Atul Annual report 2017-18

Atul Ltd | Annual Report 2017-18

Notes

to the Consolidated Financial Statements

Note 1 Significant Accounting Policies

(continued)

iv) Equity method

Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter

to recognise share of the Group in post-acquisition profit | loss and Other Comprehensive Income of the entity.

Dividends received or receivable from associate company and joint venture company are recognised as a reduction in

the carrying amount of the investment.

When the Group share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including

any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred legal

or constructive obligations or made payments on behalf of the other entity.

Unrealised gains on transactions between the Group and its associate company and joint venture company are

eliminated to the extent of the Group interest in these entities. Unrealised losses are also eliminated unless the

transaction provides evidence of an impairment of the asset transferred.

The carrying amount of equity accounted investments are tested for impairment in accordance with the policy

described in (l) below.

v) Changes in ownership interest

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with

equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts

of the controlling and non-controlling interests to reflect their relative interest in the subsidiary companies. Any

difference between the amount of the adjustment to non-controlling interests and any consideration paid or received

is recognised within equity.

When the Group ceases to consolidate or equity account for an investment because of a loss of control, joint control

or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying

amount recognised in profit or loss. This fair value becomes the initial carrying amount for the purpose of subsequently

accounting for the retained interest as an associate company, joint venture company or financial asset. In addition,

any amount previously recognised in Other Comprehensive Income in respect of that entity are accounted for as if the

Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in

Other Comprehensive Income are reclassified to the Statement of Profit and Loss.

If the ownership interest in a joint venture company or an associate company is reduced, but joint control or significant

influence is retained, only a proportionate share of the amounts previously recognised in Other Comprehensive Income

are reclassified to the Statement of Profit and Loss where appropriate.

c) Foreign currency transactions:

Functional and presentation currency:

Items included in the Financial Statements of each entities of the Group are measured using the currency of the primary

economic environment in which the Company operates (‘functional currency’). The Consolidated Financial Statements

are presented in Indian currency (

), which is also the functional and presentation currency of the Company.

ii) Transactions and balances:

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of

the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from

the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are

generally recognised in profit or loss except that they are deferred in equity if they relate to qualifying cash flow

hedges.

Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the Statement of Profit

and Loss, within finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit

and Loss on a net basis within other income | (expense).

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at

the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are

reported as part of the fair value gain | (loss).