Index – Financial Accounting for Management, 5th Edition

Index

A

Accounting, 2, 4, 6

convention, 189, 343

equation (Basic), 7, 27

estimates, 188, 244, 417, 419

income, 7, 9

Accounting standards (AS), 164, 178, 182

applicability, 178, 392

authority attached, 178, 182

details, 139

national advisory committee, 184

national harmonisation, 178

objectives of, 167

in the global context, 851

scope of, 164

AS-1 Disclosure of accounting policies, 183

AS-2 Valuation of inventories, 183

AS-3 Cash flow statements, 183

AS-4 Contingencies and events occurring after the balance sheet date, 183

AS-5 Net profit or loss for the period, prior period and extraordinary items and changes in accounting policies, 183

AS-6 Depreciation accounting, 183

AS-7 Accounting for construction contracts, 183

AS-9 Revenue recognition, 183

AS-10 Accounting for fixed assets, 183

AS-12 Accounting for government grants, 183

AS-13 Accounting for investments, 183

AS-16 Borrowing costs, 183

AS-17 Segment reporting, 183

AS-18 Related party disclosures, 183

AS-19 Leases, 183

AS-20 Earnings per share, 183

AS-22 Accounting for taxes on income, 183

AS-26 Intangible assets, 183

AS-27 Financial reporting of interest in joint ventures, 183

AS-28 Impairment of assets, 183

Accounting Standards Board, of ICAI, 164, 182

Accounting year, 319, 421

extending the, 421

Accounts payable, 145, 157, 601

Accounts receivable, 148, 157, 600

ADRs, 404, 479

ADS, 428, 660

Amalgamation, 183, 597, 635

reserve, 597

Amortisation, 193, 249, 266, 355, 425

intangible assets, of, 193, 259260

a catalyst towards ensuring a better quality of financial discipline, 395

Amortized cost, 212, 217

Analysis of capital market valuation, of Nestlé, 608, 612

comments and observations on change in valuation, 748

investment decision, 428, 533, 626

Analysis of cash flow statement, of Nestlé, 575, 593

cash flow from financing activities, 551, 574

more transparent disclosures, 607

management discussion and analysis report compliance, 405, 618

more transparent disclosures, 607

strategic issues, 607, 613

the report, 391

earnings per share, 169, 477

impairment loss on fixed assets, 345, 550

provision for contingencies, 404

related party disclosures, 171, 175

segment reporting, 183, 416

Analysis of profitability, of Nestlé, 523, 608

common-sized statement showing ratios of expenses to net sales, 450, 454

comparative analysis, 522, 625

key specific ratios, 610

more transparent disclosures, 607

strategic issues, 607608, 611

Analysis of quality of current assets, 612

loans and advances, of Nestlé, 257, 358

Analysis of quality of earnings, of Nestlé, 608, 612

Analytical balance sheet, 413, 439, 465, 499

Annual general meeting (AGM), 401, 429, 621

Annual report, 165, 175, 245

Application of funds, 379, 462, 648

Asset(s), 247, 249

Associate companies, 325, 333

Audit committee, 403, 427

Auditors, 165, 399

Auditors’ report, 165, 392, 396

MAOCARO to CARO, 392, 402

requirements of the Companies Act, 179, 231

the manufacturing and other companies

(auditor’s report) order, 392, 410

Available-for-sale (AFS), 327, 601

B

Bank overdraft, 5, 123, 126, 352

Bank book, 142, 146, 149, 155, 159

Balance Sheet, 1, 27, 43, 61, 66, 76

Banias, 1, 61, 65, 69

Board of directors, 80, 88, 377

Bonds, 126, 317, 326

Bonus shares, 97, 107, 118, 584

Book profits, 235, 373

Bottom line, 417, 619

Brand, 264, 343, 680

equity, 81, 83, 89

earnings-multiple, 691

value, 47, 106

BSE sensex, 404, 612, 700

Business transactions, 1, 3, 9, 33, 36

classifying, 33

documentation of, 8, 9

recording, 8, 9

summarising, 36

Borrowing costs, AS-16, Ind AS-23, 217

capital, 6, 8, 70

capitalisation, of, 211

disclosure requirements, 207

general borrowings, 209210

specific borrowings, 209210

C

Capital appreciation, 308, 310

Capital expenditure, 71

Capital markets, 285, 313

Capital market ratios, 500, 533

Capital structure, 289, 486

Capital work-in-progress, 180, 341, 568

CARO, 391, 402

Cash, 12

profit, 8, 99

Cash and cash equivalents, 130, 181, 551, 553, 562

restricted, 551

Cash flows, 167, 184, 230, 272, 354, 391

from financing activities, 551, 557

from investing activities, 551, 556, 567

from operating activities, 550, 556

Cash flow statement, 413, 548, 550, 562

(See corporate cash flow statement), 563

Cash book, 142, 149, 153, 157, 159

Central Board of Direct Taxes (CBDT), 179

CENVAT, 199, 218, 399

CFDS, 624, 627

Changes in inventories of finished goods, work-in-progress and stock-in-trade, 131, 365, 440

