Home  »  Company  »  Globus Corporation  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Globus Corporation Ltd. Company

Mar 31, 2014

A) BASIS FOR OPERATION OF FINANCIAL STATEMENTS:

The financial statements are prepared under the historical cost convention and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

These financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. GAAP comprises mandatory accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006 , the provisions of the Companies Act, 2013 (to the extent notified) and the Companies Act, 1956 (to the extent applicable) and guidelines issued by the Securities and Exchange Board of India (SEBI). Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

b) USE OF ESTIMATES:

The preparation of the financial statements in conformity with GAAP requires the Management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to contingent liabilities as at the date of the financial statements and reported amounts of income and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as the Management becomes aware of changes in circumstances surrounding the estimates.

B) Fixed Assets :-

Fixed assets are stated at cost less depreciation reserve, and no revaluation in case of fixed assets made during the year. There is no manufacturing activity done during the year.

Fixed assets are stated at cost, less accumulated depreciation and impairment, if any. Direct costs are capitalized until fixed assets are ready for use. Capital work-in-progress comprises the cost of fixed assets that are not yet ready for their intended use at the reporting date. Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment. Goodwill comprises the excess of purchase consideration over the fair value of the net assets of the acquired enterprise. Goodwill arising on consolidation or acquisition is not amortized but is tested for impairment.

C) Depreciation: -

Depreciation is claimed by the company as per the provisions of Companies Act, including on revalued assets at the rates specified in schedule XIV on original cost as per straight-line method & there is no change in the method of charging depreciation as compared to previous year.

Depreciation on fixed assets is provided on the straight-line method over the useful lives of assets estimated by the Management. Depreciation for assets purchased / sold during a period is proportionately charged. Individual low cost assets (acquired for Rs. 5,000 or less) are depreciated over a period of one year from the date of acquisition

D) Inventory:-

a) Raw material are valued at cost or net realisable value whichever is lower.

b) Finished products are valued at cost or net realisable value whichever is lower.

c) During the Previous year, company has sold old stock of materials to the tune of Rs. 15287209.29, which has been sold at Scrap Value of Rs. 761250.00/- (Inclusive of Vat) thereby incurring loss of Rs. 14525959.29. As an Auditor of the company we have recommended the management to value the stock as per net realizable value or cost whichever is lower by the independent committee consisting of independent valuer from outside and/or stores department. Against which management has accepted the suggestion and assured us for the same.

E) Research & Development:- Nil

F) Revenue Recognition:-

Sale of goods is recognized on dispatch to customers. Sales include amounts recovered towards sales tax and excise duty and are net of returns. Also company has issued invoices for the late payment of the bills and taken the charges as income. Sales include Tax Free Trading of goods and Share trading.

G) Foreign Currency transaction :-

There are no foreign currency transactions during the year.

H) Investments:-

Investments are stated at cost. Interest accrued thereon is not accounted.

Investments are either classified as current or long-term based on the Management s intention at the time of purchase as per AS-13. Current investments are carried at the lower of cost and fair value of each investment individually.

Non Current Investments 31.03.2014 31.03.2013

Long Term Investments:

National Savings Certificate 16000.00/- 16000.00/-

Current Investments - -

Total Investments: 16000.00/- 16000.00/-

I) Cash & Cash Equivalents:-

Cash and cash equivalents comprise cash and cash on deposit with banks and corporations. The Group considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

J) Accounting of Modvat Credit / Excise :-

Modvat credit is not accounted for separately, accordingly the stocks are valued at cost. During the year company has availed vat set-off as under

a) Maharashtra value added tax. Nil

b) Andhra Pradesh value added tax Rs. Nil

K) Provisions for Retirement Benefits :-

No provision is made separately nor any payment under the head made. It is reported by the management that the payment shall be made on actual payment basis. The company has suspended its business activity w.e.f. 28th July 2012 and workers dues have yet to be settled. The Comp any is in the process of clearing the dues. Partial compensation to Staff & Workers has been paid by the Company amounting to Rs. 33,12,800/- on account of Closure of Factory at Hyderabad.

