Accounting Policies of Himalayan Solar Ltd. Company

2.1 Basis of accounting

The financial statements of the Company have been prepared in accordance with the Generally Accepted
Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards Specified under
section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014 and the
relevant provisions of the Companies Act, 2013 (the Act), as applicable. The financial statements have been
prepared on accrual basis under the historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of Estimates

The preparation of financial statements in accordance with the generally accepted accounting principles
(Indian GAAP), which requires management to make judgments, estimates and assumptions that affect the
application of accounting policies and the reported amounts of assets and liabilities, income, expenses and
the disclosure of contingent liabilities at the end of the reporting period. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revision to accounting estimate is recognized in the period
in which the estimates are revised and in any future period affected.

3 CURRENT AND NON-CURRENT CLASSIFICATIONS

All assets and liabilities are classified into current and non-current.

3.1 Assets

An asset is classified as current when it satisfies any of the following criteria:

i. ) It is expected to be realized in, or is intended for sale or consumption in, the company’s normal
operating cycle;

ii. ) It is held primarily for the purpose of being traded;

iii. ) It is expected to be realised within 12 months after the reporting date, or

iv. ) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for
at least 12 months after the reporting date.

Current assets include the current portion of non-current financial assets. All other assets are classified as
noncurrent.

3.2 Liabilities

A liability is classified as current when it satisfies any of the following criteria:

i. ) it is expected to be settled in the company’s normal operating cycle;

ii. ) it is held primarily for the purpose of being traded;

iii. ) it is due to be settled within 12 months after the reporting date; or

iv. ) the company does not have an unconditional right to defer settlement of the liability for at least 12
months after the reporting date.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are
classified as noncurrent.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or

cash equivalents. Based on the nature of operations and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as twelve months.

4 ACCOUNTING FOR TAXES ON INCOME

Provision for current tax is made after taking into consideration benefits under the provisions of the Income
Tax Act 1961. Deferred tax resulting from timing differences between book and taxable profit is accounted
for using the tax rates and laws that have been enacted or substantively enacted as on the balance sheet date,
in accordance with Accounting standards (A.S. 22) "Accounting for Taxes on Income" issued by the institute
of Chartered Accountants of India.

5 INVESTMENTS

Long term investments are stated at cost less other than temporary diminution in value, if any.

Current investments are stated at lower of cost and fair value.

Non- current investments, if any, are stated at cost.

6 EARNINGS PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity
shareholders (after deducting preference dividends if any and attributable taxes) by the weighted average
number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity
shareholders and the weighted average number of shares outstanding during the year are adjusted for the
effects of all dilutive potential equity shares from the exercise of options on unissued share capital. The
number of equity shares is the aggregate of the weighted average number of equity shares and the weighted
average number of equity shares, which would be issued on the conversion of all the dilutive potential equity
shares into equity shares. Options on unissued equity share capital (if any) are deemed to have been converted
into equity shares.

7 RECOGNITION OF REVENUE & EXPENDITURE
Revenue Recognition

In conformity with “Accounting Standard 9: Revenue 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, regardless of the timing of payment.

Sale of Goods: Revenue from the sale of goods is recognized when significant risks and rewards of
ownership are transferred to the buyer, which is usually upon delivery of goods. Sales are stated net
of returns, trade discounts, and taxes.

Rendering of Services: Revenue from services is recognized as and when the services are rendered, based
on the stage of completion or as per the guidelines of the Government.

Contract Revenue: Revenue from contracts is recognized on a percentage of completion basis in
accordance with the terms of the contract and the estimates of work completed.

Interest Income: Recognized on a time proportion basis using the applicable interest rate.

Other Income: Other revenues/incomes are accounted for on accrual basis unless there is uncertainty in
realization.

Expenditure Recognition

Expenses arc recognized on an accrual basis, i.c., as and when incurred, irrespective of the timing of actual
payment. Expenditures that do not result in the creation of an asset or are not deferred are recognized in
the Statement of Profit and Loss in the period in which they are incurred.

8 TRADE RECEIVABLES AND TRADE PAYABLES
Trade Receivables

Trade receivables are recognized at their original invoice amount and are stated net of provision for doubtful
debts, if any.

Trade receivables represent amounts recoverable from customers against supply of goods and/or services
rendered in the ordinary course of business.

Trade receivables classified as not due represent amounts where the agreed credit period has not expired or
where payment is linked to completion of contractual milestones and fulfilment of documentary requirements as
prescribed under customer contracts.

In case of project-based and government contracts, receivables become due upon achievement of specified
milestones and completion of required supporting documentation and verification processes, wherever
applicable.

Management periodically reviews outstanding balances for recoverability and makes provisions, wherever
considered necessary.

