Mar 31, 2018
1 Significant accounting policies
1.1 Property, plant and equipment
Property, plant and equipment are stated at cost, net of accumulated depreciation and/or accumulated impairment losses, if any. The cost includes expenditures that are directly attributable to property plant and equipment such as employee cost, borrowing costs for long-term construction projects etc., if recognition criteria are met. Likewise, when a major inspection is performed, its costs are recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Company. All other repairs and maintenance costs are recognised in statement of profit and loss.
Depreciation is computed, based on technical assessment made by technical expert and management estimate, on straight-line basis over the estimated useful life which are consistant with the useful life prescribed in Schedule II to the Companies Act, 2013. The management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used as follows:
Assets in the course of construction are stated at cost and not depreciated until commissioned.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in statement of profit and loss in the year the asset is derecognised.
The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end, and adjusted prospectively if appropriate.
1.2 Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
1.3 Non-current assets held-for-sale
Non-current assets and disposal groups classified as held-for-sale are measured at lower of carrying amount and fair value less costs to sell. Non-current assets and disposal groups are classified as held-for-sale if their carrying amounts will be recovered through a sale transaction rather than through continuous use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management is committed to the sale, which should be expected to qualify for recognition as a completed sale generally within one year from the date of classification.
Immediately before classification as held-for-sale or held-for-distribution, the assets, or components of a disposal group, are re-measured in accordance with the Companyâs other accounting policies. Thereafter, generally the assets, or disposal group, are measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets which continue to be measured in accordance with the Companyâs other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on re-measurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
1.4 Financial Instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
1.5 Financial assets
Initial recognition & Measurement
All regular way purchases or sales of financial assets are recognised/derecognised on a trade date basis Subsequent measurement
For the purposes of subsequent measurement, financial assets are classified in four categories:
- Debt instrument at amortised cost
- Debt instrument at fair value through other comprehensive income (FVTOCI).
- Equity Instruments measured at fair value through other comprehensive income (FVTOCI)
- Debt instrument, derivatives and equity instruments at fair value through profit or loss (FVTPL).
Debt instruments at amortised cost
A âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss. This category generally applies to trade and other receivables.
Debt instrument at FVTOCI
A âdebt instrumentâ is classified as at the FVTOCI if both of the following criteria are met:
- The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and
- The assetâs contractual cash flows represent SPPI.
Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the P&L. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to P&L. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). The Company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Equity investments
All equity investments in scope of Ind AS 109 are measured at fair value. For the equity instruments Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument by-instrument basis. The classification is made on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the P&L. Derecognition
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:
- The rights to receive cash flows from the asset have expired? or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpass-throughâ arrangement; and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial asset
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, trade receivables and other contractual rights to receive cash or other financial asset.
For recognition of impairment loss on other financial assets and risk exposure, the group determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that
1.6 Financial liabilities
Initial recognition
Financial liabilities within the scope of Ind AS 109 are classified as
- Fair value through profit or loss
- Other financial liability at amortised cost
The Company determines the classification of its financial liabilities at initial recognition. Financial liabilities are recognised initially at fair value and in the case of loans and borrowings, net of directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of financial liabilities depends on their classification as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are acquired for the purpose of selling in the near term. This category includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit and loss are designated as such at the initial date of recognition, and only if criteria of Ind AS 109 are satisfied.
Loans and borrowings at amortised cost
After initial recognition, loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit and loss when the liabilities are derecognised as well as through the amortisation process.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the Balance sheet if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
Amortised cost of financial instruments
Amortised cost is computed using the effective interest method less any allowance for impairment and principal repayment or reduction. The calculation takes into account any premium or discount on acquisition and includes transaction costs and fees that are an integral part ofthe EIR.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the P&L.
1.7 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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the financial asset or settle the financial liability takes place either:
- In the principal market, or
- In the absence of a principal market, in the most advantageous market
The principal or the most advantageous market must be accessible by the Company. A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use. Fair value measurement and / or disclosure purposes in these financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.
The Company- uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
At each reporting date, the Management analyses the movements in the values of assets and liabilities which are required to be remeasured or re-assessed as per the Companyâs - accounting policies.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
1.8 Foreign currency translation
In preparing the financial statements of the Company, transactions in currencies other than the entityâs functional currency are recognised at the rate of exchange prevailing on the date of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date.
Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to functional currency at foreign exchange rates ruling at the dates the fair value was determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income (OCI) or profit or loss are also recognised in OCI or profit or loss, respectively).
1.9 Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits associated with the transaction will flow to the Company, and revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable in accordance with the relevant agreements, net of discounts, rebates and other applicable taxes and duties.
Sale of electricity : Revenue from the sale of electricity is recognised when earned on the basis of contractual arrangement with the customers and reflects the value of units supplied including an estimated value of units supplied to the customers between the date of their last meter reading and year end.
Rendering of services : The Company provides project development and corporate support. Revenue from rendering of services is recognised in statement of profit and loss in the period in which the services are rendered by reference to the stage of completion of the transaction at the reporting date. The stage of completion is assessed on the basis of the actual services provided as a proportion of the total service to be provided.
Interest and dividend income : Revenue from interest is recognised on an accrual basis (using the effective interest rate method). Revenue from dividends is recognised when the right to receive the payment is established.
1.10 Taxes
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date. Tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss.
Deferred income tax
Deferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences, except:
- Where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit;
- In respect of taxable temporary differences associated with investments in subsidiaries and interests in joint operations, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credit and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised except:
- Where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss;
- In respect of deductible temporary differences associated with investments in subsidiaries and interests in joint operations, deferred income tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Unrecognised deferred income tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred income tax assets and liabilities, relating to items recognised outside statement of profit and loss is recognised outside statement of profit and loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.
1.11 Leases
Company as a lessee
Operating lease payments are recognised as an expense in the statement of profit and loss on accrual basis.
1.12 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets.
All other borrowing costs including transaction costs are recognised in the statement of profit and loss in the year in which they are incurred, the amount being determined using the effective interest rate method.
1.13 Impairment of non-financial assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (CGU) fair value less costs to sell and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or Groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
Impairment losses of continuing operations are recognised in the statement of profit and loss, except for property previously revalued where the revaluation was taken to equity. In this case the impairment is also recognised in equity up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the assetâs or cash-generating unitâs recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the assetâs recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase.
1.14 Cash and short-term deposits
Cash and short-term deposits in the Balance Sheet comprise cash at banks and on hand and short-term deposits.
For the purpose of the cash flow statement, cash and cash equivalents consist of cash and readily convertible short-term deposits, net of restricted cash and outstanding bank overdrafts.