Commencement of lease, 258, 277

Common-sized (Vertical) analysis, 450

Company (Companies), 91, 93

registration under the Companies’ Act, 91

users and their information needs, 168

Companies Act, 78, 81, 129, 179, 231

Company secretary, 343, 552

Component approach, 206, 217

Computerized accounting system, 43, 53

Conceptual framework of accounting and financial statements, 163

assumptions underlying preparation of financial statements, 170

Components of financial statements, 164, 167

Concepts of capital and capital maintenance, 164, 174

definitions, recognition and measurement of elements of financial statements, 163, 174

objective of financial statements, 167, 437

qualitative characteristics of financial statements, 163, 175

scope and coverage of, 195, 223, 633

Consolidated financial statements, AS-21, 171, 183, 634, 644

associates, 59, 151, 153

control, 329

equity Method, 660, 670

global Consolidation, 635, 677

goodwill, 123, 168

group, 55, 132

intra-group Transactions, 638, 644

investor, 106, 174

joint Control, 329330

joint Ventures, 185, 329, 665

jointly Controlled Assets, 633, 665, 667

jointly Controlled Entities, 329, 332

jointly Controlled Operations, 633, 666

line-by-Line Consolidation, 642, 651

minority Interest, 641, 650

parent, 190, 559

post-acquisition Net Profit/Loss, 660, 677

proportionate Consolidation, 668, 670

significant Influence, 309

subsidiary, 190, 325

unrealised Profits/Losses, 677

venturer, 330, 332

voting Power, 636, 663

Contemporary analytical techniques, 615, 680

(See voluntary financial reporting)

Contingent liabilities, 183, 298, 331

not provided for, 422

Contra entries, 152, 157

Convergence with International Financial Reporting Standards (IFRS Convergence), 184

