2.8 Provisions, contingent liabilities and contingent assets
a) Provisions are recognized only when there is a present obligation, as a result of past events and when a reliable estimate of the
amount of obligation can be made at the reporting date and it is probable that an outflow of economic benefits will be required
to settle the obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
If the obligation is expected to be settled more than 12 months after the end of reporting date or has no definite settlement date,
the provision is recorded as non-current liabilities after giving effect for time value of money, if material.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
b) Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control
of the Company or present obligations arising from past events where it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
c) Contingent assets are neither recognized nor disclosed except when realisation of income is virtually certain, related asset
is disclosed.
d) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
2.9 Employee benefits
a) Short-term employee benefits
Short-term employee benefits in respect of salaries and wages, including non-monetary benefits are recognised as an expense
at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
b) Defined contribution plans
Company’s Contributions to Provident fund and superannuation are charged to the Statement of Profit and Loss in the year
when the contributions to the respective funds are due.
c) Defined benefit plans
The Company operates a defined benefit gratuity plan which is unfunded. The liability or asset recognised in the Balance sheet
in respect of gratuity is the present value of the defined benefit obligation as at the balance sheet date less the fair value of plan
assets, if any. The defined benefit obligation is calculated by external actuaries using the projected unit credit method.
The current service cost and interest on the net defined benefit liability / (asset) is recognized in the statement of profit and loss.
Past service cost are immediately recognized in the statement of profit and loss. Actuarial gains and losses net of deferred taxes
arising from experience adjustment and changes in actuarial assumptions are recognized in other comprehensive income in the
period in which they arise.
2.10 Financial instruments, Financial assets, Financial liabilities and Equity instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
instrument. The Company determines the classification of its financial assets and financial liabilities at initial recognition based on its
nature and characteristics.
Initial Measurement of Financial Instruments:
Financial assets (unless it is a trade receivable without a significant financing component) and financial liabilities are initially measured
at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other
than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the
financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of
financial assets or financial liabilities at fair value through profit or loss are recognised immediately in the statement of profit and loss.
Trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent Mesurement:
i) Financial Assets
Financial Assets carried at Amortised Cost (AC):
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to
collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount outstanding.
Financial Assets at Fair Value through Other Comprehensive Income (FVTOCI):
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to
cash flows that are solely payments of principal and interest on the principal amount outstanding.
Investment in equity instruments that are not held for trading are measured at FVTOCI, where an irrevocable election has
been made by management on an instrument-by-instrument basis. These investments are initially measured at fair value
plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value
recognised in other comprehensive income and accumulated in the reserves. The cumulative gain or loss is not reclassified to
the statement of profit and loss on disposal of the investments. Dividends on such investments are recognised in the statement
of profit and loss unless the dividend clearly represents a recovery of part of the cost of the investment.
Debt investments measured at FVTOCI are subsequently measured at fair value. Interest income under effective interest
method, foreign exchange gains and losses and impairment are recognised in the statement of profit and loss. Other net gains
and losses are recognised in Other Comprehensive Income (OCI). On de-recognition, gains and losses accumulated in OCI are
reclassified to the statement of profit and loss.
Note 2 Financial Assets at Fair Value through Profit or Loss (FVTPL):
A financial asset which is not classified in any of the above categories are measured at FVTPL. A financial asset that meets the amortised
cost criteria or debt instruments that meet the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation
eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or
recognising the gains and losses on them on different bases. The Company has not designated any debt instrument as at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on re-measurement
recognised in the statement of profit and loss.
Impairment of Financial Assets:
Loss allowance for expected credit losses is recognised for financial assets measured at amortised cost and FVTOCI at each reporting date
based on evidence or information that is available without undue cost or effort.
The Company measures the loss allowance for a financial asset at an amount equal to the lifetime expected credit losses if the credit risk on
that financial instrument has increased significantly since initial recognition. If the credit risk on a financial asset has not increased significantly
since initial recognition, the Company measures the loss allowance for that financial asset at an amount equal to 12-month expected
credit losses.
