CHAPTER 6

SEPARATE FINANCIAL STATEMENTS (IAS – 27)

Introduction
IAS 27 Separate Financial Statements contains accounting and disclosure requirements for
investments in subsidiaries, joint ventures and associates when an entity prepares separate
financial statements.
The Standard requires an entity preparing separate financial statements to account for
those investments either at cost, or in accordance with IFRS 9 Financial Instruments, or using
the equity method.
Definitions
Separate financial statements
Separate financial statements are those presented by a parent or an investor with joint
control of, or significant influence over, an investee.
Who is required to present Separate Financial Statements?
a) An entity may present separate financial statements in addition to consolidated
financial statements or economic entity financial statements.
b) The entities those are exempt from preparing consolidated financial statements
under IFRS 10 or economic entity financial statements under IAS 28.
c) An investment entity exempt from preparing consolidated or economic entity
financial statements will only prepare separate financial statements.
Preparation of separate financial statements
When an entity prepares separate financial statements, it shall account for investments in
subsidiaries, joint ventures and associates either:
(a) at cost, or;
(b) in accordance with IFRS 9.; or
(c) using the equity method as described in IAS 28.
Other Provisions
 The entity shall apply the same accounting for each category of investments.
 Investments accounted for at cost or using the equity method shall be accounted
for in accordance with IFRS 5 when they are classified as held for sale or for
distribution under IFRIC 17.
 The measurement of investments accounted for in accordance with IFRS 9 is not
changed in such circumstances.
Dividends is
 recognized in the separate financial statements of an entity when entity’s right to
receive the dividend is established.
 recognized in profit or loss unless the entity elects to use the equity method, in which
case the dividend is recognized as a reduction from the carrying amount of the
investment.
Summary
Sr. No. Subsidiary Associated Joint venture Dividend
Separate
1 Cost Cost Cost Income
2 IFRS 09 IFRS 09 IFRS 09 Income
3 Equity method Equity method Equity method Eliminated
Consolidated
1 Purchase method Equity method Equity method Eliminated
If subsidiary company is measured in separate financial statements other than cost
method the profits/gains are reversed first to have cost of investment to calculate
goodwill at the date of acquisition.
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 CONSOLIDATION OF ASSOCIATED COMPANY
AND JOINT VENTURE
IAS – 28
Objective
The objective is to prescribe the accounting for investments in associates and to set out the
requirements for the application of the equity method when accounting for investments in
associates and joint ventures.
Scope
This Standard shall be applied by all entities that are investors with joint control of, or
significant influence over, an investee.
Definitions (Not given in previous chapters)
The following terms are used in this Standard with the meanings specified: -
An associate is an entity over which the investor has significant influence.
The equity method is a method of accounting whereby the investment is initially recognized
at cost and adjusted thereafter for the post-acquisition change in the investor’s share of
net assets of the investee.
A joint arrangement is an arrangement of which two or more parties have joint control.
Joint control is the contractually agreed sharing of control of an arrangement, which exists
only when decisions about the relevant activities require the unanimous consent of the
parties sharing control.
A joint venture is a joint arrangement whereby the parties that have joint control of the
arrangement have rights to the net assets of the arrangement.
A joint venturer is a party to a joint venture that has joint control of that joint venture.
Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies. Investments of
20% to 50% in voting power of companies lead to existence of significant influence.
Explanation
The significant influence by an investor is usually evidenced in one or more of the following
ways: -
a) Representation on the board of directors or equivalent governing body of the
investee.
b) Participating in policy making process, including participation in decisions about
dividends or other distributions.
c) Material transactions between the investor and the investee
d) Interchange of managerial personnel; or
e) Provision of essential technical information.

The existence of potential voting rights which are currently exercisable is also considered
when assessing significant influence.
Accounting of Associate and Joint venture
Investment is initially recorded at cost;
a) Adjusted for post-acquisition change in net assets (investor share); Or post acquisition
profits/Losses (investor share);
b) The profit or loss of the investor includes the investor’s share of the profit or loss of the
investee and its share of other comprehensive income.
c) Dividend paid or distributions made will reduce the investment.
d) On acquisition any difference between the cost of investment and investor’s share of
net fair value of associate’s identifiable assets, liabilities and contingent liabilities is
accounted for in accordance with IFRS-3.
 Goodwill relating to an associate is included in the carrying value of investment
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  The bargain purchase gain is included in the carrying value of investment and is
included in the income statement of the year of acquisition.
f) Adjustments in investor’s share of profit or loss after acquisition are made in respect
of depreciation based on Fair Value of date of acquisition.
g) If different reporting dates, adjust the effect of significant events between reporting
dates;
h) The investor’s financial statements shall be prepared using uniform accounting;
i) If the associate or the joint venture has cumulative preference shares then take the
group share in profits after preference dividend irrespective;
j) If the investor’s share of losses exceeds or equals its interest in associate or joint
venture, the investor will discontinue the recognition of further losses. Additional
losses can only be recognized if there exist any legal or constructive obligation; and
k) The entire amount of investment is tested for impairment under this IFRS considering
indicators given comparing with its recoverable value. The impairment loss will be
charged to profit or loss account.

Transaction between group and associate

Item Treatment
a) Trading between group and The profits or losses resulting from up-
associate stream or down-stream transactions
between an investor and associated or
the joint venture are recognized in the
investor’s financial statements only to the
extent of un-related investor’s interest in
associate or joint venture. The investors’
share in the associate‘s profit and losses
resulting from these transactions is
eliminated.
b) Loans between associates or joint 1) These should be disclosed
ventures and the group separately, but:
 If long term, they may appear in
the same balance sheet section
as “investment in associates or
joint venture”
 Otherwise they should appear
as current assets or liabilities.
2) Loans to and from should not be
netted off.
c) Receivables and payables arising 1) Include under respective current
from trading transactions with assets or liabilities without netting
associates or joint ventures off.
2) Disclose separately if material.
Exception to Equity Method
An investment in an associate or a joint venture shall be accounted for using the equity
method except when:
1) There is an evidence that the investment is acquired and held exclusively with a
view to its disposal within twelve months from acquisition date(Then apply IFRS-5).
2) The exception in IFRS 10, allowing a parent that also has an investment in an
associate or joint venture not to present consolidated financial statements, applies;
or All of the following apply:
a. The investor is a wholly-owned subsidiary its other owners do not object if the
investor does not apply the equity method;

