Accounting Policies of Vikram Solar Ltd. Company

Mar 31, 2025

1 General Information

Vikram Solar Limited ("" The Company"" ) is a public
limited company , incorporated under the provision of
Companies Act, applicable in India. The Registered office of
the Company is situated at Bio Wonder, Unit No. 1102, 11th
Foor, 789, Anandapur Main Road, Eastern Metropolitan
Bypass, Kolkata - 700107.

The Company is engaged in the business of manufacturing
and sale of Solar photovoltaic modules / systems. The
manufacturing facilities are situated at Falta Special
Economic Zone (SEZ), West Bengal and at Oragadam, Tamil
Nadu. The Company is also engaged into setting up of the
Solar Power Plant / Systems and provides operation &
maintenance services.

These standalone Financial Statement were approved and
authorized for issue with the resolution of the Board of
Directors on April 24, 2025.

2 Basis of Preparation and summary of Material
accounting policies

2.1 Basis of Preparation and Presentation of Financial
Statements

This note provides a list of the significant accounting
policies adopted in the preparation of these standalone
financial statements. These policies have been consistently
applied to all the years presented, unless otherwise stated.

(a) Statement of Compliance with Ind AS

These standalone financial statements comply in all
material aspects with Indian Accounting Standards
(Ind AS) notified under Section 133 of the Companies
Act, 2013 (the ''Act'') and read with [Companies (Indian
Accounting Standards) Rules, 2015] and other relevant
provisions of the Act.

(b) Basis of measurement

The financial statements have been prepared on a historical
cost convention on accrual basis, except for certain
financial instruments measured at fair value as required
by relevant Ind AS (Refer Note 2.13 for accounting policy on
financial instruments)

All assets and liabilities have been classified as current or
non-current as per the Company''s operating cycle and other
criteria set out in the Schedule III to the Companies Act,
2013. Based on the nature of operation and the time between
the rendering of supply & services and their realization in
cash and cash equivalents, the Company has ascertained its
operating cycle as twelve months for the purpose of current
and noncurrent classification of assets and liabilities.

The Company''s standalone financial statements are
reported in Indian Rupees (H), which is also the Company''s
functional currency, and all values are rounded to the nearest
millions (H 000,000), except when otherwise indicated.

(c) Significant accounting judgements, estimates and
assumptions

The preparation of financial statements in conformity with
Ind AS requires the Management to make judgements,
estimates and assumptions that affect the reported amounts
and disclosures. The Company based its assumptions
and estimates on parameters available when the financial
statements were prepared and reviewed at each Balance
Sheet date. Uncertainty about these assumptions and
estimates could result in outcomes that may require a
material adjustment to the reported amounts and disclosures.

(a) Employee benefit plans - Note 2.14 and 42

Post-employment benefits represents obligation that
will be settled in the future and require assumptions
to project benefit obligations. Post-employment
benefit accounting is intended to reflect the
recognition of future benefit cost over the employee''s
approximate service period, based on the terms
of plans and the investment and funding decisions
made. The accounting requires the company to make
assumptions regarding variables such as discount
rate, rate of compensation increase and future
mortality rates. Changes in these key assumptions
can have a significant impact on the defined benefit
obligations and benefit costs incurred.

(b) Impairment of trade receivables - Note 2.13.a and 10

The risk of delay collection of accounts receivable is
primarily estimated based on prior experience with, and
the past due status of debtors, while large accounts are
assessed individually based on factors that include ability
to pay, bankruptcy and payment history. The assumptions
and estimates applied for determining the allowance of
expected credit loss are reviewed periodically.

(c) Estimation of expected useful lives and residual values
of property, plants and equipment - Note 2.2 and 4

Property, plant and equipment are depreciated at
historical cost using straight-line method based on
the estimated useful life, taking into account their
residual value. The asset''s residual value and useful
life are based on the Company''s best estimates and
reviewed, and adjusted if required, at each Balance
Sheet date taking into consideration the estimated
usage of the assets, operating condition of the assets
and anticipated technological changes etc.

