Accounting Policies of Dredging Corporation Of India Ltd. Company
Mar 31, 2023
SIGNIFICANT ACCOUNTING POLICIES
GENERAL INFORMATION:
Dredging Corporation of India Limited ("DCIL"/ âthe Company") is a limited Company incorporated in India with the
primary objective of catering to the dredging requirements of Indian ports, Indian Navy etc.,. The Company is engaged
in providing the services of Capital Dredging , Maintenance Dredging, Beach Nourishment, Land Reclamation,
Shallow water Dredging, Project Management Consultancy, Marine Construction. The Company has its Registered
Office at Delhi and Corporate Office at Visakhapatnam. The Project offices are situated at different parts of the
Country like Haldia, Kolkata, Cochin, Chennai, Mumbai etc. The details of the fleet etc are included in the Annual
Report."
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:1.1 Statement of Compliance:
These financial statements comply in all material respects with Indian Accounting Standards ("Ind AS") notified under
Section 133 of the Companies Act, 2013 ("the Act") read with Rule 3 of the Companies (Indian Accounting Standards)
Rules, 2015, provisions of the Act to the extent notified and guidelines issued by the Securities and Exchange Board
of India ("SEBI") and other accounting principles generally accepted in India.
The Financial Statements have been prepared under the historical cost basis except for certain financial instruments
that are measured at fair values at the end of each reporting period, as explained in the accounting polices below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or liability, the entity takes into
account the characteristics of the asset or liability if market participants would take those characteristics into account
when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorized into Level 1,2, or 3 based on
the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the
fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the can
access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
The preparation of the financial statements in conformity with IndAS requires management to make estimates,
judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting
policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the
date of the financial statements and reported amounts of revenues and expenses during the period. Accounting
estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in
estimates are made as management becomes aware of changes in circumstances surrounding the estimates.
Changes in estimates are reflected in the financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial statements.
3. OPERATIONAL INCOME: REVENUE RECOGNITION:
a) Revenue is measured at the fair value of the consideration received or receivable and is reduced for
allowances wherever applicable as per the contract.
b) Revenue from a contract to provide services is recognized by reference to the stage of completion of
the contract. The stage of completion of the contract is determined based on internal
assessment/su rvey.
c) Claims preferred on customers for works/items not contemplated are considered as income on their
acceptance.
d) Revenue Income is recognised in the Statement of Profit and Loss when:
⢠The income generating activities have been carried out on the basis of a binding agreement
⢠The income can be measured reliably
⢠It is probable that the economic benefits associated with the transaction will flow to the Company
⢠Costs relating to the transaction can be measured reliably
Revenue for all businesses is recognised when the performance obligation has been satisfied, which
happens upon the transfer of control to the customer at an amount that reflects the consideration to which
the Company expects to be entitled in exchange for the goods and services. Revenue is recognised when
or as performance obligations are satisfied by transferring the promised goods or services to the customer,
i.e. at a point in time or over time provided that the stage of completion can be measured reliably.
a) Interest income from a financial asset is recognized when it is probable that the economic benefits will
flow to the entity and the amount of income can be measured reliably. Interest income is accrued on a
time basis, by reference to the principal outstanding and at the effective interest rate applicable.
b) Interest on Tax refunds are accounted on receipt basis.
a) All operational expenses are charged to revenue under accrual basis.
b) Insurance: Final adjustments to insurance premium paid are considered in accounts on the basis of
demands received.
c) Insurance:
I Expenses on account of general average claims/damages to ships are written off in the year in
which they are incurred.
ii In respect of hull and machinery insurance claims, the claim is accounted as claims recoverable
from underwriters on submission of average adjuster report to the underwriter under operational
income. Necessary adjustments are made to the claims recoverable account as and when the
actual claims are received from the underwriters. In respect of other claims, the same are
accounted for on realization /settlement of the same by the underwriters and is accounted under
operational income.
a) Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under
construction) less their residual values over their useful lives, using the straight-line method.
b) Freehold land is not depreciated.
c) The Company depreciates property, plant and equipment over their estimated useful lives using the straight¬
line method as per the useful life prescribed in schedule II of the Companies Act, 2013 except for the
following categories of assets in which case the estimated useful life has been assessed based on technical
advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions
of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and
maintenance support.
7. PROPERTY, PLANT & EQUIPMENT:
a. Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any.
Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with
the Entity''s accounting policy. Such properties are classified to the appropriate categories of property, plant
and equipment when completed and ready for intended use. Depreciation of these assets, on the same
basis as other property assets, commences when the assets are ready for their intended use.
b. Land and buildings held for use in the production or supply of goods or services, or for administrative
purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated
impairment losses.
c. Properties in the course of construction for production, supply or administrative purposes are carried at cost,
less any recognized impairment loss.
d. Dry Dock Expenses: The expenditure incurred on account of dry-dock of vessels (along with spares
consumed) will be capitalised to Property, Plant and Equipment and will be depreciated over a period from
the date of dry dock completion to the next due date of docking survey as certified by IRS.
e. Items of Fixed Assets whose cost does not exceed Rs.5,000/- (Rupees five thousand) are capitalized and
depreciated 100% during the year.
f. Government grants whose primary condition is that the Company should purchase, construct or otherwise
acquire non-current assets are recognised as deferred revenue in the balance sheet and transferred to
profit or loss on systematic and rational basis over the useful lives of the related assets.
a) As per the transitional provisions given in the notification issued by the Ministry of Corporate Affairs,
Government of India dated 31st Mar, 2009 read with the notification dated 9th August, 2012, the Company
has opted for adjusting the exchange difference on the long term foreign currency monetary items to the
cost of the assets acquired out of these foreign currency items.
b) Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalised as
part of the cost of that asset, till the time the asset is put to use. Other borrowing costs are recognised as an
expense in the period in which they are incurred.
9. FOREIGN CURRENCY TRANSACTIONS:
a) Transactions in foreign currency are recorded at exchange rates prevailing at the dates of the transactions.
As per the notification issued by the Ministry of Corporate Affairs Government of India dated 31st Mar,
2009, the Company has opted for adjusting the exchange difference on the long term foreign currency
monetary items to the cost of the assets acquired out of these foreign currency monetary items. The
Company has accordingly aligned its accounting policy based on the above notification. Exchange
differences arising out of fluctuation in exchange rates on settlement/restatement at the period end are
accounted based on the nature of transaction as under:
(i) Short term foreign currency monetary assets and liabilities recognized in the profit and loss account.
(ii) Long term foreign currency monetary liabilities used for acquisition of fixed assets adjusted to the cost of
the fixed assets and amortized over the remaining useful life of the asset.
a. Stock of spares and stores is valued at lower of Periodic weighted average cost or net realizable value.
b. Spares are accounted for as per respective delivery/ shipment terms as material-in transit/ stock accounts, valued
as per (a) above and are charged to revenue as and when consumed.
c. Stores/fuel/lubricants delivered to crafts are charged to revenue as and when consumed at respective crafts.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of
the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets
and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in
profit or loss.
(a) All short-term employee benefits are recognized at their undiscounted amount in the accounting period in
which they are incurred.
(b) Employee benefits under defined contribution plans comprising of Provident fund, post-retirement medical
benefits (wef 01.01.2007) and pension (NPS) contribution are recognized based on the undiscounted amount
of obligations of the company to contribute to the plan.
(c) Employee benefits under defined benefit plans comprising of gratuity, leave salary benefits are recognized
based on the present value of defined benefit obligation which is computed on the basis of actuarial valuation
using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognized
during the year. Actuarial gains and losses are recognized in the statement of Profit & Loss during the period
in which they occur.
