Investor Presentaiton
Sr.
Key Audit Matter
No.
Our Response
2.
3.
Due to the size of these schemes, small changes We tested the employee data used in calculating the obligation and where material, we also
in these assumptions can have a material impact considered the treatment of curtailments, settlements, past service costs, remeasurements, benefits
on the estimated defined benefit obligation. paid, and any other amendments made to obligations during the year. From the evidence obtained,
we found the data and assumptions used by management in the actuarial valuations for retirement
benefit obligations to be appropriate.
Warranty Provision
The Company makes an estimated provision for
assurance type warranties at the point of sale.
This estimate is based on historical claims data.
Litigation, Claims and Contingent Liabilities
(Refer Note 28(r), to be read along with Emphasis
of matter in Independent Auditor's Report)
The Company is exposed to variety of different
laws, regulations and interpretations thereof.
Consequently, in the normal course of business,
Provisions and Contingent Liabilities may arise
from legal proceedings, constructive obligations
and commercial claims.
.
Management applies significant judgement
when considering whether and how much
to provide for the potential exposure of each
matter.
These estimates could change substantially
over time as new facts emerge as each legal
case or matters progresses.
Given the different views possible, basis the
interpretations, complexity and the magnitude
of potential exposures and the judgement
necessary to estimate the amount of provision
required or determine required disclosures.
We understood and tested the controls over the assumptions applied in arriving at the warranty
provision, particularly vouching of relevant data elements with provision calculations; validation
of formula used in the warranty spread sheet; management review control of the relevant internal
and external factors impacting the provision.
•
We understood the processes, evaluated the design and implementation of controls and tested
the operating effectiveness of the Company's controls over the recording and re-assessment of
uncertain legal positions, claims and contingent liabilities.
We held discussions with senior management including the person responsible for legal
and compliance to obtain an understanding of the factors considered by management in
classification of the matter as 'probable', 'possible' and 'remote'.
Examined the Company's legal expenses on sample basis and read the minutes of the board
meetings in order to ensure completeness.
With respect to tax matters, involving our tax specialists, and discussing with the Company's
tax officers, their views and strategies on significant cases, as well as the related technical
grounds relating to their conclusions based on applicable tax laws.
Assessing the decisions and rationale for provisions held or for decisions not to record
provisions or make disclosures.
For those matters where management concluded that no provisions should be recorded,
considering the adequacy and completeness of the Company's disclosures.
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