globus power generation ltd share price Management discussions

ECONOMIC GROWTH AND POWER SECTOR

Indias power sector is one of the most diversified in the world. Sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydro and nuclear power, to viable non-conventional sources such as wind, solar, agricultural and domestic waste. Electricity demand in the country has increased rapidly and is expected to rise further in the years to come. In order to meet the increasing demand for electricity in the country, massive addition to the installed generating capacity is required.

India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 411.64 GW as of January 31, 2023. The peak power demand in the country stood at 205.03 GW in December, 2022.

Total FDI inflows in the power sector reached US$ 16.57 billion between April 2000-December 2022.

In order to promote sustained industrial growth, the Government of India has identified the power sector as a key factor and during the union budget 2022-23, the Government of India has allocated Rs. 7,327 Crore for the solar power sector including grid, off-grid, and PM-KUSUM projects. The Green Energy Corridor projects have been initiated to facilitate renewable power evacuation and reshape the grid for future requirements. Also, other projects came into force during previous years like SAUBHAGYA was launched by the Government of India with the aim of achieving universal household electrification and many other alike projects.

OUTLOOK OF THE COMPANY

VISION:

To be one of the leading companies across the Globe that produces Clean & Smart Energy and with the aim to be environment friendly.

MISSION:

a) To reduce societys total reliance on limited Fossil Fuels and change perspective to look at clever alternative sources that are unlimited; b) To contribute to lessen the phenomena of Global Warming and gain the maximum from the abundant Clean Energy sources of India and c) To protect the needs of our future generation and safeguard the current renewable resources.

Keeping major problems in mind, like the rising levels of pollution leading to the universal crisis of Global Warming is not only dangerous for our surroundings but also life-threatening. Our consistent strive to substitute conventional and harmful sources of energy like Fossil Fuels with renewable and smart sources like Solar Power is assured to protect and safeguard the needs of our nation and of the world. We follow the philosophy of the clever use of the unlimited bounty of nature and have to be utilized judiciously so as to gain the maximum from them. We do this by strategically planning and extracting these resources from various sites from across the country that are chosen keeping many factors in mind.

Our Management and Promoters use all possible technological advances and mechanical techniques to extract these resources in the best possible way so that they are also economically viable and serve even at the grass root levels by providing them steady electricity and a source of employment.

RISK AND CONCERNS

The Power Sector, directly or indirectly, impacts almost all the sectors contributing to the growth of the nation. Setting up a power project requires huge capital investments and takes years of concentrated efforts for successful completion and commissioning. Hence, any slowdown in the power sector has a domino effect on the overall economic growth of the country.

Some of the critical issues impacting the performance of the sector are mentioned below:

The following potential environmental and social risks associated with power generation Industry are:

1. Global Warming and Climate Change - One of the biggest contributors to the "greenhouse effect" causing global warming is fossil fuel emission of which, 80 percent of the worlds energy comes from.

2. Environment Hazards - The environmental impact of conventional sources is hazardous and has to be eradicated to establish a healthy milieu, for us and for our future as country.

3. Restrictions on Energy Sources In India we have limited coal reserves and the potential of increased dependence on imported fuel is increasing.

4. Solid waste (production and disposal) - ash residues (from combustions process) and sludge (from cooling process)

5. Atmospheric emissions:

• Pollutants (VOC, NOX, SOX, PM10, CO, CO2, etc)

• Greenhouse gas production

• Dust and noise Employee Health and Safety - operational noise, odour, nuisance, Landscape scarring and visual impact

6. Financial health of state Discoms and Government support

Poor financial health and financial viability of the Discoms continue to be the major power producers face. Most Discoms continue to make major losses as a result of poor and archaic network infrastructure, inefficient operations, and expensive long-term power purchase agreements. This has resulted in Discoms growing inability to pay power generators on time, thereby in-turn endangering the financial health of the generators and their lenders, keeping them tottering on the brink of slipping back into stress.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a system of internal controls commensurate with the nature and size of its operations, which effectively and adequately encompasses every facet of its operations and functional areas. The system involves a compliance management team with established policies, norms and practices as also the applicable statutes and rules and regulations, with an inbuilt system of checks and balances, so that appropriate and immediate corrective actions are initiated in right earnest in the event of any deviations from the stipulated standards and parameters.

The effectiveness and deliverability of the internal control systems are reviewed periodically so that measures, if any, needed for strengthening the same can be taken, with the changing business needs of the Company. The Company continues to regularly review its systems, processes and controls on an on-going basis, comparing and aligning them with the industry best practices.

HUMAN RESOURCES

Your Company respects each employee and motivates them by offering opportunities based on their skill sets, and in the process, builds mutually benefiting relations between the Company and its employees.

Your Company has put in place a recruitment system in the organization wherein right candidates with the right skills are recruited. Your Company has established systems, which aim to provide training to employees at every level of the organization that leads to quality work output in their assigned work, in turn helping in improving the bottom line of your Company.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. The Board takes note of this periodically in their meeting.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The details of the financial performance of your Company are reflected in the Balance Sheet, Profit & Loss Account and notes to accounts thereon, appearing separately in the Financial Statements for the financial year ended March 31, 2023 . Highlights of the said Financial Statements are provided below:

PARTICULARS	Financial Year 2022-23	Financial Year 2021-22
Sales and other income	0.43	0
Profit/(Loss) before exceptional items and tax	(48.92)	(54.20)
Exceptional Item	1196.00	129.31
Profit/(Loss) before Tax	(1244.92)	(183.51)
Tax Expenses	0	0
Profit/(Loss) for the period	(1244.92)	(183.51)

The financial performance of your Company has been further explained in the Directors Report of your Company for the year 2023, appearing separately.

SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AS COMPARED TO THE PREVIOUS YEAR

Ratios	2022-23	2021-22	Variation (%)	Reason for significant change (i.e. 25% or more)
Debtor Turnover	0.0002	NIL	NIL
Inventory Turnover	NIL	NIL	NIL
Interest Coverage Ratio	NIL	NIL	NIL
Current Ratio	0.40	0.47	17.75%	NA
Debt Equity Ratio	NIL	NIL	NIL
Operating Profit Margin (%)	NIL	NIL	NIL
Net Profit Margin (%)	NIL	NIL	NIL

DISCLOSURE OF ACCOUNTING TREATMENT

The Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) and Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 and other relevant provisions of the Companies Act, 2013. Further, the Financial Statements have been prepared on a going concern basis under the historical cost convention on an accrual basis.

The Company continues follow the period of 1^st day of April to 31^st day of March, each year as its financial year for the purpose of preparation of financial statements under the provisions of Section 2(41) of the Companies Act, 2013.