21 9 30
AccumulatedamortizationasofApril1,2016 21 9 30 Loans 2.6 5 5
Amortizationexpense 0 0 0 Otherfinancialassets 2.7 216 192
Deletion 0 0 0 Deferredtaxassets(net) 2.17 346 405
AccumulatedamortizationasofMarch31,2017 21 9 30 Othernoncurrentassets 2.1 996 755
CarryingvalueasofMarch31,2017 0 0 0 Incometaxassets(net) 2.17 5,454 29
5,020
CarryingvalueasofApril1,2016 0 0 0 Totalnoncurrentassets 32,203 26,635
 2.5Investments 2017 2016
2.6Loans 2017 2016
Noncurrentinvestments
Equityinstrumentsofsubsidiaries 7,305 6,901 Noncurrent
Debenturesofsubsidiary 2,129 2,549 Unsecured,consideredgood
Preferencesecurities,equityinvestments 132 93 Otherloans
Others 3 Loanstoemployees 5 5
5 5
Taxfreebonds 1,833 1,533
Unsecured,considereddoubtful
Fixedmaturityplansecurities 357
Loanstoemployees 17 13
Nonconvertibledebentures 3,575 22 18
15,334 11,076 Less:Allowancefordoubtfulloanstoemploye 17 13
Currentinvestments 5 5
Liquidmutualfundunits 1,755 Current
Fixedmaturityplansecurities 151 Unsecured,consideredgood
Loanstosubsidiaries(RefertoNote2.25) 69 91
Certificatesofdeposit 7,635
Loanstoemployees 241 264
Governmentbonds 2 310 355
Nonconvertibledebentures 102 Totalloans 315 360
9,643 2
Totalcarryingvalue 24,977 11,078
Noncurrentassets 2017 2016
2.7OtherFinancialAssets 2017 2016 Property,plantandequipment 2.3 8,605 8,248
Noncurrent Capitalworkinprogress 1,247 934
Securitydeposits(1) 81 73 Intangibleassets 2.4
Rentaldeposits(1)(4) 135 119
Financialassets
216 192
Current Investments 2.5 15,334 11,076
Securitydeposits(1) 2 1 Loans 2.6 5 5
Rentaldeposits(1) 2 2
Otherfinancialassets 2.7 216 192
Restricteddeposits 1,309 1,154
Unbilledrevenues 3,200 2,673 Deferredtaxassets(net) 2.17 346 405
Interestaccruedbutdue(1) 514 696 Othernoncurrentassets 2.1 996 755
Foreigncurrencyforwardandoptionscontracts 268 109 Incometaxassets(net) 2.17 5,454 5,020
Others(1)(6) 108 166
Totalnoncurrentassets 32,203 26,635
5403 4801
Total 5619 4993 30
 Noncurrentassets 2017 2016
Property,plantandequipment 2.3 8,605 8,248
2.10Otherassets 2017 2016
Noncurrent
Capitalworkinprogress 1,247 934
Capitaladvances 562 333
Intangibleassets 2.4 0 0 Advancesotherthancapitaladvance
Financialassets Prepaidgratuity(RefertoNote2.22) 56 2
Investments 2.5 15,334 11,076 Others
Loans 2.6 5 5 Prepaidexpenses 95 87
Deferredcontractcost 283 333
Otherfinancialassets 2.7 216 192
996 755
Deferredtaxassets(net) 2.17 346 405
Current
Othernoncurrentassets 2.10 996 755 Advancesotherthancapitaladvance
Incometaxassets(net) 2.17 5,454 5,020 Paymenttovendorsforsupplyofgoods 87 58
Totalnoncurrentassets 32,203 26,635 Prepaidexpenses 387 209
Deferredcontractcost 74 48
Withholdingtaxesandothers 1,665 1650
2213 1965
TotalotherAsset 3209 2720

2.17Incometaxes 2017 2016

Currenttaxes 5,068 4,898
Deferredtaxes 52 9
Incometaxexpense 5,120 4,907

Netcurrentincometaxasset/(liability)atthebeginning 1716 1263

Incometaxpaid 5033 5350
Currentincometaxexpense(RefertoNote2.17) 5068 4898
Incometaxonothercomprehensiveincome 8
Taxbenefitontheexerciseofsharebasedpayments 1
Translationdifference 2 1 31
Netcurrentincometaxasset/(liability)attheend 1692 1716
 2.17Incometaxes 2017 2016
Currenttaxes 5,068 4,898
Deferredtaxes 52 9
Incometaxexpense 5,120 4,907

Deferredincometaxassets (pg147)
Noncurrentassets 2017 2016
Property,plantandequipment 107 146
Property,plantandequipment 2.3 8,605 8,248
Computersoftware 40 50
Capitalworkinprogress 1,247 934
Accruedcompensationtoemployees 35 46
Intangibleassets 2.4 0 0
Tradereceivables 123 79
Financialassets
Compensatedabsences 336 359
Investments 2.5 15,334 11,076
Postsalesclientsupport 93 76
Loans 2.6 5 5
Others 32 21
Totaldeferredincometaxassets 766 777 Otherfinancialassets 2.7 216 192
Deferredincometaxliabilities Deferredtaxassets(net) 2.17 346 405
Branchprofittax 327 334 Othernoncurrentassets 2.10 996 755
Others 93 38 Incometaxassets(net) 2.17 5,454 5,020
Totaldeferredincometaxliabilities 420 372 Totalnoncurrentassets 32,203 26,635
Deferredincometaxassetsaftersetoff 346 405
Deferredincometaxliabilitiesaftersetoff 32
 NonCurrentAssets HINDALCO

Non-Current Assets 2016 2015

Fixed Assets:
Tangible Assets 12 32,700.57 26,035.87
Intangible Assets 13 112.91 24.02
Capital Work-in-Progress 3,083.27 10,743.61
Intangible Assets under Development 0.33 0.02
35,897.08 36,803.52
Non-Current Investments 14 14,797.33 14,781.75
Long-term Loans and Advances 15 1,200.08 1,454.73
Other Non-Current Assets 16 80.08 31.44
51,974.57 53,071.44