Page 3 of 27
 b. The investor’s debt or equity instruments are not traded in a public market
c. The investor did not file its financial statements with a securities commission, and
d. The ultimate parent of the investor produces consolidated financial statements.
3) When an investment in an associate or a joint venture is held by, or is held indirectly
through, an entity that is a venture capital organization, or a mutual fund, unit trust
and similar entities including investment-linked insurance funds, the entity may elect
to measure investments in those associates and joint ventures at fair value through
profit or loss in accordance with IFRS 9.
4) When an entity has an investment in an associate, a portion of which is held
indirectly through a venture capital organization, or a mutual fund, unit trust and
similar entities including investment-linked insurance funds, the entity may elect to
measure that portion of the investment in the associate at fair value through profit or
loss in accordance with IFRS 9 regardless of whether the venture capital
organization, or the mutual fund, unit trust and similar entities including investment-
linked insurance funds, has significant influence over that portion of the investment.
If the entity makes that election, the entity shall apply the equity method to any
remaining portion of its investment in an associate that is not held through a venture
capital organization, or a mutual fund, unit trust and similar entities including
investment-linked insurance funds.
5) Classification as held for sale
a) An entity shall apply IFRS 5 to an investment, or a portion of an investment, in
an associate or a joint venture that meets the criteria to be classified as held
for sale.
b) Any retained portion of an investment in an associate or a joint venture that
has not been classified as held for sale shall be accounted for using the
equity method until disposal of the portion that is classified as held for sale
takes place.
c) After the disposal takes place, an entity shall account for any retained
interest in the associate or joint venture in accordance with IFRS 9 unless the
retained interest continues to be an associate or a joint venture, in which
case the entity uses the equity method.
d) When an investment or a portion of an investment, in an associate or a joint
venture previously classified as held for sale no longer meets the criteria to be
so classified, it shall be accounted for using the equity method retrospectively
as from the date of its classification as held for sale. Financial statements for
the periods since classification as held for sale shall be amended accordingly.
e) Discontinuing the use of the equity method: - An entity shall discontinue the
use of the equity method from the date when its investment ceases to be an
associate or a joint venture as follows:
 If the investment becomes a subsidiary, the entity shall account for its
investment in accordance with IFRS 3 Business Combinations and IFRS
10.
 If the retained interest in the former associate or joint venture is a
financial asset, the entity shall measure the retained interest at fair
value. The fair value of the retained interest shall be regarded as its fair
value on initial recognition as a financial asset in accordance with IFRS
9. The entity shall recognize in profit or loss any difference between:
(i) the fair value of any retained interest and any proceeds from
disposing of a part interest in the associate or joint venture; and
(ii) the carrying amount of the investment at the date the equity
method was discontinued.
 When an entity discontinues the use of the equity method, the entity
shall account for all amounts previously recognized in other
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 comprehensive income in relation to that investment on the same
basis as would have been required if the investee had directly
disposed of the related assets or liabilities.
6) PREVIOUS GAINS/LOSSES RECOGNIZED IN OCI
Therefore, if a gain or loss previously recognized in other comprehensive income by
the investee would be reclassified to profit or loss on the disposal of the related
assets or liabilities, the entity reclassifies the gain or loss from equity to profit or loss (as
a reclassification adjustment) when the equity method is discontinued. For example,
if an associate or a joint venture has cumulative exchange differences relating to a
foreign operation and the entity discontinues the use of the equity method, the
entity shall reclassify to profit or loss the gain or loss that had previously been
recognized in other comprehensive income in relation to the foreign operation.

CHANGE IN STATUS FROM ASSOCIATE TO JV OR VICE VERSA

If an investment in an associate becomes an investment in a joint venture or an investment
in a joint venture becomes an investment in an associate, the entity continues to apply the
equity method and does not re-measure the retained interest.

CHANGES IN OWNERSHIP INTEREST

If an entity’s ownership interest in an associate or a joint venture is reduced, but the entity
continues to apply the equity method, the entity shall reclassify to profit or loss the
proportion of the gain or loss that had previously been recognized in other comprehensive
income relating to that reduction in ownership interest if that gain or loss would be required
to be reclassified to profit or loss on the disposal of the related assets or liabilities.

SUMMERY
The main accounting requirements can be summarized in the following flowchart.

Page 5 of 27
EXAMPLES
E–1
Leigh acquired 30% of the ordinary share capital of Handy, a public limited company on
June 01 20x6. The purchase consideration was one million ordinary shares of Leigh which
had a market value of Rs.2.5 per share at that date and the fair value of the net assets of
Handy was Rs.9 million. The retained earnings of Handy were Rs. 4 million and other reserves
of Handy were Rs. 3 million at that date. Leigh appointed two directors to the Board of
Handy. The summarized financial position of Handy at 31 May 20x7 is as follows: -
Rs. (m)
Share capital of Rs. 1 each 2
Other reserves 3
Retained earnings 5
Net assets 10
There had been no new issue of shares by Handy since the acquisition by Leigh and the
estimated recoverable amount of the net assets of Handy at 31 May 20x7 was Rs. 11 million.
Required: - Discuss with suitable computations how the above situation should be
accounted for under IAS -28 for the year ended May 31, 20x7?
E–2
A group has the following individual statement of financial positions at 31 December 20X8
H Ltd A Ltd H Ltd A Ltd
Rs. 000s Rs. 000s Rs. 000s Rs. 000s
Ordinary share capital Share in A Ltd at cost (30%) 120
(Re. 1 shares) 1,000 200
Revenue reserves 750 150 Sundry net assets 1,630 600
Debentures 250
1,750 600 1,750 600
The investment in A Ltd was acquired on 1 January 20X7 when A Ltd’s revenue reserves
amounted to Rs. 60,000.
Required consolidated statement of financial position?
E–3
Otway, a public Limited Company, acquired a subsidiary, Holgarth, on July 01, 20x2 and an
associate, Betterbee, on January 01, 20x5. The details of the acquisition at the respective
dates are as follows: -