Trade Payables

Trade payables are recognized based on contractual terms and agreed commercial arrangements with vendors
and service providers. Payments are generally made in accordance with agreed credit terms and payment
conditions.

The Company periodically reviews outstanding balances and necessary reconciliations are carried out wherever
required. Management does not expect any material adjustment upon such reconciliation.

The Company has considered applicable disclosures relating to Micro and Small Enterprises based on
information available with the Company.

9 FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at their original cost of acquisition including freight and other incidental expenses
related to acquisition and installation of the concerned assets less depreciation till date.

Fixed Assets are carried at cost less accumulated depreciation/amortisation and impairment losses, if any.
The cost of fixed assets includes interest on borrowings attributable to the acquisition of qualifying fixed
assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that
date.

Depreciation on Fixed Assets shall be provided on WDV Method as per the rates prescribed in Schedule II
of the Companies Act, 2013. Depreciation on the added/disposed off during the year has been provided on
pro-rata basis with reference to the date of addition/disposal or the date when the asset is put into use.

For Intangible Assets, company is using Straight Line Method (SLM) for calculating amortization.
Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies
Act, 2013.

Depreciation on additions to/deductions from Property, Plant &Equipment during the period is charged on
a pro-rata basis from/up to the date in which the asset is available for use/disposed off.

Depreciation method, useful lives, and residual values are reviewed at each Financial Year-end and adjusted
if appropriate, the management believes that its estimates of useful lives as given above best represent the
period over which management expects to use these assets.

The residual values, useful lives, and method of depreciation are reviewed at the end of each Financial Year.
The carrying amounts of fixed assets are reviewed at each balance sheet date to assess whether there is any
indication of impairment. If any indication exists, the asset’s recoverable amount is estimated and an
impairment loss is recognized wherever the carrying amount exceeds the recoverable amount.

10 BORROWING COST

a) Recognition

Borrowing costs are interest and other costs incurred in connection with the borrowing of funds. Borrowing
costs that are directly attributable to the acquisition, construction, or production of a qualifying asset arc
capitalized as part of the cost of that asset. A qualifying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use or sale.

b) Other Borrowing Costs

All other borrowing costs are recognized as an expense in the period in which they are incurred. Borrowing
cost also includes exchange differences to the extent regarded as an adjustment to the borrowing cost.

c) Commencement and Cessation of Capitalization

Capitalization of borrowing costs commences when:

• Expenditures for the asset are being incurred;

• Borrowing costs are being incurred; and

• Activities necessary to prepare the asset for its intended use or sale are in progress.

Capitalization of borrowing costs ceases when substantially all the activities necessary to prepare the
qualifying asset for its intended use or sale are complete.

11 DEFFERED TAX ASSET / LIABILITY

Deferred tax is recognized on timing differences between the accounting income and taxable income for
the year, in accordance with the provisions of Accounting Standard (AS) 22 - Accounting for Taxes on
Income.

a) Deferred Tax Liability (DTL)

Deferred tax liabilities are recognized for all taxable timing differences and are measured using the tax
rates and laws that have been enacted or substantively enacted as of the balance sheet date.

b) Deferred Tax Asset (DTA)

Deferred tax assets are recognized for deductible timing differences and carry-forward of unused tax losses
and tax credits, only 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. In the case of unabsorbed
depreciation or carry-forward losses under tax laws, deferred tax assets are recognized only when there
is virtual certainty supported by convincing evidence of future taxable income.

Review’ and Reassessment

The carrying amount of deferred tax assets is reviewed at each balance sheet date and written down or
reversed 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.

12 INVENTORIES

Inventories other than scrap materials are valued at the lower of cost (on FIFO basis) or the net realizable
value (NRV) after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost
of conversion and other costs including manufacturing overheads net of recoverable taxes incurred in
bringing them to their respective present location and condition. Net realisable value is the estimated selling
price in the ordinary course of business, less the estimated cost of completion and the estimated cost
necessary to make the sale.

The basis of valuation is as follows:

• Raw Materials and Components: Valued at cost, determined on a First-In-First-Out (FIFO) basis
or weighted average method, as applicable. Obsolete and slow-moving items are written down,
where necessary.

• Work-in-Progress (WIP): Valued at cost, which includes material cost, direct labor, and
proportionate manufacturing overheads.

• Finished Goods: Valued at cost or net realizable value, whichever is lower. Cost includes

materials, direct labour, and a proportion of manufacturing overheads. HimataAar,^vjolar Ltd.

• Stores and Spares: Valued at cost. Specific provision is made for obsolete and non-moving items,
wherever necessary.

• Goods-in-Transit: Valued at cost including related duties, taxes, and incidental expenses up to the
date of the balance sheet.

