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Accounting Policies of Globus Power Generation Ltd. Company

Mar 31, 2018

1) SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis for preparation of accounts

The accounts have been prepared in accordance with IND AS and Disclosures thereon comply with requirements of IND AS, stipulations contained in Schedule- III (revised) as applicable under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, Companies (Indian Accounting Standards) Rules 2015 as amended form time to time. Upto financial year ended on 31st March 2017, the company had prepared the accounts according to the Previous Indian GAAP. The financial statements for the year ended 31st March 2018 are the first to have been prepared in accordance with IND AS. Opening balance sheet as on 1st April 2016 and 31st March 2017 have been presented as comparatives. The transition was carried out retrospectively as on the transition date which is 1st April 2016, and for any variation in the amounts represented in the comparative balance sheet vis-a-vis earlier presentation, reconciliation is given as part of notes under the head Reserves and surplus Reconcilation.

Assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in revised Schedule - III to the Companies Act, 2013.

2.2 Use of Estimates

IND AS enjoins management to make estimates and assumptions related to financial statements, that affect reported amount of assets, liabilities, revenue, expenses and contingent liabilities pertaining to the year.

Actual result may differ from such estimates. Any revision in accounting estimates is recognized prospectively in the period of change and material revision, including its impact on financial statements, is reported in the notes to accounts in the year of incorporation of revision.

2.3 First time adoption of IND AS

A) Being first time adoption of IND AS, the company has availed the following exemptions as granted under Appendix C & D of IND AS 101 :-

i). The company elects not to apply IND AS-103 retrospectively, pertaining to business combinations occurred before transition date.

ii). The company is also not applying IND AS 21 towards effects of changes in foreign currency rates retrospectively to items arising in business combinations that occurred before transition date.

iii). Carrying values for all of its Property, Plant and Equipment, Intangible assets and Investment property if any, as at the date of transition to IND AS, measured as per previous GAAP have been treated as their deemed costs as at the date of transition.

iv). Carrying value for all of its investment in subsidiaries, Joint Ventures and Associates as at the date of transition to IND AS, measured as per previous GAAP are treated as their deemed costs as at the date of transition.

B) Retrospective impacts of transition from previous GAAP to IND AS on assets and liabilities, have been adjusted against "Other Equity" on 1st April 2016.

2.4 Statement of Cash Flows :

a) The company reports cash flows using indirect method. Profit or Loss is adjusted for the effects of transactions of a non cash nature, or any deferrals or accruals of past or future as prescribed under IND AS 7.

b) Cash and cash equivalents :

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

2.5 Recognition of Income and Expenses

a) The company has adopted the policy that sales wherever any, are recognized with the transfer of significant risk and rewards of ownership of the goods, with the company losing effective control or the right to managerial involvement thereon and the revenue including cost incurred or to be incurred in respect of the transaction are measurable reliably and the recovery of the consideration is probable.

b) Revenue from services wherever any, are recognized in proportion to the stage of completion of transaction at the end of reporting period, and cost incurred in the transaction including same to complete the transaction and revenue can be measured reliably.

c) Supply of sales and services are measured at the fair value of consideration received or receivable. They are recognized net of GST.

d) Dividend for distribution is accounted for at the point of approval by relevant authority. However the disclosure in financial statements is made of dividend declared/recommended/proposed pending distribution.

e) Other incomes have been recognized on accrual basis in financial statements except for cash flow information.

f) Dividend Income is accounted when the company’s right to receive the payment is established, which is generally when the appropriate authority approves the dividend.

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

h) Futures and Options transactions - In case of futures transactions, they are recognized, if any on the basis of 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 transactions, the premium received on sale of options and the differences in reverse trades are treated as income or loss as the case may be.

i) Other Derivatives- The company may also hold derivative financial instruments in the form of Future Contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts are Banks. These derivatives whenever held constitute hedges from an economic perspective. They do not qualify for hedge accounting under IND AS109 and consequently are categorized as financial assets or financial liabilities at fair value through profit or loss. The resulting exchange gain or loss are included in other income and attributable transaction costs are recognized in the Statement of Profit and Loss when incurred.

