Mar 31, 2015
A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis and these financial statements have
been prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) (which continues ' to be
applicable in terms of General circular 15/2013 dated September 13,
2013 of the Ministry of Corporate Affairs in respect of Section 133 of
the Companies Act, 2013) and other relevant provisions of the Companies
Act, 1956.
b) USE OF ESTIMATES :
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expense during the year. Examples of
such estimates include provisions for doubtful receivables, employee
benefits, provision for income taxes, the useful lives of depreciable
fixed assets and provisions for impairment. Future results could differ
due to changes in these estimates - and the difference between the
actual result and the -estimates are recognized in the
period in which the results are known / materialize.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the 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.
c) FIXED ASSETS:
Fixed Assets are stated at cost, less accumulated depreciation (other
than 'Freehold . Land' where no depreciation is charged) and
impairment loss, if any. Cost comprises
the purchase price, including duties and other non-refundable taxes or
levies any directly attributable cost of bringing the asset to its
working condition and indirect costs specifically attributable to
construction of a project or to the acquisition of a fixed asset.
In the event of the same having been revalued, they are stated at the
revalued figures. Expenditures relating to fixed assets is added to
costs only when the same involved modification work whereby it
increases the life of the assets.
d) DEPRECIATION/AMORTIZATION:
I. In respect of fixed assets (other than freehold land and capital
work-in-progress) acquired during the year,depreciation/ amortization is
charged on a straight line basis so as to write off the cost of the
assets over the useful lives as per the Companies Act, 2013 and for the
assets acquired prior to April 1,2014, the carrying amount as on April
1, 2014 is depreciated over the remaining useful life estimated by
management as per the Companies Act, 2013 on the basis of evaluation.
II. Depreciation and amortization methods, useful lives and residual
values are reviewed periodically, including at each financial year end.
e) IMPAIRMENT OF ASSTES:
The management reviews periodically the carrying amounts of its assets
included in each cash generating unit to determine whether there is any
indication that those assets were impaired. If any such indication
exists, the recoverable amount of the asset is estimated in order to
determine the extent of impairment. Recoverable amount is the higher.of
an asset's net selling price and value in use. In assessing value in
use, the estimated future cash flows expected from the continuing use
of the asset and from its disposal are discounted to their present
value using a pre-tax discount rate that reflects the current market
assessments of time value of moneys and the risks specific to the
asset.
Reversal of impairment loss is recognized as income in the statement of
profit and loss.
f) BORROWING COSTS:
Borrowing costs are recognized in the Statement of Profit and Loss
except interest incurred on borrowings, specifically raised for
projects are capitalized to the cost of the asset until such time that
the asset is ready to be put to use for its intended purpose.
g) INVESTMENTS i
Investments are either classified as current or long term based on
Management's intentions:
I) Current investment are carried at the lower of cost and fair market
value.
II) Long term investments are carried at cost less provisions recorded
to recognize any decline, other than temporary, in the carrying value
of investments.
h) VALUATION OF INVENTORIES :
inventories are taken as verified, valued and certified by the
management. The weight pf the ship purchased is accounted in terms of
LOT of the ship at the time of its construction. Ascertaining weight of
ship at the time of purchase is not possible due to its nature and
size. There is loss of weight on account of corrosion and other factors
during the usage of the ship and its voyage for about 20 to 25 years.
Inventory at the end of the year is ascertained by reducing the weight
of the scrap sold together with the estimated wastage of the material.
As regards to consumable stores and spares, the same is terated as
having been * consumed in the year of purchase. .
The inventory is valued at cost.
i) REVENUE RECOGNITION:
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. Turnover include sale of goods, services, sales tax',
service tax, excise duty and sales during trial run period, adjusted for
discounts (net) , Value Added Tax and gain/loss corresponding hedge
contracts.
Dividend income-is recognized when right to receive is established.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
j) FOREIGN CURRENCY TRANSACTIONS :
Purchase in respect of materials are accounted for on actual payment
basis if the same are made before the year end and/or at the rate of
foreign exchange booking are made. In all other cases, the purchases
and also the liability in respect of said foreign exchange are stated
as converted at the exchnage rate prevalent at the last day of the
financial year. -
k) TAXATION:
Current Taxes
Provision for current tax is made in accordance with the provisions of
Income Tax Act, 1961.
