GSK_Annual_Report_2021

Notes to the Consolidated Financial Statements for the year ended March 31, 2021 (contd.) Annual Report 2020-21 177 Interest Income Interest income is recorded using the Effective Interest Rate (EIR). Interest income is included in other income in the statement of profit and loss. Rental income Rental income arising from operating leases on investment properties is accounted for on a straight-line basis over the lease terms and is included in revenue in the statement of profit and loss due to its operating nature. d) Property, plant and equipment Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost, net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to the statement of profit and loss during the reporting period in which they are incurred. Depreciation is provided on the straight-line method over the estimated useful lives of the assets as per the rates prescribed under Schedule II to the Companies Act, 2013 or re-assessed useful life based on technical evaluation as under: • Factory Buildings 30 to 50 years • Other Buildings 60 years • Plant and Equipment 10 to 15 years • Personal Computers and Laptops 3 to 5 years • Other Computer Equipment 4 years • Furniture and Fixtures 10 years • Office Equipment 5 years • Vehicles 5 years Depreciation is provided pro-rata for the number of months available for use. Depreciation on sale / disposal of assets is provided pro-rata up to the end of the month of sale / disposal. An asset purchased where the actual cost does not exceed ` 5,000 is depreciated at the rate of 100%. Leasehold building, leasehold land and leasehold improvements are amortised over the period of the lease. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are recognised as income or expense in the statement of profit and loss. Cost of items of property, plant and equipment not ready for intended use as on the balance sheet date is disclosed as capital work-in-progress. Advances given towards acquisition of property, plant and equipment outstanding at each balance sheet date are disclosed as Capital advance under Other non-current assets. An item of property, plant and equipment and any significant part initially recognised is derecognised 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 statement of profit and loss when the asset is derecognised.