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Accounting Policies of Central Provinces Railways Company Ltd. Company

Mar 31, 2015

I. Business

The Central Provinces Railways Company Limited is public limited listed company. The Company operates in the business of transportation through railways & Trading business.

ii. Income

a) Financial statements are prepared under historical cost convention on accrual basis in accordance with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013.

b) Income from Railway represents the net earnings received from Central Railway in terms of the Contracts for the Construction and Working of the Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway.

c) Income from Central Railways shown in their books of accounts is Rs. 8,96,476 /-(Rs. 738,972/-) as certified by the management, being the Company's share of income for the period 01.04.2014 to 31.03.2015 has been adjusted by the Central Railway against expenditure claimed to have been incurred by them for and on account of the company's liability towards repairs, rehabilitation, renewals & replacements of the railway assets. The Company has disowned the liability on the ground that these liabilities being in the nature of replacement are to borne by the Central Railway, as per the contract. However, the Company has thought it is prudent not to account for the aforesaid amount of Rs. 8,96,476/- (Rs. 738,972/-) adjusted in the aforesaid manner by Central Railway. In the past also company has followed this policy of recognition of revenue and there is no change in the policy on this account.

iii. Inventories:

Shares held are considered as stock-in-trade; in case of quoted shares the same are valued at lower of cost & market value.

iv. Fixed Assets

Fixed assets are stated at historical cost of acquisition less depreciation.

Under the terms of the agreement with the Government, the working agency namely Central Railway, is responsible for maintaining and renewing the railway. The assets shown as fixed capital expenditure on railway construction account in Schedule '5' annexed are in the physical possession of the Central Railway. In view of the legal opinion obtained in the past that the extent of depreciation under Section 205 and 350 of the Companies Act, 1956 in respect of these assets is nil, the Company has, consistent with the past practice not provided for any depreciation on these assets. However, the Central Railway have in their letter addressed to the Company raised various legal issues such as liability of the Company for certain expenditure incurred by them, provision for depreciation in respect of the assets in their possession etc. The Company is seeking legal opinion in the matter. The issues when resolved may have impact on various items disclosed in the accounts. vi. Revenue Recognition

All income and expenditure items having a material bearing on the financial statement are recognized on accrual basis.

vii. Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed in the financial statements.

viii. Privilege Leave Encashment

Employees are entitled to accumulate their privilege leave within specified limit and can claim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retiral benefit and the cost thereof is accounted for, in the year of its payment.

a) Provision for is made on the basis of the estimated taxable income as per the provisions of the Income Tax Act,1961 and the relevant Finance Act, after taking into consideration judicial pronouncements and opinions of the Company's tax advisors.

b) Deferred tax is recognized, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

x. Impairment of Assets

Where carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value is use determined by the present value of estimated future cash flow.


Mar 31, 2014

I. Income

a) Financial statements are prepared under historical cost convention on accrual basis in accordance with the requirement of the Companies Act, 1956.

b) Income from Railway represents the net earnings received from Central Railway in terms of the Contracts for the Construction and Working of the Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway.

c) Income from Central Railways shown in their books of accounts is Rs. 738,972/- (Rs. 757,012/-) as certified by the management, being the Company''s share of income for the period 01.04.2013 to 31.03.2014 has been adjusted by the Central Railway against expenditure claimed to have been incurred by them for and on account of the company''s liability towards repairs, rehabilitation, renewals & replacements of the railway assets. The Company has disowned the liability on the ground that these liabilities being in the nature of replacement are to borne by the Central Railway, as per the contract. However, the Company has thought it is prudent not to account for the aforesaid amount of Rs 738,972/- (Rs.757,012/-) adjusted in the aforesaid manner by Central Railway. In the past also company has followed this policy of recognition of revenue and there is no change in the policy on this account.

iii. Inventories:

Shares held are considered as stock-in-trade; in case of quoted shares the same are valued at lower of cost & market value.

iv. Fixed Assets

Fixed assets are stated at historical cost of acquisition less depreciation.

