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Accounting Policies of Container Corporation of India Ltd. Company

Mar 31, 2016

1. Accounting Convention & Concepts:

The financial statements are prepared under the historical cost convention on accrual basis, in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. Accounting Policies not referred to otherwise are consistent with generally accepted accounting principles

2. Fixed Assets & Capital Work in Progress:

(i) Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost of acquisition is net of interest on capital advances and duty credits and is inclusive of freight, duties, taxes and other incidental expenses. In respect of assets due for capitalization, where final bills/claims are to be received/passed, the capitalisation is based on the engineering estimates. Final adjustments, for costs and depreciation are made retrospectively in the year of ascertainment of actual cost and finalisation of claim. Machinery spares, which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized. Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use and the cost of assets not put to use before the Balance Sheet date. Advances paid to acquire fixed assets are shown as part of ''Long Term Loans & Advances".

(ii) Provision for stamp duty at the prevailing rate is made by the company at the time of capitalization of the amount paid for acquisition of land & is capitalised as part of the cost of Land.

3. Intangible Assets:

(i) Software:

Expenditure on computer software, which is not an integral part of hardware, is capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Software is amortized over five years being management''s estimate of life of assets over which economic benefits will be derived.

(ii) Registration Fee:

Registration fee paid to Ministry of Railways (MOR) for movement of container trains on Indian Railways and running of Private Freight Terminals (PFT) is capitalized as an Intangible Asset. The registration fee is amortized over the period covered by the respective agreements with Indian Railways.

4. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets and all other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

5. Investments:

(i) Long term investments are stated at cost. A provision for diminution in value is made to recognise a decline other than temporary in nature.

(ii) Current investments are stated at lower of cost or fair value.

6. Inventories:

Stores and spare parts are valued at cost on weighted average basis or Net Realizable Value (NRV) whichever is lower. Provision for obsolescence is made, whenever required.

7. Depreciation/Amortization:

(i) The Depreciation on fixed assets including assets created on leasehold land is provided based on useful life and in the manner prescribed in Schedule II to the Companies Act 2013.

(ii) Leasehold land other than acquired on perpetual lease is amortized over the period of lease. Leasehold buildings are amortized over the period of lease or useful life of the buildings, as prescribed under Schedule II of Companies Act 2013, whichever is less.

(iii) Capital expenditure on enabling assets, like roads, culverts & electricity transmissions etc., the ownership of which is not with the Company are charged off to revenue in the accounting period of incurrence of such expenditure. However, capital expenditure on enabling assets, ownership of which rests with the company and which have been created on land not belonging to the Company is written off to the Statement of Profit & Loss over its approximate period of utility or over a period of 5 years, whichever is less. For this purpose, land is not considered to be belonging to the company, if the same is not owned or leased/licensed to the company.

8. Impairment of Assets:

An asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

9. Employee Benefits:

(i) Liability for gratuity, leave salary and post retirement medical benefits payable to employees is provided for on accrual basis using the Projected Accrued Benefit Method (Projected Unit Credit Method with control period of one year) done by an independent actuary as at the Balance Sheet date. Contributions are made to approved gratuity fund created in a separate trust set up by the company for this purpose.

(ii) Contribution to defined contribution plans such as Provident Fund, Pension Fund and Family Pension Fund are charged to the Statement of Profit & Loss as and when accrued.

(iii) The undiscounted amount of short term employee benefits expected to be paid for the services rendered are recognized as an expense during the period when the employees render the services.

10. Foreign Currency Transactions:

(i) Income & Expenditure denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

(ii) Loans, Current liabilities and Current assets in foreign currencies are translated at the exchange rate prevailing at the end of financial year.

(iii) Gains or losses due to foreign exchange fluctuations are recognised in the Statement of Profit & Loss.

11. Revenue Recognition:

(i) Rail freight income & related expenses are accounted for at the time of issue of RRs by Indian Railways.

(ii) Road transportation/handling income & related expenses are accounted for at the time of booking of containers.

(iii) Terminal service charges (TSC) for empty containers are accounted for on accrual basis.

(iv) Terminal service charges (TSC) for loaded container & warehousing charges are accounted for on receipt/at the time of release of containers on "completed service contract method".

(v) Dividend income is recognized when the company''s right to receive the dividend is established.

(vi) Company''s share in profits or losses from Business Arrangement is accounted annually on determination of the profits or losses by Business Arrangement after the same is audited by Auditors of Business Arrangement.

