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Accounting Policies of Mercator Ltd. Company

Mar 31, 2016

CORPORATE INFORMATION

Mercator Limited was incorporated on 24th November 1983 as private limited company with name as Mercator Lines Private Limited.
It was converted into limited company vide ROC approval dated 12th April 1984. The name was changed to Mercator Limited vide ROC
approval dated 22nd November 2011. The Company has directly and/or through its subsidiaries diversified business verticals viz.
Shipping (tankers, Gas Carriers and dry bulkers), Dredging, Oil and Gas (EPCIC and E & P), Coal (Mining, Procurement and
Logistics).

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation

The financial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles
(GAAP) under the historical cost convention, on the accrual basis. GAAP comprises accounting standards notified by the Central
Government of India under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, other
pronouncements of Institute of Chartered Accountants of India (ICAI), Accounting Standard 30, Financial Instruments: Recognition
and Measurement issued by the ICAI to the extent it does not contradict with any other accounting standard referred to above,
other pronouncements of ICAI and other relevant provisions of the Companies Act, 2013 and guidelines issued by Securities and
Exchange Board of India.

All assets and liabilities are classified as current or non- current as per the company''s normal operating cycle and other
criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition
of assets for processing and their realization in cash and cash equivalents, 12 months has been considered by the company for the
purpose of current – noncurrent classification of assets and liabilities.

The Financial Statements are presented in Indian rupees rounded off to the nearest rupees in lakhs.

1.2 Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements
and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in
the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates
and underlying assumptions are reviewed on a going concern basis. Any revision to accounting estimates is recognized
prospectively in the current and future periods.

1.3 Tangible fixed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost

includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related
to the acquisition of the asset.

b) Individual fixed assets costing up to Rs, 25,000 are not capitalized but fully written off to the statement of profit and loss
in the year of purchase.

c) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans
relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA)
dated 31st March 2009 / 29th December 2011, adjusted to carrying cost of the respective fixed assets.

d) Depreciation on fixed assets is provided to the extent of depreciable amount on the Written Down value (WDV) method, except in
case of Vessels, where depreciation is provided on Straight Line Method (SLM). Depreciation is provided based on useful life of
the assets as prescribed in Schedule II of the Companies Act, 2013 except in respect of Vessels, where useful life is considered
as under based on technical evaluation:

Tankers, Dry Bulk carriers, Cutters,

Dredgers - 25 years

Gas Carriers - 30 years

e) Depreciation on additions/disposals during the year is provided on pro-rata basis.

f) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the
initial period of lease.

g) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net
realizable value.

1.4 Impairment of assets

The carrying amounts of all assets are reviewed at each balance sheet date, if there is any indication of impairment based on
internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this
estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the
assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account,
if available. If no such transactions are identified, and appropriate valuation model is used.

The Impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable
amount.

1.5 Capital Work in Progress

All expenditure, including borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this
head till the vessel is put to commercial use.


1.6 Revenue Recognition

a) Freight Income

Income on account of freight is recognized in all cases where loading of the cargo is completed before the close of the year. All
corresponding direct expenses are also provided.

b) Cargo Handling

Where loading of the cargo is not completed before the close of the year, revenue is not recognized and the corresponding
expenses are also carried forward to the next year.

c) Charter Hire Income

Income from charter hire and demurrage earnings is recognized on accrual basis as per the terms of agreement.

d) Dividend Income

Dividend on investments is recognized when the right to receive the same is established by the balance sheet date.

e) Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest
rate.

f) Insurance Claims

Claims including insurance claims are accounted when there is a reasonable certainty of the reliability of the claim amount.

g) Income from other services is accounted on accrual basis as per the terms of the relevant agreement.

1.7 Incomplete Voyages

Incomplete voyages represent freight income and direct operating expenses on voyages which are not complete as at the balance
sheet date.

1.8 Foreign exchange transactions and balances

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that
date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary items are, following option given by
notification of MCA dated 31st March 2009 / 29th December 2011, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the
cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a ''Foreign Currency Monetary Item Translation

Difference Account''. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities
or 31st March 2020, whichever is earlier.

d) Differences in translation of other monetary items and realized gains and losses on foreign currency transactions are
recognized in the Statement of Profit and Loss.

e) Exchange differences arising on translation of long term foreign currency loans given to entities classified as non integral
foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said
reserve is transferred to the Statement of Profit and Loss.

1.9 Derivative financial instruments and Hedging

The company classifies foreign currency derivatives in respect of the identified transactions at the inception of each contract
meeting the hedging criterion, as cash flow hedges. Changes in the fair value of derivatives classified as cash flow hedges are
recognized directly in reserves and surplus (under the head "Hedging Reserve") and are reclassified into the Statement of Profit
and Loss upon occurrence of the hedged transaction.

