1B) Material Accounting Policies
a) Statement of Compliance
The Standalone Financial Statements have been
prepared as a going concern in accordance with Indian
Accounting Standards (Ind AS) notified under Section
133 of the Companies Act, 2013 ("the Act") including the
Companies (Indian Accounting Standards) Rules,2015
(as amended from time to time) and presentation
requirements of Division II of Schedule III to the
Companies Act, 2013, (Ind AS compliant) as applicable
to the Standalone Financial Statements.
b) i) Basis for Preparation of Financial Statements
The Financial Statements have been prepared under
the historical cost convention on accrual basis with the
exception of certain assets and liabilities carried at fair
values. The assets and liabilities have been classified
as Current/Non-Current as per the Company's normal
operating cycle and other criteria set out in the Act.
Based on the nature of products and the time between
the acquisition of assets for processing and their
realisation in cash and cash equivalents, the Company
has ascertained its operating cycle as 12 months for the
purpose of Current/Non-Current classification of assets
and liabilities. The Statement of Cash Flows has been
prepared under indirect method.
Accounting policies have been consistently applied
except where a newly issued accounting standard is
initially adopted or a revision to an existing accounting
standard requires a change in the accounting policy
hitherto in use. The material accounting policy
information used in preparation of the audited
Standalone Financial Statements have been discussed
in the respective notes.
ii) Use of Estimates and Critical Accounting Judgements
The preparation of Financial Statements is in conformity
with Generally Accepted Accounting Principles
which requires management to make estimates and
assumptions.
The estimates and the associated assumptions are
based on historical experience, opinions of experts and
other factors that are considered to be relevant. Actual
results may differ from these estimates.
Significant judgements and estimates are made in
areas relating to useful life of Property, Plant and
Equipment, impairment of Property, Plant and
Equipment, Investments, actuarial assumptions relating
to recognition and measurement of employee defined
benefit obligations and recognition of provisions and
exposure of contingent liabilities relating to pending
litigations or other outstanding claims etc.
c) Property, Plant and Equipment-Tangible Assets
Property, Plant and Equipment are stated at cost, net
of recoverable taxes, trade discounts and rebates less
accumulated depreciation and impairment losses, if any.
Such cost includes purchase price, borrowing cost and
any cost directly attributable to bringing the assets to
its working condition for its intended use, net changes
on foreign exchange contracts and adjustments arising
from exchange rate variations attributable to the assets.
Subsequent costs are included in the asset's carrying
amount or recognised 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. All other repairs and
maintenance are charged to the Statement of Profit
and Loss during the reporting period in which they are
incurred.
An item of Property, Plant and Equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from continued use of asset.
Depreciation Method and Estimated Useful Life
Depreciation is calculated using the straight line
method on a pro-rata basis from the date on which
each asset is put to use to allocate their cost, net of
their residual values, over their estimated useful lives.
The estimated useful lives are those prescribed under
Schedule II to the Companies Act, 2013 except in respect
of the following assets,where useful life is different than
those prescribed in Schedule II (based on technical
evaluation)
i) Carpeted roads-other than RCC - Auto 15 years
SBU
ii) Carpeted roads-other than RCC - Float 25 years
SBU
iii) Fences (Boundary Walls) - Float SBU 25 years
iv) Plant and Equipment
a) Tooling, Utility, Forklifts, Testing 20 years
Equipment
b) Continuous Process Plant and 18 years
Electrical Installations forming part
thereto
c) Float Glass Melting Furnace 15 years
d) Other parts of Plant and Equipment 25 years
(where cost of a part asset is
significant to total cost of the asset)
v) Electrical Installations- Auto SBU 25 years
vi) Assets not represented by physical assets owned
by the Company are amortised over a period of 5
years.
vii) Gains and losses on disposals are determined by
comparing proceeds with carrying amount and
such gains or losses are recognised as income or
expense in the Statement of Profit and Loss.
viii) Cost of items of Property, Plant and Equipment
not ready for intended use as on the Balance
Sheet date is disclosed as capital work in progress.