(d) For defined retirement gratuity benefit plans, the cost of providing benefits is determined using the projected
unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re¬
measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the
return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or
credit recognized in other comprehensive income in the period in which they occur.
(e) Provision for Gratuity, Provident fund, Post-retirement Medical and Pension benefits is funded with
separate Trusts formed for the purpose.
Mar 31, 2022
ACCOUNTING POLICIES:
Dredging Corporation of India Limited (âDCILâ/ âthe Companyâ) is a limited Company incorporated in India with the primary objective of catering to the dredging requirements of Indian ports, Indian Navy etc.,. The Company is engaged in providing the services of Capital Dredging , Maintenance Dredging, Beach Nourishment, Land Reclamation, Shallow water Dredging, Project Management Consultancy, Marine Construction. The Company has its Registered Office at Delhi and Corporate Office at Visakhapatnam. The Project offices are situated at different parts of the Country like Haldia, Kolkata, Cochin, Chennai, Mumbai etc. The details of the fleet etc are included in the Annual Report.â
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
1.1 Statement of Compliance:
These financial statements comply in all material respects with Indian Accounting Standards (âInd ASâ) notified under Section 133 of the Companies Act, 2013 (âthe Actâ) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, provisions of the Act to the extent notified and guidelines issued by the Securities and Exchange Board of India (âSEBIâ) and other accounting principles generally accepted in India.
1.2 Basis of Measurement:
The Financial Statements have been prepared under the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting polices below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the can access at the measurement date;
⢠Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the asset or liability.
2. ACCOUNTING ESTIMATES:
The preparation of the financial statements in conformity with IndAS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
3. OPERATIONAL INCOME: REVENUE RECOGNITION:
a) Revenue is measured at the fair value of the consideration received or receivable and is reduced for allowances wherever applicable as per the contract.
b) Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. The stage of completion of the contract is determined based on internal assessment/survey.
c) Claims preferred on customers for works/items not contemplated are considered as income on their acceptance.
d) Revenue Income is recognised in the Statement of Profit and Loss when:
⢠The income generating activities have been carried out on the basis of a binding agreement
⢠The income can be measured reliably
⢠It is probable that the economic benefits associated with the transaction will flow to the Company
⢠Costs relating to the transaction can be measured reliably
Revenue for all businesses is recognised when the performance obligation has been satisfied, which happens upon the transfer of control to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for the goods and services. Revenue is recognised when or as performance obligations are satisfied by transferring the promised goods or services to the customer, i.e. at a point in time or over time provided that the stage of completion can be measured reliably.
4. OTHER INCOME:
a) Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the entity and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable.
b) Interest on Tax refunds are accounted on receipt basis.
5. OPERATIONAL EXPENSES:
a) All operational expenses are charged to revenue under accrual basis.
b) Insurance: Final adjustments to insurance premium paid are considered in accounts on the basis of demands received.
c) Insurance:
i. Expenses on account of general average claims/damages to ships are written off in the year in
which they are incurred.
ii. In respect of hull and machinery insurance claims, the claim is accounted as claims recoverable
from underwriters on submission of average adjuster report to the underwriter under operational income. Necessary adjustments are made to the claims recoverable account as and when the actual claims are received from the underwriters. In respect of other claims, the same are accounted for on realization /settlement of the same by the underwriters and is accounted under operational income.
6. DEPRECIATION:
a) Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method.
b) Freehold land is not depreciated.
c) The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method as per the useful life prescribed in schedule II of the Companies Act, 2013 except for the following categories of assets in which case the estimated useful life has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support.
|
Type of Asset |
Estimated Useful Life |
|
Dredgers |
25 years |
|
Mild steel pipe lines equipment |
4 years |
|
High density polyethylene pipe line equipment |
8 years |
|
Second hand assets |
As per estimated balance Service period. |
d) An item of property, plant and equipment is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
7. PROPERTY, PLANT & EQUIPMENT:
a. Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Entity''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
b. Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.
c. Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss.
d. Dry Dock Expenses: The expenditure incurred on account of dry-dock of vessels (along with spares consumed) will be capitalised to Property, Plant and Equipment and will be depreciated over a period from the date of dry dock completion to the next due date of docking survey as certified by IRS.
e. Items of Fixed Assets whose cost does not exceed Rs.5,000/- (Rupees five thousand) are capitalized and depreciated 100% during the year.
f. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the balance sheet and transferred to profit or loss on systematic and rational basis over the useful lives of the related assets.
8. BORROWING COSTS:
a) As per the transitional provisions given in the notification issued by the Ministry of Corporate Affairs, Government of India dated 31st Mar, 2009 read with the notification dated 9th August,2012, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items .
b) Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalised as part of the cost of that asset, till the time the asset is put to use. Other borrowing costs are recognised as an expense in the period in which they are incurred.
9. FOREIGN CURRENCY TRANSACTIONS:
a) Transactions in foreign currency are recorded at exchange rates prevailing at the dates of the transactions. As per the notification issued by the Ministry of Corporate Affairs Government of India dated 31st Mar, 2009, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency monetary items. The Company has accordingly aligned its accounting policy based on the above notification. Exchange differences arising out of fluctuation in
exchange rates on settlement/restatement at the period end are accounted based on the nature of transaction as under:
(i) Short term foreign currency monetary assets and liabilities recognized in the profit and loss account.
(ii) Long term foreign currency monetary liabilities used for acquisition of fixed assets adjusted to the cost of the fixed assets and amortized over the remaining useful life of the asset.
a. Stock of spares and stores is valued at lower of Periodic weighted average cost or net realizable value.
b. Spares are accounted for as per respective delivery/ shipment terms as material-in transit/ stock accounts, valued as per (a) above and are charged to revenue as and when consumed.
c. Stores/fuel/lubricants delivered to crafts are charged to revenue as and when consumed at respective crafts.
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
(a) All short-term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.
(b) Employee benefits under defined contribution plans comprising of Provident fund, post-retirement medical benefits (wef 01.01.2007) and pension (NPS) contribution are recognized based on the undiscounted amount of obligations of the company to contribute to the plan.
(c) Employee benefits under defined benefit plans comprising of gratuity, leave salary benefits are recognized based on the present value of defined benefit obligation which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognized during the year. Actuarial gains and losses are recognized in the statement of Profit & Loss during the period in which they occur.
(d) For defined retirement gratuity benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
(e) Provision for Gratuity, Provident fund, Post-retirement Medical and Pension benefits is funded with separate Trusts formed for the purpose.
13. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:
a) Provisions are recognized when the entity has a present obligation (legal or constructive) as a result of a past event, it is probable that the Entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
b) Contingent Assets and Contingent liabilities are disclosed by way of notes.
Provisions for income tax liability is made on operational income as per special provisions relating to shipping companies under the Income Tax Act,1961 on the basis of deemed tonnage income of the company. Provision for Income tax on non-operational income is made as per the provisions of the Income Tax Act 1961
Mar 31, 2018
General Information:
âDredging Corporation of India Limited (âDCILâ/ âthe Companyâ) is a limited Company incorporated in India and a Government of India Undertaking under the administrative control of Ministry of Shipping with the primary objective of catering to the dredging requirements of Indian ports, Indian Navy etc.,. The Company is engaged in providing the services of Capital Dredging , Maintenance Dredging, Beach Nourishment, Land Reclamation, Shallow water Dredging, Project Management Consultancy, Marine Construction. The Company is categorized as Mini Ratna Category - I enterprise by Government of India. The Company has its Registered Office at Delhi and Corporate Office at Visakhapatnam. The Project offices are situated at different parts of the Country like Haldia, Kolkata, Cochin, Chennai, Mumbai etc. The details of the fleet etc are included in the Annual Report.â
Notes:
1. As per the requirement of Schedule II to the Companies Act,2013, where cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately for depreciation purpose. After careful examination, the company is of the view that none of the component part of the fixed asset is considered to be significant as compared to total cost of the asset except Dry Dock expenses incurred for dredgers which are less than 25 years in usage. Consequently, other than for Dry Dock expenses, the charging of depreciation for component parts was not required. Dry Dock expenses are capitalized to the respective dredger and depreciated over a period of 2.5 years from the date of capitalization based on management evaluation.
