Accounting Policies of Mercator Ltd. Company

Mar 31, 2018

1. Basis of Preparation and Significant Accounting Policies

1.1 Basis for Preparation

The standalone financial statements of Mercator Limited (“the Company”) have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to section 133 of Companies Act, 2013 (‘Act’) read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other accounting generally accepted in India.

Items included in the Ind AS financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The Company’s Ind AS financial statements are presented in Indian Rupee (INR), which is also the Company’s functional and presentation currency. All amounts in these Ind AS financial statements, except per share amounts and unless as stated otherwise, have been rounded off to two decimal places and have been presented in Crore.

These Ind AS standalone financial statements for the year ended March 31, 2018 were approved by the Board of Directors and were authorized for issue in accordance with a resolution of the Board of Directors in its meeting held on May 28, 2018.

1.2 Historical cost convention

The Ind AS financial statements have been prepared on a historical cost convention, except for the following

1. Certain financial assets and liabilities including derivative instruments are measured at fair value.

2. Assets held for sale- measured at fair value less costs to sell

3. Defined benefit plans- plan assets measured at Fair value.

1.3 Use of estimates

The preparation of theInd AS financial statements in conformity with the recognition and measurement principles of the Ind-AS that requires Management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at date of financial statements and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the Ind AS financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialised. Estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected.

Critical estimates and judgements

This note provides an overview of the areas that involved a higher degree of judgement or complexity, and items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgements is included in relevant notes together with information about the basis of calculation for each affected line item in the Ind AS financial statements.

The major areas involving critical estimates or judgement are:

- Estimation of Defined benefit obligation - refer note 3.3

- Estimation of current tax expenses and Payable -refer note 3.13

- Scrap Value and Useful lives of property, plant and equipment - refer note 1.6

- Impairment of property, plant and equipment -refer note 1.7

- Provisions for litigations, insurance claim receivables and claim of underperformance by client.

1.4 Current versus non-current classification

The Company presents assets and liabilities in the balance sheet based on current/ non-current classification.

All the assets and liabilities have been classified as current/non-current, as per the Company’s normal operating cycle and other criteria set out in Division II to Schedule III of the Companies Act, 2013.

Based on the nature of services rendered by the Company and the normal time between the rendering of the services and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.5 Foreign Currency translation

(i) Functional and presentation currency

The Company’s Ind AS financial statements are presented in Indian Rupee (INR), which is also the Company’s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currency are recorded at functional currency using the exchange rate at the date of accounting of the transaction. Non monetary items, which are measured in terms of historical costs denominated in a foreign currency, are reported using the exchange rate at the date of thetransaction. Monetary assets and liabilities denominated in foreign currency, remaining unsettled at the yearend are translated at closing rates. The difference in translation of long term monetary assets acquired and liabilities incurred prior to April 1, 2016 and realised gains and losses on foreign currency transactions relating to acquisition of depreciable capital assets are added to or deducted from the cost of the asset and depreciated over the balance life of the asset; and in other cases, accumulated in a Foreign Currency Monetary Item Translation Difference Account and amortised over the balance period of such long term asset / liability, by recognition as income or expense. The difference in translation of all other monetary assets andliabilities and realised gains and losses on other foreign currency transactions are recognisedin the Statement of Profit and Loss. They are deferred in Other Equity, if they relate to qualifying cash flow hedges. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a part of the entity’s net investment in that foreign operation.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in Other Comprehensive Income or profit or loss are also recognised in Other Comprehensive Income or profit or loss, respectively). Exchange differences relating to Long term foreign currency monetary items incurred prior to April 1, 2016 are accounted in terms of para D13AA of Ind- AS 101 as under:

(i) In so far as they relate to the acquisition of a depreciable capital asset, such differences are added to/ deducted from the cost of such capital asset and depreciated over the balance useful life of the asset

(ii) In other cases, such differences are accumulated in “Foreign currency Monetary Items Translation differences account” and amortised in the statement of Profit and loss over the balance useful life of the long-term foreign currency monetary item.

