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Accounting Standard 4

Some Specimen Disclosures

By February 9, 2023May 31st, 2024No Comments
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Specimen Disclosure – ITC Ltd – (31st March 2022)

Specimen Disclosure 1 – Adjusting Events – Specific Note added

During the year, the Scheme for Amalgamation of Hobbits International Foods Private Limited (Hobbits) and Sunrise Sheetgrah Private Limited (Sheetgrah) with the Company was sanctioned by the Hon’ble National Company Law Tribunal, Allahabad Bench, which became effective from 12th August, 2021.

The fair value of assets and liabilities of Hobbits and Sheetgrah have been recorded in accordance with Ind AS 103 – ‘Business Combinations’. The financial statements, therefore, reflect  the effect of the Scheme from 27th July, 2020 (being the appointed date) and figures for the previous periods have been restated, wherever necessary. The consequential effect of the above is not material.

Specimen Disclosure 2 – Conversion of loan into equity issued at a discount – PBE

ITC Hotels Ltd. (31st March xxx)
Ansal Hotels Ltd.

Your Company holds 48% equity in Ansal Hotels Ltd, which owns the Marriott WelcomHotel at Saket, New Delhi, managed by your Company under an Operating Services Agreement. During the year under review, the hotel’s income increased by 24% to Rs.36.76 crores.

The Company is in receipt of approval from the Company Law Board for issuance of equity shares of Rs.10/- each at a discount of 35% per share, as fully paid up to ITC Ltd., by way of conversion of ITC’s outstanding loan as at 31st May xxx amounting to Rs.164.63 crores. 

Accordingly, 25,29,65,339 equity shares of Rs.10 each will be issued and allotted to ITC Limited, subject to the approval of its members. Consequently, the equity holding of your Company would reduce to 9% in Ansal Hotels Ltd.

Specimen Disclosure 3 – Capital Restructuring

Larsen and Toubro Ltd (31st March xxx)
Extract from Director’s Report
Capital Restructuring

In terms of the Scheme, the paid up Capital of the Company was restructured comprising of 12,44,01,796 equity shares of the face value of Rs.2/- each, aggregating Rs.24.88 crores. 

On 4th June 2004, these shares were allotted to the shareholders, whose names appeared in the Register of Members on 27th May xxx, the Record Date fixed for that purpose.  These shares are entitled to full dividend for the year xxx and have been listed on The Stock Exchange, Mumbai and the National Stock Exchange of India Ltd. 

Specimen Disclosure 4 – Dividend Declaration

Tata Motors Ltd
Annual Report – 31st March 2022

Any dividend declared by Tata Motors Limited is based on the profits available for distribution as reported in the statutory financial statements of Tata Motors Limited (standalone) prepared in accordance with Generally Accepted Accounting Principles in India or Indian GAAP or Ind AS.

Indian law permits the declaration and payment of dividend out of profits for the year or previous financial year(s) as stated in the statutory financial statements of Tata Motors Limited (Standalone) prepared in accordance with Generally Accepted Accounting Principles in India, or Ind AS after providing for depreciation in accordance with the provisions of Schedule II to the Companies Act.

However, in the absence or inadequacy of the said profits, it may declare dividend out of free reserves, subject to certain conditions as prescribed under the Companies (Declaration and Payment of Dividend) Rules, 2014. Accordingly, in certain years the net income reported in these financial statements may not be fully distributable. The amount available for distribution is Nil as at March 31, 2022 (`Nil as at March 31, 2021).

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CA. S D Bala

Chartered Accountant, Author and Accounting Standard Expert

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