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Accounting Policies of K P Energy Ltd. Company

Mar 31, 2023

SIGNIFICANT ACCOUNTING POLICIES

5. CURRENT VERSUS NON-CURRENT CLASSIFICATION

The Company presents assets and liabilities in the balance

sheet based on current/non-current classification. An asset

is treated as current when it is:

• Expected to be realised or intended to be sold or
consumed in normal operating cycle*;

• Held primarily for the purpose of trading;

• Expected to be realised within twelve months after the
reporting period; or

• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• It is expected to be settled in normal operating cycle*;

• It is held primarily for the purpose of trading;

• It is due to be settled within twelve months after the
reporting period; or

• There is no unconditional right to defer the settlement
of the liability for at least twelve months after the
reporting period.

The Company classifies all other liabilities as non-current.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

6. REVENUE RECOGNITION

Revenue is recognised 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 when the
payment is being made. Revenue is measured at fair value
of the consideration received or receivable, after deduction
of any trade discounts, volume rebates and any taxes or
duties collected on behalf of the government which are
levied on sales such as goods and services tax and other
applicable taxes etc.

The Company applies the revenue recognition criteria
to each separately identifiable component of the sales
transaction as set out below:

Sale of goods

Revenue from sale of goods is recognised when all the
significant risks and rewards of ownership in the goods are
transferred to the buyer as per the terms of the contract,
there is neither continuing managerial involvement with
the goods nor effective control over the goods sold, it is
probable that economic benefits will flow to the Company,
the costs incurred or to be incurred in respect of the
transaction can be measured reliably and the amount of
revenue can be measured reliably.

Sale of power

Revenue from sale of power is recognized when there is
actual transmission of power and considerable certainty
for recoverability of the revenue exists once the actual
transmission of power is confirmed from the regulatory
authorities. The Company recognises the revenue from
sale of power as unbilled revenue on monthly basis
and the same is settled after the Company receives the
confirmation from regulatory authorities and the customer
in respect of the actual units transmitted and thereafter
the actual Invoice is raised to the customer and the same
is settled against the unbilled revenue recognised for the
said customer. Revenue from the end of the last billing to
the Balance Sheet date is recognized as unbilled revenues.

Revenue from Infrastructure development and
work contract income

Revenue on time-and-material contracts are recognized
as the related services are performed and revenue from

the end of the last billing to the Balance Sheet date is
recognized as unbilled revenues. Revenue from fixed-price,
fixed-timeframe contracts, where there is no uncertainty
as to measurement or collectability of consideration, is
recognized as per the percentage-of-completion method.
When there is uncertainty as to the measurement or
ultimate collectability, revenue recognition is postponed
until such uncertainty is resolved. Efforts or costs
expended have been used to measure progress towards
completion as there is a direct relationship between input
and productivity. Provisions for estimated losses, if any,
on uncompleted contracts are recorded in the period in
which such losses become probable based on the current
contract estimates. Costs and earnings in excess of billings
are classified as unbilled revenue while billings in excess
of costs and earnings are classified as unearned revenue.
Deferred contract costs are amortized over the term of the
contract. Maintenance revenue is recognized rateably over
the term of the underlying maintenance arrangement.

Interest Income

Interest income is recognised on time proportion basis
taking into account the amount outstanding and rate
applicable. Interest income is recognised using the effective
interest rate (EIR) method.

For all Financial Assets measured at amortized cost, interest
income is recorded using the effective interest rate (EIR)
i.e. the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset
to the net carrying amount of the financial assets. The
future cash flows include all other transaction costs paid or
received, premiums or discounts if any, etc.

Dividend income

Dividend income is recognised at the time when right to
receive the payment is established, which is generally when
the shareholders approve the dividend.

7. INVENTORY

Inventories are valued as follows:

Raw materials, stores and spares

Raw materials, components, stores and spares are valued at
lower of cost and net realisable value. Cost of raw materials,
components and stores and spares is determined on a
"First-in, First-out” basis and includes interest on raw
materials as a carrying cost of materials where such
materials are stored for a substantial period of time. Stores
and spares having useful life of more than twelve months
are capitalised as tangible assets under "Property, plant and
equipment” and are depreciated prospectively over their
remaining useful lives in accordance with Ind AS 16.

