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Accounting Policies of Sanghvi Movers Ltd. Company

Mar 31, 2014

The accounting policies set out below have been applied consistently to the periods presented in these financial statements.

2.1 Basis of preparation of financial statements

These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting and comply with the Accounting Standards notified under the Companies Act, 1956 (''the Act'') read with the General Circular dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 and other accounting principles generally accepted in India, to the extent applicable. The financial statements are presented in Indian Rupees rounded off to nearest Lakh.

2.2 Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting principles and reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

2.3 Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realised in, or is intended for sale or consumption in, the Company''s normal operating cycle

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within 12 months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include current portion of non-current financial assets. All other assets are classified as non- current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the Company''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be settled within 12 months after the reporting date; or

d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The operating cycle of the Company is less than 12 months.

2.4 Revenue recognition

a) Revenue from hiring of equipments (cranes and trailers along with relevant manpower) is recognised when the service is performed, usually on a time proportionate basis as per the terms of contract and the performance of service is regarded as achieved when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the service.

b) Revenue from power is recognised on the accrual basis in accordance with the provisions of Power Purchase Agreement entered with the regulatory commission of the respective state. Claims for delayed payment charges and any other claims, which the Company is entitled to under the Power Purchase Agreement, are accounted for in the year of acceptance.

c) Interest income is recognised using the time proportion method based on the underlying interest rates.

d) Other items of income are accounted as and when the right to receive arises.

2.5 Fixed assets and depreciation

Tangible fixed assets

Tangible fixed assets are carried at acquisition cost less accumulated depreciation and/or impairment loss if any. The cost of an item of tangible fixed asset comprises its purchase price including inward freight, duties, taxes, relevant foreign exchange fluctuation differences and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to tangible fixed assets are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard or performance.

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Other borrowing costs are recognised as expense in the period in which they are incurred.

Exchange differences (favorable as well as unfavorable) arising in respect of translation/settlement of long term foreign currency borrowings attributable to the acquisition of depreciable fixed assets are also included in the cost of the assets.

Tangible fixed assets under construction are disclosed as capital work-in-progress.

Depreciation on fixed assets is provided on straight line method, at the rates and in the manner prescribed under Schedule XIV to the Act except for cranes and windmills which are depreciated over useful life of 13 years. Depreciation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

Freehold land is not depreciated. Acquired assets consisting of leasehold land are recorded at acquisition cost and amortised on straight-line basis based over the lease term.

Additions to fixed assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition.

A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal. Losses arising from retirement or gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

2.6 Investments

Investments that are readily realizable and intended to be held for not more than a year from the date of the acquisition are classified as current investments. All other investments are classified as long-term investments. However, that portion of long term investments which is expected to be realised within 12 months after the reporting date is also presented under ''current assets'' as current portion of long term investments in consonance with the current/non-current classification scheme of revised Schedule VI.

Long-term investments are valued at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

Current investments are valued at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

2.7 Inventories

Inventories comprise of stores and spare parts and are valued at cost on first in first out (FIFO) basis, net of Cenvat credit.

2.8 Employee benefits

a) Short term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee services is recognised as an expense as the related service is rendered by employees.

b) Post employment benefits (defined benefit plans)

The employees'' gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined at each Balance Sheet date based on an actuarial valuation carried out by an independent actuary using the projected unit credit method. Gratuity Liability is funded through

a Group Gratuity Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

c) Post employment benefits (defined contribution plans)

Contributions to the provident fund and superannuation fund which are defined contribution schemes are recognised as an expense in the Statement of Profit and Loss in the period in which the contribution is due.

d) Long term employee benefits

Long term employee benefits comprise of compensated absences. These are measured based on an actuarial valuation carried out by an independent actuary at each Balance Sheet date. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss. Compensated absences are funded through a Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

2.9 Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of these assets. Deferred tax assets are reviewed as at each Balance Sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.

2.10 Foreign exchange transactions

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. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.

c) Exchange differences

From accounting period commencing on or after 7 December 2006, the Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

i. Exchange differences arising on long-term foreign currency monetary items related to acquisition of fixed assets are capitalised in accordance with an amendment issued by the Ministry of Corporate Affairs (''MCA'') on 29 December 2011 to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates and clarification provided vide circular 25/2012 dated 09 August 2012 and depreciated over the remaining useful life of the asset. For this purpose, the Company treats a foreign currency monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

ii. All other exchange differences are recognised as income or expenses in the period in which they arise.

d) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability

The Company is exposed to foreign currency fluctuations on foreign currency assets and liabilities and forecasted cash flows denominated in foreign currency. The Company enters into forward exchange contracts, where the counterparty is a bank. The forward contracts are not used for trading or speculation purposes.

