Notes to Accounts of Surana Solar Ltd.

Mar 31, 2018

1. Related Party Disclosure

a. Name of the Related Parties and related party relationship Enterprises owned or significantly influenced by key management personnel or their relatives:

(i) Bhagyanagar India Limited (x) Andhra Electro Galvanising works

(ii) Surana Telecom and Power Limited (xi) Shahsons Private Limited

(iii) Surana Infocom Private Limited (xii) Surana Solar Systems Private Limited

(iv) Bhagyanagar Properties Limited (xiii) Innova Technologies Private Limited

(v) Bhagyanagar Green Energy Limited (xiv) Crescentia Solar Private Limited

(vi) Bhagyanagar Energy & Telecom Private Limited (xv) Aryavaan Renewable Energy Private Limited

(vii) Tejas India Solar Energy Private Limited (xvi) N.S Enterprises

(viii) Aanvik Mercantile Private Limited (xvii) Surana Woodworks India Private Limited

(ix) Bhagyanagar Ventures Private Limited (xviii) Bhagyanagar Securities Private Limited

b. Key management personnel

(i) G.M Surana (iii)Narender Surana

(ii) Devendra Surana (iv) Manish Surana (Director Fin. & Tech)

c. The following transactions were carried out during the year with Enterprises owned or significantly influenced by key management personnel or their relatives related parties in the ordinary course of business:

2. Advance to suppliers includes '' 7,962,711/- (USD $122,427) fraudulently collected from the company. A complaint has been lodged with the cybercrime cell, Hyderabad and the receiving bank in Poland who has confirmed to have blocked the amount and reported the case to Local Prosecutor. The company has taken steps for refund of the amount.

3. During the course of implementation of the project, there has been disputes on technical grounds between the company and PPT as regard to escalation in cost and time limit for completion of the project. Taking a contrary stand, PPT cancelled/ terminated LOI and forfeited mobilization advance, guarantee and performance guarantee. The company challenged the action of PPT before Honorable court of Odisha who in turn was pleased to pass an order to pursue the remedy before the adjudicator or file suitable application for settlement of dispute through arbitration. The amount of Bank Guarantees invoked by PPT amounting to '' 66,663,020/- (net of mobilization advance) has been shown under “Other Advances”.

4. In the opinion of Board of Directors and to the best of their knowledge and belief, the value on realization of current assets, loans and advances in the ordinary course of business, would not be less than the amount at which the same are stated in the Balance Sheet.

The above table summarizes the components of Net Benefit expenses recognized in the Profit & Loss account and amount recognized in the Balance Sheet for the respective plans.

5. Segment Reporting

Factors used to identify the reportable segments:

The Company has following business segments, which are its reportable segments. These segments offer different products and services, and are managed separately because they require different technology and production processes. Operating segment disclosures are consistent with the information

Reportable segments Product/Service

1. Solar Products Manufacturing and trading of Solar Photovoltic (SPV) Modules.

2. Wind Power Generation of Wind Power Energy.

A. Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises two types of risk: interest rate risk and other price risk, such as equity price risk and commodity/ real-estate risk. Financial instruments affected by market risk include loans and borrowings and refundable deposits

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s long-term debt obligations with floating interest rates. The Company manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The Company does not enter into any interest rate swaps.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including refundable joint development deposits, security deposits, loans to employees and other financial instruments.

Trade receivables

i. Receivables resulting from sale of properties: Customer credit risk is managed by requiring customers to pay advances before transfer of ownership, therefore, substantially eliminating the Company''s credit risk in this respect.

ii. Receivables resulting from other than sale of properties: The firm has established credit limits for customers and monitors their balances on ongoing basis. Credit Appraisal is performed before leasing agreements are entered into with customers. The risk is also marginal due to customers placing significant amount of security deposits for lease and fit out rentals.

Financial Instrument and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company''s Finance department in accordance with the Company''s policy. Investments of surplus funds are reviewed and approved by the Company''s Board of Directors on an annual basis The Company''s maximum exposure to credit risk for the components of the statement of financial position at 31 March 2018 and 2017 is the carrying amounts.

C. Liquidity risk

The Company''s objective is to maintain a balance between continuity of funding and flexibility through the use of bank deposits and loans.