2. Capital-Work in progress includes advances paid to CPWD Rs,1925.92 lakhs.
3. During the year, Dredger-VII and IX were sold and profit on sale of condemned assets has been accounted Rs,882.92 lakhs under other income.
Notes: 1. The Company holds 4.0268% (Rs,30 crores investment in total Share Capital of Rs,745 crores) of the equity share capital of M/s Sethusamudram Corporation Limited. Company involved in the development of shipping route in the shallow straits between India and Sri Lanka. The directors of the Company do not consider that the Company is able to exercise significant influence or control over Sethusamudram Corporation Limited
Notes:
1. Pursuant to the company''s claim vide its letter dated 06.06.2012 for the works executed in sethusamudram project, the company is of the view that the actual cost incurred will be reimbursed by GOI and the same is under active consideration by GOI. In view of this, provisions for doubtful debts amounting to Rs,84.14 Crores has not been made in respect of receivables in this regard.
2. The average credit period on sale/services is 90 days. The Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due.
Notes:Cash and cash equivalents as of March 31, 2018, March 31, 2017 include restricted cash and bank balances of Rs,3641 Lakhs (PY Rs,4200Lakhs), respectively. The restrictions are primarily on account of bank balances held as debenture redemption reserve deposits in syndicate bank & for obtaining Standby Letter of credit for Dr-XIX & Dr-XX loan instalments.
5. Financial Instruments:
Capital management - The Company manages its capital to ensure that Company will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.The Capital structure of the company consists of net debt (borrowings as detailed in the note.12 and total equity as detailed in note 10 & 11.
9. GENERAL
a) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.
b) Income Tax appeals are pending for the Assessment years 2009-10 to 2014-15 before the Income Tax Authorities.
c) The Company filed an appeal and an application for stay before the Customs, Excise and Service Tax Appellate Tribunal against Commission rate''s Orders confirming recovery of ''9450lakhs towards irregular Cenvat credit availed during the period from June, 2005 to March, 2018 and imposing a penalty/interest of Rs,3623 lakhs. No provision has been made as the matter is pending before the tribunal.
d) Escalation claims (Labour / Material) have been preferred on the basis of latest available indices.
e) Disclosure requirements under Ind AS 19 on Employee benefits are given hereunder.
The contributions to employee''s Provident Fund benefits are made to a separate trust. The trust is exempted u/s 17 of the Employees Provident Fund and Miscellaneous Provisions Act,1952. As per the Conditions for grant of exemption, the Company shall make good the deficiency if any, in the interest rate declared by the trust as against the statutory rate declared by Gol.
The Provident fund contributions are accounted for on accrual basis.
The Company offers to its employees defined benefit plans in the form of Gratuity, Leave Encashment and Postretirement Medical Benefits as given under.
Gratuity: This benefit accrues to employee on retirement/resignation and is based on the number of years of service rendered by the employee. A Separate trust is formed for gratuity, which is funded by the Company.
Leave Encashment: This benefit represents un-availed leave accruing to the credit of the employees accumulated and paid to shore and floating employees as per respective rules.
9. ACCOUNTING POLICIES:
BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
Statement of Compliance:
These financial statements comply in all material respects with Indian Accounting Standards (âInd ASâ) notified under Section 133 of the Companies Act, 2013 (âthe Actâ) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, provisions of the Act to the extent notified and guidelines issued by the Securities and Exchange Board of India (âSEBIâ).
Basis of Measurement:
The Financial Statements have been prepared under the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting polices below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
The preparation of the financial statements in conformity with IndAS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
OPERATIONAL INCOME:
REVENUE RECOGNITION:
a) Revenue is measured at the fair value of the consideration received or receivable and is reduced for allowances wherever applicable as per the contract.
b) Revenue from a contract to provide services is recognized by reference to the stage of completion of the contract. The stage of completion of the contract is determined based on internal assessment/survey.
c) Claims preferred on customers for works/items not contemplated are considered as income on their acceptance. OTHER INCOME:
a) Interest income from a financial asset is recognized when it is probable that the economic benefits will flow to the entity and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
b) Interest on Tax refunds are accounted on receipt basis.
OPERATIONAL EXPENSES:
a) All operational expenses are charged to revenue under accrual basis.
b) Insurance:
i. Expenses on account of general average claims/damages to ships are written off in the year in which they are incurred.
ii. Expenses on account of general average claims/damages to ships are written off in the year in which they are incurred.
iii. In respect of hull and machinery insurance claims, the claim is accounted as claims recoverable from underwriters on submission of average adjuster report to the underwriter under operational income. Necessary adjustments are made to the claims recoverable account as and when the actual claims are received from the underwriters. In respect of other claims, the same are accounted for on realization /settlement of the same by the underwriters and is accounted under operational income.
DEPRECIATION:
a) Depreciation is recognized so as to write off the cost of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method.
b) Freehold land is not depreciated.
c) Dry Dock Expenses:
i. Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is completed is charged to the statement of Profit and Loss.
ii. Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is not completed is capitalized to property plant and Equipment and depreciated as a separate component over its estimated useful life of 2.5 years.
d) The Company depreciates property, plant and equipment over their estimated useful lives using the straight-line method as per the useful life prescribed in schedule II of the Companies Act, 2013 except for the following categories of assets in which case the estimated useful life has been assessed based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturers warranties and maintenance support.
Type of Asset Estimated Useful Life
Dredgers 25 years
Mild steel pipe lines equipment 4 years
High density polyethylene pipe line equipment 8 years
Second hand assets As per estimated balance Service period.
Building on lease hold land Cost of building construction on leasehold land amortized over
the lease period or useful life of the building Whichever is lower.
e) An item of property, plant and equipment is de-recognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.
f) Items of Fixed Assets whose cost does not exceed Rs, 5,000/- (Rupees five thousand) are capitalized and depreciated 100% during the year.
PROPERTY, PLANT & EQUIPMENT:
a. Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the Entity''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
b. Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the balance sheet at cost less accumulated depreciation and accumulated impairment losses.
c. Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss.
d. Dry Dock Expenses: Dry Dock Expenses incurred on Dredgers where estimated useful life of 25 years is not completed is capitalized to property plant and Equipment.
e. Items of Fixed Assets whose cost does not exceed ''5,000/- (Rupees five thousand) are capitalized and depreciated 100% during the year.
f. Government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the balance sheet and transferred to profit or loss on systematic and rational basis over the useful lives of the related assets.
BORROWING COSTS:
a) As per the transitional provisions given in the notification issued by the Ministry of Corporate Affairs, Government of India dated 31st Mar, 2009 read with the notification dated 9th August,2012, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items.
b) Borrowing costs attributable to acquisition, construction or production of qualifying assets are capitalized as part of the cost of that asset, till the time the asset is put to use. Other borrowing costs are recognized as an expense in the period in which they are incurred.
