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NOTES TO FINANCIAL STATEMENTS
(cont’d)
31 March 2016

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 Consolidation (cont’d)

The consideration transferred does not include amounts related to the settlement of pre-existing relationships.
Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the
Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration
is classified as funds and reserves, it is not remeasured and settlement is accounted for within funds and reserves.
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in the statement
of profit or loss and other comprehensive income.

Joint ventures

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.

The results and assets and liabilities of joint ventures are incorporated in these consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in joint venture is initially
recognised in the consolidated statement of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the joint venture. When the Group’s share
of losses of a joint venture exceeds the Group’s interest in that joint venture, the Group discontinues recognising
its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal
or constructive obligations or made payments on behalf of the joint venture.

An investment in a joint venture is accounted for using the equity method from the date on which the investee
becomes a joint venture. On acquisition of the investment in a joint venture, any excess of the cost of investment
over the Group’s share of the net fair value of the identifiable assets and liabilities of the investee is recognised
as goodwill, which is included within 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 investment, after reassessment, is
recognised immediately in profit or loss in the period in which the investment is acquired.

When a Group entity transacts with a joint venture of the Group, profits and losses resulting from the transactions
with the joint venture are recognised in the Group’s consolidated financial statements only to the extent of interests
in the joint venture that are not related to the Group.

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