Click it and Unblock the Notifications
Accounting Policies of Hind Rectifiers Ltd. Company
Mar 31, 2025
NOTE 1: OTHER NOTES ON FINANCIAL STATEMENTS AS AT, AND FOR THE YEAR ENDED1.1. Corporate Information
Hind Rectifiers Limited (''Hirectâ or ''the Companyâ) is a public Company domiciled in India and is incorporated under the provisions of the Companies Act, applicable in India. The principal place of business of the Company is located in Bhandup, Mumbai. The Company is principally engaged in developing, designing, manufacturing and marketing Power Semiconductor, Power Electronic Equipments and Railway Transportation Equipments.
1.2: Material Accounting Policies
a) Basis of Preparation of Financial Statements
i) Compliance with IND-AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind ASâ) as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Actâ) read with of the Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.
ii) Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) Assets held for sale - measured at lower of carrying amount or fair value less cost to sell.
2) Defined benefit plans - plan assets measured at fair value.
3) Certain Financial Instruments that is measured at Fair value/Subsequently measured at amortized cost.
4) Share Based Payments.
The financial statements are presented in '' and all values are rounded to the nearest lakhs ('' ,00,000), except when otherwise indicated.
b) Material accounting judgements, estimates and assumptions
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience
and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognized in the period in which the results are known/ materialized.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
c) Current / non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
Expected to be realized or intended to be sold or consumed in the normal operating cycle
Expected to be realized within twelve months after the reporting period, or
Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is treated as current when it is:
Expected to be settled in normal operating cycle
Due to be settled within twelve months after the reporting period, or
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents.
The Company derives revenues primarily from sale of manufactured goods & rendering of services.
The Company has adopted Ind AS 115, Revenue from Contract with Customers with effect from April 1,2018.
The Companyâs obligation to repair and replace faulty products under standard warranty terms is recognized as a provision.
Revenue from contracts with customers is recognized when a performance obligation is satisfied by transfer of promized goods or services to a customer. Customers obtain control as per the terms of the respective contracts.
In all other cases, performance obligation is considered as satisfied at a point in time.
The revenue is recognized to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which entity expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The entity includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved.
Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer, ranging from 30 to 120 days.
Amounts disclosed in the revenue excludes GST.
Services rendered include Repairing and Servicing, AMC and Erectioning and Commissioning services.
Invoices are issued according to contractual terms and are usually receivable as per the credit period agreed with the customer.
Revenue from rendering of services is recognized over time as the customer receives the benefit of the Companyâs performance and the Company has an enforceable right to receive the payment for services transferred.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognized based on time elapsed mode and revenue is straight lined over the period of performance. The Company is generally the principal
as it typically controls the goods or services before transferring them to the customer. Significant judgments are used in:
a. Determining the revenue to be recognized in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation.
b. Determining the expected losses, which are
recognized in the period in which such losses
become probable based on the expected total
contract cost as at the reporting date.
c. Determining the method to be applied to
arrive at the variable consideration requiring an adjustment to the transaction price. Revenue includes adjustments made towards liquidated damages and price variation clause wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account.
Interest income from debt instruments is recognized using the effective interest rate method.
Dividends are recognized in the Statement of Profit and Loss only when the right to receive payment is established.
Export incentives receivable under various schemes are accounted on accrual basis.
The Company is entitled to incentives from government authorities in respect of manufacturing units located in developing regions. The Company accounts for itâs entitlement as income on accrual basis.
Government grants are recognized when there is reasonable assurance that the grant will be received upon the Company complying with the conditions attached to the grant. If the government grants are by way of financial assistance on the basis of certain qualifying criteria are recognized as they become receivable.
Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Company.
In the unlikely event that a grant previously recognized is ultimately not received, it is treated as a change in estimate and the amount cumulatively recognized is expensed in the Statement of Profit and Loss.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted or substantively enacted, by the end of the reporting period.
Current tax items are recognized in correlation to the underlying transaction either in the Statement of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are generally 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. Such deferred tax assets and liabilities are not recognized if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax credit is recognized as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the Company intends to settle the asset and liability on a net basis.
f) Property, Plant and Equipment
Land and buildings 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. Freehold land is not depreciated.
Properties in the course of construction for production or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees , administrative and other general overhead expenses and, for qualifying assets, borrowing costs capitalized in accordance with the Companyâs accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
The initial cost of an asset comprises its purchase price (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use)
PPE is recognized when 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.
Subsequent costs are included in the assetâs carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-in-progress".
Other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is 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 or loss.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 and management believe that useful life of assets are same as those prescribed in Scehdule II to the Act.
Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.
Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.
Depreciation on additions to/deductions from, owned assets is calculated pro rata to the period of use.
Intangible assets with finite useful lives that are acquired separately or developed in-house are carried at cost less accumulated amortization and accumulated impairment losses.
The useful life of an intangible asset is considered finite where the rights to such assets are limited to a specified period of time by contract or law or the likelihood of technical, technological obsolescence or commercial obsolescence. If, there are no such limitations, the useful life is taken to be indefinite. An intangible asset with an indefinite useful life is not amortized.
Intangible assets that have finite lives are amortized over their estimated useful lives by the straight line method.
The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets representing
a. cost of software capitalized is amortized over its useful life which is estimated to be a period of five years.
b. cost of technical knowhow and product development capitalized are amortized over its useful life which is estimated to be a period of seven years.
The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required for assets with finite lives and to confirm that business circumstances continue to support an indefinite useful life assessment for assets so classified.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses on de-recognition are determined by comparing proceeds with carrying amount. These are included in profit or loss under other expenses / other income.
Development expenditure on new products is capitalized as intangible asset, if all of the following can be demonstrated:
1. The technical feasibility of completing the intangible asset so that it will be available for use or sale;
2. The Company has intention to complete the intangible asset and use or sell it;
3. The Company has ability to use or sell the intangible asset;
4. The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
5. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
6. The Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and conditions. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
i) Raw material is valued at cost or net realisable value whichever is lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Stock-inTrade are valued at cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at lower of cost or net realisable value. Tools and Instruments are valued at book value.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a provision is made for such inventories.
j) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
When the possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision is made.
Contingent liability is disclosed in case of:
(i) a possible obligation arising from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity; or
(ii) a present obligation arising from past events where:
⢠it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or
⢠the amount of the obligation cannot be measured with sufficient reliability.
Contingent assets are disclosed where an inflow of economic benefits is probable.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.
Cash and cash equivalents consist of balances with banks which are unrestricted for withdrawal and usage.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
i) Short Term Employee Benefits
All employee benefits payable within twelve months of rendering the service are recognized in the period in which the employee renders the related service.
ii) Post Employment / Retirement Benefits Defined Contribution plan
- Provident Fund is a defined contribution scheme established under State Plan. The contributions to the scheme are charged to Profit & Loss Account in the year when the contributions to the funds are due.
- Superannuation Fund is a defined contribution scheme and contribution to the scheme are charged to the Profit & Loss Account in the year when contributions are made in respect of employees covered under the scheme. The scheme is funded with Life Insurance Corporation of India.
The present value of the obligation under defined benefit retirement (gratuity) plan , is determined based on an actuarial valuation by an independent actuary at the end of each year. In the case of gratuity, which is funded, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.
- The liability in respect of employees is provided and contributed to Life Insurance Corporation of India under Group Gratuity (Cash Accumulation) Scheme except;
a) In case of Mananging Director and CEO and Executive Director, Gratuity liability, is provided in accordance with the terms of appointment.
b) In case of Nashik and Dehradun Division it is provided on the basis of actuarial valuation.
c) Employees working in Sweden office are not covered under this scheme as they are covered by the social security tax scheme as per Sweden laws.
Remeasurement of net defined benefit liability, which comprises actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any excluding interest), are recognized immediately in other comprehensive income.
iii) Other Long Term Employee Benefits
The Group has other long term employee benefits in the form of Leave Encashment. The liability in respect of Leave Encashment is provided for on the basis of actuarial valuation made at the end of the financial year. The aforesaid Leave Encashment is not funded.
Actuarial gains / losses are recognised immediately to Other Comprehensive income, net of income taxes.
Compensation to employees who have opted for retirement under the Voluntary Retirement Scheme and termination of services of the employees by the Company is charged to the Statement of Profit and Loss account in the year on actual basis.
Research and development expenditures are accounted for in accordance with the principles laid down in Ind AS 38 - Intangible Assets.
