Accounting Policies of Bharati Defence and Infrastructure Ltd. Company

Mar 31, 2016

1 Corporate Information:

Bharati Shipyard Limited is a listed public company incorporated on 22nd June, 1976. The company is primarily engaged in manufacturing of Ships, Non Propelled Vessels, Cranes, Rigs, off shore structures, ship repairing and related activities.

2 Significant Accounting Policies

a. Basis of Preparation of financial statements:

The financial statements are prepared under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts, on accrual basis of accounting, in accordance with the generally accepted accounting principles in India (Indian GAAP), on a going concern basis and in line with Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions of the Companies Act, 2013.

The financial statements are presented in Indian rupees rounded off to the nearest rupees in Lakhs.

b Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the year. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Further, the 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 or materialized. Any changes in such estimates are recognized prospectively.

c. Fixed Assets

i. Tangible Assets:

Tangible Assets are stated at cost less accumulated depreciation and impairment losses, if any and includes amounts added on revaluation if any. The cost includes 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), borrowing costs and any directly attributable expenses, incurred to bring the tangible assets to its present location and condition.

ii. Intangible Assets:

Intangible Assets are stated at cost less accumulated amortization and impairment losses, if any. The cost includes 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), borrowing costs and any directly attributable expenses, incurred to bring the intangible asset to its working condition for the intended use.

d. Capital Work-in-progress:

Capital work-in-progress includes the cost of tangible assets that are not yet ready for their intended use at the balance sheet date and are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

e. Depreciation and Amortization:

i. Depreciation on Tangible Assets has been provided on Straight - Line Method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

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

ⁱⁱⁱ Leasehold land - Cost of leasehold land is amortized over lease period

f. Impairment of Assets:

The carrying value of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.

g. Investments:

Long Term Investments are valued at cost of acquisition. Provision for diminution in value of Long Term Investments is made only if such a decline is other than temporary in the opinion of the Management.

Current investments are stated at the lower of cost and fair value, determined by category of Investments.

h. Inventories:

i. Raw Material and Other Components and Stores and Spares have been valued at lower of cost determined on FIFO basis or net realizable value. Cost of Inventories comprise of all costs of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition.

ii. Work in progress is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

i Employee Benefits

i. Short term benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, performance incentives, compensated absences etc. and the expected cost of ex-gratia are recognized in the period in which the employee renders the related service.

ii. Post employment benefits Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company''s contribution paid/ payable under the schemes is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

In addition, employees of the company are also covered under Employees'' State Insurance Scheme Act,

The Company''s contribution paid/ payable under the schemes is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

The company has no further obligation under these plans beyond its monthly contributions.

Defined benefit plans:

The Company''s gratuity benefit scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market

When the calculation results in a benefit to the Company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized in the Statement of Profit and Loss as and when determined.

iii. Compensated Absences:

The company has a scheme for compensated absences for employees, the liability for which is determined on the basis of an independent actuarial valuation, carried out at the balance sheet date.

The Company''s contribution paid/ payable under the schemes is recognized as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

j Revenue Recognition:

i. Revenue is recognized in accordance with ''AS-7 Accounting for Construction Contracts'' specified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions of the Companies Act, 2013 on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair activity is recognized on the basis of job completion.

iii. Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

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

k Government Subsidy:

Government Subsidy is recognized in the Statement of Profit and Loss in accordance with the related scheme and in the period in which it is accrued. The scheme drawn up in this regard by the Ministry of Shipping, Government of India specifies that the subsidy due on vessels constructed by Private Shipyards such as the Company itself would be payable only upon completion and delivery of eligible vessels as defined by the scheme. However, since the Company follows accrual concept of accounting, the subsidy recognized in Statement of Profit and Loss also comprises of vessels under construction.

l. Borrowing Costs:

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss.

m. Provision for Taxation

i. Tax expense comprises of current tax and deferred tax.

ii. Current Tax:

Provision for current income-tax is made on the basis of estimated taxable income for the year, using the applicable tax rates and where the income is assessed by the tax authorities on the basis of such assessed income.

iii. Deferred Tax:

Deferred Tax on timing differences is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred Tax Assets are recognized only to the extent that there is virtual certainty with convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

iv. Minimum Alternative 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.

n. Foreign Currency transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. Gains or Losses upon settlement of transaction during the year is recognized in the statement of profit and loss.

