Items of stores and spares that meet the definition of property, plant and equipment are capitalized at cost and depreciated over
their useful life. Otherwise, such items are classified as inventories. We identify and determine the cost of each component/part
of the asset separately, if the component/part has a cost which is significant to the total cost of the asset and has useful life that
is materially different from that of the remaining asset.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when
no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the
consolidated statement of profit and loss when the asset is derecognized. Property, plant and equipment held for sale is valued
at lower of their carrying amount and net realizable value. Any write-down is recognized in the consolidated statement of profit
and loss.

Depreciation
Depreciation on property, plant and equipment other than leasehold improvements is calculated on a straight-line basis using

the following rates arrived at based on the useful lives estimated by the management which coincide with the lives prescribed
under the schedule II to the Companies Act, 2013, except for depreciation on Leasehold Improvements:

 

 

 

 

 
 

Asset class Management’s estimated useful life
Buildings... 60 years
Furniture and fixtures ..... 10 years
Vehicles... 8 to 10 years
Office equipment 5 years
Data processing equipment 3 to 6 years

 

Plant and equipment... 5 to 10 years
Depreciation on leasehold improvements is provided over the lease term or 5 years, whichever is shorter, which is higher than
the rates prescribed under the schedule II to the Companies Act, 2013.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial
year end and adjusted prospectively, if appropriate.

Intangible Assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a
business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at
cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangibles, excluding
capitalized development costs, are not capitalized and the related expenditure is reflected in profit or loss in the period in which
the expenditure is incurred.

Amortization of intangible assets
The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an
indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least
at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are
treated as changes in accounting estimates. The amortization expense on these intangible assets is recognized in the statement
of profit and loss unless such expenditure forms part of carrying value of another asset.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at
the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal
proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is
derecognized.

Inventories
Inventories comprise of trading goods and stores and consumables and are valued at lower of cost and net realizable value. Cost
includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. In case of

manufactured inventories and work-in-progress, cost includes an appropriate share of fixed production overheads based on
normal operating capacity.

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