The premium or discount arising at the inception of the forward exchange contract is amortised and recognised as an expense/income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the Statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period. Any gain/loss arising on forward exchange contracts which are long-term foreign currency monetary items is recognised in accordance with paragraph ''c'' above.

2.11 Government grants and subsidies

Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. In case the asset cannot be distinguished, the grant/subsidy is accounted for as Capital Reserve.

Government grants of the nature of promoters'' contribution are credited to Capital Reserve and treated as a part of the shareholders'' funds.

2.12 Provisions

A provision is recognised if, as a result of a past event, the Company has an present obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the

obligation. Provisions are recognised at the best estimate of the expenditure required to settle the obligation at the Balance Sheet date. The provisions are measured on an undiscounted basis.

Onerous contracts

A contract is considered as onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable costs of meeting its obligations under the contract. The provision for onerous contracts is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

Contingencies

Provision in respect of loss contingencies relating to claims, litigations assessment, fines, penalties etc are recognised when it is probable that a liability has been incurred and the amount can be estimated reliably.

2.13 Contingent liabilities and contingent assets

A contingent liability exists when there is a possible but no obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it virtually certain that an inflow of economic benefit will arise, the asset and related income are recognised in the period in which the change occurs.

2.14 Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

If at the Balance Sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.

2.15 Operating leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating lease. Operating lease rentals are recognised over the period of the lease in the Statement of Profit and Loss on a straight line basis.

2.16 Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the period by the weighted average number of equity shares outstanding during the year.

The diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent potential dilutive equity shares outstanding during the year, except where the result would be anti dilutive.

2.17 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

3.1 Rights, preferences and restrictions attached to equity shares

The Company has a single class of equity shares. Accordingly, all equity shares rank equally with regard to dividends and share in the Company''s residual assets. The equity shares are entitled to received dividend as declared from time to time. The voting rights of an equity share holder on a poll (not on show of hands) are in proportion to its share of the paid up equity capital of the Company. Voting rights cannot be exercised in respect of shares on which any call or other sums presently payable have not been paid.

Failure to pay any amount called up on shares may lead to forfeiture of the shares.

On winding up of the Company, the holders of equity shares will be entitled to receive the residual assets of the company, remaining after distribution of all preferential amounts in proportion to the number of equity shares held.

i) Term loans from banks in Indian Rupees carry interest rate ranging from 11% to 13.5% p.a. The number of monthly installments payable for these loans are 54 to 96.

ii) Foreign currency term loans from banks carry usuance interest or interest rate ranging from 6 months to 1 year LIBOR or EURIBOR plus additional basis points ranging from 90 to 250. These loans are repayable in 360 to 720 days from the date when these loans were availed.

iii) Loans from related parties are repayable after 36 months and carry an interest rate of 8.5% - 12.5% p.a.

Security

a) Term loans amounting to Rs. 21,892.04 (2013 : Rs. 45,332.81) are secured against cranes/trailers.

b) Term loans amounting to Rs. 11,536.48 (2013 : Rs. 11,393.45) are secured against cranes/trailers and equitable mortgage on land and buildings at Tathawade.

c) Term loans amounting to Rs. Nil (2013 : Rs. 126.13) are secured against mortgage on land and buildings at Tathawade and Bharuch.

d) Term loans amounting to Rs. Nil (2013 : Rs. 454.47) are secured against cranes/trailers and personal guarantees given by Chairman and Managing Director Mr. Chandrakant Sanghvi.

e) Term loans amounting to Rs. 5,000.00 (2013 : Rs. Nil) are secured against cranes and equitable Mortgage of residential land at Sate & personal guarantees given by Chairman and Managing Director Mr. Chandrakant Sanghvi till the conversion of land into Non-agricultural land.

f) Term loans amounting to Rs. 5,582.08 (2013 : Rs. Nil) are secured against cranes and equitable Mortgage of residential land at Sate.

g) Term loans amounting to Rs. Nil (2013 : Rs. 44.55) are secured against vehicles purchased out of the term loan. h) Also refer note 16.

a) Working capital loans from banks represeting cash credit facilities are secured against receivables, personal guarantee of Mr. Chandrakant Saghvi, Chairman and the Managing Director up to Rs. 3,500 lakh (2013 : Rs. 3,500 lakh) and pledge of 6 lakh (2013 : 6 lakh) equity shares of the Company held by Mr. Chandrakant Saghvi, Chairman and the Managing Director. The cash credit facilities are repayable on demand and carry an interest ranging between 12-14% p.a.

b) Foreign currency term loans from banks carry usuance interest and are repayable within 360 days from the date when these loans were availed.