FOREIGN CURRENCY TRANSACTIONS:
a) Transactions in foreign currency are recorded at exchange rates prevailing at the dates of the transactions. As per the notification issued by the Ministry of Corporate Affairs dated 31st Mar, 2009, the Company has opted for adjusting the exchange difference on the long term foreign currency monetary items to the cost of the assets acquired out of these foreign currency items. The Company has accordingly aligned its accounting policy based on the above notification. Exchange differences arising out of fluctuation in exchange rates on settlement/restatement at the period end are accounted based on the nature of transaction as under:
(i) Short term foreign currency monetary assets and liabilities recognized in the profit and loss account.
(ii) Long term foreign currency monetary liabilities used for acquisition of fixed assets: adjusted to the cost of the fixed assets and amortized over the remaining useful life of the asset.
INVENTORIES:
a. Stock of spares and stores is valued at lower of weighted average cost and net realizable value.
b. Spares are accounted for as per respective delivery/ shipment terms as material-in transit/ stock accounts, valued as per (a) above and are charged to revenue as and when consumed.
c. Stores and lubricants delivered to crafts during the year are charged to revenue.
FINANCIAL INSTRUMENTS:
Financial assets and financial liabilities are recognized when an entity becomes a party to the contractual provisions of the instruments. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
Initial Recognition:
The company recognizes financial assets and financial liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.
EMPLOYEE BENEFITS:
(a) All short-term employee benefits are recognized at their undiscounted amount in the accounting period in which they are incurred.
(B) Employee benefits under defined contribution plans comprising of Provident fund, post-retirement medical benefits (wef 01.01.2007) and pension contribution are recognized based on the undiscounted amount of obligations of the company to contribute to the plan.
(C) Employee benefits under defined benefit plans comprising of gratuity, leave salary benefits are recognized based on the present value of defined benefit obligation which is computed on the basis of actuarial valuation using the projected unit credit method. Actuarial liability in excess of respective plan assets is recognized during the year.
Actuarial gains and losses are recognized in the statement of Profit & Loss during the period in which they occur.
(D) For defined retirement gratuity benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Re-measurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling and the return on plan assets (excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognized in other comprehensive income in the period in which they occur.
(E) Provision for Gratuity, Provident fund, Post-retirement Medical and Pension benefits is funded with separate Trusts formed for the purpose.
PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:
a) Provisions are recognized when the entity has a present obligation (legal or constructive) as a result of a past event, it is probable that the Entity will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration
(All amounts in ''lakhs, except share data and unless otherwise stated) required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
b) Contingent Assets and Contingent liabilities are disclosed by way of notes.
TAX EXPENSES:
Provisions for income tax liability is made on operational income as per special provisions relating to shipping companies under the Income Tax Act,1961 on the basis of deemed tonnage income of the company. Provision for Income tax on non-operational income is made as per the provisions of the Income Tax Act 1961._
Mar 31, 2017
(All amounts in ''lakhs, except share data and unless otherwise stated)
General Information:
Dredging Corporation of India Limited (âDCILâ/ âthe Companyâ) is a limited Company incorporated in India and a Government of India Undertaking under the administrative control of Ministry of Shipping with the primary objective of catering to the dredging requirements of Indian ports, Indian Navy etc.,. The Company is engaged in providing the services of Capital Dredging , Maintenance Dredging, Beach Nourishment, Land Reclamation, Shallow water Dredging, Project Management Consultancy, Marine Construction. The Company is categorized as Mini Ratna Category â I enterprise by Government of India. The Company has its Registered Office at Delhi and Corporate Office at Visakhapatnam. The Project offices are situated at different parts of the Country like Haldia, Kolkata, Cochin, Chennai, Mumbai etc. The details of the fleet etc are included in the Annual Report.
Applicability of new and revised Ind AS:
These financial statements of Dredging Corporation of India Limited, for the year ended March 31, 2017 have been prepared in accordance with Ind AS. This is the companyâs first set of financial statements in accordance with Ind AS. For the purpose of transition into Ind AS, the company has followed the guidance prescribed in Ind AS 101- First time adoption of Indian Accounting Standard, with April 1, 2015 as the transition date and IGAAP as the previous GAAP. In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as "Ind AS") notified under the Companies (Indian Accounting Standard) Rules, 2015 with effect from April 1, 2016.
Notes: 1. As per the requirement of Schedule II to the companies Act ,2013 where cost of a part of the asset is significant to the total cost of the asset and useful life of that part is different from the useful life of the remaining asset, useful life of that significant part shall be determined separately for depreciation purpose. After careful examination, the company is of the view that none of the component part of the fixed asset is considered to be significant as compared to total cost of the asset except Dry Dock expenses incurred for dredgers which are less than 25 years in usage. Consequently, other than for Dry Dock expenses, the charging of depreciation for component parts was not required. Dry Dock expenses are capitalized to the respective dredger and depreciated over a period of 2.5 years from the date of capitalization based on management evaluation.
2. The Cutter Suction Dredger, DCI-XVIII after major repair came out of the Dry-dock yard in Dec, 15 & sailed to Goa for operation in April, 16. The management is of the view that there is no impairment required for this vessel as in "Value in use " is more than carrying amount.
3. Capital-Work in progress includes advances paid to CPWD - Rs,1412.60
Notes: 1. The Company holds 4.0268% (Rs,30 crores investment in total Share Capital of Rs,745 crores) of the equity share capital of M/s Sethusamudram Corporation Limited. Company involved in the development of shipping route in the shallow straits between India and Sri Lanka. The directors of the Company do not consider that the Company is able to exercise significant influence or control over Sethusamudram Corporation Limited 2. The Management has evaluated the fair value of the above equity instruments in accordance with Ind AS 109 as at April 01, 2015. The accounting with respect to the difference in the carrying value of the investment as at the date of transition and the fair value on the same date have been dealt with in the opening balance sheet.
Notes: 1. Pursuant to the company''s claim vide its letter dated 06.06.2012 for the works executed in sethusamudram project, the company is of the view that the actual cost incurred will be reimbursed by GOI and the same is under active consideration by GOI. In view of this, provisions for doubtful debts amounting to Rs,84.14 Crores has not been made in respect of receivables in this regard.
2. The average credit period on sale/services is 90 days. The Company has used practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the days the receivables are due.
5. Financial Instruments:
Capital management - The Company manages its capital to ensure that Company will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The Capital structure of the company consists of net debt (borrowings) as detailed in the note. 12 and total equity as detailed in note 10 & 11.
9. Exceptional Items for the year FY 2015-16 :
Commissioner (Appeals) Vide order no.S.N.P-5-360/CUS/ (ARS)/KPL (port)/2013 dated 30/06/2015 stated that the company is entitled to refund of the entire amount of Rs,1132.81 lakhs custom duty paid by the company. Aggrieved by this order, Assistant commissioner approached the CESTAT, Kolkata for stay of the commissioner orders dated 30/ 06/2015. CESTAT dismissed the stay petition filed by the department in favour of the company. The company has submitted all the documents for obtaining refund of the amount. Last year (FY 2015-16) an amount of Rs,1110.15 lakhs was consideredand shown under exceptional items in Profit &Loss account and reduced residual value of Dr-Aquarius by Rs,22.66 lakhs.
10. Key Managerial Personnel :
Directors : Rajesh Tripathi , Chairman & Managing Director
: S.Charles Director (Finance)
: M.S.Rao Director (Ops.& Tech.)