If the hedging instrument no longer meets the criteria for hedge accounting, gets expired or is sold, terminated or exercised
before the forecasted transaction, the hedge accounting on such transaction is discontinued prospectively. The cumulative gain or
loss previously recognized in hedging reserve continues to remain there until the forecasted transaction occurs. If the
forecasted transaction is no longer expected to occur, the balance in hedging reserve is recognized immediately in the Statement
of Profit and Loss.

In respect of other derivative transactions which do not meet the hedging criteria, the changes in their value are recognized in
the statement of profit and loss.

1.10 Employee Benefits

a) Short – term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee
benefits. Benefits such as salaries, wages, performance incentives, etc. are recognized at actual amounts due in the period in
which the employee renders the related service.

b) Post – employment benefits

i. Defined Contribution Plans

Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defined Benefit Plans

The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation
carried out as at the Balance Sheet date. Actuarial gains and losses are recognized immediately in the Statement of Profit and
Loss.


c) Other Long – term employee benefits

Other Long – term employee benefit viz. leave encashment is recognized as an expense in the Statement of Profit and Loss as it
accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at
the balance sheet date. The actuarial gains and losses in respect of such benefit are charged to the Statement of Profit and
Loss.

1.11 Operating lease

Leases where the less or effectively retains substantially all the risks and benefits of the ownership of the lease term are
classified as operating lease.

a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognized as expense
in the Statement of Profit and Loss over the lease term.

b) In respect of operating lease agreement entered into by the Company as a less or, the initial direct costs are recognized as
expenses in the year in which they are incurred.

1.12 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realizable Value ascertained on First in First out basis.

1.13 Investments

a) Investments are classified into non-current and current investments.

b) Investments which are readily realizable and intended to be held for not more than twelve months are classified as current
investments. All other investments are classified as non-current investments.

c) Non-current investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value
of such investments is made to recognize a decline, other than of a temporary nature.

d) Current investments are stated at cost of acquisition including incidental / related expenses or at fair value as at 31st
March 2016, whichever is less and the resultant decline, if any, is charged to revenue.

1.14 Borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.
Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalized as part
of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the
period they occur.

1.15 Provision for Taxation

Tax expense comprises both current and deferred tax.

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from
shipping activities is assessed on the basis of deemed tonnage income of the company under section 115VG(3) of Chapter XII-G of
the Income Tax Act, 1961.

b) Deferred income tax is recognized 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 yearend based on tax rates and laws, enacted
or substantially enacted as of the balance sheet date.

c) 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 during the specified period.

1.16 Earnings per share

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity
shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year
and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity
shares.

1.17 Provisions and Contingent Liabilities

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably
estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their
existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control
of the Company.

1.18 Premium on redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account

1.19 Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign
currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.

1.20 Cash Flow Statement

Cash flows are reported using the indirect method, where by net 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 are
segregated.


Mar 31, 2015

1. Basis of Preparation

The financial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, other pronouncements of Institute of Chartered Accountants of India (ICAI), Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the ICAI to the extent it does not contradict with any other accounting standard referred to above, other pronouncements of ICAI and other relevant provisions of the Companies Act, 2013 and guidelines issued by Securities and Exchange Board of India.

All assets and liabilities are classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, 12 months has been considered by the company for the purpose of current - noncurrent classification of assets and liabilities.

The Financial Statements are presented in Indian rupees rounded off to the nearest rupees in lakhs.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going concern basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

3. Tangible fixed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Individual fixed assets costing up to Rs. 25,000 are not capitalized but fully written off to the statement of profit and loss in the year of purchase.

c) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated 31 March, 2009 / 29 December, 2011, adjusted to carrying cost of the respective fixed assets.

d) Depreciation on fixed assets is provided to the extent of depreciable amount on the Written Down value (WDV) method, except in case of Vessels, where depreciation is provided on Straight Line Method (SLM). Depreciation is provided based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 except in respect of Vessels, where useful life is considered as under based on technical evaluation :

Tankers, Dry Bulk carriers, Cutters, Dredgers - 25 years Gas Carriers - 30 years

e) Depreciation on additions/disposals during the year is provided on pro-rata basis.

f) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the initial period of lease.

g) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net realisable value.

4. Impairment of assets

The carrying amounts of all assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/ external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identified, and appropriate valuation model is used.

The Impairment loss recognized in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.

5. Capital Work in Progress

All expenditure, including borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

6. Revenue Recognition

a) Freight Income

Income on account of freight is recognized in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Cargo Handling

Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are also carried forward to the next year.

c) Charter Hire Income

Income from charter hire and demurrage earnings is recognized on accrual basis as per the terms of agreement.

d) Dividend Income

Dividend on investments is recognised when the right to receive the same is established by the balance sheet date.

e) Interest Income

Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

f) Insurance Claims

Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

g) Income from other services is accounted on accrual basis as per the terms of the relevant agreement.

7. Incomplete Voyages

Incomplete voyages represent freight income and direct operating expenses on voyages which are not complete as at the balance sheet date.

