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Accounting Policies of ABC India Ltd. Company
Mar 31, 2025
2. | Material accounting policies_
2.1 Statement of Compliance with Ind AS
These financial statements of the Company have been prepared in accordance with the Indian Accounting
Standards as notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian
Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs(''MCA'')). The Company has uniformly
applied the accounting policies during the periods presented. The financial statements have also been
prepared in accordance with the relevant presentation requirements of the Companies Act, 2013.
2.2 Basis of preparation
The financial statements are prepared in accordance with the historical cost convention, except for certain
financial assets and liabilities and Defined benefit plans which are measured at fair value as explained in the
accounting policies. Historical cost is generally based on the fair value of the consideration in exchange for
goods and services.
All amount disclosed in the financial statements including notes thereon have been rounded off to the
nearest rupees in lakh as per the requirement of Schedule III to the Act, unless stated otherwise.
2.3 Use of estimates
The preparation of financial statements in conformity with Ind AS requires management to make judgements,
estimates and assumptions that affect the application of the accounting policies and the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements,
and the reported amounts of revenues and expenses during the year. Actual results could differ from those
estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the period in which the estimate is revised if the revision affects only
that period; they are recognised in the period of the revision and future periods if the revision affects both
current and future periods.
2.4 Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating
cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of
Financial Statements. The Company has ascertained its operating cycle to be 12 months for the purpose of
current, non-current classification of assets and liabilities.
2.5 Property, plant and equipment (PPE) and Depreciation/Amortisation
a) Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/
amortisation and impairment, if any.
b) Cost is inclusive of inward freight, non-refundable taxes and duties and directly attributable costs of bringing
an asset to the location and condition of its intended use. Expenses capitalised also include applicable
borrowing costs for qualifying assets, if any. All upgradation / enhancements are charged off as revenue
expenditure unless they bring similar significant additional benefits. The Present value of the expected cost
for the decommissioning of an asset if the recognition criteria for a provision are met.
The cost and related accumulated depreciation are derecognised from the financial statements upon sale or
retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
c) Depreciation of these assets commences when the assets are ready for their intended use. Depreciation
on items of PPE is provided on a straight line basis to allocate their cost, net of their residual value over the
estimated useful life of the respective asset as specified in Schedule II to the Companies Act, 2013 which in
the view of the management best represents the period for which the asset is expected to be used except
in respect of Imported Trailers, where estimated useful life is different than those prescribed in Schedule II
are used.
The estimated useful lives of PPE of the Company are as follows:
Leased assets are depreciated over the shorter of the estimated useful life of the asset or the term of the
relevant lease.
The assets'' residual values, useful lives and methods of depreciation are reviewed at each financial year end
and adjusted prospectively, if appropriate. Currently the residual life is considered as 5% of the value of PPE.
2.6 Leases
The Company has applied & adopted Ind AS-116 ''Leases, using modified retrospective approach, which has
resulted in recognition of Right-of-Use Asset and corresponding Lease Liability.
2.6.1 Company as a Lessee
The Company assess whether a contract is or contains a lease, at inception of contract. A contract is, or
contains a lease, if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an
identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the
Company has substantially all of the economic benefits from use of the asset through the period of the lease,
and (iii) the Company has the right to direct the use of the asset. The Company''s lease assets consists of the
following:
Asset Description Useful life Leasehold Land As per Lease period Leasehold Improvements Lower of Lease
period or useful life At date of commencement of leases, the Company recognised a right -of-use asset (ROU)
and a corresponding lease liability for all the lease arrangements, except for those with a term of twelve
month or less (short term leases) and leases of low value assets. For these leases, the Company recognises
lease payments as an operating expense on straight line basis over the lease term.
Initial Measurement ROU assets are initially measured at cost that comprises of the initial amount of lease
liability adjusted for any lease payments made at or prior to the date of commencement, initial direct costs
and lease incentives (if any). Lease Liability is initially measured at the present value of future lease payments
that are not paid at that date. The lease payments shall be discounted using the interest the interest rate
implicit in the lease or, if not readily determinable, incremental borrowing rate. Subsequent Measurement
ROU assets are subsequently measured at cost less accumulated depreciation and impairment loss, if any.
ROU is depreciated from the date of commencement on a straight line basis over the shorter of lease term
or useful life of the underlying asset. Lease Liability is subsequently measured by increasing the carrying
amount to reflect interest and reducing the carrying amount to reflect the lease payments made. The carrying
amount of lease liability is remeasured to reflect any reassessment or lease modification such as change in
lease term. ROU asset and lease liability are separately presented in the balance sheet and lease payments
have been classified as financing cash flows.
2.6.2 Leased Assets as a Lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the
Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are
classified as operating leases. Lease income from operating leases is recognised in statement of profit and
loss on a straight line basis over the lease term unless the receipts are structured to increase in line with
expected general inflation to compensate for the expected inflationary cost increases. The respective leased
assets are included in the balance sheet based on their nature.
2.7 Intangible assets
a) Intangible assets are stated at cost of acquisition less accumulated amortisation and impairment, if any.
b) Intangible assets are recognized when it is probable that future economic benefits that are attributable to
asset will flow to the company and the cost of the asset can be measured reliably.
Cost (net of taxes) includes acquisition price, licence fees and costs of implementation/system integration
services and any directly attributable expenses, wherever applicable for bringing the assets to its working
condition and for their intended use.
Computer Software is amortized on a straight-line basis over their estimated useful lives of 3 years, from the
date, the asset is available for use.
The estimated useful lives, residual values and amortization method are reviewed at-least at the end of each
financial year and adjusted prospectively, if appropriate.
2.8 Impairment of Non Financial Assets
As at each balance sheet date, the Company assesses whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is required, if any,
an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its
recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs to sell and value
in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre¬
tax discount rate that reflects current market assessments of the time value of money and the risks specific
to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by
valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists,
the recoverable amount is reassessed and the impairment loss previously recognized is reversed such that
the asset is recognized at its recoverable amount but not exceeding written down value which would have
been reported if the impairment loss had not been recognized.
2.9 Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using the FIFO method and
comprises of the purchase price including duties and taxes, freight inward and other expenditure directly
attributable to the acquisition but excluding the trade discounts and other rebates.
2.10 Revenue recognition
The Company had adopted and applied Ind AS 115 which establishes a comprehensive framework for
determining whether, how much and when revenue is to be recognised using the cumulative effect method.
Revenue is recognised upon transfer of control of promised products or services to customers in an amount
that reflects the consideration which the Company expects to receive in exchange for those products or
services.
The specific recognition criteria for revenue recognition are as follows:
a) Freight Services
Freight income and associated expenses are recognized using the percentage-of-completion method. The
stage of completion is assessed with reference to completion of the specific transaction assessed on the basis
of the actual service provided as a proportion of the total services to be provided. Generally, the contracts are
Fixed-price, thus the associated costs can be reliably measured. Where necessary, single transactions are split
into separately identifiable components to reflect the substance of the transaction. Conversely, two or more
transactions may be considered together for revenue recognition purposes, where the commercial effect
cannot be understood without reference to the series of transactions as a whole.
b) Logistics Services
Under Logistics services, the principal service is related to customer contracts for warehousing activities.
Based on the customer contracts logistics income is recognized when services are rendered, the amount of
revenue can be reliably measured, and in all probability, the economic benefits from the transaction will flow
to the company. Where necessary, single transactions are split into separately identifiable components to
reflect the substance of the transaction. Conversely, two or more transactions may be considered together
for revenue recognition purposes, where the commercial effect cannot be understood without reference to
the series of transactions as a whole.
c) Contract Receipts
In construction contracts, income is recognized on percentage of completion method. The stage of
completion under the percentage completion method is measured on the basis of percentage that actual
costs incurred on construction contracts to the total estimated cost of the contract.
d) Sale of goods
Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership thereof
is transferred to the customers.
e) Interest income
Interest income is recorded on accrual basis.
f) Dividend Income
Dividend income is recognised when the Company''s right to receive the dividend is established.
g) All other income is accounted for on accrual basis.
2.11 Foreign Currency Transactions
The functional and presentation currency of the Company is Indian Rupee.
Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date.
Gains/ losses arising on settlement as also on translation of monetary items are recognised in the Statement
of Profit and Loss.
2.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition and/or construction of a qualifying asset are
capitalized as part of the cost of such asset till such time that is required to complete and prepare the asset
to get ready for its intended use. A qualifying asset is one that necessarily takes a substantial period of time
to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are
incurred.
