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Accounting Policies of Motor & General Finance Ltd. Company

Mar 31, 2015

I) Accounting Conventions

The financial statements are prepared on accrual basis of accounting under the historical cost convention in accordance with Generally Accepted Accounting Principles in India (GAAP), Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, the relevant provisions of the Companies Act, 2013 and guidelines issued by Securities and Exchange Board of India, to the extent applicable.

ii) Fixed Assets

Fixed Assets have been stated at cost less accumulated depreciation and impairment, if any. Cost refers to cost of acquisitions/revalued cost.

iii) Investments

Long Terms Investments are valued at cost. Cost refers to actual cost of acquisition / carrying cost. Provision for diminution is made to recognise a decline, other than temporary, in the value of such investments. Cost refers to actual cost of acquisition / carrying cost. Current Investments are valued at lower of cost or market value. Investments in immovable properties are valued at cost.

iv) Stock in Trade-Projects

Valued at lower of cost or net realizable value. Stock in trade includes total amount of expenditure incurred upto the date of certificate of completion. Subsequent expenditure which relates to an item of capital nature is added into the cost of stock in trade.

v) Depreciation

a) Depreciation on fixed assets is provided on the written down value (WDV) method based on the useful lives and residual value of the assets as prescribed in Schedule II to the Companies Act, 2013.

Based on internal assessment and technical evaluation, the management has assessed useful lives of two buildings as 80 years and 75 years, which is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act, 2013.

b) No depreciation is provided in respect of investments in Land and Buildings held as investments, as the amount set aside under Property Reserve is considered adequate to cover such depreciation.

c) Depreciation on Land & Buildings is provided on composite cost, where cost of Land is not separately ascertained.

vi) Revenue Recognition

a) Rental income from leased properties, interest income is recognised on accrual basis.

b) Insurance claims are accounted for on receipt basis.

c) Dividend is accounted for on accrual basis when the right to receive dividend is established.

vii) Retirement Benefits

a) Provision for Gratuity payable to eligible employees is made on actual basis as per payment of Gratuity Act, 1972 or on actuarial valuation whichever is higher.

b) Provision for leave encashment is made on actuarial valuation.

c) Provident Fund contribution for all employees is charged to statement of Profit & Loss each year.

viii) Deferred Tax

Deferred Tax is recognised, subject to consideration of prudence, on timing differences, representing the difference between the taxable income/ (loss) and the accounting income/ (loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax assets viz. unabsorbed depreciation and carry forward losses are recognised if there is 'virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

ix) Income Tax

The current tax under Indian Income tax relates to Minimum Alternate Tax(MAT) as per the provisions of Section 115JB, if it is expected to be recovered in future years then the same has been recognised as MAT credit entitlement.

x) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain impairment based on internal/external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its realizable value. The realizable value is greater of the assets net selling price and value in use.

xi) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognised for liabilities that can be measured only by using a substantial degree of estimation, if

a) the company has a present obligation as a result of past event,

b) a probable outflow of resources is expected to settle the obligation and

c) the amount of obligation can be reliably estimated.

Reimbursements expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, of which the probability of outflow of resources is remote.

Contingent Assets are neither, recognised nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.




Mar 31, 2014

I) Accounting Conventions

The financial statements of the company, have been prepared on a Going Concern basis, on historical cost convention, applicable Accounting Standards referred to in Section 211 ( 3C ) of the Companies Act, 1956 which have been notified by the Companies ( Accounting Standards ) Rules, 2006 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and the relevant provisions of Companies Act, 1956 to the extent applicable.

ii) Fixed Assets

Fixed Assets have been stated at cost less accumulated depreciation and impairment, if any. Cost refers to cost of acquisitions/revalued cost.

iii) Investments

Long Terms Investments are valued at cost. Cost refers to actual cost of acquisition / carrying cost. Provisions for diminution in value, if any, is made if decline is of permanent nature. Current Investments are valued at lower of cost or market value. Investments in immovable properties are valued at cost. Other Investments are stated at cost less provision for decline in value, if any.

iv) Stock in Trade-Projects

Valued at lower of cost or net realizable value. Stock in trade includes total amount of expenditure incurred upto the date of certificate of completion. Subsequent expenditure which relates to an item of capital nature is added to the stock in trade.

v) Depreciation

a) Fixed Assets: Pro -rata on Written Down Value method as per rates prescribed under the Income Tax Act, 1961 or as per rates prescribed in Schedule XIV to the Companies Act,1956, whichever is higher.