12. Claims/Counter-claims/Penalties/Awards:

Claims/counter-claims/penalties/awards are accounted for in the year of its settlement.

13. Taxes on Income:

(i) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

(ii) Disputed income tax liabilities are accounted for on the finalization of assessments.

(iii) Deferred Tax Liability/Asset resulting from timing difference between book profit and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantially enacted as at the balance sheet date in accordance with AS-22 issued by the ICAI. Deferred Tax Asset, if any is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions involving substantial degree of estimation are recognised in respect of obligations where, based on the evidence available, their existence on the Balance Sheet date is considered probable.

Contingent liabilities are determined on the basis of available information. These liabilities are not provided for and disclosed by way of notes on accounts.

Contingent assets are not recognized in the accounts.

15. Grants:

(i) Capital Grants:

Grants received towards specific fixed assets are deducted from the gross value of the asset or capital work in progress as the case may be. Unutilized amount out of grant received is shown as liability.

(ii) Revenue Grants:

Grants received, which are revenue in nature are credited to the Statement of Profit & Loss. Unutilized amount out of grant received is shown as liability.

16. Provision for Doubtful Trade Receivables/Advances/Deposits:

Provision for Doubtful Trade Receivables/Advances/Deposits is made when there is uncertainty of realisation irrespective of the period of its dues. For dues outstanding over three years, full provision is made unless the amount is considered recoverable.

17. Earnings per share (EPS)

Basic earnings per share (''EPS'') is computed by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of shares outstanding during the year.

Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period except where the result would be anti-dilutive.

18. Leases

Operating lease: Asset acquired on lease where the significant portion of risk and rewards are retained by the lessor are classified as operating lease. Lease rentals in respect of assets acquired under operating lease are charged off to the Statement of Profit and Loss on a straight line basis over the lease term.

Finance Lease: Assets acquired on lease where significant portion of risk and reward are retained by the lessee are classified as finance lease. Finance expense out of the lease rentals are charged off to the statement of profit and loss.


Mar 31, 2015

1. Accounting Convention & Concepts:

The financial statements are prepared under the historical cost convention on accrual basis, in accordance with the applicable mandatory Accounting Standards and relevant presentation requirements of the Companies, Act 1956 and Companies Act, 2013.Accounting Policies not referred to otherwise are consistent with generally accepted accounting principles.

2. FixedAssets&Capital Work in Progress:

(i) Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost of acquisition is net of interest on capital advances and duty credits and is inclusive of freight, duties, taxes and other incidental expenses. In respect of assets due for capitalization, where final bills/claims are to be received/passed, the capitalisation is based on the engineering estimates. Final adjustments, for costs and depreciation are made retrospectively in the year of ascertainment of actual cost and finalisation of claim. Machinery spares, which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized. Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use and the cost of assets not put to use before the Balance Sheet date. Advances paid to acquire fixed assets are shown as part of 'Long Term Loans &Advances".

(ii) Provision for stamp duty at the prevailing rate is made by the company at the time of capitalization of the amount paid for acquisition of land & is capitalised as part of the cost of Land.

3. IntangibleAssets:

(i) Software:

Expenditure on computer software, which is not an integral part of hardware, is capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Software is amortized overfive years.

(ii) Registration Fee:

Registration fee paid to Ministry of Railways (MOR) for movement of container trains on Indian Railways and running of Private Freight Terminals (PFT) is capitalized as an Intangible Asset. The registration fee is amortized overthe period covered by the respective agreements with Indian Railways.

4. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets and all other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

5. Investments:

(i) Long term investments are stated at cost. A provision for diminution in value is made to recognise a decline other than temporary in nature.

(ii) Current investments are stated at lower of cost or fair value.

6. Inventories:

Stores and spare parts are valued at cost on weighted average basis. Provision for obsolescence is made, whenever required.

7. Depreciation/Amortization:

(i) The Depreciation on fixed assets including assets created on leasehold land is provided based on useful life and in the manner prescribed in Schedule 11 to the Companies Act 2013.

(ii) Leasehold land other than acquired on perpetual lease is amortized over the period of lease. Leasehold buildings are amortized overthe period of lease or useful life of the buildings, as prescribed under Schedule II of Companies Act 2013, whichever is less.

(iii) Capital expenditure on enabling assets, like roads, culverts & electricity transmissions etc., the ownership of which is not with the Company are charged off to revenue in the accounting period of incurrence of such expenditure. However, capital expenditure on enabling assets, ownership of which rests with the company and which have been created on land not belonging to the Company is written off to the Statement of Profit & Loss over its approximate period of utility or over a period of 5 years, whichever is less. For this purpose, land is not considered to be belonging to the company, if the same is not owned or leased/licensed to the company.