Mar 31, 2024
2. Material accounting policies
2.1 Statement of Compliance with Ind AS
These financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs(''MCA'')). The Company has uniformly applied the accounting policies during the periods presented. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013.
2.2 Basis of preparation
The financial statements are prepared in accordance with the historical cost convention, except for certain financial assets and liabilities and Defined benefit plans which are measured at fair value as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration in exchange for goods and services.
All amount disclosed in the financial statements including notes thereon have been rounded off to the nearest rupees in lakh as per the requirement of Schedule III to the Act, unless stated otherwise.
2.3 Use of estimates
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
2.4 Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 -Presentation of Financial Statements. The Company has ascertained its operating cycle to be 12 months for the purpose of current, non-current classification of assets and liabilities.
2.5 Property, plant and equipment (PPE) and Depreciation/Amortisation
a) Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/amortisation and impairment, if any.
b) Cost is inclusive of inward freight, non-refundable taxes and duties and directly attributable costs of bringing an asset to the location and condition of its intended use. Expenses capitalised also include applicable borrowing costs for qualifying assets, if any. All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits. The Present value of the expected cost for the decommissioning of an asset if the recognition criteria for a provision are met.
The cost and related accumulated depreciation are derecognised from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
c) Depreciation of these assets commences when the assets are ready for their intended use. Depreciation on items of PPE is provided on a straight line basis to allocate their cost, net of their residual value over the estimated useful life of the respective asset as specified in Schedule II to the Companies Act, 2013 which in the view of the management best represents the period for which the asset is expected to be used except in respect of Imported Trailers, where estimated useful life is different than those prescribed in Schedule II are used.
Leased assets are depreciated over the shorter of the estimated useful life of the asset or the term of the relevant lease.
The assets'' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Currently the residual life is considered as 5% of the value of PPE.
2.6 Leases
The Company has applied & adopted Ind AS-116 ''Leases'', using modified retrospective approach, which has resulted in recognition of Right-of-Use Asset and corresponding Lease Liability.
2.6.1 Company as a Lessee
The Company assess whether a contract is or contains a lease, at inception of contract. A contract is, or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease, and (iii) the Company has the right to direct the use of the asset The Company''s lease assets consists of the following:
Asset Description Useful life Leasehold Land As per Lease period Leasehold Improvements Lower of Lease period or useful life At date of commencement of leases, the Company recognised a right -of-use asset (ROU) and a corresponding lease liability for all the lease arrangements, except for those with a term of twelve month or less (short term leases) and leases of low value assets. For these leases, the Company recognises lease payments as an operating expense on straight line basis over the lease term.
Initial Measurement ROU assets are initially measured at cost that comprises of the initial amount of lease liability adjusted for any lease payments made at or prior to the date of commencement, initial direct costs and lease incentives (if any). Lease Liability is initially measured at the present value of future lease payments that are not paid at that date. The lease payments shall be discounted using the interest the interest rate implicit in the lease or, if not readily determinable, incremental borrowing rate. Subsequent Measurement ROU assets are subsequently measured at cost less accumulated depreciation and impairment loss, if any. ROU is depreciated from the date of commencement on a straight line basis over the shorter of lease term or useful life of the underlying asset. Lease Liability is subsequently measured by increasing the carrying amount to reflect interest and reducing the carrying amount to reflect the lease payments made. The carrying amount of lease liability is remeasured to reflect any reassessment or lease modification such as change in lease term. ROU asset and lease liability are separately presented in the balance sheet and lease payments have been classified as financing cash flows.
2.6.2 Leased Assets as a Lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Lease income from operating leases is recognised in statement of profit and loss on a straight line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
2.7 Intangible assets
a) Intangible assets are stated at cost of acquisition less accumulated amortisation and impairment, if any.
b) Intangible assets are recognized when it is probable that future economic benefits that are attributable to asset will flow to the company and the cost of the asset can be measured reliably.
Cost (net of taxes) includes acquisition price, licence fees and costs of implementation/system integration services and any directly attributable expenses, wherever applicable for bringing the assets to its working condition and for their intended use.
Computer Software is amortized on a straight-line basis over their estimated useful lives of 3 years, from the date, the asset is available for use.
The estimated useful lives, residual values and amortization method are reviewed at-least at the end of each financial year and adjusted prospectively, if appropriate.
2.8 Impairment of Non Financial Assets
As at each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, if any, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the impairment loss previously recognized is reversed such that the asset is recognized at its recoverable amount but not exceeding written down value which would have been reported if the impairment loss had not been recognized.
2.9 Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using the FIFO method and comprises of the purchase price including duties and taxes, freight inward and other expenditure directly attributable to the acquisition but excluding the trade discounts and other rebates.
2.10 Revenue recognition
The Company had adopted and applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised using the cumulative effect method. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services.
The specific recognition criteria for revenue recognition are as follows:
a) Freight Services
Freight income and associated expenses are recognized using the percentage-of-completion method. The stage of completion is assessed with reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Generally, the contracts are Fixed-price, thus the associated costs can be reliably measured. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
b) Logistics Services
Under Logistics services, the principal service is related to customer contracts for warehousing activities. Based on the customer contracts logistics income is recognized when services are rendered, the amount of revenue can be reliably measured, and in all probability, the economic benefits from the transaction will flow to the company. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
c) Contract Receipts
In construction contracts, income is recognized on percentage of completion method. The stage of completion under the percentage completion method is measured on the basis of percentage that actual costs incurred on construction contracts to the total estimated cost of the contract.
d) Sale of goods
Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership thereof is transferred to the customers.
e) Interest income
Interest income is recorded on accrual basis.
f) Dividend Income
Dividend income is recognised when the Company''s right to receive the dividend is established.
g) All other income is accounted for on accrual basis.
2.11 Foreign Currency Transactions
The functional and presentation currency of the Company is Indian Rupee.
Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ losses arising on settlement as also on translation of monetary items are recognised in the Statement of Profit and Loss.
2.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition and/or construction of a qualifying asset are capitalized as part of the cost of such asset till such time that is required to complete and prepare the asset to get ready for its intended use. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
Mar 31, 2023
2. Significant accounting policies
2.1 Statement of Compliance with Ind AS
These financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015 (by Ministry of Corporate Affairs (''MCA'')). The Company has uniformly applied the accounting policies during the periods presented. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013.
2.2 Basis of preparation
The financial statements are prepared in accordance with the historical cost convention, except for certain financial assets and liabilities and Defined benefit plans which are measured at fair value as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration in exchange for goods and services.
All amount disclosed in the financial statements including notes thereon have been rounded off to the nearest rupees in lakh as per the requirement of Schedule III to the Act, unless stated otherwise.
2.3 Use of estimates
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
2.4 Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of Financial Statements. The Company has ascertained its operating cycle to be 12 months for the purpose of current, non-current classification of assets and liabilities.
2.5 Property, plant and equipment (PPE) and Depreciation/Amortisation
a) Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/ amortisation and impairment, if any.
b) Cost is inclusive of inward freight, non-refundable taxes and duties and directly attributable costs of bringing an asset to the location and condition of its intended use. Expenses capitalised also include applicable borrowing costs for qualifying assets, if any. All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits. The Present value of the expected cost for the decommissioning of an asset if the recognition criteria for a provision are met.
The cost and related accumulated depreciation are derecognised from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
c) Depreciation of these assets commences when the assets are ready for their intended use. Depreciation on items of PPE is provided on a straight line basis to allocate their cost, net of their residual value over the estimated useful life of the respective asset as specified in Schedule II to the Companies Act, 2013 which in the view of the management best represents the period for which the asset is expected to be used except in respect of Imported Trailers, where estimated useful life is different than those prescribed in Schedule II are used.
Leased assets are depreciated over the shorter of the estimated useful life of the asset or the term of the relevant lease.
The assets'' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Currently the residual life is considered as 5% of the value of PPE.
2.6 Leases
The Company has applied & adopted Ind AS-116 ''Leases'', using modified retrospective approach, which has resulted in recognition of Right-of-Use Asset and corresponding Lease Liability.
2.6.1 Company as a Lessee
The Company assess whether a contract is or contains a lease, at inception of contract. A contract is, or contains a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease, and (iii) the Company has the right to direct the use of the asset The Company''s lease assets consists of the following:
Asset Description Useful life Leasehold Land As per Lease period Leasehold Improvements Lower of Lease period or useful life At date of commencement of leases, the Company recognised a right -of-use asset (ROU) and a corresponding lease liability for all the lease arrangements, except for those with a term of twelve month or less (short term leases) and leases of low value assets. For these leases, the Company recognises lease payments as an operating expense on straight line basis over the lease term.
