Accounting Policies of Disa India Ltd. Company

Mar 31, 2025

2. Material accounting policies

2.1. Statement of compliance and basis of preparation

The standalone financial statements of the Company have
been prepared in accordance with Indian Accounting Standards
(Ind AS) notified under 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 Schedule III), as
applicable to standalone financial statement.

The financial statements have been prepared on the historical
cost basis, except for the defined benefit plans, which have
been measured at fair value.

The accounting policies adopted for preparation and
presentation of financial statement have been consistent with
the previous year.

The financial statements are presented in Indian Rupees (INR)
and all values are rounded to the nearest million (INR 000,000),
except when otherwise indicated.

The Company has prepared the financial statements on the
basis that it will continue to operate as a going concern.

2.2. Functional currency

Financial statements are presented in Indian Rupees, which is

the functional currency of the Company, and the currency of
primary economic environment in which the Company
operates.

2.3. Significant accounting judgements, estimates and
assumptions

The preparation of the Company''s standalone financial
statements requires the Management to make judgements,
estimates and assumptions that affect the reported amounts
of revenues, expenses, assets, liabilities, the accompanying
disclosures and the disclosure of contingent liabilities.
Uncertainty about these assumptions and estimates could
result in outcomes that require a material adjustment to the
carrying amount of assets or liabilities affected in future
periods. Estimates and assumptions are reviewed on periodic
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised.

The key assumptions concerning the future and other key
sources of estimation, that have a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities, within the next financial year, are described below.
The Company''s assumptions and estimates are based on
parameters available at the time of preparation of the
standalone financial statements. Existing circumstances and
assumptions about future developments, however, may
change due to market changes or circumstances arising that
are beyond the control of the Company. Such changes are
reflected in the assumptions when they occur.

Provision for inventories

Management reviews the aged inventory on a periodic basis.
The purpose is to ascertain whether an allowance is required to
be made in the financial statements for any obsolete and slow-
moving items. The Management also evaluates on the usability
of existing inventories as a result of technological and
regulatory changes if any and provides for the required
allowances for slow moving/ non-moving and obsolete
inventory. This review also involves comparison of the carrying
value of the aged inventory item with the respective net
realisable value. Management believes that adequate
allowance for obsolete and slow-moving inventories has been
made in the financial statements.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present
value of the gratuity obligation are determined using actuarial
valuations. An actuarial valuation involves making various
assumptions that may differ from actual developments in the
future. These include the determination of the discount rate,

future salary increases and mortality rates. Due to the
complexities involved in the valuation and its long-term nature,
a defined benefit obligation is highly sensitive to changes in
these assumptions. All assumptions are reviewed at each
reporting date.

The parameter most subject to change is the discount rate. In
determining the appropriate discount rate for plans operated in
India, the Management considers the interest rates of
government bonds in currencies consistent with the currencies
of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables.
These mortality tables tend to change only at interval in
response to demographic changes. Future salary increases and
gratuity increases are based on expected future inflation rates.

Allowance for doubtful trade receivables

The Company determines the allowance for credit losses based
on historical loss experience adjusted to reflect current and
estimated future economic conditions. The Company
considered current and anticipated future economic conditions
relating to industries the Company deals with.

Useful lives of property, plant and equipment

Management reviews the useful lives of property, plant and
equipment at least once a year. Such lives are dependent upon
an assessment of both the technical lifes of the assets and also
their likely economic lives based on various internal and external
factors including relative efficiency and operating costs. This
reassessment may result in change in depreciation and
amortisation expected in future periods.

Provision for warranty

Warranty estimates are established using historical information
on the nature, frequency and average cost of warranty claims
and also Management estimates regarding possible future
outflow on servicing the customers for any corrective action in
respect of product failure.

3. Summary of material accounting policies

3.1. Current versus non-current classification

Based on the time involved between the acquisition of assets
for processing and their realization in cash and cash
equivalents, the Company has identified twelve months as its
operating cycle for determining current and non-current
classification of assets and liabilities in the balance sheet.

Deferred tax assets and liabilities are classified as non-current
assets and liabilities.

3.2. Revenue from contracts with customers

Revenue towards satisfaction of a performance obligation is
measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The
transaction price of goods sold and services rendered is net of
goods & service tax, returns, discounts offered by the Company
as part of the contract. Revenue from contracts with
customers is recognised when control of the goods or services
are transferred to the customer at an amount that reflects the
consideration to which the Company expects to be entitled in
exchange for those goods or services. 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, it is the
primary obligor in all the revenue arrangements as it has pricing
latitude and is also exposed to inventory and credit risks.
Specific criteria''s in relation to satisfaction of performance
obligations have been met for each for the Company''s activities
described below:

3.2.1 Revenue from sale of products

Revenue from sale of manufactured goods is recognised at the
point in time on satisfaction of each performance obligation by
transfer of control of the machines to the customer, generally
on dispatch. A performance obligation is transferred when the
customer obtains control.

a) Revenue from sale of manufactured machinery:

The Company earns revenues from sale of two categories of
manufactured machineries 1) smaller machines or parts of larger
assembled machineries i.e. sand plants and 2) single machines
viz. moulding machines, short-blast machines, filters, and other
similar machines. For the first category, each individual machine
or part of the large assembled machines are separate
performance obligation with transaction price allocated to each
of these identified performance obligation in the contract on a
relative stand-alone selling price. For the second category, each
single machine is identified as a separate performance
obligation.

The Company also considers other promises viz. supervision of
installation services in the contract that are separate
performance obligations to which a portion of the transaction
price is allocated.

b) Revenue from sale of traded and manufactured parts of
machinery:

Revenue from sale of traded and manufactured parts of
machinery is recognised at the point in time on satisfaction of
each performance obligation by transfer of control to the
customer, generally on delivery.

A receivable is recognised if an amount of consideration that is
unconditional (i.e., only the passage of time is required before
payment of the consideration is due). Refer to accounting
policies of financial assets in section (3.15) Financial
instruments - initial recognition and subsequent
measurement.

The Company applies the practical expedient for short-term
advances received from customers. That is, the promised
amount of consideration is not adjusted for the effects of a
significant financing component if the period between the
transfer of the promised good or service and the payment is
one year or less.

3.2.2. Warranty obligations

The Company typically provides warranties for general repairs
of defects that existed at the time of sale, as required by law.
These assurance-type warranties are accounted for under Ind
AS 37 Provisions, Contingent Liabilities and Contingent Assets.
Refer to the accounting policy on warranty provisions in section
(3.13) Provisions.

Provisions for the expected cost of warranty obligations are
recognized at the date of sale of the relevant products, based
on the best estimate established using historical information
on the nature, frequency and average cost of warranty claims
and Management estimates regarding possible future
incidence based on corrective actions on product failures. The
timing of outflows will vary as and when warranty claim will
arise.

The disclosures of significant accounting judgements,
estimates and assumptions relating to revenue from contracts
with customers are provided in Note 2.3.

3.2.3 Supervision services for erection and commissioning

The Company provides supervision services as bundled
together with the sale of equipment to a customer. The
supervision of installation services do not significantly
customise or modify the equipment.

Contracts for bundled sales of equipment and supervision
services are comprised of separate performance obligations
because the equipment and installation and supervision
services are both sold on a stand-alone basis and are distinct
within the context of contract. Accordingly, the Company
allocates the transaction price based on the relative stand¬
alone selling prices of the equipment and installation and
supervision services.

The Company recognises revenue supervision services over
time because the customer simultaneously receives and

consumes the benefits provided to them. The Company uses an
input method in measuring progress of the installation and
supervision services because there is a direct relationship
between the Company''s effort (i.e., based on cost incurred or
labour hours incurred) and the transfer of service to the
customer. The Company recognises revenue on the basis of the
cost/labour hours expended relative to the total expected
cost/labour hours to complete the service.

3.2.4. Loyalty Discount

Loyalty discount is provided to dealers who are customers of
the Company on sale of spare parts that can be redeemed
against subsequent sales. The Company applies the most likely
amount method or the expected value method to estimate the
variable consideration in the contract. The selected method
that best predicts the amount of variable consideration is
primarily driven by the number of volume thresholds contained
in the contract. The most likely amount is used for those
contracts with a single volume threshold, while the expected
value method is used for those with more than one volume
threshold. The Company then applies the requirements on
constraining estimates in order to determine the amount of
variable consideration that can be included in the transaction
price and recognised as revenue. A refund liability is recognised
for the expected future rebates (i.e., the amount not included
in the transaction price).

3.2.5. Commission Income

Commission Income is recognized on accrual basis as per the
terms of the agreement

3.2.6. Export Entitlements

Export entitlements from government authorities are
recognized in the statement of profit & loss when the right to
receive credit as per the terms of the scheme is established in
respect of exports made by the Company and where there is no
significant uncertainty regarding the ultimate collection of the
relevant export proceeds.

3.2.7. Interest Income

Interest Income is accrued on a time basis by reference to the
principal outstanding and at the effective interest rate
applicable.

3.3. Leasing

Company as a Lessee

The Company assesses whether a contract contains a lease, at
inception of a contract. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified

asset for a period of time in exchange for consideration.
Right-of-use assets

The Company recognises a right-of-use asset at the lease
commencement date. The right-of-use asset is initially
measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or
before the commencement date, plus any initial direct costs
incurred and an estimate of costs to dismantle and remove the
underlying asset or to restore the underlying asset or the site
on which it is located, less any lease incentives received. The
right-of-use asset is subsequently depreciated using the
straight-line method from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or
the end of the lease term i.e., 5 years.

