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Notes forming part of consolidated onancial statements (Contd.)
Annual Report 2016-17
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assets acquired under business combinations which have been measured at fair value. Historical cost is generally
based on the fair value of the consideration given in exchange for goods and services. The accounting policies are
consistently applied by the Group during the year and are consistent with those used in previous year except for
the changes in accounting policies required to be made on adoption of Indian Accounting Standards notioed under
the Companies Act, 2013.
Statement of compliance
In accordance with the notiocation issued by the Ministry of Corporate Affairs, the Group has adopted Indian
Accounting Standards (referred to as “Ind AS”) notioed under the Companies (Indian Accounting Standards) Rules,
2015. These are the Group’s orst Ind AS onancial statements. The date of transition to Ind AS is April 1, 2015.
Previous year’s numbers in the onancial statements have been restated to Ind AS. In accordance with Ind AS 101
First-time Adoption of Indian Accounting Standards, the Group has presented a reconciliation from the presentation
of onancial statements under Accounting Standards notioed under the Companies (Accounting Standards) Rules,
2006 (“Previous GAAP”) to Ind AS of Shareholders’ equity as at March 31, 2016, and April 1, 2015 and of the
comprehensive net income for the year ended March 31, 2016.
3. Principles of consolidation
The consolidated onancial statements of the Company and its subsidiaries (“the Group”) for the year ended March
31, 2017 are prepared in accordance with generally accepted accounting principles applicable in India, and the Indian
Accounting Standard 110 (Ind AS 110) on ‘Consolidated Financial Statements’, notioed by Companies (Accounting
Standards) Rules, 2015, (“Indian Accounting Standards”) by and to the extent possible in the same format as that
adopted by the Company for its separate onancial statements.
The Company consolidates entities which it owns or controls. The consolidated onancial statements comprise the
onancial statements of the company, its subsidiaries as disclosed below. Control exists when the parent has power
over the entity, is exposed or has rights to variable returns from its involvement with the entity and has the ability
to affect those returns by using its power over the entity. Power is demonstrated through existing rights that
give the ability to direct relevant activities, those which signiocantly affect the entity’s returns. Subsidiaries are
consolidated from the date control commences until the date control ceases.
The onancial statements of the Company and its subsidiary companies have been combined on line by line basis
by adding together the book values of like items of assets and liabilities, income and expenses after eliminating
intra group balances and intra group transactions except where cost cannot be recovered. The unrealized proots
or losses resulting from the intra group transactions and balances have been eliminated.
The consolidated onancial statements include the share of proot / loss of associate companies, which are accounted
for under the ‘Equity method’. The share of proot / loss of the associate company has been adjusted to the cost
of investment in the associate, as per the ‘Equity method’. An associate is an enterprise in which the investor has
signiocant inpuence and which is neither a subsidiary nor a joint venture.
The excess of the cost to the Company of its investment in a subsidiary and the Company’s portion of equity of
subsidiary on the date at which investment in the subsidiary is made, is described as goodwill and recognized
separately as an asset in the consolidated onancial statements. The excess of the Company’s portion of equity
of the subsidiary over the cost of investment in the subsidiary is treated as capital reserve in the consolidated
onancial statements. Goodwill arising on consolidation is not amortized. It is tested for impairment on a periodic
basis and written off if found impaired.
The consolidated onancial statements are prepared using uniform accounting policies for like transactions and
other events in similar circumstances and necessary adjustments required for deviations, if any, are made in the
consolidated onancial statements. The consolidated onancial statements are presented in the same manner as the
Company’s separate onancial statements.
The onancial statements of the subsidiary companies used in the consolidation are drawn up to the same reporting
date as of the Company.