WAAREE ENERGIES LIMITED |
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Accompanying notes to the Financial Statements for the year ended March 31, 2017 |
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| Note 1 : Significant Accounting Policies: |
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| A | Corporate Information: |
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| Waaree Energies Limited is a Limited Company registered in India, under Companies Act 1956, and was incorporated in December 1990.The Company is mainly engaged in business of manufacture of Solar PV Modules & setting up of Projects in solar space. The principal place of business is at Mumbai, India & the plant is located at Surat, India. |
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| B | Basis of Accounting: |
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| The Financial Statements have been brpared under the historical cost convention, on an accrual basis of accounting and in accordance with the Generally Accepted Accounting Principles in India and comply with the Accounting Standards Specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. |
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| C | Use of Estimates: |
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| The brparation of Financial Statements in conformity with Generally Accepted Accounting Principles requires estimates and assumptions to be made that affect the reported amounts of assets & liabilities and disclosure of contingent liabilities on the Financial Statements and the reported amounts of revenues & expenses during the reporting period.
Difference between actual results and estimates are recognized in the periods in which the results are known/ materialize. |
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| D | Revenue Recognition: |
| i) | Revenue is recognised when it is earned and no significant uncertainty exists as to its realisation or collection |
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| ii) | Contract Revenue in respect of projects for Solar power plants , involving designing, engineering, supply, erection (or supervision thereof), commissioning, guaranteeing performance thereof etc., execution of which is sbrad over more than one accounting periods is recognized on the basis of percentage of completion method, measured by reference to the percentage of cost incurred upto the reporting date to estimated total cost for each contract.
Determination of revenues under the percentage of completion method necessarily involves making estimates by the management (some of which are of a technical nature) of the expected costs to completion, the expected revenues from each contract (adjusted for probable liquidation damages, if any) and the foreseeable losses to completion. When it is probable that the total contract costs will exceed the total contract revenue, the expected loss is recognised as an expense immediately.
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| iii) | Revenue in respect of operation and maintenance contracts is recognised on the basis of time proportion |
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| iv) | Revenue from domestic sales of goods is recognized when the significant risks and the rewards of ownership of the goods are passed on to the buyer (i.e. on dispatch of goods) except revenue from contracts in relation to government tenders which is recognised once the goods are supplied to the subcontractor at the site for installation. |
| v) | Interest is recognised on a time proportion basis taking in to account the amount outstanding and the rate applicable. |
| vi) | Dividend income is recognised when right to receive the payment is established. |
| vii) | Claims for insurance are accounted on receipts/ on acceptance of claim by insurer. |
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| E | Fixed Assets: |
| i) | Fixed Assets are stated at actual costs less accumulated debrciation. Cost comprises the purchase price and any attributable costs of bringing the asset to its working condition for its intended use. |
| ii) | Leasehold improvement includes all expenditure incurred on the leasehold brmises that have future economic benefits. |
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| F | Debrciation & Amortisation: |
| i) | Debrciation on all Fixed Assets is provided on Straight Line Method at the rates and in the manner brscribed in the Schedule II of the Companies Act, 2013.Debrciations on additions & deletions made during the year is provided on pro-rata basis from & upto the date of acquisitions and deletions of assets respectively. |
| ii) | Leasehold improvement are written off over the non cancellable period of lease . |
| iii) | Intangible assets are amortised over a period of four years. |
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| G | Impairment of Assets: |
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| An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. |
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| H | Investments: |
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| Investments that are intended to be held for more than a year, from the date of acquisition, are classified as long term investment and are carried at cost less any provision for diminution in value other than temporary. Investments other than long term investments being current investments are valued at cost or fair value whichever is lower. |
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| I | Inventories: |
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| Inventories are valued as follows: |
| i) | Finished Goods are valued at lower of cost or net realisable value. |
| ii) | Raw Materials are valued at lower of cost or net realisable value. |
| iii) | Work-in-Process are valued at lower of cost or net realisable value. |
| iv) | Stores & Spares and Packing Materials are valued at cost . |
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| J | Employee Benefits : |
| i) | Companys contribution to Provident Fund and other Funds for the year is accounted on accrual basis and charged to the Profit & Loss Account for the year. |
| ii) | Retirement benefits in the form of Gratuity are considered as defined benefit obligations and are provided on the basis of the actuarial valuation, using the projected unit credit method as at the date of the Balance Sheet. |
| iii) | Liability for Leave Encashment Benefits has been provided on the basis of the actuarial valuation, using the projected unit method, as at the date of the Balance Sheet. |
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| K | Provisions and Contingent Liabilities: |
| i) | Provisions are recognized in terms of Accounting Standard 29- Provisions, Contingent Liabilities and Contingent Assets , when there is a brsent legal or statutory obligation as a result of past events where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made. |
| ii) | Contingent Liabilities are recognized only when there is a possible obligation arising from past events due to occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or where reliable estimate of the obligation cannot be made. Obligations are assessed on an ongoing basis and only those having a largely probable outflow of resources are provided for. |
| iii) | Contingent Liabilities are disclosed by way of Notes |
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| L | Foreign Exchange Fluctuations : |
| i) | The transactions in foreign currencies are stated at the rate of exchange brvailing on the date of transactions. |
| ii) | The difference on account of fluctuation in the rate of exchange brvailing on the date of transaction and the date of realization is charged to the Statement of Profit and Loss Account. |
| iii) | Differences on translations of Monetary Assets and Monetary Liabilities remaining unsettled at the year-end are recognized in the Statement of Profit and Loss . |
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| M | Borrowing Costs |
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| Borrowing costs are recognised as an expense in the period in which they are incurred except the borrowing costs attributable to the acquisitions / constructions of a qualifying assets which are capitalised as a part of the cost of the fixed assets, up to the date, the assets are ready for its intended use. |
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| O | Accounting for Taxes of Income:- |
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| Current Taxes |
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| Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is made annually based on the tax liability after taking credit for tax allowances and exemptions |
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| P | Deferred Taxes |
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| Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the balance sheet date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future. Deferred Tax Assets are reviewed at each Balance Sheet date. |
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| Q | Operating Cycle |
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| Based on nature of activities of the Company & normal time between acquisition of assets and their realisation in cash & cash equivalents, the Company has determined its operating cycle as 12 months for the purposes of classification of its assets and liabilities as current and non-current |