Initial Measurement ROU assets are initially measured at cost that comprises of the initial amount of lease liability adjusted for any lease payments made at or prior to the date of commencement, initial direct costs and lease incentives (if any). Lease Liability is initially measured at the present value of future lease payments that are not paid at that date. The lease payments shall be discounted using the interest the interest rate implicit in the lease or, if not readily determinable, incremental borrowing rate. Subsequent Measurement ROU assets are subsequently measured at cost less accumulated depreciation and impairment loss, if any. ROU is depreciated from the date of commencement on a straight line basis over the shorter of lease term or useful life of the underlying asset. Lease Liability is subsequently measured by increasing the carrying amount to reflect interest and reducing the carrying amount to reflect the lease payments made. The carrying amount of lease liability is remeasured to reflect any reassessment or lease modification such as change in lease term. ROU asset and lease liability are separately presented in the balance sheet and lease payments have been classified as financing cash flows.
2.6.2 Leased Assets as a Lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Leases in which the Company does not transfer substantially all the risks and rewards incidental to ownership of an asset are classified as operating leases. Lease income from operating leases is recognised in statement of profit and loss on a straight line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
2.7 Intangible assets
a) Intangible assets are stated at cost of acquisition less accumulated amortisation and impairment, if any.
b) Intangible assets are recognized when it is probable that future economic benefits that are attributable to asset will flow to the company and the cost of the asset can be measured reliably.
Cost (net of taxes) includes acquisition price, licence fees and costs of implementation/system integration services and any directly attributable expenses, wherever applicable for bringing the assets to its working condition and for their intended use.
Computer Software is amortized on a straight-line basis over their estimated useful lives of 3 years, from the date, the asset is available for use.
The estimated useful lives, residual values and amortization method are reviewed at-least at the end of each financial year and adjusted prospectively, if appropriate.
2.8 Impairment of Non Financial Assets
As at each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, if any, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the impairment loss previously recognized is reversed such that the asset is recognized at its recoverable amount but not exceeding written down value which would have been reported if the impairment loss had not been recognized.
2.9 Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using the FIFO method and comprises of the purchase price including duties and taxes, freight inward and other expenditure directly attributable to the acquisition but excluding the trade discounts and other rebates.
2.10 Revenue recognition
The Company had adopted and applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised using the cumulative effect method. Revenue is recognised upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the Company expects to receive in exchange for those products or services.
The specific recognition criteria for revenue recognition are as follows:
a) Freight Services
Freight income and associated expenses are recognized using the percentage-of-completion method. The stage of completion is assessed with reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Generally, the contracts are Fixed-price, thus the associated costs can be reliably measured. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
b) Logistics Services
Under Logistics services, the principal service is related to customer contracts for warehousing activities. Based on the customer contracts logistics income is recognized when services are rendered, the amount of revenue can be reliably measured, and in all probability, the economic benefits from the transaction will flow to the company. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
c) Contract Receipts
In construction contracts, income is recognized on percentage of completion method. The stage of completion under the percentage completion method is measured on the basis of percentage that actual costs incurred on construction contracts to the total estimated cost of the contract.
d) Sale of goods
Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership thereof is transferred to the customers.
e) Interest income
Interest income is recorded on accrual basis.
f) Dividend Income
Dividend income is recognised when the Company''s right to receive the dividend is established.
g) All other income is accounted for on accrual basis.
2.11 Foreign Currency Transactions
The functional and presentation currency of the Company is Indian Rupee.
Transactions in foreign currency are accounted for at the exchange rate prevailing on the transaction date. Gains/ losses arising on settlement as also on translation of monetary items are recognised in the Statement of Profit and Loss.
2.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition and/or construction of a qualifying asset are capitalized as part of the cost of such asset till such time that is required to complete and prepare the asset to get ready for its intended use. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
Mar 31, 2018
1. Significant accounting policies
1.1 Statement of Compliance with Ind AS
These financial statements of the Company have been prepared in accordance with the Indian Accounting Standards as notified under Section 133 of the Companies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (by Ministry of Corporate Affairs (âMCAâ)). The Company has uniformly applied the accounting policies during the periods presented. The financial statements have also been prepared in accordance with the relevant presentation requirements of the Companies Act, 2013. The Company adopted Ind AS from 1st April, 2017. Up to the year ended 31st March, 2017, the Company prepared its financial statements in accordance with the requirements of previous Generally Accepted Accounting Principles (GAAP), which includes Standards notified under the Companies (Accounting Standards) Rules, 2006. These are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is 1st April, 2016. Details of the exceptions and optional exemptions availed by the Company and principal adjustments along with related reconciliations are detailed in Note 36 (First-time Adoption).
1.2 Basis of preparation
The financial statements are prepared in accordance with the historical cost convention, except for certain financial assets and liabilities and Defined benefit plans which are measured at fair value as explained in the accounting policies. Historical cost is generally based on the fair value of the consideration in exchange for goods and services.
All amount disclosed in the financial statements including notes thereon have been rounded off to the nearest rupees in lakh as per the requirement of Schedule III to the Act, unless stated otherwise.
1.3 Use of estimates
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
1.4 Operating Cycle
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013 and Ind AS 1 - Presentation of Financial Statements. The Company has ascertained its operating cycle to be 12 months for the purpose of current, non-current classification of assets and liabilities.
1.5 Property, plant and equipment (PPE) and Depreciation/Amortisation
a) Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation/amortisation and impairment, if any. For this purpose, cost includes deemed cost which represents the carrying value of PPE recognised as at 1st April, 2016 measured as per the previous GAAP.
b) Cost is inclusive of inward freight, non-refundable taxes and duties and directly attributable costs of bringing an asset to the location and condition of its intended use. Expenses capitalised also include applicable borrowing costs for qualifying assets, if any. All upgradation / enhancements are charged off as revenue expenditure unless they bring similar significant additional benefits. The Present value of the expected cost for the decommissioning of an asset if the recognition criteria for a provision are met.
The cost and related accumulated depreciation are derecognised from the financial statements upon sale or retirement of the asset and the resultant gains or losses are recognized in the Statement of Profit and Loss.
c) Depreciation of these assets commences when the assets are ready for their intended use. Depreciation on items of PPE is provided on a straight line basis to allocate their cost, net of their residual value over the estimated useful life of the respective asset as specified in Schedule II to the Companies Act, 2013 which in the view of the management best represents the period for which the asset is expected to be used except in respect of Imported Trailers, where estimated useful life is different than those prescribed in Schedule II are used. The estimated useful lives of PPE of the Company are as follows :
Leased assets are depreciated over the shorter of the estimated useful life of the asset or the term of the relevant lease.
The assetsâ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate. Currently the residual life is considered as 5% of the value of PPE.
1.6 Leases
Leases are recognised as a finance lease whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
1.6.1 Company as a Lessee
a) Finance Lease
Assets used under finance leases are recognised as property, plant and equipment in the Balance Sheet for an amount that corresponds to the lower of fair value and the present value of minimum lease payments determined at the inception of the lease and a liability is recognised for an equivalent amount. The minimum lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the Statement of Profit and Loss.
b) Operating Lease
Rentals payable under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the term of the relevant lease unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
1.6.2 Leased Assets as a Lessor Operating lease
Rental income is recognized on straight-line basis over the lease term except where scheduled increase in rent compensates the Company with expected inflationary costs.
1.7 Intangible assets
a) Intangible assets are stated at cost of acquisition less accumulated amortisation and impairment, if any. For this purpose, cost includes deemed cost which represents the carrying value of intangible assets recognised as at 1st April, 2016 measured as per the previous GAAP
b) Intangible assets are recognized when it is probable that future economic benefits that are attributable to asset will flow to the company and the cost of the asset can be measured reliably.
Cost (net of taxes) includes acquisition price, licence fees and costs of implementation/system integration services and any directly attributable expenses, wherever applicable for bringing the assets to its working condition and for their intended use.
Computer Software is amortized on a straight-line basis over their estimated useful lives of 3 years, from the date, the asset is available for use.
The estimated useful lives, residual values and amortization method are reviewed at-least at the end of each financial year and adjusted prospectively, if appropriate.