33
12. Tangible Assets HINDALCO
ORIGINAL COST DEPRECIATION IMPAIRMENT NET BOOK VALUE
As at 31st As at 31st As at Deductio As at As at 31st As at 31st
ns/
As at 31st Disposals/ As at 31st March, Disposals/ March, 31st Recognised/ Adjustme 31st March, March,
March. 2015 Additions Adjustments March, 2016 2015 Additions Adjustments 2016 March, Reversal nts March, 2016 2015
Leasehold Land 550.29 135.39 56.08 629.6 26.67 11.03 0 37.7 0 0 0 0 591.9 523.62
Freehold Land 505.35 1.65 8.03 498.97 0.28 0 0 0.28 0 0 0 0 498.69 505.07
Buildings 5157.06 1748.15 8.66 6896.55 593.69 217.15 1.92 808.92 11.57 47.74 0 59.31 6028.32 4551.8
Plant and Equipment 28176.85 6614.8 110.72 34680.93 8099.34 987.77 59.67 9027.44 173.5 498.58 0 672.08 24981.41 19904.01
Furniture and Fixtures 104.84 10.84 1.35 114.33 78.47 5.47 1.24 82.7 0 0.64 0 0.64 30.99 26.37
Vehicles and Aircraft 370.37 15.18 4.83 380.72 134.56 19.07 2.3 151.33 0 0.23 0 0.23 229.16 235.81
Office Equipment 141.55 17.11 7.05 151.61 108.83 9.3 6.86 111.27 0 0.52 0 0.52 39.82 32.72
Railway Sidings 309.68 75.83 0 385.51 50.55 18.03 0 68.58 2.66 13.99 0 16.65 300.28 256.47
35315.99 8618.95 196.72 43738.22 9092.39 1267.82 71.99 10288.22 187.73 561.7 0 749.43 32700.57 26035.87
Previous Year 26682.01 9124.11 490.13 35315.99 35315.99 922.25 265.54 9092.39 221.35 95.26 128.88 187.73 26035.87 18024.98
13. Intangible Assets: ORIGINAL COST AMORTISA TION IMPAIRMENT NET BOOK VALUE
As at 31st Disposals/ As at 31st As at 31st Recognis
Disposals/ As at 31st March, Adjustmen March, March, ed/ Deductions/ As at 31st As at 31st As at 31st
As at 31st March, 2015 Additions Adjustments March, 2016 2015 Additions ts 2016 2015 Reversal Adjustments March, 2016 March, 2016 March, 2015
Computer Software 47.92 7.19 0.11 55 39.56 6.69 0.12 46.13 0 0 0 0 8.87 8.36
Mining Rights 31.25 91.7 0.09 122.86 20.93 1.97 0.09 22.81 0 0 0 0 100.05 10.32
Technology 38.55 0.27 0 38.82 33.21 1.62 0 34.83 0 0 0 0 3.99 5.34
117.72 99.16 0.20 216.68 93.7 10.28 0.21 103.77 0 0 0 0 112.91 24.02
Previous Year 122.18 13.44 17.9 117.72 92.45 6.59 5.34 93.7 0 0 0 0 24.02 29.73

Depreciationfortheyear=1267.82+10.28=1278.10

34
14. Non-Current Investments: Face value per Unit 3/31/2016 3/31/2015 3/31/2016 3/31/2015
LONG TERM TRADE INVESTMENTS Numbers - As at Amount
Investments in Equity Instruments
Investment in Subsidiaries HINDALCO
Utkal Alumina International Limited ` 10 3,971,764,068 3,911,764,068 4,082.03 4,022.03
Dahej Harbour & Infrastructure Limited ` 10 50,000,000 50,000,000 50 50
Birla Resources Pty Limited 0 650,000 650,000 1.79 1.79
Minerals & Minerals Limited ` 10 50,000 50,000 0.17 0.17
Hindalco-Almex Aerospace Limited ` 10 172,115,744 172,115,744 83.24 83.24
A V Minerals (Netherlands) B.V. EUR 567.83 2,228,728 2,216,689 9,534.16 9,485.21
Tubed Coal Mines Limited ` 10 27,176,700 26,754,000 10.18 13.75
East Coast Bauxite Mining Company Pvt. Limited ` 10 7,400 7,400 0.01 0.01
Mauda Energy Limited ` 10 175,000 175,000 0.18 0.18
Aditya Birla Chemicals (India) Limited (c) ` 10 0 12,004,987 nil 12.45
Aditya Birla Minerals Limited (e) 0 159,820,001 159,820,001 222.35 222.35
Hindalco Guinea SARL GNF 100000 100 100 0.01 0.01
(incorporated during current year)
Investment in Joint Ventures
Mahan Coal Limited ` 10 195,750,000 195,250,000 173.75 173.25
MNH Shakti Limited ` 10 12,765,000 12,765,000 12.77 12.77
Hydromine Global Minerals GMBH Limited USD 100 64,650 64,650 0.08 31.58
Investment in Associate
Aditya Birla Science & Technology Company Limited ` 10 9,800,000 9,800,000 9.8 9.8
Investment in Other Entities
Sanjana Cryogenic Storage Limited ` 10 780,000 780,000 3.12 3.12
Aditya Birla Ports Limited ` 10 100,000 100,000 0.1 0.1
14,183.74 14,121.81
OTHER LONG TERM INVESTMENTS
Investments in Equity Instruments
Investment in Subsidiaries
Renuka Investments & Finance Limited ` 10 9,250,000 9,250,000 9.25 9.25
Renukeshwar Investments & Finance Limited ` 10 4,795,000 4,795,000 4.8 4.8
Suvas Holdings Limited ` 10 3,612,600 3,612,600 3.61 3.61
Lucknow Finance Company Limited ` 10 9,902,500 9,902,500 9.9 9.9
Investment in Associate
IDEA Cellular Limited ` 10 228,340,226 228,340,226 228.34 228.34
Investment in Other Entities
National Aluminium Company Limited `5 28,384,938 28,667,404 74.46 75.2
Aditya Birla Nuvo Limited - (d) ` 10 8,650,412 8,650,412 61.17 127.11
Aditya Birla Fashion and Retail Limited - (d) ` 10 44,982,142 - 65.94 -
Grasim Industries Limited ` 10 3,049,370 2,299,059 84.99 72.54
Ultra Tech Cement Limited ` 10 1,258,515 1,313,748 11.97 12.5
Birla International Limited CHF 100 2,500 2,500 0.53 0.53
Bharuch-Dahej Railway Company Limited ` 10 13,530,000 13,530,000 13.53 13.53
Investments in Preference Shares
Investment in Subsidiaries
Investment in Other Entities
Aditya Birla Health Services Limited - 3.50% Redeemable Cumula ` 100 2,500,000 2,500,000 25 25
Investments in Debentures or Bonds
9.20 % HDFC Limited Bonds ` 1,000,000 0 349 0 35.05
8.30% Bond of National Highways Authority of India ` 1,000 0 24,724 0 2.47
8.46% Tax Free NCD of REC Limited ` 1,000,000 0 200 0 20.01
Investments in Government Securities
6.83% Government of India Bond, 2039 20.1 20.1
20072017 613.59
35659.94
14,797.33 14,781.75
15 Long-term Loans and Advances: 3/31/2016 3/31/2015
(Unsecured, Considered Good unless otherwise stated)
Capital Advances 124.1 151.07
Loans, Advances and Deposits to Related Parties - (a) 65.95 72.78 HINDALCO
Security Deposits 131.07 115.5
Advances recoverable in cash or in kind: FromIS:
Unsecured, Considered Good 143.84 491.35 ProfitbeforeTax 732.61 1,246.91
Unsecured, Considered Doubtful 0.33 12.94 TaxExpenses:
Less: Provision for doubtful amount -0.33 -12.94 CurrentTax 119.63 321.52
143.84 491.35
MATCreditEntitlement 119.63 602.97
Other Advances and Balances
MAT Credit Entitlement
DeferredTax 125.36 636.48
722.6 602.97
Prepaid Expenses 2.13 2.08 Taxadjustedforearlieryear(Net) 33.26
Others - (b) 10.39 18.98 Profitfortheyear 607.25 925.16
1,200.08 1,454.73