Mar 31, 2013

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting, in accordance with the generally accepted accounting principles (GAAP) in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Indian Companies Act, 1956 (''the Act''), to the extent applicable.

1.2 Use of estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP) requires management to make judgments, estimates and assumptions that affect the application of accounting principles and reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements. Actual results may differ from those estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Current-non-current classification

All assets and liabilities are classified into current and non-current.

Assets

An asset is classified as current when it satisfies any of the following criteria:

a) it is expected to be realised in, or is intended for sale or consumption in, the company''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be realised within 12 months after the reporting date; or

d) it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include current portion of non-current financial assets. All other assets are classified as non-current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

a) it is expected to be settled in the Company''s normal operating cycle;

b) it is held primarily for the purpose of being traded;

c) it is expected to be settled within 12 months after the reporting date; or

d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include current portion of non-current financial liabilities. All other liabilities are classified as non-current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. The operating cycle of the Company is less than 12 months.

1.4 Revenue recognition

a) Rendering of services

Revenue from hiring of equipments (cranes and trailers along with relevant manpower) is recognised when the service is performed, usually on a time proportionate basis as per the terms of contract, and the performance of service is regarded as achieved when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the service.

b) Sale of goods

Revenue from sale of goods is recognised when all significant risks and rewards of owner ship of goods are passed onto the customers.

c) Interest income

Interest income is recognised using the time proportion method based on the underlying interest rates.

d) Other

Other items of income are accounted as and when the right to receive arises.

1.5 Fixed assets and depreciation (also refer note 40)

Tangible fixed assets

Tangible fixed assets are carried at acquisition cost less accumulated depreciation and/or impairment loss if any. The cost of an item of tangible fixed asset comprises its purchase price including inward freight, duties, taxes, relevant foreign exchange fluctuation differences and any directly attributable cost of bringing the asset to its working condition for its intended use; any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an tangible fixed assets are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard or performance.

Borrowing costs directly attributable to acquisition or construction of those fixed assets which necessarily take a substantial period of time to get ready for their intended use are capitalised. Other borrowing costs are recognised as expense in the period in which they are incurred. (also refer note 40)

Exchange differences (favorable as well as unfavorable) arising in respect of translation/settlement of long term foreign currency borrowings attributable to the acquisition of depreciable asset are also included in the cost of the assets.

Tangible fixed assets under construction are disclosed as capital work-in-progress.

Depreciation on fixed assets is provided on straight line method, at the rates, and in the manner prescribed under Schedule XIV to the Act except for cranes and windmills which are depreciated over useful life of 13 years. Depreciation is provided on a pro-rata basis i.e. from the date on which asset is ready for use.

Freehold land is not depreciated. Acquired assets consisting of leasehold land are recorded at acquisition cost and amortised on straight-line basis based over the lease term.

Additions to fixed assets individually costing Rs.5,000 or less are depreciated fully in the year of acquisition.

A fixed asset is eliminated from the financial statements on disposal or when no further benefit is expected from its use and disposal.

Losses arising from retirement or gains or losses arising from disposal of fixed assets which are carried at cost are recognised in the Statement of Profit and Loss.

1.6 Investments

Investments that are readily realizable and intended to be held for not more than a year from the date of the acquisition are classified as current investments. All other investments are classified as long-term investments. However, that portion of long term investments which is expected to be realised within 12 months after the reporting date is also presented under ''current assets'' as current portion of long term investments in consonance with the current/non-current classification scheme of revised Schedule VI.

Long-term investments are valued at cost less any other-than-temporary diminution in value, determined separately for each individual investment.

Current investments are valued at lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Any reductions in the carrying amount and any reversals of such reductions are charged or credited to the Statement of Profit and Loss.