Investment Ordinary Reserves Fair value Cost of Ordinary

share of net investment share
capital assets at capital
acquisition acquired
Retained Share
earnings premium
Rs. 1each Rs. (m) Rs. (m) Rs. (m) Rs. (m) Rs. (m)
Holgarth 400 160 140 800 765 320
Betterbee 220 269 83 652 203 55
The draft financial statements for the year ended June 30, 20x6 are: -
Statement of financial position as at June 30, 20x6 Otway Holgarth Betterbee
Rs. (m) Rs. (m) Rs. (m)
Non-current assets
Property, plant and equipment 1,012 920 442
Intangible assets 350 27
Investment in Holgarth 765 -- --
Investment in Betterbee 203 -- --
1,980 1,270 469
Page 6 of 27
Current assets
Inventories 620 1,460 214
Trade receivables 950 529 330
Cash and cash equivalents 900 510 45
2,470 2,499 589
4,450 3,769 1,058
Equity
Share capital 1,000 400 220
Share premium 200 140 83
Retained earnings 1,370 929 361
2,570 1,469 664
Current liabilities
Trade and other payables 1,880 2,300 394
4,450 3,769 1,058
Statement of comprehensive income for the year Otway Holgarth Betterbee
ended June 30, 20x6
Rs. (m) Rs. (m) Rs. (m)
Revenue 4,480 4,200 1,460
Cost of sales (2,690) (2,940) (1,020)
Gross profit 1,790 1,260 440
Distribution and administrative cost (620) (290) (196)
Finance cost (50) (80) (24)
Dividend income 260 -- --
Profit before tax 1,380 890 220
Income tax expense (330) (274) (72)
Profit for the year 1,050 616 148

Dividend paid for the year 250 300 80

Retained earnings brought forward 570 613 293

Additional information:
a) The Otway Group has the policy of measuring NCI at fair value at the date of
acquisition and Fair Value of NCI was Rs. 210 million at the date of acquisition.
b) Neither Holgarth nor Betterbee had reserves other than retained earnings and share
premium at the date of acquisition. Neither issued new shares since acquisition.
c) The fair value difference on the subsidiary relates to property, plant and equipment
being depreciated through cost of sales over the remaining useful life of 10 years
from the acquisition date. The fair value difference on the associate relates to a
piece of land which has not been sold since acquisition.
d) Holgarth’s intangible assets include Rs. 87 million of training and marketing cost
incurred during the year ended June 30, 20x6. The directors of Holgarth believe that
these should be capitalized as they relate to the startup period of a new business
venture in Scotland, and intend to amortize the balance over five years from July 01,
20x6.
e) During the year ended June 30, 20x6 Holgarth sold goods to Otway for Rs. 1,300
million. The company makes a profit of 30% on the selling price. Rs. 140 million of
these goods were held by Otway on June 30, 20x6 (Rs. 60 million on June 30, 20x5).
f) Otway sold goods worth Rs. 1,000 to Betterbee during the year by charging 25%
margin on sales, 10% of the goods still remains unsold by Betterbee.
g) Annual impairment tests have indicated impairment losses of Rs. 100 million relating
to the recognized goodwill of Holgarth including Rs. 25 million in the current year. The

Page 7 of 27
 Otway group recognizes impairment losses on goodwill in cost of sales. No
impairment losses to date have been necessary for the investment in Betterbee.
Required: -
Prepare the statement of comprehensive income and statement of changes in equity for
the year ended June 30, 20x6 for the Otway Group and a statement of financial position at
that date?
SOLUTIONS TO EXAMPLES
E–1
June 01, X6 Rs. (m) Rs. (m)
Cost of investment [1 x 2.5) 2.50
Share of net assets (9 x 30%) (2.70)
Bargain purchase gain (0.20)
Cost on investment -restated
Cost of investment 2.50
Bargain purchase gain 0.20
2.70
May 31, 20x7
Carrying value of associate
Cost of investment 2.70
Share of post acquisition profit 0.30
[1 x 30%]
Carrying value of associate 3.00
May 31, 20x7
Impairment test
Carrying value of associate 3.00
Fair value [11 x 30%] 3.30
There is no impairment as the fair
value is greater than carrying value
E-2
H LIMITED
STATEMENT OF FINANCIAL POSITION
AS AT DECEMBER 31, X8

Rs. (000) Rs. (000)

Assets
Sundry net assets 1,630
Investment in associate
Cost of investment 120
Add: share of post acquisition profits 27 147
[150 – 60 ]x30%
1,777
Equity and liabilities
Equity –ordinary share capital 1,000
Revenue reserves 777 1,777
[750 + 27]
1,777
W-1
1-1-x7
Cost of investment 120
Share of net assets (78)
Page 8 of 27
 [60+200]30%
Goodwill 42
Goodwill is not recognized separately from
cost of investment in associate

E-3
OTWAY GROUP
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT JUNE 30, 20X6
Rs. (m) Rs. (m)
Non-current assets
Property, plant and equipment (1,012+920+100-40) 1,992
Intangible assets (350-87) 263
Investment in associate 219.75
Goodwill (125+50-100) 75 2,549.75
Current assets
Inventories (620+1,460-42) 2,038
Trade receivables (950+529) 1,479
Cash and cash equivalents (900+510) 1,410 4,927
7,476.75

Equity
Share capital 1,000
Share premium 200
Consolidated retained earnings 1,786.75 2,986.75
Non controlling interest 310
3,296.75
Current liabilities
Trade and other payables (1,880+2,300) 4,180
7,476.75
Otway Group
Consolidated statement of comprehensive income
For the year ended June 30, 20X6
Revenue 7,380
Cost of sales (4,476)
Gross profit 2,904
Distribution and administrative cost (910)
Finance cost (130)
Profit before tax 1,864
Income tax expense (604)
Profit for the year 1,260
Share of profit from associate 30.75
Net profit for the year 1,290.75
Attributable to: -
Group 1,196.75
NCI 94
1,290.75
W-1 Group structure % %
Group 80 25
Page 9 of 27
NCI 20 --
100 25
W-2 Goodwill-Group Holgarth Betterbee
Cost of investment 765 203
Share of net assets (640) (163)
Goodwill 125 40
W-3 Goodwill NCI
Fair value of NCI 210
Share of net assets (160)
Goodwill 50
W-3 Fair value gain
Fair value of net assets 800 652
Share capital 400 220
Retained earnings 160 269
Share premium 140 83
700 572
Fair value gain 100 80
W-4 Opening retained earnings – Group
Parent company 570
Associated company 6
Subsidiary share of profit 264
840

