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existence of enforceable right to payment for
performance to date and alternate use of such
product or service, transfer of significant risks
and rewards to the customer, acceptance of
delivery by the customer, etc.
Revenue for fixed-price contract is recognised
using percentage-of-completion method. The
Group uses judgement to estimate the future
cost-to-completion of the contracts which is
used to determine the degree of completion of
the performance obligation.
• Recognition and measurement of defined benefit
obligations
The obligation arising from defined benefit plan is
determined on the basis of actuarial assumptions.
As actuarial valuation involves making various
assumptions that may be different from the
actual development in the future, key actuarial
assumptions include discount rate, trends in
salary escalation, attrition and mortality rate.
The discount rate is determined by reference
to market yields at the end of the reporting
period on government bonds. The period to
maturity of the underlying bonds correspond to
the probable maturity of the post-employment
benefit obligations.
•
•
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 Group 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 2.23.
Provisions and contingent liabilities
Provision is recognised when the Group 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
174 Annual Report 2024
Consolidated
•
•
•
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 Group.
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 Group uses
judgement in making these assumptions and
selecting the inputs to the impairment calculation,
based on the Group’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.
2.5 Cash flow statement
Cash flows are reported using the indirect method,
whereby profit before tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or
accruals of past or future cash receipts or payments and
item of income or expenses associated with investing
or financing cash flows. Cash flow from operating,
investing and financing activities are segregated.