Non-Current Assets 2016 2015

16 Other Non Current Assets: 3/31/2016 3/31/2015 Fixed Assets:
Long Term Trade Receivables: Tangible Assets 12 32,700.57 26,035.87
Unsecured, Considered Doubtful - 19.35 Intangible Assets 13 112.91 24.02
Capital Work-in-Progress 3,083.27 10,743.61
Less: Provision for doubtful amount - -19.35
Intangible Assets under Development 0.33 0.02
- -
35,897.08 36,803.52
Deposits with Bank exceeding 12 months maturity 1.87 0.35 Non-Current Investments 14 14,797.33 14,781.75
Interest Accured on Investment and Deposits - 0.95 Long-term Loans and Advances 15 1,200.08 1,454.73
Derivatives Assests (refer Note No. 49 ) 78.21 30.14 Other Non-Current Assets 16 80.08 31.44
80.08 31.44 51,974.57 53,071.44

36
37
LiabilitiesandShareholdersEquity

38
 CurrentLiabilities
Definition:
Anentityshallclassifyaliabilityascurrentwhen
(a)itexpectstosettletheliabilityinitsnormaloperatingcycle;
(b)itholdstheliabilityprimarilyforthepurposeoftrading;
(c)theliabilityisduetobesettledwithintwelvemonthsafterthereportingperiod;or
(d)itdoesnothaveanunconditionalrighttodefersettlementoftheliabilityforat
leasttwelvemonthsafterthereportingperiod.
Anentityshallclassifyallotherliabilitiesasnoncurrent.
Obligationsduetobesettled(paidorperformed)withinoneyearorentitysnormal
operatingcyclewhicheverislonger
Typicallypaidfromcurrentassetsorbyincurringnewshorttermliabilities
IncludesCustomerAdvances(UnearnedRevenues),CurrentPortionofLongterm
debt,TaxesPayableetc

Current liabilities
Notes payable $60,000
Accounts payable 102,732
Salaries payable 8,000
Total current liabilities $170,732
39
 CurrentLiabilities
Primarilyoperatinginnature: AccountsPayable,UnearnedRevenue,Taxespayable
NonoperatingCurrentLiabilities:Shorttermdebt,Currentportionoflongtermdebt

NotesPayable:Formalwrittennotetopaytoalender(canbeinterestbearing)
AccountsPayable(SundryCreditors)orTradePayables:Suppliers(i.e.vendors)
claimsforgoodsorservicesfurnishedbutnotyetpaid
UnearnedRevenueorDeferredRevenue:Precollections,servicenotrendered(OCL)
OFL
Taxespayable:Owedtogovernmentfortaxes:Currenttaxliabilities(notFL)
AccruedorOutstandingExpense:oweInterestPayable,WagesPayable
DividendsPayable:Dividenddeclaredbecomesalegalobligation
ShorttermProvisions:Liabilityofuncertaintimingandamount,Requires
estimation,Reportedseparately Provisionforproductwarranty
CURRENTLIABILITIES Infosys 2017 2016
Financialliabilities
Tradepayables 2.14 269 623
Otherfinancialliabilities(accruedexpense,unpaiddividend,notespayable) 2.13 5,056 5,132
Othercurrentliabilities(UnearnedRevenue) 2.15 2,349 2,093
Provisions 2.16 350 436
Incometaxliabilities(net) 2.17 3,762 3,304
Totalcurrentliabilities 11,786 11,588 40
2 Currentliabilities b)Othercurrentliabilities:
Theamountsshallbeclassifiedas
a Financialliabilities (a)revenuereceivedinadvance;
i Borrowings (b)otheradvances(specifynature);and
(c)others(specifynature);
ii Tradepayables
iii Otherfinancialliabilities(otherthanthosespecifiedinitem(c) c)Provisions shallbeclassifiedas
(i)provisionforemployeebenefits;and
b Othercurrentliabilities
(ii)others(specifynature).
c Provisions
d Currenttaxliabilities(net)
Currenttaxliabilitiesisincometax
Totalcurrentliabilities payable(opening+currenttaxforthe
year taxespaid)
Afinancialliabilityisanyliabilitythatis:
acontractualobligation
todelivercashoranotherfinancialassettoanotherentity;or
toexchangefinancialassetsorfinancialliabilitieswithanotherentityunderconditionsthatarepotentiallyunfavourable totheentity;or
acontractthatwillormaybesettledintheentitysownequityinstrumentsundercertaincircumstances(worthafixedamountofcash)

i) Borrowingsshallbeclassifiedas
(a)Loansrepayableondemand
(I)frombanks
(II)fromotherparties
(b)Loansfromrelatedparties
(c)Deposits
(d)Otherloans(specifynature);
Borrowings shallfurtherbesub
classifiedassecuredandunsecured.
iii)OtherFinancialliabilitiesshallbeclassifiedas
(a)Currentmaturitiesoflongtermdebt*;
(b)Currentmaturitiesoffinanceleaseobligations; AlsoincludesNotesPayable
(c)Interestaccrued;
(d)Unpaiddividends;
(e)Applicationmoneyreceivedforallotmentofsecuritiestotheextentrefundableandinterest
accruedthereon;
(f)Unpaidmatureddepositsandinterestaccruedthereon;
(g)Unpaidmatureddebenturesandinterestaccruedthereon;and
(h)Others(specifynature).
*Longtermdebtisaborrowinghavingaperiodofmorethantwelvemonthsatthetimeof
origination

