Accounting Policies of Surana Telecom and Power Ltd. Company

Mar 31, 2025

4. SIGNIFICANT ACCOUNTING POLICIES AND KEY
ACCOUNTING ESTIMATES AND JUDGEMENTS

A summary of the significant accounting policies applied
in the preparation of the standalone financial statements
are as given below. These accounting policies have
been applied consistently to all the periods presented in
the standalone financial statements, unless otherwise
stated.

1. Inventories

Raw materials and stores, work in progress, traded
and finished goods are stated at the lower of cost
and net realisable value. Cost of raw materials and
traded goods comprises cost of purchases. Cost
of work-in-progress and finished goods comprises
direct materials, direct labour and an appropriate
proportion of variable and fixed overhead
expenditure, the latter being allocated on the basis
of normal operating capacity. Costs of inventories
also include all other costs incurred in bringing
the inventories to their present location and
condition. Costs are assigned to individual items
of inventory arrived on weighted average basis.
Costs of purchased inventory are determined after
deducting rebates and discounts. Net realisable
value is the estimated selling price in the ordinary
course of business less the estimated costs of
completion and the estimated costs necessary to
make the sale.

Stores, spares and consumables

Stores spares, packing material and all
consumables'' items held for use in the production
of inventories are charged to profit & loss account
as and when purchased.

Provision is recognized for damaged, defective or
obsolete stocks where necessary.

2. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand, Cheques
on hand and short-term deposits with an original
maturity of three months or less, which are subject
to an insignificant risk of change in value.

3. Cash Flows

Cash flows are reported using the indirect method,
where by net profit before tax is adjusted for the
effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing
cash flows. The cash flows from operating,
investing and financing activities are segregated.

4. Income Tax

Income Tax comprises current and deferred tax.

a) Current Tax

Current Tax is measured on the basis of
estimated taxable income for the current
accounting period in accordance with the

applicable tax rates and the provisions of the
Income-tax Act, 1961. Current income tax
is recognized in the standalone statement
of profit and loss except to the extent that
it relates to an item recognized directly in
equity or in other comprehensive income.

b) Deferred Tax

Deferred tax is provided, on all temporary
differences at the reporting date between
the tax bases of assets and liabilities and
their carrying amounts for financial reporting
purposes. Deferred tax assets and liabilities
are measured at the tax rates that are
expected to be applied to the temporary
differences when they reverse, based on the
laws that have been enacted or substantively
enacted at the reporting date. Tax relating to
items recognised directly in equity or OCI is
recognised in equity or OCI and not in the
standalone statement of profit and loss.

Deferred tax assets and liabilities are offset
if there is a legally enforceable right to offset
current tax liabilities and assets, and they
relate to income taxes levied by the same
tax authority, but they intend to settle current
tax liabilities and assets on a net basis or
their tax assets and liabilities will be realized
simultaneously.

A deferred tax asset is recognized to the
extent that it is probable that future taxable
profits will be available against which
the temporary difference can be utilised.
Deferred tax assets are reviewed at each
reporting date and are reduced to the extent
that it is no longer probable.

MAT Credit is recognized as an asset only
when and to the extent there is convincing
evidence that the Company will pay normal
Income Tax during the specified period. In
the year in which the Minimum Alternative
Tax (MAT) credit becomes eligible to be
recognized as an asset in accordance with
the recommendations contained in guidance
note issued by the ICAI, the said asset
is created by way of credit to standalone
statement of profit and loss and shown
as MAT credit entitlement. The Company
reviews the same at each Balance Sheet
date and writes down the carrying amount
of MAT entitlement to the extent there is no
longer convincing evidence to the effect that
Company will pay normal Income Tax during
the specified period.

5. Property, Plant and Equipment

a) Recognition and Measurement

i) Property, plant and equipment held for use
in the production or/and supply of goods or
services, or for administrative purposes, are
stated in the balance sheet at cost, less any
accumulated depreciation and accumulated
impairment losses (if any).

ii) Cost of an item of property, plant and
equipment acquired comprises its purchase
price, including import duties and non¬
refundable purchase taxes, after deducting
any trade discounts and rebates, any directly
attributable costs of bringing the assets
to its working condition and location for
its intended use and present value of any
estimated cost of dismantling and removing
the item and restoring the site on which it is
located.

iii) In case of self-constructed assets, cost
includes the costs of all materials used
in construction, direct labour, allocation
of directly attributable overheads, directly
attributable borrowing costs incurred in
bringing the item to working condition for
its intended use, and estimated cost of
dismantling and removing the item and
restoring the site on which it is located.
The costs of testing whether the asset is
functioning properly, after deducting the
net proceeds from selling items produced
while bringing the asset to that location and
condition are also added to the cost of self-
constructed assets.

iv) For transition to IND AS, the company has
revalued land at fair value as deemed cost
and considered other assets at Ind AS Cost.

v) Gains or losses arising from de-recognition
of property, plant and equipment are
measured as the difference between the net
disposal proceeds and the carrying amount
of the asset is recognized in the standalone
statement of profit and loss.

vi) Subsequent costs are included in the asset''s
carrying amount, only when it is probable
that future economic benefits associated
with the cost incurred will flow to the
Company and the cost of the item can be
measured reliably. The carrying amount of
any component accounted for as a separate
asset is derecognized when replaced. Major
Inspection/ Repairs/ Overhauling expenses
are recognized in the carrying amount of
the item of property, plant and equipment
a replacement if the recognition criteria
are satisfied. Any Unamortized part of the
previously recognized expenses of similar
nature is derecognized.

vii) The residual values, useful lives and
methods of depreciation of property, plant
and equipment are reviewed at each financial
year end and adjusted prospectively, if
appropriate.

viii) The Company identifies and determines
cost of asset significant to the total cost of
the asset having useful life that is materially
different from that of the remaining life.

ix) Research and development costs that are
in nature of tangible/ intangible assets and
are expected to generate probable future
economic benefits are capitalised and
classified under tangible/intangible assets
and depreciated on the same basis as
other fixed assets. Revenue expenditure on
research and development is charged to the
statement of profit and loss in the year in
which it is incurred.

b) Depreciation and Amortization

i) Depreciation on property, plant and
equipment is provided under Straight Line
Method over the useful lives of assets
prescribed by Schedule II of the Companies
Act, 2013. Depreciation in change in the
value of fixed assets due to exchange rate
fluctuation has been provided prospectively
over the residual life of the respective assets.

ii) Depreciation in respect of property, plant
and equipment added / disposed off during
the year is provided on pro-rata basis, with
reference to the date of addition/disposal.

6. Intangible Assets

i) Intangible assets acquired separately are
measured on initial recognition at cost. Following
initial recognition, intangible assets are carried
at cost less accumulated amortisation and
accumulated impairment loss, if any.

ii) Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss.

iii) Intangible assets are amortised on straight line
basis over its estimated useful life of 5 years.

7. 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. Where 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.

Recoverable amount is the higher of fair value less
costs to sell 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 it carrying
amount, the carrying amount of the asset (or cash¬

generating unit) is reduced to its recoverable amount.
An impairment loss is recognised immediately in the
statement of profit and loss.

Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been
determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately
in the statement of profit and loss.

Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment or more frequently if events or
changes in circumstances indicate that they might be
impaired.

8. Capital Work in Progress

Capital work-in-progress is stated at cost which includes
expenses incurred during construction period, interest
on amount borrowed for acquisition of qualifying assets
and other expenses incurred in connection with project
implementation in so far as such expenses relate to
the period prior to the commencement of commercial
production.

9. Investment in Joint-Venture

Investment in Joint-venture is measured at cost less
impairment loss, if any.

The joint arrangement is structured through a separate
vehicle and the legal form of the separate vehicle,
the terms of the contractual arrangement and, when
relevant, any other facts and circumstances gives the
Company rights to the net assets of the arrangement
(i.e. the arrangement is a joint venture). The activities of
the joint venture are primarily aimed to provide the third
parties with an output and the parties to the joint venture
will not have rights to substantially all the economic
benefits of the assets of the arrangement.

10. Investment in subsidiaries and associates

Investments in subsidiaries and associates are
recognised at cost as per IND AS 27. Except where
investments accounted for at cost shall be accounted
for in accordance with IND AS 105, Non-current Assets
held for Sale and Discontinued Operations, when they
are classified as held for sale.

11. Leases

a) The Company as lessor

Leases for which the Company is a lessor is
classified as finance or operating leases. Whenever
the terms of the lease transfer substantially all the
risks and rewards of ownership to the lessee, the
contract is classified as finance lease. All other
leases are classified as operating leases.

Rental income from operating leases is
recognised on a straight-line basis over the term
of the relevant lease. Initial direct costs incurred in

negotiating and arranging an operating lease are
added to the carrying amount of the leased asset
and recognised on a straight-line basis over the
lease term.

b) The Company as lessee

The Company assesses whether a contract is
or contains a lease, at inception of the contract.
The Company recognises a right-of-use asset
and a corresponding lease liability with respect to
all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases
with a lease term of 12 months or less) and
leases of low value assets. For these leases, the
Company recognises the lease payments as an
operating expense on a straight-line basis over
the lease term, unless another systematic basis
is more representative of the time pattern in which
economic benefits from the leased assets are
consumed. Contingent and variable rentals are
recognized as expense in the periods in which
they are incurred.

c) Lease Liability

The lease payments that are not paid at the
commencement date are discounted using
the interest rate implicit in the lease. If that rate
cannot be readily determined, which is generally
the case for leases in the Company, the lessee''s
incremental borrowing rate is used, being the rate
that the individual lessee would have to pay to
borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar
economic environment with similar terms, security
and conditions.

Lease payments included in the measurement of
the lease liability comprise:

• Fixed lease payments (including in¬
substance fixed payments) payable during
the lease term and under reasonably certain
extension options, less any lease incentives;

• Variable lease payments that depend on an
index or rate, initially measured using the
index or rate at the commencement date;

• The amount expected to be payable by the
lessee under residual value guarantees;

• The exercise price of purchase options, if the
lessee is reasonably certain to exercise the
options; and

• Payments of penalties for terminating the
lease, if the lease term reflects the exercise
of an option to terminate the lease.

The lease liability is presented as a separate line
in the Balance Sheet.

The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.

The Company re-measures the lease liability (and
makes a corresponding adjustment to the related
right-of-use asset) whenever:

• The lease term has changed or there is a
change in the assessment of exercise of a
purchase option, in which case the lease
liability is re-measured by discounting the
revised lease payments using a revised
discount rate.

• A lease contract is modified and the lease
modification is not accounted for as a
separate lease, in which case the lease
liability is re-measured by discounting the
revised lease payments using a revised
discount rate.

d) Right of Use (ROU) Assets

The ROU assets comprise the initial measurement
of the corresponding lease liability, lease payments
made at or before the commencement day and
any initial direct costs. They are subsequently
measured at cost less accumulated depreciation
and impairment losses.

Whenever the company incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore
the underlying asset to the condition required by
the terms and conditions of the lease, a provision
is recognised and measured under Ind AS 37-
Provisions, Contingent Liabilities and Contingent
Assets. The costs are included in the related right-
of-use asset.

ROU assets are depreciated over the shorter
period of the lease term and useful life of the
underlying asset. If the company is reasonably
certain to exercise a purchase option, the right-
of-use asset is depreciated over the underlying
asset''s useful life. The depreciation starts at the
commencement date of the lease.

The ROU assets are not presented as a separate
line in the Balance Sheet but presented below
similar owned assets as a separate line in the PPE
note under “Notes forming part of the Financial
Statement”.

The Company applies Ind AS 36- Impairment
of Assets to determine whether a right-of-use
asset is impaired and accounts for any identified
impairment loss as per its accounting policy on
‘property, plant and equipment''.

As a practical expedient, Ind AS 116 permits a
lessee not to separate non-lease components
when bifurcation of the payments is not available
between the two components, and instead
account for any lease and associated non-lease
components as a single arrangement. The
Company has used this practical expedient.

Extension and termination options are included
in many of the leases. In determining the lease
term, the management considers all facts and

circumstances that create an economic incentive
to exercise an extension option, or not exercise a
termination option.

12. Revenue Recognition

Revenue represents amount receivable from sale of
solar modules, sale of solar power and lease rental,
stated net of discounts.

Ind AS 115 “Revenue from Contracts with Customers”
introduced one single new model for recognition
of revenue which includes a 5-step approach and
detailed guidelines. Among other, such guidelines are
on allocation of revenue to performance obligations
within multi-element arrangements, measurement and
recognition of variable consideration and the timing of
revenue recognition.

The Company considers the terms of the contract in
determining the transaction price. The transaction
price is based upon the amount the entity expects to
be entitled to in exchange for transferring of promised
goods and services to the customer after deducting
incentive programs, included but not limited to discounts,
volume rebates etc.

a) Revenue from sale of goods

Revenue from the sale of solar modules is
measured based on the consideration specified in
a contract with a customer and excludes amounts
collected on behalf of third parties. Company
recognises revenue at a point in time, when
control is transferred to the customer, and the
consideration agreed is expected to be received.
Control is generally deemed to be transferred
upon delivery of the products in accordance with
the agreed delivery plan.

In case of related party transactions where related
party meets the definition of customer (i.e. a
party that has contracted with the Company to
obtain goods or services that are an output of
the Company''s ordinary activity in exchange for
consideration) and the transactions are within
the scope of the standard then the revenue is
recognised based on the principles of IND AS 115.

Revenues for services are recognised when the
service rendered has been completed.

• Revenue from services

Revenue from services mainly consists of
the following;

• Income from Lease Rent

Revenue from services, which mainly
consists of lease rentals from letting of
space, is recognised over time on satisfying
performance obligations as per the terms
of agreement, that is, by reference to the
period in which services are being rendered.
Revenue from services, if any, involving
single performance obligation is recognised
at a point in time

• Sale of energy

Revenue from operations comprises of
sale of power. Revenue is recognized at an

amount that reflects the consideration for
which the Company expects to be entitled
in exchange for transfer of power (goods /
service) to the customer. Revenue from sale
of power is accounted for in accordance
with tariff provided in Power Purchase
Agreement (PPA) read with the regulations
of respective regulatory authorities and no
significant uncertainty as to the measurability
or collectability exist. There is no impact on
the adoption of the standard in the financial
statement as the Company''s revenue
primarily comprised of revenue from sale
of power and the recognition criteria of this
revenue stream is largely unchanged by Ind
AS 115.

