1B. MATERIAL ACCOUNTING POLICIES:
The material accounting policies applied by the Company in the preparation of its standalone financial statements are
listed below. Such accounting policies have been applied consistently to all the periods presented in these standalone
financial statements, unless otherwise indicated.
a. Statement of compliance
The standalone financial statements comply in all material respects with the Indian Accounting Standards
(referred to as "Ind AS") notified under Section 133 of the Companies Act, 2013 ('Act'), read together with the
Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act, as amended
from time to time.
b. Basis of preparation
The standalone financial statements are prepared in accordance with the historical cost convention, except for
certain assets and liabilities that are measured at fair values at the end of each reporting period, as explained in
the accounting policies.
The standalone financial statements are prepared in Indian rupees and all amounts are rounded off to the nearest
crores unless otherwise stated.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is directly
observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability,
the Company takes into account the characteristics of the asset or liability if market participants would take
those characteristics into account when pricing the asset or liability at the measurement date. Fair value for
measurement and/or disclosure purposes in these standalone financial statements is determined on such a basis,
except measurements that have some similarities to fair value but are not fair value, such as net realisable value
in Ind AS 2 - Inventories or value in use in Ind AS 36 - Impairment of Assets.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the
inputs to the fair value measurement in its entirety, which are described as follows:
• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Company can access at the measurement date;
• Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
• Level 3 inputs are unobservable inputs for the asset or liability.
The preparation of standalone financial statements in conformity with Ind AS requires management to make
judgements, estimates and assumptions (such estimates and judgements are reviewed every year) that affect
the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities at the date of the standalone financial statements, and the reported amounts
of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised
in the period in which the estimate is revised if the revision affects only that period; they are recognised in the
period of the revision and future periods if the revision affects both current and future periods.
All assets and liabilities have been classified as current or non-current as per Company's normal operating cycle
and other criteria set out in Schedule III to the Companies Act 2013 and Ind AS 1 - Presentation of Financial
Statements which is based on the nature of businesses and the time elapsed between deployment of resources
and the realisation in cash and cash equivalents. The Company has considered an operating cycle of 12 months.
c. Going concern
The directors have, at the time of approving the standalone financial statements, a reasonable expectation that
the Company has adequate resources to continue in operational existence for the foreseeable future. Thus, they
continue to adopt the going concern basis of accounting in preparing the standalone financial statements.
d. Revenue recognition
Revenue from contracts with customers is recognised when the Company satisfies performance obligation by
transferring promised goods and services to the customer. The Company has generally concluded that it is the
principal in its revenue arrangements, because it typically controls the goods or services before transferring
them to the customer. Performance obligations are satisfied at a point of time or over a period of time.
Sale of Products
Revenue from sale of goods is recognised at the point in time when control of the goods is transferred to the
customer, generally on delivery of the goods and there are no unfulfilled obligations. Delivery occurs when
the products have been shipped and delivered to the specific location, as the case may be, the risks of loss has
been transferred, and either the customer has accepted the products in accordance with the sales contract, or the
Company has objective evidence that all criteria for acceptance have been satisfied.
Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net
of variable consideration) allocated to that performance obligation. Transaction price of goods sold is net of
variable consideration on account of discounts, incentives and schemes offered by the Company. Revenue from
these sales is recognised based on the price specified in the contract, net of the volume and price discounts A
liability is recognised for expected volume discounts payable to customers in relation to sales made until the end
of the reporting period. No element of financing is deemed present as the sales are generally made with a credit
term of 30-60 days , which is consistent with market practice. Any obligation to provide a refund is recognised
as a provision. A receivable is recognised when the goods are delivered as this is the point in time that the
consideration is unconditional because only the passage of time is required before the payment is due.
The Company does not adjust the transaction prices for any time value of money in case of contracts where the
period between the transfer of the promised goods or services to the customer and payment by the customer
does not exceed one year.
Sale of Services
The Company provides installation, annual maintenance and extended warranty services that are sold separately.
Revenue from services rendered over a period of time, such as annual maintenance contracts, are recognised
on straight line basis over the period or as per the terms of relevant contractual agreements / arrangements.
The Company recognizes revenue from sales of services over time, because the customer simultaneously
receives and consumes the benefits provided by the Company over a period of time. Revenue from services
related activities is recognised as and when services are rendered and on the basis of contractual terms with the
parties.
Interest Income
Interest income from financial assets is recognized when it is probable that the economic benefit will flow to
the Company and the amount can be measured reliably. Interest income is accrued on time basis, by reference
to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts
estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount
on initial recognition.
e. Property, plant and equipment
Freehold land is carried at historical cost. All other items of Property, plant and equipment are stated at cost
of acquisition or construction less accumulated depreciation and impairment, if any. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Cost is inclusive of inward freight, duties and taxes and incidental expenses related to acquisition. In respect
of major projects involving construction, related pre-operational expenses form part of the value of assets
capitalised. Expenses capitalised also include applicable borrowing costs for qualifying assets, if any. All
upgradation / enhancements are charged off as revenue expenditure unless they bring significant additional
benefits.
