48 Estimated useful lives of the assets are as follows: Asset category Estimated useful life Buildings (Residential, factory, etc.) 30 to 60 years Plant and equipment1 6 to 20 years Vehicles1 6 years Office equipment and furniture 5 to 10 years 1The useful lives have been determined based on technical evaluation done by the Management | experts, which are different from the useful life prescribed in Part C of Schedule II to the Act, in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset. The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed annually and adjusted prospectively, if appropriate. The carrying amount of an asset is written down immediately to its recoverable amount if the carrying amount of the asset is greater than its estimated recoverable amount. Land accounted under a finance lease is amortised on a straight-line basis over the primary period of lease. Assets held under finance leases are depreciated over their expected useful lives on the same basis as own assets. However, when there is no reasonable certainty that ownership will be obtained by the end of the lease term, assets are depreciated over the shorter of the lease term and their useful lives. d) Intangible assets Computer software includes enterprise resource planning application and other costs relating to such software that provides significant future economic benefits. These costs comprise license fees and cost of system integration services. Amortisation Computer software cost is amortised over a period of three years using the straight-line method. e) Impairment The carrying amounts of assets are reviewed at each Balance Sheet date to assess if there is any indications of impairment based on internal | external factors. An impairment loss on such an assessment will be recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of the assets is net selling price or value in use, whichever is higher. While assessing value in use, the estimated future cash flows are discounted to the present value by using the weighted average cost of capital. A previously recognised impairment loss is further provided or reversed depending on changes in the circumstances and to the extent that the carrying amount of the assets does not exceed the carrying amount that will be determined if no impairment loss had previously been recognised. f) Cash and cash equivalents Cash and cash equivalents include cash in hand, demand deposits with banks and other short-term (three months or less from the date of acquisition), highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value. g) Trade receivable Trade receivables are recognised at the amount of the transaction price (net of variable consideration) when the r ight to considerat ion becomes unconditional. These assets are held at amortised cost, using the effective interest rate (EIR) method where applicable, less provision for impairment based on expected credit loss. Trade receivables overdue more than 180 days are considered in which there is significant increase in credit risk. h) Trade and other payables These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year, which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method.
RkJQdWJsaXNoZXIy MjA2MDI2