(d) Fair Value Measurements

When the fair values of financial assets and financial
liabilities recorded in the Balance Sheet cannot be
measured based on quoted prices in active markets, their
fair values are measured using valuation techniques
which involve various judgements and assumptions.

(e) Contingent Liabilities - Note 2.11 and 43

Contingent Liabilities covering a range of matters are
pending against the Company. Due to the uncertainty
inherent in such matters, it is often difficult to predict
the final outcomes. The cases and claims against the
Company often raise difficult and complex factual and
legal issues that are subject to many uncertainties
and complexities, including but not limited to the facts
and circumstances of each particular case and claim,
the jurisdiction and the differences in applicable
law, in the normal course of business, the Company
consults with experts on matters related to litigations.
The Company accrues a liability when it is determined
that an adverse outcome is probable and the amount
of the loss can be reasonably estimated. In the event
an adverse outcome is possible or an estimate is not
determinable, the matter is disclosed.

(f) Revenue Recognition

The Company uses the proportionate completion
method for recognition of revenue, accounting for
unbilled revenue / unearned revenue and contract
cost thereon for its turnkey contracts. Unbilled
revenue represents value of services rendered but
not yet been invoiced on the reporting date due to
contractual terms. The percentage of completion is
measured by reference to the stage of the projects
and contract determined based on the proportion of
contract costs incurred for work performed to date
bear to the estimated total contract costs. Use of
the proportionate completion method requires the
Company to estimate the efforts or costs incurred
to date as a proportion of the total efforts or cost to
be incurred. Significant assumptions are required in
determining the stage of completion, the extent of the
contract cost incurred, the estimated total contract
revenue and contract cost and the recoverability of
the contracts. These estimates are based on events
existing at the end of each reporting date.

2.2 Property, plant and equipment

Property, Plant and Equipment, Capital Work in Progress
is stated at cost, net of accumulated depreciation and
accumulated impairment losses, if any. Cost comprises
of purchase price (net of tax credits), borrowing costs, if

capitalization criteria are met, commissioning expenses,
etc. up to the date the asset is ready for its intended use.
Freehold land is not depreciated.

Expenditure directly attributable to expansion projects is
capitalized. Administrative, general overheads and other
indirect expenditure (including borrowing costs) incurred
during the project period which are not related to the project nor
are incidental thereto, are expensed off when that are incurred.

Subsequent costs are included in the asset''s carrying
amount or recognized as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognized when replaced. All other repairs and
maintenance are charged to Statement of Profit and Loss
during the year in which they are incurred.

Advances paid towards the acquisition of property, plant
and equipment outstanding at each balance sheet date
is classified as capital advances under other non-current
assets and the cost of assets not put to use before such
date are disclosed under ''Capital work-in-progress''.

Depreciation methods, estimated useful lives

Depreciation is calculated on a straight-line basis using the
rates arrived at based on the useful lives estimated by the
management, or as per rates prescribed in the Schedule II
of the Companies Act, 2013.

The Company, based on technical assessment made by
technical expert and management estimate, depreciates
certain items of tools, plant & machinery and other
handling equipment over estimated useful lives which
are different from 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.

The Company re-assess the estimated useful life every year
and in case of change in estimated life, depreciation is provided
prospectively over the remaining useful life of such assets.

An item of property, plant and equipment is derecognised upon
disposal or when no future economic benefits are expected to
arise from the continued use of the asset. Any gain or loss
arising on the disposal or retirement of an item of property,
plant and equipment is determined as the difference between
the sales proceeds and the carrying amount of the assets and
is recognised in statement of profit and loss.

Depreciation on addition to property plant and equipment
is provided on pro-rata basis from the date of put to use.
Depreciation on sale/deduction from property plant and
equipment is provided up to the date preceding the date of
sale, deduction as the case may be.

Depreciation methods, useful lives and residual values
are reviewed periodically at each financial year end and
adjusted prospectively, as appropriate.