W-5 opening retained earnings –Holgarth Pre Post

Brought forward 160 453
Fair value gain 100 -
Extra depreciation - (30)
Impairment loss on goodwill - (75)
URP on opening stock - (18)
260 330
Group 208 264
NCI 52 66
W-6 Investment in associate
Cost of investment 203
Share of profit b/ f profit (293-269)x.25 6
URP on stock (6.25)
Share of profit for the year 37
Dividend received (20)
219.75
W-7 NCI opening
Fair value at date of acquisition 210
Post acquisition profit share b/ f 66
276
W-7
Otway Holgarth Adjustment Consolidated
Rs. (m) Rs. (m)
Revenue 4,480 4,200 (1,300) 7,380
Cost of sales (2,690) (2,940) 1,154 (4,476)
Gross profit 1,790 1,260 (146) 2,904
Distribution and administrative cost (620) (290) - (910)

Page 10 of 27
Finance cost (50) (80) (130)
Dividend income 260 -- (260)
Profit before tax 1,380 890 (406) 1,864
Income tax expense (330) (274) - (604)
Profit for the year 1,050 616 (406) 1,260
Share of profit from associate (37-6.25) - - 30.75 30.75
Profit or loss for the year 1,050 616 (375.25) 1,290.75
Attributable to: -
Group 1,196.75
NCI 94
1,290.75
W-8 Adjusting entries
Cost of sale 10
Opening retained earnings (Post) 30
Property, plant and equipment 40
Property, plant and equipment 100
Retained earnings -pre 100
Cost of sales 87
Intangible assets 87
Sales 1,300
Cost of sales 1,300
Cost of sales 42
Closing stock 42
Opening retained –post 18
Cost of sales 18
Profit and loss account/CRE 6.25
Investment in associate 6.25
(1000x.25)x10%x.25
Opening retained earnings-post 75
Cost of sales 25
Goodwill 100
Profit or loss account 240
NCI 60
Dividend 300
Profit or loss account 20
Investment in associate 20
W-9 Adjusted profit
Profit after tax 616
Extra depreciation (10)
Impairment loss on goodwill (25)
Intangible asset (87)
URP on closing stock (42)
URP on opening stock 18
470
NCI share @20% 94
OTWAY GROUP
CONSOLIDATED STATEMENT OF CHANGED IN EQUITY
FOR THE YEAR ENDED JUNE 30, 20X6
Ordinary Share Consolidated Total NCI Total
share retained
capital premium earnings
B/f 1,000 200 840 2,040 276 2,316
Page 11 of 27
 Total comp. - - 1,196.75 1,196.75 94 1,290.75
income
Dividends (250) (250) (60) (310)
C/ d 1,000 200 1,786.75 2,986.75 310 3,296.75

Past Papers
Q-1
Golden Limited (GL) is a listed company and has held shares in two companies, Yellow
Limited (YL) and Black Limited (BL), since July 1, 2006. The details of acquisition of shares in
these companies are as follows:
(A) GL acquired 18 million shares in YL at par, when YL’s reserves were Rs. 24
million. The acquisition was made by issuing four shares in GL for every five
shares in YL. The market price of GL’s shares at July 1, 2006 was Rs. 20 per
share. A fair value exercise was carried out for YL’s assets and liabilities at the
time of its acquisition with the following results:

Book Value Fair Value

Rupees in million
Land 170 192
Machines 25 45
Investments 3 6

The remaining life of machine on acquisition was 5 years. The fair values of the
assets have not been accounted for in YL’s financial statements.
(B) 6 million shares in BL were acquired for Rs. 12 per share in cash. At the date of
acquisition, the reserves of BL stood at Rs. 40 million.
The summarized income statement of the three companies for the year ended June
30, 2008 is as follows:
GL YL BL
Rupees in million
Sales 875 350 200
Cost of sales (567) (206) (244)
Gross profit / (loss) 308 144 (44)
Selling expenses (33) (11) (15)
Administrative expenses (63) (40) (16)
Interest expenses (30) (22) (15)
Other income 65 - -
Profit/(loss) before tax 247 71 (90)
Income tax (73) (15) 8
Profit/(loss) for the period 174 56 (82)
The following relevant information is available:
(i) The share capital and reserves as at July 1, 2007 were as follows:
GL YL BL
Rupees in million
Ordinary share capital of Rs. 10 each 600 200 150
Reserves 652 231 108
The share capital of all companies have remained unchanged since their
incorporation.
(ii) During the year, GL sold goods amounting to Rs. 40 million to YL. The sales were
made at a markup of 25% on cost. 30% of these goods were still in the
inventories of YL at June 30, 2008.
Page 12 of 27
 (iii) GL manufactures a component used by BL. During the year, GL sold these
components amounting to Rs. 20 million to BL. Transfers are made at cost plus
15%. BL held Rs. 11.5 million of these components in inventories at June 30, 2008.
(iv) All assets are depreciated on straight line method.
(v) Other income includes dividend received from YL on April 15, 2008.
(vi) During the year, YL paid 20% cash dividend to its ordinary shareholders.
(vii) An impairment test was carried out on June 30, 2008 for the goodwill of YL and
investments in BL, appearing in the consolidated financial statements. The test
indicated that:
 goodwill of YL was impaired by 20%;
 due to recent losses, the fair value of investment in BL has been reduced to
Rs.40 million.
No such impairment was required in previous years.
Required:
Prepare, in a format suitable for inclusion in the annual report, a consolidated income
statement for the year ended June 30, 2008. (22)
Q-2
T Limited, a public listed company, entered into an expansion program on July 1, 2004. On
that date, the company purchased 80% of the share capital of Alpha Ltd and 40% of the
share capital of Beta Ltd. For Alpha, T Ltd paid total consideration of Rs.25 million. This was
settled by signing a loan agreement of Rs.20 million carrying interest at 7% payable semi-
annually and the balance by issuing 200,000 ordinary shares of T Limited. Shares of Beta Ltd.
were acquired by a 1 for 1 share exchange. The market value of T Limited’s share at the
date of acquisition was Rs 25. The yearend of all the companies is June 30.
Extracts from their balance sheets at June 30, 2005 are as under:
T Ltd Alpha Ltd Beta Ltd
Rs 000 Rs 000 Rs 000
Fixed Assets:
Land 5,000 4,000 3,500
Building 8,000 6,000 5,500
Plant 22,400 14,000 12,000

Current Assets:
Stocks 10,000 9,000 16,200
Trade debts 9,200 7,000 2,800
Cash Nil 3,000 4,300

Share Capital and Reserves:

Ordinary shares of Rs.10 each 10,000 20,000 25,000
Un-appropriated profits 20,000 15,000 4,500

