Accounting Policies of Western India Shipyard Ltd. Company

Mar 31, 2014

Basis of preparation

Accounting Convention

The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared under the historical cost convention method as a "Going Concern Concept" and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP).

The Company follows the mercantile system of accounting and recognizes Income and Expenditure on accrual basis except Medical Reimbursements, Leave Travel Allowances, Insurance Claims, Ex-gratia and Scrap Sale which are on cash basis. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(a) 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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(b) Tangible fixed assets

The Company''s Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. No revaluation has taken place during the year.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

(c) Depreciation:

i. Depreciation on fixed assets is provided on straight line method in the manner and the rates prescribed in Schedule VI to the Companies Act, 1956. However in case of "Ship Building Platform", depreciation has been calculated @ 8.33% based on remaining period of lease with Mormugao Port Trust, upto 04.04.2018.

ii. Depreciation on additions / deletions is calculated on pro-rata basis from / to the date of such additions / deletions.

iii. Depreciation on additions in Floating Dry Dock on account of foreign exchange fluctuations and any major additions is amortized over the remaining useful life of the asset.

iv. Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition

(d) Impairment of tangible assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(e) Investments

Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

(f) Inventories

Raw materials, components, stores and spares are valued at lower of cost (computed on the basis of Annual Weighted Average method) and net realizable value.

Work-in-progress is valued at Percentage Completion Method.

(g) Revenue recognition

Revenue is recognised on proportionate completion method.

i) Shiprepair 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.

ii) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

(h) Foreign Currency Transaction :

Foreign currency translation

Foreign currency transactions and balances

Exchange differences

The Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

1. Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

2. All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

(i) Retirement and other employee benefits

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, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the employee renders the related service.

Post Employment Benefits:

Defined Contribution Plans:

Payments made to a defined contribution plan such as Provident Fund are charged as an expense in the Profit and Loss Account as they fall due.

Defined Benefit Plans:

Company''s liability towards gratuity to past employees is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of the defined benefit obligations. During the current year end, the accrued liability towards such fund is provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 ''Employee Benefits'' as issued by the Institute of Chartered Accountants of India.

Other Long Term Employee Benefits:

Other Long Term Employee Benefits i.e., Gratuity is recognised as an expense in the Profit and Loss Account as and when it accrues.

The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date. Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account

(j) Income tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement S-15 ''Employee Benefits'' as issued by institute of Charted Accountant of India.'' writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

(k) Segment reporting

During the year, the Company operated primarily in India in one business segment only namely "Ship Repairs" which includes Oil Rig repairs. It does not operate in any geographical segment outside India

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(m) Provisions & Contingent liabilities

As per Accounting Standard 29, ''Provisions, Contingent Liabilities and Contingent Assets'', the Company recognizes provisions only when it has a present obligation 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 when a reliable estimate of the amount of the obligation can be made.

No Provision is recognized for : -

A. Any possible obligation that arises from past events and 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

B. Any present obligation that arises from past events but is not recognized because

a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) Where a reliable estimate of the amount of obligation cannot be made. Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

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Mar 31, 2013

(a) 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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates.

(b) Tangible fixed assets

The Company''s Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. No revaluation has taken place during the year.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

(c) Depreciation:

i. Depreciation on fixed assets is provided on straight line method in the manner and the rates prescribed in Schedule VI to the Companies Act, 1956. However in case of "Ship Building Platform", depreciation has been calculated @ 8.33% based on remaining period of lease with Mormugao Port Trust, upto 04.04.2018.

ii. Depreciation on additions / deletions is calculated on pro-rata basis from / to the date of such additions / deletions.

iii. Depreciation on additions in Floating Dry Dock on account of foreign exchange fluctuations and any major additions is amortized over the remaining useful life of the asset.

iv. Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition

(d) Impairment of tangible assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

(e) Investments

Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

(f) Inventories

Raw materials, components, stores and spares are valued at lower of cost (computed on the basis of Annual Weighted Average method) and net realizable value.