2.6 Property, Plant and Equipment

1) These are tangible assets which are held for use in production, supply of goods or services or for administrative purposes. These are recognized and carried under cost model i.e. cost less accumulated depreciation and impairment loss, if any which is akin to recognition criteria under erstwhile GAAP.

a) Cost includes freight, duties, taxes and other expenses directly incidental to acquisition, bringing the asset to the location and installation including site restoration up to the time when the asset is ready for intended use. Such costs also include borrowing cost if the recognition criteria are met.

b) When a major inspection/repair occurs, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. Any remaining carrying amount of the cost of previous inspection/repair is derecognized.

c) Depreciation has been provided on WDV method in terms of expected life span of assets as referred to in Schedule II of the Companies Act, 2013.The residual value and useful life is reviewed annually and any deviation is accounted for as a change in estimate.

d) Components relevant to fixed assets, where significant, are separately depreciated on WDV basis in terms of their life span.

e) For New Projects, all direct expenses and direct overheads (excluding services of non-exclusive nature provided by employees in Company’s regular payroll)are capitalized till the assets are ready for intended use.

f) During sales of fixed assets any profit earned / loss sustained towards excess /short fall of sale value vis-a-vis carrying cost of assets is accounted for in statement of profit & loss.

2.7 Investments Property

a) Properties held to earn rentals or / and for capital appreciation but not for sale in the ordinary course of business, or use in the production or supply of goods or services or for administrative purposes are categorized as investment properties. These are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost shall also include borrowing cost if the recognition criteria are met. Any gain or loss on disposal of investment properties is recognised in profit or loss account.

b) Fair value of investments properties under each category are disclosed in the notes. Fair values are determined based on the evaluation performed by an accredited external independent valuer applying a recognized and accepted valuation model or estimation based on available sources of information from market.

c) Transfers to or from the investment property is made only when there is a change in use and the same is made at the carrying amount of Investment Property.

2.8 Intangible Assets

a) Intangible Assets wherever any, are initially recognized at :-

1) In case the assets are acquired separately then at cost

2) In case the assets are acquired in a business combination then at fair value.

3) In case the assets are internally generated then at capitalized development cost subject to satisfaction of criteria of recognition (identifiability, control and future economic benefit) laid down from clause 11 to17 of IND AS 38.

Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment loss. Research costs if any, are recognized as expense in the period in which it is incurred.

b) Intangible assets with finite useful life are assessed for impairment whenever there is an indication that the intangible assets may be impaired. Intangible assets with infinite useful life Including goodwill are tested for impairment annually.

c) Intangible assets with finite useful life are amortized over the useful economic life on a straight line basis. In case of Patents and Trade Marks the useful life is taken to be 10 years and in case of Software, the useful life is taken as 5 years.

2.9 Goodwill

No self-generated goodwill is recognized. Goodwill arises during the course of acquisition of an entity in terms of accounting treatment provided in IND AS-103 dealing with ’Business Combination’. Goodwill represents the excess of consideration money paid over the fair value of net assets of the entity under acquisition. Such goodwill if any, is construed to have indefinite life and as such is not subject to annual amortization but annual test of impairment under IND AS - 36 ’Impairment of Assets’. In case consideration money paid is less vis-a-vis fair value of net assets on account of bargain purchase, it is recognized in OCI at acquisition point and subsequently transferred to capital reserve.

2.10 Impairment of Non-Financial Assets

a) An asset is deemed impairable when recoverable value is less than its carrying cost and the difference between the two represents provisioning exigency.

b) Recoverable value is the higher of the ’Value in Use’ and fair value as reduced by cost of disposal.

c) Test of impairment of PPE, investment in subsidiaries / associates / joint venture and goodwill are under taken under Cash Generating Unit (CGU) concept. For Intangible Assets and Investment Properties it is undertaken in asset specific context.

d) Test of impairment of assets are generally undertaken based on identification criteria of impairment, if any, from external and internal sources of information outlined in para 12 of Ind AS-36. .

Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

2.11 Government subsidy / grant

Government Grant is recognized only when there is a reasonable assurance that the entity will comply with the conditions attaching to them and the grants will be received.

a) Subsidy related to assets is recognized as deferred income which is recognized in the statement of profit & loss on systematic basis over the useful life of the assets. Purchase of assets and receipts of related grants are separately disclosed in statement of cash flow.

b) Grants related to income are treated as other income in statement of profit & loss subject to due disclosure about the nature of grant.