Monetary items denominated in foreign currencies at the yearend are restated at year end rates. Gains or losses arising as a result of the above are recognized in the statement of profit and loss.

0. Provisions, Contingent Liabilities and Contingent Assets:

1. The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation

that may, but probably will not, require an outflow of resources.

iii. Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

iv. Contingent assets are neither recognized nor disclosed in the financial statements.

p. Operating Leases:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in the Statement of Profit and Loss in accordance with respective lease agreements.

q. 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) attributable to the shareholders for the year 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.

r. Segment Reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organization and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been allocated to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on cost.

Segment revenue, Segment expenses, Segment assets and Segment liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities."

s. Cash Flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before 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.

Cash comprises cash on hand and demand deposits with banks. Cash Equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in values.

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Mar 31, 2015

A. Basis of Preparation of financial statements:

The financial statements are prepared under the historical cost convention, except for certain Fixed Assets which are carried at revalued amounts, on accrual basis of accounting, in accordance with the generally accepted accounting principles in India (Indian GAAP), on a going concern basis and in line with Accounting Standards notified by the Companies (Accounting Standards) Rules 2006 which continues to be applicable in respect of Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions of the Companies Act, 2013.

The financial statements are presented in Indian rupees rounded off to the nearest rupees in Lakhs. b Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the year. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future, the 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 or materialised. Any changes in such estimates are recognized prospectively.

Change in Accounting Estimates:-

As per notification dated, March 26, 2014 issued by the Ministry of Corporate Affairs, Schedule II "Useful Lives to compute Depreciation" of the Companies Act, 2013 came into effect from April 1, 2014 which prescribes the useful lives for determining the depreciation charge for the tangible assets. Accordingly, with effect from April 1, 2014, the Company has modified the useful lives of its tangible assets in line with the requirements of Schedule II of the Companies Act, 2013.

In respect of assets where the remaining useful life is Nil, the carrying amount as on 1st April, 2014 as determined by the management has been adjusted against the balances of retained earnings.

c. Fixed Assets

i. Tangible Assets:

Tangible Assets are stated at cost less accumulated depreciation and impairment losses, if any and includes amounts added on revaluation if any. The cost includes 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), borrowing costs and any directly attributable expenses, incurred to bring the tangible assets to its present location and condition.

ii. Intangible Assets:

Intangible Assets are stated at cost less accumulated amortisation and impairment losses, if any. The cost includes 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), borrowing costs and any directly attributable expenses, incurred to bring the asset to its working condition for the intended use.

iii. Assets held for Sale:

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately under the head Other Current Assets.

d. Capital Work-in-progress:

Capital work-in-progress includes the cost of tangible assets that are not yet ready for their intended use at the balance sheet date and are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

e. Depreciation and Amortisation:

i. Depreciation on Tangible Assets has been provided on Straight - Line Method based on the useful life of the assets as prescribed in Schedule II to the Companies Act, 2013.

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

iii. Leasehold land - Cost of leasehold land is amortised over lease period

f. Impairment of Assets:

The carrying value of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

g. Investments:

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments are stated at the lower of cost and fair value, determined by category of Investments.

h. Inventories:

i. Inventories of Raw Material and Other Components, Stores and Spares have been valued at lower of cost determined on FIFO basis or net realisable value. Cost of Inventories comprise of all costs of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition.

ii. Work in progress is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

i Employee Benefits

i. Short term benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, performance incentives, compensated absences etc. and the expected cost of ex-gratia are recognised in the period in which the employee renders the related service.

ii. Post employment benefits Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company's contribution paid/ payable under the schemes is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

In addition, employees of the company are also covered under employees' State Insurance Scheme Act, 1948.

The Company's contribution paid/ payable under the schemes is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

The company has no further obligation under these plans beyond its monthly contributions.

Defined benefit plans:

The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the balance sheet date.

