NOTE -2 Significant accounting policies
(a) Basis of accounting and preparation of financial
statements
These financial statements are prepared in accordance
with Indian Generally Accepted Accounting Principles
(GAAP) under the historical cost convention on the
accrual basis. GAAP comprises mandatory accounting
standards as prescribed under Section 133 of the
Companies Act, 2013 (‘Act') read with Rule 7 of the
Companies (Accounts) Rules, 2014, the provisions of
the Act (to the extent notified). The accounting policies
adopted in the preparation of the financial statements
are consistent with those followed in the previous year.
(b) Use of estimates
The preparation of the financial statements
in conformity with Indian GAAP requires the
Management to make estimates and assumptions
considered in the reported amounts of assets and
liabilities (including contingent liabilities) and the
reported income and expenses during the year. The
Management believes that the estimates used in
preparation of the financial statements are prudent
and reasonable. Future results could differ due to
these estimates and the differences between the
actual results and the estimates are recognized in the
periods in which the results are known / materialize.
(c) Functional and Presentation Currency
These financial statements are presented in Indian
Rupees (INR), which is the Company's functional
currency.All the amounts included in the financial
statements are reported in Lacs of Indian Rupees and
are rounded to the nearest Lacs, except per share data
and unless stated otherwise.
(d) Cash and cash equivalents (for purposes of Cash
Flow Statement)
Cash and cash equivalent in the balance sheet
comprise cash at banks and cash on hand.
(e) Cash flow statement
Cash flows are reported using the indirect method,
whereby profit / (loss) before extraordinary items and
tax is adjusted for the effects of transactions of non¬
cash nature and any deferrals or accruals of past or
future cash receipts or payments. Cash flow statement
classifies cash flows during the period from operating,
investing and financing activities of the Company.
(f) Revenue Recognition
Revenue from transportation service is usually
recognised as the service is performed, by the
completed service contract method.
Interest income is recognized on accrual basis on
balance outstanding as at end of financial year, on
time proportionate basis, based on interest rates
implicit in the transaction.
Revenue from rendering of services is recognised
when the performance of agreed contractual task has
been completed.
(g) Property, Plant & Equipment (Tangible)
Items of Property, plant and equipment are measured
at its cost less any accumulated depreciation and
any accumulated impairment losses. The cost
comprises its purchase price including import duties
and non- refundable purchase taxes after deducting
trade discounts and rebates and any cost directly
attributable to bringing the assets to its working
condition for its intended use.
Subsequent expenditures related to an item of
Tangible asset are added to its book value only if
they increase the future benefits from the existing
asset beyond its previously assessed standards of
performance.
Projects under which assets are not ready for their
intended use are disclosed under Capital work in
Progress.
Items of property, plant and equipment retired from
active use and held for disposal is stated at the lower
of their carrying amount and net realisable value. Any
write-down in this regard is recognised immediately
in the statement of profit and loss.
(h) Intangibles
An intangible asset is recognised only when it is
probable that the future economic benefits that are
attributable to the asset will flow to the enterprise and
the cost of the asset can be measured reliably.
Intangible assets are carried at cost less accumulated
amortization and accumulated impairment losses, if
any.
An intangible asset is derecognised (eliminated from
the balance sheet) on disposal or when no future
economic benefits are expected from its use and
subsequent disposal.
The depreciable amount of an intangible asset is
allocated on a systematic basis over the best estimate
of its useful life.
(i) Depreciation & amortisation
Depreciation on Property, Plant and Equipment is
provided to the extent of depreciable amount using
Straight Line (SLM) Method. Depreciation is provided
based on useful life of the assets as prescribed in
schedule II of the companies Act, 2013 except for
intangible assets which are amortised over a period of
5 years as prescribed in Accounting Standard 26.