• Contract Assets

Contract assets are recognised when there
is excess of revenue earned over billings
on contracts. Unbilled receivables where
further subsequent performance obligation
is pending are classified as contract
assets when the company does not have
unconditional right to receive cash as per
contractual terms. Revenue recognition
for fixed price development contracts is
based on percentage of completion method.
Invoicing to the clients is based on milestones
as defined in the contract. This would
result in the timing of revenue recognition
being different from the timing of billing the
customers. Unbilled revenue for fixed price
development contracts is classified as non¬
financial asset as the contractual right to
consideration is dependent on completion of
contractual milestones.

• Impairment of Contract asset

The Company assesses a contract asset
for impairment in accordance with Ind AS
109.An impairment of a contract asset is
measured, presented and disclosed on the
same basis as a financial asset that is within
the scope of Ind AS 109.

• Contract Liability

Contract Liability is recognised when there
are billings in excess of revenues and it
also includes consideration received from
customers for whom the company has
pending obligation to transfer goods or
services.

The billing schedules agreed with customers
include periodic performance-based
payments and / or milestone-based progress
payments. Invoices are payable within
contractually agreed credit period.

• Modification in contract

Contracts are subject to modification to
account for changes in contract specification

and requirements. The Company reviews
modification to contract in conjunction
with the original contract, basis which the
transaction price could be allocated to a
new performance obligation, or transaction
price of an existing obligation could undergo
a change. In the event transaction price is
revised for existing obligation, a cumulative
adjustment is accounted for.

b) Interest Income

Interest income from a financial asset is
recognized when it is probable that the economic
benefit will flow to the company and the amount
of income can be measured reliably. Interest
income is accrued on a time basis, by reference
to principal outstanding and the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial assets to that
assets'' net carrying amount on initial recognition.

13. Retirement and other employee benefits

a) Short Term Employee Benefits

Short term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related services are provided.
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within twelve months after the end of the
period in which the employees render the related
service are recognized in respect of employees''
services up to the end of the reporting period.

b) Other Long Term Employee Benefits

The liabilities for earned leaves that are not
expected to be settled wholly within twelve months
are measured as the present value (determined
by actuarial valuation using the projected unit
credit method) of the expected future payments
to be made in respect of services provided by
employees up to the end of the reporting period
and recognised in books of accounts. The
present value of the defined benefit plan liability
is calculated using a discount rate which is
determined by reference to market yields at the
end of the reporting period on government bonds.
Re-measurements as the result of experience
adjustment and changes in actuarial assumptions
are recognized in standalone statement of profit
and loss.

c) Post-Employment Benefits

The Company operates the following post¬
employment schemes:

i) Defined Benefit Plan

The liability or asset recognized in the
Balance Sheet in respect of defined benefit
plans is the present value of the defined
benefit obligation at the end of the reporting
period less the fair value of plan assets.
The Company''s net obligation in respect
of defined benefit plans is calculated by

estimating the amount of future benefit that
employees have earned in the current and
prior periods.

The defined benefit obligation is calculated
annually by Actuaries using the projected
unit credit method. The liability recognized for
defined benefit plans is the present value of
the defined benefit obligation at the reporting
date less the fair value of plan assets,
together with adjustments for unrecognized
actuarial gains or losses and past service
costs. Net interest is calculated by applying
the discount rate at the beginning of the
period to the net defined benefit liability or
asset. Past service cost is recognised in
the standalone statement of profit and loss
in the period of a plan amendment. The
present value of the defined benefit plan
liability is calculated using a discount rate
which is determined by reference to market
yields at the end of the reporting period on
government bonds.

Re-measurement, 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 recognised in Other
Comprehensive Income (OCI) in the period
in which they occur. Re-measurement
recognised in OCI is reflected immediately in
retained earnings and will not be reclassified
to standalone statement of profit and loss.

ii) Defined Contribution Plan

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation other than the
contribution payable to the Provident fund.
Contribution payable under the provident
fund is recognised as expenditure in the
standalone statement of profit and loss and/
or carried to Construction work-in-progress
when an employee renders the related
service.

14. Government Grants

Government grants are recognized at their fair values
when there is reasonable assurance that the grants will
be received and the Company will comply with all the
attached conditions.

a) Government grants are recognised in the
statement of profit or loss on a systematic basis
over the periods in which the Company recognises
the related costs for which the grants are
intended to compensate.

b) Grants related to acquisition/ construction of
property, plant and equipment are recognised
as deferred revenue in the Balance Sheet and
transferred to the statement of profit or loss on a
systematic and rational basis over the useful lives
of the related asset.

15. Foreign Currency Transactions

a) The functional currency and presentation currency
of the company is Indian Rupee (INR).

b) Transactions in currencies other than the
company''s functional currency are recorded on
initial recognition using the exchange rate at the
transaction date. At each balance sheet date,
foreign currency monetary items are reported using
the closing rate.

c) Non- monetary items that are measured in terms
of historical cost in foreign currency are not
retranslated. Exchange difference that arise on
settlement of monetary items or on reporting of
monetary items at each Balance sheet date at the
closing spot rate are recognised in profit or loss in
the period in which they arise except for:

i) exchange difference on foreign currency
borrowings related to assets under
construction for future productive use, which
are included in the cost of those assets when
they are regarded as an adjustment to interest
cost on those foreign currency borrowings;
and

ii) exchange differences on transactions entered
into in order to hedge certain foreign currency
risks.

iii) exchange differences on monetary items
receivable from or payable to a foreign
operation for

Which settlement is neither planned nor likely to
occur (therefore forming part of the net investment in
the foreign operation), which are recognised initially
in other comprehensive income and reclassified
from equity to the Statement of Profit and Loss on
repayment of the monetary items.

According to Appendix B of Ind AS 21 “Foreign
currency transactions and advance consideration”,
purchase or sale transactions must be translated at
the exchange rate prevailing on the date the asset
or liability is initially recognized. In practice, this is
usually the date on which the advance payment is
paid or received. In the case of multiple advances,
the exchange rate must be determined for each
payment and collection transaction

16. Borrowing Cost

Borrowing cost include interest expense calculated using
the Effective interest method, finance charges in respect
of assets acquired on finance lease and exchange
difference arising on foreign currency borrowings to the
extent they are regarded as an adjustment to the finance
cost.

Borrowing costs (including other ancillary borrowing cost)
directly attributable to the acquisition or construction of a
qualifying asset are capitalized as a part of the cost of that
asset that necessarily takes a substantial period of time
to complete and prepare the asset for its intended use or
sale. The Company considers a period of twelve months
or more as a substantial period of time.

Transaction costs in respect of long-term borrowing
are amortized over the tenure of respective loans using
Effective Interest Rate (EIR) method. All other borrowing
costs are recognized in the standalone statement of
profit and loss in the period in which they are incurred.

17. Earnings per Share

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

18. Exceptional Item

Exceptional items include income or expense that are
considered to be part of ordinary activities, however
are of such significance and nature that separate
disclosure enables the user of the financial statements
to understand the impact in a more meaningful manner.
Exceptional items are identified by virtue of either their
size or nature so as to facilitate comparison with prior
periods and to assess underlying trends in the financial
performance of the Company.

19. Financial Guarantee Contract

Financial guarantee contract provided to the lenders of
the Company by its Parent Company is measured at
their fair values and benefit of such financial guarantee
is recognised to equity as a capital contribution from
the parent.

20. Financial Instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity. Financial assets
and financial liabilities are recognised when a Company
entity becomes a party to the contractual provisions of
the instruments.

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit
or loss and ancillary costs related to borrowings) are
added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately
in standalone statement of profit and loss.

a) Financial Assets

i) Classification and Subsequent
Measurement

For purposes of subsequent measurement,
financial assets are classified in four
categories:

• Measured at Amortized Cost

• Measured at Fair Value Through Other
Comprehensive Income (FVTOCI)

• Measured at Fair Value Through Profit
or Loss (FVTPL) and

• Equity Instruments measured at Fair
Value Through Other Comprehensive
Income (FVTOCI)

Financial assets are not reclassified
subsequent to their initial recognition,
except if and in the period the
Company changes its business model
for managing financial assets.

• Measured at Amortized Cost

The Financial assets are subsequently
measured at the amortized cost if both
the following conditions are met:

• The asset is held within a business
model whose objective is achieved by
both collecting contractual cash flows;
and

• The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest (SPPI) on the
principal amount outstanding.

After initial measurement, such
financial assets are subsequently
measured at amortized cost using the
effective interest rate (EIR) method.
Income is recognised on an effective
interest basis for debt instruments
other than those financial assets
classified as FVTPL. Interest income
is recognised in the standalone
statement of profit and loss.

• Measured at Fair Value Through
Other Comprehensive Income
(FVTOCI)

The financial assets are measured
at the FVTOCI if both the following
conditions are met:

• The objective of the business model is
achieved by both collecting contractual
cash flows and selling the financial
assets; and

• The asset''s contractual cash flows
represent SPPI.

Debt instruments meeting these
criteria are measured initially at fair
value plus transaction costs. They
are subsequently measured at fair
value with any gains or losses arising
on re-measurement recognized in
other comprehensive income, except
for impairment gains or losses and
foreign exchange gains or losses.

Interest calculated using the effective
interest method is recognized in the
standalone statement of profit and loss
in investment income.

• Measured at Fair Value Through
Profit or Loss (FVTPL)

Financial assets are measured at fair
value through profit or Loss unless it is
measured at amortised cost or at fair
value through other comprehensive
income on initial recognition. Gains or
losses arising on re-measurement are
recognised in the standalone statement
of profit and loss. The net gains or loss
recognised in standalone statement
of profit and loss incorporates any
dividend or interest earned on the
financial assets and is included in the
“Other income” line item.

• Equity Instruments measured
at Fair Value Through Other
Comprehensive Income (FVTOCI)

All equity investments in scope of
Ind AS - 109 are measured at fair
value. Equity instruments which
are, held for trading are classified
as at FVTPL. For all other equity
instruments, the company may make
an irrevocable election to present
in other comprehensive income
subsequent changes in the fair value.
The company makes such election
on an instrument-by instrument basis.
The classification is made on initial
recognition and is irrevocable. In
case the company decides to classify
an equity instrument as at FVTOCI,
then all fair value changes on the
instrument, excluding dividends, are
recognized in the OCI. There is no
recycling of the amounts from OCI to
P&L, even on sale of investment.

ii) Derecognition

The Company derecognizes a financial asset
on trade date only when the contractual
rights to the cash flows from the asset expire,
or when it transfers the financial asset and
substantially all the risks and rewards of
ownership of the asset to another entity.

iii) Impairment of Financial Assets

In accordance with Ind AS 109, the Company
uses ‘Expected Credit Loss'' (ECL model, for
evaluating impairment of financial assets
other than those measured at fair value
through profit and loss (FVTPL).

Expected credit losses are measured through
a loss allowance at an amount equal to''

• The 12-months expected credit losses
(expected credit losses that result from
those default events on the financial
instrument that are possible within 12
months after the reporting date); or

• Full lifetime expected credit losses
(expected credit losses that result from
all possible default events over the life
of the financial instrument)

For trade receivables Company applies
‘simplified approach'' which requires
expected lifetime losses to be recognised
from initial recognition of the receivables.
The Company uses historical default rate to
determine impairment loss on the portfolio of
trade receivables. At all reporting date these
historical default rates are reviewed and
changes in the forward-looking estimates
are analysed.

For other assets, the Company uses
12-month ELC to provide for impairment
loss where there is no significant increase in
credit risk. If there is significant increase in
credit risk full lifetime ELC is used.

iv) Foreign exchange gains and losses

The fair value of financial assets denominated
in a foreign currency is determined in that
foreign currency and translated at the spot
rate at the end of each reporting period.
For foreign currency denominated financial
assets measured at amortised cost, the
exchange differences are recognised in the
standalone statement of profit and loss.

b) Financial Liabilities and equity instruments

Debts and equity instruments issued by a
Company are classified as either financial liabilities
or as equity in accordance with the substance of
the contractual arrangements and the definitions
of a financial liability and an equity instrument.

Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of equity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.

Financial Liabilities

i) Recognition and Initial Measurement

Financial liabilities are classified, at initial
recognition, as at fair value through profit
or loss, loans and borrowings, payables or
as derivatives as appropriate. All financial
liabilities are recognized initially at fair value
and, in the case of loans and borrowings
and payables, net of directly attributable
transaction costs.

ii) Subsequent Measurement

Financial liabilities are measured
subsequently at amortized cost or FVTPL.
A financial liability is classified as FVTPL if

it is classified as held for-trading, or it is a
derivative or it is designated as such on initial
recognition. Financial liabilities at FVTPL are
measured at fair value and net gains and
losses, including any interest expense, are
recognized in profit or loss. Other financial
liabilities are subsequently measured at
amortized cost using the effective interest
rate method. Interest expense and foreign
exchange gains and losses are recognized
in profit or loss. Any gain or loss on de¬
recognition is also recognized in profit or
loss.

iii) Financial Guarantee Contracts

Financial guarantee contracts issued by the
company are those contracts that require a
payment to be made to reimburse the holder
for a loss it incurs because the specified
debtor fails to make a payment when due
in accordance with the terms of a debt
instrument.

