Accounting Policies of XL Energy Ltd. Company

Mar 31, 2015

Corporate Information

XL Energy Limited is listed company having its shares listed in Bombay Stock Exchange and National Stock Exchange. The company is engaged in manufacturing/trading/production and sale of Solar Photovoltaic Modules as its main business. In addition to this, the company is engaged in the business of manufacture of equipment for Telecom Industry and manufacture of Ethanol. However at present this business conducted in this segment has become negligible. The company caters to both international and domestic market in Solar PV Business.

1.1 System of Accounting:

The accounts have been prepared and presented under the historical cost convention method on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India (ICAI) as notified in the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of companies Act 2013, to the extent applicable.

1.2 Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Although, these estimates are used on the managements' best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcome requiring a material adjustment to the carrying amounts of assets or liabilities to the carrying amounts of assets or liabilities in further periods.

1.3 Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive of duties & taxes (net of CENVAT/VAT), incidental expenses and erection / commissioning expenses.

1.4 Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule II to the Companies Act, 2013. Depreciation on Assets bought / sold during the year is charged at applicable rates on monthly basis in the month the Asset is put to use / sold.

1.5 Expenditure during construction period:

Expenditure (including Finance cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are shown under "Capital Work in Progress". These expenses will be apportioned to fixed assets on commencement of commercial production.

1.6 Investments:

Long term investments and investments in subsidiary companies are carried at cost.

1.7 Valuation of Inventories:

a) Inventories are valued at the lower of weighted average cost or net realizable value. The weighted average value is calculated on the basis of net landed cost.

b) Cost for the purpose of finished goods and material in process is computed on the basis of cost of material, labour and other related overheads.

c) In all the cases necessary adjustments are made in respect of non-moving, slow moving, damaged and unserviceable goods.

1.8 Fo reign Exchange:

Foreign Exchange transactions are recorded at the exchange rates prevailing at the time of transactions or at contracted rates. Current assets and current liabilities are translated at values prevailing at the Balance Sheet date. Gains/losses, if any, arising thereby are recognized in the Profit and Loss account.

1.9 Revenue Recognition:

a) Revenue from sales is recognized when significant risk and rewards in respect of ownership of the products are transferred.

b) Revenue from domestic sales is recognized on dispatch of products from the factory of the Company.

c) Revenue from export sales is recognized on the basis of dates of Bill of Lading.

1.10 Employee Retirement Benefits:

Defined Contribution Plan: Contributions paid/ payable the defined contribution plan of provident fund for employees covered under the scheme are recognized in the profit and loss account each year. However, during the year the company does not have any employees who are covered under the Provident fund scheme.

Defined Benefit Plan: The Company is accounting gratuity and bonus on cash basis. The company has not provided for gratuity and bonus liability as at the Balance Sheet date in accordance with revised accounting standard 15 issued by ICAI

Other Long Term employee Benefits: There are no long term employee benefits comprising of Leave encashment, bonus, etc. as at the Balance Sheet date.

1.11 Borrowing Costs:

Borrowing costs incurred in relation to the acquisition and construction of assets is capitalized as part of the cost of such assets up to the date when such assets are ready for intended use.

1.12 Income Tax Expenditure:

a) Current Tax Expense: The current charge for income tax is calculated in accordance with the tax regulations.

b) Deferred Tax Expense: Deferred income tax reflects the impact of timing difference between accounting income and tax income for the year/ period. Deferred tax is measured based on the tax rates and the tax laws enacted at the Balance sheet date. Deferred tax asset is recognized till the previous year. Deferred tax asset for the year is not recognized in view of the uncertainty of its utilization against the future profits of the Company.

1.13 Miscellaneous Expenditure:

Miscellaneous expenditure comprises of preliminary/ public issue expenses which are amortized over a period of ten years.

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Mar 31, 2014

Corporate Information

XL Energy Limited (formerly XL Telecom & Energy Limited) is listed company having its shares listed in BSE and NSE stock exchanges. The company is engaged in manufacturing/trading/production and sale of Solar Photo voltaic Modules as its main business. In addition to this the company is engaged in the business of manufacture of equipment for Telecom Industry and manufacture of Ethanol. However at present the business conducted in this segment has become negligible. The company caters to both international and domestic market in Solar PV Business.