When the calculation results in a benefit to the Company, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognised in the Statement of Profit and Loss as and when determined.

iii. Compensated Absences:

The company has a scheme for compensated absences for employees, the liability for which is determined on the basis of an independent actuarial valuation, carried out at the balance sheet date.

j Revenue Recognition:

i. Revenue is recognised in accordance with 'AS-7 Accounting for Construction Contracts' notified by the Companies (Accounting Standards) Rules 2006 which continues to be applicable in respect of Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 and relevant provisions of the Companies Act, 2013 on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair activity is recognised on the basis of job completion.

iii. Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

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

k Government Subsidy:

Government Subsidy is recognised in the Statement of Profit and Loss in accordance with the related scheme and in the period in which it is accrued. The scheme drawn up in this regard by the Ministry of Shipping, India specifies that the subsidy due on vessels constructed by Private Shipyards such as the Company itself would be payable only upon completion and delivery of eligible vessels as defined by the scheme. However, since the Company follows accrual concept of accounting, the subsidy recognised in Statement of Profit and Loss also comprises of vessels under construction.

l. Borrowing Costs:

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalised as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss.

m. Provision for Taxation

i. Tax expense comprises of current tax and deferred tax.

ii. Current Tax:

Provision for current income-tax is made on the basis of estimated taxable income for the year, using the applicable tax rates and where the income is assessed by the tax authorities on the basis of such assessed income.

iii. Deferred Tax:

Deferred Tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising there on is debited / credited to statement of profit and loss. In case of net difference giving rise to deferred tax assets, the same is recognised on the assumption that the company would be earning profits in the future.

iv. Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The Company recognizes the MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay the normal income tax during the specified period i.e., period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes the 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.

n. Foreign Currency transactions:

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction. Gains or Losses upon settlement of transaction during the year is recognized in the statement of profit and loss.

Monetary items denominated in foreign currencies at the year end are restated at year end rates. Gains or losses arising as a result of the above are recognized in the statement of profit and loss.

0. Provision Contingent Liabilities and Contingent Assets:

1. The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii. Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

iv. Contingent assets are neither recognised nor disclosed in the financial statements.

p. Operating Leases:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in the Statement of Profit and Loss in accordance with respective lease agreements.

q. 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) attributable to the shareholders for the year 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.

r. Segment Reporting:

The Company identifies primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on cost. Segment revenue, Segment expenses, Segment assets and Segment liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities."

s. Cash Flow statement:

Cash flows are reported using the indirect method, whereby profit/ (loss) before 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.

Cash comprises cash on hand and demand deposits with banks. Cash Equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in values.

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Mar 31, 2014

A. Basis of Preparation of financial statements:

The financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with the Generally Accepted Accounting Principles (Indian GAAP), on a going concern basis and in line with Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September, 2013 of the Ministry of Corporate Affairs) and the relevant provisions of the Companies Act, 1956, as applicable.

b. Use of Estimates:

The preparation of financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the year. The management believes that the estimates used in the preparation of the 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 or materialise.

c. Fixed Assets

i. Tangible Assets:

Tangible Assets are stated at cost less accumulated depreciation and impairment losses, if any. The cost includes 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 expenses, incurred to bring the tangible assets to its present location and condition.

ii. Intangible Assets:

Intangible Assets are stated at cost less accumulated ammortisation and impairment losses, if any. The cost includes 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 expenses, incurred to bring the asset to its working condition for the intended use.

iii. Assets held for Sale:

Fixed assets retired from active use and held for sale are stated at the lower of their net book value and net realisable value and are disclosed separately under the head Other Current Assets.

d. Capital Work-in-Progress:

Capital Work-in-Progress includes the cost of tangible assets that are not yet ready for their intended use at the balance sheet date and are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

e. Depreciation and Amortisation:

i. Depreciation on tangible assets has been provided on Straight – Line Method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

ii. Depreciation on revalued amount has been charged to Revaluation Reserve.

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

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

f. Impairment of Assets:

The carrying value of assets / cash generating units at each balance sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value

based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

g. Investments:

Long-term investments are stated at cost less provision for other than temporary diminution in value of such investments. Current investments are stated at the lower of cost and fair value, determined by category of Investments.

h. Inventories:

i. Raw materials are valued at cost or market price whichever is lower. Cost is taken on FIFO basis.

ii. Stock in process is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

i Employee Benefits

i. Short term benefits:

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, compensated absences etc. and the expected cost of ex- gratia are recognised in the period in which the employee renders the related service.

ii. Post employment benefits

Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company''s contribution paid/ payable under the schemes is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined benefit plans:

The Company''s gratuity benefit scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

"The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the balance sheet date."

