Page 248 - Index

• Valuation of taxes on income
Significant judgments are involved in determining
the provision for income taxes, including the
amount expected to be paid or recovered
in connection with uncertain tax positions.
Uncertain tax position is with regards to items of
expense or transaction that may be challenged by
tax authorities. The Company reviews the carrying
amount of deferred tax assets at the end of each
reporting period. The policy for the same has been
explained under note 2.18.
• Provisions and contingent liabilities
Provision is recognised when the Company has a
present obligation as a result of past event and
it is probable that an outflow of resources will
be required to settle the obligation, in respect
of which a reliable estimate can be made.
Provisions (excluding retirement obligations and
compensated absences) are not discounted to its
present value and are determined based on best
estimate required to settle the obligation as at the
Balance Sheet date. These are reviewed at each
balance sheet date adjusted to reflect the current
best estimates.
Contingent liabilities are disclosed in respect of
possible obligations that arise from past events,
but their existence is confirmed by the occurrence
or non-occurrence of one or more uncertain
future events not wholly within the control of
the Company.
• Business combinations and intangible assets
Business combinations are accounted for using
Ind AS 103, Business Combinations. Ind AS 103
requires the identifiable intangible assets and
contingent consideration to be fair valued in
order to ascertain the net fair value of identifiable
assets, liabilities and contingent liabilities of the
acquiree. Significant estimates are required to
be made in determining the value of contingent
consideration and intangible assets. These
valuations are conducted by valuation experts.
• Impairment of financial assets
The impairment provision for financial assets
disclosed are based on assumptions about risk
of default and expected loss rates. The Company
uses judgement in making these assumptions
and selecting the inputs to the impairment
246 Annual Report 2024
2.4 2.5 Standalone
calculation, based on the Company’s past
history, existing market conditions as well as
forward looking estimates at the end of each
reporting period.
• Share-based payments
Estimating fair value for share-based payments
requires determination of the most appropriate
valuation model, which is dependent on the terms
and conditions of the grant. The estimate also
requires determination of the most appropriate
inputs to the valuation model including the
expected life of the option, volatility and dividend
yield and making assumptions about them.
Property, plant and equipment (PPE)
Property, plant and equipment (PPE) are measured at
cost less accumulated depreciation and impairment
losses, if any. Amount capitalised under property, plant
and equipment includes purchase price, duties and
taxes, other incidental expenses incurred during the
construction / installation stage. If significant parts
of an item of property, plant and equipment have
different useful lives, then they are accounted for as
separate items (major components) of property, plant
and equipment.
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss on
disposal of an item of property, plant and equipment
is recognised in the statement of profit and loss.
Capital work in progress comprises of the cost of PPE
that are not ready for their intended use as of balance
sheet date.
Goodwill and other intangibles assets
Goodwill is not amortised but it is tested for
impairment annually or more frequently if events or
changes in circumstances indicate that the asset may
be impaired, and is carried at cost less accumulated
impairment losses. Gains and losses on the disposal
of an entity include the carrying amount of goodwill
relating to the entity sold.
Other intangible assets are carried at cost less
accumulated amortisation and impairment losses, if
any. The cost of an intangible asset comprises of its
purchase price, including any import duties and other
taxes (other than those subsequently recoverable from