Work in progress

Lower of cost and net realisable value. Cost includes
raw material cost and a proportion of direct and indirect
overheads up to estimated stage of completion.

8. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are stated at cost less
accumulated depreciation and impairment, if any. Costs
directly attributable to acquisition are capitalized until

the property, plant and equipment are ready for use, as
intended by the Management. The Company depreciates
property, plant and equipment over their estimated useful
lives using the Straigh Line method.

Depreciation methods, useful lives and residual values are
reviewed periodically, including at each financial year end.

Building (Temporary structure) | 3 years (1)

Building (Permanent structure) | 60 years (1)

Computer equipment | 3 years (1)

Electrical installation and equipment | 10 years (1)

Furniture and fixtures | 10 years (1)

Vehicles (Heavy) | 8 years (1)

Vehicles (Others) | 10 years (1)

Office equipment | 5 years (1)

Plant and machinery | 15 years (1)

Wind power generation plant | 22 years (1)

Freehold land is not depreciated.

(1) Based on technical evaluation, the Management
believes that the useful lives as given above best
represent the period over which the Management
expects to use these assets. Hence, the useful lives
for these assets may be different from the useful
lives as prescribed under Part C of Schedule II of the
Companies Act, 2013.

Depreciation methods, useful lives and residual values
are reviewed periodically, including at each financial
year end.

Advances paid towards the acquisition of property,
plant and equipment outstanding at each Balance
Sheet date is classified as capital advances under
other non-current assets and the cost of assets not put
to use before such date are disclosed under ''Capital
work-in-progress''. Subsequent expenditures relating
to property, plant and equipment are capitalized only
when it is probable that future economic benefits
associated with these will flow to the Company
and the cost of the item can be measured reliably.
Repairs and maintenance costs are recognized in the
Statement of Profit and Loss when incurred. The cost
and related accumulated depreciation are eliminated
from the financial statements upon sale or retirement
of the asset and the resultant gains or losses are
recognized in the Statement of Profit and Loss. Assets
to be disposed of are reported at the lower of the
carrying value or the fair value less cost to sell.

9. INTANGIBLE ASSETS

Intangible assets are stated at cost less accumulated
amortization and impairment. Intangible assets are
amortized over their respective individual estimated useful
lives on a straight-line basis, from the date that they are
available for use. The estimated useful life of an identifiable
intangible asset is based on a number of factors including
the effects of obsolescence, demand, competition, and
other economic factors (such as the stability of the industry,

and known technological advances), and the level of
maintenance expenditures required to obtain the expected
future cash flows from the asset. Amortization methods
and useful lives are reviewed periodically including at each
financial year end.

10. INVESTMENTS IN SUBSIDIARIES,
ASSOCIATES AND JOINT VENTURES

Investments in Subsidiaries, Associates and Joint Ventures
are carried at cost less accumulated impairment losses, if
any. Where an indication of impairment exists, the carrying
amount of the investment is assessed and written down
immediately to its recoverable amount. On disposal of
investments in subsidiaries, associates and joint venture,
the difference between net disposal proceeds and the
carrying amounts are recognised in the Statement of Profit
and Loss.

11. BORROWING COST

Borrowing costs directly attributable to the acquisition,
construction or production of an asset that necessarily
takes a substantial period of time to get ready for its
intended use or sale are capitalized as part of the cost of
the asset. All other borrowing costs are expensed in the
period in which they occur. Borrowing costs consist of
interest calculated using the effective interest rate (EIR) and
other costs like finance charges in respect of the finance
leases recognised in accordance with Ind AS 17, that an
entity incurs in connection with held within a business
model whose objective is achieved by both collecting
contractual cash flows and selling financial asset give rise
on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Further, in cases where the Company has made an
irrevocable election based on its business model, for its
investments which are classified as equity instruments, the
subsequent changes in fair value are recognized in other
comprehensive income.

12. FINANCIAL INSTRUMENTS12.1.Initial recognition

The Company recognizes financial assets and financial
liabilities when it becomes a party to the contractual
provisions of the instrument. All financial assets and liabilities
are recognized at fair value on initial recognition, except for
trade receivables which are initially measured at transaction
price. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities
that are not at fair value through profit or loss, are added to
the fair value on initial recognition. Regular way purchase
and sale of financial assets are accounted for at trade date.