If ownership of the leased asset transfers to the Company at
the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated
useful life of the asset. In addition, the right-of-use asset is
periodically reduced by impairment losses.

Lease liabilities

The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, Company''s
incremental borrowing rate. Generally, the Company uses its
incremental borrowing rate as the discount rate. Certain lease
arrangements include the options to extend or terminate the
lease before the end of the lease term. The lease liability is
measured at amortised cost using the effective interest
method.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets
and lease liabilities for short-term leases of real estate
properties that have a lease term of 12 months. The Company
recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.

Company as a Lessor

Leases in which the Company does not transfer substantially all
the risks and rewards incidental to ownership of an asset is
classified as operating leases. Rental income arising is
accounted for on a straight-line basis over the lease terms.
Initial direct costs incurred in negotiating and arranging an
operating lease are added to the carrying amount of the leased
asset and recognised over the lease term on the same basis as
rental income. Contingent rents are recognised as revenue in
the period in which they are earned. Payments received under

operating leases are recognised in the Statement of Profit and
Loss on a straight-line basis over the term of the lease.

3.4. Foreign currency transactions & translations

In preparing the financial statements of the Company,
transactions in currencies other than the entity''s functional
currency (foreign currencies) are recorded at the rates of
exchange prevailing on the dates of the transactions.

Monetary items denominated in foreign currencies are restated
at the rates prevailing on the balance sheet date. Exchange
differences on monetary items are recognized in the statement
of profit or loss in the period in which those arise.

Non-monetary items denominated in foreign currencies that
are measured at fair value are restated to the functional
currency at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not restated.

3.5. Employee benefits

3.5.1 Defined Contribution Plans

The Company makes defined contribution to the Government
Employee Provident Fund, Superannuation Fund and
Employees'' State Insurance, which are recognised in the
Statement of Profit and Loss, on accrual basis. The Company
recognises contribution payable to the provident fund scheme
as an expense, when an employee renders the related service.
The Company has no obligation, other than the contribution
payable to the provident fund.

3.5.2. Defined Benefit Plans

The Company operates a defined benefit gratuity plan in India.
The Company contributes to a gratuity fund maintained by an
independent insurance company. The Company''s liabilities
under The Payment of Gratuity Act, 1972 are determined on the
basis of actuarial valuation made at the end of each financial
year using the projected unit credit method. Obligation is
measured at the present value of estimated future cash flows
using a discounted rate that is determined by reference to
market yields at the Balance Sheet date on Government bonds,
where the terms of the Government bonds are consistent with
the estimated terms of the defined benefit obligation. The net
interest cost is calculated by applying the discount rate to the
net balance of the defined benefit obligation and fair value of
plan assets. This cost is included in the ''Employee benefits
expense'' in the Statement of Profit and Loss. Re-measurement
gains or losses and return on plan assets (excluding amounts
included in net Interest on the net defined benefit liability)
arising from changes in actuarial assumptions are recognised in

the period in which they occur, directly in OCI. These are
presented as re-measurement gains or losses on defined
benefit plans under other comprehensive income in other
equity. Remeasurements gains or losses are not reclassified
subsequently to the Statement of Profit and Loss.

3.5.3. Leave encashment / Compensated absences

The employees of the Company are entitled to compensated
absences. The employees can carry forward a portion of the
unutilised accumulating compensated absences and utilise it in
future periods or receive cash at retirement or termination of
employment. The Company records an obligation for
compensated absences in the period in which the employee
renders the services that increases this entitlement. The
Company measures the expected cost of compensated
absences as the additional amount that the Company expects
to pay as a result of the unused entitlement that has
accumulated at the end of the reporting period. The Company
recognises accumulated compensated absences based on
actuarial valuation in the Statement of Profit and Loss.

The Company presents the entire leave as a current liability in
the Balance Sheet, since it does not have any unconditional
right to defer its settlement for twelve months after the
reporting date.

3.5.4. Short term & Other Long-Term Employee benefits

Short-term employee benefits are recognised as an expense on
accrual basis.

3.6. Fair value measurement

The Company measures financial instruments at fair value at
each balance sheet date.

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. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most
advantageous market for the asset or liability

The principal or the most advantageous market must be
accessible by the Company.

The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.

A fair value measurement of a non-financial asset takes into
account a market participant''s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the asset
in its highest and best use.

The Company uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorised within the
fair value hierarchy, described as follows, based on the lowest
level input that is significant to the fair value measurement as a
whole:

• Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
unobservable

3.7. Taxation

Tax expense for the year comprises of current tax expense and
deferred tax using rates at the balance sheet date.

3.7.1. Current Tax

The current tax payable is based on taxable profit for the year
and any adjustment to tax payable in respect of previous years,
computed as per Income Tax Act 1961. The current tax is
calculated using effective tax rates that have been enacted by
the end of the reporting period.

Current income tax assets and liabilities are measured at the
amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the
amount are those that are enacted or substantively enacted at
the reporting date in the countries where the Company
operates and generates taxable income.

Current income tax relating to items recognised outside profit
or loss is recognised outside profit or loss (either in other
comprehensive income or in equity). Current tax items are
recognised in correlation to the underlying transaction either in
OCI or directly in equity. Management periodically evaluates
positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation
and considers whether it is probable that a taxation authority

will accept an uncertain tax treatment. The Company shall
reflect the effect of uncertainty for each uncertain tax
treatment by using either most likely method or expected value
method, depending on which method predicts better
resolution of the treatment.

3.7.2. Deferred Tax

Deferred tax is recognized on temporary timing differences
between the carrying amounts of assets and liabilities in the
financial statements using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary
differences, except when the deferred tax liability arises from
the initial recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable
profit or loss and does not give rise to equal taxable and
deductible temporary differences.

Deferred tax assets are recognized 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 utilized except, when the deferred tax asset
relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss
and does not give rise to equal taxable and deductible
temporary differences.

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 profit will be
available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are re-assessed at
each reporting date and are recognised to the extent that it has
become probable that future taxable profits will allow the
deferred tax asset to be recovered.

In assessing the recoverability of deferred tax assets, the
Company relies on the same forecast assumptions used
elsewhere in the financial statements.

Deferred tax relating to items recognised outside profit or loss
(either in other comprehensive income or in equity). Deferred
tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred tax
liabilities if and only if it has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax
assets and deferred tax liabilities relate to income taxes levied

by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle
current tax liabilities and assets on a net basis, or to realise the
assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.

3.8. Property, plant and equipment

Property, plant & equipment held for use in the production or
supply of goods or services, or for administrative purposes, are
stated in the balance sheet at cost (i.e., Purchase cost, Net of
duties), less accumulated depreciation and accumulated
impairment losses, if any. Cost includes purchase price, non -
refundable taxes & duties, freight and other directly
attributable costs to bring the asset to the location and
condition necessary for it to be capable of operating in the
manner intended by the Management. Freehold land is not
depreciated.

Items such as spare parts, stand-by equipment and servicing
equipment are recognized as property, plant and equipment if it
is probable that future economic benefits associated with the
item will flow to the Company and the cost of the item can be
measured reliably.

Projects under which property, plant and equipment are not yet
ready for their intended use are carried at cost, comprising
direct cost, related incidental expenses and attributable
interest.

The Company, based on technical assessment made by
technical expert and Management estimate, depreciates
certain property, plant and equipment over estimated useful
lives which are different from the useful life prescribed in
Schedule II to the Companies Act, 2013. The Management
believes that these estimated useful lives reflect fair
approximation of the period over which the assets are likely to
be used. The Company has used the following rates to provide
depreciation on its property, plant and equipment:

An item of property, plant and equipment is derecognized 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
recognized in statement of profit and loss.

The Company reviews the estimated residual values, expected
useful lives and methods of depreciation of property, plant and
equipment are reviewed at each financial year end and adjusted
prospectively, if appropriate. In particular, the Company
considers the impact of health, safety and environmental
legislation in its assessment of expected useful lives and
estimated residual values. Furthermore, the Company
considers climate-related matters, including physical and
transition risks. Specifically, the Company determines whether
climate-related legislation and regulations might impact either
the useful life or residual values, e.g., by banning or restricting
the use of the Company''s fossil fuel-driven machinery and
equipment or imposing additional energy efficiency
requirements on the Company''s buildings and office
properties.

3.9. Investment Properties

Investment properties 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 40 requirements for cost
model. Investment properties are stated at cost less
accumulated depreciation and accumulated impairment loss, if
any

The Company depreciates building component of investment
property over 40 years from the date of original purchase.

The Company, based on technical assessment made by
technical expert and Management estimate, depreciates the
building over estimated useful lives which are different from
the useful life prescribed in Schedule II to the Companies Act,
2013. The Management believes that these estimated useful
lives are realistic and reflect fair approximation of the period
over which the assets are likely to be used.

Though the Company measures investment properties using
cost-based measurement, the fair value of investment
properties are disclosed in the notes. Fair values are determined
based on an annual evaluation performed by an accredited
external independent valuer applying a valuation model
recommended by the International Valuation Standards
Committee.

An investment property is derecognized 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 derecognition of the
property (calculated as the difference between the net disposal
proceeds and the carrying amount of the asset) is included in
profit or loss in the period in which the property is
derecognized.

