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Accounting Policies of North Eastern Carrying Corporation Ltd. Company

Mar 31, 2015

1. Corporate information

North Eastern Carrying Corporation Limited is a Limited Company incorporated under the provisions of the Companies Act, 1956. The company is engaged in the business of transportation.

2. Basis of preparation

* The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP).

* The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 2013.

* The company follows the Mercantile System of Accounting recognizing Income and Expenditure on accrual basis.

* The directors have certified that there are no outstanding expenses not provided for and nor there are income which have fallen due but not accounted for. The accounts are prepared on historical cost basis and as a going concern.

* The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Summary of significant accounting policies

From the year ended 31 March 2015, the Schedule III notified under the Companies Act 2013, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of Schedule III does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

* Use of estimates .

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

* Contingent Liabilites

Contingent Liability are disclosed by way of notes in the Balance Sheet.

* Fixed Assets

Fixed Assets are stated at cost. Depreciation of fixed assets is calculated on the basis of useful life of the assets as per Schedule II of the Companies Act, 2013.

* Leases

Lease rentals in respect of operating lease arrangements are recognized as an expense in the profit & loss account on accrual basis with reference to lease terms and other considerations.

* Investment

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

* Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods are valued at lower of cost and net realizable value.

* Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

* Income tax

* Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

* Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years.

* Retirement Benefits

* Gratuity: The company has a defined employee benefit scheme in the form of gratuity. Accordingly gratuity is provided on the basis of calculations made by the company and is payable of the termination of the services of employee.

* Provident Fund: Contribution to the Provident Fund as per provisions of Employees Provident Fund Act 1952 is remitted to the P.F. Comissioner and is charged to the Profit & loss Account.

* Leave Encashment: Leave Encashment benefits (short term compensated absences) are provided on the basis of calculations made by the Company based on average encashable salary of the employee.


Mar 31, 2013

During the year ended 31 March 2013, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

* Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

* Contingent Liabilities

Contingent Liability are disclosed by way of notes .in the Balance Sheet.

* Fixed Assets

Fixed Assets are stated ail cost. Depreciation of fixed assets is calculated at the rates prescribed under Schedule XIV to the Companies Act, 1956.

» Leases

Lease rentals in respect of operating lease arrangements are recognized as an expense in the profit & loss account on accrual basis with reference to lease terms and other considerations.

* Investment

Investments; which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

* Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods are valued at lower of cost and net realizable value.

* Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

* Income tax

o Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

o Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years.

* Retirement Benefits

o Gratuity: The company has a defined employee benefit scheme in the form of gratuity. Accordingly gratuity is provided on the basis of calculations made by the company and is payable of the termination of the services of employee.

o Provident Fund: Contribution to the Provident Fund as per provisions of Employees Provident Fund Act 1952 is remitted to the P.F. Commissioner and is charged to the Profit & loss Account.

o Leave Encashment : Leave Encashment benefits (short term compensated absences) are provided on the basis of calculations made by the Company based on average encashable salary of the employee.


Mar 31, 2012

During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

- Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

- Contingent Liabilities

Contingent Liability are disclosed by way of notes in the Balance Sheet.

- Fixed Assets

Fixed Assets are stated at cost. Depreciation of fixed assets is calculated at the rates prescribed under Schedule XIV to the Companies Act, 1956.

- Leases

Lease rentals in respect of operating lease arrangements are recognized as an expense in the profit & loss account on accrual basis with reference to lease terms and other considerations.

- investment

Investments, which are readily realizable and Intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost.

Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

- Inventories

Raw materials, components, stores and spares are valued at lower of cost and net realizable value. Work in progress and finished goods are valued at lower of cost and net realizable value.

- Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.

- Income tax

- Tax expense comprises current and deferred tax. Current income-tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.

- Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years.

- Retirement Benefits

- Gratuity: The company has a defined employee benefit scheme in the form of gratuity. Accordingly gratuity is provided on the basis of calculations made by the company and is payable of the termination of the services of employee.

- Provident Fund : Contribution to the Provident Fund as per provisions of Employees Provident Fund Act 1952 is remitted to the P.F. Commissioner and is charged to the Profit & loss Account.

- Leave Encashment : Leave Encashment benefits (short term compensated absences) are provided on the basis of calculations made by the Company based on average encashable salary of the employee.


Mar 31, 2011

A) BASIS OF ACCOUNTING:

The company follows mercantile system of accounting recognizing Income & Expenditure on accrual basis. However, demurrage is accounted for on cash basis. The accounts are prepared on historical cost basis as a going concern. Accounting policies not referred to specifically are otherwise consistent with the generally accepted accounting principles.