8. Foreign exchange transactions and balances

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary items are, following option given by notification of MCA dated 31st March 2009/ 29th December 2011, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a ''Foreign Currency Monetary Item Translation Difference Account''. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or 31st March 2020, whichever is earlier.

d) Differences in translation of other monetary items and realised gains and losses on foreign currency transactions are recognised in the Statement of Profit and Loss.

e) Exchange differences arising on translation of long term foreign currency loans given to entities classified as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the Statement of Profit and Loss.

9. Derivative financial instruments and Hedging

The company classifies foreign currency derivatives in respect of the identified transactions at the inception of each contract meeting the hedging criterion, as cash flow hedges. Changes in the fair value of derivatives classified as cash flow hedges are recognized directly in reserves and surplus (under the head "Hedging Reserve") and are reclassified into the Statement of Profit and Loss upon occurrence of the hedged transaction.

If the hedging instrument no longer meets the criteria for hedge accounting, gets expired or is sold, terminated or exercised before the forecasted transaction, the hedge accounting on such transaction is discontinued prospectively. The cumulative gain or loss previously recognized in hedging reserve continues to remain there until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the balance in hedging reserve is recognized immediately in the Statement of Profit and Loss.

In respect of other derivative transactions which do not meet the hedging criteria, the changes in their value are recognized in the statement of profit and loss.

10. Employee Benefits

a) Short - term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post - employment benefits

i. Defined Contribution Plans Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defined Benefit Plans

The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the Balance Sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

c) Other Long - term employee benefits

Other Long - term employee benefit viz. leave encashment is recognised as an expense in the Statement of Profit and Loss as it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such benefit are charged to the Statement of Profit and Loss.

11. Operating lease

Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease term are classified as operating lease.

a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the Statement of Profit and Loss over the lease term.

b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

12. Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.

13. Investments

a) Investments are classified into non-current and current investments.

b) Investments which are readily realizable and intended to be held for not more than twelve months are classified as current investments. All other investments are classified as non-current investments.

c) Non-current investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

d) Current investments are stated at cost of acquisition including incidental / related expenses or at fair value as at 31st March 2015, whichever is less and the resultant decline, if any, is charged to revenue.

14. Borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalized as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

15. Provision for Taxation

Tax expense comprises both current and deferred tax.

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

b) Deferred income tax is recognized 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.

c) 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 during the specified period.

16. Earning per share

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

17. Provisions and Contingent Liabilities

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

18. Premium on redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account

19. Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.

20. Cash Flow Statement

Cash flows are reported using the indirect method, where by net 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 are segregated.


Mar 31, 2014

1.1 Basis of Preparation

The financial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis. GAAP comprises accounting standards notified by the Central Government of India under Section 211(3C) of the Companies Act, 1956 read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013, Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict with any other accounting standard referred to above, other pronouncements of Institute of Chartered Accountants of India and other relevant provisions of the Companies Act, 1956 and guidelines issued by Securities and Exchange Board of India.

1.2 Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the financial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going basis. Any revision to accounting estimates is recognised prospectively in the current and future periods.

1.3 Tangible Fixed Assets and Depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Individual fixed assets costing up to Rs. 25,000 are not capitalised but fully written off to the statement of profit and loss in the year of purchase.

c) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated March 31, 2009/December 29, 2011, adjusted to carrying cost of the respective fixed assets.

d) Depreciation on vessels is provided on Straight Line Method so as to write off the original cost as reduced by the estimated scrap value over the balance useful life of the vessels or the rates as prescribed under the Schedule XIV of the Companies Act, 1956, whichever are higher. The rate of depreciation ranges from 5% to 11%.

e) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

f) Depreciation on additions/disposals during the year is provided on pro-rata basis.

g) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the initial period of lease.

h) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net realisable value.

1.4 Impairment of Assets

The carrying amounts of all assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identified, and appropriate valuation model is used.

1.5 Capital Work in Progress

All expenditure, including borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

1.6 Revenue Recognition

a) Income on account of freight is recognised in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are also carried forward to the next year.

c) Income from charter hire and demurrage earnings is recognised on accrual basis as per the terms of agreement.

d) income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established by the balance sheet date.

f) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

g) Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

1.7 Incomplete Voyages

Incomplete voyages represent freight income and direct operating expenses on voyages which are not complete as at the balance sheet date.

1.8 Foreign Exchange Transactions and Balances

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary items are, following option given by notification of MCA dated March 31, 2009/ December 29, 2011, treated in the following manner:

i. in respect of borrowings relating to or utilised for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a ''Foreign Currency Monetary Item Translation Difference Account''. The amount so accumulated in this account is amortised over the balance period of such assets / liabilities or March 31, 2020, whichever is earlier.

d) Differences in translation of other monetary items and realised gains and losses on foreign currency transactions are recognised in the statement of profit and loss.

e) Exchange differences arising on translation of long term foreign currency loans given to entities classified as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the statement of profit and loss.