1.15 Earnings per share
The earnings considered in ascertaining the Companyâs earnings per share (EPS) comprise the net profit or loss for the period attributable to equity holders. The number of shares used for computing the basic EPS is the weighted average number of shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit attributable to equity holders (after adjusting for effects of all dilutive potential equity shares) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of shares that would be issued on conversion of all the dilutive potential shares into equity shares.
1.16 Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
1.17 Employee benefits
Gratuity
In accordance with Gratuity laws, the Company provides for gratuity, a defined benefit retirement plan (âthe Gratuity Planâ) covering eligible employees. The Gratuity Plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employeeâs salary and the tenure of employment.
Liabilities with regard to the Gratuity plan are determined by actuarial valuation, performed by an independent actuary, at each reporting date using the projected unit credit method. The Company fully contributes all ascertained liabilities to the gratuity fund administered and managed by Life Insurance Corporation of India, a Government of India undertaking which is a qualified insurer.
The Company recognises the net obligation of a defined benefit plan in its Balance sheet as an asset or liability, respectively in accordance with Ind AS 19, Employee benefits. Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Company determines the net interest expense / (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability / (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss
Provident fund
Eligible employees of Company receive benefits from a provident fund, which is a defined contribution plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employeeâs salary and the employer contribution is charged to statement of profit and loss. The benefits are contributed to the government administered provident fund, which is paid directly to the concerned employee by the fund. The Company has no further obligation to the plan beyond its monthly contributions.
Employees State Insurance Scheme
In addition, some employees of the Company are covered under âEmployees State Insurance Scheme Act 1948â, which are also defined contribution schemes recognized and administered by Government of India.
The Companyâs contributions to these schemes are recognized as expense in statement of profit and loss during the period in which the employee renders the related service. The Company has no further obligation under these plans beyond its monthly contributions.
Short- term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid towards bonus if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Mar 31, 2016
1 Corporate Information
KSK Energy Ventures Limited ("KSKEVLâ or the "Companyâ), was incorporated on February 14, 2001 and is primarily engaged in the development of private sector power projects. KSKEVL focused its strategy on the private sector power development market, undertaking entire gamut of development, investment, construction of power plant with supplies initially to heavy industrials operating in India and now branching out to cater to the needs of utilities and others in the wider Indian power sector.
2 Significant Accounting Policies
2.1 Accounting convention
The Financial Statements of KSK Energy Ventures Limited have been prepared and presented under the historical cost convention on the accrual basis in accordance with Indian Generally Accepted Accounting Principles (GAAP). GAAP comprises accounting standards notified by the Central Government of India under Section 133 of the Companies Act, 2013, other pronouncements of Institute of Chartered Accountants of India, the provisions of Companies Act, 2013 and guidelines issued by Securities and Exchange Board of India.
2.2 Use of estimates
The Preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure relating to contingent assets and contingent liabilities as on date of financial statements and the reported amounts of income and expenses during the period. Actual results could differ from the estimates. Examples of such estimates include provision for doubtful debt, future obligation under employee retirement benefit plan, income taxes, useful life of fixed assets, etc. Any revision to accounting estimates is recognized prospectively in current and future periods.
2.3 Cash flow statement
Cash flows are reported using the indirect method, where by the net profit before tax is adjusted for the effects of transactions of a non cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated and presented separately.
2.4 Revenue recognition
Revenue in the form of project development fees for services rendered in relation to development work of potential power projects is recognized when such fees is assured and determinable under the terms of the respective contract.
Corporate support service income is recognized when such income is assured and determinable under the terms of the respective contract.
Consultancy income is recognized proportionately with the degree of completion of contract.
Dividend income is recognized when the right to receive the same is established.
Interest is recognized using the time proportionate method, based on the underlying interest rates.
Sale of energy is recognized on accrual basis in accordance with the relevant agreements.
2.5 Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is inclusive of freight, duties, levies and all incidentals directly or indirectly attributable to bringing the asset to its working condition for its intended use. The cost of fixed assets includes cost of initial warranty/ insurance spares purchased along with the capital asset, which are grouped as single item under respective assets.
Depreciation is computed based on the useful life of the assets as prescribed in schedule II of the Companies Act 2013. Depreciation is calculated using straight line method. Depreciation is calculated on a pro-rata basis from the date of installation / capitalization till the date the assets are sold or disposed. Assets costing up to Rs. 10,000/-are fully depreciated in the year of capitalization/acquisition.
Depreciation on initial/warranty spares are provided on the same rates applicable for that Asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognized as per the criteria specified in the Accounting Standard (AS) 26 "Intangible Assets" notified by the Central Government of India under Section 133 of the Companies Act, 2013 and is amortized over a period of three years.
Leasehold improvements are amortized over the period of lease.
2.6 Foreign currency transactions
Foreign currency transactions are initially recorded at the rates of exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported using the closing rate. Non monetary items denominated in foreign currency are reported at the exchange rate ruling at the date of transaction.
All exchange differences are recognized as income or expense in the period in which they arise.
2.7 Investments
Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments. Current investments are carried at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investment.
2.8 Retirement benefits Provident fund
Eligible employees receive benefits from a provident fund, which is a defined contribution scheme. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee salary. The contribution made by the Company is charged to the Statement of Profit and Loss.
Gratuity
"In accordance to the Payment of Gratuity Act, 1972, the Company provides for the gratuity, a defined benefit retirement plan ("the gratuity planâ) covering the eligible employees. The gratuity plan provides for a lump sum payment to the vested employees at retirement, death, incapacitation or termination of the employment, of an amount based on the respective employee salary and the tenure of the employment with the Company.
Liabilities with regard to the gratuity plan are determined by independent actuary.
The company makes annual contribution lo employeeâs group gratuity scheme administered by trustees and managed by Life Insurance Corporation of India. The Company recognizes the net obligation of the gratuity plan in the Balance Sheet as an asset or liability, respectively in accordance with Accounting Standard (AS) 15, "Employee Benefitsâ.
Actuarial gains or losses arising from experience adjustments and changes in actuarial assumptions are recognized in the Statement of Profit and Loss."
2.9 Borrowing cost
"Borrowing costs include interest on borrowings and amortization of ancillary cost incurred in connection with the arrangement of borrowings.
Borrowing costs directly attributable to the acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalized.
All other borrowing costs are recognized as an expense in the year in which they are incurred."
2.10 Leases
Lease that do not transfer substantially all the risks and rewards of ownership are classified as operating leases and recorded as expense as and when the payments are made over the lease term.
