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Accounting Policies of Entegra Ltd. Company

Mar 31, 2015

1. Background information

Entegra Limited ("Entegra" or the "Company") was incorporated in 1995 as a private limited company. In 2000, the Company was converted into a public limited company. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Entegra is engaged in the development of integrated global renewable energy projects.

2. Basis of presentation

The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with the Accounting Standard notified in the Companies (Accounting Slandered) Rules, 2006 and the relevant provisions of the Companies Act 1956, to the extent applicable.

3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period's results could differ from those estimates. Any revisions to accounting estimates are recognized in the period in which such revisions are made.

4. Significant accounting policies

4.1. Revenue recognition

i. Revenues from sales of goods are recognized on shipment or dispatch to ustomers and are recorded exclusive of Value Added Taxes but are net of any sales returns.

ii. Revenues from services rendered are recognized on completion of the service and are recorded exclusive of Service Tax.

iii. Interest income on deposits with banks and investments is recognized on a time proportion basis. iv. Dividend incomes on investments are accounted for when the right to receive the payment is established.

4.2. Purchases

Purchases are shown exclusive of Value Added Tax.

4.3. Fixed assets and depreciation

Fixed assets are stated at cost of acquisition/construction including any cost attributable to bringing the assets to their working condition, less accumulated depreciation and impairment loss, if any. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and on pro-rata basis with reference to the month of additions / deductions. Fixed assets having value lower than Rs.5,000 are depreciated fully in the year of acquisition / installation. Intangible assets are amortized over the irrespective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

4.4. Expenditure during construction period

Expenditure during construction period reflects an element of capital work in progress and includes directly attributable costs that relate to the project and general and administration overheads as are specifically attributable to the construction of the project. Such expenditure is included under 'Pre operative expenses (pending allocation) and will be capitalized under relevant fixed asset accounts upon commencement of commercial generation of power.

4.5. Inventories

Inventories of components used for renewable energy projects have been valued at lower of cost or net realizable value. Civil construction materials are valued at cost.

4.6. Investments

Long term investments are stated at cost and provision is made to recognize any decline, other than temporary, in the value of such investments.

4.7. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transactions. Gains or losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency are recognized in the statement of Profit and Loss.

4.8. Employee benefits

Gratuity

Employees in India are entitled to benefits under the Payment of Gratuity Act, 1972, a defined benefit retirement plan covering eligible employees of the Company. The Plan provides a lump-sum payment to eligible employees at retirement or on termination of employment. The gratuity benefit conferred by the Company on its employees is equal to or greater than the statutory minimum.

4.9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to the income statement.

4.10. Impairment of assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

4.11. Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required, and a reliable estimate can be made of the amount required to settle the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

4.12. Income taxes

Income tax expense comprises current income tax, deferred tax and fringe benefit tax.

Current taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income Tax Act, 1961, and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date.

The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the year that includes the enactment date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty, supported by convincing evidence of recognition of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.

4.13. Leases

For operating leases, lease payments (excluding costs for services such as insurance and maintenance) are recognized as an expense in the statement of profit and loss on a straight line basis unless another systematic basis is more representative of the time pattern of the user's benefit, except where the rental is for pre operative activities in which case it is charged to 'Pre operative expenses (pending allocation)'.


Mar 31, 2014

1. Background information

Entegra Limited ("Entegra" or the "Company") was incorporated in 1995 as a private limited company. In 2000, the Company was converted into a public limited company. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Entegra is engaged in the development of integrated global renewable energy projects.

2. Basis of presentation

The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with the Accounting Standards notified in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956, to the extent applicable.

3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period''s results could differ from those estimates. Any revisions to accounting estimates are recognised in the period in which such revisions are made.

4.1. Revenue recognition

i. Revenues from sales of goods are recognized on shipment or dispatch to customers and are recorded exclusive of Value Added Taxes but are net of any sales returns. ii. Revenues from services rendered are recognized on completion of the service and are recorded exclusive of Service Tax. iii. Interest income on deposits with banks and investments is recognized on a time proportion basis. iv. Dividend incomes on investments are accounted for when the right to receive the payment is established.

4.2. Purchases

Purchases are shown exclusive of Value Added Tax.

4.3. Fixed assets and depreciation

Fixed assets are stated at cost of acquisition/construction including any cost attributable to bringing the assets to their working condition, less accumulated depreciation and impairment loss, if any. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and on pro-rata basis with reference to the month of additions / deductions. Fixed assets having value lower than Rs.5,000 are depreciated fully in the year of acquisition / installation. Intangible assets are amortised over the irrespective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

4.4. Expenditure during construction period

Expenditure during construction period reflects an element of capital work in progress and includes directly attributable costs that relate to the project and general and administration overheads as are specifically attributable to the construction of the project. Such expenditure is included under ''Pre operative expenses (pending allocation) and will be capitalized under relevant fixed asset accounts upon commencement of commercial generation of power.