1.8 Impairment of Non Financial Assets
As at each balance sheet date, the Company assesses whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, if any, an impairment loss is recognized for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an assetâs fair value less costs to sell and value in use.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
If at the balance sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the impairment loss previously recognized is reversed such that the asset is recognized at its recoverable amount but not exceeding written down value which would have been reported if the impairment loss had not been recognized.
1.9 Inventories
Inventories are stated at lower of cost or net realizable value. Cost is determined using the FIFO method and comprises of the purchase price including duties and taxes, freight inward and other expenditure directly attributable to the acquisition but excluding the trade discounts and other rebates.
1.10 Revenue recognition
Revenue is recognised to the extent it is probable that economic benefits would flow to the Company and the revenue can be reliably measured, regardless of when the revenue proceeds is received from customers. Revenue is measured at the fair value of the consideration received/ receivable taking into account contractually defined terms of payment net of rebate and taxes.
The specific recognition criteria for revenue recognition are as follows:
a) Freight Services
Freight income and associated expenses are recognized using the percentage-of-completion method. The stage of completion is assessed with reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be provided. Generally, the contracts are Fixed-price, thus the associated costs can be reliably measured. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
b) Logistics Services
Under Logistics services, the principal service is related to customer contracts for warehousing activities. Based on the customer contracts logistics income is recognized when services are rendered, the amount of revenue can be reliably measured, and in all probability, the economic benefits from the transaction will flow to the company. Where necessary, single transactions are split into separately identifiable components to reflect the substance of the transaction. Conversely, two or more transactions may be considered together for revenue recognition purposes, where the commercial effect cannot be understood without reference to the series of transactions as a whole.
c) Contract Receipts
In construction contracts, income is recognized on percentage of completion method. The stage of completion under the percentage completion method is measured on the basis of percentage that actual costs incurred on construction contracts to the total estimated cost of the contract.
d) Sale of goods
Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership thereof is transferred to the customers.
e) Interest income
Interest income is recorded on accrual basis.
f) Dividend Income
Dividend income is recognised when the Companyâs right to receive the dividend is established.
g) All other income are accounted for on accrual basis.
1.11 Foreign Currency Transactions
The functional and presentation currency of the Companyis Indian Rupee.
Transactions in foreign currency are accounted for atthe exchange rate prevailing on the transaction date. Gains/ losses arising on settlement as also on translationof monetary items are recognised in the Statement of Profit and Loss.
1.12 Borrowing costs
Borrowing costs that are directly attributable to the acquisition and/or construction of a qualifying asset are capitalized as part of the cost of such asset till such time that is required to complete and prepare the asset to get ready for its intended use. A qualifying asset is one that necessarily takes a substantial period of time to get ready for its intended use.
All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
1.13 Provisions, contingent liabilities and contingent assets
a) Provisions are recognized only when there is a present obligation, as a result of past events and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.Provisions are discounted to their present values, where the time value of money is material.
b) Contingent liability is disclosed for possible obligations which will be confirmed only by future events not wholly within the control of the Company or present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount ofthe obligation cannot be made.
c) Contingent assets are neither recognized nor disclosed except when realisation of income is virtually certain, related asset is disclosed.
d) Provisions, contingent liabilities and contingent assets are reviewed at each balance sheet date.
1.14 Employee benefits
a) Short-term employee benefits
Short-term employee benefits in respect of salaries and wages, including non-monetary benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered.
b) Defined contribution plans
Companyâs Contributions to Provident fund are charged to the Statement of Profit and Loss in the year when the contributions to the respective funds are due.
c) Defined benefit plans
Gratuity is in the nature of a defined benefit plan. The cost of providing benefits under the defined benefit obligation is calculated on the basis of actuarial valuations carried out at reporting date by independent actuary using the projected unit credit method. Service costs and net interest expense or income is reflected in the Statement of Profit and Loss. Gain or Loss on account of remeasurements are recognised immediately through other comprehensive income in the period in which they occur.
d) Other employee benefits
The employees of the Company are entitled to compensated leave which is recognised as an expense in the statement of profit and loss account as and when they accrue. The liability is calculated based on actuarial valuation using projected unit credit method. These benefits are unfunded.
1.15 Financial instruments, Financial assets, Financial liabilities and Equity instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value on initial recognition of financial assets or financial liabilities.
i) Financial Assets
(a) Recognition
Financial assets include Investments, Loans, Trade receivables, Advances, Security Deposits, Cash and cash equivalents, etc. Such assets are initially recognised at transaction price when the Company becomes party to contractual obligations. The transaction price includes transaction costs unless the asset is being fair valued through the Statement of Profit and Loss.
(b) Classification
Management determines the classification of an asset at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification.
Financial assets are classified as those measured at:
1) amortised cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and/ or interest.
2) fair value through other comprehensive income (FVTOCI), where the financial assets are held not only for collection of cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in other comprehensive income.
3) fair value through profit or loss (FVTPL), where the assets does not meet the criteria for categorization as at amortized cost or as FVTOCI. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in the Statement of Profit and Loss in the period in which they arise.
Loans, Trade receivables, Advances, Security Deposits, Cash and cash equivalents etc. are classified for measurement at amortised cost while investments may fall under any of the aforesaid classes. However, in respect of particular investments in equity instruments that would otherwise be measured at fair value through profit or loss, an irrevocable election at initial recognition may be made to present subsequent changes in fair value through other comprehensive income.
(c) Impairment
The Company assesses at each reporting date whether a financial asset (or a group of financial assets) held at amortised cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or effort.
The Company recognizes loss allowances using the expected credit loss (ECL) model and ECL impairment loss allowance are measured at an amount equal to lifetime ECL.
Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
(d) De-recognition
Financial assets are derecognised when the right to receive cash flows from the assets has expired, or has been transferred, and the Company has transferred substantially all of the risks and rewards of ownership. If the asset is one that is measured at:
(i) amortised cost, the gain or loss is recognised in the Statement of Profit and Loss;
(ii) fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment in which case the cumulative fair value adjustments previously taken to reserves is reclassified with in equity.
ii) Financial liabilities
Borrowings, trade payables and other financial liabilitiesare initially recognised at the value of the respective contractual obligations. They are subsequently measured at amortised cost. Financial liabilities are derecognised when the liabilities extinguished, that is, when the contractual obligation is discharged, cancelled and on expiry.
iii) Equity instruments
Equity instruments are recognised at the value of the proceeds, net of direct costs of the capital issue.
iv) Derivatives
Derivatives are initially recognised at fair value and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gains / losses is recognised in the Statement of Profit and Loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of recognition in profit or loss / inclusion in the initial cost of non-financial asset depends on the nature of the hedging relationship and the nature of the hedged item.
v) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is included in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
vi) Dividend distribution
Dividends paid (including income tax thereon) is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.
vii) Fair value measurement
The Company measures financial instruments at fair value at each balance sheet date.
For some assets and liabilities, observable market transactions or market information might be available. For other assets and liabilities, observable market transactions and market information might not be available. However, the objective of a fair value measurement in both cases is the sameâto estimate the price at which an orderly transaction to sell the asset or to transfer the liability would take place between market participants at the measurement date under current market conditions.
In determining the fair value of financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each balance sheet date.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
1.16 Taxes
Taxes on income comprises of current taxes and deferred taxes. Current tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment to tax payable in respect of previous years.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes (tax base), at the tax rates and tax laws enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognized for deductible temporary differences, the carry forward of unused tax credits and any unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised.
Unrecognised deferred tax assets are re-assessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Income tax, in so far as it relates to items disclosed under other comprehensive income or equity, are disclosed separately under other comprehensive income or equity, as applicable.
1.17 Earnings per Share
a) Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted-average number of equity shares outstanding during the period.
b) For the purpose of calculating diluted earnings per share, the net profit or loss for the period 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.
The number of equity shares and potential dilutive equity shares are adjusted retrospectively for all periods presented for any share split and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
1.18 Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker (CODM).
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Managing Director.
The accounting policies adopted for segment reporting are in line with the accounting policies adopted for preparing and presenting the Financial Statements of the Company as a whole. In addition, the following specific accounting policies have been followed for segment reporting:
a) Segment revenue includes sales and other income directly identifiable with/allocable to the segment including inter segment transfers.
b) Revenue, expenses, assets and liabilities are identified to segments on the basis of their relationship to the operating activities of the segment. Segment results represent profits before finance charges, unallocated corporate expenses and taxes. Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on direct and/or on a reasonable basis, have been disclosed as âUnallocableâ
1.19 Cash and cash equivalents
Cash and cash equivalents in the Balance sheet comprise cash on hand, cheques on hand, balance with banks on current accounts and short term, highly liquid investments with an original maturity of three months or less and which carry insignificant risk of changes in value.