2.11 Earnings per share
Basic earnings per share are computed by dividing the net profit or loss after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit or loss after tax 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. Dilutive potential equity shares are deemed converted as of the beginning of the period, unless they have been issued at a later date. In computing the dilutive earnings per share, only potential equity shares that are dilutive and that either reduces the earnings per share or increases loss per share are included.
2.12 Taxes on income
Income tax expense /(income) comprises of current tax, deferred tax and Minimum Alternative Tax (MAT) credit.
Current tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or credit reflects 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 recognized using the tax rates that have been enacted or substantially enacted by the Balance Sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carry forward of loss under taxation laws, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets.
Deferred tax assets are reviewed 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 realized.
The break-up of the deferred tax assets and liabilities as at the Balance Sheet date has been arrived at after setting-off deferred tax assets and liabilities where the Company has legally enforceable right and an intention to set-off assets against liabilities and where such assets and liabilities relate to taxes on income levied by the same governing taxation laws.
MAT Credit
MAT credit is recognized as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognized as an asset in accordance with the recommendations contained in Guidance Note issued by the Institute of Chartered Accountants of India, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal Income Tax during the specified period.
2.13 Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. 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 recognized in the profit and loss account. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash-generating unit to which the asset belongs. If at the balance sheet date there is an indication that 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 depreciated historical cost.
2.16 Provisions and contingencies
Provisions and contingencies
"The Company recognizes a provision when there is a present obligation as a result of past 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. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
Mar 31, 2015
1 Accounting convention
The Financial Statements of KSK Energy Ventures Limited have been
prepared and presented under the historical cost convention on the
accrual basis in accordance with Indian Generally Accepted Accounting
Principles (GAAP). GAAP comprises Accounting Standards notified by the
Central Government of India under Companies (Accounting Standards)
Rules, 2006, other pronouncements of Institute of Chartered Accountants
of India, the provisions of Companies Act, 2013 and guidelines issued
by Securities and Exchange Board of India.
2 Use of estimates
The Preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent assets and contingent liabilities as on date of financial
statements and the reported amounts of income and expenses during the
period. Actual results could differ from the estimates. Examples of
such estimates include provision for doubtful debt, future obligation
under employee retirement benefit plan, income taxes, useful life of
fixed assets, etc. Any revision to accounting estimates is recognised
prospectively in current and future periods.
3 Cash flow statement
Cash flows are reported using the indirect method, where by the net
profit before tax is adjusted for the effects of transactions of a non
cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated and
presented separately.
4 Revenue recognition
Revenue in the form of project development fees for services rendered
in relation to development work of potential power projects is
recognised when such fees is assured and determinable under the terms
of the respective contract.
Corporate support service income is recognised when such income is
assured and determinable under the terms of the respective contract.
Consultancy income is recognised proportionately with the degree of
completion of contract.
Dividend income is recognised when the right to receive the same is
established.
Interest is recognized using the time proportionate method, based on
the underlying interest rates.
Sale of energy is recognised on accrual basis in accordance with the
relevant agreements.
5 Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly attributable to bringing the asset to its working condition
for its intended use. The cost of fixed assets includes cost of initial
warranty/ insurance spares purchased along with the capital asset,
which are grouped as single item under respective assets.
Depreciation is computed based on the useful life of the assets as
prescribed in schedule II of the Companies Act 2013. Depreciation is
calculated using straight line method. Depreciation is calculated on a
pro-rata basis from the date of installation / capitalization till the
date the assets are sold or disposed.
Depreciation on initial/ warranty spares are provided on the same rates
applicable for that Asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognized as per the
criteria specified in the Accounting Standard (AS) 26 "Intangible
Assets" notified by the Central Government of India under Companies
(Accounting Standards) Rules, 2006 and is amortized over a period of
three years.
Leasehold improvements are amortised over the period of lease.
6 Foreign currency transactions
Foreign currency transactions are initially recorded at the rates of
exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported
using the closing rate. Non monetary items denominated in foreign
currency are reported at the exchange rate ruling at the date of
transaction.
All exchange differences are recognised as income or expense in the
period in which they arise.
7 Investments
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Current investments are carried at the lower of
cost and fair value. The comparison of cost and fair value is done
separately in respect of each category of investment.
8 Retirement benefits
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined contribution scheme. Both the employee and the Company make
monthly contributions to the provident fund plan equal to a specified
percentage of the covered employee salary. The contribution made by the
Company is charged to the Statement of Profit and Loss.
Gratuity
In accordance to the Payment of Gratuity Act, 1972, the Company
provides for the gratuity, a defined benefit retirement plan ("the
gratuity plan") covering the eligible employees. The gratuity plan
provides for a lump sum payment to the vested employees at retirement,
death, incapacitation or termination of the employment, of an amount
based on the respective employee salary and the tenure of the
employment with the Company. Liabilities with regard to the gratuity
plan are determined by independent actuary. The company makes annual
contribution to employee's group gratuity scheme administered by
trustees and managed by Life Insurance Corporation of India. The
Company recognizes the net obligation of the gratuity plan in the
Balance Sheet as an asset or liability, respectively in accordance with
Accounting Standard (AS) 15, "Employee Benefits".Actuarial gains or
losses arising from experience adjustments and changes in actuarial
assumptions are recognized in the Statement of Profit and Loss.
9 Borrowing cost
Borrowing costs include interest on borrowings and amortisation of
ancillary cost incurrred in connection with the arrangement of
borrowings. Borrowing costs directly attributable to the acquisition or
construction of those fixed assets which necessarily take a substantial
period of time to get ready for their intended use are capitalized. All
other borrowing costs are recognised as an expense in the year in which
they are incurred.
10 Leases
Lease that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
11 Earnings per share
Basic earnings per share are computed by dividing the net profit or
loss after tax attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss after tax 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. Dilutive potential
equity shares are deemed converted as of the beginning of the period,
unless they have been issued at a later date. In computing the dilutive
earnings per share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases loss per share
are included.
12 Taxes on income
Income tax expense / (income) comprises of current tax, deferred tax
and Minimum Alternative Tax (MAT) credit.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or credit reflects 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 substantially enacted by the Balance Sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realised in future;
however, where there is unabsorbed depreciation or carry forward of
loss under taxation laws, deferred tax assets are recognised only if
there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed 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.
The break-up of the deferred tax assets and liabilities as at the
Balance Sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has legally enforceable right
and an intention to set-off assets against liabilities and where such
assets and liabilities relate to taxes on income levied by the same
governing taxation laws.
MAT Credit
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with the
recommendations contained in Guidance Note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a
credit to the statement of profit and loss and shown as MAT Credit
Entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that
Company will pay normal Income Tax during the specified period.