4.5. Inventories

Inventories of components used for renewable energy projects have been valued at lower of cost or net realizable value. Civil construction materials are valued at cost.

4.6. Investments

Long term investments are stated at cost and provision is made to recognize any decline, other than temporary, in the value of such investments.

4.7. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transactions. Gains or losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency are recognized in the statement of Profit and Loss.

4.8. Employee benefits

Gratuity

Employees in India are entitled to benefits under the Payment of Gratuity Act, 1972, a defined benefit retirement plan covering eligible employees of the Company. The Plan provides a lump-sum payment to eligible employees at retirement or on termination of employment. The gratuity benefit conferred by the Company on its employees is equal to or greater than the statutory minimum.

4.9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to the income statement.

4.10. Impairment of assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

4.11. Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required, and a reliable estimate can be made of the amount required to settle the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

4.12. Income taxes

Income tax expense comprises current income tax, deferred tax and fringe benefit tax.

Current taxes

Provision for current income-tax is recognized in accordance with the provisions of Indian Income Tax Act, 1961, and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred taxes

Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date. The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the year that includes the enactment date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in the future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty, supported by convincing evidence of recognition of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.

4.13. Leases

For operating leases, lease payments (excluding costs for services such as insurance and maintenance) are recognised as an expense in the statement of profit and loss on a straight line basis unless another systematic basis is more representative of the time pattern of the user''s benefit, except where the rental is for pre operative activities in which case it is charged to ''Pre operative expenses (pending allocation)''.


Mar 31, 2012

1. Background information

Entegra Limited ("Entegra" or the "Company") was incorporated in 1995 as a private limited company. In 2000, the Company was converted into a public limited company. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Entegra is engaged in the development of integrated global renewable energy projects.

2. Basis of presentation

The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with the Accounting Standards notified in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956, to the extent applicable.

3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period's results could differ from those estimates. Any revisions to accounting estimates are recognised in the period in which such revisions are made.

4.1. Revenue recognition

i. Revenues from sales of goods are recognized on shipment or dispatch to customers and are recorded exclusive of Value Added Taxes but are net of any sales returns,

ii. Revenues from services rendered are recognized on completion of the service and are recorded exclusive of Service Tax.

iii. Interest income on deposits with banks and investments is recognized on a time proportion basis,

iv Dividend incomes on investments are accounted for when the right to receive the payment is established.

4.2. Purchases

Purchases are shown exclusive of Value Added Tax.

4.3. Fixed assets and depreciation

Fixed assets are stated at cost of acquisition/construction including any cost attributable to bringing the assets to their working condition, less accumulated depreciation and impairment loss, if any. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and on pro-rata basis with reference to the month of additions / deductions. Fixed assets having value lower than Rs.5,000 are depreciated fully in the year of acquisition / installation. Intangible assets are amortised over the irrespective individual estimated useful lives on a straight-line basis, commencing from the date the asset is available to the Company for its use.

4.4. Expenditure during construction period

Expenditure during construction period reflects an element of capital work in progress and includes directly attributable costs that relate to the project and general and administration overheads as are specifi cally attributable to the construction of the project. Such expenditure is included under 'Pre operative expenses (pending allocation) and will be capitalized under relevant fixed asset accounts upon commencement of commercial generation of power.

4.5. Inventories

Inventories of components used for renewable energy projects have been valued at lower of cost or net realizable value. Civil construction materials are valued at cost.

4.6. Investments

Long term investments are stated at cost and provision is made to recognise any decline, other than temporary, in the value of such investments.

4.7. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transactions. Gains or losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency are recognised in the statement of Profit and Loss.

4.8. Employee benefits

Gratuity

Employees in India are entitled to benefits under the Payment of Gratuity Act, 1972, a defined benefit retirement plan covering eligible employees of the Company. The Plan provides a lump-sum payment to eligible employees at retirement or on termination of employment. The gratuity benefit conferred by the Company on its employees is equal to or greater than the statutory minimum.

The Company provides for liability towards gratuity plan on the basis of actuarial valuation. The entire amount of gratuity is unfunded.

Compensated absences

The Company's liability towards compensated absences (leave encashment) is determined on an actuarial basis for the entire unavailed vacation balance standing to the credit of each employee as at period-end.

4.9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to the income statement.

4.10. Impairment of assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

4.11. Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event and it is probable that an outfl ow of resources embodying economic benefits will be required, and a reliable estimate can be made of the amount required to settle the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outfl ow of resources is remote, no provision or disclosure is made.

4.12. Income taxes

Income tax expense comprises current income tax, deferred tax and fringe benefit tax.

Current taxes

Provision for current income-tax is recognised in accordance with the provisions of Indian Income Tax Act, 1961, and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred taxes

Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences that result between the Profits offered for income taxes and the Profits as per the fi nancial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date. The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the year that includes the enactment date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in the future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty, supported by convincing evidence of recognition of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.

