Accounting Policies of Agni Green Power Ltd. Company

Mar 31, 2024

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Note 1 : SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES_

1. Company background

Agn Green Power, (the Company) is a public company, domicile in India and incorporated under the provisions of the Companies Act. I956.T Company is engaged in the business of manufacture/assembiy of Solar Photovoltaic Power Plants. Solar Lamps and other Solar products and erectk installation and servicing the same. The Company is a Small and Medium Sized Company (SMC) as defined in the General Instructions in respect Accounting Standards as notified under the Companies (Accounting Standards) Rules. 2006 and the relevant provisions of the Companies Act 201 Accordingly the Company complies with the Accounting Standards as applicable to a Small and Medium Sized Company.

2. SIGNIFICANT ACCOUNTING POLICIES :

a. Basis of Preparation :

I''he financial statements of the Company have been prepared in accordance with the generally accepted accounting principles (GAAP) India using the Historical Cost convention on accrual basis. These financial statements have been prepared to comply in all material aspei with the accounting standards specified under section 133 of the Companies Act. 2013 read with Rule 7 of Companies (Accounts) Ruli 2014 and the relevant provisions of The Companies Act. 2013. The accounting policies adopted in the presentation of the financial statemei are consistent with those followed in the previous year.

b. Current & non-current classification and operating cvcle :

All the Assets and Liabilities have been classified as Current or Non-Current as per the Company’s normal operating cycle and other crite set out in the Schedule 111 to The Companies Act 2013. Based on the present activities of the Company the classification between Cura and Non-Current Assets and Liabilities has been made on the basis of twelve months.

c. Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles in India (GAAP) requires Manageiiu to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as on i date of the financial statements and the results of operations during the reporting period. Although these estimates are based up Management''s best knowledge of current events and actions, actual results could differ from these estimates.

d. Fixed Assets :

Tangible Assets:

Fixed Assets are stated at cost of acquisition and amounts added on revaluation less accumulated depreciation and impairment loss, il''ai Cost comprises ihe purchase price and any cost directly attributable to bringing the asset to its working condition for its intended use.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits’ from the existi asset beyond its previously assessed standard of performance. Projects under which assets arc not ready for their intended use are shown Capital Work-in-Progress.

Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization/depletion and impairment loss, if any. The cost eompris purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use and adjustments arisi from exchange rate variations attributable to the intangible assets.

e. Depreciations and amortizations

Depreciation on tangible fixed assets are provided on Written Down Value Method (WDV) based on useful life of the assets as prescribed Schedule 11 of the Companies Act. 2013 and considering residual value to be 5% of cost and in cases w here written down value ns 31.03.2014 was less than 5% of cost, Re. 1 for each individual/block of assets (as the case may be). Depreciation on fixed asst added/disposed-off during the year is provided on pro-rata basis with respect to date of acquisition/ disposal.

Amoitization/Depreciation on intangible fixed assets are provided on Written Down Value Method (WDV) based on useful life of the ass^ and considering residual value to be 5% of cost and in cases where written dow n value as on 31.03.2014 was less than 5% of cost. Re. I I each individual/block of assets (as the case may be). Useful life of the asset is the period over which the asset is expected to be available I use.

Leasehold improvement, wherever applicable, is amortized on a straight-line basis over the period of lease. No scrap value is eonsidci while depreciating the same.

In case of impairment, if any. depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

Amortisation is calculated to write-off the cost of intangible assets less their estimated residual values using the w ritten-down method o\ their estimated useful lives, and is recognised in Statement of profit or loss. The estimated useful lives for current and comparative porio are as follows:

i) Technology Development Charges : over the leasc/fVriod i.e.. 10 years

ii) Software Licenses : 5 years / /

_iii) Technical knowhow : 5 y ears _

f. Investment

Investments, which are readily realizable and intended to be held lor not more than a year from the date on which such investments a made, are classified as current investments. All other investments are classified as long-term investments. Non-current investments a carried at cost. Provision lor diminution in the value of non-current investments is made onlv if such reduction is other than temporary

g. Hoi row ina Costs

Borrowing costs that are attributable fb the acquisition or constructions of qualify ing assets are capitalized as part of the cost of the asset A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charge to revenue.

h. Income Recognition :

Revenue is recognized to the extent that it is probable that the economic benefits will How to the Companv and the revenue can be reliah measured.

