Notes to Accounts of Emmvee Photovoltaic Power Ltd.

Mar 31, 2024

k) Provisions and contingencies

The Company recognizes a provision when there is a present obligation as a result of past (or obligating) event that
probably requires an outflow of resources, and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. When there is a possible obligation or a present obligation that
the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions for onerous contracts, i.e. contracts where the expected unavoidable costs of meeting the obligations
under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable
that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of
an obligating event, based on a reliable estimate of such obligation.

l) Impairment of assets

The Company periodically assesses whether there is any indication that an asset or a group of assets comprising a
cash generating unit may be impaired. If any such indication exists, the Company estimates the recoverable amount
of the asset. For an asset or group of assets that do not generate largely independent cash inflows, the recoverable
amount is determined for the cash-generating unit to which the asset belongs. If such recoverable amount of the asset
or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the
carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is
recognised in the Statement of profit and loss. If at the balance sheet date, there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciable historical cost. An impairment loss is reversed only to the
extent that the carrying amount of asset does not exceed the net book value that would have been determined; if no
impairment loss had been recognised.

m) Leases

Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as
finance leases. Such assets are capitalised at fair value of the asset or present value of the minimum lease payments at
the inception of the lease, whichever is lower.

For operating leases, lease payments (excluding cost for services, such as maintenance) are recognised as an expense
in the Statement of profit and loss on a straight line basis over the lease term. The lease term is the non- cancellable
period for which the lessee has agreed to take on lease the asset together with any further periods for which the lessee
has the option to continue the lease of the asset, with or without further payment, which option at the inception of the
lease it is reasonably certain that the lessee will exercise.

Assets given by the Company under operating lease are included in property, plant and equipment. Lease income
from operating leases is recognised in the Statement of profit and loss on a straight line basis over the lease term
unless another systematic basis is more representative of the time pattern in which benefit derived from the leased
asset is diminished. Costs, including depreciation, incurred in earning the lease income are recognised as expenses.
Initial direct costs incurred specifically for an operating lease are deferred and recognised in the Statement of profit
and loss over the lease term in proportion to the recognition of lease income.

n) Investments

Investments in subsidiary is made to enhance the Company’s business interests and therefore classified as trade
investments. Investments are either classified as current or long-term based on the Management’s intention at the
time of purchase/investment. Current investments are carried at the lower of cost and fair value. Non-current
investments/trade investments are carried at cost less any other than temporary diminution in value, determined on
the specific identification basis. Profit or loss on sale of investments is determined as the difference between the sale
price and carrying value of investment, determined individually for each investment.

o) Income-tax

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-
tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income
and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or
assets are recognised using the tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax assets are recognised only to the extent that there is reasonable certainty that the assets can be realised
in future; however, where there is unabsorbed depreciation or carry forward of losses, deferred tax assets are
recognised only if there is virtual certainty of realisation of such assets. Deferred tax assets are reviewed as at each
balance sheet date and written down or written up to reflect the amount that is reasonably/ virtually certain (as the
case may be) to be realised.

In the AY 2022-23 the company has opted for concessional tax regime u/s 115BAA of the income tax act of 1961.

The Company offsets, on a year-on-year basis, the current tax assets and liabilities where it has a legally enforceable
right and where it intends to settle such assets and liabilities on a net basis.

p) Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to equity shareholders for the period
by the weighted average number of equity shares outstanding during the year.

q) Borrowing costs

Borrowing costs are interest and other costs (including exchange differences arising from currency borrowings to the
extent that they are regarded as adjustment to interest costs) incurred by the company in connection with the
borrowing of the funds. Borrowing costs directly attributable to acquisition or construction of those property plant,
equipment which necessarily takes a substantial period of time to get ready for their intended use are capitalized.
Other borrowing costs are recognized as expense in the period in which they are incurred.

Exchange differences (favorable as well as unfavorable) arising in respect of translation/settlement of long term
foreign currency borrowing attributable to the acquisition of a depreciable asset are also included in the cost of the
asset up to the date of asset put to use.

r) Government Grants

Government grants are recognised when there is a reasonable assurance that the same will be received. Revenue
grants are recognised in the Statement of Profit and Loss. Government grants related to expenditure on Capital assets
are credited to the Statement of Profit and Loss over the useful lives of capital assets. Total grants received less the
amounts credited to Statement of Profit and Loss at the Balance Sheet date are included in the Balance Sheet as
deferred income. Other capital grants are credited to Reserves.

s) Cash and cash equivalents

Cash and cash equivalents comprise of cash-in-hand and balance in bank in current accounts, deposit accounts and
drafts/cheques in hand.

t) Cash flow statement

Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of
transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash
flows from operating, investing and financing activities of the Company are segregated.

u) Recent accounting pronouncements,

Standards issued but not effective

Ministry of Corporate Affairs (MCA) has on March 24, 2021, through a notification, amended Schedule III of the
Companies Act, 2013. The amendments deal with reporting and presentation of certain items in the Balance Sheet
and Profit and Loss Statement and to the extent there has been a revision in the Formats of Division I, II and III of
Schedule III. The Amendments are applicable from April 1, 2021. The amendments are to the Schedule III of the
Companies Act, 2013 are extensive. The Company has evaluated the amendments and has given effect to them in the
financial statements as applicable to the Company and required by law.

v) Audit Trail

With effect from 1 April 2023, the Ministry of Corporate Affairs (MCA) has made it mandatory for companies to
maintain an audit trail throughout the year for transactions impacting books of accounts. Company is using SAP
software for the accounting and business operations, SAP has inbuilt audit trail and all transactions are covered for
Audit trail.