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Accounting Policies of Globus Power Generation Ltd. Company

Mar 31, 2015

I. Basis for preparation of Financial Statements

The Financial Statements are prepared on the historical cost convention and on the basis of going concern assumption. They are prepared in accordance with the Generally Accepted Accounting Principles ("GAAP'") in India to comply in ail material aspects with the Accounting Standards specified under section 133 of the companies Act 2013 , r/w rule 7 of Companies Accounts Rules 2014 Accounting standards adopted in the preparation of these Financial Statements are consistent with those of previous year. Accounting policies not specifically referred to otherwise are being consistently followed.

II Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported balances if assets and liabilities, revenues and expenses and the disclosure of continue liabilities on the date of the financial statements. Management believes that the estimates used in the preparation of Financial Statements are prudent and reasonable. Actual results could differ from those estimates. Differences between the actual results and estimates are recognized in the year in which the results are known/ materialized. Any revision to accounting estimates is recognized pros preventively in current and future periods.

iii. Non SMC Status

The Company is a Non-SMC as defined in the general instructions in the Accounting Standards notified under Companies Act 2013.

IV. Stock in Trade/Inventories

Stock in Trade , wherever any are valued at the lower of cost or net realizable value of the securities in fared / properties in trade / other stocks as on the date of Balance Sheet. Cost is determined on FIFO basis.

V. Cash flow Statement

Cash flow statement is prepared following the "indirect method" as set out in the CAS - 3 on Cash flow statement. Cash and cash equivalents represent cash and bank balances including bank deposits. Cash equivalent consist of highly liquid investments having maturity less than 3 months from the date of investments.

VI. Prior Period Item

Prior Period expenses, if any significant are charged to prior period expense Account. Similarly exceptional or extraordinary items, if any significant are shown separately in the accounts statements.

VII. Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule 11 to the Companies Act,2013. Assets purchased up to 30"' September of the year are charged full year depreciation. Assets purchased after that date are charged half year depreciation.


Mar 31, 2014

I. Basis for preparation of Financial Statements

The financial Statements have been prepared under historical cost convention and in accordance with the generally accepted accounting principles in India. The Company has prepared these Financial Statements to comply in all material respects with the Accounting Standards under the Companies (Accounting Standards) Rules 2006 notified under Section 211(3C) of the Companies Act 1956 r/w with the general circular No''15/2013 dt 13.09.2013 of the MCA in respect of section 133 of the Companies Act 2013. Accounting Standards adopted in the preparation of these financial Statements are consistent with those of the previous year.

II. Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect the reported balances of assets and liabilities, revenues and expenses and the disclosure of contingent liabilities on the date of the financial statements. Management believes that the estimates used in the preparation of Financial Statements arc prudeni and reasonable. Actual results could differ from those estimates. Differences between the actual results and estimates arc recognized in the year in which the results are known/ materialized. Any revision to accounting estimates is recognized prospectively in current and future periods.

III. Non SMC Status

The Company is a Non-SMC as defined in the general instruction in the Accounting Standards notified under Companies Act 1956.

IV. The company generally follows mercantile system of accounting and recognizes significant items of income and expenditure on accrual basis, if determinable. Accounting policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles.

V. Stock In Trade/Invenlories

Stock in Trade are valued at the lower of cost or net realizable value of the securities in trade / properties in trade / other stocks as on the date of Balance Sheet. Cost is determined on FIFO basis.

VI. Cash flow Statement

Cash flow statement is prepared following :hc "indirect method" as set out in the Aecounting Standard — 1 on flash flow statement Cash and cash equivalents represent cash and hank balances including bank deposits. Cash equivalent consist of highly liquid investments having maturity less than 3 months from the date of investments.

VII. Depreciation

Depreciation on fixed assets is provided on written down value method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956. Assets purchased up to 30th September of the year are charged full year depreciation. Assets purchased after that data are charged half year depreciation.