Properties in course of construction for production, supply or administrative purposes, or for purposes not yet
determined, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for
qualifying assets, borrowing costs capitalised in accordance with Company's policy.
Depreciation on property, plant and equipment has been provided on the straight-line method less residual
values as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the tools
and moulds, in whose case the life of the assets has been assessed as 5 years based on technical advice, taking
into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past
history of replacement, anticipated technological changes, manufacturers warranties and maintenance support,
etc. Depreciation commences when the assets are ready for their intended use.
Freehold land is not depreciated. The estimated useful lives, residual values and depreciation method are
reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a
prospective basis.
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 sales proceeds and the
carrying amount of the asset and is recognised in the statement of profit and loss.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date
is classified as 'Capital advances' under other non-current assets and the cost of property, plant and equipment
not ready to use are disclosed under 'Capital work-in-progress'
On transition to Ind AS, the Company had chosen to carry forward previous GAAP carrying amount and
accordingly the net carrying amount on transition date was considered as the deemed cost.
f. Investment property
Investment property are properties held to earn rentals and/or for capital appreciation (including property under
construction for such purposes). Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16 - Property,
Plant and Equipment requirement for cost model, other than those that meet the criteria to be classified as held
for sale (or are included in a disposal group that is classified as held for sale) in accordance with Ind AS 105 -
Non-current Assets Held for Sale and Discontinued Operations.
An investment property is derecognised upon disposal or when the investment property is permanently
withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising
on de-recognition of the property (calculated as the difference between the net disposal proceeds and the
carrying amount of the asset) is included in statement of profit and loss in the period in which the property is
derecognised.
g. Intangible assets
Intangible assets that the Company acquires separately and from which it expects future economic benefits are
capitalised upon acquisition and measured initially at cost comprising the purchase price (including import
duties and non-refundable taxes) and directly attributable costs to prepare the asset for its intended use.
Internally generated assets for which the cost is clearly identifiable are capitalised at cost. All directly attributable
expenditure incurred to prepare the asset for its intended use are recognised as the cost of such assets.
Research expenditure is recognised as an expense when it is incurred. Development costs are capitalised only
after the technical and commercial feasibility of the asset for sale or use has been established. All directly
attributable expenditure incurred to prepare the asset for its intended use are recognised as the cost of such
assets.
Internally generated brands, websites and customer lists are not recognised as intangible assets.
The useful life of an intangible asset is considered finite where the rights to such assets are limited to a specified
period of time by contract or law (e.g., patents, licences, trademarks, franchise and servicing rights) or the
likelihood of technical, technological obsolescence (e.g., computer software, design, prototypes) or commercial
obsolescence (e.g., lesser-known brands are those to which adequate marketing support may not be provided).
Intangible assets that have finite lives are amortised over their estimated useful lives by the straight-line method
unless it is practical to reliably determine the pattern of benefits arising from the asset. An intangible asset with
an indefinite useful life is not amortised. The estimated useful lives of intangible assets of the Company are as
follows:
Amortisation expenses, impairment losses and reversal of impairment losses are taken to the statement of profit
and loss. Thus, after initial recognition, an intangible asset is carried at its cost less accumulated amortisation
and / or impairment losses.
The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required
for assets with finite lives and to confirm that business circumstances continue to support an indefinite useful life
assessment for assets so classified. Based on such review, the useful life may change or the useful life assessment
may change from indefinite to finite. The impact of such changes is accounted for as a change in accounting
estimate.
An intangible asset is derecognised on disposal or when no future economic benefits are expected from use or
disposal. Gains or losses from derecognition are measured as the difference between the net disposal proceeds
and the carrying amount of the assets, and are recognised in the statement of profit or loss when the asset is
derecognised.
On transition to Ind AS, the Company had chosen to carry forward previous GAAP carrying amount and
accordingly the net carrying amount on transition date was considered as the deemed cost.
h. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible
assets 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 asset 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
Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for
impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than it's carrying amount, the carrying
amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised immediately
in the statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a CGU) 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
CGU) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and
loss.
i. Foreign currency transactions
Items included in the standalone financial statements are measured using the currency of the primary economic
environment in which the entity operates ('the functional currency'). The functional and presentation currency
of the Company is Indian Rupee.
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing on
the date of the respective transactions. Foreign exchange gains and losses arising on foreign currency transactions
settled during the year are recognised in the statement of profit and loss.
At each reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated
at the rates prevailing at that date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the
exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign
currency are translated using the exchange rates at the date when the fair value is determined.