Advances given towards acquisition of Property,
Plant and Equipment outstanding at each Balance
Sheet date are disclosed as Capital Advance under
Other Non-Current Assets.
d) Intangible Assets and Amortisation
Intangible assets are stated at cost, net of recoverable
taxes, trade discounts and rebates less accumulated
amortisation and impairment loss, if any. The cost
comprises of purchase price, borrowing costs and any
cost directly attributable to bringing the asset to its
working condition for the intended use.
Gains and losses on disposals are determined by
comparing proceeds with carrying amount. These are
recognised as income or expense in the Statement of
Profit and Loss.
Cost of items of intangible assets not ready for intended
use as on the Balance Sheet date is disclosed as
intangible assets under development.
An intangible asset is derecognised when no future
benefits are expected from use.
Amortisation Method and Estimated Useful Life
Amortisation is charged on a straight-line basis (SLM)
over the estimated useful life. The estimated useful life
and amortisation method is reviewed at the end of each
annual reporting period with the effect of any changes in
the estimate being accounted for on a prospective basis.
e) Impairment
Tangible and Intangible assets are tested for impairment
whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which
the asset's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an
asset's fair value less costs of disposal and value in use.
Non-financial assets that suffered an impairment are
reviewed for possible reversal of the impairment at the
end of each reporting period.
f) Leases
Company as a lessor:
The Company classifies the leases as either a finance
lease or an operating lease depending on whether
the risks and rewards incidental to ownership of an
underlying asset are transferred and recognises finance
income over the lease term.
Company as a lessee:
In accordance with Ind AS-116, the Company assesses
whether a contract contains a lease at inception of a
contract. At the date of commencement of the lease,
the Company recognises a "Right of Use" asset and
a corresponding liability for all lease arrangements
in which it is the lessee, except for leases with a term
of twelve months or less (short term leases) and low
value leases. For these short term and low value leases,
the Company recognises the lease payments as an
operating expense on a straight-line basis over the term
of the lease. The right of use assets are amortised using
the straight line method from the commencement date
over the shorter of lease term or useful life of right to
use asset. The lease payments are discounted using
the interest rate implicit in the lease or if not readily
determinable using the incremental borrowing rates.
Lease liabilities are re measured with a corresponding
adjustment to the related right of use asset if the
Company changes its assessment of whether it will
exercise an extension or termination option.
g) Financial Instruments
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the relevant instrument. Since the
transaction price does not differ significantly from the
fair value of the financial asset or financial liability, the
transaction price is assumed to be the fair value on
initial recognition. Transaction costs that are directly
attributable to the acquisition or issue of financial assets
and financial liabilities are added to or deducted from
the fair value on initial recognition of financial assets or
financial liabilities. Purchase and sale of financial assets
are recognised using trade date accounting.
i) Financial Assets
Financial assets include Trade Receivables,
Advances, Security Deposits, Cash and Cash
Equivalents etc., which are classified for
measurement at amortised cost. The Company
accounts its investments in subsidiaries and
associates at cost. However, all other equity
investments are measured at fair value, with
value changes recognised through "Other
Comprehensive Income".
Management determines the classification of
an asset at initial recognition depending on the
purpose for which the assets were acquired. The
subsequent measurement of financial assets
depends on such classification.
Impairment:
The Company assesses at each reporting date
whether a financial asset (or a group of financial
assets) are tested for impairment based on
available evidence or information. Expected
credit losses are assessed and loss allowances
recognised if the credit quality of the financial
asset has deteriorated significantly since initial
recognition.
De-Recognition:
Financial assets are derecognised when the right
to receive cash flow from the assets has expired,
or has been transferred and the Company has
transferred substantially all of the risks and
rewards of ownership.
Income Recognition:
Interest income is recognised in the Statement of
Profit and Loss using the effective interest method.
Dividend income is recognised in the Statement of
Profit and Loss when the right to receive the same
is established.
ii) Financial Liabilities:
Borrowings, Trade Payables and Other Financial
Liabilities are initially recognised at the value of
the respective contractual obligations. They are
subsequently measured at amortised cost using
the effective interest method.
For trade and other payables maturing within one
year from the Balance Sheet date, the carrying
amounts approximate fair value due to short
maturity of these instruments.