1.6 Property, Plant and Equipment& Depreciation

Free hold land is carried at historical cost. All other items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the item.

The cost of Property, Plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), anydirectly attributable expenditure including exchange difference capitalised as per para 1.5 (ii) above, brokerage andstart-up costs on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use.

Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for longterm construction projects if the recognition criteria are met.

Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

Drydocks are considered as component of fleet with estimated useful lives different than the main component of fleet. Cost relating to drydock which is mandatorily required to be carried out as per the Classification Rules and Regulations is recognized in the carrying amount of ship and is depreciated/ amortised over 2.5 years. On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Property, Plant and equipment.

Depreciation on Property, Plant and equipment 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 except for two dredgers considered as 42 and 60 years.

Gas Carriers 30 years

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Assets costing less than Rs. 25,000/- are fully depreciatedin the year of capitalisation.

Intangible Assets & Amortization

Intangible assets are stated at acquisition cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortized on a straight-line basis over the estimated useful lives.

1.7 Impairment of non-financial assets

Non-financial assets other than inventories and noncurrent assets held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. The recoverable amount is higher of asset’s or Cash- Generating Units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash flows that are largely independent of those from other assets or group of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount and the impairment loss, if any, is recognized in the Statement of Profit and Loss in the period in which impairment takes place.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in the statement of profit and loss.

1.8 Investment Property

Since there is no change in the functional currency, the Company has elected to continue with the carrying value for all of its investment property as recognised in its Indian GAAP. Ind AS financial statements as deemed cost at the transition date, viz., 1 April 2015.

Investment Property is property (land or a building-ora part of a building) held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supplyof goods or services or for administrative purposes.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

The Company depreciates building component of investment property over 20 years from the date of original purchase.

Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal.

The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.

1.9 Assets held for sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets.

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less cost to sell.

Property, plant and equipment classified as held for sale are not depreciated.

1.10 Investment in subsidiaries

Non-current Investments inequity sharesin subsidiaries are carried at cost less accumulated impairment losses, if any. Where anindication of impairment exists, the carrying amount of the investment is assessed and written down to its recoverableamount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts arerecognized in the Statement of Profit and Loss.

1.11 Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivabletaking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company recognises revenue when the specific criteria have been met for each of the Company’s activities as described below:

a) 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.

b) Charter Hire Income

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

c) Dividend Income

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

d) Interest Income

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

e) Insurance Claims

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

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

g) Vessel Demurrage income due as per contractual terms is recognized. A provision on estimated basis is made towards deduction from demurrage based on past experience of settlements.

1.12 Incomplete Voyages

In case of incomplete voyages, freight earnings are recognised pro rata on the basis of direct operating expenses incurred as compared to total estimated direct operating expenses for the voyage.

1.13 Operating Expenses

a) Fleet direct operating expenses are charged to the Statement of Profit and Loss on accrual basis.

b) Bunker consumption cost, which is part of direct operating expenses, is charged to the Statement of Profit and Loss on consumption.

c) Stores and spares delivered on board the ships are charged to the Statement of Profit and Loss.

1.14 Inventories

Bunker and Lubes on vessels are valued at lower of cost and Net Realisable Value ascertained on First in First out basis. The cost includes all costs of purchase and other costs incurred in bringing theinventories to their present location and condition.

1.15 Leases

a) Finance Lease

Leases are classified as finance leases, if substantially all of the risks and rewards incidental to ownership of the leased asset is transferred to the lessee.

b) Operating Lease As a lessee

A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to Company is classified as a finance lease. A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

As a lessor

Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.

1.16 Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any differences between the proceeds (net of transaction costs) and the redemption amount is recognised in Profit or loss over the period of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facilities will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

The fair value of the liability portion of an optionallyconvertible bond is determined using a market interest rate for an equivalent non convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or redemption of the Bonds. The remainder of the proceeds is attributable to the equity portion of the compound instrument, this is recognised and included in share holder’s equity, net of income tax effect, and not subsequently re measured.

