Investor Presentaiton
MRP
13)
cash and cash equivalents includes cash on hand, cheques
and drafts on hand, deposits held with Banks, other short-
term, highly liquid investments with original maturities of
three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant
risk of changes in value, and book overdrafts. However,
Book overdrafts are to be shown within borrowings in
current liabilities in the balance sheet for the purpose of
presentation.
Revenue Recognition:
The Group derives revenues primarily from sale of goods
comprising of Automobile Tyres, Tubes, Flaps, Tread Rubber,
Speciality Coatings and dealing in rubber.
The following is a summary of significant accounting policies
related to revenue recognition:
Revenue is recognised upon transfer of control of promised
products or services to customers in an amount that reflects
the consideration the Group expects to receive in exchange
for those products or services.
Revenue from the sale of goods is recognised at the point in
time when control is transferred to the customer.
Revenue towards satisfaction of a performance obligation is
measured at the amount of transaction price (net of variable
consideration) allocated to that performance obligation. The
transaction price of goods sold and services rendered is net of
variable consideration on account of turnover/product/prompt
payment discounts and schemes offered by the Group as part
of the contract with the customers. When the level of discount
varies with increase in levels of revenue transactions, the Group
recognises the liability based on its estimate of the customer's
future purchases. If it is probable that the criteria for the discount
will not be met, or if the amount thereof cannot be estimated
reliably, then discount is not recognised until the payment is
probable and the amount can be estimated reliably. The Group
recognises changes in the estimated amounts of obligations for
discounts in the period in which the change occurs. Revenue
also excludes taxes collected from customers.
Revenue in excess of invoicing are classified as contract assets
while invoicing in excess of revenues are classified as contract
liabilities.
The Holding Company provides warranties for general
repairs and does not provide extended warranties or
maintenance services in its contracts with customers and
are assurance type warranties. Claims preferred during the
year against such obligations are netted off from revenue,
consistent with its current practice. Provision for warranties
is made for probable future claims on sales effected and
are estimated based on previous claim experience and
are accounted for under Ind AS 37 Provisions, Contingent
Liabilities and Contingent Assets, consistent with its current
practice.
Use of significant judgments in revenue recognition:
Judgment is also required to determine the transaction
price for the contract. The transaction price could
be either a fixed amount of consideration or variable
consideration with elements such as turnover/product/
prompt payment discounts. Any consideration payable
to the customer is adjusted to the transaction price,
unless it is a payment for a distinct product or service
from the customer. The estimated amount of variable
consideration is adjusted in the transaction price only
to the extent that it is highly probable that a significant
reversal in the amount of cumulative revenue recognised
will not occur and is reassessed at the end of each
reporting period.
The Group exercises judgement in determining whether
the performance obligation is satisfied at a point in
time or over a period of time. The Group considers
indicators such as how customer consumes benefits
as services are rendered or who controls the asset as
it is being created or existence of enforceable right to
payment for performance to date and alternate use of
such product or service, transfer of significant risks and
rewards to the customer, acceptance of delivery by the
customer.
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