Exchange differences arising on settlement or translation of monetary items are recognized as income or expense
in the period in which they arise.
j. Derivatives
The Company uses derivative financial instruments, primarily foreign exchange forward contracts and currency
swaps to manage its exposure to foreign exchange risks and commodity forward contacts to manage the price risk
associated with anticipated purchase transactions or purchased inventory. Derivatives are initially recognised at
fair value and are subsequently re-measured to their fair value at the end of each reporting period. Derivatives
are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is
negative. The resulting gains / losses is recognised in the statement of profit and loss.
k. Investment in subsidiaries and associates
Investments in subsidiaries and associates are carried at cost, less accumulated impairment losses, if any. Where
an indication of impairment exists, the carrying amount of investment is assessed. An impairment provision is
recognised for the amount by which the carrying amount exceeds its recoverable amount. Recoverable amount is
the higher of its fair value less costs of disposal and its value in use). On disposal of such investments, difference
between the net disposal proceeds and carrying amount is recognised in the statement of profit and loss.
l. Inventories
Inventories are valued at the lower of cost and net realisable value after providing cost of obsolescence, if any.
Costs of inventories are determined using weighted average method. However, materials and other items held
for use in the production of inventories are not written down below cost if the finished products in which they
will be incorporated are expected to be sold at or above cost. The comparison of cost and net realizable value is
made on an item-by-item basis. Cost comprises all costs of purchase, duties, taxes (other than those subsequently
recoverable from tax authorities) and all other costs incurred in bringing such inventories to its present location
and condition and includes, where applicable, appropriate overheads based on normal level of activity. Net
realisable value represents the estimated selling price for inventories less all estimated costs of completion and
costs necessary to make the sale. Inventory of scrap materials have been valued at net realizable value.
Cost of finished goods and work-in-progress includes direct labour and an appropriate share of fixed and
variable production overheads. Fixed production overheads are allocated on the basis of normal capacity of
production facilities.
Provisions are made to cover slow moving and obsolete items based on historical experience of utilisation on
a product category basis, which involves individual businesses considering their product lines and market
conditions. Obsolete, slow moving and defective inventories are identified from time to time and, where
necessary, a provision is made for such inventories.
m. Employee benefits
Defined Contribution Plans:
Contribution payable for provident fund, pension and superannuation fund, which are defined contribution
schemes are recognised as an employee benefit expense in the statement of profit and loss.
Defined Benefit Plans:
For retirement benefit - defined benefit plan i.e., gratuity, other long-term employee benefits i.e., leave encashment
and sick leave, the cost of providing benefits is determined using the projected unit credit method, with actuarial
valuations being carried out at the end of each annual reporting period.
Re-measurement gains and losses is recognised immediately through other comprehensive income for gratuity
and statement of profit and loss for leave encashment and sick leave in the period in which they occur.
Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and is
not reclassified to profit and loss. Net interest is calculated by applying the discount rate at the beginning of the
period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and
settlements);
• net interest expense or income; and
• re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the
line item 'Employee benefits expense.'
The retirement benefit obligation recognised in the balance sheet represents the actual deficit or surplus in the
Company's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of
any economic benefits available in the form of reductions in future contributions to the plans.
Short-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries. Liabilities for short¬
term employee benefits that are expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in respect of employees' services up to the end
of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of
the benefits expected to be paid in exchange for the related service
n. Taxation
Tax expenses comprise current and deferred tax.
Current tax
Current tax is measured at the amount expected to be paid to tax authorities in accordance with the Income Tax
Act, 1961. The Company's current tax is calculated using tax rates and tax laws that have been enacted during
the period, together with any adjustment to tax payable in respect of previous years. Current tax assets and tax
liabilities are offset where the Company has a legally enforceable right to offset and intends either to settle on net
basis, or to realise the asset and settle the liability simultaneously.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the standalone financial statements and the corresponding tax bases used in the computation of taxable profit.
Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are
generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits
will be available against which those deductible temporary differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary difference arises from the initial recognition of assets and
liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which
the liability is settled or the asset realised, based on tax rates and tax laws that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset when there is legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances are related to the same taxation authority.
Current and deferred tax are recognised as an expense or income in the statement of profit and loss, except when
they relate to items credited or debited either in other comprehensive income or directly in equity, in which case
the tax is also recognised in other comprehensive income or directly in equity.
o. Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received, and
compliance with the conditions attached therewith have been met. Accordingly, government grants:
a) related to or used for assets are included in the balance sheet as deferred income and recognised as income
over the useful life of the assets.
b) related to incurring specific expenditures are taken to the statement of profit and loss on the same basis and
in the same periods as the expenditures incurred.
c) by way of financial assistance on the basis of certain qualifying criteria are recognised as they become
receivable.
p. Warranties
The Company generally provides for warranties for general repair of defects or replacements. Warranty costs are
estimated by the Management on the basis of a technical evaluation and based on specific warranties, claims and
claim history. Provision is made for estimated liability in respect of warranty cost in the year of sale of goods.
Warranty provisions are measured at discounted amounts. The Company discounts its provision for warranty
to present value at reporting dates. Consequently, the unwinding of discount is recognised in the statement of
profit and loss.
Provision for warranty is expected to be utilised over a period of one to five years.
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