Integrated Annual Report 2024-25 290 The management’s estimate of useful lives are in accordance with Schedule II to the Companies Act, 2013, other than the following asset classes, based on the Company’s expected usage pattern supported by technical assessment: Asset Class Useful lives (i) Certain items of Plant and Equipment 2 - 25 years as the case may be (ii) Buildings (Roads) 15 years (iii) Vehicles 5 years (f) Other Intangible assets Intangible assets under development The Company expenses costs incurred during research phase to profit or loss in the year in which they are incurred. Development phase expenses are initially recognised as intangible assets under development until the development phase is complete, upon which the amount is capitalised as intangible asset. Intangible assets Intangible assets are initially recognised at cost. Subsequent to initial recognition, intangible assets with definite useful lives are amortised on a straight line basis so as to reflect the pattern in which the asset’s economic benefits are consumed and are reported at cost less accumulated amortisation and accumulated impairment losses, if any. The intangible assets are amortised over the estimated period of benefit as below: Asset Class Useful lives (i) Development expenditure 3-5 years (ii) Brand licences 30 years (iii) Computer software 3 years (iv) Others (excluding TDRs) 10 years The amortisation period for intangible assets are reviewed annually and changes in expected useful lives are treated as changes in estimates. (g) Impairment of assets At the end of each reporting period, the Company reviews the carrying amounts of its tangible assets, intangible assets and investments in subsidiaries, associates and joint ventures to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount, which is the higher of the value in use or fair value less cost to sell, of the asset or cash- generating unit, as the case may be, is estimated and impairment loss (if any) is recognised and the carrying amount is reduced to its recoverable amount. In assessing the value in use, the estimated future cash flows are discounted to their present value. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When an impairment loss subsequently reverses, the carrying amount of the asset or a cash-generating unit is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) earlier. Goodwill and other intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. (h) Inventories Inventories are carried at cost or net realisable value whichever is lower. Cost is determined on the basis of the weighted average method and comprises of all cost of purchase, conversion and other costs incurred in bringing the inventories to their present location and condition. (i) Foreign exchange transactions and translation Transactions in foreign currencies i.e. other than the Company’s functional currency of Indian Rupees are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the functional currency using exchange rates prevailing at that date. Non-monetary items measured at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value is determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Exchange differences on monetary items are recognised in profit or loss in the period in which they arise except for exchange differences on transactions entered into in order to hedge certain foreign currency risks (refer policy on Derivative Financial Instruments and Hedge Accounting). 2. Material accounting policy information (contd.)
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