B. Significant accounting policies L Statement of compliance
The financial statements have been prepared in accordance with Indian Accounting standards ("Lnd AS1') notified, under section 133 of the Companies Act, 2013 ('Act') read with the rules notified under the relevant provisions of the Act,
2. Ba sis of Pre pa ratio n
The financial statements have been prepared on accrual basis and under the historical cost convention except for certain financial instruments which are measured at fair va^ue at the end of each reporting period, as explained in the accounting policies mentioned below.
The financial statements have been prepared in accordance with the requirements of the information and disclosures mandated by Schedule III (Division - HI} of the companies Act, applicable Ind AS and other applicable pronouncements and regulations.
The fin an cal statements Including notes thereon are presented in Indian Rupees ("Rupees" or "IWR”), which is the Company's functional and presentation currency. All amounts disclosed in the financial statements including notes thereon have been rounded off to the nearest thousands of Rupees as per the requirement of Schedule HI to the Act, unless staled otherwise,
3. Use of Estimates, Judgments and Assumptions
The preparation oF financial statements in accordance with lod AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have significant effect on amount recognized in the finance I statements are: Ý
L Allowance for bad and doubtfuI trade recejvabfe.
i i. ftecognitl on a n d m ea su re m e n t of p rovisi o n an d co ntingencie s.
Eli. Depreciation/ Amortisation and useful lives of Property, plant and equipment / Intangible assets. __
iv. Recognition of deferred tax.
v. Income Texes.
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vi. Measurement of defined benefit obligation. [/*/ \ ^ YS\\
vh. impairment of ndn-ftnancial asset! and financial assets.
4. Changes in accounting policies and disclosures:
The Company has not early adopted any standards or amendments that have teen issued but are not yet effective.
5. Reve n u e ftecogfi ft i on
a. Interest income is recognited on accrual basis using the effective interest method-
b. Revenue from contract with customer is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services. Revenue is measured based on the transaction price, which is the consideration, adjusted for discounts and other incentives, if any, as per contracts with the customers.
L Revenue from windmill energy generation is accounted for cm the basis of the billing to respective state governments as per the Power purchase Agreement entered into with them.
ii. Other operational revenue represents income earned from the activities incidental to the business and is recognized when the performance obligation is satisfied and right to receive the income is established as per the terms of the contract, ,
c. Dividend income is recognised in profit or loss on the date on which the company's right to receive payment is established.
6. Property, Plant and Equipment
a. Measurement and recognition:
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost.
Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses, if any.
The cost of an Item of property, plant and equipment comprises of its purchase price including import duties and other non-refundable purchase taxes or levies, directly attributable cost uf bringing the asset to its working condition for its intended use and the initial estimate of decommissioning, restoration, and similar liabilities, if any.
Subsequent expenditure Is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the company.
b. Depreciation:
Depreciation is provided using straight-line method as specified in Schedule fl to the Companies Act, 2013. Depreciation on assets acquired / disposed of during the year is provided on pro-rata basis with reference to the date of addition / disposal.
c. Derecognition:
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from continued use of the asset. Any gain or loss arising on the disposal or retirement of property, plant and equipment is determined as the difference between the sale proceeds and the carrying amount of the assets and is recognised in StajtertfenfStRrofit and Loss.
7, Intangible assets
a. Measurement and recognition:
Intangible assets 3re held at cost less accumulateo amortisation ana impairment losses. Intangible assets developed or Acquired with finite useful life are amortised on straight line basis over the useful life of asset.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates or when the development stage is achieved. All other expenditure, including expenditure on internally generated goodwill and brands, when Incurred is recognised in statement of profit and loss.
b. Amortisation
The intangible assets of the Company are assessed to be of finite lives and are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The Company reviews amortization period on an annuel basis- Intangible assets are amortized on straight line basis in accordance with IND AS 3B and Schedule II tc the Companies Act,2013 or based on technical estimates.
c- Derecognition:
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 and Loss when the asset is derecognised.
3, (impairment of non-financial asset
The company assesses at each reporting date whether there is any objective evidence that a nonfinancial asset or a group of non'financial assets are impaired. If any such indication exists, the company estimates the amount of impairment loss. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or group of assets is considered as cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.