1.1 System of Accounting:

The accounts have been prepared and presented under the historical cost convention method on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards issued be the Institute of Chartered Accountants of India (ICAI) to the extent applicable.

1.2 Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Although, these estimates are used on the managements'' best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcome requiring a material adjustment to the carrying amounts of assets or liabilities to the carrying amounts of assets or liabilities in further periods.

1.3 Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive of duties & taxes (net of CENVAT/VAT), incidental expenses and erection / commissioning expenses.

1.4 Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on Assets bought / sold during the year is charged at applicable rates on monthly basis in the month the Asset is put to use / sold.

1.5 Expenditure during construction period:

Expenditure (including Finance cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are shown under "Capital Work in Progress". These expenses will be apportioned to fixed assets on commencement of commercial production.

1.6 Investments:

Long term investments and investments in subsidiary companies are carried at cost.

1.7 Valuation of Inventories:

a) Inventories are valued at the lower of weighted average cost or net realizable value. The weighted average value is calculated on the basis of net landed cost.

b) Cost for the purpose of finished goods and material in process is computed on the basis of cost of material, labour and other related overheads.

c) In all the cases necessary adjustments are made in respect of non-moving, slow moving, damaged and unserviceable goods.

1.8 Foreign Exchange:

Foreign Exchange transactions are recorded at the exchange rates prevailing at the time of transactions or at contracted rates. Current assets and current liabilities are translated at values prevailing at the Balance Sheet date. Gains/losses, if any, arising thereby are recognized in the Profit and Loss account.

1.9 Revenue Recognition:

a) Revenue from sales is recognized when significant risk and rewards in respect of ownership of the products are transferred.

b) Revenue from domestic sales is recognized on dispatch of products from the factory of the Company.

c) Revenue from export sales is recognized on the basis of dates of Bill of Lading.

1.10 Employee Retirement Benefits:

Defined Contribution Plan: Contributions paid/ payable the defined contribution plan of provident fund for employees covered under the scheme are recognized in the profit and loss account each year.

Defined Benefit Plan: The Company is accounting gratuity and bonus on cash basis. The company has not provided for gratuity and bonus liability as at the Balance Sheet date in accordance with revised accounting standard 15 issued by ICAI Other Long Term employee Benefits: There are no long term employee benefits comprising of Leave encashment, bonus, etc. as at the Balance Sheet date.

1.11 Borrowing Costs:

Borrowing costs incurred in relation to the acquisition and construction of assets is capitalized as part of the cost of such assets up to the date when such assets are ready for intended use.

1.12 Income Tax Expenditure:

a) Current Tax Expense: The current charge for income tax is calculated in accordance with the tax regulations.

b) Deferred Tax Expense: Deferred income tax reflects the impact of timing difference between accounting income and tax income for the year/ period. Deferred tax is measured based on the tax rates and the tax laws enacted at the Balance sheet date. Deferred tax asset is recognized till the previous year. Deferred tax asset for the year is not recognized in view of the uncertainty of its utilization against the future profits of the Company.

c) The company had received a demand notice from the Income Tax department in September 2012, for payment of Income tax dues for the AY.2005-06, AY.2006-07, AY. 2007-08 & AY 2008-09 for a total aggregate sum of Rs. 319.68 Lakhs. The company had not provided for such expenses in the account since the company had contested the demand raised by the department and the company is confident of winning the appeals.

1.13 Miscellaneous Expenditure:

Miscellaneous expenditure comprises of preliminary/ public issue expenses which are amortized over a period of ten years.

2.29 Corporate Debt Restructuring (CDR)- Loan Recovery & OTS :

The Company could not execute the CDR package due to various reasons already explained in the previous year and the Banks have initiated steps for recovery of the debt including issuance of notice under SARFAESI Act as well as filing the OA with the DRT. However, the Banks have kept the option open for settling the debt under the OTS proposal. Interest on all banks outstanding have not been provided as the company is confident that the OTS proposal with support from the ARC companies will be acceptable to the banks and an early settlement with the banks will be completed.