Advance taxes and provisions for current income taxes are presented in
the balance sheet after off-setting advance taxes paid and TDS/TCS
receivables.
Deferred Taxes
Deferred tax expense or benefit is recognized on timing differences
being the difference between taxable income and accounting income that
originate in one period and is likely to reverse in one or more
subsequent periods. Deferred tax assets and liabilities are measured
using the tax rates and tax laws that have been enacted or
substantively enacted by the Balance Sheet date. In other situations,
deferred tax assets are recognized only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available to realize these assets.
Minimum Alternative Tax (MAT) '
Minimum Alternate Tax (MAT) credit is recognized as an asset only when
and to the extent there is convincing evidence that the Company will
pay normal income tax v * during the specified period. In the year in
which the MAT credit becomes eligible to be recognized as an asset in
accordance with the recommendations contained in Guidance Note issued
by the Institute of Chartered Accountants of India, the said asset is
created by way of a credit to the statement of profit and loss and
shown as MAT Credit Entitlement. The Company reviews the same at each
Balance Sheet date and writes down the carrying amount of MAT Credit
Entitlement to the extent there is no longer . convincing evidence to
the effect that the Company will pay normal Income Tax during the
specified period.
l) RETIREMENT BENEFITS TO EMPLOYEES:
The management is of the opinion that since none of the employees of
the Company were in continuous service of more than five years,
requirement of provision of gratuity does not arise. The Management is
also of the opinion that the payment of pension Act, is not applicable
to the Company.
m) EARNING PER SHARE :
Basic earnings per share is computed by dividing the Net Profit after
Tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares. The diluted
potential equity shares are adjusted for . the proceeds receivable had
the shares been actually issued at fair value which is the
average market value of the outstanding shares. Dilutive potential
equity shares are deemed converted as of the beginning of the period,
unless issued at a later date. Dilutive potential equity shares are
determined independently for each period presented, '
n) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that is reasonably estimable and it is
probable that an outflow of economic benefits will be required to
settle the obligation. Provisions are determined by the best estimate
of the outflow of economic benefits required to settle the obligation
at the reporting date. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote,no provision or disclosure is made.
o) CASH & CASH EQUIVALENTS :
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to
be'cash equivalents.
p) CASH FLOW STATEMENTS :
Cash flows are reported using the Indirect Method, whereby profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the Company are segregated.
a) Deferred tax has been accounted in accordance with the requirement
of accounting standard on " Taxes on Income" (AS-22) taking into
account the present earning of the company, the anticipated earning,
etc are subject to adjustment on year to year.
The major components of the Deferred Tax Assets/Liabilities, based on
the tax effect of the timing differences, as at 31st March 2015, are as
under:
Particular March 31,2015 March 31,2014
Deferred Tax Liability
On account of Depreciation 1,485,349 1,522,753
Deferred Tax Assets - -
Net deferred tax liability at the
year end 1,485,349 1,522,753
b) The Company has taken lease right of the Ship Breaking plot No. 45
Alang Ship breaking yard. The consideration paid to GMB and party for
which such plot has been taken over is treated as deferred revenue
expenses and written off over the balance lease period.
c) in the opinion of the Board of Directors, Current Assets, Loans &
Advances have a value on realization at least equal to the amount at
which they are stated in the Balance Sheet. Adequate provision have
been made in the accounts for all the known.
d) The Balance of Sundry Creditors, Sundry Debtors, Loans & Advances
are unsecured, considered goods and subject to confirmation. .
e) Previous years figures have been regrouped/rearranged wherever
necessary so as to make them comparable with current years figures.