13 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. 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 profit and loss account. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If
at the balance sheet date there is an indication that 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 depreciated historical cost.
14 Provisions and contigencies
The Company recognises a provision when there is a present obligation
as a result of past 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. Where 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 recognized
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.
Mar 31, 2014
1.1 Accounting convention
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with Generally Accepted Accounting Principles in India
(GAAP) and comply with the mandatory Accounting Standards as specified
in the Companies (Accounting Standards) Rules 2006 (''Rules''), other
pronouncements of the Institute of Chartered Accountants of India
(ICAI) to the extent applicable, the provisions of Companies Act, 1956,
the provisions of the Companies Act 2013 (to the extent notified) and
guidelines issued by Securities and Exchange Board oflndia.
2.2 Use of estimates
The Preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent assets and contingent liabilities as on date of financial
statements and the reported amounts of income and expenses during the
period. Actual results could differ from the estimates. Examples of
such estimates include provision for doubtful debt, future obligation
under employee retirement benefit plan, income taxes, useful life of
fixed assets, etc. Any revision to accounting estimates is recognised
prospectively in current and future periods.
2.3 Cash flow statement
Cash flows are reported using the indirect method, where by the net
profit before tax is adjusted for the effects of transactions of a non
cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated and
presented separately.
2.4 Revenue recognition
Revenue in the form of project development fees for services rendered
in relation to development work of potential power projects is
recognised when such fees is assured and determinable under the terms
of the respective contract.
Corporate support service income is recognised when such income is
assured and determinable under the terms of the respective contract.
Consultancy income is recognised proportionately with the degree of
completion of contract.
Dividend income is recognised when the right to receive the same is
established.
Interest income is recognised on time proportion basis taking into
account the amount outstanding and at the rate applicable.
Sale of energy is recognised on accrual basis in accordance with the
relevant agreements.
2.5 Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly attributable to bringing the asset to its working condition
for its intended use. The cost of fixed assets includes cost of initial
warranty/ insurance spares purchased along with the capital asset,
which are grouped as single item under respective assets.
Depreciation has been provided on Straight Line Method at the rates and
in the manner specified in Schedule XIV of the Companies Act, 1956
except for assets costing up to Rs. 5,000/-, which are fully
depreciated in the year of capitalization. Depreciation is calculated
on a pro-rata basis from the date of installation till the date the
assets are sold or disposed.
Depreciation on initial/warranty spares are provided on the same rates
applicable for that Asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognised as per the
criteria specified in the Accounting Standard (AS) 26 "Intangible
Assets" notified by the Government of India under Section 211 (3C) of
the Companies Act, 1956 and is amortised over a period of three years.
Leasehold improvements are amortised overthe period of lease.
2.6 Foreign currency transactions
Foreign currency transactions are initially recorded at the rates of
exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported
using the closing rate. Non monetary items denominated in foreign
currency are reported at the exchange rate ruling at the date of
transaction.
All exchange differences are recognised as income or expense in the
period in which they arise.
2.7 Investments
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Current investments are carried at the lower of
cost and fair value. The comparison of cost and fair value is done
separately in respect of each category of investment.
2.8 Retirement benefits
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined contribution scheme. Both the employee and the Company make
monthly contributions to the provident fund plan equal to a specified
percentage of the covered employee salary. The contribution made by the
Company is charged to the Statement of Profit and Loss.
Gratuity
In accordance to the Payment of Gratuity Act, 1972, the Company
provides for the gratuity, a defined benefit retirement plan ("the
gratuity plan") covering the eligible employees. The gratuity plan
provides for a lump sum payment to the vested employees at retirement,
death, incapacitation or termination of the employment, of an amount
based on the respective employee salary and the tenure of the
employment with the Company.
Liabilities with regard to the gratuity plan are determined by
independent actuary. The Company recognizes the net obligation of the
gratuity plan in the Balance Sheet as an asset or liability,
respectively in accordance with Accounting Standard (AS) 15, "Employee
Benefits".Actuarial gains or losses arising from experience adjustments
and changes in actuarial assumptions are recognized in the Statement of
Profit and Loss.
2.9 Borrowing cost
Borrowing costs include interest on borrowings and amortisation of
ancillary cost incurrred in connection with the arrangement of
borrowings. Borrowing costs directly attributable to the acquisition or
construction of those fixed assets which necessarily take a substantial
period of time to get ready for their intended use are capitalized. All
other borrowing costs are recognised as an expense in the year in which
they are incurred.
2.10 Leases
Lease that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
2.11 Earnings per share
Basic earnings per share are computed by dividing the net profit or
loss after tax attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss after tax 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. Dilutive potential
equity shares are deemed converted as of the beginning of the period,
unless they have been issued at a later date. In computing the dilutive
earnings per share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases loss per share
are included.
2.12 Taxes on income
Income tax expense /(income) comprises of current tax, deferred tax and
Minimum Alternative Tax (MAT) credit.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or credit reflects 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 substantially enacted by the Balance Sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realised in future;
however, where there is unabsorbed depreciation or carry forward of
loss under taxation laws, deferred tax assets are recognised only if
there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed 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.
The break-up of the deferred tax assets and liabilities as at the
Balance Sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has no legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
MAT Credit
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with the
recommendations contained in Guidance Note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a
credit to the statement of profit and loss and shown as MAT Credit
Entitlement. The Company reviews the same at each balance sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that
Company will pay normal Income Tax during the specified period.
2.13 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. 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 profit and loss account. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If
at the balance sheet date there is an indication that 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 depreciated historical cost.
2.14 Provisions and contingencies
The Company recognises a provision when there is a present obligation
as a result of past 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. Where 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 recognized 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.
1) Details of security provided for various credit facilities
Security : Secured by first pari-passu charge on fixed assets, current
assets of the Company and corporate guarantee of KSK Power Ventur plc.
2) Repayment terms of the long-term borrowings
a The long term Rupee loans are repayable in quarterly, half yearly
instalments with the last instalment of respective loans are payable
from October 2014 to December 2014 The long term borrowings carries an
weightage average rate of interest of 14.42 % p.a.
b Deferred payment liability is repayable in March 2018.
Discount rate: The discount rate is based on the prevailing market
yields of indian government securities as at balance sheet date for the
estimated term of the obligations
Expected rate of return on planned assets: This is based on the
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
Mar 31, 2013
1.1 Accounting corrrenlion
The financial Statements have bean prepared end presented under lha
h«r.oncaJ cost convention on ine accrual basis In accordance wtth
Generally Accepted Accosting Principles in India (GAAPRs., Gapp
comprise&s Accounting Standard* as specified'' in the Companies
(Accenting Standards) Rules 2006" (''Rules''), olner prOrWuncerftentS Of
the InsfrtUte Of Chartered Accountants, of India flCAf}to tha extent
applicable, the provisions of Companies. Act, 1958 and guidelines.
