2.1 Revenue Recognition & Other Income
• Revenue is recognized upon transfer of control of the products to customers at a point in time i.e. when the
products are delivered to the carrier in an amount that reflects the consideration that the company expects
to receive in exchange for those products
• Dividend is recognized at the time of receipt.
• Interest income is accrued on a time proportion basis, by reference to the principal outstanding and
effective interest rate applicable.
• Interest subsidy and Electricity duty are accounted for on the basis of receipts or where there is reasonable
assurance that the Company will comply with the conditions attaching to them and that the subsidies will
be received or when actually received by the Company. Subsidies from the Government are recognized in
profit or loss on a systematic basis over the periods in which the Company recognizes as expenses the
related costs for which the subsidies are intended to compensate.
2.2 Property, Plant, Equipment (PPE) and Intangible Assets:
• The Company has elected to continue with the carrying value of Property, Plant and Equipment (‘PPE’)
recognized as of transition date measured as per the Previous GAAP and use that carrying value as its
deemed cost of the PPE as on the transition date.
• Property, Plant, Equipment and Intangible Assets (Fixed Assets) are stated at cost, net of accumulated
depreciation and impairment losses if any. The cost comprises purchase price, borrowing cost
capitalization if criteria and met and directly attribute cost of bringing attributable cost of bringing the
assets to its working condition for the intended use. Any trade discounts and rebates are deducted in
arriving at the purchase price.
• Subsequent expenditure related to an item of fixed assets is added to its book value only if it increased the
future benefits from the existing asset beyond its previously assessed standard of performance. All other
expenses on existing Property, Plant, Equipment and Intangible Assets, including day to day repair and
maintenance expenditure and cost of replacing parts, are charged to statement of profit and loss for the
period during which such expenses are incurred.
• The Company adjusts exchange difference arising on transaction of long-term foreign currency monetary
items pertaining to the acquisition of a depreciable asset to the cost of the assets and depreciates the same
over the remaining life of project.
• An item of property, plant and equipment is derecognized upon the disposal or when no future benefits are
expected from its use or disposal. Gains and losses on disposal of an item of property, plant and equipment
are determined by comparing the proceeds from disposal with the carrying amount of property, plant and
equipment, and are recognized net within other income / expenses in the statement of profit and loss.
• Property, Plant and Equipment (Fixed Assets) under installation or under construction as at Balance Sheet
are shown as Capital Work in Progress. However, apart from the above stated assets, Wind Mill & Solar
Power System also to be considered as a Capital Work in Progress in the current financial year as it is an
under-installation phrase.
2.3 Depreciation
• The depreciable amount of an asset is determined after deducting its residual value. Where the residual
value of an asset increases to an amount equal to or greater than the asset’s carrying amount, no
depreciation charge is recognized till the asset’s residual value decreases below the asset’s carrying
amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and
condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset
ceases at the earlier of the date that the asset is classified as held for sale in accordance with IND AS 105
and the date that the asset is derecognized. The estimated useful lives of assets are as follows:
Impairments of non-financial assets:
The Company assesses at each balance sheet date whether there is any indication that an asset or cash generating unit
(CGU) may be impaired. Indefinite life intangibles are subject to a review for impairment annually or more frequently if
events or circumstances indicate that it is necessary. If any such indication exists, the Company estimates the recoverable
amount of the asset. The recoverable amount is the higher of an asset's or CGU's fair value less costs of disposal or its value
in use. 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.
In assessing the 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. In determining
the fair value less costs of disposal, recent market transactions are considered. An impairment loss is recognized if the
carrying amount of an asset or CGU exceeds its recoverable amount, Impairment losses are recognized in the statement of
profit and loss.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, an impairment
loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortization, if no impairment loss had been recognized.
2.4 Employee Benefits
Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee
benefits. Undiscounted value of benefits such as salaries, incentives, allowances and bonus are recognized in the period in
which the employee renders the related service.
Long term benefits:
Defined Contribution Plans:
The Company contributes to the employee's approved provident fund scheme. The Company’s contribution paid/payable
under the scheme is recognized as an expense in the statement of profit and loss during the period in which the employee
renders the related services.