Company Secretary : K Aswini Sreekanth
Total Salary & Benefits : Rs,115.86 lakhs
11. GENERAL
a) Letters seeking confirmation of balances have been sent to Customers and replies from the Customers are awaited and as such could not be reconciled.
b) Income Tax appeals are pending for the Assessment years 2009-10 to 2014-15 before the Income Tax Authorities.
c) The Company filed an appeal and an application for stay before the Customs, Excise and Service Tax Appellate Tribunal against Commission rateâs Orders confirming recovery of Rs,8920 lakhs towards irregular Cenvat credit availed during the period from June, 2005 to March, 2016 and imposing a penalty/interest of Rs,4984 lakhs. No provision has been made as the matter is pending before the tribunal.
d) Physical verification of Inventory on board dredger has been carried out for all the dredgers and the same is pending for reconciliation. Necessary adjustments for surplus/ deficit of the items will be made in the accounts soon after completion of reconciliation.
e) Escalation claims (Labour / Material) have been preferred on the basis of latest available indices.
f) During the financial year 2014-15 and 2015-16, company has capitalized an amount of Rs,6987 lakhs being amount incurred for dry dock of dredgers whose useful life of 25 years (Company has estimated the dredger useful life as 25 years) was completed. The Company has referred the same to expert advisory committee (EAC) of ICAI and EAC has opined that the company has to charge the capitalized amount to the repairs and maintenance as the estimated useful life of the dredgers were expired.
In compliance with the companies (Indian Accounting Standards) Rules, 2015 (Ind AS) prescribed under section 133 of the Companies Act 2013, the company has restated the financial statements of 2015-16 by giving effect of ICAI opinion as an Ind AS adjustment.
The contributions to employeeâs Provident Fund benefits are made to a separate trust. The trust is exempted u/s 17 of the Employees Provident Fund and Miscellaneous Provisions Act,1952. As per the Conditions for grant of exemption, the Company shall make good the deficiency if any, in the interest rate declared by the trust as against the statutory rate declared by Gol. The Provident fund contributions are accounted for on accrual basis.
The Company offers to its employees defined benefit plans in the form of Gratuity, Leave Encashment and Postretirement Medical Benefits as given under.
Gratuity: This benefit accrues to employee on retirement/resignation and is based on the number of years of service rendered by the employee. A Separate trust is formed for gratuity, which is funded by the Company.
Leave Encashment: This benefit represents un-availed leave accruing to the credit of the employees accumulated and paid to shore and floating employees as per respective rules.
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
1.1 Statement of Compliance:
a. These financial statements comply in all material respects with Indian Accounting Standards (âInd ASâ) notified under Section 133 of the Companies Act, 2013 (âthe Actâ) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016, provisions of the Act to the extent notified and guidelines issued by the Securities and Exchange Board of India (âSEBIâ).
b. The financial statements up to year ended March 31, 2016 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act (âprevious GAAPâ).
c. These financial statements are the first financial statements of the Company under Ind AS. Refer note.2 for an explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows.
1.2 Basis of Measurement:
a. The Financial Statements have been prepared under the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period, as explained in the accounting polices below.
b. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
c. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the entity takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date.
d. In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;
- Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
- Level 3 inputs are unobservable inputs for the asset or liability.
Mar 31, 2015
1. 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
principles (IGAAP) under the historical cost convention on accrual
basis. IGAAP comprises Accounting standards notified by the central
Government of India, and the relevant provisions of Companies Act,
2013.The financial statements are presented in Indian Rupees rounded
off to the nearest lakh with two decimals.
2. OPERATIONAL INCOME:
a ) Operational income is recognized as income depending upon nature of
the contract as per respective applicable accounting standards.
b) Claims preferred on customers for works/items not contemplated are
considered as in come on their acceptance.
3. OTHER INCOME:
a ) Sale proceeds of condemned and unserviceable Spares, Stores,
Empties, Waste Oil, etc are accounted for in the year of disposal. b)
Liquidated damages recovered from suppliers are accounted on settlement
of bills. c ) Interests on Tax refunds are accounted on receipt basis.
d) In respect of hull and machinery insurance claims, the claim is
accounted as claims recoverable from underwriters as and when the
repair bill is submitted by yard/firm. Necessary adjustments are made
as and when the claim is accepted by Underwriters. In respect of other
insurance claims, the same are accounted for on realization /
settlement of the same by the underwriters".
4. OPERATIONAL EXPENSES:
a ) All operational expenses are charged to revenue under accrual
basis.
b) Insurance:
Final adjustments to insurance premium paid are considered in accounts
on the basis of demands received.
5. DEPRECIATION:
Depreciation is provided considering the useful lives as prescribed
under Schedule II of the Companies Act, 2013, other than the following
class of assets, whose useful lives are different from that of the
lives prescribed in the Schedule, which are determined based on the
technical evaluation. i. Dredgers- ii. The useful life dredgers will
be 25 years. iii. Expenditure incurred on dry-docking of dredgers
which have completed the useful life of 25 years already is capitalized
to the said dredger and depreciated over the extended useful life
determined by technical evaluation.
Note:
Residual value of the dredgers will be considered at 2% of the original
cost of the dredger including capitalization of exchange variance in
accordance with AS-11.
In respect of the following assets depreciation is provided on straight
line method based on technical estimation of useful lives of such
assets: iv. Pipeline Equipment: 25% for Mild Steel pipe line equipment
and 12.5% for high density polyethylene pipe line equipment.
v. Second hand assets: As per estimate of balance service life.
vi. Building on lease: Cost of building constructed on lease hold land
is amortized over the lease period. vii. Items of Fixed Assets whose
cost does not exceed Rs.5,000/- (Rupees five thousand) are capitalized
and depreciated 100% during the year.
viii. Cost of Library: Cost of library is considered as Other
establishment expenditure. ix. The exchange differences on long term
foreign currency monetary liabilities used for acquisition of specific
fixed assets adjusted to the cost of fixed assets, are amortized over
the remaining useful life of the said asset.
6. FIXED ASSETS:
a ) Fixed Assets are stated at historical cost less depreciation
(historical cost includes financing cost and other related overheads).
b) Grants in Aid relating to specific Fixed Assets are shown as
deduction from the gross value of the assets concerned in arriving at
book value.
c ) Items of the nature of Capital/ Equipments are capitalized and
depreciated over the remaining useful life of the asset.
d) The exchange differences on long term foreign currency liabilities
used for acquisition of fixed assets are adjusted to the cost of the
specific fixed assets.
7. BORROWING COSTS:
a ) As per the transitional provisions given in the notification issued
by the Ministry of Corporate Affairs, Government of India dated 31st
Mar, 2009 read with the notification dated 9th August,2012, the Company
has opted for adjusting the exchange difference on the long term
foreign currency monetary items to the cost of the assets acquired out
of these foreign currency items. b) Borrowing costs attributable to
acquisition, construction or production of qualifying assets are
capitalized as part of the cost of that asset, till the time the asset
is put to use. Other borrowing costs are recognized as an expense in
the period in which they are incurred.
8. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are recorded at exchange rates
prevailing at the dates of the transactions. As per the notification
issued by the Ministry of Corporate Affairs dated 31st Mar, 2009, the
Company has opted for adjusting the exchange difference on the long
term foreign currency monetary items to the cost of the assets acquired
out of these foreign currency items. The Company has accordingly
aligned its accounting policy based on the above notification.
Exchange differences arising out of fluctuation in exchange rates on
settlement/restatement at the period end are accounted based on the
nature of transaction as under:
i) Short term foreign currency monetary assets and liabilities:
recognized in the profit and loss account. ii) Long term foreign
currency monetary liabilities used for acquisition of fixed assets:
adjusted to the cost of the fixed assets and amortized over the
remaining useful life of the asset.
