Accounting Policies of Disa India Ltd. Company
Mar 31, 2022
1. General information
1.1 DISA India Limited (''the Company'') is a public limited company incorporated in India in 1984 under the Companies Act 1956.It is listed on Bombay Stock Exchange and headquartered in Bangalore. Its Promoters are DISA Holding AG of Switzerland and DISA Holding A/S of Denmark which hold 54.10% and 20.73% of share capital of the Company respectively. The Company''s ultimate holding company is Norican Global A/S, Denmark.
1.2 The Company is a leading equipment manufacturer with advanced foundry and surface preparation process technology. It supplies complete foundry systems with DISA range of moulding machines, sand mixers with combination of sand plant equipment, surface preparation machines and environmental control systems to customers across the country with its network of sales offices in New Delhi, Pune, Kolkata and Bangalore with its two manufacturing plants located in Tumkur and Hosakote in Bangalore, Karnataka.
1.3 The Company''s standalone financial statements were approved by the Company''s Board of Directors on May 25, 2022.
2. Significant accounting policies
2.1 The financial statements of the Company have been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 and relevant amended rules issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
2.2 Basis of Preparation and Presentation
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/
or disclosure purposes in these financial statements is determined on such a basis, except for leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realizable value in Ind AS 2 or value in use in Ind AS 36.
Financial statements are presented in Indian Rupees, which is the functional currency of the Company, and the currency of primary economic environment in which the Company operates. All the financial information presented in Indian Rupees has been rounded to the nearest million except shares and earning per share data which are presented in absolute terms.
2.4 Use of estimates and judgements
The preparation of financial statements in conformity with Ind AS requires management to make judgments, estimates and assumptions, that affect the application of accounting policies and the reported amounts of assets, liabilities & disclosures of contingent assets and liabilities at the date of these financial statements and the reported amounts of revenues and expenses for the years. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and future periods affected.
The Company has assessed the effects of the global pandemic COVID-19 in the preparation of these standalone financial statements. The Company has undertaken various initiatives to control costs. In the management''s assessment, there have been no significant changes in the carrying amounts of receivables, inventories or property, plant and equipment and it does not anticipate any challenge in meeting its financial obligations. The impact of the pandemic may be different from that estimated at the date of approval of these standalone financial statements given the uncertainties associated with its nature and duration. The Company''s management will continue to closely monitor any material change to the Company''s financial position due to the pandemic and its impact on the future economic conditions.
Critical estimates and judgments:
Areas involving critical judgments are
a. Note 13 - Inventories - Write down of inventories
b. Note 39 - Estimation of defined benefit obligations
c. Note 14 - Allowance for doubtful trade receivables - The Company determines the allowance for credit losses based on historical loss experience adjusted to reflect current and estimated future economic conditions. The Company
considered current and anticipated future economic conditions relating to industries the company deals with.
3. Summary of significant accounting policies3.1 Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable and is net of goods & service tax, returns, discounts, sales incentives and other similar allowances. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria in relation to satisfaction of performance obligations have been met for each for the Company''s activities described below:
Sale of goods are accounted on satisfaction of performance obligation by transfer of control of the goods to the customer when the customer obtains control of the asset, the significant risks and rewards of ownership of the asset is transferred to the customers and the customers have accepted the assets. In case of machineries/equipment which together form part of a contract for a larger group of machinery, revenue is recognized only when all significant machinery/equipment is transferred.
Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract as and when the company satisfies performance obligations
Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Dividend Income is recognized in the statement of profit and loss when the right to receive dividends is established.
Commission Income is recognized on accrual basis as per the terms of the agreement.
3.2 Leasing Company as a Lessee:
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset. The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain re-measurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, company''s incremental borrowing rate. Generally, the company uses its incremental borrowing rate as the discount rate. Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities include these options when it is reasonably certain that they will be exercised.
The lease liability is measured at amortised cost using the effective interest method. The company presents right-of-use assets that do not meet the definition of ''investment property'' or ''property, plant and equipment'' and lease liabilities in ''Other financial liabilities'' in the statement of financial position.
Short-term leases and leases of low-value assets:
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases of real estate properties that have a lease term of 12 months. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The company does not recognize the lease in respect of low value assets, such lease rentals are charged to expenses.
Company as a Lessor
Leases in which the Company does not transfer
substantially all the risks and rewards of ownership of an asset are classified as operating leases. Where the Company is a lessor under an operating lease, the asset is capitalised under investment property and depreciated over its useful economic life. Payments received under operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the term of the lease.
3.3 Foreign currency transactions & translations
In preparing the financial statements of the Company, transactions in currencies other than the entity''s functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.
Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise.
Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.
3.4 Employee benefits3.4.1. Defined Contribution Plans:
Provident Fund, Superannuation Fund & ESIC
The Company''s Provident Fund Scheme, Superannuation Fund and Employees'' State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
3.4.2. Defined Benefit Plans Gratuity
The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with an insurance company. These constitute the Defined Benefit Plans of the Company.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings
and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorized as follows:
⢠service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
⢠net interest expense or income; and
⢠remeasurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Company''s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
3.4.3.Short term & Other Long-Term Employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
Income tax expense for the year comprises of current and deferred tax using rates at the balance sheet date.
The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961. The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period.
Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period.
3.6 Property, plant and equipment
Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Freehold land is not depreciated.
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Depreciation on Property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except as follows.
Vehicles - 5 years.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in statement of profit and loss.
Investment properties are properties held to earn rentals and / or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 40 requirements for cost model.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn
from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.
3.8 Other Intangible Assets3.8.1. Recognition
Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities)if any, and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.
Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years.
Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.
3.8.2. Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
3.9 Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs
of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.
Raw materials, Components, Work-in-Progress, finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.
Provisions are recognized when the Company has a present obligation as a result of a past event that it is probable will result in an outflow of economic benefits that can be reasonably estimated.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, based on the best estimate established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.
3.12 Investment in subsidiaries
Investment in subsidiaries are carried at cost less impairment if any.
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments and are recognized initially at fair value, and subsequently measured at either
amortized cost or fair value through profit and loss or other comprehensive income. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (Other than financial assets recorded at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
3.14 Financial Assets
Recognition: Financial assets include investments, trade receivables, advances, security deposits, cash & cash equivalents.
Measurement: At initial recognition, the Company measures a financial asset at its fair value. In the case of financial assets which are recognized at fair value through profit or loss(FVTPL), its transaction costs are recognized in the statement of profit & loss. In other cases, the transaction costs are attributed to the acquisition value of the financial assets.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or at fair value depending on the classification of the financial assets.
Effective interest method: The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Classification: The Company determines the classification of assets at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification. Financial assets are classified as those measured at:
a. Amortized cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and or interest.
b. Fair value through other comprehensive income(FVTOCI) where the financial assets are held not only for collection of cash flow arising from payment of principal and interest but also from sale of such assets. Such assets are subsequently measured at fair value with unrealized gains or losses arising from changes in the fair value being recognized in other comprehensive income.
c. Fair value through profit and loss(FVTPL)where the assets are managed in accordance with an approved investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are subsequently
measured at fair value with unrealized gains and losses arising from changes in the fair value being recognized in the statement of profit and loss in the period in which they arise.
