Mar 31, 2015
I Basis of Preparation
The Financial Statements are prepared in accordance with the generally
accepted accounting principles in India (Indian GAAP), and comply in
material aspects with the Accounting Standards specified under Section
133 of the Companies Act, 2013 (the act) (read with Rule 7 of the
Companies (Accounts) Rules, 2014). The financial statements have been
prepared under the historical cost convention on an accrual, basis,
except in case of assets for which provision for impairment is made and
revaluation is carried out. The accounting policies have been
consistently applied by the Company & are consistent with those used in
the previous year.
ii Use of Estimates
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets &
liabilities & disclosures of contingent liabilities at the date of
financial statements & the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events & actions, actual results could differ from
these estimates.
iii Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation &
impairment losses (if any). Cost comprises the purchase price & any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing cost relating to the acquisition of the
fixed asset which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
iv Expenditure During Construction Period
Expenditure incurred during construction period which is directly or
indirectly related to the projects is included under Pre-operative
Expenses and the same will be allocated to the respective Fixed Assets
upon completion of construction.
v Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
to ascertain if there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price &
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed
depending upon changes in circumstances. 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.
vi. Investments
Investments that are readily realizable & intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are carried at lower of cost & 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 the
decline other than temporary in the value of investments.
vii Foreign Currency Transactions
Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Foreign currency denominated
asset and liabilities (monetary items) are translated into reporting
currency at the exchange rates prevailing on the Balance Sheet date.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated assets and
liabilities (monetary items) are recognized in the Statement of Profit
and Loss.
viii Employee benefits
Employee benefits such as salaries, allowances, non-monetary benefits
which fall due for payment within a period of twelve months after
rendering service, are capitalised if related to project else
recognised in the Statement of Profit and Loss in the period in which
the service is rendered.
Employee benefits under defined benefit plans, such as gratuity, which
fall due for payment after completion of employment, are measured by
the projected unit credit method, on the basis of actuarial valuation
carried out by the third party actuaries at each balance sheet date.
The Company's obligations recognized in the Balance sheet represents
the present value of obligations as reduced by the fair value of plan
assets, where applicable.
Leave Encashment, which is considered as other long term employee
benefit, is provided based on actuarial valuation made using projected
unit method at the end of the financial year.
Actuarial gains and losses are recognized immediately in the Statement
of Profit and Loss.
ix Borrowing Cost
Borrowing cost which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the respective asset. All other borrowing
cost are expensed in the period they occur. Borrowing cost consists of
interest & other cost that an entity incurs in connection with the
borrowing of funds. In determining the amount of borrowing cost
eligible for capitalization during a period, any income earned on the
temporary investments of those borrowings is deducted from the
borrowing costs incurred.
x Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating lease. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
xi Earning Per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders, share split and reverse share split
(consolidation of shares). Diluted EPS is computed by dividing the net
profit or loss for the year by the weighted average number of equity
shares outstanding during the year as adjusted for the effects of all
dilutive potential equity shares, except where the results are
anti-dilutive.
xii Taxation
Provision for Current Tax is made after taking into consideration
benefits admissible under the provisions of The Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between book and
taxable profit is measured using the tax rates and laws that have been
enacted or substantively enacted as on the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable income
will be available against which such deferred tax assets can be
realised. In situations where the company has unabsorbed depreciation or
carry forward tax losses, all deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence that they
can be realised against future taxable profits.
At each balance sheet date, the Company re-assesses unrecognised
deferred tax assets. It recognizes, unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realised. The
carrying amount of deferred tax assets are.reviewed at each balance
sheet date. The company write-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available, against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
xiii Provisions
A provision is recognized when the Company has a present obligation as
a result of past event. It is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
xiv Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes to Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
xv Cash Flow Statement
The Cash Flow Statement is prepared by 'Indirect Method' set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the Cash
Flow Statement by Operating, Investing and Financing activities of the
Company. Cash and Cash equivalents presented in the Cash Row Statement
consists of Cash in hand and balance in current accounts.
