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Accounting Policies of Morarka Finance Ltd. Company

Mar 31, 2013

A. Basis of presentation

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standard notified under section 211(3C) and other relevant provisions of the Companies Act, 1956.

All the assets and liabilities have been classified as current or non current as per company''s normal operating cycle and other criteria set out in Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the company has recognized its operating cycle being period of 12 months.

b. Fixed Assets

(i) Fixed assets are valued at cost of acquisition.

(ii) Expenditure relating to existing fixed assets is added to the cost of the assets where it increases theperformance/life of the assets as assessed earlier.

c. Inventories

Inventories representing stock of shares, debentures etc. are valued at lower of cost or market price.

d. Investments

Long term investments are carried at cost after providing for any diminution in value, if such diminution is of permanent nature.

e. Retirement Benefits

Provision for leave encashment are determined and accrued on actual basis. Gratuity is accounted for on cash basis.

f. Depreciation

The Company provides for depreciation on fixed assets at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, on written down value method.

g. Taxes on Income

(i) Provision for income tax Rs.Nil is determined on the basis of the estimated taxable income of the current year in accordance with the Income Tax Act, 1961.

(ii) Deferred tax is recognized in respect of deferred tax assets (subject to the consideration of prudence) and to the extent there is virtual certainty that the asset will be realized in future and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

h. Contingencies and events occurring after the Balance Sheet Date

Accounting for contingencies (gains & losses) arising out of contractual obligations, are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered upto the date of approval of the accounts by the Board, where material.

i. Intangible Assets:

Intangible Assets are recognized only where:

i. a) It is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and

b) The cost of the asset can be measured reliably.

ii. Intangible Assets are capitalized at cost of acquisition including any import duty and other taxes and any directly attributable expenditure on making the assets ready for its intended use.

iii. Amortization of Intangible Assets:

a) Intangible assets recognized are amortized over its best-estimated useful life, under a rebuttablepresumption that the useful life of an intangible asset will not exceed ten years.

b) Where the expenditure incurred on intangible assets do not meet recognition criteria, it isrecognized as an expense for the period.

j. Use Of Estimates:

The preparation of financial statements requires the use of estimates and assumptions to be made that affect the reported amount of assets, liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known / materialised.

k. Government Grants:

Grants relating to specific fixed assets are deducted from the original cost of specified assets.

l. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets. 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 costs are recognized as an expense in the period in which they are incurred.

m. Impairment:

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life. The impairment loss recognized in prior accounting period is reversed if there is a favourable change in the estimate of recoverable amount.


Mar 31, 2012

A. Basis of presentation

These financial statements have been prepared on an accrual basis and under historical cost convention and in compliance, in all material aspects, with the applicable accounting principles in India, the applicable accounting standard notified under section 211(3C) and other relevant provisions of the Companies Act, 1956.

All the assets and liabilities have been classified as current or non current as per company's normal operating cycle and other criteria set out in Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalent, the company has recognized its operating cycle being period of 12 months.

b. Fixed Assets

(i) Fixed assets are valued at cost of acquisition.

(ii) Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

c. Inventories

Inventories representing stock of shares, debentures etc. are valued at lower of cost or market price.

d. Investments

Long term investments are carried at cost after providing for any diminution in value, if such diminution is of permanent nature.

e. Retirement Benefits

Provision for leave encashment are determined and accrued on actual basis. Gratuity is accounted for on cash basis.

f. Depreciation

The Company provides for depreciation on fixed assets at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, on written down value method.

g. Taxes on Income

(i) Provision for income tax Rs. Nil is determined on the basis of the estimated taxable income of the current year in accordance with the Income Tax Act, 1961.

(ii) Deferred tax is recognized in respect of deferred tax assets (subject to the consideration of prudence) and to the extent there is virtual certainty that the asset will be realized in future and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

h. Contingencies and events occurring after the Balance Sheet Date

Accounting for contingencies (gains & losses) arising out of contractual obligations, are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered upto the date of approval of the accounts by the Board, where material.

i. Intangible Assets:

Intangible Assets are recognized only where:

i. a) It is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and

b) The cost of the asset can be measured reliably.

ii. Intangible Assets are capitalized at cost of acquisition including any import duty and other taxes and any directly attributable expenditure on making the assets ready for its intended use.

iii. Amortization of Intangible Assets:

a) Intangible assets recognized are amortized over its best-estimated useful life, under a rebuttable presumption that the useful life of an intangible asset will not exceed ten years.

b) Where the expenditure incurred on intangible assets do not meet recognition criteria, it is recognized as an expense for the period.

j. Use Of Estimates:

The preparation of financial statements requires the use of estimates and assumptions to be made that affect the reported amount of assets, liabilities and disclosure of contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognised in the period in which the results are known/materialised.

k. Government Grants:

Grants relating to specific fixed assets are deducted from the original cost of specified assets.

l. Borrowing Costs:

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as part of cost of such assets. 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 costs are recognized as an expense in the period in which they are incurred.

m. Impairment:

Where the recoverable amount of the fixed asset is lower than its carrying amount, a provision is made for the impairment loss. Post impairment, depreciation is provided for on the revised carrying value of the asset over its remaining useful life. The impairment loss recognized in prior accounting period is reversed if there is a favourable change in the estimate of recoverable amount.