For the purpose of the Cash Flow Statement, Cash and cash equivalents consist of Cash and cash equivalents, as defined above and net of outstanding book overdrafts as they are considered an integral part of the Companyâs cash management.
1.20 Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.
Mar 31, 2016
Note No. 1: SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis of Preparation of Financial Statements
The financial statements have been prepared on an accrual basis and under historical cost convention and in compliance with all material aspects with the applicable accounting principles in India, the applicable accounting standards issued by The Institute of Chartered Accountants of India and referred to Sec 129 & 133 of the Companies Act, 2013.
All the Assets and Liabilities have been classified as current or non-current as per the companyâs normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. The Company has ascertained its operating cycle to be 12 months for the purpose of current, non-current classification of assets and liabilities.
1.2 Use of Estimates
The preparation of financial statements require judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities including contingent liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Difference between actual results and estimates are recognized in the period in which the results are known/ materialized.
1.3 Inventories
Inventories are stated at lower of cost or net realizable value, except for consumables and spares which are determined at cost. Cost is determined using the FIFO method and comprises of the purchase price including duties and taxes, freight inward and other expenditure directly attributable to the acquisition but excluding the trade discounts and other rebates.
1.4 Revenue recognition
In compliance with the requirement of accrual system of accounting, following standards have been set out and are being followed over the years -
a) Freight Income is accounted for, generally when goods are delivered by the Company to customers. Direct expenses on transportation of goods are accounted for when hired lorries deliver the goods at destination and in case of Companyâs own trucks on completion of trip.
b) Payments made to hired lorries at the time of commencement of trip for destination and freight received from customers in advance at the time of booking are charged to revenue as and when paid/received.
c) In case of composite contract jobs, all receipts are accounted for on the basis of completion of job or a distinct part thereof if so provided for in contract and in case of transportation jobs where progressive work bills are raised as per contracts, on the basis of such bills, as the case may be.
d) In case of construction contracts, the company follows the percentage of completion method, based on the stage of completion at the balance sheet date taking into account the contract price by estimating total revenue as per AS-7 issued by The Institute of Chartered Accountants of India and total cost till completion of the contract and the profit so determined has been accounted for proportionate to the percentage of the actual work done except for the contracts for which the cost incurred is less than 25% of the estimated cost, only actual billing is recognized as revenue.
e) Revenue from sale of goods is recognized when significant risk and rewards in respect of ownership thereof is transferred to the customers.
f) Income from dividend is recognized, when the right to receive such payment is established.
g) Income from Investments/Other Income are recognized on accrual basis.
h) Service Tax collected on freight and services income and works contract services are included in the respective heads. Value Added Tax collected on work contract services are also included in the respective heads.
i) Deductions made by parties including Tax Deducted at Source are accounted for in the year of actual deduction or communication by the party, as the case may be.
Having regard to size of operations and the nature and complexities of Companyâs business, in managementâs opinion the above are the reasonable standards of applying the accrual system of accounting as required by the law.
1.5 Tangible and Intangible Fixed Assets
a. Tangible Assets:
Fixed Assets are stated at cost or at revalued amounts, as the case may be, less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price, import duties and other taxes, excluding those subsequently recoverable, improvement cost, self constructed cost thereto, and any attributable cost of bringing the asset to its working condition for its intended use. Any trade discount and rebates is deducted in arriving at the actual cost.
b. Intangible Assets:
Intangible assets are stated at cost on initial recognition, after which the same are stated at cost less accumulated depreciation/amortization and accumulated impairment loss, if any.
1.6 Depreciation / Amortization Tangible Assets
a) Depreciation on Fixed Assets is provided on historical cost and where revaluation of assets has been made, on revalued amount as per Straight Line Method. Depreciation for the current year is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013 which in the view of the management best represents the period for which the asset is expected to be used except in respect of the following assets, where estimated useful life is different than those prescribed in Schedule II are used:
b) Most of the assets of the company are old and the actual cost of the components is not readily available. In the opinion of the management having regard to the nature of the assets and non-availability of actual value of each significant component of the assets, component accounting is not feasible and hence component approach is not followed for the purpose of calculation of depreciation.
c) Premium on Leasehold Land is amortized over the period of lease term.
Intangible Assets are amortized as per Accounting Standard - 26 issued by The Institute of Chartered Accountants of India. Hence, accordingly cost of computer software has been amortized over a period of 3 years.
1.7 Cash flow Statements:
Cash Flows are reported using the indirect method, as per Accounting Standard-3 issued by The Institute of Chartered Accountants of India, where by profit before tax is adjusted for the effects of transactions of a non cash nature and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company has been segregated.
1.8 Foreign Currency Transaction:
a) Initial Recognition:
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 the transaction.
b) Conversion:
Foreign currency monetary items are reported using the closing rate.
c) Exchange Differences:
Exchange differences arising on the settlement of monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognized as income or as expense in the year in which they arise, however exchange differences arising from foreign currency borrowings are regarded as an adjustment to interest cost to the extent of the differences between interest on local currency borrowing and interest on foreign currency borrowing
d) Forward Exchange Contracts not intended for trading or speculation purposes:
The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
1.9 Investments
Current Investments are stated at lower of cost and fair value. Long-term Investments intended to be held for more than a year are classified as non-current investments, and are carried at cost. However, provision for diminution in value, other than temporary, is recognized, whenever necessary.
1.10 Employee Benefits
All employee benefits falling due wholly within twelve months of rendering service are classified as short term benefits.
The benefits like salaries, wages, Leave Encashment, etc are recognized in the period in which the employee renders the related service.
Defined Contribution Plan consists of Provident Fund Scheme and Employeesâ State Insurance Scheme. Companyâs contribution paid/payable during the year under the schemes are recognized as expense in the Statement of Profit and Loss. There are no other obligations other than the contribution made by the Company.
The Employeesâ Gratuity Scheme is the Defined Benefit Plan of the Company, The present value of the obligation under such plan is determined based on the actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses on such valuation are recognized immediately in the Statement of Profit and Loss. In case of funded defined benefit plan, the fair value of the plan assets is reduced from the gross obligation to recognize the obligation on net basis.
1.11 Leases
As a lessee
Leases in which a significant portion of the risks and rewards of ownership are retained by the less or are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight line basis over the period of the lease or other systematic basis more representative of the time pattern of the userâs benefits.
As a less or
Leases in which the company has substantially retained all the risks and rewards of ownership are classified as Operating Leases. Lease Income on such operating leases are recognized in the Statement of Profit and Loss on a straight line basis over the lease term which is representative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognized as an expense in the Statement of Profit and Loss in the period in which they are incurred.
1.12 Earning per share
Basic & Diluted earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period as per Accounting Standard-20 issued by The Institute of Chartered Accountants of India.
1.13 Taxation & Deferred Tax
Tax expense comprises both current and deferred tax charge or credit. Current tax is measured at the amount expected to be paid to the taxation authorities, using the applicable tax rates and tax laws. Minimum Alternate Tax (MAT) credit is recognized as an asset only when and to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. Deferred tax is recognized for the timing differences, subject to the consideration of prudence in respect of deferred tax assets and measured using the tax rates and tax laws enacted on the balance sheet date. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably certain that future taxable income will be available against which such deferred tax assets can be realized.
1.14 Impairment of Assets
The carrying amount of assets is reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of the recoverable amount.
1.15 Provisions, Contingent Liabilities & Contingent Assets
Provisions are recognized for present obligation as a result of past events where it is probable that outflow of resources will be required to settle the obligation, and in respect of which a reliable estimate can be made at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Contingent Liabilities not provided for are disclosed in the notes to the Financial Statements. Contingent Assets are neither recognized nor disclosed in the financial statements.
1.16 Measurement of EBITDA
The Company has opted to present earnings before interest, tax, depreciation and amortization (EBIDTA) as a separate line item on the statement of Profit and Loss.
Mar 31, 2014
1.1 Basis of Preparation of Financial Statements
The 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 standards 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 the company''s normal operating cycle and other
criteria set out in Schedule VI to the Companies Act, 1956. The Company
has ascertained its operating cycle to be 12 months for the purpose of
current, non-current classification of assets and liabilities.