2.12 Financial instruments

(i) Financial Assets

a) Initial Recognition and Measurement

All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.

Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial assets measured at amortized cost.

b) Subsequent Measurement

For purpose of subsequent measurement financial assets are classified in two broad categories:-

- Financial Assets at fair value

- Financial assets at amortized cost

Where assets are measured at fair value, gains and losses are either recognized entirely in the statement of profit and loss , or recognized in other comprehensive income.

c) A financial asset that meets the following two conditions is measured at amortized cost.

- Business Model Test: The objective of the company''s business model is to hold the financial asset to collect the contractual cash flows.

- Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

d) A financial asset that meets the following two conditions is measured at fair value through OCI:-

- Business Model Test: The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

- Cash flow characteristics test: The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payment of principal and interest on the principal amount outstanding.

e) All other financial assets are measured at fair value through profit and loss.

All equity investments are measured at fair value in the balance sheet, with value changes recognized in the statement of profit and loss, except for those equity investments for which the entity has elected irrevocable option to present value changes in OCI.

f) Investment in associates, j oint venture and subsidiaries

The company accounts for its investment in subsidiaries, associates and j oint venture at cost.

g) Impairment of financial assets

The company assesses impairment based on expected credit losses (ECL) model at an amount equal to:-

- 12 months expected credit losses, or

- Lifetime expected credit losses

depending upon whether there has been a significant increase in credit risk since initial recognition.

However, for trade receivables, the company does not track the changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.

(ii) Financial Liabilities

a) All financial liabilities are initially recognized at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.

b) Financial liabilities are classified as measured at amortized cost or fair value through profit and loss (FVTPL).

c) A financial liability is classified as FVTPL if it is classified as held for trading, or it is a derivative or is designated as such on initial recognition. Financial Liabilities at FVTPL are measured at fair value and net gain or losses, including any interest expense, are recognised in statement of profit and loss.

d) Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in statement of profit and loss. Any gain or loss on de-recognition is also recognized in statement of profit and loss.

2.13 Fair value measurement

a) The Group measures financial instruments, such as, derivatives at fair value at each balance sheet date.

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:

- In the principal market for the asset or liability, or

- 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.

b) A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

c) The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

d) All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

e) For assets and liabilities that are recognized in the financial statements on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization based on the lowest level input that is significant to the fair value measurement as a whole at the end of each reporting period.

2.14 Lease assets

a) Any transfer under an arrangement of lease if any, virtually endowing the lessee to utilize the property as if his own property for a specified period (including renewal thereon by convention or express stipulation in lease agreement itself ) is treated as finance lease.

No lease deal in which the company is a party as lessor is recognized as finance lease unless lease period is by an large commensurate with the life span of the assets given on lease in terms of schedule II of the Companies Act, 2013.

Lease arrangement of any other nature is treated as operating lease.

b) In case of finance lease, the value of concerned non-current assets / liability is determined at the point of commencement of lease by way of adding initial payment with discounted value of future lease installment during life span of lease in terms of interest rate implicit in the lease or incremental borrowing rate, if the former is not practicable to determine.

c) Expenses/Income under operating lease are more or less same as that of rental income/payment accounted for on accrual basis unless an escalation clause forms integral part of lease agreement in which case income booking is appropriately averaged.

d) Depreciation on leasehold assets if any, is provided on straight line method over the period of lease.

2.15 Inventories

Inventories, wherever any are valued at the lower of cost or net realizable value. Cost includes purchase price, Import duties and other taxes (other than those subsequently recoverable by the entity from taxing authorities) , transport & handling costs and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition.

2.16 Income Tax and Deferred Tax

a) The liability of company on account of Income Tax is computed considering the provisions of the Income Tax Act, 1961.

b) Deferred tax is provided using balance sheet approach on temporary differences at the reporting date as difference between the tax base and the carrying amount of assets and liabilities. Deferred tax is recognized subject to the probability that taxable profit will be available against which the temporary differences can be reversed.

c) Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

d) Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss (either in other comprehensive income or in equity).

e) 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 deferred taxes relate to the same taxable entity and the same taxation authority.

f) Deferred tax liabilities are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries where it is probable that the differences will not reverse in the foreseeable future.

g) Deferred tax assets are not recognised for temporary differences between the carrying amount and tax bases of investments in subsidiaries, where it is not probable that the differences will reverse in the foreseeable future and taxable profit will not be available against which the temporary difference can be utilized.