3 SCHEME OF ARRANGEMENT :
The Board of Directors in their meeting held on October 18, 2013 has
approved the effect of the orders of the Hon'ble Bombay High Court
dated September 3, 2013, (which was filed with the Registrar of
Companies on 11th October 2013- the Effective date) approving the
Scheme of Arrangement under Section 391 to 394 of the Companies Act,
1956 for hive off of the Cuddalore Power Division of the Company to the
SRM Energy Tamilnadu Private Limited,with effect from April 01, 2012
(the "Appointed Date"), Accordingly all the assets and liabilities of
the Cuddalore Power Division of the Company at book value as on
01.04.2012 along with increase or decrease thereafter were transferred
to the SRM Energy Tamilnadu Private Limited. However, the formalities
of transfer of properties, assets, consents, approvals, sanctions,
licenses, contracts etc pertaining to the Cuddalore Power Division in
the name of the SRM Energy Tamilnadu Private Limited are in progress.
Mar 31, 2014
I Basis of Preparation
The Financial statements have been prepared to comply in all material
respects with the mandatory Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006 (as amended) & the relevant
provisions of the Companies Act 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis,
except in case of assets for which provision for impairment is made and
revaluation is carried out. The accounting policies have been
consistently applied by the Company & are consistent with those used in
the previous year.
ii Use of Estimates
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets &
liabilities & disclosures of contingent liabilities at the date of
financial statements & the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events & actions, actual results could differ from
these estimates.
iii Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation &
impairment losses (if any). Cost comprises the purchase price & any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing cost relating to the acquisition of the
fixed asset which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
In respect of accounting periods commencing on or after 7th December,
2006, exchange difference arising on reporting of the long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in the previous
financial statements are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, if these
monetary items pertain to the acquisition of a depreciable fixed asset.
iv Expenditure During Construction Period
Expenditure incurred during construction period which is directly or
indirectly related to the projects is included under Pre-operative
Expenses and the same will be allocated to the respective Fixed Assets
upon completion of construction.
v Depreciation & Amortization
Depreciation on Fixed Assets is provided on Straight Line Method as per
the useful lives of the assets estimated by the management or at the
rates specified in Schedule XIV to the Companies Act, 1956, whichever
is higher except for goodwill which will be amortised over a period of
five years after the commencement of commercial production of the
projects. Depreciation on additions is charged proportionately from the
date of acquisition. Assets individually costing less than or equal to
rupees Five thousand have been fully depreciated in the year of
purchase.
The depreciation in respect of following assets has been provided based
on management estimate of useful life, which is as under:
Particulars Useful Life
Office Equipment 3 - 10 years
Furniture 10 years
Computers 5 years
vi Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
to ascertain if there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price &
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed
depending upon changes in circumstances. 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.
vii Investments
Investments that are readily realizable & intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are carried at lower of cost & 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 the
decline other than temporary in the value of investments.
viii Foreign Currency Transactions
Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Foreign currency denominated
asset and liabilities (monetary items) are translated into reporting
currency at the exchange rates prevailing on the Balance Sheet date.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated assets and
liabilities (monetary items) are capitalized if related to the project,
else recognized in the Statement of Profit and Loss.
ix Employee benefits
Employee benefits such as salaries, allowances, non-monetary benefits
which fall due for payment within a period of twelve months after
rendering service, are capitalised if related to project else
reconganised in the Satement of Profit and Loss in the period in which
the service is rendered.
Employee benefits under defined benefit plans, such as gratuity, which
fall due for payment after completion of employment, are measured by
the projected unit credit method, on the basis of actuarial valuation
carried out by the third party actuaries at each balance sheet date.
The Company''s obligations recognized in the Balance sheet represents
the present value of obligations as reduced by the fair value of plan
assets, where applicable.
Leave Encashment are provided based on actuarial valuation made using
projected unit method at the end of the financial year
Actuarial gains and losses are recognized immediately in the Statement
of Profit and Loss.
x Borrowing Cost
Borrowing cost which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the respective asset. All other borrowing
cost are expensed in the period they occur. Borrowing cost consists of
interest & other cost that an entity incurs in connection with the
borrowing of funds. In determining the amount of borrowing cost
eligible for capitalization during a period, any income earned on the
temporary investments of those borrowings is deducted from the
borrowing costs incurred.
xi Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating lease. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
xii Earning Per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares). Diluted EPS is computed by dividing the net
profit or loss for the year by the weighted average number of equity
shares outstanding during the year as adjusted for the effects of all
dilutive potential equity shares, except where the results are
anti-dilutive.
xiii Taxation
Provision for Current Tax is made after taking into consideration
benefits admissible under the provisions of The Income Tax Act, 1961
Deferred tax resulting from "timing differences" between book and
taxable profit is measured using the tax rates and laws that have been
enacted or substantively enacted as on the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realised. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognised
only if there is virtual certainty supported by convincing evidence
that they can be realised against future taxable profits.
