5. Goodwill and intangible assets

The movement in goodwill balance is given below:


	Year ended March 31,
	2017			2018
Balance at the beginning of the year	₹	101,991		₹	125,796
Translation adjustment		(4,319	)		2,970
Acquisition through business combination		28,124			1,172
Assets reclassified as held for sale		—			(12,354	)

Balance at the end of the year	₹	125,796		₹	117,584

Acquisition through business combinations for the year ended March 31, 2018, includes goodwill recognized on four acquisitions. Also refer Note 6 to the consolidated financial statements.

The Company is organized by two operating segments: IT Services and IT Products. Goodwill as at March 31, 2017 and 2018 has been allocated to the IT Services operating segment.

Goodwill recognized on business combinations is allocated to Cash Generating Units (CGUs), within the IT Services operating segment, which are expected to benefit from the synergies of the acquisitions.

Goodwill has been allocated to the CGUs as at March 31, 2017 and 2018 as follows:


CGUs	As at March 31, 2017		As at March 31, 2018
Banking Financial Services and Insurance (BFSI)	₹	19,826	₹	17,475
Healthcare and Life Sciences (HLS)		48,144		49,085
Consumer (CBU)		17,442		14,776
Energy, Natural Resources and Utilities (ENU)		16,393		14,863
Manufacturing and Technology (MNT)		23,086		20,406
Communication (COMM)		905		979

	₹	125,796	₹	117,584

For the purpose of impairment testing, goodwill is allocated to a CGU representing the lowest level within the Group at which goodwill is monitored for internal management purposes, and which is not higher than the Company’s operating segment. Goodwill is tested for impairment at least annually in accordance with the Company’s procedure for determining the recoverable value of each CGU.

The recoverable amount of the CGU is determined on the basis of Fair Value Less Cost of Disposal (FVLCD). The FVLCD of the CGU is determined based on the market capitalization approach, using the turnover and earnings multiples derived from observable market data. The fair value measurement is categorized as a level 2 fair value based on the inputs in the valuation techniques used.

Based on the above testing, no impairment was identified as at March 31, 2017 and 2018 as the recoverable value of the CGUs exceeded the carrying value. Further, none of the CGU’s tested for impairment as at March 31, 2017 and 2018 were at risk of impairment. An analysis of the calculation’s sensitivity to a change in the key parameters (turnover and earnings multiples), did not identify any probable scenarios where the CGU’s recoverable amount would fall below its carrying amount.

The movement in intangible assets is given below:


	Intangible assets
	Customer related			Marketing related			Total
Gross carrying value:
As at April 1, 2016	₹	18,360		₹	2,587		₹	20,947
Translation adjustment		(546	)		(314	)		(860	)
Acquisition through business combinations		2,714			4,006			6,720

As at March 31, 2017	₹	20,528		₹	6,279		₹	26,807
Accumulated amortization/ impairment:
As at April 1, 2016	₹	4,164		₹	942		₹	5,106
Translation adjustment		(7	)		(68	)		(75	)
Amortization and impairment *		5,107			747			5,854

As at March 31, 2017	₹	9,264		₹	1,621		₹	10,885

Net carrying value as at March 31, 2017	₹	11,264		₹	4,658		₹	15,922

Gross carrying value:
As at April 1, 2017	₹	20,528		₹	6,279		₹	26,807
Translation adjustment		493			103			596
Acquisition through business combinations		5,565			169			5,734

As at March 31, 2018	₹	26,586		₹	6,551		₹	33,137
Accumulated amortization/ impairment:
As at April 1, 2017	₹	9,264		₹	1,621		₹	10,885
Translation adjustment		14			11			25
Amortization and impairment *		2,985			1,129			4,114

As at March 31, 2018	₹	12,263		₹	2,761		₹	15,024

Net carrying value as at March 31, 2018	₹	14,323		₹	3,790		₹	18,113

*	Includes impairment charge on certain intangible assets recognized on acquisitions, amounting to ₹Nil, ₹3,056 and ₹643 for the year ended March 31, 2016, 2017 and 2018, respectively.

Amortization and impairment expense on intangible assets is included in selling and marketing expenses in the consolidated statement of income.

Acquisition through business combinations for the year ended March 31, 2018 primarily includes intangible assets recognized on four acquisitions. Also refer Note 6 to the consolidated financial statements.

As at March 31, 2018, the estimated remaining amortization period for intangible assets acquired on acquisition are as follows:


Acquisition	Estimated remaining amortization period
Global oil and gas information technology practice of the Commercial Business Services Business Unit of Science Applications International Corporation		2.25 – 3.25 years
Promax Application Group		4.25 years
Opus Capital Markets Consultants LLC		0.75 – 2.75 years
ATCO I-Tek		6.50 years
Designit AS		0.25 – 2.25 years
Cellent AG		2.75 – 4.75 years
HealthPlan Services		1 – 5 years
Appirio Inc.		2.50 – 8.50 years
Other entities		2 – 14.25 years