If the Company determines that the fair value at initial
recognition differs from the transaction price, the Company
accounts for that instrument at that date as follows:

• at the measurement basis mentioned above if that
fair value is evidenced by a quoted price in an active
market for an identical asset or liability (i.e. a Level 1
input) or based on a valuation technique that uses
only data from observable markets. The Company
recognises the difference between the fair value at

initial recognition and the transaction price as a gain
or loss.

• in all other cases, at the measurement basis mentioned
above, adjusted to defer the difference between the
fair value at initial recognition and the transaction price.
After initial recognition, the Company recognises that
deferred difference as a gain or loss only to the extent
that it arises from a change in a factor (including time)
that market participants would take into account when
pricing the asset or liability.

12.2.Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized
cost if it is held within a business model whose objective is
to hold the asset in order to collect contractual cash flows,
and the contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.

(ii) Financial assets at fair value through other
comprehensive income

A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling financial
asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal
amount outstanding. Further, in cases where the Company
has made an irrvocable election based on its business
model, for its investments which are classified as equity
instruments, the subsequent changes in fair value are
recognized in other comprehensive income.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above
categories is subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities are subsequently carried at amortized
cost using the effective interest method, except for
contingent consideration recognized in a business
combination which is subsequently measured at fair
value through profit or loss. For trade and other payables
maturing within one year from the Balance Sheet date, the
carrying amounts being approximate fair value due to the
short maturity of these instruments.

(v) Investment in subsidiaries

Investment in subsidiaries is carried at cost in accordance
with Ind AS 27- separate financial statements.

b. Share capital
Ordinary shares

Ordinary shares are classified as equity. Incremental costs
directly attributable to the issuance of new ordinary shares
and share options are recognized as deduction from equity,
net of any tax effects.

Derecognition of financial instruments

The Company derecognizies a financial asset when the
contractual rights to the cash flow from the financial asset

expire or it transfers the financial asset and the transfer
qualifies for derecognition under Ind AS 109. A financial
liability(or a part of financial liability) is derecognized from
the Company''s Balance Sheet when the obligation specified
in the contract is discharged or cancelled or expires.

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

In determining the fair value of its financial instruments, the
Company uses a variety of methods and assumptions that
are based on market conditions and risks existing at each
reporting date. The methods used to determine fair value
include discounted cash flow analysis, available quoted
market prices and dealer quotes. All methods of assessing
fair value result in general approximation of value, and such
value may never actually be realized.

For financial assets and liabilities maturing within one year
from the Balance Sheet date and which are not carried at
fair value, the carrying amounts being approximate fair
value due to the short maturity of these instruments.

14. FAIR VALUE MEASUREMENT

Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most
advantageous market for the asset or liability The fair
value of an asset or a liability is measured using the
assumptions that market participants would use when
pricing the asset or liability, assuming that market
participants act in their economic best interest. All
assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

Level 1 — Quoted (unadjusted) market prices in active
markets for identical assets or liabilities

Level 2 — Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable

Level 3 — Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable

15. ASSETS HELD FOR SALE

Non-current assets or disposal groups comprising of assets
and liabilities are classified as ''held for sale'' when all the
following criteria are met: (i) decision has been made to sell,
(ii) the assets are available for immediate sale in its present
condition, (iii) the assets are being actively marketed and
(iv) sale has been agreed or is expected to be concluded
within 12 months of the Balance Sheet date.

Subsequently, such non-current assets and disposal groups
classified as ''held for sale'' are measured at the lower of its

carrying value and fair value less costs to sell. Non-current
assets held for sale are not depreciated or amortised.

16. IMPAIRMENT

a. Financial assets

The Company recognizes loss allowances using the
expected credit loss (ECL) model for the financial assets
which are not fair valued through profit or loss. Loss
allowance for trade receivables with no significant financing
component is measured at an amount equal to lifetime
ECL. For all other financial assets, ECLs are measured at an
amount equal to the 12-month ECL, unless there has been
a significant increase in credit risk from initial recognition
in which case those are measured at lifetime ECL. The
amount of ECLs (or reversal) that is required to adjust the
loss allowance at the reporting date to the amount that is
required to be recognized is recognized as an impairment
gain or loss in profit or loss.

b. Non-financial assets

(i) Intangible assets and property, plant and equipment

Intangible assets and property, plant and equipment are
evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not
be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost
to sell and the value-in-use) is determined on an individual
asset basis unless the asset does not generate cash flows
that are largely independent of those from other assets. In
such cases, the recoverable amount is determined for the
CGU to which the asset belongs.