De-Recognition:
Financial Liabilities are derecognised when
the liability is extinguished, that is, when the
contractual obligation is discharged, cancelled
and on expiry.
h) Inventories
Inventories are valued at lower of cost or net realisable
value except waste which is valued at estimated
realisable value as certified by the management. The
basis of determining cost for various categories of
inventories are as follows:
i) Revenue
Revenue is recognised when the performance
obligation is satisfied by transferring promised goods
or services (i.e. an asset) to a customer. An asset is
transferred when (or as) the customer obtains control
of that asset. Revenue is measured at the fair value
of the consideration received or receivable net of
discounts, taking into account contractually defined
terms and excluding taxes and duties collected on
behalf of the Government. Dividend income from
investments is recognised when the right to receive
payment has been established. Interest income is
accrued on time proportion basis, by reference to the
principal outstanding and the effective interest rate
applicable. Rental income from investment properties
is recognised on a straight-line basis over the term of
the relevant leases. Income from services is accounted
over the period of rendering of services.
j) Foreign Currency Transactions
i) Items included in the Financial Statements are
measured using the currency of the primary
economic environment in which the entity
operates (the functional currency). The Standalone
Ind AS Financial Statements are presented in
Indian Rupee (INR) which is Company's functional
and presentation currency.
Foreign currency transactions are translated into
the functional currency using the exchange rates
at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement
of such transactions and from the translation of
monetary assets and liabilities denominated in
foreign currencies at year end exchange rates are
generally recognised in Statement of Profit and
Loss except on transactions entered into to hedge
certain foreign currency risks.
Exchange gains or losses on foreign currency
borrowings taken prior to 1st April, 2017 which
are related to the acquisition or construction of
qualifying assets are adjusted in the carrying cost
of such assets.
ii) Derivative Financial Instruments
In the ordinary course of business, the Company
uses certain financial instruments to reduce
business risks which arise from its exposure to
foreign exchange rate risks, commodity price risks
and interest rate fluctuations. The instruments
are confined mainly to forward contracts, certain
other derivative financial instruments and interest
rate swaps.
Derivatives are initially accounted for and
measured at fair value from the date derivative
contract is entered into and subsequently
remeasured to their fair value at the end of each
reporting period.
k) Cash and Cash Equivalents
For the purpose of presentation in the statement of
Cash Flows, Cash and Cash Equivalents includes cash
in hand, cheques/drafts in hand, demand deposits with
banks, short term balances, highly liquid investments
that are readily convertible into known amounts of cash
and which are subject to insignificant risk of changes in
value. Book overdrafts are shown within Other Financial
Liabilities in the Balance Sheet and form part of Cash
and Cash Equivalents in the Cash Flow Statement.
l) Income Tax
Income tax expense represents the sum of the current
tax and deferred tax.
Current tax charge is based on taxable profit for the
year. Taxable profit differs from profit as reported in
the Statement of Profit and Loss because some items
of income or expense are taxable or deductible in
different years or may never be taxable or deductible.
The Company's liability for current tax is calculated
using Indian tax rates and laws that have been enacted
by the reporting date.
Current tax assets and liabilities are offset when there
is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to
income taxes levied by the same taxation authority.
The Company periodically evaluates positions taken
in the tax returns with respect to situations in which
applicable tax regulations are subject to interpretation
and establishes provisions where appropriate.
Deferred tax is the tax arising from temporary differences
between the carrying amounts of assets and liabilities
in the Balance Sheet and the corresponding tax bases
used in the computation of taxable profit. Deferred
tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable
profits will be available against which deductible
temporary differences can be utilised. Deferred tax is
calculated at the tax rates that are expected to apply
in the period when the liability is settled or the asset
realised, based on tax rates that have been enacted or
substantively enacted by the reporting date.
Deferred income tax assets and liabilities are off set
against each other and the resultant net amount is
presented in the Balance Sheet if and only when the
Company currently has a legally enforceable right to
set off the current income tax assets and liabilities.
Deferred tax assets include Minimum Alternate Tax
(MAT) paid in accordance with the tax laws in India,
to the extent it would be available for set off against
future current income tax liability. Accordingly, MAT is
recognised as deferred tax asset in the Balance Sheet
when the asset can be measured reliably and it is
probable that the future economic benefit associated
with the asset will be realised.