Trade receivables, advances, security deposits, cash & cash equivalents etc are classified for measurement at amortized cost while investment may fall under any one of the aforesaid classes.
Impairment: The Company assesses at each reporting date whether a financial asset such as investment, trade receivables, advances and security deposits held at amortized cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or efforts. Expected credit losses are assessed and loss allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.
Derecognition: A financial asset is derecognized only when the contractual rights to the cash flows from the asset expire or when the Company transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations.
Classification: Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument. All financial liabilities are subsequently measured at amortized cost using the effective interest method or FVTPL.
Financial liabilities at FVTPL: Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising in measurement recognized in profit or loss. Net gain or loss recognized in the profit or loss on the financial liability is included in the Other income or Finance cost line item. Derecognition: A financial liability is derecognized only when the Company''s obligations are discharged, cancelled or have expired.
Derivative financial instruments
Derivative financial instruments such as foreign exchange forward contracts, if any, are held to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities. Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the statement of Profit & Loss.
Cash flows are reported using the indirect method,
whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Operating segments are components of the Company whose operating results are regularly reviewed by the Chief Operating Decision Maker [CODM] to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Manufacturing and selling of foundry machinery and machinery parts is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance (refer note 45).
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit/(loss) per share.
3.19 Standards Issued but Not Effective
On March 23, 2022, the Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standards) Amendment Rules, 2022. This notification has resulted into amendments in the following existing accounting standards from April 1, 2022.
i. Ind AS 101 - First time adoption of Ind AS
ii. Ind AS 103 - Business Combination
iii. Ind AS 109 - Financial Instrument
iv. Ind AS 16 - Property, Plant and Equipment
v. Ind AS 37 -Provisions, Contingent Liabilities and Contingent Assets
vi. Ind AS 41 - Agriculture
Application of above standards are not expected to have any significant impact on the Company''s financial statements.
Mar 31, 2018
1.1. Revenue Recognition
Revenue is measured at the fair value of consideration received or receivable and is net of goods & service tax, returns, discounts, sales incentives and other similar allowances. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured, and it is probable that future economic benefits will flow to the entity and specific criteria in relation to significant risk and reward and degree of managerial involvement associated with ownership or effective control have been met for each of the Companyâs activities as described below.
1.1.1. Sale of goods:
Domestic and export sales are accounted on transfer of significant risks and rewards to the customer which generally coincides with the dispatch of goods from the factory or the port, as appropriate, and no continuing involvement of management to the degree associated with ownership nor effective control over the goods sold. In case of machinery / equipment which together form part of a contract for a larger group of machinery, revenue is recognized only when all significant machinery/ equipment is transferred.
1.1.2. Services
Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract.
1.1.3. Export Entitlements
Export entitlements from government authorities are recognized in the statement of profit & loss when the right to receive credit as per the terms of the scheme is established in respect of exports made by the Company and where there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
1.1.4. Interest Income
Interest Income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable. Dividend Income is recognized in the statement of profit and loss when the right to receive dividends is established.
1.1.5. Commission Income
Commission Income is recognized on accrual basis as per the terms of the agreement.
1.2. Leasing
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other Leases are classified as operating leases.
1.2.1. As Lessor : Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.
Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Companyâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.
1.2.2.As Lessee: Rental expenses from operating leases are recognized on a straight-line basis over the term of the relevant lease. Where the rentals are structured solely to increase in line with expected general inflation to compensate for the Lessorâs expected inflationary cost increases, such increases are recognized in the year in which such benefits accrue.
1.3. Foreign currency transactions & translations
In preparing the financial statements of the Company, transactions in currencies other than the entityâs functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions.
Monetary items denominated in foreign currencies are restated at the rates prevailing on the balance sheet date. Exchange differences on monetary items are recognized in the statement of profit or loss in the period in which those arise.
Non-monetary items denominated in foreign currencies that are measured at fair value are restated to the functional currency at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not restated.
1.4. Employee benefits Defined Contribution Plans:
1.4.1. Provident Fund, Superannuation Fund & ESIC
The Companyâs Provident Fund Scheme, Superannuation Fund and Employeesâ State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
1.4.2.Defined Benefit Plans Gratuity
The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with an insurance company. These constitute the Defined Benefit Plans of the Company.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.
Defined benefit costs are categorized as follows:
- service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
- net interest expense or income; and
- remeasurement
The Company presents the first two components of defined benefit costs in profit or loss in the line item âEmployee benefits expenseâ. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognized in the balance sheet represents the actual deficit or surplus in the Companyâs defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognized at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognizes any related restructuring costs.
1.4.3.Short term & Other Long-Term Employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of the estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
1.5. Taxation
Income tax expense for the year comprises of current and deferred tax using rates at the balance sheet date.
1.5.1. Current Tax
The current tax payable is based on taxable profit for the year and any adjustment to tax payable in respect of previous years, computed as per Income Tax Act 1961. The current tax is calculated using effective tax rates that have been enacted by the end of the reporting period.
1.5.2.Deferred Tax
Deferred tax is recognized on temporary timing differences between the carrying amounts of assets and liabilities in the financial statements using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period.
1.6. Property, plant and equipment
Property, plant & equipment held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost (i.e., Purchase cost, Net of duties), less accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management. Freehold land is not depreciated.
Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
Depreciation on Property, plant and equipment has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 effective from April 1, 2014.
An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in statement of profit and loss.
1.7. Investment Properties
Investment properties are properties held to earn rentals and / or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 40 requirements for cost model.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.
1.8. Other Intangible Assets
1.8.1. Recognition
Intangible assets that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.
Intangible assets, with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives of four years.
Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets.
1.8.2.Derecognition of intangible assets
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss when the asset is derecognized.
1.9. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash generating unit to which the asset belongs. Corporate assets are also allocated to individual cash generating units when a reasonable and consistent basis of allocation can be identified, or otherwise corporate assets are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in statement of profit and loss.
1.10. Inventories
Raw materials, Components, Work-in-Progress, finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis. Cost includes direct materials and where applicable direct labor costs and overhead costs that have been incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable.
1.11. Provisions
Provisions are recognized when the Company has a present obligation as a result of a past event that it is probable will result in an outflow of economic benefits that can be reasonably estimated.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
1.11.1. Warranties
Provisions for the expected cost of warranty obligations are recognized at the date of sale of the relevant products, based on the best estimate established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.
1.12. Investment in subsidiaries
Investment in subsidiaries are carried at cost less impairment if any.
1.13. Financial instruments
Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments and are recognized initially at fair value, and subsequently measured at either amortized cost or fair value through profit and loss or other comprehensive income. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (Other than financial assets recorded at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
1.14. Financial Assets
Recognition: Financial assets include investments, trade receivables, advances, security deposits, cash & cash equivalents.
Measurement: At initial recognition, the Company measures a financial asset at its fair value. In the case of financial assets which are recognized at fair value through profit or loss(FVTPL), its transaction costs are recognized in the statement of profit & loss. In other cases, the transaction costs are attributed to the acquisition value of the financial assets.
