II. MATERIAL ACCOUNTING POLICIES

a) Property, plant and equipment

An item of Property, Plant and Equipment that qualified as an asset is measured at initial recognition at
Cost. Following initial recognition, items of property, plant and equipment (PPE) are carried at cost less
accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized
until the property, plant and equipment are ready for use, as intended by the management.

The company identifies and determines cost of each part of PPE separately, if the part has a cost which is
significant to the total cost of that items of PPE and has useful life that is materially different from that of
the remaining items.

Advances paid for acquisition of Property, plant and equipment outstanding at each balance sheet date is
classified as capital advances under other non-current assets. Cost of the assets not put to use before such
date are disclosed under ‘Capital Work-in-progress’. Any subsequent expenditure relates to property,
plant and equipment is capitalized only when it is probable that future economic benefits associated with
these will flow to the company and the cost of the item can be measured reliably. Repairs and maintenance
costs are recognized in the statement of profit and loss when incurred. Items of spare parts are recognized
as Property, plant and equipment when they meet the definition of PPE. The cost and related depreciation
are eliminated from the PPE upon sale or retirement of the asset and the resultant gain or losses are
recognized in statement of profit and loss.

b) Intangible assets

Intangible assets are stated at cost of acquisition less accumulated amortization. Intangible assets are
amortized over their respective individual estimated useful lives on a straight line basis from the date they
are available for use.

c) Borrowing costs

Borrowing Costs, that are directly attributable to the acquisition or construction of assets, that necessarily
take a substantial period of time to get ready for its intended use, are capitalised as part of the cost of
qualifying asset when it is possible that they will result in future economic benefits and the cost can be
measured reliably.

d) Depreciation and amortization

Depreciation is recognized so as to write off the cost of assets less their residual values based on useful lives

as specified in Schedule II of the Companies Act, 2013 as follows:

i) Under straight line method in respect of plant and machinery of wind power division.

ii) Under written down value method on the remaining assets of the company.

iii) The intangible assets, being computer software is amortized over a period of 5 years on straight line
method.

Depreciation methods, useful lives and residual values are reviewed periodically at each financial year end.

e) Inventories

i) Finished goods are valued at lower of cost or net realizable value.

ii) Cost of work-in-progress and finished goods includes appropriate portion of overheads etc.,

iii) Raw materials, stores and spares are valued at cost using weighted average method.

iv) Work-in-progress, raw materials, stores, spares, material in transit, are valued at cost except where the
net realizable value of the finished goods they are used in is less than the cost of finished goods and
in such an event, if the replacement cost of such materials etc., is less than their book values, they are
valued at replacement cost.

v) By-products and scrap are valued at net realizable value.

f) 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.

i) Revenue from sale of products is recognised when the entity satisfies a performance obligation by
transferring the promised goods to customers and the goods are transferred when the customer
obtains control over the goods and the company retains no effective control over the goods sold.
Revenue is measured at the amount of transaction price (net of variable consideration) allocated to
that performance obligation. The transaction price of goods sold is net of variable consideration on
account of discounts offered as part of contract.

When there is any uncertainty as to the measurement or collectability of consideration, revenue
recognition to the extent of amount of uncertainty is postponed until such uncertainty is resolved.

ii) Amounts collected on behalf of third parties such as GST are excluded from Revenue.

iii) Revenue realized on processing charges is recognized to the extent of completion of job as per the
agreements/arrangements with the concerned parties.

iv) Power purchased from other units is accounted at market price at which the power is purchased from
external party.

v) Interest income is recognized using effective interest method.

vi) Dividend income is recognized when the right to receive payment is established.

g) Taxes on income

Income tax expense comprises the sum of tax currently payable and deferred tax. Income tax expense is
recognized in net profit in the statement of profit and loss except to the extent that it relates to items
recognized directly in equity, in which case it is recognized in other comprehensive income.

Current tax is determined at the amount expected to be paid to or recovered from the tax authorities, using
the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax assets and liabilities are recognized for all temporary differences arising between the
tax bases of assets and liabilities and their carrying amounts in the financial statements. The carrying
amount of deferred tax assets is reviewed at the end of each year and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the assets to be
recovered.

Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted
or subsequently enacted by the balance sheet date and are expected to apply to taxable income in the years
in which those temporary differences are expected to be recovered or settled. The effect of changes in tax
rates on deferred income tax assets and liabilities are recognized as income or expense in the year of
enactment. A deferred income tax asset is recognized to the extent that it is probable that future taxable
profit will be available against which the deductible temporary differences and tax losses can be utilized.

h) Segment reporting

The operating segments of the entity are identified based on the revenues earned and expenses incurred
whose operating results are regularly reviewed by the entity’s decision maker to make decisions about
resources to be allocated to the segment and assess its performance for which discrete financial information
is available.

The accounting policies adopted for segment reporting are in line with the accounting policies of the
Company.

Inter segment revenue has been accounted for based on the market related prices.

Revenue and expenses have been identified to segments on the basis of their relationship to the operating
activities of the segment. Revenue and expenses which relate to the enterprise as a whole and are not
allocable to segments on a reasonable basis, have been included under "Unallocated expenses".

i) Retirement benefits

The Company provides retirement benefits in the form of Provident Fund, Superannuation and Gratuity
etc., contribution to Provident Fund, a defined contribution scheme, is made at the prescribed rates to the

Provident Fund Commissioner and is charged to the Statement of Profit and Loss. There is no other
obligation other than the contribution payable.

Certain employees of the company are eligible for superannuation and company has no obligation beyond
its monthly contribution to LIC. The periodic contribution is charged to the statement of profit and loss
account.

Gratuity, a defined Benefit scheme is covered by a Group Gratuity cum Life Assurance policy with LIC. The
cost of providing benefits is determined using the projected unit credit method with actuarial valuations
being carried out at the end of each reporting period. Remeasurement, comprising actuarial losses and
gains, the effect of changes to the asset ceiling and actual return on plan assets, in excess of the yield
computed by applying the discount rate used to measure the defined benefit obligation, is reflected in the
balance sheet with a charge or credit recognized in other comprehensive income in the period in which they
occur. Such remeasurement losses/gains are not reclassified to profit or loss subsequently.

The liability in respect of compensated absences 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. Liability in respect of compensated absences becoming due or expected to be availed more than one
year after the balance sheet date is estimated on the basis of actuarial valuation using projected unit credit
method at the end of each year.

j) Research & development expenditure

Revenue expenditure is charged to Statement of Profit & Loss and Capital expenditure is added to the cost
of Fixed Assets in the year in which it is incurred.

k) Foreign exchange transactions

The functional currency of the company is the Indian rupee and the financial statements are presented in
Indian rupee.

Transactions in foreign currency are initially accounted at the exchange rate prevailing on the date of the
transaction, and adjusted appropriately, with the difference in the rate of exchange arising on actual
receipt/payment during the year.

At each Balance Sheet date

i) Foreign currency denominated monetary items are translated into the relevant functional currency at
exchange rate at the balance sheet date. The gains and losses resulting from such translations are included
in net profit in the statement of profit and loss.

ii) Foreign currency denominated non-monetary items are reported using the exchange rate at which they
were initially recognized.

Transaction gains or losses realized upon settlement of foreign currency transactions are included in statement
of profit and loss.

l) Impairment of assets

i) Financial assets (other than at fair value)

The company assesses at each balance sheet date whether a financial asset or a group of financial
assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance.
The company recognizes lifetime expected losses for all trade receivables that do not constitute a
financing transaction. For all other financial assets, expected credit losses are measured at an amount
equal to the 12 month expected credit losses or at an amount equal to the life time expected credit
losses if the credit risk on the financial asset has increased significantly since initial recognition.

ii) Non financial assets

Property, plant and equipment and intangible assets with finite life are evaluated for recoverability
whenever there is any indication that their carrying amount may not be recoverable. If any such
indication exists, the recoverable amount (i.e higher of the fair value less cost of sale and value in use)
is determined on an individual asset basis unless the asset does not generates cash flows that are
largely independent of those from other assets. In such cases, the recoverable amount is determined
for the cash generating unit (CGU) to which the asset belongs. If the recoverable amount of an asset
or CGU is estimated to be less than its carrying amount, the carrying amount of the asset or CGU is
reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and
loss.

An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates
used to determine the recoverable amount and the carrying amount of the asset is increased to its revised
recoverable amount subject to maximum of carrying amount.