1.2 Use of Estimates
The preparation of financial statements require judgments, estimates
and assumptions to be made that affect the reported amount of assets
and liabilities including contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between actual results and
estimates are recognized in the period in which the results are
known/materialized.
1.3 Inventories
Inventories are stated at lower of cost or net realizable value. Cost
is determined using the FIFO method and comprises of the purchase price
including duties and taxes, freight inward and other expenditure
directly attributable to the acquisition but excluding the trade
discounts and other rebates.
1.4 Revenue recognition
In compliance with the requirement of accrual system of accounting,
following standards have been set out and are being followed over the
years -
a) Freight Income is accounted for, generally when goods are delivered
by the Company to customers. Direct expenses on transportation of goods
are accounted for when hired lorries deliver the goods at destination
and in case of Company''s own trucks on completion of trip.
b) Payments made to hired lorries at the time of commencement of trip
for destination and freight received from customers in advance at the
time of booking are charged to revenue as and when paid/received.
c) In case of composite contract jobs all receipts are accounted for on
the basis of completion of job or a distinct part thereof if so
provided for in contract and in case of transportation jobs where
progressive work bills are raised as per contracts, on the basis of
such bills, as the case may be.
d) Revenue from sale of goods is recognized when significant risk and
rewards in respect of ownership thereof is transferred to the
customers.
e) Income from dividend is recognized, when the right to receive such
payment is established.
f) Income from Investments/Other Income is recognized on accrual basis.
g) Service Tax collected on freight and services income are included in
the respective heads.
h) Deductions made by parties including Tax Deducted at Source are
accounted for in the year of actual deduction or communication, as the
case may be, by the party.
Having regard to size of operations and the nature and complexities of
Company''s business, in management''s opinion the above are the
reasonable standards of applying the accrual system of accounting as
required by the law.
1.5 Tangible and Intangible Fixed Assets
a. Tangible Assets :
Fixed assets are stated at cost or at revalued amounts, as the case may
be, less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price, improvement cost, self constructed cost
thereto, and any attributable cost of bringing the asset to its working
condition for its intended use.
b. Intangible Assets :
Intangible assets are stated at cost on initial recognition, after
which the same are stated at cost less accumulated
depreciation/amortization and accumulated impairment loss, if any.
1.6 Depreciation / Amortization
Depreciation has been provided on historical cost and where revaluation
of assets has been made on written up cost in the manner and as per
Straight Line Method at rates prescribed in the Schedule-XIV of the
Companies Act, 1956. An amount equivalent to the depreciation on such
written up amount of assets is transferred from Capital reserve due to
revaluation of assets, and reduced from Depreciation. Premium paid on
Leasehold properties is amortized based on their lease term.
1.7 Foreign Currency Transaction
a) Initial Recognition :
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 the
transaction.
b) Conversion : Foreign currency monetary items are reported using the
closing rate.
c) Exchange Differences :
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized
as income or as expense in the year in which they arise, however
exchange differences arising from foreign currency borrowings are
regarded as an adjustment to interest cost to the extent of the
differences between interest on local currency borrowing and interest
on foreign currency borrowing
d) Forward Exchange Contracts not intended for trading or speculation
purposes :
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
e) Hedging :
The company has used foreign exchange future contracts to hedge its
exposure to movements in foreign exchange rates related to interest on
foreign currency denominated loans.
1.8 Investments
Current Investments are stated at lower of cost and fair value.
Long-term Investments intended to be held for more than a year are
classified as non-current investments, and are carried at cost.
However, provision for diminution in value, other than temporary, has
been recognized, wherever necessary.
1.9 Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering service are classified as short term benefits. The benefits
like salaries, wages, Leave Encashment, etc are recognized in the
period in which the employee renders the related service.
Defined Contribution Plan consists of Provident Fund Scheme and
Employees'' State Insurance Scheme. Company''s contribution paid/payable
during the year under the schemes are recognized as expense in the
Statement of Profit and Loss. There are no other obligations other
than the contribution made by the Company.
The Employees'' Gratuity Scheme is the Defined Benefit Plan of the
Company, The present value of the obligation under such plan is
determined based on the actuarial valuation using the Projected Unit
Credit Method. Actuarial gains and losses on such valuation are
recognized immediately in the Statement of Profit and Loss. In case of
funded defined benefit plan, the fair value of the plan assets is
reduced from the gross obligation to recognize the obligation on net
basis.
1.10 Borrowing Costs
Financing costs, if incurred, relating to construction of qualifying
fixed assets are also included to the cost of such qualifying fixed
assets to the extent they relate to the period till such assets are
ready to be put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.11 Leases
As a lessee
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight line basis over the period
of the lease or other systematic basis more representative of the time
pattern of the user''s benefits.
As a lessor
The Company has leased certain tangible assets and such leases where
the company has substantially retained all the risks and rewards of
ownership are classified as Operating Leases. Lease Income on such
operating leases are recognized in the Statement of Profit and Loss on
a straight line basis over the lease term which is representative of
the time pattern in which benefit derived from the use of the leased
asset is diminished. Initial direct costs are recognized as an expense
in the Statement of Profit and Loss in the period in which they are
incurred.
1.12 Earning per share
Basic & Diluted earnings per share are calculated by dividing the net
profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period as per Accounting Standard-20 issued by The Institute of
Chartered Accountants of India.
1.13 Taxation & Deferred Tax
Tax expense comprises both current and deferred tax charge or credit.
Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal Income Tax during the specified period. Deferred tax is
recognized for the timing differences, subject to the consideration of
prudence in respect of deferred tax assets and measured using the tax
rates and tax laws enacted on the balance sheet date. Unrecognized
deferred tax assets of earlier years are re-assessed and recognized to
the extent that it has become reasonably certain that future taxable
income will be available against which such deferred tax assets can be
realized.
1.14 Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. An impairment loss recognized in prior
accounting periods is reversed if there has been a change in the
estimate of the recoverable amount.
1.15 Provisions, Contingent Liabilities & Contingent Assets
Provisions are recognized for present obligation as a result of past
events where it is probable that outflow of resources will be required
to settle the obligation, and in respect of which a reliable estimate
can be made at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities not provided for are disclosed in the notes to
the Financial Statements. Contingent Assets are neither recognized nor
disclosed in the financial statements.
1.16 Measurement of EBITDA
The Company has opted to present earnings before interest, tax,
depreciation and amortization(EBIDTA)as a separate line item on the
statement of Profit and Loss.
1.17 The Company has reserved issuance of 1,10,130 (Previous year
1,10,130) equity shares of Rs. 10 each for exercise or grant of options
under Employee Stock Option Scheme to eligible employees. As per the
terms of the Stock Option Scheme, 2007 of the Company, options vesting
on or before 01/11/2008 can be exercised @ Rs. 50/- per equity shares and
option vesting after 01/11/2008 can be exercised @ Rs. 55/- per equity
share. The options granted vest over a maximum period of 3 years from
the date of grant.
1.18 There are no dues to Micro and Small Enterprises determined to the
extent such parties have been identified on the basis of information
available with the Company as at 31 March, 2014 which require
disclosure under the Micro, Small and Medium Enterprises Development
Act, 2006.
Mar 31, 2013
1.1 Basis of Preparation of Financial Statements
The 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 standards 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 the company''s normal operating cycle and other
criteria set out in Schedule VI to the Companies Act, 1956. The Company
has ascertained its operating cycle to be 12 months for the purpose of
current, non-current classification of assets and liabilities.
1.2 Use of Estimates
The preparation of financial statements require judgments, estimates
and assumptions to be made that affect the reported amount of assets
and liabilities including contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between actual results and
estimates are recognized in the period in which the results are
known/materialized.
1.3 Inventories
Inventories are stated at lower of cost or net realizable value. Cost
is determined using the FIFO method and comprises of the purchase price
including duties and taxes, freight inward and other expenditure
directly attributable to the acquisition but excluding the trade
discounts and other rebates.