1.7 Inventories

Inventories comprise of stores and spare parts and are valued at cost on first in first out (FIFO) basis, net of Cenvat credit.

1.8 Employee benefits

a) Short term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. These benefits include salaries and wages, bonus and ex-gratia. The undiscounted amount of short-term employee services is recognised as an expense as the related service is rendered by employees.

b) Post employment benefits (defined benefit plans)

The employees'' gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined at each Balance Sheet date based on an actuarial valuation carried out by an independent actuary using the projected unit credit method. Gratuity Liability is funded through a Group Gratuity Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

c) Post employment benefits (defined contribution plans)

Contributions to the provident fund and superannuation fund which are defined contribution scheme are recognised as an expense in the Statement of Profit and Loss in the period in which the contribution is due.

d) Long term employee benefits

Long term employee benefits comprise of compensated absences. These are measured based on an actuarial valuation carried out by an independent actuary at each Balance Sheet date. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss. Compensated absences are funded through a Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

1.9 Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law), and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonablecertainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of these assets. Deferred tax assets are reviewed asat each Balance Sheet date and written down or written-up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realised.

1.10 Foreign exchange transactions

a) Initial recognition (also refer note 40)

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. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined

c) Exchange differences

From accounting period commencing on or after 7 December 2006, the Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

i. Exchange differences arising on long-term foreign currency monetary items related to acquisition of fixed assets are capitalised in accordance with an amendment issued by the Ministry of Corporate Affairs (''MCA'') on 29 December 2011 to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates and clarification provided vide circular 25/2012 dated 09 August 2012 and depreciated over the remaining useful life of the asset. For this purpose, the Company treats a foreign currency monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

ii. All other exchange differences are recognised as income or expenses in the period in which they arise.

d) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability

The Company is exposed to foreign currency fluctuations on foreign currency assets and liabilities and forecasted cash flows denominated in foreign currency. The Company enters into forward exchange contracts, where the counterparty is a bank.The forward contracts are not used for trading or speculation purposes.

The premium or discount arising at the inception of the forward exchange contract is amortised and recognised as an expense/income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the Statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period. Any gain/loss arising on forward exchange contracts which are long-term foreign currency monetary items is recognised in accordance with paragraph ''c'' above.

1.11 Government grants and subsidies

Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. In case the asset cannot be distinguished, the grant/subsidy is accounted for as Capital Reserve.

Government grants of the nature of promoters'' contribution are credited to Capital Reserve and treated as a part of the shareholders'' funds.

1.12 Provisions

A provision is recognised if, as a result of a past event, the Company has an present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the obligation at the Balance Sheet date. The provisions are measured on an undiscounted basis.

Onerous contracts

A contract is considered as onerous when the expected economic benefits to be derived by the Company from the contract are lower than the unavoidable costs of meeting its obligations under the contract. The provision for onerous contracts is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.

Contingencies

Provision in respect of loss contingencies relating to claims, litigations assessment, fines, penalties etc are recognised when it is probable that a liability has been incurred, and the amount can be estimated reliably.

1.13 Contingent liabilities and contingent assets

A contingent liability exists when there is a possible but no obligation, or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resourcesis remote. Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it virtually certain that an inflow of economic benefit will rise, the asset and related income are recognised in the period in which the change occurs.

1.14 Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

If at the Balance Sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.

1.15 Operating leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating lease. Operating lease rentals are recognised over the period of the lease in the Statement of Profit and Loss on a straight line basis.

1.16 Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the period by the weighted average number of equity shares outstanding during the year.

The diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent potential dilutive equity shares outstanding during the year, except where the result would be anti dilutive.

1.17 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.


Mar 31, 2012

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting, in accordance with the generally accepted accounting principles (GAAP) in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Indian Companies Act, 1956 ('the Act'), to the extent applicable.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for change in presentation and disclosure of financial statements explained in note 2.2 below.

1.2 Presentation and disclosure of financial statements

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 measurements 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. For further details, refer note 41.