All recognized financial assets are subsequently measured in their entirety at either amortized cost or at fair value depending on the classification of the financial assets.
Effective interest method: The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
Classification: The Company determines the classification of assets at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification. Financial assets are classified as those measured at:
a. Amortized cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and or interest.
b. Fair value through other comprehensive income(FVTOCI)where the financial assets are held not only for collection of cash flow arising from payment of principal and interest but also from sale of such assets. Such assets are subsequently measured at fair value with unrealized gains or losses arising from changes in the fair value being recognized in other comprehensive income.
c. Fair value through profit and loss(FVTPL)where the assets are managed in accordance with an approved investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are subsequently measured at fair value with unrealized gains and losses arising from changes in the fair value being recognized in the statement of profit and loss in the period in which they arise.
Trade receivables, advances, security deposits, cash & cash equivalents etc are classified for measurement at amortized cost while investment may fall under any one of the aforesaid classes.
Impairment: The Company assesses at each reporting date whether a financial asset such as investment, trade receivables, advances and security deposits held at amortized cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or efforts. Expected credit losses are assessed and loss allowances recognized if the credit quality of the financial asset has deteriorated significantly since initial recognition.
Derecognition: A financial asset is derecognized only when the contractual rights to the cash flows from the asset expire or when the Company transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
1.15. Financial liabilities
Borrowings, trade payables and other financial liabilities are initially recognized at the value of the respective contractual obligations.
Classification: Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definition of a financial liability and an equity instrument. All financial liabilities are subsequently measured at amortized cost using the effective interest method or FVTPL.
Financial liabilities at FVTPL: Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising in measurement recognized in profit or loss. Net gain or loss recognized in the profit or loss on the financial liability is included in the Other income or Finance cost line item.
Derecognition: A financial liability is derecognized only when the Companyâs obligations are discharged, cancelled or have expired.
Derivative financial instruments
Derivative financial instruments such as foreign exchange forward contracts, if any, are held to mitigate the risk of changes in foreign exchange rates on foreign currency assets or liabilities. Derivatives are recognized and measured at fair value. Attributable transaction costs are recognized in the statement of Profit & Loss.
1.16. Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.17. Segment reporting
Operating segments are components of the Company whose operating results are regularly reviewed by the Chief Operating Decision Maker [CODM] to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Manufacturing and selling of foundry machinery and machinery parts is identified as single operating segment for the purpose of making decision on allocation of resources and assessing its performance (refer note 41).
1.18. Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share.
1.19. Recent accounting pronouncements
Ind AS 21- Foreign currency transactions and advance consideration: On March 28,2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
This rule will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and it is not material.
Ind AS 115 - Revenue from Contract with Customers: The Ministry of Corporate Affairs (MCA) has notified Ind AS 115 Revenue from Contracts with Customers vide its notification dated March 28, 2018.The standard replaces Ind AS 11 Construction Contracts and Ind AS 18 Revenue. The said notification is applicable to contracts with customers and is effective for annual periods beginning on or after 1 April 2018.
The core principle of the standard is to identify performance obligations and assess the satisfaction of the performance obligations for the purpose of recognising revenue. An entity shall recognise revenue when (or as) the entity satisfies a performance obligation by transferring a promised goods or service (i.e. an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. The new standard offers certain transition options. An entity can choose to apply the new standard to its historical transactions and retrospectively adjust each comparative period. Alternatively, an entity can recognize the cumulative effect of applying the new standard at the date of initial application - and make no adjustments to its comparative information.
The Company is currently evaluating the requirements of Ind AS 115, and is in the process of determining the impact on the financial statements.
1.20. First-time adoption - mandatory exceptions, optional exemptions
Overall principle
These financial statements are the first financial statements of the Company under Ind AS. The date of transition to Ind AS is April 1, 2016. The transition is carried out from Indian GAAP (previous GAAP) to Ind AS, notified under Section 133 of the Companies Act, 2013 [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act. The Company has applied exceptions and exemptions in accordance with Ind AS 101 âFirsttime Adoption of Indian Accounting Standardsâ.
Exceptions:
1. Estimates: Ind AS estimates on the date of transition are consistent with the estimates as at the same date made in conformity with previous GAAP.
2. Derecognition of financial assets & liabilities: The Company has applied the de-recognition requirements of Ind AS 109 prospectively from the date of transition to Ind AS.
3. Classification and measurement of financial assets: The Company has assessed classification and measurement of financial assets based on facts and circumstances prevalent on the date of transition to Ind AS.
4. Impairment of financial assets: The Company has applied impairment requirements of Ind AS 109 retrospectively to financial instruments and concluded that there is no need to recognize any additional loss allowance on financial assets.
Exemptions:
1. Investment in subsidiary company in separate financial statement: The Company has measured investment in subsidiary company at previous GAAP carrying amount as deemed cost on transition to Ind AS in the separate financial statements.
2. Deemed cost for property, plant and equipment, intangible assets and investment in property: The Company has elected to continue with the carrying value of all of its plant and equipmentâs recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
Mar 31, 2017
NOTE 1
Significant Accounting Policies
1.1 Basis of accounting and presentation of financial statements:
The financial statements of Disa India Limited (''the Companyâ) have been prepared in accordance with the Generally accepted accounting principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 ( âAct" ) read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act, as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements are in conformity with the Indian GAAP requires the management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements, and the reported amounts of revenue and expenses during the reported year. Actual results could differ from those estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
1.2 a) Property, plant and equipment
Property plant and equipment are stated at cost (i.e., Purchase cost, Net of CENVAT), net of accumulated depreciation and accumulated impairment losses, if any. Cost includes purchase price, non - refundable taxes & duties, freight and other directly attributable costs to bring the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.
Items such as spare parts, stand-by equipment and servicing equipment are recognized as property, plant and equipment if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
b) Capital work-in- progress
Projects under which tangible fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.
c) Intangible
Computer software, except standard utility software packages which are not integral part of the hardware are classified as Intangible assets. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the tax authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.
1.4 Depreciation and amortization
Depreciation on Property, plant and equipmentâs has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 effective from April 1, 2014. Intangible assets in form of computer software are amortized over their estimated useful life on straight line method at the rate of 25 % p.a.
1.5 Inventories
Raw materials, Components, Work-in-Progress, Finished goods and Stock-in-trade are valued at lower of cost and net realizable value. Cost is ascertained on FIFO basis .Cost includes cost incurred in bringing the goods to the current location and condition. Work-in-progress and finished goods include appropriate proportion of overheads and where applicable, excise duty.
1.6 Revenue recognition
Revenue from sale of machinery and parts is recognized on transfer of significant risks and rewards to the purchaser, which generally coincides with the dispatch of goods to customers. In case of various machinery / equipment which together form part of a larger group of machinery revenue is recognized only when all significant machineries/ equipment are transferred. Sales includes excise duty and are stated net of discounts, other taxes and sales returns. Revenue from services are recognized when services are rendered. Commission income and export incentives are recognized on accrual basis.
