in a Dynamic Environment - Domain-b

Dividends are recorded when the right to receive payment is established. Interest income is recognised on timeproportion basis.k) Research and DevelopmentResearch and Development expenditure is recognised in the profit and loss account when incurred. Fixed assetsutilised for research and development are capitalised and depreciated in accordance with the depreciation rates setout in paragraph 1(e).l) TaxationCurrent income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Incometax payable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expenserelating to overseas operations is determined in accordance with tax laws applicable in countries where suchoperations are domiciled.Minimum alternative tax (MAT) paid in accordance to the tax laws, which gives rise to future economic benefits inthe form of adjustment of future income tax liability, is considered as an asset if there is convincing evidence that theCompany will pay normal income tax after the tax holiday period. Accordingly, MAT is recognised as an asset in thebalance sheet when it is probable that the future economic benefit associated with it will flow to the Company andthe asset can be measured reliably.Deferred tax expense or benefit is recognised on timing differences being the difference between taxable incomeand accounting income that originate in one period and are capable of reversal in one or more subsequent periods.Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantivelyenacted by the balance sheet date.In the event of unabsorbed depreciation and carry forward of losses, deferred tax assets are recognised only to theextent that there is virtual certainty that sufficient future taxable income will be available to realise such assets. Inother situations, deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficientfuture taxable income will be available to realise these assets.Advance taxes and provisions for current income taxes are presented in the balance sheet after offsetting advancetax paid and income tax provision arising in the same tax jurisdiction and the Company intends to settle the assetand liability on a net basis.The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and theserelate to taxes on income levied by the same governing taxation laws.m) Foreign currency transactionsIncome and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction.Foreign currency monetary assets and liabilities other than net investments in non-integral foreign operations aretranslated at the exchange rate prevailing on the balance sheet date. Exchange difference arising on a monetaryitem that, in substance, forms part of an enterprise's net investments in a non-integral foreign operation areaccumulated in a foreign currency translation reserve.Premium or discount on forward exchange contracts are amortized and recognised in the profit and loss accountover the period of the contract. Forward exchange contracts and currency option contracts outstanding at thebalance sheet date, other than designated cash flow hedges, are stated at fair values and any gains or losses arerecognised in the profit and loss account.For the purpose of consolidation, income and expenses are translated at average rates and the assets and liabilitiesare stated at closing rate. The net impact of such change is accumulated under Foreign currency translation reserve.n) Derivative instruments and hedge accountingThe Company uses foreign currency forward contracts and currency options to hedge its risks associated with foreigncurrency fluctuations relating to certain firm commitments and forecasted transactions. The Company designatesthese hedging instruments as cash flow hedges applying the recognition and measurement principles set out in theAccounting Standard 30 "Financial Instruments: Recognition and Measurement" (AS - 30).171