Atul Ltd 2016-17

Atul Ltd | Annual Report 2016-17 ( ` cr) Note 16 Other equity As at March 31, 2017 As at March 31, 2016 a) Securities premium reserve 34.66 34.66 b) General reserve 97.36 97.36 c) Retained earnings Balance as at the beginning of the year 1,156.81 911.97 Add: Profit for the year 322.97 274.18 Remeasurement gain | (loss) on defined benefit plans 1.58 (1.92) Transfer to retained earnings on disposal of FVOCI equity instruments 0.75 – Dividends paid (including dividend distribution tax) (37.02) (26.81) Non-controlling interests on acquisition of subsidiary company (18.30) (0.61) Balance as at the end of the year 1,426.79 1,156.81 d) Other reserves i) FVOCI equity instruments Balance as at the beginning of the year 287.52 325.89 Add: Equity Instruments through Other Comprehensive Income (FVOCI) 77.36 (38.37) Less: Transfer to retained earnings on disposal of FVOCI equity instruments (0.75) – Balance as at the end of the year 364.13 287.52 ii) Effective portion of Cash Flow Hedges Balance as at the beginning of the year (0.59) (0.28) Add: Effective portion of gain | (loss) on cash flow hedges (0.73) (0.90) Add: Deferred tax liability 0.25 0.31 Less: Hedging gain | (loss) reclassified to Consolidated Statement of Profit and Loss 0.59 0.28 Balance as at the end of the year (0.48) (0.59) iii) Exchange difference in translating the Financial Statements of a foreign operation Balance as at the beginning of the year 9.35 – Add: Changes in foreign currency translation reserve 4.45 9.35 Balance as at the end of the year 13.80 9.35 1,936.26 1,585.11 Nature and purpose of other reserves a) Securities premium reserve Securities premium reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013. b) FVOCI - Equity investments The Group has elected to recognise changes in the fair value of certain investments in equity securities in Other Comprehensive Income. These changes are accumulated within the FVOCI equity investments reserve within equity. The Group transfers amounts from this reserve to retained earnings when the relevant equity securities are derecognised. c) Cash flow hedging reserve The Group uses hedging instruments as part of its management of foreign currency risk associated with its highly probable forecast sale and inventory purchases and interest rate risk associated with variable interest rate borrowings. For hedging foreign currency risk, the Group uses foreign currency forward contracts, foreign currency option contracts and interest rate swaps. They are designated as cash flows hedges. To the extent these hedges are effective; the change in fair value of the hedging instrument is recognised in the cash flows hedging reserve. Amounts recognised in the cash flows hedging reserve is reclassified to profit or loss when the hedged item affects profit or loss (for example, sales and interest payments). When the forecast transaction results in the recognition of a non-financial asset (for example, inventory), the amount recognised in the cash flows hedging reserve is adjusted against the carrying amount of the non-financial asset. d) Foreign currency translation reserve Exchange differences arising on translation of the foreign operations are recognised in Other Comprehensive Income as described in Accounting Policy and accumulated in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed-off. Notes to the Consolidated Financial Statements