v. Depreciation

Under the terms of the agreement with the Government, the working agency namely Central Railway, is responsible for maintaining and renewing the railway. The assets shown as fixed capital expenditure on railway construction account in Schedule ''5'' annexed are in the physical possession of the Central Railway. In view of the legal opinion obtained in the past that the extent of depreciation under Section 205 and 350 of the Companies Act, 1956 in respect of these assets is nil, the Company has, consistent with the past practice not provided for any depreciation on these assets. However, the Central Railway have in their letter addressed to the Company raised various legal issues such as liability of the Company for certain expenditure incurred by them, provision for depreciation in respect of the assets in their possession etc. The Company is seeking legal opinion in the matter. The issues when resolved may have impact on various items disclosed in the accounts.

vi. Revenue Recognition

All income and expenditure items having a material bearing on the financial statement are recognized on accrual basis.

vii. Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed in the financial statements.

viii. Privilege Leave Encashment

Employees are entitled to accumulate their privilege leave within specified limit and can claim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retiral benefit and the cost thereof is accounted for, in the year of its payment.

ix. Taxes on Income

a) Provision for is made on the basis of the estimated taxable income as per the provisions of the Income Tax Act,1961 and the relevant Finance Act, after taking into consideration judicial pronouncements and opinions of the Company''s tax advisors.

b)Deferred tax is recognized, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

x. Impairment of Assets

Where carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value is use determined by the present value of estimated future cash flow.


Mar 31, 2013

1. Business

The Central Provinces Railways Company Limited is public limited listed company. Company is in the business of transportation through railways & trading in various products.

2. Income

a) Financial statements are prepared under historical cost convention on accrual basis in accordance with the requirement of the Companies Act, 1956.

b) Income from Railway represents the net earnings received from Central Railway in terms of the Contracts for the Construction and Working of the Ellichipur Murtajapur Yeotamal Railway and Pulgaon- Arvi Railway.

c) Income from Central Railways shown in their books of accounts is Rs.7,57,012.09 /-(Rs.25,17,886/-) as certified by the management, being the Company''s share of income for the period 01.04.2012 to 31.03.2013 has been adjusted by the Central Railway against expenditure claimed to have been incurred by them for and on account of the company. Liability for any part of the said expenditure has been disowned by the company. However, the Company has thought it prudent not to account for the aforesaid amount of Rs.7,57,012.09 (Rs.25,17,886/-) adjusted in the aforesaid manner by Central Railway. In the past also company has followed this policy of recognition of revenue and there is no change in the policy on this account.

3. Inventories:

Shares held are as stock-in-trade; in case of quoted shares the same are valued at lower of cost & market value.

4. Investments

Investments are long term in the nature and stated at cost. Interest is accounted on accrual basis. However the current status of the investments is not available with the management.

5. Fixed Assets

Fixed assets are stated at historical cost of acquisition less depreciation.

6. Depreciation

Under the terms of the agreement with the Government, the working agency namely Central Railway, is responsible for maintaining and renewing the railway. The assets shown as fixed capital expenditure on railway construction account in Schedule ''3'' annexed are in the physical possession of the Central Railway. In view of the legal opinion obtained in the past that the extent of depreciation under Section 205 and 350 of the Companies Act, 1956 in respect of these assets is nil, the Company has, consistent with the past practice not provided for any depreciation on these assets. However, the Central Railway have in their letter addressed to the Company raised various legal issues such as liability of the Company for certain expenditure incurred by them, provision for depreciation in respect of the assets in their possession etc. The Company is seeking legal opinion in the matter. The issues when resolved may have impact on various items disclosed in the accounts.

7. Revenue Recognition

For dealing in Shares & Securities in cash market segment the same are accounted for on the basis of bill dates received from the brokers.

8. Information required under Para 3 (ii) (b) of Part II of Schedule VI to the Companies Act, 1956 in respect of items traded during the year:

a. Since the Company is in the business of trading, the provisions regarding licensed and installed capacity, as well as production & raw - material consumption are not applicable.

b. Details of items traded –

9. Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.

10. Privilege Leave Encashment

Employees are entitled to accumulate their privilege leave within specified limit and can claim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retiral benefit and the cost thereof is accounted for, in the year of its payment.

11. Taxes on Income

a)Provision for is made on the basis of the estimated taxable income as per the provisions of the Income

Tax Act,1961 and the relevant Finance Act, after taking into consideration judicial pronouncements and opinions of the Company''s tax advisors. b)Deferred tax is recognized, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

12. Impairment of Assets

Where carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value is use determined by the present value of estimated future cash flow.

