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Accounting Policies of Ujaas Energy Ltd. Company

Mar 31, 2015

A. Basis Of Accounting

The Accounts have been prepared in accordance with the historical cost convention. The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP) in India.

These financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Rule 7 of the Companies (Accounts) Rules, 2014 in respect of section 133 of the Companies Act, 2013 and other recognized accounting practices and policies.

b. Use of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known / materialize.

c. Valuation Of Inventories

Inventories are valued at lower of cost or market value except scrap and renewable energy certificate valued at net realizable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of inventory is generally comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

d. Depreciation and Amortization

Depreciation on fixed assets is provided in the manner specified in Schedule II to the Companies Act, 2013 except based on technical evaluation the useful life of Solar power generation plant is considered 25 years which is different from that prescribed in schedule II of the Act i.e. 15 years. Depreciation of an asset is the difference between Original cost / revalued amount and the estimated residual value and is charged to the statement of profit and loss over the useful life of an asset on straight line basis. The estimated useful life of assets and estimated residual value is taken as prescribed under Schedule II to the Companies Act, 2013.

Depreciation on additions during the year is provided on pro rata basis with reference to date of addition/installation. Depreciation on assets disposed /discarded is charged up to the date on which such asset is sold.

Intangible assets - Computer software are amortized over a period of 3 years.

e. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

Sales revenue is recognized on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.

Revenue from construction of Solar Power system (construction contract) activity is recognized in accordance with accounting standard-7 (Revised), construction contracts, issued by the institute of Chartered Accountants of India (the"ICAI"), contract revenue is recognized using fixed price contract basis, on percentage of completion method subject to such cost of work performed being 15% or more of total estimated cost. The percentage completion method is the proportion of cost of work performed till date to the total estimated contract cost.

Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity and allocable to the contract costs that cannot be attributed to contract activity are expensed where incurred.

Revenue from Power Supply is recognized for on acceptance by Electricity Distribution Company/Consumers of units generated and after giving allowance for wheeling and transmission loss.

Revenue from Renewable Energy Certificate is recognized on accrual basis.

Interest income is recognized on time proportion basis.

Income from services is recognized as they are rendered (based on arrangement / agreement with the concern customers).

f. Fixed Assets

i. Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction or development, net of tax /duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairments, if any.(except freehold land).

ii. Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.

g. Foreign Currency Transaction

I. All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss.

II. Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss.

III. In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

h. Investments

Investments that are readily realizable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current Investments are carried at lower of cost or fair value. Noncurrent / Long Term investments are carried at cost of acquisition. However, no provision is made for diminution in the value of long term investments, where in the opinion of board of directors such diminutions is temporary.

i. Employee Benefits

(a) Post- employment benefit plans

(i) Defined Contribution Plan - Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

(ii) Defined Benefit Plan -The liability in respect of gratuity is determined using actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) as at balance sheet date. Actuarial gain and losses are recognized in full in statement of Profit and Loss.

(b) Short term employment benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees renders the services. These benefits include compensated absence also.

j. Borrowing Cost

Borrowing costs attributable to acquisitions and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Statement of Profit and Loss.

k. Segment Accounting Policies

1. The company has disclosed business segment as the primary segment. Segment have been identified taking into account the type of products, the differing risk return and the internal reporting system. The various segment identified by the company comprised as under :-

Name of Segment Comprised of

Transformer - Manufacturing and servicing of transformer

Solar Power Plant Generation - Generation and distribution of Power Units, Operation and

Maintenance of solar Power Plant

Manufacturing and Sale of Solar - Manufacturing and sales of Solar Power Plant

Power System

2. Segment revenue, segment results, segment assets and segment liabilities include respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost. Assets and liabilities that cannot be allocated between the segments are shown as un- allocable corporate assets and liabilities respectively.

3. The Company has identified geographical segments as the secondary segment. Secondary segments comprise of domestic and export markets. However, company has no export sales.

l. Lease Accounting As a Lessee

Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rentals thereon are charged to the statement of profit and loss over the period of lease.

m. Taxes On Income

Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax is recognized on timing difference between taxable income and accounting income that originate i n one period and are capable of reversal on one or more subsequent period.