1.9 Derivative Financial Instruments and Hedging

The Company classifies foreign currency derivatives in respect of the identified transactions at the inception of each contract meeting the hedging criterion, as cash flow hedges. Changes in the fair value of derivatives classified as cash flow hedges are recognised directly in reserves and surplus (under the head "Hedging Reserve") and are reclassified into the statement of profit and loss upon occurrence of the hedged transaction.

If the hedging instrument no longer meets the criteria for hedge accounting, gets expired or is sold, terminated or exercised before the forecasted transaction, the hedge accounting on such transaction is discontinued prospectively. The cumulative gain or loss previously recognised in hedging reserve continues to remain there until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the balance in hedging reserve is recognised immediately in the statement of profit and loss.

In respect of other derivative transactions which do not meet the hedging criteria, the changes in their value are recognised in the statement of profit and loss.

1.10 Employee Benefits

a) Short - Term Employee Benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post - Employment Benefits

i. Defined Contribution Plans

Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defined Benefit Plans

The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profit and loss.

c) Other Long-term Employee Benefits

i. Other Long-term employee benefit viz. leave encashment is recognised as an expense in the statement of profit and loss as it accrues. The Company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such benefit are charged to the statement of profit and loss.

1.11 Operating Lease

a) Leases where the lessor effectively retains substantially all the risks and benefits of the ownership of the lease term are classified as operating lease.

b) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the statement of profit and loss over the lease term.

c) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

1.12 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.

1.13 Investments

a) Investments are classified into long-term and current investments.

b) Investments which are readily realisable and intended to be held for not more than 12 months are classified as current investments. All other investments are classified as long term investments.

c) Long-term investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

d) Current investments are stated at cost of acquisition including incidental / related expenses or at fair value as at March 31, 2014, whichever is less and the resultant decline, if any, is charged to revenue.

1.14 Borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalised as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

1.15 Provision for Taxation

Tax Expense comprises both Current and Deferred Tax.

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the Company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

b) 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.

c) 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.

1.16 Earning Per Share

The basic earnings per share is computed by dividing the net profit after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profit after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.17 Provisions and Contingent Liabilities

Provisions are recognised in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

1.18 Premium on Redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account

1.19 Cash and Cash Equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.


Mar 31, 2013

1.1 Basis of Preparation

The fi nancial statements have been prepared and presented in accordance with Indian Generally Accepted Accounting Principles (GAAP) under the historical cost convention, on the accrual basis. GAAP comprises accounting standards notifi ed by the Central Government of India under Section 211(3C) of the Companies Act, 1956, Accounting Standard 30, Financial Instruments: Recognition and Measurement issued by the Institute of Chartered Accountants of India to the extent it does not contradict with any other accounting standard referred to Section 211(3C) of the Act, other pronouncements of Institute of Chartered Accountants of India and other relevant provisions of the Companies Act, 1956 and guidelines issued by Securities and Exchange Board of India.

1.2 Use of Estimates

The preparation of fi nancial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of the fi nancial statements and reported amounts of revenues and expenses during the reporting period. The management believes that the estimates used in the preparation of fi nancial statements are prudent and reasonable. Actual results could differ from these estimates. Estimates and underlying assumptions are reviewed on a going basis. Any revision to accounting estimates is recognized prospectively in the current and future periods.

1.3 Tangible fi xed assets and depreciation

a) Fixed assets are stated at cost less accumulated depreciation and impairment losses, if any. Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

b) Individual fi xed assets costing up to Rs. 25,000 are not capitalized but fully written off to the statement of profi t and loss in the year of purchase.

c) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency loans relating to acquisition of depreciable assets are, following option given by notifi cation of Ministry of Corporate Affairs (MCA) dated 31st March 2009/29th December 2011, adjusted to carrying cost of the respective fi xed assets.

d) Depreciation on vessels is provided on Straight Line Method so as to write off the original cost as reduced by the estimated scrap value over the balance useful life of the vessels or the rates as prescribed under the Schedule XIV of the Companies Act, 1956, whichever are higher. The rate of depreciation ranges from 5% to 7%.

e) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

f) Depreciation on additions/disposals during the year is provided on pro-rata basis.

g) Depreciation on furniture, fi xtures and electrical fi ttings installed at offi ce premises taken on lease is provided over the initial period of lease.

h) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net releasable value.

1.4 Impairment of assets

The carrying amounts of all assets are reviewed at each balance sheet date, if there is any indication of impairment based on internal/external factors, where they are recorded in excess of their recoverable amounts, and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use determined asset wise. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions are identifi ed, and appropriate valuation model is used.

1.5 Capital Work in Progress

All expenditure, including borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

1.6 Revenue Recognition

a) Income on account of freight is recognized in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are also carried forward to the next year.

c) Income from charter hire and demurrage earnings is recognized on accrual basis as per the terms of agreement.

d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established by the balance sheet date.

f) Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate.

g) Claims including insurance claims are accounted when there is a reasonable certainty of the realisability of the claim amount.