Corporate accounting, 27, 81

Corporate balance sheet, 60, 98, 422, 484

assets (Application of Funds), 5, 8

current assets, 65, 103

current liabilities, 6, 66, 110, 129

deferred tax assets and liabilities, 372

features of, 78, 131

fixed assets, 49, 71, 134

investments, 5, 71, 136

liabilities (sources of funds), 56, 115

loan funds, 639, 643, 653

loans and advances, 98, 134, 358

miscellaneous expenditure, 106, 139

net current assets, 463, 493

provisions, 98, 180

shareholders’ funds, 129, 140

understanding the various accounts of and their treatment, 340

vertical form, 129, 132

Corporate cash flow statements, AS-3, 548, 605

AS-7, 183, 235

accounting and reporting, 189

analysis of, 24, 61

basis for classification of activities, 555

cash and cash equivalents, 130, 167, 551552

consolidated, 166, 203

construction of, 66, 69, 139

construction of, from abridged balance sheet and income Statement, 562

disclosures in, 241, 413, 561

features of, 78, 131

financing activities, 551, 557

indirect Method, 550, 552, 561

investing activities, 551, 557, 574

issues requiring special considerations, 553, 556

meaning and significance of, 224, 281, 553

non–cash investing and financing transactions, 553, 560

operating activities, 550, 556

principles of standard accounting treatment of, 198, 225, 282

reporting cash flows, 553, 557

reporting of, 183, 554

restricted cash and cash equivalents, 553, 561

scope and coverage of, 223, 477

Corporate dividend practices, 574, 586, 643, 648

Corporate governance, 186, 342, 402

accounting industry reforms act, 493

clause 49 of the Listing Agreement, 186

fundamental objective, 402

kumar Mangalam Birla Committee, 402, 406, 409

report, 97, 119

role of SEBI, 186, 405

Corporate financial statements, 60, 76, 106, 118, 129, 139, 339, 349

Corporate profit and loss account, 235

balance available for appropriations, 640, 646, 654

basic and diluted earnings per share, 346, 493

depreciation, 69, 104

excise duty, 218, 365

expenditure, 62, 100, 199

features of, 78, 346

impairment loss on fixed assets, 345, 367, 609

income, 7, 10, 17, 60

interest, 26, 76, 109

manufacturing and other expenses, 640, 646, 654

materials consumed and purchase of goods, 7, 137, 519

profit after tax, 121, 346, 439

profit Before tax, 135, 346

provision for Contingencies-Net, 404

provision for Income tax, 69, 105, 138

understanding the various accounts of and their treatment, 341, 347, 363

Corporate scoreboard, 625, 627

Corporate social responsibility, 346, 371, 407

Corporate value, 699

Credit Policy, 168, 541

Cost model, 206, 329

Cost of goods sold (COGS), 73, 443, 622

Credit/Cr., 27

CRISIL, 404, 618

Cum-interest price, 317, 333

Cum-right basis, 322, 333, 336

Current income tax, 529, 541

Current investments, 130, 318, 320

Current-cost-adjusted financial statement, 680, 682

Creative accounting, 417, 422, 431

Creative financial practices, 173

Current assets, 6, 50, 66, 110, 130

bills receivable, 102, 105, 126

cash and bank balances, 362, 449, 551

inventories, 6, 130, 184, 280

net, 8, 24, 26, 66, 105

sundry debtors, 123, 148, 693

Current liabilities, 6, 171, 128, 312

advances from customers, 6, 124

bills payable, 101, 104, 120

debit/Dr., 27

expenses payable, 108, 110, 112, 136

interest accrued but not due, 353

sundry creditors (Creditor), 123, 144, 516

tax, 63, 99, 105, 121

tax assets, 372, 577

tax liabilities, 341, 374, 463

D

Deferred tax assets, 372, 465, 566, 577