8. Impairment of Assets:

An asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

9. Employee Benefits:

(i) Liability for gratuity, leave salary and post retirement medical benefits payable to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date. Contributions are made to approved gratuity fund created in a separate trust set up by the company for this purpose.

(ii) Contribution to defined contribution plans such as Provident Fund, Pension Fund and Family Pension Fund are charged to the Statement of Profit & Loss as and when accrued.

10. Foreign Currency Transactions:

(i) Income & Expenditure denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

(ii) Loans, Current liabilities and Current assets in foreign currencies are translated at the exchange rate prevailing at the end of financial year.

(iii) Gains or losses due to foreign exchange fluctuations are recognised in the Statement of Profit & Loss.

11. Revenue Recognition:

(i) Rail freight income & related expenses are accounted for at the time of issue of RRs by Indian Railways.

(ii) Roadtransportation/handling income & related expenses are accounted for at the time of booking of containers.

(iii) Terminal service charges for empty containers are accounted for on accrual basis.

(iv) Terminal service charges for loaded container & wharfage are accounted for on receipt/at the time of release of containers on "completed service contract method".

(v) Dividend income is recognized when the company's right to receive the dividend is established.

12. Claims/Counter-claims/Penalties/Awards:

Claims/counter-claims/penalties/awards are accounted for in the year of its settlement.

13. Taxes on Income:

(i) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

(ii) Disputed income tax liabilities are accounted for on the finalization of assessments.

(iii) Deferred Tax Liability/Asset resulting from timing difference between book profit and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantially enacted as at the balance sheet date in accordance with AS-22 issued by the ICAI. Deferred Tax Asset, if any is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

14. Provisions, Contingent Liabilities&ContingentAssets:

Provisions are recognised in respect of obligations where, based on the evidence available, their existence on the Balance Sheet date is considered probable.

Contingent liabilities are determined on the basis of available information. These liabilities are not provided for and disclosed by way of notes on accounts.

Contingent assets are not recognized in the accounts.

15. Grants:

(i) Capital Grants:

Grants received towards specific fixed assets are deducted from the gross value of the asset or capital work in progress as the case may be. Unutilized amount out of grant received is shown as liability.

(ii) Revenue Grants:

Grants received, which are revenue in nature are credited to the Statement of Profit & Loss. Unutilized amount out of grant received is shown as liability.

16. Provision for Doubtful Trade Receivables/Advances/Deposits:

Provision for Doubtful Trade Receivables/Advances/Deposits is made when there is uncertainty of realisation irrespective of the period of its dues. For dues outstanding over three years, full provision is made unless the amount is considered recoverable.


Mar 31, 2014

1. Accounting Convention & Concepts:

The financial statements are prepared under the historical cost convention on accrual basis, in accordance with the applicable mandatory Accounting Standards and relevant presentation requirements of the Companies Act, 1956. Accounting Policies not referred to otherwise are consistent with generally accepted accounting principles.

2. Fixed Assets & Capital Work in Progress:

(i) Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost of acquisition is net of interest on capital advances and duty credits and is inclusive of freight, duties, taxes and other incidental expenses. In respect of assets due for capitalization, where final bills/claims are to be received/passed, the capitalisation is based on the engineering estimates. Final adjustments, for costs and depreciation are made retrospectively in the year of ascertainment of actual cost and finalisation of claim. Machinery spares, which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized. Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use and the cost of assets not put to use before the Balance Sheet date. Advances paid to acquire fixed assets are shown as part of ''Long Term Loans & Advances".

(ii) Provision for stamp duty at the prevailing rate is made by the company at the time of capitalization of the amount paid for acquisition of land & is capitalised as part of the cost of Land.

3. Intangible Assets: (i) Software:

Expenditure on computer software, which is not an integral part of hardware, is capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Software is amortized over five years. (ii) Registration Fee:

Registration fee paid to Ministry of Railways (MOR) for movement of container trains on Indian Railways and running of Private Freight Terminals (PFT) is capitalized as an Intangible Asset. The registration fee is amortized over the period covered by the respective agreements with Indian Railways.

4. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets and all other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

5. Investments:

(i) Long term investments are stated at cost. A provision for diminution in value is made to recognise a decline other than temporary in nature.

(ii) Current investments are stated at lower of cost or fair value.