1.7 Other income
Interest income is recognized on accrual basis.
1.8 Foreign currency transactions and translations Transactions in foreign currencies are recognized at exchange rate prevailing on the date of the transaction. All monetary assets and monetary liabilities denominated in foreign currency outstanding as at the Balance Sheet date are translated at the year-end exchange rates. Non-monetary items are carried at historical cost. Exchange differences arising on settlement / re statement of foreign currency monetary assets and liabilities are recognized as income or expense in the statement of profit and loss.
The Company uses forward exchange contract to hedge its exposure to movements in foreign exchange rates. The premium or discount arising at the inception of such a forward exchange contract are amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense in the period in which such cancellation or renewal is made
1.9 Impairment of assets
The carrying values of assets at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have been decreased, such reversal of impairment loss is recognized in the statement of profit and loss.
1.10 Investments
Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.
1.11 Employee benefits
(a) Short term employee benefits
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salaries, wages, bonus, leave encashment etc. are recognized in the period in which the employee renders the related service.
(b) Post - employment benefits
i. Defined Contribution Plans: The Companyâs Provident Fund Scheme, Superannuation Fund and Employeesâ State Insurance are defined contribution plans. The contribution paid/payable under the schemes is recognized during the period in which the employee renders the related service.
ii. Defined Benefit Plans: The Company has taken a Group Gratuity Policy and Group Leave Encashment Scheme with LIC of India. These constitute the Defined Benefit Plans of the Company.
The Present Value of the Obligation under such defined benefit plans is determined based on the actuarial valuation using the Projected Unit Credit Method. The Objective of this method is to spread the cost of each employeeâs benefits over the period that the employee works for the Company. The allocation of cost of benefits to each year of service is achieved indirectly by allocating projected benefits to years of service. The cost allocated to each year of service is then the value of the projected benefit allocated to that year.
The discount rates used for determining the present value of the obligation under defined benefit plans, is based on the market yields on Government securities as at the balance sheet date, having maturity periods approximating to the term of related obligations.
Actuarial gains and losses are recognized immediately in the statement of profit and loss.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on the net basis.
1.12 Taxes on income
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws.
Deferred tax is recognized on timing differences, being the difference between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets are recognized for timing differences only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.
1.13 Provisions and Contingencies
a) Provision for warranty
The estimated liability for product warranties is recorded when products are sold. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future incidence based on corrective actions on product failures. The timing of outflows will vary as and when warranty claim will arise.
b) Other
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimates required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
1.14 Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals under such leases are charged to statement of profit and loss.
1.15 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The Cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
Cash for the purpose of cash flow statement comprises cash on hand and demand deposits with banks. Cash equivalents are short term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.16 Segment reporting
The Company identifies primary segments based on the dominant source nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating / loss amounts are evaluated regularly by the Management in assessing performance.
The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expense, segment assets and segment liabilities have been identified to segment on the basis of the relationship to the operating activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under âunallocated revenue / expenses/assets/ liabilities.
1.17 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit /(loss ) after tax as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share.
1.18 Operating cycle
All assets and liabilities have been classified as current or noncurrent as per the Groupâs normal operating cycle and other criteria set out in the revised Schedule III to the Companies Act, 2013. Based on the nature of activities and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Group has determined its cycle as twelve months for the purpose of current / non-current classification of assets and liabilities.
iv) Details of rights, preferences and restrictions in respect of equity shares :
The Company has one class of Shares referred to as Equity Shares with par value of Rs 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the share holders.
The Equity shareholders are entitled to receive dividend proposed (if any) by the Board of Directors which is subject to the approval of the shareholders in the ensuing Annual General meeting, except in case of Interim Dividend.
v) During the year ended March 31, 2017, the Company has concluded the buyback of 56,000 fully paid equity shares as approved by the board of directors on August 12, 2016 at a price of Rs. 4,800/- per share amounting to Rs. 268.8 Million. In line with the Companies Act 2013, an amount of Rs. 109.1 Million, Rs. 142.6 Million and Rs 17.1 Million have been utilized from Security premium account, General reserve and Surplus in profit and loss account respectively. Further Capital Redemption reserve of Rs 0.6 Million has been created as an apportionment from retained earnings. Consequent to the buyback, share capital has reduced by Rs. 0.6 Million.
Mar 31, 2015
1.1 Basis of accounting and presentation of financial statements:
The financial statements of Disa India Limited ('the Company')have been
prepared in accordance with the Generally accepted accounting
principles in India (Indian GAAP) to comply with the Accounting
Standards specified under Section 133 of the Companies Act, 2013 read
with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant
provisions of the Companies Act, 2013 / Companies act, 1956, as
applicable. The financial statements have been prepared on accrual
basis under the historical cost convention. The accounting policies
adopted in the preparation of the financial statements are consistent
with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements are in conformity with the
Indian GAAP requires the management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure
of contingent liabilities as at the date of the financial statements,
and the reported amounts of revenue and expenses during the reported
year. Actual results could differ from those estimates. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
1.3 Fixed assets
a) Tangible
Tangible fixed asset are capitalized at acquisition cost which includes
incidental expenses incurred to bring the asset ready for its intended
use.
b) Intangible
Computer software, except standard utility software packages which are
not integral part of the hardware are classified as Intangible assets.
The cost of an intangible asset comprises its purchase price, including
any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), and any directly attributable
expenditure on making the asset ready for its intended use and net of
any trade discounts and rebates.
c) Capital work-in- progress
Capital work-in-progress is carried at cost.
1.4 Depreciation and amortization
Depreciation on tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013 effective from April 1, 2014.
Intangible assets in form of computer software are amortized over their
estimated useful life on straight line method at the rate of 25 % p.a.
1.5 Inventories
Raw materials, Components, Work-in-Progress, Finished goods and
Stock-in-trade are valued at lower of cost and net realizable value.
Cost is ascertained on FIFO basis .Cost includes cost incurred in
bringing the goods to the current location and condition.Work-in-
progress and finished goods include appropriate proportion of overheads
and where applicable, excise duty.
1.6 Revenue recognition
Revenue from sale of machinery and parts is recognized on transfer of
significant risks and rewards to the purchaser, which generally
coincides with the dispatch of goods to customers. In case of various
machinery / equipment which together form part of a larger group of
machinery revenue is recognized only when all significant machineries/
equipment are transferred. Sales includes excise duty and are stated
net of discounts, other taxes and sales returns.Revenue from services
are recognized when services are rendered. Commission Income and export
incentives are recognized on accrual basis.
1.7 Other income
Interest income is recognized on accrual basis.
1.8 Foreign currency transactions and translations
Transactions in foreign currencies are recognized at exchange rate
prevailing on the date of the transaction. All monetary assets and
monetary liabilities denominated in foreign currency outstanding as at
the Balance Sheet date are translated at the year end exchange rates.
Non-monetary items are carried at historical cost. Exchange differences
arising on settlement / re statement of foreign currency monetary
assets and liabilities are recognized as income or expense in the
statement of profit and loss.