At each balance sheet date, the Company re-assesses unrecognised
deferred tax assets. It recognizes, unrecognised deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realised. The
carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available, against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain orvirtually certain, as the case may be, that
sufficient future taxable income will be available.
xiv Provisions
A provision is recognized when the Company has a present obligation as
a result of past event. It is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
xv Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
xvi Cash Flow Statement
The Cash Flow Statement is prepared by ''Indirect Method'' set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the
Cash Flow Statement by Operating, Investing and Financing activities of
the Company. Cash and Cash equivalents presented in the Cash Flow
Statement consists of Cash on hand and balance in current accounts.
Mar 31, 2013
I Basis of Preparation
The Financial statements have been prepared to comply in all material
respects with the mandatory Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006 (as amended) & the relevant
provisions of the Companies Act 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis,
except in case of assets for which provision for impairment is made and
revaluation is carried out. The accounting policies have been
consistently applied by the Company & are consistent with those used in
the previous year.
II Use of Estimates
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets &
liabilities & disclosures of contingent liabilities at the date of
financial statements & the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events & actions, actual results could differ from
these estimates.
ill Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation &
impairment losses (if any). Cost comprises the purchase price & any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing cost relating to the acquisition of the
fixed asset which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
In respect of accounting periods commencing on or after 7th December,
2006, exchange difference arising on reporting of the long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in the previous
financial statements are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, if these
monetary items pertain to the acquisition of a depreciable fixed asset.
.
Iv Expenditure During Construction Period
Expenditure incurred during construction period which is directly or
indirectly related to the projects is included under Pre-operative
Expenses and the same will be allocated to the respective Fixed Assets
upon completion of construction.
v Depreciation & Amortization
Depreciation on Fixed Assets is provided on Straight Line Method as per
the useful lives of the assets estimated by the management or at the
rates specified in Schedule XIV to the Companies Act, 1956, whichever
is higher except for goodwill which will be amortized over a period of
five years after the commencement of commercial production of the
projects. Depreciation on additions is charged proportionately from the
date of acquisition. Assets individually costing less than or equal to
rupees Five thousand have been fully depreciated in the year of
purchase.
The depreciation in respect of following assets has been provided based
on management''s estimate of useful life, which is as under:
vl Impairment of Assets
The carrying amounts of assets are reviewed at each balance sheet date
to ascertain if there is any indication of impairment based on
internal/ external factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount. The
recoverable amount is the greater of the assets net selling price &
value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value at the weighted average
cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed
depending upon changes in circumstances. 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, vll Investments
Investments that are readily realizable & intended to be held for not
more than a year are classified as current investments. All other
investments are classified as long term investments. Current
investments are carried at lower of cost & 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 the
decline, other than temporary, in the value of investments, vlil
Foreign Currency Transactions
Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Foreign currency denominated
assets and liabilities (monetaiy items) are translated into reporting
currency at the exchange rates prevailing on the Balance Sheet date.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated assets and
liabilities (monetary items) are capitalized if related to the project,
else recognized in the Statement of Profit and Loss.
ix Employee benefits
Employee benefits such as salaries, allowances, non-monetary benefits
which fall due for payment within a period of twelve months after
rendering service, are capitalized, if related to project, else
recognized in the Statement of Profit and Loss in the period in which
the service is rendered.
Employee benefits under defined benefit plans, such as gratuity, which
fall due for payment after completion of employment, are measured by
the projected unit credit method, on the basis of actuarial valuation
carried out by the third party actuaries at each balance sheet date.
The Company''s obligations recognized in the Balance sheet represents
the present value of obligations as reduced by the fair value of plan
assets, where applicable.