Deferred Tax assets are recognized and carried forward to the extent that there is a virtual / reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

n. Impairment Of Assets

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognized for an asset no longer exists or may have decreased.

o. Provision, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the financial statements. Contingent assets are neither recognized nor disclosed in the financial statements.

p. Cash Flow Statement

Cash flows are reported using indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the company is segregated based on the available information.


Mar 31, 2014

A. Basis Of Accounting

The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP), Accounting Standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

b. Use Of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. The difference between actual results and estimates are recognized in the period in which the results are known / materialize.

c. Valuation Of Inventories

Inventories are valued at lower of cost or market value except scrap valued at net realizable value. Cost of inventory is arrived at by using Moving Average Price Method. Cost of Raw Materials are determined on Moving Average Price basis. Cost of inventory of finished goods and work in progress is generally comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition.

d. Depreciation

Depreciation on fixed assets is being provided on straight line method as per the rates prescribed in schedule XIV of the companies Act, 1956.

Depreciation on assets added/disposed off during the year has been provided on pro-data basis with reference to the month of addition / disposal except in case of Solar Power plant it is provided with reference to date of addition/disposal.

Intangible assets software are amortized over a maximum period of five years or its useful life whichever is shorter. Premium on Lease hold land is amortized over the period of lease.

e. Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty.

Revenue from construction of Solar Power system (construction contract) activity is recognized in accordance with accounting standard-7 (Revised), construction contracts, issued by the institute of Charted Accountants of India (the"ICAI"), contract revenue is recognized using fixed price contract basis, on percentage of completion method subject to such cost of work performed being 15% or more of total estimated cost. The percentage completion method is the proportion of cost of work performed till date to the total estimated contract cost.

Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity and allocable to the contract costs that cannot be attributed to contract activity are expensed where incurred.

Interest income is recognized on time proportion basis.

Income from services is recognized as they are rendered (based on arrangement / agreement with the concern customers).

f. Fixed Assets

i. Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction or development , net of tax /duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairments, if any.(except freehold land).

ii. Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre-operative expenses" to be capitalized on erection/installations of the assets.

g. Foreign Currency Transaction

I. All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss.

II. Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet. Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss.

III. In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract. Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities.

h. Employee Benefits

(a) Post- employment benefit plans

(i) Defined Contribution Plan - Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

(b) Short term employment benefits

i. Borrowing Cost

j. Segment Accounting Policies

1. The company has disclosed business segment as the primary segment. Segment have been identified taking into account the type of products, the differing risk return and the internal reporting system. The various segment identified by the company comprised as under :-

Name of Segment Comprised of

Transformer - Manufacturing and servicing of transformer

Solar Power Plant Operation - Generation and distribution of Power Units, operation & maintenance of solar power plant Manufacturing & sale of solar power system - Manufacturing, sales, Services of Solar power systems respectively.

3. The Company has identified geographical segments as the secondary segment. Secondary segments comprise of domestic and export markets. However,

k. Lease Accounting

As a Lessee

Leases, where risk and reward of ownership, are significantly retained by the lessor are classified as operating leases and lease rentals thereon are charged to

l. Taxes On Income

Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax is recognized on timing difference betwe

m. Impairment Of Assets

Provision, Contingent Liabilities And Contingent Assets


Mar 31, 2013

A Basis Of Accounting

The financial statements are prepared as a going concern under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP), Accounting Standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956

b Use Of Estimates

The preparation and presentation of financial statements requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period The difference between actual results and estimates are recognized in the period in which the results are known / materialize

c Valuation Of Inventories

Inventories are valued at lower of cost or market value on FIFO basis except scrap valued at net realizable value Cost of inventory of finished goods and work in progress is generally comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition The excise duty in respect of closing inventory of finished goods is included as cost of finished goods and goods in transit stated at cost

d Depreciation

Depreciation on fixed assets is being provided on straight line method as per the rates prescribed in schedule XIV of the companies Act, 1956

Depreciation on assets added/disposed off during the year has been provided on pro data basis with reference to the month of addition / disposal except in case of Solar Power plant it is provided with reference to date of addition/disposal