The carrying amounts of assets are reviewed at each
Balance Sheet date to determine if there is any indication
of impairment based on external or internal factors. An
impairment loss is recognised wherever the carrying
amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and
their ''value in use''. The estimated future cash flows are
discounted to their present value using pre-tax discount
rates and risks specific to the asset.

2.3 Intangible Assets

Acquired intangible assets are initially measured at cost
and subsequently at cost less accumulated amortization
and accumulated impairment loss, if any.

Amortization of Intangible assets

Intangibles are amortized on a straight line basis over
the useful lives as given below, which is based on the
management estimates.

Intangible assets are amortized over their respective useful
economic lives and assessed for impairment whenever
there is an impairment indicator. The amortization expense
and the gain or loss on disposal, is recognized in the
statement of profit and loss.

2.4 Rounding off amounts

All amounts disclosed in financial statements and notes have
been rounded off to the nearest million as per requirement
of Schedule III of the Act, unless otherwise stated.

2.5 Borrowing costs

Borrowing costs that are directly attributable to the
acquisition, construction or production of an asset that
necessarily takes a substantial period of time to get
ready for its intended use are capitalized as part of the
cost of asset. All other borrowing costs are recognised as
expenditure in the period in which they are incurred.

Borrowing cost includes interest, amortization of ancillary
costs incurred in connection with the arrangement of
borrowings and exchange differences arising from foreign
currency borrowings to the extent they are regarded as an
adjustment to the interest cost.

2.6 Foreign Currency Transactions

The Company''s functional currency and reporting currency
is the same i.e. Indian Rupee(H).

Initial recognition of transactions in foreign currencies are
recorded in reporting currency by the Company at spot
rates at the date of transaction.

At the end of each reporting period, Foreign currency
monetary items are reported using the closing rate. Exchange
differences arising on settlement or translation of monetary
items are recognised in Statement of Profit and Loss.
Foreign currency non-monetary items measured at
historical cost are translated using the exchange rates at
the dates of the initial transactions.

2.7 Revenue Recognition

Sale of goods and rendering of services

Revenue from contracts with customers is recognised
when control of the goods or services are transferred to
the customer at an amount that reflects the consideration
to which the company expects to be entitle in exchange
for those goods or services. The Company has concluded
that it is the principal in its revenue arrangements with
the customer because the Company typically controls the
goods or services before transferring them to the customer.

Revenue from sales of goods is recognised at the point
in time when control of the asset is transferred to the
customer, generally on delivery.

Revenues from turnkey contracts, which are generally time bound
fixed price contracts are recognised over the life of the contract

using the proportionate completion method with contract costs
of determining the degree of completion. Foreseeable losses on
such contracts are recognised when probable.

Revenue on installation and commissioning contracts are
recognised as per the terms of contract.

Revenue from maintenance contracts are recognised pro
rata over the period of the contract.

Other Operating revenues

Exports entitlements are recognised when the right to
receive such incentives as per the applicable terms is
established, in respect of the exports made and when
there is no significant uncertainty regarding the ultimate
realisation/ utilization of such incentives.

Other Income

Interest Income is recognised using the effective interest
rate method. The effective interest rate is the rate that
exactly discounts estimated future cash receipts through
the expected life of the financial asset to the gross carrying
amount of a financial asset. When calculating the effective
interest rate, the Company estimates the expected cash
flows by considering all the contractual terms of the
financial instrument.

Dividend income is recognised when the Company''s right to
receive dividend is established by the reporting date.

Insurance claims are accounted for on the basis of claims
admitted/ expected to be admitted and to the extent there
is no uncertainty in receiving the claims.

2.8 Taxes

(a) Current income tax

Current tax assets and liabilities are measured at the
amount expected to be recovered 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,
at the year end date. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right
to offset and intends either to settle on a net basis, or to
realize the asset and settle the liability simultaneously.
Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable
tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts
expected to be paid to the tax authorities."