The borrowings are removed from the Balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that hasbeen extinguished or transferred to another party and the consideration paid including any noncash asset transferred or liabilities assumed, is recognised in profit or loss as other gains/(losses).

Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability of at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statement for issue, not to demand payment as a consequence of the breach.

1.17 Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use for sale.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

1.18 Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market that can be accessed by the Company for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

All assets and liabilities for which fair value is measured or disclosed in the Ind AS financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.

- Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognised in the Ind AS financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

1.19 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

A) Financial assets Initial recognition and measurement

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement

Subsequent measurement is determined with reference to the classification of the respective financial assets and the contractual cash flow characteristics of the financial asset, the Company classifies financial assets as subsequently measured at amortised cost, fair value through Other Comprehensive Income or fair value through profit and loss.

Debt instruments at amortised cost

Debt instruments such as trade and other receivables, security deposits and loans given are measured at the amortised cost if both the following conditions are met:

- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

Debt instrument at FVTOCI

A ‘debt instrument’ is classified as at the FVTOCI if both of the following criteria are met:

- The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

- The asset’s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income. However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the profit or loss.

Debt instrument at FVTPL

FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changesrecognized in the Statement of Profit and Loss. However, currently the Company does not have any financial instruments in this category.

Equity investments

All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading are classified at FVTPL.

For all other equity instruments, the Company decides to classify the same either at FVTOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in the Other Comprehensive Income. There is no recycling of the amounts from Other Comprehensive Income to Statement Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit or loss.

De- recognition

A financial asset is primarily derecognised when:

- The rights to receive cash flows from the asset have expired, or

- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a

‘pass-through’ arrangements and either (a) the Company has transferred substantially all the risks and rewards of the asset, or (b) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVTOCI) and equity instruments (measured at FVTPL) are recognized in the Statement of Profit and Loss. Gains and losses in respect of debt instruments measured at FVTOCI and that are accumulated in are reclassified to profit or loss on de-recognition. Gains or losses on equity instruments measured at FVTOCI that are recognized and accumulated in Other Comprehensive Income are not reclassified to profit or loss on de-recognition.

Impairment of financial assets

The Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortised cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

b) Financial assets measured at fair value through other comprehensive income.

In case of other assets (listed as a) above), the Company determines if there has been a significant increase in credit risk of the financial asset since initial recognition.

B) Financial liabilities

Initial recognition and measurement All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at FVTPL

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in Other Comprehensive Income. These gains/ losses are not subsequently transferred to profit or loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

Financial liabilities at amortized cost

Financial liabilities classified and measured at amortized such as loans and borrowings are initially recognized at fair value, net of transaction cost incurred. After initial recognition, financial liabilities are subsequently measured at amortised cost using the Effective interest rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

C) Financial guarantee obligation

The Company’s investments include the effect of notional income from financial guarantee obligations.

D) Derivative financial instruments

Initial recognition and subsequent measurement The Company uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks. Such derivative financial instrument is initially recognised at fair value on the date on which derivative contract is entered into and is subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken through other comprehensive income.

E) Foreign currency convertible bonds (FCCBs)

FCCBs are separated into liability and equity components based on the terms of the contract. On issuance of the FCCBs, the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortised cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognised and included in equity since conversion option meets Ind AS 32 criteria for fixed to fixed classification. Transaction costs are apportioned between the liability and equity components of the FCCBS based on the allocation of proceeds to the liability and equity components when the instruments are initially recognised.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

1.20 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 other comprehensive income. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in Other Comprehensive Income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

c) Other Long - term employee benefits

Other Long - term employee benefit viz. leave encashment is recognised as an expense in the other comprehensive income 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.

Actuarial gain / loss, comprising of experience adjustments and the effects of changes in actuarial assumptions is recognized in the Statement of Other Comprehensive Income except for Longterm compensated absences where the same is immediately recognized in the Statement of Profit and Loss.