b) Assets costing Rs. 5,000/- or below are fully depreciated in the year of acquisition.

c) No depreciation is provided in respect of investments in Land and Buildings held as Investments, as the amount set aside under Property Reserve is considered adequate to cover such depreciation.

d) Depreciation on Land & Buildings is provided on composite cost, where cost of Land is not separately ascertained.

vi) Revenue Recognition

a) Rental income from leased properties, interest income is recognised on accrual basis.

b) Interest on Post Office Savings BankAccount, Insurance claims etc. are accounted for on receipt basis.

c) Dividend is accounted for on accrual basis when the right to receive dividend is established.

vii) Retirement Benefits

a) Provision for gratuity payable to eligible employees is made on actual basis as per payment of Gratuity Act, 1972 or on actuarial valuation whichever is higher.

b) Provision for leave encashment is made on actuarial valuation.

c) Provident Fund contribution for all employees is charged to Statement of Profit & Loss each year.

viii) Deferred Tax

Deferred Tax is recognised, subject to consideration of prudence, on timing differences, representing the difference between the taxable income/ (loss) and the accounting income/ (loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax assets viz. unabsorbed depreciation and carry forward losses are recognised if there is ''virtual certainty'' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

ix) Income Tax

The current tax under Indian Income tax relates to Minimum Alternate Tax(MAT) as per the provisions of Section 115JB, if it is expected to be recovered in future years then the same has been recognized as MAT credit entitlement.

x) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain impairment based on internal/external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its realizable value. The realizable value is greater of the assets net selling price and value in use.

xi) Provisions, Contingent Liabilities and Contingent Assets Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of past event,

b) a probable outflow of resources is expected to settle the obligation and

c) the amount of obligation can be reliably estimated.

Reimbursements expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, of which the probability of outflow of resources is remote.

Contingent Assets are neither, recognised nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.


Mar 31, 2013

I) The financial statements have been prepared on a Going Concern basis, on historical cost convention, applicable

Accounting Standards referred to in Section 211 ( 3C ) of the Companies Act, 1956 which have been notified by the Companies ( Accounting Standards ) Rules, 2006 and the provisions of Companies Act, 1956 and after taking into account the applicable guidelines issued by the Reserve Bank of India to Non Banking Financial Companies from time to time and in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

ii) Fixed Assets

Fixed Assets (including assets given on lease upto 31.3.2001) have been stated at cost less accumulated depreciation and impairment, if any. Cost refers to cost of acquisitions/revalued cost.

iii) Investments

Long Terms Investments are valued at cost. Cost refers to actual cost of acquisition / carrying cost. Provisions for diminution in value, if any, is made if decline is of permanent nature. Current Investments are valued at lower of cost or market value. Investments in Immovable Properties are valued at cost. Other Investments are stated at cost less provision for decline in value, if any.

iv) Inventories

Inventories are stated at lower of cost or net realizable value less provision for obsolescence, if any.

v) Repossessed Vehicles

Repossessed Vehicles in hand are valued at the Principal or Principal and Interest amount due form hirers or at net realisable value, whichever is lower.

vi) Depreciation

a) Assets on Lease and Assets at Gas Division: Pro-Rata on straight line method, as per rates prescribed in Schedule XIV to the Companies Act, 1956.

b) Other Fixed Assets: Pro -rata on Written Down Value method as per rates prescribed under the Income Tax Act, 1961 or as per rates prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher.

c) Assets costing Rs. 5,000/- or below are fully depreciated in the year of acquisition.

d) No write off is made in respect of lease relating to leasehold lands.

e) No depreciation is provided in respect of investments in Land and Buildings held as investments, (other than those under development) as the amount set aside under Property Reserve is considered adequate to cover such depreciation.

f) Depreciation on Land & Buildings is provided on composite cost, where cost of Land is not separately ascertained.

vii) Classification of Assets and Provisioning

Assets are classified into Performing and Non Performing categories based on their record of recovery as prescribed by the Reserve Bank of India''s Prudential Norms and after considering adjustments effected, if any. Income from Non Performing Assets is recognised when realised and provision made as per Prudential Norms.

viii) Revenue Recognition

a) Finance Charges on hire purchase/ loan against hypothecation contracts and income from finance lease transactions are computed using Internal Rate of Return method which ensures a constant periodic rate of return on net finance amount outstanding.