Expenditure incurred during the research phase of an internal project is expensed as incurred. Research activities are aimed at obtaining new knowledge and do not result in the creation of an asset that meets the recognition criteria under Ind AS 38.
Expenditure on development activities is recognized as an intangible asset only if all of the following criteria are met:
i) The technical feasibility of completing the intangible asset so that it will be available for use or sale;
ii) The intention to complete the asset and use or sell it;
iii) The ability to use or sell the asset;
iv) How the asset will generate probable future economic benefits;
v) The availability of adequate technical, financial, and other resources to complete the development and to use or sell the asset;
vi) The ability to reliably measure the expenditure attributable to the asset during its development.
If the above conditions are not met, the development expenditure is charged to the Statement of Profit and Loss as incurred.
Capitalization and Amortization:
Development costs recognized as an intangible asset are measured initially at cost and are amortized on a systematic basis over their useful life, not exceeding ten years. The amortization method and useful life are reviewed at least annually.
R&D costs that do not qualify for capitalization are recognized as expenses in the period in which they are incurred. Property, plant and equipment acquired for R&D purposes are capitalized under Ind AS 16 and depreciated over their estimated useful lives.
Expenses incurred till the research phase are charged in the statement of profit and loss whereas the expenses for the development phase are capitalised as Intangible assets on completion of certain conditions.
n) Effects of Changes in Foreign Exchange Rates
1) Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rates of exchange at the reporting date.
2) Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss except to the extent of exchange differences which are regarded as an adjustment to interest costs on foreign currency borrowings that are directly attributable to the acquisition or construction of qualifying assets which are capitalized as cost of assets.
3) Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded
using the exchange rates at the date of the transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
4) In case of an asset, expense or income where a non-monetary advance is paid/received, the date of transaction is the date on which the advance was initially recognized. If there were multiple payments or receipts in advance, multiple dates of transactions are determined for each payment or receipt of advance consideration.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
Diluted earnings per share is computed using the net profit or loss after tax and weighted average number of equity and potential equity shares outstanding during the year, except where the result would be anti-dilutive.
Dilutive potential equity shares are deemed to be considered as at the beginning of the period unless issued at a later date.
p) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
Non-current assets are not depreciated or amortized while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognized.
A sale is considered as highly probable when decision has been made to sell, assets are available for immediate sale in its present condition, assets are being actively marketed and sale has been agreed or is expected to be concluded within 12 months of the date of classification.
Non-current assets held for sale are neither depreciated nor amortized.
Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a noncash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.
Investing and financing transactions that do not require the use of cash or cash equivalents shall be excluded from a statement of cash flows. Such transactions shall be disclosed elsewhere in the financial statements in a way that provides all the relevant information about these investing and financing activities.
The Group 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. In certain contracts, the Company provides warranty for an extended period of time and includes rectification of defects that existed at the time of sale and are normally bundled together with the main contract. Such bundled contracts include two performance obligations because the promises to transfer the goods and services and the provision of service-type warranty are capable of being distinct. Using the relative stand-alone selling price method, a portion of the transaction price is allocated to the service-type warranty and recognised as a liability. Revenue is recognised over the period in which the service-type warranty is provided on a basis appropriate to the nature of the contract and services to be rendered.
Provision made as at March 31, 2025 represents the amount of the expected cost of meeting such obligations of rectification/replacement as per acturial valuation report. The timing of the outflows is expected to be within a period of 1 to 6 years from the date of Balance Sheet.
Provisions for warranty-related costs are recognized annually.
As at the end of each financial year, the carrying amounts of PPE, Capital Work-in-Progress, intangible assets and Intangible asset under development are reviewed
to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, PPE, Capital Work-in-Progress, intangible assets and Intangible asset under development are tested for impairment so as to determine the impairment loss, if any.
Intangible assets with indefinite life are tested for impairment each year. Impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
(i) in the case of an individual asset, at the higher of the fair value less costs to sell and the value-in-use; and
(ii) in the case of a cash generating unit (the smallest identifiable group of assets that generates independent cash flows), at the higher of the cash generating unitâs fair value less costs to sell and the value-in-use.
The amount of value-in-use is determined as the present value of estimated future cash flows from the continuing use of an asset, which may vary based on the future performance of the Company and from its disposal at the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the Company suitably adjusted for risks specified to the estimated cash flows of the asset.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognized immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount, such that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the Statement of Profit and Loss.
Assets taken on lease are accounted as right-of-use assets and the corresponding lease liability is recognized at the lease commencement date.
The lease liability is initially measured at the present value of the lease payments, discounted using the Companyâs incremental borrowing rate.
The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.
Interest on lease liability is recognized using the effective interest method.
The right-of-use asset is measured by applying cost model i.e. right-of-use asset at cost less accumulated depreciation and cumulative impairment, if any. The right-of-use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right-of-use asset
For short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the lease term.
The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments. The Company recognizes the amount of the re-measurement of lease liability due to modification as an adjustment to the right-of-use asset and statement of profit and loss depending upon the nature of modification.
Equity-settled share based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share based payments is expensed on a straightline basis over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognized in Statement of Profit and Loss such that the cumulative expenses reflects the revised estimate, with a corresponding adjustment to the Share Based Payments Reserve.
If granted number of shares lapse after the vesting period, the cumulative amount recognised as expense in respect of such granted share is transferred to the retained earnings.
Operating segments are reported in the manner consistent with the internal reporting provided by the Chief Operating Decision Maker (CODM). Chairman and Managing Director of the Company has been identified as CODM. Company has identified only one reportable segment.
w) Financial Instruments:Financial assets - Initial recognition
Financial assets are recognized when the company becomes party to a contract embodying the related financial instruments. All financial assets are initially measured at fair value except for trade receivables not containing a significant financing component are initially measured at transaction price. Transaction costs that are attributable to the acquisition of financial assets at fair value through profit and loss are added to or deducted from as the case may be, from the fair value of such financial assets on initial recognition. Subsequent measurement Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both:
(i) the entityâs business model for managing the financial assets and;
(ii) the contractual cash flow characteristics of the financial asset.
(1) Measured at amortized cost:
A financial asset is measured at amortized cost, if it is held under the hold to collect business model i.e. held with an objective of holding the assets to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest on the principal outstanding. Amortized cost is calculated using the effective interest rate ("EIR") method by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR
amortization is included in interest income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss. On derecognition, gain or loss, if any, is recognized to Statement of Profit and Loss.
(2) Measured at fair value through other comprehensive income (FVOCI):
A financial asset is measured at FVOCI, if it is held under the hold to collect and sell business model i.e. held with an objective to collect contractual cash flows and selling such financial asset and the contractual cash flows are solely payments of principal and interest on the principal outstanding. It is subsequently measured at fair value with fair value movements recognized in the OCI, except for interest income which recognized using EIR method. The losses arising from impairment are recognized in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognized in the OCI is reclassified from the equity to Statement of Profit and Loss.
(3) Measured at fair value through profit or loss (FVTPL):
Investment in financial asset other than equity instrument, not measured at either amortized cost or FVOCI is measured at FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognized in the Statement of Profit and Loss.
For all equity instruments, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument shall be recognized in Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognized in the OCI. Amounts recognized in Other Comprehensive Income (OCI) are not subsequently transferred to Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognized in Statement of Profit and Loss.
The Company recognizes a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortized cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward-looking.
The Companyâs trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
For financial assets other than trade receivables, the Company recognizes 12-month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL.
The impairment losses and reversals are recognized in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement for impairment testing.
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers rights to receive cash flows from an asset, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Financial LiabilitiesInitial Recognition and measurement
Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially recognized at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or loss.
The Companyâs financial liabilities include trade and other payables, loans and borrowings.
Financial liabilities measured at amortized cost are subsequently measured at using EIR method. Financial liabilities carried at fair value through profit or loss is measured at fair value with all changes in fair value recognized in the Statement of Profit and Loss.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using EIR method. Gains and losses are recognized in profit & loss when the liabilities are derecognized as well as through EIR amortization process.
Financial guarantee contracts issued by the Company are those contracts that requires a payment to be made or to reimburse the holder for a loss it incurs because the specified debtors fails to make payment when due in accordance with the term of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative adjustments.
