Heritage Foods Limited

FINANCIAL STATEMENTS Consolidated 29 th Annual Report 2020-21 | 227 • Is part of a single co-ordinated plan to dispose of a separate major line of business or geographical area of operations or • Is a subsidiary acquired exclusively with a view to resale. Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as pro fi t or loss after tax from discontinued operations intheconsolidatedstatementofpro fi t and loss. Additional disclosures are provided in Note 47. All notes to the consolidated fi nancial statements mainly include amounts for continuing operations, unless otherwise mentioned. i. Property, plant and equipment Property, plant and equipment are stated at cost net of accumulated depreciation and accumulated impairment losses. The cost comprises purchase price, the cost of replacing the part of plant and equipment and borrowing costs if capitalization criteria are met and any attributable cost of bringing the asset to its working condition and location for the intended use. When signi fi cant parts of plant and equipment are required to be replaced at intervals, the Group depreciates them separately based on their speci fi c useful lives. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satis fi ed. All other repair and maintenance costs are recognised in the consolidated statement of pro fi t and loss as incurred. The present value of the expected cost for the 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 Group 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 line method 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 a 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. TheGroupdepreciates general sparesover 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 consolidated 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