The Company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortized as
expense or income over the life of the contract. Exchange differences
on such contracts are recognized in the statement of profit and loss in
the reporting period in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of such contracts is recognized
as income or expense in the period in which such cancellation or
renewal is made.
1.9 Impairment of assets
The carrying values of assets at each Balance Sheet date are reviewed
for impairment. If any indication of impairment exists, the recoverable
amount of such assets is estimated and impairment is recognized, if the
carrying amount of these assets exceeds their recoverable amount. The
recoverable amount is the greater of the net selling price and their
value in use. Value in use is arrived at by discounting the future cash
flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognized for an
asset in earlier accounting periods no longer exists or may have been
decreased, such reversal of impairment loss is recognized in the
statement of profit and loss.
1.10 Employee benefits
(a) Short term employee benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages,bonus, leave encashment etc. are
recognized in the period in which the employee renders the related
service.
(b) Post - employment benefits
i. Defined Contribution Plans: The Company's Provident Fund Scheme,
Superannuation Fund and Employees' State Insurance are defined
contribution plans. The contribution paid/payable under the schemes is
recognized during the period in which the employee renders the related
service..
ii. Defined Benefit Plans: The Company has taken a Group Gratuity
Policy and Group Leave Encashment Scheme with LIC of India. These
constitute the Defined Benefit Plans of the Company.
The Present Value of the Obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit
Credit Method. The Objective of this method is to spread the cost of
each employee's benefits over the period that the employee works for
the Company. The allocation of cost of benefits to each year of service
is achieved indirectly by allocating projected benefits to years of
service. The cost allocated to each year of service is then the value
of the projected benefit allocated to that year.
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date, having maturity
periods approximating to the term of related obligations.
Actuarial gains and losses are recognized immediately in the statement
of profit and loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognize
the obligation on the net basis.
1.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the applicable tax rates and the
provisions of the Income-tax Act, 1961 and other applicable tax laws.
Deferred tax is recognised on timing differences, being the difference
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences only to the extent that
reasonable certainty exists that sufficient future taxable income will
be available against which these can be realised. Deferred tax assets
and liabilities are offset if such items relate to taxes on income
levied by the same governing tax laws and the Company has a legally
enforceable right for such set off. Deferred tax assets are reviewed
at each Balance Sheet date for their realisability.
1.12 Provisions and Contingencies
a) Provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates regarding possible future incidence
based on corrective actions on product failures. The timing of out
flows will vary as and when warranty claim will arise.
b) Other
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimates required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the notes. Contingent assets are neither recognized
nor disclosed in the financial statements.
1.13 Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Lease rentals under such leases are charged to statement of
profit and loss.
1.14 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The Cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
Cash for the purpose of cash flow statement comprises cash on hand and
demand deposits with banks. Cash equivalents are short term (with an
original maturity of three months or less from the date of
acquisition), highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk
of changes in value.
1.15 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit / loss amounts are evaluated regularly by the Management in
assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of the relationship to the operating
activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses/assets /
liabilities".
1.16 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax by the weighted average number of equity shares outstanding
during the year. Diluted earnings per share is computed by dividing the
profit /(loss ) after tax as adjusted for dividend, interest and other
charges to expense or income relating to the dilutive potential equity
shares, by the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share.
1.17 Operating cycle
All assets and liabilities have been classified as current or non-
current as per the Company's normal operating cycle and other criteria
set out in Schedule III to the Companies Act, 2013. Based on the nature
of activities and the time between the acquisition of assets for
processing and their realization in cash and cash equivalents, the
Company has determined its operating cycle as twelve months for the
purpose of current / non-current classification of assets and
liabilities.
Dec 31, 2013
1.1 Basis of accounting and presentation of financial statements:
The financial statements of Disa India Limited (''the Company'') have
been prepared in accordance with the Generally accepted accounting
principles in India (Indian GAAP] to comply with the provisions of
Companies Act , 1956 and Accounting Standards notified under the
Companies (Accounting Standards) Rules , 2006 (as amended) (which
continues to be applicable in respect of Section 133 of the Companies
Act, 2013 in terms of General Circular 15/2013 dated September 13, 2013
of the Ministry of Corporate Affairs).The financial statements have
been prepared on accrual basis under the historical cost convention.
1.2 Use of estimates
The preparation of the financial statements are in conformity with the
Indian GAAP requires the management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure
of contingent liabilities as at the date of the financial statements,
and the reported amounts of revenue and expenses during the reported
year. Actual results could differ from those estimates. Difference
between the actual results and estimates are recognized in the period
in which the results are known /materialized.
1.3 Fixed assets
a) Tangible
Tangible fixed asset are capitalized at acquisition cost which includes
incidental expenses incurred to bring the asset ready for its intended
use.
b) Intangible
Computer software, except standard utility software packages which are
not integral part of the hardware are classified as Intangible assets.
The cost of an intangible asset comprises its purchase price, including
any import duties and other taxes (other than those subsequently
recoverable from the tax authorities), and any directly attributable
expenditure on making the asset ready for its intended use and net of
any trade discounts and rebates.
c) Capital work-in- progress
Capital work-in-progress is carried at cost.
1.4 Depreciation and amortization
Depreciation has been provided on the straight-line method and the
depreciation rates adopted for other assets are not less than the rates
specified in Schedule XIV to the Companies Act, 1956.
Depreciation rates adopted is 3.34% p.a in respect of Buildings, 13 %
p.a in respect of Plant and Equipment, Patterns , tools jigs and
Fixtures, Office Equipment, Furniture and fixtures, 20 % p.a in respect
of vehicles and 25 % p.a in respect of Computers. Intangible assets in
form of computer software are amortized at the rate of 25 % p.a.
Individual assets costing less than Rs. 10,000/- are charged off by the
Company at the time of acquisition.
1.5 Inventories
Raw materials, Components, Work-in-Progress, Finished goods and
Stock-in-trade are valued at tower of cost and net realizable value.
Cost is ascertained on FIFO basis .Cost includes cost incurred in
bringing the goods to the current location and condition. Work-
in-progress and finished goods include appropriate proportion of
overheads and where applicable, excise duty.
1.6 Revenue recognition
Revenue from sale of machinery and parts is recognized on transfer of
significant risks and rewards to the purchaser, which generally
coincides with the dispatch of goods to customers. Sales includes
excise duty and are stated net of discounts, other taxes and sales
returns. Revenue from services are recognized when services are
rendered. Commission Income and export incentives are recognized on
accrual basis.
1.7 Other income
Interest income is recognized on accrual basis.
1.8 Foreign currency transactions and translations
Transactions in foreign currencies are recognized at exchange rate
prevailing on the date of the transaction. All monetary assets and
monetary liabilities denominated in foreign currency outstanding as at
the Balance Sheet date are translated at the year end exchange rates.
Non-monetary items are carried at historical cost. Exchange differences
arising on settlement / re statement of foreign currency monetary
assets and liabilities are recognized as income or expense in the
statement of profit and loss.