2.17 Employee Benefits

Liabilities in respect of employee benefits to employees are provided for as follows:

a) Short-term employee benefit

i) Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be incurred when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.

ii) ESI wherever any, is provided on the basis of actual liability accrued and paid to authorities.

b) Long Term Employee Benefit Plan

The Company has a policy on compensated absences which are both accumulating and non-accumulating in nature. Keeping in view the small strength of employees (less than ten) and their small no. of years of service, the cost of accumulating compensated absences is not expected to be material and hence is not determined by actuarial valuation performed by an independent actuary.

Expense on non-accumulating compensated absences is recognized in the period in which the absences occur.

c) Post Separation Employee Benefit Plan

i) Defined Benefit Plan

- Liability recognized in the balance sheet in respect of gratuity if any, is the present value of the defined benefit obligation at the end of each reporting period less the fair value of plan assets.

- Company contributes its share of contribution whenever applicable, to Employees Provident Fund Scheme of central government.

- Actuarial gain / loss pertaining to these defined benefits and other components of re-measurement of net defined benefit liability (asset) are accounted for as OCI. All remaining components of costs are accounted for in statement of profit & loss.

ii) Defined Contribution Plans :

- Liability for superannuation fund if any, is provided on the basis of the premium paid to insurance company in respect of employees covered.

iii) Other employee benefits -This includes bonus, performance incentive etc. The undiscounted 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.

2.18 Foreign Currency Translation

a) The company’s financial statements are presented in INR, which is also the company’s functional currency.

b) Transactions in foreign currencies are recognized at rate of overseas currency ruling on the date of transactions. Gain / Loss arising on account of rise or fall in overseas currencies vis-a-vis functional currency between the date of transaction and that of payment is charged to Statement of Profit & Loss.

c) Monetary Assets in foreign currencies are translated into functional currency at the exchange rate ruling at the Reporting Date and the resultant gain or loss, is accounted for in the Statement of Profit & Loss. Monetary items mean units of currency held and assets and liabilities to be received or paid in fixed or determinable no.s of units of currency eg. cash, receivables, payables, etc.

d) A contract to receive a variable no. of entity’s own equity instruments in which the fair value to be received equals a fixed or determinable no. of units of currency (amount of money) is a monetary item.

e) Non-Monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non monetary items mean property, plant and equipment, inventories, investments in equity shares, goodwill, intangibles, prepaid amounts, etc.

f) Impact of exchange fluctuation is separately disclosed in notes to accounts.

2.19 Borrowing Cost

Borrowing cost that are directly attributable to the acquisition, construction, or production of a qualifying asset if any, are capitalized as a part of the cost of such asset till such time the asset is ready for its intended use or sale.

Borrowing costs consist of interest and other costs that an entity 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. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing cost are recognized as expense in the period in which they are incurred.

2.20 Provisions. Contingent Liability 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.

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

c) Disputed liabilities and claims against the company including claims raised by fiscal authorities (e.g. Income Tax, Service tax, GST, etc.) pending in appeal / court for which no reliable estimate can be made and or involves uncertainty of the outcome of the amount of the obligation or which are remotely poised for crystallization are not provided for in accounts but disclosed in notes to accounts.

d) However, present obligation as a result of past event with possibility of outflow of resources, when reliable estimation can be made of the amount of obligation, is recognized in accounts in terms of discounted value, if the time value of money is material using a current pre-tax rate that reflects the risk specific to the liability.

e) No contingent asset is recognized but disclosed by way of notes to accounts.

