Accounting Policies of Trans Freight Containers Ltd. Company

Mar 31, 2024

2 Significant Accounting Policies

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting
Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as
amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, under the
historical cost convention on the accrual basis except for derivative financial instruments and certain
financial assets and liabilities which are measured at fair value.

2.2 Summary of significant accounting policies

(a) Revenue recognition

(i) Sale of goods

Revenue from the sale of goods is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer. Revenue from the sale of goods is
measured at the fair value of the consideration received or receivable, net of returns, trade
discounts and volume rebates.

(ii) Interest income

Income from Interest on fixed deposits is recognised using effective interest rate method.

(iii) Dividend income

Revenue is recognised when the Company’s right to receive the payment is established,
which is generally when shareholders approve the dividend.

(b) Taxes

(i) Current income tax

Income tax expense is recognized in net profit in the statement of profit and loss except to
the extent that it relates to items recognized directly in equity, in which case it is recognized
in other comprehensive income.

Current income tax for current and prior periods is recognized at the amount expected to
be paid to or recovered from the tax authorities, using the tax rates and tax laws that have
been enacted or substantively enacted by the balance sheet date.

(c) Impairment of non financial assets

Property, plant and equipment are evaluated for recoverability whenever events or changes in
circumstances indicate that their carrying amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell
and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. In such cases, the
recoverable amount is determined for the Cash Generating Unit to which the asset belongs.

If such assets are considered to be impaired, the impairment to be recognized in the Statement
of Profit and Loss is measured by the amount by which the carrying value of the assets
exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the
statement of profit and loss if there has been a change in the estimates used to determine the

recoverable amount. The carrying amount of the asset is increased to its revised recoverable
amount, provided that this amount does not exceed the carrying amount that would have been
determined (net of any accumulated amortization or depreciation) had no impairment loss been
recognized for the asset in prior years.

(d) Cash and cash equivalents

Cash and cash equivalent in the balance sheet comprises of cash at banks and cash in hand.

(e) Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for
as follows:

Raw materials: cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition.

Finished goods and work in progress: cost includes cost of direct materials and labour
and a proportion of manufacturing overheads based on the normal operating capacity, but
excluding borrowing costs.

Net realisable value is the estimated selling price in the ordinary course of business, less
estimated costs of completion and the estimated costs necessary to make the sale.

(f) Financial instruments

(i) Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a
party to the contractual provisions of the instrument. All financial assets and liabilities
are recognized at fair value on initial recognition. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities, that are
not at fair value through profit or loss, are added to the fair value on initial recognition.
Regular way purchase and sale of financial assets are accounted for at trade date.

(ii) Subsequent measurement

a. Non-derivative financial instruments

(i) Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised cost if it is held within a
business model whose objective is to hold the asset in order to collect contractual
cash flows and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at
amortised cost using the effective interest rate (EIR) method. Amortised cost is
calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included
in finance income in the profit or loss. The losses arising from impairment are
recognised in the profit or loss. This category generally applies to trade and other
receivables.

(ii) Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other
comprehensive income if it is held within a business model whose objective is
achieved by both collecting contractual cash flows and selling financial assets and
the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal amount
outstanding.

(iii) Financial assets at fair value through profit or loss

A financial asset which is not classified in any of the above categories are
subsequently fair valued through profit or loss.

(iv) Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held
for trading and financial liabilities designated upon initial recognition as at fair value
through profit or loss. Financial liabilities are classified as held for trading if they
are incurred for the purpose of repurchasing in the near term. This category also
includes derivative financial instruments entered into by the company that are not
designated as hedging instruments in hedge relationships as defined by Ind AS
109.

Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or
loss are designated as such at the initial date of recognition, and only if the criteria
in Ind AS 109 are satisfied.

Financial liabilities at amortised cost

Financial liabilities are subsequently carried at amortized cost using the effective
interest rate method. For trade and other payables maturing within one year from
the Balance Sheet date, the carrying amounts approximate fair value due to the
short maturity of these instruments.

(iii) Derecognition of financial instruments

The company derecognizes a financial asset when the contractual rights to the cash flows
from the financial asset expire or it transfers the financial asset and the transfer qualifies
for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is
derecognized from the Company’s Balance Sheet when the obligation specified in the
contract is discharged or cancelled or expires.

(iv) Impairment of financial assets

The company assesses on a forward looking basis the expected credit losses associated
with its assets carried at amortised cost. The impairment methodology applied depends
on whether there has been a significant increase in credit risk. Note 28 details how the
Company determines whether there has been a significant increase in credit risk.

