1 B) 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) Fixed Assets not represented by physical assets
owned by the Company are amortised over a
period of five 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 Method
(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. The Company determines the lease term as
the non-cancellable period of a lease, together with
both periods covered by an option to extend the lease if
the Company is reasonably certain to exercise that
option, and periods covered by an option to terminate
the lease if the Company is reasonably certain not to
exercise that option. 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 depreciated 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. In
cases where 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 and 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.
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
Investments 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.
|