A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
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:
(i) In the principal market for the asset or liability, or
(ii) 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 categorized 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:
(i) Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
(ii) Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
(iii) Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
x) Application of new and amended standards
(A) Amendments to existing Standards (w.e.f. April 1, 2024)
The Ministry of Corporate Affairs vide notification dated September 9, 2024 and September 28, 2024 notified the Companies (Indian Accounting Standards) Second Amendment Rules, 2024 and Companies (Indian Accounting Standards) Third Amendment Rules, 2024, respectively, which amended/ notified certain accounting standards (see below), and are effective for annual reporting periods beginning on or after April 1, 2024: -Insurance contracts - Ind AS 117 and - Lease Liability in Sale and Leaseback - Amendments to Ind AS 116 These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
(B) Standards notified but not yet effective
No new standards have been notified during the year ended March 31,2025.
1.3 Critical Accounting Estimates
The preparation of these standalone financial statements requires the management to make judgments, use estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these judgements, assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.
The Company determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. After the commencement date, the Company reassesses the lease term if there is a material event or change in circumstances that is within its control and affects its ability to exercise or not to exercise the option to renew or to terminate.
Uncertainties exist with respect to the interpretation of tax regulations, changes in tax laws, and the
amount and timing of future taxable income. Given the wide range of business relationships differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Company establishes provisions, based on reasonable estimates. The amount of such provisions is based on various factors, such as experience of previous tax assessments and differing interpretations of tax regulations by the taxable entity and the responsible tax authority.
c) Gratuity benefit and Leave obligation
The cost of defined benefit plans (i.e. Gratuity benefit) and other long term employee obligations (i.e Leave obligation) is determined using actuarial valuations. An actuarial valuation involves making various assumptions which may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and its long-term nature, a defined benefit obligation and leave obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. In determining the appropriate discount rate, management considers the interest rates of long term government bonds with extrapolated maturity corresponding to the expected duration of the defined benefit obligation. The mortality rate is based on publicly available mortality tables for India. Future salary increases and pension increases are based on expected future inflation rates for India. Further details about the assumptions used, including a sensitivity analysis, are given in Note 58.
d) Impairment of Financial and Non-Financial Assets
The impairment provisions for Financial Assets are based on assumptions about risk of default and expected cash loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward-looking estimates at the end of each reporting period. In case of non-financial assets, assessment of impairment indicators involves consideration of future risks. Further, the Company estimates assetâs recoverable amount, which is higher of an assetâs or Cash
Generating Units (CGUâs) fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account, if no such transactions can be identified, an appropriate valuation model is used.
e) Provision for expected credit losses (ECL) of trade receivables and contract assets
The Company uses a provision matrix to calculate ECLs for trade receivables and contract assets. The provision matrix is initially based on the Companyâs historical observed default rates. The Company will calibrate the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting date, the historical observed default rates are updated and changes in the forwardlooking estimates are analysed.
f) Recoverability of Trade Receivables
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of expected future payments and any possible actions that can be taken to mitigate the risk of non-payment.
g) Recognition of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are recognised for deductible temporary differences and unused
Mar 31, 2024
1.2 Material Accounting Policies
a) Basis of Preparation of Financial Statements
i) Compliance with IND-AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with of the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.
ii) Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) Assets held for sale - measured at lower of carrying amount or fair value less cost to sell.
2) Defined benefit plans - plan assets measured at fair value.
3) Certain Financial Instruments.
iii) Rounding of amounts
The financial statements are presented in INR and all values are rounded to the nearest lakhs (INR ,00,000), except when otherwise indicated.
b) Significant accounting judgements, estimates and assumptions
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known / materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
c) Current / non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in the normal operating cycle.
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when it is:
⢠Expected to be settled in normal operating cycle.
⢠Due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
d) Revenue recognition
The Company derives revenues primarily from sale of manufactured goods & rendering of services.
The Company has adopted Ind AS 115, Revenue from Contract with Customers with effect from 1st April 2018.
The Company''s obligation to repair and replace faulty products under standard warranty terms is recognised as a provision.
Sale of Products
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. Customers obtain control as per the terms of the respective contracts.
Performance obligation is considered as satisfied at a point in time.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which entity expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The entity includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved.
Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer ranging from 30 to 120 days.
Amounts disclosed in the revenue excludes GST.
Sale of services
Services rendered include Repairing and Servicing, AMC and Erectioning and Commissioning services.
Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Revenue from rendering of services is recognised over time as the customer receives the benefit of the company''s performance and the company has an enforceable right to payment for services transferred.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.
The Company is generally the principal as it typically controls the goods or services before transferring them to the customer.
Significant judgments are used in:
a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation.
b. Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date.
c. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price.
Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account.
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer.
In all other cases, performance obligation is considered as satisfied at a point in time.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which entity expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The entity includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved.
Interest income
Interest income from debt instruments is recognised using the effective interest rate method.
Dividends
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established. Export Incentives
Export incentives receivable under various schemes are accounted on accrual basis.
Government Incentives
The Company is entitled to incentives from government authorities in respect of manufacturing units located in developing regions. The Company accounts for it''s entitlement as income on accrual basis.
Government grants are recognised when there is reasonable assurance that the grant will be received upon the Company complying with the conditions attached to the grant. If the government grants are by way of financial assistance on the basis of certain qualifying criteria are recognised as they become receivable.
Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Company.
In the unlikely event that a grant previously recognised is ultimately not received, it is treated as a change in estimate and the amount cumulatively recognised is expensed in the Statement of Profit and Loss.
e) Taxes Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted, by the end of the reporting period.
Current tax items are recognised in correlation to the underlying transaction either in the Statement of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the company intends to settle the asset and liability on a net basis.
f) Property, Plant and Equipment
Land and buildings 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. Freehold land is not depreciated.
Properties in the course of construction for production or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees, administrative and other general overhead expenses and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
The initial cost of an asset comprises its purchase price (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use).
PPE is recognised when 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.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-inprogress".
Other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit or loss.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 and management believe that useful life of assets are same as those prescribed in Scehdule II to the Act.
Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.
Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.
Depreciation on additions to / deductions from, owned assets is calculated on pro rata basis to the period of use.
g) Intangible assets
Intangible assets with finite useful lives that are acquired separately or developed in-house are carried at cost less accumulated amortisation and accumulated impairment losses.
The useful life of an intangible asset is considered finite where the rights to such assets are limited to a specified period of time by contract or law or the likelihood of technical, technological obsolescence or commercial obsolescence. If, there are no such limitations, the useful life is taken to be indefinite. An intangible asset with an indefinite useful life is not amortized.
Intangible assets that have finite lives are amortized over their estimated useful lives by the straight line method.
The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets representing
a. cost of software capitalised is amortised over its useful life which is estimated to be a period of five years.
b. cost of technical knowhow and product development capitalised are amortised over its useful life which is estimated to be a period of seven years.
The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required for assets with finite lives and to confirm that business circumstances continue to support an indefinite useful life assessment for assets so classified.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses on de-recognition are determined by comparing proceeds with carrying amount. These are included in profit or loss under other expenses / other income.
Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
1. The technical feasibility of completing the intangible asset so that it will be available for use or sale;
2. The Company has intention to complete the intangible asset and use or sell it;
3. The Company has ability to use or sell the intangible asset;
4. The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
5. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
6. The Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
I) Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and conditions. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
i) Raw material is valued at cost or net realisable value whichever is lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Stock-in-Trade are valued at cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at lower of cost or net realisable value. Tools and Instruments are valued at book value.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a provision is made for such inventories.
Mar 31, 2023
1.2 Significant Accounting Policies
a) Basis of Preparation of Financial Statements
i) Compliance with IND-AS
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (''Act'') read with of the Companies (Indian Accounting Standards) Rules,2015 as amended and other relevant provisions of the Act.
ii) Historical Cost Convention
The financial statements have been prepared on a historical cost basis, except for the following:
1) Assets held for sale - measured at lower of carrying amount or fair value less cost to sell.
2) Defined benefit plans - plan assets measured at fair value.
iii) Rounding of amounts
The financial statements are presented in INR and all values are rounded to the nearest lakhs (INR ,00,000), except when otherwise indicated.
b) Significant accounting judgements, estimates and assumptions
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known / materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
c) Current / non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification. An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in the normal operating cycle.
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when it is:
⢠Expected to be settled in normal operating cycle.
⢠Due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
d) Revenue recognition
The Company derives revenues primarily from sale of manufactured goods & rendering of services.
The Company has adopted Ind AS 115, Revenue from Contract with Customers with effect from 1st April 2018.