Net realizable value is the estimated selling price in the ordinary course of business, less the
estimated costs of completion and the estimated costs necessary to make the sale.

During the period, assessee has valued Raw Material at cost and Finished Goods at Cost or NRV
whichever is lower.

13 EVENTS OCCURRING AFTER BALANCE SHEET DATE

As per the “AS 4: Contingencies and Events occurring after the balance sheet date”, Events occurring after
the balance sheet date that provide additional evidence of conditions existing at the balance sheet date are
considered for recognition or adjustment in the financial statements.

Such adjusting events are reflected in the financial statements, where applicable.

Non-adjusting events that are indicative of conditions arising after the balance sheet date are not
recognized in the financial statements. However, if material, such events are disclosed in the notes to the
accounts, providing the nature and estimated financial effect, if determinable.

As of the date of approval of the financial statements, no material events have occurred after the balance
sheet date that require adjustment or disclosure in the accompanying financial statements as no significant
events which could affect the financial position as on 31-03-2026 to the material extent have been reported
by the assessee, after the balance sheet date till the signing of report.

14 STATEMENT OF CASH FLOWS

Cash flows are reported using the indirect method, whereby profit/loss before tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts and payments.
Cash flow for the year are classified by operating, investing and financial activities.

15 CASH AND CASH EQUIVALENT

Cash and cash equivalents comprises Cash-in-Hand, Short-term Deposits and Balance in Current Accounts
with Banks. Cash equivalents are short-term balances (with an original maturity of three months or less from
the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash
and which are subject to insignificant risk of changes in value.

16 RELATED PARTY TRANSACTIONS (AS-18)

As per provisions of “AS 18: Related Party Disclosures” issued by the Institute of Chartered Accountants’
of India, the details of related party transactions are applicable. The following are the details of Related
Party Transactions for the period 01/04/2025 to 31/03/2026:

c) Terms and Conditions

All related party transactions were conducted in the ordinary course of business and were carried out on an
arm’s length basis.

There are no provisions for doubtful debts or amounts written off or written back in respect of dues from/to
related parties.

Loan from Director is non-interest bearing.

17 PRIOR PERIOD AND EXTRAORDINARY ITEMS

According to “AS 5: Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting
Policies”,

a) Prior Period Items

Prior period items are income or expenses which arise in the current period as a result of errors or

Himalavan Solar L

omissions in the preparation of the financial statements of one or more prior periods. These are separately
disclosed in the Statement of Profit and Loss to ensure proper presentation and comparability,
a) Extraordinary Items

Extraordinary items are income or expenses that arise from events or transactions clearly distinct from the
ordinary activities of the business and are not expected to recur frequently or regularly. These are presented
separately in the Statement of Profit and Loss.

During the period, no extraordinary items were recorded in the financial statements.

18 FOREIGN EXCHANGE TRANSACTIONS

As per Accounting Standard - 11

a) Initial Recognition

Foreign currency transactions are recorded in the reporting currency, i.e., Indian Rupees (1NR), by
applying the exchange rate prevailing at the date of the transaction.

b) Conversion at Balance Sheet Date

Foreign currency monetary items (such as receivables, payables, loans, etc.) outstanding at the balance
sheet date are translated at the closing exchange rate as on the date of the balance sheet.

Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported
using the exchange rate at the date of the transaction.

Exchange Differences

Exchange differences arising on the settlement of monetary items or on reporting such items at rates different
from those at which they were initially recorded are recognized as income or expense in the period in which they
arise.

Exchange differences relating to acquisition of fixed assets are adjusted in the carrying cost of the respective
assets only where allowed under applicable regulations.

Forward Exchange Contracts

Premium or discount arising at the inception of forward exchange contracts entered into to hedge foreign
currency risks are amortized over the life of the contract. Exchange differences on such contracts are recognized
in the Statement of Profit and Loss in accordance with the provisions of AS 11.

19 EMPLOYEE BENEFITS

Provisions have been made in the books of accounts for ESI and EPF and other retirement benefits for the
employees. Management informs that the above provision is applicable to the company and followed properly.
The Company pays a fixed contribution to government-administered provident fund scheme, ESI Scheme and
Labour Welfare Fund scheme at predetermined rates. The contributions to the fund for the year are recognized
as expenses and are charged to the Profit or Loss.

The company is also covered under the Bonus Act and Gratuity related provisions and the same has been adhered
to.

Retirement benefit Plan (Gratuity)

The Company has an unfunded defined benefit gratuity plan. Every employee who has completed five years or
more of service gets a gratuity on separation equal to 15 days’ salary based upon average last drawn salary for
each completed year of continuous service or part thereof in excess of six months.