Issued by Securities and Exchange Board of India.
1.2 U&eot est! mates
The Preparation of financial statements In conformity with GAAP
requires management to make estimates end asE. motions that affect tha
reported amounts a'' assets and I Labil.lies and" tha disclosure
relating 1o contingent assets and Gonting^N^rtiesasm date of
frwofflatatemants a^
period. ActuaJ results could differ from the estimates. Examples, or
such estimates include provision for doUotful debt, future otiligal''on
under employee retirement oenefil pJan, Income taxes, usefu1 hfe of
fixed assets, etc. Any revision to accounting estimates IS recognised
prospect (very In current and future periods.
1.3 cash now elstemeni
Cash flows are reported using the indirect method, where by the net
profit before tax Is adjusted for the effects of transactions of a nan
cash nature, any deferrals 0* accruals ol past or future operating cash
receipts or paymentRs. and Item of income or expenses associated with
investing or financing, cash news, The cash flows from operating.
Investing end flnancingectlvibesof the Company em segregated and
preserMed separately.
1.4 Revenue recognition
Revenue m the form of profed development fees for services rendered in
relallon to development work of potential power projects Is recognised
when such fees is essuted and determinable under the terms of the
respective contract,
Corporate support service income ks recognised wnoneuch income is
assured and determinable under the terms ofihe respective contract.
Consultancy income is recognised proportional el y with the degree of
completion of contract.
Dividend Income is recognised when Ihe right to receive the semsia
establshed. interest income a recognised on time proportion basis
taking into account the amount outsiandiTfl and al in* mis apptgajbto
Saieol energy is recognised on accruer base in accordance with ii»eref
event agreements,
1.5 Rued asseta and depreciation
Fixed assets are slated al oosl of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly Bltribulable to bringing the asset Ed rts working condition
for its intended use-. The cost of fixed assets includes cost of
Initial warranty/ insurance spares purchased along *if h the capital
esse*. which are grouped as Single Horn under respective assets
Depreciation has been provided on Straight Line Method at the rates and
in the manner specified m Schedule XIV of the Companies Aci. 135$
except lor assets costing; up toRs. 5.00IV-. which are fulry depreciated
m the year of capitalization. Depredation fc calcutated on a pro-rata
baste from the date of installation HUmedate Iheaeaets are sold or
disposed.
Deprecialen on initial/ warranty spares are provided on me same redes
applicable fr theft Asset group, irrespective of rts actual usage
Intangible assets, viz.. computer software is recognised as per the
criteria specified In the Account! ng Standard IAS) 26 "Intangible
Assets" notified by ir*e Government of India under Section 2n OO of the
Companies Act. i3SS and is amortised over a period of three year*.
Lessened mprovements are amortised over me period or lease.
1.6 Foreign cunrencrlrensecfan*
Foretgncurrency transact!ons are initially recorded at the rates ol
exchange ruling atthedale ol transaction.
At the Balance Sheet date, foreign currency monetary hems are deported
using the closing rata. Non monetary items denominarterj in foreign
currency are reported ai the eiichangerete Ming at the date of
transaction.
All exchange d ifferences are recognised as Income or expense in the
period ri which they arise.
1.7 Investments
Long-term Investments ere stated at cost. A provision lor diminution is
made to recognise a decline, other than tempo raryr ii the value of
long-term investments. Cu merit investments are carried at Ihe lowerol
cost and fair value. The comparison of cost and tor velue Is done
sepe/ateiy in respe
Provident fund
Eligible emptoyeea receive benefits from a provident fund, which Is a
defined corrtri but Ion scheme. Both Che employee and the Company make
monlhry contributions to the provident fund plan oojjbI to a apeeffled
percentage of the covered employee salary. The contribution made by the
company b charged to ihe Stalemem ot Profit and Lose.
Gratuity
In accordance to Ihe Payment of Cmrtutty Act, 1972, the Company
provides for ma gralirlty. a defined benefit retirement plan rine
gratutly plan'') covering: ihe eligible employees. The gratuity plan
prcrides for a lump sum payment to Ihe vested ampfoyees at retirement,
death, Incapacitation or tarmination of tha employment, Of an amount
based on the respectrvaemployee salary and the tenured the employment
with the Company.
Liabilities with regard lo the gratuity plan aie drienriined by
independenl aduvy. The Company recognizes the net
obligation ol Ihe gratuity plan In the Balance Sheet as an asset or
liability, respectively In accordance wtth Accounting Standard (AS) 15,
"Employee BenefHa". Ac!uarial gains or losses arising from eiq^rlance
adjustments and changes In actuarial assumptiona are recognized in the
Statement of Profit and Loss.
1.8 Borrowing coat
Borrowing costs directly attn butabla to the acquisition or
construction of these fixed assets which necessarily take a substantial
period of time to gat ready for their intended use arecapitaltsed.
All other boitowing costs are recognised as an expense in the Year in
which Ihey an incurred
1.9 Lease*
Lease that do nql transfer substantially all the rtjka and rewards of
ownership ana classrtied os qperatmg leases and recorded asfjapenseas
and vrtwn the payments a/ernadeoverth* lease term.
1.10 Bask earnk per share are ccmputedtyd the
year by the weighted average number of eojufty shares outstanding
during) the year. Fw the purpose of ufcuroWig diluted earnings per
share, net profit or loss after tax attributable to equity shareholders
and the weghtad average number oF snares outstanding during the year
are adjusted tor the affects of alt dirutrvepartential equity shares.
Dikjtwe potanEfil equity shares are- deemed converted as of the
beginning of 1 he pe" od, Lnleas they have bean is&uad at a later date.
in computiriH, the dilutive earnings per Bhars, only potential eojufty
snares mat are diutr/e bjxJ tbal etlhe* reduces the earnings per sham
or increases loss per share areineludod.
1.11 on Income
Income tax expense/(Income) <^mprigosof current tax, deferred tax and
Minimum Alternative Tax (MAT) credit.
Current tax
The cufrerti charge for pumhw taxes Is calculated m accc*dance with the
relevant tax regulations appocablo1 The Company.
