Page 184 - Index

a corresponding increase in equity, over the period that
the employees become unconditionally entitled to the
options. The expense is recorded for each separately
vesting portion of the award as if the award was, in
substance, multiple awards. The increase in equity
recognised in connection with share based payment
transaction is presented as a separate component
in equity under “Share based payment reserve”. The
amount recognised as an expense is adjusted to reflect
the actual number of stock options that vest.
2.22 Foreign currency
Functional currency
The functional currency of the Group and its Indian
subsidiaries is the Indian Rupee (INR), whereas the
functional currency of the foreign subsidiaries is
mentioned in AOC-1. These consolidated financial
statements are presented in Indian Rupees (rounded
off to the nearest lakh except otherwise indicated).
The financial statements of subsidiary companies
whose functional currency is the currency of a
hyperinflationary economy are adjusted for the
effects of changes in general price index (to reflect the
change in purchasing power of the local currency) and
expressed in terms of the current unit of measurement
at the closing date of the reporting period, in
accordance with Ind AS 29 “Financial Reporting in
Hyperinflationary Economies”.
Subsidiaries with the currency of hyperinflationary
economy as their functional currency are restated as
per Ind AS 29 before consolidation in accordance with
Ind AS 110 ‘Consolidated Financial Statements’. Once
restated, all items of the financial statements of such a
subsidiary is converted to INR at the closing exchange
rate. To determine the existence of hyperinflation, the
Group assesses the qualitative characteristics of the
economic environment of the country such as the trend
of inflation rate over the past three years.
Foreign currency transactions
Foreign currency transactions are recorded at exchange
rates prevailing on the date of transaction. Foreign
currency denominated monetary assets and liabilities
are restated into the functional currency using
exchange prevailing at the balance sheet date. Gains
and losses arising on settlement and restatement of
foreign currency denominated monetary assets and
liabilities are recognised in the statement of profit
and loss. Non-monetary assets and liabilities that
are measured in terms of historical cost in foreign
currencies are not translated.
182 Annual Report 2024
Consolidated
Foreign currency translation
Assets and liabilities of the entities with functional
currency other than the presentation currency have
been translated to the presentation currency using
exchange rates prevailing on the balance sheet date.
The statement of profit and loss has been translated
using monthly average exchange rates prevailing
during the year. Translation adjustment have been
reported as foreign currency translation reserve in the
statement of changes in equity.
2.23 Taxes on income
Income tax expense comprises current and deferred
tax. It is recognised in the statement of profit and loss
except to the extent it relates to the items recognised
directly in equity or in OCI.
Current tax
Current tax comprises the expected tax payable or
receivable on the taxable income or loss for the year
and any adjustment to the tax payable or receivable in
respect of previous years. It is measured using tax rates
enacted or substantively enacted at the reporting date.
Management periodically evaluates positions taken
in tax returns with respect to situations in which
applicable tax regulation is subject to interpretations
and establishes provisions where appropriate.
Current tax assets and liabilities are offset only if,
the Group:
a) b) has a legally enforceable right to set off the
recognised amounts; and
intends either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
The current income tax for overseas subsidiaries has
been computed based on the tax laws applicable to
each subsidiary in the respective jurisdiction in which
they operate.
Deferred tax
Deferred tax is recognised in respect of temporary
differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the
amounts used for taxation purposes (including those
arising from consolidation adjustments).
Deferred tax assets are recognised for unused tax
losses, unused tax credits and deductible temporary
differences to the extent that it is probable that future
taxable profits will be available against which they
can be used. Deferred tax assets are reviewed at each
reporting date and are reduced to the extent that it
is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the
probability of future taxable profits improves.