1.  (a) ACCOUNTING CONVENTION
 
 The financial statements are prepared to comply in all material aspects
 under the Historical Cost convention and in accordance with generally
 accepted Accounting principles in India and the relevant provisions of
 the Companies Act, 1956, notified Accounting Standards by Companies
 (Accounting Standards) Rules, 2006 (as amended) to the extent
 applicable and current practices prevailing within the Shipping
 Industries in India.
 
 (b) USE OF ESTIMATES
 
 The preparation of financial statements requires estimates and
 assumptions that affect the reported amount of assets and liabilities,
 and disclosure of contingent liabilities at that date of the financial
 statements and the result of operations during the reporting period.
 Although such estimates and assumptions are made on reasonable and
 prudent basis taking into account all available information, actual
 results could differ from these estimates and assumptions and such
 differences are recognised in the period in which results are
 crystallised.
 
 2.  RECOGNITION OF REVENUE AND EXPENDITURE
 
 (a) The Profit & Loss Account reflects,
 
 (i) The Earnings and Direct Operating Expenses (Voyage related variable
 costs) in respect of all Finished Voyages on accrual basis.
 
 (ii) Standing Charges (Vessel related Fixed Costs) for all the vessels
 for the entire period of operation during the year on accrual basis.
 
 (iii) Income and Expenditure in respect of the customs penalty claims
 and container detention charges which are accounted for on realisation.
 
 (iv) In respect of slot sharing agreement with other shipping lines,
 the earnings and expenses on accrual basis based on completed voyage
 cycle during the year.
 
 (v) In respect of time charter arrangements, income and expenses are
 booked on accrual basis.
 
 (vi) Demurrage income is recognised on estimated basis, based on past
 experience of settlements.
 
 (b) The criteria followed for the purpose of determining the Finished
 Voyages are as under:
 
 (i) Passenger cum Cargo Vessels :- Disembarkation of passengers and
 discharge of cargo should be completed on or before the last date of
 the financial year.
 
 (ii) Cargo Vessels (other than those serviced by Feeder or Daughter
 Vessels) - Discharge of cargo should be completed on or before the last
 date of the financial year.
 
 (iii) Cargo vessels serviced by Daughter vessels :- The ultimate
 discharge of cargo by all daughter vessels should be completed on or
 before the last date of the financial year.
 
 (iv) Cargo vessels serviced by feeder vessels :- The discharge of cargo
 at the transhipment port by the mainline and own feeder vessels should
 be completed on or before the last date of financial year.
 Transhipment port is the point of commencement and completion of both
 the services. The completion of the mainline and feeder voyage is
 determined independent of each other.
 
 (v) Cellular Liner Service :- On completion of round voyage
 
 (c) Unfinished Voyages:
 
 Any voyage, which does not fulfil the above mentioned criteria, is
 treated as an unfinished voyage. Amount received on account of freight
 earning and other charges in respect of such voyages are carried
 forward as Unfinished Voyage Earnings. Direct operating expenses
 incurred for such voyages including hire and freight for vessels
 chartered-in are carried forward as Unfinished Voyage Expenses except
 in case of time charter.
 
 (d) Allocation of Container Expenses:
 
 Expenses relating to container activities such as stevedoring, stuffing
 and destuffing, transportation, etc. are identified with the relevant
 voyage and classified as direct operating expenses. Expenses such as
 container hire, kobi charges, ground rent and handling of empty
 containers, etc., which are not directly identifiable with any
 particular voyage are allocated to all voyages on the basis of unit
 days for each voyage. The sum so allocated to unfinished voyages is
 carried forward as Unfinished Voyage Expenses.
 