1.7 Incomplete Voyages

Incomplete voyages represent freight income and direct operating expenses on voyages which are not complete as at the balance sheet date.

1.8 Foreign exchange transactions and balances

a) Monetary transactions in foreign currency are recorded at standard exchange rates determined monthly.

b) Monetary items denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

c) Exchange differences arising on translation of Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notifi cation of MCA dated 31st March 2009/ 29th December 2011, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a ''Foreign Currency Monetary Item Translation Difference Account''. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or 31st March 2020, whichever is earlier.

d) Differences in translation of other monetary items and realised gains and losses on foreign currency transactions are recognised in the statement of profi t and loss.

e) Exchange differences arising on translation of long term foreign currency loans given to entities classifi ed as non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the said reserve is transferred to the statement of profi t and loss.

1.9 Derivative fi nancial instruments and Hedging

The company classifi es foreign currency derivatives in respect of the identifi ed transactions at the inception of each contract meeting the hedging criterion, as cash fl ow hedges. Changes in the fair value of derivatives classifi ed as cash fl ow hedges are recognized directly in reserves and surplus (under the head "Hedging Reserve") and are reclassifi ed into the statement of profi t and loss upon occurrence of the hedged transaction.

If the hedging instrument no longer meets the criteria for hedge accounting, gets expired or is sold, terminated or exercised before the forecasted transaction, the hedge accounting on such transaction is discontinued prospectively. The cumulative gain or loss previously recognized in hedging reserve continues to remain there until the forecasted transaction occurs. If the forecasted transaction is no longer expected to occur, the balance in hedging reserve is recognized immediately in the statement of profi t and loss.

In respect of other derivative transactions which do not meet the hedging criteria, the changes in their value are recognized in the statement of profi t and loss.

1.10 Employee Benefi ts

a) Short – term employee benefi ts

All employee benefi ts payable wholly within twelve months of rendering the service are classifi ed as short term employee benefi ts. Benefi ts such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post – employment benefi ts

i. Defi ned Contribution Plans

Payments made to defi ned contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defi ned Benefi t Plans

The cost of providing benefi t i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the statement of profi t and loss.

c) Other Long – term employee benefi ts

i. Other Long – term employee benefi t viz. leave encashment is recognised as an expense in the statement of profi t and loss as it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such benefi t are charged to the statement of profi t and loss.

1.11 Operating lease

a) Leases where the lessor effectively retains substantially all the risks and benefi ts of the ownership of the lease term are classifi ed as operating lease.

b) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the statement of profi t and loss over the lease term.

c) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

1.12 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.

1.13 Investments

a) Investments are classifi ed into long-term and current investments.

b) Investments which are readily realizable and intended to be held for not more than 12 months are classifi ed as current investments. All other investments are classifi ed as long term investments.

c) Long-term investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

d) Current investments are stated at cost of acquisition including incidental / related expenses or at fair value as at March 31, 2013, whichever is less and the resultant decline, if any, is charged to revenue.

1.14 Borrowing Costs

Borrowing costs include interest, ancillary costs, incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs that are directly attributable to the acquisition/construction of the qualifying assets are capitalized as part of the cost of the asset, up to the date of acquisition/completion of construction. All other borrowing costs are expenses in the period they occur.

1.15 Provision for Taxation

Tax expense comprises both current and deferred tax.

a) Provision for current income tax is made on the basis of the assessable income under the Income tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the company under section 115VG(3) of Chapter XII-G of the Income Tax Act, 1961.

b) Deferred income tax is recognized 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.

c) 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 during the specifi ed period.

1.16 Earning per share

The basic earnings per share is computed by dividing the net profi t after tax for year by weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, net profi t after tax for the year and weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.

1.17 Provisions and Contingent Liabilities

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confi rmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

1.18 Premium on redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account

1.19 Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash fl ow statement comprise cash in hand and at bank in current and foreign currency accounts. Term deposits having maturities of three months or less are considered as cash equivalents.


Mar 31, 2012

1.1 Basis of Accounting

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act, 1956.

1.2 Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable.

1.3 Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation.

b) Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till the port of first loading are included in the cost of the respective vessels.

d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency liabilities relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated 29th December 2011,adjusted to carrying cost of the respective fixed assets.

e) Individual fixed assets costing up to Rs. 25,000 are fully written off.

1.4 Depreciation

a) Depreciation on all the vessels is computed on Straight Line Method so as to write off the original cost as reduced by the expected/estimated scrap value over the balance useful life of the vessels or the rates as prescribed under the Schedule XIV of the Companies Act, 1956, whichever are higher. The said higher rate ranges from 5% to 6% of the original cost of the vessel.

b) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

c) On additions made to the existing vessels depreciation is provided for the full year over the remaining useful life of the ships.

d) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the initial period of lease.

