Notes on Financial Statements for the year ended 31st March, 2015

Note 1  Significant Accounting Policies

a) Accounting Concept:

The Financial Statements are brpared under the historical cost convention. Accounting Policies not referred to otherwise are consistent with Generally Accepted Accounting Principles and comply with the applicable Accounting Standards, notified under relevant provisions of the Companies Act, 2013.

b) Recognition of Income & Expenditure:

The Company follows Mercantile System of Accounting and recognises Income and Expenditure on accrual basis. However, since it is not possible to ascertain with reasonable accuracy, the quantum to be provided in respect of Warranty and Liquidated Damages, Insurance Claims and Export benefits, being indeterminate / insignificant , the same are accounted for on cash basis.

c) Sales :

The Company recognises Revenue for Supply Contracts on the basis of Bills raised against Supplies and for Erection & Construction Contracts on reaching reasonable stage of completion of respective Contracts based on physical proportions of the Contracts. However, certain escalation and other claims, which are not ascertainable/ acknowledged by the customers are not taken into account.

Revenue from Sale of Energy (Power) is recognised on the basis of electrical units generated, net of wheeling and transmission loss as applicable, as stated in the Power Purchase Agreements entered into between the Company and the respective State Utilities.

d) Borrowing Costs:

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

e) Earning Per Share:

Basic earning per share is calculated by dividing the net profit/(loss) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

f) Fixed Assets:

Tangible and Intangible Fixed Assets are stated at their original cost, less accumulated debrciation. Cost includes all expenditure necessary to bring the asset to its working condition for its intended use.

Capital work-in-progress comprises of cost of fixed assets that are not yet ready for their intended use as at the Balance Sheet date.

(i) Debrciation ( except as stated in Note (ii) below ) is calculated on the basis of useful life brscribed in Schedule II to the Companies Act, 2013 and is provided for on Straight Line Method on all assets except Office Equipments, Furniture & Fixtures which is provided for on Written Down Value Method.

(ii) Debrciation on assets of overseas projects is provided at the rates as per the requirement of laws of respective foreign countries.

(iii) Lease-hold land is ammortised over the period of lease and the amortisation amount included under Debrciation.

(iv) Debrciation on Wind Mills are calculated on the basis of useful life of 20 years as per Power Purchase Agreements with the respective government Authorities as against 22 years in Schedule II to the Companies Act, 2013.

g) Impairment of Assets:

Impairment loss is recognized, where applicable, when the carrying value of the fixed assets of a cash generating unit exceeds its market value or value in use, whichever is higher.

h) Investments:

Long-term investments are carried at cost less provision for diminution other than temporary, in value of such investments determined individually. Current investments are carried at cost or fair market value, whichever is lower, determined individually.

i) Inventories:

Contract work-in-progress is stated at cost or market value whichever is lower. However, materials purchased are charged to Statement of Profit and Loss as and when purchased.

j) Foreign Currency Transactions:

Foreign currency transactions are accounted at the exchange rates brvailing on the date of the transactions.

Foreign currency monetary items remaining unsettled at the reporting date are translated at the rates brvailing on the reporting date. Exchange difference arising on translation of unsettled foreign currency monetary items, which were initially recorded at different rates, are recognized in the Statement of Profit and Loss, except in respect of long term foreign currency monetary items relating to borrowings for acquisition of fixed assets, for which the Company has availed the option to adjust such difference to the cost of the debrciable asset and debrciating the same over the balance life of asset.

In case of transactions covered by forward exchange contracts, which are not intended for trading or speculation purpose, brmium or discount are amortised as expense or income over the life of the contract.

Any profit or loss arising on settlement or cancellation of foreign currency forward contracts or options are recognised in the Statement of Profit and Loss for the year in which settlement or cancellation takes place.

Translation of overseas jobs/ projects are done as under -

A) Assets and liabilities at the rates brvailing at the reporting date; and

B) Income and expenses at the exchange rate brvailing for the month of transaction.

 k) Employee Benefits:

Contributions to defined contribution scheme in the form of Provident and Other Funds are charged to the Statement of Profit and Loss. In respect of certain employees, Provident Fund contributions are made to Trust administered by the Trustees. The interest rate payable to the members of the Trust shall not be lower than the statutory rate of interest declared by the Central Government under the Employees Provident Fund and Miscellaneous Provisions Act,1952 and short fall, if any, shall be made good by the Company. The remaining contributions are made to a Government administered Provident Fund towards which the Company has no further obligations beyond its monthly contribution.

The Company has defined benefit plan for post-employment benefit in the form of gratuity for all employees, which are controlled by a Trust, administered by the Trustees. Liability for above defined benefit plan is provided on the basis of actuarial valuation as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit method.

In respect of compensated absence benefits to employees, liability is provided for on the basis of actuarial valuation as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit method.

l) Taxation:

Current tax is determined on the basis of the amount payable for the year under Income Tax Act. Deferred tax is calculated at current/ substantively enacted Income tax rate and is recognised on timing differences between taxable income and accounting income. Deferred tax assets, subject to consideration of prudence, are recognised and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The Company's business units, engaged in generation of electricity from Wind Mills at various locations, are eligible for 100% tax holiday for a period of 10 consecutive years out of 15 years, from the year in which the generation of power is started. Timing difference between the tax basis and the carrying values of assets and liabilities of the Units, which originate during the year but reverse during the tax holiday period are not recognised in the year in accordance with the requirements of Accounting Standard - 22: Accounting for Taxes of Income.

m) Segment Reporting

The Accounting Policies adopted for segment reporting are in line with the Accounting Policies of the Company. Segment revenue and expenses are directly attributable to the segment. Revenue and expenses like dividend, interest, profit/loss on sale of assets and investments etc., which relate to the enterprise as a whole and are not allocable to segment on a reasonable basis, have not been included therein.

All segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and consist principally of fixed assets, inventories, sundry debtors, loans and advances and operating cash and bank balances. Segment assets and liabilities do not include investments, miscellaneous expenditure not written off, share capital, reserves and surplus, unpaid dividend, deferred tax liability, provision for tax and proposed dividend.

n) Provisions, Contingent Liabilities and Contingent Assets:

A provision is recognised when the company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their brsent value and are determined based on best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.

Contingent liabilities are disclosed by way of notes to the Financial Statements. Contingent assets are not recognised.

Note2  The brvious year’s figures have been regrouped ,rearranged and re-classified to conform to the current year’s classification.

For S . S. Kothari & Co.

Chartered Accountants

Firm’s Registration No. 302034E

R.N. Bardhan

Partner

Membership No. 017270

N. Brahma Company Secretary Membership No. A-11652

S. N. Roy Director DIN: 00408742

P. P. Gupta Managing Director

DIN: 00055954

Centre Point21, Old Court House Street Kolkata - 700 001

The 22nd day of May, 2015