Page 189 - Kolte Patil AR 2019-20

Notes forming part of the Consolidated Financial Statements

relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power,
including:
• the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the
relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses
control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date
when the Company ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-
controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
All inter-company transactions, balances and income and expenses are eliminated in full on consolidation.
Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling
interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners
of the Company.

D. Business Combination:
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is
measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities
incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the
acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date
amounts of the identifiable assets acquired and the liabilities assumed.
The interest of non-controlling shareholders is initially measured either at fair value or at the non-controlling interests’ proportionate
share of the acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis.
Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus
the non-controlling interests’ share of subsequent changes in equity of subsidiaries.

Business combinations arising from transfers of interests in entities that are under the common control are accounted at historical cost.
The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired
entity are recorded in shareholders’ equity.

E. Goodwill:
Goodwill represents the cost of acquired business as established at the date of acquisition of the business in excess of the acquire’s
interest in the fair value of the identifiable assets, liabilities and contingent liabilities less accumulated impairment losses, if any.
Goodwill is tested for impairment annually or when events or circumstances indicate that the implied fair value of goodwill.
F. Use of Estimates:
The preparation of consolidated financial statements in conformity with Ind AS requires the management of the Group to make
judgement, estimates and assumptions to be made that affect the reported amounts of assets and liabilities (including contingent

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