annual-report-FY2021

313 MAHINDRA & MAHINDRA LTD. INTEGRATED ANNUAL REPORT 2020-21 2. Significant Accounting Policies (contd.) When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to its acquisition-date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss where such treatment would be appropriate if that interest were disposed off. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amount for the items for which the accounting is incomplete. Those provisional amount are adjusted during the measurement period (which cannot exceed one year from the acquisition date), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amount recognised at that date. In consolidated financial statements, acquisition of non-controlling interest is accounted as equity transaction. The carrying amount 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. Business Combination under common control are accounted as per Appendix C in Ind AS 103 - Business combinations, at carrying amount of assets and liabilities acquired and any excess of consideration issued over the net assets acquired is recognised as capital reserve on common control business combination. (t) Acquisition of interest in associate and joint ventures Acquisition of interest in an associate or a joint venture, is initially recognised at cost. Any excess of the cost of the investment over the Group’s share of the fair value of the identifiable assets and liabilities of the investee is regarded as goodwill, which is included in the carrying amount of the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is recognised in equity as capital reserve in the period in which the investment is acquired. (u) Discontinued operations A discontinued operation is a component of the group, the operations and cash flow of which can be clearly distinguished from the rest of the Group and which: — represents a separate major line of business or geographical area of operations, — is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or — is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operations occurs at the earlier of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as discontinued operations, the results of the discontinued operations are presented separately in consolidated statement of profit and loss and OCI. The comparative consolidated statement of profit and loss and OCI is re-presented as if the operation had been discontinued from the start of the previous year. 3. Recent Accounting Pronouncements On 24 th March, 2021, the Ministry of Corporate Affairs (”MCA”) through a notification, amended Schedule III of the Companies Act, 2013 revising Division I, II and III of Schedule III and are applicable from 1 st April, 2021. The amendments in Division II (applicable to the Company) of Schedule III, primarily relate to : a) Change in existing presentation requirements for certain items in Balance sheet, for eg. lease liabilities, security deposits, current maturities of long term borrowings, effect of prior period errors on equity share capital. b) Additional disclosure requirements in specified formats, for eg. ageing of trade receivables, trade payables, capital work in progress, intangible assets, shareholding of promoters, etc. c) Disclosure if funds have been used other than for the specific purpose for which it was borrowed from banks and financial institutions. d) Additional Regulatory Information, for eg.,compliance with layers of companies, title deeds of immovable properties, financial ratios, loans and advances to key managerial personnel, etc. e) Disclosures relating to Corporate Social Responsibility (CSR), undisclosed income and crypto or virtual currency. The amendments are extensive and the Group is evaluating the same.