Leave Encashment are provided based on actuarial valuation made using
projected unit method at the end of the financial year
Actuarial gains and losses are recognized immediately in the Statement
of Profit and Loss.
x Borrowing Cost
Borrowing cost which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the respective asset. All other borrowing
cost are expensed in the period they occur. Borrowing cost consists of
interest & other cost that an entity incurs in connection with the
borrowing of funds. In determining the amount of borrowing cost
eligible for capitalization during a period, any income earned on the
temporary investments of those borrowings is deducted from the
borrowing costs incurred.
xi Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating lease. Operating lease payments are recognized as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
xli Earning Per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
are adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares). Diluted EPS is computed by dividing the net
profit or loss for the year by the weighted average number of equity
shares outstanding during the year as adjusted for the effects of all
dilutive potential equity shares, except where the results are
anti-dilutive.
xlil Taxation
Provision for Current Tax is made after taking into consideration
benefits admissible under the provisions of The Income Tax Act, 1961
Deferred tax resulting from "timing differences'' between book and
taxable profit is measured using the tax rates and laws that have been
enacted or substantively enacted as on the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. In situations where the Company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
At each balance sheet date, the Company re-assesses unrecognized
deferred tax assets. It recognizes, '' unrecognized deferred tax assets
to the extent that it has become reasonably certain or virtually
certain, as the case may be, that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The Company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available, against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
xiv Provisions
A provision is recognized when the Company has a present obligation as
a result of past event. It is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
xv Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
xvi Cash Flow Statement
The Cash Flow Statement is prepared by ''Indirect Method'' set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the
Cash Flow Statement by Operating, Investing and Financing activities of
the Company. Cash and Cash equivalents presented in the Cash Flow
Statement consists of Cash on hand and balance in current accounts.
Mar 31, 2012
I Basis of Preparation
The Financial statements have been prepared to comply in all material
respects with the mandatory Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006 (as amended) & the relevant
provisions of the Companies Act 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis
except in case of assets for which provision for impairment is made and
revaluation is carried out. The accounting policies have been
consistently applied by the Company & are consistent with those used in
the previous year.
During the current year, the revised Schedule VI notified under
Companies Act, 1956, has become applicable to the Company, for
preparation of its financial statements. The adoption of revised
Schedule VI does not impact recognition and measurement principles
followed for preparation of financial statements. However, it has
significant impact on presentation and disclosures made in the
financial statements. The Company has also reclassified the previous
year figures in accordance with the requirements applicable in the
current year.
ii Use of Estimates
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets &
liabilities & disclosures of contingent liabilities at the date of
financial statements & the results of operations during the reporting
period. Although these estimates are based upon management's best
knowledge of current events & actions, actual results could differ from
these estimates.
iii Fixed Assets
Fixed Assets are stated at cost less accumulated depreciation &
impairment losses (if any). Cost comprises the purchase price & any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing cost relating to the acquisition of the
fixed asset which takes substantial period of time to get ready for
its intended use are also included to the extent they relate to the
period till such assets are to be put to use.
In respect of accounting periods commencing on or after 7th December,
2006, exchange difference arising on reporting of the long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in the previous
financial statements are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, if these
monetary items pertain to the acquisition of a depreciable fixed asset.
iv Expenditure During Construction Period
Expenditure incurred during construction period which is directly or
indirectly related to the power project is included under Pre-operative
Expenses and the same will be allocated to the respective Fixed Assets
upon completion of construction.
v Depreciation & Amortization
Depreciation on Fixed Assets is provided on Straight Line Method as per
the useful lives of the assets estimated by the management or at the
rates specified in Schedule XIV to the Companies Act, 1956, whichever
is higher except for goodwill which will be amortized over a period of
five years after the commencement of commercial production of the power
project. Goodwill arose during 2007-08 on amalgamation of SRM Energy
Pvt. Ltd., a special purpose vehicle for implementing power project,
into the Company as per the scheme of amalgamation approved by the
Hon'ble High Courts at Mumbai & Delhi. Depreciation on additions is
charged proportionately from the date of acquisition. Assets
individually costing less than or equal to rupees Five thousand have
been fully depreciated in the year of purchase.
vi 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 impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price & value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed
depending upon changes in circumstances. 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.
vii Investments
Investments that are readily realizable & intended to be held for not
more than a year are classified as current investment. All other
investments are classified as long term investments. Current
investments are carried at lower of cost & 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 the
decline other than temporary in the value of investments.
viii Foreign Currency Transactions
Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Foreign currency denominated
asset and liabilities (monetary items) are translated into reporting
currency at the exchange rates prevailing on the Balance Sheet date.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated assets and
liabilities (monetary items) are capitalized if related to the project
or recognized in the profit and loss account.
ix Employee benefits
Employee benefits such as salaries, allowances, non-monetary benefits
which fall due for payment within a period of twelve months after
rendering service, are charged as expense to the profit and loss
account in the period in which the service is rendered. .