1.5 Capital Work in Progress

All expenditure, including borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

1.6 Retirement and Disposal of Ships

a) Profits on sale of vessels are accounted for on completion of sale thereof.

b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net realisable value.

1.7 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.

1.8 Investments

a) Investments are classified into Long Term and Current investments.

b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at 31st March 2012, whichever is less and the resultant decline, if any, is charged to revenue.

d) Investment in shares of subsidiaries outside India is stated at cost by converting at the rate of exchange at the time of their acquisition.

1.9 Incomplete Voyages

Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete as at the Balance sheet date.

1.10 Borrowing Costs

Borrowing costs incurred for the acquisition of vessels are capitalized till first loading of cargo, only if the time gap between date of Memorandum of Agreement and "Date when vessel is ready for use" is more than three months.

Incidental expenses related to borrowing are amortized over the term of the said borrowings.

1.11 Revenue Recognition

a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are carried forward to the next accounting year.

c) Income from charter hire and demurrage are recognised on accrual basis.

d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established by the balance sheet date.

f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of the claim amount.

1.12 Foreign Exchange Transactions

a) Monetary Current assets and liabilities denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dated 29th December 2011, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a 'Foreign Currency Monetary Item Translation Difference Account'. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or 31st March 2020, whichever is earlier.

c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign currency transactions are recognised in the Statement of Profit and Loss.

d) Exchange differences arising on long term foreign currency loans given to non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the reserve is transferred to statement of profit and loss.

1.13 Derivative instruments and Hedge Accounting

Pursuant to ICAI Announcement "Accounting for Derivatives" on the early adoption of Accounting Standard AS 30 "Financial Instruments: Recognition and Measurement", the company has adopted the Standard, to the extent that the adoption does not conflict with existing mandatory accounting standards and other authoritative pronouncements, Company Law and other regulatory requirements.

The company classifies foreign currency derivatives in respect of the identified transactions at the inception of each contract meeting the hedging criterion, as cash flow hedges. Changes in the fair value of derivatives classified as cash flow hedges are recognized directly in reserves and surplus (under the head "Hedging Reserves") and are reclassified into the statement of profit and loss upon occurrence of the hedged transaction.

In respect of other derivative transactions which do not meet the hedging criteria, the changes in their value are recognized in the Statement of Profit and Loss.

1.14 Employees Benefits

a) Short – term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post – employment benefits

i. Defined Contribution Plans

Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defined Benefit Plans

The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

c) Other Long – term employee benefits

i. Other Long – term employee benefit viz. leave encashment is recognised as an expense in the statement of profit and loss as and when it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such benefit are charged to the statement of profit and loss.

1.15 Lease Accounting

a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the statement of profit and loss over the lease term.

b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

1.16 Earning per share:

The company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard – 20. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The diluted EPS have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

1.17 Provision for Taxation :

a) The company has opted for the Tonnage Tax scheme and provision for tax has been accordingly made under the relevant provisions of the Income Tax Act, 1961.

b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per other provisions of the Income Tax Act, 1961.

c) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than that covered under Tonnage Tax scheme is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to reverse in future.

1.18 Impairment of assets

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. Impairment loss, if any, is recognized in the year in which impairment takes place.

1.19 Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

1.20 Premium on redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account.

1.21 Cash and Cash equivalents

Cash and cash equivalents for the purpose of the cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.


Mar 31, 2011

1. Basis of Accounting

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable.

3. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation.

b) Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till the port of frst loading are included in the cost of the respective vessels.

d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency liabilities relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dated. March 31, 2009, adjusted to carrying cost of the respective fxed assets.

e) Individual fxed assets costing up to Rs. 25,000 are fully written off.

4. Depreciation

a) Depreciation on all the vessels is computed on Straight Line Method so as to write off the original cost as reduced by the expected/estimated scrap value over the balance useful life of the vessels or the rates as prescribed under the Schedule XIV of the Companies Act, 1956, whichever are higher. The said higher rate ranges from 5% to 9% of the original cost of the vessel.

b) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

c) On additions made to the existing vessels depreciation is provided for the full year over the remaining useful life of the ships.

d) Depreciation on furniture, fxtures and electrical fttings installed at offce premises taken on lease is provided over the initial period of lease.

5. Capital work in Progress

All expenditure, including advances given to contractors and borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

6. Retirement and Disposal of Ships

a) profits on sale of vessels are accounted for on completion of sale thereof.

b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net releasable value.

7. Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis.

8. Investments

a) Investments are classified into Long Term and Current investments.

b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at March 31 2011, whichever is less and the resultant decline, if any, is charged to revenue.

d) Investment in shares of subsidiaries outside India is stated at cost by converting at the rate of exchange at the time of their acquisition.

9. Incomplete voyages

Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete as at the Balance Sheet date.

10. Borrowing Costs

Borrowing costs incurred for the acquisition of vessels are capitalized till frst loading of cargo, only if the time gap between date of Memorandum of Agreement and "Date when vessel is ready for use" is more than three months.