In case of debt instruments measured at FVTOCI, the loss allowance shall be recognised in other comprehensive income with a corresponding
effect to the profit or loss and not reduced from the carrying amount of the financial asset in the balance sheet. In case of such instrument,
amount recognized in the statement of profit and loss are the same as the amount would have been recognized in case the debt instrument
is measured at amortised cost.
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope
of Ind AS 115, the Company measures the loss allowance using 'simplified approach' which is at an amount equal to lifetime expected credit
losses taking into account historical credit loss experience and adjusted for forward-looking information.
Derecognition of Financial Assets:
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the
financial asset and substantially all the risks and rewards of ownership of the asset to another party
On derecognition of a financial asset accounted under Ind AS 109 in its entirety:
a) for financial assets measured at amortised cost, the gain or loss is recognized in the statement of profit and loss.
b) for financial assets measured at fair value through other comprehensive income, the cumulative fair value adjustments previously
taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment in which case
the cumulative fair value adjustments previously taken to reserves is reclassified within equity
ii) Financial Liabilities and Equity Instruments:
Classification as debt or equity:
Financial liabilities and equity instruments issued are classified according to the substance of the contractual arrangements entered
into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An Equity Instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
Repurchase of the Company's own equity instruments is recognised and deducted directly in equity. No gain or loss is recognised in
the statement of profit and loss on the purchase, sale, issue or cancellation of the Company's own equity instruments. Incremental
costs directly attributable to the issuance of new equity shares and buy-back of equity shares are shown as a deduction from the
Equity net of any tax effects.
Financial Liabilities
Financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost using
the effective interest rate method.
For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due
to the short maturity of these instruments.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a
new liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable
is recognised in the statement of profit and loss.
Off-setting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the Balance Sheet when there is a legally enforceable right to
offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously
backed by past practice.
Fair value measurement:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
a) In the principal market for the asset or liability, or
b) In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming that market participants act in their economic best interest.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised into Level 1, 2, or 3
based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair
value measurement in its entirety, which are as follows:
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
Level 2 - Other than quoted prices included within Level 1, that are observable for the asset or liability either directly or indirectly; and
Level 3 - Unobservable inputs for the asset or liability.
Expected Credit Loss
Expected credit loss (ECL) is the probability-weighted estimate of credit losses (i.e., the present value of all cash shortfalls) over the
expected life of the financial instrument. A cash shortfall is the difference between scheduled or contractual cash flows and actual
expected cash flows. Consequently, ECL subsumes both the amount and timing of payments - a credit loss would arise even when a
receivable was realised in full but later than when contractually due.
2.11 Income Taxes
Income tax expense comprises current tax and deferred tax. It is recognised in the profit or loss except to the extent that it relates to
items directly recognised in Equity or Other comprehensive income (OCI) in which case, income tax expenses are also recognised
directly in Equity or Other comprehensive income respectively.
Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period
using tax rates and tax laws enacted or substantively enacted at the balance sheet date, together with any adjustment to tax payable in
respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid
or received.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognised
amounts and where it intends either to settle on a net basis or to realise the assets and settle the liabilities simultaneously
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities and the amounts used for
taxation purposes (tax base), at the tax rates and tax laws enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and any unused tax
losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the
carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current
tax liabilities, and the current taxes relate to the same taxable entity and the same taxation authority.
2.13 Earnings per Share
a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after
deducting attributable taxes) by the weighted-average number of equity shares outstanding during the period.
b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders
and the weighted-average number of shares outstanding during the period are adjusted for the effects of all dilutive potential
equity shares.
The number of equity shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any
share split and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.
2.14 Leases
a) Where the Company is the lessee
The Company's lease asset classes primarily consist of land. The Company assesses whether a contract contains a lease,
at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (a) the contract involves the use of an identified asset, (b) the Company has
substantially all of the economic benefits from use of the asset through the period of the lease and (c) the Company has the right
to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of use asset (“ROU”) and a corresponding lease
liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases)
and low value leases. For these short- term and low value leases, the Company recognizes the lease payments as an operating
expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives.
They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease
term and useful life of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes
in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the
recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments
are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates.