3.10. Other Intangible Assets

3.10.1. Recognition

Intangible assets that are acquired separately are carried at cost
less accumulated amortization and accumulated impairment
losses, if any. The cost of an intangible asset comprises its
purchase price, including any import duties and other taxes
(other than those subsequently recoverable from the tax
authorities), and any directly attributable expenditure on
making the asset ready for its intended use and net of any trade
discounts and rebates.

Intangible assets, with finite useful lives that are acquired
separately are carried at cost less accumulated amortization
and accumulated impairment losses. Amortization is
recognized on a straight-line basis over their estimated useful
lives of four years.

Computer software, except standard utility software packages
which are not integral part of the hardware are classified as
Intangible assets.

3.10.2. Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no
future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible
asset, measured as the difference between the net disposal
proceeds and the carrying amount of the asset, are recognized
in profit or loss when the asset is derecognized.

3.11. Impairment of non-financial assets

At the end of each reporting period, the Company reviews the
carrying amounts of its 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
to which the asset belongs. Corporate assets are also allocated
to individual cash generating units when a reasonable and
consistent basis of allocation can be identified, or otherwise
corporate assets are allocated to the smallest group of cash-

generating units for which a reasonable and consistent
allocation basis can be identified.

The Company assesses whether climate risks, including physical
risks and transition risks could have a significant impact.

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 cash-generating unit)
is estimated to be less than its carrying amount, the carrying
amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. An impairment loss is recognized
immediately in statement of profit and loss.

3.12. Inventories

Raw materials, Components, Work-in-Progress, finished goods
and Stock-in-trade are valued at lower of cost and net
realizable value. Cost is ascertained on FIFO basis. Cost
includes direct materials and where applicable direct labor costs
and overhead costs that have been incurred in bringing the
goods to the current location and condition. Work-in-progress
and finished goods include appropriate proportion of
overheads and where applicable.

Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and the
estimated costs necessary to make the sale.

---

Mar 31, 2024

2. Material accounting policies

2.1. Basis of Preparation and Presentation

The standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under 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 Schedule III), as applicable to standalone financial statement.

The financial statements have been prepared on the historical cost basis, except for the defined benefit plans, which have been measured at fair value.

The accounting policies adopted for preparation and presentation of financial statement have been consistent with the previous year.

The financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest million (INR 000,000), except when otherwise indicated.

The Company has prepared the financial statements on the basis that it will continue to operate as a going concern.

2.2. Functional currency

Financial statements are presented in Indian Rupees, which is the functional currency of the Company, and the currency of

primary economic environment in which the Company operates.

2.3. Significant accounting judgements, estimates and assumptions

The preparation of the Company''s standalone financial statements requires the Management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets, liabilities, the accompanying disclosures and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and assumptions are reviewed on periodic basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised.

The key assumptions concerning the future and other key sources of estimation, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities, within the next financial year, are described below. The Company''s assumptions and estimates are based on parameters available at the time of preparation of the standalone financial statements. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Provision for inventories

Management reviews the aged inventory on a periodic basis. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. The Management also evaluates on the usability of existing inventories as a result of technological and regulatory changes if any and provides for the required allowances for slow moving/ non-moving and obsolete inventory. This review also involves comparison of the carrying value of the aged inventory item with the respective net realisable value. Management believes that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.

Defined benefit plans (gratuity benefits)

The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature,

a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the Management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.

The mortality rate is based on publicly available mortality tables. These mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates.

Allowance for doubtful trade receivables

The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with.

Useful lives of property, plant and equipment

Management reviews the useful lives of property, plant and equipment at least once a year. Such lives are dependent upon an assessment of both the technical lifes of the assets and also their likely economic lives based on various internal and external factors including relative efficiency and operating costs. This reassessment may result in change in depreciation and amortisation expected in future periods.

Provision for warranty

Warranty estimates are established using historical information on the nature, frequency and average cost of warranty claims and also Management estimates regarding possible future outflow on servicing the customers for any corrective action in respect of product failure.

3. Summary of material accounting policies

3.1. Current versus non-current classification

Based on the time involved between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has identified twelve months as its operating cycle for determining current and non-current classification of assets and liabilities in the balance sheet.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

3.2. Revenue from contracts with customers

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price of goods sold and services rendered is net of goods & service tax, returns, discounts offered by the Company

as part of the contract. Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. 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, it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks. Specific criteria''s in relation to satisfaction of performance obligations have been met for each for the Company''s activities described below:

3.2.1 Revenue from sale of product:

Revenue from sale of manufactured goods is recognised at the point in time on satisfaction of each performance obligation by transfer of control of the machines to the customer, generally on dispatch. A performance obligation is transferred when the customer obtains control.

a) Revenue from sale of manufactured machinery:

The Company earns revenues from sale of two categories of manufactured machineries 1) smaller machines or parts of larger assembled machineries i.e. sand plants and 2) single machines viz. moulding machines, short-blast machines, filters, and other similar machines. For the first category, each individual machine or part of the large assembled machines are separate performance obligation with transaction price allocated to each of these identified performance obligation in the contract on a relative stand-alone selling price. For the second category, each single machine is identified as a separate performance obligation.

The Company also considers other promises viz. supervision of installation services in the contract that are separate performance obligations to which a portion of the transaction price is allocated.

b) Revenue from sale of traded and manufactured parts of machinery:

Revenue from sale of traded and manufactured parts of machinery is recognised at the point in time on satisfaction of each performance obligation by transfer of control to the customer, generally on delivery.

A receivable is recognised if an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section (3.15) Financial instruments - initial recognition and subsequent measurement.

The Company applies the practical expedient for short-term advances received from customers. That is, the promised

amount of consideration is not adjusted for the effects of a significant financing component if the period between the transfer of the promised good or service and the payment is one year or less.

3.2.2. Warranty obligations

The Company typically provides warranties for general repairs of defects that existed at the time of sale, as required by law. These assurance-type warranties are accounted for under Ind AS 37 Provisions, Contingent Liabilities and Contingent Assets. Refer to the accounting policy on warranty provisions in section (3.13) Provisions.

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, based on the best estimate established using historical information on the nature, frequency and average cost of warranty claims and Management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

The disclosures of significant accounting judgements, estimates and assumptions relating to revenue from contracts with customers are provided in Note 2.3.

3.2.3 Supervision services for erection and commissioning

The Company provides supervision services as bundled together with the sale of equipment to a customer. The supervision of installation services do not significantly customise or modify the equipment.

Contracts for bundled sales of equipment and supervision services are comprised of separate performance obligations because the equipment and installation and supervision services are both sold on a stand-alone basis and are distinct within the context of contract. Accordingly, the Company allocates the transaction price based on the relative standalone selling prices of the equipment and installation and supervision services.

The Company recognises revenue supervision services over time because the customer simultaneously receives and consumes the benefits provided to them. The Company uses an input method in measuring progress of the installation and supervision services because there is a direct relationship between the Company''s effort (i.e., based on cost incurred or labour hours incurred) and the transfer of service to the customer. The Company recognises revenue on the basis of the cost/labour hours expended relative to the total expected cost/labour hours to complete the service.

3.2.4. Loyalty Discount

Loyalty discount is provided to dealers who are customers of the Company on sale of spare parts that can be redeemed

against subsequent sales. The Company applies the most likely amount method or the expected value method to estimate the variable consideration in the contract. The selected method that best predicts the amount of variable consideration is primarily driven by the number of volume thresholds contained in the contract. The most likely amount is used for those contracts with a single volume threshold, while the expected value method is used for those with more than one volume threshold. The Company then applies the requirements on constraining estimates in order to determine the amount of variable consideration that can be included in the transaction price and recognised as revenue. A refund liability is recognised for the expected future rebates (i.e., the amount not included in the transaction price).

3.2.5. Commission Income

Commission Income is recognized on accrual basis as per the terms of the agreement.

3.2.6. Export Entitlements

Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

3.2.7. Interest Income

Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable.

3.3. Leasing

Company as a Lessee

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Right-of-use assets

The Company recognises a right-of-use asset at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term i.e., 5 years.

If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. In addition, the right-of-use asset is periodically reduced by impairment losses.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. The lease liability is measured at amortised cost using the effective interest method.

Short-term leases and leases of low-value assets

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of real estate properties that have a lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Company as a Lessor

Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset is classified as operating leases. Rental income arising is accounted for on a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. Payments received under operating leases are recognised in the Statement of Profit and Loss on a straight-line basis over the term of the lease.

3.4. Foreign currency transactions & translations

In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.

3.5. Employee benefits

3.5.1 Defined Contribution Plans

The Company makes defined contribution to the Government Employee Provident Fund, Superannuation Fund and Employees'' State Insurance, which are recognised in the Statement of Profit and Loss, on accrual basis. The Company recognises contribution payable to the provident fund scheme as an expense, when an employee renders the related service. The Company has no obligation, other than the contribution payable to the provident fund.

3.5.2. Defined Benefit Plans

The Company operates a defined benefit gratuity plan in India. The Company contributes to a gratuity fund maintained by an independent insurance company. The Company''s liabilities under The Payment of Gratuity Act, 1972 are determined on the basis of actuarial valuation made at the end of each financial year using the projected unit credit method. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government bonds, where the terms of the Government bonds are consistent with the estimated terms of the defined benefit obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets. This cost is included in the ''Employee benefits expense'' in the Statement of Profit and Loss. Re-measurement gains or losses and return on plan assets (excluding amounts included in net Interest on the net defined benefit liability) arising from changes in actuarial assumptions are recognised in the period in which they occur, directly in OCI. These are presented as re-measurement gains or losses on defined benefit plans under other comprehensive income in other equity. Remeasurements gains or losses are not reclassified subsequently to the Statement of Profit and Loss.