Work-in-progress is valued at Percentage Completion Method.

(g) Revenue recognition

Revenue is recognised on proportionate completion method except where part bill has been raised and recognised.

i) Shiprepair 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.

ii) Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.

(h) Foreign Currency Transaction :

Foreign currency translation

Foreign currency transactions and balances

Exchange differences

The Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

1. Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

2. All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

(i) Retirement and other employee benefits

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, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the employee renders the related service.

Post Employment Benefits:

Defined Contribution Plans:

Payments made to a defined contribution plan such as Provident Fund are charged as an expense in the Profit and Loss Account as they fall due.

Defined Benefit Plans:

Company''s liability towards gratuity to past employees is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of the defined benefit obligations. During the current year end, the accrued liability towards such fund is provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 ''Employee Benefits'' as issued by the Institute of Chartered Accountants of India.

Other Long Term Employee Benefits:

Other Long Term Employee Benefits i.e., Gratuity is recognised as an expense in the Profit and Loss Account as and when it accrues.

The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date.

Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account

(j) Income tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

(k) Segment reporting

During the year, the Company operated primarily in India in one business segment only namely "Ship Repairs" which includes Oil Rig repairs. It does not operate in any geographical segment outside India.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(m) Provisions & Contingent liabilities

As per Accounting Standard 29, ''Provisions, Contingent Liabilities and Contingent Assets'', the Company recognizes provisions only when it has a present obligation 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 when a reliable estimate of the amount of the obligation can be made.

No Provision is recognized for : –

A. Any possible obligation that arises from past events and 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

B. Any present obligation that arises from past events but is not recognized because

a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) Where a reliable estimate of the amount of obligation cannot be made. Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

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Mar 31, 2012

(a) 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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

(b) Tangible fixed assets

The Company's Fixed Assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. No revaluation has taken place during the year.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.

The Company adjusts exchange differences arising on translation/settlement of long-term foreign currency monetary items

pertaining to the acquisition of a depreciable asset to the cost of the asset and depreciates the same over the remaining life of the asset.

(c) Depreciation:

Depreciation on fixed assets is provided on straight line method in the manner and the rates prescribed in Schedule VI to the Companies Act, 1956. However in case of "Ship Building Platform", depreciation has been calculated @ 8.33% based on remaining period of lease With Mormugao Port Trust, upto 04.04.2018.

Depreciation on additions / deletions is calculated on pro-rata basis from I to the date of such additions / deletions.

Depreciation on additions in Floating Dry Dock on account of foreign exchange fluctuations and any major additions is amortized over the remaining useful life of the asset.

Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition

(d) Impairment of tangible assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period Is reversed if there has been a change in the estimate of recoverable amount.

(e) Investments

Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

(f) Inventories

Raw materials, components, stores and spares are valued at lower of cost (computed on the basis of Annual Weighted Average method) and net realizable value.

Work-in-progress is valued at Percentage Completion Method.

(g) Revenue recognition

Revenue is recognised on proportionate completion method except where part bill has been raised and recognised. Ship repair 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. Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer.



(h) Foreign Currency Transaction :

Foreign currency translation

Foreign currency transactions and balances

Exchange differences

The Company accounts for exchange differences arising on translation/settlement of foreign currency monetary items as below:

1. Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

2. All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

(i) Retirement and other employee benefits 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, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the employee renders the related service.

Post Employment Benefits:

Defined Contribution Plans:

Payments made to a defined contribution plan such as Provident Fund are charged as an expense in the Profit and Loss Account as they fall due.

Defined Benefit Plans:

Company's liability towards gratuity to past employees is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of the defined benefit obligations. During the current year end, the accrued liability towards such fund is provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 'Employee Benefits' as issued by the Institute of Chartered Accountants of India.