When the calculation results in a benefit to the Company, the recognised asset is limited to the net total of any unrecognised actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss.

iii. Compensated Absences:

The company has a scheme for compensated absences for employees, the liability for which is determined on the basis of an independent actuarial valuation, carried out at the balance sheet date.

j Revenue Recognition:

i. Revenue is recognised in accounts in accordance with ''AS-7 Accounting for Construction Contracts'' issued by the ICAI on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair is recognised on the basis of job completion.

iii. Export turnover include exchange rate difference arising on realisation.

iv. Dividend income on investment is accounted for in the year in which the right to receive the payment is established. v. Interest income is recognised on the time proportion basis.

k Government Subsidy:

Government Subsidy is recognised in the Statement of Profit and Loss in accordance with the related scheme and in the period in which it is accrued. The scheme drawn up in this regard by the Ministry of Shipping, India specifies that the subsidy due on vessels constructed by Private Shipyards such as the Company itself would be payable only upon completion and delivery of eligible vessels as defined by the scheme. However, since the Company follows accrual concept of accounting, the subsidy recognised in Statement of Profit and Loss also comprises of vessels under construction.

l. Borrowing Costs:

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss.

m. Provision for Taxation

Current Tax:

Provision for current income-tax is made on the basis of estimated taxable income for the year, and where the income is assessed by the tax authorities on the basis of such assessed income.

Deferred Tax:

Deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited / credited to Statement of Profit and Loss. In case of net difference giving rise to a deferred tax asset, the same is recognised on the assumption that the Company would be earning profits in the future.

n. Foreign Currency transactions:

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date.

o. Provision Contingent Liabilities and Contingent Assets:

i. The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii. Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

iv. Contingent assets are neither recognised nor disclosed in the financial statements.

p. Operating Leases:

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognised as expenses on accrual basis in accordance with respective lease agreements.

q. 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) attributable to the shareholders for the year 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.

r. Segment Reporing

The Company identifies the primary segments based on the dominant source, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit / loss amounts are evaluated regularly by the executive Management in deciding how to allocate resources and in assessing performance.

The accounting policies adopted for segment reporting are in line with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.

Inter-segment revenue is accounted on the basis of transactions which are primarily determined based on cost.

Segment revenue, Segment expenses, Segment assets and Segment liabilities which relate to the Company as a whole and are not allocable to segments on reasonable basis have been included under "unallocated revenue / expenses / assets / liabilities."

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Mar 31, 2013

A. Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with the generally accepted accounting principles, on a going concern basis and in line with accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of Companies Act, 1956. The Company is currently facing a dilemma of reviving from liquidity crunch caused mainly due to the global meltdown and honoring its substantial debt obligation. The Management believes this to be only a temporary mismatch between the timing of the fund flows which would be resolved once the Company''s production cycle reboots itself entailing completion and delivery of its vessels under construction. Considering the same, its case was referred to CDR Mechanism which is a voluntary non statutory system comprising of certain major Banks and Financial Institutions and the CDR Cell, for the Company''s financial restructuring. A financial restructuring scheme has been drawn up and commenced to be implemented for helping the Company in achieving its objective of revival and that of continuing its operations as a normal business entity. Considering the magnitude and far-reaching effects of this restructuring scheme, it would be safe to say that successful and complete implementation of this scheme in form and in substance is a newly evolved assumption for considering the Company to be a going concern.

b. Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the period. Examples of such estimates are provision for income taxes and accrued income.

c. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost includes all expenses incurred to bring the assets to its present location and condition.

d. Capital Work in progress

Capital work in progress includes the cost of fixed assets that are not ready to use at the balance sheet date and advances paid to acquire the same before the balance sheet date.

e. Depreciation

i) Depreciation on Fixed Assets has been provided on Straight - Line Method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

ii) Depreciation on revalued amount has been charged to Revaluation Reserve.