Lease liabilities are re-measured with a corresponding adjustment to the related right of use asset if the Company changes its
assessment of whether it will exercise an extension or a termination option.
Leasehold land classified as Right-of-use assets is depreciated from the commencement date on a straight-line basis over the
lease term.
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments have been classified
as financing cash flows.
b) Where the Company is the lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer
substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are
classified as operating leases.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The
sublease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
2.15 Borrowing Cost
Borrowing costs, general or specific, that are directly attributable to the acquisition or construction of a qualifying asset are capitalised
as part of the cost of such asset till such time that is required to complete and prepare the asset to get ready for its intended use. A
qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use. Borrowing costs consist of
interest and other costs that the Company incurs in connection with the borrowing of funds. Borrowing costs also include exchange
differences to the extent regarded as an adjustment to the borrowing costs.
All other borrowing costs are charged to the statement of profit and loss in the period in which they are incurred.
2.16 Government grants
Government grants are recognised when there is reasonable assurance that the grant will be received and the Company will comply
with all the conditions attached to them.
Government grants related to property, plant and equipment, including non-monetary grants, are presented in the Balance sheet by
deducting the grant arriving at the asset’s carrying amount.
Government grants of revenue in nature are recognised on a systematic basis in the Statement of Profit and Loss over the period
necessary to match them with the related costs and are adjusted with the related expenditure. If not related to a specific expenditure, it
is considered income and included under “Other operating revenue” or “Other income”.
2.17 Operating Segment
The Company is engaged in production of Solar photo-Voltaic Cells and Modules. Based on its internal organisation and management
structure, the Company operates in only one business segment i.e. manufacturing of Solar photo-Voltaic Cells and Modules and in only
one geographic segment i.e. India. Accordingly there are no separate reportable segments.
2.18 Foreign Currency Transactions
The functional and presentation currency of the Company is Indian Rupee.
Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ losses arising on
settlement as also on translation of monetary items are recognised in the Statement of Profit and Loss of the period in which they arise.
Monetary assets and liabilities denominated in foreign currency as at the balance sheet date are translated at the closing rate. The
resultant exchange rate differences are recognised in the statement of profit and loss. Non-monetary assets and liabilities are carried
at the rates prevailing on the date of transaction.
2.19 Cash and cash equivalents
Cash and cash equivalents in the Balance sheet comprise cash on hand, cheques on hand, balance with banks, and short-term highly
liquid investments with an original maturity of three months or less and carry an insignificant risk of changes in value.
2.20 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non¬
cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated
with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.
2.21 Exceptional items
Exceptional items include income or expenses that are part of ordinary activities. However, they are of such significance and nature
that separate disclosure enables the user of financial statements to understand the impact more clearly. These items are identified by
their size or nature to facilitate comparison with prior periods and assess underlying trends in the Company’s financial performance.
Note 3 Use of critical estimates, judgements and assumptions
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial
statements and the results of operations during the reporting period end. Although these estimates are based upon management’s best
knowledge of current events and actions, actual results could differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the
period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision
affects both current and future periods.
The application of accounting policies that require critical judgements and accounting estimates involving complex and subjective
judgements and the use of assumptions in financial statements have been disclosed herein below.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting
period that may have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year.
(i) Useful lives of property, plant and equipment:
The Company reviews the useful life of property, plant and equipment at the end of each reporting period. This reassessment may
result in change in depreciation expense in future periods.
(ii) Fair value measurement
When the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted
prices in active markets, their fair value is measured using valuation techniques. The inputs to these models are taken from observable
markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include
considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the
reported fair value of financial instruments.
(iii) Provisions and contingent liabilities
The Company has ongoing litigations with various regulatory authorities and third parties. Where an outflow of funds is believed to
be probable and a reliable estimate of the outcome of the dispute can be made based on management’s assessment of specific
circumstances of each dispute and relevant external advice, management provides for its best estimate of the liability Such accruals
are by nature complex and can take number of years to resolve and can involve estimation uncertainty. Information about such
litigations is provided in notes to the financial statements.