(i) Sale of Products - Income is recognized on the basis of the invoices raised on successful installation and commissioning of a sol. photovoltaic power plant project for solar powered electrification or on dispatch of a solar powered product to a customer.

(ii) Rendering of Service - Revenue is recognized on completion of rendering of the service in terms of the relevant w ork order.

(iii) Interest - Interest from bank deposits is recognized as per certificate of income received from bank on time proportion basis or intere credited to bank account.

(iv) Other Income and Dividend - These are recognized on receipt basis.

i. Foreign Currency transactions :

Initial Recognition: Foreign currency transactions are recorded in the functional currencv by applying the spin exchange rate between tl functional currency and the foreign currency at the date of the transaction. Foreign currencv monetary items outstanding at the Balam Sheet date are restated at year end rates. Gain / Loss arising there from and arising on conversion at point of realization have been booked Foreign Exchange Fluctuation Account in accordance with AS11.

j. Inventories

Inventories have been valued at lower of cost or net realizable value in accordance w ith AS-2 applying first-in-first-out method (FIFO). I I cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their prese location and condition. Net realizable value is the estimated selling price in ordinary course of business, less estimated costs of completion ai the estimated costs necessary to make sale.

k. Employee Bene tits

Short term benefits: these are employee benefits (other than termination benefits) that are due to be settled within twelve months after tl end of the period in which the employees render the related service. All undiscounted amount of short term benefits accounted for on accru basis.

Post-Employment Bene fits: Defined Contribution P Ians: defined contribution plans are post-employment benefit plans under which an enti pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pav further contributions if the I''m does not hold sufficient assets to pav all employee benefits relating to employee sen ice in the current and prior periods. The Companv maki specific contribution towards Provident Fund. Pension Scheme and Gratuity Scheme, fhese are recognized as expense in profit and lo account during the period in which the employee renders the related service.

l. Income Taxes:

Provisions for both current and deferred taxes are made in the books. Current tax is measured on the basis of taxable income usii applicable tax rates and tax laws. Current tax for current and prior periods, to the extent unpaid, is recognized as a liability. If the amou already paid in respect of current and prior periods exceeds the amount due for those periods, the excess are recognized as an ass*. Deferred tax is recognized subject to the consideration of prudence. In respect of deferred tax is the tax effect on temporal) (timin differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal one or more subsequent periods and is measured using tax rates and laws that have been enacted or substanlivelv enacted bv the Balam Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to reassess its realization.

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Mar 31, 2023

2. SIGNIFICANT ACCOUNTING POLICIES :

a. Basis of Preparation :

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles (GAAP) in India using the Historical Cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014 and the relevant provisions of The Companies Act, 2013. The accounting policies adopted in the presentation of the financial statements are consistent with those followed in the previous year.

b. Current & non-current classification and operating cycle :

All the Assets and Liabilities have been classified as Current or Non-Current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to The Companies Act 2013. Based on the present activities of the Company the classification between Current and Non-Current Assets and Liabilities has been made on the basis of twelve months.

c. Use of Estimates :

The preparation of financial statements in conformity with generally accepted accounting principles in India (GAAP) requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities as on the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon Management''s best knowledge of current events and actions, actual results could differ from these estimates.

d. Fixed Assets :

Tangible Assets:

Fixed Assets are stated at cost of acquisition and amounts added on revaluation less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any cost directly attributable to bringing the asset to its working condition for its intended use.

Subsequent expenditure related to an item of fixed assets is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. Projects under which assets are not ready for their intended use are shown as Capital Work-in-Progress.

