Notes to the Financial Statements

NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The financial statements of the company have been brpared under the historical cost convention. Items of income and expenditure are recognized on accrual basis unless otherwise stated.

(b) Fixed Assets are stated at cost less debrciation (Debrciating asset over its useful life brscribed as per schedule II to the Companies Act 2013 on a pro-rata basis).

(c) i) Raw materials, Stores & Spares and Trading goods are valued at cost determined on the weighted average method or

market price whichever is lower.

ii) Work-in-process is valued at cost inclusive of appropriate production overheads.

iii) Finished goods are valued at Cost or Market Price whichever is lower.

(d) Transactions in Foreign currencies to the extent not covered by forward contracts are accounted for at exchange rates brvailing on the dates on which the transactions took place. Losses and gains arising from subsequent fluctuations are recognized as and when they are crystallized. Foreign Currency Loans, Creditors and Debtors are stated at exchange rates brvailing on the date of the Balance Sheet.

(e) The diminution in carrying amount of investment which are considered temporary are not provided for in the books.

(f) Sales are net of returns. The consumption of Raw Materials and Stores & Spares are net of sale thereof, if any.

(g) Purchases are net of rebates and discounts including those in respect of purchases made in earlier years.

(h) The foreign exchange gain / loss on Sales, Purchases, Debtors, Creditors, Foreign Currency Term Loans, External Commercial Borrowings and Foreign Currency Convertible Bonds have been shown as exceptional item in the Statement of Profit and Loss.

(i) In respect of retirement benefits in the form of Provident Fund, the contribution payable by the Company for the year is charged to revenue.

(j) Liability for future payment of Gratuity to employees is covered by Group Gratuity Scheme of Life Insurance Corporation of India. The amount paid/payable to them is charged to revenue as and when demand is raised.

(k) Payment to employees in respect of encashment of leave is accounted for as and when claimed by the employee concerned and paid by the Company.

(l) No provision is made in books of account for future liability, being unascertainable, that may occur on account of warranty on company's products [Please refer Note No. 31(b) also]

(m) Fixed Assets are reviewed at each Balance Sheet date for impairment. In case, events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, wherever the carrying amount of assets either belonging to cash generating unit or otherwise exceeds recoverable amount. The recoverable amount is the greater of net selling price of assets or its value in use. In assessing the value in use, the estimated future cash flow from the use of assets is discounted to their brsent value at appropriate rate. An impairment loss is reversed if there has been change in the recoverable amount and such loss no longer exists or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets, which in case of cash generating unit, are allocated to assets on a pro-rata basis.

(n) Borrowing cost incurred in relation to the acquisition or construction of assets are capitalized / allocated as part of the cost of such assets till the date of completion of such assets. Other borrowing costs are charged as an expense in the year in which these are incurred.

2 The Working Capital borrowing accounts of the Company continue to remain NPA as on the date of Balance sheet under review. Out of the five Working Capital lenders, Allahabad Bank, being in the capacity of the lead bank, has taken symbolic possession of the Salt Lake land which was given as collateral security against the Working Capital loans. Further Dena Bank has assigned its credit facilities in favor of M/s Asset Reconstruction Company (India) Ltd. (ARCIL) and as such all rights & obligations in respect of the credit facilities sanctioned & availed by the company from Dena Bank fund have been transferred in the name of ARCIL.

3 The Company has not provided for interest payable on unsecured Loans obtained from various Companies due to the stipulation of the Working Capital Lenders in this regard, under the scheme of OTS.

4 The Company has recognized diminution in the value of certain fixed assets pertaining to the erstwhile factory situated at Salt Lake and also installed at falta plant and as such discarded the obsolete / unusable fixed assets having the cost of Rs..5759.10 Lacs and accumulated Debrciation of Rs. 1988.07 Lacs.

5 The Company is in the process of making third party adjustments / netting off on account of certain imports and exports from a same party. A part of netting off is complete to the extent of $ 9661825.97 of exports and $ 9666691.90 of imports and therefore debtors and creditors amounting $ 9666691.90 has been netted off in balance sheet as on 31.03.15. As such, there are balance amounts on account of same Sundry Debtors & Sundry Creditors which shall be adjusted against each other subject to the receipt of pending approval by the company in this regard from the concerned authorities.

6 Capital contracts not provided for Rs. 1593.60 Lacs stands unexecuted and cancelled by the company (Previous period Rs. 1593.60 Lacs). Total Advances paid there against Rs. 457.10 Lacs including Rs. 346.15 Lacs in foreign currency (Previous period Rs. 553.03 Lacs including Rs. 345.75 Lacs in Foreign Currency) are still lying wih the creditors and company is in the process of recovery of these amounts.

7 Contingent Liabilities -

(a) The Company's product, namely, Solar Photovoltaic Modules carry a warranty of 25 years as per International Standards. A fair estimate of future liability that may arise on this account is not ascertainable. The same shall be accounted for as and when any claim occurs.

(b) Demand against the legal expenses and interest by certain Sundry Creditors, amount of which is not ascertainable.

(c) Demand of Rs. 8.96 Lacs against Interest and other payments on TDS by Income Tax Department.

8 Based on and to the extent of information obtained from the suppliers regarding their status as Micro, Small or Medium Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 there are no amounts overdue to them as at the end of the year under reporting.

9 (a) As the Company has incurred losses in the current year, both as per statement of Profit & Loss and Income Tax computation, the measurement of deferred tax liability has not been considered.

(b) Since the Company has incurred losses for the last 3 years and there is no reasonable certainty that sufficient future taxable income will be available, the measurement of deferred tax asset has not been considered in these accounts.

10  Amounts paid / payable to Statutory Auditors -

(a) Audit fees Rs. 2.85 Lacs (Previous period Rs. 2.65 Lacs), plus the applicable service tax.

(b) In other capacity in respect of certification work Rs. 0.50 Lacs (Previous period Rs. 0.50 Lacs) plus the applicable service tax.

11 Balances of Debtors, Creditors, Security Deposits, Certain Bank Accounts and Loans and Advances are subject to confirmation and reconciliation with respective parties

12 Since the Company is dealing in only one product i.e., Solar Photo-Voltaic Cells and Modules, segmental reporting as brscribed under Accounting Standard 17 is not applicable.

13 Since the accounting year of the Company is from 01st April, 2014 to 31st March, 2015 these accounts are for a period of twelve months and the figures thereof are comparable with those of brvious period which was also for twelve months i.e., 01st April, 2013 to 31st March, 2014.

14  Previous period figures have been regrouped / rearranged wherever necessary to make them comparable with the current year figures.

In terms of our report of even date

For Agarwal Sanganeria & Co.

Chartered Accountants

Firm Registration No. 317224E

(P. K. Agarwal)

Partner

Membership No. 53496

For and on behalf of the Board of Directors

(Swati Agarwal) Company Secretary

(S. L. Agarwal) Managing Director

(00189898)

(D. Sethia) Director

(06775533)

Place : Kolkata

Date : 29th May, 2015