Mar 31, 2014
1.1 BASIS OF PRESENTATION :
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year, except for the
change in accounting policy explained below.
a) SIGNIFICANT ACCOUNTING POLICIES :
Accounts are prepared on historical cost & accrual concept basis and in
accordance with the generally accepted accounting principles in India,
the applicable mandatory Accounting Standards as notified by the
Companies (Accounting Standard) Rules, 2006 and relevant provisions of
the Companies Act, 1956 of India.
b) USE OF ESTIMATES :
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c) TANGIBLE FIXED ASSETS :
Fixed Assets are stated at cost, less accumulated depreciation (other
than ''Freehold Land'' where no depreciation is charged) and impairment
loss, if any. Cost comprises the purchase price, including duties and
other non-refundable taxes or levies any directly attributable cost of
bringing the asset to its working condition and indirect costs
specifically attributable to construction of a project or to the
acquisition of a fixed asset.
In the event of the same having been revalued, they are stated at the
revalued figures. Expenditures relating to fixed assets is added to
costs only when the same involved modification work whereby it
increases the life of the assets.
d) DEPRECIATION ON TANGIBLE ASSETS :
I Depreciation is provided on the straight line method, pro-rata basis
to the period of use, so as to writtenoff the original cost of the
asset over the remaining estimated useful life (as per technical
evaluation by the Management at the time of acquisition) or at rates
prescribed under the Schedule XIV to the Companies Act, 1956, whichever
is higher, on the following basis :
II No depreciation is provided for assets sold during the year whereas
pro-rata depreciation is provided on assets acquired during the year.
e) IMPAIRMENT OF ASSTES :
The Company assesses on each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset is less than its carrying amount,
the carrying amount is reduced to its recoverable amount. The amount
so reduced is treated as an impairment loss and is recognised in the
Statement of Profit and Loss, except in case of revalued assets, where
it is first ad- justed against the related balance in fixed assets
revaluation reserve.
If at the balance sheet date, there is an indication that a previously
assessed impair- ment loss no longer exists, the recoverable amount is
reassessed and the asset is carried at the recoverable amount subject
to a maximum of depreciated historical cost.
f) BORROWING COSTS :
Borrowing costs that are directly attributable to the acquisition,
construction/develop- ment of a qualifying asset are capitalized as a
part of cost of such asset. A qualifying asset is one that necessarily
takes substantial period of time to get ready for its in- tended use.
Costs in connection with borrowing of funds to the extent not directly
related to the acquisition of fixed assets are amortised and charged to
the Statement of Profit and Loss, over the tenure of the loan.
g) INVESTMENTS :
Investments are either classified as current or long term based on
Management''s intention at the time of purchases:
I) Current investment are carried at the lower of cost and fair market
value.
II) Long term investments are carried at cost less provisions recorded
to recognize any decline, other than temporary, in the carrying value
of investments.
h) VALUATION OF INVENTORIES :
The weight of the ship purchased is accounted in terms of LDT of the
ship at the time of its construction. Ascertaining of weight of ship at
the time of purchase is not possible due to its nature and size. There
is loss of weight on account of corrosion and other factors during the
usage of the ship and its voyage for about 20 to 25 years.
Inventory at the close of the year is ascertained by reducing the
weight of the scrap sold together with the estimated wastage of the
material.
Stores & Spares are written off at the time of purchase itself and no
inventory is main- tained.
The inventory is valued at cost.
i) RECOGNITION OF INCOME AND EXPENDITURE :
Revenue is recognised only when it can be reliably measured and it is
reasonable to accept ultimate collection. Turnover include sale of
goods, services, sales tax, service tax, excise duty and sales during
trial run period, adjusted for discounts (net) , Value Added Tax and
gain/loss corresponding hedge contracts.
Dividend income is recognized when right to receive is established.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
j) FOREIGN CURRENCY TRANSACTIONS :
Purchase in respect of materials are accounted for on actual payment
basis if the same are made before the year end and/or at the rate of
foreign exchange booking are made. In all other cases, the purchases
and also the liability in respect of said foreign exchange are stated
as converted at the exchnage rate prevalent at the last day of the
financial year.
k) EXCISE DUTY & CENVAT :
Excise duty is chargeable on production but is payable on clearance of
goods. Ac- cordingly excise duty on the goods manufactured by the
company is accounted for at the time of their clearance. Excise duty
payable is adjusted against the Cenvat credits, to the extent it is
available and balance duty is paid and debited to Rev- enue.
l) PROVISION FOR TAXATION :
Tax expense comprises both current and deferred tax.