b) Lease Rentals are accounted for as per terms of lease agreements. However, in compliance of the Guidance Note issued by the Institute of Chartered Accountants of India, and applicable to transactions entered into prior to 01.4.2001, the differential between the Capital Recovery Component comprised (based on the Internal Rate of Return method) in the lease rentals and the depreciation referred to in Para 6(a) above, (for all assets acquired on or beginning from 1st April, 1995 from accounting year 1995-96 and in respect of assets acquired upto 1.4.1995 prospectively from the accounting year 1996-97) is carried to "Lease Equalisation" in the Profit & Loss Account.

c) Income from Non Performing Assets is recognised when realised.

d) Bills Discounting Charges are accounted for on accrual basis except in case of Non Performing Assets, wherein it is recognised on realisation basis.

e) Overdue charges from hirers/lessees are accounted for on realisation basis in view of uncertainly thereof.

f) Interest income in the Profit & Loss Account is recognised on accrual basis.

g) Interest on Post Office Savings Bank Account, Insurance claims etc. are accounted for on receipt basis.

h) Dividend is accounted for on accrual basis when the right to receive dividend is established.

ix) Retirement Benefits

a) Provision for Gratuity payable to eligible employees and for leave encashment is made based on actuarial valuation or as per actual liability, which ever is higher .

b) Provident Fund contribution for all employees is charged to revenue each year.

x) Deferred Revenue Expenditure

a) Shares and Debenture issue expenses are written off over a period of ten years.

b) The total liability under Voluntary Retirement Scheme (VRS) is amortised to the Profit & Loss Account over the period of expected future benefits (a period of five years) commencing from the year the employees opts for the scheme. The unamortized amount to the extent not written off is disclosed as "Miscellaneous Expenditure."

xi) Deferred Tax

Deferred Tax is recognised, subject to consideration of prudence, on timing differences, representing the difference between the taxable income/ (loss) and the accounting income/ (loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax assets viz. unabsorbed depreciation and carry forward losses are recognised if there is ''virtual certainty'' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

xii) Income Tax

The current tax under Indian Income tax relates to Minimum Alternate Tax(MAT) as per the provisions of Section 115JB, it is expected to be recovered in future years and the same has been recognized as MAT credit entitlement.

xiii) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain impairment based on internal/external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its realisable value. The realisable value is greater of the assets net selling price and value in use.

xiv) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the Company has a present obligation as a result of past event,

b) a probable outflow of resources is expected to settle the obligation and

c) the amount of obligation can be reliably estimated.

Reimbursements expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, of which the probability of outflow of resources is remote. Contingent Assets are neither, recognised nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.


Mar 31, 2012

I) Accounting Conventions

The financial statements have been prepared on a Going Concern basis, on historical cost convention, applicable Accounting Standards referred to in Section 211 ( 3C ) of the Companies Act, 1956 which have been notified by the Companies ( Accounting Standards ) Rules, 2006 and the provisions of Companies Act, 1956 and after taking into account the applicable guidelines issued by the Reserve Bank of India to Non Banking Financial Companies from time to time and in accordance with the mandatory Accounting Standards issued by the Institute of Chartered Accountants of India.

ii) Fixed Assets

Fixed Assets (including assets given on lease upto 31.3.2001) have been stated at cost less accumulated depreciation and impairment, if any. Cost refers to cost of acquisitions/revalued cost.

iii) Investments

Long Terms Investments are valued at cost. Cost refers to actual cost of acquisition / carrying cost. Provisions for diminution in value, if any, is made if decline is of permanent nature. Current Investments are valued at lower of cost or market value. Investments in Immovable Properties are valued at cost. Other Investments are stated at cost less provision for decline in value, if any.

iv) Inventories

Inventories are stated at lower of cost or net realizable value less provision for obsolescence, if any.

v) Repossessed Vehicles

Repossessed Vehicles in hand are valued at the Principal or Principal and Interest amount due form hirers or at net realisable value, whichever is lower.

vi) Depreciation

a) Assets on Lease and Assets at Gas Division: Pro-Rata on straight line method, as per rates prescribed in Schedule XIV to the Companies Act, 1956.

b) Other Fixed Assets: Pro -rata on Written Down Value method as per rates prescribed under the Income Tax Act, 1961 or as per rates prescribed in Schedule XIV to the Companies Act, 1956, whichever is higher.