Current liabilities:
Creditors 12,000 5,300 13,600
Running finance 3,000 Nil Nil
Taxation 9,600 2,700 1,200
The following further information is available:
• T Ltd. has not recorded the acquisition of the above investments nor the issue
of new shares at the time of preparing the above balance sheet. However
interest on loan of Rs.20 million has already been account for.
• The book values of the assets of Alpha Ltd. and Beta Ltd., at the date of
acquisition, were considered to be a reasonable approximation of their fair
values with the exception of fixed assets of Alpha Ltd. These were considered
Page 13 of 27
 to have the following fair values.
Land Rs. 5.0 million
Plant Rs.16.0 million
The plant had a remaining life of 4 years at the time of acquisition.
• The profits of Alpha Ltd. and Beta Ltd., for the year ended June 30, 2005, as
reported in their financial statements, were Rs.8 million and Rs. 2 million
respectively. No dividends have been paid by any of the companies during
the year.
Required: Prepare the Consolidated Balance Sheet of T Ltd. as at June 30, 2005?
Q-3
Qudsia Limited (QL) has investments in two companies as detailed below:
Manto Limited (ML)
 On 1 January 2010, QL acquired 40 million ordinary shares in ML, when its retained
earnings were Rs. 150 million.
 The fair value of ML’s net assets on the acquisition date was equal to their carrying
amounts.
Hali Limited (HL)
 On 30 November 2012, QL acquired 16 million ordinary shares in HL, when its retained
earnings stood at Rs. 224 million.
 The purchase consideration was made up of:
o Rs. 190 million in cash, paid on acquisition; and
o 4 million shares in QL. At the date of acquisition, QL’s shares were being traded at
Rs. 15 per share but the price had risen to Rs. 16 per share by the time the shares
were issued on 1 January 2013.
 The fair value of the net assets of HL on the date of acquisition by QL was equal to their
carrying amounts, except a building whose fair value exceeded its carrying amount by
Rs. 28 million. The building had a remaining useful life of seven years on 30 November
2012.
The draft summarised statements of financial position of the three companies on 31
December 2012 are shown below:

QL ML HL
Rs. in million
Assets
Property, plant and equipment 5,000 550 500
Investment in ML 630 - -
Investment in HL 190 - -
Current assets 5,480 400 350
11,300 950 850
Equity and liabilities
Ordinary share capital (Rs.10 each) 6,000 500 400
Retained earnings 2,900 100 240
Current liabilities 2,400 350 210
11,300 950 850
The following additional information is available:
(i) QL considers ML as a cash-generating unit (CGU). As on 31 December 2012, the
recoverable amount of the CGU was estimated at Rs. 700 million.
(ii) QL values the non-controlling interest at its proportionate share of the fair value of
the subsidiary’s net identifiable assets.
(iii) On 1 October 2012, ML sold a machine to QL for Rs. 24 million. The machine had
been purchased on 1 October 2010 for Rs. 26 million. The machine was originally
assessed as having a useful life of ten years and that estimate has not changed.

Page 14 of 27
(iv) In December 2012, QL sold goods to HL at cost plus 30%. The amount invoiced was
Rs. 52 million. These goods remained unsold at year end and the invoiced amount
was also paid subsequent to the year end.
Required:
Prepare a consolidated statement of financial position for QL as on 31 December 2012 in
accordance with the requirements of International Financial Reporting Standards? (20)
Q-4
On 1 October 2012, Alpha Industries Limited (AIL) held 15% and 35% equity in Beta (Private)
Limited and Delta (Private) Limited (DPL) respectively. The following balances, pertains to
the three companies as on the above date.
AIL BPL DPL
RS. In millions
Share capital (Rs. 100 each) 100 60 50
Retained earnings 35 30 15
Other comprehensive income – fair value reserve related to BPL 6 -- --
Total equity 141 90 65

Non-current investment –BPL *(Cost Rs. 18 million) 20 -- --

Non-current investment –DPL **(Cost Rs. 40 million) 43 -- --

* recorded as available for sale

** recorded as investment in associate

On 1 April 2013, AIL acquired a further 55% equity in BPL when: -

a) The fair value of the net assets of BPL was Rs. 100 million which was equal to their
carrying value; and
b) The fair value of the 15% equity already held in BPL was Rs. 25 million.

The purchase considerations comprised of 150,000 shares in AIL which were issued on the
date of acquisition at their market value of Rs. 160 per share and Rs. 42 million payable in
cash on 31 March 2014. AIL uses discount rate of 12% for determining the present value of
its future assets and liabilities.
Other relevant information is as follows: -
a) For the year ended 30 September 2013 the profits after tax of AIL, BPL and DPL were
Rs. 58 million, Rs. 40 million and Rs. 30 million respectively.
b) AIL value non controlling interest at the acquisition date at its fair value which was
Rs. 32 million.
c) AIL sold goods at Rs. 65 million to BPL on 1 July 2013. The sales were invoiced at 30%
above cost. 20% of these goods remained unsold as on 30 September 2013.
d) DPL’s sales to AIL amounted to Rs. 70 million. DPL earns profit of 20% of sales value.
On 30 September 2013, inventory of AIL included Rs. 20 million in respect of such
goods.
e) For the year ended 30 September 2012 AIL, BPL and DPL paid final cash dividend of
15%, 20% and 12% respectively.
Required: -
a) Compute the amount of goodwill; retained earnings and investment in associate as
they would appear in the consolidated statement of financial position of AIL as at 30
September 2013, in accordance with IFRS (Ignore taxation)? (18)
b) Describe how the investments as it would appear in the separate statement of
financial position of AIL as at 30 September 2013, in accordance with IFRS? (4)

.
Page 15 of 27
Q-5
a) On 1 October 2009 Sky Limited (SL) acquired 25% holding (2.5 million ordinary shares)
in Mars Limited (ML) for Rs. 900 million. On the date of acquisition, ML’s equity was as
follows:
b)
Rs. in million
Ordinary share capital (Rs. 100 each) 1,000
Share premium 150
Retained earnings 2,898
12% cumulative preference share capital 200
c) On the above date, fair value of a building owned by ML exceeded its carrying
value by Rs. 12 million and its estimated useful life was 15 years. Fair values of all
other assets and liabilities of ML were equal to their carrying values.

