Financial Reporting - November 2023

The extracts of the Balance Sheets of Hammer Ltd. and its subsidiary Sleek Ltd. as on 318! March, 2023 are given below: Particulars Note | Hammer Ltd. | Sleek Ltd. No. (@ (9 I. ASSETS A. Non-Current Assets Property, Plant and Equipment 1 6,00,000 3,25,000 Intangible Assets 2 1,25,000 75,000 Investments 6,25,000 1,25,000 B. Current Assets Inventories 1,25,000 1,60,000 Financial Assets Trade receivables 3,25,000 2,90,000 Cash and Cash equivalents 1,50,000 3,50,000 Total Assets 19,50,000 | 13,25,000 I EQUITY AND LIABILITIES…

(a) As per the provisions of section 135 of the Companies Act, 2013 read with relevant rules, circulars and notifications related to ‘Corporate Social Responsibility’ (CSR), discuss the following situations: (i) A company is formed under section 8 of the Companies Act, 2013 to undertake charitable activities. The management of the Company is of the opinion that since all the activities of the Company are charitable in the normal course of business, the CSR provisions are not applicable to it.…

(a) A consumer products entity, Entity A Limited (lessee) enters into a lease agreement with Entity B Limited (lessor) for a dedicated production line to manufacture one of its storebrand household products for a period of three years. Entity A Limited has agreed to order a minimum 1,00,000 units per month and to make a payment to Entity B Limited as per the following agreed rates: (i) 240 per unit if the ordered quantity is between 1,00,000 to 1,20,000 units…

Ore Exploration Ltd. is engaged in the manufacturing of drilling and mining equipment for over last 25 years. The management of the company is planning to expand the manufacturing activities for which funds are needed. On 1*' April, 2019, to meet out the financial requirement Ore Exploration Ltd. issued 50,000, Compulsory Convertible Cumulative Preference Shares (CCCPS) of 7100 each. These preference shares carry a coupon rate of 12% p.a. and is payable every year. The Company has substantial profits for…

(a) A Ltd. announced a stock appreciation right (SAR) on 1%' April, 2020 for each of its employees. The scheme gives the employees the right to claim cash payment equivalent to an excess of market price of Company’s shares on exercise date over the exercise price of ₹250 per share in respect of 100 shares, subject to a condition of continuous employment of 3 years. The SAR is exercisable after 31%‘ March, 2023 but before 30! June,2023. The fair value…

(a) Diamond Limited is transitioning to Ind AS. It has certain investments in Ruby Limited's Convertible Debt Instruments, which are currently (on the date of transition to Ind AS) exercisable and would provide Diamond Limited with a controlling stake over Ruby Limited on exercise of the conversion rights. Diamond Limited evaluated that @ The Institute of Chartered Accountants of India Ruby Limited should be treated as its subsidiary under Ind AS. Hence it would require consolidation in its Ind AS…