Financial guarantee contracts are recognized
initially as a liability at fair value, adjusted
for transaction costs that are directly
attributable to the issuance of the guarantee.
Subsequently, the liability is measured at
the higher of the amount of loss allowance
determined as per impairment requirement of
Ind AS 109 and the amount recognized less
cumulative amortization.

iv) De-recognition

A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires.

v) Foreign exchange gains and losses

For financial liabilities that are denominated
in a foreign currency and are measured at
amortised cost at the end of each reporting
period, the foreign exchange gains and losses
are determined based on the amortised cost of
the instruments and are included in standalone
statement of profit and loss. The fair value
of the financial liabilities denominated in a
foreign currency is determined in that foreign
currency and translated at the spot rate at the
end of the reporting period.

vi) Offsetting financial instruments

Financial assets and liabilities are offset and
the net amount reported in the balance sheet
when there is a legally enforceable right to
offset the recognized amounts and there is an
intention to settle on a net basis or realize the
asset and settle the liability simultaneously.
The legally enforceable right must not be
contingent on future events and must be
enforceable in the normal course of business
and in the event of default, insolvency or
bankruptcy of the counterparty.

c) Derivative financial instruments

The Company uses derivative financial
instruments such as forward, swap, options etc. to
hedge against interest rate and foreign exchange
rate risks, including foreign exchange fluctuation
related to highly probable forecast sale. The
realized gain / loss in respect of hedged foreign
exchange contracts which has expired / unwinded
during the year are recognized in the standalone
statement of profit and loss and included in other
operating revenue / other expense as the case
may be. However, in respect of foreign exchange
forward contracts period of which extends
beyond the balance sheet date, the fair value
of outstanding derivative contracts is marked to
market and resultant net loss/gain is accounted
in the standalone statement of profit and loss.
Company does not hold derivative financial
instruments for speculative purposes.

d) Derivatives and Hedge Accounting

Derivatives are initially recognised at fair value
and are subsequently remeasured to their
fair value at the end of each reporting period.
The resulting gains / losses are recognised in
Statement of Profit and Loss immediately unless
the derivative is designated and effective as a
hedging instrument, in which event the timing of
recognition in profit or loss / inclusion in the initial
cost of non-financial asset depends on the nature
of the hedging relationship and the nature of the
hedged item. The Company complies with the
principles of hedge accounting where derivative
contracts are designated as hedge instruments.
At the inception of the hedge relationship, the
Company documents the relationship between the
hedge instrument and the hedged item, along with
the risk management objectives and its strategy
for undertaking hedge transaction, which is a cash
flow hedge.

e) Cash Flow Hedge

The effective portion of changes in the fair value
of derivatives that are designated and qualify
as cash flow hedges is recognised in the other
comprehensive income and accumulated as
‘Cash Flow Hedging Reserve''. The gains / losses
relating to the ineffective portion are recognised
in the Statement of Profit and Loss. Amounts
previously recognised and accumulated in other
comprehensive income are reclassified to profit or
loss when the hedged item affects the Statement
of Profit and Loss. However, when the hedged
item results in the recognition of a non- financial
asset, such gains / losses are transferred from
equity (but not as reclassification adjustment)
and included in the initial measurement cost of
the non- financial asset. Hedge accounting is
discontinued when the hedging instrument expires
or is sold, terminated, or exercised, or when it no

longer qualifies for hedge accounting. Any gains /
losses recognised in other comprehensive income
and accumulated in equity at that time remain in
equity and are reclassified when the underlying
transaction is ultimately recognised. When an
underlying transaction is no longer expected to
occur, the gains / losses accumulated in equity are
recognised immediately in the Statement of Profit
and Loss.

---

Mar 31, 2024

CORPORATE OVERVIEW:

Surana Telecom and Power Limited (“the Company”) is a Public Limited Company registered under the Companies Act, 1956. It is listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). It was incorporated on 14.08.1989 having its registered office at Plot No. 214, 215/A, Phase-II IDA, Cherlapally Hyderabad 500051. The company''s CIN No. is L23209TG1989PLC010336. The Company is into the business of manufacturing/Trading of Solar related Products, Generation of Solar Power and Wind Power.

The standalone financial statements of the Company have been approved by the Board of Directors in their meeting held on May 20, 2024.

SIGNIFICANT ACCOUNTING POLICIES AND KEY ACCOUNTING ESTIMATES AND JUDGEMENTS

A summary of the significant accounting policies applied in the preparation of the standalone financial statements are as given below. These accounting policies have been applied consistently to all the periods presented in the standalone financial statements, unless otherwise stated.

1. BASIS OF PREPARATION:

a) Statement of Compliance

These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (“Ind AS”) as prescribed by Ministry of Corporate Affairs pursuant to Section 133 of the Companies Act, 2013 (“the Act”), read with the Companies (Indian Accounting Standards) Rules, 2015 (amended), guidelines issued by the Securities and Exchange Board of India (SEBI), and presentation requirements of Division II of Schedule III to the Companies Act, 2013, (Ind AS compliant Schedule III), as applicable to the Standalone Financial Statement, other relevant provisions of the Act and other accounting principles generally accepted in India.

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.

b) Basis of Measurement

The standalone financial statements of the Company have been prepared on historical cost basis except for the following assets and liabilities which have been measured at fair value:

i) Certain financial assets & liabilities (including derivative instruments)

ii) Defined Benefit Plans as per actuarial valuation

iii) Share based Payments

c) Functional and Presentation Currency

The standalone financial statements have been presented in Indian Rupees (INR), which is also

the Company''s functional currency. All financial information presented in INR has been rounded off to the nearest lakhs as per the requirements of Schedule III, unless otherwise stated.

d) Use of Assumptions, Judgments and Estimates

The key assumption, judgment and estimation at the reporting date, that have significant risk causing the material adjustment to the carrying amounts of assets and liabilities within the next financial year, are describe below. The company based its assumption, judgment and estimation on parameters available on the standalone financial statements were prepared. Existing circumstances and assumption about future development,

however, may change due to market changes or circumstances arising that are beyond the control of the company. Such changes are reflected in the assumption when they occur.

i) Revenue

The application of revenue recognition accounting standards is complex and involves a number of key judgements and estimates. Revenue is measured based on the transaction price, which is the consideration, adjusted for volume discounts, price concessions and incentives, if any, as specified in the contract with the customer. The Company exercises judgment in determining whether the performance obligation is satisfied at a point in time or over a period of time.

ii) Impairment of non-financial assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or CGU''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

An impairment loss is recognized as an expense in the standalone statement of profit and loss in the year in which an asset is identified as impaired. The impairment loss recognized in earlier accounting period is reversed if there has been an improvement in recoverable amount.

iii) Defined benefit plans

The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

iv) Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.

v) Impairment of financial assets

The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

vi) Share-based payments

The Company measures the cost of equity-settled transactions with employees using Black-Scholes model to determine the fair value of the liability incurred on the grant date. Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option, volatility and dividend yield and making assumptions about them.

Employees (including senior executives) of the Company receive remuneration in the form of share-based payments, whereby

employees render services as consideration for equity instruments (equity-settled transactions).

vii) Equity-settled transactions

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model.

That cost is recognised, together with a corresponding increase in share-based payment reserves in equity, over the period in which the performance and/or service conditions are fulfilled in employee benefits expense.

The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company''s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit and loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee benefits expense. No expense is recognised for awards that do not ultimately vest because service conditions have not been met. When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original vesting terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

viii) Recognition of Deferred Tax Assets

The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized. In addition, significant judgement is required in assessing the impact of any legal or economic limits.

ix) Classification of Leases

The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including,

but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

x) Restoration, rehabilitation and decommissioning

Estimation of restoration/ rehabilitation/ decommissioning costs requires interpretation of scientific and legal data, in addition to assumptions about probability of future costs.

xi) Provisions and Contingencies

The assessments undertaken in recognising provisions and contingencies have been made in accordance with Indian Accounting Standards (Ind AS) 37, ‘Provisions, Contingent Liabilities and Contingent Assets''. The evaluation of the likelihood of the contingent events is applied best judgement by management regarding the probability of exposure to potential loss.

e) Classification of Assets and Liabilities into Current/Non-Current

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, as given below.

The Company has ascertained its operating cycle as 12 months for the purpose of current and noncurrent classification of assets and liabilities.

For the purpose of Balance Sheet, an asset is classified as current if:

i) Expected to be realized or intended to sold or consumed in normal operating cycle;

ii) Held primarily for the purpose of trading;

iii) Expected to be realized within twelve months after the reporting period; or

iv) Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All the other assets are classified as non-current. Similarly, a liability is current if:

i) It is expected to be settled in normal operating cycle;

ii) It is held primarily for the purpose of trading;

iii) It is due to be settled within twelve months after the reporting period; or

iv) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Company classifies all other liabilities as noncurrent.

Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities respectively.

2. Inventories

Raw materials and stores, work in progress, traded and finished goods are stated at the lower of cost and net realisable value. Cost of raw materials and traded goods comprises cost of purchases. Cost of work-in-progress and finished goods comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs are assigned to individual items of inventory arrived on weighted average basis. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

Stores, spares and consumables

Stores spares, packing material and all consumables items held for use in the production of inventories are charged to profit & loss account as and when purchased.

Provision is recognized for damaged, defective or obsolete stocks where necessary.

3. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet comprise cash at banks and on hand, Cheques on hand and short term deposits with an original maturity of three months or less, which are subject to an insignificant risk of change in value.

4. Cash Flows

Cash flows are reported using the indirect method, where by net profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities are segregated.

5. Income Tax

Income Tax comprises current and deferred tax.

a) Current Tax

Current Tax is measured on the basis of estimated taxable income for the current accounting period in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961. Current income tax is recognized in The standalone statement of profit and loss except to the extent that it relates to an item recognized directly in equity or in other comprehensive income.

b) Deferred Tax

Deferred tax is provided, on all temporary differences at the reporting date between the

tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted at the reporting date. Tax relating to items recognised directly in equity or OCI is recognised in equity or OCI and not in the standalone statement of profit and loss.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable.

MAT Credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. In the year in which the Minimum Alternative Tax (MAT) credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in guidance note issued by the ICAI, the said asset is created by way of credit to standalone statement of profit and loss and shown as MAT credit entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.

6. Property, Plant and Equipment

a) Recognition and Measurement

i) Property, plant and equipment held for use in the production or/and supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost, less any accumulated depreciation and accumulated impairment losses (if any).

ii) Cost of an item of property, plant and equipment acquired comprises its purchase price, including import duties and nonrefundable purchase taxes, after deducting any trade discounts and rebates, any directly attributable costs of bringing the assets to its working condition and location for its intended use and present value of any estimated cost of dismantling and removing the item and restoring the site on which it is located.

iii) In case of self-constructed assets, cost includes the costs of all materials used

in construction, direct labour, allocation of directly attributable overheads, directly attributable borrowing costs incurred in bringing the item to working condition for its intended use, and estimated cost of dismantling and removing the item and restoring the site on which it is located. The costs of testing whether the asset is functioning properly, after deducting the net proceeds from selling items produced while bringing the asset to that location and condition are also added to the cost of self-constructed assets.

iv) For transition to IND AS, the company has revalued land at fair value as deemed cost and considered other assets at Ind AS Cost.

v) Gains or losses arising from de-recognition of property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset is recognized in the standalone statement of profit and loss.

vi) Subsequent costs are included in the asset''s carrying amount, only when it is probable that future economic benefits associated with the cost incurred will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. Major Inspection/ Repairs/ Overhauling expenses are recognized in the carrying amount of the item of property, plant and equipment a replacement if the recognition criteria are satisfied. Any Unamortized part of the previously recognized expenses of similar nature is derecognized.

vii) The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

viii) The Company identifies and determines cost of asset significant to the total cost of the asset having useful life that is materially different from that of the remaining life.

ix) Research and development costs that are in nature of tangible/ intangible assets and are expected to generate probable future economic benefits are capitalised and classified under tangible/intangible assets and depreciated on the same basis as other fixed assets. Revenue expenditure on research and development is charged to the statement of profit and loss in the year in which it is incurred.

b) Depreciation and Amortization

i) Depreciation on property, plant and equipment is provided under Straight Line Method over the useful lives of assets

prescribed by Schedule II of the Companies Act, 2013. Depreciation in change in the value of fixed assets due to exchange rate fluctuation has been provided prospectively over the residual life of the respective assets.

ii) Depreciation in respect of property, plant and equipment added / disposed off during the year is provided on pro-rata basis, with reference to the date of addition/disposal.

7. Intangible Assets

i) Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment loss, if any.

ii) Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss.

iii) Intangible assets are amortised on straight line basis over its estimated useful life of 5 years.

8. 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. Where 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.

Recoverable amount is the higher of fair value less costs to sell 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 cashgenerating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cashgenerating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the statement of profit and loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of profit and loss.

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or

changes in circumstances indicate that they might be impaired.

9. Capital Work in Progress

Capital work-in-progress is stated at cost which includes expenses incurred during construction period, interest on amount borrowed for acquisition of qualifying assets and other expenses incurred in connection with project implementation in so far as such expenses relate to the period prior to the commencement of commercial production.

10. Investment in Joint-Venture

Investment in Joint-venture is measured at cost less impairment loss, if any.

The joint arrangement is structured through a separate vehicle and the legal form of the separate vehicle, the terms of the contractual arrangement and, when relevant, any other facts and circumstances gives the Company rights to the net assets of the arrangement (i.e. the arrangement is a joint venture). The activities of the joint venture are primarily aimed to provide the third parties with an output and the parties to the joint venture will not have rights to substantially all the economic benefits of the assets of the arrangement.

11. Investment in subsidiaries and associates

Investments in subsidiaries and associates are recognised at cost as per IND AS 27. Except where investments accounted for at cost shall be accounted for in accordance with IND AS 105, Non-current Assets held for Sale and Discontinued Operations, when they are classified as held for sale.

12. Leases

a) The Company as lessor

Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as finance lease. All other leases are classified as operating leases.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.

b) The Company as lessee

The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which

economic benefits from the leased assets are consumed. Contingent and variable rentals are recognized as expense in the periods in which they are incurred.

c) Lease Liability

The lease payments that are not paid at the commencement date are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Company, the lessee''s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including insubstance fixed payments) payable during the lease term and under reasonably certain extension options, less any lease incentives;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the Balance Sheet.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company re-measures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

• The lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is re-measured by discounting the revised lease payments using a revised discount rate.

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is re-measured by discounting the revised lease payments using a revised discount rate.

d) Right of Use (ROU) Assets

The ROU assets comprise the initial measurement of the corresponding lease liability, lease payments

made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under Ind AS 37-Provisions, Contingent Liabilities and Contingent Assets. The costs are included in the related right-of-use asset.

ROU assets are depreciated over the shorter period of the lease term and useful life of the underlying asset. If the company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful life. The depreciation starts at the commencement date of the lease.

The ROU assets are not presented as a separate line in the Balance Sheet but presented below similar owned assets as a separate line in the PPE note under “Notes forming part of the Financial Statement”.

The Company applies Ind AS 36- Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as per its accounting policy on ‘property, plant and equipment''.

As a practical expedient, Ind AS 116 permits a lessee not to separate non-lease components when bifurcation of the payments is not available between the two components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

Extension and termination options are included in many of the leases. In determining the lease term the management considers all facts and circumstances that create an economic incentive to exercise an extension option, or not exercise a termination option.

13. Revenue Recognition

Revenue represents amount receivable from sale of solar modules, sale of solar power and lease rental, stated net of discounts.

Ind AS 115 “Revenue from Contracts with Customers”, introduced one single new model for recognition of revenue which includes a 5-step approach and detailed guidelines. Among other, such guidelines are on allocation of revenue to performance obligations within multi-element arrangements, measurement and recognition of variable consideration and the timing of revenue recognition.

The Company considers the terms of the contract in determining the transaction price. The transaction price is based upon the amount the entity expects to be entitled to in exchange for transferring of promised

goods and services to the customer after deducting incentive programs, included but not limited to discounts, volume rebates etc.

a) Revenue from sale of goods

Revenue from the sale of solar modules is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. Company recognises revenue at a point in time, when control is transferred to the customer, and the consideration agreed is expected to be received. Control is generally deemed to be transferred upon delivery of the products in accordance with the agreed delivery plan.