1.3 Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets, liabilities and the disclosure of contingent liabilities on the date of the financial statements and the reported amounts of revenues and expenditure during the reporting period. Actual results may differ from those estimates. Any difference between the actual results and estimates are recognised in the period in which the results are known/materialize. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.4 Revenue recognition

a) Rendering of services

Revenue from hiring of equipments (cranes and trailers along with relevant manpower) is recognised when the service is performed, usually on a time proportionate basis as per the terms of contract, and the performance of service is regarded as achieved when no significant uncertainty exists regarding the amount of consideration that will be derived from rendering the service.

b) Sale of goods

Revenue from sale of goods is recognised when all significant risks and rewards of ownership of goods are passed onto the customers.

c) Interest income

Interest income is recognised using the time proportion method based on the underlying interest rates.

d) Other

Other items of income are accounted as and when the right to receive arises.

1.5 Fixed assets and depreciation (also refer note 40)

Fixed assets are stated at acquisition cost less accumulated depreciation. Cost includes inward freight, duties, taxes, relevant foreign exchange fluctuation differences and other incidental expenses related to the acquisition, construction and installation of the fixed assets.

Depreciation on fixed assets is provided on straight line method, at the rates, and in the manner prescribed under Schedule XIV to the Act except for cranes and windmills which are depreciated over useful life of 13 years.

Acquired assets consisting of leasehold land are recorded at acquisition cost and amortised on straight-line basis based over the lease term ranging from 20 to 99 years.

Additions to fixed assets individually costing Rs. 5,000 or less are depreciated fully in the year of acquisition.

1.6 Investments

Long-term investments are valued at cost. Provision is made in case of diminution, other than temporary, in the value of long-term investments. Current investments are valued at lower of cost and market value.

1.7 Intangible assets and amortisation

Intangible assets are recognised when the asset is identifiable, is within the control of the Company, it is probable that the future economic benefits that are attributable to the asset will flow to the Company and cost of the asset can be reliably measured.

Intangible assets representing customer base and other intangibles of similar nature are initially recorded at their acquisition price and are amortised over its estimated useful life / period of contractual rights on a straight line basis, commencing from the date the assets are available for its use. The useful life of the intangible assets is reviewed by the management at each Balance Sheet date.

1.8 Inventories

Inventories comprise of stores and spare parts and are valued at cost on first in first out (FIFO) basis, net of Cenvat credit.

1.9 Employee benefits

a) Short term employee benefits

Employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and are recognised in the period in which the employee renders the related service.

b) Post employment benefits (defined benefit plans)

The employees' gratuity scheme is a defined benefit plan. The present value of the obligation under such defined benefit plan is determined at each Balance Sheet date based on an actuarial valuation carried out by an independent actuary using the projected unit credit method. Gratuity Liability is funded through a Group Gratuity Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

c) Post employment benefits (defined contribution plans)

Contributions to the provident fund and superannuation fund which are defined contribution scheme are recognised as an expense in the Statement of Profit and Loss in the period in which the contribution is due.

d) Long term employee benefits

Long term employee benefits comprise of compensated absences. These are measured based on an actuarial valuation carried out by an independent actuary at each Balance Sheet date. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss. Compensated absences are funded through a Scheme with Life Insurance Corporation of India wherein contributions are made and charged to revenue on annual basis. Actuarial gains and losses and past service costs are recognised immediately in the Statement of Profit and Loss.

1.10 Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law), and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the year).

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the asset can be realised in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty of realisation of these assets. Deferred tax assets are reviewed as at each Balance Sheet date and written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realised.

1.11 Foreign exchange transactions

a) Initial recognition (also refer note 40)

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. Nonmonetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined

c) Exchange differences

From accounting period commencing on or after 7 December 2006, the Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

i. Exchange differences arising on long-term foreign currency monetary items related to acquisition of fixed assets are capitalised in accordance with an amendment issued by the Ministry of Corporate Affairs ('MCA') on 29 December 2011 to Accounting Standard 11- The Effects of changes in Foreign Exchange Rates and depreciated over the remaining useful life of the asset. For this purpose, the Company treats a foreign currency monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination.

ii. All other exchange differences are recognised as income or expenses in the period in which they arise.

d) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/liability

The Company is exposed to foreign currency fluctuations on foreign currency assets and liabilities and forecasted cash flows denominated in foreign currency. The Company enters into forward exchange contracts, where the counterparty is a bank. The forward contracts are not used for trading or speculation purposes.

The premium or discount arising at the inception of the forward exchange contract is amortised and recognised as an expense/income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the Statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period. Any gain/loss arising on forward exchange contracts which are long-term foreign currency monetary items is recognised in accordance with paragraph i above.