(j) Government Grants
Government grants available to the enterprise are
considered for inclusion in accounts: (i) where there is
reasonable assurance that the enterprise will comply
with the conditions attached to them; and (ii) where
such benefits have been earned by the enterprise and
it is reasonably certain that the ultimate collection will
be made. The grant towards fixed assets is shown as a
deduction from the gross value of the asset concerned
in arriving at its book value. Government grants related
to revenue is recognised on a systematic basis in the
profit and loss statement over the periods necessary
to match them with the related costs which they are
intended to compensate.
(k) Investments
Investments are classified as long term investments
and current investments. The carrying amount for
current investments is the lower of cost and fair value.
For current investments, any reduction to fair value
and any reversals of such reductions are included in
the profit and loss statement. Long-term investments
are usually carried at cost. Any decline, other than
temporary, in the value of a long term investment, the
carrying amount is reduced to recognise the decline.
On disposal of an investment, the difference between
the carrying amount and the disposal proceeds,
net of expenses, is recognised in the profit and loss
statement.
(l) Employee benefits
(i) 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.
(ii) Defined contribution plans
Defined contribution plans are those plans in
which the company pays fixed contribution
into separate entities and will have no legal or
constructive obligation to pay further amounts.
Provident Fund and Employee State Insurance
are Defined Contribution Plans in which company
pays a fixed contribution and will have no further
obligation beyond the monthly contributions and
are recognised as an expenses in Statement of
Profit & Loss.
(iii) Defined Benefit Plans:
(a) Gratuity is defined benefit plan payable at
the end of the employment and is provided
for on the basis of actuarial valuation at each
year-end using the projected unit credit
method. Actuarial gain and loss for defined
benefit plan is recognized in full in the period
in which it occur in the statement of profit
and loss.
(b) Provision for leave encashment (including
long term compensated absences) is
provided for on the basis of acturial valuation
at each year-end using the projected unit
credit method. Actuarial gain and loss for
defined benefit plan is recognized in full in
the period in which it occur in the statement
of profit and loss.
(m) Borrowing Cost
Borrowing costs include interest, amortisation of
ancillary costs incurred and exchange differences
arising from foreign currency borrowings to the extent
they are regarded as an adjustment to the interest
cost. Costs in connection with the borrowing of funds
to the extent not directly related to the acquisition
of qualifying assets are charged to the Statement of
Profit and Loss over the tenure of the loan. Borrowing
costs, allocated to and utilised for qualifying assets,
pertaining to the period from commencement of
activities relating to construction / development of the
qualifying asset upto the date of capitalisation of such
asset is added to the cost of the assets. Capitalisation
of borrowing costs is suspended and charged to the
Statement of Profit and Loss during extended periods
when active development activity on the qualifying
assets is interrupted.
(n) Earning per share
Basic Earning Per Share is calculated by dividing
the net profit or loss for the period attributable to
equity shareholders by weighted average number
of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per
share, net profit after tax during the year and the
weighted average number of shares outstanding
during the year are adjusted for the effect of all dilutive
potential equity shares.
(o) Accounting for taxes on income
Deferred tax liabilities are recognized for all taxable
timing differences. Deferred tax assets are recognized
for deductible timing differences only to the extent
that there is reasonable certainty that sufficient
future taxable income will be available against which
such deferred tax assets can be realized. In situations
where the Company has unabsorbed depreciation
or carry forward tax losses, all deferred tax assets are
recognized only if there is virtual certainty supported
by convincing evidence that they can be realized
against future taxable profits.
The carrying amount of deferred tax assets are
reviewed at each balance sheet date. The Company
writes-down the carrying amount of a deferred tax
asset to the extent that it is no longer reasonably
certain or virtually certain, as the case may be, that
sufficient future taxable income will be available
against which deferred tax asset can be realized.
Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the
case may be, that sufficient future taxable income will
be available.
(p) Impairment of Assets
An asset is treated as impaired when the carrying cost
of asset exceeds its recoverable value. An impairment
loss is charged to the Profit and Loss Account in the
year in which an asset is identified as impaired. The
impairment loss recognised in prior accounting period
is reversed if there has been a change in the estimate
of recoverable amount.
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