An impairment loss Is calculated as the difference between an asset's carrying amount and recoverable amount. Losses are recognized in profit or toss and reflected in an allowance account. When the company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. if the: amount of impairment loss subsequently decreases ana the decrease can be related objectively to an event occurring after the impairment was recognized, then the previously recognized impairment loss is reversed through profit ar loss.
When on impairment loss subsequently reverses, the carrying amount of the asset (or a cash-Eeneratiug unit) is increased to the revised estimate of its recoverable amount, hut so that the increased carrying amount does not exceed Lhe carrying amount that would have been in place had there been no impairment loss been recognized for the asset (or cash-generating unit) in prior years A reversal of an impairment loss is recognized immediately in Statement of Profit and Loss, taking into account the normal depreclatlon/amortization,
9. Employee Benefits
Short-term benefits
Short-term benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for Lhe amount expected to be paid under shortterm cash bonus or profit-sharing plans If the Company has a present lepLoc-CQrjstructive obligation to pay this amount as a result of past service provided oy the employee and the obligation can he estimated reliably.
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into a separate? entity and will have no legal or constructive obligation to pay further amounts. Obligations trjr contributions to recognised provident funds, approved superannuation schemes and other social securities, which are defined contribution plans, are recognised as an employee benefit expense in the statement of profit and loss as incurred, Ý
defined benefit plans
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company's net obligation in respect of an approved gratuity pi on, which is a defined benefit plan, and certain other definec benefit plans is calculated separately for each material plan by estimating the ultimate cost to the entity of the benefit that employees have earned In return for their service in the current and prior periods. This requires an entity to determine how much benefit is attributable to the current and prior periods and to make estimates (actuarial assumptions) about demographic var iables end financial variables that will affect the cost of the benefit. The cost of providing benefits under the defined benefit plan i; determined using actuarial valuation performed annually by a qualified actuary using the projected unit credit method.
The benefit is discounted to determine the present value of the defined benefit obligation and the current service cost. The discount rate is the yield at the reporting date ort risk free government bonds that have maturity dates approximating the terms of the Company's obligations and that are denominated in the same currency in which the benefits are expected to be paid-
The fair value of any plan assets is deducted from the present value of the defined benefit obligation to determine the amount of deficit or surplus. The net defined benefit stability/ (asset) is determined as the amount of the deficit or surplus, adjusted for any effect of limiting a net defined benefit asset to the asset ceiling, The net defined benefit liability/(asset) is recognised in the balance sheet.
Defined benefit costs are recognised as follows:
* Service cost in the statement of profit and loss
* Met interest on the net defined benefit liability (asset) in the statement of profit and loss
* Remeasurement of the net defined benefit liability/ (asset) in other comprehensive income
Service costs comprise of current service cost, past service cost, as well as gains and losses on curtailment and settlements. The benefit attributable to current and past periods of service is determined using the plan's benefit formula. However, if an employee's service in later years will lead to a materially higher level of henefit than in earlier years, the benefit is attributed on a straight-fine basis Past service cost is recognised in the statement of profit and loss in the period of plan amendment. A gain or loss on the settlement of a defined benefit plan is recognised when the settlement occurs.
Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability/! as set) at the beginning of the period, taking account of any changes in the net defined benefit liability/fassetj during the period as a result of contribution and benefit payments.
Re measurement comprises of actuarial gains and losses, the return on plan assets (excluding interest), and the effect of changes to the asset ceiling (if applicable). Remeasurement recognised in other comprehensive income is not reclassified to the statement of profit and loss.
The income tax expense or credit for the period is the tax payable on the current period's taxable Inrnnie based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
a. Current taxes
Provision for current tax is made after taking into consideration benefits admissible under provisions of the Income Tax Act, 19G1. Minimum Alternative Tax (MAT) credit entitlement is recognized where there Is convincing evidence that the same can be realized in future.
h. Deferred Taxes
The deferred tax charge or credit the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date, Deferred tax assets are recognized to the extent there is reasonable certainly that the assets can be realized in future; however, vzhere there is unahsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is reasonable certainty of realization of such assets.
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