9. INVENTORIES:
a ) Stock of spares and stores is valued at weighted average cost and
is inclusive of :
(i) Customs duty, if any as applicable to the whole consignment and
(ii) Overheads at predetermined rate.
b) Reconditioned spares are valued at the respective cost of
reconditioning. c ) Spares /stores are accounted for as per respective
delivery/ shipment terms as material-in transit/ stock accounts,
valued as per (a) above and are charged to revenue as and when
consumed. d) Stores and lubricants delivered to crafts during the year
are charged to revenue.
10. INVESTMENTS:
a ) Long Term Investments are stated at cost. Provision for diminution
is made to recognize a decline, other than temporary, in the value of
such investments. b) Current Investments are stated at lower of cost
and fair value.
11. EMPLOYEE BENEFITS:
Provisions for Gratuity Liability and leave encashment liability are
made on the basis of actuarial Valuation using the projected unit
credit method. In the case of crew and MPW of floating employees who
are entitled to settlement of leave in full on signing off, provision
is made for the leave at credit of such employees as on 31st March.
Actuarial liability in excess of respective plan assets is recognized
during the year. Provision for Gratuity as per the Actuarial valuation
is funded with a separate Trust.
12. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities, if material, are disclosed by way
of notes.
Mar 31, 2014
1. 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
principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
2. OPERATIONAL INCOME:
a) Unbilled values of works executed up to 31st March are considered as
income although bills are raised subsequently. The Corresponding debit
balances are shown under "Current Assets-unbilled operational income
receivable".
b) Claims preferred on Customers for works/items not contemplated are
considered as income on their acceptance.
c) Income in respect of incomplete dredging jobs undertaken on insitu
basis are accounted for on the basis of estimated realizable value of
the work done up to 31st March.
3. OTHER INCOME:
a) Sale proceeds of condemned and unserviceable Spares, Stores,
Empties, Waste Oil, etc are accounted for in the year of disposal.
b) Liquidated damages recovered from suppliers are accounted on
settlement of bills.
c) Interests on Tax refunds are accounted on receipt basis.
4. OPERATIONAL EXPENSES:
a) Spares issued to Dredgers, of the nature of inventory, are charged
to revenue as and when consumed.
b) Stores:
Stores and Lubricants delivered to the crafts during the year and
acknowledged by the Master/CEO are charged to revenue. Provision is
made towards consumption for the material delivered to crafts up to
31st March in respect of which acknowledgements are not received.
c) Insurance:
Final adjustments to Insurance Premium paid are considered in accounts
on the basis of demands received.
d) In respect of hull and machinery insurance claims, the claim is
accounted as claims recoverable from underwriters as and when the
repair bill is submitted by yard/firm. Necessary adjustments are made
as and when the claim is accepted by Underwriters. In respect of other
insurance claims, the same are accounted for on realisation /
settlement of the same by the underwriters"
5. DEPRECIATION:
Depreciation is provided under straight-line method in accordance with
Schedule XIV of the Companies Act. In respect of the following Assets,
depreciation is provided on straight-line method at the following rates
based on the technical estimation of the useful lives of such assets:-
a) Pipeline Equipment: 25% for Mild Steel Pipeline equipment and 12.5%
for High Density polyethylene pipeline equipment.
b) Second hand assets/ retrofit of vessels: as per the estimated
balance service life.
c) Building on lease: Cost of Buildings constructed on lease hold land
is amortized over the lease period.
d) Items of Fixed Assets whose cost does not exceed Rs. 5000/- (Rupees
Five thousand) each are capitalized and depreciated 100% during the
year.
e) Cost of Library: Cost of Library is considered as Other
Establishment expenditure.
f) The exchange differences on long term foreign currency monetary
liabilities used for acquisition of specific fixed assets, adjusted to
the cost of the fixed assets, are amortised over the remaining useful
life of the said asset.
6. FIXED ASSETS:
a) Fixed Assets are stated at historical cost less depreciation
(historical cost includes financing cost and other related overheads).
b) Grants in Aid relating to specific Fixed Assets are shown as
deduction from the gross value of the assets concerned in arriving at
book value.
c) Items of the nature of Capital/ Equipments are capitalized and
depreciated over the remaining useful life of the asset.
d) The exchange differences on long term foreign currency liabilities
used for acquisition of fixed assets are adjusted to the cost of the
specific fixed assets.
7. BORROWING COSTS:
a) As per the transitional provisions given in the notification issued
by the Ministry of Corporate Affairs, Government of India dated 31st
Mar, 2009 read with the notification dated 9th August,2012, the Company
has opted for adjusting the exchange difference on the long term
foreign currency monetary items to the cost of the assets acquired out
of these foreign currency items.
b) Borrowing costs attributable to acquisition, construction or
production of qualifying assets are capitalised as part of the cost of
that asset, till the time the asset is put to use. Other borrowing
costs are recognised as an expense in the period in which they are
incurred.
8. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are recorded at exchange rates
prevailing at the dates of the transactions. As per the notification
issued by the Ministry of Corporate Affairs dated 31st Mar, 2009, the
Company has opted for adjusting the exchange difference on the long
term foreign currency monetary items to the cost of the assets acquired
out of these foreign currency items. The Company has accordingly
aligned its accounting policy based on the above notification.
Exchange differences arising out of fluctuation in exchange rates on
settlement/restatement at the period end are accounted based on the
nature of transaction as under:
i) Short term foreign currency monetary assets and liabilities:
recognized in the profit and loss account.
ii) Long term foreign currency monetary liabilities used for
acquisition of fixed assets: adjusted to the cost of the fixed assets
and amortized over the remaining useful life of the asset.
9. STOCK OF SPARES AND STORES:
a) Stock of spares and stores is valued at weighted average cost and is
inclusive of:
i) Customs Duty, if any, as applicable to the whole consignment and
ii) Overheads at pre-determined rate.
b) Reconditioned spares are valued at the respective cost of
reconditioning.
c) Value of Materials dispatched on F.O.B. basis by Foreign Suppliers
on or before 31st March of a year is considered in the accounts of that
year, provided dispatch documents are retired or accepted within 15
days of the end of the accounting year.
10. INVESTMENTS:
(a) Long Term Investments are stated at cost. Provision for diminution
is made to recognize a decline, other than temporary, in the value of
such investments.
(b) Current Investments are stated at lower of cost and fair value.
11. EMPLOYEE BENEFITS:
Provisions for Gratuity Liability and leave encashment liability are
made on the basis of actuarial Valuation using the projected unit
credit method. In the case of crew and MPW of floating employees who
are entitled to settlement of leave in full on signing off, provision
is made for the leave at credit of such employees as on 31st March.
Actuarial liability in excess of respective plan assets is recognized
during the year.
Provision for Gratuity as per the Actuarial valuation is funded with a
separate Trust.
12. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities, if material, are disclosed by way
of notes.
Mar 31, 2013
1 1. 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
principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
2. OPERATIONAL INCOME:
a) Unbilled values of works executed up to 31st March are considered as
income although bills are raised subsequently. The Corresponding debit
balances are shown under "Current Assets-unbilled operational income
receivableÂ.
b) Claims preferred on Customers for works/items not contemplated are
considered as income on their acceptance.
c) Income in respect of incomplete dredging jobs undertaken on insitu
basis are accounted for on the basis of estimated realizable value of
the work done up to 31st March.
3. OTHER INCOME:
a) Sale proceeds of condemned and unserviceable Spares'' Stores''
Empties'' Waste Oil'' etc are accounted for in the year of disposal.
b) Liquidated damages recovered from suppliers are accounted on
settlement of bills.
c) Interests on Tax refunds are accounted on receipt basis.