In case of related party transactions where related party meets the definition of customer (ie a party that has contracted with the Company to obtain goods or services that are an output of the Company''s ordinary activity in exchange for consideration) and the transactions are within the scope of the standard then the revenue is recognised based on the principles of IND AS 115. Revenues for services are recognised when the service rendered has been completed.

• Revenue from services

Revenue from services mainly consists of the following;

• Income from Lease Rent

Revenue from services, which mainly consists of lease rentals from letting of space, is recognised over time on satisfying performance obligations as per the terms of agreement, that is, by reference to the period in which services are being rendered. Revenue from services, if any, involving single performance obligation is recognised at a point in time

• Sale of energy

Revenue from operations comprises of sale of power. Revenue is recognized at an amount that reflects the consideration for which the Company expects to be entitled in exchange for transfer of power (goods / service) to the customer. Revenue from sale of power is accounted for in accordance with tariff provided in Power Purchase Agreement (PPA) read with the regulations of respective regulatory authorities and no significant uncertainty as to the measurability or collectability exist. There is no impact on the adoption of the standard in the financial statement as the Company''s revenue primarily comprised of revenue from sale of power and the recognition criteria of this revenue stream is largely unchanged by Ind AS 115.

• Contract Assets

Contract assets are recognised when there is excess of revenue earned over billings

on contracts. Unbilled receivables where further subsequent performance obligation is pending are classified as contract assets when the company does not have unconditional right to receive cash as per contractual terms. Revenue recognition for fixed price development contracts is based on percentage of completion method. Invoicing to the clients is based on milestones as defined in the contract. This would result in the timing of revenue recognition being different from the timing of billing the customers. Unbilled revenue for fixed price development contracts is classified as nonfinancial asset as the contractual right to consideration is dependent on completion of contractual milestones.

• Impairment of Contract asset

The Company assesses a contract asset for impairment in accordance with Ind AS 109.An impairment of a contract asset is measured, presented and disclosed on the same basis as a financial asset that is within the scope of Ind AS 109.

• Contract Liability

Contract Liability is recognised when there are billings in excess of revenues and it also includes consideration received from customers for whom the company has pending obligation to transfer goods or services.

The billing schedules agreed with customers include periodic performance based payments and / or milestone based progress payments. Invoices are payable within contractually agreed credit period.

• Modification in contract

Contracts are subject to modification to account for changes in contract specification and requirements. The Company reviews modification to contract in conjunction with the original contract, basis which the transaction price could be allocated to a new performance obligation, or transaction price of an existing obligation could undergo a change. In the event transaction price is revised for existing obligation, a cumulative adjustment is accounted for.

b) Interest Income

Interest income from a financial asset is recognized when it is probable that the economic benefit will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to principal outstanding and the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that assets'' net carrying amount on initial recognition.

14. Retirement and other employee benefits

a) Short Term Employee Benefits

Short term employee benefit obligations are measured on an undiscounted basis and are expensed as the related services are provided. Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within twelve months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period.

b) Other Long Term Employee Benefits

The liabilities for earned leaves that are not expected to be settled wholly within twelve months are measured as the present value (determined by actuarial valuation using the projected unit credit method) of the expected future payments to be made in respect of services provided by employees up to the end of the reporting period and recognised in books of accounts. The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds. Re-measurements as the result of experience adjustment and changes in actuarial assumptions are recognized in standalone statement of profit and loss.

c) Post-Employment Benefits

The Company operates the following postemployment schemes:

i) Defined Benefit Plan

The liability or asset recognized in the Balance Sheet in respect of defined benefit plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The Company''s net obligation in respect of defined benefit plans is calculated by estimating the amount of future benefit that employees have earned in the current and prior periods.

The defined benefit obligation is calculated annually by Actuaries using the projected unit credit method. The liability recognized for defined benefit plans is the present value of the defined benefit obligation at the reporting date less the fair value of plan assets, together with adjustments for unrecognized actuarial gains or losses and past service costs. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Past service cost is recognised in the standalone statement of profit and loss in the period of a plan amendment. The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.

Re-measurement, 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 recognised in Other Comprehensive Income (OCI) in the period in which they occur. Re-measurement recognised in OCI is reflected immediately in retained earnings and will not be reclassified to standalone statement of profit and loss.

ii) Defined Contribution Plan

Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation other than the contribution payable to the Provident fund. Contribution payable under the provident fund is recognised as expenditure in the standalone statement of profit and loss and/or carried to Construction work-in-progress when an employee renders the related service.

15. Government Grants

Government grants are recognized at their fair values

when there is reasonable assurance that the grants will

be received and the Company will comply with all the

attached conditions.

a) Government grants are recognised in the statement of profit or loss on a systematic basis over the periods in which the Company recognises the related costs for which the grants are intended to compensate.

b) Grants related to acquisition/ construction of property, plant and equipment are recognised as deferred revenue in the Balance Sheet and transferred to the statement of profit or loss on a systematic and rational basis over the useful lives of the related asset.

16. Foreign Currency Transactions

a) The functional currency and presentation currency of the company is Indian Rupee (INR).

b) Transactions in currencies other than the company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each balance sheet date, foreign currency monetary items are reported using the closing rate.

c) Non- monetary items that are measured in terms of historical cost in foreign currency are not retranslated. Exchange difference that arise on settlement of monetary items or on reporting of monetary items at each Balance sheet date at the closing spot rate are recognised in profit or loss in the period in which they arise except for:

i) exchange difference on foreign currency borrowings related to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest cost on those foreign currency borrowings; and

ii) exchange differences on transactions entered into in order to hedge certain foreign currency risks.

iii) exchange differences on monetary items receivable from or payable to a foreign operation for

which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to the Statement of Profit and Loss on repayment of the monetary items.

According to Appendix B of Ind AS 21 “Foreign currency transactions and advance consideration”, purchase or sale transactions must be translated at the exchange rate prevailing on the date the asset or liability is initially recognized. In practice, this is usually the date on which the advance payment is paid or received. In the case of multiple advances, the exchange rate must be determined for each payment and collection transaction

17. Borrowing Cost

Borrowing cost include interest expense calculated using the Effective interest method, finance charges in respect of assets acquired on finance lease and exchange difference arising on foreign currency borrowings to the extent they are regarded as an adjustment to the finance cost.

Borrowing costs (including other ancillary borrowing cost) directly attributable to the acquisition or construction of a qualifying asset are capitalized as a part of the cost of that asset that necessarily takes a substantial period of time to complete and prepare the asset for its intended use or sale. The Company considers a period of twelve months or more as a substantial period of time.

Transaction costs in respect of long term borrowing are amortized over the tenure of respective loans using Effective Interest Rate (EIR)method. All other borrowing costs are recognized in the standalone statement of profit and loss in the period in which they are incurred.

18. Earnings per Share

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

19. Exceptional Item

Exceptional items include income or expense that are considered to be part of ordinary activities, however are of such significance and nature that separate disclosure enables the user of the financial statements to understand the impact in a more meaningful manner. Exceptional items are identified by virtue of either their size or nature so as to facilitate comparison with prior

periods and to assess underlying trends in the financial performance of the Company.

20. Financial Guarantee Contract

Financial guarantee contract provided to the lenders of the Company by its Parent Company is measured at their fair values and benefit of such financial guarantee is recognised to equity as a capital contribution from the parent.

21. Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when a Company entity becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss and ancillary costs related to borrowings) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in standalone statement of profit and loss.

a) Financial Assets

i) Classification and Subsequent Measurement

For purposes of subsequent measurement, financial assets are classified in four categories:

• Measured at Amortized Cost

• Measured at Fair Value Through Other Comprehensive Income (FVTOCI)

• Measured at Fair Value Through Profit or Loss (FVTPL) and

• Equity Instruments measured at Fair

Value Through Other Comprehensive Income (FVTOCI)

Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.

• Measured at Amortized Cost

The Financial assets are subsequently measured at the amortized cost if both the following conditions are met:

- The asset is held within a business model whose objective is achieved by both collecting contractual cash flows; and

- The contractual terms of the

financial asset give rise on

specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR)method. Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as FVTPL. Interest income is recognised in the standalone statement of profit and loss.

• Measured at Fair Value Through Other Comprehensive Income (FVTOCI)

The financial assets are measured at the FVTOCI if both the following conditions are met:

- The objective of the business model is achieved by both collecting contractual cash flows and selling the financial assets; and

- The asset''s contractual cash flows represent SPPI.

Debt instruments meeting these criteria are measured initially at fair value plus transaction costs. They are subsequently measured at fair value with any gains or losses arising on re-measurement recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains or losses. Interest calculated using the effective interest method is recognized in the standalone statement of profit and loss in investment income.

• Measured at Fair Value Through Profit or Loss (FVTPL)

Financial assets are measured at fair value through profit or Loss unless it is measured at amortised cost or at fair value through other comprehensive income on initial recognition. Gains or losses arising on re-measurement are recognised in the standalone statement of profit and loss. The net gains or loss recognised in standalone statement of profit and loss incorporates any dividend or interest earned on the financial assets and is included in the “Other income” line item.

• Equity Instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI)

All equity investments in scope of Ind AS - 109 are measured at fair

value. Equity instruments which are, held for trading are classified as at FVTPL. For all other equity instruments, the company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The company makes such election on an instrument-by instrument basis. The classification is made on initial recognition and is irrevocable. In case the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment.

ii) Derecognition

The Company derecognizes a financial asset on trade date only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.

iii) Impairment of Financial Assets

In accordance with Ind AS 109, the Company uses ‘Expected Credit Loss'' (ECL model, for evaluating impairment of financial assets other than those measured at fair value through profit and loss (FVTPL).

Expected credit losses are measured through a loss allowance at an amount equal to:

• The 12-months expected credit losses (expected credit losses that result from those default events on the financial instrument that are possible within 12 months after the reporting date); or

• Full lifetime expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument)

For trade receivables Company applies ‘simplified approach'' which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rate to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.

For other assets, the Company uses 12 month ELC to provide for impairment loss where there is no significant increase in credit risk. If there is significant increase in credit risk full lifetime ELC is used.

iv) Foreign exchange gains and losses

The fair value of financial assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of each reporting period. For foreign currency denominated financial assets measured at amortised cost, the exchange differences are recognised in the standalone statement of profit and loss.

b) Financial Liabilities and equity instruments

Debts and equity instruments issued by a Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instruments.

Equity Instruments

An equity instrument is any contract that evidences a residual interest in the assets of an equity after deducting all of its liabilities. Equity instruments issued by the Company are recognised at the proceeds received, net of direct issue costs.

Financial Liabilities

i) Recognition and Initial Measurement

Financial liabilities are classified, at initial recognition, as at fair value through profit or loss, loans and borrowings, payables or as derivatives as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

ii) Subsequent Measurement

Financial liabilities are measured subsequently at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest rate method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

iii) Financial Guarantee Contracts

Financial guarantee contracts issued by the company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument.

Financial guarantee contracts are recognized initially as a liability at fair

value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirement of Ind AS 109 and the amount recognized less cumulative amortization.

iv) De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

v) Foreign exchange gains and losses

For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are included in standalone statement of profit and loss. The fair value of the financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period.

vi) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the counterparty.

c) Derivative financial instruments

The Company uses derivative financial instruments such as forward, swap, options etc. to hedge against interest rate and foreign exchange rate risks, including foreign exchange fluctuation related to highly probable forecast sale. The realized gain / loss in respect of hedged foreign exchange contracts whi

---

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES AND KEY
ACCOUNTING ESTIMATES AND JUDGEMENTS

A summary of the significant accounting policies applied in
the preparation of the standalone financial statements are as
given below. These accounting policies have been applied
consistently to all the periods presented in the standalone
financial statements, unless otherwise stated.

1. BASIS OF PREPARATION:

a) Statement of Compliance

These standalone financial statements have been
prepared in accordance with the Indian Accounting
Standards (“Ind AS”) as prescribed by Ministry
of Corporate Affairs pursuant to Section 133 of
the Companies Act, 2013 (“the Act”), read with
the Companies (Indian Accounting Standards)
Rules, 2015 (amended), guidelines issued by the
Securities and Exchange Board of India (SEBI),
and presentation requirements of Division II of
Schedule III to the Companies Act, 2013, (Ind
AS compliant Schedule III), as applicable to the
Standalone Financial Statement, other relevant
provisions of the Act and other accounting
principles generally accepted in India.

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.

b) Basis of Measurement

The standalone financial statements of the
Company have been prepared on historical cost
basis except for the following assets and liabilities
which have been measured at fair value:

i) Certain financial assets & liabilities (including
derivative instruments)

ii) Defined Benefit Plans as per actuarial
valuation

iii) Share based Payments

c) Functional and Presentation Currency

The standalone financial statements have been
presented in Indian Rupees (INR), which is also

the Company''s functional currency. All financial
information presented in INR has been rounded
off to the nearest lakhs as per the requirements
of Schedule III, unless otherwise stated.

d) Use of Assumptions, Judgments and Estimates

The key assumption, judgment and estimation
at the reporting date, that have significant risk
causing the material adjustment to the carrying
amounts of assets and liabilities within the next
financial year, are describe below. The company
based its assumption, judgment and estimation on
parameters available on the standalone financial
statements were prepared. Existing circumstances
and assumption about future development,
however, may change due to market changes or
circumstances arising that are beyond the control
of the company. Such changes are reflected in
the assumption when they occur.

i) Revenue

The application of revenue recognition
accounting standards is complex and
involves a number of key judgements
and estimates. Revenue is measured
based on the transaction price, which is
the consideration, adjusted for volume
discounts, price concessions and incentives,
if any, as specified in the contract with the
customer. The Company exercises judgment
in determining whether the performance
obligation is satisfied at a point in time or
over a period of time.

ii) Impairment of non-financial assets

The Company assesses at each reporting
date whether there is an indication that an
asset may be impaired. If any indication
exists, or when annual impairment testing
for an asset is required, the Company
estimates the asset''s recoverable amount.
An asset''s recoverable amount is the higher
of an asset''s or CGU''s fair value less
costs of disposal and its value in use. It is
determined for an individual asset, unless
the asset does not generate cash inflows
that are largely independent of those from
other assets or groups of assets. Where
the carrying amount of an asset or CGU
exceeds its recoverable amount, the asset
is considered impaired and is written down
to its recoverable amount.