1.12 Government grants and subsidies

Grants and subsidies from the government are recognised when there is reasonable assurance that the grant/subsidy will be received and all attaching conditions will be complied with.

When the grant or subsidy relates to an expense item, it is recognised as income over the periods necessary to match them on a systematic basis to the costs, which it is intended to compensate. Where the grant or subsidy relates to an asset, its value is deducted in arriving at the carrying amount of the related asset. In case the asset cannot be distinguished, the grant/ subsidy is accounted for as Capital Reserve.

Government grants of the nature of promoters' contribution are credited to Capital Reserve and treated as a part of the shareholders' funds.

1.13 Provisions and contingencies

A provision is recognized in the Balance Sheet when the Company has a present obligation as a result of a past event that probably requires an outflow of resources 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 by way of a contingent liability is made when there is a possible or present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

1.14 Impairment of assets

The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss.

If at the Balance Sheet date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is reflected at the recoverable amount subject to a maximum of depreciable historical cost.

1.15 Borrowing costs (also refer note 40)

Borrowing costs incurred for the acquisition of qualifying assets are recognised as part of costs of such assets while other borrowing costs are expensed in the period in which they are incurred.

1.16 Operating leases

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership over the lease term are classified as operating lease. Operating lease rentals are recognised over the period of the lease in the Profit and Loss Account on a straight line basis.

1.17 Earnings per share

The basic earnings per share is computed by dividing the net profit attributable to the equity shareholders for the period by the weighted average number of equity shares outstanding during the year.

The diluted earnings per share is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and equivalent potential dilutive equity shares outstanding during the year, except where the result would be anti dilutive.

1.18 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

1.19 Onerous contracts

Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at lower of the expected cost of terminating the contract and the expected net cost of fulfilling the contract.


Mar 31, 2011

Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention on accrual basis of accounting following the accounting principles generally accepted in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006.

Use of Estimates

In preparing financial statements the Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

Fixed Assets

Fixed Assets are carried at cost of acquisition less accumulated depreciation. All costs incurred for bringing the assets to their working condition for intended use are included in their cost of acquisition, excepting duty which is eligible for credit under the relevant CENVAT Credit Rules.

Depreciation

Depreciation on all Fixed Assets is provided for on the "Straight Line Method" at the rates specified in Schedule XIV to the Companies Act, 1956 excepting on certain class of Cranes acquired prior to 1st April 2002 on which Depreciation is being provided for on the "Written Down Value" method. Damaged assets, if any, are depreciated to the extent of their estimated salvage value. Change in cost of fixed assets due to foreign exchange fluctuations is considered over their residual life.

Investments

Investments are considered to be long term and are carried at cost.

Inventories

Inventories are of bought out consumables, stores and spare parts and are valued at cost, net of Cenvat credit. Obsolete spares are excluded from stocks.

Foreign Currency Liabilities

Liabilities for Foreign Currency Loans and outstanding Acceptances are stated at the exchange rates prevailing at the close of the year, excepting those that are covered by forward contracts, which are stated at contracted rates. Changes in liabilities on fluctuation of foreign exchange rates which relate to acquisition of fixed assets are adjusted to the cost of the fixed assets.

Revenue Recognition

Revenues from Hiring of Cranes and Trailers are accrued and recognised to the extent they can be reliably measured and it is probable that the economic benefits from their deployment will flow to the Company. Receipts are classified as unearned revenues when received against performances to be given or for costs to be incurred in subsequent years. Electricity sold is recognised at rates and units measured in the manner as contracted.

Operating and Other Expenses

Costs and Expenses are accounted for on their accrual as and when they are incurred or when obligation to pay them is accepted by the Company. Consumables for operations of Cranes and Trailers are charged out as expense on their purchase. Stores and spare parts for repairs and maintenance are initially charged as expense on their purchase. Increase in inventory of stores and spare parts at year end are reduced from the respective expenses.

Retirement Benefits

Contributions to the provident fund and superannuation fund, which are defined contribution schemes, are recognised as expense when due. The employees' gratuity scheme is defined benefit plan. The present value of obligation under such plan is determined based on actuarial valuation. Current and past service cost is recognised to the extent benefits are vested and is charged as an expense with adjustments for expected return on plan assets, actuarial gains or losses and interest cost.