 3.  FIXED ASSETS AND DEPRECIATION
 
 a) Fixed Assets are stated at historical cost less accumulated
 depreciation. Cost includes acquisition cost and directly attributable
 cost of bringing the assets to its working condition for its intended
 use.
 
 b) Depreciation on ships is charged on Straight Line Method at the
 rates prescribed in Schedule XIV to the Companies Act, 1956 except in
 cases of Offshore Vessels, which are written off over a period of 12
 years and second hand vessels, which are written off over their
 respective useful lives as determined by technical evaluation subject
 to minimum rates as prescribed in Schedule XIV to the Companies Act,
 1956.
 
 Additions made to ships which have completed their useful life,
 involving structural changes and resulting in the extension of the
 useful life based on the technical evaluation, the depreciation is
 provided over the extended useful life / remaining useful life subject
 to minimum rates as prescribed in Schedule XIV to the Companies Act,
 1956.
 
 c) Assets other than ships and Intangible assets, depreciation is
 charged on the Written Down Value Method as per the rates prescribed
 in Schedule XIV to the Companies Act, 1956.
 
 d) Intangible assets including software is amortised over the useful
 life not exceeding five years.
 
 e) Assets costing individually Rs. 5,000/- and below are fully
 depreciated in the year of addition.
 
 f) The carrying amounts of assets are reviewed at each Balance Sheet
 date for impairment so as to determine the provision for impairment
 loss, if any, required, or the reversal, if any, required of impairment
 loss recognised in previous periods.
 
 4.  CAPITALISATION OF EXPENSES
 
 Interest and other expenses, incurred till the date of first loading,
 on amounts borrowed for acquisition / improvement of assets, is
 capitalised to the cost of respective assets. In addition, operating
 costs including initial stores and spares of newly acquired ships till
 the port of first loading are added to the cost of the respective ship.
 
 5.  RETIREMENT AND DISPOSAL OF SHIP
 
 (a) Ships which have been retired from operations for eventual disposal
 are withdrawn from the fixed assets and exhibited separately at Net
 block in the Balance Sheet under Ships Retired From Operation.
 
 Anticipated loss, if any, in the disposal of such ships is recognised
 immediately and provision for the same is made in the accounts for the
 year in which these have been retired. For the purpose of determining
 the loss, the sale price is recognised, if contract for sale is
 concluded. In other cases, assessment of the realisable value is made
 on the basis of the prevailing market conditions. Losses on such ships
 are provided for after taking into account the expenses such as customs
 duty, sales tax / value added tax, etc. in connection with the
 disposal, as well as estimated expenses in maintaining the ship, till
 its sale. Wherever the exact amount under each item of expenses is not
 known, an assessment is done on the best estimate basis.
 
 (b) Profits on sale of ships are accounted for only upon completion of
 sale thereof.
 
 6.  MAJOR REPAIRS AND RENEWALS OF SHIP
 
 (a) Advances given towards repairs / renewals of capital/revenue
 nature, are adjusted only on completion of the entire work duly
 certified by the concerned Authority.
 
 (b) Dry-dock expenditure is recognised in the Profit & Loss account to
 the extent work is done, based on technical evaluation.
 
 7.  VALUATION OF STOCK
 
 (a) Inventories are valued at lower of cost as determined on
 ''First-in-First-out'' method or net realisable value unless otherwise
 stated.
 
 (b) Fuel oil purchases are initially booked as stock. The value of
 year-end stock is arrived at after charging consumption on the basis of
 method as stated above.
 
 (c) As regards provisions purchased for victualling on board the ships,
 where catering is under departmental catering system, all purchases are
 treated as consumed.
 
 (d) The Company maintain godowns for keeping certain limited items of
 stores pending issue to the ships.  Store / Spares including paints,
 etc. are charged to revenue as consumed when delivered to ships,
 however at the end of the financial year, provision for consumption is
 made for items which remain as stores / spares in transit for more then
 three months. The valuation of items of Store / Spares is done as
 mentioned 7 (a) above.
 
 8.  ACCOUNTING OF FOREIGN CURRENCY TRANSACTIONS
 
 (a) All foreign currency transactions are recorded at the exchange rate
 of the last Friday of the preceding month published in Financial Times,
 London.
 