Apayableshallbeclassifiedasatradepayableifitisinrespectoftheamountdueonaccountofgoodspurchasedor
servicesreceivedinthenormalcourseofbusiness 41
2.13Otherfinancialliabilities 2017 2016
Noncurrent
2.14Tradepayables 2017 2016
Rentaldeposits 27
Payableforacquisitionofbusiness(RefertoNotes2.5.1an 40 35 Tradepayables(1) 269 623
40 62
269 623
Current Includesduestosubsidiaries(RefertoNote2.25) 135 145
Unpaiddividends 17 5
Others 2.15Otherliabilities 2017 2016
Accruedcompensationtoemployees 1404 1,764 Noncurrent
Accruedexpenses 2013 1,707 Deferredincome 42
Retentionmonies 153 58 42
Payableforacquisitionofbusiness(RefertoNotes2.5.1and2.5.2) Current
Deferredconsideration Unearnedrevenue 1320 1025
Contingentconsideration 45 80 Withholdingtaxesandothers 1027 1068
Clientdeposits 25 16 Deferredrent 2
Capitalcreditors 36 66 2349 2093
Compensatedabsences 1,142 1,130 Provisionforwarranties
Foreigncurrencyforwardandoptionscontracts 2 2
Otherpayables 219 304
2.16Provisions 2017 2016
5056 5132 Current
CurrentLiabilities Infosys Others
Currentliabilities 2017 2016 Postsalesclientsupportandwarrantiesandothers 350 436
Financialliabilities 350 436
Tradepayables 2.14 269 623
Otherfinancialliabilities 2.13 5,056 5,132
Othercurrentliabilities 2.15 2,349 2,093
Provisions 2.16 350 436
Incometaxliabilities(net) 2.17 3,762 3,304
Totalcurrentliabilities 11,786 11,588
Totalequityandliabilities 79,885 72,732
 CurrentLiabilities HINDALCO 10. Other Current Liabilities: 31-03-2016 31-03-2015
CurrentLiabilities 2016 2015
Current maturities of Long-term Debts 229.3 357.19
ShorttermBorrowings 8 4,640.99 5,675.53 Interest accrued but not due on Borrowings/Deposits 536.37 562.63
TradePayables: 9 Interest accrued but due on Borrowings 0.02
Dues of Micro Enterprises & Small Unclaimed Dividends - (a) 5.54 5.77
Enterprises 4.28 2.40 Application/Call Money received due for refund 0.31 0.31
DuesofCreditorsotherthanMicro Advance from Customers 180.26 157.2
EnterprisesandSmallEnterprises 3,939.72 3,649.25
Derivative Liabilities (refer Note No. 49 (c)) 158.89 80.6
OtherCurrentLiabilities 10 2,499.75 2,678.13 Liability for Capital Expenditure 980.18 1,097.46
ShorttermProvisions 11 1,266.97 1,087.41 Security and other Deposits 21.96 22.57
12,351.71 13,092.72 Statutory dues payable 304.82 232.84
Other Payables 82.12 161.54
8. Short-term Borrowings: 31-03-2016 31-03-2015 2,499.75 2,678.13
Secured
From Banks: 11. Short-term Provisions: 31-03-2016 31-03-2015
Cash Credit, Export Credit etc. - (a) 96.66 42.22 Provision for Employee Benefits 25.57 22.72
96.66 42.22 Proposed Dividends 206.5 206.5
Unsecured
Loans and Advances from Related Parties 100.5 0
Provisions for Dividend Distribution Tax 42.04 39.59
From Banks: Provision for Current Tax (Net of Advance Tax) 959.09 786.96
Buyers Credit & Packing Credit 4,443.83 5,618.33 Provision for Assets Retirement Obligation (refer N 3.83 0
Cash Credit 0 14.98
4,544.33 5,633.31
Other Provisions (refer Note No. 46) 29.94 31.64
4,640.99 5,675.53 1,266.97 1,087.41
9. Trade Payables: 31-03-2016 31-03-2015
Micro, Small and Medium Enterprises (refer Note No. 52) 4.28 2.4
Others 3,939.72 3,649.25
3,944.00 3,651.65 43
 LongTermLiabilities
Obligationsacompanyreasonablyexpectstopayatleastafteroneyearinthefuture
orbeyondthenormaloperatingcycle(typicallywillbepaidoutofnoncurrentassets)
Primarilyinthenatureoflongtermfinancinglikelongtermdebt
LongtermNotes,DebenturesorBondspayable
SecuredLoan:Loanssecuredbymortgageofassets,MortgagePayable
DeferredTaxliability: ArisingfromTaxabletimingdifferencei.e.whentaxableincome
islowerthanaccountingprofit
LeaseLiabilities(Leasepaymentsdue)andPensionLiabilities(forpensionbenefits
payabletoemployees) Noncurrentliabilities
a Financialliabilities
i Borrowings
Noncurrentliabilities 2017 2016
Infosys ii Tradepayables
Financialliabilities iii Otherfinancialliabilities
Otherfinancialliabilities 2.13 40 62 b Provisions
Othernoncurrentliabilities 2.15 42 c Deferredtaxliabilities(net)
Deferredtaxliabilities(net) 2.17 d Othernoncurrentliabilities

Totalnoncurrentliabilities 82 62

Non-Current Liabilities HINDALCO 2016 2015

Long-term Borrowings 4 23,896.04 22,973.85
Deferred Tax Liabilities (Net) 5 1,679.25 1,748.28
Other Long-term Liabilities 6 577.86 474.63
Long-term Provisions 7 553.94 455.90 44
26,707.09 25,652.66
 Noncurrentliabilities:Infosys 2.15Otherliabilities 2017 2016
Noncurrent
2.17Incometaxes 2017 2016 Deferredincome 42
Currenttaxes 5,068 4,898 42
Deferredtaxes 52 9 Current
Incometaxexpense 5,120 4,907 Unearnedrevenue 1320 1025
Netcurrentincometaxasset/(liability)atthebeginning 1716 1263 Others
Incometaxpaid 5033 5350 Withholdingtaxesandothers 1027 1068
Currentincometaxexpense(RefertoNote2.17) 5068 4898 Deferredrent 2
Incometaxonothercomprehensiveincome 8
Taxbenefitontheexerciseofsharebasedpayments 1 2.13Otherfinancialliabilities 2017 2016
Translationdifference 2 1 Noncurrent
Netcurrentincometaxasset/(liability)attheend 1692 1716 Rentaldeposits(1) 27
Payableforacquisitionofbusiness(Refer 40 35
Deferredincometaxassets
40 62
Property,plantandequipment 107 146
Computersoftware 40 50 Current
Accruedcompensationtoemployees 35 46 Unpaiddividends 17 5
Tradereceivables 123 79 Others
Compensatedabsences 336 359 Accruedcompensationtoemployees 1404 1,764
Accruedexpenses(2) 2013 1,707
Postsalesclientsupport 93 76
Retentionmonies 153 58
Others 32 21 Payableforacquisitionofbusiness(RefertoNotes2.5
Totaldeferredincometaxassets 766 777 Deferredconsideration
Deferredincometaxliabilities Contingentconsideration 45 80
Branchprofittax 327 334 Clientdeposits 25 16
Others 93 38 Capitalcreditors 36 66
Compensatedabsences 1,142 1,130
Totaldeferredincometaxliabilities 420 372
Foreigncurrencyforwardandoptionscon 2 2
Deferredincometaxassetsaftersetoff 346 405 Otherpayables(3) 219 304
Deferredincometaxliabilitiesaftersetoff 5056 5132
4. Long-term Borrowings:
Non-current Portion Current Maturities* Total
3/31/2016 3/31/2015 3/31/2016 3/31/2015 3/31/2016 3/31/2015
Secured
Debentures - (a) 6,000.00 6,000 0 0 6,000.00 6,000
Term Loans:
From Banks - (b), (c) ,(d) & e 17,380.85 16,523.60 166.59 298.9 17,547.44 16,822.50
From Other Parties - (c) & (f) 514.27 449.25 62.63 57.96 576.90 507.21
Unsecured
Deferred Payment Liabilities - (g) 0.92 1 0.08 0.33 1 1.33
23,896.04 22,973.85 229.30 357.19 24,125.34 23,331.04
* Current maturities of long-term borrowings is disclosed under the head Other Current Liabilities
5. Deferred Tax Liabilities (Net): 3/31/2016 3/31/2015
Major components of Deferred Tax arising on account of temporary timing differences are given
Deferred Tax Liabilities
Depreciation and Amortization Expenses 4,557.75 3,544.57
NonCurrentLiabilities 4,557.75 3,544.57
Less: Deferred Tax Assets
HINDALCO Unaborbed Depreciation 2,549.63 1,457.26
Employee's Separation and Retirement Expenses 120.92 111.04
Expenses/Provisions Allowable 207.95 227.99
2,878.50 1,796.29
1,679.25 1,748.28