2.30 The net worth of the Company suffered further depletion during the year due to substantial reduction in revenues of the company and the consequent losses suffered. However, considering the early settlement with the banks through the OTS and also the various measures taken by the Company to gain and accumulate orders and also taking into consideration the business potential in solar power space and future business prospects of the company, the accounts are stated ongoing concern basis.

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Mar 31, 2013

1.1 Change In accounting policy:

PRESENTATION AND DISCLOSURE OF FINANACIAL STATEMENTS for the year ended 31st March 2013, the revised schedule VI notified under the companies Act, 1956 has become applicable to the company for preparation and presentation of its financial status. The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

1.2 System of Accounting:

The accounts have been prepared and presented under the historical cost convention method on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards issued be the Institute of Chartered Accountants of India (ICAI) to the extent applicable.

1.3 Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Although, these estimates are used on the managements'' best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcome requiring a material adjustment to the carrying amounts of assets or liabilities to the carrying amounts of assets or liabilities in further periods.

1.4 Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive of duties & taxes (net of CENVAT/VAT), incidental expenses and erection / commissioning expenses. .

1.5 Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on Assets bought / sold during the year is charged at applicable rates on monthly basis in the month the Asset is put to use / sold.

1.6 Expenditure during construction period:

Expenditure (including Finance cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are shown under "Capital Work in Progress". These expenses will be apportioned to fixed assets on commencement of commercial production.

1.7 Investments:

Long term investments and investments in subsidiary companies are carried at cost. Provision for diminution in value is made whenever necessary in accordance with the Accounting Standards in force.

1.8 Valuation of Inventories:

a) Inventories are valued at the lower of weighted average cost or net realizable value. The weighted average value is calculated on the basis of net landed cost.

b) Cost for the purpose of finished goods and material in process is computed on the basis of cost of material, labour and other related overheads.

c) In all the cases necessary adjustments are made in respect of non-moving, slow moving, damaged and unserviceable goods.

d) During the year, Raw Materials to the extent of Rs.560.48 lakhs have been written off to the Profit and Loss account. This loss is on account of absolute and dead stock.

1.9 Foreign Exchange:

Foreign Exchange transactions are recorded at the exchange rates prevailing at the time of transactions or at contracted rates. Current assets and current liabilities are translated at values prevailing at the Balance Sheet date. Gains/losses, if any, arising thereby are recognized in the Profit and Loss account.

1.10 Revenue Recognition:

a) Revenue from sales is recognized when significant risk and rewards in respect of ownership of the products are transferred.

b) Revenue from domestic sales is recognized on dispatch of products from the factory of the Company.

c) Revenue from export sales is recognized on the basis of dates of Bill of Lading- Li 1 Employee Retirement Benefits:

Defined Contribution Plan: Contributions paid/ payable the defined contribution plan of provident fund for employees covered under the scheme are recognized in the profit and loss account each year.

Defined Benefit Plan: The Company is accounting gratuity and bonus on cash basis. The company has not provided for gratuity and bonus liability as at the Balance Sheet date in accordance with revised accounting standard 15 used by ICAI.

Other Long Term Employee Benefits: The Company has not provided any other Long term Employee Benefits comprising of Leave Encashment, Bonus, etc. as at the Balance Sheet date.

1.12 Borrowing Costs:

Borrowing costs incurred in relation to the acquisition and construction of assets is capitalized as part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

1.13 Income Tax Expenditure:

a) Current Tax Expense: The current charge for income tax is calculated in accordance with the tax regulations.

b) Deferred Tax Expense: Deferred income tax reflects the impact of timing difference between accounting income and tax income for the year/ period. Deferred tax is measured based on the tax rates and the tax laws enacted at the Balance sheet date. Deferred tax asset is recognized only to the extent of certainty of realization of the asset.

c) The company has received a demand notice from the Income Tax department in September 2012, for payment of Income tax dues for the AY.2005-06, AY.2006-07, AY. 2007-08 & AY 2008-09 for a total aggregate sum of Rs.319.68 Lakhs. The company has not provided for such expenses in the account as the company is contesting the demand raised by the department and the company is confident of winning the appeals.