Deterred tax
Defcned tax charge or credit mnocts the- tax cherts of timing
drtfereneos between: accounting income and taxable Income for the
period. The deferred lax charge or credit and the corresponding
deferred tax Babllrties or assets are recognlaed using (he lax rataa
that have been enacted or substantially enact ad by trie Balance Sheet
date. Deterred 1ax assets are recogrwed oniy to the extent Ehere Is
reasonable certainty that the assets can tie real tssd In future:
hewauer, where tnare is unabsorbed depreciation Of carry forward or
loss uwJr^ taxation laws, deterred tax assets are recognised only it
1here is a virtual certainly oi reateation d such assets.
Deterred tax assets are reviewed at eacn Balance Sheet date and written
down or written-up to reflect Ehe emrjunt that ks reasonabiyV virtually
certain (as me case may be) to be realised.
The break-up of the deferred rax assets and llebfrties as at trie
Balance Sheet date has been arrived at after setting-off deferred lax
assets and liabilities where the Company has legally enforceable right
and an Intention to set-off assets against iiaw uses and where such
assets and liabilities relate to I axes on income levied by the same
governing taxation law*,
MAT Credit
MAT credit is recognised as an asset only whan End to the extent there
is convincing evidence thai the company will pay normal income tax
during ttia specif ad period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with Ihe
reccm man rations contained in Guidance Note issued by the. Institute
of Cnarrered Accountants of Ind ia, the 93d asset Is cr&etod by way of
a cred rt to lho atelcmont of profit and loss and shown Jirj MAT Cf od
ft Entitlement. The Company reviews ihe same al each balance shod data
and wines down iho canying amount of MAT credit entitlement to the
extent there Is no longer convincing evidence to the effect that
Company will pay normal FncomeTex during the specified period.
1.12 Impairment of assets
The Company assesses at each balance sheet date whether there ia any
Jxtfcation thai an asset may be Impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset If
such recoverable amount or Ihe asset or the recoverable amount of the
cash general «g unit to which the assel be longs is lesa than to
carrying amount, tne carrying amount e reduced to rts recoverable
amoorH. Tna reduction is treated B5 an Impairment losa end 6 recognised
in ihe p/oift and loss account For an asset mat does not generate
large1Rs. independent cash inflows, ihe recoverable amouM is determined
roe the cash-ganeratlrtg unit to which the asset belongs. If at the
balance sheet dale there la an Indication 1 hat a previously assessed
bnpalrment losa no longer exists, the nscoverebta amount ks reassessed
end the asset la reflected at the recoverable amount subject to a
maximum of depreciated historical cost.
1.13 Provisions and cenugencleB
The Company recognises a provision when (here Is a praseni obligation
as a resuH of pasl obligating event ihat probably requlrMan outflow of
resources and a rsliab^ A disclosure tor 1
contingent liability is made when there ia a possiHe obligation or a
present obligation that may, but probably wSJ not, require an outflow
o1 resources. Where there is s possfdle coligstion a a present
obligation that the likelihood of outflow of resources ta remote, no
provision ordisclosura b made.
Provisions Tor onerous contracts i.e. contracts where the expected
unavoidable costs or meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognized
when it is probable that an outflow of resources embodying economy
benefits will be requued to seme a pfesenl orji«ation as a result of an
obligating event, based on a reliable esimaie 01 suon obftgattorv
Mar 31, 2012
1.1 Accounting convention
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis in accordance with
Indian Generally Accepted Accounting Principles (GAAP). GAAP comprises
Accounting Standards notified by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of
Institute of Chartered Accountants of India, the provisions of
Companies Act, 1956 and guidelines issued by Securities and Exchange
Board of India.
1.2 Use of estimates
The Preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent assets and contingent liabilities as on date of financial
statements and the reported amounts of income and expenses for the
period. Actual results could differ from the estimates. Examples of
such estimates include provision for doubtful debt, future obligation
under employee retirement benefit plan, income taxes, useful life of
fixed assets, etc. Any revision to accounting estimates is recognised
prospectively in current and future periods.
1.3 Cash flows statement
Cash flows are reported using the indirect method, where by the net
profit before tax is adjusted for the effects of transactions of a non
cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated and
presented separately.
1.4 Revenue recognition
Revenue in the form of project development fees for services rendered
in relation to development work of potential power projects is
recognised when such fees is assured and determinable under the terms
of the respective contract.
Corporate support service income is recognised when such income is
assured and determinable under the terms of the respective contract.
Consultancy income is recognised proportionately with the degree of
completion of contract.
Dividend income is recognised when the unconditional right to receive
the income is established.
Interest is recognised using the time proportionate method, based on
the underlying interest rates.
Sale of energy is recognised on accrual basis in accordance with the
relevant agreements.
1.5 Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly attributable to bringing the asset to its working condition
for its intended use. The cost of fixed assets includes cost of initial
warranty/ insurance spares purchased along with the capital asset,
which are grouped as single item under respective assets.
Borrowing costs directly attributable to the acquisition or
construction of those fixed assets which necessarily take asubstantial
period of time to get ready for their intended use are capitalised.
Depreciation has been provided on Straight Line Method at the rates and
in the manner specified in Schedule XIV of the Companies Act, 1956
except for assets costing up to Rs. 5,000/-, which are fully
depreciated in the year of capitalisation / acquisition. Depreciation
is calculated on a pro-rata basis from the date of installation /
capitalisation till the date the assets are sold or disposed.
Depreciation on initial/ warranty spares are provided on the same rates
applicable for that asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognised as per the
criteria specified in the Accounting Standard (AS) 26 "Intangible
Assets" notified by the Central Government of India under Section 211
(3C) of the Companies Act, 1956 and is amortised over a period of three
years.
Leasehold improvements are amortised over the period of lease.
1.6 Capital work in progress
The cost of fixed assets not ready for their intended use before such
date is disclosed under capital work in progress.
Capital work in progress is carried at cost and incidental and
attributable expenses including interest and depreciation on fixed
assets in use during construction are carried as part of "expenditure
during construction period, pending allocation" to be allocated /
apportioned on major assets on commissioning of the project.
1.7 Foreign currency translation
Foreign currency translation are initially recorded at the rates of
exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported
using the closing rate. Non monetary items denominated in foreign
currency are reported at the exchange rate ruling at the date of
transaction.
All exchange differences are recognised as income or expense in the
period in which they arise.
1.8 investments
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Current investments are carried at the lower of
cost and fair value. The comparison of cost and fair value is done
separately in respect of each category of investment.
1.9 Retirement benefits
Provident fund
Eligible employees receive benefits from a provident fund, which is a
defined contribution scheme. Both the employee and the Company make
monthly contributions to the provident fund plan equal to a specified
percentage of the covered employee salary. The contribution made by the
Company is charged to the Profit and Loss Statement.
