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Accounting Policies of ABC India Ltd. Company

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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