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Notes to the Consolidated Financial Statements

31st March 2018

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2.4 Foreign currency translation (Continued)

(c) Group companies

The results and financial position of all the group entities (none of which has the currency of
a hyperinflationary economy) that have a functional currency different from the presentation
currency are translated into the presentation currency as follows:

(i) assets and liabilities for each balance sheet presented are translated at the closing rate
at the date of that balance sheet;

(ii) income and expenses for each income statement are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and

(iii) all resulting exchange differences are recognised in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated
as assets and liabilities of the foreign entity and translated at the closing rate. Currency
translation differences arising are recognised in other comprehensive income.

(d) Disposal of foreign operation and partial disposal

On the disposal of a foreign operation (that is, a disposal of the Group’s entire interest in
a foreign operation, or a disposal involving loss of control over a subsidiary that includes a
foreign operation, a disposal involving loss of joint control over a joint venture that includes a
foreign operation, or a disposal involving loss of significant influence over an associate that
includes a foreign operation), all of the currency translation differences accumulated in equity
in respect of that operation attributable to the owners of the company are reclassified to
consolidated income statement.

In the case of a partial disposal that does not result in the Group losing control over a
subsidiary that includes a foreign operation, the proportionate share of accumulated currency
translation differences are re-attributed to non-controlling interests and are not recognised
in profit or loss. For all other partial disposals (that is, reductions in the Group’s ownership
interest in associates or joint ventures that do not result in the Group losing significant
influence or joint control) the proportionate share of the accumulated exchange difference is
reclassified to consolidated income statement.

ALCO HOLDINGS LIMITED ANNUAL REPORT 2018 67