Current income-tax is recognised at the amount expected to be paid to
the tax authori- ties, using the tax rates and tax laws, enacted or
substantially enacted as at the bal- ance sheet date. Income from
shipping activities is assessed on the basis of deemed tonnage income
of the Company.
Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or
more subsequent periods only in respect of the nonshipping activities
of the Company. The tax effect is calculated on the accumulated timing
differences at the year end based on tax rates and laws, enacted or
substantially enacted as of the balance sheet date. Deferred Tax Assets
are recognised and carried forward only to the extent that there is
reasonable certainty that sufficient future taxable income will be
available against which such Deferred Tax Assets can be realised.
Minimum Alternate Tax (MAT) credit is recognised as an asset only when
and to the extent there is convincing evidence that the company will
pay normal income tax during the specified period.
m) RETIREMENT BENEFITS :
The management is of the opinion that since none of the employees of
the company were in continous service of more than five years, making
provision of gratuity does not arise. The Management is also of the
opinion that the payment of pension Act, is not applicable to the
Company.
n) EARNING PER SHARE :
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares out- standing during the
period is adjusted for events such as bonus issue, bonus element in a
rights issue, share split, and reverse share split (consolidation of
shares) that have changed the number of equity shares outstanding,
without a corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
A provision is recognised when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
report- ing date. These estimates are reviewed at each reporting date
and adjusted to reflect the current best estimates.
A contingent liability is a possible obligation that arises from past
events whose exist- ence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognised
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognised because it cannot be measured reliably. The company does
not recognise a contingent liability but discloses its existence in the
financial statements.
Contingent assets are neither recognised nor disclosed in the financial
statements.
p) CASH & CASH EQUIVALENTS :
For the purpose of presentation in the statement of cash flows, cash
and cash equivalents include cash on hand, cash at bank and short-term
fixed deposits with maturity period not more than three months.
q) MEASUREMENT OF EBITDA :
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/ (loss) from current year
operations. In its measurement, the company does not include deprecia-
tion and amortization expense, finance costs and tax expense.
Mar 31, 2012
A) ACCOUNTING POLICIES
During the year ended 31 March 2012, the revised Schedule VI notified
under the Companies Act 1956, has become applicable to the company, for
preparation and presentation of its financial statements. Adoption of
revised Schedule VI does not materially impact recognition and
measurement principles followed for preparation of financial
statements.
However, it has significant impact on presentation and disclosures made
in the financial statements. The company has also reclassified the
previous year figures in accordance with the requirements applicable
in the current year.
b) USE OF ESTIMATES :
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end
of the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c) TANGIBLE FIXED ASSETS :
Fixed Assets are stated at cost, less accumulated depreciation (other
than 'Freehold Land' where no depreciation is charged) and impairment
loss, if any. Cost comprises the purchase price, including duties and
other non-refundable taxes or levies any directly attributable cost of
bringing the asset to its working condition and indirect costs
specifically attributable to construction of a project or to the
acquisition of a fixed asset.
In the event of the same having been revalued, they are stated at the
revalued figures. Expenditure relating to fixed assets is added to
costs only when the same involved modification work whereby it
increases the life of the assets. Fixed assets acquired from ships
during the course of scrapping operation are capitalised at value
estimated by the management.
d) DEPRECIATION ON TANGIBLE ASSETS :
I Depreciation is provided on the straight line method, pro-rata basis
to the period of use, so as to write off the original cost of the asset
over the remaining estimated useful life (as per technical evaluation
by the Management at the time of acquisition) or at rates prescribed
under the Schedule XIV to the Companies Act, 1956, whichever is higher,
on the following basis :
Tangibale Fixed Assets Method Estimated useful
Factory Shed & Building Straight line Not Estimated
Other Buildings Straight line Not Estimated
Plant & Machinery Straight line 3 to 10 Years
Furniture & Fixtures,
Office Equipments, etc Straight line 5 Years
Vehicle Straight line 4 Years
Computers Straight line 3 Years
Leasehold improvements 25% or the rate based on lease
period, whichever is higher
II No depreciation is provided for assets sold during the year whereas
pro-rata depreciation is provided on assets acquired during the year.