3.5.3. Leave encashment / Compensated absences

The employees of the Company are entitled to compensated absences. The employees can carry forward a portion of the unutilised accumulating compensated absences and utilise it in future periods or receive cash at retirement or termination of employment. The Company records an obligation for compensated absences in the period in which the employee renders the services that increases this entitlement. The Company measures the expected cost of compensated absences as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the end of the reporting period. The Company recognises accumulated compensated absences based on actuarial valuation in the Statement of Profit and Loss.

The Company presents the entire leave as a current liability in the Balance Sheet, since it does not have any unconditional

right to defer its settlement for twelve months after the reporting date.

3.5.4. Short term & Other Long-Term Employee benefits

Short-term employee benefits are recognised as an expense on accrual basis.

3.6. Fair value measurement

The Company measures financial instruments at fair value at each balance sheet date.

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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most advantageous market for the asset or liability

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

3.7. Taxation

Tax expense for the year comprises of current tax expense and

deferred tax using rates at the balance sheet date.

3.7.1. Current Tax

The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961. The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period.

Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Company operates and generates taxable income.

Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and considers whether it is probable that a taxation authority will accept an uncertain tax treatment. The Company shall reflect the effect of uncertainty for each uncertain tax treatment by using either most likely method or expected value method, depending on which method predicts better resolution of the treatment.

3.7.2. Deferred Tax

Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.

Deferred tax assets are recognized 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 utilized except, when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences.

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 profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.In assessing the recoverability of deferred tax assets, the Company relies on the same forecast assumptions used elsewhere in the financial statements.

Deferred tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

The Company offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

3.8. Property, plant and equipment

Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost (i.e., Purchase cost, Net of duties), less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non -refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the Management. Freehold land is not depreciated.

Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Projects under which property, plant and equipment are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

The Company, based on technical assessment made by technical expert and Management estimate, depreciates certain property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The Management believes that these estimated useful lives reflect fair

An item of property, plant and equipment is derecognized 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 recognized in statement of profit and loss.

The Company reviews the estimated residual values, expected useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. In particular, the Company considers the impact of health, safety and environmental legislation in its assessment of expected useful lives and estimated residual values. Furthermore, the Company considers climate-related matters, including physical and transition risks. Specifically, the Company determines whether climate-related legislation and regulations might impact either the useful life or residual values, e.g., by banning or restricting the use of the Company''s fossil fuel-driven machinery and equipment or imposing additional energy efficiency requirements on the Company''s buildings and office properties.

3.9. Investment Properties

Investment properties 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 40 requirements for cost model. Investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

The Company depreciates building component of investment property over 40 years from the date of original purchase.

The Company, based on technical assessment made by technical expert and Management estimate, depreciates the building over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. The Management believes that these estimated useful

lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.

Though the Company measures investment properties using cost-based measurement, the fair value of investment properties are disclosed in the notes. Fair values are determined based on an annual evaluation performed by an accredited external independent valuer applying a valuation model recommended by the International Valuation Standards Committee.

An investment property is derecognized 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 derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

3.10. Other Intangible Assets

3.10.1. Recognition

Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years. Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.

3.10.2. Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

3.11. Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its 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 to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cashgenerating units for which a reasonable and consistent allocation basis can be identified.

The Company assesses whether climate risks, including physical risks and transition risks could have a significant impact.

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 cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.

3.12. Inventories

Raw materials, Components, Work-in-Progress, finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale

---

Mar 31, 2023

2. Significant accounting policies

2.1. The financial statements of the Company have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amended rules issued thereafter.

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.

2.2. Basis of Preparation and Presentation

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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 financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

2.3. Functional currency

Financial statements are presented in Indian Rupees, which is the functional currency of the Company, and the currency of primary economic environment in which the Company

operates. All the financial information presented in Indian Rupees has been rounded to the nearest million except shares and earning per share data which are presented in absolute terms.

2.4. Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities & disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and future periods affected.

Critical estimates and judgments:

Areas involving critical judgments are

a) Note 13 - Inventories - Write down of inventories

b) Note 39 - Estimation of defined benefit obligations

c) Note 14 - Allowance for doubtful trade receivables - The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company considered current and anticipated future economic conditions relating to industries the Company deals with.

3. Summary of significant accounting policies

3.1. Revenue Recognition

Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of variable consideration) allocated to that performance obligation. The transaction price for goods supplied and services rendered is net of variable consideration on account of returns and discounts, sales incentives , similar allowances offered by the Company to its customers and goods and service tax. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria in relation to satisfaction of performance obligations have been met for each for the Company''s activities described below:

3.1.1. Sale of goods:

Sale of goods are accounted on satisfaction of performance obligation by transfer of control of the goods to the customer. Indicators that control has been transferred include the establishment of the Company''s present right to receive payment for the goods sold, transfer of physical possession to the customer, transfer of significant risks, and rewards of ownership in the goods to the customer, and the acceptance of the goods by the customer. In case of machineries/equipment which together form part of a contract for a larger group of machinery, revenue is recognized only when all significant machinery/equipment is transferred.

3.1.2. Services

Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract as and when the Company satisfies performance obligations.

3.1.3. Export Entitlements

Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

3.1.4. Interest Income

Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Dividend Income is recognized in the statement of profit and loss when the right to receive dividends is established.

3.1.5. Commission Income

Commission Income is recognized on accrual basis as per the terms of the agreement.

3.2. Leasing

Company as a Lessee:

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

The lease liability is measured at amortised cost using the effective interest method. The Company presents right-of-use assets that do not meet the definition of ''investment property'' or ''property, plant and equipment'' and lease liabilities in ''Other financial liabilities'' in the statement of financial position.

Short-term leases and leases of low-value assets: The

Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of real estate properties that have a lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company does not recognize the lease in respect of low value assets, such lease rentals are charged to expenses. Company as a Lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Where the Company is a lessor under an operating lease, the asset is capitalised under investment property and depreciated over its useful economic life. Payments received under operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the term of the lease.

3.3. Foreign currency transactions & translations

I n preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise. Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.

3.4. Employee benefits

3.4.1 Defined Contribution Plans:

Provident Fund, Superannuation Fund & ESIC

The Company''s Provident Fund Scheme, Superannuation Fund and Employees'' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

3.4.2. Defined Benefit Plans Gratuity

The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with an insurance Company. These constitute the Defined Benefit Plans of the Company.

For defined benefit retirement benefit plans, 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. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.

Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. 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 categorized 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

• remeasurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized 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 refunds from the plans or reductions in future contributions to the plans.

A liability for termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

3.4.3. Short term & Other Long-Term Employee benefits A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized 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.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

3.5. Taxation

Income tax expense for the year comprises of current and deferred tax using rates at the balance sheet date.

3.5.1. Current Tax

The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961.

The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period. 3.5.2. Deferred Tax

Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period.

3.6. Property, plant and equipment

Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Freehold land is not depreciated.

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest. Depreciation on Property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except as follows.

Vehicles - 5 years.

An item of property, plant and equipment is derecognized 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 recognized in statement of profit and loss.

3.7. Investment Properties

Investment properties 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 40 requirements for cost model.

An investment property is derecognized 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 derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

3.8. Other Intangible Assets

3.8.1. Recognition

Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities)if any, and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years.

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.

3.8.2. Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

3.9. 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 to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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 cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.

3.10. Inventories

Raw materials, Components, Work-in-Progress, finished

goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-inprogress and finished goods include appropriate proportion of overheads and where applicable.

---

Mar 31, 2022

1. General information

1.1 DISA India Limited (''the Company'') is a public limited company incorporated in India in 1984 under the Companies Act 1956.It is listed on Bombay Stock Exchange and headquartered in Bangalore. Its Promoters are DISA Holding AG of Switzerland and DISA Holding A/S of Denmark which hold 54.10% and 20.73% of share capital of the Company respectively. The Company''s ultimate holding company is Norican Global A/S, Denmark.

1.2 The Company is a leading equipment manufacturer with advanced foundry and surface preparation process technology. It supplies complete foundry systems with DISA range of moulding machines, sand mixers with combination of sand plant equipment, surface preparation machines and environmental control systems to customers across the country with its network of sales offices in New Delhi, Pune, Kolkata and Bangalore with its two manufacturing plants located in Tumkur and Hosakote in Bangalore, Karnataka.

1.3 The Company''s standalone financial statements were approved by the Company''s Board of Directors on May 25, 2022.

2. Significant accounting policies

2.1 The financial statements of the Company have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amended rules issued thereafter.

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.

2.2 Basis of Preparation and Presentation

The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. 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 financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.

2.3 Functional currency

Financial statements are presented in Indian Rupees, which is the functional currency of the Company, and the currency of primary economic environment in which the Company operates. All the financial information presented in Indian Rupees has been rounded to the nearest million except shares and earning per share data which are presented in absolute terms.

2.4 Use of estimates and judgements

The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities & disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and future periods affected.

The Company has assessed the effects of the global pandemic COVID-19 in the preparation of these standalone financial statements. The Company has undertaken various initiatives to control costs. In the management''s assessment, there have been no significant changes in the carrying amounts of receivables, inventories or property, plant and equipment and it does not anticipate any challenge in meeting its financial obligations. The impact of the pandemic may be different from that estimated at the date of approval of these standalone financial statements given the uncertainties associated with its nature and duration. The Company''s management will continue to closely monitor any material change to the Company''s financial position due to the pandemic and its impact on the future economic conditions.