The Company''s obligation to repair and replace faulty products under standard warranty terms is recognised as a provision.
Sale of Products
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer. Customers obtain control as per the terms of the respective contracts.
Performance obligation is considered as satisfied at a point in time.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which entity expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The entity includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved.
Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Amounts disclosed in the revenue excludes GST.
Sale of services
Services rendered include Repairing and Servicing, AMC and Erectioning and Commissioning services.
Invoices are issued according to contractual terms and are usually payable as per the credit period agreed with the customer.
Revenue from rendering of services is recognised over time as the customer receives the benefit of the company''s performance and the company has an enforceable right to payment for services transferred.
Unbilled revenue represents value of services performed in accordance with the contract terms but not billed.
Revenue related to fixed price maintenance and support services contracts where the Company is standing ready to provide services is recognised based on time elapsed mode and revenue is straight lined over the period of performance.
The Company is generally the principal as it typically controls the goods or services before transferring them to the customer.
Significant judgments are used in:
a. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time. Revenue recognition is done by measuring the progress towards complete satisfaction of performance obligation.
b. Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as at the reporting date.
c. Determining the method to be applied to arrive at the variable consideration requiring an adjustment to the transaction price.
Revenue includes adjustments made towards liquidated damages and variation wherever applicable. Escalation and other claims, which are not ascertainable / acknowledged by customers are not taken into account.
Revenue from contracts with customers is recognised when a performance obligation is satisfied by transfer of promised goods or services to a customer.
In all other cases, performance obligation is considered as satisfied at a point in time.
The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Transaction price is the amount of consideration to which entity expects it to be entitled in exchange for transferring goods or services to a customer excluding amounts collected on behalf of a third party. The entity includes variable consideration as part of transaction price when there is a basis to reasonably estimate the amount of the variable consideration and when it is probable that a significant reversal of cumulative revenue recognised will not occur when the uncertainty associated with the variable consideration is resolved.
Interest income
Interest income from debt instruments is recognised using the effective interest rate method.
Dividends
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established. Export Incentives
Export incentives receivable under various schemes are accounted on accrual basis.
Government Incentives
The Company is entitled to incentives from government authorities in respect of manufacturing units located in developing regions. The Company accounts for it''s entitlement as income on accrual basis.
Government grants are recognised when there is reasonable assurance that the grant will be received upon the Company complying with the conditions attached to the grant. If the government grants are by way of financial assistance on the basis of certain qualifying criteria are recognised as they become receivable.
Government grants, which are revenue in nature and are towards compensation for the qualifying costs incurred by the Company.
In the unlikely event that a grant previously recognised is ultimately not received, it is treated as a change in estimate and the amount cumulatively recognised is expensed in the Statement of Profit and Loss.
e) Taxes Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted, by the end of the reporting period.
Current tax items are recognised in correlation to the underlying transaction either in the Statement of Profit and Loss, other comprehensive income or directly in equity.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the relevant entity intends to settle its current tax assets and liabilities on a net basis.
Advance taxes and provisions for current income taxes are presented in the balance sheet after off-setting advance tax paid and income tax provision arising in the same tax jurisdiction and where the company intends to settle the asset and liability on a net basis.
f) Property, Plant and Equipment
Land and buildings 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. Freehold land is not depreciated.
Properties in the course of construction for production or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees, administrative and other general overhead expenses and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
The initial cost of an asset comprises its purchase price (including import duties and non-refundable taxes), any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of any decommissioning obligation, if any, and, borrowing cost for qualifying assets (i.e. assets that necessarily take a substantial period of time to get ready for their intended use).
PPE is recognised when 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.
Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. PPE not ready for the intended use on the date of the Balance Sheet are disclosed as "capital work-inprogress.
Other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in statement of profit or loss.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 and management believe that useful life of assets are same as those prescribed in Scehdule II to the Act.
Depreciation charge for impaired assets is adjusted in future periods in such a manner that the revised carrying amount of the asset is allocated over its remaining useful life.
Where cost of a part of the asset ("asset component") is significant to total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part is determined separately and such asset component is depreciated over its separate useful life.
Depreciation on additions to / deductions from, owned assets is calculated pro rata to the period of use.
g) Intangible assets
Intangible assets with finite useful lives that are acquired separately or developed in-house are carried at cost less accumulated amortisation and accumulated impairment losses.
The useful life of an intangible asset is considered finite where the rights to such assets are limited to a specified period of time by contract or law or the likelihood of technical, technological obsolescence or commercial obsolescence. If, there are no such limitations, the useful life is taken to be indefinite. An intangible asset with an indefinite useful life is not amortized.
Intangible assets that have finite lives are amortized over their estimated useful lives by the straight line method .
The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets representing
a. cost of software capitalised is amortised over its useful life which is estimated to be a period of five years.
b. cost of technical knowhow and product development capitalised are amortised over its useful life which is estimated to be a period of seven years.
The useful lives of intangible assets are reviewed annually to determine if a reset of such useful life is required for assets with finite lives and to confirm that business circumstances continue to support an indefinite useful life assessment for assets so classified.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses on de-recognition are determined by comparing proceeds with carrying amount. These are included in profit or loss under other expenses / other income.
Development expenditure on new products is capitalised as intangible asset, if all of the following can be demonstrated:
1. The technical feasibility of completing the intangible asset so that it will be available for use or sale;
2. The Company has intention to complete the intangible asset and use or sell it;
3. The Company has ability to use or sell the intangible asset;
4. The manner in which the probable future economic benefits will be generated including the existence of a market for output of the intangible asset or intangible asset itself or if it is to be used internally, the usefulness of intangible assets;
5. The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
6. The Company has ability to reliably measure the expenditure attributable to the intangible asset during its development. Development expenditure that does not meet the above criteria is expensed in the period in which it is incurred.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs incurred in connection with the borrowing of funds. Borrowing costs also include exchange differences to the extent regarded as an adjustment to the borrowing costs.
I) Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and conditions. Taxes which are subsequently recoverable from taxation authorities are not included in the cost.
i) Raw material is valued at cost or net realisable value whichever is lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Stock-in-Trade are valued at cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at lower of cost or net realisable value. Tools and Instruments are valued at book value.
Obsolete, slow moving and defective inventories are identified from time to time and, where necessary, a provision is made for such inventories.
Mar 31, 2018
1. OTHER NOTES ON FINANCIAL STATEMENTS AS AT, AND FOR THE YEAR ENDED 31ST MARCH, 2018
1.1 Corporate Information
Hind Rectifiers Limited CHirect'' or ''the Company'') is a public Company domiciled in India and is incorporated under the provisions of the Companies Act, applicable in India. The principal place of business of the Company is located in Bhandup, Mumbai. The Company is principally engaged in developing, designing, manufacturing and marketing Power Semiconductor, Power Electronic Equipments and Railway Transportation Equipments.
1.2 Significant Accounting Policies
a) Basis of Preparation of Financial Statements
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the Ind AS'') as notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time).
For all the periods upto 31st March 2017, the Company had prepared its financial statements in accordance with the accounting standards notified under the section 133 of the companies Act 2013, read together with paragraph 7 of the companies (Accounts) Rule, 2014 (Indian GAAP).
These financial Statements for the year ended 31st March 2018 are the first the Company has prepared in accordance with IND AS
The financial statements have been prepared on a historical cost basis, except for the following:
1) Assets held for sale - measured at lower of carrying amount or fair value less cost to sell;
2) Defined benefit plans - plan assets measured at fair value;
The financial statements are presented in INR and all values are rounded to the nearest lacs (INR 00,000), except when otherwise indicated.
b) Significant accounting judgements, estimates and assumptions
The estimates and judgments used in the preparation of the financial statements are continuously evaluated by the Company and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Differences between actual results and estimates are recognised in the period in which the results are known/materialised.
The said estimates are based on the facts and events, that existed as at the reporting date, or that occurred after that date but provide additional evidence about conditions existing as at the reporting date.
c) Current non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in the normal operating cycle
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current. A liability is treated as current when it is:
⢠Expected to be settled in normal operating cycle
A F^i i^ -l-y"v 1^^ r''^-H-l^yH id/H-K i M fa«/^K i£± rv^y^M''l-Kr'' "^fl-^i- -I-K^ K^r^y"vK ir^yi r\^r\r\f\ r\r
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities. The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents.
d) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being received. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment.
Sales
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and discounts etc.