Gratuity
In accordance to the Payment of Gratuity Act, 1972, the Company
provides for the gratuity, a defined benefit retirement plan ("the
gratuity plan") covering the eligible employees. The gratuity plan
provides for a lump sum payment to the vested employees at retirement,
death, incapacitation or termination of the employment, of an amount
based on the respective employee salary and the tenure of the
employment within the Group.
Liabilities with regard to the gratuity plan are determined by
independent actuary. The Company makes annual contribution to
employee's Company gratuity scheme administered by trustees and managed
by Life Insurance Corporation of India.
The Company recognises the net obligation of the gratuity plan in the
Balance Sheet as an asset or liability, respectively in accordance with
Accounting Standard (AS) 15, "Employee Benefits".
Actuarial gains or losses arising from experience adjustments and
changes in actuarial assumptions are recognized in the Profit and Loss
Statement.
1.10 Leases
Lease that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
1.11 Earnings per share
Basic earnings per share are computed by dividing the net profit or
loss after tax attributable to equity shareholders for the period by
the weighted average number of equity shares outstanding during the
period. For the purpose of calculating diluted earnings per share, net
profit or loss after tax 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.
Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless they have been issued at a later date.
In computing the dilutive earnings per share, only potential equity
shares that are dilutive and that either reduces the earnings per share
or increases loss per share are included.
1.12 Taxes on income
Income tax expense/(income) comprises current tax, deferred tax and
Minimum Alternative Tax (MAT) credit. Current tax
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or credit reflects 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 there is
reasonable certainty that the assets can be realised in future;
however, where there is unabsorbed depreciation or carry forward of
loss undertaxation laws, deferred tax assets are recognised only if
there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed 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.
The break-up of the deferred tax assets and liabilities as at the
Balance Sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has legally enforceable right
and an intention to set-off assets against liabilities and where such
assets and liabilities relate to taxes on income levied by the same
governing taxation laws.
MAT credit
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the MAT credit
becomes eligible to be recognised as an asset in accordance with the
recommendations contained in guidance note issued by the Institute of
Chartered Accountants of India, the said asset is created by way of a
credit to the profit and loss statement and shown as MAT credit
entitlement. The Company reviews the same at each Balance Sheet date
and writes down the carrying amount of MAT credit entitlement to the
extent there is no longer convincing evidence to the effect that
Company will pay normal Income tax during the specified period.
1.13 Provisions and contingencies
Provisions and contingencies
The Company recognises a provision when there is a present obligation
as a result of past 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. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
Onerous contracts
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 recognized
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.
1.14 Impairment of assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. 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 Profit and Loss Statement. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If
at the Balance Sheet date there is an indication that 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 depreciated historical cost.
Mar 31, 2011
A. Accounting Convention
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting in
accordance with Generally Accepted Accounting Principles in India
(GAAP) and comply with the mandatory Accounting Standards as specified
in the Companies (Accounting Standards) Rules 2006 ('Rules'), other
pronouncements of the Institute of Chartered Accountants of India
(ICAI) to the extent applicable, the provisions of Companies Act, 1956
and guidelines issued by Securities and Exchange Board of India.
b. Use of estimates
The Preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure relating
to contingent assets and contingent liabilities as on date of financial
statements and the reported amounts of income and expenses during the
period. Actual results could differ from the estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
c. Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly attributable to bringing the asset to its working condition
for its intended use. The cost of fixed assets includes cost of initial
warranty/ insurance spares purchased along with the capital asset,
which are grouped as single item under respective assets.
Borrowing costs directly attributable to the acquisition or
construction of those fixed assets which necessarily take a substantial
period of time to get ready for their intended use are capitalised.
Depreciation has been provided on Straight Line Method at the rates and
in the manner specified in Schedule XIV of the Companies Act, 1956
except for assets costing up to Rs. 5,000/-, which are fully
depreciated in the year of capitalisation. Depreciation is calculated
on a pro-rata basis from the date of installation till the date the
assets are sold or disposed.
Depreciation on initial/ warranty spares are provided on the same rates
applicable for that Asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognized as per the
criteria specified in the Accounting Standard (AS) 26 "Intangible
Assets" notified by the Government of India under Section 211 (3C) of
the Companies Act, 1956 and is amortized over a period of three years.
Leasehold improvements are amortized over the period of lease.
d. Foreign currency transactions
Foreign Currency transactions are initially recorded at the rates of
exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported
using the closing/contracted rate. Non monetary items denominated in
foreign currency are reported at the exchange rate ruling at the date
of transaction.
All exchange differences are recognized as income or expense in the
period in which they arise.
e. Investments
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Current investments are carried at the lower of
cost and fair value. The comparison of cost and fair value is done
separately in respect of each category of investment.
f. Revenue recognition
Revenue in the form of project development fees for services rendered
in relation to development work of potential power projects is
recognized when such fees is assured and determinable under the terms
of the respective contract.
Consultancy income is recognised proportionately with the degree of
completion of contract.
Dividend income is recognized when the right to receive the same is
established.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and at the rate applicable.
Sale of energy is recognised on accrual basis in accordance with the
relevant agreements.
Corporate support service income is recognised when such income is
assured and determinable under the terms of the respective contract.
g. Retirement benefits
Contributions payable to the recognised provident fund, which is a
defined contribution scheme, is charged to the Profit and Loss account.
Gratuity, which is defined benefits, are provided for on the basis of
an actuarial valuation at the Balance Sheet date, carried out by an
independent actuary.
Actuarial gains and losses arising during the year are recognised in
the profit and loss account.
h. Cash flow statement
Cash flows are reported using the indirect method, where by the net
profit before tax is adjusted for the effects of transactions of a non
cash nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated and
presented separately.
i. Taxes on income
Income tax expense comprises current tax, deferred tax and MAT credit.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
MAT Credit
MAT credit is recognised as an asset only when and to the extent there
is convincing evidence that the company will pay normal income tax
during the specified period. In the year in which the Minimum
Alternative tax (MAT) credit becomes eligible to be recognized as an
asset in accordance with the recommendations contained in Guidance Note
issued by the Institute of Chartered Accountants of India, the said
asset is created by way of a credit to the profit and loss account and
shown as MAT Credit Entitlement. The Company reviews the same at each
balance sheet date and writes down the carrying amount of MAT credit
entitlement to the extent there is no longer convincing evidence to the
effect that Company will pay normal Income Tax during the specified
period.
Deferred tax
Deferred tax charge or credit reflects 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 substantially enacted by the Balance Sheet
date. Deferred tax assets are recognised only to the extent there is
reasonable certainty that the assets can be realised in future;
however, where there is unabsorbed depreciation or carry forward of
loss under taxation laws, deferred tax assets are recognised only if
there is a virtual certainty of realisation of such assets.