1.21 Cash and Cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents includes cash in handand at bank in current and foreign currency accounts, deposit held at call with financial institution, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank Overdrafts are shown within borrowings in current liabilities in Balance sheet.

1.22 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.23 Taxes on Income

Tax expenses comprise both current and deferred tax.

(a) Current tax

Current tax is the amount of tax payable as per special provisions relating to income of shipping companies under the Income Tax Act, 1961 on the basis of deemed tonnage income of the Company and tax payable on other taxable income for the year determined in accordance with section 115VG (3) of chapter XII-G of the Income Tax Act, 1961.

(b) Deferred tax

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilised. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

Further, the Company is paying taxes on the basis of deemed tonnage income, hence there is no impact on deferred tax.

(c) Minimum Alternate Tax (MAT)

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognisedas an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

1.24 Provisions and Contingent Liabilities

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation for which a reliable estimate of the amount can be made. If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Ind AS financial statements. Contingent assets are not recognised. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset. Contingent assets are not recognised but disclosed when the inflow of economic benefits is probable. However, when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as an asset.

1.25 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shareswhich could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

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Mar 31, 2017

SIGNIFICANT ACCOUNTING POLICIES AND NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR YEAR ENDED MARCH 31, 2017

CORPORATE INFORMATION

Mercator Limited ("the Company") was incorporated on November 24, 1983 as private limited company with name as Mercator Lines Private Limited. It was converted into limited company vide ROC approval dated April 12, 1984. The name was changed to Mercator Limited vide ROC approval dated November 22, 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 and P), Coal (Mining, Procurement and Logistics).

1. SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis for Preparation

The Ind AS financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of Companies Act, 2013 (''Act'') read with Companies (Indian Accounting Standards) Rules, 2015 as amended and other relevant provisions of the Act.

These Ind AS financial statements for the year ended March 31, 2017 are the first financials with comparatives, prepared under Ind AS. For all previous periods including the year ended March 31, 2016, the company had prepared its Ind AS financial statements in accordance with the accounting standards notified under companies (Accounting Standard) Rule, 2006 (as amended) and other relevant provisions of the Act (hereinafter referred to as the ‘Previous GAAP'') used for its statutory reporting requirement in India.

The Ind AS financial statements have been prepared on accrual and going concern basis. The accounting policies are applied consistently to all the periods presented in the Ind AS financial statements, including the preparation of the opening Ind AS Balance Sheet as at 1st April, 2015 being the ‘date of transition to Ind AS''.

Authorization of Ind AS financial statements: The Ind

AS financial statements for the year ended March 31, 2017 were approved by the Board of Directors and were authorized for issue in accordance with a resolution of the Board of Directors in its meeting held on May 30, 2017.

Items included in the Ind AS financial statements of the Company are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency''). The company''s Ind AS financial statements are presented in Indian Rupee (INR), which is also the company''s functional and presentation currency. All amounts in these Ind AS financial statements, except per share amounts and unless as stated otherwise, have been rounded off to two decimal places and have been presented in lakhs.

1.2 Historical cost convention

The Ind AS financial statements have been prepared on a historical cost basis, except for the following

1. Certain financial assets and liabilities including derivative instruments are measured at fair value.

2. Assets held for sale- measured at fair value less costs to sell

3. Defined benefit plans- plan assets measured at Fair value.

1.3 Use of estimates

The preparation of the Ind AS financial statements in conformity with Ind-AS requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the Ind AS financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialized.

Revisions to accounting estimates are recognized prospectively in the Statement of Profit and Loss in the period in which the estimates are revised and in any future periods affected

Critical estimates and judgments

This note provides an overview of the areas that involved a higher degree of judgment or complexity, and items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these estimates and judgments is included in relevant notes together with information about the basis of calculation for each affected line item in the Ind AS financial statements

The areas involving critical estimates or judgment are: Estimation of Defined benefit obligation - refer note 3.5 Estimation of current tax expenses and Payable - refer note 3.14

Useful lives of property, plant and equipment- refer note 1.6

1.4 Current versus non-current classification

The company presents assets and liabilities in the balance sheet based on current/ non-current classification.

