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Accounting Policies of MCS Ltd. Company

Mar 31, 2014

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual and prudent basis.

These financial statements have been prepared to comply, in all material aspects, with the applicable accounting standards notified under Section 211 (3C) {Companies (Accounting Standard) Rules, 2006 as amended} and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956.

i) Use of Estimates

The preparation of financial statements in confirmity with indian GAAP requires the management to make judgements, estimates and assumptions that effect the reported amount of revenues, expenses, assets and liabilities and the disclosure of contigent liabilities, at the end of reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimate could result in outcomes requiring a material adjustments to the carrying amount of assets or liabilities in the future period.

ii) Depreciation

Depreciation, on assets other than leased assets is provided on straight line method, on prorata basis, in accordance with the Schedule XIV of the Companies Act, 1956. In respect of additions to the assets other than leased assets during the year where the cost of each asset does not exceed Rs.5,000/-, are written off 100%. Improvement on Leased assets and the assets created on leasehold land are written off over the primary period of lease. Intangible assets (Goodwill and software) are accounted at their cost of acquisition and amortized over their estimated economic life not exceeding 10 years.

iii) Tangible fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. All costs relating to up-gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant benefits of lasting nature.

iv) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company''s fixed assets. If any indication exists, asset''s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of assets is the value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

v) Borrowing Costs

The borrowing cost in respect of loans taken by the Company for augmenting its resources for carrying out its regular business activity and capital expenditure, is charged to the revenue as expense in the period in which they are incurred as the assets acquired does not take a substantial period of time to get ready for its intended use.

vi) Income Taxes

Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has unabsorbed depreciation and carry forward of tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits.

vii) Income Recognition:

The Income from operational activities (net of rebate and discounts) are accounted for on accrual basis.

Income in respect of other heads of Income such as dividend, interest etc. is accounted for on accrual basis. In cases where there is uncertainty of collections, the income is accounted on receipt basis.

viii) Investments

Investments are stated at lower of cost or realizable value in accordance with applicable accounting standards.

ix) Foreign Currency Transactions

Foreign Currency Transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.

x) Retirement and Other Employee Benefits

Gratuity liability is defined benefit obligation and is so provided for on the basis of an actuarial valuation on the projected unit credit method made at the end of each financial year.

Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Statement of Profit & Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.

Short term/ Long tern compensated absences are provided for, based on actuarial valuation carried by an actuary as at the end of the year.

Actuarial gains/ losses are immediately taken to Statement of Profit and Loss account and are not deferred.

xi) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable of equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xii) Impairment of Assets

As stipulated in accounting standard -28 on Impairment of Assets issued by the Institute of Chartered Accountants of India, the Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

xiii) Claims are accounted for at the time of settlement.


Mar 31, 2012

The financial statements are prepared under the historical cost convention in accordance with applicable Accounting Standards based on prudential accounting norms and relevant provisions of the Companies Act, 1956. The significant accounting policies foil owed are as under:

i) Depreciation

Depreciation, on assets other than leased assets is provided on straight line method, on prorate basis, in accordance with the Schedule XIV of the Companies Act, 1956. In respect of additions to the assets other than leased assets during the year where the cost of each asset does not exceed Rs. 5,000/-, are written off 100% Improvement on Leased assets and the assets created on leasehold land are written off over the primary period of lease. Intangible assets (Goodwill and software) are accounted at their cost of acquisition and amortized over their estimated economic life not exceeding 10 years.

ii) Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. All costs relating to up-gradations/ enhancements are generally charged off as revenue expenditure unless they bring significant benefits of lasting nature.

iii) Impairment of Fixed Assets

Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Company's fixed assets. If any indication exists, asset's recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recordable amount. The recoverable around of assets is the value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

iv) Borrowing Costs

The borrowing cost in respect of loans taken by the Company for augmenting its resources for carrying out its regular business activity and capital expenditure, is charged to the revenue as expense in the period in which they are incurred as the assets acquired does not take a substantial period of time to get ready for its intended use

v) Provision for Tax

Current tax is determined as the amount of tax payable in respect of estimated taxable income for the yearend in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized using the enacted tax rates and laws as on the Balance Sheet date, subject to the consideration of prudence in respect of deferred tax assets, on all timing differences, between taxable income and accounting income that originate in one period and are capable of reversal in one or crore

' The Income from operational activities (net of rebate and discounts) are accounted for on accrual basis.