Intangible assets software are amortized over a maximum period of five years or its useful life whichever is shorter Premium on Lease hold land is amortized over the period of lease

e Revenue Recognition

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis

Sales revenue is recognised on transfer of the significant risks and rewards of ownership of the goods to the buyer and stated net of sales tax, VAT, trade discounts and rebates but includes excise duty

Revenue from construction of Solar Power system (construction contract) activity is recognized in accordance with accounting standard 7 (Revised), construction contracts, issued by the institute of Charted Accountants of India (the”ICAI”), contract revenue is recognized using fixed price contract basis, on percentage of completion method subject to such cost of work performed being 15% or more of total estimated cost The percentage completion method is the proportion of cost of work performed till date to the total estimated contract cost

Contract costs include costs that relate directly to the specific contract and costs that are attributable to contract activity and allocable to the contract costs that cannot be attributed to contract activity are expensed where incurred

Interest income is recognised on time proportion basis

Income from services is recognised as they are rendered (based on arrangement / agreement with the concern customers)

f Fixed Assets

i Fixed Assets

Fixed assets (Tangible and Intangible) are stated at cost of acquisition or construction or development , net of tax /duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use, less depreciation, amortization and impairments, if any (except freehold land)

ii Capital Expenditure

Assets under erection/installation are shown as "Capital work in progress", Expenditure during construction period are shown as "pre operative expenses" to be capitalized on erection/installations of the assets

g Foreign Currency Transaction

i All transactions in foreign currency are recorded at the rates of the exchange prevailing on the dates when the relevant transactions took place; any gain/ loss on account of the fluctuations in the rate of exchange is recognized in the statement of Profit and Loss

ii Monetary items in the form of loans, current assets and current liabilities in foreign currencies at the close of the year are converted in the Indian currency at the appropriate rate of exchange prevailing on the dates of the Balance Sheet Resultant gain or loss on account of fluctuation in the rate of exchange is recognized in the statement of Profit and Loss

iii In respect of the Forward Exchange Contracts entered into to hedge foreign currency risks, the difference between the Forward Rate and Exchange Rate at the inception of the contract is recognized as income or expense over the life of the contract Further, the exchange difference arising on such contracts are recognized as income or expense along with the exchange difference on the underlying assets/ liabilities

h Employee Benefits

i Post employment benefit plans

a) Defined Contribution Plan Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities

b) Defined Benefit Plan The liability in respect of gratuity is determined using actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) as at balance sheet date Actuarial gain and losses are recognized in full in statement of Profit and Loss

ii Short term employment benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees renders the services These benefits include compensated absence also The Company makes the provision for leave encashment at the year end as per the Factories Act 1948 , which is being paid in subsequent year

i Borrowing Cost

Borrowing costs attributable to acquisitions and construction of qualifying assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use Other borrowing costs are charged to Statement of Profit and Loss

j Segment Accounting Policies

1 The company has disclosed business segment as the primary segment Segment have been identified taking into account the type of products, the differing risk return and the internal reporting system The various segment identified by the company comprised as under :

Name of Segment Comprised of

Transformer Manufacturing and servicing of transformer

Solar Power Generation Generation and distribution of Power Units

Other Manufacturing, sales, Services of Solar power systems

2 Segment revenue, segment results, segment assets and segment liabilities include respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost Assets and liabilities that can not be allocated between the segments are shown as unallocable corporate assets and liabilities respectively

3 The Company has identified geographical segments as the secondary segment Secondary segments comprise of domestic and export markets However, company has no export sales

k Taxes On Income

Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1956

Deferred Tax is recognized on timing difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent period

Deferred Tax assets are recognized and carried forward to the extent that there is a virtual / reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized

l Impairment Of Assets

An asset is impaired when the carrying cost of asset exceeds its recoverable value An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired An impairment loss recognized in prior period is reversed if there has been an indication that impairment loss recognised for an asset no longer exists or may have decreased

m Provision, Contingent Liabilities And Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources Contingent liabilities are not recognized but are disclosed in the financial statements Contingent assets are neither recognized nor disclosed in the financial statements

n Cash Flow Statement

Cash flows are reported using indirect method, whereby profit/ (loss) before extraordinary items and tax is adjusted for the effects of transactions of non cash nature and any deferrals or accruals of past or future cash receipts or payments The cash flow from operating, investing and financing activities of the company is segregated based on the available information


Mar 31, 2012

BASIS OF ACCOUNTING

The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the Generally Accepted Accounting Principles (GAAP), Accounting Standards Issued by the Institute of Chartered Accountants of India, as applicable, and the relevant provisions of the Companies Act, 1956.