1.14 Miscellaneous Expenditure:

Miscellaneous expenditure comprises of preliminary/ public issue expenses which are amortizedover a period of ten years.

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Mar 31, 2012

1.Corporate Information

XL Energy Limited (formerly XL Telecom & Energy Limited) is listed company having its shares listed in BSE and NSE stock exchanges. The company is engaged in manufacturing/trading/production and sale of Solar Photo voltaic Modules as its main business. In addition to this the company is engaged in the business of manufacture of equipment for Telecom Industry and manufacture of Ethanol. However at present this business conducted in this segment has become negligible. The company caters to both international and domestic market in Solar PV Business.

1.1 Change in accounting policy:

PRESENTATION AND DISCLOSURE OF FINANACIAL STATEMENTS for the year ended 31st March 2012, the revised schedule VI notified under the companies Act, 1956 has become applicable to the company for preparation and presentation of its financial status. The company has also reclassified the previous year figures in accordance with the requirement applicable in the current year.

1.2 System of Accounting:

The accounts have been prepared and presented under the historical cost convention method on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards issued be the Institute of Chartered Accountants of India (ICAI) to the extent applicable.

1.3 Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgment estimates and assumptions that effect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the end of the reporting period. Although, these estimates are used on the managements'' best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the out come requiring a material adjustment to the carrying amounts of assets or liabilities to the carrying amounts of assets or liabilities in further periods.

1.4 Tangible Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive of duties & taxes (net of CENVAT/VAT), incidental expenses and erection / commissioning expenses.

1.5 Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on Assets bought / sold during the year is charged at applicable rates on monthly basis in the month the Asset is put to use / sold.

1.6 Expenditure during construction period:

Expenditure (including Finance cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are shown under "Capital Work in Progress". These expenses will be apportioned to fixed assets on commencement of commercial production.

1.7 Investments:

Long term investments and investments in subsidiary companies are carried at cost. Provision for diminution in value is made whenever necessary in accordance with the Accounting Standards in force.

1.8 Valuation of Inventories:

a) Inventories are valued at the lower of weighted average cost or net realizable value. The weighted average value is calculated on the basis of net landed cost.

b) Cost for the purpose of finished goods and material in process is computed on the basis of cost of material, labour and other related overheads.

c) In all the cases necessary adjustments are made in respect of non-moving, slow moving, damaged and unserviceable goods.

d) During the year, Raw Materials to the extent of Rs .876.19 lacs and Finished Goods to the extent of RS .49.94 lacs have been written off to the Profit and Loss account. This loss is on account of absolute and dead stock.

1.9 Foreign Exchange:

Foreign Exchange transactions are recorded at the exchange rates prevailing at the time of transactions or at contracted rates. Current assets and current liabilities are translated at values prevailing at the Balance Sheet date. Gains/losses, if any, arising thereby are recognized in the Profit and Loss account.

1.10 Revenue Recognition:

a) Revenue from sales is recognized when significant risk and rewards in respect of ownership of the products are transferred.

b) Revenue from domestic sales is recognized on dispatch of products from the factory of the Company.

c) Revenue from export sales is recognized on the basis of dates of Bill of Lading.

1.11 Employee Retirement Benefits:

Defined Contribution Plan: Contributions paid/ payable the defined contribution plan of provident fund for employees covered under the scheme are recognized in the profit and loss account each year.

Defined Benefit Plan: The Company is accounting gratuity and bonus on cash basis. The company has not provided for gratuity and bonus liability as at the Balance Sheet date in accordance with revised accounting standard 15 used by ICAI Other Long Term employee Benefits: The company has not provided any other Long term employee Benefits comprising of Leave encashment, bonus, etc. as at the Balance Sheet date.