Other Long Term Employee Benefits:

Other Long Term Employee Benefits i.e., Gratuity is recognised as an expense in the Profit and Loss Account as and when it accrues.

The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date.

Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account

(j) Income tax

Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

Deferred tax asset is recognised and carried forward only to the extent that there is a virtual certainty that the asset will be realised in future.

(k) Segment reporting

During the year, the Company operated primarily in India in one business segment only namely "Ship Repairs" which includes Oil Rig repairs. It does not operate in any geographical segment outside India.

(l) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

(m) Provisions & Contingent liabilities

As per Accounting Standard 29, 'Provisions, Contingent Liabilities and Contingent Assets', the Company recognizes provisions only when it has a present obligation 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 when a reliable estimate of the amount of the obligation can be made.

(N) Provision is recognized for:

A. Any possible obligation that arises from past events and 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

B. Any present obligation that arises from past events but is not recognized because

a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) Where a reliable estimate of the amount of obligation cannot be made. Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

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Mar 31, 2011

1. Accounting Convention :

The accounts are drawn up in accordance with the historical cost convention method as a "Going Concern Concept" and are in accordance with Generally Accepted Accounting Principles and under relevant provisions of the Companies Act, 1956. The Company follows the mercantile system of Accounting and recognises Income and Expenditure on accrual basis except medical reimbursements, leave travel allowances, insurance claims and scrap sale which are on cash basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

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 amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates

3. Inventories :

Stores, Consumables & Spare parts are valued at cost, computed on the basis of Annual Weighted Average Method or Market Value, whichever is lower. Works-in-progress are valued as per Percentage Completion Method.

4. Investments :

Investments, being considered long term, are stated at cost.

5. Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. The cost of assets includes :

i) Cost of acquisition

ii) Expenses incurred on replacement and installation of assets and

iii) Incidental cost incurred to bring them into their present location and condition and making them ready to use.

6. Depreciation :

i. Depreciation on fixed assets is provided on straight-line method in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956. However in case of "Ship Building Platform", depreciation has been calculated @ 8.33% based on remaining period of lease with Mormugao Port Trust, upto 04.04.2018.

ii. Depreciation on additions / deletions is calculated on pro-rata basis from / to the date of such additions / deletions.

iii. Depreciation on additions in Floating Dry Dock on account of foreign exchange fuctuations and any major additions is amortised over the remaining useful life of the asset.

iv. Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition.

7. Revenue Recognition :

i) Revenue is recognised on proportionate completion method.

ii) Sales and Services are stated at net of trade discounts.

8. Foreign Currency Transaction :

i) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

ii) All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

9. Provisions and Contingent Liabilities :

As per Accounting Standard 29, 'Provisions, Contingent Liabilities and Contingent Assets', the Company recognizes provisions only when it has a present obligation 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 when a reliable estimate of the amount of the obligation can be made.

No Provision is recognized for : -

A. Any possible obligation that arises from past events and the existence of which will be confrmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company; or

B. Any present obligation that arises from past events but is not recognized because

a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) A reliable estimate of the amount of obligation cannot be made. Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

10. Retirement Benefits :

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, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the employee renders the related service.

Post Employment Benefits:

Defined Contribution Plans:

Payments made to a defined contribution plan such as Provident Fund are charged as an expense in the Profit and Loss Account as they fall due.

Defined Benefit Plans:

Company's liability towards gratuity to past employees is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of the defined benefit obligations. During the current year end, the accrued liability towards such fund is provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 'Employee Benefits' as issued by the Institute of Chartered Accountants of India.

Other Long Term Employee Benefits:

Other Long Term Employee Benefits i.e., leave encashment is recognised as an expense in the Profit and Loss Account as and when it accrues. The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date.

Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account

11. Miscellaneous Expenditure :

Miscellaneous expenses are written off over a period of 10 years.