The table below summarizes the maturity profile of the Company''s financial liabilities based on contractual undiscounted payments. (Amount in '')

6. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the

7. First-time adoption of Ind AS

These financial statements, for the year ended March 31, 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on March 31, 2018, together with the comparative period data as at and for the year ended March 31, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2016, the Company''s date of transition to Ind AS.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:

(a) Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and investment property at their previous GAAP carrying value.

(b) Ind AS 27 requires investments in subsidiaries to be recorded at cost or in accordance with Ind AS 109 in its separate financial statements. However Ind AS 101 provides an option in case the Company decides to measure such investment at cost (determined in accordance with Ind AS 27) or deemed cost (fair value or previous GAAP carrying amount) at that date. The Company can avail the above exemption and recognize the investment in firms at the previous GAAP carrying amount at the date of transition to Ind AS.

The Company has also prepared a reconciliation of equity as at March 31, 2017 and April 1, 2016 under the Previous GAAP with the equity as reported in these financial statements under Ind AS, that reflect the impact of Ind AS on the components of statement of balance sheet which is presented below:

Notes to reconciliations between previous GAAP and Ind AS

Other comprehensive income:

Under Indian GAAP, the Company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit/loss to profit/loss as per Ind AS. Further, Indian GAAP profit/loss is reconciled to total comprehensive income as per Ind AS.

8. Previous year''s figures have been regrouped and rearranged, wherever found necessary.

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Mar 31, 2016

1 (a) There were no Bonus issues, forfeited shares and buy back of shares in last five years.

2 (b) Issued, subscribed and paid-up capital

Notes:

3 (a) Car loan from bank / Financial Institutions

(i) Car loan from HDFC Bank Ltd is secured against hyphotication of car. The loan was taken during the financial year 2012-13 and is repayable in monthly installment of Rs 131,972/- each. Accordingly due with in a year is Rs 15,83,664/- which is classified under "Other Current Liabilities".

(ii) Car loan from Kotak Mahindra Prime Limited is secured against hyphotication of car. The loan was taken during the financial year 2013-14 and is repayable in monthly installment of Rs 32,000/- each. Accordingly due with in a year is Rs 3,84,000/- which is classified under "Other Current Liabilities".

(iii) Car loan from Daimler Financial Services India Private Limited is secured against hyphotication of car. The loan was taken during the financial year 2014-15 and is repayable in monthly installment of Rs 353,760/- each. Accordingly due with in a year is Rs 4,245,120/- which is classified under "Other Current Liabilities".

4 (b) Term Loan from Indian Overseas Bank is secured by way of Lease hold right of land and Building of the plant situated at Fabcity, RR.District. The loan is repayable in 12 quarterly installments of Rs 41,70,000/- each beginning from March 2016. Accordingly due with in a Year is Rs. 1,66,80,000/- which is classified under "Other Current Liabilities".

Notes: 5 (a) Cash Credit

Cash credit from Scheduled Banks is secured by hypothecation of stock, trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranteed by the Managing Director and Director.

(b) Buyer''s Credit

Buyer''s credit from Scheduled Banks is secured by hypothecation of stock, trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranteed by the Managing Director and Director.

6 (b) In case of Trade Payables, Letter of confirmations of balances were sent, Hence the balances as on the date of Balance Sheet are Subject to Confirmation and Reconciliation.

(c) As per the information available with the company about the Industry Status of the Creditors, There are no dues to Micro and Small Enterprises under the Micro, Small and Medium Enterprises development Act, 2006.

Retirement and Other Employees Benefits

The Company''s employee benefits primarily cover provident fund, gratuity and leave encashment.

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue.

Gratuity liability is a defined benefit obligation and is based on the actuarial valuation done. The gratuity liability and the net periodic gratuity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ losses are immediately charged to the Profit & Loss account and are not deferred.

The following table summarizes the components of Net Benefit expenses recognized in the Profit & Loss account and amount recognized in the Balance Sheet for the respective plans.

Notes:

(7) The Company is currently focused on two business segments: manufacturing of solar Photovoltic (SPV) modules and generation of wind power energy. The company''s organizational structure and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.

(8) Previous years figures have been regrouped and recast wherever necessary to make them comparable with current year''s figures.

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Mar 31, 2015

1. (a) There were no Bonus issues, forefieted shares and buy back of shares in last five years.