Amounts disclosed in the revenue includes excise duty and service tax but excludes sales tax/VAT and GST.
Interest income
Interest income from debt instruments is recognised using the effective interest rate method. Dividends
Dividends are recognised in the Statement of Profit and Loss only when the right to receive payment is established.
e) Taxes Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ''profit before tax'' as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax rates that have been enacted or substantively enacted, by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Minimum Alternate Tax credit is recognised as deferred tax asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date.
f) Property, Plant and Equipment
Land and buildings 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. Freehold land is not depreciated.
Properties in the course of construction for production or administrative purposes are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property,plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
The Company depreciates its property, plant and equipment over the useful life in the manner prescribed in Schedule II of the Companies Act, 2013 and management believe that useful life of assets are same as those prescribed in Scehdule II to the Act.
Transition date accounting:
The Company has considered Previous GAAP carrying value as deemed cost as at the transition date as per Ind AS 101
g) Intangible assets
Intangible assets with finite useful lives that are acquired separately or developed in-house are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives.
The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets representing cost of software capitalised is amortised over its useful life which is estimated to be a period of three years.
Transition date accounting:
The Company has considered Previous GAAP carrying value as deemed cost as at the transition date as per Ind AS 101.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
i) Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Stock-in-Trade are valued at cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are valued at book value. j) Provisions and contingent liabilities
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated.
Provisions are not recognised for future operating losses.
Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable estimate of the obligation cannot be made.
k) Cash and cash equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits.
I) Employee Benefits
i) Provident Fund is a defined contribution scheme established under State Plan. The contributions to the scheme are charged to Profit & Loss Account in the year when the contributions to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and contribution to the scheme are charged to the Profit & Loss Account in the year when contributions are made in respect of employees covered under the scheme. The scheme is funded with Life Insurance Corporation of India.
iii) The Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The Gratuity Plan provides a lumpsum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company.
The liability in respect of employees is provided and contributed to Life Insurance Corporation of India under Group Gratuity (Cash Accumulation) Scheme except;
a) In case of Chairman cum Managing Director and Executive Director, in whose cases the additional Gratuity liability in accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis of actuarial valuation.
iv) The Company has other long term employee benefits in the form of Leave Encashment. The liability in respect of Leave Encashment is provided for on the basis of actuarial valuation made at the end of the financial year. The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by the employees is recognised during the period when the employee renders the services.
vi) Terminal Benefits:
Compensation to employees who have opted for retirement under the Voluntary Retirement Scheme and termination of services of the employees by the Company is charged to the Statement of Profit and Loss account in the year on actual basis.
vii) Actuarial gains / losses are recognised immediately to the Statement of Profit and Loss account.
m) Research and Development
Research and Development expenditure of revenue nature is charged to revenue and capital expenditure is treated as fixed assets.
n) Foreign currencies
i) Transaction denominated in foreign currency are recorded at the rate of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are stated at the rates ruling at the year end and any exchange difference arising on such transaction is dealt with in the Statement of Profit and Loss Account.
iii) Transactions completed during the year are adjusted at the prevailing rates. o) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
p) Non-current assets held for sale
Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and contractual rights under insurance contracts, which are specifically exempt from this requirement.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal company classified as held for sale continue to be recognised.
Standards issued but not yet effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment. The amendments are applicable to the Company from 1 April 2017.
Amendment to Ind AS 7
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The Company is evaluating the requirements of the amendment and its impact on its cash flows, which are not expected to be material.
Ind AS 115
In March 2018, the Ministry of Corporate Affairs has notified the Companies (Indian Accounting Standards) Amended Rules, 2018 ("amended rules"). As per the amended rules, Ind AS 115 "Revenue from contracts with customers" supersedes Ind AS 11, "Construction contracts" and Ind AS 18, "Revenue" and is applicable for all accounting periods commencing on or after 1 April 2018.
Ind AS 115 introduces a new framework of five step model for the analysis of revenue transactions. The model specifies that revenue should be recognized when (or as) an entity transfer control of goods or services to a customer at the amount to which the entity expects to be entitled. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The new revenue standard is applicable to the Company from 1 April 2018.
The standard permits two possible methods of transition:
⢠Retrospective approach - Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
⢠Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach)
The Company is evaluating the requirement of the amendment and the impact on the financial statements.
The effect on adoption of Ind AS 115 is expected to be insignificant
Mar 31, 2016
26. OTHER NOTES ON FINANCIAL STATEMENTS AS AT, AND FOR THE YEAR ENDED 31ST MARCH, 2016
i) Significant Accounting Policies
a) Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost convention, in accordance with Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
b) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles in India (Indian GAAP) requires management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent liabilities on the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as of the date of financial statements which in management''s opinion are prudent and reasonable. Actual results may differ from the estimates used in preparing the accompanying financial statements. Any revision to accounting estimates is recognized prospectively in current and future periods.
c) Fixed Assets / Intangible Assets
i) Fixed assets are carried at cost of acquisition less depreciation. Cost of fixed assets includes interest of directly related loans up to the date of commissioning/installation.
ii) Expenditure during construction period incurred on the projects under implementation are treated as pre-operative expenses pending allocation to the assets and are included under "Capital Work in Progress". These expenses are apportioned to fixed assets on commencement of commercial production. Capital Work in Progress is stated at the amount expended up to the date of Balance Sheet.
iii) Expenses incurred on development of new products are treated as Capital Work in Progress during the development period and once the product is developed, the same is shown as Product Development Cost under Intangible Assets.
iv) Intangible assets are recognized if it is probable that the future economic benefits that are attributable to the assets will flow to the Company and cost of the assets can be measured reliably.
d) Depreciation
i) Depreciation on fixed assets is provided on the basis of useful life of assets as per Schedule II of the Companies Act, 2013.
ii) Depreciation on Technical know-how is provided on the basis of its useful life as per Schedule II of the Companies Act, 2013.
iii) Product Development Cost is amortized on the basis of its useful life as per Schedule II of the Companies Act, 2013.
iv) Leasehold Land is amortized over the period of lease.
e) Valuation of Inventories
Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and conditions.
i) Raw material is valued at cost or net realizable value whichever is lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Stock-in-Trade are valued at cost or net realizable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are valued at book value.
f) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.
Sales
Net operational income comprises of sale of goods and reconditioning, repairing and servicing income.
Sale of goods is recognized on dispatch to customers. Sales are stated net of Sales Tax. Sales excludes captive consumption of materials.
Other Income
Interest income is accounted on accrual basis.
g) Foreign Currency Transactions
i) Transactions denominated in foreign currency are recorded at the rate of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are stated at the rates ruling at the year end and any exchange difference arising on such transaction is dealt with in the Statement of Profit and Loss.
iii) Transactions completed during the year are adjusted at the prevailing rates.
h) Research and Development
Research and Development expenditure of revenue nature is charged to revenue and capital expenditure
is treated as fixed assets.
i) Retirement and Other Employee Benefits
i) Provident Fund is a defined contribution scheme established under State Plan. The contributions to the scheme are charged to the Statement of Profit & Loss in the year when the contributions to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and contribution to the scheme are charged to the Statement of Profit & Loss in the year when contributions are made in respect of employees covered under the scheme. The scheme is funded with Life Insurance Corporation of India.
iii) The Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all employees. The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee''s last drawn salary and the years of employment with the Company. The liability in respect of employees is provided and contributed to Life Insurance Corporation of India under Group Gratuity (Cash Accumulation) Scheme except;
a) In case of Chairman cum Managing Director and Executive Vice Chairperson, in whose cases the additional Gratuity liability in accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis of actuarial valuation.
iv) The Company has other long term employee benefits in the form of Leave Encashment. The liability in respect of Leave Encashment is provided for on the basis of actuarial valuation made at the end of the Financial Year. The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to be paid in exchange for the services rendered by the employees is recognized during the period when the employee renders the services.
vi) Terminal Benefits:
Compensation to employees who have opted for retirement under the Voluntary Retirement Scheme and termination of services of the employees by the Company is charged to the Statement of Profit & Loss in the year on actual basis.
vii) Actuarial gains / losses are recognized immediately to the Statement of Profit & Loss.
j) Provision for Current and Deferred Tax
i) Provision for current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates relevant to the respective ''Previous Year''. Minimum Alternate Tax (MAT) eligible for set-off in subsequent years (as per tax laws), is recognized as an asset by way of credit to the Statement of Profit & Loss only if there is convincing evidence of its realization. At each Balance Sheet date, the carrying amount of MAT Credit Entitlement receivable is reviewed to reassure realization.