4. OPERATIONAL EXPENSES:
a) Spares issued to Dredgers'' of the nature of inventory'' are charged
to revenue as and when consumed.
b) Stores:
Stores and Lubricants delivered to the crafts during the year and
acknowledged by the Master/CEO are charged to revenue. Provision is
made towards consumption for the material delivered to crafts up to
31st March in respect of which acknowledgements are not received.
c) Insurance:
Final adjustments to Insurance Premium paid are considered in accounts
on the basis of demands received.
d) In respect of hull and machinery insurance claims'' the claim is
accounted as claims recoverable from underwriters as and when the
repair bill is submitted by yard/firm. Necessary adjustments are made
as and when the claim is accepted by Underwriters. In respect of other
insurance claims'' the same are accounted for on realisation /
settlement of the same by the underwritersÂ
5. DEPRECIATION:
Depreciation is provided under straight-line method in accordance with
Schedule XIV of the Companies Act. In respect of the following Assets''
depreciation is provided on straight-line method at the following rates
based on the technical estimation of the useful lives of such assets:-
a) Pipeline Equipment: 25% for Mild Steel Pipeline equipment and 12.5%
for High Density polyethylene pipeline equipment.
b) Second hand assets/ retrofit of vessels: as per the estimated
balance service life.
c) Building on lease: Cost of Buildings constructed on lease hold land
is amortized over the lease period.
d) Items of Fixed Assets whose cost does not exceed Rs.5000/- (Rupees
Five thousand) each are capitalized and depreciated 100% during the
year.
e) Cost of Library: Cost of Library is considered as Other
Establishment expenditure.
f) The exchange differences on long term foreign currency monetary
liabilities used for acquisition of specific fixed assets'' adjusted to
the cost of the fixed assets'' are amortised over the remaining useful
life of the said asset.
6. FIXED ASSETS:
a) Fixed Assets are stated at historical cost less depreciation
(historical cost includes financing cost and other related overheads).
b) Grants in Aid relating to specific Fixed Assets are shown as
deduction from the gross value of the assets concerned in arriving at
book value.
c) Items of the nature of Capital/ Equipments are capitalized and
depreciated over the remaining useful life of the asset.
d) The exchange differences on long term foreign currency liabilities
used for acquisition of fixed assets are adjusted to the cost of the
specific fixed assets.
7. BORROWING COSTS:
a) As per the transitional provisions given in the notification issued
by the Ministry of Corporate Affairs'' Government of India dated 31st
Mar'' 2009 read with the notification dated 9th August''2012'' the Company
has opted for adjusting the exchange difference on the long term
foreign currency monetary items to the cost of the assets acquired out
of these foreign currency items.
b) Borrowing costs attributable to acquisition'' construction or
production of qualifying assets are capitalised as part of the cost of
that asset'' till the time the asset is put to use. Other borrowing
costs are recognised as an expense in the period in which they are
incurred.
8. FOREIGN CURRENCY TRANSACTIONS:
Transactions in foreign currency are recorded at exchange rates
prevailing at the dates of the transactions. As per the notification
issued by the Ministry of Corporate Affairs dated 31st Mar'' 2009'' the
Company has opted for adjusting the exchange difference on the long
term foreign currency monetary items to the cost of the assets acquired
out of these foreign currency items. The Company has accordingly
aligned its accounting policy based on the above notification.
Exchange differences arising out of fluctuation in exchange rates on
settlement/restatement at the period end are accounted based on the
nature of transaction as under:
i) Short term foreign currency monetary assets and liabilities:
recognized in the profit and loss account.
ii) Long term foreign currency monetary liabilities used for
acquisition of fixed assets: adjusted to the cost of the fixed assets
and amortized over the remaining useful life of the asset.
9. STOCK OF SPARES AND STORES:
a) Stock of spares and stores is valued at weighted average cost and is
inclusive of:
i) Customs Duty'' if any'' as applicable to the whole consignment and
ii) Overheads at pre-determined rate.
b) Reconditioned spares are valued at the respective cost of
reconditioning.
c) Value of Materials dispatched on F.O.B. basis by Foreign Suppliers
on or before 31st March of a year is considered in the accounts of that
year'' provided dispatch documents are retired or accepted within 15
days of the end of the accounting year.
10. INVESTMENTS:
(a) Long Term Investments are stated at cost. Provision for diminution
is made to recognize a decline'' other than temporary'' in the value of
such investments.
(b) Current Investments are stated at lower of cost and fair value.
11. EMPLOYEE BENEFITS:
Provisions for Gratuity Liability and leave encashment liability are
made on the basis of actuarial Valuation using the projected unit
credit method. In the case of crew and MPW of floating employees who
are entitled to settlement of leave in full on signing off'' provision
is made for the leave at credit of such employees as on 31st March.
Actuarial liability in excess of respective plan assets is recognized
during the year. Provision for Gratuity as per the Actuarial valuation
is funded with a separate Trust.
12. PROVISIONS'' CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities'' if material'' are disclosed by way
of notes.
Mar 31, 2012
1. 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
principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
2. OPERATIONAL INCOME:
a) Unbilled values of works executed up to 31st march are considered as
income although bills are raised subsequently. The Corresponding debit
balances are shown under "Current Assets-unbilled operational income
receivable".
b) Claims preferred on Customers for works/items not contemplated are
considered as income on their acceptance.
c) Income in respect of incomplete dredging jobs undertaken on insitu
basis are accounted for on the basis of estimated realizable value of
the work done up to 31st March.
3. OTHER INCOME:
a) Sale proceeds of condemned and unserviceable Spares, Stores,
Empties, Waste Oil, etc are accounted for in the year of disposal.
b) Liquidated damages recovered from suppliers are accounted on
settlement of bills.
c) Interests on Tax refunds are accounted on receipt basis.
4. OPERATIONAL EXPENSES:
a) Spares issued to Dredgers, of the nature of inventory, are charged
to revenue as and when consumed.
b) Stores:
Stores and Lubricants delivered to the crafts during the year and
acknowledged by the Master/CEO are charged to revenue. Provision is
made towards consumption for the material delivered to crafts up to
31st March in respect of which acknowledgements are not received.
c) Insurance:
Final adjustments to Insurance Premium paid are considered in accounts
on the basis of demands received.
d) In respect of hull and machinery insurance claims, the claim is
accounted as claims recoverable from underwriters as and when the
repair bill is submitted by yard/firm. Necessary adjustments are made
as and when the claim is accepted by Underwriters. In respect of other
insurance claims, the same are accounted for on realisation /
settlement of the same by the underwriters
5. DEPRECIATION:
Depreciation is provided under straight-line method in accordance with
Schedule XIV of the Companies Act. In respect of the following Assets,
depreciation is provided on straight-line method at the following rates
based on the technical estimation of the useful lives of such assets:-
a) Pipeline Equipment: 25% for Mild Steel Pipeline equipment and 12.5%
for High Density polyethylene pipeline equipment.
b) Second hand assets/retrofit of the vessels: as per the estimated
balance service life.
c) Building on lease: Cost of Buildings constructed on lease hold land
is amortised over the lease period.
d) Items of Fixed Assets whose cost does not exceed Rs.5000/-(Rupees
Five thousand) each are capitalized and depreciated 100% during the
year.
e) Cost of Library: Cost of Library is considered as Other
Establishment expenditure.
6. FIXED ASSETS:
a) Fixed Assets are stated at historical cost less depreciation
(historical cost includes financing cost and other related overheads).
b) Grants in Aid relating to specific Fixed Assets are shown as
deduction from the gross value of the assets concerned in arriving at
book value.
c) Items of the nature of Capital/ Equipments are capitalized and
depreciated over the remaining useful life of the asset.
