A) Basis of Preparation of Financial Statements
a) The Financial statements have been prepared under the historical
cost convention, in accordance with the generally accepted accounting
principals and provisions of the Companies Act, 1956 as adopted by the
Companies Act, 1956, and the applicable Accounting standards under the
Companies (Accounting Standards) Rules, 2006. All Income and
Expenditure having material bearing on the financial statements are
recognized on accrual basis.
b) The Company accounts for freight income as soon as bills are raised
and freight expenses when the hired vehicle start towards its
destination. Having regard to the size of the Company and nature of its
business, in the opinion of Management the foregoing is a reasonable
basis of applying the accrual basis of accounting.
c) Change in Accounting Policy
During the year ended on 31s'' March 2012, the Revised Schedule VI
notified under the Companies Act 1956, has become applicable to the
company for preparation and presentation of financial statements. The
adoption of the 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 figures for the
previous year has been reclassified in accordance with the requirements
applicable in the current year.
B) Use of Estimates
The presentation of the financial statements in conformity with the
Generally Accepted Accounting policies requires, the management to make
estimates and assumptions that affect the reported amount of Assets and
Liabilities, revenues and Expenses and disclosure of contingent
liabilities. Such estimation and assumptions are based on management''s
evaluation of relevant facts and circumstances as on date of financial
statements. Difference between the actual results and estimates are
recognized in the period in which the result are known / materialized.
C) Revenue Recognition
Revenue/ Income and Cost/ Expenditure are generally accounted on
accrual basis as they are earned/ incurred, except those with
Dividend income from investment is recognized as and when received.
Other incomes are accounted for on accrual basis except when the
recovery is uncertain, it is accounted for on receipt basis.
Claims made against the company are evaluated as to type thereof,
period for which they are outstanding and appropriate provision made.
Claims are stated net of recoveries from insurance companies and
Administrative and other expenses are stated net of recoveries wherever
D) Fixed assets
Fixed Assets acquired by the company are reported at acquisition value,
with deductions for accumulated depreciation and impairment of loss, if
any. The acquisition value indicates the purchase price and expenses
directly attributable to assets to bring it to the office and in the
working condition for its intended use. Moreover Capital Work in
Progress has been shown separately.
Depreciation on Fixed Assets is provided on Straight line method at
the rates prescribed under Schedule XIV of the Companies Act, 1956.
Depreciation on the fixed assets acquired during the year has been
provided on Pro rata basis.
Investments are accounted at the cost plus brokerage and stamp charges.
Long term Investments are valued at cost less provision for diminution
other than temporary, in value, if any. Profit or losses on investment
are calculated on FIFO Method and it is accounted as and when realized.
Inventories at year-end are valued at the Lower of the Cost Price or
net realizable Value.
H) Miscellaneous Expenditure
Preliminary expenses and pre-operative expenses are amortised over a
period of 5 years.
I) Retirement Benefits
a) Short term employee benefits are recognized as expenses at the
undiscounted amount in the profit and loss account of the year is which
the related service is rendered.
b) Defined Contribution Plan:
Monthly contribution to the provident fund which is defined
contribution schemes are charged to profit & loss account and deposited
with the provident fund authorities on monthly basis.
Defined benefit Plans:
Gratuity to employees is not accounted for or provided for present or
future liabilities as per the provision of Accounting Standard 15
issued by Institute of Chartered Accountants of India in respect of
accounting for retirement benefits.
c) Termination benefits are charged to Profit & loss account in the
year of payment.
J) Taxes on Income
a. Current tax in determined on the basis of amount of tax payable on
taxable income for the year.
b. In accordance with Accounting Standard; -22 Accounting For Taxes
on Income issued by The Institute of Chartered Accountants of India,
amount of the deferred tax for timing difference between the book and
tax profits for the year is accounted for using the tax rate and laws
that have been enacted or substantively enacted as of the balance sheet
Material known liabilities are provided for on the basis of available
information /estimates with the Management.
Whenever external evidence for expenses are not available, Management
has taken care of proper authorization of such expenses.
L) Transaction in Foreign Currency
Foreign currency transactions are recorded at the exchange rate
prevailing on the date of such transaction.
Foreign currency monetary assets and liabilities are reported using the
closing rate. Gains ad losses arising on account of difference in
foreign exchange rates on settlement/translation of monetary assets and
liabilities on the closing date are recognized in the Profit and Loss
M) Borrowing Cost
Borrowing cost are recognized in the period to which they relate,
regardless of how the funds have been utilized, except where it relates
to the financing of new assets requiring a substantial period of time
for their intended future use. Interest on borrowings if any is
capitalized up to the date when the asset is ready for its intended
use. The amount of interest capitalized for the period is determined by
applying the interest rate applicable to appropriate borrowings.
N) Earning per Share
Basic earning per share is computed and disclosed using the weighted
average number of common shares outstanding during the year. Dilutive
earning per share is computed and disclosed using the weighted average
number of common and dilutive common equivalent shares outstanding
during the year, except when the results would be anti-dilutive.
O) Impairments of Assets
At each Balance sheet date, the company reviews the carrying amount of
fixed assets to determine whether there is an indication that those
assets have suffered impairment loss. If any such indication exists,
the recoverable amount of assets is estimated in order to determine the
extent of impairment of loss. The recoverable amount is higher of the
net selling price and value in use, determined by discounting the
estimated future cash flows expected from the continuing use of the
assets to their present value.
P) Provisions and Contingent Liabilities
Provisions involving substantial degrees of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Provisions (excluding long term benefits) are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
estimates. Contingent liabilities are not recognized but are disclosed
in the notes to accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
Q) Cash Flow Statement
The cash flow statement is prepared by the Indirect Method set out in
Accounting standard 3 on Cash Flow Statements and present the cash flow
by operating, investing and financing activities of the company.
Cash and cash equivalent presented in the cash flow statement consist
of cash on hand, Bank balances and demand deposits with banks
R) Additional Notes Forming Part of Accounts For The Year Ended 31st