ii) Deferred tax resulting from ''timing difference'' between book and taxable profit for the year is accounted for using the current tax rates. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable certainty that the assets will be adjusted in future. However, in case of deferred tax assets (representing unabsorbed depreciation or carry forward losses) are recognized, if and only if there is a virtual certainty that there would be adequate future taxable income against which such deferred tax assets can be realized, or to the extent of deferred tax liabilities.
k) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.
l) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
ii) Estimated amount of contract remaining to be executed and not provided on account of Technical Know-How Rs. 94.28 lacs (previous year Rs. 192.85 lacs) and on account of Capital Purchase Rs. 271.54 lacs (previous year Rs. 245.76 lacs).
vi) Trade Receivables over six months comprises of Rs. 774.20 lacs (previous year Rs. 629.36 lacs) due from Government concerns and Rs. 195.56 lacs (previous year Rs. 215.38 lacs) due from commercial parties.
vii) In the opinion of the Management, the current assets, loans and advances are approximately of the values stated if realized in the ordinary course of business and all provisions for liabilities are adequate and not in excess of the amount considered necessary.
viii) In the opinion of the Management, no provision is required against contingent liabilities referred hereinabove.
ix) Advance and deposits from customers reflected under ''Other Long Term Liabilities'' and ''Other Current Liabilities'' represent advance / dealership deposit received by the Company for supply of capital goods.
x) Balance of Trade Receivables and Trade Payables are subject to confirmation.
xi) During the year, the Company has incurred an expenditure of Rs. 219.62 lacs on the development of various products and completed the development process of the products of Rs. 163.19 lacs (including Rs. 49.90 lacs incurred upto 31st March, 2015) and balance of Rs. 170.81 lacs (including Rs. 64.48 lacs incurred upto 31st March, 2015) related to the products still under development is shown under Capital Work in Progress.
Mar 31, 2014
A) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting and in
accordance with the provisions of the Companies Act, 1956 (''the Act''),
and the accounting principles generally accepted in India and comply
with the accounting standards prescribed in the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government, in
consultation with the National Advisory Committee on Accounting
Standards, to the extent applicable.
The financial statements are prepared and presented in the form set out
in Part I and Part II of Revised Schedule VI of the Act, so far as they
are applicable thereto.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in India (Indian GAAP) requires
management to make estimates and assumptions that affect the reported
amount of assets, liabilities, revenues and expenses and disclosure of
contingent liabilities on the date of the financial statements. The
estimates and assumptions used in the accompanying financial statements
are based upon management''s evaluation of the relevant facts and
circumstances as of the date of financial statements which in
management''s opinion are prudent and reasonable. Actual results may
differ from the estimates used in preparing the accompanying financial
statements. Any revision to accounting estimates is recognised
prospectively in current and future periods.
c) Fixed Assets / Intangible Assets
i) Fixed assets are carried at cost of acquisition less depreciation.
Cost of fixed assets includes interest of directly related loans upto
the date of commissioning / installation.
ii) Expenditure during construction period incurred on the projects
under implementation are treated as pre-operative expenses pending
allocation to the assets and are included under "Capital Work in
Progress". These expenses are apportioned to fixed assets on
commencement of commercial production. Capital Work in Progress is
stated at the amount expended upto the date of Balance Sheet.
iii) Intangible assets are recognized if it is probable that the future
economic benefits that are attributable to the assets will flow to the
Company and cost of the assets can be measured reliably.
d) Depreciation
i) Depreciation on fixed assets is provided on written down value in
the manner and at the rates as per schedule XIV of the Companies Act,
1956.
ii) Technical know-how is amortized from the year in which commercial
production commences on the written down value method.
iii) Leasehold Land is amortised over the period of lease.
e) Valuation of Inventories
Cost of inventories have been computed to include all cost of
purchases, cost of conversion and other costs incurred in bringing the
inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is
lower. Cost is calculated by applying the weighted average method.
ii) Work-in-progress, Finished Goods and Stock-in-Trade are valued at
cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are
valued at book value.
f) Revenue Recongnition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sales
Net operational income comprises of sale of goods and reconditioning,
repairing and servicing income. Sale of goods is recognised on
despatch to customers. Sales are stated net of Sales Tax. Sales
excludes captive consumption of materials.
Other Income
Interest income is accounted on accrual basis.
g) Foreign Currency Transactions
i) Transaction denominated in foreign currency are recorded at the rate
of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are
stated at the rates ruling at the year end and any exchange difference
arising on such transaction is dealt with in the Statement of Profit
and Loss.
iii) Transactions completed during the year are adjusted at the
prevailing rates.
h) Research and Development
Research and Development expenditure of revenue nature is charged to
revenue and capital expenditure is treated as fixed assets.
i) Retirement and Other Employee Benefits
i) Provident Fund is a defined contribution scheme established under
State Plan. The contributions to the scheme are charged to the
Statement of Profit & Loss in the year when the contributions to the
funds are due.
ii) Superannuation Fund is a defined contribution scheme and
contribution to the scheme are charged to the Statement of Profit &
Loss in the year when contributions are made in respect of employees
covered under the scheme. The scheme is funded with Life Insurance
Corporation of India.
iii) The Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering all employees. The Gratuity Plan provides
a lumpsum payment to vested employees, at retirement or termination of
employment, an amount based on the respective employee''s last drawn
salary and the years of employment with the Company. The liability in
respect of employees is provided and contributed to Life Insurance
Corporation of India under Group Gratuity (Cash Accumulation) Scheme
except;
a) In case of Chairman cum Managing Director and Executive Vice
Chairperson, in whose cases the additional Gratuity liability in
accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis
of actuarial valuation.
iv) The Company has other long term employee benefits in the form of
Leave Encashment. The liability in respect of Leave Encashment is
provided for on the basis of actuarial valuation made at the end of the
Financial Year. The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to
be paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the services.
vi) Terminal Benefits:
Compensation to employees who have opted for retirement under the
Voluntary Retirement Scheme and termination of services of the
employees by the Company is charged to the Statement Profit & Loss in
the year on actual basis.
vii) Actuarial gains / losses are recognised immediately to the
Statement of Profit & Loss.
j) Provision for Current and Deferred Tax
i) Provision for current tax is made with reference to taxable income
computed for the accounting period for which the financial statements
are prepared by applying the tax rates relevant to the respective
''Previous Year''. Minimum Alternate Tax (MAT) eligible for set-off in
subsequent years (as per tax laws), is recognised as an asset by way of
credit to the Statement of Profit and Loss only if there is convincing
evidence of its realisation. At each Balance Sheet date, the carrying
amount of MAT Credit Entitlement receivable to reassure realisation.
ii) Deferred tax resulting from ''timing difference'' between book and
taxable profit for the year is accounted for using the current tax
rates. The deferred tax asset is recognised and carried forward only to
the extent that there is a reasonable certainty that the assets will be
adjusted in future. However, in case of deferred tax assets
(representing unabsorbed depreciation on carry forward losses) are
recognised, if and only if there is a virtual certainty that there
would be adequate future taxable income against which such deferred tax
assets can be realised, or to the extent of deferred tax liabilities.
k) Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal / external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. An impairment loss recognised in prior
accounting periods is reversed if there has been change in the estimate
of the recoverable amount.
l) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
Mar 31, 2013
A) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting and in
accordance with the provisions of the Companies Act, 1956 (Âthe Act''),
and the accounting principles generally accepted in India and comply
with the accounting standards prescribed in the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government, in
consultation with the National Advisory Committee on Accounting
Standards, to the extent applicable.
The financial statements are prepared and presented in the form set out
in Part I and Part II of Revised Schedule VI of the Act, so far as they
are applicable thereto.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in India (Indian GAAP) requires
management to make estimates and assumptions that affect the reported
amount of assets, liabilities, revenues and expenses and disclosure of
contingent liabilities on the date of the financial statements. The
estimates and assumptions used in the accompanying financial statements
are based upon management''s evaluation of the relevant facts and
circumstances as of the date of financial statements which in
management''s opinion are prudent and reasonable. Actual results may
differ from the estimates used in preparing the accompanying financial
statements. Any revision to accounting estimates is recognised
prospectively in current and future periods.
c) Fixed Assets / Intangible Assets
i) Fixed assets are carried at cost of acquisition less depreciation.
