U Ltd. is engaged in mining and many other industries and prepares its financial statements following Indian Accounting Standards and follows…

U Ltd. is engaged in mining and many other industries and prepares its financial statements following Indian Accounting Standards and follows April-March as their financial year. During the year 20X2-20X3, the company has faced some issues and for their solution seeks your professional advice. (i) U Ltd. and F Ltd. are partners of a joint operation engaged in the business of mining precious metals. The entity uses a jointly owned drilling plant in its operations. During the year ended 31st March 20X3, an inspection was conducted by the government authorities in the mining fields. The inspection authorities concluded that adequate safety measures were not followed by the entity. As a consequence, a case was filed and a penalty of 50 crores has been demanded from U Ltd. The legal counsel of the company has assessed the demand and opined that appeals may not be useful, and the appeal orders will be unfavourable to the joint arrangement. Out of 50 crores (to be paid by U Ltd.),30 crore will be reimbursed by F Ltd. later, as per the terms of the Joint Operation Agreement. At the year end, actual reimbursement was not received from F Ltd. (ii) On 1st April 20X2, U Ltd. leased a machine from D Ltd. on a three-year lease. The expected future economic life of the machine on 1st April 20X2 was eight years. If the machine breaks down, then under the terms of the lease, D Ltd. would be required to repair the machine or provide a replacement. D Ltd. agreed to allow U Ltd. to use the machine for the first six months of the lease without the payment of any rental as an incentive to U Ltd. to sign the lease agreement. After this initial period, lease rentals of 2,10,000 were payable six-monthly in arrears, the first payment falling due on 31st March 20X3. (iii) U Ltd. has issued 10,00,000, 9% cumulative preference shares. The Company has arrears of 15 crores of preference dividend as on 31st March 20X3, it includes current year arrears of 1.75 crores. The Company did not declare any dividend for equity shareholders as well as for preference shareholders. Further U Ltd. has also issued certain optionally convertible debentures, which are outstanding as at the year end. (iv) On 1st January 20X3, U Ltd. acquired 30% of the shares of T Ltd. The investment was accounted for as an associate in U Ltd.'s consolidated financial statements. Both U Ltd. and T Ltd. have an accounting year end of 31st March 20X3. U Ltd. has no other investments in associates. Net profit for the year in T Ltd.'s income statement for the year ended 31st March 20X3 was - 0.23 crores. It declared and paid dividend of 0.1 crore on 1st March 20X3. No other dividends were paid in the year. (v) On 1st January, 20X3, U Ltd. also acquired a 60% stake in S Ltd. The cash consideration payable was 1 crore to be paid immediately, and - 1.21 crores after two years. The fair value of net assets of S Ltd. at acquisition date was 3 crores. U Ltd. has calculated that its cost of capital is 10%. Non-controlling interest is measured at the proportionate share of identifiable net assets.