Deferred tax liabilities, 129, 180, 344, 570, 584

Depreciation, accounting, AS-6, 65, 71, 99, 109

accumulated depreciation, 228, 236

charge in special cases, 224, 237

choice of the method of, 231

consistency principle, 224, 235, 241

determinants of, 199, 224, 235

disclosures in financial statements, 205, 241, 324, 657

exchange fluctuations and, 217, 237

fixed assets, 5, 66, 98

meaning and significance of, 224, 281

Nestlé India Ltd., 235

principles of standard accounting treatment of, 194

rates of, as per Appendix I–Rule 5, 233

rates of, as per Schedule XIV, 232, 242

revaluation of fixed assets and, 204, 237

revision of useful life and, 237

scope and coverage, 164, 225

straight line method (SLM) of, 226, 244

subsequent expenditure and, 199, 237

written down value method (WDV) of, 201, 229

Derivative contracts, 328

Diluted EPS, 374, 471, 481

Dilutive potential, 486, 491

Diminution, 319, 323, 418

in the value of long-term investments, 418, 432

non-provision of, 398, 417

Directors’ report, 165, 400, 402, 419, 421

analysis of, of Nestlé, 374

Disinvestments, 478, 506, 535

Dividend, 81, 99, 105

Dividend policy, 510

Dividend tax, 560, 579, 638

Double entry system, 9, 179

Doubtful/disputed debts, 421, 434

non-provisioning of, 421

Drawings, 26, 41, 52

Du Pont analysis, 530, 532

E

Earnings Per Share (EPS), 169, 477, 495

basic, 476

diluted, 476

Effective interest rate method, 212, 328

Enterprise value, 697698

EPS, 106, 118, 132, 387

AS-20, 183

anti-dilutive Potential Equity Shares, 491, 495

BEPS, 478, 481

bonus Issue, 98, 117

convertible Debentures, 490, 493, 510

convertible Preference Shares, 491

dEPS, 477, 486

dilutive Potential Equity Shares,. 491, 495

ex-rights Fair Value, 495

fair Value, 185, 209, 316, 387

FCCBs, 487, 495

incremental EPS, 491, 495

net Profit Attributable to Equity Shareholders, 482, 484, 486

options, 378

potential Equity Shares, 478, 486, 491

price Earning (PE) Ratio, 478, 495

rights Issue, 83, 118, 333, 336

share Split, 482, 493

share Warrants, 180

weighted Average Number of Equity Shares, 346, 483, 495

outstanding, 120, 212

Equity shares, 95, 97, 115, 135, 386, 479

ESOPs, 477, 488, 495

ESOPs, ESOS 377

accounting value, 379, 384

deferred Employee Compensation Expenses, 378, 380, 382

employee Compensation Expenses, 378, 380

employee Stock Options Outstanding, 378, 381

employee Stock Purchase Scheme Guidelines, 1999, 377, 385

exercise price, 377

exercising, 377

fair value, 377

grant, 377

intrinsic value, 377

market price, 377

SEBI (Employee Stock Option Scheme ), 83, 178

vesting, 377

Estimated residual value, 226, 229, 238

Equity and liabilities, 128, 133, 341, 346, 502, 566

Exceptional/extraordinary items, 422, 525

Exchange differences, 355, 367, 374, 550

Exchange fluctuations, 217, 237

Expected useful life, 226, 229

Expenditure (Expenses), 62, 106, 379

non-provisioning of, 379

Ex-right, 322, 333, 483

Extraordinary general meeting, 465, 523

F

Fair market value, 217, 318

Fair value, 185, 217, 309, 316

Finance lease, AS-19, 193, 249

assets under, 193, 249

disclosures in financial statements, 205, 241

Ind AS-17, 254

meaning of lease and, 249–250

principles of standard accounting treatment, 198

substance over form, 163, 175, 254

valuation of, 254

Financial accounting, 3, 20, 30, 64, 96, 162

Financial Accounting Standards Board/FASB, 3, 20, 58, 100, 166

Financial Accounting Standards/FAS, 218, 220

Financial analyst, 30