Income in respect of other heads of Incurred such as dividend, interest etc. is accounted for on accrual basis. In cases where there is uncertainty of collections, the income is accounted on receipt basis.

" Investments are stated at lower of cost or realizable value in accordance with applicable accounting

" Foreign Currency Transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the

vi) Retirement and Other Employee Benefits

Gratuity liability is defined benefit obligation and is so provided for on the basis of an actuarial valuation on the projected unit credit retched made at the end of each financial year.

Retirement benefits in the form of Provident Fund is a defined contribution scherre and the contributions are charged to the Profit & Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective


Mar 31, 2010

The financial statements are prepared under the historical cost convention in accordance with applicable Accounting Standards based on prudential accounting norms and relevant provisions of the Companies Act, 1956. The significant accounting policies followed are as under:

i) Depreciation, on assets other than leased assets is provided on straight line method, on prorata basis, in accordance with the Schedule XIV of the Companies Act, 1956. In respect of additions tothe assets other than leased assets during the year where the cost of each asset does not exceed Rs.5,000/-, are written off 100%. Improvement on Leased assets and the assets created on leasehold land are written off over the primary period of lease. Intangible assets (Goodwill and software) are accounted at their cost of acquisition and amortized over their estimated economic life not exceeding 10 years.

ii) Fixed Assets: Fixed assets are stated at cost less accumulated depreciation. Cost is inclusive of freight, duties, levies and any directly attributable cost of bringing the assets to their working condition for intended use. All costs relating to up- gradations/enhancements are generally charged off as revenue expenditure unless they bring significant benefits of lasting nature.

iii) Consideration is given at each balance sheet date to determine whether there is any indication of impairment of the carrying amount of the Companys fixed assets. If any indication exists, assets recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of assets is the value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value based on an appropriate discount factor.

Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased. However, the increase in carrying amount of an asset due to reversal of an impairment loss is recognized to the extent it does not exceed the carrying amount that would have been determined (net of depreciation) had no impairment loss been recognized for the asset in prior years.

iv) Borrowing Costs: The borrowing cost in respect of loans taken by the Company for augmenting its resources for carrying out its regular business activity and capital expenditure, is charged to the revenue as expense in the period in which they are incurred as the assets acquired does not take a substantial period of time to get ready for its intended use.

v) Provision for Tax : Current tax is determined as the amount of tax payable in respect of estimated taxable income for the year and in accordance with the provisions of Income Tax Act, 1961. Deferred tax is recognized using the enacted tax rates and laws as on the Balance Sheet date, subject to the consideration of prudence in respect of deferred tax assets, on all timing differences, between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

vi) Income Recognition:

a) The Income from operational activities (net of rebate and discounts) are accounted for on accrual basis.

b) Income in respect of other heads of Income such as dividend, interest etc. is accounted for on accrual basis. In cases where there is uncertainty of collections, the income is accounted on receipt basis.

vii) Investments are stated at lower of cost or realizable value in accordance with applicable accounting standards.

viii) Foreign Currency Transactions:

Foreign Currency Transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the sate of transaction.

ix) Retirement and Other Employee Benefits:

Gratuity liability is defined benefit obligation and is so provided for on the basis of an actuarial valuation on the projected unit credit method made at the end of each financial year.

Retirement benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit & Loss Account of the year when the contributions to the fund are due. There are no other obligations other than the contribution payable to the respective authorities.

Short term/ Long tern compensated absences are provided for, based on actuarial valuation carried by an actuary as at the end of the year.

Actuarial gains/ losses are immediately taken to Profit and Loss account and are not deferred.

x) Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable of equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

xi) Impairment of Assets

As stipulated in accounting standard - 28 on Impairment of Assets issued by the Institute of Chartered Accounts of India, the Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing business are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

xii) Claims are accounted for at the time of settlement.

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