Borrowing Costs

Interest and other borrowing costs on specific borrowings, relatable to qualifying assets, are capitalised. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Taxation

Current Tax includes tax payable in respect of taxable income for the year plus tax demands arising in the year on completion of past assessments and appeals to the extent accepted by the Company. Deferred Tax arises due to timing difference; 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. Deferred Tax Asset and Deferred Tax Liability are calculated by applying the tax rate and tax laws that have been substantially enacted by the Balance Sheet date.

Service Tax

Service Tax on services rendered and billed is accrued as not due under current liabilities with amount receivable included in Sundry Debtors. Liability to pay Service Tax arose on receipt of money from Debtors. It was discharged either by payment of tax or by adjustment against eligible CENVAT Credit under the relevant rules. CENVAT Credit eligible for set off in subsequent year is carried forward under Advances recoverable in cash or in kind for value to be received.

Provisions and Contingencies

Provisions are made when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed. Contingent assets are not recognised in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs.


Mar 31, 2010

Basis of Preparation of Financial Statements

The financial statements are prepared under the historical cost convention on accrual basis of accounting following the accounting principles generally accepted in India and comply with the Accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006.

Use of Estimates

In preparing financial statements the Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in the current and future periods.

Fixed Assets

Fixed Assets are carried at cost of acquisition less accumulated depreciation. All costs incurred for bringing the assets to their working condition for intended use are included in their cost of acquisition, excepting duty which is eligible for credit under the relevant CENVAT Credit Rules.

Depreciation

Depreciation on all Fixed Assets is provided for on the "Straight Line Method" at the rates specified in Schedule XIV to the Companies Act, 1956 excepting on certain class of Cranes acquired prior to 1st April 2002 on which Depreciation is being provided for on the "Written Down Value" method considering their estimated residual life at the rates specified in Schedule XIV to the Companies Act, 1956. Damaged assets, if any, are depreciated to the extent of their estimated salvage value. If there is an increase or decrease in the cost of assets due to foreign exchange fluctuations, the same is considered over the residual life of the respective assets.

Investments

Investments are considered to be long term and are carried at cost.

Foreign Currency Liabilities

Liabilities for Foreign Currency Loans and Acceptances outstanding are stated at the exchange rates prevailing at the close of the year, excepting the borrowings covered by forward exchange contracts which are stated at the contracted rates. Change in liability due to change in foreign exchange rates for foreign currency loans relating to acquisition of fixed assets are adjusted to the cost of the fixed assets.

Revenue Recognition

Revenues from Hiring of Cranes and Trailers are accrued and recognised to the extent they can be reliably measured and it is probable that the economic benefits from their deployment will flow to the Company. Receipts are classified as unearned revenues when received against performances to be given or for costs to be incurred in subsequent years. Electricity sold is recognised at rates and units measured in the manner as contracted.

Operating and Other Expenses

Costs and Expenses are accounted for on their accrual as and when they are incurred or when obligation to pay them is accepted by the Company. Consumables for operations of Cranes and Trailers are charged out as expense on their purchase. Stores and spare parts for repairs and maintenance are charged as expense on their purchase but are reduced by their inventory.

Retirement Benefits

Contributions to the provident fund and superannuation fund, which are defined contribution schemes, are recognised as expense when due. The employees gratuity scheme is defined benefit plan. The present value of obligation under such plan is determined based on actuarial valuation. Current and past service cost is recognised to the extent benefits are vested and is charged as an expense with adjustments for expected return on plan assets, actuarial gains or losses and interest cost.

Borrowing Costs

Interest and other borrowing costs on specific borrowings, relatable to qualifying assets, are capitalised. All other borrowing costs are recognised as an expense in the period in which they are incurred.

Taxation

This comprises of Current Tax and Deferred Tax. Current Tax includes tax payable in respect of taxable income for the year plus tax demands arising in the year on completion of past assessments and appeals to the extent accepted by the Company. 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 period. Deferred Tax Asset and Deferred Tax Liability are calculated by applying the tax rate and tax laws that have been substantially enacted by the Balance Sheet date.

Service Tax

Service Tax billed on taxable services provided is accrued under current liabilities with the contra amount included in Sundry Debtors. The liability to pay Service Tax arises only on receipt of money from the Debtors. The said liability is discharged either by way of payment of tax or adjustment against eligible CENVAT Credit under the relevant rules. CENVAT Credit eligible for set off in subsequent year is carried forward under Advances recoverable in cash or in kind for value to be received.

 
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