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Mar 31, 2010

1. Accounting Convention :

The accounts are drawn up in accordance with the historical cost convention method as a "Going Concern Concept" and are in accordance with Generally Accepted Accounting Principles and under relevant provisions of the Companies Act, 1956. The Company follows the mercantile system of Accounting and recognises Income and Expenditure on accrual basis except medical reimbursements, leave travel allowances, insurance claims and scrap sale which are on cash basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

2. Use of Estimates :

The preparation of Financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period end. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates

3. Inventories :

Stores, Consumables & Spare parts are valued at cost, computed on the basis of Annual Weighted Average Method or Market Value, whichever is lower.Jobs-in-progress are valued as per Percentage Completion Method.

4. Investments :

Investments, being considered long term, are stated at cost.

5. Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. The cost of assets includes :

i) Cost of acquisition

ii) Expenses incurred on replacement and installation of assets and

iii) Incidental cost incurred to bring them into their present location and condition and making them ready to use.

6. Depreciation :

i. Depreciation on fixed assets is provided on straight-line method in the manner and at the rates prescribed in Schedule XIV to the Companies Act, 1956. However in case of "Ship Building Platform", depreciation has been calculated based on remaining period of lease with Mormugao Port Trust.

ii. Depreciation on additions / deletions is calculated on pro-rata basis from / to the date of such additions / deletions.

iii. Depreciation on additions on account of foreign exchange fluctuations is amortised over the remaining useful life of the asset.

iv. Assets costing less than Rs. 5,000/- are depreciated at 100% in the year of acquisition

7. Revenue Recognition :

i) Revenue is recognised on proportionate completion method. ii) Sales and Services are stated at net of trade discounts.

8. Foreign Currency Transaction :

i) Foreign currency transactions are recorded at the exchange rate prevailing on the date of transaction.

ii) All current assets and current liabilities in foreign currency as on Balance Sheet date are restated at the exchange rate prevailing on that date. Any gain or loss arising out of such conversion is charged to revenue.

9. Provisions and Contingent Liabilities :

As per Accounting Standard 29, Provisions, Contingent Liabilities and Contingent Assets, the Company recognizes provisions only when it has a present obligation 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 when a reliable estimate of the amount of the obligation can be made.

No Provision is recognized for : -

A. Any possible obligation that arises from past events and 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

B. Any present obligation that arises from past events but is not recognized because

a) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

b) A reliable estimate of the amount of obligation cannot be made.Such obligations are recorded as Contingent Liabilities. These are assessed periodically and only that part of the obligation for which an outflow of resources embodying economic benefits is probable, is provided for, except in the extremely rare circumstances where no reliable estimate can be made. Contingent Assets are not recognized in the financial statements since this may result in the recognition of income that may never be realized.

10. Retirement Benefits :

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, performance incentives, etc., are recognized as an expense at the undiscounted amount in the Profit and Loss Account of the year in which the employee renders the related service.

Post Employment Benefits:

Defined Contribution Plans:

Payments made to a defined contribution plan such as Provident Fund are charged as an expense in the Profit and Loss Account as they fall due.

Defined Benefit Plans:

Companys liability towards gratuity to past employees is determined using the projected unit credit method which considers each period of service as giving rise to an additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the statement of Profit and Loss Account as income or expense. Obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and terms of the Government Securities are consistent with the currency and estimate terms of the defined benefit obligations. During the current year end, the accrued liability towards such fund is provided on actuarial basis as on the Balance Sheet date as per revised Accounting Standard AS-15 Employee Benefits as issued by the Institute of Chartered Accountants of India.

Other Long Term Employee Benefits:

Other Long Term Employee Benefits i.e., leave encashment is recognised as an expense in the Profit and Loss Account as and when it accrues. The Company determines the liability as per the actuarial valuation carried out as at the Balance Sheet date.Actuarial gains and losses in respect of such benefits are charged to the Profit and Loss Account

11. Miscellaneous Expenditure :

Miscellaneous expenses are written off over a period of 10 years.