Accounting Policies of Monotype India Ltd. Company

Mar 31, 2017

Notes forming part of the financial statements Corporate Information

The Company was Incorporated on 30^th September, 1974 at Calcutta as a private limited company and converted into a public limited company on 23^rd October, 1976. Hon''ble Calcutta High Court vide order dated December 09, 2014 had approved the scheme for amalgamation of Mono herbicides Ltd, Gateway Distributor Limited, Unicorn Vyapar Limited, Subhankar Vinimay Limited, Swagatam Tradevin Limited and Lotus Financial Management Private Limited with Monotype India Limited. Company is engaged in business of dealing in shares and securities.

1. Significant Accounting Policies: a. Basis of preparation of Financial Statements

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis to comply with the accounting standards specified under section 133 of the Companies Act, 2013, the relevant provisions of the Companies Act, 2013 as applicable. The accounting policies adopted in the preparation of financial statements are consistent with those of the previous year.

b. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that effect the reported amount of assets and liabilities, disclosure of contingent liabilities and the reported amount of income and expenses during the year. Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Difference between the actual results and estimates are recognized in the period in which the results are known / materialize.

c. Revenue Recognition

i) Revenue is recognized to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured.

ii) Interest income is accounted on accrual basis and dividend income is recognized when the right to receive the dividend is established.

iii) Profits / Losses from share trading is determined on the basis of the “First In First Out” method.

d. Derivative : Equity Index / Stock Futures

i) Equity Index / Stock Futures are marked-to-market on a daily basis. Debit or credit balances, if any, disclosed under Short-term loans and advances or Current liabilities respectively, in the “Mark-to-Market Margin - Index / Stock Futures Account”, represents the net amount paid or received on the basis of movement in the prices of Index / Stock Futures till the Balance Sheet date.

ii) As at the Balance Sheet date, the profit / loss on open positions, if any, in Equity Index / Stock Futures are accounted for as follows:

- Credit balance in the “Mark-to-Market Margin - Equity Index / Stock Futures Account”, being anticipated profit, is ignored and no credit is taken in the Statement of Profit and Loss.

- Debit balance in the “Mark-to-Market Margin - Equity Index / Stock Futures Account”, being anticipated loss, is recognized in the Statement of Profit and Loss.

iii) On final settlement or squaring-up of contracts for Equity Index / Stock Futures, the profit or loss is calculated as difference between settlement / squaring-up price and contract price. Accordingly, debit or credit balance pertaining to the settled / squared-up contract in “Mark-to-Market Margin - Equity Index / Stock Futures Account” is recognized in the Statement of Profit and Loss upon expiry of the contracts. When more than one contract in respect of the relevant series of Equity Index / Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring up of the contract, the contract price of the contract so squared up is determined using “First In First Out” method for calculating profit / loss on squaring-up.

iv) “Initial Margin - Equity Index / Stock Futures Account”, representing the initial margin and “Margin Deposits” representing additional margin paid over and above the initial margin, for entering into contracts for Equity Index / Stock Futures, which are released on final settlement / squaring-up of underlying contracts, are disclosed under Short-term loans and advances.

Derivative Accounting:

Derivative contracts which remain open as at reporting date, other than the forward contracts to which Accounting Standard - 11 ''The Effect of Change in Foreign Exchange Rates'' is applicable, are marked to market. The resultant losses are recognized in the Statement of Profit and Loss and gains, if any, are not recognized as a matter of prudence.

e. Fixed Assets and Depreciation

Tangible Fixed assets are carried at cost of acquisition less accumulated depreciation and/ or accumulated impairment loss, if any. The cost of an item of tangible fixed asset comprises its purchase price, including non-refundable taxes or levies and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Depreciation on all the assets have been provided at the rates and in the manner prescribed under Part C of Schedule II to the Act on written down value. Depreciation on additions to assets or on sale / disposal of assets is calculated on a pro-rata basis from the date of such addition, sale or disposal.

f. Borrowing Cost

Borrowing costs attributable to the acquisition or construction of qualifying assets till the time such assets are ready for intended use are capitalized as part of cost of the assets. All other borrowing costs are expensed in the period they occur.

g. Investment

Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments.

Current investments are carried at lower of cost and fair value. Long term Investments are stated at cost less provision for diminution, other than temporary, in the value of such investments.

h. Taxes on incomes

Tax expense comprises of current tax and deferred tax.

