Page 64 - Honeywell Annual Report 2021 comm 10 09 v17a.cdr

Notes to the Financial Statements

For the Year Ended 31 March, 2021cont’d

3. Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below.

3.1 Going Concern
The Directors have reasonable expectation that the Company has adequate resources to continue in operational
existence for the unforeseeable future. The Company continues to adopt the going concern basis in preparing its
financial statements.

3.2 Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating-decision maker. The chief operating decision-maker, who is responsible for allocating resources, making
strategic decisions and assessing performance of the operating segments, has been identified as the Board of
Directors.
The Company's business operating segments are identified by three factories located at Apapa, Ikeja and Sagamu.
The basis of segmental reporting is disclosed in the note 16.

3.3 Business Combination
Business combination involving entities under common control are outside the scope of IFRS 3. Management
exercises its judgment to apply the pooling of interest method of accounting for business combination in accordance
with IAS 8, 10 - 12. The IAS 8 and 12 allow management to consider the most relevant conceptual framework in
developing an accounting policy where IFRS has no specific requirements.

Under a pooling of interests-type method, the acquirer accounts for the combination as follows:
Ÿ The assets and liabilities of the acquirer are recorded at book value not fair value (although adjustments should
be recorded to achieve uniform accounting policies);
Ÿ No goodwill is recorded. The difference between the acquirer's cost of investment and the acquiree's equity is
presented separately within Other Statements of Comprehensive Income; no goodwill is recorded. The difference
between the acquirer's cost of investment and the acquiree's equity is presented separately within Other
Statements of Comprehensive Income;
Ÿ Comparative amounts are restated as if the combination had taken place at the beginning of the earliest
comparative period presented.

3.4 Foreign Currency Transactions
Foreign currency transactions are translated into Naira using the exchange rates prevailing at the dates of the
transactions or valuations where items are re-measured. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognized in the income statement, except when deferred in other
comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the
income statement within 'finance income or cost'. All other foreign exchange gains and losses are presented in the
income statement within 'other gains / (losses) - net'.

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