The Company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortized as
expense or income over the life of the contract. Exchange differences
on such contracts are recognized in the statement of profit and loss in
the reporting period in which the exchange rates change. Any profit 01
loss arising on cancellation or renewal of such contracts is recognized
as income or expense of the period.
1.9 Impairment of assets
The carrying values of assets at each Balance Sheet date are reviewed
for impairment. If any indication of impairment exists, the recoverable
amount of such assets is estimated and impairment is recognized, if the
carrying amount of these assets exceeds their recoverable amount. The
recoverable amount is the greater of the net selling price and their
value in use. Value in use is arrived at by discounting the future cash
flows to their present value based on an appropriate discount factor.
When there is indication that an impairment loss recognized for an
asset in earlier accounting periods no longer exists or may have been
decreased, such reversal of impairment loss is recognized in the
statement of profit and loss.
1.10 Employee benefits
(a) Short term employee benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, bonus, leave encashment etc. are
recognized in the period in which the employee renders the related
service.
(b) Post - employment benefits
i. Defined Contribution Plans: The Company''s Provident Fund Scheme,
Superannuation Fund and Employees'' State Insurance are defined
contribution plans. The contribution paid/payable under the schemes is
recognised during the period in which the employee renders the related
service.
ii. Defined Benefit Plans.- The Company has taken a Group Gratuity
Policy and Group Leave Encashment Scheme with LIC of India. These
constitute the Defined Benefit Plans of the Company.
The Present Value of the Obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit
Credit Method. The Objective of this method is to spread the cost of
each employee''s benefits over the period that the employee works for
the Company. The allocation of cost of benefits to each year of service
is achieved indirectly by allocating projected benefits to years of
service. The cost allocated to each year of service is then the value
of the projected benefit allocated to that year.
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date, having maturity
periods approximating to the term of related obligations.
Actuarial gains and losses are recognised immediately in the statement
of profit and loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognise
the obligation on the net basis.
1.11 Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax is recognised on timing differences, being the difference
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets are recognised for timing differences only to the extent that
reasonable certainty exists that sufficient future taxable income will
be available against which these can be realised. Deferred tax assets
and liabilities are offset if such items relate to taxes on income
levied by the same governing tax laws and the Company has a legally
enforceable right for such set off. Deferred tax assets are reviewed
at each Balance Sheet date for their readability.
1.12 Provisions and Contingencies
a) Provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates regarding possible future incidence
based on corrective actions on product failures. The timing of outflows
will vary as and when warranty claim will arise.
b) Other
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits] are not discounted to their present value and are determined
based on the best estimates required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the notes. Contingent assets are neither recognized
nor disclosed in the financial statements.
1.13 Leases
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Lease rentals under such leases are charged to statement of
profit and loss.
1.14. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The Cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
Cash for the purpose of cash flow statement comprises cash on hand and
demand deposits with banks. Cash equivalents are short term (with an
original maturity of three months or less from the date of
acquisition), highly liquid investments that are readily convertible
into known amounts of cash and which are subject to insignificant risk
of changes in value.
1.15 Segment reporting
The Company identifies primary segments based on the dominant source,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit / loss amounts are evaluated regularly by the Management in
assessing performance.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the Company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified
to segments on the basis of the relationship to the operating
activities of the segment.
Revenue, expenses, assets and liabilities which relate to the Company
as a whole and are not allocable to segments on reasonable basis have
been included under "unallocated revenue / expenses/assets/
liabilities".
1.16 Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax by the weighted average number of equity shares outstanding
during the year. Diluted earnings per share is computed by dividing the
profit /(loss ) after tax as adjusted for dividend, interest and other
charges to expense or income relating to the dilutive potential equity
shares, by the weighted average number of equity shares which could
have been issued on the conversion of all dilutive potential equity
shares. Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share.
1.17 Operating cycle
All assets and liabilities have been classified as current or non-
current as per the Company''s normal operating cycle and other criteria
set out in the revised Schedule VI to the Companies Act, 1956. Based on
the nature of activities and the time between the acquisition of assets
for processing and their realization in cash and cash equivalents, the
Company has determined its operating cycle as twelve months for the
purpose of current / non-current classification of assets and
liabilities.
Dec 31, 2012
1. Basis of Presentation:
The financial statements have been prepared and presented under the
historical cost convention and in accordance with the provision of
Companies Act , 1956 and accounting standards contained in the
Companies ( Accounting Standards ) Rules , 2006.
All assets and liabilities have been classified as current or non-
current as per the Company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of activities and the time between the acquisition
of assets for processing and their realisation in cash and cash
equivalents, the Company has determined its operating cycle as twelve
months for the purpose of current - non current classification of
assets and liabilities.
2. Use of Estimates
The preparation of the financial statements are in conformity with the
GAAP which requires that the management makes estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure
of contingent liabilities as at the date of the financial statements,
and the reported amounts of revenue and expenses during the reported
year. Actual results could differ from those estimates. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
3. Fixed Assets:
Fixed Assets comprising those acquired at the time of setting up of
initial operations are at cost to the Company inclusive of direct and
appropriate allocated expenses upto the date of commercial production.
All subsequent acquisitions are capitalized at actual acquisition cost.
4. Depreciation :
Effective from 1995-96 the company adopted DISA group Depreciation
policies and rates as per straight-line method. Consequently the
assets acquired during the period 1995-96 to 2001-02 not exceeding CHF
5000, (currently equivalent to about Rs.2,35,000/-) were depreciated
fully at the time of acquisition.
Effective from 01.04.2002 the Company has changed its Accounting policy
to charge off individual assets costing less than Rs. 10,000 to revenue
at the time of acquisition. The depreciation rates adopted for other
assets are not less than the rates specified in Schedule XIV of the
Companies Act, 1956.
Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15 %
p.a in respect of Plant & Machinery, Patterns, tools, jigs and
Fixtures, Office Equipment, Furniture & Fittings, 20 % p.a in respect
of vehicles and 25 % p.a in respect of Computers and 25 % p.a in
respect of Computer software. (Also refer Sl. No. 13 below)
5. Inventories:
Raw materials, Components and Work-in-Progress are valued at lower of
cost and net realizable value. Cost which was generally ascertained on
Weighted average basis is now ascertained on FIFO basis.Scrap generated
is not valued as it is not of significant value. Scrap is brought into
books only when identified and sold.
6. Revenue Recognition:
Revenue is recognized on accrual basis except for interest collected on
overdues from customers which is accounted on receipt basis.
7. Foreign Currency Transactions:
Transactions in foreign Currencies are recognized at exchange rate
prevailing on the date of the transaction. All monetary Assets and
liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the year end exchange rates.
The company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortised as
expense or income over the life of the contract. Exchange differences
on such contracts are recognized in the profit and loss statement in
the reporting period in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of such contracts is recognized
as income or expense of the period.
8. Impairment of assets
At each Balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount. If the carrying
amount of the asset exceeds its recoverable amount an impairment loss
is recognized in the Profit and Loss Account to the extent carrying
amount exceeds the recoverable amount.
9. Accounting for Government grants
Government grants received are credited directly to Capital reserves
under the Capital approach.
