SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India
(‘Indian GAAP’) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, as
applicable. The financial statements have been prepared under the historical cost convention on accrual basis, except for
certain financial instruments which are measured at fair value.
Use of estimates
The preparation of financial statements requires the management of the Company to make estimates and assumptions
that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date
of the financial statements and reported amounts of income and expense during the year. Examples of such estimates
include provisions for doubtful receivables, provision for income taxes, the useful lives of depreciable Property, Plant and
Equipment and provision for impairment. Future results could differ due to changes in these estimates and the difference
between the actual result and the estimates are recognised in the period in which the results are known / materialise.
Property, Plant and Equipment
Property, plant and equipment are carried at the cost of acquisition or construction less accumulated depreciation. The
cost of property, plant and equipment includes non-refundable taxes, duties, freight and other incidental expenses related
to the acquisition and installation of the respective assets.
Intangible Assets
Intangible assets are stated at cost as reduced by accumulated depreciation thereon. Cost of intangible assets include all
expenditure incurred for the purpose of its development till the date such assets is ready for intended use. Upgradation
other than routine upgradation shall also be capitalised if such upgradation results in increase of economic benefit by such
intangible assets.
Depreciation / amortisation
Depreciation on property, plant and equipment (PPE) including assets taken on lease, other than freehold land is charged
on the basis of Written Down Value Method over useful life of the assets as specified in Schedule II to the Companies Act,
2013.
Leases
Assets taken on lease by the Company in its capacity as lessee, where the Company has substantially all the risks and
rewards of ownership are classified as finance lease. Such a lease is capitalised at the inception of the lease at lower of
the fair value or the present value of the minimum lease payments and a liability is recognised for an equivalent amount.
Each lease rental paid is allocated between the liability and the interest cost so as to obtain a constant periodic rate of
interest on the outstanding liability for each year.
Lease arrangements where the risks and rewards incidental to ownership of an asset substantially vest with the lessor, are
recognised as operating leases. Lease rentals under operating leases are recognised in the statement of profit and loss on
a straight-line basis.
Impairment
At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating
unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of impairment. Recoverable amount is the
higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected
from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount
rate that reflects the current market assessments of time value of money and the risks specific to the asset. Reversal of
impairment loss is recognised as income in the statement of profit and loss.
Investments
Long-term investments and current maturities of long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments, except for current maturities of long-term investments, comprising
investments in mutual funds, government securities and bonds are stated at the lower of cost and fair value.
Revenue recognition
Revenue from the sale of equipment are recognised upon delivery, which is when title passes to the customer.
Revenue is reported net of discounts.
Dividend is recorded when the right to receive payment is established. Interest income is recognised on time proportion
basis taking into account the amount outstanding and the rate applicable.
Taxation
Current income tax expense comprises taxes on income from operations in India and in foreign jurisdictions. Income
taxpayable in India is determined in accordance with the provisions of the Income Tax Act, 1961. Tax expense relating to
foreign operations is determined in accordance with tax laws applicable in countries where such operations are domiciled.
Deferred tax expense or benefit is recognised on timing differences being the difference between taxable income and
accounting income that originate in one period and is likely to reverse 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 substantively enacted by the
balance sheet date.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax
paid and income tax provision arising in the same tax jurisdiction for relevant tax paying units and where the Company is
able to and intends to settle the asset and liability on a net basis.
The Company offsets deferred tax assets and deferred tax liabilities if it has a legally enforceable right and these relate to
taxes on income levied by the same governing taxation laws.
Foreign currency transactions
Income 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 are
translated at the exchange rate prevailing on the balance sheet date and exchange gains and losses are recognised in the
statement of profit and loss. Exchange difference arising on a monetary item that, in substance, forms part of an
enterprise’s net investments in a non-integral foreign operation are accumulated in a foreign currency translation reserve.
Inventories
Raw materials are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis.
Purchased goods-in-transit are carried at cost. Work-in-progress is carried at the lower of cost and net realisable value.
Stores and spare parts are carried at lower of cost and net realisable value. Finished goods produced or purchased by the
Company are carried at lower of cost and net realisable value. Cost includes direct material and labour cost and a
proportion of manufacturing overheads.
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