1.4 Revenue Recognition
In compliance with the requirement of accrual system of accounting,
following standards have been set out and are being followed over the
years -
a) Freight Income is accounted for, generally when goods are delivered
by the Company to customers. Direct expenses on transportation of goods
are accounted for when hired lorries deliver the goods at destination
and in case of Company''s own trucks on completion of trip.
b) Payments made to hired lorries at the time of commencement of trip
for destination and freight received from customers in advance at the
time of booking are charged to revenue as and when paid/received.
c) In case of composite contract jobs all receipts are accounted for on
the basis of completion of job or a distinct part thereof if so
provided for in contract and in case of transportation jobs where
progressive work bills are raised as per contracts, on the basis of
such bills, as the case may be.
d) Revenue from sale of goods is recognized when significant risk and
rewards in respect of ownership thereof is transferred to the
customers.
e) Income from dividend is recognized, when the right to receive such
payment is established.
f) Income from Investments/Other Income is recognized on accrual basis.
g) Service Tax collected on freight and services income are included in
the respective heads.
h) Deductions made by parties including Tax Deducted at Source are
accounted for in the year of actual deduction or communication, as the
case may be, by the party.
Having regard to size of operations and the nature and complexities of
Company''s business, in management''s opinion the above are the
reasonable standards of applying the accrual system of accounting as
required by the law.
1.5 Tangible and Intangible Fixed Assets a. Tangible Assets:
Fixed assets are stated at cost or at revalued amounts, as the case may
be, less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price, improvement cost.self constructed cost
thereto, and any attributable cost of bringing the asset to its working
condition for its intended use.
b. Intangible Assets:
Intangible assets are stated at cost on initial recognition, after
which the same are stated at cost less accumulated
depreciation/amortization and accumulated impairment loss, if any.
1.6 Depreciation / Amortization
Depreciation has been provided on historical cost and where revaluation
of assets has been made on written up cost in the manner and as per
Straight Line Method at rates prescribed in the Schedule-XIV of the
Companies Act, 1956. An amount equivalent to the depreciation on such
written up amount of assets is transferred from Capital reserve due to
revaluation of assets, and reduced from Depreciation. Premium paid on
Leasehold properties is amortized based on their lease term.
1.7 Foreign Currency Transaction
a) Initial Recognition:
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 the
transaction.
b) Conversion:
Foreign currency monetary items are reported using the closing rate.
c) Exchange Differences:
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized
as income or as expense in the year in which they arise, however
exchange differences arising from foreign currency borrowings are
regarded as an adjustment to interest cost to the extent of the
differences between interest on local currency borrowing and interest
on foreign currency borrowing.
d) Forward Exchange Contracts not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
e) Hedging:
The company has used foreign exchange future contracts to hedge its
exposure to movements in foreign exchange rates related to interest on
foreign currency denominated loans.
1.8 Investments
Current Investments are stated at lower of cost and fair value.
Long-term Investments intended to be held for more than a year are
classified as non-current investments, and are carried at cost.
However, provision for diminution in value, other than temporary, has
been recognized, wherever necessary.
1.9 Employee Benefits
All employee benefits falling due wholly within twelve months of
rendering service are classified as short term benefits. The benefits
like salaries, wages, Leave Encashment, etc are recognized in the
period in which the employee renders the related service.
Defined Contribution Plan consists of Provident Fund Scheme and
Employees'' State Insurance Scheme. Company''s contribution paid/payable
during the year under the schemes are recognized as expense in the
Statement of Profit and Loss. There are no other obligations other than
the contribution made by the Company.
The Employees'' Gratuity Scheme is the Defined Benefit Plan of the
Company, The present value of the obligation under such plan is
determined based on the actuarial valuation using the Projected Unit
Credit Method. Actuarial gains and losses on such valuation are
recognized immediately in the Statement of Profit and Loss. In case of
funded defined benefit plan, the fair value of the plan assets is
reduced from the gross obligation to recognize the obligation on net
basis.
1.10 Borrowing Costs
Financing costs, if incurred, relating to construction of qualifying
fixed assets are also included to the cost of such qualifying fixed
assets to the extent they relate to the period till such assets are
ready to be put to use. Other borrowing costs are recognized as an
expense in the period in which they are incurred.
1.11 Leases
As a lessee
Leases in which a significant portion of the risks and rewards of
ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases are charged to the
Statement of Profit and Loss on a straight line basis over the period
of the lease or other systematic basis more representative of the time
pattern of the user''s benefits.
As a lessor
The Company has leased certain tangible assets and such leases where
the company has substantially retained all the risks and rewards of
ownership are classified as Operating Leases. Lease Income on such
operating leases are recognized in the Statement of Profit and Loss on
a straight line basis over the lease term which is representative of
the time pattern in which benefit derived from the use of the leased
asset is diminished. Initial direct costs are recognized as an expense
in the Statement of Profit and Loss in the period in which they are
incurred.
1.12 Earning per share
Basic & Diluted earnings per share are calculated by dividing the net
profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period as per Accounting Standard- 20 issued by The Institute of
Chartered Accountants of India.
1.13 Taxation & Deferred Tax
Tax expense comprises both current and deferred tax charge or credit.
Current tax is measured at the amount expected to be paid to the
taxation authorities, using the applicable tax rates and tax laws.
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal Income Tax during the specified period. Deferred tax is
recognized for the timing differences, subject to the consideration of
prudence in respect of deferred tax assets and measured using the tax
rates and tax laws enacted on the balance sheet date. Unrecognized
deferred tax assets of earlier years are re-assessed and recognized to
the extent that it has become reasonably certain that future taxable
income will be available against which such deferred tax assets can be
realized.
1.14 Impairment of Assets
The carrying amount of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/external
factors. An asset is impaired when the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss in the year in which an asset is
identified as impaired. An impairment loss recognized in prior
accounting periods is reversed if there has been a change in the
estimate of the recoverable amount.
1.15 Provisions, Contingent Liabilities & Contingent Assets
Provisions are recognized for present obligation as a result of past
events where it is probable that outflow of resources will be required
to settle the obligation, and in respect of which a reliable estimate
can be made at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities not provided for are disclosed in the notes to
the Financial Statements. Contingent Assets are neither recognized nor
disclosed in the financial statements.
1.16 Measurement of EBITDA
The Company has opted to present earnings before interest, tax,
depreciation and amortization (EBIDTA) as a separate line item on the
statement of Profit and Loss.
Mar 31, 2012
1.1 Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention, except for certain fixed assets which are revalued, in
accordance with the generally accepted accounting principles in India
and the provisions of the Companies Act, 1956.
1.2 Use of Estimates
The preparation of financial statements require judgements, estimates
and assumptions to be made that affect the reported amount of assets
and liabilities including contingent liabilities on the date of
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between actual results and
estimates are recognized in the period in which the results are
known/materialized.
1.3 Revenue Recognition
In compliance with the requirement of accrual system of accounting,
following standards have been set out and are being followed over the
years -
a) Freight Income is accounted for, generally when goods are delivered
by the Company to customers. Direct expenses on transportation of goods
are accounted for when hired lorries deliver the goods at destination
and in case of Company's own trucks on completion of trip.
b) Payments made to hired lorries at the time of commencement of trip
for destination and freight received from customers in advance at the
time of booking are charged to revenue as and when paid/received.
c) In case of composite contract jobs all receipts are accounted for on
the basis of completion of job or a distinct part thereof if so
provided for in contract and in case of transportation jobs where
progressive work bills are raised as per contracts, on the basis of
such bills, as the case may be.
d) Deductions made by parties including Tax Deducted at Source are
accounted for in the year of actual deduction or communication, as the
case may be, by the party.
e) Income from dividend is recognized, when the right to receive such
payment is established.
f) Service Tax collected on freight and services income are included in
the respective heads.
Having regard to size of operations and the nature and complexities of
Company's business, in management's opinion the above are the
reasonable standards of applying the accrual system of accounting as
required by the law.
1.4 Tangible and Intangible Fixed Assets
a. Tangible Assets:
Fixed assets are stated at cost or at revalued amounts, as the case may
be, less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price, improvement cost thereto, and any
attributable cost of bringing the asset to its working condition for
its intended use.
b. Intangible Assets:
Intangible assets are stated at cost on initial recognition, after
which the same are stated at cost less accumulated
depreciation/amortization and accumulated impairment loss, if any.
1.5 Borrowing Costs
Financing costs, if incurred, relating to construction of fixed assets
are also included to the extent they relate to the period till such
assets are ready to be put to use. Other borrowing costs are recognized
as an expense in the period in which they are incurred.
1.6 Investments
Investments intended to be held for more than a year are classified as
long-term investments, and carried at cost. However, provision for
diminution in value, other than temporary, has been recognized,
wherever necessary.
1.7 Stock in trade
Inventories are stated at lower of cost or net realizable value. Cost
is determined using the FIFO method and comprises of the purchase price
including duties and taxes, freight in-ward and other expenditure
directly attributable to the acquisition but excluding the trade
discounts and other rebates.