(iv) Valuation of inventories
The Company considers various factors like shelf life, ageing of inventory product discontinuation, price changes and any other factor
which impacts the Company’s business in determining the allowance for obsolete, non-saleable and slow moving inventories. The
Company considers the above factors and adjusts the inventory provision on a periodic basis to reflect its actual experience.
(v) Employee benefits
The accounting of employee benefit plans in the nature of defined benefit requires the Company to use assumptions. These
assumptions include rate of increase in compensation levels, discount rates, expected rate of return on assets and attrition rates
(vi) Provision for income tax and deferred tax assets
The Company exercises significant judgements in determining provision for income taxes, uncertain tax positions and to reassess the
carrying amount of deferred tax assets at the end of the each reporting period.
Deferred tax assets are recognised for unused losses (carry forward of prior years’ losses) to the extent that taxable profit would
probably be available against which the losses and tax credit could be utilised. Significant judgement is required to determine the
amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits together with
future tax planning strategies. The Company reviews the carrying amount of deferred tax assets and liabilities at each balance sheet
date with consequential change being given effect to in the year of determination.
Note 4 Recent Pronouncements
(i) New and revised standards adopted by the Company
During the year ended 31st March 2025, the Company considered the amendments notified by the Ministry of Corporate Affairs (MCA)
through the 1st Amendment dated 12th August 2024, the 2nd Amendment dated 9th September 2024, and the 3rd Amendment dated 28th
September 2024 to the Companies (Indian Accounting Standards) Rules, 2015.
These amendments primarily relate to the introduction of Ind AS 117 - Insurance Contracts and consequential changes to standards
including Ind AS 101,103, 104, 105, 107, 109, 115, and 116, which address accounting and disclosure requirements for insurance contracts,
financial guarantee contracts, and sale and leaseback arrangements, among others.
The adoption of these amendments did not have impact on the profit or loss and earnings per share of the Company for the year.
(ii) Standards issued but not yet effective
The Ministry of Corporate Affairs (MCA), vide notification dated 7th May 2025, has amended Indian Accounting Standard (Ind AS) 21
- The Effects of Changes in Foreign Exchange Rates and Ind AS 101 - First time Adoption of Indian Accounting Standards. These
amendments are applicable for annual reporting periods beginning on or after 1st April 2025.
The key amendment relates to providing guidance for assessing lack of exchangeability between currencies and estimating the spot
exchange rate when a currency is not exchangeable. Additional disclosure requirements have also been introduced in such scenarios,
including the nature and financial effect of the currency in exchangeability, the estimation methodology used, and risks arising therefrom.
The Company is currently evaluating the impact of these amendments and expects that their application will not have a material effect
on the financial statements.
Note No. : 14 Other equity (Contd)
2 Securities Premium is used to record the premium on issue of shares. This reserve is being utilised in accordance with the provisions of
the Act.
3 Retained Earnings/(deficit) represents the undistributed profit /accumulated earnings/(loss) of the Company. This includes re¬
measurement of the defined benefit plan resulting from experience adjustments and changes in actuarial assumptions, recognised in
other comprehensive income.
4 During the year, the Company issued 12,10,000 convertible warrants at Rs.530/- per warrant to it’s promoter company, M/s Websol
Green Projects Private Limited in consideration of extinguishment of unsecured loan not exceeding Rs. 600 lakh and balance in cash,
in accordance with the provisions of the Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 and
applicable provisions of the Companies Act, 2013 and rules made thereunder. These warrants are convertible in the ratio of 1:1 equity
share of face value Rs. 10/- each at a price of Rs. 530/- each (including premium of Rs. 520/- each) and the conversion can be exercised
at any time during the period of 18 months from the date of allotment of warrants in one or more tranches.
An amount of Rs. 1,603.25 lakh (Previous year Nil) which is equivalent to 25% of the Warrants Issue Price represent subscription amount
and balance 75% shall be payable upon conversion into equity shares.