10. Employee Benefits
(a) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, bonus etc. are recognised in the
period in which the employee renders the related service.
(b) Post - Employment Benefits
i. Defined Contribution Plans: The Company''s Provident Fund Scheme,
Super Annuation Fund and Employees'' State Insurance are defined
contribution plans. The contribution paid/payable under the schemes is
recognised during the period in which the employee renders the related
service.
ii. Defined Benefit Plans: The Company has taken a Group Gratuity
Policy and Group Leave Encashment Scheme with LIC of India. These
constitute the Defined Benefit Plans of the company.
The Present Value of the Obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit
Credit Method. The Objective of this method is to spread the cost of
each employee''s benefits over the period that the employee works for
the company. The allocation of cost of benefits to each year of service
is achieved indirectly by allocating projected benefits to years of
service. The cost allocated to each year of service is then the value
of the projected benefit allocated to that year.
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date, having maturity
periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the Statement
of Profit & Loss.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognise
the obligation on the net basis.
11. Provision for Current Tax and Deferred Income Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act,1961.
Deferred Tax resulting from timing difference between book and taxable
profit is accounted for using the tax rates and laws that are enacted
or substantially enacted as on the balance sheet date. The deferred tax
asset is recognized and carried forward only to the extent there is a
reasonable certainty that the asset will be realized in future.
12. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
13. Intangible assets
Software which are not integral part of the hardware are classified as
Intangibles and are amortized over its estimated useful life. However
standard utility software packages are expensed at the time of
purchase.
14. Borrowing costs
Borrowing costs that are attributable to the acquisition and or
construction of qualifying assets are capitalized as part of the cost
of such assets , in accordance with Accounting Standard - AS 16. A
qualifying asset is one that necessarily takes a substantial period of
time to be ready for its intended use.
15. Operating Lease:
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments under such leases are charged to Statement of Profit
and Loss.
Dec 31, 2011
1. Basis of Presentation:
The financial statements have been prepared and presented under the
historical cost convention and in accordance with the provision of
Companies Act, 1956 and accounting standards contained in the Companies
(Accounting Standards) Rules , 2006.
2. Use of Estimates
The preparation of the financial statements are in conformity with the
GAAP which requires that the management makes estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure
of contingent Labilities as at the date of the financial statements,
and the reported amounts of revenue and expenses during the reported
year. Actual results could differ from those estimates. Difference
between the actual results and estimates are recognized in the period
in which the results are known / materialized.
3. Fixed Assets:
Fixed Assets comprising those acquired at the time of setting up of
initial operations are at cost to the Company inclusive of direct and
appropriate allocated expenses upto the date of commercial production.
All subsequent acquisitions are capitalized at actual acquisition cost.
4. Depreciation :
Effective from 1995-96 the company adopted DISA group Depreciation
policies and rates as per straight-line method. Consequently the
assets acquired during the period 1995-96 to 2001-02 not exceeding CHF
5000, (currently equivalent to about Rs.2,35,000/-) were depreciated
fully at the time of acquisition.
Effective from 01.04.2002 the Company has changed its Accounting policy
to charge off individual assets costing less than Rs. 10,000 to revenue
at the time of acquisition. The depreciation rates adopted for other
assets are not less than the rates specified in Schedule XIV of the
Companies Act, 1956.
Depreciation rates adopted is 3.34 ACU- p.a in respect of Buildings, 15 ACU-
p.a in respect of Plant ACY- Machinery , Patterns , tools jigs and
Fixtures, Office Equipment, Furniture ACY- Fittings, 20 ACU- in respect of
vehicles and 25 ACU- in respect of Computers. (Also refer SI. No. 13
below)
5. Inventories:
Raw materials, Components and Work-in-Progress are valued at lower of
cost and net realizable value. Cost is generally ascertained on
Weighted average basis. Scrap generated is not valued as it is not of
significant value. Scrap is brought into books only when identified and
sold.
6. Revenue Recognition:
Revenue is recognized on accrual basis except for interest collected on
overdues from customers which is accounted on receipt basis.
7. Foreign Currency Transactions:
Transactions in foreign Currencies are recognized at exchange rate
prevailing on the date of the transaction. All monetary Assets and
liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the year end exchange rates.
The company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortised as
expense or income over the life of the contract. Exchange differences
on such contracts are recognized in the profit and loss statement in
the reporting period in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of such contracts is recognized
as income or expense of the period.
8. Impairment of assets
At each Balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount. If the carrying
amount of the asset exceeds its recoverable amount an impairment loss
is recognized in the Profit and Loss Account to the extent carrying
amount exceeds the recoverable amount.
9. Accounting for Government grants
Government grants received are credited directly to Capital reserves
under the Capital approach.
10. Employee Benefits
(a) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages, bonus etc. are recognised in the
period in which the employee renders the related service.
(b) Post - Employment Benefits
i. Defined Contribution Plans: The Company's Provident Fund Scheme,
Super Annuation Fund and Employees' State Insurance are defined
contribution plans. The contribution paid/payable under the schemes is
recognised during the period in which the employee renders the related
service.
ii. Defined Benefit Plans: The Company has taken a Group Gratuity
Policy and Group Leave Encashment Scheme with LIC of India . These
constitute the Defined Benefit Plans of the company.
The Present Value of the Obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit
Credit Method. The Objective of this method is to spread the cost of
each employee's benefits over the period that the employee works for
the company. The allocation of cost of benefits to each year of service
is achieved indirectly by allocating projected benefits to years of
service. The cost allocated to each year of service is then the value
of the projected benefit allocated to that year.
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date, having maturity
periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the Profit ACY-
Loss Account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognise
the obligation on the net basis.
11. Provision for Current Tax and Deferred Income Tax Provision for
current tax is made after taking into consideration benefits admissible
under the provisions of the Income Tax Act,1961.
Deferred Tax resulting from timing difference between book and taxable
profit is accounted for using the tax rates and laws that are enacted
or substantially enacted as on the balance sheet date. The deferred tax
asset is recognized and carried forward only to the extent there is a
reasonable certainty that the asset will be realized in future.
12. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
13. Intangible assets
Software which are not integral part of the hardware are classified as
Intangibles and are amortized over its estimated useful life. However
standard utility software packages are expensed at the time of
purchase.
14. Borrowing costs
Borrowing costs that are attributable to the acquisition and or
construction of qualifying assets are capitalized as part of the cost
of such assets , in accordance with Accounting Standard - AS 16. A
qualifying asset is one that necessarily takes a substantial period of
time to be ready for its intended use.
Dec 31, 2010
I. Basis of Presentation:
The financial statements have been prepared and presented under the
historical cost convention and in accordance with the provision of
Companies Act, 1956 and accounting standards contained in the Companies
( Accounting Standards ) Rules , 2006.
2. FIXED ASSETS:
Fixed Assets comprising those acquired at the time of setting up of
initial operations are at cost to the Company inclusive of direct and
appropriate allocated expenses upto the date of commercial production.
All subsequent acquisitions are capitalized at actual acquisition cost.