Critical estimates and judgments:

Areas involving critical judgments are

a. Note 13 - Inventories - Write down of inventories

b. Note 39 - Estimation of defined benefit obligations

c. Note 14 - Allowance for doubtful trade receivables - The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company

considered current and anticipated future economic conditions relating to industries the company deals with.

3. Summary of significant accounting policies3.1 Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable and is net of goods & service tax, returns, discounts, sales incentives and other similar allowances. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria in relation to satisfaction of performance obligations have been met for each for the Company''s activities described below:

3.1.1.Sale of goods:

Sale of goods are accounted on satisfaction of performance obligation by transfer of control of the goods to the customer when the customer obtains control of the asset, the significant risks and rewards of ownership of the asset is transferred to the customers and the customers have accepted the assets. In case of machineries/equipment which together form part of a contract for a larger group of machinery, revenue is recognized only when all significant machinery/equipment is transferred.

3.1.2.Services

Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract as and when the company satisfies performance obligations

3.1.3.Export Entitlements

Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

3.1.4.Interest Income

Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Dividend Income is recognized in the statement of profit and loss when the right to receive dividends is established.

3.1.5.Commission Income

Commission Income is recognized on accrual basis as per the terms of the agreement.

3.2 Leasing Company as a Lessee:

The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains,

a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, company''s incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.

The lease liability is measured at amortised cost using the effective interest method. The company presents right-of-use assets that do not meet the definition of ''investment property'' or ''property, plant and equipment'' and lease liabilities in ''Other financial liabilities'' in the statement of financial position.

Short-term leases and leases of low-value assets:

The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of real estate properties that have a lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The company does not recognize the lease in respect of low value assets, such lease rentals are charged to expenses.

Company as a Lessor

Leases in which the Company does not transfer

substantially all the risks and rewards of ownership of an asset are classified as operating leases. Where the Company is a lessor under an operating lease, the asset is capitalised under investment property and depreciated over its useful economic life. Payments received under operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the term of the lease.

3.3 Foreign currency transactions & translations

In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.

3.4 Employee benefits3.4.1. Defined Contribution Plans:

Provident Fund, Superannuation Fund & ESIC

The Company''s Provident Fund Scheme, Superannuation Fund and Employees'' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

3.4.2. Defined Benefit Plans Gratuity

The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with an insurance company. These constitute the Defined Benefit Plans of the Company.

For defined benefit retirement benefit plans, 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. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.

Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings

and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. 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 categorized 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

• remeasurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized 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 refunds from the plans or reductions in future contributions to the plans.

A liability for termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

3.4.3.Short term & Other Long-Term Employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized 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.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

3.5 Taxation

Income tax expense for the year comprises of current and deferred tax using rates at the balance sheet date.

3.5.i.Current Tax

The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961. The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period.

3.5-2.Deferred Tax

Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period.

3.6 Property, plant and equipment

Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Freehold land is not depreciated.

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Depreciation on Property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except as follows.

Vehicles - 5 years.

An item of property, plant and equipment is derecognized 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 recognized in statement of profit and loss.

3.7 Investment Properties

Investment properties 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 40 requirements for cost model.

An investment property is derecognized 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 derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

3.8 Other Intangible Assets3.8.1. Recognition

Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities)if any, and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years.

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.

3.8.2. Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

3.9 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 to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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 cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.

3.10 Inventories

Raw materials, Components, Work-in-Progress, finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.

3.11 Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event that it is probable will result in an outflow of economic benefits that can be reasonably estimated.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

3.ii.i.Warranties

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, based on the best estimate established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

3.12 Investment in subsidiaries

Investment in subsidiaries are carried at cost less impairment if any.

3.13 Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments and are recognized initially at fair value, and subsequently measured at either

amortized cost or fair value through profit and loss or other comprehensive income. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (Other than financial assets recorded at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

3.14 Financial Assets

Recognition: Financial assets include investments, trade receivables, advances, security deposits, cash & cash equivalents.

Measurement: At initial recognition, the Company measures a financial asset at its fair value. In the case of financial assets which are recognized at fair value through profit or loss(FVTPL), its transaction costs are recognized in the statement of profit & loss. In other cases, the transaction costs are attributed to the acquisition value of the financial assets.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or at fair value depending on the classification of the financial assets.

Effective interest method: The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Classification: The Company determines the classification of assets at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification. Financial assets are classified as those measured at:

a. Amortized cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and or interest.

b. Fair value through other comprehensive income(FVTOCI) where the financial assets are held not only for collection of cash flow arising from payment of principal and interest but also from sale of such assets. Such assets are subsequently measured at fair value with unrealized gains or losses arising from changes in the fair value being recognized in other comprehensive income.

c. Fair value through profit and loss(FVTPL)where the assets are managed in accordance with an approved investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are subsequently

measured at fair value with unrealized gains and losses arising from changes in the fair value being recognized in the statement of profit and loss in the period in which they arise.

Trade receivables, advances, security deposits, cash & cash equivalents etc are classified for measurement at amortized cost while investment may fall under any one of the aforesaid classes.

Impairment: The Company assesses at each reporting date whether a financial asset such as investment, trade receivables, advances and security deposits held at amortized cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or efforts. Expected credit losses are assessed and loss allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.

Derecognition: A financial asset is derecognized only when the contractual rights to the cash flows from the asset expire or when the Company transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

3.15 Financial liabilities

Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations.

Classification: Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument. All financial liabilities are subsequently measured at amortized cost using the effective interest method or FVTPL.

Financial liabilities at FVTPL: Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising in measurement recognized in profit or loss. Net gain or loss recognized in the profit or loss on the financial liability is included in the Other income or Finance cost line item. Derecognition: A financial liability is derecognized only when the Company''s obligations are discharged, cancelled or have expired.

Derivative financial instruments

Derivative financial instruments such as foreign exchange forward contracts, if any, are held to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities. Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the statement of Profit & Loss.

3.16 Cash flow statement

Cash flows are reported using the indirect method,

whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

3.17 Segment reporting

Operating segments are components of the Company whose operating results are regularly reviewed by the Chief Operating Decision Maker [CODM] to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Manufacturing and selling of foundry machinery and machinery parts is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance (refer note 45).

3.18 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the 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/(loss) per share.

3.19 Standards Issued but Not Effective

On March 23, 2022, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2022. This notification has resulted into amendments in the following existing accounting standards from April 1, 2022.

i. Ind AS 101 - First time adoption of Ind AS

ii. Ind AS 103 - Business Combination

iii. Ind AS 109 - Financial Instrument

iv. Ind AS 16 - Property, Plant and Equipment

v. Ind AS 37 -Provisions, Contingent Liabilities and Contingent Assets

vi. Ind AS 41 - Agriculture

Application of above standards are not expected to have any significant impact on the Company''s financial statements.

---

Mar 31, 2018

1.1. Revenue Recognition

Revenue is measured at the fair value of consideration received or receivable and is net of goods & service tax, returns, discounts, sales incentives and other similar allowances. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria in relation to significant risk and reward and degree of managerial involvement associated with ownership or effective control have been met for each of the Company’s activities as described below.

1.1.1. Sale of goods:

Domestic and export sales are accounted on transfer of significant risks and rewards to the customer which generally coincides with the dispatch of goods from the factory or the port, as appropriate, and no continuing involvement of management to the degree associated with ownership nor effective control over the goods sold. In case of machinery / equipment which together form part of a contract for a larger group of machinery, revenue is recognized only when all significant machinery/ equipment is transferred.

1.1.2. Services

Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.

1.1.3. Export Entitlements

Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.

1.1.4. Interest Income

Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Dividend Income is recognized in the statement of profit and loss when the right to receive dividends is established.

1.1.5. Commission Income

Commission Income is recognized on accrual basis as per the terms of the agreement.

1.2. Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other Leases are classified as operating leases.

1.2.1. As Lessor : Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.

Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Company’s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

1.2.2.As Lessee: Rental expenses from operating leases are recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Lessor’s expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue.

1.3. Foreign currency transactions & translations

In preparing the financial statements of the Company, transactions in currencies other than the entity’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.

Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.

1.4. Employee benefits Defined Contribution Plans:

1.4.1. Provident Fund, Superannuation Fund & ESIC

The Company’s Provident Fund Scheme, Superannuation Fund and Employees’ State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

1.4.2.Defined Benefit Plans Gratuity

The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with an insurance company. These constitute the Defined Benefit Plans of the Company.

For defined benefit retirement benefit plans, 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. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.

Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. 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 categorized 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

- remeasurement

The Company presents the first two components of defined benefit costs in profit or loss in the line item ‘Employee benefits expense’. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized 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 refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.

1.4.3.Short term & Other Long-Term Employee benefits

A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.

Liabilities recognized 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.

Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.

1.5. Taxation

Income tax expense for the year comprises of current and deferred tax using rates at the balance sheet date.

1.5.1. Current Tax

The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961. The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period.

1.5.2.Deferred Tax

Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized 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 utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period.

1.6. Property, plant and equipment

Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost (i.e., Purchase cost, Net of duties), less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Freehold land is not depreciated.

Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

Depreciation on Property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 effective from April 1, 2014.

An item of property, plant and equipment is derecognized 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 recognized in statement of profit and loss.

1.7. Investment Properties

Investment properties 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 40 requirements for cost model.

An investment property is derecognized 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 derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.

1.8. Other Intangible Assets

1.8.1. Recognition

Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years.

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.

1.8.2.Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.