Employee benefits under defined benefit plans, such as leave encashment
and gratuity which fall due for payment after a period of 12 months
from rendering serviced or after completion of employment, are measured
by the projected unit credit method, on the basis of actuarial
valuation carried out by the third party actuaries at each balance
sheet date. The Companies obligations recognized in the Balance sheet
represents the present value of obligations as reduced by the fair
value of plan assets, where applicable.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
x Borrowing Cost
Borrowing cost which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the respective asset. All other borrowing
cost are expensed in the period they occur. Borrowing cost consists of
interest & other cost that an entity incurs in connection with the
borrowing of funds. In determining the amount of borrowing cost
eligible for capitalization during a period, any income earned on the
temporary investments of those borrowings is deducted from the
borrowing costs incurred.
xi Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating lease. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
xii Earning Per share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares). Diluted EPS is computed by dividing the net
profit or loss for the year by the weighted average number of equity
shares outstanding during the year as adjusted for the effects of all
dilutive potential equity shares, except where the results are
anti-dilutive.
xiii Taxation
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognized only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognized
only if there is virtual certainty supported by convincing evidence
that they can be realized against future taxable profits.
At each balance sheet date the Company re-assesses unrecognized
deferred tax assets. It recognizes, unrecognized deferred tax assets to
the extent that it has become reasonably certain or virtually certain,
as the case may be that sufficient future taxable income will be
available against which such deferred tax assets can be realized. The
carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
xiv Provisions
A provision is recognized when the Company has a present obligation as
a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates.
xv Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
xvi Cash Flow Statement
The cash flow statement is prepared by 'indirect method' set out in
Accounting Standard 3 on "Cash Flow Statement" and presents the cash
flow statement by operating investing and financing activities of the
company. Cash and cash equivalents presented in the cash flow statement
consists of cash on hand and balance in current accounts.
As per the authorization letter received from the holding company -
Spice Energy Pvt. Ltd, money advanced by them to the Company are to be
utilized towards its right entitlement and also against renunciation in
the proposed right issue of the Company. Accordingly the same have been
shown in share application money.(Also Refer Note no. 30 below)
Mar 31, 2011
I. Basis of preparation of financial statements
The Financial statements have been prepared to comply in all material
respect with the mandatory Accounting Sta/idards notified by companies
(Accounting Standards) rules, 2006 (as amended) & the relevant
provisions of the companies act 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis
in case of assets for which provisions for impairment is made and
revaluation is carried out. The accounting policies have been
consistently applied by the company & are consistent with those used in
the previous year.
ii. Use of estimates
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amount of assets &
liabilities & disclosures of contingent liabilities at the date of
financial statements & the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events & actions, actual results could differ from
these estimates.
iii. Fixed assets
Fixed Assets are stated at cost less accumulated depreciation &
impairment losses (if any). Cost comprises the purchase price & any
attributable cost of bringing the asset to its working conditions for
its intended use. Borrowing cost relating to the acquisition of the
fixed asset which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use.
In respect of accounting periods commencing on or after 7th December,
2006, exchange difference arising on reporting of the long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in the previous
financial statements are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, if these
monetary items pertain to the acquisition of a depreciable fixed asset.
iv. Expenditure During Construction Period
a) The expenditure incurred for the project is accounted under the head
preoperative expenditure and shall be capitalized on completion of the
project.
b) Advances paid, towards acquisition of the fixed assets which have
not been installed or put to use and the cost of the assets not put to
use before the period end are disclosed under capital work-
in-progress.
v. Depreciation & Amortization
Depreciation on Fixed Assets is provided on Straight Line Method as per
the useful lives of the assets estimated by the management or at the
rates specified in Schedule XIV to the Companies Act, 1956, whichever
is higher except for goodwill which will be amortised over a period of
five years after the commencement of commercial production of the power
project. Depreciation on additions is charged proportionately from the
date of acquisition. Assets individually costing less than or equal to
rupees Five thousand has been fully depreciated in the year of
purchase.