If such assets are considered to be impaired, the impairment
to be recognized in the Statement of Profit and Loss is
measured by the amount by which the carrying value of the
assets exceeds the estimated recoverable amount of the
asset. An impairment loss is reversed in the Statement of
Profit and Loss if there has been a change in the estimates
used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the
carrying amount that would have been determined (net
of any accumulated amortization or depreciation) had no
impairment loss been recognized for the asset in prior years.


Mar 31, 2018

1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES :

(I) Basis of preparation of Financial Statements :

These 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 financial statements have been prepared under the historical cost convention on accrual basis, except in case of assets for which provision for impairment for certain financial instruments which are measured at fair value.

All amounts included in the financial statements are reported in absolute figures of Indian Rupees.

(ii) Presentation and disclosure of financial statements :

During the year end 3 1ST March 2018, the company has presented the financial statements as per the Schedule III notified under the Companies Act, 2013. The company has also reclassified the previous figures in accordance with the requirements applicable in the current year.

(iii) Use of estimates :

The preparation of financial statements in conformity with Indian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, if any at the end of the reporting period. Although these estimates are based upon management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(iv) Tangible Fixed Assets (AS 10) :

Tangible Fixed assets are carried at cost of acquisition and other applicable costs less accumulated depreciation and accumulated impairment loss, if any. The cost of fixed assets includes cost of acquisition plus, any freight, taxes, duties and other incidental expenses that are directly attributable to bring the assets to their working conditions for their intended use. Borrowing costs directly attributable to the qualifying assets are capitalized as part of the cost. The costs of internally generated assets comprise direct costs attributed to the generation of the assets.

Capital work in progress, if any comprises of the cost of fixed assets that are not yet ready for their intended use at the balance sheet date. Assets held for disposal, if any are stated at the lower of net book value and the estimated net realizable value.

When parts of the items of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Subsequent expenditure relating to the property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the company and the cost of the item can be measured reliably.

Gain / loss arising from de-recognition / sale / disposal of fixed assets are measured as the difference between the net disposal / sale proceeds and the carrying amount of the assets and are recognized in the statement of profit or loss when the asset is derecognized / disposed off.

Advances paid towards the acquisition of fixed assets, if any outstanding as of balance sheet date is disclosed under long term loans and advances.

No assets have been revalued during the year.

(v) Intangible Assets :

Intangible assets are stated at the consideration paid for acquisition less accumulated amortization and accumulated impairment losses, if any.

Intangible assets, if any are amortised on a straight line basis over the estimated useful economic life.

(v i) Borrowing Costs (AS 16):

Loan processing charges paid to Bank for Term Loans have been charged to respective assets account since the same are attributable to the acquisition of qualifying assets as per the requirements of AS 16. Borrowing cost primarily includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset.

All other borrowing costs are expensed in the period they occur.

(vi i) Depreciation / Amortization (AS 6):

Depreciation on tangible fixed assets is calculated on the Straight Line Method (SLM) based on the useful lives and residual values estimated by the management in accordance with Schedule II to the Companies Act, 2013. The identified components are depreciated separately over their useful lives; the remaining components are depreciated over the life of the principal asset.

Intangible assets, if any are amortized on a straight line basis over the estimated useful economic life.

No assets have been revalued during the year.

(vi i i) Impairment of tangible and Intangible Assets (AS 28):

As per the estimates made by the management and as per the various assessments made by the management, there were no indicators whether internal or external (as provided in para 8 of AS 28) which has led to the impairment loss to any assets. Since there are no such indicators which suggest that the net value of the assets would fall significantly by passage of time and normal use, the company has not provided for any impairment loss for any assets during the current financial period. The company has chosen the “value in use” technique and as per the measurement of future cash flow, the management is of the opinion that the future cash flow and the terminal value of the assets would not be significantly less than the carrying value and hence no impairment for any assets has been provided for in the financial statements.