6. Inventories:

Stores and spare parts are valued at cost on weighted average basis. Provision for obsolescence is made, whenever required.

7. Depreciation/Amortization:

(i) Depreciation on fixed assets including assets created on leasehold land is provided on "Straight Line Method" at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, except for Roads/Pavements/Boundary wall/ Warehouses and Electrical Fittings of terminals on which depreciation has been provided @ 3.34% and 10.34% respectively and for upgraded BFKI Wagons @ 6.79%.

(ii) Leasehold land other than acquired on perpetual lease is amortized over the period of lease. Leasehold buildings are amortized over the period of lease or useful life of the building as per rates prescribed under Schedule XIV, whichever is less.

(iii) Capital expenditure on enabling assets, like roads, culverts & electricity transmissions etc., the ownership of which is not with the Company are charged off to revenue in the accounting period of incurrence of such expenditure. However, capital expenditure on enabling assets, ownership of which rests with the company and which have been created on land not belonging to the Company is written off to the Statement of Profit & Loss over its approximate period of utility or over a period of 5 years, whichever is less. For this purpose, land is not considered to be belonging to the company, if the same is not owned or leased/licensed to the company.

8. Impairment of Assets:

An asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

9. Retirement Benefits:

(i) Liability for gratuity, leave salary and post retirement medical benefits payable to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date. Contributions are made to approved gratuity fund created in a separate trust set up by the company for this purpose.

(ii) Contribution to defined contribution plans such as Provident Fund, Pension Fund and Family Pension Fund are charged to the Statement of Profit & Loss as and when accrued.

10. Foreign Currency Transactions:

(i) Income & Expenditure denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

(ii) Loans, Current liabilities and Current assets in foreign currencies are translated at the exchange rate prevailing at the end of financial year.

(iii) Gains or losses due to foreign exchange fluctuations are recognised in the Statement of Profit & Loss.

11. Income from Operations (Terminal & Other Service Charges):

(i) Rail freight income & related expenses are accounted for at the time of issue of RRs by Indian Railways.

(ii) Road transportation/handling income & related expenses are accounted for at the time of booking of containers.

(iii) Terminal service charges for empty containers are accounted for on accrual basis.

(iv) Terminal service charges for loaded container & wharfage are accounted for on receipt/at the time of release of containers on "completed service contract method".

12. Claims/Counter-claims/Penalties/Awards:

Claims/counter-claims/penalties/awards are accounted for in the year of its settlement.

13. Taxes on Income:

(i) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

(ii) Disputed income tax liabilities are accounted for on the finalization of assessments.

14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognised in respect of obligations where, based on the evidence available, their existence on the Balance Sheet date is considered probable.

Contingent liabilities are determined on the basis of available information. These liabilities are not provided for and disclosed by way of notes on accounts.

Contingent assets are not recognized in the accounts.

15. Grants:

(i) Capital Grants:

Grants received towards specific fixed assets are deducted from the gross value of the asset or capital work in progress as the case may be. Unutilized amount out of grant received is shown as liability.

(ii) Revenue Grants:

Grants received, which are revenue in nature are credited to the Statement of Profit & Loss. Unutilized amount out of grant received is shown as liability.

16. Provision for Doubtful Trade Recievables/Advances/Deposits:

Provision for Doubtful Trade Receivables/Advances/Deposits is made when there is uncertainty of realisation irrespective of the period of its dues. For dues outstanding over three years, full provision is made unless the amount is considered recoverable.

i). Estimated amount of Contracts remaining to be executed and not provided for (Net of advances):


Mar 31, 2013

1. Accounting Convention & Concepts:

The financial statements are prepared under the historical cost convention on accrual basis, in accordance with the applicable mandatory Accounting Standards and relevant presentation requirements of the Companies Act, 1956. Accounting Policies not referred to otherwise are consistent with generally accepted accounting principles.

2. Fixed Assets & Capital Work in Progress:

(i) Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost of acquisition is net of interest on capital advances and duty credits and is inclusive of freight, duties, taxes and other incidental expenses. In respect of assets due for capitalization, where final bills/claims are to be received/passed, the capitalisation is based on the engineering estimates. Final adjustments, for costs and depreciation are made retrospectively in the year of ascertainment of actual cost and finalisation of claim. Machinery spares, which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalized. Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use and the cost of assets not put to use before the Balance Sheet date. Advances paid to acquire fixed assets are shown as part of ''''Long Term Loans & Advances".