L) Taxes on Income:-

The provision for taxation has been made as per the provisions of Income Tax Act, 1961.

A provision is made for income tax annually, based on the tax liability computed, after considering tax allowances and exemptions. Provisions are recorded when it is estimated that a liability due to disallowances or other matters is probable.

M) Deferred Tax Liability/Asset:-

Deferred Ta x is accounted for subject to consideration of prudence of deferred tax assets at the current rate of tax, on timing differences being the difference between taxable incomes & accounting income that originates in one period and are capable of reversal in one or more subsequent periods. The difference in tax liability on carry forward losses is also considered in the current year for accounting deferred tax.

The differences that result between the profit considered for income taxes and the profit as per the financial statements are identified, and thereafter a deferred tax asset or deferred tax liability is recorded for timing differences, namely the differences that originate in one accounting period and reverse in another, based on the tax effect of the aggregate amount of timing difference. The tax effect is calculated on the accumulated timing differences at the end of an accounting period based on enacted or substantively enacted regulations. Deferred tax assets in a situation where unabsorbed depreciation and carry forward business loss exists, are recognized only if there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax asset can be realized. Deferred tax assets, other than in a situation of unabsorbed depreciation and carry forward business loss, are recognized only if there is reasonable certainty that they will be realized.

N) Earnings Per Share:-

Basic earnings per share are computed by dividing the net profit after tax by the weighted number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted number of equity shares considered for deriving basic earnings per share and also the weighted number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues.


Mar 31, 2012

A) The financial statements are prepared under the historical cost convention and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

B) Fixed Assets :-

Fixed assets are stated at cost less depreciation reserve, and no revaluation in case of fixed assets made during the year.

C) Depreciation: -

Depreciation is claimed by the company as per the provisions of Companies Act, including on revalued assets at the rates specified in schedule XIV on original cost as per straight-line method & there is no change in the method of charging depreciation as compared to previous year.

D) Inventory:-

a) Raw material are valued at cost or net realisable value whichever is lower.

b) Finished products are valued at cost or net realisable value whichever is lower.

c) During the year, company has sold old stock of materials to the tune of Rs.239 lacs, which has been rejected by the vendor stating the reason of goods having inferior quality after year end, as per accounting standards we have valued the stock at not realizable value of Rs. 59 lacs (scrap value) thereby incurring net loss of Rs. 180 lacs in the account. Also we as on Auditors of the company has recommended the management to value the stock as per net realizable value or cost whichever is lower by the independent committee consisting of independent valuer from outside and/or stores department. Against which management has accepted the suggestion and assured us for the same.

E) Research & Development: - Nil

F) Revenue Recognition:-

Sale of goods is recognized on dispatch to customers. Sales include amounts recovered towards sales tax and excise duty and are net of returns. Also company has issued invoices for the late payment of the bills and taken the charges as income.

G) Foreign Currency transaction :-

There are no foreign currency transactions during the year.

H) Investments:-

Investments are stated at cost. Interest accrued thereon is not accounted.

I) Accounting of Modvat Credit / Excise: -

Modvat credit is not accounted for separately, accordingly the stocks are valued at cost including excise duty. Excise duty is recognized on the goods manufactured. During the year company has availed vat set-off as under

a) Maharashtra value added tax Nil

b) Andhra Pradesh value added tax Rs. 97,35,425/-

J) Provisions for Retirement Benefits: -

No provision is made separately nor any payment under the head made. It is reported by the management that the payment shall be made on actual payment basis. The company has suspended its business activity w.e.f. 29.07.2012 and workers have been paid their due and outstanding. However office staff is still working and their retirement benefits are workable at that time.

K) Taxes on Income:-

The provision for taxation has been made as per the provisions of Income Tax Act, 1961.