Financial instruments, 183, 185, 285, 333

Financial investment, AS-39, 314

Financial performance, 5, 9, 188, 405

Financial position, 1, 3, 9, 32, 69

Financial reports (See other financial reports), 339, 395

Financial statement analysis, 106, 413, 438, 469, 479

analytical balance sheet, 413, 462

common-sized analysis, 450, 456, 460

horizontal analysis, 444, 465

innovative techniques of, 158

multi-step income statement, 438, 458, 542

objectives of, 437

ratio analysis, 106, 413

tool kit of the financial analyst, 438

trend analysis, 173

various stakeholders and their interests, 438

Financial statements, of companies, 67, 70, 80, 100, 106

annual accounts and balance sheet, 391, 400

books of accounts, 22, 28, 179

consolidated, 166, 322

constraints on qualitative characteristics of, 173

limitations of, 415

Features of Financial Statements, 76, 81, 99, 347

Form and contents of, 171

requirements of the Companies Act, 100, 178, 391, 400

schedule VI, 104, 198

schedule XIV, 232, 234, 254

Financing activities, 552, 557, 562

Finished goods, 71, 125, 301, 365

Fixed assets, accounting for, AS-10, 69, 109

Ind AS-16, 202

Ind AS-105, 202, 325

basket purchase, 203, 219

buildings, 5, 211, 233

disclosures in financial statements, 205, 300, 324

determinants of value of, 198

Furniture and fixtures, 195, 219, 355

identification of certain, 196, 203

jointly owned, 202, 309

land, 96, 202

nestlé India Ltd., 276, 548

meaning and significance of, 224, 282

net block, 214, 461

plant and machinery, 101, 126

principles of standard accounting treatment of, 198

revaluation of, 238

retirements and disposals, 196, 205

scope and coverage, 164, 225

valuation in special cases, 196

valuation of, 64

vehicles, 126, 214

Floating stock, 534, 541

FMCG companies, 366

Fundamental accounting concepts, 22, 26, 43

Fundamental accounting assumptions, 190

Free reserves, 364

G

Gearing structure, 509, 541

General Journal, 142, 157

General reserve, 112

Generally accepted accounting principles (GAAPs), 161, 185, 607

sources of, 167

accounting concepts and principles other than the framework, 178

accounting standards formulated by ICAI, 182, 186

conceptual framework of financial statements, 161, 165, 171

requirements of Income Tax Act, 178, 186

requirements of SEBI, 178, 185

requirements of the Companies Act, 100, 179, 391

Global financial reporting, 676

corporate financial practices, 202, 215

Government grants, AS-12, 206209

impact on fixed assets valuation, of, 202

accounting for, 6, 20, 34

alternative treatments of, 211

non-monetary assets at a concessional rate, 206207

disclosure requirements, 81, 206, 233

Gross block, 214, 240, 253

Gross profit, 61, 64, 66, 99

Guidance note on accounting for changing prices, 694

H

Half yearly financial results, 177, 787

Held-for-trading (HFT), 333

Held-to-maturity (HTM), 333

Hidden reserves, 173

Hindustani Bahikhataa Paddhati, 4

Historical cost, 174, 189, 224, 226

Holding company (companies), 309, 333, 342

Horizontal analysis, 444

of Bajaj, 445

the tool, 444

Horizontal balance sheet, 190

Horizontal financial statements, 132, 140, 445

Human resources accounting, 680, 699

I

ICRA, 618

IFRS Converged Indian Accounting Standards (Ind ASs), 184, 188

complete list of, 174

Ind AS-1, Presentation of Financial Statements, 188

Ind AS-2, Inventories, 26, 137

Ind AS-7, Statement of Cash Flows, 184, 562

Ind AS-8, Accounting Policies, Changes in Accounting Estimates and Errors, 165, 187

