167 / 236
165
Note 1 Significant Accounting Policies
(continued)
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 value at the acquisition date. The Group recognises any non-controlling interests
in the acquired entity on an acquisition either at fair value or at the proportionate share of non-controlling interests in net
identifiable assets of the acquired entity.
Acquisition-related costs are expensed as incurred.
The excess of the
• consideration transferred,
• amount of any non-controlling interests in the acquired entity and
• 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 these 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 the future are discounted to their
present value as at the date of exchange. The discount rate used is incremental borrowing rate of the entity, being the rate
at which a similar borrowing may 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 equity interest in the acquiree
previously held by the acquirer is remeasured at fair value on 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. All other repairs and maintenance expenses are charged to the Statement of Profit and Loss during the
period in which they are incurred. Gains or losses arising on retirement or disposal of assets are recognised in the Statement
of Profit and Loss.
Fruit 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 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.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as
‘Capital work-in-progress’.
Notes
to the Consolidated Financial Statements