Following additional information is available:

(i) ML’s profit after tax for the year ended 30 September 2011 was Rs. 250 million (2010:
Rs. 240 million). Dividend received from ML amounted to Rs. 30 million (2010: nil).
(ii) Cost of goods purchased from SL and included in ML’s closing inventory was Rs. 10
million (2010: Rs. 16 million). SL makes a profit of 20% on all sales.
(iii) Applicable tax rate is 35% and 10% for business and dividend income respectively.
On 1 January 2011, SL acquired 70% holding (7 million ordinary shares) in Jupiter
Limited (JL) for Rs. 1,400 million. SL has been following a policy to account for
investments in associates using equity basis of accounting. Since SL is now required
to prepare consolidated financial statements, it needs to change its accounting
policy for investments in associates, for the purpose of preparation of its separate
financial statements, to comply with the requirements of International Financial
Reporting Standards.
Required:
Prepare the following notes (relevant portion only) for incorporation in the separate
financial statements of Sky Limited for the year ended 30 September 2011:
(a) Change in accounting policy
(b) Investments
(Show all the necessary disclosures and comparative figures in respect of the above, in
accordance with International Financial Reporting Standards.) (22 marks)
Q-6
In order to pursue expansion of its business, Parrot Limited (PL) has made the following
investments during the year ended 30 June 2012:
(a) On 1 July 2011, PL acquired 20% shares of Goose Limited (GL), a listed company,
when GL’s retained earnings stood at Rs. 250 million and the fair value of its net
assets was Rs. 350 million. The purchase consideration was two million ordinary shares
of PL whose market value on the date of purchase was Rs. 33 per share. PL is in a
position to exercise significant influence in finalizing the financial and operational
policies of GL.
The summarized statement of financial position of GL at 30 June 2012 was as follows:

Rs. in million
Share capital (Rs. 10 each) 100
Retained earnings 280
380
Net assets 380
Recoverable amount of GL’s net assets at 30 June 2012 was Rs. 370 million. (06)
(b) Costs incurred for development and promotion of a brand are enumerated below:

Page 16 of 27
 Rupees
(i) Research on size of potential market 800,000
(ii) Products designing 1,500,000
(iii) Labour costs in refinement of products 950,000
(iv) Development work undertaken to finalize the product design 11,000,000
(v) Cost of upgrading the machine 18,000,000
(vi) Staff training costs 600,000
(vii) Advertisement costs 3,400,000
(06)
Required:
Discuss how the above investments/costs would be accounted for in the consolidated
financial statement for the year ended 30 June 2012.
Q-7
Opal Industries Limited (OIL) is a listed company. As at June 30, 2014 OIL has various
investments as detailed under: -
Company Investment Equity held Cost At the acquisition date
date
Share capital Retained
(RS. 100 earnings
each)
Rs. In millions
AL 01-July-2012 30% 50 80 60
BL 31-Dec-2011 10% 8 70 40
GL 01-Jan-2014 65% 195 150 95
Information pertaining to profit and dividend of the investee companies is as follows: -
Company Profit / (loss) Final cash dividend for year
For the year ended ended
2014 2013 2014 2013
Rs. (m) Rs. (m)
AL 30 28 20% 16%
BL (10) 14 -- 18%
GL 55 50 30% 15%

BL is a listed company and fair value of its shares as at June 30, 2014 was Rs. 110 per share
(2013 Rs. 160). OIL classifies investment in BL as available for sale.
AL and GL are private companies and market value of their shares is not available.
GL is the first subsidiary of OIL, since its incorporation. Following information pertains to OIL: -
2013 2012
Rs. (m) Rs. (m)
Share capital (Rs. 10 each) 2,875 2,500
Profit for the year 1,260 1,100
Closing retained earnings balance 850 465
Final dividend – cash 25% 20%
Bonus issue -- 15%

OIL’s profit for the year ended June 30, 2014 prior to taking effects of the transactions of its
investee companies was Rs. 1,450 million and it has announced a final cash dividend of
30%.
Required: -
Prepare following for inclusion in the first separate financial statements of OIL for the year
ended June 30, 2014 as required by the International Financial Reporting Standards.

Page 17 of 27
a) Movement in retained earnings for inclusion in statements of changes in equity; and
(06)
b) Note on investments (10)
(Show comparative figures and ignore taxation)

Page 18 of 27
SOLUTIONS TO PAST PAPERS
A–1

GOLDEN LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED JUNE 30, 2008
GL YL Adjustments Consolidated
Rs.(m) Rs.(m) Rs.(m) Rs.(m)
Sales 875 350 (40) 1,185.00
Cost of sales (567) (206) 24.42 (748.58)
Gross profit/(loss) 308 144 (15.58) 436.42
Selling expenses (33) (11) (44.00)
Administrative expenses (63) (40) (103.00)
Interest expense (30) (22) (52.00)
Other income 65 -- (36.00) 29.00
Share of loss from associate (W-3) -- -- (63.20) (63.20)
Profit / (loss) before tax 247 71 (114.78) 203.22
Income tax (73) (15) -- (88.00)
Profit after tax 174 56 (114.78) 115.22
NCI [56-4]x10% -- (5.2) -- (5.20)
Profit attributable to owners of 174 50.80 (114.78) 110.02
parent

Workings
W-1 Group structure YL BL
% %
Group 90 40
NCI 10
100 40
W-2
Cost of control account Rs. (m) Rs. (m)
Cost of investment (18x4/5x20) 288
Share of net assets acquired
Share capital 180.00
Pre- acquisition reserves (24+45) x 90% 62.10 242.10
Goodwill 45.90
W-3
Investment in associate
Cost of investment (6x12) 72.00
Share of net assets [40+150]x40% (76.00)
Bargain purchase gain (4.00)
Restate cost of investment (72+4) 76.00
Share of brought forward profits [108-40]x40% 27.20
Share of loss of current year [82x40%] (32.80)
Un-realized profit on intra group trading (0.60)
[11.5x15/115]x40%
Carrying value of associate 69.80
Impairment loss (29.80)
Fair value of associate 40.00
Share of loss from associate for the current year
Share of loss (32.80)
Page 19 of 27
 Un-realized profit (0.60)
Impairment loss (29.80)
(63.20)
W-4 Extra depreciation Rs. 4
million/year
Fair value gain Rs. 20 (m)
Remaining useful life 5 years
W-5 Un-realized profit on closing stock Rs. 2.4
[40x30%x25/125] million
W-6 Intra group dividend [20%200]x90% Rs. 36
W-7 Impairment loss on goodwill [45.90x20%]=9.18
W-8 adjusting entries
Sales 40.00
Cost of sales 40.00
Cost of sales 2.40
Closing stock 2.40
Cost of sales 9.18
Goodwill 9.18
Cost of sales 4.00
Plant 4.00
A–2
T Limited Group
Consolidated statement of financial position
As at June 30, 2005
Rs. (000) Rs. (000)
Fixed assets
Land (9,000+1,000) 10,000
Building 14,000
Plant (36,400-2667+667) 34,400
Investment in associate 25,800
Goodwill 4,734 88,934
Current assets
Stock 19,000
Trade debtors 16,200
Cash 3,000 38,200