13. The Company does not owe any sum to Small Scale Industrial Undertakings.

14. Contingent Liabilities

Claims against the Company by Central Railway for Capital Expenditure claimed to have been incurred by them on behalf of the company Rs.16,78,26,853/- (Rs.18,72,00,000/- – Rs.193,73,147/-) , Previous Year Rs. 16,85,83,865/- (Rs.18,72,00,000/- – Rs.1,86,16,135/-) being the Company''s share of income for the period 01.10.2002 to 31.3.2013 adjusted by them and not treated by the Company as income.

As per the terms of agreement between the Company and the then Secretary of State for, the Construction and Working of Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway the said Secretary of State ( now the Railway Board) has a right to terminate the contract by purchasing the assets of the Company at a price which shall not be less then the total capital cost incurred by the Company. In view of the said contract, no provision for depreciation or impairment of asset is deemed necessary.


Mar 31, 2010

1 Income

a) Financial statements are prepared under historical cost convention on accrual basis in accordance with the requirement of the Companies Act,1956.

b) Income from Railway represents the net earnings received from Central Railway in terms of the Contracts for the Construction and Working of the Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway.

c) Income from Railways shown in the accounts is Rs. NIL ( Rs. NIL ).Rs.20,76,071/- (Rs. 20,29,341/-) as certified by the management, being the Companys share of income for the period 01.04.2009 to 31.03.2010 has been adjusted by the Central Railway against expenditure claimed to have been incurred by them for and on account of the company. Liability for any part of the said expenditure has been disowned by the company. However, the Company has thought it prudent not to account for the aforsaid amount of Rs.20,76,071/- (Rs. 20,29,341/-) adjusted in the aforesaid manner by Central Railway. In the past also company has followed this policy of recognition of revenue and there is no change in the policy on this account.

2 Investments

Investments are long term in the nature and stated at cost.Interest is accounted on accrual basis.

3 Fixed Assets

Fixed assets are stated at historical cost of acquisition less depreciation.

4 Depreciation

Under the terms of the agreement with the Government, the working agency namely Central Railway, is responsible for maintainng and renewing the railway. The assets shown as fixed capital expenditure on railway construction account in Schedule 3 annexed are in the physical possession of the Central Railway. In view of the legal opinion obtained in the past that the extent of depreciation under Section 205 and 350 of the Comapnies Act,1956 in respect of these assets is nil, the Company has, consistent with the past practice not provided for any depreciation on these assets. However, the Central Railway have in their letter addressed to the Company raised various legal issues such as liability of the Company for certain expenditure incurred by them, provision for depreciation in respect of the assets in their possession etc. The Company is seeking legal opinion in the matter. The issues when resolved may have impact on various items disclosed in the accounts.

5 Current Assets & Current Liabilities

In the case of current assets and current liabilities expressed in foreign currency the exchange rate prevalent at the end of the year is taken for the purpose of translation. Exchange differences arising on the foreign currency transactions are recognised as income or expenses in the year in which they arise.

6 Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.

7 Privilege Leave Encashment

Employees are entitled to accumulate their privilege leave within specified limit and can claim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retiral benefit and the cost thereof is accounted for, in the year of its payment.

8 Taxes on Income

a) Provision for is made on the basis of the estimated taxable income as per the provisions of the Income Tax Act,1961 and the relevent Finance Act, after taking into consideration judicial pronouncements and opinions of the Companys tax advisors.

b) Deferred tax is recognised, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

9 Impairment of Assets

Where carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value is use determined by the present value of estimated future cash flow.

The Company does not owe any sum to Small Scale Industrial Undertakings.

10 Contingent Liabilities

11 Claims against the Company by Central Railway for Capital Expenditure claimed to have been incurred by them on behalf of the company Rs.2,64,00,711/= (Rs.2,58,20,167/=)- Net of Rs.1,27,15,897/=(Rs-1,06,39,825/= )being the Companys share of income for the period 1.10.2002 to 31.3.2010 adjusted by them and not treated by the Company as income.

12 As per the terms of agreement between the Company and the then Secretary of State for, the Construction and Working of Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway the said Secretary of State ( now the Railway Board) has a right to terminate the contract by purchasing the assets of the Company at a price which shall not be less then the total capital cost incurred by the Company. In view of the said contract, no provision for depreciation or impairment of asset is deemed necessary.

