Accounting Policies of Modella Woollens Ltd. Company

Mar 31, 2015

(A) COMPANY OVERVIEW

Modella Woolens Ltd. is a public limited company domiciled in India and incorporated under the provisions of the Its shares are listed on BSE Ltd. The Company is engaged in trad.ng of tables.

(1) Basis of preparation

(i) The financial statements of the Company have been prepared and presented in accordance with the generally accepted Accounting Principles in India under them. stoical cost convent on an accrual basis. The Company has prepared these Financial Statements to comply in all material respects with the mandatory accounting standards. (ii) The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(2) Fixed-Assets and Depreciation

m Fixed assets are stated at cost of acquisition or construction or at revalued amount, net of impairment loss if any, less accumulated depreciation/amortization. Costs include financing costs of borrowed funds attributable to acquisition or construction of fixed assets, up to the date the assets are put to use. Assessment of indication of impairment of an asset is made at the period end and impairment loss if any, recognized.

(ii) The Carrying cost (after retaining residual value) of the asset existing on April 1, 2014 is depreciated on Straight Line Method (SLM) over a period of remaining useful life of an asset as per Schedule II of the Companies Act, 2013.

In case where the remaining useful life of an asset as on April 1, 2014 is nil, the carrying amount of such asset after retaining its residual value is recognized in the opening balance of retained earnings as per Schedule II of the Companies Act,2013.

Depreciation on addition / deletion to any asset during the period is calculated torpor rata basis from / up to the date of such addition / deletion respectively as per Schedule II of the Companies Act, 2013.

(3) Current investments are valued at cost or market value whichever is less.

(4) Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can '-e reliably measured.

Sale of goods

Revenue is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer.

(Interest and Dividend Income Interest income is recognized on a time proportion basis taking into account the amount outstanding and the, rate aft fester Dividend income is recognized when the Company's night to receive dividend is established by the Balance Sheet Date.

(5) (i) Gratuity is provided on the basis of premium computed by the Life insurance Corporation of India.

(,i) Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. The liability cannot be ascertained.

(iii) In the case of employees not covered by the Scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year,

(iv) Provision of liability for earned leave estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

(6) Rentals under operating leases are charged to the Profit and Loss account on the straight line basis over the term of the lease.

(7) Legal expenses are provided only on receipt of lawyer's memo of fees as the same cannot be estimated. Advance given to lawyer is adjusted on receipt of final memo of fees.

(8) Use of estimates

The preparation of financial statements requires the management to make judgments, estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses for the year. Although these estimates are based on the management's best knowledge of current event and actions, uncertainty about these assumptions and estimates could result in the outcomes different from the estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

(9) Cash and Cash Equivalents

Cash and Cash equivalents for the purpose of cash flow statement comprise cash in hand, demand deposits with bank and other short term highly liquid investment/ deposits with an original maturity of three months or less.

(10)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 reflect the impact of current year's 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 recognized 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 realized.

The carrying amount of deferred tax assets are reviewed at each Balance Sheet date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain that sufficient future taxable income will be available against which deferred tax asset can be realized. Army sole write-down is reversed to the extent that it becomes reasonably certain that sufficient future taxable income will be available.

(11) Provisions and contingent liabilities

A provision is recognized when the Company has a present obligation as a result of past events if it is probable that an outflow of resources embodying economic benefits will be required to set* the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are determined based on the best estimate required to settle the obligation at the reporting date.

A contingent liability is a possible obligation that arises from past events whose existence will but confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond tin control of the company or a present obligation that is not recognized because it is not prebake that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.

(12) Earnings per share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

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 year are adjusted for the effects of all dilutive potential equity shares.

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Mar 31, 2014

1. The accounts have been prepared under the historical cost convention on accrual basis of accounting and comply with the accounting standards made mandatory by the Institute of Chartered Accountants of India

2. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation is charged on written down value basis at the rates prescribed under Schedule XIV of the Companies Act, 1956.

3. Current investments are valued at cost or market value whichever is less.

4. Other income is recognized on accrual basis.

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Mar 31, 2013

1 The accounts have been prepared under the historical cost convention on accrual basis of accounting and comply with the accounting standards made mandatory by the Institute of Chartered Accountants of India

2 Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation is charged on written down value basis at the rates prescribed under Schedule XIV of the Companies Act, 1956.

3 Current investments are valued at cost or market value whichever is less.

4 Other income is recognized on accrual basis.

5. 1) Gratuity is provided on the basis of premium computed by the Life- Insurance Corporation of India.

2) Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. The liability cannot be ascertained.

3) in the case of employees not covered by the Scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year.