(v) Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in
the balance sheet if there is a currently enforceable legal right to offset the recognised
amounts and there is an intention to settle on a net basis, to realise the assets and settle
the liabilities simultaneously.

(g) Property, plant and equipment

Property, plant and equipment are stated at cost, less accumulated depreciation. Cost directly
attributable to the acquisition are capitalised until the property, plant and equipment are ready
for use, as intended by management. The Company depreciates property, plant and equipment
over their estimated useful lives as specified in Schedule II of the Companies Act, 2013 using
the written down value method. The estimated useful lives of assets are as follows:

Buildings 30 Years

Plant and Equipments* 8-15 Years

Furniture and Fixtures 10 Years

Vehicles 8-10 Years

Air- Conditioners 5-15 Years

Office Equipments 5 Years

Computer Hardwares 3 - 6 Years

Factory Equipments 15 Years

Flats 60 Years

Electric Installations 10 Years

* Based on technical evaluation, the management believes that the useful lives for few plant
and machinery best represent the period over which management expects to use these assets.

Hence, the useful lives for these assets is different from the useful lives as prescribed under
Part C of Schedule II of the Companies Act 2013.

The residual values are not more than 5% of the original cost of the asset. The Useful lives and
residual values are reviewed periodically, including at each financial year end.

Subsequent expenditures relating to property, plant and equipment is capitalized only
when it is probable that future economic benefits associated with these will flow to the
Company and the cost of the item can be measured reliably. Repairs and maintenance
costs are recognized in net profit in the Statement of Profit and Loss when incurred.
The cost and related accumulated depreciation are eliminated 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. Assets to be disposed off are reported at the lower of the carrying
value or the fair value less cost to sell.

Factory Building Market value & Book Value is Zero(Rs.Nil) as on 31.03.2023 , as it is already
demolished and land also sold in FY 2021-22 So,Factory Building Estates were Removed from
Schedule of Property Plant and Equipment as on 31.03.2023

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Mar 31, 2015

A. Accounting Policies :

The books of accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

b. Inventories :

Inventories are valued at the lower of cost or net realisable value.

c. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XI to the Companies Act, 1956.

d. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalised.

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Mar 31, 2014

A. Accounting Policies :

The books of accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

b. Inventories :

Inventories are valued at the lower of cost or net realisable value.

c. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

d. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalised.

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Mar 31, 2013

A. Accounting Policies :

The books of accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

b. Inventories :

Inventories are valued at the lower of cost or net realisable value.

c. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

d. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalised.

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Mar 31, 2011

1. Accounting Policies :

The books of Accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

2. Inventories :

Inventories are valued at the lower of cost or net realisable value.

3. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

4. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalized.

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Mar 31, 2010

1. Accounting Policies :

The books of Accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

2. Inventories :

Inventories are valued at the lower of cost or net realisable value.

3. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

4. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalized.

5. Government Grant :

The Company has been granted Rs. NIL ( Previous year Rs.163.12 Lacs ) as Sale Tax Incentive (Deferral ), under Part I of the 1988 Scheme of the Government of Maharashtra.

6. Retirement Benefits :

All workers and staff who left their jobs have been paid their gratuity, leave encashment and their pending dues as per the direction of the one time settlement agreed between the union and the management. There are no pending defined contributions such as Provident Fund.

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Mar 31, 2009

1. Accounting Policies :

The books of accounts are prepared under the Historical Cost Convention Method using the accrual method of accounting.

2. Inventories :

Inventories are valued at the lower of cost or net realisable value.

3. Depreciation :

Depreciation on all assets is provided on the Straight Line Method in accordance with the provisions of Section 205 (2) (b) of the Companies Act, 1956 and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

4. Fixed Assets :

Fixed Assets are stated at cost of acquisition or construction. All costs including finance cost till commencement of commercial production are capitalized.

5. Government Grant :

The Company has been granted Rs. 163.12 Lacs (Previous year Rs. 163.12 Lacs) as Sale Tax Incentive (Deferral), under Part I of the 1988 Scheme of the Government of Maharashtra.

6. Retirement Benefits :

All workers and staff who left their jobs have been paid their gratuity, leave encashment and their pending dues as per the direction of the one time settlement agreed between the union and the management. There are no pending defined contributions such as Provident Fund.