Non-Current Liabilities 2016 2015 6. Other Long-term Liabilities: 3/31/2016 3/31/2015

Long-term Borrowings 4 23,896.04 22,973.85 Trade Payables 7.17 5.22
Derivative Liabilities (refer Note No. 49 (c)) 401.62 0.05
Deferred Tax Liabilities (Net) 5 1,679.25 1,748.28 Liability for Capital Expenditure 33.79 74.77
Other Long-term Liabilities 6 577.86 474.63 Security and other Deposits 3.67 2.47
Other Payables 131.61 392.12
Long-term Provisions 7 553.94 455.90 577.86 474.63
26,707.09 25,652.66 7. Long-term Provisions: 3/31/2016 3/31/2015
Provision for Employee Benefits 515.81 455.9
Provision for Assets Retirement Obligations (refer No 38.13 0
553.94 455.90
 EquityFinancingvs DebtFinancing

Advantages Equity
Advantages
Debt
Lessriskythanfinancingwithdebt Shareholderscontrolisnotaffected
Dividendsdonothavetobepaidunless Bondholdersdonthavevoting
boarddeclaresthem rights Fullcontrolretainedby
Cashgeneratedbyprofitableoperationscan currentSH
bereinvestedbackintothecompany. TaxSavings
Protectiontodebtholders Interestistaxdeductible
Helpstoexpand

Disadvantages
Dividendspaidonstockarenot
taxdeductible
Issuanceofstockdilutesownership
Disadvantage
Debtrequiresinterestpayments
Companymustpaythefixedchargesin
goodtimesaswellasinbadtimes
DebtreducesSolvency
Inperiodsoflowearningsandweakcash
position maycallforbankruptcy
47
 EquityShareCapital
StockholdersEquity=ContributedCapital+RetainedEarnings
Contributedcapitalisgenerallyshownastwoamounts:
Theparvalueoftheissuedstockand
TheAdditionalpaidincapital inexcessofpar(calledSharePremium/SecuritiesPremiuminIndia R&S)
Authorised CapitalandFaceValue
Maximumamountofcapitalthatthecompanyisauthorisedtoissuetoitsshareholdersduringits
life partremainsunissued
Parvalue:Setwhenthestockisauthorized,
MentionedinMemorandumofAssociation establishesacompanyslegalcapital
Largeauthorisedcapitalsignals?Ambitiontogrowlarge
FaceValueorParvalueisthevalueassignedpershare
=Authorizedcapitalamount/Maxnumberofsharesthatcanbeissued
Issued Capital:PartoftheAuthorizedcapitalwhichhasbeenissuedtoinvestorsforsubscription
Subscribed&fullypaidup:Partoftheissuedcapitalwhichhasbeensubscribedbyinvestors,fullypaid
XYZ issued20,000sharesof$10parvaluecommonstockforcashat$12pershare
Issuanceofcommonstockaffectspaidincapitalaccounts
NewCommonStock,or
Cash(20,000sharesx$12)Dr.240,000 EquitySharecapitalIssue
Commonstock(20,000x$10)(EquityShareCapital)Cr.200,000
AdditionalPaidincapital(EquitySharePremium R&S)Cr.40,000
Contributedcapital US
Commonstock,$10parvalue,20,000sharesauthorized,issued,andoutstanding$200,000
Additionalpaidincapital 40,000
Totalcontributedcapital $240,000
Retainedearnings 153,732 48
Totalstockholdersequity 393,732
 INDIA:EquityShareCapital
Equity 2017 2016
Equitysharecapital 2.12 1,148 1,148
Otherequity 66,869 59,934
Totalequity 68,017 61,082
Infosys
2.12Equity(INFOSYS) 2017 2016
Authorized
Equi tys hares ,Rs 5parval ue
2,40,00,00,000(PY2,40,00,00,000)equi tys hares 1200 1200
Issued,subscribedandpaidup
Equi tys hares ,Rs 5parval ue
2,29,69,44,664(PY2,29,69,44,664)equi tys hares ,ful l ypai dup 1148 1148
1148 1148
Shareholders Funds 2016 2015
Share Capital 2 206.52 206.52 HINDALCO
Reserves and Surplus 3 36,861.37 37,048.74
37,067.89 37,255.26
2 SHARE CAPITAL (HINDALCO) 2016 2015
Authorized:
2,500,000,000 (Previous year 2,100,000,000)
Equity Shares of Re 1/- each 250 250
25,000,000 (Previous year 25,000,000)
Redeemable Cumulative Preference Shares of Rs 2/- each 5 5
255 255
Issued:
2,065,539,406 (Previous year 2,065,534,028)
Equity Shares of ` 1/- each # 206.55 206.55
206.55 206.55
Subscribed and Paid-up:
2,065,532,009 (Previous year 2,065,526,631) 206.55 206.55
Equity Shares of Re 1/- each fully paid-up
Less: Face value of 546,249 (Previous year 546,249) Equity Shares forfeited 0.05 0.05
206.5 206.5
Add: Forfeited Shares (Amount originally Paid-up) 0.02 0.02
206.52 206.52
 PreferredStock
Preferenceovercommonstockholders:
Preferenceastoreceivedividends Dividendsinarrears nota
Preferenceastoassetsofthebusinessinliquidation liabilityuntildividendisdeclared

Nonvoting;NoGuaranteedDividends
Canbe: ABCLtdhas10,000sharesof8%,,
Callable(canberetiredattheoptionofthecompany) cumulativepreferredstock($100par
value)outstandingatDecember31,
Convertible(canbeexchangedforcommonstockorequityshares)
2010.Nodividendswerepaidin
CumulativePreferenceshares(fixeddividendaccumulatefromyear 2008or2009.IfABCwantstopay
toyear):Mustbepaidtheirannualdividendplusanydividendsin $375,000ofdividendsin2010,
arrearsbeforecommonstockholdersreceivedividends commonstockholderswillreceive:
0,or295,000,or215,000,or
135,000?