Current tax is measured at the amount expected to be paid to / recovered from the tax authorities, using the applicable tax rates.

Deferred income tax reflect the current period timing differences between taxable income and accounting income for the period and reversal of timing differences of earlier years / period. During the current year, Company have not recognized the Deferred Tax assets.

Minimum Alternate Tax (MAT) credit entitlement is recognized in accordance with the Guidance Note on “Accounting for credit available in respect of Minimum Alternate Tax under the Income-tax Act, 1961” issued by the Institute of Chartered Accountants of India (ICAI).

i. Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized when the Company has present obligations, as result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made for the amount of obligation. Contingent liabilities are not recognized but disclosed in the financial statements. A Contingent asset is neither recognized nor disclosed in the financial statements.

j. Employee Benefits

i. Short term employee benefits are charged off in the year in which the related service is rendered

ii. The Company is exempted from Payment of Gratuity Act, 1972 in view of its strength of employees being less than threshold limit attracting the applicability of the said statute and as such no provision has been made for the said liability

iii. Leave encashment is not provided on actuarial basis in view of employees being less than 10 and same is charged on actual basis.

k. Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

l. Earnings per share

The Company reports its basic and diluted earnings per share in accordance with Accounting Standard 20 Earnings per Share. Basic earnings per share are computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares except where the results are anti-dilutive.

Notes:

1. The Company has only one class of equity share having par value of '' 10 per share. Each holder of equity share is entitled to one vote per share held. All the equity shares rank pari passu in all respects including but not limited to entitlement for dividend, bonus issue and rights issue. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all liabilities in proportion to their shareholding.

* Include Cash Withdrawn from bank

---

Mar 31, 2014

1. Basis of Accounting:

The financial statements have been prepared under the historical cost convention on an accrual system based on principle of going concern and are in accordance with the generally accepted accounting principles and the accounting standards referred to in section 211(3C) of the Companies Act, 1956.

2. Taxation:

Income tax expense comprises current tax, deferred tax charge or release and charge on account of fringe benefit tax. The deferred tax charge or credit is recognized using substantially enacted rates. In the case of unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only to the extent there is virtual certainty or realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed as at each Balance Sheet date to reassess realization.

3. Provisions, Contingent Liabilities and Contingent Assets:

Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past event and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statement except where virtual certainty is there.

4. Use of Estimates:

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of financial statements and the reported amounts of revenues and expenses during the reported Period. Difference between the actual results and estimates are recognized in the Period in which the results and estimates are recognized in the Period in which the results are known or materialize.

---

Mar 31, 2012

A. BASIS OF ACCOUNTING

The Company prepares its accounts on accrual basis, except otherwise stated, in accordance with the generally accepted accounting policies.

b. INVESTMENTS

Long-term investments are stated at cost less provision for diminution in value other than temporary if any. Current investments are stated at cost or market / fair value whichever is lower.

c. INCOME TAX

Provision for tax is made for current and deferred tax. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences, which are capable of reversal in subsequent periods and recognized using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized. In case of the carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognized only if there is "virtual certainty" that deferred tax assets can be realized against future taxable profits.

d. PROVISION, CONTINGENT LIABILITIES AND ASSETS

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty is treated as contingent and disclosed by way of note on the accounts. Contingent assets are not recognized or disclosed in the financial statements. A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.

---

Mar 31, 2010

A. BASIS OF ACCOUNTING

The company prepares its accounts on accrual basis, except otherwise stated, in accordance with the generally accepted accounting policies.

b. INVESTMENTS

Long-term investments are stated at cost less provision for diminution other than temporary, if any. Current investments are stated at cost or market / fair value whichever is lower.

c. INCOME TAX

Provision for tax is made for current, deferred and fringe benefit taxes. Current tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing differences, which are capable of reversal in subsequent periods and recognised using tax rates and tax laws, which have been enacted or substantively enacted. Deferred tax assets are only to be recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets will be realised. In case of the carry forward of unabsorbed depreciation and tax losses, deferred tax assets are recognised only if there is "virtual certainty" that deferred tax assets can be realised against future taxable profits.

d. PROVISION, CONTINGENT LIABILITIES AND ASSETS

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of note on the accounts. Contingent assets are not recognized or disclosed in the financial statements. A provision is recognized when an enterprise has a present obligation as a result of past event(s) and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation(s), in respect of which a reliable estimate can be made for the amount of obligation.