VIII. Revenue Recognition

Revenue is recognized on accrual basis to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Statutory levies like service tax , sales tax, excise duty etc. if any collected on behalf of the government is not included in the turnover.

a. Interest and Rent- Revenue is recognized on time proportion basis.

b. Dividend- Revenue is recognized when the declaring company declares the dividend

c. Speculative transactions - They are settled by paying out the differences which may be positive or negative. In such transactions, although the contract notes arc issued for the full value of the purchased, sold scrip, the entries are made in the books of accounts only for the differences.

d. Derivatives. Futures and Options- Transactions are recognized on the basis o: favorable and unfavorable differences of every day. The net of these differences is treated as net gain or loss on such transactions over the period. In case of options, the premium received on sale of options and the differences n reverse trades are treated as income or loss as the ease may be

e. Delivery based transactions- The total value of sales is considered as turnover provided the said stock of scrips/commodity is held as stock in trade before sale

f. Commission- It is recognized when service is rendered once and for all'' and accepted by the client

g. Sale of goods- It is recognized when all significant risks and rewards of ownership of the transaction, if any have been transferred to buyer, seller does not retain any effective control of ownership of the transferred goods and there is no significant uncertainty in collection of the amount of consideration which ordinarily coincides with dispatch of goods lo customers unless agreed otherwise.

IX. Fixed Assets

Fixed Assets arc stated at cost, net ot C''LNVAT, wherever availed less accumulated depreciation. All costs including borrowing costs for bringing the assets to their present location and condition for their intended use, net charge on foreign exchange contract & adjustment arising from exchange rate variations are capitalized.

Vehicles Rs. 17,07,744/- acquired in merger during 2013-14 arc yet to be transferred in company''s name.

X. Foreign currency Transactions

a) Transactions denominated in foreign currencies arc normally recorded at the exchange rate prevailing at the time of the transaction. Monetary items denominated in foreign currencies at the year end are translated at the year end rates. Monetary items are reported using closing rates on that date. Monetary items mean money held and assets and liabilities to be received or paid in fixed or determinable amounts of money e.g. cash, receivables, payables etc. Non-monelary foreign currency items arc carried at cost e g Fixed assets, inventories, investments in equity shares etc. Premium in respect of foreign exchange contract is recognized over the life of the contract.

b) Any income or expense on account of exchange difference either on settlement of a transaction or on its translation is recognized in the profit and loss account.

c) Exchange differences arising on liabilities incurred or on repayment of borrowing in foreign currency for acquisition of fixed assets are accounted in the following manner:

- In respect of fixed assets acquired from a country outside India, exchange differences are adjusted in the carrying cost of the asset.

- In respect of fixed assets acquired within India, exchange differences are recognized in the statement of P&L.

d) In respect of forward contracts, the premium or discount on these contracts is recognized as income or expenditure over the period of the contract Any profit or loss arising on cancellation or renewal of such contracts is recognized as income or expense of the year.

XI. Investments

Investments are classified into current and long-term investments. Current investments are carried at the lower of cost and fair value (i.c. net realizable value) computed individually. In case of long term investments the fair value is obtained by investees'' assets and results or expected cash flows fro m investments. In case of quoted investment realizable value is taken as their quoted price or. the date of Balance Sheet. Long-term investments are stated at cost less any provision for diminution in value. Provision for diminution in the value of long-term investments is made only if such a decline is ''other than temporary'' in the opinion of the management.

XII. Employee benefits

i. Defined benefit plans This includes gratuity. The Company determines and provides the said liability assuming that such benefit are payable to all employees at the end of the accounting period irrespective of their vesting or non - vesting. Keeping in view the small strength of employees and their small number of years of service to the company, it is understood that actuarial valuation will not have any material effect on balance sheet.

ii Defined Contribution Plan -this includes contributory provident fund. That is not applicable to the company.

iii Compensated absences — Other long term employee benefits - this includes earned leave. Earned leave accruing to employees as on the last day of financial year is accounted for on accrual basis based on cumulative number of leaves unavailed.

iv. Other employee benefits — This includes bonus, performance incentive etc. The undiscountcd amount of employee benefits expected to be paid in exchange for the services rendered by employees is recognized during the period when the employee renders service.

v The number of persons employed at any time during the year is less than 10, therefore most such benefits arc not applicable to the company.

XIII. Borrowing Cost

Borrowing costs that are attributable to the acquisition or the construction of qualifying assets are capitalized as part of cost of such assets. All other borrowing costs arc charged to revenue.

XIV''. Earning* per share

In computing earnings per share, the Company considers net profit/ (loss) after tax. Basic earnings per share are computed by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed using the weighted average number of equity and dilutive equivalent of potential equity'' shares outstanding daring the year, except where results would be antidilutive.

XV. Current and Deferred Tax

- The current charge for income tax is measured at the amounts expected to be paid to the authorities in accordance with relevant tax regulations applicable to the company.

- Deferred tax is recognized, subject to the consideration of prudence, on timing differences, being the difference between taxable income and acccainting income that originate in one period and arc capable of reversal in one or more subsequent periods.