Cost of fixed assets includes interest of directly related loans upto
the date of commissioning / installation.
ii) Expenditure during construction period incurred on the projects
under implementation are treated as pre-operative expenses pending
allocation to the assets and are included under "Capital Work in
Progress". These expenses are apportioned to fixed assets on
commencement of commercial production. Capital Work in Progress is
stated at the amount expended upto the date of Balance Sheet.
iii) Intangible assets are recognized if it is probable that the future
economic benefits that are attributable to the assets will flow to the
Company and cost of the assets can be measured reliably.
d) Depreciation
i) Depreciation on fixed assets is provided on written down value in
the manner and at the rates as per schedule XIV of the Companies Act,
1956.
ii) Technical know-how is amortized from the year in which commercial
production commences on the written down value method.
iii) Leasehold Land is amortised over the period of lease.
e) Valuation of Inventories
Cost of inventories have been computed to include all cost of
purchases, cost of conversion and other costs incurred in bringing the
inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is
lower. Cost is calculated by applying the weighted average method.
ii) Work-in-progress, Finished Goods and wtock-in-Trade are valued at
cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are
valued at book value.
f) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sales
Net operational income comprises of sale of goods and reconditioning,
repairing and servicing income.
Sale of goods is recognised on despatch to customers. Sales are stated
net of Sales Tax. Sales excludes
captive consumption of materials.
Other Income
Interest income is accounted on accrual basis.
g) Foreign Currency Transactions
i) Transaction denominated in foreign currency are recorded at the rate
of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are
stated at the rates ruling at the year end and any exchange difference
arising on such transaction is dealt with in the Statement of Profit
and Loss Account.
iii) Transactions completed during the year are adjusted at the
prevailing rates.
h) Research and Development
Research and Development expenditure of revenue nature is charged to
revenue and capital expenditure is treated as fixed assets.
i) Retirement and Other Employee Benefits
i) Provident Fund is a defined contribution scheme established under
State Plan. The contributions to the scheme are charged to the
Statement of Profit & Loss Account in the year when the contributions
to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and
contribution to the scheme are charged to the Statement of Profit &
Loss Account in the year when contributions are made in respect of
employees covered under the scheme. The scheme is funded with Life
Insurance Corporation of India.
iii) The Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering all employees. The Gratuity Plan provides
a lumpsum payment to vested employees, at retirement or termination of
employment, an amount based on the respective employee''s last drawn
salary and the years of employment with the Company. The liability in
respect of employees is provided and contributed to Life Insurance
Corporation of India under Group Gratuity (Cash Accumulation) Scheme
except;
a) In case of Chairman cum Managing Director and Executive Vice
Chairperson, in whose cases the additional Gratuity liability in
accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis
of actuarial valuation.
iv) The Company has other long term employee benefits in the form of
Leave Encashment. The liability in respect of Leave Encashment is
provided for on the basis of actuarial valuation made at the end of the
Financial Year. The aforesaid Leave Encashment is not funded. v) The
undiscounted amount of short term employee benefits expected to be paid
in exchange for the services rendered by the employees is recognised
during the period when the employee renders the services.
vi) Terminal Benefits:
Compensation to employees who have opted for retirement under the
Voluntary Retirement Scheme and termination of services of the
employees by the Company is charged to the Statement Profit & Loss
account in the year on actual basis.
vii)Actuarial gains / losses are recognised immediately to the
Statement of Profit & Loss account.
j) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
Mar 31, 2012
A) Basis of Preparation of Financial Statements
The financial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting and in
accordance with the provisions of the Companies Act, 1956 ('the Act'),
and the accounting principles generally accepted in India and comply
with the accounting standards prescribed in the Companies (Accounting
Standards) Rules, 2006 issued by the Central Government, in
consultation with the National Advisory Committee on Accounting
Standards, to the extent applicable.
The financial statement are prepared and presented in the form set out
in Part I and Part II of Revised Schedule VI of the Act, so far as they
are applicable thereto.
b) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles in India (Indian GAAP) requires
management to make estimates and assumptions that affect the reported
amount of assets, liabilities, revenues and expenses and disclosure of
contingent liabilities on the date of the financial statements. The
estimates and assumptions used in the accompanying financial statements
are based upon management's evaluation of the relevant facts and
circumstances as of the date of financial statements which in
management's opinion are prudent and reasonable. Actual results may
differ from the estimates used in preparing the accompanying financial
statements. Any revision to accounting estimates is recognised
prospectively in current and future periods.
c) Fixed Assets / Intangible Assets
i) Fixed assets are carried at cost of acquisition less depreciation.
Cost of fixed assets includes interest of directly related loans upto
the date of commissioning/installation.
ii) Expenditure during construction period incurred on the projects
under implementation are treated as pre-operative expenses pending
allocation to the assets and are included under "Capital Work-in-
Progress". These expenses are apportioned to fixed assets on
commencement of commercial production. Capital Work-in-Progress is
stated at the amount expended upto the date of Balance Sheet.
iii) Intangible assets are recognized if it is probable that the future
economic benefits that are attributable to the assets will flow to the
Company and cost of the assets can be measured reliably.
d) Depreciation
i) Depreciation on fixed assets is provided on written down value in
the manner and at the rates as per schedule XIV of the Companies Act,
1956.
ii) Technical know-how is amortized from the year in which commercial
production commences on the written down value method.
iii) Leasehold Land is amortised over the period of lease.
e) Valuation of Inventories
Cost of inventories have been computed to include all cost of
purchases, cost of conversion and other costs incurred in bringing the
inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is
lower. Cost is calculated by applying the weighted average method.
ii) Work-in-progress, Finished Goods and Stock-in-Trade are valued at
cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are
valued at book value.
f) Revenue Recongnition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sales
Net operational income comprises of sale of goods and reconditioning,
repairing and servicing income.
Sale of goods is recognised on despatch to customers. Sale are stated
net of Sales Tax. Sales excludes captive consumption of materials.
Other Income
Interest income is accounted on accrual basis.
g) Foreign Currency Transactions
i) Transaction denominated in foreign currency are recorded at the rate
of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are
stated at the rates ruling at the year end and any exchange difference
arising on such transaction is dealt with in the Statement of Profit
and Loss.
iii) Transactions completed during the year are adjusted at the
prevailing rates.
h) Research and Development
Research and Development expenditure of revenue nature is charged to
revenue and capital expenditure is treated as fixed assets.
i) Retirement and Other Employee Benefits
i) Provident Fund is a defined contribution scheme established under
State Plan. The contributions to the scheme are charged to Profit &
Loss Account in the year when the contributions to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and
contribution to the scheme are charged to the Profit & Loss Account in
the year when contributions are made in respect of employees covered
under the scheme. The scheme is funded with Life Insurance Corporation
of India.
iii) The Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering all employees. The Gratuity Plan provides
a lumpsum payment to vested employees, at retirement or termination of
employment, an amount based on the respective employee's last drawn
salary and the years of employment with the Company. The liability in
respect of employees is provided and contributed to Life Insurance
Corporation of India under Group Gratuity (Cash Accumulation) Scheme
except;
a) In case of Chairman cum Managing Director and Executive Vice
Chairperson, in whose cases the additional Gratuity liability in
accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis
of actuarial valuation.
iv) The Company has other long term employee benefits in the form of
Leave Encashment. The liability in respect of Leave Encashment is
provided for on the basis of actuarial valuation made at the end of the
Financial Year. The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to
be paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the services.
vi) Terminal Benefits:
Compensation to employees who have opted for retirement under the
Voluntary Retirement Scheme and termination of services of the
employees by the Company is charged to Profit & Loss account in the
year on actual basis.
vii) Actuarial gains / losses are recognised immediately to the Profit
& Loss account.
j) Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
Mar 31, 2011
A) Accounting Convention
The Company adopts the accrual concepts in preparation of accounts.
b) Fixed Assets and Depreciation/Amortization
i) Fixed assets are carried at cost of acquisition less depreciation.