All the assets and liabilities have been classified as current/non-current as per the Company''s normal operating cycle and other criteria set out in Division II to Schedule III of the Companies Act, 2013.

The operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. Based on the nature of activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

1.5 Foreign Currencies

(i) Functional and presentation currency

The Company''s Ind AS financial statements are presented in Indian Rupee (INR), which is also the Company''s functional and presentation currency.

(ii) Transactions and balances

Transactions in foreign currencies are translated into functional currency using the exchange rate at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the yearend exchange rates are generally recognized in Profit or loss. They are deferred in Equity if they relate to qualifying cash flow hedges. A monetary item for which settlement is neither planned nor likely to occur in the foreseeable future is considered as a part of the entity''s net investment in that foreign operations.

Foreign exchanges differences regarded as an adjustment to borrowing costs are presented in the statement of Profit and loss, within finance cost. All other foreign exchange gains and losses are presented in the Statement of Profit and loss on a net basis within other gains/ (losses).

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in Other Comprehensive Income or profit or loss are also recognized in Other Comprehensive Income or profit or loss, respectively).

Exchange differences relating to Long term foreign currency monetary items incurred prior to April 1, 2016 are accounted in terms of para D13AA of Ind-AS 101 as under:

(i) In so far as they relate to the acquisition of a depreciable capital asset, such differences are added to/deducted from the cost of such capital asset and depreciated over the balance useful life of the asset

(ii) In other cases, such differences are accumulated in "Foreign currency Monetary Items Translation differences account and amortized in the statement of Profit and loss over the balance useful life of the long term foreign currency monetary item.

1.6 Property, Plant and Equipment

Free hold land is carried at historical cost. All other items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of the item.

The cost of Property, Plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure including brokerage and start-up costs on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying assets up to the date the asset is ready for its intended use.

Such cost includes the cost of replacing part of the plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met.

When significant parts of plant and equipment are required to be replaced at intervals, company depreciates them separately based on their specific useful lives.

When major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repairs and maintenance costs are recognized in profit or loss as incurred.

Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.

Drydocks are considered as component of fleet with estimated useful lives different than the main component of fleet. Cost relating to drydock which is mandatorily required to be carried out as per the Classification Rules and Regulations is recognized in the carrying amount of ship and is amortized over 2.5 years.

On transition to Ind AS, the company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2015 measured as per the previous GAAP and use that carrying value as the deemed cost of the Property, Plant and equipment.

Depreciation on Property, Plant and equipment 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

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized .

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

Assets costing less than '' 25,000/- are fully depreciated in the year of capitalization.

1.7 Impairment of non-financial assets

Non-financial assets other than inventories and noncurrent assets held for sale are reviewed at each Balance Sheet date to determine whether there is any indication of impairment. If any such indication exists, or when annual impairment testing for an asset is required, the company estimates the asset''s recoverable amount. The recoverable amount is higher of asset''s or Cash-Generating Units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash flows that are largely independent of those from other assets or group of assets.

When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

1.8 Investment Property

Since there is no change in the functional currency, the company has elected to continue with the carrying value for all of its investment property as recognized in its Indian GAAP Ind AS financial statements as deemed cost at the transition date, viz., 1 April 2015.

Investment Property is property (land or a building- or a part of a building) held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in production or supply of goods or services or for administrative purposes

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any.

The company depreciates building component of investment property over 20 years from the date of original purchase.

Investment properties are derecognized either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal.

The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

1.9 Investment in subsidiaries

Investment in equity shares of subsidiaries are recorded at cost and reviewed for impairment at each reporting date.

1.10 Inventories

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

1.11 Cash and Cash equivalents

For the purpose of presentation in statement of cash flows, cash and cash equivalents includes cash in hand and at bank in current and foreign currency accounts, deposit held at call with financial institution, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank Overdrafts are shown within borrowings in current liabilities in Balance sheet.