e) IMPAIRMENT OF ASSTES :
The Company assesses on each balance sheet date whether there is any
indication that an asset may be impaired. If any such indication
exists, the Company estimates the recoverable amount of the asset. If
such recoverable amount of the asset is less than its carrying amount,
the carrying amount is reduced to its recoverable amount. The amount
so reduced is treated as an impairment loss and is recognised in the
Statement of Profit and Loss, except in case of revalued assets, where
it is first adjusted against the related balance in fixed assets
revaluation reserve.
If at the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is carried at the recoverable amount subject
to a maximum of depreciated historical cost.
f) BORROWING COSTS :
Borrowing costs that are directly attributable to the acquisition,
construction/ development of a qualifying asset are capitalized as a
part of cost of such asset. A qualifying asset is one that necessarily
takes substantial period of time to get ready for its intended use.
Costs in connection with borrowing of funds to the extent not directly
related to the acquisition of fixed assets are amortised and charged to
the Statement of Profit and Loss, over the tenure of the loan.
g) INVESTMENTS:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
Investment in Partnership Firm as M/s. Jai Maa Durge Associates, as
trade investment which shown at their book value at cost.
h) VALUATION OF INVENTORIES :
The weight of the ship purchased is accounted in terms of LDT of the
ship at the time of its construction. Ascertaining of weight of ship at
the time of purchase is not possible due to its nature and size. There
is loss of weight on account of corrosion and other factors during the
usage of the ship and its voyage for about 20 to 25 years.
Inventory at the close of the year is ascertained by reducing the
weight of the scrap sold together with the estimated wastage of the
material.
Stores & Spares are written off at the time of purchase itself and no
inventory is maintained.
The inventory is valued at cost.
i) RECOGNITION OF INCOME AND EXPENDITURE :
Revenue is recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Turnover include sale of
goods, services, sales tax, service tax, excise duty and sales during
trial run period, adjusted for discounts (net) , Value Added Tax and
gain/loss corresponding hedge contracts.
Dividend income is recognized when right to receive is established.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
j) FOREIGN CURRENCY TRANSACTIONS :
Purchase in respect of raw materials are accounted for on actual
payment basis if the same are made before the year end and/or at the
rate of foreign exchange booking are made. In all other cases, the
purchases and also the liability in respect of said foreign exchange
are stated as converted at the exchange rate prevalent at the last day
of the financial year.
k) EXCISE DUTY & CENVAT :
Excise duty is chargeable on production but is payable on clearance of
goods. Accordingly excise duty on the goods manufactured by the
company is accounted for at the time of their clearance. Excise duty
payable is adjusted against the Cenvat credits, to the extent it is
available and balance duty is paid and debited to Revenue.
I) PROVISION FOR TAXATION :
Tax expense comprises both current and deferred tax.
Current income-tax is recognised at the amount expected to be paid to
the tax authorities, using the tax rates and tax laws, enacted or
substantially enacted as at the balance sheet date. Income from
shipping activities is assessed on the basis of deemed tonnage income
of the Company.
Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods only in
respect of the non-shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date. Deferred Tax Assets are recognised and carried
forward only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
Deferred Tax Assets can be realised.
Minimum Alternate Tax (MAT) credit is recognised as an asset only when
and to the extent there is convincing evidence that the company will
pay normal income tax during the specified period.
m) RETIREMENT BENEFITS:
The management is of the opinion that since none of the employees of
the company were in continuous service of more than five years, making
provision of gratuity does not arise. The Management is also of the
opinion that the payment of pension Act, is not applicable to the
Company.
n) EARNING PER SHARE :
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
o) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS :
A provision is recognized when the company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and - a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
financial statements.