Cost of fixed assets includes interest of directly related loans upto
the date of commissioning/installation.
ii) Expenditure during construction period incurred on the projects
under implementation are treated as preoperative expenses pending
allocation to the assets and are included under "Capital Work in
Progress". These expenses will be apportioned to fixed assets on
commencement of commercial production. Capital Work in Progress is
stated at the amount expended upto the date of Balance Sheet.
iii) Depreciation on fixed assets is provided on written down value in
the manner and at the rates as per schedule XIV of the Companies Act,
1956.
iv) Technical know-how is amortized from the year in which commercial
production commences on the written down value method.
v) Leasehold Land is amortised over the period of lease.
c) Valuation of Inventories
Cost of inventories have been computed to include all cost of
purchases, cost of conversion and other costs incurred in bringing the
inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is
lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Trading Goods are valued at
cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are
valued at book value.
d) Foreign Currency Transactions
i) Transaction denominated in foreign currency are recorded at the rate
of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are
stated at the rates ruling at the year end and any exchange difference
arising on such transaction is dealt with in the Profit and Loss
Account.
iii) Transactions completed during the year are adjusted at the
prevailing rates.
e) Sales
Net operational income comprises of sale of goods and reconditioning,
repairing and service income. Sale of goods is recognised on despatch
to customers. Sale of goods is exclusive of Sales Tax. Sales excludes
captive consumption of materials.
f) Other Income
Interest income is accounted on accrual basis.
g) Research and Development
Research and Development expenditure of revenue nature is charged to
revenue and capital expenditure is treated as fixed assets.
h) Employee Benefits
i) Provident Fund is a defined contribution scheme established under
State Plan. The contributions to the scheme are charged to Profit &
Loss Account in the year when the contributions to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and
contribution to the scheme are charged to the Profit & Loss Account in
the year when contributions are made in respect of employees covered
under the scheme. The scheme is funded with Life Insurance Corporation
of India.
iii) The Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering all employees. The Gratuity Plan provides
a lumpsum payment to vested employees, at retirement or termination of
employment, an amount based on the respective employees last drawn
salary and the years of employment with the Company. The liability in
respect of employees is provided and contributed to Life Insurance
Corporation of India under Group Gratuity (Cash Accumulation) Scheme
except;
a) In case of Chairman cum Managing Director and Executive Vice
Chairperson, in whose cases the additional Gratuity liability in
accordance with their terms of appointment, is provided in the books.
b) In case of Nashik and Dehradun Division it is provided on the basis
of actuarial valuation.
iv) The Company has other long term employee benefits in the form of
Leave Encashment. The liability in respect of Leave Encashment is
provided for on the basis of actuarial valuation made at the end of the
Financial Year. The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to
be paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the services.
vi) Terminal Benefits: Compensation to employees who have opted for
retirement under the Voluntary Retirement Scheme and termination of
services of the employees by the Company is charged to Profit & Loss
account in the year on actual basis.
vii) Actuarial gains / losses are recognised immediately to the Profit
& Loss account.
Mar 31, 2010
A) Accounting Convention
The Company adopts the accrual concepts in preparation of accounts.
b) Fixed Assets and Depreciation/Amortization
i) Fixed assets are carried at cost of acquisition less depreciation.
Cost of fixed assets includes interest of directly related loans upto
the date of commissioning/installation.
ii) Expenditure during construction period incurred on the projects
under implementation are treated as preoperative expenses pending
allocation to the assets and are included under "Capital Work in
Progress".
These expenses will be apportioned to fixed assets on commencement of
commercial production. Capital Work in Progress is stated at the
amount expended upto the date of Balance Sheet.
iii) Depreciation on fixed assets is provided on written down value in
the manner and at the rates as per schedule XIV of the Companies Act,
1956.
iv) Technical know-how is amortized from the year in which commercial
produciton commences on the written down value method.
v) Leasehold Land is amortised over the period of lease.
c) Valuation of Inventories
Cost of inventories have been computed to include all cost of
purchases, cost of conversion and other costs incurred in bringing the
inventories to their present location and conditions.
i) Raw material is valued at cost or net realisable value whichever is
lower. Cost is calculated by applying the weighted average method.
ii) Work in progress, Finished Goods and Trading Goods are valued at
cost or net realisable value whichever is lower.
iii) Scrap is valued at estimated selling price.
iv) Stores and Spares are valued at cost. Tools and Instruments are
valued at book value.
d) Foreign Currency Transactions
i) Transaction denominated in foreign currency are recorded at the rate
of exchange prevailing at the time of transaction.
ii) Current Liabilities / Assets not covered by forward contract are
stated at the rates ruling at the year end and any exchange difference
arising on such transaction is dealt with in the Profit and Loss
Account.
iii) Transactions completed during the year are adjusted at the
prevailing rates.
e) Sales
Net operational income comprises of sale of goods and reconditioning,
repairing and service income. Sale of goods is recognised on despatch
to customers. Sale of goods is exclusive of Sales Tax. Sales excludes
captive consumption of materials.
f) Other Income
Interest income is accounted on accrual basis.
g) Research and Development
Research and Development expenditure of revenue nature is charged to
revenue and capital expenditure is treated as fixed assets.
h) Employee Benefits
i) Provident Fund is a defined contribution scheme established under
State Plan. The contributions to the scheme are charged to Profit &
Loss Account in the year when the contributions to the funds are due.
ii) Superannuation Fund is a defined contribution scheme and
contribution to the scheme are charged to the Profit & Loss Account in
the year when contributions are made in respect of employees covered
under the scheme. The scheme is funded with Life Insurance Corporation
of India.
iii) The Company provides for gratuity, a defined benefit retirement
plan (Gratuity Plan) covering all employees. The Gratuity Plan provides
a lumpsum payment to vested employees, at retirement or termination of
employment, an amount based on the respective employees last drawn
salary and the years of employement with the Company. The liability in
respect of employees is provided and contributed to Life Insurance
Corporation of India under Group Gratuity (Cash Accumulation) Scheme
except;
a) In case of Chairman cum Managing Director and Executive Vice
Chairperson, in whose cases the additional Gratuity liability in
accordance with their terms of appointment, is provided in the books.
b) In case of Nashik Division it is provided on the basis of actuarial
valuation.
iv) The Company has other long term employee benefits in the form of
Leave Encashment. The liability in respect of Leave Encashment is
provided for on the basis of actuarial valuation made at the end of the
Financial Year.The aforesaid Leave Encashment is not funded.
v) The undiscounted amount of short term employee benefits expected to
be paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the services.
vi) Terminal Benefits: Compensation to employees who have opted for
retirement under the Voluntary Retirement Scheme and termination of
services of the employees by the Company is charged to Profit & Loss
account in the year on actual basis.
vii) Actuarial gains / losses are recognised immediately to the Profit
& Loss account.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on Hind Rectifiers Ltd.
-
Hind Rectifiers Ltd. Tools
- Bulk Deals
-
Hind Rectifiers Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- Rights
- BSE Price History
- NSE Price History
-
Hind Rectifiers Ltd. Key Financial Ratios
- Ratios
-
Hind Rectifiers Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Hind Rectifiers Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Hind Rectifiers Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Hind Rectifiers Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
-
Stocks To Buy Today, Dec 19: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Stocks To Buy Today, Dec 18: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday -
Stocks To Buy Today, Dec 17: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
Stocks To Buy Today, Dec 16: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
India Stock Market Weekly Review: Nifty and Sensex Fall as Caution Spreads -
Stocks To Buy Today, Dec 15: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday
-
Stocks To Buy Today, Dec 12: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Friday -
Market Outlook 2026: Kotak Securities Sees Nifty 50 at 30,000; THESE 4 Sectors Lead Rally, Gold To Stay Strong -
Stocks To Buy Today, Dec 10: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Wednesday -
D-Street Bleeds For 2nd Day! Sensex Slumps 678 Pts; Nifty Cracks 25,800; Why Stock Market Is Falling Today? -
Stocks To Buy Today, Dec 9: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Tuesday -
Stocks To Buy Today, Dec 8: Top 4 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Monday -
Stock Market Alert! Major Pre-Open Session Change From Dec 8: Full Timings, Rules & All You Need To Know -
Bank Nifty Surges: RBI’s 25 bps Rate Cut Triggers Strong Upside in Major Banking Stocks -
Closing Bell: Sensex Ends 158 pts Higher, Nifty Climbs Above 26,000; Hero MotoCorp, HAL Up 2% Each -
Stocks To Buy Today, Dec 4: Top 2 Picks By Riyank Arora of Mehta Equities For Profitable Trading On Thursday
-
Block for 8 hours
-
Block for 12 hours
-
Block for 24 hours
-
Don't block
Sign in with Google- Male
- Female
- Others
- Under 18
- 18 to 25
- 26 to 35
- 36 to 45
- 45 to 55
- 55+