4) Provision of liability for earned leave estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

6. Rentals under operating leases are charged to the Profit and Loss account on the straight line basis over the term of the lease,

7 Legal expenses are provided only on receipt of lawyer''s memo of fees as the same cannot be estimated. Advances given to lawyer is adjusted on receipt of final memo of fees.

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Mar 31, 2012

1. The accounts have been prepared under the historical cost convention on accrual basis of accounting and comply with the accounting standards made mandatory by the Institute of Chartered Accountants of India

2. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation is charged on written down value basis at the rates prescribed under Schedule XIV of the Companies Act, 1956.

3. Current investments are valued at cost or market value whichever is less.

4. Other income is recognized on accrual basis.

5. 1. Gratuity is provided on the basis of premium computed by the Life Insurance Corporation of India.

2. Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. The liability cannot be ascertained.

3. In the case of employees not covered by the Scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year.

4. Provision of liability for earned leave estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

6. Rentals under operating leases are charged to the Profit and Loss account on the straight line basis over the term of the lease.

7. Legal expenses are provided only on receipt of lawyer's memo of fees as the same cannot be estimated. Advances given to lawyer is adjusted on receipt of final memo of fees.

1. Rent including society charges for office premises debited to the profit & loss account for the period is Rs.2,41,544/- (Rs.2,42,544/-) also includes Rs.11,000/- (Rs.12,000/-) paid as lease rent for office premises to the Modella Textile Industries Pvt. Ltd.

2. Provision for rent payable upto 31st March, 2012 Rs. 28,05,020/- (Rs.26,08,016/-) includes cheques paid but not cashed by the landlord.

3. The Company has not created deferred tax asset on tax losses and depreciation, that are available for set off against future taxable income, in view of significant uncertainty regarding reliability of the same.

4. There are no dues to enterprises as defined under the Micro & Small Enterprises Development Act, 2006, which are outstanding for more than 45 days as at March 31st, 2012 which is on the basis of such party having been identified by the management & relied upon by the auditor.

7. In the opinion of the Board, current assets, loans and advances other than those disclosed as doubtful, have a value at least equal to the amounts as shown in the Balance Sheet if realized in ordinary course of the business. The provision for all the liabilities except legal cost is adequate and not in excess of the amount reasonably necessary.

8. The Company has not accepted any "Public Deposit" as defined in para 2(1)(xi) of Non-Banking Financial Companies Acceptance of Public Deposits(Reserve Bank) Direction, 1998 as at March 31st, 2012.

9. Figures of previous period have been re-grouped/rearranged wherever necessary to confirm to current period.

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Mar 31, 2011

1. The accounts have been prepared under the historical cost convention on accrual basis of accounting and comply with the accounting standards made mandatory by the Institute of Chartered Accountants of India.

2. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation is charged on written down value basis at the rates prescribed under Schedule XIV of the Companies Act, 1956.

3. Current investments are valued at cost or market value whichever is less.

4. Other income is recognised on accrual basis.

5. 1. Gratuity is provided on the basis of premium computed by the Life Insurance Corporation of India.

2. Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. This liability cannot be ascertained.

3. In the case of employees not covered by the scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year.

4. Provision of liability for earned leave is estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

6. Rentals under operating leases are charged to the Profit and Loss account on a straight line basis over the term of the lease.

7. Legal expenses are provided only on receipt of lawyer's memo of fees as the same cannot be estimated. Advances given to lawyer is adjusted on receipt of final memo of fees.

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Mar 31, 2010

1. The accounts have been prepared under the historical cost convention on accrual basis of accounting and comply with the accounting standards made mandatory by the Institute of Chartered Accountants of India.

2. Fixed Assets are stated at cost of acquisition less accumulated depreciation. Depreciation is charged on written down value basis at the rates prescribed under Schedule XIV of the Companies Act, 1956.

3. Other income is recognised on accrual basis.

4. 1. Gratuity is provided on the basis of premium computed by the Life Insurance Corporation of India.

2. Under the LIC Scheme, the Company has to bear a part of actual payment to an employee except on death or retirement at sixty. This liability cannot be ascertained.

3. In the case of employees not covered by the scheme, provision of liability for gratuity is estimated and based on the assumption that the amount is payable to employees at the end of the year.

4. Provision of liability for earned leave is estimated and based on the assumption that the accumulated leave to the credit of the employees is payable at the end of the year.

5. Rentals under operating leases are charged to the Profit and Loss account on a straight line basis over the term of the lease.

6. Legal expenses are provided only on receipt of lawyers memo of fees as the same cannot be estimated.