3 Material accounting policy information
(a) Revenue recognition
Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the entity and
the revenue can be reliably measured, regardless of
when the payment is being made.
Revenue is measured at the transaction price for
each separate performance obligation taking into
account contractually defined terms of payment and
excluding taxes or duties collected on behalf of the
government. The transaction price is net of estimated
customer returns, rebates, discounts and other
similar allowances.
(i) Sale of security and surveillance equipment
and components
Revenue is recognized upon transfer of control
of promised goods to customers in an amount
that reflects the consideration which Company
expects to receive in exchange of those goods.
Revenue from the sale of goods is recognised
at the point in time when control is transferred
to the customer, based on terms of contracts
with the customers which generally coincides
with delivery of products to customers in case of
domestic sales and on the basis of bill of lading
in the case of export sales.
Revenue from the sale of goods is recognised
when the control of the product is transferred,
the goods are delivered and titles have passed,
at which time all the following conditions
are satisfied:
• The Company has transferred to the
buyer the significant risks and rewards of
ownership of the goods.
• The Company has a present right to
payment for the asset.
• The Company has transferred physical
possession of the asset, whereby the
customer has the ability to direct the use of,
and obtain substantially all of the remaining
benefits from, the asset or to restrict the
access of other entities to those benefits.
Provision for contractual warranty is recognised
as per the principles defined under Ind AS
37: Provisions, Contingent liabilities and
Contingent assets.
(ii) Rendering of services including business
support, survelliance and cloud storage and
technical training services
(a) Revenue from business support services,
survelliance services and cloud storage
services is recognised over a period of
time when the services are rendered as per
the terms of the respective contracts with
the customers.
(b) Revenue from other services including
technical training services are recognised at
a point in time as and when the services are
rendered as per the terms of the respective
contracts with the customers.
(iii) Dividend income
Dividend is recognised when right to receive the
payment is established.
(iv) Interest income
Interest income from a financial asset is
recognised and accrued using effective
interest rate method.
(v) Insurance & Other Claims
Revenue in respect of claims is recognized when
no significant uncertainty exists with regard
to the amount to be realized and the ultimate
collection thereof.
(vi) Trade Receivables
Trade receivables are initially measured (initial
recognition amount) at their transaction price in
accordance with Ind AS 115 unless those contain
significant financing component determined in
accordance with Ind AS 115 or when the entity
applies the practical expedient in accordance
with paragraph 63 of the Ind AS 115 and
subsequently measured at amortised cost using
effective interest method, less allowance for
expected credit loss.
(vii) Contract Assets
A contract asset is the right to consideration
in exchange for goods or services transferred
to the customer. If the Company performs by
transferring goods or services to a customer
before the customer pays consideration or before
payment is due, a contract asset is recognised for
the earned consideration that is conditional.
(viii) Contract Liabilities
A contract liability is the obligation to transfer
services to a customer or which the company
as receive consideration from the customer.
If a customer pays consideration before the
Company transfers goods or services to the
customer, a contract liability is recognised
when the payment is made. Contract liabilities
are recognised as revenue when the Company
performs under the contract.
Assets and liabilities arising from rights of
return:
(i) Right of return assets
Right of return asset represents the
Company's right to recover the goods
expected to be returned by customers. The
asset is measured at the former carrying
amount of the inventory, less any expected
costs to recover the goods, including any
potential decreases in the value of the
returned goods. The Company updates the
measurement of the asset recorded for any
revisions to its expected level of returns,
as well as any additional decreases in the
value of the returned goods.
(ii) Refund liabilities
A refund liability is the obligation to refund
some or all of the consideration received
(or receivable) from the customer and is
measured at the amount the Company
ultimately expects it will have to return
to the customer. The Company updates
its estimates of refund liabilities (and the
corresponding change in the transaction
price) at the end of each reporting period.
(b) Inventories
Inventories are stated at the lower of cost determined
on weighted average cost basis and net-realisable
value. Cost includes freight, taxes and duties net of
GST input tax credit, wherever applicable. Customs
duty payable on material in bonded warehouse is
added to the cost of the material.
Net realisable value represents the estimated
selling price for inventories less all estimated cost of
completion and cost necessary to make the sale.
(c) Property, plant and equipment
Property plant and equipment are stated at their cost
of acquisition. The cost comprises purchase price,
borrowing cost if capitalization criteria are met and
directly attributable cost of bringing the asset to its
working condition for the intended use. Any trade
discount and rebates are deducted in arriving at the
purchase price.
Subsequent costs are included in the asset's
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will
flow to the entity and the cost can be measured
reliably. Property, Plant and Equipment which are
significant to the total cost of that item of Property,
Plant and Equipment and having different useful life
are accounted separately. Depreciation on Property,
Plant and Equipment is provided using written down
value method on depreciable amount. Depreciation
is provided based on useful life of the assets as
prescribed in Schedule II to the Companies Act, 2013
except in respect of certain category of assets as
mentioned below in respect of which the useful life
has been assessed based on technical assessment.
The estimates of useful life of property, plant and
equipment are as follows:
Leasehold improvements are amortised over the
period of lease including the optional period which in
the management's view is probable to be exercised.
De-recognition
An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued use of the asset. Any gain or loss arising
on the disposal or retirement of an item of property,
plant and equipment is determined as the difference
between the sale proceeds and the carrying amount
of the asset and is recognised in profit or loss.