(b) During the year, the Equity Shares of Rs. 10/- each were sub-divided into Equtiy Shares of Rs. 5/- each, due to which there is an increase in no. of shares.

2.(a) Buyer's credit from banks

(i) Buyer's credit from Scheduled Banks is secured by hypothecation of stock, trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranted by the Managing Director and Director. Accordingly due with in a Year is Rs. 509,806,556/- which is classified under short term borrowings.

(b) Car loan from bank / Financial Institutions

(i) Car loan from HDFC Bank Ltd is secured against hyphotication of car. The loan was taken during the financial year 2012-13 and is repayable in monthly installment of Rs. 131,972/- each. Accordingly due with in a year is Rs. 1,451,692/- which is clasified under current liabilities.

(ii) Car loan from Kotak Mahindra Prime Limited is secured against hyphotication of car. The loan was taken during the financial year 2013-14 and is repayable in monthly installment of Rs. 32,000/- each. Accordingly due with in a year is Rs. 384,000/- which is clasified under current liabilities.

(iii) Car loan from Daimler Financial Services India Private Limited is secured against hyphotication of car. The loan was taken during the financial year 2014-15 and is repayable in monthly installment of Rs. 353,760/- each. Accordingly due with in a year is Rs. 4,245,120/- which is clasified under current liabilities.

3.(a) Cash credit

Cash credit from Scheduled Banks is secured by hypothecation of stock, trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranted by the Managing Director and Director.

(b) Buyer's credit from scheduled banks due within a year is classified as short term borrowings

4.Provision for interest on buyer's credit from banks has been made on proportionate basis

5. The Board of Directors have recommended a dividend of Rs 0.50/- per share for the year ended 31st March, 2015 (Previous Year Rs.0.50/- per share). There is a subdivision of shares of Rs 10 each into 2 equity shares of Rs. 5/- each during the year. Hence, the dividend per share for the pervious year is restated to make it comparable.

As at As at Particulars 31.03.2015 31.03.2014

6. Commitments and contingent liabilities i Commitments/ contingent liabilities

a Guarantees issued by banks 18,424,116 3,062,116

b Letters of credit outstanding 65,076,532 44,256,894

Total 83,500,648 47,319,010

7. Related party disclosures

a. Related parties where significant inluence exists and with whom transactions have taken place during the year

1 Bhagyanagar India Limited

2 Surana Telecom and Power Limited

3 Solar Dynamics Private Limited

4 Surana Solar Systems Private Limited

5 Green Energy Systems Private Limited

6 Bhagyanagar Securities Private Limited

7 Bhagyanagar Green Energy Limited

8 Bhagyanagar Energy & Telecom Private Limited

b Associate Company

Solar World Exchange Private Limited

c Key Managerial Personnel

G.M Surana

Narender Surana

Devendra Surana

Manish Surana (Director Fin. & Tech)

Badarish H Chimalgi (Company Secretary)

8. Surana Solar Systems Private Limited ceased to be the subsidiary with effect from 09.06.2013

9. Retirement and Other Employees Benefits

The Company's employee benefits primarly cover provident fund, gratuity and leave encashment.

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue.

Gratutiy liabilty is a defined benefit obligation and is based on the actuarial valuation done. The gratutiy liability and the net periodic gratutity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ lossess are immediately charged to the Profit & Loss account and are not deferred.

The following table summarises the components of Net Benefit expenses recognised in the Profit & Loss account and amount recognised in the Balance Sheet for the respective plans.

10.i. The Company is currently focused on two business segments: manufacturing of solar Photovoltic (SPV) modules and generation of wind power energy. The company's organisational stracture and governance processes are designed to support effective management of multiple businesses while retaining focus on each one of them.

ii. Previous years figures have been regrouped and recast wherever necessary to make them comparable with current year's figures.t year's figures.

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Mar 31, 2014

1.1 (a) Cash credit

Cash credit from Scheduled Banks is secured by hypothecation of stock, trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranted by the Managing Director and Director.