(b) REVENUE RECOGNITION:

a Income of Delivery Freight is accounted for on accrual basis. This coincides with delivery of goods or reaching of goods carried on behalf of the clients in the godowns of the company at destinations, which ever is earlier.

c) DEPRECIATION:

a Depreciation has been provided in the accounts for the year at the rates provided in Schedule -XIV to the Companies Act, 1956 on WDV Method and in respect of Lorries & Trucks on Straight Line Method. Pro-rata depreciation has been provided on assets acquired/sold during the year. Depreciation is charged from the date of assets are put to use.

(d) FIXED ASSETS:

a Fixed Assets are valued at cost. They are stated at historical costs in the books of account. All costs directly relating to acquisition and installation of assets is capitalised.

a In case of very old and immaterial amount of assets which has been sold during the year and whose costs and WDV are not identifiable it has been assumed that their costs has been fully amortised therefore, the whole of the sale proceeds has been taken as profit on sale of fixed assets.

Goodwill is being recorded in the books of account as per accounting treatment laid down in AS 10 issued by ICAI. The Management has decided not to amortise goodwill and it is being retained as an asset.

(e) CLAIMS:

a The company provides for shortage/losses as claims in the accounts on the basis of payment or settlement of claim whichever is earlier. The recovery against such losses, if any, is taken as income of the year in which it is recovered. Insurance, if any and admissible, is accounted for on accrual basis. The insurance claims are deemed to accrue on the date on which claims are admitted by Insurance Company.

(f) RETIREMENT BENEFITS:

Contribution to Provident Fund, ESI etc. is charged to Profit & Loss Account

The company has made provisions for Gratuity liability on accrual basis. The provision for Gratuity has been made based on estimates made by the Company Management.

(g) LEASES:

- Leases, where the Lessor retains substantially all the risks and rewards incidental to the ownership are classified as Operating Leases. Operating Lease payments are recognized as an expense in Profit & Loss Account on Straight Line Basis over the Lease Term.

h) TAXATION:

- Tax Expenses (tax saving) is the aggregate of current year tax and deferred tax charged (or credited) to the Profit & Loss A/c. of the year.

-Deferred tax is recognized, on timing differences, being the differences resulting from the recognition of items in the financial statements and in estimating its current income tax provision.

- Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted on the Balance Sheet date.

- Provision for Wealth Tax has been made on estimated basis.

(i) CONTINGENT LIABILITIES:

- Contingent liabilities are disclosed by way of note in the Balance Sheet.


Mar 31, 2009

(a) BASIS OF ACCOUNTING:

- The company follows mercantile system of accounting recognizing Income & Expenditure on accrual basis. However, demurrage is accounted for on cash basis. The accounts are prepared on historical cost basis as a going concern. Accounting policies not referred to specifically are otherwise consistent with the generally accepted accounting principles.

(b) REVENUE RECOGNITION:

- Income of Delivery Freight is accounted for on accrual basis. This coincides with delivery of goods or reaching of goods carried on behalf of the clients in the godowns of the company at destinations, which ever is earlier.

(c) DEPRECIATION:

- Depreciation has been provided in the accounts for the year at the rates provided in Schedule -XIV to the Companies Act, 1956 on WDV Method and in respect of Lorries & Trucks on Straight Line Method. Pro-rata depreciation has been provided on assets acquired/sold during the year. Depreciation is charged from the date of assets are put to use.

(d) FIXED ASSETS:

- Fixed Assets are valued at cost. They are stated at historical costs in the books of account. All costs directly relating to acquisition and installation of assets is capitalised.

- In case of very old and immaterial amount of assets which has been sold during the year and whose costs and WDV are not identifiable it has been assumed that their costs has been fully amortised therefore, the whole of the sale proceeds has been taken as profit on sale of fixed assets.

- Goodwill is being recorded in the books of account as per accounting treatment laid down in AS10 issued by ICAI. The Management has decided not to amortise goodwill and it is being retained as an asset.

(e) CLAIMS:

- The company provides for shortage/losses as claims in the accounts on the basis of payment or settlement of claim whichever is earlier. The recovery against such losses, if any, is taken as income of the year in which it is recovered. Insurance, if any and admissible, is accounted for on accrual basis. The insurance claims are deemed to accrue on the date on which claims are admitted by Insurance Company.

(f) RETIREMENT BENEFITS:

- Contribution to Provident Fund, ESI etc. is charged to Profit & Loss Account

- The company has made provisions for Gratuity liability on accrual basis. The provision for Gratuity has been made based on estimates made by the Company Management.

(g) TAXATION:

- Tax Expenses (tax saving) is the aggregate of current year tax and deferred tax charged (or credited) to the Profit & Loss A/c. of the year.

- Deferred tax is recognized, on timing differences, being the differences resulting from the recognition of items in the financial statements and in estimating its current income tax provision.

- Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted on the Balance Sheet date.

- Provision for Wealth Tax has been made on estimated basis.

(h) CONTINGENT LIABILITIES:

- Contingent liabilities are disclosed by way of note in the Balance Sheet.