5 Remeasurement of defined benefit plans comprises actuarial gains and losses which are recognised in other comprehensive income
and then immediately transferred to retained earnings.
i) Nature of security:
Term loan from IREDA is primarily secured by way of hypothecation of movable assets pertaining to the projects, both existing and
future, subject to prior charge of working capital lenders on specified current assets along with personal guarantee of Mr. Sohan Lal
Agarwal, the Managing Director and Corporate guarantee of M/s S.L. Industries Pvt. Ltd. and M/s Websol Green Projects Private Limited
and pledge on 81.38% of shares held by promoters of the Company till the tenure of loan. Also, assignment of leasehold rights of the
entire project land by way of Indenture of Mortgage and creation of DSRA (Refer Note No. 11(ii)).
ii) Rate of interest
Interest is payable @ 9.90% p.a. (previous year @ 9.70% p.a.) on secured loan.
Interest is payable @ 8.00% p.a. to 18.00% p.a. (previous year @ 8.00% p.a. to 18.00% p.a.) on unsecured loan.
iii) Terms of Repayment
Term loan is repayable in 24 quarterly installments starting from 30-06-2025 as below:
Notes:
1. The amounts shown above represent the best possible estimates arrived at on the basis of available information. The uncertainties
and timing of the cash flows are dependent on the outcome of different legal processes which have been invoked by the Company
or the claimants, as the case may be and, therefore, cannot be estimated accurately The Company does not expect any
reimbursement in respect of above contingent liabilities. The Company has recognized a provision of Rs. 750.00 lakhs towards
Income Tax Demand under appeal based on management assessment.
2. 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.
3. Pursuant to the High Court’s order dated 27 September 2012, the Company is required to deposit 25% of the demanded excise duty
and penalty and provide a bond for the remaining 75% of the demand. Aggrieved by this order, the Company has filed GA 3166 of
2017 seeking rectification of the said order.
4. During the previous year, the employee provident fund comprises damages unders section 14B and interest under section 7Q of the
Employees’ Provident Funds Act.
5. The Company’s pending litigation comprises of claim against the Company and proceeding pending against tax authorities. The
Company has reviewed all its pending litigations and proceedings and has made adequate provisions, and disclosed the contingent
liabilities, where applicable, in its Financial Statements. The Company does not expects the outcome of these proceedings to
have a material Impact on its financial position. Future cash outflows in respect of 'A’ above are dependent upon the outcome of
judgments/ decisions.
3. Operating segment
The Company is primarily engaged in only one product line i.e., Solar photo-Voltaic Cells and Modules. All the activities of the Company
revolve around the main business. As such there are no separate reportable segments as per requirements of Accounting Standard
(Ind AS- 108) on operating segment. Further, the Company operates only in India, hence additional information under geographical
segments is also not applicable. The Directors of the Company has been identified as the Chief Operating Decision Maker (CODM).
The Chief Operating Decision Maker also monitors the operating results as one single segment for the purpose of making decisions
about resource allocation and performance assessment and hence, there are no additional disclosures to be provided other than those
already provided in the financial statements.
4 Employee Benefits :
As per Indian Accounting Standard - 19 “ Employee Benefits”, the disclosures of Employee Benefits are as follows:
a) Defined Contribution Plan :
Employee benefits in the form of Provident Fund and Employee State Insurance Corporation are considered as defined
contribution plan.
The contributions to the respective fund are made in accordance with the relevant statute and are recognised as expense when
employees have rendered service entitling them to the contribution. The contributions to defined contribution plan, recognised as
expense in the Statement of Profit and Loss are as under :
b) Defined Benefit Plan :
The Company operates a unfunded defined benefit plan (the gratuity plan) covering eligible employees, which provides a lump
sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the
respective employees salary and the tenure of employment. The liability is unfunded. The Company accounted for the liability for
gratuity benefits payable in the future based on an actuarial valuation. The Company was exposed to interest risk, salary inflation
risk and demographic risk.
i. Interest risk: The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the
defined benefit obligation will tend to increase.
ii. Salary Inflation risk: Higher than expected increases in salary will increase the defined benefit obligation.
iii. Demographic risk: This is the risk of variability of results due to unsystematic nature of decrements that include mortality,
withdrawal, disability and retirement. The effect of these decrements on the defined benefit obligation is not straight forward
and depends upon the combination of salary increase, discount rate and vesting criteria. It is important not to overstate
withdrawals because in the financial analysis the retirement benefit of a short career employee typically costs less per year as
compared to a long service employee.