1.9. 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 to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

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 cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.

1.10. Inventories

Raw materials, Components, Work-in-Progress, finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.

1.11. Provisions

Provisions are recognized when the Company has a present obligation as a result of a past event that it is probable will result in an outflow of economic benefits that can be reasonably estimated.

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).

1.11.1. Warranties

Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, based on the best estimate established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

1.12. Investment in subsidiaries

Investment in subsidiaries are carried at cost less impairment if any.

1.13. Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments and are recognized initially at fair value, and subsequently measured at either amortized cost or fair value through profit and loss or other comprehensive income. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (Other than financial assets recorded at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

1.14. Financial Assets

Recognition: Financial assets include investments, trade receivables, advances, security deposits, cash & cash equivalents.

Measurement: At initial recognition, the Company measures a financial asset at its fair value. In the case of financial assets which are recognized at fair value through profit or loss(FVTPL), its transaction costs are recognized in the statement of profit & loss. In other cases, the transaction costs are attributed to the acquisition value of the financial assets.

All recognized financial assets are subsequently measured in their entirety at either amortized cost or at fair value depending on the classification of the financial assets.

Effective interest method: The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Classification: The Company determines the classification of assets at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification. Financial assets are classified as those measured at:

a. Amortized cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and or interest.

b. Fair value through other comprehensive income(FVTOCI)where the financial assets are held not only for collection of cash flow arising from payment of principal and interest but also from sale of such assets. Such assets are subsequently measured at fair value with unrealized gains or losses arising from changes in the fair value being recognized in other comprehensive income.

c. Fair value through profit and loss(FVTPL)where the assets are managed in accordance with an approved investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are subsequently measured at fair value with unrealized gains and losses arising from changes in the fair value being recognized in the statement of profit and loss in the period in which they arise.

Trade receivables, advances, security deposits, cash & cash equivalents etc are classified for measurement at amortized cost while investment may fall under any one of the aforesaid classes.

Impairment: The Company assesses at each reporting date whether a financial asset such as investment, trade receivables, advances and security deposits held at amortized cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or efforts. Expected credit losses are assessed and loss allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.

Derecognition: A financial asset is derecognized only when the contractual rights to the cash flows from the asset expire or when the Company transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

1.15. Financial liabilities

Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations.

Classification: Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument. All financial liabilities are subsequently measured at amortized cost using the effective interest method or FVTPL.

Financial liabilities at FVTPL: Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising in measurement recognized in profit or loss. Net gain or loss recognized in the profit or loss on the financial liability is included in the Other income or Finance cost line item.

Derecognition: A financial liability is derecognized only when the Company’s obligations are discharged, cancelled or have expired.

Derivative financial instruments

Derivative financial instruments such as foreign exchange forward contracts, if any, are held to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities. Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the statement of Profit & Loss.

1.16. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.17. Segment reporting

Operating segments are components of the Company whose operating results are regularly reviewed by the Chief Operating Decision Maker [CODM] to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Manufacturing and selling of foundry machinery and machinery parts is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance (refer note 41).

1.18. Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the 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.

1.19. Recent accounting pronouncements

Ind AS 21- Foreign currency transactions and advance consideration: On March 28,2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.

This rule will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and it is not material.

Ind AS 115 - Revenue from Contract with Customers: The Ministry of Corporate Affairs (MCA) has notified Ind AS 115 Revenue from Contracts with Customers vide its notification dated March 28, 2018.The standard replaces Ind AS 11 Construction Contracts and Ind AS 18 Revenue. The said notification is applicable to contracts with customers and is effective for annual periods beginning on or after 1 April 2018.

The core principle of the standard is to identify performance obligations and assess the satisfaction of the performance obligations for the purpose of recognising revenue. An entity shall recognise revenue when (or as) the entity satisfies a performance obligation by transferring a promised goods or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. The new standard offers certain transition options. An entity can choose to apply the new standard to its historical transactions and retrospectively adjust each comparative period. Alternatively, an entity can recognize the cumulative effect of applying the new standard at the date of initial application - and make no adjustments to its comparative information.

The Company is currently evaluating the requirements of Ind AS 115, and is in the process of determining the impact on the financial statements.

1.20. First-time adoption - mandatory exceptions, optional exemptions

Overall principle

These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is April 1, 2016. The transition is carried out from Indian GAAP (previous GAAP) to Ind AS, notified under Section 133 of the Companies Act, 2013 [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The Company has applied exceptions and exemptions in accordance with Ind AS 101 “Firsttime Adoption of Indian Accounting Standards”.

Exceptions:

1. Estimates: Ind AS estimates on the date of transition are consistent with the estimates as at the same date made in conformity with previous GAAP.

2. Derecognition of financial assets & liabilities: The Company has applied the de-recognition requirements of Ind AS 109 prospectively from the date of transition to Ind AS.

3. Classification and measurement of financial assets: The Company has assessed classification and measurement of financial assets based on facts and circumstances prevalent on the date of transition to Ind AS.

4. Impairment of financial assets: The Company has applied impairment requirements of Ind AS 109 retrospectively to financial instruments and concluded that there is no need to recognize any additional loss allowance on financial assets.

Exemptions:

1. Investment in subsidiary company in separate financial statement: The Company has measured investment in subsidiary company at previous GAAP carrying amount as deemed cost on transition to Ind AS in the separate financial statements.

2. Deemed cost for property, plant and equipment, intangible assets and investment in property: The Company has elected to continue with the carrying value of all of its plant and equipment’s recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.

---

Mar 31, 2017

NOTE 1

Significant Accounting Policies

1.1 Basis of accounting and presentation of financial statements:

The financial statements of Disa India Limited (''the Company’) 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 ( “Act" ) read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements are in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

1.2 a) Property, plant and equipment

Property plant and equipment are stated at cost (i.e., Purchase cost, Net of CENVAT), net of accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.

Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.

b) Capital work-in- progress

Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

c) Intangible

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

1.4 Depreciation and amortization

Depreciation on Property, plant and equipment’s has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 effective from April 1, 2014. Intangible assets in form of computer software are amortized over their estimated useful life on straight line method at the rate of 25 % p.a.

1.5 Inventories

Raw materials, Components, Work-in-Progress, Finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis .Cost includes cost incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable, excise duty.

1.6 Revenue recognition

Revenue from sale of machinery and parts is recognized on transfer of significant risks and rewards to the purchaser, which generally coincides with the dispatch of goods to customers. In case of various machinery / equipment which together form part of a larger group of machinery revenue is recognized only when all significant machineries/ equipment are transferred. Sales includes excise duty and are stated net of discounts, other taxes and sales returns. Revenue from services are recognized when services are rendered. Commission income and export incentives are recognized on accrual basis.

1.7 Other income

Interest income is recognized on accrual basis.

1.8 Foreign currency transactions and translations Transactions in foreign currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary assets and monetary liabilities denominated in foreign currency outstanding as at the Balance Sheet date are translated at the year-end exchange rates. Non-monetary items are carried at historical cost. Exchange differences arising on settlement / re statement of foreign currency monetary assets and liabilities are recognized as income or expense in the statement of profit and loss.

The Company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which such cancellation or renewal is made

1.9 Impairment of assets

The carrying values of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have been decreased, such reversal of impairment loss is recognized in the statement of profit and loss.

1.10 Investments

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.11 Employee benefits

(a) Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave encashment etc. are recognized in the period in which the employee renders the related service.

(b) Post - employment benefits

i. Defined Contribution Plans: The Company’s Provident Fund Scheme, Superannuation Fund and Employees’ State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India. These constitute the Defined Benefit Plans of the Company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employee’s benefits over the period that the employee works for the Company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the term of related obligations.

Actuarial gains and losses are recognized immediately in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on the net basis.

1.12 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.

Deferred tax is recognized on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

1.13 Provisions and Contingencies

a) Provision for warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

b) Other

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

1.14 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals under such leases are charged to statement of profit and loss.

1.15 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.16 Segment reporting

The Company identifies primary segments based on the dominant source nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating / loss amounts are evaluated regularly by the Management in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expense, segment assets and segment liabilities have been identified to segment on the basis of the relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under “unallocated revenue / expenses/assets/ liabilities.

1.17 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the 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.

1.18 Operating cycle

All assets and liabilities have been classified as current or noncurrent as per the Group’s normal operating cycle and other criteria set out in the revised Schedule III to the Companies Act, 2013. Based on the nature of activities and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Group has determined its cycle as twelve months for the purpose of current / non-current classification of assets and liabilities.

iv) Details of rights, preferences and restrictions in respect of equity shares :

The Company has one class of Shares referred to as Equity Shares with par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the share holders.

The Equity shareholders are entitled to receive dividend proposed (if any) by the Board of Directors which is subject to the approval of the shareholders in the ensuing Annual General meeting, except in case of Interim Dividend.

v) During the year ended March 31, 2017, the Company has concluded the buyback of 56,000 fully paid equity shares as approved by the board of directors on August 12, 2016 at a price of Rs. 4,800/- per share amounting to Rs. 268.8 Million. In line with the Companies Act 2013, an amount of Rs. 109.1 Million, Rs. 142.6 Million and Rs 17.1 Million have been utilized from Security premium account, General reserve and Surplus in profit and loss account respectively. Further Capital Redemption reserve of Rs 0.6 Million has been created as an apportionment from retained earnings. Consequent to the buyback, share capital has reduced by Rs. 0.6 Million.