Defined Benefit Plans:
Gratuity Liability is a defined benefit obligation and is provided on the basis of an actuarial valuation model made at the end
of the Financial Year. Contributions to such fund is charged to Profit & Loss Account. Actuarial Valuation of the Gratuity is
done at the end of the Financial Year and accounted for accordingly.
2.5 Inventories
• Inventories consist of raw materials and finished goods. Raw material is valued at cost. Finished goods are
valued at lower of cost and net realizable value (NRV).
• Cost of raw materials includes cost of purchases and other costs incurred in bringing the inventories to their
present location and condition.
• 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. However, materials and other items held for
use in the production of inventories are not written down below cost if the finished products in which they
will be used are expected to be sold at or above cost.
2.6 Borrowing Cost
• The total borrowing cost on the acquisition of fixed assets, if pertaining to the period up to the date on
which the said fixed assets have been put-to-use, has been capitalized in the respective fixed assets and the
cost for the period after the said fixed assets have been put-to-use has been debited to the Profit and Loss
Account.
2.7 Investments
• Investments, which are readily realizable and intended to be held for not more than one year from the date
one which such investments are made, are classified as current investments. All other investments are
classified as long-term investments.
• On initial recognition, all investments are measured at cost. The cost comprises the purchase price and
directly attributable acquisition charges such as brokerage, fees and duties.
• Current investments are carried at the lower of cost and fair value determined on an individual investment
basis. Long-term investments are carried at cost. However, provision for diminution in value is made to
recognize a decline other than temporary in the value of such long-term investments.
• On disposal of an investment, the difference between its carrying amount and net disposal proceeds is
charged or credited to the statement of profit and loss.
2.8 Cash Flows and Cash and cash equivalent
• Statement of cash flows is prepared in accordance with the indirect method prescribed in the relevant IND
AS. For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash
on hand, cheques and drafts on hand, deposits held with Banks, other short-term, highly liquid investments
with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value, and book overdrafts.
However, Book overdrafts are to be shown within borrowings in current liabilities in the balance sheet for
the purpose of presentation.
2.9 Financial Assets:
A. F air Value Assessment:
• Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date, regardless of whether that price is
directly observable or estimated using another valuation technique. In estimating the fair value of an asset
or a liability, the Company takes into account the characteristics of asset and liability if market participants
would take those into consideration. Fair value for measurement and / or disclosure purposes in these
Financial Statements is determined in such basis except for transactions in the scope of Ind AS - 2, 17 and
36. Normally at initial recognition, the transaction price is the best evidence of fair value.
• The fair value of an asset or a liability is measured using the assumptions that market participants would
use when pricing the asset or liability, assuming that market participants act in their economic best interest.
• A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
• The Company uses valuation techniques those are appropriate in the circumstances and for which sufficient
data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing
the use of unobservable inputs.
• All financial assets and financial 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.
B. Subsequent Measurement:
For purposes of subsequent measurement financial assets are classified in three categories:
• Financial assets measured at amortized cost
• Financial assets at fair value through OCI
• Financial assets at fair value through profit or loss
C. Financial assets measured at amortized cost:
• Financial assets are measured at amortized cost if the financials asset is 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 asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding. These financials assets are amortized using the effective
interest rate (‘EIR’) method, less impairment. 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 in finance income in the Statement of Profit And Loss. The losses arising from
impairment are recognized in the Statement of Profit And Loss.
D. Financial assets at fair value through OCI (‘FVTOCI’):
• Financial assets are measured at fair value through other comprehensive income if the financial asset is
held within a business model whose objective is achieved by both collecting contractual cash flows and
selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount outstanding. At initial
recognition, an irrevocable election is made (on an instrument-by-instrument basis) to designate
investments in equity instruments other than held for trading purpose at FVTOCI. Fair value changes are
recognized in the other comprehensive income (‘OCI’). However, the Company recognizes interest
income, impairment losses and reversals and foreign exchange gain or loss in the Statement of Profit And
Loss. On de-recognition of the financial asset other than equity instruments designated as FVTOCI,
cumulative gain or loss previously recognized in OCI is reclassified to the Statement of Profit and Loss.