An impairment loss is recognized as an
expense in the standalone statement of profit
and loss in the year in which an asset is
identified as impaired. The impairment loss
recognized in earlier accounting period is
reversed if there has been an improvement
in recoverable amount.

iii) Defined benefit plans

The cost of the defined benefit plan and other
post-employment benefits and the present
value of such obligation are determined using
actuarial valuations. An actuarial valuation
involves making various assumptions that
may differ from actual developments in the
future. These include the determination of
the discount rate, future salary increases,
mortality rates and attrition rate. Due to
the complexities involved in the valuation
and its long-term nature, a defined benefit
obligation is highly sensitive to changes in
these assumptions. All assumptions are
reviewed at each reporting date.

iv) Fair value measurement of financial
instruments

When the fair values of financial assets and
financial liabilities recorded in the balance
sheet cannot be measured based on quoted
prices in active markets, their fair value
is measured using valuation techniques
including the Discounted Cash Flow (DCF)
model. The inputs to these models are taken
from observable markets where possible,
but where this is not feasible, a degree of
judgement is required in establishing fair
values. Judgements include considerations
of inputs such as liquidity risk, credit risk
and volatility. Changes in assumptions about
these factors could affect the reported fair
value of financial instruments.

v) Impairment of financial assets

The impairment provisions for financial
assets are based on assumptions about
risk of default and expected loss rates. The
Company uses judgement in making these
assumptions and selecting the inputs to the
impairment calculation, based on Company''s
past history, existing market conditions as
well as forward looking estimates at the end
of each reporting period.

vi) Share-based payments

The Company measures the cost of equity-
settled transactions with employees using
Black-Scholes model to determine the fair
value of the liability incurred on the grant
date. Estimating fair value for share-based
payment transactions requires determination
of the most appropriate valuation model,
which is dependent on the terms and
conditions of the grant. This estimate
also requires determination of the most
appropriate inputs to the valuation model
including the expected life of the share
option, volatility and dividend yield and
making assumptions about them.

Employees (including senior executives)
of the Company receive remuneration
in the form of share-based payments,
whereby employees render services as
consideration for equity instruments (equity-
settled transactions).

vii) Equity-settled transactions

The cost of equity-settled transactions is
determined by the fair value at the date
when the grant is made using an appropriate
valuation model.

That cost is recognised, together with a
corresponding increase in share-based
payment reserves in equity, over the period
in which the performance and/or service
conditions are fulfilled in employee benefits
expense.

The cumulative expense recognised for
equity-settled transactions at each reporting
date until the vesting date reflects the
extent to which the vesting period has
expired and the Company''s best estimate
of the number of equity instruments that
will ultimately vest. The expense or credit in
the statement of profit and loss for a period
represents the movement in cumulative
expense recognised as at the beginning
and end of that period and is recognised in
employee benefits expense. No expense is
recognised for awards that do not ultimately
vest because service conditions have not
been met. When the terms of an equity-
settled award are modified, the minimum
expense recognised is the grant date fair
value of the unmodified award, provided the
original vesting terms of the award are met.
An additional expense, measured as at the
date of modification, is recognised for any
modification that increases the total fair value
of the share-based payment transaction,
or is otherwise beneficial to the employee.
Where an award is cancelled by the entity or
by the counterparty, any remaining element
of the fair value of the award is expensed
immediately through profit or loss.

The dilutive effect of outstanding options is
reflected as additional share dilution in the
computation of diluted earnings per share.

viii) Recognition of Deferred Tax Assets

The extent to which deferred tax assets can
be recognized is based on an assessment
of the probability of the Company''s future
taxable income against which the deferred
tax assets can be utilized. In addition,
significant judgement is required in assessing
the impact of any legal or economic limits.

ix) Classification of Leases

The Company enters into leasing
arrangements for various assets. The
classification of the leasing arrangement as a
finance lease or operating lease is based on
an assessment of several factors, including,
but not limited to, transfer of ownership of
leased asset at end of lease term, lessee''s
option to purchase and estimated certainty of
exercise of such option, proportion of lease
term to the asset''s economic life, proportion
of present value of minimum lease payments
to fair value of leased asset and extent of
specialized nature of the leased asset.

x) Restoration, rehabilitation and
decommissioning

Estimation of restoration/ rehabilitation/
decommissioning costs requires interpretation
of scientific and legal data, in addition to
assumptions about probability of future costs.

xi) Provisions and Contingencies

The assessments undertaken in recognising
provisions and contingencies have been
made in accordance with Indian Accounting
Standards (Ind AS) 37, ‘Provisions,
Contingent Liabilities and Contingent Assets''.
The evaluation of the likelihood of the
contingent events is applied best judgement
by management regarding the probability of
exposure to potential loss.

e) Classification of Assets and Liabilities into
Current/Non-Current

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, as
given below.

The Company has ascertained its operating cycle
as 12 months for the purpose of current and non¬
current classification of assets and liabilities.

For the purpose of Balance Sheet, an asset is
classified as current if:

i) Expected to be realized or intended to sold
or consumed in normal operating cycle;

ii) Held primarily for the purpose of trading;

iii) Expected to be realized within twelve months
after the reporting period; or

iv) Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period.

All the other assets are classified as non-current.

Similarly, a liability is current if:

i) It is expected to be settled in normal
operating cycle;

ii) It is held primarily for the purpose of trading;

iii) It is due to be settled within twelve months
after the reporting period; or

iv) There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period.

The Company classifies all other liabilities as
non-current.

Deferred Tax Assets and Liabilities are classified
as non-current assets and liabilities respectively.

2. Inventories

Raw materials and stores, work in progress, traded
and finished goods are stated at the lower of cost
and net realisable value. Cost of raw materials and
traded goods comprises cost of purchases. Cost of
work-in-progress and finished goods comprises direct
materials, direct labour and an appropriate proportion
of variable and fixed overhead expenditure, the latter
being allocated on the basis of normal operating
capacity. Costs of inventories also include all other
costs incurred in bringing the inventories to their present
location and condition. Costs are assigned to individual
items of inventory arrived on weighted average basis.
Costs of purchased inventory are determined after
deducting rebates and discounts. Net realisable value
is the estimated selling price in the ordinary course of
business less the estimated costs of completion and
the estimated costs necessary to make the sale.

Stores, spares and consumables

Stores spares, packing material and all consumables
items held for use in the production of inventories are
charged to profit & loss account as and when purchased.

Provision is recognized for damaged, defective or
obsolete stocks where necessary.

3. Cash and Cash Equivalents

Cash and cash equivalents in the balance sheet
comprise cash at banks and on hand, Cheques on hand
and short term deposits with an original maturity of three
months or less, which are subject to an insignificant
risk of change in value.

4. Cash Flows

Cash flows are reported using the indirect method,
where by net profit before tax is adjusted for the effects
of transactions of a non-cash nature, any deferrals or
accruals of past or future operating cash receipts or
payments and item of income or expenses associated
with investing or financing cash flows. The cash flows
from operating, investing and financing activities are
segregated.

5. Income Tax

Income Tax comprises current and deferred tax.

a) Current Tax

Current Tax is measured on the basis of estimated
taxable income for the current accounting period in
accordance with the applicable tax rates and the
provisions of the Income-tax Act, 1961. Current
income tax is recognized in The standalone
statement of profit and loss except to the extent
that it relates to an item recognized directly in
equity or in other comprehensive income.

b) Deferred Tax

Deferred tax is provided, on all temporary
differences at the reporting date between the
tax bases of assets and liabilities and their
carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to be applied
to the temporary differences when they reverse,
based on the laws that have been enacted or
substantively enacted at the reporting date. Tax
relating to items recognised directly in equity or
OCI is recognised in equity or OCI and not in
the standalone statement of profit and loss.

Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they relate to income
taxes levied by the same tax authority, but they
intend to settle current tax liabilities and assets
on a net basis or their tax assets and liabilities
will be realized simultaneously.

A deferred tax asset is recognized to the extent
that it is probable that future taxable profits will be
available against which the temporary difference
can be utilised. Deferred tax assets are reviewed
at each reporting date and are reduced to the
extent that it is no longer probable.

MAT Credit is recognized as an asset only when
and to the extent there is convincing evidence
that the Company will pay normal Income Tax
during the specified period. In the year in which
the Minimum Alternative Tax (MAT) credit becomes
eligible to be recognized as an asset in accordance
with the recommendations contained in guidance
note issued by the ICAI, the said asset is created
by way of credit to standalone statement of profit
and loss and shown as MAT credit entitlement.
The Company reviews the same at each Balance
Sheet date and writes down the carrying amount
of MAT entitlement to the extent there is no longer
convincing evidence to the effect that Company
will pay normal Income Tax during the specified
period.

6. Property, Plant and Equipment

a) Recognition and Measurement

i) Property, plant and equipment held for use
in the production or/and supply of goods or
services, or for administrative purposes, are
stated in the balance sheet at cost, less any
accumulated depreciation and accumulated
impairment losses (if any).

ii) Cost of an item of property, plant and
equipment acquired comprises its purchase
price, including import duties and non¬
refundable purchase taxes, after deducting
any trade discounts and rebates, any directly
attributable costs of bringing the assets to
its working condition and location for its
intended use and present value of any
estimated cost of dismantling and removing
the item and restoring the site on which it
is located.

iii) In case of self-constructed assets, cost
includes the costs of all materials used
in construction, direct labour, allocation
of directly attributable overheads, directly
attributable borrowing costs incurred in
bringing the item to working condition for
its intended use, and estimated cost of
dismantling and removing the item and
restoring the site on which it is located.
The costs of testing whether the asset is
functioning properly, after deducting the
net proceeds from selling items produced
while bringing the asset to that location
and condition are also added to the cost
of self-constructed assets.

iv) For transition to IND AS, the company has
revalued land at fair value as deemed cost
and considered other assets at Ind AS Cost.

v) Gains or losses arising from de-recognition
of property, plant and equipment are
measured as the difference between the net
disposal proceeds and the carrying amount
of the asset is recognized in the standalone
statement of profit and loss.

vi) Subsequent costs are included in the asset''s
carrying amount, only when it is probable
that future economic benefits associated
with the cost incurred will flow to the
Company and the cost of the item can be
measured reliably. The carrying amount of
any component accounted for as a separate
asset is derecognized when replaced. Major
Inspection/ Repairs/ Overhauling expenses
are recognized in the carrying amount of
the item of property, plant and equipment
a replacement if the recognition criteria
are satisfied. Any Unamortized part of the
previously recognized expenses of similar
nature is derecognized.

vii) The residual values, useful lives and
methods of depreciation of property, plant
and equipment are reviewed at each financial
year end and adjusted prospectively, if
appropriate.

viii) The Company identifies and determines cost
of asset significant to the total cost of the
asset having useful life that is materially
different from that of the remaining life.

ix) Research and development costs that are
in nature of tangible/ intangible assets and
are expected to generate probable future
economic benefits are capitalised and
classified under tangible/intangible assets
and depreciated on the same basis as
other fixed assets. Revenue expenditure on
research and development is charged to the
statement of profit and loss in the year in
which it is incurred.

b) Depreciation and Amortization

i) Depreciation on property, plant and
equipment is provided under Straight Line
Method over the useful lives of assets
prescribed by Schedule II of the Companies
Act, 2013. Depreciation in change in the
value of fixed assets due to exchange rate
fluctuation has been provided prospectively
over the residual life of the respective assets.

ii) Depreciation in respect of property, plant
and equipment added / disposed off during
the year is provided on pro-rata basis, with
reference to the date of addition/disposal.

7. Intangible Assets

i) Intangible assets acquired separately are
measured on initial recognition at cost. Following
initial recognition, intangible assets are carried
at cost less accumulated amortisation and
accumulated impairment loss, if any.

ii) Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss.

iii) Intangible assets are amortised on straight line
basis over its estimated useful life of 5 years.

8. 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. Where 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.

Recoverable amount is the higher of fair value less
costs to sell 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 recognised immediately in the
statement of profit and loss.

Where an impairment loss subsequently reverses, the
carrying amount of the asset (or cash-generating unit)
is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been
determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately
in the statement of profit and loss.

Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events
or changes in circumstances indicate that they might
be impaired.

9. Capital Work in Progress

Capital work-in-progress is stated at cost which includes
expenses incurred during construction period, interest
on amount borrowed for acquisition of qualifying assets
and other expenses incurred in connection with project
implementation in so far as such expenses relate to
the period prior to the commencement of commercial
production.

10. Investment in Joint-Venture

Investment in Joint-venture is measured at cost less
impairment loss, if any.

The joint arrangement is structured through a separate
vehicle and the legal form of the separate vehicle,
the terms of the contractual arrangement and, when
relevant, any other facts and circumstances gives the
Company rights to the net assets of the arrangement
(i.e. the arrangement is a joint venture). The activities
of the joint venture are primarily aimed to provide
the third parties with an output and the parties to the
joint venture will not have rights to substantially all the
economic benefits of the assets of the arrangement.

11. Investment in subsidiaries and associates

Investments in subsidiaries and associates are
recognised at cost as per IND AS 27. Except where
investments accounted for at cost shall be accounted
for in accordance with IND AS 105, Non-current Assets
held for Sale and Discontinued Operations, when they
are classified as held for sale.

12. Leases

a) The Company as lessor

Leases for which the Company is a lessor
are classified as finance or operating leases.
Whenever the terms of the lease transfer
substantially all the risks and rewards of ownership
to the lessee, the contract is classified as finance

lease. All other leases are classified as operating
leases.

Rental income from operating leases is recognised
on a straight-line basis over the term of the
relevant lease. Initial direct costs incurred in
negotiating and arranging an operating lease are
added to the carrying amount of the leased asset
and recognised on a straight-line basis over the
lease term.

b) The Company as lessee

The Company assesses whether a contract is
or contains a lease, at inception of the contract.
The Company recognises a right-of-use asset
and a corresponding lease liability with respect to
all lease arrangements in which it is the lessee,
except for short-term leases (defined as leases
with a lease term of 12 months or less) and
leases of low value assets. For these leases, the
Company recognises the lease payments as an
operating expense on a straight-line basis over
the lease term, unless another systematic basis is
more representative of the time pattern in which
economic benefits from the leased assets are
consumed. Contingent and variable rentals are
recognized as expense in the periods in which
they are incurred.

c) Lease Liability

The lease payments that are not paid at the
commencement date are discounted using the
interest rate implicit in the lease. If that rate
cannot be readily determined, which is generally
the case for leases in the Company, the lessee''s
incremental borrowing rate is used, being the rate
that the individual lessee would have to pay to
borrow the funds necessary to obtain an asset of
similar value to the right-of-use asset in a similar
economic environment with similar terms, security
and conditions.

Lease payments included in the measurement of
the lease liability comprise:

• Fixed lease payments (including in¬
substance fixed payments) payable during
the lease term and under reasonably certain
extension options, less any lease incentives;

• Variable lease payments that depend on an
index or rate, initially measured using the
index or rate at the commencement date;

• The amount expected to be payable by the
lessee under residual value guarantees;

• The exercise price of purchase options, if
the lessee is reasonably certain to exercise
the options; and

• Payments of penalties for terminating the
lease, if the lease term reflects the exercise
of an option to terminate the lease.