ANS:$375,000 (10,000shares
*0.08*$100*3years)=$135,000

Presentationof
StockholdersEquity
(US)

50
 BasicEPS
ProfitsAvailable toEquitySHs=NetIncome(orPAT)minus DividendtoPreference SH

Net Income - Preferred Stock Dividend Net income earned on each

EPS share of common stock
Weighted- AverageCommon Shares Outstanding
Usedtoevaluateacompanysperformanceandcompareitwithothercompanies
Shouldbepresentedonthefaceoftheincomestatement
SupposethatfromJan.1toMarch31,Vistulahad1,000sharesoutstanding
On1st April:Issued200shares,
OnOct.1:Repurchased100shares
Netincomeof$2,500,Preferencedivided:$250
1,000shares 3/12year 250
1,200shares 6/12year 600
1,100shares 3/12year 275
Weightedaveragecommonsharesoutstanding 1125

$2,500 - 250
Basic EPS $2 per share
1125 shares

51
 DilutedEPS
SimpleCapitalStructure Nopreferredstocks,bonds,orstock
ReportBasicEPS options thatcanbeconvertedinto
commonstock
ComplexCapitalStructure Issuedsecuritiesorstockoptions
thatcanbeconvertedtocommonstock
MustreportbothbasicanddilutedEPS
HasthepotentialtodiluteEPSof
commonstock

Dilutedearningspersharearecalculatedby:Addingallpotentiallydilutivesecurities
tothedenominator(ofthebasicearningspersharecalculation)
Net income to common shares + Interest (net of tax)
Weighted average common shares (including dilutive securities like convertible bonds)

Convertiblebonds:100,5%bonds(FaceValue:$10,soldatpar),convertibleinto50
sharesofcommonstock.IncomeTaxrate:40%

Diluted EPS = $ 2,250 + [($1,000 x 5%)(1-0.40)] = Rs 1.94

1125 + 50 52
 36.EarningsperShare(EPS) HINDALCO 31032016 31032015
Profitfortheperiod(RsCrore) 607.25 925.16
WeightedaveragenumberofsharesusedinthecalculationofEPS:
WeightedaveragenumberofEquitySharesforcomputingbasicEPS 2,06,49,85,267 2,06,48,21,218
DilutiveimpactofEmployeeStockOptionsScheme 12,98,140 18,34,285
WeightedaveragenumberofequitysharesforcomputingdilutedEPS 2,06,62,83,407 2,06,66,55,503
Facevalueofpershare(Rs) 1 1
BasicEPS(Rs) 2.94 4.48
DilutedEPS(Rs) 2.94 4.48

Earningspershare(EPS)isthenetearningsavailabletocommonstockholdersforthe
perioddividedbytheweightedaveragenumberofcommonstocksharesoutstanding
BasicEPS= (Netincome Preferreddividends)
Weightedaveragenumberofsharesoutstanding

INFOSYS
2017 2016 2015
Profitfortheperiod 13,818 12,693 12,164
Earningsperequityshare
EquitysharesofparvalueRs 5each
Basic(Rs) 60.16 55.26 52.96
Diluted(Rs) 60.15 55.26 52.96
Weightedaverageequitysharesusedincomputing
earningsperequityshare
Basic 2.23 2,29,69,44,664 2,29,69,44,664 2,29,69,44,664
Diluted 2.23 2,29,71,59,670 2,29,69,44,664 2,29,69,75,348
 HINDALCO
3. RESERVES AND SURPLUS: 2016 2015
Capital Reserve
Balance as at the beginning of the year 144.54 144.54
Add: Capital Subsidy received during the year - (a) 0 0
Balance as at the end of the year 144.54 144.54
Capital Redemption Reserve
Balance as at the beginning of the year 101.57 101.57
Business Reconstruction Reserve (refer Note No. 43)
Balance as at the beginning of the year 8,397.04 8,494.33
Less: Adjusted during the year -682.27 -97.29
Balance as at the end of the year 7714.77 8397.04
Securities Premium Account
Balance as at the beginning of the year 4,890.89 4,885.24
Add: Premium on issue of shares under ESOS scheme 0.06 5.65
Add: Premium on issue of shares against share warrants 0 0.00
Balance as at the end of the year 4890.95 4890.89
Debenture Redemption Reserve
Balance as at the beginning of the year 450 300
Add: Created during the year 150 150
Balance at the end of the year 600 450
Employees Stock Options Outstanding
Balance as at the beginning of the year 14.08 8.43
Add: Compensation for the year 7.05 7.28
Options p -0.01 -1.63
expired -0.74 0
Balance as at the end of the year 20.38 14.08
Hedging Reserve (refer Note No. 49 (g))
Balance as at the beginning of the year 419.97 433.52
Gain/(Loss) recognized during the year 775.58 195.96
(Gain)/Loss recycled during the year -667.46 -209.51
20072017 54
Balance as at the end of the year 528.09 419.97
 General Reserve
Balance as at the beginning of the year 21,351.30 21,408.34
Add: Transferred from Employees Stock Option Outstanding 0.74 0
Less: Transitional Depreciation on adoption of schedule II 0 -57.04

Add: Transferred from Surplus in the Statement of Profit and Loss 0 0.00
Balance as at the end of the year 21352.04 21351.3
Surplus in the Statement of Profit and Loss
Balance as at the beginning of the year 1,279.35 750
Add: Profit for the year 607.25 925.16
Less: Transferred to Debenture Redemption Reserve -150 -150
Less: Dividend on Equity Shares - (c) -206.5 -206.52
Less: Dividend Distribution Tax - (c) & (d) -21.07 -39.29
Less: Transferred to General Reserve 0 0.00
Balance as at the end of the year 1509.03 1279.35
36,861.37 37,048.74
Debitbalanceofstatementofprofitandlossshallbeshownasanegative figureunderthehead
Surplus.Similarly,thebalanceofReservesandSurplus,afteradjustingnegativebalanceofsurplus,if
any,shallbeshownundertheheadReservesandSurpluseveniftheresultingfigureisinthenegative.

BookvalueperShare:Equityoftheownerofoneshareofstockinthenetassetsofacompany
Whenacompanyhasonlycommonsharesoutstanding,calculatebookvaluepershareasfollows:
Total Stockholde rs' Equity
Book Value per Share
Total Common Shares Outstandin g
Whenacompanyhaspreferredstockalso:
subtracttheredemptionvalueofthepreferredstock(Useparvalueifredemptionvaluenot
specified)plusanydividendsinarrearsfromtotalstockholdersequity 55
 EquityandOtherEquity
1)EquityShareCapital
2)OtherEquity
ReservesandSurplus
CapitalReserve:Notavailablefordistributionofdividend(capitalprofits)
SharePremium/SecuritiesPremiumReserve(Addln paidincapital) reportedaspartofR&S
RevenueReserve:Reserveotherthancapitalreserve(Example:Generalreserve)
OtherReserveslikeDebentureRedemptionReserve
RetainedEarnings SurplusordeficitinProfitandLossAccount
OpeningBalance
Add:NetProfitfortheperiod
Less:Dividends
Less:Transferstosay,GRorDRR
ClosingBalance
OtherComprehensiveIncome(Equity/debtinstrumentthroughOCI)

Equity Infosys 2017 2016

Equitysharecapital 2.12 1,148 1,148
Otherequity 66,869 59,934
Totalequity 68,017 61,082

Shareholders Funds HINDALCO

Share Capital 2 206.52 206.52
Reserves and Surplus 3 36,861.37 37,048.74
37,067.89 37,255.26 56
A)EquityShareCapital
Balanceatthebeginningofthereportingperiod Changesinequitysharecapital Balanceattheendofthe