 (b) Liner freight is booked at rates referred to in (a) above relevant
 to the months in which the dates of sailing fall.
 
 (c) The foreign currency balances other than in US Dollars appearing in
 the books of account are translated into US Dollars at the closing
 exchange rate of the last Friday of March published in the Financial
 Times, London and thereafter, the monetary assets and monetary
 liabilities as well as the Long Term Loans are translated into rupees
 at SBI Mean Rate prevailing at the end of the period.
 
 (d) Exchange difference arising on repayment of liabilities and
 conversion of closing foreign currency balances pertaining to long term
 loans for acquiring ships / ownership containers / other depreciable
 assets and asset under construction is adjusted in the carrying cost of
 respective assets.
 
 (e) The exchange difference in translation arising on other monetary
 assets and liabilities are recognised in profit and loss account.
 
 9.  EMPLOYEE BENEFITS
 
 (a) Defined Contribution Plan-Provident fund contribution are accounted
 for on accrual basis.
 
 (b) Defined Benefit Plans-In case of shore staff, officers afloat, and
 crew on Company''s roster, the cost of Gratuity, Leave encashment, &
 post retirement medical benefit is determined using the projected unit
 credit method, with actuarial valuations being carried out at each
 reporting date.
 
 Actuarial gains and losses are recognised in full in the profit and
 loss account for the period in which they occur.
 
 The retirement benefit obligation recognised in the financial statement
 represents the present value of defined benefit obligation net of past
 service cost and reduced by the fair value of the plan assets. Any
 asset resulting from this calculation is limited to the present value
 in the form of refunds or reduction in the future contribution to the
 plan.
 
 (c) In case of crew on the general roster, gratuity, which is
 insignificant in value, is accounted on cash basis.
 
 10.  INSURANCE, P&I AND OTHER CLAIMS
 
 (a) Provision in respect of claims against the Company and covered by
 Insurance and P&I risks is made as under:-
 
 (i) In respect of claims falling under Hull & Machinery Insurance,
 which are estimated to be above the deductible limit, to the extent of
 deductible limit.
 
 (ii) In case of Cargo claims, on the basis of the actual claims
 registered and / or paid pertaining to the relevant year''s voyages as
 ascertained at the year-end as reduced by the amounts recoverable from
 the insurers.
 
 (b) All types of claims settled and paid above the deductible limits
 are shown as recoverable from Hull Underwriters / P&I Clubs until these
 are finally accepted by them as per the conditions of insurance policy
 and / or P&I cover. Adjustments, if any of revenue nature are made
 after statement of claims are received from the Average Adjusters.
 
 (c) Claims made by the Company against other parties including ship
 repair yards, ship-owners, ship charterers, customs and others, etc.
 are accounted for on realisation, due to uncertainty in the amounts of
 their ultimate recovery.
 
 11.  INVESTMENTS
 
 (a) Long Term Investments are stated at cost. Provision for diminution
 is made to recognize a decline, other than temporary, in the value of
 such investments.
 
 (b) Current Investments are stated at lower of cost and fair value.
 
 12.  TAXES ON INCOME
 
 Provision for income tax liability is made as per special provisions
 relating to income of shipping companies under the Income Tax Act, 1961
 on the basis of deemed tonnage income of the Company.
 
 13.  LEASES
 
 In respect of assets acquired on lease prior to 1st April 2001, lease
 rentals are accounted on accrual basis over the period of the lease and
 in respect of assets acquired on or after 1st April 2001, lease rentals
 are accounted in accordance with AS-19 Accounting for Leases.
 
 14.  PROVISIONS
 
 Provisions are recognised when the company has a present obligation as
 a result of past events, for which it is probable that an outflow of
 resources embodying economic benefits will be required to settle the
 obligation and a reliable estimate of the amount can be made.