The lease liability is presented as a separate line
in the Balance Sheet.

The lease liability is subsequently measured by
increasing the carrying amount to reflect interest
on the lease liability (using the effective interest
method) and by reducing the carrying amount to
reflect the lease payments made.

The Company re-measures the lease liability (and
makes a corresponding adjustment to the related
right-of-use asset) whenever:

• The lease term has changed or there is a
change in the assessment of exercise of a
purchase option, in which case the lease
liability is re-measured by discounting the
revised lease payments using a revised
discount rate.

• A lease contract is modified and the lease
modification is not accounted for as a
separate lease, in which case the lease
liability is re-measured by discounting the
revised lease payments using a revised
discount rate.

d) Right of Use (ROU) Assets

The ROU assets comprise the initial measurement
of the corresponding lease liability, lease payments
made at or before the commencement day and
any initial direct costs. They are subsequently
measured at cost less accumulated depreciation
and impairment losses.

Whenever the company incurs an obligation for
costs to dismantle and remove a leased asset,
restore the site on which it is located or restore
the underlying asset to the condition required by
the terms and conditions of the lease, a provision
is recognised and measured under Ind AS 37-
Provisions, Contingent Liabilities and Contingent
Assets. The costs are included in the related
right-of-use asset.

ROU assets are depreciated over the shorter
period of the lease term and useful life of the
underlying asset. If the company is reasonably
certain to exercise a purchase option, the right-
of-use asset is depreciated over the underlying
asset''s useful life. The depreciation starts at the
commencement date of the lease.

The ROU assets are not presented as a separate
line in the Balance Sheet but presented below
similar owned assets as a separate line in the PPE
note under “Notes forming part of the Financial
Statement”.

The Company applies Ind AS 36- Impairment
of Assets to determine whether a right-of-use
asset is impaired and accounts for any identified
impairment loss as per its accounting policy on
‘property, plant and equipment''.

As a practical expedient, Ind AS 116 permits a
lessee not to separate non-lease components
when bifurcation of the payments is not available
between the two components, and instead
account for any lease and associated non-lease
components as a single arrangement. The
Company has used this practical expedient.

Extension and termination options are included
in many of the leases. In determining the lease
term the management considers all facts and
circumstances that create an economic incentive
to exercise an extension option, or not exercise
a termination option.

13. Revenue Recognition

Revenue is measured at the fair value of the
consideration received or receivable, and represents
amount receivable from sale of solar modules, sale of
solar power and lease rental, stated net of discounts.

Ind AS 115 “Revenue from Contracts with Customers”,
introduced one single new model for recognition
of revenue which includes a 5-step approach and
detailed guidelines. Among other, such guidelines are
on allocation of revenue to performance obligations
within multi-element arrangements, measurement and
recognition of variable consideration and the timing of
revenue recognition.

The Company considers the terms of the contract
in determining the transaction price. The transaction
price is based upon the amount the entity expects to
be entitled to in exchange for transferring of promised
goods and services to the customer after deducting
incentive programs, included but not limited to discounts,
volume rebates etc.

a) Revenue from sale of goods

Revenue from the sale of solar modules is
measured based on the consideration specified in
a contract with a customer and excludes amounts
collected on behalf of third parties. Company
recognises revenue at a point in time, when
control is transferred to the customer, and the
consideration agreed is expected to be received.
Control is generally deemed to be transferred upon
delivery of the products in accordance with the
agreed delivery plan.

In case of related party transactions where
related party meets the definition of customer (ie
a party that has contracted with the Company
to obtain goods or services that are an output
of the Company''s ordinary activity in exchange
for consideration) and the transactions are within
the scope of the standard then the revenue is
recognised based on the principles of IND AS
115.

Revenues for services are recognised when the
service rendered has been completed.

• Revenue from services

Revenue from services mainly consists of
the following;

• Income from Lease Rent

Revenue from services, which mainly
consists of lease rentals from letting of
space, is recognised over time on satisfying
performance obligations as per the terms
of agreement, that is, by reference to the
period in which services are being rendered.
Revenue from services, if any, involving
single performance obligation is recognised
at a point in time

• Sale of energy

Revenue from operations comprises of sale
of power. Revenue is recognized at an
amount that reflects the consideration for
which the Company expects to be entitled
in exchange for transfer of power (goods /
service) to the customer. Revenue from sale
of power is accounted for in accordance
with tariff provided in Power Purchase
Agreement (PPA) read with the regulations
of respective regulatory authorities and no
significant uncertainty as to the measurability
or collectability exist. There is no impact on
the adoption of the standard in the financial
statement as the Company''s revenue
primarily comprised of revenue from sale
of power and the recognition criteria of this
revenue stream is largely unchanged by Ind
AS 115.

• Contract Assets

Contract assets are recognised when there
is excess of revenue earned over billings
on contracts. Unbilled receivables where
further subsequent performance obligation
is pending are classified as contract
assets when the company does not have
unconditional right to receive cash as per
contractual terms. Revenue recognition for
fixed price development contracts is based on
percentage of completion method. Invoicing
to the clients is based on milestones as
defined in the contract. This would result
in the timing of revenue recognition being
different from the timing of billing the
customers. Unbilled revenue for fixed price
development contracts is classified as non¬
financial asset as the contractual right to
consideration is dependent on completion
of contractual milestones.

• Impairment of Contract asset

The Company assesses a contract asset
for impairment in accordance with Ind AS
109.An impairment of a contract asset is
measured, presented and disclosed on the
same basis as a financial asset that is within
the scope of Ind AS 109.

• Contract Liability

Contract Liability is recognised when there
are billings in excess of revenues and it
also includes consideration received from
customers for whom the company has
pending obligation to transfer goods or
services.

The billing schedules agreed with customers
include periodic performance based
payments and / or milestone based progress
payments. Invoices are payable within
contractually agreed credit period.

• Modification in contract

Contracts are subject to modification to
account for changes in contract specification
and requirements. The Company reviews
modification to contract in conjunction
with the original contract, basis which the
transaction price could be allocated to a
new performance obligation, or transaction
price of an existing obligation could undergo
a change. In the event transaction price is
revised for existing obligation, a cumulative
adjustment is accounted for.

b) Interest Income

Interest income from a financial asset is recognized
when it is probable that the economic benefit
will flow to the company and the amount of
income can be measured reliably. Interest income
is accrued on a time basis, by reference to
principal outstanding and the effective interest
rate applicable, which is the rate that exactly
discounts estimated future cash receipts through
the expected life of the financial assets to that
assets'' net carrying amount on initial recognition.

14. Retirement and other employee benefits

a) Short Term Employee Benefits

Short term employee benefit obligations are
measured on an undiscounted basis and are
expensed as the related services are provided.
Liabilities for wages and salaries, including non¬
monetary benefits that are expected to be settled
wholly within twelve months after the end of the
period in which the employees render the related
service are recognized in respect of employees''
services up to the end of the reporting period.

b) Other Long Term Employee Benefits

The liabilities for earned leaves that are not
expected to be settled wholly within twelve months
are measured as the present value (determined
by actuarial valuation using the projected unit
credit method) of the expected future payments
to be made in respect of services provided
by employees up to the end of the reporting
period and recognised in books of accounts.
The present value of the defined benefit plan

liability is calculated using a discount rate which
is determined by reference to market yields at the
end of the reporting period on government bonds.
Re-measurements as the result of experience
adjustment and changes in actuarial assumptions
are recognized in standalone statement of profit
and loss.

c) Post-Employment Benefits

The Company operates the following post¬
employment schemes:

i) Defined Benefit Plan

The liability or asset recognized in the
Balance Sheet in respect of defined benefit
plans is the present value of the defined
benefit obligation at the end of the reporting
period less the fair value of plan assets.
The Company''s net obligation in respect
of defined benefit plans is calculated by
estimating the amount of future benefit that
employees have earned in the current and
prior periods.

The defined benefit obligation is calculated
annually by Actuaries using the projected unit
credit method. The liability recognized for
defined benefit plans is the present value of
the defined benefit obligation at the reporting
date less the fair value of plan assets,
together with adjustments for unrecognized
actuarial gains or losses and past service
costs. Net interest is calculated by applying
the discount rate at the beginning of the
period to the net defined benefit liability or
asset. Past service cost is recognised in
the standalone statement of profit and loss
in the period of a plan amendment. The
present value of the defined benefit plan
liability is calculated using a discount rate
which is determined by reference to market
yields at the end of the reporting period on
government bonds.

Re-measurement, 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 recognised in Other
Comprehensive Income (OCI) in the period
in which they occur. Re-measurement
recognised in OCI is reflected immediately in
retained earnings and will not be reclassified
to standalone statement of profit and loss.

ii) Defined Contribution Plan

Retirement benefit in the form of provident
fund is a defined contribution scheme. The
Company has no obligation other than the
contribution payable to the Provident fund.
Contribution payable under the provident
fund is recognised as expenditure in the

standalone statement of profit and loss and/
or carried to Construction work-in-progress
when an employee renders the related
service.

15. Government Grants

Government grants are recognized at their fair values
when there is reasonable assurance that the grants
will be received and the Company will comply with all
the attached conditions.

a) Government grants are recognised in the
statement of profit or loss on a systematic basis
over the periods in which the Company recognises
the relatedcostsforwhich the grants are intended
to compensate.

b) Grants related to acquisition/ construction of
property, plant and equipment are recognised
as deferred revenue in the Balance Sheet and
transferred to the statement of profit or loss on
a systematic and rational basis over the useful
lives of the related asset.

16. Foreign Currency Transactions

a) The functional currency and presentation currency
of the company is Indian Rupee (INR).

b) Transactions in currencies other than the
company''s functional currency are recorded on
initial recognition using the exchange rate at the
transaction date. At each balance sheet date,
foreign currency monetary items are reported
using the closing rate.

c) Non- monetary items that are measured in terms
of historical cost in foreign currency are not
retranslated. Exchange difference that arise on
settlement of monetary items or on reporting of
monetary items at each Balance sheet date at
the closing spot rate are recognised in profit or
loss in the period in which they arise except for:

i) exchange difference on foreign currency
borrowings related to assets under
construction for future productive use, which
are included in the cost of those assets
when they are regarded as an adjustment
to interest cost on those foreign currency
borrowings; and

ii) exchange differences on transactions
entered into in order to hedge certain foreign
currency risks.

iii) exchange differences on monetary items
receivable from or payable to a foreign
operation for

which settlement is neither planned nor likely to
occur (therefore forming part of the net investment
in the foreign operation), which are recognised
initially in other comprehensive income and
reclassified from equity to the Statement of Profit
and Loss on repayment of the monetary items.

According to Appendix B of Ind AS 21 “Foreign
currency transactions and advance consideration”,
purchase or sale transactions must be translated
at the exchange rate prevailing on the date the
asset or liability is initially recognized. In practice,
this is usually the date on which the advance
payment is paid or received. In the case of multiple
advances, the exchange rate must be determined
for each payment and collection transaction

17. Borrowing Cost

Borrowing cost include interest expense calculated using
the Effective interest method, finance charges in respect
of assets acquired on finance lease and exchange
difference arising on foreign currency borrowings to
the extent they are regarded as an adjustment to the
finance cost.

Borrowing costs (including other ancillary borrowing cost)
directly attributable to the acquisition or construction
of a qualifying asset are capitalized as a part of the
cost of that asset that necessarily takes a substantial
period of time to complete and prepare the asset for its
intended use or sale. The Company considers a period
of twelve months or more as a substantial period of
time.

Transaction costs in respect of long term borrowing are
amortized over the tenure of respective loans using
Effective Interest Rate (EIR)method. All other borrowing
costs are recognized in the standalone statement of
profit and loss in the period in which they are incurred.

18. Earnings per Share

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

19. Exceptional Item

Exceptional items include income or expense that are
considered to be part of ordinary activities, however
are of such significance and nature that separate
disclosure enables the user of the financial statements
to understand the impact in a more meaningful manner.
Exceptional items are identified by virtue of either their
size or nature so as to facilitate comparison with prior
periods and to assess underlying trends in the financial
performance of the Company.

20. Financial Guarantee Contract

Financial guarantee contract provided to the lenders of
the Company by its Parent Company is measured at
their fair values and benefit of such financial guarantee
is recognised to equity as a capital contribution from
the parent.

21. Financial Instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability
or equity instrument of another entity. Financial assets
and financial liabilities are recognised when a Company
entity becomes a party to the contractual provisions of
the instruments.

Financial assets and financial liabilities are initially
measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial
assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss
and ancillary costs related to borrowings) are added to
or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition
of financial assets or financial liabilities at fair value
through profit or loss are recognised immediately in
standalone statement of profit and loss.

a) Financial Assets

i) Classification and Subsequent
Measurement

For purposes of subsequent measurement,
financial assets are classified in four
categories:

• Measured at Amortized Cost

• Measured at Fair Value Through Other
Comprehensive Income (FVTOCI)

• Measured at Fair Value Through Profit
or Loss (FVTPL) and

• Equity Instruments measured at Fair
Value Through Other Comprehensive
Income (FVTOCI)

Financial assets are not reclassified
subsequent to their initial recognition, except
if and in the period the Company changes
its business model for managing financial
assets.

• Measured at Amortized Cost

The Financial assets are subsequently
measured at the amortized cost if both the
following conditions are met:

• The asset is held within a business
model whose objective is achieved by
both collecting contractual cash flows;
and

• The contractual terms of the financial
asset give rise on specified dates to
cash flows that are solely payments
of principal and interest (SPPI) on the
principal amount outstanding.

After initial measurement, such financial
assets are subsequently measured at

amortized cost using the effective interest
rate (EIR)method. Income is recognised
on an effective interest basis for debt
instruments other than those financial assets
classified as FVTPL. Interest income is
recognised in the standalone statement of
profit and loss.

• Measured at Fair Value Through
Other Comprehensive Income
(FVTOCI)

The financial assets are measured at the
FVTOCI if both the following conditions are
met:

• The objective of the business model is
achieved by both collecting contractual
cash flows and selling the financial
assets; and

• The asset''s contractual cash flows
represent SPPI.

Debt instruments meeting these criteria
are measured initially at fair value plus
transaction costs. They are subsequently
measured at fair value with any gains
or losses arising on re-measurement
recognized in other comprehensive income,
except for impairment gains or losses and
foreign exchange gains or losses. Interest
calculated using the effective interest method
is recognized in the standalone statement
of profit and loss in investment income.