3. DEPRECIATION:
Effective from 1995-96 the company adopted DISA group Depreciation
policies and rates as per straight-line method. Consequently the
assets acquired during the period 1995-96 to 2001-02 not exceeding CHF
5000, (currently equivalent to about Rs.235,000/-) were depreciated
fully at the time of acquisition.
Effective 01.04.2002 the Company has changed its Accounting policy to
charge off individual assets costing less than Rs. 10,000 to revenue at
the time of acquisition. The depreciation rates adopted for other
assets are not less than the rates specified in Schedule XIV of the
Companies Act, 1956.
Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15 %
p.a in respect of Plant &. Machinery , Patterns , tools jigs and
Fixtures, Office Equipment, Furniture &. Fittings, 20 % in respect of
vehicles and 25 % in respect of Computers. Software is expensed out at
the time of purchase.
4. INVENTORIES:
Raw materials, Components and Work-in-Progress are valued at lower of
cost and net realizable value. Cost is generally ascertained on
Weighted average basis. Scrap generated is not valued as it is not of
significant value. Scrap is brought into books only when identified and
sold.
5. REVENUE RECOGNITION:
Revenue is recognized on accrual basis except for interest collected on
overdues from customers which is accounted on receipt basis.
6. FOREIGN CURRENCY TRANSACTIONS :
Transactions in foreign Currencies are recognized at exchange rate
prevailing on the date of the transaction. Ail monetary Assets and
liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the year end exchange rates.
The company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortised as
expense or income over the life of the contract. Exchange differences
on such contracts are recognized in the profit and loss statement in
the reporting period in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of such contracts is recognized
as income or expense of the period.
7. Impairment of assets
At each Balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount. If the carrying
amount of the asset exceeds its recoverable amount an impairment loss
is recognized in the Profit and Loss Account to the extent carrying
amount exceeds the recoverable amount.
8. Accounting for Government grants
Government grants received are credited directly to Capital reserves
under the Capital approach.
Dec 31, 2009
1. The financial statments have been prepared and pre- sented under
the historical cost convention and in ac- cordance with the provision
of Companies Act, 1956 and accounting Standards contained in the
Companies (Accounting Standards) Rules, 2006.
2. FIXED ASSETS:
Fixed Assets comprising those acquired at the time of setting up of
initial operations are at cost to the Company inclusive of direct and
appropriate allocated expenses upto the date of commercial production.
All subsequent acquisitions are capitalized at actual acquisition cost.
3. DEPRECIATION:
Effective from 1995-96 the company adopted DISA group Depreciation
policies and rates as per straight- line method. Consequently the
assets acquired during the period 1995-96 to 2001-02 not exceeding CHF
5000, (currently equivalent to about Rs.2,25,000/-) were depreciated
fully at the time of acquisition.
Effective from 01.04.2002 the Company has changed its Accounting policy
to charge off individual assets costing less than Rs. 10,000 to revenue
at the time of acquisition. The depreciation rates adopted for other
assets are not less than the rates specified in Schedule XIV of the
Companies Act, 1956.
Depreciation rates adopted is 3.34% p.a in respect of Buildings, 15%
p.a in respect of Plant & Machinery, Patterns, tools jigs and Fixtures,
Office Equipment, Furniture & Fittings, 20 % in respect of vehicles and
25% in respect of Computers. Software is expensed out at the time of
purchase.
4. INVENTORIES:
Raw materials, Components and Work-in-Progress are valued at lower of
cost and net realizable value. Cost is generally ascertained on
Weighted average basis. Scrap generated is not valued as it is not of
significant value. Scrap is brought into books only when identified and
sold.
5. REVENUE RECOGNITION:
Revenue is recognized on accrual basis except for interest collected on
overdues from customers which is accounted on receipt basis.
6. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign Currencies are recognized at exchange rate
prevailing on the date of the transaction. All monetary Assets and
liabilities denominated in foreign currency as at the Balance Sheet
date are translated at the year end exchange rates.
The company uses forward exchange contract to hedge its exposure to
movements in foreign exchange rates. The premium or discount arising at
the inception of such a forward exchange contract are amortised as
expense or income over the life of the contract. Exchange differences
on such a contract are recognized in the profit and loss statement in
the reporting period in which the exchange rates change. Any profit or
loss arising on cancellation or renewal of such a forward exchange
contract is recognized as income or expense of the period.
7. Impairment of assets
At each Balance sheet date, the Company assesses whether there is any
indication that an asset may be impaired. If any such indication
exists, the company estimates the recoverable amount. If the carrying
amount of the asset exceeds its recoverable amount an impairment loss
is recognized in the Profit and Loss Account to the extent carrying
amount exceeds the recoverable amount.
8. Accounting for Government grants
Government grants received are credited directly to Capital reserves
under the Capital approach.
9. Employee Benefits
(a) Short Term Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salaries, wages,bonus etc. are recognised in the
period in which the employee renders the related service.
(b) Post - Employment Benefits
i. Defined Contribution Plans: The Companys Provident Fund Scheme,
Super Annuation Fund and Employees State Insurance are defined
contribution plans. The contribution paid/payable under the schemes is
recognised during the period in which the employee renders the related
service.
ii. Defined Benefit Plans: The Company has taken a Group Gratuity
Policy with of India and also compensates the unutilized leave of its
employees by way of leave encashment. These constitute the Defined
Benefit Plans of the company.
The Present Value of the Obligation under such defined benefit plans is
determined based on the actuarial valuation using the Projected Unit
Credit Method. The Objective of this method is to spread the cost of
each employees benefits over the period that the employee works for
the company. The allocation of cost of benefits to each year of service
is achieved indirectly by allocating projected benefits to years of
service. The cost allocated to each year of service is then the value
of the projected benefit allocated to that year.
The discount rates used for determining the present value of the
obligation under defined benefit plans, is based on the market yields
on Government securities as at the balance sheet date, having maturity
periods approximating to the terms of related obligations.
Actuarial gains and losses are recognised immediately in the Profit &
Loss Account.
In case of funded plans, the fair value of the plan assets is reduced
from the gross obligation under the defined benefit plans to recognise
the obligation on the net basis.
10. Provision for Current Tax and Deferred Income Tax
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act,1961.
Deferred Tax resulting from timing difference between book and taxable
profit is accounted for using the tax rates and laws that are enacted
or substantially enacted as on the balance sheet date. The deferred tax
asset is recognized and carried forward only to the extent there is a
reasonable certainty that the asset will be realized in future.
11. Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
12. Intangible assets
Software which are not integral part of the hardware are classified as
Intangibles and are expensed out at the time of purchase.
13. Borrowing costs
Borrowing costs that are attributable to the acquisition and or
construction of qualifying assets are capitalized as part of the cost
of such assets, in accordance with Accounting Standard - AS 16. A
qualifying asset is one that necessarily takes a substantial period of
time to be ready for its intended use.
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 Disa India Ltd.
-
Disa India Ltd. Tools
- Bulk Deals
- Block Deals
-
Disa India Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- BSE Price History
-
Disa India Ltd. Key Financial Ratios
- Ratios
-
Disa India Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
Disa India Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
Disa India Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
Disa India Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