(ii) Provision for stamp duty at the prevailing rate is made by the company at the time of capitalization of the amount paid for acquisition of land & is capitalised as part of the cost of Land.

3. Intangible Assets:

(i) Software:

Expenditure on computer software, which is not an integral part of hardware, is capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Software is amortized over five years.

(ii) Registration Fee:

Registration fee paid to Ministry of Railways (MOR) for movement of container trains on Indian Railways and running of Private Freight Terminals (PFT) is capitalized as an Intangible Asset. The registration fee is amortized over the period covered by the respective agreements with Indian Railways.

4. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets and all other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

5. Investments:

(i) Long term investments are stated at cost. A provision for diminution in value is made to recognise a decline other than temporary in nature.

(ii) Current investments are stated at lower of cost or fair value.

6. Inventories:

Stores and spare parts are valued at cost on weighted average basis. Provision for obsolescence is made, whenever required.

7. Depreciation/Amortization:

(i) Depreciation on fixed assets including assets created on leasehold land is provided on "Straight Line Method" at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, except for Roads/Pavements/Boundary wall/ Warehouses and Electrical Fittings of terminals on which depreciation has been provided @ 3.34% and 10.34% respectively and for upgraded BFKI Wagons @ 6.79%.

(ii) Leasehold land other than acquired on perpetual lease is amortized over the period of lease. Leasehold buildings are amortized over the period of lease or useful life of the building as per rates prescribed under Schedule XIV, whichever is less.

(iii) Capital expenditure on enabling assets, like roads, culverts & electricity transmissions etc., the ownership of which is not with the Company are charged off to revenue in the accounting period of incurrence of such expenditure. However, capital expenditure on enabling assets, ownership of which rests with the company and which have been created on land not belonging to the Company is written off to the Statement of Profit & Loss over its approximate period of utility or over a period of 5 years, whichever is less. For this purpose, land is not considered to be belonging to the company, if the same is not owned or leased/licensed to the company.

8. Impairment of Assets:

An asset is treated as impaired when the carrying amount of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit & Loss in the year in which an asset is identified as impaired.

9. Retirement Benefits:

(i) Gratuity liability to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date. Contributions are made to approved Gratuity Fund created in a Trust set up by the Company for this purpose.

(ii) Liability for leave travel concession & leave salary payable to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date.

(iii) Contribution to defined contribution plans such as Provident Fund and Family Pension Fund are charged to the Statement of Profit & Loss as and when accrued.

10. Foreign Currency Transactions:

(i) Income & Expenditure denominated in foreign currencies are recorded at the exchange rate prevailing on the date oftransaction.

(ii) Loans, Current liabilities and Current assets in foreign currencies are translated at the exchange rate prevailing at the end of financial year.

(iii) Gains or losses due to foreign exchange fluctuations are recognised in the Statement of Profit & Loss.

11. Income from Operations (Terminal & other Service Charges):

(i) Rail freight income & related expenses are accounted for at the time of issue of RRs by Indian Railways.

(ii) Road transportation/handling income & related expenses are accounted for at the time of booking of containers.

(iii) Terminal service charges for empty containers are accounted for on accrual basis.

(iv) Terminal service charges for loaded container & wharfage are accounted for on receipt/at the time of release of containers on "completed service contract method".

12. Claims/Counter-claims/Penalties/Awards:

Claims/counter-claims/penalties/awards are accounted for in the year of its settlement.

13. Taxes on Income:

(i) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

(ii) Disputed income tax liabilities are accounted for on the finalization of assessments.

14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognised in respect of obligations where, based on the evidence available, their existence on the Balance Sheet date is considered probable.

Contingent liabilities are determined on the basis of available information. These liabilities are not provided for and disclosed by way of notes on accounts.

Contingent assets are not recognized in the accounts.

15. Grants:

(i) Capital Grants:

Grants received towards specific fixed assets are deducted from the gross value of the asset or capital work in progress as the case may be. Unutilized amount out of grant received is shown as liability.

(ii) Revenue Grants:

Grants received, which are revenue in nature are credited to the Statement of Profit & Loss. Unutilized amount out of grant received is shown as liability.


Mar 31, 2011

1. Accounting Convention & Concepts:

The financial statements are prepared under the historical cost convention on accrual basis, in accordance with the applicable mandatory Accounting Standards and relevant presentation requirements of the Companies Act, 1956. Accounting Policies not referred to otherwise are consistent with generally accepted accounting principles.

