I.  Accounting Convention :
 
 The financial statements are prepared under the historical cost
 convention and as a going concern, in accordance with, generally
 accepted accounting principles in India, the Accounting Standards
 issued by The Institute of Chartered Accountants of India and
 provisions of the Companies Act, 1956.
 
 II.  Use of Estimates :
 
 The preparation of financial statements in conformity with generally
 accepted accounting principles requires the management to make
 estimates and assumptions that affect the reported balances of assets
 and liabilities as of the date of financial statements and reported
 amounts of income and expenses during the period. Management believes
 that the estimates used in the preparation of financial statements are
 prudent and reasonable. Actual results could differ from the estimates.
 
 III.  Fixed Assets :
 
 Fixed assets are stated at cost less accumulated depreciation. Cost
 includes expenses related to acquisition, financing costs on borrowings
 during construction period and operational costs till commencement of
 first commercial voyage. Further, additions or extentions of a capital
 nature are added to the cost of vessel as and when incurred.
 
 IV.  Depreciation of Assets :
 
 (a) On fleet:
 
 Depreciation has been arrived at on straight line method at the rate
 arrived at so as to provide 95% of the total cost of each vessel over
 its balance economic useful life. For this purpose the economic useful
 life of vessels is estimated as 30 years. However, in the current year
 in the case of two vessels M.V.Garware I and M.V.Garware V, management
 has decided to reduce the economic useful life of the vessel from 30
 years to 29 years. As a result depreciation for the year has increased
 by Rs. 248.46 lacs.
 
 Any additions or extensions to existing vessels which forms an integral
 part of the vessels is depreciated by 95% over the remaining useful
 life of the vessels, in accordance with the requirement of para. 24 of
 Accounting Standard 6 (Revised) - Depreciation Accounting, issued by
 The Institute of Chartered Accountants of India.
 
 (b) On Motor Vehicles :
 
 Depreciation is arrived at on straight line method at 25% p.a. of the
 cost, based on the estimated useful life of 4 (four) years for the
 motor vehicles.
 
 (c) On Other Assets :
 
 Depreciation on assets acquired upto 31st December, 2003 is charged in
 the accounts on the Written Down Value method at the rates prescribed
 under Schedule XIV of the Companies Act, 1956.
 
 Depreciation on assets acquired from 1st January, 2004 is charged in
 the accounts on the Straight Line method at the rates prescribed under
 Schedule XIV of the Companies Act, 1956.
 
 V.  Accounting for Investments :
 
 Long term investments are valued at cost.
 
 VI.  Valuation of Inventories :
 
 (a) The stocks of stores and spares including on board the ships as
 certified by the management, are valued at cost.
 
 (b) The Stocks of fuel and diesel oil owned by the Company as confirmed
 by masters of the vessels are valued at cost.
 
 VII.  Revenue Recognition :
 
 Time Charter earnings are recognized on accrual basis.
 
 VIII.  Operating Expenses :
 
 Expenses charged to Profit and Loss account are recognised on accrual
 basis.
 
 IX.  Employee Benefits :
 
 Defined Contribution Plan
 
 Employee benefits in the form of Provident Fund which is a defined
 contribution scheme, is charged to the Profit and Loss account during
 the year when the contribution accrues.
 
 Defined Benefit Plan
 
 The liability for gratuity, a defined benefit obligation, is accrued
 and provided for on the basis of actuarial valuation, using the
 projected unit credit method as at the Balance Sheet date.
 
 Other Long Term Benefits
 
 Long term compensated absences are provided on the basis of an
 actuarial''valuation, using the projected credit method as at the
 Balance Sheet date.
 
 Actuarial gains and losses comprising of experience adjustments and the
 effects of changes in actuarial assumptions are recognised in the
 Profit and Loss account for the year as income or expense.
 
 X.  Foreign Exchange Transaction :
 
 (a) Transactions in foreign currency are recorded at the standard
 exchange rates determined monthly. Monetary assets and liabilities
 denominated in foreign currency, remaining unsettled at the period end
 are re-stated at closing rates. The difference in translation of
 monetary assets and liabilities and realised gains and losses on
 foreign currency transactions ( including those relating to acquisition
 of depreciable assets) is recognised in the Profit and Loss Account.
 
 (b) Forward exchange contracts entered into to hedge foreign currency
 risks of firm commitments or highly probable forecast transactions,
 forward rate options, currency and interest rate swaps and commodity
 future contracts, that qualify as cash flow hedges are recorded in
 accordance with the principles of hedge accounting enunciated in
 Accounting Standard (AS) 30 - Financial Instruments: Recognition and
 Measurement. The gain or loss on designated hedging instruments that
 qualify as effective hedges is recorded in the Hedging Reserve Account
 and is recognised in the statement of Profit and Loss in the same
 period or periods during which the hedged transaction affects Profit
 and Loss.
 
 Gains or losses on the ineffective transactions are immediately
 recognised in the Profit and Loss Account. When a forcasted transaction
 is no longer expected to occur the gains and losses that were
 previously recognised in the Hedging Reserve are transferred to the
 statement of Profit and Loss immediately.
 
 Accordingly the Company has designated borrowings in foreign currency
 (relating to acquisition of depreciable assets) as hedge instruments to
 cover its foreign currency risks of its firm commitments and highly
 probable forcecast transactions of revenue streams and the same are
 accounted as cash flow hedge.
 
 XI.  Borrowing Cost :
 
 Borrowing costs directly attributable to borrowed funds raised to meet
 any financial obligation on account of acquisition or other value added
 cost of any qualifying assets (Fixed Assets) incurred uptill the date
 of cessation of substantial activities necessary to prepare the
 qualifying asset for its intended use, is capitalised.
 
 XII.  Provisions & Contingent Liabilities :
 
 (a) Provisions are recognised in the accounts for present probable
 obligations arising out of past events that require outflow of
 resources, the amount of which can be reliably estimated.
 
 (b) Contingent liabilities are disclosed in respect of possible
 obligation that arise from past events but their existence is confirmed
 by occurance or non-occurance of one or more uncertain future events
 not wholly within the control of the Company, unless the likelyhood of
 an outflow of resources is remote.
 
 (c) Contingent assets are not recognised in the accounts, unless there
 is virtual certainity as to its realisation.
 
 XIII.  Provision for Taxation :
 
 Provision of current income-tax is made on the basis of the assessable
 income under the income tax Act, 1961.  Income from shipping activities
 is assessed on the basis of deemed tonnage income of the Company.
 
 Deferred income tax is recognised on timing differences, between
 taxable income and accounting income which originate in one period and
 are capable of reversal in one or more subsequent periods only in
 respect of the non- shipping activities of the Company. The tax effect
 is calculated on the accmulated timing differences at the year end
 based on tax rates and laws, enacted or substantially enacted as of the
 balance sheet date.
 
 XIV.  Prior Period Items/ Extra Ordinary Items :
 
 Prior period items & extra ordinary items, if any, are disclosed
 separately in the notes to accounts.
 
 XV.  Impairment of Assets :
 
 The Company reviews the carrying values of tangible assets for any
 possible impairment at each Balance Sheet date. Impairment loss, if
 any, is recognised in the year in which impairment takes place.