No reversal of impairment loss has been recognized in the Profit & loss Account.

Since the company has not carried out the activities in segments, the impairment loss or reversal of the impairment loss has not been provided for the segments.

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

(ix) Investments (AS 13):

Investments which are readily realisable and 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.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued.

Current investments are carried in the financial statements at lower of cost and fair value determined in respect of each category of the investments. Long-term investments are carried at cost. However, provision for diminution in value, if any is made to recognise a decline other than temporary in the value of the investments.

On disposal of an investment, if any, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

The company has made Investments in the shares of subsidiary companies and capital contribution in various LLP in current financial year which is recognised under the head non-current investments at cost.

All other Investments are stated at cost or Net realizable value whichever is less.

(x) Government grants and subsidies (AS 12):

Grants and subsidies from the government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant / subsidy will be received. When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and released to income in equal amounts over the expected useful life of the related asset.

During the year, the Company has not applied for any Grants / subsidies related to the Revenue or specific Fixed Assets nor the Company has received any such Grants / subsidies during the year.

(xi) Inventories (AS 2):

Inventories of materials including stores and spares and consumables, packing materials, components, work-in-progress, project work-in-progress. Inventories except work in progress are valued at the lower of cost and estimated net realisable value. Inventory of power is recognized at net realizable value. Cost in case of work in progress is determined on the basis of the actual expenditure attributable to the said work till the end of the reporting period.

(xii) Revenue recognition (AS 9):

Revpnue com pri ses sale of materi als, sale of power gy nerated by the Company, sere/ice income, interest. Revenue is recoge i sed to the extent v is proba ble that th b econo mic benefits wi ll flow/ to the Com pany and that the; revene^ can be re liably measured. The Company collects vales taxes, Service tax, value added eaxes (VAT), GST as applicable on behalf of the government and teeretore, these are not economic benefits f owing to the; Cvmpany. Hence, they are excluded from revenue.

Sales:

Revenue from sale of goods is recognized in the statement of profit and loss when the significant risks , and rewards in respect of ownership of goods has been transferred to the buyer as per the terms of the respective sales order, and the income can be measured reliably and is expected to be received.

Sale of Power :

Revenue from sale of power is recognized as and when significant certainty as to the measurability and collectability exists and actual billing is made to the customers once the actual consumption of power is confirmed from the regulatory authorities and customers.

Revenue from Infrastructure Development and Work Contract Income :

Contracts to deliver wind power systems (turnkey and projects involving installation and / or commissioning apart from supply) are recognised in revenue based on the stage of completion of the individual contract using the percentage completion method and accordingly the customers are billed after taking into account the conditions of Work Order provided the order outcome as well as expected total costs can be reliably estimated.

Interest Income :

Interest income are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

(xiii) CENVAT, Gujarat VAT Credit & GST :

CENVAT, Gujarat VAT credit, Service tax credit and GST credit available on purchase of materials, purchase of capital goods and input services is not charged to cost of material, capital goods and services. CENVAT VAT credit, service tax credit and GST Credit availed is accounted by way of adjustment against VAT payable, Service tax payable, GST payable on dispatch of finished goods or service tax payable and GST payable on rendering of services.

(xiv) Retirement and other Employee benefits (AS 15) :

Defined contributions to Provident Fund are charged to the statement of Profit & Loss of the year, when the employee renders the related service. There are no other obligations other than the contribution payable to the respective statutory authorities.

No retirement benefits have been paid to any employee during the year by the company. Retirement benefits in the form of Gratuity and other long term / short term employee benefits have not been provided in the financial statements.

(xv) Foreign Exchange Transactions (AS 1 1):

The Company has not entered into any Foreign Exchange Transactions during the year under consideration.

The company has not entered into any forward exchange contracts during the year.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax asset to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset 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 against which deferred tax asset can be realised. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT credit entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period in future.

Separate and detailed calculation of Deferred tax is appended in these notes.

(xvii) Provisions and contingent liabilities, Contingent assets (AS 29):

A provision is recognised when the Company has a present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made of the amount of obligation. Provisions are not discounted to their present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These estimates are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

Provisions of various expenses are recognized in the financial statements since there exists present obligations as a result of event and the expenses are accrued and incurred during the year.

