(xvii) Provisions and contingencies

Provisions:

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at
the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date.

If the effect of the time value of money is material, provisions are discounted to reflect its present value using a
current pre-tax rate that reflects the current market assessments of the time value of money and the risks
specific to the obligation. When discounting is used, the increase in the provision due to the passage of time is
recognised as a finance cost.

Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the income statement net of any reimbursement.

Contingencies:

Contingent liabilities
A contingent liability is:

• a possible obligation arising from past events, the existence of which will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company, or

• a present obligation that arises from past events but is not recognized because :

- it is not probable that an outflow of resources embodying economic benefits will be required to settle the
obligation; or

- the amount of the obligation cannot be measured with sufficient reliability.

Contingent liabilities are not recognized but disclosed unless the contingency is remote.

Contingent assets

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only
by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company.

Contingent assets are not recognized but are disclosed when the inflow of economic benefits is probable. When
inflow is virtually certain, an asset is recognized.

(xviii) Segment Reporting

Operating segments are defined as components of an enterprise for which discrete financial information is
available that is evaluated regularly by the chief operating decision maker, in deciding how to allocate
resources and assessing performance.

The Company is primarily engaged in manufacture of solar cells and modules. The Company's Chief Operating
Decision Maker (CODM) is the Managing Director. He evaluates the Company’s performance and allocates
resources based on analysis of various performance indicators by geographical areas only. Accordingly, there is
no operating segment or reportable segment as such.

(xix) Related party

A related party is a person or entity that is related to the reporting entity and it includes:

(a) A person or a close member of that person’s family if that person:

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity; or

(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

(b) An entity is related to the reporting entity if any of the following conditions apply:

(i) The entity and the reporting entity are members of the same Group.

(ii) One entity is an associate or joint venture of the other entity.

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity has a post-employment benefit plan for the benefit of employees of either the reporting entity or
an entity related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a).

(vii) A person identified in (a) (i) has significant influence over the entity or is a member of the key
management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a Group of which it is a part, provides key management personnel services
to the reporting entity or to the parent of the reporting entity.

Close members of the family of a person are those family members who may be expected to influence, or be
influenced by, that person in their dealings with the entity including:

(a) that person’s children, spouse or domestic partner, brother, sister, father and mother;

(b) children of that person’s spouse or domestic partner; and

(c) dependants of that person or that person’s spouse or domestic partner.

Key management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity.

Related party transactions and outstanding balances disclosed in the financial statements are in accordance with
the above definition as per Ind AS 24.

(xx) Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at banks and on hand and short term
deposits/investments with an original maturity of three months or less from the date of acquisition, which are
subject to an insignificant risk of changes in value. These exclude bank balances (including deposits) held as
margin money or security against borrowings, guarantees etc. being not readily available for use by the
Company.

For the purpose of the Statement of cash flows, cash and cash equivalents consist of cash and short term
deposits and exclude items which are not available for general use as on the date of Balance Sheet, as defined
above, net of bank overdrafts which are repayable on demand where they form an integral part of an entity's
cash management.

(xxi)Cash Flow Statement

Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing
activities. Cash flow from operating activities is reported using indirect method as set out in Ind AS 7
'Statement of Cash Flows', adjusting the net profit for the effects of:

(i) changes during the period in inventories and operating receivables and payables transactions of a non¬
cash nature;

(ii) non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and
losses, and

(iii) all other items for which the cash effects are investing or financing cash flows.

(xxii) Earnings per share

The Basic Earnings per equity share ('EPS') is computed by dividing the net profit or loss after tax before other
comprehensive income for the year attributable to the equity shareholders of the Company by weighted average
number of equity shares outstanding during the year. Ordinary shares that will be issued upon the conversion of
a mandatorily convertible instrument are included in the calculation of basic earnings per share from the date
the contract is entered into. Contingently issuable shares are treated as outstanding and are included in the
calculation of basic earnings per share only from the date when all necessary conditions are satisfied (i.e. the
events have occurred).

Diluted earnings per equity share are computed by dividing the net profit or loss before OCI attributable to
equity holders of the Company by the weighted average number of equity shares considered for deriving basic
earnings per equity share and also the weighted average number of equity shares that could have been issued
upon conversion of all dilutive potential equity shares (including options and warrants). The dilutive potential

equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value.
Dilutive potential equity shares are deemed converted as of the beginning of the period unless issued at a later
date.

Contingently issuable potential ordinary shares (such as contingently issuable convertible instruments) are
included in the diluted earnings per share in accordance with Ind AS 33. The Optionally Convertible
Cumulative Redeemable Preference shares (OCCRPS) issued by the Company to Union Bank of India under
Debt Settlement Agreement where the Bank has a right to convert the preference shares into equity in the event
of default are in fact contingent convertible preference shares and the contingent settlement event is Event of
default by the Company. As the said event has not happened till the end of the reporting period, exercise or
conversion is not assumed for the purpose of calculating diluted earnings per share and accordingly potential
ordinary shares are not included in the calculation of diluted earnings per share. Anti-dilutive effects are
ignored.

(xxiii) Events after Reporting date

Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of
the reporting period, the impact of such events is adjusted within the financial statements. Where the events are
indicative of conditions that arose after the reporting period, the amounts are not adjusted, but are disclosed if
those non-adjusting events are material.

(xxiv) Exceptional Items

An item of Income or expense which by its size, type or incidence requires disclosure in order to improve an
understanding of the performance of the Company is treated as an exceptional item and the same is disclosed in
the financial statements.

As per our report of even date attached

For A.K.G & ASSOCIATES For and on behalf of the Board of Directors of

Chartered Accountants Indosolar Limited

ICAI Firm registration number: 002688N

CA. HARVINDER SINGH Hitesh Doshi Hitesh Mehta

Partner Director Director

Membership No.: 087889 (DIN 00293668) (DIN 00207506)

UDIN: 22087889AQYWFL2418

Place: Delhi
Date: 05/09/2022