13 The Company had granted in earlier year an unsecured interest bearing loan to M/s. Killick Nixon Limited amounting to Rs. 20,00,000/-. Interest on the said loan is not being received, accordingly no provision has been made for interest on the said intercorporate loan w.e.f. 1st April, 2005 in terms of resolution passed by the Board of Directors on 21st January, 2006.

14 Reimbursement of administrative expenses of Rs. 54,000/- (Previous Year Rs. 54,000/-) represents the amount reimbursed to Killick Nixon Limited from 01.04.2009 to 31.03.2010 towards the cost of services of their staff for carrying out the Companys day to day work.

16 Related Party Disclosure

Related Party Disclosure under AS-18 issued by the Institute of Chartered Accounts of India

The Management has informed that all the transactions entered during the previous year with various parties do not fall within the purview of the Accounting standard 18 "Related Party Transaction" issued by the Institute of Chartered Accountants of India.

The company has only one revenue segment.


Mar 31, 2009

1 Income

a) Financial statements are prepared under historical cost convention on accrual basis in accordance with the requirement of the Companies Act, 1956.

b) Income from Railway represents the net earnings received from Central Railway in terms of the Contracts for the Construction and Working of the Ellichipur Murtajapur Yeotamal Railway and Pulgaon-Arvi Railway.

c) Income from Railways shown in the accounts is Rs. NIL (Rs. NIL ).Rs.2029341/= (Rs. 16,99,134/-) as certified by the management, being the Companys share of income for the period 01.04.2008 to 31.03.2009 has been adjusted by the Central Railway against expenditure claimed to have been incurred by them for and on account of the company. Liability for any part of the said expenditure has been disowned by the comapny. However, the Company has thought it prudent not to account for the aforsaid amount of Rs.2029341/= (Rs. 16,99,134/-) adjusted in the aforesaid manner by Central Railway. In the past also company has followed this policy of recognition of revenue and there is no change in the policy on this account.

2 Investments

Investments are long term in the nature and stated at cost.Interest is accounted on accrual basis.

3 Fixed Assets

Fixed assets are stated at historical cost of acquisition less depreciation.

4 Depreciation

Under the terms of the agreement with the Government, the working agency namely Central Railway, is responsible for maintainng and renewing the railway. The assets shown as fixed capital expenditure on railway construction account in Schedule 3 annexed are in the physical possession of the Central Railway. In view of the legal opinion obtained in the past that the extent of depreciation under Section 205 and 350 of the Comapnies Act, 1956 in respect of these assets is nil, the Company has, consistent with the past practice not provided for any depreciation on these assets. However, the Central Railway have in their letter addressed to the Company raised various legal issues such as liability of the Company for certain expenditure incurred by them, provision for depreciation in respect of the assets in their possession etc. The Company is seeking legal opinion in the matter. The issues when resolved may have impact on various items disclosed in the accounts.

5 Current Assets & Current Liabilities

In the case of current assets and current liabilities expressed in foreign currency the exchange rate prevalent at the end of the year is taken for the purpose of translation. Exchange differences arising on the foreign currency transactions are recognised as income or expenses in the year in which they arise.

6 Provisions and Contingencies

A provision is recognized when there is a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

A disclosure for a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Contingent Assets are neither recognized nor disclosed in the financial statements.

7 Privilege Leave Encashment

Employees are entitled to accumulate their privilege leave within specified limit and can daim encashment thereof while in service or on separation or superannuation or otherwise. This is not treated as a specific retiral benefit and the cost thereof is accounted for, in the year of its payment.

8 Taxes on Income

a) Provision for is made on the basis of the estimated taxable income as per the provisions of the Income Tax Act,1961 and the relevent Finance Act, after taking into consideration judicial pronouncements and opinions of the Companys tax advisors.

b) Deferred tax is recognised, subject to the consideration of prudence on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods.

9 Impairment of Assets

Where carrying amount of fixed assets exceeds the recoverable amount on the reporting date, the carrying amount is reduced to the recoverable amount. The recoverable amount is measured as the higher of the net selling price and the value is use determined by the present value of estimated future cash flow.

10 The Company does not owe any sum to Small Scale Industrial Undertakings.