Incidental expenses related to borrowing are amortized over the term of the said borrowings.

11. Revenue Recognition

a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are carried forward to the next accounting year.

c) Income from charter hire and demurrage are recognised on accrual basis.

d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established.

f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of the claim amount.

12. Foreign Exchange Transactions

a) Monetary Current assets and liabilities denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dated March 31, 2009, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a 'Foreign Currency Monetary Item Translation Difference Account'. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or March 31, 2011, whichever is earlier.

c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign currency transactions are recognised in the profit and Loss Account.

d) Exchange differences arising on long term foreign currency loans given to non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the reserve is transferred to profit and loss account.

e) Contracts in the nature of foreign currency swaps, are converted at the exchange rate prevailing as on March 31, 2011 and the profits or loss thereon are charged to the profit and Loss account.

f) Differences on account of swap contracts for interest payable in foreign currency are accounted on accrual basis and the profit or loss thereon charged to the profit and Loss account.

13. Employees Benefts

a) Short – term employee benefts

All employee benefts payable wholly within twelve months of rendering the service are classified as short term employee benefts. Benefts such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post – employment benefts

i. Defned Contribution Plans

Payments made to defned contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defned Beneft Plans

The cost of providing beneft i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the profit and Loss Account.

c) Other Long – term employee benefts

i. Other Long – term employee beneft viz. leave encashment is recognised as an expense in the profit and loss account as and when it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The actuarial gains and losses in respect of such beneft are charged to the profit and loss account.

14. Lease Accounting

a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the profit and loss account over the lease term.

b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

15. Earning per share:

The company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard – 20. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The diluted EPS have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

16. Provision for Taxation :

a) The company has opted for the Tonnage Tax scheme and provision for tax has been accordingly made under the relevant provisions of the Income Tax Act, 1961.

b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per other provisions of the Income Tax Act, 1961.

c) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than that covered under Tonnage Tax scheme is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to reverse in future.

17. Impairment of assets

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. Impairment loss, if any, is recognized in the year in which impairment takes place.

18. Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confrmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.

19. Premium on redemption of Bonds / Debentures

Premium on redemption of bonds / debentures is adjusted against Securities Premium Account.


Mar 31, 2010

1.Basis of Accounting

The financial statements are prepared under the historical cost convention, on the accrual basis of accounting and in conformity with Generally Accepted Accounting Principles in India, Accounting Standards as notified by the Companies (Accounting Standards) Rules, 2006 and the other relevant provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with Generally Accepted Accounting Principles requires the management to make estimates and assumptions that affect the reported balances of assets and liabilities as of the date of the financial statements and reported amounts of income and expenses during the period. The management believes that the estimates used in the preparation of financial statements are prudent and reasonable.

3. Fixed Assets

a) Fixed assets are stated at cost less accumulated depreciation.

b) Cost includes cost of acquisition or construction including attributable borrowing cost, duties and other incidental expenses related to the acquisition of the asset.

c) Operating costs and other incidental costs including initial stores and spares of newly acquired vessels till the port of first loading are included in the cost of the respective vessels.

d) Exchange differences arising on repayment of foreign currency loans and year end translation of foreign currency liabilities relating to acquisition of depreciable assets are, following option given by notification of Ministry of Corporate Affairs (MCA) dt. 31st March 2009, adjusted to carrying cost of the respective fixed assets.

e) Individual fixed assets costing up to Rs. 25,000 are fully written off.

4. Depreciation

a) Depreciation on all the vessels is computed on Straight Line Method so as to write off the original cost as reduced by the expected/estimated scrap value over the balance useful life of the vessels or the rates as prescribed under the Schedule XIV of the Companies Act, 1956, whichever are higher. The said higher rate ranges from 5% to 9% of the original cost of the vessel.

b) Depreciation on all assets other than vessels is computed on the Written Down Value method in the manner and at the rates prescribed under schedule XIV of the Companies Act, 1956.

c) On additions made to the existing vessels depreciation is provided for the full year over the remaining useful life of the ships.

d) Depreciation on furniture, fixtures and electrical fittings installed at office premises taken on lease is provided over the initial period of lease.

5. Capital Work in Progress

All expenditure, including advances given to contractors and borrowings cost incurred during the vessel acquisition period, are accumulated and shown under this head till the vessel is put to commercial use.

6. Retirement and Disposal of Ships

a) Profits on sale of vessels are accounted for on completion of sale thereof.

b) Assets which are retired from active use and are held for disposal are stated at the lower of their net book value or net releasable value.

7. Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable value ascertained on First in First out basis. 8- Investments

a) Investments are classified into Long Term and Current investments.

b) Long Term Investments are stated at cost of acquisition and related expenses. Provision for diminution, if any, in the value of such investments is made to recognise a decline, other than of a temporary nature.

c) Current Investments are stated at cost of acquisition including incidental / related expenses or at fair value as at 31st March 2010, whichever is less and the resultant decline, if any, is charged to revenue.

d) Investment in shares of subsidiaries outside India is stated at cost by converting at the rate of exchange at the time of their acquisition.