2. Fixed Assets & Capital Work in Progress:

i) Fixed assets are stated at cost of acquisition or construction, less accumulated depreciation. Cost of acquisition is net of interest on capital advances and duty credits and is inclusive of freight, duties, taxes and other incidental expenses. In respect of assets due for capitalisation where final bills/claims are to be received/passed, the capitalisation is based on the engineering estimates. Final adjustments, for costs and depreciation are made retrospectively in the year of ascertainment of actual cost and finalisation of claim. Machinery spares which can be used only in connection with an item of fixed asset and whose use is expected to be irregular are capitalised. Capital work in progress includes the cost of fixed assets that are not yet ready for their intended use, advances paid to acquire fixed assets and the cost of assets not put to use before the Balance Sheet date.

ii) Provision for stamp duty payable on the immovable properties is made as and when conveyance deed for the properties is executed and the liability is ascertained.

iii) Grants received towards specific fixed assets are deducted from the gross value of the asset or capital work in progress as the case may be. Unutilised amount out of grant received is shown as current liability.

3. Intangible Assets:

i) Software:

Expenditure on computer software, which is not an integral part of hardware, is capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Software is amortized over five years.

ii) Registration Fee:

The registration fee paid to Ministry of Railway (MOR) for approval for movement of container trains on Indian Railways is capitalized as an Intangible Asset. The registration fee is amortized over a period of 20 years.

4. Borrowing Costs:

Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets and all other borrowing costs are charged to revenue. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use.

5. Investments:

i) Long term investments are stated at cost. A provision for diminution in value is made to recognise a decline other than temporary in nature.

ii) Current investments are stated at lower of cost or fair value.

6. Inventories:

Stores and spare parts are valued at cost on weighted average basis. Provision for obsolescence is made, whenever required.

7. Depreciation/Amortization:

i) Depreciation on fixed assets including assets created on leasehold land is provided on "Straight Line Method" at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956, except for Roads/Pavements/Boundary wall/ Warehouses and Electrical Fittings of terminals on which depreciation has been provided @ 3.34% and 10.34% respectively and for upgraded BFKI Wagons @ 6.79%.

ii) Leasehold land other than acquired on perpetual lease is amortized over the period of lease. Leasehold

buildings are amortized over the period of lease or useful life of the building as per rates prescribed under Schedule XIV, whichever is less.

(iii) Capital expenditure on enabling assets, like roads, culverts & electricity transmissions etc., the ownership of which is not with the Company are charged off to revenue in the accounting period of incurrence of such expenditure. However, capital expenditure on enabling assets, ownership of which rests with the company and which have been created on land not belonging to the Company is written off to the P&L Account over its approximate period of utility or over a period of 5 years, whichever is less. For this purpose, land is not considered to be belonging to the company, if the same is not owned or leased/licensed to the company.

8. Impairment of Assets:

An asset is treated as impaired when the carrying amount of assets 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.

9. Retirement Benefits:

i) Gratuity liability to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date. Contributions are made to approved Gratuity Fund created in a Trust set up by the Company for this purpose.

ii) Liability for leave travel concession & leave salary payable to employees is provided for on accrual basis based on valuation done by an independent actuary as at the Balance Sheet date.

iii) Contribution to defined contribution plans such as Provident Fund and Family Pension Fund are charged to the Profit & Loss Account as and when accrued.

10. Foreign Currency Transactions:

i) Income & Expenditure denominated in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.

ii) Loans, Current liabilities and Current assets in foreign currencies are translated at the exchange rate prevailing at the end of financial year. iii) Gains or losses due to foreign exchange fluctuations are recognised in the Profit & Loss Account.

11. Income from Operations (Terminal & other Service Charges):

Rail Freight Income & related Expenses are accounted for at the time of issue of RRs by Indian Railways whereas Road Transportation/Handling Income & related Expenses are accounted for at the time of booking of containers. Terminal service charges and wharfage are accounted for on receipt/at the time of release of containers on "completed service contract method".

12. Claims/Counter-claims/Penalties/Awards:

Claims/counter-claims/penalties/awards are accounted for in the year of its settlement.

13. Taxes on Income:

i) Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961.

Ii) Disputed income tax liabilities are accounted for on the finalization of assessments.

14. Provisions, Contingent Liabilities & Contingent Assets:

Provisions are recognised in respect of obligations where, based on the evidence available, their existence on the Balance Sheet date is considered probable.

Contingent liabilities are determined on the basis of available information. These liabilities are not provided for and disclosed by way of notes on accounts.

Contingent assets are not recognized in the accounts.

 
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