The depreciation has been provided on the following basis:
vi. 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 impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price & value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
A previously recognized impairment loss is increased or reversed
depending upon changes in circumstances. 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.
vii. Investments
Investments that are readily realizable & intended to be held for not
more than a year are classified as current investment. All other
investments are classified as long term investments. Current
investments are carried at lower of cost & 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 the
decline other than te-.iporary in the value of investments.
viii. Foreign Currency transactions
Foreign Currency transactions are recorded at the exchange rate
prevailing on the date of transaction. Foreign currency denominated
asset and liabilities (monetary items) are translated into reporting
currency at the exchange rates prevailing on the Balance Sheet date.
Exchange difference arising on settlement of foreign currency
transactions or restatement of foreign currency denominated assets and
liabilities (monetary items) are capitalized if related to the project
or recognized in the profit and loss account.
ix. Employee benefits
Employee benefits such as salaries, allowances, non-monetary benefits
which fall due for payment within a period of twelve months after
rendering service, are charged as expense to the profit and loss
account in the period in which the service is rendered.
Employee benefits under defined benefit plans, such as leave encashment
and gratuity which fall due for payment after a period of 12 months
from rendering serviced or after completion of employment, are measured
by the projected unit credit method, on the basis of actuarial
valuation carried out by the third party actuaries at each balance
sheet date. The Companies obligations recognized in the Balance sheet
represents the present value of obligations as reduced by the fair
value of plan assets, where applicable.
Actuarial gains and losses are recognized immediately in the profit and
loss account.
x. Borrowing Cost
Borrowing cost which are directly attributable to the acquisition,
construction or production of an asset that necessarily takes a
substantial period of time to get ready for its intended use or sale
are capitalized as part of the respective asset. All other borrowing
cost are expensed in the period they occur. Borrowing cost consists of
interest & other cost that an entity incurs in connection with the
borrowing of funds. In determining the amount of borrowing cost
eligible for capitalization during a period, any income earned on the
temporary investments of those borrowings is deducted from the
borrowing costs incurred.
xi. Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased item are classified as
operating lease. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
xii. Earning Per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events of bonus issue; bonus element in a rights issue
to existing shareholders; share split; and reverse share split
(consolidation of shares). Diluted EPS is computed by dividing the net
profit or loss for the year by the weighted average number of equity
shares outstanding during the year as adjusted for the effects of all
dilutive potential equity shares, except where the results are
anti-dilutive.
xiii. Taxation :
(i) Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets and deferred tax liabilities are offset, if a legally
enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and deferred tax
liabilities relate to the taxes on income levied by same governing
taxation laws. Deferred tax assets are recognised only to the extent
that there is reasonable certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realised. In situations where the company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are recognised
only if there is virtual certainty supported by convincing evidence
that they can be realised against future taxable profits.
(ii) At each balance sheet date the Company re-assesses unrecognised
deferred tax assets. It recognizes, unrecognised deferred tax assets
to the extent that it has become reasonably certain or virtually
certain, as the case may be that sufficient future taxable income will
be available against which such deferred tax assets can be realised.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available
xiv. Provisions
A provision is recognized when the Company has a present obligation as
a resultof past event; it is probable that an outflow of resources will
be required to settle the obligation, in respect of which a reliable
estimate can be made. Provisions are not discounted to its present
value and are determined based on best estimate required to settle the
obligation at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
xv. Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
xvi. Cash Flow Statement
The cash flow statement is prepared by indirect method set out in
accounting standard 3 on "Cash Flow Statement" and presents the cash
flow statement by operating investing and financing activities of the
Company. Cash and cash equivalents presented in the cash flow statement
consists of cash on hand and balance in current accounts.
Mar 31, 2010
1 Basis of Preparation
(i) The financial statements have been prepared to comply in all
material respects with the Accounting Standards notified by Companies
(Accounting Standards) Rules, 2006, (as amended) and the relevant
provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis
except in case of assets for which provisions for impairment is made
and revaluation is carried out. The accounting policy have been
consistently applied by the Company and except for the changes in
accounting policy discussed more fully below, are consistent with those
used in the previous year.
(ii) The Company follows the mercantile system of accounting in general
and recognizes income and expenditure on accrual basis except as
otherwise stated.
2. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
3. Fixed Assets
(i) Fixed Assets are stated at cost (or revalued amounts, as the case
may be), less accumulated depreciation and impairment losses if any.