• Measured at Fair Value Through
Profit or Loss (FVTPL)

Financial assets are measured at fair
value through profit or Loss unless it is
measured at amortised cost or at fair value
through other comprehensive income on
initial recognition. Gains or losses arising
on re-measurement are recognised in the
standalone statement of profit and loss. The
net gains or loss recognised in standalone
statement of profit and loss incorporates any
dividend or interest earned on the financial
assets and is included in the “Other income”
line item.

• Equity Instruments measured at Fair
Value Through Other Comprehensive
Income (FVTOCI)

All equity investments in scope of Ind AS
- 109 are measured at fair value. Equity
instruments which are, held for trading
are classified as at FVTPL. For all other
equity instruments, the company may
make an irrevocable election to present in
other comprehensive income subsequent
changes in the fair value. The company
makes such election on an instrument-by
instrument basis. The classification is made

on initial recognition and is irrevocable. In
case the company decides to classify an
equity instrument as at FVTOCI, then all fair
value changes on the instrument, excluding
dividends, are recognized in the OCI. There
is no recycling of the amounts from OCI to
P&L, even on sale of investment.

ii) Derecognition

The Company derecognizes a financial asset
on trade date only when the contractual
rights to the cash flows from the asset expire,
or when it transfers the financial asset and
substantially all the risks and rewards of
ownership of the asset to another entity.

iii) Impairment of Financial Assets

In accordance with Ind AS 109, the Company
uses ‘Expected Credit Loss'' (ECL model, for
evaluating impairment of financial assets
other than those measured at fair value
through profit and loss (FVTPL).

Expected credit losses are measured through
a loss allowance at an amount equal to:

• The 12-months expected credit losses
(expected credit losses that result from
those default events on the financial
instrument that are possible within 12
months after the reporting date); or

• Full lifetime expected credit losses
(expected credit losses that result from
all possible default events over the life
of the financial instrument)

For trade receivables Company applies
‘simplified approach'' which requires expected
lifetime losses to be recognised from initial
recognition of the receivables. The Company
uses historical default rate to determine
impairment loss on the portfolio of trade
receivables. At every reporting date these
historical default rates are reviewed and
changes in the forward looking estimates
are analysed.

For other assets, the Company uses 12
month ELC to provide for impairment loss
where there is no significant increase in
credit risk. If there is significant increase in
credit risk full lifetime ELC is used.

iv) Foreign exchange gains and losses

The fair value of financial assets denominated
in a foreign currency is determined in that
foreign currency and translated at the spot
rate at the end of each reporting period.
For foreign currency denominated financial
assets measured at amortised cost, the
exchange differences are recognised in the
standalone statement of profit and loss.

b) Financial Liabilities and equity instruments

Debts and equity instruments issued by a
Company are classified as either financial liabilities
or as equity in accordance with the substance of
the contractual arrangements and the definitions
of a financial liability and an equity instruments.

Equity Instruments

An equity instrument is any contract that evidences
a residual interest in the assets of an equity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.

Financial Liabilities

i) Recognition and Initial Measurement

Financial liabilities are classified, at initial
recognition, as at fair value through profit
or loss, loans and borrowings, payables or
as derivatives as appropri

---

Mar 31, 2018

1. Significant Accounting Policies:

(a) Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principle in all of its revenue arrangements since it is the primary obligation in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.

Interest income

Interest income, including income arising from other financial instruments, is recognized using the effective interest rate method.

(b) Property, Plant and Equipment

Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation and impairment loss (if any). All significant costs relating to the acquisition and installation of property, plant and equipment are capitalized. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of plant and equipment are required to be replaced at intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in statement of profit and loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met.

Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The identified components are depreciated over their useful lives, the remaining asset is depreciated over the life of the principal asset.

Depreciation for identified components is computed on straight line method based on useful lives, determined based on internal technical evaluation. Freehold land is carried at cost.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(c) Intangible Assets

Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. The company amortizes Computer software using the straight-line method over the period of 6 years.

(d) Depreciation and amortization

Depreciation is provided on the straight-line method over the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013. Depreciation for assets purchased/sold during a period is proportionately charged.

(e) Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is: -

- Expected to be realized or intended to be sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period, or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period

- All other assets are classified as non-current. A liability is current when:

- It is expected to be settled in normal operating cycle;

- It is held primarily for the purpose of trading;

- It is due to be settled within twelve months after the reporting period, or

- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

- The Company classifies all other liabilities as non-current.

(f) Financial assets

Financial assets comprise of cash and cash equivalents.

Initial recognition:

All financial assets are recognized initially at fair value. Purchases or sales of financial asset that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the company commits to purchase or sell the assets.

Subsequent Measurement:

(i) Financial assets measured at amortized cost: Financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding are measured at amortized cost using effective interest rate (EIR) method. The EIR amortization is recognized as finance income in the Statement of Profit and Loss.

The Company while applying above criteria has classified the following at amortized cost:

a) Trade receivable

b) Cash and cash equivalents

c) Other Financial Asset

Impairment of Financial Assets:

Financial assets are tested for impairment based on the expected credit losses.

De-recognition of financial assets:

A financial asset is primarily de-recognized when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.

(g) Impairment of Non-Financial Assets

At each reporting date, the Company assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the company makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash generating unit to which the asset belongs.

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.

(h) Inventories

Cost of inventories have been computed to include all cost of purchases, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Raw materials/traded goods and components, stores and spares and loose tools are valued at lower of cost and net realizable value.

Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.

Cost of work-in-progress and finished goods/ Traded goods are determined on a weighted average basis. Scrap is valued at net realizable value.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

(i) Cash and Cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. Deposits with banks are subsequently measured at amortized cost and short term investments are measured at fair value through statement of profit & loss account.

(j) Financial liabilities

Initial recognition and measurement:

All financial liabilities are recognized initially at fair value and transaction cost that is attributable to the acquisition of the financial liabilities is also adjusted. These liabilities are classified as amortized cost. A preference share that provides for mandatory redemption by the issuer for a fixed or determinable amount at a fixed or determinable future date, or gives the holder the right to require the issuer to redeem the instrument at or after a particular date for a fixed or determinable amount, is a financial liability.

Subsequent measurement:

These liabilities include are borrowings and deposits. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss. This category generally applies to borrowings.

De-recognition of financial liabilities:

A financial liability is de-recognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

(k) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest, exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other costs that an entity incurs in connection with the borrowing of funds. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

(l) Employee Benefits

Employee benefits are charged to the Statement of Profit and Loss for the year.

Provident Fund

Retirement benefits in the form of Provident Fund are defined contribution scheme and such contributions are recognized, when the contributions to the respective funds are due. There are no other obligation other than the contribution payable to the respective funds.

Gratuity

The Company has not created any gratuity fund. However adequate provisions have been made in the accounts for gratuity liability. The benefit vests upon completion of five years of continuous service and once vested it is payable to employees on retirement or on termination of employment. In case of death while in service, the gratuity is payable irrespective of vesting.

Compensated absences

Liability in respect of compensated absences becoming due or expected to be availed within one year from the balance sheet date is recognized on the basis of undiscounted value of estimated amount required to be paid or estimated value of benefit expected to be availed by the employees.

Short-term employee benefits

Expense in respect of other short term benefits is recognized on the basis of the amount paid or payable for the period during which services are rendered by the employee.

(m) Income Taxes

Income tax expense is comprised of current and deferred taxes. Current and deferred tax is recognized in net income Current income taxes for the current period, including any adjustments to tax payable in respect of previous years, are recognized and measured at the amount expected to be recovered from or payable to the taxation authorities based on the tax rates that are enacted or substantively enacted by the end of the reporting period.

Deferred income tax

Deferred income tax assets and liabilities are recognized for temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base using the tax rates that are expected to apply in the period in which the deferred tax asset or liability is expected to settle, based on the laws that have been enacted or substantively enacted by the end of reporting period. Deferred tax assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income.

Minimum Alternative Tax (MAT)

MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The company reviews the same at each balance sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that company will pay normal Income Tax during the specified period.

(n) Leases

As a lessee

Leases of property, plant and equipment where the company, as lessee, has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessor’s expected inflationary cost increases.

As a lessor

Lease income from operating leases where the company is a lessor is recognized in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.

Lease-hold land:

Leasehold land that normally has a finite economic life and title which is not expected to pass to the lessee by the end of the lease term is treated as an operating lease. The payment made on entering into or acquiring a leasehold land is accounted for as leasehold land use rights (referred to as prepaid lease payments in Ind AS 17 “Leases”) and is amortized over the lease term in accordance with the pattern of benefits provided.

(o) Provisions, contingent assets and contingent liabilities

Provisions are recognized only when there is a present obligation, as a result of past events, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions are discounted to their present values, where the time value of money is material.

Contingent liability is disclosed for:

- Possible obligations which will be confirmed only by future events not wholly within the control of the Company or

- Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

Contingent assets are neither recognized nor disclosed. However, when realization of income is virtually certain, related asset is recognized.

(p) Fair value measurement

In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date. Fair value hierarchy:

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 —Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2—Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

(q) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for events of bonus issue. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

4. Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with the recognition and measurement principles of Ind AS requires management to make judgements, estimates and assumptions that affect the reported balances of revenues, expenses, assets and liabilities and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

a) Judgements

In the process of applying the accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:

i) Classification of property The Company determines whether a property is classified as investment property or inventory property:

Investment property comprises land and buildings (principally offices, commercial warehouse and retail property) that are not occupied substantially for use by, or in the operations of, the Company, nor for sale in the ordinary course of business, but are held primarily to earn rental income and capital appreciation. These buildings are substantially rented to tenants and not intended to be sold in the ordinary course of business.

b) Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

i) Classification of leases -

The Company enters into leasing arrangements for various assets. The classification of the leasing arrangement as a finance lease or operating lease is based on an assessment of several factors, including, but not limited to, transfer of ownership of leased asset at end of lease term, lessee''s option to purchase and estimated certainty of exercise of such option, proportion of lease term to the asset''s economic life, proportion of present value of minimum lease payments to fair value of leased asset and extent of specialized nature of the leased asset.

ii) Useful lives of depreciable/amortizable assets

Management reviews its estimate of the useful lives of depreciable/amortizable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utility of certain software, customer relationships, IT equipment and other plant and equipment.

iii) Fair value measurements

Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument.

Management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.

c) Recent Amendments

Standards issued but not yet effective

i) Ind AS 115-Revenue from Contracts with Customers-The Ministry of Corporate Affairs (MCA) on March 28, 2018 has notified new Indian Accounting Standard as mentioned above .The new standard will come to into force from accounting period commencing on or after April 01, 2018.It replaces existing recognition guidance, including Ind AS 18 Revenue and Ind AS 11 Construction contract. The standard is likely to affect the measurement, recognition and disclosure of revenue. The Company has evaluated and there is no material impact of this amendment on the Financial Statement of the Company except disclosure. The Company will adopt the Ind AS 115 on the required effective date.

ii) Ind AS 21, The Effect of Changes in Foreign Exchange Rates - The amendments to Ind AS 21 addresses issue to determine the date of transactions for the purpose of determining the exchange rate to be used on initial recognition of related assets, expenses or income when entity has received or paid advances in foreign currencies by incorporating the same in Appendix B to Ind AS 21. The amendment will come into force from accounting period commencing on or after April 01, 2018. The Company has evaluated this amendment and impact of this amendment will not be material.

The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.

---

Mar 31, 2016

1. Significant Accounting Policies

i. Company Information

Surana Telecom and Power Limited (the Company) is a public limited company domiciled in India and is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) Company is into Manufacturing of Aluminum Rods, Generation of wind & Solar Power and trading of Solar Modules and other related products.

ii. Basis of Preparation of Financial Statements

The financial statements of Surana Telecom and Power Limited (‘the company'') have been prepared under the historical cost convention on the accrual basis with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013 (“ the Act) including the accounting standard notified under the Act.

ii. Use of Estimates

The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

iii. Own Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat / value added tax, less accumulated depreciation and impairment loss, if any. Any costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized.

iv. Leased Assets

Premium Paid on Leased Assets is amortized over the lease period and the annual lease rentals are charged to Profit and Loss Account in the year it accrues.

v. Depreciation

Depreciation is provided on Straight Line Method, except for Plant & Machinery of Gujarat Unit for which written down Value method is followed, in the manner prescribed in Schedule II of the Companies Act 2013. However, till previous year, depreciation was provided at the rate and in the manner prescribed in Schedule XIV of the Companies Act 1956. Capitalized Software Cost is amortized over a period of 3 years.

vi. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

vii. Investments

Current Investments are carried at the lower of cost and quoted / fair value, computed category wise. Long Term Investments are stated at cost less any permanent diminution in value, determined separately for each individual investment Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.

viii. Inventories

Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net releasable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads.

ix. Foreign Currency Transactions

Gains and Losses on account of exchange differences existing out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements , in so far as they relate to the acquisition of a depreciable capital asset can be added or deducted from the cost of asset and shall be depreciated over the balance life of asset and in other cases ,it can be accumulated in a “foreign currency monetary item transaction Difference Account” in the enterprises financial statements and amortized over the balance period of such long asset/liability.

In respect of Purchases / Sales in normal course of business, the Gain / Loss is charged to Profit and Loss Account.

x. Employee Retirement / Terminal Benefits

The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The premium paid thereon is charged to Profit and Loss Account. Leave Encashment liability is provided on the basis of actuarial valuation on actual entitlement of eligible employees at the end of the year.

xi. Provision, Continent 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements.

xii. Turnover

Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net). Inter-Unit sales are excluded in the Main Profit and Loss account.

xiii. Revenue Recognition

Dividend income is recognized when the unconditional right to receive the income is established. Income from sale of VER is accounted as and when sold to customers.

xiv. Government Grants

Grants received against capital items carrying cost of asset is adjusted against the cost of the asset on actual receipt of the money from the government.

Assets received as grant free of cost are recorded at nominal value of Rs, 1 transfer of possession.

Compensation / Reimbursement of specific revenue items are adjusted in the year of receipt against the respective revenue items on receipt basis.

xv. Segment Reporting

Company''s operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments representing one or more strategic business units that offer products or services of different nature and to different Markets.

Inter-Segment transfers are done at cost.

