Heritage Foods Limited

Heritage Foods Limited 164 decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Spare parts are capitalized when they meet the de fi nition of PPE, i.e., when the company intends to use these during more than a period of 12 months. Depreciation is provided on the basis of straight line method at the useful life and in the manner prescribed in Schedule II of the Companies Act, 2013 except in respect of the following assets, based on technical assessment made by technical expert and management estimate, useful life is di ff erent from than those described in Schedule II. Management believes that these estimated useful lives are realistic and re fl ect fair approximation of the period over which the assets are likely to be used. i) Plant and Machinery: Depreciation on Plant and Machinery is provided on the basis of straight-line method based on the useful life ranging from 1 to 30 years. Useful life of each asset is determined based on internal and external technical evaluation. ii) Furniture and Fixtures: Depreciation on Furniture and Fixtures is provided on the basis of straight-line method based on the useful life ranging from 1 to 15 years. iii) O ffi ce Equipment: DepreciationonO ffi ce Equipment is provided on the basis of straight-linemethod based on the useful life ranging from 1 to 20 years. iv) Vehicles: Depreciation on vehicles is provided on the basis of straight-line method based on the useful life ranging from 2 to 10 years. v) Buildings: Depreciation on buildings is provided on the basis of straight-line method based on the useful life ranging from 5 to 40 years. vi) Improvements to leasehold property: Depreciation on Improvements to leasehold property is provided over the period of lease. vii) Depreciation in respect of its Renewable Energy business is provided on straight line method and at rates/ methodology prescribed under the relevant Central Electricity Regulatory Commission (CERC) regulations. The useful life provided for di ff erent asset classes under schedule II of the Companies Act, 2013 are as follows: Asset class Useful life (years) Buildings 30 Plant and machinery 15 Furniture and Fixtures 10 Vehicles 8 O ffi ce Equipment 5 Depreciation on assets which are commissioned during the year is charged on pro-rata basis from the date of commissioning. The company depreciates general spares over the life of the spare from the date it is available for use. An item of property, plant and equipment and any signi fi cant part initially recognised is derecognised upon disposal or when no future economic bene fi ts are expected from its use or disposal. Gains or losses arising from de-recognition of a tangible asset are measured as the di ff erence between the net disposal proceeds and the carrying amount of the asset and are recognised in the standalone statement of pro fi t and loss when the asset is derecognised. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each fi nancial year end and adjusted prospectively, if appropriate. h. Investment property Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost includes the cost of replacing parts and borrowing costs for long-term construction projects if the recognition criteria are met. When signi fi cant parts of the investment property are required to be replaced at intervals, the Company depreciates them separately based on their speci fi c useful lives. All other repair and maintenance costs are recognised in the standalone statement of pro fi t and loss as incurred. The Company depreciates building component of investment property over the useful life prescribed in Schedule II to the Act. Though the Company measures investment property using cost based measurement, the fair value of the investment property is disclosed in the note 8 to the standalone fi nancial statements.