NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

A. System of Accounting:

i. The company follows mercantile system of accounting and recognizes Income and Expenditure on accrual basis.

ii. The Financial statements have been brpared in all material aspects with Accounting Standards brscribed under the provisions of the Companies Act, 2013.

iii. Financial statements are brpared on historical cost basis and as a going concern.

B. Revenue Recognition :

i. Sale of goods is recognized at the point of despatch of goods to customers and Gross Sales are inclusive of duties and taxes.

ii. Income from Sale of Wind Power is recognized on the basis of units measured and certified by the concerned State Authorities.

iii. Dividends are recognized as income of the year in which the same are received.

C. Tangible Fixed Assets and Debrciation

i. Tangible Fixed Assets acquired by the company are reported at acquisition value, with deductions for accumulated debrciation and impairment losses, if any.

ii. The acquisition cost includes the purchase price (excluding refundable taxes) and expenses directly attributable to the asset to bring it to the site and in the working condition for intended use.

iii. Debrciation is provided in accordance with Schedule II of the Companies Act, 2013 in respect of the remaining useful life of the asset as far as the existing assets are concerned. In respect of additions, debrciation is provided on the basis of the useful life of the assets as brscribed by Schedule II of Companies Act, 2013.

iv. During the year the company had carried out technical evaluation of the useful life of the existing assets and applied the method of debrciation as brscribed by Schedule II of the Companies Act, 2013. The adjustment as a result of the re-computation is made to the opening balance of profit and loss account.

v. The residential units received by the company towards its share in the development agreement in respect of the land belonging to the company, entered into an earlier year, are treated as fixed assets and no debrciation is charged on the same.

vi. In the current year the application of Schedule II method is made for the first time and the difference arising on account of reworking the useful life of the assets is adjusted to the opening balance of reserves.

D. Investments

Non-current investments are stated at cost. Traded shares are stated at cost or market value whichever is lower.

E. Inventories

Stocks are valued at cost or realizable value whichever is lower. Cost of finished goods for this purpose is arrived at on absorption costing basis and is inclusive of excise duty.

F. Staff Benefits

Provident Fund Contributions and other staff benefits are accounted on accrual basis. The company is in the process ascertaining appropriate Group Gratuity Scheme for subscription and the brmium / contributions towards the same will be charged to revenue as and when paid. Pending the finalization of the scheme gratuity payments if any, made to the employees is charged to revenue as and when paid.

G. Deferred Taxation

Accounting treatment in respect of deferred taxation is in accordance with Accounting Standard 22: "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India.

H. Impairment of Assets :

The carrying amounts of assets are reviewed at each Balance Sheet date, if there is any indication of impairment based on internal / external factors. An impairment loss will be recognized wherever the carrying amount of an asset exceeds its estimated recoverable amount. The recoverable amount is greater of the asset's net selling price and value in use. In assessing the value in use, the estimated future cash flows are discounted to the brsent value using the weighted average cost of capital. In carrying out such exercise, due effect is given to the requirements of Schedule II of the Companies Act, 2013.

2. Contingent Liability. : Disputed Income Tax liability. Rs.32.50 lacs. The first appeal of the company before the Hon'ble Commissioner of Income Tax (Appeals) has been allowed in favor of the company. A second appeal has been brferred by the department to the Hon'ble Income Tax Appellate Tribunal, Hyderabad.

3. Previous year's figures have been regrouped wherever considered necessary