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

iv) Assets costing less than Rs.5,000/- are fully depreciated in the year of acquisition.

v) Fixed assets under construction are shown as Capital Work-in-Progress and are not depreciated.

f. Impairment of Assets

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

g. Investments

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments comprising mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

h. Inventories

i) Raw materials are valued at cost or market price whichever is lower. Cost is taken on FIFO basis.

ii) Stock in process is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

iii) In continuation to point no. (a) Basis of preparation w.r.t successful implementation of the restructuring scheme, the said factor plays an important role even for valuation of Inventories which has been presently done considering the Company to be going concern. This is especially applicable to the Company''s Stock which achieves its complete value only upon its use in manufacturing process and subsequent completion, which in turn becomes recoverable from its Owner/Buyer (the Company''s customer). This process validates the accounting practice of debiting the ongoing construction cost to the Stock-in-progress as against accounting it a loss which cannot be recovered due to reasons such as non-completion of vessel.

i. Employee Benefits

Short term benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, leave salary etc. and the expected cost of ex-gratia are recognized in the period in which the employee renders the related service.

Post employment benefits

Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company''s contribution paid/ payable under the schemes is recognized as an expense in the profit and loss account during the period in which the employee renders the related service.

Defined benefit plans:

The Company''s gratuity benefit scheme is a defined benefit plan. The Company''s net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the balance sheet date.

When the calculation results in a benefit to the Company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the profit and loss account.

j. Revenue Recognition

i) Revenue is recognised in accounts in accordance with ''AS-7 Accounting for Construction Contracts'' issued by the ICAI on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii) Revenue from ship repair is recognized on the basis of job completion.

iii) Export turnover include exchange rate difference arising on realization.

iv) Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

v) Interest income is recognized on the time proportion basis.

k. Government Subsidy

Government Subsidy is recognized in the Profit & Loss account in accordance with the related scheme and in the period in which it is accrued. The scheme drawn up in this regard by the Ministry of Shipping, India specifies that the subsidy due on vessels constructed by Private Shipyards such as the Company itself would be payable only upon completion and delivery of eligible vessels as defined by the scheme. However, since the Company follows accrual concept of accounting, the subsidy recognized in Profit & Loss account is also comprises of vessels under construction. Reference is once again be made to point no. I(a) Basis of preparation, which places reliance on the successful implementation of the restructuring scheme for completion and delivery of the vessel to have an unambiguous understanding of the basis for recognizing the Government subsidy.

l. Borrowing Costs

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit and Loss account

m. Provision for Taxation

Current Tax

Provision for current income-tax is made on the basis of estimated taxable income for the year, and where the income is assessed by the tax authorities on the basis of such assessed income.

Deferred Tax

Deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited to Profit & Loss Account. In case of net difference giving rise to a deferred tax asset, the same is recognized on the assumption that the Company would be earning profits in the future.

n. Foreign Currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Premium or discount on forward exchange contracts are amortized and recognized in the Profit and Loss account over the period of the contract. Forward exchange contracts outstanding at the balance sheet date are stated at fair values and any gains or losses are recognized in the Profit and Loss account.

o. Provision and Contingent Liabilities

i) The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

ii) A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii) Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

p. Operating Leases

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with respective lease agreements.

q. Earnings Per Share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.

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Mar 31, 2012

A) Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with the generally accepted accounting principles, on a going concern basis and in line with accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of Companies Act, 1956.

b) Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the period. Examples of such estimates are provision for income taxes and accrued income.

c) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost includes all expenses incurred to bring the assets to its present location and condition.

d) Capital Work in progress

Capital work in progress includes the cost of fixed assets that are not ready to use at the balance sheet date.

e) Depreciation

i. Depreciation on Fixed Assets has been provided on Straight - Line Method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

ii. Depreciation on revalued amount has been charged to Revaluation Reserve.

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

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

v. Fixed assets under construction are shown as Capital Work-in-Progress and are not depreciated.

f) Impairment of Assests

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

g) Investments

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments comprising mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

h) Inventories

i. Raw materials are valued at cost or market price whichever is lower. Cost is taken on FIFO basis.

i. Stock in process is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

i) Employee Benefits Short term benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, leave salary etc. and the expected cost of ex-gratia are recognized in the period in which the employee renders the related service.

Post employment benefits

Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company's contribution paid/ payable under the schemes is recognized as an expense in the profit and loss account during the period in which the employee renders the related service.

Defined benefit plans:

The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows.

The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the balance sheet date.