(b) Deferred tax

Deferred tax is recognised on temporary differences
arising between the tax bases of assets and liabilities and
their carrying amounts in financial statements. Deferred
tax is determined using tax rates (and laws) that have been
enacted or substantially enacted by the end of the year and
are expected to apply when the related deferred tax asset
is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for all deductible
temporary differences and unused tax losses and tax
credits only if it is probable that future taxable amounts will
be available to utilize those temporary differences, losses
and tax credits. The carrying amount of deferred tax assets
is reviewed at each Balance Sheet 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 tax
asset to be utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised to
the extent that it has become probable that future taxable
profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the
same taxation authority.

In the situations where the Company is entitled to a tax holiday
under the Income Tax Act, 1961, no deferred tax (asset or
liability) is recognised in respect of temporary differences
which reverse during the tax holiday period, to the extent the
Company''s gross total income is subject to the deduction
during the tax holiday period. Deferred tax in respect of
temporary differences which reverse after the tax holiday
period is recognised in the year in which the temporary
differences originate. However, the Company restricts the
recognition of deferred tax assets to the extent that it has
become probable that sufficient future taxable profits will
be available against which such deferred tax assets can be
realised. For recognition of deferred taxes, the temporary
differences which originate first are considered to reverse first.

In case of tax payable as Minimum Alternative Tax (''MAT'')
under the provisions of the Income-tax Act, 1961, the credit
available under the Act in respect of MAT paid 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 period for which the MAT credit can be carried
forward for set-off against the normal tax liability. MAT
credit recognised as a deferred tax asset is reviewed at
each balance sheet date and written down to the extent the
aforesaid convincing evidence no longer exists.

Current and deferred tax is recognized in Statement of
Profit and Loss, except to the extent that it relates to items
recognised in other comprehensive income or directly
in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.

2.9 Leases

The Company assesses at contract inception whether
a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset
for a period of time in exchange for consideration.

As a lessee

The Company applies a single recognition and measurement
approach for all leases, except for short-term leases and
leases of low-value assets. The Company recognises lease
liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.

(i) Right-of-use assets

The Company recognises right-of-use assets at the
commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use
assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made
at or before the commencement date less any lease
incentives received. Right-of-use assets are depreciated
on a straight-line basis over the shorter of the lease term
and the estimated useful lives of the assets.

The right-of-use assets are also subject to impairment.

(ii) Lease Liabilities

At the commencement date of the lease, the Company
recognises lease liabilities measured at the present
value of lease payments to be made over the lease
term. The lease payments include fixed payments
(including in substance fixed payments) less any lease
incentives receivable, variable lease payments that
depend on an index or a rate, and amounts expected
to be paid under residual value guarantees.

In calculating the present value of lease payments, the
Company uses its incremental borrowing rate at the
lease commencement date because the interest rate
implicit in the lease is not readily determinable. After the
commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced
for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in

the lease payments (e.g., changes to future payments
resulting from a change in an index or rate used to
determine such lease payments) or a change in the
assessment of an option to purchase the underlying asset.

Short-term lease and lease of low-value assets

The Company applies the short-term lease recognition
exemption to its short-term leases of machinery and
equipment (i.e., those leases that have a lease term of
twelve months or less from the commencement date
and do not contain a purchase option). It also applies
the lease of low-value assets recognition exemption
to leases of offices, godowns, equipment, etc. that are
of low value. Lease payments on short-term leases
and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term."

2.10 Inventories

Raw materials, packaging materials and stores and
spare parts are valued at lower of cost and net realizable
value. However, material and other items held for use in
production of inventories are not written down below cost if
the finished products in which they will be incorporated are
expected to be sold at or above cost.

Cost includes purchase price, (excluding those
subsequently recoverable by the enterprise from the
concerned revenue authorities), freight inwards and other
expenditure incurred in bringing such inventories to their
present location and condition.

Work in progress and Finished Goods are valued at
lower of cost and net realisable value. Cost includes cost
of direct materials and direct labour and a proportion
of manufacturing overhead based on the normal
operating capacity. Cost is determined on monthly
weighted average basis.

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