Ind AS-11, Construction Contracts, 183, 285

Ind AS-12, Income Taxes, 601, 690

Ind AS-16, Property, Plant and Equipment, 206, 592

Ind AS-17, Leases, 256, 258

Ind AS-18, Revenue, 62, 100

Ind AS-20, Accounting for Government Grants and Disclosure of Government Assistance, 183, 209

Ind AS-23, Borrowing Costs, 206, 209

Ind AS-24, Related Party Disclosures, 171, 173, 175, 185

Ind AS-27, Consolidated and Separate Financial Statements, 332, 658

Ind AS-28, Investments in Associates, 183, 664

Ind AS-31, Interests in Joint Ventures, 185, 670

Ind AS-33, Earnings per Share, 169, 372

Ind AS-36, Impairment of Assets, 171, 249

Ind AS-37, Provisions, Contingent Liabilities and Contingent Assets, 185, 298

Ind AS-38, Intangible Assets, 180, 193, 249

Ind AS-39, Financial Instruments: Recognition and Measurement, 185, 333

Ind AS-40, Investment Property, 316, 329, 333

Ind AS-105, Non–current Assets Held for Sale and Discontinued Operations, 206, 332

Ind AS-108, Operating Segments, 185

Impairment of assets, 270, 275, 277

AS-28, 183, 273

disclosures in financial statements, 205, 241, 324

Ind AS-36, 267

loss on, 213, 220

meaning and significance of, 224, 310, 553

principles of standard accounting treatment of, 267

recoverable amount of, 204, 271

value in use, 271, 274

 Indian GAAP, 343, 350, 357, 374, 687

Inception of lease, 258, 277

Income, 7, 9, 16, 63, 99, 131, 237

Income Tax Act, 63, 231, 233

Independent directors, 403, 409

Industry benchmarks, 426, 431, 500

Industry P/E, 534, 541

Information from sources other than annual reports, 615, 619, 621, 629

analysis against industry aggregates, 625, 627

analysis of, 438, 529

details of, 220, 242, 358

Institute of Chartered Accountants of India (ICAI), 4, 257, 694

Inter-company comparative analysis, 625

Interim financial results, 618, 622

news items from The Economic Times, 618, 620

research report from Capital Market, 618

significance of, 281, 309

Initial public offerings (IPO), 478, 506, 533

Intangible assets, 193, 259260

AS-26, 183, 264

Ind AS-38, 266,

amortisation of, 111, 311, 388

copyrights, 268, 699

disclosures in financial statements, 205, 241, 300

goodwill, 123, 259

external assets, 685, 699

human resources, 386, 688

identifiability of, 262263

intellectual property assets, 685, 699

internal assets, 685, 699

internally generated, 266, 277

know–how, 260, 268, 244

meaning and significance of, 224, 310

patents, 120, 259, 264

principles of standard accounting treatment, 259

rates of depreciation of, as per appendix-rule, 232233

recognition of, 206, 259, 272

score sheet, 684, 699

trademark, 259, 269

Inter-company comparative analysis, 625

Inter-firm comparison, 426, 431

Interim dividend, 131, 349, 661

Internal audit system, 392, 394

Internal control systems, 406

International accounting standards, 184

International Accounting Standards Board (IASB/IASC), 184

Inventories, valuation of, AS-2, 193, 281

absorption Cost, 287, 301

cost of, 200

disclosures in financial statements, of, 205, 241, 300

FIFO, 290, 294, 290

global valuation, 297

goods-in-process, 281, 302

loose tools, 303, 473

meaning and significance of, 241, 310

of Nestlé India Ltd., 548, 550

raw materials, 7, 14, 64

scope and coverage of, 198, 285

stores and Spares, 300, 361

specific identification2889, 303

valuation policy of, 281, 286, 333

weighted average cost (WAC), 210, 293, 310

Investing activities, 557, 574

Investments, accounting for, AS-13, 114, 136, 180

carrying amount of, 318, 322

classification of, 118, 318

cost of, 106

disclosures in financial statements, 205, 324, 659

disposal of, 240, 424

forms of, 314, 329

in jointly controlled entities, 329, 332

investment property, 316, 329

Ind AS-40, 325

long term, 108, 131

meaning and significance of, 309, 553

non–trade, 424

quoted, 316, 325

unquoted, 337, 357

reclassification of, 320, 336

scope and coverage of, 285, 633

treasury bills, 326, 333

valuation of, 64, 195

IRR, 213, 328

J

Jamaa (Cr.), 4

Joint control, 329, 333, 666, 668

Joint ventures, 185, 331, 634, 665

Jointly controlled (entity) entities, 329, 665

Journal Proper, 142, 145, 147, 157

Journal, 1, 27

K

Knowledge capital, 699

Knowledge-intensive company, 684

L

Leased assets, 217, 256

Ledger, 20, 33, 37

Lessor, 277

Liabilities (sources of funds), 6, 67

Limited review, 186, 623

Liquidity ratios, 514, 518

collection period allowed to customers, 514, 539

current, 6, 25

inventory holding period, 284, 517

quick, 506, 514

suppliers’ credit, 501, 519

Listed companies, 185, 190

Listing Agreement, 186

clause, 186, 391, 405

loan funds, 645, 652

Loans and advances, 98, 358

Losses, 7, 27

M

Management discussion and analysis (MD&A) report, 175, 390, 405

contents of, 405

significance of, 406

Managerial remuneration, 118, 121

Market appreciation, 537, 541

Market capitalization, 169, 533

Market value, 203, 224, 314

Matching principle, 63, 175

Materiality, 170, 172, 355

MAOCARO, 392, 402

Measurement of profit and financial position, 1, 3, 13, 15, 85, 121

alternative presentation of ledger using tally, 54

analysis of trial balance, 61

capital and revenue expenditure/receipts, 62

classifying business transactions, 33, 37

construction of balance sheet and profit and loss account, 64, 66, 69, 72

documentation of business transactions, 3, 8, 71

general instructions and observations for preparing the two financial statements, 61, 65