Intangible Assets

Intangible assets are stated at cost of acquisition less accumulated amortization/depletion and impairment loss, if any. The cost comprises purchase price and any cost directly attributable to bringing the asset to its working condition for the intended use and adjustments arising from exchange rate variations attributable to the intangible assets.

e. Depreciations and amortizations

Depreciation on tangible fixed assets are provided on Written Down Value Method (WDV) based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 and considering residual value to be 5% of cost and in cases where written down value as on 31.03.2014 was less than 5% of cost, Re.1 for each individual/block of assets (as the case may be). Depreciation on fixed assets added/disposed-off during the year is provided on pro-rata basis with respect to date of acquisition/ disposal.

Amortization/Depreciation on intangible fixed assets are provided on Written Down Value Method (WDV) based on useful life of the assets and considering residual value to be 5% of cost and in cases where written down value as on 31.03.2014 was less than 5% of cost, Re. 1 for each individual/block of assets (as the case may be). Useful life of the asset is the period over which the asset is expected to be available for use.

Leasehold improvement, wherever applicable, is amortized on a straight-line basis over the period of lease. No scrap value is considered while depreciating the same.

In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.

Amortisation is calculated to write-off the cost of intangible assets less their estimated residual values using the written-down method over their estimated useful lives, and is recognised in Statement of profit or loss. The estimated useful lives for current and comparative periods are as follows:

i) Technology Development Charges : over the lease period i.e., 10 years

ii) Software Licenses : 5 years

iii) Technical knowhow : 5 years

f. Investment

Investments, which are readily realizable and intended to be held for not more than a year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Non-current investments are carried at cost. Provision for diminution in the value of non-current investments is made only if such reduction is other than temporary.

g. Borrowing Costs

Borrowing costs that are attributable to the acquisition or constructions of qualifying assets are capitalized as part of the cost of the assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

h. Income Recognition :

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

(i) Sale of Products - Income is recognized on the basis of the invoices raised on successful installation and commissioning of a solar photovoltaic power plant project for solar powered electrification or on dispatch of a solar powered product to a customer.

(ii) Rendering of Service - Revenue is recognized on completion of rendering of the service in terms of the relevant work order.

(iii) Interest - Interest from bank deposits is recognized as per certificate of income received from bank on time proportion basis or interest credited to bank account.

(iv) Other Income and Dividend - These are recognized on receipt basis.

i. Foreign Currency transactions :

Initial Recognition: Foreign currency transactions are recorded in the functional currency by applying the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Foreign currency monetary items outstanding at the Balance Sheet date are restated at year end rates. Gain / Loss arising there from and arising on conversion at point of realization have been booked to Foreign Exchange Fluctuation Account in accordance with AS11.

j. Inventories

Inventories have been valued at lower of cost or net realizable value in accordance with AS-2 applying first-in-first-out method (FIFO). The cost of inventories comprise all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in ordinary course of business, less estimated costs of completion and the estimated costs necessary to make sale.

k. Employee Benefits

Short term benefits: these are employee benefits (other than termination benefits) that are due to be settled within twelve months after the end of the period in which the employees render the related service. All undiscounted amount of short term benefits accounted for on accrual basis.

Post-Employment Benefits: Defined Contribution Plans: defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods. The Company makes specific contribution towards Provident Fund, Pension Scheme and Gratuity Scheme. These are recognized as expense in profit and loss account during the period in which the employee renders the related service.

l. Income Taxes:

Provisions for both current and deferred taxes are made in the books. Current tax is measured on the basis of taxable income using applicable tax rates and tax laws. Current tax for current and prior periods, to the extent unpaid, is recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess are recognized as an asset. Deferred tax is recognized subject to the consideration of prudence. In respect of deferred tax is the tax effect on temporary (timing) differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods and is measured using tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are reviewed at each Balance Sheet date to reassess its realization.