The most recent actuarial valuation of the present value of the defined benefit obligation were carried out as at 31st March,
2025 by a registered Actuary The present value of the defined benefit obligation, and the related current service cost and past
service cost, were measured using the projected unit credit method.
d) During the previous year, the Company issued and allotted 10,62,500 and 2,46,429 Equity Shares pursuant to conversion of loan to the
M/s Websol Green Projects Private Limited and M/s S.L. Industries Private Limited (Promoter Companies) respectively at the rate of Rs.
112 per share of face value of Rs. 10 each aggregating to Rs. 130.89 lakh (Refer note no. 13).
e) Refer Note No.14(4). for terms of warrants convertible into equity shares
f) The Company has received personal guarantee from Mr. S.L. Agarwal (Managing Director) and Corporate guarantee from M/s Websol
Green Projects Private Limited and M/s S.L. Industries Private Limited (Promoter Companies) for the loan taken from IREDA Rs.
15,232.00 Lakh (Previous year: 15,232.00 Lakh) (Refer note no. 15). and given the letter of Comfort on behalf of Mrs. Raj Kumari Agarwal
(Wife of Mr. S. L. Agarwal) for Rs. 590.00 lakh (Previous year: Rs. 590.00 lakh) (Refer note no. 35(1)).
g) Figures in brackets ( ) represents for year ended 31st March, 2024.
Terms & Conditions :
The transactions with related parties have been entered at an amount which are not materially different from those on normal commercial terms.
Outstanding balances are unsecured and will be settled in cash. No guarantees have been given or received except as stated in para 35(8)(f).
B. Fair value hierarchy
The fair value of the financial assets and financial liabilities are included at the amount at which the instrument could be exchanged in a
current transaction between willing parties, other than in a forced or liquidation sale.
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
The fair values of investment in mutual funds represent net asset value as stated by the issuers of these mutual fund units in the published
statements. Net asset values represent the price at which the issuer will issue further units in the mutual fund and the price at which such
units are redeemed.
Fair value of cash and cash equivalents, bank balances other than cash and cash equivalents, trade receivables, other current financial
assets, short term borrowings, trade payables and other current financial liabilities is considered to be equal to the carrying amounts of
these items due to their short-term nature.
Where such items are Non-current in nature (other than investments), the same has been classified as Level 3 and fair value determined
using adjusted net asset value method.
There has been no change in the valuation methodology for Level 3 inputs during the year. The Company has not classified any material
financial instruments under Level 3 of the fair value hierarchy. There were no transfers between Level 1 and Level 2.
The following tables provide the fair value hierarchy of the Company’s assets measured at fair value on a recurring basis:
10. Financial risk management objectives and policies
The Company’s activities expose it to market risk, liquidity risk and credit risk. The Company’s Board of Directors has overall responsibility
for the establishment and oversight of the Company’s risk management framework. This note explains the sources of risk which the
entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
(a) Credit risk
Credit risk is the risk that a customer or counterparty to a financial instrument fails to perform or pay the amounts due causing
financial loss to the Company. Credit risk arises from Company’s activities in receivables from customers, investments, cash and
bank balances and other financial assets. The Company ensure that sales of products are made to customers with appropriate
creditworthiness. Investment and other market exposures are managed against counterparty exposure limits. Credit information
is regularly shared between businesses and finance function, with a framework in place to quickly identify and respond to cases of
credit deterioration.
Note No. : 35 Other disclosures and additional regulatory information (Contcf)
Credit risk arising from balances with banks and other cash equivalents is limited and no collaterals are held against these because
the counterparties are banks and recognised financial institutions with high credit ratings assigned by credit rating agencies.
Other financial assets measured at amortized cost includes security deposits and others. Credit risk related to these financial
assets are managed by monitoring the recoverability of such amounts continuously, while at the same time internal control system
is in place to ensure that the amounts are within defined limits.
Customer credit risk is managed as per company’s established policy, procedure and control related to credit risk management.
