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Integrated report Statutory reportS Financial StatementS
Standalone

Impairment evaluation of Investments in subsidiaries and joint ventures (refer notes 2.3.5, 2.12 and 8 to the Standalone Financial
Statements)
The Key Audit Matter How the matter was addressed in our audit
The carrying amount of the investments in unlisted subsidiaries Our audit procedures included:
and joint ventures (held at cost less impairment) represents 29%
of the Company’s total assets. • Evaluating design and implementation and testing operating
effectiveness of controls over the Company’s process of
The Company’s investments in unlisted subsidiaries and joint impairment assessment and approval of forecasts;
ventures are carried at cost less any impairment. The investments
are assessed for impairment when an indicator of impairment • Assessing the indicators for impairment of the unlisted
exists. With the spread of COVID-19 in India and globally, demand subsidiaries and joint ventures and understanding Company’s
loss is expected for the products of unlisted subsidiaries and joint assessment of those indicators;
ventures.
• Assessing the valuation methods used for determining
The impairment assessment involves use of estimates and recoverable amount, financial position of the unlisted
judgements. The identification of an impairment event and the subsidiaries and joint ventures and assessing historical
determination of impairment charge also requires the application financial performance of those subsidiaries and joint
of significant judgement by the Company. The judgement, in ventures;
particular, is with respect to the timing, quantity and estimation • understanding the basis and assumptions used for the
of future discounted cash flows of the underlying entities. It financial forecasts;
involves significant estimates and judgment, due to the inherent
uncertainty involved in forecasting and discounting future cash • Testing the assumptions used in the discounted cash flow
flows. forecast analysis based on our knowledge of the Company
and the markets in which the unlisted subsidiaries and joint
In view of the significance of these investments and estimates ventures operate. We challenged these assumptions with the
and judgments involved, we consider impairment evaluation of assistance of our valuations team;
investments in unlisted subsidiaries and joint ventures to be a key
audit matter. • Comparing the carrying amount of investments with
recoverable amount based on discounted cash flow analysis;
• Considering the adequacy of disclosures, in respect of the
investments in unlisted subsidiaries.

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