Page 181 - Index

Mission-Critical Decisions, Made with Confidence.
dividends, are recognized in the other
comprehensive income. There is no recycling
of the amounts from other comprehensive
income (OCI) to profit and loss, even on sale of
investment. However, the Group may transfer
the cumulative gain or loss within equity.
(iii) Financial assets at fair value through profit
or loss (FVTPL)
A financial asset which is not classified in any
of the above categories are subsequently fair
valued through profit or loss.
(iv) Financial liabilities
Financial liabilities are subsequently carried
at amortised cost using the effective interest
method, except for contingent consideration
recognised in a business combination
which is subsequently measured at FVTPL.
For trade and other payables maturing
within one year from the balance sheet
date, the carrying amounts approximate
the fair value due to the short maturity of
these instruments.
b) Derivative financial instruments
The Group uses derivative financial instruments
i.e. foreign exchange forward and options
contracts to manage its exposure to foreign
exchange risks. Such derivative financial
instruments are initially recognised at fair value
on the date on which a derivative contract is
entered into and are subsequently re-measured
at fair value. Derivatives are carried as financial
assets when the fair value is positive and as
financial liabilities when the fair value is negative.
The Group uses hedging instruments that are
governed by the policies of the Group.
(i) Cash flow hedges
Changes in the fair value of the derivative
hedging instrument designated as a
cash flow hedge are recognised in other
comprehensive income and presented within
equity in the cash flow hedging reserve to
the extent that the hedge is effective. To
the extent that the hedge is ineffective,
changes in fair value are recognised in
the statement of profit and loss. If the
hedging instrument no longer meets the
criteria for hedge accounting, expires or is
sold, terminated or exercised, then hedge
accounting is discontinued prospectively.
The cumulative gain or loss previously
recognised in the cash flow hedging reserve
is transferred to the statement of profit and
loss upon the occurrence of the related
forecasted transaction.
(ii) Receivable hedge
Changes in fair value of foreign currency
derivative instruments not designated as
cash flow hedges and the ineffective portion
of cash flow hedges are recognised in the
statement of profit and loss and reported
within foreign exchange gains/(losses).
Derecognition of financial instruments
The Group derecognises a financial asset when
the contractual rights to the cash flows from the
financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition
under Ind AS 109. The changes in fair value of equity
investments designated at FVTOCI are accumulated
within ‘Equity instruments at OCI’ reserve within
equity. The Group transfers amounts from this reserve
to retained earnings when these equity instruments
are derecognised. A financial liability (or a part of a
financial liability) is derecognised from the Group’s
Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.
2.16  Provision, contingent liabilities and contingent
assets:
A provision is recognised when the Group has a present
obligation (legal or constructive) 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 reliable estimate can be made. If the effect
of the time value of money is material, provisions
are discounted using a current pre-tax rate that
reflects, when appropriate, the risks specific to the
liability. When discounting is used, the increase in the
provision due to the passage of time is recognised as
a finance cost.
Contingent liabilities are disclosed for:
(i) possible obligations which will be confirmed only
by future events not wholly within the control of
the Group or
Annual Report 2024
179
Financial Statements