Deferred tax assets are reviewed 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.
The break-up of the deferred tax assets and liabilities as at the
Balance Sheet date has been arrived at after setting-off deferred tax
assets and liabilities where the Company has no legally enforceable
right and an intention to set-off assets against liabilities and where
such assets and liabilities relate to taxes on income levied by the
same governing taxation laws.
j. Earnings per share
Basic earnings per share is computed by dividing the net profit or loss
after tax attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss after tax 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. Dilutive potential
equity shares are deemed converted as of the beginning of the period,
unless they have been issued at a later date. In computing the dilutive
earnings per share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases loss per share
are included.
k. Provisions and contingencies
The Company recognises a provision when there is a present obligation
as a result of past 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. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
l. Leases
Lease that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
m. Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. 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
recognized in the profit and loss account. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If
at the balance sheet date there is an indication that 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 depreciated historical cost.
Mar 31, 2010
A. Accounting convention
The Financial Statements have been prepared and presented under the
historical cost convention on the accrual basis in accordance with
Indian Generally Accepted Accounting Principles (GAAP). GAAP comprises
accounting standards notified by the Central Government of India under
Section 211 (3C) of the Companies Act, 1956, other pronouncements of
Institute of Chartered Accountants of India, the provisions of
Companies Act, 1956 and guidelines issued by Securities and Exchange
Board of India. The financial statements are rounded off to the nearest
thousands.
b. Useof estimates
The preparation of financial statements in conformity with GAAP
requires management to make estimates and assumptions that affect the
reported amount of assets and liabilities and the disclosure of
contingent liabilities as on date of financial statements and the
reported amount of income and expenses during the year. Actual results
could differ from the estimates. Any revision to accounting estimates
is recognized prospectively in current and future periods.
c. Fixed assets and depreciation
Fixed assets are stated at cost of acquisition. Cost of acquisition is
inclusive of freight, duties, levies and all incidentals directly or
indirectly attributable to bringing the asset to its working condition
for its intended use. The cost of fixed assets includes cost of initial
warranty/ insurance spares purchased along with the capital asset,
which are grouped as single item under respective assets.
Borrowing costs directly attributable to the acquisition or
construction of those fixed assets which necessarily take a substantial
period of time to get ready for their intended use are capitalized
Depreciation has been provided on Straight Line Method at the rates and
in the manner specified in Schedule XIV of the Companies Act, 1956
except for assets costing up to Rs. 5,000/- which are fully depreciated
in the year of capitalization. Depreciation is calculated on a pro-rata
basis from the date of installation till the date the assets are sold
or disposed.
Depreciation on initial/ warranty spares are provided on the same rates
applicable for that asset group, irrespective of its actual usage.
Intangible assets, viz., computer software is recognized as per the
criteria specified in the Accounting Standard (AS) 26 "Intangible
Assets" notified by the Government of India under Section 211 (3C) of
the Companies Act, 1956 and is amortized over a period of three years.
d. Capital work in progress
Capital work in progress is carried at cost and incidental and
attributable expenses including interest and depreciation on fixed
assets in use during construction are carried as part of "Expenditure
During Construction Period, Pending Allocation" to be allocated on
major assets on commissioning of the project.
In respect of supply-cum-erection contracts, the value of supplies
received at site and accepted is treated as capital work in progress.
Claims for price variation/exchange variation in case of contracts are
accounted for on acceptance.
e. Revenue recognition
Revenue in the form of project development fees for services rendered
in relation to development work of potential power projects is
recognized when such fees is assured and determinable under the terms
of the respective contract.
Corporate support service income is recognized when such income is
assured and determinable under the terms of the respective contract.
Consultancy income is recognized in proportion with the degree of
completion of contract.
Dividend income is recognized when the unconditional right to receive
the income is established.
Interest income is recognized using the time proportion method based on
the under line interest rates.
Sale of energy is recognized on accrual basis in accordance with the
relevant agreements.
f. Investments
Long-term investments are stated at cost. A provision for diminution is
made to recognize a decline, other than temporary, in the value of
long-term investments. Current investments are carried at the lower of
cost and fair value. The comparison of cost and fair value is done
separately in respect of each category of investment.
g. Retirement benefits
Contributions payable to the recognized provident fund, which is a
defined contribution scheme, is charged to the Profit and Loss Account.
Gratuity, which is defined benefits, is provided for on the basis of an
actuarial valuation at the Balance Sheet date, carried out by an
independent actuary.
Actuarial gains or losses arising during the year are recognized in the
Profit and Loss Account.
h. Foreign currency transactions
Foreign currency transactions are initially recorded at the rates of
exchange ruling at the date of transaction.
At the Balance Sheet date, foreign currency monetary items are reported
using the closing/contracted rate. Non monetary items denominated in
foreign currency are reported at the exchange rate ruling at the date
of transaction.
All exchange differences are recognized as income or expense in the
period in which they arise.
i. Taxes on income
I ncome tax expense comprises cu rrent tax, deferred tax.
Current tax
The current charge for income taxes is calculated in accordance with
the relevant tax regulations applicable to the Company.
Deferred tax
Deferred tax charge or credit reflects 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 substantially enacted by the Balance Sheet
date. Deferred tax assets are recognised only to the extent there is
reasonablecertainty that the assets can be realised in future; however,
where there is unabsorbed depreciation or carry forward of loss under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of such assets.
Deferred tax assets are reviewed 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.
The break-up of the deferred tax assets and liabilities as at the
Balance Sheet date has been arrived at after setting- off deferred tax
assets and liabilities where the Company has legally enforceable right
and an intention to set-off assets against liabilities and where such
assets and liabilities relate to taxes on income levied by the same
governing taxation laws.
j. Earnings per share
Basic earnings per share are computed by dividing the net profit or
loss after tax attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, net profit
or loss after tax 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. Dilutive potential
equity shares are deemed converted as of the beginning of the period,
unless they have been issued at a later date. In computing the dilutive
earnings per share, only potential equity shares that are dilutive and
that either reduces the earnings per share or increases loss per share
are included.
k. Leases
Lease that do not transfer substantially all the risks and rewards of
ownership are classified as operating leases and recorded as expense as
and when the payments are made over the lease term.
l. Provisions and contingencies
The Company recognises a provision when there is a present obligation
as a result of past 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. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
m. Impairment of assets
The Company assesses at each Balance Sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. 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
recognized in the Profit and Loss account. For an asset that does not
generate largely independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs. If
at the Balance Sheet date there is an indication that 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 depreciated historical cost.
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