Capital Work in Progress
Capital work-in-progress is recorded at its cost,
which encompasses expenses incurred during the
construction period. This cost also includes interest
on the amount borrowed for the acquisition of
qualifying assets and other expenses related to project
implementation, to the extent that these expenses
pertain to the period before the commencement of
commercial production/ use.
(d) Intangible assets
Intangible assets acquired separately are measured
on initial recognition at cost. The cost of intangible
assets acquired in a business combination is their
fair value at the date of acquisition. Following initial
recognition, intangible assets are carried at cost less
any accumulated amortisation and accumulated
impairment losses. Internally generated intangibles,
excluding capitalised development costs, are
not capitalised and the related expenditure is
reflected in profit or loss in the period in which the
expenditure is incurred.
Research costs are expensed as incurred. Development
costs are expensed as incurred unless technical and
commercial feasibility of the project is demonstrated,
future economic benefits are probable, the Company
has an intention and ability to complete and use or sell
the product and the costs can be measured reliably.
The costs, which can be capitalized include the cost of
material, direct labor, overhead costs that are directly
attributable to prepare the asset for its intended use.
Intangible assets with finite lives are amortised over
the useful economic life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with
a finite useful life are reviewed at least at the end
of each reporting period. Changes in the expected
useful life or the expected pattern of consumption
of future economic benefits embodied in the asset
are considered to modify the amortisation period or
method, as appropriate, and are treated as changes in
accounting estimates. The amortisation expense on
intangible assets with finite lives is recognised in the
statement of profit and loss unless such expenditure
forms part of carrying value of another asset.
De-recognition
An intangible asset is derecognised on disposal, or
when no future economic benefits are expected
from use or disposal. Gain or loss arising from
derecognition of an intangible asset, measured as
the difference between the net disposal proceeds
and the carrying amount of the asset, are recognised
in profit or loss when the asset is derecognised.
(e) Intangible assets under development
Intangible assets under development represents
expenditure incurred in respect of intangible assets
under development and are carried at cost less
accumulated impairment loss, if any. Cost includes
related acquisition expenses, development costs,
borrowing costs and other direct expenditure.
(f) Investment properties
Investment properties are properties held to
earn rentals or for capital appreciation, or both.
Investment properties are measured initially at their
cost of acquisition. The cost comprises purchase
price, borrowing cost, if capitalization criteria are met
and directly attributable cost of bringing the asset to
its working condition for the intended use. Any trade
discount and rebates are deducted in arriving at the
purchase price.
Subsequent costs are included in the asset's
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company. All other repair and maintenance
costs are recognized in statement of profit or
loss as incurred.
Investment properties are subsequently measured at
cost less accumulated depreciation and impairment
losses. Depreciation on investment properties
is provided on the written down value method
computed on the basis of useful lives as prescribed in
the Schedule II of the Act:
The residual values, useful lives and method of
depreciation are reviewed at the end of each
financial year.
De-recognition
Investment properties are de-recognized either
when they have been disposed off or when they
are permanently withdrawn from use and no future
economic benefit is expected from their disposal.
The difference between the net disposal proceeds
and the carrying amount of the asset is recognized in
profit or loss in the period of de-recognition.
(g) Impairment of non-financial assets- property,
plant and equipment, intangible assets and
investment property
At the end of each reporting period, the entity
reviews the carrying amount of property, plant
and equipment, intangible assets and investment
property to determine whether there is any indication
that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount
of the assets is estimated in order to determine the
extent of the impairment loss (if any). When it is not
possible to estimate the recoverable amount of an
individual asset, the entity estimates the recoverable
amount of the cash-generating unit to which the
asset belongs. When a reasonable and consistent
basis of allocation can be identified, corporate assets
are also allocated to individual cash-generating units.
An impairment loss is recognised in the Statement of
Profit and Loss to the extent, asset's carrying amount
exceeds its recoverable amount. The recoverable
amount is higher of an asset's fair value less cost of
disposal and value in use. Value in use is based on
the estimated future cash flows, discounted to their
present value using pre-tax discount rate that reflects
current market assessments of the time value of
money and risk specific to the assets.
When an impairment loss subsequently reverses, the
carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that
would have been determined had no impairment
loss been recognised for the asset (or cash-generated
unit) in prior years. A reversal of an impairment loss is
recognised immediately in profit or loss.
(h) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash
flow statement comprise cash at bank and in hand,
cheques in hand and short-term deposits with an
original maturity of three months or less, which are
subject to an insignificant risk of changes in value and
having original maturities of three months or less from
the date of purchase, to be cash equivalents. Cash
and cash equivalents consist of balances with banks
which are unrestricted for withdrawal and usage.
(i) Cash Flow Statement
Cash flows are reported using the indirect method,
whereby profit for the year is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities of
the Company are segregated.
(j) Earnings per Share
Basic earnings per equity share is computed by
dividing the net profit attributable to the equity
holders of the Company by the weighted average
number of equity shares outstanding during the
period. The weighted average number of equity
shares outstanding during the period is adjusted
for events such as share split, bonus issue that have
changed the number of equity shares outstanding,
without a corresponding change in resources.
Diluted earnings per share reflects the potential
dilution that could occur if securities or other
contracts to issue equity shares were exercised or
converted during the year. Diluted earnings per
equity share is computed by dividing the net profit
attributable to the equity holders of the Company
by the weighted average number of equity shares
considered for deriving basic earnings per equity
share and also the weighted average number of
equity shares that could have been issued upon
conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive
only if their conversion to equity shares would
decrease the net profit per share from continuing
ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of
the period, unless they have been issued at a later
date. Dilutive potential equity shares are determined
independently for each period presented.
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