On October 1, 2021, Pangani Ltd acquired 90,000,000 of Segera Ltds 150,000,000 TZS 1 equity shares. The acquisition was achieved through a share exchange of one share in Pangani Ltd for every three shares in Segera Ltd. At that date the stock market prices of Pangani Ltds and Segera Ltds shares were TZS 4/= and TZS 250 per share respectively. Additionally, Pangani Ltd will pay TZS 154 cash on September 30, 2022 for each share acquired. Pangani Ltds finance cost is 10% per annum.

The retained earnings of Segera Ltd brought forward at April 1, 2021 were TZS 120,000,000/=.

The summarised statements of profit or loss and other comprehensive income for the companies for the year ended March 31, 2022 are:

	Pangani Ltd TZS000	Segera Ltd TZS000
Profit or Loss
Revenue	620,000	310,000
Cost of sales	(400,000)	(150,000)
Gross profit	220,000	160,000
Distribution costs	(40,000)	(20,000)
Administrative expenses	(36,000)	(25,000)
Investment income (note(iii))	5,000	1,600
Finance costs	(2,000)	(5,600)
Profit before tax	147,000	111,000
Income tax expense	(45,000)	(31,000)
Profit for the year	102,000	80,000
Other comprehensive income
Gain/(loss) on revaluation of land (notes (i) and (ii))	(2,200)	3,000
Total comprehensive income for the year	99,800	83,000

The following information is relevant:

1. A fair value exercise conducted on October 1, 2021 concluded that the carrying amounts of Segera Ltds net assets were equal to their fair values with the following exceptions:
   • The fair value of Segera Ltds land was TZS 2,000,000/= in excess of its carrying amount;
   • An item of plant had a fair value of TZS 6,000,000/= in excess of its carrying amount.The plant had a remaining life of two years at the date of acquisition. Plant depreciation is charged to cost of sales.
   • Pangani Ltd placed a value of TZS 5,000,000/= on Segera Ltds good trading relationships with its customers. Pangani Ltd expected, on average, a customer relationship to last for a furtherfive years. Amortisation of intangible assetsis charged to administrative expenses.
2. Pangani group policy is to revalue land to market value at the end of each accounting period. Prior to its acquisition, Segera Ltds land had been valued at historical cost, but it has adopted the group policy since its acquisition. In addition to the fair value increase in Segera Ltds land of TZS 2,000,000/= (see note (i)), it had increased by a further TZS 1,000,000/= since the acquisition.

1. On October 1, 2021, Pangani Ltd also acquired 30% of Korogwe Ltds equity shares. Korogwe Ltds profit after tax for the year ended March 31, 2021 was TZS 10,000,000/= and during March 2021 Korogwe Ltd paid a dividend of TZS 6,000,000/=. Pangani uses equity accounting in its consolidated financial statements for its investment in Korogwe Ltd.

Segera Ltd did not pay any dividends in the year ended March 31, 2022.

1. After the acquisition Pangani Ltd sold goods to Segera Ltd for TZS 20,000,000/=. Segera Ltd had one fifth of these goods still in inventory at March 31, 2022. In March 2022 Pangani Ltd sold goods to Korogwe Ltd for TZS 15,000,000/=, all of which were still in inventory at March 31, 2022. All sales to Segera Ltd and Korogwe Ltd had a mark-up on cost of 25%.
2. Pangani Ltds policy is to value the non-controlling interest at the date of acquisition at its fair value. For this purpose, the share price of Segera Ltd at that date (October 1, 2021) is representative of the fair value of the shares held by the non-controlling interest.
3. All items in the above statements of profit or loss and other comprehensive income are deemed to accrue evenly over the year unless otherwise indicated.

Required:

1. Calculate the consolidated goodwill as at October 1, 2021.
2. Prepare the consolidated statement of profit or loss and other comprehensive income of Pangani Ltd for the year ended March 31, 2022.