3 Significant Accounting Policies:
3.1 Property, Plant and Equipment:
Property, Plant and Equipment (PPE) acquired are stated at cost, net of tax/ duty credit availed and includes
amounts added on revaluation, less accumulated depreciation and impairment losses, if any. Cost include expenses
directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in
the manner intended by management. Subsequent expenditures relating to PPE is capitalized only when it is
probable that the future economic benefits associated with the item will flow to the Company and its cost can be
measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss
when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon
sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Capital work-in-progress comprises the cost of fixed assets that are not ready for their intended use at the reporting
date.
Intangible assets are recognized only if it is probable that the future economic benefits that are attributable to the
assets will flow to the Company and the cost of the assets can be measured reliably. The intangible assets are carried
at cost less accumulated amortization. Intangible assets are amortized over their estimated useful economic life over
a period of four years using Straight Line Method.
Leasehold land is amortized over the period of lease.
3.2 Depreciation and Amortization:
The Company depreciates its property, plant and equipment (PPE) over the useful life in the manner prescribed in
Schedule II to the Act. Management believes that useful life of assets are same as those prescribed in Schedule II to
the Act, except for plant and equipment's wherein based on technical evaluation, useful life has been estimated to be
different from that prescribed in Schedule II of the Act.
An item of property, plant and equipment and any significant part initially recognized is de-recognized upon
disposal or when no future economic benefits are expected from its use or disposal, any gain or loss arising on de¬
recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the statement of profit and loss when the property, plant and equipment is de-recognized.
3.3 Revenue Recognisation:
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the
revenue can be reliably measured. The specific recognition criteria described below also be met before revenue is
recognised.
Sale of Goods:
Revenue from the sale of goods is recognised, when control of goods has been transferred to the customer and
where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as
fulfilled in accordance with the terms agreed with the respective customers. Revenue include transport charges,
insurance and other incidental charges charged to customers.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of
returns and allowances, trade discounts and volume rebates. Sales as disclosed, are exclusive of Goods and Services
Tax.
Revenue arising from sale of Wind Energy is recognised in the succeeding month of generation, when such Wind
Energy is invoiced to customer.
Export Incentives:
Income from export incentives and duty drawbacks are recognised on accrual basis when no significant
uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Interest Income:
Interest income is recognized on a time proportionate method using underlying interest rates. Interest is recognized
on delayed payment by trade receivables as and when debit notes are raised by company on such trade receivables .
Divident Income:
Dividend income is recognized when the unconditional right to receive the income is established.
Insurance Claims:
Insurance claims are recognized where there exists no significant uncertainty with regard to the amount to be
realised and the ultimate collection thereof.
3.4 Inventories:
Inventories such as Raw Materials, Stock-in-Progress, Finished Goods and Stores and Spares are valued at lower of
cost or net realisable value (except scrap/waste which are valued at net realisable value) in line wih Accounting
Standard 2 ('AS-2') "Valuation of Inventory". The cost is computed on first in first out (FIFO) basis. Finished Goods
and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present
location and condition.
3.5 Employee Benefits:
Defined Contribution plan:
Contribution to defined contribution schemes such as employees' state insurance, labour welfare fund etc. are
charged as an expense based on the amount of contribution required to be made as and when services are rendered
by the employees. Company's provident fund contribution, in respect of certain employees, is made to a
government administered fund and charged as an expense to the Statement of Profit and Loss. The above benefits
are classified as Defined Contribution Schemes as the Company has no further defined obligations beyond the
monthly contributions.
Defined benefit plans:
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees.
The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on
termination of employment of an amount equivalent to 15 days salary payable for each completed year of service.
Vesting occurs upon completion of five years of service. The plan is managed by a trust and the fund is invested
with Life Insurance Corporation of India under its Group Gratuity Scheme. The Company makes annual
contributions to gratuity fund and the Company recognizes the liability for gratuity benefits payable in future based
on an independent actuarial valuation.
3.6 Income Taxes:
Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit
and Loss.
Current tax is the expected tax payable/receivable on the taxable income/ loss for the year using applicable tax
rates at the Balance Sheet date, and any adjustment to taxes in respect of previous years.
Deferred tax:
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date.
Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or
substantively 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 is recognized as income or expense in the period that includes the enactment or the
substantive enactment date. 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.
The Company offsets current tax assets and current tax liabilities. Where it has a legally enforceable right to set off
the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.
Deferred tax assets include Minimum Alternate Tax (MAT) paid in accordance with the tax laws in India, which is
likely to give future economic benefits in the form of availability of set off against future income tax liability. MAT is
recognised as deferred tax assets in the Balance Sheet when the asset can be measured reliably and it is probable that
the future economic benefit associated with the asset will be realised.
3.7 Operating Lease:
Lease rentals in respect of assets taken on operating lease are charged to the Profit and Loss Account on Straight line
basis over the period of lease term. The accounting for the lease has been done in accordance with the Accounting
Standard AS - 19 "Leases" notified by The Ministry of Corporate Affairs.
|