When the calculation results in a benefit to the Company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the profit and loss account.

j) Revenue Recognition

i. Revenue is recognized in accounts in accordance with AS-7Accounting for Construction Contracts' issued by the ICAI on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair is recognized on the basis of job completion.

iii. Export turnover include exchange rate difference arising on realization.

iv. Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

v. Interest income is recognized on the time proportion basis.

k) Government Subsidy

Government Subsidy is recognized in the Profit & Loss account in accordance with the related scheme and in the period in which it is accrued.

l) Borrowing Costs

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit and Loss account

m) Provision for Taxation

Current Tax

Provision for current income-tax is made on the basis of estimated taxable income for the year, and where the income is assessed by the tax authorities on the basis of such assessed income.

Deferred Tax

Deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited to Profit & Loss Account.

n) Foreign Currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Premium or discount on forward exchange contracts are amortized and recognized in the Profit and Loss account over the period of the contract. Forward exchange contracts outstanding at the balance sheet date are stated at fair values and any gains or losses are recognized in the Profit and Loss account.

o) Provision and Contingent Liabilities

i. The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii. Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

p) Operating Leases

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with respective lease agreements.

q) Earnings Per Share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.

All above secured loans are secured by way of combine charged on Land situated at Mirya Village (Dist. Ratnagiri), Land Situated at Village Usgaon (Taluka Dist Ratnagiri), all movable properties located at all locations (i.e. Ghodbunder-Thane, Usgaon-Ratnagiri, Mirya Bunder- Ratnagiri, Zorinto-Sancole-Goa, Thannirbhavi-Mangalore, Shibpur, Howrah-Kolkata and others) including Plant and Machinery, Equipment, Appliance, Furniture and Fixture, vehicles, machinery spares and stores tools and accessories, whether or not installed, windmills, whole of current assets namely Raw Materials, Stock in process, semi finished and finished goods, stores spares, bill receivable and Book Debts by Mortgage Deed entered on 09th April 2010 and amended thereafter on 30th September 2010.

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Mar 31, 2011

1. Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with the generally accepted accounting principles, on a going concern basis and in line with accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the period. Examples of such estimates are provision for income taxes and accrued income.

3. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost includes all expenses incurred to bring the assets to its present location and condition.

4. Capital Work in progress

Capital work in progress includes the cost of fixed assets that are not ready to use at the balance sheet date and advances paid to acquire the same before the balance sheet date.

5. Depreciation

i. Depreciation on Fixed Assets has been provided on Straight – Line Method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

ii. Depreciation on revalued amount has been charged to Revaluation Reserve.

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

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

v. Fixed assets under construction are shown as Capital Work-in-Progress and are not depreciated

6. Impairment of Assests

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset's net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

7. Investments

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments comprising mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

8. Inventories

i. Raw materials are valued at cost or market price whichever is lower. Cost is taken on FIFO basis.

ii. Stock in process is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

9. Employee Benefits

Short term benefits

All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries and wages, leave salary etc. and the expected cost of ex-gratia are recognized in the period in which the employee renders the related service.

Post employment benefits

Defined contribution plans:

The Company makes specified monthly contributions towards employee provident fund. The Company's contribution paid/ payable under the schemes is recognized as an expense in the profit and loss account during the period in which the employee renders the related service.

Defined benefit plans:

The Company's gratuity benefit scheme is a defined benefit plan. The Company's net obligation in respect of the gratuity benefit scheme is calculated by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any plan assets deducted.

The present value of any obligation under such defined benefit plan is determined based on actuarial valuation using the Project Unit Completion Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The obligation is measured at the present value of the estimated future cash flows. The discount rates used for determining the present value of the obligation under defined benefit plan, are based on the market yields on Government securities as at the balance sheet date.

When the calculation results in a benefit to the Company, the recognized asset is limited to the net total of any unrecognized actuarial losses and past service costs and the present value of any future refunds from the plan or reductions in future contributions to the plan.

Actuarial gains and losses are recognized immediately in the profit and loss account.

10. Revenue Recognition

i. Revenue is recognised in accounts in accordance with 'AS-7 Accounting for Construction Contracts' issued by the ICAI on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair is recognized on the basis of job completion.

iii. Export turnover include exchange rate difference arising on realization.

iv. Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

v. Interest income is recognized on the time proportion basis.

11. Government Subsidy

Government Subsidy is recognised in the Profit & Loss account in accordance with the related scheme and in the period in which it is accrued.

12. Borrowing Costs

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit and Loss account

13. Miscellaneous Expenditure

Preliminary expenses are written off over a period of 5 years, commencing from the year of commencement of commercial operations.