1.8 Depreciation I Amortization
Depreciation has been provided on historical cost and where revaluation
of assets has been made on written up cost in the manner and as per
Straight Line Method at rates prescribed in the Schedule-XIV of the
Companies Act, 1956. An amount equivalent to the depreciation on such
written up amount of assets is transferred from Capital reserve due to
revaluation of assets, and reduced from Depreciation. Premium paid on
Leasehold properties is amortized based on their lease term.
1.9 Foreign Currency Transaction:
a) Initial Recognition:
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 cuirency at the date of the
transaction.
b) Conversion:
Foreign currency monetary items are reported using the closing rate.
c) Exchange Differences:
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized
as income or as expense in the year in which they arise.
d) Forward Exchange Contracts not intended for trading or speculation
purposes:
The premium or discount arising at the inception of forward exchange
contracts is amortized as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
e) Hedging:
The company has used foreign exchange future contracts to hedge its
exposure to movements in foreign exchange rates related to interest on
foreign currency denominated loans.
1.10 Retirement Benefit
a) Short-term employee benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
b) Post employment and other long term employee benefits are recognized
as an expense in the Profit and Loss account for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuations techniques. Actuarial Gains and Losses in respect of post
employment and other long term benefits are charged to Profit and Loss
Account.
1.11 Taxation & Deferred Tax
Tax expense comprises both current and deferred taxes. Current tax is
measured at the amount expected to be paid to the taxation authorities,
using the applicable tax rates and tax laws. Minimum Alternate Tax
(MAT) credit is recognized as an asset only when and to the extent
there is convincing evidence that the Company will pay normal Income
Tax during the specified period. Deferred tax is recognized for the
timing differences, subject to the consideration of prudence in respect
of deferred tax assets and measured using the tax rates and tax laws
enacted on the balance sheet date. Unrecognized deferred tax assets of
earlier years are re-assessed and recognized to the extent that it has
become reasonably certain that future taxable income will be available
against which such deferred tax assets can be realized.
1.12 Earning per Share
Basic & Diluted earnings per share are calculated by dividing the net
profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period as per AS 20 issued by The Institute of Chartered Accountants of
India.
1.13 Provisions & Contingencies
Provisions are recognized for present obligation as a result of past
events where it is probable that outflow of resources will be required
to settle the obligation, and in respect of which a reliable estimate
can be made at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities not provided for are disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
1.14 Impairment of Assets
The management has carried out an impairment test as per AS-28,
Impairment of Assets, issued by the Institute of Chartered Accountants
of India on all its fixed assets. As there was no impairment, no
provision has been made.
Mar 31, 2010
In compliance with the requirement of accrual system of accounting,
following standards have been set out and are being followed over the
years -
a) Freight Income is accounted for, generally when goods are delivered
by the Company to customers. Direct expenses on transportation of goods
are accounted for when hired lorries deliver the goods at destination
and in case of Companys own trucks on completion of trip.
b) Payments made to hired lorries at the time of commencement of trip
for destination and freight received from customers in advance at the
time of booking are charged to revenue as and when paid/received.
c) In case of composite contract jobs all receipts are accounted for on
the basis of completion of job or a distinct part thereof if so
provided for in contract and in case of transportation jobs where
progressive work bills are raised as per contracts, on the basis of
such bills, as the case may be.
d) Deductions made by parties including Tax Deducted at Source are
accounted for in the year of actual deduction or communication, as the
case may be, by the party.
e) Income from dividend is recognized, when the right to receive such
payment is established.
f) Service Tax collected on freight income are included in the freight
income.
Having regard to size of operations and the nature and complexities of
Companys business, in managements opinion the above are the
reasonable standards of applying the accrual system of accounting as
required by the law.
II) Fixed Assets
Fixed assets are stated at cost or at revalued amounts, as the case may
be, less accumulated depreciation and impairment losses, if any. Cost
comprises the purchase price, improvement cost thereto, and any
attributable cost of bringing the asset to its working condition for
its intended use.
III) Borrowing Costs
Financing costs, if incurred, relating to construction of fixed assets
are also included to the extent they relate to the period till such
assets are leady to be put to use.
IV) Intangible Assets
Costs relating to softwares and licenses, which are acquired, are
capitalised and amortised on a straight line basis over their useful
life.
V) Investments
Investments intended to be held for more than a year are classified as
long-term investments, and carried at cost. However, provision for
diminution in value, other than temporary, has been recognized,
wherever necessary.
VI) Work-in-Progress/Stock-in-Trade
a) Stock-in-Trade
Inventories are stated at lower of cost or net realizable value. Cost
is determined using the FIFO method and comprises of the purchase price
including duties and taxes, freight in-ward and other expenditure
directly attributable to the acquisition but excluding the trade
discounts and other rebates. Provision is made for obsolete, slow-
moving and damaged stock, wherever necessary.
b) Work-in-Process
Work in progress as and when arise (mainly expenditure relating to
incomplete transportation job) are stated at estimated/actual cost.
VII) Depreciation/Amortization
Depreciation has been provided on historical cost and where revaluation
of assets has been made on written up cost in the manner and as per
Straight Line Method at rates prescribed in the Schedule-XIV of the
Companies Act, 1956. An amount equivalent to the depreciation on such
written up amount of assets has been transferred from Capital reserve
due to revaluation of assets, and separately credited to the Profit &
Loss Account. Premium paid on Leasehold properties is amortized based
on their lease term.
VIII) Foreign Currency Transaction
a) Initial Recognition
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 the
transaction.
b) Conversion
Foreign currency monetary items are reported using the closing rate.
c) Exchange Differences
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the year, or reported in previous financial statements, are recognized
as income or as expense in the year in which they arise.
d) Forward Exchange Contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortized ac expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
IX) Retirement Benefit
a) Provident Fund and Pension Fund are defined contribution schemes
(Government scheme) and the contributions thereto are charged to the
Profit & Loss Account of the year when the contributions to the
respective funds are paid/due.
b) Gratuity liability is Defined Benefit Obligation and is fully funded
by way of contribution determined on the basis of an actuarial
valuation made at the end of each financial year which is in turn
funded with Life Insurance Corporation of India Limited in the form of
a qualifying insurance policy. Actuarial gain/ losses, if any, are
recognized in Statements of Profit & Loss.
The Company has used the Projected Unit Credit Method to actually
determine the present value of its defined benefit obligation and the
related current service cost and where applicable, past service cost.
X) Employees Stock Option Scheme
The company follows accounting policies specified as per Securities &
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines,1999.
XI) Taxation & Deferred Tax
Tax expense comprises both current and deferred taxes. Current tax is
measured at the amount expected to be paid to the taxation authorities,
using the applicable tax rates and tax laws. Deferred tax is recognized
for the timing differences, subject to the consideration of prudence in
respect of deferred tax assets and measured using the tax rates and tax
laws enacted on the balance sheet date.
Unrecognized deferred tax assets of earlier years are re-assessed and
recognized to the extent that it has become reasonably certain that
future taxable income will be available against which such deferred tax
assets can be realized.
Xil) Earning Per Share
Basic & Diluted earnings per share are calculated by dividing the net
profit or loss for the period attributable to equity shareholders by
the weighted average number of equity shares outstanding during the
period as per AS 20 issued by The Institute of Chartered Accountants of
India.
XIII) Petrol Pump at Pune
The Companys petrol pump at Pune is being administered and operated
under an agreement by a party where the Company is entitled to fixed
monthly income and such party has to bear operating expenses including
bad debts and losses, if any, besides making arrangements of funds.
Such operating expenses are accounted for deriving cost of sales.
XIV) Provisions & Contingencies
Provisions are recognized for present obligation as a result of past
events where it is probable that outflow of resources will be required
to settle the obligation, and in respect of which a reliable estimate
can be made at the balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities not provided for are disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
XV) Impairment of Assets (AS-28)
The management has carried out an impairment test as per AS-28,
Impairment of Assets, issued by the Institute of Chartered Accountants
of India on all its fixed assets. As there was no impairment, no
provision has been made.
XVI) Interest in joint venture
The Company has a 24% interest in the joint venture, Nissin ABC
Logistics Pvt. Limited, incorporated in India, which is engaged in
logistic service business.
XVII) The company has used foreign exchange future contracts to hedge
its exposure to movements in foreign exchange rates related to interest
on foreign currency denominated loans.
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