4.14 Provisions and Contingencies

Necessary provisions are made for the present obligations that
arise out of past events entailing future outflow of economic
resources. Such provisions reflect best estimates based on
available information.

Provisions for cost of warranty obligations are recognised at
the best estimate of the expenditure required to settle the
Company’s obligation.

However a disclosure for a contingent liability is made when
there is a possible obligation or a present obligation that may,
but probably will not, require an outflow of resources. When
there is a possible obligation or a present obligation in respect
of which the likelihood of outflow of resources is remote, no
provision or disclosure is made.

4.15 Revenue Recognition

a) Revenue from contracts with customers for sale of
goods or services is recognised when a performance
obligation is satisfied either over a time or at a point in
time by transferring a promised good or service under
the contract to a customer and the customer obtains
control of the same, creating a right to payment for the
performance completed, the associated costs can be
estimated reliably and the amount of revenue can be
measured reliably.

Revenue towards satisfaction of a performance
obligation is measured at the transaction price allocated
to that performance obligation net of discounts, rebates
and returns.

b) Contract is recognised when parties to the contract
approve the contract committing respective performance
obligations, identify each parties rights to goods and
services to be transferred under the contract, payment
terms, thus has a commercial substance and where the
Company shall be entitled to collect the consideration in
exchange of goods or services to the Customer.

c) I n contracts under which performance obligation is
satisfied at a point in time, revenue is recognised at point
in time when the control is transferred. Evaluation of point
of time when control is transferred is perform based on
consideration of transfer of risks & rewards of ownership,
legal title to the goods, acceptance or inspection by the
customer, companies right to the payment and physical
possession in case of domestic sales and in case of
export on the date of bill of lading.

d) I n contracts under which performance obligation is
satisfied over a period of time, covering multiple reporting
dates, an input method is used to recognise the revenue as
it corresponds to entity’s efforts to the satisfaction of the
performance obligation relative to total expected efforts.

e) Such measurement may result in the Company
recognising either contract asset or contract liability
(unbilled revenue). The contract assets represents
amount due from customer, primarily relate to the
Company’s rights to consideration for work executed
but not billed at the reporting date. The contract
assets are transferred to receivables when the rights
become unconditional, that is when invoice is raised
on achievement of contractual milestone. This usually
occurs when the Company issues an invoice to the
customer. The contract liabilities represents amount
due to customer, primarily relate invoice raised on
customer on achievement of milestone for which
revenue is recognised over the period of time and after
the reporting date.

f) Performance obligations are identified based on individual
terms of contract. If a contract contains more than one
distinct good or service, the transaction price is allocated
to each performance obligation based on relative stand¬
alone selling prices. The company reasonably estimates
the standalone selling prices if such prices are not
observable. For each performance obligations identified
as above the revenue is recognised either at a point in
time or over time. When the company’s efforts or inputs
are expended evenly throughout the performance period
revenue is recognised on straight-line basis over time.

g) Disaggregation of Revenue is depicted in
Operating Segment.

h) Government grant in the nature of export incentives under
various schemes notified by government are accounted
for in the year of exports as grant related to income and is

recognized as other operating income in the statement of
profit and loss if the entitlements can be estimated with
reasonable accuracy and conditions precedent to claim
are fulfilled.

i) Rental income arising from operating leases is accounted
for on a straight-line basis over the lease terms.

j) Income from dividend on investments is accrued in the
year in which it is authorized, whereby right to receive
is established

k) Profit/Loss on sale of investments is recognized on the
contract date.

4.16 Cash dividend

The Company recognises a liability to make cash distributions
to the equity holders of the Company when the distribution is
authorised and the distribution is no longer at the discretion
of the Company. As per the provisions of Companies Act,
2013, a distribution is authorised when it is approved by the
shareholders except in case of interim dividend which is
approved by the Board. A corresponding amount is recognised
directly in equity.

4.17 Earnings Per Share

Earnings per share is calculated by dividing the net profit or loss
for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
For calculating diluted earnings per share, the net profit or
loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during
the period is adjusted for the effects of all dilutive potential
equity shares.

4.18 Cash Flow Statement

Cash flows are reported using the indirect method, whereby
net profit before tax is adjusted for the effects of transactions
of a non cash nature and any deferral or accruals of past or
future cash receipts or payments and increase & decrease
in current assets and current liabilities. The cash flows from
regular operating, investing and financing activities of the
Company are segregated.