Notes to the financial statements for the year ended March 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 brparation • The financial statements of the company have been brpared in accordance with generally accepted accounting principles in India (Indian GAAP). • The company has brpared 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 brpared on historical cost basis and as a going concern. • The accounting policies adopted in the brparation of financial statements are consistent with those of brvious 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 brparation and brsentation of its financial statements. The adoption of Schedule III does not impact recognition and measurement principles followed for brparation of financial statements. However, it has significant impact on brsentation and disclosures made in the financial statements. The company has also reclassified the brvious year figures in accordance with the requirements applicable in the current year. • Use of estimates The brparation 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. Debrciation 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 i 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 taws brvailing 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. ii 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 i 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. ii 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. iii 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. 4. The Company has been advised that the computation of net profits for the purpose of directors remuneration under section 349 of the Companies Act, 1956 need not be enumerated since no commission has been paid to the directors. Fixed monthly remuneration has been paid to the directors within the limits laid down under Schedule -XII! to the Companies Act, 1956 and as per Companies Act, 2013 5 Contingent Liability not provided for: (a) In Respect of Bank Guarantees issued by the bank on behalf of the company Rs 1,74,77,447/- (b) For claims/shortage not ascertained nor settled during the year. Claims lodged by customers but not settled by the company Rs 1,10,89,335/-. (c) Approximate Liability on account of major cases filed against the company in various courts aggregating to Rs 1,12,87,046/- 6. Sundry Debtors include freight receivable against GRs issued during the year. 7. Tax Deducted at Source (A.Y. 2015-2016) is not final as more TDS Certificates might be received by the company in future. 8. There is nothing to be disclosed under AS 17 - Segment Reporting since there is no business segment or geographical segment which is a reportable segment based on the definitions contained in the accounting standard. 9. The debit and credit balances standing in the name of parties are subject to confirmation from them. 10. The company has not received any intimation from "suppliers" regarding their status under Micro Small and Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been furnished. 11 In the opinion of the Board of Directors, the current assets, loans & advances are fully realizable at the value stated, if realized in the ordinary course of business. The provisions for all known liabilities are adequate in the opinion of board. 12. Being a service company quantitative information/clause are not applicable. 13. Previous year figures have been regrouped/ reclassified wherever necessary. Auditors Report As per our report of even date attached For M/s Sanghi & Company Chartered Accountants Firm No: 012619N Ram Kishan Sanghi Proprietor M.No. 091534 Sunil Kumar Jain Managing Director DIN:00010695 Utkarsh Jain Director DIN:05271884 Hemanshu Yadav Company Secretary M. No. 36718 S.L. Yadav CFO Place Delhi Date: 28.05.2015 |