---

Mar 31, 2015

1.1 Basis of accounting and presentation of financial statements:

The financial statements of Disa India Limited ('the Company')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 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 / Companies act, 1956, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements are in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

1.3 Fixed assets

a) Tangible

Tangible fixed asset are capitalized at acquisition cost which includes incidental expenses incurred to bring the asset ready for its intended use.

b) Intangible

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

c) Capital work-in- progress

Capital work-in-progress is carried at cost.

1.4 Depreciation and amortization

Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 effective from April 1, 2014.

Intangible assets in form of computer software are amortized over their estimated useful life on straight line method at the rate of 25 % p.a.

1.5 Inventories

Raw materials, Components, Work-in-Progress, Finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis .Cost includes cost incurred in bringing the goods to the current location and condition.Work-in- progress and finished goods include appropriate proportion of overheads and where applicable, excise duty.

1.6 Revenue recognition

Revenue from sale of machinery and parts is recognized on transfer of significant risks and rewards to the purchaser, which generally coincides with the dispatch of goods to customers. In case of various machinery / equipment which together form part of a larger group of machinery revenue is recognized only when all significant machineries/ equipment are transferred. Sales includes excise duty and are stated net of discounts, other taxes and sales returns.Revenue from services are recognized when services are rendered. Commission Income and export incentives are recognized on accrual basis.

1.7 Other income

Interest income is recognized on accrual basis.

1.8 Foreign currency transactions and translations

Transactions in foreign currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary assets and monetary liabilities denominated in foreign currency outstanding as at the Balance Sheet date are translated at the year end exchange rates. Non-monetary items are carried at historical cost. Exchange differences arising on settlement / re statement of foreign currency monetary assets and liabilities are recognized as income or expense in the statement of profit and loss.

The Company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which such cancellation or renewal is made.

1.9 Impairment of assets

The carrying values of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have been decreased, such reversal of impairment loss is recognized in the statement of profit and loss.

1.10 Employee benefits

(a) Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages,bonus, leave encashment etc. are recognized in the period in which the employee renders the related service.

(b) Post - employment benefits

i. Defined Contribution Plans: The Company's Provident Fund Scheme, Superannuation Fund and Employees' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service..

ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India. These constitute the Defined Benefit Plans of the Company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employee's benefits over the period that the employee works for the Company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the term of related obligations.

Actuarial gains and losses are recognized immediately in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on the net basis.

1.11 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.

Deferred tax is recognised on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

1.12 Provisions and Contingencies

a) Provision for warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of out flows will vary as and when warranty claim will arise.

b) Other

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

1.13 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals under such leases are charged to statement of profit and loss.

1.14 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.15 Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Management in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of the relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses/assets / liabilities".

1.16 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the 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.

1.17 Operating cycle

All assets and liabilities have been classified as current or non- current as per the Company's normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of activities and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current / non-current classification of assets and liabilities.

---

Dec 31, 2013

1.1 Basis of accounting and presentation of financial statements:

The financial statements of Disa India Limited (''the Company'') have been prepared in accordance with the Generally accepted accounting principles in India (Indian GAAP] to comply with the provisions of Companies Act , 1956 and Accounting Standards notified under the Companies (Accounting Standards) Rules , 2006 (as amended) (which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs).The financial statements have been prepared on accrual basis under the historical cost convention.

1.2 Use of estimates

The preparation of the financial statements are in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known /materialized.

1.3 Fixed assets

a) Tangible

Tangible fixed asset are capitalized at acquisition cost which includes incidental expenses incurred to bring the asset ready for its intended use.

b) Intangible

Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.

c) Capital work-in- progress

Capital work-in-progress is carried at cost.

1.4 Depreciation and amortization

Depreciation has been provided on the straight-line method and the depreciation rates adopted for other assets are not less than the rates specified in Schedule XIV to the Companies Act, 1956.

Depreciation rates adopted is 3.34% p.a in respect of Buildings, 13 % p.a in respect of Plant and Equipment, Patterns , tools jigs and Fixtures, Office Equipment, Furniture and fixtures, 20 % p.a in respect of vehicles and 25 % p.a in respect of Computers. Intangible assets in form of computer software are amortized at the rate of 25 % p.a.

Individual assets costing less than Rs. 10,000/- are charged off by the Company at the time of acquisition.

1.5 Inventories

Raw materials, Components, Work-in-Progress, Finished goods and Stock-in-trade are valued at tower of cost and net realizable value. Cost is ascertained on FIFO basis .Cost includes cost incurred in bringing the goods to the current location and condition. Work- in-progress and finished goods include appropriate proportion of overheads and where applicable, excise duty.

1.6 Revenue recognition

Revenue from sale of machinery and parts is recognized on transfer of significant risks and rewards to the purchaser, which generally coincides with the dispatch of goods to customers. Sales includes excise duty and are stated net of discounts, other taxes and sales returns. Revenue from services are recognized when services are rendered. Commission Income and export incentives are recognized on accrual basis.

1.7 Other income

Interest income is recognized on accrual basis.

1.8 Foreign currency transactions and translations

Transactions in foreign currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary assets and monetary liabilities denominated in foreign currency outstanding as at the Balance Sheet date are translated at the year end exchange rates. Non-monetary items are carried at historical cost. Exchange differences arising on settlement / re statement of foreign currency monetary assets and liabilities are recognized as income or expense in the statement of profit and loss.

The Company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit 01 loss arising on cancellation or renewal of such contracts is recognized as income or expense of the period.

1.9 Impairment of assets

The carrying values of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have been decreased, such reversal of impairment loss is recognized in the statement of profit and loss.

1.10 Employee benefits

(a) Short term employee benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave encashment etc. are recognized in the period in which the employee renders the related service.

(b) Post - employment benefits

i. Defined Contribution Plans: The Company''s Provident Fund Scheme, Superannuation Fund and Employees'' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii. Defined Benefit Plans.- The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India. These constitute the Defined Benefit Plans of the Company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employee''s benefits over the period that the employee works for the Company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the term of related obligations.

Actuarial gains and losses are recognised immediately in the statement of profit and loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on the net basis.

1.11 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their readability.

1.12 Provisions and Contingencies

a) Provision for warranty

The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.

b) Other

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits] are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.

1.13 Leases

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals under such leases are charged to statement of profit and loss.

1.14. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.15 Segment reporting

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the Management in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of the relationship to the operating activities of the segment.

Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses/assets/ liabilities".

1.16 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the 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.

1.17 Operating cycle

All assets and liabilities have been classified as current or non- current as per the Company''s normal operating cycle and other criteria set out in the revised Schedule VI to the Companies Act, 1956. Based on the nature of activities and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current / non-current classification of assets and liabilities.

---

Dec 31, 2012

1. Basis of Presentation:

The financial statements have been prepared and presented under the historical cost convention and in accordance with the provision of Companies Act , 1956 and accounting standards contained in the Companies ( Accounting Standards ) Rules , 2006.

All assets and liabilities have been classified as current or non- current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of activities and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has determined its operating cycle as twelve months for the purpose of current - non current classification of assets and liabilities.

2. Use of Estimates

The preparation of the financial statements are in conformity with the GAAP which requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets:

Fixed Assets comprising those acquired at the time of setting up of initial operations are at cost to the Company inclusive of direct and appropriate allocated expenses upto the date of commercial production. All subsequent acquisitions are capitalized at actual acquisition cost.

4. Depreciation :

Effective from 1995-96 the company adopted DISA group Depreciation policies and rates as per straight-line method. Consequently the assets acquired during the period 1995-96 to 2001-02 not exceeding CHF 5000, (currently equivalent to about Rs.2,35,000/-) were depreciated fully at the time of acquisition.

Effective from 01.04.2002 the Company has changed its Accounting policy to charge off individual assets costing less than Rs. 10,000 to revenue at the time of acquisition. The depreciation rates adopted for other assets are not less than the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15 % p.a in respect of Plant & Machinery, Patterns, tools, jigs and Fixtures, Office Equipment, Furniture & Fittings, 20 % p.a in respect of vehicles and 25 % p.a in respect of Computers and 25 % p.a in respect of Computer software. (Also refer Sl. No. 13 below)

5. Inventories:

Raw materials, Components and Work-in-Progress are valued at lower of cost and net realizable value. Cost which was generally ascertained on Weighted average basis is now ascertained on FIFO basis.Scrap generated is not valued as it is not of significant value. Scrap is brought into books only when identified and sold.

6. Revenue Recognition:

Revenue is recognized on accrual basis except for interest collected on overdues from customers which is accounted on receipt basis.

7. Foreign Currency Transactions:

Transactions in foreign Currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary Assets and liabilities denominated in foreign currency as at the Balance Sheet date are translated at the year end exchange rates.

The company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the profit and loss statement in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense of the period.

8. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount an impairment loss is recognized in the Profit and Loss Account to the extent carrying amount exceeds the recoverable amount.

9. Accounting for Government grants

Government grants received are credited directly to Capital reserves under the Capital approach.

10. Employee Benefits

(a) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus etc. are recognised in the period in which the employee renders the related service.

(b) Post - Employment Benefits

i. Defined Contribution Plans: The Company''s Provident Fund Scheme, Super Annuation Fund and Employees'' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India. These constitute the Defined Benefit Plans of the company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employee''s benefits over the period that the employee works for the company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognised immediately in the Statement of Profit & Loss.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on the net basis.

11. Provision for Current Tax and Deferred Income Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act,1961.

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent there is a reasonable certainty that the asset will be realized in future.

12. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

13. Intangible assets

Software which are not integral part of the hardware are classified as Intangibles and are amortized over its estimated useful life. However standard utility software packages are expensed at the time of purchase.

14. Borrowing costs

Borrowing costs that are attributable to the acquisition and or construction of qualifying assets are capitalized as part of the cost of such assets , in accordance with Accounting Standard - AS 16. A qualifying asset is one that necessarily takes a substantial period of time to be ready for its intended use.

15. Operating Lease:

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments under such leases are charged to Statement of Profit and Loss.

---

Dec 31, 2011

1. Basis of Presentation:

The financial statements have been prepared and presented under the historical cost convention and in accordance with the provision of Companies Act, 1956 and accounting standards contained in the Companies (Accounting Standards) Rules , 2006.

2. Use of Estimates

The preparation of the financial statements are in conformity with the GAAP which requires that the management makes estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent Labilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

3. Fixed Assets:

Fixed Assets comprising those acquired at the time of setting up of initial operations are at cost to the Company inclusive of direct and appropriate allocated expenses upto the date of commercial production. All subsequent acquisitions are capitalized at actual acquisition cost.

4. Depreciation :

Effective from 1995-96 the company adopted DISA group Depreciation policies and rates as per straight-line method. Consequently the assets acquired during the period 1995-96 to 2001-02 not exceeding CHF 5000, (currently equivalent to about Rs.2,35,000/-) were depreciated fully at the time of acquisition.

Effective from 01.04.2002 the Company has changed its Accounting policy to charge off individual assets costing less than Rs. 10,000 to revenue at the time of acquisition. The depreciation rates adopted for other assets are not less than the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation rates adopted is 3.34 ACU- p.a in respect of Buildings, 15 ACU- p.a in respect of Plant ACY- Machinery , Patterns , tools jigs and Fixtures, Office Equipment, Furniture ACY- Fittings, 20 ACU- in respect of vehicles and 25 ACU- in respect of Computers. (Also refer SI. No. 13 below)

5. Inventories:

Raw materials, Components and Work-in-Progress are valued at lower of cost and net realizable value. Cost is generally ascertained on Weighted average basis. Scrap generated is not valued as it is not of significant value. Scrap is brought into books only when identified and sold.

6. Revenue Recognition:

Revenue is recognized on accrual basis except for interest collected on overdues from customers which is accounted on receipt basis.

7. Foreign Currency Transactions:

Transactions in foreign Currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary Assets and liabilities denominated in foreign currency as at the Balance Sheet date are translated at the year end exchange rates.

The company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the profit and loss statement in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense of the period.

8. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount an impairment loss is recognized in the Profit and Loss Account to the extent carrying amount exceeds the recoverable amount.

9. Accounting for Government grants

Government grants received are credited directly to Capital reserves under the Capital approach.

10. Employee Benefits

(a) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus etc. are recognised in the period in which the employee renders the related service.

(b) Post - Employment Benefits

i. Defined Contribution Plans: The Company's Provident Fund Scheme, Super Annuation Fund and Employees' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India . These constitute the Defined Benefit Plans of the company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employee's benefits over the period that the employee works for the company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognised immediately in the Profit ACY- Loss Account.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on the net basis.

11. Provision for Current Tax and Deferred Income Tax Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act,1961.

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent there is a reasonable certainty that the asset will be realized in future.

12. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

13. Intangible assets

Software which are not integral part of the hardware are classified as Intangibles and are amortized over its estimated useful life. However standard utility software packages are expensed at the time of purchase.

14. Borrowing costs

Borrowing costs that are attributable to the acquisition and or construction of qualifying assets are capitalized as part of the cost of such assets , in accordance with Accounting Standard - AS 16. A qualifying asset is one that necessarily takes a substantial period of time to be ready for its intended use.

---

Dec 31, 2010

I. Basis of Presentation:

The financial statements have been prepared and presented under the historical cost convention and in accordance with the provision of Companies Act, 1956 and accounting standards contained in the Companies ( Accounting Standards ) Rules , 2006.

2. FIXED ASSETS:

Fixed Assets comprising those acquired at the time of setting up of initial operations are at cost to the Company inclusive of direct and appropriate allocated expenses upto the date of commercial production. All subsequent acquisitions are capitalized at actual acquisition cost.

3. DEPRECIATION:

Effective from 1995-96 the company adopted DISA group Depreciation policies and rates as per straight-line method. Consequently the assets acquired during the period 1995-96 to 2001-02 not exceeding CHF 5000, (currently equivalent to about Rs.235,000/-) were depreciated fully at the time of acquisition.

Effective 01.04.2002 the Company has changed its Accounting policy to charge off individual assets costing less than Rs. 10,000 to revenue at the time of acquisition. The depreciation rates adopted for other assets are not less than the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15 % p.a in respect of Plant &. Machinery , Patterns , tools jigs and Fixtures, Office Equipment, Furniture &. Fittings, 20 % in respect of vehicles and 25 % in respect of Computers. Software is expensed out at the time of purchase.

4. INVENTORIES:

Raw materials, Components and Work-in-Progress are valued at lower of cost and net realizable value. Cost is generally ascertained on Weighted average basis. Scrap generated is not valued as it is not of significant value. Scrap is brought into books only when identified and sold.

5. REVENUE RECOGNITION:

Revenue is recognized on accrual basis except for interest collected on overdues from customers which is accounted on receipt basis.

6. FOREIGN CURRENCY TRANSACTIONS :

Transactions in foreign Currencies are recognized at exchange rate prevailing on the date of the transaction. Ail monetary Assets and liabilities denominated in foreign currency as at the Balance Sheet date are translated at the year end exchange rates.

The company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the profit and loss statement in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense of the period.

7. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount an impairment loss is recognized in the Profit and Loss Account to the extent carrying amount exceeds the recoverable amount.

8. Accounting for Government grants

Government grants received are credited directly to Capital reserves under the Capital approach.

---

Dec 31, 2009

1. The financial statments have been prepared and pre- sented under the historical cost convention and in ac- cordance with the provision of Companies Act, 1956 and accounting Standards contained in the Companies (Accounting Standards) Rules, 2006.

2. FIXED ASSETS:

Fixed Assets comprising those acquired at the time of setting up of initial operations are at cost to the Company inclusive of direct and appropriate allocated expenses upto the date of commercial production. All subsequent acquisitions are capitalized at actual acquisition cost.

3. DEPRECIATION:

Effective from 1995-96 the company adopted DISA group Depreciation policies and rates as per straight- line method. Consequently the assets acquired during the period 1995-96 to 2001-02 not exceeding CHF 5000, (currently equivalent to about Rs.2,25,000/-) were depreciated fully at the time of acquisition.

Effective from 01.04.2002 the Company has changed its Accounting policy to charge off individual assets costing less than Rs. 10,000 to revenue at the time of acquisition. The depreciation rates adopted for other assets are not less than the rates specified in Schedule XIV of the Companies Act, 1956.

Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15% p.a in respect of Plant & Machinery, Patterns, tools jigs and Fixtures, Office Equipment, Furniture & Fittings, 20 % in respect of vehicles and 25% in respect of Computers. Software is expensed out at the time of purchase.

4. INVENTORIES:

Raw materials, Components and Work-in-Progress are valued at lower of cost and net realizable value. Cost is generally ascertained on Weighted average basis. Scrap generated is not valued as it is not of significant value. Scrap is brought into books only when identified and sold.

5. REVENUE RECOGNITION:

Revenue is recognized on accrual basis except for interest collected on overdues from customers which is accounted on receipt basis.

6. FOREIGN CURRENCY TRANSACTIONS:

Transactions in foreign Currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary Assets and liabilities denominated in foreign currency as at the Balance Sheet date are translated at the year end exchange rates.

The company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortised as expense or income over the life of the contract. Exchange differences on such a contract are recognized in the profit and loss statement in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or expense of the period.

7. Impairment of assets

At each Balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the company estimates the recoverable amount. If the carrying amount of the asset exceeds its recoverable amount an impairment loss is recognized in the Profit and Loss Account to the extent carrying amount exceeds the recoverable amount.

8. Accounting for Government grants

Government grants received are credited directly to Capital reserves under the Capital approach.

9. Employee Benefits

(a) Short Term Employee Benefits

All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages,bonus etc. are recognised in the period in which the employee renders the related service.

(b) Post - Employment Benefits

i. Defined Contribution Plans: The Companys Provident Fund Scheme, Super Annuation Fund and Employees State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognised during the period in which the employee renders the related service.

ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy with of India and also compensates the unutilized leave of its employees by way of leave encashment. These constitute the Defined Benefit Plans of the company.

The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employees benefits over the period that the employee works for the company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.

The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the terms of related obligations.

Actuarial gains and losses are recognised immediately in the Profit & Loss Account.

In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on the net basis.

10. Provision for Current Tax and Deferred Income Tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income Tax Act,1961.

Deferred Tax resulting from timing difference between book and taxable profit is accounted for using the tax rates and laws that are enacted or substantially enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent there is a reasonable certainty that the asset will be realized in future.

11. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

12. Intangible assets

Software which are not integral part of the hardware are classified as Intangibles and are expensed out at the time of purchase.

13. Borrowing costs

Borrowing costs that are attributable to the acquisition and or construction of qualifying assets are capitalized as part of the cost of such assets, in accordance with Accounting Standard - AS 16. A qualifying asset is one that necessarily takes a substantial period of time to be ready for its intended use.