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.