Financial liabilities

The company derecognises a financial liability when its contractual obligations are discharged or cancelled,
or expire. The company also derecognises a financial liability when its terms are modified and the cash flows
under the modified terms are substantially different. In this case, a new financial liability based on the
modified terms is recognised at fair value. The difference between the carrying amount of the financial liability
extinguished and the new financial liability with modified terms is recognised in profit or loss.

d. Offsetting

Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when,
and only when, the company currently has a legally enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

7.2 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand and short-term deposits with an original
maturity of three months or less which are readily convertible to known amounts of cash and subject to
insignificant risk of changes in value.

7.3 Cash flow statement

Cash flows are reported using the indirect method, whereby net profit/(loss) before tax is adjusted for the
effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or
payments. The cash flows from operating, investing and financing activities of the company are segregated.

7.4 Revenue recognition
Revenue from operations

Income from sale of power is recognized on the supply of units generated from the plant to the grid, as per
the terms of the PPA entered into with the customers. Cost and earnings in excess of billings are recognized as
unbilled revenue.

7.5 Property, plant and equipment
Recognition and measurement

Property, plant and equipment are measured at cost, less accumulated depreciation and accumulated
impairment losses, if any. The cost of an item of property, plant and equipment comprises its purchase price,
including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any
directly attributable cost of bringing the item to its working condition for its intended use and estimated costs
of dismantling and removing the item and restoring the site on which it is located.

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with
the expenditure will flow to the company.

If significant parts of an item of property, plant and equipment have different useful lives then they are
accounted as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in statement of
profit and loss.

Depreciation

Depreciation on tangible assets is provided on the Straight Line method over the useful lives of assets
estimated by the Management, which coincide with useful life specified in the Schedule II of the Act exceptin
case of the Plant and equipment, in whose case the life of the assets has been estimated ranging from 14 to 25
years in case of Solar power generation based on technical assessment taking into account the nature of assets,
the estimated usage of the assets, the operating condition of the assets, anticipated technical changes,
manufacturer warranties and maintenance support. Depreciation for assets purchased/ sold during the year is
proportionately charged.

Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if
appropriate.

The cost and related accumulated depreciation are derecognized from the financial statements upon sale or
disposition of the asset and the resultant gains or losses are recognized in the statement of profit and loss.
Amount paid towards the acquisition of property, plant and equipment outstanding as of each reporting date
are recognized as capital advance and the cost of property, plant and equipment not ready for intended use
before such date are disclosed under capital work-in-progress.

7.6 Earnings/(loss) per share

The basic earnings/(loss) per share is computed by dividing the net profit/(loss) attributable to equity
shareholders for the period by the weighted average number of equity shares outstanding during the year.

The Company does not have potential dilutive equity shares outstanding during the year.

7.7 Income tax

Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it
relates to an item recognized directly in equity or in other comprehensive income.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax
reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty,
if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted
by the reporting date.

Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the
recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or
simultaneously.

Deferred tax

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes.

Deferred tax liabilities are recognized for all taxable temporary differences.

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available
against which they can be used. Deferred tax assets - unrecognized or recognized, are reviewed at each
reporting date and are recognized/ reduced to the extent that it is probable/ no longer probable respectively
that the related tax benefit will be realized.

Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realized or
the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting
date.

The measurement of deferred tax reflects the tax consequences that would follow from the manner in which
the company expects, at the reporting date, to recover or settle the carrying amount of its assets and
liabilities.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis ortheir tax assets
and liabilities will be realized simultaneously.

7.8 Impairment

a. Impairment of financial instruments

The Company recognizes loss allowances for expected credit losses on financial assets measured at amortized
cost;

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit
impaired. A financial asset is 'credit- impaired' when one or more events that have a detrimental impact on the
estimated future cash flows of the financial asset have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

- significant financial difficulty of the borrower or issuer;

- The restructuring of a loan or advance by the Company on terms that the Company would not consider
otherwise;

- I0t is probable that the borrower will enter bankruptcy or other financial reorganization; or

- The disappearance of an active market for a security because of financial difficulties.

The Company measures loss allowances at an amount equal to lifetime expected credit losses, except for the
following, which are measured as 12 month expected credit losses:

- Debt securities that are determined to have low credit risk at the reporting date; and

- Other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the
expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit
losses.

Lifetime expected credit losses are the expected credit losses that result from all possible default events over
the expected life of a financial instrument.

12-month expected credit losses are the portion of expected credit losses that result from default events that
are possible within 12 months after the reporting date (or a shorter period if the expected life of the
instrument is less than 12 months).

In all cases, the maximum period considered when estimating expected credit losses is the maximum
contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating expected credit losses, the Company considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both quantitative and
qualitative information and analysis, based on the Company's historical experience and informed credit
assessment and including forward-looking information.

Measurement of expected credit losses

Expected credit losses are a probability-weighted estimate of credit losses. Credit losses are measured as the
present value of all cash shortfalls (i.e. the difference between the cash flows due to the Company in
accordance with the contract and the cash flows that the Company expects to receive).

Presentation of allowance for expected credit losses in the balance sheet.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount
of the assets.

Write-off

The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there
is no realistic prospect of recovery. This is generally the case when the Company determines thatthe trade
receivable does not have assets or sources of income that could generate sufficient cash flows to repay the
amounts subject to the write- off. However, financial assets that are written off could still be subject to
enforcement activities in order to comply with the Company's procedures for recovery of amounts due.

b. Impairment of non- financial assets

The company's non-financial assets and deferred tax assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, then the asset's recoverable
amount is estimated.

For impairment testing, assets that do not generate independent cash inflows are combined together into cash¬
generating units (CGUs). Each CGU represents the smallest company of assets that generates cash inflows that

are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less
costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value of money and the risks
specific to the CGU (or the asset).

The Company's corporate assets (e.g., central office building for providing support to various CGUs) do not
generate independent cash inflows. To determine impairment of a corporate asset, recoverable amount is
determined for the CGUs to which the corporate asset belongs.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable
amount. Impairment losses are recognized in the statement of profit and loss.

7.9 Provisions and contingent liabilities
General

Provisions are recognized when the company has a present obligation (legal or constructive) as a result of a
past event, it is probable than an outflow of resources embodying economic benefits will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects
some or all of the provisions to be reimbursed, the expenses relating to the provisions is presented in the
statement of profit and loss net of any reimbursement.

If the effect of the time value of the money is material, provisions are discounted using a current pre-tax rate
that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the
provisions due to the passage of time is recognized as a finance cost.

Contingent liabilities

A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that
may probably not require an outflow of resources. When there is a possible or present obligation where the
likelihood of outflow of resources is remote, no provision or disclosure is made.

7.10 Events after reporting date

Where events occurring after the balance sheet date provide evidence of conditions that existed at the end of
the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events
after the balance sheet date of material size or nature are only disclosed.