Atul Ltd Annual Report 2016-17

Atul Ltd | Annual Report 2016-17

Transition to Ind AS

(continued)

A) Exemptions and exceptions availed

In preparing these Ind AS Financial Statements, the Company has availed certain exemptions and exceptions in accordance

with Ind AS 101 First-time Adoption of Indian Accounting Standards, as explained below. The resulting difference between

the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and IGAAP

have been recognised directly in equity (retained earnings or another appropriate category of equity). This Note explains

the adjustments made by the Company in restating its IGAAP Financial Statements, including the Balance Sheet as at

April 01, 2015 and the Financial Statements as at and for the year ended March 31, 2016.

Ind AS optional exemptions

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the

transition from IGAAP to Ind AS.

Deemed cost

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant

and equipment as recognised in the Financial Statements as at the date of transition to Ind AS, measured under

IGAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for

de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 ‘Intangible

Assets’ and investment properties covered by Ind AS 40 ‘Investment Property’. Accordingly, the Company has

elected to measure all of its property, plant and equipment, intangible assets and investment properties at their

IGAAP carrying value in their Financial Statements.

ii)

Designation of previously recognised financial instruments

Ind AS 101 allows an entity to designate investments in equity instruments at FVOCI on the basis of the facts and

circumstances at the date of transition to Ind AS.

The Company has elected to apply this exemption for its investment in equity investments.

iii)

Investments in subsidiary companies, associate company and joint venture company

Ind AS 101 permits a first-time adopter to measure it’s investment, at the date of transition, at cost determined

in accordance with Ind AS 27, or deemed cost, The deemed cost of such investment shall be it’s fair value at

date of transition to Ind AS of the Company, or IGAAP carrying amount at that date. The Company has elected

to measure its investment in subsidiary companies, associate company and joint venture company under IGAAP

carrying amount as its deemed cost on the transition date.

iv)

Long-term foreign currency monetary items

Under IGAAP, para 46A of AS 11 'The Effects of Changes in Foreign Exchange Rates', provided an alternative

accounting treatment to companies with respect to exchange differences arising on restatement of long-term

foreign currency monetary items. Exchange differences on account of depreciable assets can be added | deducted

from the cost of the depreciable asset, which will be depreciated over the balance life of the asset. Ind AS 101

includes an optional exemption that allows a first-time adopter to continue the above accounting treatment in

respect of the long-term foreign currency monetary items recognised in the Financial Statements for the period

ending immediately before the beginning of the first Ind AS financial reporting period.

The Company has opted to apply this exemption.

Ind AS mandatory exceptions

The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily

required under Ind AS 101:

Hedge accounting

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge

accounting criteria in Ind AS 109 at that date. Hedging relationships cannot be designated retrospectively, and the

supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied

the hedge accounting criteria as of April 01, 2015 are reflected as hedges in the results of the Company under Ind AS.

The Company had designated various hedging relationships as cash flow hedges under the IGAAP. On date of

transition to Ind AS, the entity had assessed that all the designated hedging relationships qualifies for hedge

accounting as per Ind AS 109. Consequently, the Company continues to apply hedge accounting on and after the

date of transition to Ind AS.

Notes

to the Financial Statements