1.12 Borrowing Costs:

Borrowing costs incurred in relation to the acquisition and construction of assets is capitalized as part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

1.13 Income Tax Expenditure:

a) Current Tax Expense: The current charge for income tax is calculated in accordance with the tax regulations.

b) Deferred Tax Expense: Deferred income tax reflects the impact of timing difference between accounting income and tax income for the year/ period. Deferred tax is measured based on the tax rates and the tax laws enacted at the Balance sheet date. Deferred tax asset is recognized only to the extent of certainty of realization of the asset.

c) The company has received a demand notice from the Income Tax department in September 2012, for payment of Income tax dues for the AY.2005-06, AY.2006-07, AY. 2007-08 & AY 2008-09 for a total aggregate sum of Rs. 319.68 Lacs. The company has not provided for such expenses in the account as the company is contesting the demand raised by the department and the company is confident of winning the appeals.

1.14 Miscellaneous Expenditure:

Miscellaneous expenditure comprises of preliminary/ public issue expenses which are amortized over a period of ten years.

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Dec 31, 2009

1) System of Accounting:

The accounts have been prepared and presented under the historical cost convention method on the accrual basis of accounting in accordance with the accounting principles generally accepted in India and comply with the Accounting Standards issued be The Institute of Chartered Accountants of India (ICAI) to the extent applicable.

2) Fixed Assets:

Fixed Assets are stated at cost less accumulated depreciation. Cost is inclusive of duties & taxes (net of CEN VAT/VAT), incidental expenses and erection / commissioning expenses.

3) Depreciation:

Depreciation on Fixed Assets is provided on Straight Line Method at the rates specified in Schedule XIV to the Companies Act, 1956. Depreciation on Assets bought / sold during the year is charged at applicable rates on monthly basis in the month the Asset is put to use /sold.

4) Expenditure during construction period:

Expenditure (including Finance cost relating to borrowed funds for construction or acquisition of fixed assets) incurred on projects under implementation are treated as preoperative expenses pending allocation to the assets and are shown under "Capital Work in Progress". These expenses will be apportioned to fixed assets on commencement of commercial production.

5) Investments:

Long term investments and investments in subsidiary companies are carried at cost. Provision for diminution in value is made whenever necessary in accordance with the Accounting Standards in force.

6) Valuation of Inventories:

a) Inventories are valued at the lower of weighted average cost or net realizable value. The weighted average value is calculated on the basis of net landed cost.

b) Cost for the purpose of finished goods and material in process is computed on the basis of cost of material, labour and other related overheads.

c) In all the cases necessary adjustments are made in respect of non-moving, slow moving, damaged and unserviceable goods.

7) Foreign Exchange:

Foreign Exchange transactions are recorded at the exchange rates prevailing at the time of transactions or at contracted rates. Current assets and current liabilities are translated at values prevailing at the Balance Sheet date. Gains/losses, if any, arising thereby are recognized in the Profit and Loss account.

8) Revenue Recognition:

a) Revenue from sales is recognized when significant risk and rewards in respect of ownership of the products are transferred.

b) Revenue from domestic sales is recognized on dispatch of products from the factory of the Company.

c) Revenue from export sales is recognized on the basis of dates of Bill of Lading.

9) Employee Retirement Benefits:

Contributions paid/payable to the defined contribution plan of Provident Fund for employees covered under the scheme are recognized in the Profit and Loss account each year. Gratuity has been provided on cash basis.

10) Borrowing Costs:

Borrowing costs incurred in relation to the acquisition and construction of assets is capitalized as part of the cost of such assets up to the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in which they are incurred.

11) Income Tax Expenditure:

a) Current Tax Expense: The current charge for income tax is calculated in accordance with the tax regulations.

b) Deferred Tax Expense: Deferred income tax reflects the impact of timing difference between accounting income and tax income for the year/ period. Deferred tax is measured based on the tax rates and the tax laws enacted at the Balance sheet date. Deferred tax asset is recognized only to the extent of certainty of realization of the asset.

c) Fringe Benefit Tax: Fringe Benefit Tax is calculated in accordance with the tax regulations.

12) Miscellaneous Expenditure:

Miscellaneous expenditure comprises of preliminary/public issue expenses and deferred revenue expenditure which are amortized over a period of ten years.