1.12 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.13 Taxes on Income

Tax expenses comprise both current and deferred tax

(a) Current tax

Current tax is the amount of tax payable as per special provisions relating to income of shipping companies under the Income Tax Act, 1961 on the basis of deemed tonnage income of the Company and tax payable on other taxable income for the year determined in accordance with section 115VG (3) of chapter XII-G of the Income Tax Act, 1961.

(b) Deferred tax

Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the Balance sheet and the corresponding tax bases used in the computation of taxable profit and are accounted for using the liability method. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences, carry forward tax losses and allowances to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, carry forward tax losses and allowances can be utilized. Deferred tax assets and liabilities are measured at the applicable tax rates. Deferred tax assets and deferred tax liabilities are off set, and presented as net.

Further, the company is paying taxes on the basis of deemed tonnage income therefore no impact on deferred tax

(c) Minimum Alternate Tax (MAT)

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.

1.14 Provisions and Contingencies

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a 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. If the effect of the time value of money is material, provisions are discounted using equivalent period government securities interest rate. Unwinding of the discount is recognized in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. Information on contingent liability is disclosed in the Notes to the Ind AS financial statements. Contingent assets are not recognized . However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

Contingent assets are not recognized but disclosed when the inflow of economic benefits is probable. However, when the realization of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognized as an asset.

1.15 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post-tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.

Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.16 Leases

a) Finance Lease

Leases are classified as finance leases, if substantially all of the risks and rewards incidental to ownership of the leased asset is transferred to the lessee.

b) Operating Lease

As a lessee

A lease is classified at the inception date as a finance lease or an operating lease.

A lease that transfers substantially all the risks and rewards incidental to ownership to company is classified as a finance lease.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.

As a lessor

Leases in which the company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.

1.17 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, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company recognizes revenue when the specific criteria have been met for each of the Company''s activities as described below:

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 effective interest rate.

f) Insurance Claims

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

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

1.18 Incomplete Voyages

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

1.19 Borrowings

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any differences between the proceeds (net of transaction costs) and the redemption amount is recognized in Profit or loss over the period of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facilities will be drawn down. In this case, the fee is deferred until the drawdown occurs. To the extent there is no evidence that it is probable that some or all of the facilities will be drawn down, the fee is capitalized as a prepayment for liquidity services and amortized over the period of the facility to which it relates.

The fair value of the liability portion of an optionally convertible bonds is determined using a market interest rate for an equivalent non convertible bonds. This amount is recorded as a liability on an amortized cost basis until extinguished on conversion or redemption of the Bonds. The remainder of the proceeds is attributable to the equity portion of the compound instrument, this is recognized and included in share holders equity, net of income tax effect, and not subsequently re measured.

The borrowings are removed from the Balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability that has been extinguished or transferred to another party and the consideration paid including any noncash asset transferred or liabilities assumed, is recognized in profit or loss as other gains/(losses).

Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability of at least 12 months after the reporting period. Where there is a breach of a material provision of a long term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statement for issue, not to demand payment as a consequence of the breach.

1.20 Borrowing costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is required to complete and prepare the asset for its intended use for sale. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.

1.21 Assets held for sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets.

Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less cost to sell.

Property, plant and equipment classified as held for sale are not depreciated.

1.22 Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market that can be accessed by the company for the asset or liability.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

All assets and liabilities for which fair value is measured or disclosed in the Ind AS financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

- Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities

- Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

- Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognized in the Ind AS financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

1.23 Financial Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

A) Financial assets

Initial recognition and measurement All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss,

transaction costs that are attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.

Subsequent measurement Subsequent measurement is determined with reference to the classification of the respective financial assets and the contractual cash flow characteristics of the financial asset, the Company classifies financial assets as subsequently measured at amortized cost, fair value through Other Comprehensive Income or fair value through profit and loss.

Debt instruments at amortized cost Debt instruments such as trade and other receivables, security deposits and loans given are measured at the amortized cost if both the following conditions are met:

- The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and

- Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss.