L) Deferred Tax Liability/Asset:-

Deferred Tax is accounted for subject to consideration of prudence of deferred tax assets at the current rate of tax, on timing differences being the difference between taxable incomes & accounting income that originates in one period and are capable of reversal in one or more subsequent periods. The difference in tax liability on carry forward losses is also considered in the current year for accounting deferred tax.


Mar 31, 2011

The financial statements are prepared under the historical cost convention and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

B) Fixed Assets :-

Fixed assets are stated at cost less depreciation reserve, and no revaluation in case of fixed assets made during the year.

C) Depreciation: -

Depreciation is claimed by the company as per the provisions of Companies Act, including on revalued assets at the rates specified in schedule XIV on original cost as per straight-line method & there is no change in the method of charging depreciation as compared to previous year.

D) Inventory:-

a) Raw material are valued at cost or net realisable value whichever is lower.

b) Finished products are valued at cost or net realisable value whichever is lower.

E) Research & Development: - Nil

F) Revenue Recognition:-

Sale of goods is recognized on dispatch to customers. Sales include amounts recovered towards sales tax and excise duty and are net of returns.

G) Foreign Currency transaction :-

There are no foreign currency transactions during the year.

H) Investments:-

Investments are stated at cost. Interest accrued thereon is not accounted.

I) Accounting of Modvat Credit / Excise: -

Modvat credit is not accounted for separately, accordingly the stocks are valued at cost including excise duty. Excise duty is recognized on the goods manufactured. During the year company has availed vat set-off as under

a) Maharashtra value added tax Rs.9,89,476/-

b) Andhra Pradesh value added tax Rs.60,44,248/-

J) Provisions for Retirement Benefits: -

No provision is made separately nor any payment under the head made. It is reported by the management that the payment shall be made on actual payment basis.

K) Taxes on Income:-

The provision for taxation has been made as per the provisions of Income Tax Act, 1961.

L) Deferred Tax Liability/Asset:-

Deferred Tax is accounted for subject to consideration of prudence of deferred tax assets at the current rate of tax, on timing differences being the difference between taxable incomes & accounting income that originates in one period and are capable of reversal in one or more subsequent periods. The difference in tax liability on carry forward losses is also considered in the current year for accounting deferred tax.


Mar 31, 2010

The financial statements are prepared under the historical cost convention and materially comply with the mandatory accounting standards issued by the Institute of Chartered Accountants of India.

B) Fixed Assets

Fixed assets are stated at cost less depreciation reserve, and no revaluation in case of fixed assets made during the year. Additions to plant & machinery and car have been made during the year.

C) Depreciation

Depreciation is claimed by the company as per the provisions of Companies Act, including on revalued assets at the rates specified in schedule XIV on original cost as per straight-line method & there is no change in the method of charging depreciation as compared to previous year. Depreciation has been charged on additions to fixed assets.

D) Inventory

a). Raw material are valued at cost or net realisable value whichever is lower.

b). Finished products are valued at cost or net realisable value whichever is lower.

E) Research & Development: Nil

F) Revenue Recognition

Sale of goods is recognized on dispatch to customers. Sales include amounts recovered towards sales tax and excise duty and is net of returns.

G) Foreign Currency transaction

There are no foreign currency transactions during the year.

H) Investments

Investments are stated at cost. Interest accrued thereon are not accounted.

I) Accounting of Modvat Credit/Excise

Modvat credit is not accounted for separately, accordingly the stocks are valued at cost including excise duty. Excise duty is recognized on the goods manufactured.

J) Provisions for Retirement Benefits

No provision is made separately nor any payment under the head is made. It is reported by the management that the payment shall be made on actual payment basis.

K) Taxes on Income :-

The provision for taxation has been made as per the provisions of Income Tax Act, 1961.

L) Deferred Tax Liability/Asset :-

Deferred Tax is accounted for subject to consideration of prudence of deferred tax assets at the current rate of tax, on timing differences being the difference between taxable income & accounting income that originates in one period and are capable of reversal in one or more subsequent periods. The difference in tax liability on carry forward losses is also considered in the current year for accounting deferred tax.

 
Subscribe now to get personal finance updates in your inbox!