2.21 Share Based Payments (Employee Stock Option Scheme)

a) All the share based payment transactions as entered by the company if any, are of the nature of Equity settled share based payment transactions which means there are no terms of arrangement which provide either the company or the counter party with the choice of settling the transaction in cash rather than by issuing the Equity Instruments.

b) The services received under a share based payment transaction are recognized as and when the services are received.

c) Aggregate of quantum of option granted under the scheme in monetary term (net of consideration of issue to be paid in cash) is netted off against corresponding debit on account of deferred employee compensation under ESOP so as to appear as ESOP Outstanding under the head of Other Equity.

d) With the exercise of option and consequent issue of equity share, corresponding ESOP outstanding is transferred to share premium account.

e) Deferred employees compensation under ESOP is amortized on straight line method over the vesting period which appears under Employee Benefit Expense in the statement of Profit & Loss as ESOP expense.

2.22 Operating Segments

a) The company monitors the operating results of its operating segments (business segments) separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit and loss and is measured consistently with profit and loss in the financial statements.

b) Revenue for each group of similar products and services from external customers wherever any, is reported separately. Revenue from a single major customer if any(i.e more than 10 %), is disclosed separately.

c) Revenue from external customers

(i) attributed to the entity''s country of domicile and,

(ii) attributed to all foreign countries in total is reported separately. If revenue from an individual foreign currency is material, that is disclosed separately.

d) The primary reporting segment of the company is performed on the basis of business segments. The company has been making strategic investments in power generation business and acquisition of portfolio of wind / bio mass power plants.

2.23 Earnings Per Share

Basic Earnings per share is calculated by dividing the net profit ( total comprehensive income) for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit for the period attributed to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares, except where the results would be anti dilutive.

2.24 Business Combinations

a) The acquisition method of accounting is used to account for all business combinations wherever any, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:

- fair values of the assets transferred;

- liabilities incurred to the former owners of the acquired business;

- equity interests issued by the company; and

- fair value of any asset or liability resulting from a contingent consideration arrangement.

b) Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

c) The Company recognizes any non-controlling interest in the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest''s proportionate share of the acquired entity''s net identifiable assets.


Mar 31, 2016

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 all 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 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 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 prospectively 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 trade / 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 II 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.

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.

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

2. Dividend- Revenue, if any is recognized when the declaring company declares the dividend.

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

4. Derivatives, Futures and Options- Transactions are recognized, if any on the basis of 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 in reverse trades are treated as income or Loss as the case may be.

5. Delivery based transactions- The total value of sales is considered as turnover provided the said stock of scrip''s/commodity, if any is held as stock in trade before sale.

6. Commission- It is recognized, if any when service is rendered "once and for all" and accepted by the client.

7. Sale of goods- It is recognized , if any when all significant risks and rewards of ownership 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.

IX. Fixed Assets

Fixed Assets are stated at cost, net of CENVAT, wherever availed less accumulated depreciation. All costs including borrowing costs for bringing the assets to their present location and condition for their intended use.

X. Foreign currency Transactions

a) Transactions denominated in foreign currencies are 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-monetary foreign currency items are carried at cost e.g. fixed assets, inventories, investments in equity shares etc.

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

c) Exchange differences arising on liabilities incurred or on repayment of borrowing in foreign currency for acquisition of fixed assets, if any 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 if any 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 realizable value computed individually and aggregated category wise. In case of long term investments the fair value is obtained by investees'' assets and results or expected cash flows from investments. In case of quoted investment realizable value is taken as their quoted price on 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 benefits 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 considered that actuarial valuation may not be needed as it will not have any material effect on Financial Statements.

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 undiscounted 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.

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 are charged to revenue.

XIV. Earnings 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 during the year, except where results would be anti dilutive.

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 accounting income that originate in one period and are 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

i. Expenditure on intangible items, if any are expensed as incurred unless it qualifies as an intangible asset as defined in CAS-26. The carrying value of intangible asset is assessed for recoverability by reference to the estimated future discounted net cash flows that are expected to be generated by the asset. Where this assessment indicates a deficit, the assets are written down to the market value or fair value as computed above.

ii. Intangible asset, if any is recognized only when the following criteria are fulfilled:

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

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

c. The cost of it can be measured reliably.

(b) 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 the CGU is less than the recoverable 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.

(c) 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 are raised against such show cause notice and are disputed by the company then these are classified as possible obligations.

c) Contingent liabilities are not recognized but are disclosed in notes. They are 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. Performance guarantee or counter guarantee is not treated as contingent liability.

e) 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 are non-cancellable and their cancellation will 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.


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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