Debt instrument at FVTOCI A ‘debt instrument'' is classified as at the FVTOCI if both of the following criteria are met:

- The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets, and

- The asset''s contractual cash flows represent SPPI.

Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income.

However, the company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the profit or loss.

Debt instrument at FVTPL FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.

Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss. However currently the company does not have any financial instruments in this category.

Equity investments

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the company decides to classify the same either as at FVTOCI or FVTPL The company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

If the Company decides to classify an equity instrument as at FVTOCI, all fair value changes on the instrument, excluding dividends, are recognized in the Other Comprehensive Income. There is no recycling of the amounts from Other Comprehensive Income to Statement Profit and Loss, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.

Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit or loss.

De- recognition

A financial asset is primarily derecognized when:

- The rights to receive cash flows from the asset have expired, or

- The company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ‘pass-through'' arrangement and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset

On de-recognition, any gains or losses on all debt instruments (other than debt instruments measured at FVOCI) and equity instruments (measured at

FVPTL) are recognized in the Statement of Profit and Loss. Gains and losses in respect of debt instruments measured at FVOCI and that are accumulated in are reclassified to profit or loss on de-recognition. Gains or losses on equity instruments measured at FVOCI that are recognized and accumulated in Other Comprehensive Income are not reclassified to profit or loss on de-recognition

Impairment of financial assets The company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure:

a) Financial assets that are debt instruments, and are measured at amortized cost e.g., loans, debt securities, deposits, trade receivables and bank balance.

b) Financial assets measured at fair value through other comprehensive income.

In case of other assets (listed as a) above), the company determines if there has been a significant increase in credit risk of the financial asset since initial recognition.

B) Financial liabilities

Initial recognition and measurement

All financial liabilities are recognized initially at fair

value and, in the case of loans and borrowings and

payables, net of directly attributable transaction

costs.

The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.

Subsequent measurement

The measurement of financial liabilities depends on

their classification, as described below:

Financial liabilities at FVTPL

Financial liabilities at fair value through profit or

loss include financial liabilities designated upon

initial recognition as at fair value through profit or

loss.

Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind-AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk are recognized in Other Comprehensive Income. These gains/ loss are not subsequently transferred to profit or loss. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognized in the statement of profit or loss.

Financial liabilities at amortized cost Financial liabilities classified and measured at amortized such as loans and borrowings are initially recognized at fair value, net of transaction cost incurred. After initial recognition, financial liabilities are subsequently measured at amortized cost using the Effective interest rate (EIR) method. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the EIR amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the statement of profit or loss.

C) Financial guarantee obligation

The company''s investments include the effect of notional income from financial guarantee obligations.

D) Derivative financial instruments

Initial recognition and subsequent measurement The company uses derivative financial instruments such as forward currency contracts to hedge its foreign currency risks.

Such derivative financial instrument is initially recognized at fair value on the date on which derivative contract is entered into and is subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.

Any gains or losses arising from changes in the fair value of derivatives are taken through other comprehensive income.

E) Foreign currency convertible bonds (FCCBs)

FCCBs are separated into liability and equity components based on the terms of the contract. On issuance of the FCCBs, the fair value of the liability component is determined using a market rate for an equivalent non-convertible instrument. This amount is classified as a financial liability measured at amortized cost (net of transaction costs) until it is extinguished on conversion or redemption. The remainder of the proceeds is allocated to the conversion option that is recognized and included in equity since conversion option meets Ind AS 32 criteria for fixed to fixed classification. Transaction costs are apportioned between the liability and equity components of the FCCBS based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized .

Offsetting of financial instruments Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

1.24 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 other comprehensive income. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in Other Comprehensive Income. They are included in retained earnings in the Statement of Changes in Equity and in the Balance Sheet.

c) Other Long - term employee benefits

Other Long - term employee benefit viz. leave encashment is recognized as an expense in the other comprehensive income 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 other comprehensive income.

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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.

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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.

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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.

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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.