The opening balance of provisions is used during the year against the payments during the year. The closing balances of provisions are the expenses accrued during the year and provided.

A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably.

The Company does not recognise a contingent liability but discloses its existence in the financial statements unless the possibility of an outflow is remote.

A contingent asset is not recognized in the financial statements and hence not disclosed.

(xviii) Earning / (loss) per share (AS 20) :

Basic earnings / (loss) per share are calculated by dividing the net profit / (loss) for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for any bonus shares issued during the year and also after the balance sheet date but before the date the financial statements are approved by the board of directors for the purpose of calculating diluted earnings / (loss) per share. The net profit / (loss) for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

The number of equity shares and potentially dilutive equity shares are adjusted for bonus and right issue as appropriate. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been issued at fair value. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date.

(xix) Cash and Cash Equivalents :

Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand, cheques on hand and short-term investments with an original maturity of three montes or less.

(xx) Operating leases :

Where the Company is a lessee

Leases where the lessor effevtively retains snbsth nsi ally all ene ris kh and benefito of ownerseip o0 the leased item are classified as operating leases. Operatlng lease payments are recognised es an expvnse in ehe statement oo profit ond loss on the basis of the lease (rent agreements). Initial direct costs such as legal costs, brokerage costs, etc. if any, are recognised immediately in the statement of profit and loss.


Mar 31, 2016

(2) Significant Accounting Policies:

“The Company is a small and Medium Sized Company as defined in the General Instructions in respect of Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended). Accordingly, the company has complied with accounting Standards as applicable to a small and Medium Sized Company.”

Basis of preparation :

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies Act, 2013. The Financial Statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those followed in the previous year.

1 Use of Estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires the management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known/materialize.

2. Inventories:

''Inventories are valued at the lower of cost (on FIFO) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Cost includes all charges in bringing the goods to the point of sale, including other levies, transit insurance and receiving charges. Work-in-progress and finished goods include appropriate proportion of overheads and, where applicable, excise duty.

3 Cash and cash equivalent:

Cash comprises cash on hand and demand deposits 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.

4 Cash flow statement :

Cash flows are reported using the 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 flows from operating, investing and financing activities of the Company are segregated based on the available information.

5 Depreciation and amortization:

Depreciation has been provided on the straight-line method as per the rates prescribed in Schedule

II to the Companies Act, 2013.

6 Revenue recognition:

Sale of goods: There is No Sale of Goods during the year.

Income from services: Revenues from contracts priced on a time and material basis are recognized when services are rendered and related costs are incurred. Revenues from turnkey contracts, which are generally time bound fixed price contracts, are recognized over the life of the contract using the proportionate completion method, with contract costs determining the degree of completion. Foreseeable losses on such contracts are recognized when probable.

Revenues from maintenance contracts are recognized pro-rata over the period of the contract.

7 Other income:

Interest Income is accounted on accrual basis.

8 Tangible fixed assets:

Fixed assets are carried at cost less accumulated depreciation. The cost of fixed assets includes interest on borrowings attributable to 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. *Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized and depreciated over the useful life of the principal item of the relevant assets. Subsequent expenditure relating to fixed assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Fixed assets acquired and put to use for project purpose are capitalized and depreciation thereon is included in the project cost till commissioning of the project.

(* Where ever Applicable)

9 Foreign currency transactions and translations:

Transaction in foreign currencies entered into by the company and its integral foreign operations are accounted at the exchange rate prevailing on the date of the transaction.

10 Investments:

Long-term investments are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.

11 Borrowing costs:

Borrowing costs include Bank charges, Bank Guarantee Commission and Loan Processing charges.

12 Earnings per share:

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

13 Taxes on income:

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

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability

Current and deferred tax relating to items directly recognized in equity is recognized in equity and not in the Statement of Profit and Loss.

14 Research and development expenses:

There is no such expenditure during the year.

15 Provisions and contingencies:

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.

16 Share issues expenses:

The Expenses related to public issue is Amortized in 5 years.

17 Service tax input credit:

Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is no uncertainty in availing / utilizing the credits.

18 Previous Year Figures have been regrouped recasted wherever necessary.

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