Contingent assets are neither recognised nor disclosed in the financial
statements.
p) CASH & CASH EQUIVALENTS :
For the purpose of presentation in the statement of cash flows, cash
and cash equivalents include cash on hand, cash at bank and short-term
fixed deposits with maturity period not more than three months.
q) MEASUREMENT OF EBITDA :
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The company
measures EBITDA on the basis of profit/(loss) from current year
operations. In its measurement, the company does not include
depreciation and amortization expense, finance costs and tax expense.
Mar 31, 2010
A) General
i) The Accounts are prepared on the historical cost basis and on the
accounting principles of a going concern.
ii) Accounting policies not specifically referred to otherwise are
consistent and in consonance with generally accepted accounting
principles.
iii) All material expenditure and income to the extent considered
payable and receivable respectively are accounted for on accrual basis,
except insurance claims,refunds from statutory authorities are
accounted on cash basis, keeping in view the concept of materiality.
b) Fixed Assets
Fixed assets are stated at cost net of cenvat / value added tax and
includes amounts added on revaluation , less accumulated depreciation
and impairment loss, if any.
Expenditure relating to fixed assets is added to costs only when the
same involved modification work whereby it increased the life of the
assets. Fixed assets acquired from ships during the course of scrapping
operation are capitalised at value estimated by the management.
Depreciation is provided on Straight Line Method at the rates specified
in the Schedule -XIV of the Companies Act,1956.
Depreciation on the revaluation amount has been charged to revaluation
reserve to the extent available and the balance is charged to the
General Reserve.
c) Impairment of Assets
An asset is treated as impared when the carrying cost of assets exceeds
its recoverable value. An impairment loss is charged to the Profit and
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognised in prior accouning period is reversed if
there has been a change in the estiate of recoverable amount.
d) Inventories
The weight of the ship purchased is accounted in terms of LDT of the
ship at the time of its construction. Ascertaining of weight of ship at
the time of purchase is not possible due to its nature and size. There
is loss of weight on account of corrosion and other factors during the
usage of the ship and its voyage for about 20 to 25 years.
Inventory at the close of the year is ascertained by reducing the
weight of the scrap sold together with the estimated wastage of the
material.
Stores & Spares are written off at the time of purchase itself and no
inventory is maintained. The stock of inventory is valued at cost.
e) Revenue Recongnition
Revenue is recognised only when it can be reliably measured and it is
reasonable to expect ultimate collection. Turnover include sale of
goods, services , sales tax, service tax, excise duty and sales during
trial run period,adjusted for discounts (net) , Value Added Tax(VAT)
and gain /loss on corresponding hedge contracts. Dividend income is
recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
f) Investment
The investment is stated at cost. Provisions for increase/(decrease) in
the market value of the quoted investment has been made in the
accounts. However, value of unquoted investments have been shown at
cost , market value being unascertainable.
g) Foreign Currency Transaction
Purchase in respect of raw materials are accounted for on actual
payment basis if the same are made before the year end and/or at the
rate of foreign exchange booking are made. In all other cases, the
purchases and also the liability in respect of said foreign exchange
are stated as converted at the exchnage rate prevalent at the last day
of the financial year.
h) Excise duty and Cenvat
Excise duty is chargeable on production but is payable on clearance of
goods. Accordingly excise duty on the goods manufactured by the company
is accounted for at the time of their clearance. Excise duty payable is
adjusted against the Cenvat credits, to the extent it is available and
balance duty is paid and debited to Revenue.
i) Provision for Taxation
Provision for taxation are being made after considering applicable
legal provisoions including claiming of reliefs, exemptions and
deductions under the Income Tax Act, 1961.
j) Retirement Benefits
The management is of the opinion that since none of the employees of
the Company were in continuous service of more than five years,
Provisions of Gratuity Act is not applicable to the Company. The
Management is also of the opinion that the payment of Pension Act, is
also not applicable to the Company.
k) Deferred Taxation
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income tax Act 1961.
Deffered tax resulting from Ãtiming differenceà between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date.
Deffered tax assets is recongised and carreid forward only to the
extent that there is a virtual certainty that the asset will be
realised in future.