4.13. Leases

For operating leases, lease payments (excluding costs for services such as insurance and maintenance) are recognised as an expense in the statement of Profit and loss on a straight line basis unless another systematic basis is more representative of the time pattern of the user's benefit, except where the rental is for pre operative activities in which case it is charged to 'Pre operative expenses (pending allocation)'.


Mar 31, 2011

1. Background information

Entegra Limited ("Entegra" or the "Company") was incorporated in 1995 as a private limited company. In 2000, the Company was converted into a public limited company. The Company is listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. Entegra is engaged in the development of integrated global renewable energy projects.

2. Basis of presentation

The financial statements are prepared and presented under the historical cost convention on the accrual basis of accounting and in accordance with the Accounting Standards notified in the Companies (Accounting Standard) Rules, 2006 and the relevant provisions of the Companies Act, 1956, to the extent applicable.

3. Use of estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates made in the preparation of financial statements are prudent and reasonable. Actual future period's results could differ from those estimates. Any revisions to accounting estimates are recognised in the period in which such revisions are made.

4. Significant accounting policies

4.1. Revenue recognition

i. Revenues from sales of goods are recognized on shipment or dispatch to customers and are recorded exclusive of Value Added Taxes but are net of any sales returns.

ii. Revenues from services rendered are recognized on completion of the service and are recorded exclusive of Service Tax. iii. Interest income on deposits with banks and investments is recognized on a time proportion basis. iv. Dividend incomes on investments are accounted for when the right to receive the payment is established.

4.2. Purchases

Purchases are shown exclusive of Value Added Tax.

4.3. Fixed assets and depreciation

Fixed assets are stated at cost of acquisition/construction including any cost attributable to bringing the assets to their working condition, less accumulated depreciation and impairment loss, if any.

Depreciation on fixed assets is provided on straight line method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956 and on pro-rata basis with reference to the month of additions / deductions. Fixed assets having value lower than Rs. 5,000 are depreciated fully in the year of acquisition / installation.

4.4. Expenditure during construction period

Expenditure during construction period reflects an element of capital work in progress and includes directly attributable costs that relate to the project and general and administration overheads as are specifically attributable to the construction of the project. Such expenditure is included under 'Pre operative expenses (pending allocation) and will be capitalized under relevant fixed asset accounts upon commencement of commercial generation of power.

4.5. Inventories

Inventories of components used for renewable energy projects have been valued at lower of cost or net realizable value. Civil construction materials are valued at cost.

4.6. Investments

Long term investments are stated at cost and provision is made to recognise any decline, other than temporary, in the value of such investments.

4.7. Foreign currency transactions

Transactions denominated in foreign currencies are recorded at the exchange rates prevailing on the date of the transactions. Gains or losses resulting from the settlement of such transactions and from translation of monetary assets and liabilities denominated in foreign currency are recognised in the Profit and Loss Account.

4.8. Employee benefits

Gratuity

Employees in India are entitled to benefits under the Payment of Gratuity Act, 1972, a defined benefit retirement plan covering eligible employees of the Company. The Plan provides a lump-sum payment to eligible employees at retirement or on termination of employment. The gratuity benefit conferred by the Company on its employees is equal to or greater than the statutory minimum.

The Company provides for liability towards gratuity plan on the basis of actuarial valuation. The entire amount of gratuity is unfunded.

Compensated absences

The Company's liability towards compensated absences (leave encashment) is determined on an actuarial basis for the entire unavailed vacation balance standing to the credit of each employee as at period-end.

4.9. Borrowing costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs are charged to the income statement.

4.10. Impairment of assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss, if any, is charged to Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

After impairment depreciation is provided on the revised carrying amount of the asset over its remaining useful life. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

4.11. Provisions and contingent liabilities

The Company creates a provision when there is present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required, and a reliable estimate can be made of the amount required to settle the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

4.12. Income taxes

Income tax expense comprises current income tax, deferred tax and fringe benefit tax.

Current taxes

Provision for current income-tax is recognised in accordance with the provisions of Indian Income Tax Act, 1961, and is made annually based on the tax liability after taking credit for tax allowances and exemptions.

Deferred taxes

Deferred tax assets and liabilities are recognised for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date. The effect of a change in tax rates on deferred tax assets and liabilities is recognised in the year that includes the enactment date.

Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realised in the future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is virtual certainty, supported by convincing evidence of recognition of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.

4.13. Leases

For operating leases, lease payments (excluding costs for services such as insurance and maintenance) are recognised as an expense in the statement of profit and loss on a straight line basis unless another systematic basis is more representative of the time pattern of the user's benefit, except where the rental is for pre operative activities in which case it is charged to 'Pre operative expenses (pending allocation)'.















 
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