Mar 31, 2011

A. Basis of presentation

The accounts have been prepared using historical cost convention and on the basis of going concern with revenues recognised and expenses accounted on accrual including committed obligations and are in accordance with Section 211(3C) and other provisions of the Companies Act, 1956.

b. Fixed Assets

(i) Fixed assets are valued at cost of acquisition.

(ii) Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

c. Inventories

Inventories representing stock of shares, debentures etc. are valued at lower of cost or market price.

d. Investments

Long term investments are carried at cost after providing for any diminution in value, if such diminution is of permanent nature.

e. Retirement Benefits

Provision for leave encashment are determined and accrued on actual basis. Gratuity is accounted for on cash basis.

f. Depreciation

The Company provides for depreciation on fixed assets at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, on written down value method.

g. Taxes on Income

(i) Provision for income tax Rs. Nil is determined on the basis of the estimated taxable income of the current year in accordance with the Income Tax Act, 1961.

(i) Deferred tax is recognized in respect of deferred tax assets (subject to the consideration of prudence) and to the extent there is virtual certainty that the asset will be realized in future and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

h. Contingencies and events occurring after the Balance Sheet Date

Accounting for contingencies (gains & losses) arising out of contractual obligations, are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered up to the date of approval of the accounts by the Board, where material.

i. Intangible Assets:

i. Intangible Assets are recognized only where:

a) It is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and

b) The cost of the asset can be measured reliably.

ii. Intangible Assets are capitalized at cost of acquisition including any import duty and other taxes and any directly attributable expenditure on making the assets ready for its intended use.

iii. Amortization of Intangible Assets:

a) Intangible assets recognized are amortized over its best-estimated useful life, under a rebuttable presumption that the useful life of an intangible asset will not exceed ten years.

b) Where the expenditure incurred on intangible assets do not meet recognition criteria, it is recognized as an expense for the period.


Mar 31, 2010

A. Basis of presentation

The accounts have been prepared using historical cost convention and on the basis of going concern with revenues recognised and expenses accounted on accrual including committed obligations and are in accordance with Section 211(3C) and other provisions of the Companies Act, 1956.

b. Fixed Assets

(i) Fixed assets are valued at cost of acquisition.

(ii) Expenditure relating to existing fxed assets is added to the cost of the assets where it increases the performance/life of the assets as assessed earlier.

c. Inventories

Inventories representing stock of shares, debentures etc. are valued at lower of cost or market price.

d. Investments

long term investments are carried at cost after providing for any diminution in value, if such diminution is of permanent nature.

e. Retirement Benefts

Provision for leave encashment are determined and accrued on actual basis. Gratuity is accounted for on cash basis.

f. Depreciation

The Company provides for depreciation on fxed assets at the rates and in the manner specifed in Schedule XIV of the Companies Act, 1956, on written down value method.

g. Taxes on Income

(i) Provision for income tax Rs.Nil is determined on the basis of the estimated taxable income of the current year in accordance with the Income Tax Act, 1961.

(i) Deferred tax is recognized in respect of deferred tax assets (subject to the consideration of prudence) and to the extent there is virtual certainty that the asset will be realized in future and deferred tax liabilities on timing differences, being the difference between taxable income and accounting income that originate in one year and are capable of reversal in one or more subsequent years.

h. Contingencies and events occurring after the Balance Sheet Date

Accounting for contingencies (gains & losses) arising out of contractual obligations, are made only on the basis of mutual acceptances. Events occurring after the date of the Balance Sheet are considered up to the date of approval of the accounts by the Board, where material.

i. Intangible Assets:

i. Intangible Assets are recognized only where:

a) It is probable that the future economic benefts that are attributable to the asset will fow to the enterprise; and

b) The cost of the asset can be measured reliably.

ii. Intangible Assets are capitalized at cost of acquisition including any import duty and other taxes and any directly attributable expenditure on making the assets ready for its intended use.

iii. Amortization of Intangible Assets:

a) Intangible assets recognized are amortized over its best-estimated useful life, under a rebuttable presumption that the useful life of an intangible asset will not exceed ten years.

b) Where the expenditure incurred on intangible assets do not meet recognition criteria, it is recognized as an expense for the period.

 
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