1.  Basis of Accounting
 
 The financial statements are prepared under the Historical Cost
 Conventions on the basis of Going Concern and as per
 applicable Indian Accounting Standards notified u/s 211 (3C) of The 
 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 reported
 amount of assets and liabilities on the date of financial statements
 and the reported amount of revenues and expenses during the reporting
 period . Difference if any between the actual results and estimates is
 recognised in which the results are known / materialized.
 
 3.  Revenue
 
 Revenue is recognized in accounts in accordance with Accounting
 Standard-7 Accounting for Construction Contracts'' issued by Institute
 of Chartered Accountants of India. The method of recognition is on
 percentage completion basis. Revenue is recognized under Percentage
 Completion Method on the basis of proportion that contract costs
 incurred for work performed up to the reporting date bears to the
 estimated total contract costs.
 
 Revenue from ship repair is recognized on the basis of job completion.
 
 4.  Fixed Assets
 
 Tangible Assets:
 
 Fixed Assets are recorded at Cost. Cost is purchase cost and in the
 case of Freehold Land, includes development cost incurred, together
 with all incidental costs of acquisition, borrowing costs and other
 related internal costs and is netted of for Cenvat and Value Added Tax.
 
 Profit/Loss on disposal of fixed assets is recognised in the Profit and
 Loss Account.
 
 Intangible Assets:
 
 Intangible assets are recognized and accounted at cost in accordance
 with Accounting Standard-26 Intangible Assets'' issued by Institute of
 Chartered Accountants of India.
 
 5.  Capital Work In Progress
 
 All expenditure, including advances given relating to development of
 land, buildings, dry docks and plant & machinery etc. are accumulated
 and shown as capital work-in-progress till the completion of such
 activities.
 
 6.  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.
 
 7.  Depreciation and Amortisation
 
 a) Freehold land is not depreciated. Leasehold land is amortised
 equally over the period of lease.
 
 b) Dry Docks (included in Plant & Machinery) and Dry Docks Civil Works
 (included in Factory Building) and Jetty are depreciated on Straight
 Line Method in accordance with Accounting Standard -6 ''Depreciation
 Accounting'' of the Institute of Chartered Accountants of India at 
 ther ates prescribed in Schedule XIV to the Companies Act, 1956.
 
 c) Other assets are depreciated on Written Down Value Method at the
 rates prescribed in Schedule XIV to the Companies Act, 1956.
 
 d) Depreciation on additions / deletions to Fixed Assets made during
 the year is provided on pro-rata basis from or up to date of such
 additions / deletions as the case may be.
 
 e) Depreciation on amounts added on revaluation is recouped from
 Revaluation Reserve
 
 f) Intangible assets are stated at cost less accumulated amortisation.
 
 g) Software is amortised over a period of five years.
 
 8.  Impairment of Assets
 
 An asset is treated as impaired when the carrying cost of assets
 exceeds its recoverable value. The company assesses at each Balance
 Sheet date whether there is any indication that any asset may be
 impaired and if such indication exists, the carrying value of such
 asset is reduced to its recoverable amount and a provision is made for
 such impairment loss in the profit and loss account. The impairment
 loss recognized in prior accounting period is reversed if there has
 been a change in the estimate of recoverable amount.
 
 9.  Employees''Benefits
 
 Provident Fund: Provident Fund contributions are made as per a defined
 contribution scheme and the contribution of company is charged to
 Profit and Loss account of the year when become due. The company has no
 other obligation other than to contribute and deposit the contribution
 to respective authorities.
 
 Short term employee benefits are recognized as an expense at the
 undiscounted amount in the Profit and Loss account of the year in which
 the related service is rendered.
 
 Long term employee benefits are recognized as an expense in the Profit
 & Loss account for the year in which the employee has rendered
 services. The expense is recognized at the present value of the amount
 payable determined using actuarial valuation techniques. Actuarial
 gains and losses in respect of long term benefits are charged to the
 Profit and Loss account.
 
