Page 233 - Hitachi IR 2025

2.4 Current and non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
• Expected to be realised or intended to be sold or consumed in normal operating cycle;
•
Held primarily for the purpose of trading;
•
Expected to be realised within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
All assets and liabilities have been classified as current or non- current as per the Company’s operating cycle
and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and
the time between the acquisition of assets for processing and their realization in cash and cash equivalents,
the Company has ascertained its operating cycle as 12 months for the purpose of current and non- current
classification of assets and liabilities, except for long-term contracts. The projects business comprises long-term
contracts which have an operating cycle exceeding one year. For classification of current assets and liabilities
related to projects business, the Company uses the duration of the individual life cycle of the contract as its
operating cycle.
A liability is current when:
•
It is expected to be settled in normal operating cycle;
•
It is held primarily for the purpose of trading;
•
It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the
reporting period;
The Company classifies all other liabilities as non-current;
Advance tax paid is classified as non-current assets
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.5 Foreign Currency
Functional currency
The functional currency of the Company is the Indian Rupee.
Transactions and translations
Initial recognition transactions in foreign currencies are recorded by the Company at their respective functional
currency spot rates at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot
rates of exchange at the reporting date. The gains or losses resulting from such translations are recognised in
the statement of profit and loss.
Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value
are translated at the exchange rate prevalent at the date when the fair value was measured. Non-monetary
assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are
translated at the exchange rate prevalent at the date of the transaction.
Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining
net profit for the period in which the transaction is settled. Revenue, expense and cash flow items denominated
in foreign currencies are translated into the relevant functional currencies using the exchange rate in effect on
the date of the transaction.
Integrated Annual Report 2024-25
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