c) Assets costing Rs. 5,000/- or below are fully depreciated in the year of acquisition.

d) No write off is made in respect of lease relating to leasehold lands.

e) No depreciation is provided in respect of Investments in Land and Buildings held as Investments, (other than those under development) as the amount set aside under Property Reserve is considered adequate to cover such depreciation.

f) Depreciation on Land & Buildings is provided on composite cost, where cost of Land is not separately ascertained.

vii) Classification of Assets and Provisioning

Assets are classified into Performing and Non Performing categories based on their record of recovery as prescribed by the Reserve Bank of India's Prudential Norms and after considering adjustments effected, if any. Income from Non Performing Assets is recognised when realised and provision made as per Prudential Norms.

viii) Revenue Recognition

a) Finance Charges on hire purchase/ loan against hypothecation contracts and income from finance lease transactions are computed using Internal Rate of Return method which ensures a constant periodic rate of return on net finance amount outstanding.

b) Lease Rentals are accounted for as per terms of lease agreements. However, in compliance of the Guidance Note issued by the Institute of Chartered Accountants of India, and applicable to transactions entered into prior to 01.4.2001, the differential between the Capital Recovery Component comprised (based on the Internal Rate of Return method) in the lease rentals and the depreciation referred to in Para 6(a) above, (for all assets acquired on

or beginning from 1st April, 1995 from accounting year 1995-96 and in respect of assets acquired upto 1.4.1995 prospectively from the accounting year 1996-97) is carried to "Lease Equalisation" in the Profit & Loss Account.

c) Income from Non Performing Assets is recognised when realised.

d) Bills Discounting Charges are accounted for on accrual basis except in case of Non Performing Assets, wherein it is recognised on realisation basis.

e) Overdue charges from hirers/lessees are accounted for on realisation basis in view of uncertainly thereof.

f) Interest income in the Profit & Loss Account is recognised on accrual basis.

g) Interest on Post Office Savings Bank Account, Insurance claims etc. are accounted for on receipt basis.

h) Dividend is accounted for on accrual basis when the right to receive dividend is established.

ix) Retirement Benefits

a) Provision for Gratuity payable to eligible employees and for leave encashment is made based on actuarial valuation or as per actual liability, which ever is higher .

b) Provident Fund contribution for all employees is charged to revenue each year.

x) Deferred Revenue Expenditure

a) Shares and Debenture issue expenses are written off over a period of ten years.

b) The total liability under Voluntary Retirement Scheme (VRS) is amortised to the Profit & Loss Account over the period of expected future benefits (a period of five years) commencing from the year the employees opts for the scheme. The unamortized amount to the extent not written off is disclosed as "Miscellaneous Expenditure."

xi) Deferred Tax

Deferred Tax is recognised, subject to consideration of prudence, on timing differences, representing the difference between the taxable income/ (loss) and the accounting income/ (loss) that originated in one period and are capable of reversal in one or more subsequent periods. Deferred Tax assets and liabilities are measured using tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax assets viz. unabsorbed depreciation and carry forward losses are recognised if there is 'virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets can be realised.

xii) Income Tax

The current tax under Indian Income tax relates to Minimum Alternate Tax(MAT) as per the provisions of Section 115JB, it is expected to be recovered in future years and the same has been recognized as MAT credit entitlement.

xiii) Impairment of Assets

The carrying amounts of assets are reviewed at each Balance Sheet date to ascertain impairment based on internal/external factors. An impairment loss is recognised when the carrying amount of an asset exceeds its realisable value. The realisable value is greater of the assets net selling price and value in use.

xiv) Provisions, Contingent Liabilities and Contingent Assets

Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

a) the company has a present obligation as a result of past event,

b) a probable outflow of resources is expected to settle the obligation and

c) the amount of obligation can be reliably estimated.

Reimbursements expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.

Contingent liability is disclosed in the case of

a) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b) a possible obligation, of which the probability of outflow of resources is remote.

Contingent Assets are neither, recognised nor disclosed.

Provisions, Contingent Liabilities and Contingent Assets are reviewed at each Balance Sheet date.

a.) The Company has one class of equity shares having a par value of Rs. 10 per Share. Each Shareholder is eligible for one vote per share held. The dividend proposed (if any) by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend(if any). In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

b.) 277 Equity Shares out of issued, subscribed and paid up share capital were allotted in 2008-09 pursuant to the Schemes of amalgamation without payments being received in cash.

 
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