1.2 (b) Buyer''s credit from scheduled banks due with in a year is classified as short term borrowings

As at As at Particulars 31.03.2014 31.03.2013

Note: 2.1 Commitments and contingent liabilities

i Commitments/ contingent liabilities

a Guarantees issued by banks 3,062,116 4,638,000

b Letters of credit outstanding 44,256,894 122,695,892

Related parties where significant inluence exists and with whom transactions have not taken place during the year

1 AP Golden Apparels Private Limited 18 Bhagynagar Entertainment and Infra Development Company Private Limited

2 Bhagyanagar Capital Private Limited 19 Majestic Logistics Private Ltd

3 Bhagyanagar Industrial Park 20 Sha Sons Private Limited

4 Bhagyanagar Infrastructure Limited 21 Bhagyanagar Foods & Beverages Private Limited

5 Bhagyanagar Metals Limited 22 Andhra Electro Galvanising 6 Bhagyanagar Properties Private ltd 23 Bhagyanagar Entertainment Ltd

7 Scientia Infocom India Private Ltd 24 Bhagyanagar Ventures Pvt Ltd

8 Blossom Residency Private Limited 25 Everytime Foods Industries Private Limited

9 Celestial Solar Solutions Privae Ltd 26 Royal Skyscrapers India PvtLtd

10 Epicentre Entertainment Private Ltd 27 Surana Boichemicals Pvt Ltd

11 Globecom Infotech Private Limited 28 Site Tonic Websolutions Pvt Ltd

12 GMS Realtors Private Limited 29 Stealth Energy Private Limited

13 Green Energy Systems Private Ltd 30 Surana Technopark Pvt Ltd

14 Innova Biotech India Private Ltd 31 Metropolitan Venuters India Limited

15 Innova Infrastructure Private Ltd 32 Bhagyanagar Securities Private Limited

16 Innova Technologies Private Limited 33 Corpmedia Publications India Private Limited

17 Vpower Solutions Private Limited 34 Globecom Infra Ventures Pvt ltd (formerly Tranquil Avenues Private Limited)

Related parties where significant inluence exists and with whom transactions have taken place during the year

1 Bhagyanagar India Limited 5 Surana Infocom Private Limited

2 Surana Telecom and Power Limited 6 Value Infrastructure & Properties Private Limited

3 Solar Dynamics Private Limited 7 Bhagyanagar Green Energy Limited

4 Surana Solar Systems Private Ltd 8 Bhagyanagar Energy & Telecom Private Limited

b Associate Company c Key Managerial Personnel

Solar World Exchange Private Limited G.M Surana

Narender Surana

Devendra Surana

Manish Surana

Note: 2.2

Retirement and Other Employees Benefits

The Company''s employee benefits primarly cover provident fund, gratuity and leave encashment

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue Gratutiy liabilty is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation of India. The gratutiy liability and the net periodic gratutity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ lossess are immediately charged to the Profit & Loss account and are not deferred.

The following table summarises the components of Net Benefit expenses recognised in the Profit & Loss account and amount recognised in the Balance Sheet for the respective plans.

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Mar 31, 2013

1.1 Retirement and Other Employees Benefits

The Company''s employee benefits primarly cover provident fund, gratuity and leave encashment

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue

Gratutiy liabilty is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation of India. The gratutiy liability and the net periodic gratutity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ lossess are immediately charged to the Profit & Loss account and are not deferred.

The following table summarises the components of Net Benefit expenses recognised in the Profit & Loss account and amount recognised in the Balance Sheet for the respective plans.

1.2 Segment Information

The company is in the business of manufacture and sale of solar products and Generation of wind Electricity. Considering the core activities of the company, management is of the view that there is no secondary segment.

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Mar 31, 2012

1.1 (a) On scheme of merger, the shares of promoters and Group companies have been reduced to the extent of 60,00,000 by converting into debentures and the same were to be redeemed after a period of 18 Months from the date of issue.

(b) Out of which 1,56,03,300 shares have been allotted to the shareholders of M/s Surana Telecom and Power Limited in consideration of merger of its Solar Division as per the scheme of arrangement in the year 2011 as approved by the High Court of Andhra Pradesh.

(c) Equity shareholder holding more than 5% of equity shares along with the number of equity shares held is as given below.

Notes: Car Loan from Bank:

1.2 (a) Car loan from Axis Bank Ltd is secured against hypothecation of car. The loan was taken during the financial year 2010-11 and is repayable in monthly installment of Rs. 2,28,222/- each. Accord- ingly due with in a year is Rs 27,38,664/- which is clasified under current liabilities.

