Page 273 - Hitachi IR 2025

All amount in Indian Rupees in Crores, except as stated otherwise
Revenue by offerings/ timing For the year ended
March 31, 2025
For the year ended
March 31, 2024
Point in time
Sale of products 4,307.79 3,644.34
Other operating revenue (Scrap sales and others) 22.58 36.71
Period over time
Revenue from execution of contracts for projects and services 1,776.02 1,319.36
Sale of services 140.28 132.34
Other operating revenue (Other than scrap sales and others) 138.26 104.74
6,384.93 5,237.49
b) Contract balances Trade receivables (refer note 12) 2,109.58 1,521.71
Advance from customer (refer note 21) 1,604.39 881.61
March 31, 2025 March 31, 2024
Billing in excess of contract revenue (refer note 21) 145.17 42.58
Contract assets (refer note 15) 297.14 748.41
4,156.28 3,194.31
A contract asset is an entity’s right to consideration in exchange for goods or services that the entity has
transferred to a customer and hence is not a financial instrument. In Company’s contracts with customers,
since the contractual right to payment arises only upon achievement of milestones specified in the contract,
it is believed that the performance completed until the achievement of a particular milestone should be
recorded as a contract asset under non-financial assets.
During the year, ` 673.61 Crores (March 31, 2024 ` 140.72 Crores) from opening balance of contract
assets has been reclassified to trade receivables upon billing to customers on completion of milestones.
During the year, the Company has recognised revenue of `35.75 Crores arising from opening billing in
excess of contract revenue as of April 01, 2024 (April 01, 2023 is ` 39.60 Crores).
c) No significant adjustments are expected in contract price for revenue recognised in statement of profit
and loss.
d) Performance Obligation
Information about the Company’s performance obligations are summarised below:
i.) Long term (Construction type) contracts - The long term contracts are ordinarily presumed to consist
of combined obligations which are not distinct in the context of the contract (i.e., single performance
obligation). This is highly attributed to the long-term construction nature of the projects, whereby
deliverables are typically highly interrelated and combined. The typical scope of turnkey contracts
arrangements includes engineering, manufacturing, shipment, delivery installation, testing, erection
and commissioning and civil works. Although there are several components to the overall scope of the
contract, the turnkey contracts are generally considered one performance obligation.
ii.) Products manufacturing and erection, commissioning and installation contracts - These contracts
comprising of two performance obligations of supply of products and erection and commissioning
thereof. When the manufacturing stage is complete, factory acceptance testing procedures are
performed to ensure the equipment meets customer specifications and may involve the customer
physically observing the testing procedures. Revenue from contracts, where the performance obligations
are satisfied over time and other consideration, is recognised as per the percentage of completion
method. The Company uses the percentage of completion method based on the costs expended to
the date as a proportion of the total costs to be expended.
Company as part of its contracts, provides warranties of the equipment for defects arising out of poor
workmanship, inferior material or manufacturing. Such warranty provided is in the nature of assurance
warranty and is not accounted for as a separated performance obligation.
Integrated Annual Report 2024-25
271