57
HindustanUnileverLtd

58
59
 SomeCalculations
NetFixedAssets=GBVoffixedassets(incl CapitalWIP) AccumulatedDepreciation
NetWorkingCapital(orNetCurrentAssets)=CA CL
NetWorthorShareholdersEquity:
=ContributedCapital(CapitalStock+AdditionalPaidinCapital)
+RetainedEarnings+OCI[US]
or=ShareCapital+ReservesandSurplus(includingSharePremium,SurplusinP/L,
otherreserves)+OCI
=TA TL=NonCurrentAssets NonCurrentLiabilities+WorkingCapital
CapitalEmployed:
TotalAssets CurrentLiabilities
NetWorth+Noncurrentliabilities(typicallyLongterm,InterestBearing
Debt)

Interrelations
NFA+OtherNCA+NetCurrentAssets=CapitalEmployed
CapitalEmployed NCL=Networth
60
CalculationsHINDALCO 2016 2015 Growth Alternatively 2016 2015
NetFixedAssets(inclCapitalWIP) CapitalEmployed
Grossbookvalue
Less:AccumulatedDepreciation 35,897 36,804 2% TotalAssets 76,127 76,001
Less:CurrentLiabilities 12,352 13,093
NetWorkingCapitalorNetCurrent
Assets 63,775 62,908
CurrentAssets 24,152 22,929
CurrentLiabilities 12,352 13,093 NetAssets
CACL 11,800 9,836 20.0% TotalAssets 76,127 76,001
Less:TotalLiabilities
(C+NC) 39,059 38,745
NetWorth 37,068 37,255
Sharecapital(includingwarrants) 207 207
Reserves&Surplus(inclshare
premium) 36,861 37,049 Interrelationship 2,014 2,013
37,068 37,255 0.5% NoncurrentAssets 51,975 53,071
CapitalEmployed Add:NetcurrentAssets 11,800 9,836
NetWorth 37,068 37,255 CapitalEmployed 63,775 62,908

Add:NoncurrentLiabilties 26,707 25,653 Less:NoncurrentLiabilities 26,707 25,653

63,775 62,908 1.4% NetWorth 37,068 37,255
CalculationsHINDALCO 2016 2015 Growth CalculationsINFOSYS 2017 2016 Growth
NetFixedAssets(inclCapitalWIP) 35,897 36,804 2.5% NetFixedAssets(inclCapitalWIP) 9,852 9,182 7.3%
Grossbookvalue Grossbookvalue
Less:AccumulatedDepreciation Less:AccumulatedDepreciation

WorkingCapitalorNetCurrent
Assets WorkingCapitalorNetCurrentAssets
CurrentAssets 24,152 22,929 CurrentAssets 47,682 46,097
CurrentLiabilities 12,352 13,093 CurrentLiabilities 11,786 11,588
CACL 11,800 9,836 20.0% CACL 35,896 34,509 4.0%

NetWorth NetWorth
Sharecapital(includingwarrants) 207 207 Sharecapital(includingwarrants) 1,148 1,148
Reserves&Surplus(inclshare
premium) 36,861 37,049 Reserves&Surplus(inclsharepremium) 66,869 59,934
37,068 37,255 0.5% 68,017 61,082 11.4%
CapitalEmployed CapitalEmployed
NetWorth 37,068 37,255 NetWorth 68,017 61,082
Add:NoncurrentLiabilties 26,707 25,653 Add:NoncurrentLiabilties 82 62
63,775 62,908 1.4% 68,099 61,144 11.4%
 MoreonStockholdersEquity:
CashDividend,Stockdividend,TreasuryStockandStockSplit

63
Stockholdersearnareturn ontheirinvestmentby:
Dividendsarenotguaranteed
Receivingdividends,and
Bysellingsharesformorethantheypaidforthem(capitalgains)

CashDividends
Distributionstostockholdersofacorporationsassetsthataregeneratedbyearnings
Foracorporationtopayacashdividend,itmusthave: Pro rata:Dividendpaidin
1. AdequateRetainedearnings proportiontotheownership
2. Adequatecash(Needofcashforexpansion,handlinguncertaintieslawsuits)
3. Declaration bytheBoardofDirectors(seniormanagershaveinfluence)and
approvalbySH
Illustration:OnDec.1,thedirectorsofMediaGeneraldeclarea50persharecashdividendon
100,000sharesof$10parvaluecommonstock.ThedividendispayableonJan.20toshareholdersof
recordonDec.22:
December1(DeclarationDate) Dr Cr.
Cashdividends(ReducesRetainedEarnings)Dr. 50,000
Dividendspayable(CreatesCurrentLiability) 50,000
December22(RecordDate) Noentry
January20(PaymentDate) Dr Cr.
Dividendspayable(CLReduces) Dr. 50,000
64
Cash(CAReduces) 50,000
 StockDividendsorIssueofBonusShares
Proportionaldistributionofsharesamongcorporationsstockholders
Reasons whycorporationsissuestockdividends:
1. Satisfystockholdersdividendexpectationswithoutspendingcash.
Givesstockholderssomeevidenceofthecompanyssuccesswithoutreducingworkingcapital
2. Increasethemarketabilityofthecorporationsstock.
Reducesthestocksmarketpricebyincreasingthenumberofsharesoutstanding
3. Emphasizethataportionofstockholdersequityhasbeenpermanentlyreinvestedinthe
business notavailableforcashdividend

BonusShares(1:10)>1500shares Before Effect After RetainedEarnings(ReservesandSurplus)Dr15,000

ShareCapital(commonStock)(PV:Rs10) 150,000 15000 165,000 Commonstock(Sharecapital)Cr.15,000
Reserves&Surplus(RetainedEarnings) 300,000 15000 285,000
TotalSE 450,000 450,000
SharesOutstanding(A) 15,000 1500 16,500 Totalstockholdersequityremainsthe
FromasingleShareholder'spointofview same(before&afterastockdividend)
Say,Sharesowned(B) 500 50 550 Changesthecompositionof
PercentageOwnership(B/A) 3.33% 3.33% stockholdersequity.
Numberofsharesownedincreases,%ofcompanyownedremainsthesame

NoeffectonthePar/facevaluepershare,TotalLiabilitiesorTotalAssets

Resultsindecreaseinretainedearningsand increaseincontributedcapital
 StockSplit
Subdivisionofsharesintosmallerdenomination
IncreasesthenumberofsharesofstockIssued&outstandingandreducesthepar
value inthesameproportion
Hastheeffectofloweringastocksmarketvaluepershareandincreasingthedemand
forthestockatthislowerprice
Noentryrecordedforastocksplit NoeffectonEquity
Illustration: Medland splitsits50,000sharesofcommonstockona2for1basis.

Eachstockholdersproportionateinterestin Doesnotincreasethenumberofshares
thecompanyremainsthesamebecauseeach authorized,doesnotchangestockholders
shareof$10parvaluestockwasconvertedto equitybalance
2sharesof$5 parvaluestock. 66
 Comparison:StockDividendandStockSplit

DIFFRENCE:
Astockdividendchangesthemakeupofstockholdersequityinthatit
transferscapitalfromretainedearningstopermanentcapital
accounts. WhileAstocksplitdoesnotchangethemakeupof
stockholdersequity

SIMILARITY:
Stocksplitsandstockdividendsreduceearningspersharebecause
theyincreasethenumberofsharesissuedandoutstanding.