 10.  Valuation of Inventory
 
 Inventories of spares, consumables, components are valued at lower of
 cost and net realizable value. Cost represents purchase cost and other
 incidental costs, if any. Cost of inventories is computed on Weighted
 Average/ Fl FO basis.
 
 11.  Work in Progress and Cost Allocation
 
 Each construction contract is considered as a cost center and all costs
 directly identifiable to the Contract are charged on actual basis.
 Indirect miscellaneous costs are also allocated to the various
 contracts using appropriate overhead recovery method.  Contract
 work-in-progress is valued at cost, including therein profit or loss
 arrived at in accordance of Accounting Standard -7 ''Accounting for
 Construction Contracts''
 
 12.  Foreign Currency Transactions
 
 Transactions in Foreign Currencies are recorded at the exchange rate
 prevailing on the date of the transactions. Monetary assets and
 liabilities are translated at the year end using closing rate if remain
 unsettled at the year end. Non monetary foreign currency items are
 carried at cost.
 
 The resulting gain or loss on account of exchange difference either on
 settlement or on translation is recognised in the Profit & Loss account
 
 The Company has w.e.f. or December,2006 chosen to apply notification
 issued by Companies (Accounting Standard) Amendment Rules 2009 GSR 225
 (E) dated 31.03.2009 as regards monetary long term assets and
 liabilities. Consequently the resulting gain or loss on account of
 exchange difference on settlement or on translation is so far as they
 relate to depreciable assets is added or deducted from the cost of the
 asset.
 
 13.  Derivative Accounting
 
 During the year ended 31st March, 2008, The Institute of Chartered
 Accountants of India has issued an announcement on ''Accounting for
 Derivatives'' inter alia requiring provision for losses on all
 derivative contracts outstanding at the balance sheet date by marking
 them to market keeping in view the principle of prudence, other than
 for forward contracts to which Accounting Standard (AS) 11- ''The Effect
 of Change in Foreign Exchange Rates'' is applicable. The Company has
 entered into Forward Contracts to hedge a firm commitment or a highly
 probable forecast transaction to which AS-11 is not applicable and
 hence, the Company has applied aforesaid announcement. Premium paid on
 forward contracts is recognized in the year of entering of contract.
 
 14.  Government Subsidy
 
 Government subsidy related to shipbuilding contracts are recognized on
 compliance with the relevant conditions and is recognized in the Profit
 and Loss account and presented under ''Revenue from Operations''.
 
 15.  Operating Leases
 
 Leases where the lessor effectively retains substantially all the risks
 and benefits of ownership of the leased assets are classified as
 operating leases. Operating lease payments / receipts are recognized as
 an expense / income in the Profit and Loss Account on a straight-line
 basis over the lease term.
 
 16.  Provisions for Current and Deferred Tax
 
 Provision for Current Tax is made on the basis of taxable income under
 the provision of the Income Tax Act, 1961.
 
 Deferred Tax resulting from timing differences between book and
 taxable profit is accounted for using the tax rates and laws that have
 been enacted or substantively enacted as on the balance sheet date. The
 deferred tax asset is recognised and carried forward only to the extent
 that there is a reasonable certainty that the asset will be realised in
 future.
 
 In accordance with the guidance note issued by Institute of Chartered
 Accountants of India, the Company recognises MAT Credit as an asset
 only to the extent ,the probability exists that the Company will become
 liable to pay normal Income Tax during the specified period as per
 provision of the Income Tax Act, 1961.
 
 17.  Provisions, Contingent Liabilities and Contingent Assets
 
 A provision is made based on reliable estimate when it is probable that
 an outflow of resources embodying economic benefits will be required to
 settle an obligation. Contingent liabilities, if material, are
 disclosed by way of Notes to Accounts. Contingent
 Assete are not recognized/disclosed.
 
 18.  Investments
 
 Long Term investments are stated at cost. Cost includes incidental
 expenses of acquisition. Decline in value of investment other than of
 temporary nature is recognised in Profit & Loss account.