9. Incomplete Voyages

Incomplete voyages represent freight received and direct operating expenses on voyages which are not complete as at the Balance sheet date.

10. Borrowing Costs

Borrowing costs incurred for the acquisition of vesseJs are capitalized till first loading of cargo, only if the time gap between date of Memorandum of Agreement and "Date when vessel is ready for use" is more than three months.

Incidental expenses related to borrowing are amortized over the term of the said borrowings.

11. Revenue Recognition

a) Income on account of freight earnings is recognised in all cases where loading of the cargo is completed before the close of the year. All corresponding direct expenses are also provided.

b) Where loading of the cargo is not completed before the close of the year, revenue is not recognised and the corresponding expenses are carried forward to the next accounting year.

c) Income from charter hire and demurrage are recognised on accrual basis.

d) Income from services is accounted on accrual basis as per the terms of the relevant agreement.

e) Dividend on investments is recognised when the right to receive the same is established.

f) Insurance claims are accounted on accrual basis when there is a reasonable certainty of the realisability of the claim amount.

12. Foreign Exchange Transactions

a) Monetary Current assets and liabilities denominated in foreign currency outstanding at the end of the year are valued at the rates prevalent on that date.

b) Exchange differences arising on Long Term Foreign Currency Monetary (LTFCM) items are, following option given by notification of MCA dt. 31st March 2009, treated in the following manner:

i. In respect of borrowings relating to or utilized for acquisition of depreciable capital assets, the same is adjusted to the cost of the relevant capital asset and depreciated over the balance life of the said capital asset.

ii. In other cases, the same is accumulated in a Foreign Currency Monetary Item Translation Difference Account. The amount so accumulated in this account is amortized over the balance period of such assets / liabilities or 31st March 2011, whichever is earlier.

c) Differences in translation of other monetary assets and liabilities and realised gains and losses on foreign currency transactions are recognised in the Profit and Loss Account.

d) Exchange differences arising on long term foreign currency loans given to non integral foreign operations is accumulated in Foreign Currency Fluctuation Reserve. On disposal of investment, the balance in the reserve is transferred to profit and loss account.

e) Contracts in the nature of foreign currency swaps, are converted at the exchange rate prevailing as on 31st March 2010 and the profits or loss thereon are charged to the Profit and Loss account.

f) Differences on account of swap contracts for interest payable in foreign currency are accounted on accrual basis and the profit or loss thereon charged to the Profit and Loss account.

13. Employees Benefits

a) Short - term employee benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits. Benefits such as salaries, wages, performance incentives, etc. are recognised at actual amounts due in the period in which the employee renders the related service.

b) Post - employment benefits

i. Defined Contribution Plans

Payments made to defined contribution plans such as Provident Fund are charged as an expense as they fall due.

ii. Defined Benefit Plans

The cost of providing benefit i.e. gratuity is determined using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. Actuarial gains and losses are recognised immediately in the Profit and Loss Account.

c) Other Long - term employee benefits

i. Other Long - term employee benefit viz. leave encashment is recognised as an expense in the profit and loss account as and when it accrues. The company determines the liability using the Projected Unit Credit Method, with actuarial valuation carried out as at the balance sheet date. The Actuarial gains and losses in respect of such benefit are charged to the profit and loss account.

14. Lease Accounting

a) In respect of operating lease agreements entered into by the Company as a lessee, the lease payments are recognised as expense in the profit and loss account over the lease term.

b) In respect of operating lease agreement entered into by the Company as a lessor, the initial direct costs are recognised as expenses in the year in which they are incurred.

15. Earning per share:

The company reports basic and diluted earnings per share (EPS) in accordance with Accounting Standard - 20. The Basic EPS has been computed by dividing the income available to equity shareholders by the weighted average number of equity shares outstanding during the accounting year. The diluted EPS have been computed using the weighted average number of equity shares and dilutive potential equity shares outstanding at the end of the year.

16. Provision for Taxation :

a) The company has opted for the Tonnage Tax scheme and provision for tax has been accordingly made under the relevant provisions of the Income Tax Act, 1961.

b) Tax on incomes on which the Tonnage Tax is not applicable is provided as per other provisions of the Income Tax Act, 1961.

c) Deferred tax resulting from timing differences, if any, between book and tax profits for income other than that covered under Tonnage Tax scheme is accounted for under the liability method, at the current rate of tax, to the extent that the timing differences are expected to reverse in future.

17. Impairment of assets

The Company reviews the carrying values of tangible and intangible assets for any possible impairment at each balance sheet date. Impairment loss, if any, is recognized in the year in which impairment takes place.

18. Provisions and Contingent Liabilities:

Provisions are recognized in the accounts in respect of present probable obligations, the amount of which can be reliably estimated. Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.