Company''s Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Ministry of Corporate Affairs.

xvi. Provision for Taxation

Income taxes/ Taxation is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting & taxable profits, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

xvii. Prior Period Expenses / Income

Prior period items, if material are separately disclosed in Profit & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the financial affairs of the company are disclosed.

xviii. Sundry Debtors, Loans and Advances

Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable.

xix. Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets in accordance with Accounting Standard-16 (AS-16) prescribed under Rule 7 of Accounting Standard Rules, 2014. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Borrowing cost are ceased to be capitalized when the asset is ready for its intended use or there is cessation of development for the extended period and charged to Profit & Loss Account.

xx. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard-20 (AS-20) prescribed under Rule 7 of Accounting Standard Rules, 2014. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

---

Mar 31, 2014

I. Basis of Preparation of Financial Statements

The financial statements of Surana Telecom and Power Limited (''the company'') have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis with the generally accepted accounting principles in India and the provisions of the Companies Act, 1956 read with General Circular 15/2013 dated 13.09.2013 of Ministry of Corporate Affairs in respect of section 133 of Companies Act, 2013.

The Company has prepared these Financial Statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 issued by Ministry of Corporate Affairs. Previous year figures have been recast/ restated to comform to the classification required by the Revised Schedule VI.

ii. Use of Estimates

The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

iii. Own Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat / value added tax, less accumulated depreciation and impairment loss, if any. Any costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized.

iv. Leased Assets

Premium Paid on Leased Assets is amortized over the lease period and the annual lease rentals are charged to Profit and Loss Account in the year it accrues.

v. Deferred Revenue Expenditure

Expenses which in the opinion of the management will give a benefit beyond three years are Deferred Revenue Expenditure and amortised over 3 to 5 years. Goodwill is amortised over period of 5 years and certification fees is amortised over a period of 3 years.

vi. Depreciation

Depreciation is provided on written down value method, except for Wind Power Plant for which Straight Line Method is followed, at the rate and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

vii. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

viii. Investments

Current Investments are carried at the lower of cost and quoted / fair value, computed category wise. Long Term Investments are stated at cost less any permanent diminution in value, determined separately for each individual investment Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.

ix. Inventories

Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net releasable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads.

x. Foreign Currency Transactions

* Gains and Loses on account of exchange differences existing out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements , in so far as they relate to the acquisition of a depreciable capital asset can be added or deducted from the cost of asset and shall be depreciated over the balance life of asset and in other cases ,it can be accumulated in a "foreign currency monetary item transaction Difference Account" in the enterprises financial statements and amortized over the balance period of such long asset/liability.

* In respect of Purchases / Sales in normal course of business, the Gain / Loss is charged to Profit and Loss Account.

xi. Employee Retirement/Terminal Benefits

The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The premium paid thereon is charged to Profit and Loss Account. Leave Encashment liability is provided on the basis of actuarial valuation on actual entitlement of eligible employees at the end of the year.

xii. Provision, Continent 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements.

xiii. Turnover

Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net). Inter-Unit sales are excluded in the Main Profit and Loss account.

xiv. Revenue Recognition

Dividend income is recognized when the unconditional right to receive the income is established. Income from sale of VER is accounted as and when sold to customers.

xv. Government Grants

Grants received against capital items carrying cost of asset is adjusted against the cost of the asset on actual receipt of the money from the government.

Assets received as grant free of cost are recorded at nominal value of Rs.1 transfer of possession. Compensation / Reimbursement of specific revenue items are adjusted in the year of receipt against the respective revenue items on receipt basis.

xvi. Segment Reporting

Company''s operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments representing one or more strategic business units that offer products or services of different nature and to different Markets.

Inter-Segment transfers are done at cost.

Company''s Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Ministry of Corporate Affairs.

xvii. Provision for Taxation

Provision is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting & taxable profits, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

xviii. Prior Period Expenses / Income

Prior period items, if material are separately disclosed in Profit & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the financial affairs of the company are disclosed.

xix. Sundry Debtors, Loans and Advances

Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable.

xx. Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit & Loss Account.

xxi. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard-20 (AS-20) issued by the Ministry of Corporate Affairs. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

---

Mar 31, 2013

I. Basis of Preparation of Financial Statements

The fi nancial statements of Surana Telecom & Power Limited (''the company'') have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis.

The Company has prepared these Financial Statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 issued by Ministry of Corporate Affairs. Previous period''s fi gures have been recast/ restated to comform to the classifi cation required by the Revised Schedule VI.

ii. Use of Estimates

The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of fi nancial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

iii. Own Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat / value added tax, less accumulated depreciation and impairment loss, if any. Any costs, including fi nancing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fi xed assets are capitalized.

iv. Leased Assets

Premium Paid on Leased Assets is amortized over the lease period and the annual lease rentals are charged to Profi t and Loss Account in the year it accrues.

v. Deferred Revenue Expenditure

Expenses which in the opinion of the management will give a benefi t beyond three years are Deferred Revenue Expenditure and amortised over 3 to 5 years. Goodwill is amortised over period of 5 years and certifi cation fees is amortised over a period of 3 years.

vi. Depreciation

Depreciation is provided on written down value method, except for Wind Power Plant for which Straight Line Method is followed, at the rate and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

vii. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profi t and Loss account in the year in which an asset is identifi ed as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

viii. Investments

Current Investments are carried at the lower of cost and quoted / fair value, computed category wise. Long Term Investments are stated at cost less any permanent diminution in value, determined separately for each individual investment Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.

ix. Inventories

Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net releasable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads.

x. Foreign Currency Transactions

- Gains and Loses on account of exchange differences existing out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous fi nancial statements , in so far as they relate to the acquisition of a depreciable capital asset can be added or deducted from the cost of asset and shall be depreciated over the balance life of asset and in other cases ,it can be accumulated in a "foreign currency monetary item transaction Difference Account" in the enterprises fi nancial statements and amortized over the balance period of such long asset/ liability.

- In respect of Purchases / Sales in normal course of business, the Gain / Loss is charged to Profi t and Loss Account.

xi. Employee Retirement / Terminal Benefi ts

The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The premium paid thereon is charged to Profi t and Loss Account. Leave Encashment liability is provided on the basis of actuarial valuation on actual entitlement of eligible employees at the end of the year.

xii. Provision, Continent 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 event and it is probable that there will be an outfl ow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements.

xiii. Turnover

Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net). Inter-Unit sales are excluded in the Main Profi t and Loss account.

xiv. Revenue Recognition

Dividend income is recognized when the unconditional right to receive the income is established. Income from sale of VER is accounted as and when sold to customers.

xv. Government Grants

Grants received against capital items carrying cost of asset is adjusted against the cost of the asset on actual receipt of the money from the government.

Assets received as grant free of cost are recorded at nominal value of Rs.1 transfer of possession.

Compensation / Reimbursement of specifi c revenue items are adjusted in the year of receipt against the respective revenue items on receipt basis.

xvi. Segment Reporting

Company''s operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments representing one or more strategic business units that offer products or services of different nature and to different Markets. Inter-Segment transfers are done at cost.

Company''s Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Institute of Chartered Accountants of India.

xvii. Provision for Taxation

Provision is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting & taxable profi ts, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

xviii. Prior Period Expenses / Income

Prior period items, if material are separately disclosed in Profi t & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the fi nancial affairs of the company are disclosed.

xix. Sundry Debtors, Loans and Advances

Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable.

xx. Borrowing Costs

Borrowing Costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profi t & Loss Account.

xxi. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard-20 (AS-20) issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net Profi t or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profi t or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

---

Mar 31, 2012

I. Basis of Preparation of Financial Statements

The financial statements of Surana Telecom and Power Limited ('the company') have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis.

The Company has prepared these financial statements as per the format prescribed by Revised Schedule VI to the Companies Act, 1956 issued by Ministry of Corporate Affairs. Previous period's figures have been recast/restated to comform to the classification required by the Revised Schedule VI.

ii. Use of Estimates

The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assets and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.

iii. Own Fixed Assets

Fixed Assets are stated at cost net of modvat / cenvat / value added tax, less accumulated depreciation and impairment loss, if any. Any costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized.

iv. Leased Assets

Premium Paid on Leased Assets is amortized over the lease period and the annual lease rentals are charged to Profit and Loss Account in the year it accrues.

v. Depreciation

Depreciation is provided on written down value method, except for Wind Power Plant for which Straight Line Method is followed, at the rate and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

vi. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

vii. Investments

Current investments are carried at the lower of cost and quoted / fair value, computed category wise. Long Term Investments are stated at cost less any permanent diminution in value,determined separately for each individual investment Provision for diminution in the value of long-term investments is made only if such decline is other than temporary in the opinion of the management.

viii. Inventories

Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net releasable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads.

ix. Foreign Currency Transactions

- Gains and Loses on account of exchange differences existing out of reporting of long term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements , in so far as they relate to the acquisition of a depreciable capital asset can be added or deducted from the cost of asset and shall be depreciated over the balance life of asset and in other cases ,it can be accumulated in a "foreign currency monetary item transaction .Difference Account" in the enterprises financial statements and amortized over the balance period of such long asset/liability.

- In respect of Purchases / Sales in normal course of business, the Gain / Loss is charged to Profit and Loss Account.

x. Employee Retirement / Terminal Benefits

The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corporation of India. The premium paid thereon is charged to Profit and Loss Account. Leave Encashment liability is provided on the basis of actuarial valuation on actual entitlement of eligible employees at the end of the year.

xi. Provision, 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements.

xii. Turnover

Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net) excise duty.. Inter-Unit sales are excluded in the Main Profit and Loss account.

xiii. Revenue Recognition

Dividend income is recognized when the unconditional right to receive the income is established. Income from sale of VER is accounted as and when sold to customers.

xiv. Government Grants

Grants received against capital items carrying cost of asset is adjusted against the cost of the asset on actual receipt of the money from the government. Assets received as grant free of cost are recorded at nominal value of transfer of possession. Compensation / Reimbursement of specific revenue items are adjusted in the year of receipt against the respective revenue items on receipt basis.

xv. Segment Reporting

Company's operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments representing one or more strategic business units that offer products or services of different nature and to different Markets.

Inter-Segment transfers are done at cost.

Company's Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Institute of Chartered Accountants of India.

xvi. Provision for Taxation

Provision is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting & taxable profits, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

xvii. Excise and Customs duty

Excise and Customs duty are accounted on accrual basis. CENVAT credit is accounted by crediting the amount to cost of purchases on receipt of goods and is utilized on dispatch of material by debiting excise duty account.

xviii. Prior Period Expenses / Income :

Prior period items, if material are separately disclosed in Profit & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the financial affairs of the company are disclosed.

xix. Sundry Debtors, Loans and Advances

Doubtful Debts/Advances are written off in the year in which those are considered to be irrecoverable.

xx. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard-20 (AS-20) issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.

---

Mar 31, 2010

I. Basis of Preparation of Financial Statements.

The financial statements are prepared under the Historical cost convention with the generally ac- cepted accounting principles in India and the provisions of the Companies Act, 1956.

ii. Use of Estimates.

The Preparation of Financial Statements requires estimates and assumptions to be made that effect the reported amount of assts and liabilities on the date of financial statements and reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.

iii. Own Fixed Assets.

Fixed Assets are stated at cost net of modvat/cenvat/value added tax, less accumulated depreciation and impairment loss, if any. Any costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations to the fixed assets are capitalized.

iv. Leased Assets

Premium Paid on Leased Assets is amortised over the lease period and the annual lease rentals are charged to Profit and Loss Account in the year it accrues.

v. Depreciation

Depreciation is provided on written down value method, except for Wind Power Plant for which Straight Line Method is followed, at the rate and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

vi. Impairment of Assets

An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Profit and Loss account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

vii. Investments

Current investments are carried at the lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term invest- ments is made only if such decline is other than temporary in the opinion of the management.

viii. Inventories

Items of Inventories are measured at lower of cost or net realizable value, after providing for obsolescence, if any. Cost of inventories comprises of all cost of purchase including duties and taxes other than credits under CENVAT and is arrived on First in First out basis. Semi Finished goods are valued at cost or net realizable value whichever is lower. Finished goods are valued at cost including excise duty payable or net realizable value whichever is lower. Cost includes Direct Material, Labour cost and appropriate overheads.

ix. Foreign Currency Transactions.

Transactions in foreign currency are recorded at the exchange rate, prevailing on the date of trans- action or at the exchange rates under the related forward exchange contracts. Profit/Loss on outstanding Foreign Currency contracts have been accounted for at the exchange rates, prevailing at the year end rates as per FEDAI/RBI.

x. Employee Retirement/Terminal Benefits

The employees of the company are covered under Group Gratuity Scheme of Life Insurance Corpo- ration of India. The premium paid thereon is charged to Profit and Loss Account. Leave Encashment liability is provided on the basis of best management estimates on actual entitlement of eligible employees at the end of the year.

xi. Provision, Continent 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 event and it is probable that there will be an outflow of resources. Contingent Liabilities which are not recognized are disclosed in notes. Contingent Assets are neither recognized nor disclosed in Statements.

xii. Turnover

Turnover includes sale of goods, services, sales tax, service tax and adjusted for discounts (net), excise duty. Inter-Unit sales are excluded in the Main Profit and Loss account.

xiii. Revenue Recognition in Case of Real Estate Transactions

Revenue in case of real estate transactions is made on the basis of concluded on contracts for sales and purchases.

xiv. Segment Reporting

Companys operating Businesses, organized & Managed unit wise, according to the nature of the products and services provided, are recognized in segments representing one or more strategic business units, that offer products or services of different nature and to different Markets.

Companys Operations could not be analyzed under geographical segments in considering the guiding factors as per Accounting Standard-17 (AS-17) issued by the Institute of Chartered Accountants of India.

xv. Provision for Taxation

Provision is made for Income Tax, estimated to arise on the results for the year, at the current rate of tax, in accordance with the Income Tax Act, 1961. Taxation deferred as a result of timing difference, between the accounting & taxable profits, is accounted for on the liability method, at the current rate of tax, to the extent that the timing differences are expected to crystallize. Deferred tax asset is recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets are reviewed, as at each Balance Sheet date to re-assess realization.

xvi. Excise and Customs Duty

Excise and Customs Duty are accounted on accrual basis. CENVAT credit is accounted by crediting the amount to cost of purchases on receipt of goods and is utilized on dispatch of material by debiting excise duty account.

xvii. Prior Period Expenses/Income :

Prior period items, if material are separately disclosed in Profit & Loss Account together with the nature and amount. Extraordinary items & changes in Accounting Policies having material impact on the financial affairs of the company are disclosed.

xviii. Sundry Debtors, Loans and Advances

Doubtful Debts/Advances are written off in the year in which those are considered to be irrecover- able.

xix. Earnings per Share

The Company reports basic and diluted earnings per share in accordance with Accounting Standard- 20 (AS-20) issued by the Institute of Chartered Accountants of India. Basic earnings per share are computed by dividing the net Profit or Loss for the year by the Weighted Average number of equity share outstanding during the year. Diluted earnings per share is computed by dividing the net profit or loss for the year by weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, except where the results are anti-dilutive.