Total assets 127,134

Equity and Liabilities

Equity
Share capital (10,000+2,000+10,000) 22,000
Share premium (3,000+15,000) 18,000
Consolidated retained earnings 27,734 67,734

Non controlling interest 6,800

74,534
Non- current liabilities
Loan 20,000

Current liabilities
Creditors 17,300
Running finance 3,000
Page 20 of 27
 Taxation 12,300 32,600

Total equity and liabilities 127,134

W-1 Group structure

Alpha Beta
% %
Group 80 40
NCI 20 --
100 40
W-2 Cost of investment
Alpha Limited
Loan notes 20,000
Share capital 2,000
Share premium 3,000 25,000

W-3 cost of investment in Associate

Share capital 10,000
Share premium 15,000 25,000
W-4 cost of control account
Cost of invest 25,000
Share of net assets
Share capital (16,000)
Pre-acquisition reserves (4,266)
Goodwill 4,734

W-5 Non-controlling interest

Share capital 4,000
Pre-acquisition reserves 1,067
Post-acquisition reserves 1,733 6,800
W-6 Consolidated retained earnings
Parent company reserves 20,000
Associated company 800
Post-acquisition reserves 6,934 27,734

W-7 subsidiary reserves

Pre Post
Given 7,000 8,000
Fair value loss on plant (2,667) --
Fair value gain on land 1,000 --
Extra depreciation 667
5,333 8,667
Group share 4,266 6,934
Non-controlling interest 1,067 1,733

W-8 Investment in associate

Cost of investment 25,000
Share of post acquisition profit 800 25,800
W-9 Fair value loss on plant
Carrying value on the reporting date 14,000
Carrying value on the acquisition date 18,667
Page 21 of 27
(14,000x4/3)=18,667
Fair value at the acquisition date 16,000 (2,667)
W-10 Extra depreciation
2,667/4 667
A–3
QUDSIA LIMITED GROUP
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED DECEMBER 31, 2012
Rs. (m) Rs. (m)
Assets-noncurrent assets
Property, plant and equipment (5,550-3.10) 5,546.90
Goodwill (110 – 27.44) 82.56
Investment in associate 262.27 5,891.73

Current assets 5,880

11,771.73
Equity and liabilities
Equity –ordinary share capital 6,000
Share deposit money 60.00
Consolidated reserves 2,842.37 8,902.37

NCI 119.36
9,021.73

Current liabilities 2,750

11,771.73
W -1 Group structure ML HL
% %
Group 80 --
NCI 20 40
100 40
W- 2 Cost of control a/c ML
Cost of investment 630
Share of net assets acquired
Share capital 400
Pre – acquisition reserves 120
520
Goodwill 110
W -3 Investment in associate
Cost of investment
Cash paid 190
Shares issued (4 x 15) 60 250.00
Share of net assets acquired
Share capital 160.00
Pre –acquisition reserves (224x40%) 89.60
Fair value gain (28 x 40%) 11.20 (260.80)
Bargain purchase gain (10.80)

Re-stated cost of investment 260.80

Page 22 of 27
 Share of post acquisition profits
[240 – 224 – {(28/7)x1/12}]x 40% 6.27
Un – realized profit on stocks (4.80) 1.47
262.27

W – 4 Non controlling interest

Share capital 100.00
Pre – acquisition reserves 30.00
Post – acquisition reserves (10.64) 119.36
W – 5 Consolidate retained earn
Balance 2,900.00
Bargain purchase gain on associate 10.80
Extra depreciation [(3.2/8)x3/12] 0.10
Post – acquisition reserves (42.56)
Impairment loss on goodwill (27.44)
Share of profit from associate 6.27
Un – realized profit on stocks (4.8) 2,842.37

W – 6 Subsidiary retained earnings Pre Post

Balance 150 (50)
Un – realized profit [24 – {(26/10)x2/10}] (3.2)
150 (53.2)
Group share 120 (42.56)
NCI share 30 (10.64)
W – 7 Impairment test
Recoverable value 700.00
Carrying value of net assets
Share capital 500.00
Reserves 96.80
596.80
Goodwill (110 x 100/80) 137.50
734.30
Impairment loss 34.30
Loss to be recorded (34.30x80%) 27.44
W – 8 Un- realized profit on stocks
[52x30/130x40%] 4.8
A–4
a) Goodwill, retained earnings and investment in associate
Goodwill Rs. (m) Rs. (m)
Cost of investment
Fair value of 15% already held investment 25.00
Cost of 55% purchased 01, April 2013
Share capital issued [150,000x160] 24.00
Deferred consideration [42x(1.12)^-1 37.50 86.50
Fair value of NCI 32.00
118.50
Share of net assets acquired
Share capital 60.00
Share of pre-acquisition reserves 40.00 (100.00)
[100+12-60]
Goodwill 18.50
Page 23 of 27
 Retained earnings Debit Credit
Rs. (m) Rs. (m)
Balance brought forward-AIL 35.00
Realized gain on BPL 6.00
Gain on re-measurement of BPL 5.00
Profit for the year –AIL 58.00
Dividend for the year –AIL 15.00
Dividend from associate (50x12%)x.35 2.10
Share of profit from BPL (40+30-52)=18x70% 12.60
Share of profit from associate (30x35%) 10.50
Un-realized profit on closing stock 3.00
[65x20%x30/130]
Un-realized profit on closing stock 1.40
[20x20/100]x35%
Carried down balance 105.60
127.10 127.10
Investment in associate Rs. (m) Rs. (m)
Brought forward balance 43.00
Share of profit 10.50
Dividend from associate (2.10)
51.40

b) Values of investments in separate financial statements

Investment in subsidiary and associated company will be presented in separate
books at cost which is: - Rs.
(m)
Cost of investment in BPL 86.50
Cost of investment in DPL 40.00

A–5
Sky Limited
Notes to the financial statements
For the year ended 30 September 2011

(a)
1. Change in accounting policy
During the year the company has acquired 70% holding in Jupiter Limited on 1
January 2011. Consequently, the company has prepared the consolidated financial
statements along with its separate financial statements, for the first time for the year
ended 30 September 2011.