Cost comprises the purchase price and any attributable cost of bringing
the asset to its working condition for its intended use. Borrowing
costs relating to acquisition of fixed assets which takes substantial
period of time to get ready for its intended use are also included to
the extent they relate to the period till such assets are ready to be
put to use.
In respect of accounting periods commencing on or after 7th December,
2006, exchange difference arising on reporting of the long-term foreign
currency monetary items at rates different from those at which they
were initially recorded during the period, or reported in the previous
financial statements are added to or deducted from the cost of the
asset and are depreciated over the balance life of the asset, if these
monetary items pertain to the acquisition of a depreciable fixed asset.
(ii) Expenditure incurred for project is accounted under the head
Preoperative Expenditure and shall be capitalized on completion of the
project.
(iii) Advances paid towards acquisition of the fixed assets which have
not been installed or put to use and the cost of the assets not put to
use before the year end are disclosed under capital work-in-progress.
(iv) The carrying amounts of assets are reviewed at each balance sheet
date if ther is any indication of impairment based on internal/external
factors. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
asessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
4. Depreciation
Depreciation is provided using the Straight Line Method as per the
useful lives of the assets estimated by the management, or at the rates
prescribed under schedule XIV of the Companies Act, 1956 whichever is
higher.
5. Intangible assets
Goodwill
Goodwill will be amortized over a period of five years after
commencement of commercial production of the power project.
6. Inventories
Inventories are valued by following FIFO Method as under :
(i) Raw Material, Packing Material, Stores & Spares At cost
(ii) Finished Goods, Goods-In-Transit. Trading Stock & Waste At the
lower of cost or net realisable value
7. Investments
Long term investments are stated at cost less provision for diminution
in value, which is other than temporary. Current investments are
carried at lower of carrying value or fair value.
8. Retirement Benefits
Provision for Gratuity and Leave encashment is made on the basis of
Actuarial Valuations done by Independent Actuaries as at year end.
9. Revenue Recognition
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer. Excise Duty, Sales Tax
and VAT deducted from turnover (gross) are the amount that is included
in the amount of turnover (gross) and not the entire amount of
liability arised during the year.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
10. Retirement and other employee benefits
(i) Gratuity liability and Post employment Medical Benefit liability
are defined benefit obligations and are provided for on the basis of an
actuarial valuation on projected unit credit method made at the end of
each financial year.
(ii) Short term compensated absences are provided for based on
estimates. Long term compen- sated absences are provided for based on
actuarial valuation. The actuarial valuation is done as per projected
unit credit method.
(iii) Actuarial gains/losses are immediately taken to profit and loss
account and are not deferred.
(iv) Payments made under the Voluntary Retirement Scheme are charged to
the Profit and Loss account immediately.
11. Foreign Currency Transactions
The transactions denominated in foreign currencies are normally
recorded at the exchange rate prevailing at the time of the
transaction. Any income or expense on account of exchange difference
either on settlement or on translation is recognized in Profit and Loss
Account. Assets and liabilities denominated in foreign currencies are
stated at the exchange rate prevailing on the date of the Balance
Sheet.
12. Taxes on Income
Income tax is accounted in accordance with AS-22 Accounting for taxes
on income, issued by The Institute of Chartered Accountants of India
(ICAI), which includes current taxes and deferred taxes. Deferred
income taxes reflect the impact of the current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax assets are
recognised only to the extent that there is reasonable certainty that
sufficient future taxable income will be available except that deferred
tax assets arising due to unabsorbed depreciation and losses are
recognised if there is virtual certainty that sufficient future taxable
income will be available to realise the same. Current tax is determined
as the amount of tax payable in respect of taxable income for the year.
13. Borrowing Cost
Interest incurred on loan used to fund the construction of the project
is being capitalised as part of its cost. The company does not incur
any interest costs that qualify for capitalisation under AS 16
Borrowing Costs.
14. Operating Lease
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership over the leased term are classified as
operating leases. Operating lease rentals are recognised as an expense,
as applicable, over the lease period.
15. Earning Per share
Basis earnings per shares are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profit or
loss for the period attributable to the equity shareholders and the
weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
16. Provisions, Contingent Liabilities and Contingent Assets
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilites, if any
material are disclosed by way of notes to accounts.Contingent assets
are neither recognised nor disclosed in the financial statements.