Commonstock(sharecapital)

67
 AccountingforTreasuryStockorBuyBack
Treasurystock Corporationsownstockthatithasreacquiredfromshareholders,but
notretired. Repurchaseofacompanysown
WhyCorporationspurchasetheiroutstandingstock? stockofftheopenmarket

1. Tohavestockavailablesothattheycanbereissuedtoofficersandemployees
underbonusandstockcompensationplans.
2. Tomaintainafavourable marketforcompanysstock
3. Tohaveadditionalsharesavailableforuseinacquiringothercompanies.
4. Toincreaseearningspersharebyreducingthenumberofsharesoutstanding.
5. Topreventahostiletakeover.

Generallyaccountedforby
DebitingTreasuryStockforthepricepaid.(creditCash)
Treasurystockisacontrastockholdersequityaccount,notanasset.
Purchaseoftreasurystockreducesstockholdersequityandassets(cash)
NovotingrightsorDividends
TCS: The Board of Directors of the Company at its meeting held on February 20, 2017, approved
buyback up to 56,140,351 equity shares of Re 1 each, on a proportionate basis, at a price of Rs 2,850
per equity share (AR 2017 buy back in May 2017)
68
 AccountingforTreasuryStock

Mead acquires 4,000 shares of its stock at $8 per share.

Treasury stock (4,000 x $8) Dr. 32,000
Cash Cr. 32,000
Numberof
sharesissued
hasnot
changed,

Eventhough
thenumber
ofshares
outstanding
has
decreased. 69
 Impact Summarized

Bonus
Buy Back or Issue or
New Share Treasury Cash Stock
Impact Issue Stock Dividend Dividend Stock Split

Number of Shares
1 Outstanding Increase Decrease Same Increase Increase

2 EPS Decrease Increase Same Decrease Decrease

3 Par Value per Share Same Same Same Same Decreases

Equity Share Capital

4 or Common stock Increase Not shown Same Increase Same

5 Retained Earnings Same Separately Decrease Decrease Same

Net Worth or Share

6 Holders' Equity Increase Decrease Decrease Same Same

70
 Impact Summarized

Bonus
Buy Back or Issue or
New Share Treasury Cash Stock
Impact Issue Stock Dividend Dividend Stock Split

Number of Shares
1 Outstanding Increase Decrease Same Increase Increase

2 EPS Decrease Increase Same Decrease Decrease

3 Par Value per Share Same Same Same Same Decreases

Equity Share Capital

4 or Common stock Increase Not shown Same Increase Same

5 Retained Earnings Same Separately Decrease Decrease Same

Net Worth or Share

6 Holders' Equity Increase Decrease Decrease Same Same

71
DeferredTaxConcept

72
 TaxExpense
CurrentTaxExpense DeferredTaxExpense
=TaxableProfit TaxRate

TaxeffectofTimingDifferencebetweenAccountingProfitandTaxableProfit

PermanentDifference
Differencethatoriginatesinone
periodanddonotreverse Temporary(timing)Difference
subsequently(Example:Penalty)
Differencethatoriginatesinoneperiodand
NoDeferredTax reversesinoneormoresubsequentperiods
consequence
TaxableTimingDiff: DTEIncreases(Dr.)
AccountingProfit IncomeTaxExpense> Deferred Tax Liability (DTL)
>TaxableProfit CurrentTaxExpense increases (DTAdecreases)

DeductibleTimingDiff: DTEDecreases(Cr)
AccountingProfit IncomeTaxExpense Deferred Tax Asset
< TaxableProfit increases (DTLdecreases)
<CurrentTaxExpense
73
 ALtd.purchasedamachineryonApril1,2010,for$6,000. RV=0UL=3years,
DTLDepreciation Bobbyusesthestraightlinemethodfordepreciation.
AsperIncomeTaxRules,ULofsuchasset=2yrs.ITrateis30%.PBDT=10,000
AccountingPurpose 2010 2011 2012
PBDT 10,000 10,000 10,000
Less:Depreciation (SLM:[(6,0000)/3] 2000 2000 2000
PBT 8,000 8,000 8,000
Less: IncomeTaxExpense@30% 2400 2400 2400

TaxPurpose 2010 2011 2012

TaxableIncomebeforedepreciation 10000 10000 10000
Less:Depreciation(SLM:[(6,0000)/2] 3000 3000 0
TaxableIncome 7000 7000 10000
Less:CurrentTaxExpense@30% 2100 2100 3000
Temporary(Timing)Difference 2010 2011 2012
AccountingIncome TaxableIncomeduetoTiming.Difference:(A) 1,000 1,000 2,000
TaxEffectofTimingDifferenceOriginatingDuringtheyear(0.3*A) 300 300
TaxEffectofTimingDifferenceReversingDuringtheyear(0.3*A) 600
DeferredTaxExpense(TaxEffectofTimingdifferences) 300 300 600
DeferredTaxLiabilityBalance 300 600 0
Note: 2010 2011 2012 Total
CurrentTaxExpense(X) 2100 2100 3000 7200
DeferredTaxExpense(Y) 300 300 600 0
Income Tax Expense(X+Y) 2400 2400 2400 7200
ORIGINATES 2010 2011 REVERSES 2012
IncomeTaxExpenseDr.(CTE+DTE) 2400 2400 IncomeTaxExpenseDr. 2400
Incometaxpayable 2100 2100 DeferredtaxliabilityDr. 600
74
Deferredtaxliability 300 300 Incometaxpayable 3000
 Definitions AccountingforTaxation
AccountingProfit: Profit/lossforaperiodbeforedeductingtaxexpense(PBT)
Taxableprofit(taxloss)istheprofit(loss)foraperiod,determinedinaccordancewith
therulesestablishedbythetaxationauthorities,uponwhichincometaxesarepayable
(recoverable).
CurrentTaxExpense: Amountofincometaxespayable(recoverable)totaxation
authoritiesinrespectoftaxableprofit(taxloss)foraperiod usingapplicabletaxrates
andlaws.
Taxexpense(taxincome)comprisescurrenttaxexpense (currenttaxincome)and
deferredtaxexpense(deferredtaxincome).

UnderIncomeStatementApproach:
DeferredTaxexpenseisthetaxeffectoftimingdifferencesbetweenAccountingProfitandTaxableProfit
(AccountingProfit TaxableProfit)duetoTimingdifference TaxRate

RevenuerecognizedinISafterrecognition(taxability)fortaxpurpose
IfTaxAuthoritiestaxestherevenueoncashbasisi.e.whenthecashiscollectedbutforaccounting
purposesrevenueisrecognizedinadifferentyearbasedonrevenuerecognitionprinciple.
Unearnedrentalrevenueof3,000collectedin2010,TaxableinthatyearbutrecognizedinISin2011
In2010:AP(Revenue=0)<TI(Revenue=3000)=>DeductibleTD DTA(900)
75
BestofLuckfortheMidTerms

76