Credit quality of the customer is assessed based on his previous track record and funds & securities held by him in his account
amd individual credit limit are defined according to this assessment. Outstanding customer receivables are regularly monitored.
An impairment analysis is performed at each balance sheet date on an individual basis for major clients. In addition, a large number
of minor receivables are grouped into homogenous groups and assessed for impairment collectively. Assets are written off when
there is no reasonable expectation of recovery. The Company continues to engage with parties whose balances are written off
and attempts to enforce repayment. Recoveries made are recognized in statement of profit and loss. The maximum exposure to
credit risk at the balance sheet date is the carrying value of each class of financial assets. The maximum exposure to credit risk
is Rs. 9,992.44 lakhs and Rs. 496.58 lakhs as at 31st March, 2025 and 31st March, 2024 respectively, being the total of the carrying
amount of balances with banks, bank deposits, trade receivables, other financial assets and investments and these financial assets
are of good credit quality including those that are past due.
The Company assesses and manages credit risk of financial assets on the basis of assumptions, inputs and factors specific to the
class of financial assets. The Company provides for expected credit loss on Cash and cash equivalents, other bank balances and
other financial assets based on 12 months expected credit loss/life time expected credit loss/ fully provided for. Life time expected
credit loss is provided for trade receivables under simplified approach.
(b) Liquidity risk
Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligation on time or at reasonable price.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding
through an adequate amount of committed credit facilities to meet obligations when due. Due to the nature of the business, the
Company maintains flexibility in funding by maintaining availability under committed facilities. Management monitors rolling
forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company
takes into account the liquidity of the market in which the entity operates.
The tables below summarises the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities:
Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of change in market
interest rate.
i) Liabilities
The Company’s fixed rate borrowings are carried at amortised cost. They are, therefore, not subject to interest rate risk as
defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market
interest rates.
The Company has no variable rate borrowings.
ii) Assets
The company’s fixed deposits are carried at fixed rate. Therefore, these are not subject to interest rate risk as defined in Ind
AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Price risk
Price risk is the risk that the fair value of financial instrument will fluctuate due to change in market traded price.
The Company is not exposed to any price risk arises from investments held in mutual fund and classified as FVTPL.
11. Capital Management
Risk management
For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equity
reserves attributable to the equity share-holders of the Company. The Company’s objective when managing capital is to safeguard its
ability to continue as a going concern so that it can continue to provide returns to shareholders and other stake holders and maintain an
optimal capital structure to reduce the cost of Capital.
The Company manages its capital structure and makes adjustments in light of changes in the financial condition and the requirements
of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders,
return capital to shareholders (buy back its shares) or issue new shares.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets
financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. The Company has
complied with these covenants.
No changes were made in the objectives, policies or processes for managing capital during the year ended 31st March, 2025 and 31st
March, 2024.
12 Komex Inc, Operational Creditor have filed applications with NCLT to initiate Corporate Insolvency Resolution Process under the
Insolvency and Bankruptcy Code, 2016. During the year, the settlement with the creditor was concluded.
13 Corporate Social Responsibility
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average
net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR
activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation,
environment sustainability, disaster relief, COVID-19 relief and rural development projects. A CSR committee has been formed by the
company as per the Act. The funds were primarily allocated to a corpus and utilized through the year on these activities which are
specified in Schedule VII of the Companies Act, 2013:
c) Disclosure required under Additional regulatory information as prescribed under paragraph 6L to general instructions for preparation of
Balance Sheet under Schedule III to the Companies Act, 2013 are not applicable to the Company except as disclosed in Para (a) and (b)
above.
As per our report of even date attached.
For G. P Agrawal & Co. For and on behalf of the Board of Directors
Chartered Accountants Websol Energy System Limited
Firm's Registration No. - 302082E
(CA. Ajay Agrawal) S.L.Agarwal Sanjana Khaitan
Partner Managing Director Director & CFO
Membership No. 017643 DIN No. 00189898 DIN No. 07232095
Raju Sharma
Place of Signature: Kolkata Company Secretary
Date: The 15th day of May 2025 Membership No. : A27886
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