14. Provision for Taxation

Current Tax

Provision for current income-tax is made on the basis of estimated taxable income for the year, and where the income is assessed by the tax authorities on the basis of such assessed income.

Deferred Tax

Deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited to Profit & Loss Account.

15. Foreign Currency transactions

Income and expense in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Premium or discount on forward exchange contracts are amortised and recognised in the Profit and Loss account over the period of the contract.

Forward exchange contracts outstanding at the balance sheet date are stated at fair values and any gains or losses are recognised in the Profit and Loss account.

16. Provision and Contingent Liabilities

i. The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii. Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

17. Operating Leases

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with respective lease agreements.

18. Earnings Per Share (EPS)

The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year, except where the results would be anti-dilutive.

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Mar 31, 2010

1. Basis of Preparation

The financial statements are prepared under the historical cost convention on accrual basis of accounting, in accordance with the generally accepted accounting principles, on a going concern basis and in line with accounting standards issued by the Institute of Chartered Accountants of India, as applicable, and the provisions of Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amount of income and expenses during the period. Examples of such estimates are provision for income taxes and accrued income.

3. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation. Cost includes all expenses incurred to bring the assets to its present location and condition.

4. Depreciation

i. Depreciation on Fixed Assets has been provided on Straight – Line Method at the rates and in the manner prescribed in schedule XIV of the Companies Act, 1956.

ii. Depreciation on revalued amount has been charged to Revaluation Reserve.

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

iv. Fixed assets under construction are shown as Capital Work-in-Progress and are not depreciated.

5. Impairment of Assests

At each balance sheet date, the Company reviews the carrying amount of its fixed assets to determine whether there is any indication that those assets suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

6. Investments

Long-term investments are stated at cost less provision for other than temporary diminution in value. Current investments comprising mutual funds are stated at the lower of cost and fair value, determined on a portfolio basis.

7. Inventories

i. Raw materials are valued at cost or market price whichever is lower. Cost is taken on FIFO basis.

ii. Stock in process is valued at amount of work done as percentage of contract value duly certified by Chartered Engineer.

8. Retirement Benefits

i. Contribution to Provident and Superannuation Funds are recognised as expense when incurred.

ii. Contribution towards Gratuity payable by the Company is charged to revenue on the basis of actuarial valuation.

iii. Leave Encashment benefit is treated as accrued, as and when claimed (encashed).

9. Revenue Recognition

i. Revenue is recognised in accounts in accordance with ‘AS-7 Accounting for Construction Contracts’ issued by the ICAI on percentage completion basis by applying percentage of work completed to the total contract value duly certified.

ii. Revenue from ship repair is recognized on the basis of job completion.

iii. Export turnover include exchange rate difference arising on realization.

iv. Dividend income on investment is accounted for in the year in which the right to receive the payment is established.

v. Interest income is recognized on the time proportion basis.

10. Government Subsidy

Government Subsidy is recognised in the Profit & Loss account in accordance with the related scheme and in the period in which it is accrued.

11. Borrowing Costs

Borrowing Costs attributable to the acquisition and construction of the Qualifying Assets, which takes substantial period of time to get ready for its intended use, are capitalized as part of the cost of respective assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Profit and Loss account

12. Miscellaneous Expenditure

Preliminary expenses are written off over a period of 5 years, commencing from the year of commencement of commercial operations.

13. Provision for Taxation

Current Tax

Provision for current income-tax is made on the basis of estimated taxable income for the year, and where the income is assessed by the tax authorities on the basis of such assessed income.

Deferred Tax

The deferred tax during the year for timing difference is accounted using tax rates that have been enacted; the net difference arising thereon is debited to Profit & Loss Account.

14. Foreign Currency transactions

Income and expenses in foreign currencies are converted at exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing on the balance sheet date. Premium or discount on forward exchange contracts are amortised and recognised in the Profit and Loss account over the period of the contract. Forward exchange contracts outstanding at the balance sheet date are stated at fair values and any gains or losses are recognised in the Profit and Loss account.

15. Provision and Contingent Liabilities

i. The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation.

ii. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources.

iii.Where there is a possible or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.

16. Operating Leases

Lease of assets under which all the risk and rewards of ownership are effectively retained by the lessor are classified as operating leases. Lease payments under operating leases are recognized as expenses on accrual basis in accordance with respective lease agreements.