inventory valuation, 64, 295

need for adjustments, 63

note on computerized accounting system, 53

recording of business transactions, 9

specific daybooks, 142

summarizing business transactions, 36, 41

the accounting process, 8, 23, 37

trial balance to balance sheet and profit and loss account, 1, 59, 61

Mergers and acquisition, 7

Minimum alternate tax (MAT), 223, 235, 244

MNCs, 607

detailed model, 608

model framework for integrated analysis, 608

objectives of, 437

Multi-step income statement, 438, 470

analysis of Bajaj, 456, 458

format of, 98, 143, 146

of Bajaj, 450

the tool, 436, 445

Multi-step profit margin(s) to sales ratios, 523, 538

gross profit margin–GP, 530

net profit margin– PAT, 530

operating profit margin–OP/PBIT, 541, 619

profit before interest, depreciation and tax–PBDIT, 169

profit before tax and extraordinary items–PBTEOT, 169

profit before tax–PBT, 169

mutual funds, 169, 333

N

Name (Dr.), 4

Nestlé India Ltd., 276, 309, 548, 550

analysis of auditors’ report, 608, 612

analysis of capital market valuation, 608

analysis of cash flow statement, 575, 591

analysis of directors’ report, 608

analysis of dividend policy, 608

analysis of profitability, 523, 608

analysis of quality of current assets, loans and advances, 608

analysis of quality of earnings, 608, 612

analysis of related party disclosures, 608

annual report (2001), 168, 175

appropriations, 131, 133, 423

balance sheet, 1, 61

basic and diluted earnings per share, 346

cash flow statement, 165, 175, 413

construction of cash flow statement, 165, 562, 566

current assets, 5, 71, 103, 136, 170, 180

current liabilities, 65, 99, 115, 131, 264, 365

deferred tax assets and liabilities, 372

impairment loss on fixed assets, 345, 367, 609

interest expense, 212, 257, 490, 619

inventories, 5, 26, 134, 193, 281, 286

investments, 115, 130

loans and advances, 98, 130, 344

manufacturing and other expenses, 640, 644, 646, 649

net current assets of, 463, 695

notes to accounts and significant accounting policies, 339

other income, 123, 137, 368

overall ratio analysis, 538, 608

profit after tax earned, 407

profit before tax, 346, 437

provision for income tax, 70, 112, 122

provisions, 105, 134

reserves and surplus, 99, 128

secured loans, 98, 131, 254

share capital, 81, 83

strategic and integrated managerial financial analysis, 235, 413

unsecured loans, 98, 110, 350

Net book value, 200, 229, 236

Net profit, 8, 66, 77, 122, 298

Net realisable value/NRV, 296, 315

Net worth, 113, 185, 432

Nominal or Par value, 315, 333

Nominee Director, 403

Non-brand Profits, 699

Non-cash Charge, 511, 515, 549

Non-operating Income, 309, 425, 569

Notes to accounts and significant accounting policies, 139, 339

case of Nestlé India Ltd., 548

contingent liabilities not provided for, 422, 435

significance of, 195, 249

O

Off-balance sheet assets, 255, 277

Operating activities, 131, 167

Operating segments, Ind AS-108, 185

Operational efficiencies, 406

Optimum capital structure, 506, 521

Other financial reports, 186, 417

corporate governance report, 402, 407, 426

directors’ report, 165, 390

Other income (operating), 130, 134, 138

Overall ratio analysis, of Nestlé, 538, 608

du Pont analysis, 530, 532

innovative approach towards, 501

more transparent disclosures, 607

strategic issues, 607, 613

Owners’ equity, 207

P

AS-4, 183, 297

effective tax rate, 523, 530, 541

for contingencies, 367, 373

for doubtful debts, 112, 137, 473

for taxation, 169, 653

individual costs and expenses to sales, 540

multi-step profit margin(s) to sales, 523, 538

Parent company, 315, 333

Pari passu charge, 352

Physical verification, 392

Postal ballot, 404

Potential equity shares, 486, 489

Preferential allotment, 393, 395

Preliminary expenses, 78, 84, 87, 94, 118, 124

Profit after tax, 131, 133, 135, 346

Profit and loss account, 61, 66

Profit and loss appropriation account, 100, 109, 121, 346

Profit before tax, 346, 623

Profit from operations, 345, 363, 368

Profitability, 187, 262

Profitability/profit margin ratios, 523, 541

Property, plant and equipment, 206, 243

Proposed dividend, 99, 105, 112, 572, 584

Propriety audit, 656

Prospectus, 106, 119, 286

 Provision for Contingencies, 345, 351, 367, 373

Provisions, 110, 133

Prudence, 171, 266

Public financial institutions, 313

Public sector companies, 619, 627

Purchase book, 142, 144, 148, 157

Q

Qualitative information, 428

Quality of disclosures, 173, 415

Quality of earnings, 173, 413, 415, 427

beating window dressing, 426

creative accounting, 417, 422, 431

creative financial practices, 173, 418, 423

further care in analysis, 426

impact of other income and exceptional/extraordinary items, 422

issues related to quality of disclosures in reported earnings, 413

leverage provided by GAAPs, 415

limitations of financial statements, 416, 431

regulatory efforts in ensuring, 427

specific issues in quality of disclosures in reported earnings, 415

window dressing, 173, 433

Quarterly results, 404, 627

R

Ratio analysis, 106, 433, 499, 611

Ranbaxy, of, 197, 218, 225

core ratios, 499, 540

