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Note 1 Significant Accounting Policies
(continued)
Under combined lease agreements, land and building are assessed individually. Lease rental attributable to the operating
lease are charged to the Consolidated Statement of Profit and Loss as lease income whereas lease income attributable to
finance lease is recognised as finance lease receivable and recognised on the basis of effective interest rate.
h) Business combination
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary company
comprises the:
i)
fair values of the assets transferred,
ii) liabilities incurred to the former owners of the acquired business,
iii) equity interest issued by the Group,
iv) fair value of any asset or liability resulting from a contingent consideration arrangement.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The Group recognises any non-controlling
interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s
proportionate share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
The excess of the:
• sum of consideration transferred
• amount of any non-controlling interest in the acquired entity
• acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as Goodwill. If those amounts are less than the fair
value of the net identifiable assets of the business acquired, the difference is recognised in Other Comprehensive Income
and accumulated in equity as capital reserve provided there is clear evidence of the underlying reasons for classifying the
business combination as a bargain purchase. In other cases, the bargain purchase gain is recognised directly in equity as
Capital reserve.
Where settlement of any part of cash consideration is deferred, the amounts payable in future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate
at which a similar borrowing can be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability are
subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such
remeasurement are recognised in profit or loss or Other Comprehensive Income, as appropriate.
i) Property, plant and equipment:
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at acquisition cost net
of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. Acquisition cost may also include transfers from equity of any gains or losses
on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
Subsequent costs are included in the carrying amount of asset or recognised as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of
the item can be measured reliably. Gains or losses arising on retirement or disposal of assets are recognised in the
Consolidated Statement of Profit and Loss.
Fruits bearing plants qualify as bearer plants under Ind AS 16. Expenditure incurred on cultivation of plantations up to the
date they become capable of bearing fruit are accumulated under Bearer plant under development (Immature) and then
capitalised as a Bearer plant (Mature) to be amortised | depreciated over their estimated useful life.
The plantation destroyed due to calamity, disease or any other reasons whether capitalised as Bearer plant (Mature) or being
carried under Bearer plant under development (Immature) are charged off to Consolidated Statement of Profit and Loss.
Spare parts, stand-by equipment and servicing equipment are recognised as property, plant and equipment if they are
held for use in the production or supply of goods or services, for rental to others, or for administrative purposes and are
expected to be used during more than one period.
Notes
to the Consolidated Financial Statements