Current and deferred tax is recognised in profit or
loss, except to the extent that it relates to items
recognised in Other Comprehensive Income or
directly in equity. In this case the tax is also recognised
in Other Comprehensive Income or directly in equity
respectively.
m) Employee Benefits
i) Short Term Employee Benefits
Short term employee benefits are expensed
as the related service is provided. A liability is
recognised for the amount expected to be paid if
the Company has a present legal or constructive
obligation to pay this amount as a result of
past service provided by the employee and the
obligation can be estimated reliably.
ii) Post Employment Benefits
Defined Contribution Plans
The Company's defined contribution plans
are Superannuation and Employees Provident
Fund, Employee State Insurance/ Labour Fund
and Employees' Pension Scheme (under the
provisions of the Employees' Provident Funds
and Miscellaneous Provisions Act, 1952) since
the Company has no further obligation beyond
making the contributions. The Company's
contributions to these plans are charged to the
Statement of Profit and Loss as incurred.
Defined Benefits Plans
Liability for defined benefit plans is provided on
the basis of valuations as at the Balance Sheet
date, carried out by an independent actuary.
Gratuity
The gratuity fund benefits are administered by
a Trust recognised by Income Tax Authorities
through Group Gratuity Schemes. The liability
for gratuity at the end of the each financial year
is determined on the basis of actuarial valuation
carried out by the independent Actuary. The
method used for measuring the liability for
gratuity is Projected Unit Credit Method.
Actuarial gains and losses are recognised in the
Statement of Other Comprehensive Income in
the period of occurrence of such gains and losses.
The obligations for gratuity are measured at the
present value of estimated future cash flows
discounted at rates reflecting the prevailing
market yields of Indian Government securities as
at the Balance Sheet date for the estimated term
of the obligations. The estimate of future salary
increases considered takes into account the
inflation, seniority, promotion and other relevant
factors. The expected rate of return of plan assets
is the Company's expectation of the average long¬
term rate of return expected on investments of the
fund during the estimated term of the obligations.
Plan assets are measured at fair value as at the
Balance Sheet date.
iii) Other Long Term Benefit Plans
The liabilities for earned leave are not expected
to be settled wholly within 12 months after the
end of the period in which the employees render
the related service. They are therefore measured
as the present value of expected future payments
to be made in respect of services provided
by employees up to the end of the reporting
period using the Projected Unit Credit Method.
The benefits are discounted using the market
yields at the end of the reporting period that
have terms approximating to the terms of the
related obligation. Re-measurements as a result
of experience adjustments and changes in
actuarial assumptions are recognised in Other
Comprehensive Income.
iv) The expenditure on voluntary retirement scheme
is charged to the Statement of Profit and Loss in
the year in which it is incurred.
n) Investments in Subsidiaries
I nvestments in subsidiaries are long term and are
carried at cost less impairment loss, if not temporary.
o) Earnings Per Share
Basic earnings per Share is calculated by dividing the
profit for the period attributable to the owners of
Company by the weighted average number of equity
shares outstanding during the period. The weighted
average number of equity shares outstanding during
the period and for all periods presented is adjusted for
events, such as bonus shares, other than the conversion
of potential equity shares that have changed the
number of equity shares outstanding without a
corresponding change in resources. For the purposes of
calculating diluted earnings per share the profit for the
period attributable to the owners of the Company and
the weighted average number of shares outstanding
during the period is adjusted for the effects of all
dilutive potential equity shares.
p) Non Current Assets held for Sale
Non Current Assets are classified as held for sale if their
carrying amount will be recovered principally through
a sale transaction rather than continuing use and a sale
is considered highly probable. They are measured at the
lower of their carrying amount and fair value less cost
to sell.
q) Exceptional Items
When items of income or expense are of such nature,
size and incidence that their disclosure is necessary
to explain the performance of the Company for the
year, the Company makes a disclosure of the nature
and amount of such items separately under the head
"Exceptional Items".
r) Segment Reporting
Operating segments are reported in a manner consistent
with the internal reporting provided to the Chief
Operating Decision Maker (CODM). The Chairman &
Managing Director of the Company has been identified
as CODM and responsible for allocating the resources,
assess the financial performance of segments and
position of the Company and makes strategic decisions.
The Company has identified two reportable segments
"Automotive Glass" and "Float Glass" based on the
information reviewed by the CODM. Refer note 38 for
"Segment Information" presented.
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