USE OF ESTIMATES

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amounts of revenue and expenses during the reported period. Actual results could differ from these estimates and difference between actual results and estimates are recognized in the period in which the results are known/materialize.

VALUATION OF INVENTORIES (AS-2)

Inventories are valued at lower of cost or market value on FIFO basis. Cost of inventory is generally comprise of cost of purchase, cost of conversion and other cost incurred in bringing the inventory to their present location and condition. The excise duty in respect of closing inventory of finished goods is included as cost of finished goods and goods in transit stated at cost.

DEPRECIATION (AS-6)

Depreciation on fixed assets is being provided on straight line method as the rates prescribed in schedule XIV of the companies Act, 1956.

Depreciation on assets added/disposed off during the year has been provided on pro-data basis with reference to the month of addition / disposal except in case of Solar Power plant it is provided with reference to date of addition/disposal.

Intangible assets computer software are amortized over period of 5 years.

REVENUE RECOGNITION (AS-9)

The Company follows the mercantile system of accounting and recognizes income and expenditure on accrual basis.

FIXED ASSETS (AS-10)

Fixed assets are stated at cost of acquisition, net of tax/duty credit availed if any, including any cost attributable for bringing the assets to its working condition for its intended use; less accumulated depreciation.

INVESTMENTS (AS-13)

Investments are stated at cost. No provision is made for Diminution in the value of investments, if any, where the same is considered by Board as temporary, while investments are of long-term in nature.

EMPLOYEE BENEFITS (AS-15)

(a) Post- employment benefit plans

(i) Defined Contribution Plan - Contributions to provident fund and Family Pension Fund are accrued in accordance with applicable statute and deposited with appropriate authorities.

(ii) Defined Benefit Plan - The company has carried out actuarial valuation of gratuity using Projected Unit Credit Method as required by Accounting Standard 15 "Employee Benefits" (Revised 2005) liability as per actuarial valuation as at year end is recognized in profit and loss account. The Company makes the provision for leave encashment at the year end as per the Factories Act 1948 , which is being paid in subsequent year.

(b) Short term employment benefits

The undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered by employees is recognized during the period when the employees renders the services. These benefits include compensated absence also.

BORROWING COST (AS-16)

Borrowing costs attributable to acquisitions and construction of assets are capitalized as a part of the cost of such asset up to the date when such asset is ready for its intended use. Other borrowing costs are charged to Profit & Loss Account.

SEGMENT ACCOUNTING POLICIES (AS-17)

1. The company has disclosed business segment as the primary segment. Segment have been identified taking into account the type of products, the differing risk return and the internal reporting system. The various segment identified by the company comprised as under

Name of Segment Comprised of

Transformer - Manufacturing of transformer

Solar Power Generation - Generation and distribution of Power Units

Manufacturing, sales, Services of Solar power systems

2. Segment revenue, segment results, segment assets and segment liabilities include respective amounts directly identified with the segment and also an allocation on reasonable basis of amounts not directly identified. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost. Assets and liabilities that can not be allocated between the segments are shown as unallocable corporate assets and liabilities respectively.

3. The Company has identified geographical segments as the secondary segment. Secondary segments comprise of domestic and export markets. However, company has no export sales. Hence, no disclosure is required in respect of geographical segments.

TAXES ON INCOME (AS-22)

Current tax is the amount of tax payable on taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1956.

Deferred Tax is recognized on timing difference between taxable income and accounting income that originate in one period and are capable of reversal on one or more subsequent period.

Deferred Tax assets are recognized and carried forward to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

IMPAIRMENT OF ASSETS (AS-28)

An asset is impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired. An impairment loss recognized in prior period is reversed if there has been a change in the estimate of recoverable amount.

 
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