7. BORROWING COSTS:
Borrowing costs attributable to acquisition, construction or production
of qualifying assets are capitalised as part of the cost of that asset,
till the time the asset is put to use. Other borrowing costs are
recognised as an expense in the period in which they are incurred.
8. STOCK OF SPARES AND STORES:
a) Stock of spares and stores is valued at weighted average cost and is
inclusive of:
i) Customs Duty, if any, as applicable to the whole consignment and
ii) Overheads at pre-determined rate.
b) Reconditioned spares are valued at the respective cost of
reconditioning.
c) Value of Materials dispatched on F.O.B. basis by Foreign Suppliers
on or before 31st March of a year is considered in the accounts of that
year, provided dispatch documents are retired or accepted within 15
days of the end of the accounting year.
9. INVESTMENTS:
a) Long Term Investments are stated at cost. Provision for diminution
is made to recognize a decline, other than temporary, in the value of
such investments.
b) Current Investments are stated at lower of cost and fair value.
10. EMPLOYEE BENEFITS:
Provisions for Gratuity Liability and leave encashment liability are
made on the basis of actuarial Valuation using the projected unit
credit method. In the case of crew and MPW of floating employees who
are entitled to settlement of leave in full on signing off, provision
is made for the leave at credit of such employees as on 31st March.
Actuarial liability in excess of respective plan assets is recognized
during the year.
Provision for Gratuity as per the Actuarial valuation is funded with a
separate Trust.
11. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS:
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities, if material, are disclosed by way
of notes.
Mar 31, 2011
1. 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
principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
2. OPERATIONAL INCOME:
a) Unbilled values of works executed up to 31st march are considered as
income although bills are raised subsequently. The Corresponding debit
balances are shown under ÃCurrent Assets-unbilled operational income
receivableÃ.
b) Claims preferred on Customers for works/items not contemplated are
considered as income on their acceptance.
c) Income in respect of incomplete dredging jobs undertaken on insitu
basis are accounted for on the basis of estimated realizable value of
the work done up to 31st March.
3. OTHER INCOME:
a) Sale proceeds of condemned and unserviceable Spares, Stores,
Empties, Waste Oil, etc are accounted for in the year of disposal.
b) Liquidated damages recovered from suppliers are accounted on
settlement of bills.
c) Interests on Tax refunds are accounted on receipt basis.
d) In respect of hull and machinery insurance claims, until final
settlement, 80% of the claimable amount based on estimate of technical
department, after deductible excess, or the actual amount received,
whichever is higher, is treated as income from insurance claims.
Provision for repair expenditure is simultaneously made as per the
estimate of technical department where actual repairs have not been
completed and/or bills not settled with the repairers. In respect of
other claims, the same are accounted for on realization/settlement by
the underwriters.
4. OPERATIONAL EXPENSES:
a) Spares issued to Dredgers, of the nature of inventory, are charged
to revenue as and when consumed.
b) Stores:
Stores and Lubricants delivered to the crafts during the year and
acknowledged by the Master/CEO are charged to revenue. Provision is
made towards consumption for the material delivered to crafts up to
31st March in respect of which acknowledgements are not received.
c) Insurance:
Final adjustments to Insurance Premium paid are considered in accounts
on the basis of demands received.
Mar 31, 2010
1. 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
principles.
b) The Company generally follows mercantile system of accounting and
recognizes significant items of income and expenditure on accrual
basis.
2. OPERATIONAL INCOME:
a) Unbilled values of works executed up to 31st march are considered as
income although bills are raised subsequently. The Corresponding debit
balances are shown under "Current Assets-unbilled operational income
receivable".
b) Claims preferred on Customers for works/items not contemplated are
considered as income on their acceptance.
c) Income in respect of incomplete dredging jobs undertaken on insitu
basis are accounted for on the basis of estimated realizable value of
the work done up to 31s March.
3. OTHER INCOME:
a) Sale proceeds of condemned and unserviceable Spares, Stores,
Empties, Waste Oil, etc are accounted for in the year of disposal.
b) Liquidated damages recovered from suppliers are accounted on
settlement of bills.
c) Interests on Tax refunds are accounted on receipt basis.
d) In respect of hull and machinery insurance claims, until final
settlement, 80% of the claimable amount based on estimate of technical
department, after deductible excess, or the actual amount received,
whichever is higher, is treated as income from insurance claims.
Provision for repair expenditure is simultaneously made as per the
estimate of technical department where actual repairs have not been
completed and/or bills not settled with the repairers. In respect of
other claims, the same are accounted for on realization/settlement by
the underwriters.
4. OPERATIONAL EXPENSES:
a) Spares issued to Dredgers, of the nature of inventory, are charged
to revenue as and when consumed.
b) Stores:
Stores and Lubricants delivered to the crafts during the year and
acknowledged by the Master/CEO are charged to revenue. Provision is
made towards consumption for the material delivered to crafts up to
31st March in respect of which acknowledgements are not received.
c) Insurance:
Final adjustments to Insurance Premium paid are considered in accounts
on the basis of demands received.
5. DEPRECIATION:
Depreciation is provided under straight-line method in accordance with
Schedule XIV of the Companies Act. In respect of the following Assets,
depreciation is provided on straight-line method at the following rates
based on the technical estimation of the useful lives of such assets:-
a) Pipeline Equipment: 25% for Mild Steel Pipeline equipment and 12.5%
for High Density polyethylene pipeline equipment.
b) Second hand assets/retrofit of the vessels: as per the estimated
balance service life.
c) Building on lease: Cost of Buildings constructed on lease hold land
is amortised over the lease period.
d) Items of Fixed Assets whose cost does not exceed Rs.5000/-(Rupees
Five thousand) each are capitalized and depreciated 100% during the
year.
e) Cost of Library: Cost of Library is considered as Other
Establishment expenditure.
6. FIXED ASSETS:
a) Fixed Assets are stated at historical cost less depreciation
(historical cost includes financing cost and other related overheads).
b) Grants in Aid relating to specific Fixed Assets are shown as
deduction from the gross value of the assets concerned in arriving at
book value.
c) Items of the nature of Capital/ Equipments are capitalized and
depreciated over the remaining useful life of the asset.
7. BORROWING COSTS:
Borrowing costs attributable to acquisition, construction or production
of qualifying assets are capitalised as part of the cost of that asset,
till the time the asset is put to use. Other borrowing costs are
recognised as an expense in the period in which they are incurred.
8. STOCK OF SPARES AND STORES:
a) Stock of spares and stores is valued at weighted average cost and is
inclusive of: i) Customs Duty, if any, as applicable to the whole
consignment and
ii) Overheads at pre-determined rate.
b) Reconditioned spares are valued at the respective cost of
reconditioning.
c) Value of Materials dispatched on F.O.B. basis by Foreign Suppliers
on or before 31s" March of a year is considered in the accounts of that
year, provided dispatch documents are retired or accepted within 15
days of the end of the accounting year.
9. INVESTMENTS:
Investments are classified as long term and are carried at cost.
10. EMPLOYEE BENEFITS:
Provisions for Gratuity Liability and leave encashment liability are
made on the basis of actuarial Valuation using the projected unit
credit method. In the case of crew and MPW of floating employees who
are entitled to settlement of leave in full on signing off, provision
is made for the leave at credit of such employees as on 31st March.
Actuarial liability in excess of respective plan assets is recognized
during the year.
Provision for Gratuity as per the Actuarial valuation is funded with a
separate Trust.
11. PROVISIONS, CONTINGENT LAIBILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Assets are neither recognized nor disclosed in the financial
statements. Contingent liabilities, if material, are disclosed by way
of notes.
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