E. Financial assets at fair value through profit or loss (‘FVTPL’):
• Any financial asset that does not meet the criteria for classification as at amortized cost or as financial
assets at fair value through other comprehensive income is classified as financial assets at fair value
through profit or loss. Further, financial assets at fair value through profit or loss also include financial
assets held for trading and financial assets designated upon initial recognition at fair value through profit or
loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or
repurchasing in the near term. Financial assets at fair value through profit or loss are fair valued at each
reporting date with all the changes recognized in the Statement of Profit And Loss.
F. De-recognition:
• The Company derecognizes a financial asset 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. If the Company neither transfers nor retains substantially all the risks and
rewards of ownership and continues to control the financial asset, the Company recognizes its retained
interest in the asset and an associated liability for amounts it may have to pay.
G. Impairment of Financial Assets:
The Company assesses impairment based on expected credit loss (‘ECL’) model on the following:
• Financial assets that are measured at amortized cost; and
• Financial assets measured at FVTOCI
• ECL is measured through a loss allowance on a following basis:
• The 12 month expected credit losses (expected credit losses that result from those default events on the
financial instruments that are possible within 12 months after the reporting date)
• Full life time expected credit losses (expected credit losses that result from all possible default events over
the life of financial instruments)
2.10 Financial Liabilities:
The Company’s financial liabilities include trade payable.
A. Initial recognition and measurement:
• All financial liabilities at initial recognition are classified as financial liabilities at amortized cost or
financial liabilities at value through profit or loss, as appropriate. All financial liabilities classified at
amortized cost are recognized initially at fair value net of directly attributable transaction costs. Any
difference between the proceeds (net of transaction costs) and the fair value at initial recognition is fair
recognized in the Statement of Profit And Loss.
B. Subsequent measurement:
The subsequent measurement of financial liabilities depends upon the classification as described below:-
Financial Liabilities classified as Amortized Cost:
• Financial Liabilities that are not held for trading and are not designated as at FVTPL are measured at
amortized cost at the end of subsequent accounting periods. 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.
Interest expense that is not capitalized as part of costs of assets is included as Finance costs in the
Statement of Profit And Loss.
Financial Liabilities classified as Fair value through profit And loss (FVTPL):
• Financial liabilities classified as FVTPL includes financial liabilities held for trading and financial
liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for
trading if they are incurred for the purpose of repurchasing in the near term. Financial liabilities designated
upon initial recognition at FVTPL only if the criteria in Ind AS 109 is satisfied.
• Exports benefits are accounted for in the year of exports based on the eligibility and when there is certainty
of receiving the same.
A. De-recognition:
• A financial liability is de-recognized when the obligation under the liability is discharged / cancelled /
expired. 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 and Loss.
B. Offsetting of financial instruments:
• Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if
there is a currently enforceable legal right to offset the recognized amounts and there is an intention to
settle on a net basis, to realize the assets and settle the liabilities simultaneously.
• Other incomes, other than interest and dividend are recognized when the same are due to be received and
right to receive such other income is established.
2.11 Foreign Currency Transactions
A. Initial Recognition
• On initial recognition, transactions in foreign currencies are recorded in the functional currency (i.e., Indian
Rupee), by applying to the foreign currency amount the spot exchange rate between the functional currency
and the foreign currency at the date of the transaction.
B. Measurement of foreign currency items at reporting date
• Foreign currency monetary items are translated at the closing exchange rates. Non-monetary items that are
measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the
transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using
the exchange rates at the date when the fair value is measured.
C. Recognition of exchange difference
• Exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were translated on initial recognition during the period or in previous
financial statements is recognized in profit or loss in the period in which they arise.
2.12 T axation
• Current Tax is determined as the amount of tax payable u/s 115 BAB in respect of Book Profit of the
financial year.
• Deferred tax on account of timing differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one or more subsequent periods, is
provided using the tax rates and tax laws enacted or substantially enacted by the Balance sheet date.
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