- Deferred tax assets are not recognized on unabsorbed depreciation & carry forward of losses unless there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized and are reviewed at each balance sheet date to reassure the realization.

- Deferred tax assets & liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. They are not discounted to their present value.

xvi. intangible Assets

Intangible asse:, if any is recognized only when the following criteria are fulfilled:

i. It has the characteristics of an asset i.e. it is controlled by the enterprise as a result of past events.

ii. The future economic benefits are probable from it based on reasonable & supportive assumptions

iii. The cost of it can be measured reliably.

XVII. Impairment of Assets

- Impairment loss, if any for an individual asset is recognized where its recoverable amount is less that the carrying amount. Recoverable amount is taken as the amount obtainable from the sale of the asset less the cost of disposal. Carrying amount is taken as historical cost less depreciation or revalued price less depreciation, as the case may be.

- Cash generating unit: If certain group of assets cannot be separated, they are grouped into a smallest unit called the cash generating unit (CGU) to facilitate the identification of cash flow. The impairment loss is recognized when the value in use of llic CGU is less than the iccv»vciablc amount. Value in use of the CGU means the present value of the estimated future cash flows arising from the CGU plus the residual price at the and of its useful life.

- Impairment does not apply to inventories, debtors, loans & advances and investments.

XVIII. Provisions, contingent liabilities and contingent assets

(a) The Company recognizes a provision when there is a present obligation as a result of a past event and it is more likely than not that there will be an outflow of resources embodying economic benefits to settle such obligation and the amount of such obligation can be reliably estimated. Provisions are not discounted to its present value, and are determined as based on the management''s best estimate of the amount of obligation required at the year end. These are reviewed at each balance sheet date and adjusted to reflect current management estimates.

(b) Show cause notices wherever and if any issued by various government authorities are not considered as an obligation. When the demand notices arc raised against such show cause notice and are disputed by the company then these are classified as possible obligations.

(c) Contingent liabilities urc not recognized bat urc disclosed in notes. They arc disclosed in respect of possible obligations that have arisen from past events and the existence of which will be confirmed only by the occurrence or non occurrence of future events not wholly within the control of the Company. Where the likelihood of outflow of resource is remote, no provision or disclosure is made.

(d) Contingent liability includes guarantees, claims, commitments and Joint obligation of a financial nature. Contingent liability arises when a company issues guarantee to another person on behalf of a third party. They include fJG/LC etc issued from the bank for various types of payment obligations of the company. Letters of comfort which arc not in the nature of guarantee are not recognized as contingent liabilities.

(c) Commitment includes contracts remaining to be executed on capital account and not provided for. It also includes other long term contracts relating to sales, services, purchases, employee costs etc, which arc non-cancel table and their cancellation wil result in a penalty disproportionate to the benefits involved. It also includes unpaid portion of partly paid shares or securities.

(f) A contingent asset is neither recognized in the financial statement nor disclosed in the notes.


Dec 31, 2009

1. ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention, in accordance with the generally accepted accounting principles and provisions of the Companies Act 1956.

2. INVENTORIES

a) Raw Materials, Stores, Spares & Packing Material are valued at cost price on FIFO Basis.

b) Work-in-Progress and Finished Goods are valued at lower of cost or net realisable value.

3. REVENUE RECOGNITION

Sales Comprises sale of goods and services, net of trade discounts and include exchange differences arising on sales transactions.

4. EMPLOYEE BENEFITS

a) No provision of gratuity and bonus has been made and the same is accounted for on payment basis.


Mar 31, 2009

1. ACCOUNTING CONVENTION

The financial statements are prepared under historical cost convention, in accordance with the generally accepted accounting principles and provisions of the Companies Act 1956.

2. INVENTORIES

a) Raw Materials, Stores, Spares & Packing Material are valued atcost price on FIFO Basis.

b) Work-in-Progress and Finished Goods are valued at lower of cost or net realisable value.

3. REVENUE RECOGNITION

1. Sales Comprises sale of goods and services, net of trade discounts and include exchange differences arising on sales transactions.

4. EMPLOYEE BENEFITS

a) No provision of gratuity and bonus has been made and the same is accounted for on payment basis.

5. PROVISION FOR CURRENT & DEFFERED TAX

Provision for current tax is made after taking into consideration benefits admissible under the provision of Income- Tax Act, 1961.Deferred tax resulting from timing differences between taxable and accounting income is accounted for using the tax rates and laws that are enacted or subsequently enacted as on the balance sheet date.The deffered tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.



 
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