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• Annual Report 2018-19
Shaping the future of software driven business
The cost of an acquisition is measured at the fair value of the assets acquired and liabilities incurred or assumed on the
date of acquisition, which is the date on which control is transferred to the Group. The cost of acquisition also includes the
fair value of contingent consideration, if any. Identifiable assets acquired and liabilities and contingent liabilities assumed
in a business combination are measured initially at their fair value on the date of acquisition.
Transaction costs that the Group incurs in connection with a business combination are expensed as incurred.
(e) Goodwill/ Gain on bargain purchase
Goodwill represents the cost of business acquisition in excess of the Group’s interest in the net fair value of identifiable
assets, liabilities and contingent liabilities of the acquiree. When the net fair value of the identifiable assets, liabilities and
contingent liabilities acquired exceeds the cost of business acquisition, a gain is recognized in the other comprehensive
income as gain on bargain purchase. Goodwill is measured at cost less accumulated impairment losses.
(f) Depreciation and amortization
Depreciation on Property, Plant and Equipment is provided using the Straight Line Method (‘SLM’) over the useful lives of
the assets estimated by the management.
The management estimates the useful lives for the Property, Plant and Equipment as follows:
Assets
Useful lives
Buildings*
25 years
Computers
3 years
Computers - Servers and networks*
3 years
Office equipments
5 years
Plant and equipment*
5 years
Plant and equipment (Windmill)*
20 years
Plant and equipment (Solar Energy System) *
10 years
Furniture and fixtures*
5 years
Vehicles*
5 years
*For these classes of assets, based on internal assessment and independent technical evaluation carried out by external
valuers themanagement believes that the useful lives as given above best represent the period over which themanagement
expects to use these assets. Hence the useful lives of these assets are different from the useful lives as prescribed under
Part C of Schedule II of the Companies Act 2013.
Individual assets whose cost does not exceed
`
5,000 are fully depreciated in the year of acquisition.
Leasehold improvements are amortized over the period of lease or useful life, whichever is lower.
Intangible assets are amortized on a straight-line basis over their estimated useful lives commencing from the day the
asset is made available for use.
(g) Financial instruments
i) Financial assets
Initial recognition and measurement
Financial assets are initially measured at fair value. Transaction costs that are directly attributable to the acquisition
of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value of the
financial assets on initial recognition. Transaction costs directly attributable to the acquisition of financial assets at
fair value through profit or loss are recognised immediately in profit or loss.
Subsequent measurement
For the purpose of subsequent measurement, financial assets are classified as:
- Financial assets at amortized cost
Financial assets that are held within a business model whose objective is to hold assets for collecting contractual cash
flows and whose contractual terms give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding are subsequently measured at amortized cost using the effective interest
rate method. The change in measurements are recognized as finance income in the statement of profit and loss.
Notes forming part of consolidated financial statements (Contd.)