1.3 (b) Cash Credit & Buyer's Credit from banks

Cash Credit & Buyer's Credit from scheduled Banks is secured by hypothecation of stock, Trade receivables and first pari-passu charge on specific fixed assets of the company. Further, it has been guaranted by the Managing Director and Director.

Notes: In case of Trade payables, Letters seeking confirmation of year-end balances are sent to the respective parties. Hence the Balances are subject to confirmation and reconcilation.Further, as per the information about the industrial status of the creditor there are no dues to any micro and small enterprises under the micro small and medium enterprises development act 2006.

Notes: Debentures

1.4 (a) in lieu of scheme of merger, 60,00,000 Non-convertible secured debentures of Rs. 10/- each were issued and the same were to be redeemed after a period of 18 months from the date of issue. Accordingly, the debentures were redeemed in the current financial year.

1.4 (b) Provision for interest on Buyers Credit from banks has been made on proportionate basis.

Note: Proposed Equity Dividend

1.5 (a) The Board of Directors have recommended a dividend of Rs.0.50/- per share for the year ended 31st March, 2012 (Previous Year Rs. 1/- per share)

Note: Trade Receivables

1.6(a) Previous year's figures include Rs. 53,47,380/- which was receivable from a company in which directors are interested.

1.6(b) Includes Rs. 53,47,380/- receivable from related party in which Directors are interested.

1.6(c) In case of Trade receivables letters for confirmation of year end balances are sent. Hence, the balances as on the date of Balance Sheet are subject to confirmation and reconciliation.

(All amounts in ' except share data and unless otherwise stated)

1.7. Commitments and Contingent Liabilities

As at As at

31.03.12 31.03.11

i. Commitments/ Contingent Liabilities

a Guarantees issued by banks 2,208,000 30,000,000

b Letters of credit outstanding 12,930,255 62,952,255

1.8 Retirement and Other Employees Benefits

The Company's employee benefits primarly cover provident fund, gratuity and leave encashment.

Provident fund is a defined contribution scheme and the company has no further obligation beyond the contribution made to the fund. Contributions are charged to the Profit & Loss account in the year in which they accrue.

Gratuity liabilty is a defined benefit obligation and is based on the actuarial valuation done by the Life Insurance Corporation of India. The gratutiy liability and the net periodic gratutity cost is actually determined after considering discounting rates, expected long term return on plan assets and increase in compensation level. All actuarial gain/ lossess are immediately charged to the Profit & Loss account and are not deferred.

Previous years figures have been regrouped and recast wherever necessary to make them comparable with current year's figures.

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Mar 31, 2011

1. Share Capital

Upon scheme of arrangement with M/s. Surana Telecom and Power Limited, becoming effective on 28.07.2010 equity shares have been allotted to the share holders of M/s Surana Telecom and Power Limited and the amount of Rs. 15,60,33,000/- as disclosed on the face of the Balance Sheet under the head "Share Capital Suspense Account'' as on 31.03.2010 has been transferred to Share Capital Account.

2. Secured Loans

Cash Credit limits from banks are secured by current assets of the company on pari-pasu-basis and respectively and personal guarantee of the Managing Director and Director.

3. Minimum Alternate Tax- MAT (Non Current Asset)

The management after a detailed review of future business growth prospect of the company, the provisions of applicable accounting standards to the company and the Guidance note issued by Institute of Chartered Accountant of India on Accounting and Disclosure of MAT Credit, is of the opinion that the MAT Credit would be reversed by way of adjustments to Income Tax Payable in the forthcoming years.

4. a) Capital Advances

Capital advances represents the advances given for setting of a PV Cell Manufacturing Unit at Fab city, Hyderabad with a capacity of 35 MW.

b) Capital Commitment

Capital commitment for setting up the PV Cell Manufacturing Unit is Rs. 7,127 lacs

5. Sundry Debtors and loans and advances

In case of balances in Sundry debtors, loans & advances and other current assets letters seeking confirmation of year end balances are sent to the concerned parties. The balances are subject to confirmation and reconciliation.

6. Contingent Liability not provided for (As certified by the management)

31.03.2011 31.03.2010 Particulars Rs. in lakhs Rs. in lakhs

Counter Guarantees given to the banks against guarantee 300.00 - issued by them

Letters of Credit opened by banks/ Buyer's Credit 629.52 144.26

Previous figures have been regrouped and recast wherever necessary to make them comparable with current year's figures.