Investment in Mars Limited was accounted for using equity basis of accounting in
the financial statements for the year ended 30 September 2010. IAS 27 and 28
requires that investment in associates shall be accounted for in the investor's
separate financial statements either at cost or in accordance with IFRS 9 and IAS 39.
Accordingly, the company has changed its accounting policy for investment in
associate from equity basis of accounting to cost, in the separate financial
statements.
1.1 Effects of change in accounting policy
In accordance with requirements of IAS 8 "Accounting policies, changes in
accounting estimates and errors" this change in accounting policy has been

Page 24 of 27
 accounted for with retrospective effect. Comparative information has been re-
stated accordingly. The effects of the above change, on the financial statements
are as follows:
2011 2010
Rs. in million
Effect on Statement of Financial Position
Decrease in investment in the associated company Wl (194.92) (168.35)
Decrease in deferred tax liability (2011: 5.34+2.66) 8.00 5.34
(186.92) (163.01)
Effect on Statement of Comprehensive Income
Decrease in gain on acquisition of investment in the Wl - (115.00)
associated company
Decrease in share of profit in the associated company Wl (56.57) (53.35)
Increase in dividend income 30.00 -
(26.57) (53.35)
Decrease in deferred tax expense at 10% 2.66 5.34
Net decrease in profit (23.91) (163.01)

As the investment in Mars Limited was made on 1 October 2009, there is no effect of such
change in accounting policy, prior to 1 October 2009. As a result, opening balance sheet
as at 1 October 2009 as required by IAS 1 "Presentation of Financial Statements" has not
been presented.

(b)
2. Investment at cost
2011 2010 Description 2011 2010
(Restated
)
Number of shares Rs. in million
7,000,000 - Jupiter Limited - subsidiary 1,400 -
company
2,500,000 2,500,000 Mars Limited - associated 900 900
company
2,300 900

The company holds 70 % and 25% ownership interest in Jupiter Limited and Mars
Limited respectively.

WORKINGS
W1 Effects of change of accounting basis from equity to cost

2011 2010
Balance as at October 1, 2010 / Investment made during the year 1,068.35 900.00
Gain on acquisition of investment in associated company - 115.00
{25%*(1,000+150+2,898+12)}-900
Dividend received from ML (30.00) -
Profit for the year, after tax, attributable to ordinary share holders 2011: 56.50 54.00
(250-(200xl2%))x25% 2010: (240-(200xl2%))x25%
Profit net of tax, on inter-company stock - opening & closing 2011: 0.20 (0.52)
0.52-(10x0.2x0.65x0.25) 2010: (16x0.2x0.65x0.25)
Depreciation on fair value exceeding carrying value (12/15) xO.65x0.25) (0.13) (0.13)
56.57 53.35
Page 25 of 27
Investment in associated company - equity basis of accounting 1,094.92 1,068.35
Investment in associated company - cost basis of accounting 900.00 900.00
Decrease in investment due to change in the basis of accounting 194.92 168.35
A–6
a)
July 01, 2011 Rs. (m) Rs. (m)
Cost of investment [2 x33) 66.00
Share of net assets (350 x 20%) (70.00)
Bargain purchase gain (4.00)
Cost on investment -restated
Cost of investment 66.00
Bargain purchase gain 4.00
70.00
May 31, 20x7
Carrying value of associate
Cost of investment 70.00
Share of post acquisition profit 6.00
[30 x 20%]
Carrying value of associate 76.00
May 31, 20x7
Impairment test
Carrying value of associate 76.00
Fair value [370 x 20%] (74.00)
Impairment loss 2.00
b)

Expenses out Capitalized

Rs. Rs.
Research cost 800,000 --
Product designing -- 1,500,000
Labor cost on refinement of products 950,000 --
Development work to finalize product design -- 11,000,000
Cost of upgrading the machine -- 18,000,000
Staff training cost 600,000 --
Advertisement costs 3,400,000
5,750,000 30,500,000
Out of total expenses to be capitalized Rs. 18,000,000 will be property, plant and equipment
and rest of the expense will be capitalized under IAS 38 as intangible assets.
A–7
Opal Industries Limited
Accounting treatment for various investments in first separate financial statements

In accordance with IAS 27, in separate financial statements, investment in subsidiaries, joint
ventures and associates should be accounted for either at cost or fair value in accordance
with IFRS 9.
As OIL is preparing its first IFRS separate financial statements for the year ended June 30,
2014, there is a change in accounting policy as investment in AL, an associate company,
would be treated in 2014 at cost as against the previous basis of equity accounting.
Accordingly, comparative figures would be restated to incorporate this change in
accounting policy.
i) Opal Industries Limited
Page 26 of 27
 Statement of changes in equity for the year ended June 30, 2014

Retained
earnings
Rs. (m)
Balance as at June 30, 2012 465.00
Profit for the year –restated W-1 1,251.60
Final dividend for the year ended 30-06-12
Cash dividend @20% [2,500x20%] (500.00)
Bonus issue @ 15% [2,500x15%] (375.00)
Balance as June 30, 2013-restated 841.60
Profit for the year W-1 1,454.80
Final cash dividend at 25% for the year ended 30-06-13 (718.75)
[2,875x25%]
Balance as at June 30, 2014 1,577.65
ii) Opal Industries Limited
Notes to the financial statements for the year ended June 30, 2014
1- Long term investments:
2013 2014 Description 2014 2013
Number of shares Rupees in millions
Subsidiary and associates-at cost
975,000 GL 195.00 --
240,000 240,000 AL 50.00 50.00
Others-available for sale
70,000 70,000 BL (70,000x110), 7.70 11.20
(70,000x160)

310,000 1,285,000 252.70 61.20

The company holds 65% and 30% and 10% interest in GL, AL and BL respectively.
W-1 OIL profit for the year after taking effect of investee companies: -
2014 2013
Re-stated
Rs. in million
Profit for the year 1,450.00 1,260.00
AL- associated company:
Reversal of previously booked profit (28x30%) -- (8.40)
Dividend for the year ended June 30, 2013 (80x30%x16%) 3.84
BL – Available for sale:
Dividend for the year ended June 30, 2013
(70x10%x18%) 1.26
Investment impairment (7.7 – 8) or (11.2-8)-(7.7-11.2) (0.30)
1,454.80 1,251.60

Page 27 of 27