Resources’ efficiency or turnover ratios, 520

Return on investment (ROI) ratios, 504, 543, 545

solvency ratios, 509, 512, 540

valuation or capital market ratios, 533

Receivables management, 465

Recoverable amount, 204, 273, 275

Regular income bonds, 419

Related party disclosures, 171, 175, 183

AS-18, 183

Remuneration committee, 403, 409

Reported earnings, 413, 415, 427

Research reports, 618

Reserve Bank of India, 163, 189, 674

Reserves and surplus, 99, 31

capital redemption reserve, 597598

capital reserves, 208

debenture redemption reserve, 124

general reserve, 99, 110, 122

Retained earnings, 175

Revaluation, 198, 204

Revaluation model, 217

Revaluation reserve, 204, 238, 240

Revenue, Ind AS-18, 62, 71

Revenue from Operations, 130, 364

Revenue reserves, 100, 274

sinking fund, 274

debtors turnover, 520, 541

fixed assets turnover, 520, 522

inventory turnover, 520, 541

net worth turnover, 521, 530

Return on investment (ROI) ratios, 504, 543

cash earnings per share–EPS, 504

earnings per share (EPS), 505

Rights issues, 331, 333, 534

S

S&P CNX Nifty Index, 513

Sarbanes–Oxley Act, 493

Sale and leaseback transaction, 277

Sales book, 142, 146, 148, 158

Sales, 11, 24, 35, 41, 46, 51, 69, 126, 148, 294

Schedule III to the Companies Act, 2013, 98, 140

SEBI, 163, 178, 325, 385

accounting standards committee, of, 184186

Secondary capital market, 478, 506, 533

Secured loans, 69, 98, 110, 131, 257

debentures, 78, 314, 324

term loans from financial institutions, 359

working capital loans, 359

Segment reporting, 183, 16, 657

AS-17, 183

Segment result/profitability, 186, 190

Segment revenue/expense, 623

Share capital, 79, 81, 83, 86, 95

authorised, 78, 87

equity, 83

preference, 83, 97

Share premium, 114, 117, 384, 419, 510

Shareholders, 3, 83, 88, 95, 113, 340

Shareholders’ funds, 100, 105, 113, 117, 139, 180

share capital, 81, 83, 89, 97

reserves and surplus, 98, 106, 131, 269, 347

Shares, 79, 82, 84, 96

Significant accounting policies, 139, 242, 339

Solvency, 167

Solvency ratios, 509, 512, 538

debt equity-D/E, 509

debt-service coverage-DSCR, 509

interest cover, 509

net assets value-NAV, 509

Sources of funds, 138, 208, 379, 382, 384

Special resolutions, 403

Stakeholders, 170, 184

Statement of cash flows, 184

Statement of Profit & Loss, 134, 181

Stock exchanges, 80, 83, 169, 314

Stock Option, 175, 377, 381, 384

Strategic and integrated managerial financial analysis, of Nestlé, 235, 375, 613

auditors’ report, 165, 390, 392, 400

capital market valuation, 499, 543

corporate governance report, 402, 406, 409

directors’ report, 333, 390, 409, 421

dividend policy, 510, 534, 613

overall ratio analysis, 538, 608

profitability, 172, 470

quality of current assets, loans and advances, 608, 612

quality of earnings, 173, 413, 415, 417

strategic issues emanating out of, 607608, 611

Strategic investments, 309, 333

Subsidiary companies, 162, 172, 250, 254

Substance over form, 152

Sundry creditors, 123, 126, 144, 516

Sundry debtors, 124, 126, 148

Supply chain management, 517

Sutras, 4, 27

SWOT analysis, 613

T

Takeovers, 533, 535

Tally, 55

Tangible assets, 180, 193, 261

Taxable income, 286, 307

economic Times, 618, 622

Techniques for the measurement of, 281

cost of inventories, 286

standard cost method, 295

retail method, 295, 306

Three column cash book, 149, 152, 157

Time value of money, 244

Timing differences, 372

Tool kit of the financial analyst, 438

Top line, 520, 627

Total capital employed, 501, 541

Trading account, 61, 71

Transparent disclosures, 607

Treasury bills, 326, 333, 359

Trend analysis, 459, 473

the tool, 413, 449

data of Liberty Shoes, 459

Trial balance, 1, 27, 37, 56, 61

True and fair view, 163, 174, 179, 391

Turnover ratios, 520, 540541

(See resources efficiency ratios), 540

Two column cash book, 149, 152, 157

U

Unamortised public issue expenses, 419, 431

Unaudited financial results, 186, 622

Unclaimed dividends, 559

Unrealised foreign exchange gains and losses, 594

Unsecured loans, 69, 110, 350

Upanisads, 27

V

Valuation or capital market ratios, 533

EPS, 533

market capitalisation, 533

market price to NAV, 533

NAV, 533

price earning–P/E, 533

yield to investors, 533, 538

value in use, 272

value reporting, 682

Vedas, 4

Vedic, 4

Vertical financial statements, 1, 128, 132, 133, 138, 140

Voluntary Financial Reporting, 615, 679680

balance sheet (Including intangible assets), 682

brand valuation, 682

case of Infosys, 680, 682

current-cost-adjusted financial statements, 682683

economic value-added (EVA¨) statement, 682

economic value-added analysis, 697

emergence of contemporary techniques of, 681

emerging Dimensions in, 615, 694

growing complexity of financial statements, 681

human resources accounting, 682

need for, 681

the Infosys intangible assets score sheet, 698

value reportingª, 682

value added, 682

value-added statement, 682

Voucher, 20, 22, 24, 27, 39, 86

W

Warrants, 404, 557

Wealth creators, 663

Websites, 81, 100, 555, 630, 678

Weighted average number of equity shares outstanding, 346, 477481

Wholly owned subsidiaries, 337

Window dressing, 413417