Accounting Policies of Chokhani International Ltd. Company

Mar 31, 2012

ACCOUNTING CONVENTION

These accounts are prepared under the historical cost convention and on the basis of a going concern with revenues recognised and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the financial year. Excise duty and Customs duty are accounted as and when the liability for payment arises.

REVENUE RECOGNITION

(a) Revenue earned from ship repair has been accounted on the basis of ship repair work done and billed after adjusting credit notes/discounts. However, in respect of invoices raised and accounted but under negotiations till the finalisation of the balance Sheet, no provision has been made to meet the possible contingencies arising, if any, after the Balance Sheet date, wherever it is not possible to ascertain with reasonable accuracy the quantum to be provided for.

(b) Scrap generated is not valued but accounted for when sold.

(c) Other income/claims are accounted when right to receive the same is established.

FIXED ASSETS

(a) Certain Fixed Assets which were revalued on 31st March, 1993 are stated at revalued cost as adjusted on account of translation difference, Other Fixed Assets are stated at historical cost of acquisition including installation and commissioning.

(b) Borrowing costs eligible for capitalisation incurred, in respect of acquisition / construction of a qualifying asset, till the asset is substantially ready for use, are Capitalised as part of the cost of that asset.

DEPRECIATION OF FIXED ASSETS

(a) Depreciation for the year has been provided at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 (as amended) on Straight Line Method. The Straight Line Method rates have been applied to the original cost of all the assets including existing assets.

(b) Incase of assets where actual cost does not exceed Rs. 5,000/- at the rate of 100%.

(c) On revalued assets on straight line method on the revalued amount. The difference between depreciation on assets based on revaluation and that on original cost is transferred from Revaluation Reserve to Statement of Profit & Loss..

(d) No depreciation is charged on assets not put to use.

INVESTMENT

Investments are stated at present market rate.

CURRENT ASSETS

Inventories are valued at cost except damaged material which is valued at lower or cost of estimated net realisable value. Work in Progress is valued at direct material cost plus direct labour cost, including manufacturing & administrative overheads to the work in progress. The cost of materials is arrived by Weighted Average Method.

AMORTIZATION OF MISC. EXPENDITURE

a) Miscellaneous expenditure like preliminary and share issue expenses are written off over a period of 10 years. Accordingly 1/10th of such expenditure has been written off during the year.

b) Deferred Revenue Expenditure on Major Maintenance Programme is charged to revenue over a period of 5 years following the year it is incurred.

FOREIGN CURRENCIES

Foreign Currency assets and liabilities are translated into rupees at the exchange rates prevailing as on the date of Balance Sheet. Translation differences on foreign currency liabilities related to fixed assets are adjusted in the cost of fixed assets. Other material exchange translation differences are reflected in the Statement of Profit & Loss under appropriate income /expenses account.

RETIREMENT AND OTHER BENEFITS

Expenses and liabilities in respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 - Employee Benefits (Revised 2005) issued by the ICAI.

(a) Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

(b) Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan. The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date less the fair value of plan assets, together with adjustment for unrecognized actuarial gains or losses and past service costs. The defined benefit/obligation is calculated at or near the balance sheet date by and independent actuary using the projected unit credit method.

Actuarial gains and losses, if any, arising from past experience and changes in actuarial assumptions are charged or credited to the Profit and loss account in the year to which such gains or losses relate.

(c) Leave Encashment

Liability in respect of leave encashment becoming due or expected after the balance date is estimated on the basis of an actuarial valuation performed by an independent Actuary using the projected unit credit method.

---

Mar 31, 2010

ACCOUNTING CONVENTION

These accounts are prepared under the historical cost convention and on the basis of a going concern with revenues recognised and expenses accounted on their accrual including provisions/adjustments for committed obligations and amounts determined as payable or receivable during the financial year.Excise duty and Customs duty are accounted as and when the liability for payment arises.

REVENUE RECOGNITION

(a)Revenue earned from ship repair has been accounted on the basis of ship repair work done and billedafter adjusting credit notes/discounts.However,in respect of invoices raised and accounted but under negotiations till the finalisation of the balance Sheet,no provision has been made to meet the possible contingencies arising,if any,after the Balance Sheet date,wherever It is not possible to ascertain with reasonable accuracy the quantum to be provided for.

(b)Scrap generated is not valued but accounted for when sold.

(c)Other income/claims are accounted when right to receive the same is established.

FIXED ASSETS

(a)Certain Fixed Assets which were revalued on 31st March,1993 are stated at revalued cost as adjusted on account of translation difference,Other Fixed Assets are stated at historical cost of acquisition including installation and commissioning.

(b)Borrowing costs eligible for capitalisation incurred,in respect of acquisition 7 construction of a qualifying asset,till the asset is substantially ready for use,are capitalised as part of the cost of that asset.

DEPRECIATION OF FIXED ASSETS

(a)Depreciation for the year has been provided at the rates and in the manner prescribed in Schedule XIV to the Companies Act,1956 (as amended)on Straight Line Method.The Straight Line Method rates have been applied to the original cost of all the assets including existing assets.

(b)Incase of assets where actual cost does not exceed Rs.5.000/-at the rate of 100%.

(c)On revalued assets on straight line method on the revalued amount.The difference between depreciation on assets based on revaluation and that on original cost is transferred from Revaluation Reserve to Profit and Loss Account.

(d)No depreciation is charged on assets not put to use.

INVESTMENT

Investments are stated at present market rate.

CURRENT ASSETS

Inventories are valued at cost except damaged material which is valued at lower or cost of estimated net realisable value.Work in Progress is valued at direct material cost plus direct labour cost,including manufacturing &administrative overheads to the work in progress.The cost of materials is arrived by Weighted Average Method.

AMORTIZATION OF MISC.EXPENDITURE

i)Miscellaneous expenditure like preliminary and share issue expenses are written off over a period of 10 years.Accordingly 1/1 Oth of such expenditure has been written off during the year. ii)Deferred Revenue Expenditure on Major Maintenance Programme is charged to revenue over a period of 5 years following the year it is incurred.

FOREIGN CURRENCIES

Foreign Currency assets and liabilities are translated into rupees at the exchange rates prevailing as on the date of Balance Sheet.Translation differences on foreign currency liabilities related to fixed assets are adjusted in the cost of fixed assets.Other material exchange translation differences are reflected in the Profit &Loss Account under appropriate income /expenses account.

RETIREMENT AND OTHER BENEFITS

Expenses and liabilities in*respect of employee benefits are recorded in accordance with Revised Accounting Standard 15 -Employee Benefits (Revised 2005)issued by the ICAI.

(a)Provident Fund

The Company makes contribution to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act,1952 which is a defined contribution plan and contribution paid or payable is recognized as an expense in the period in which services are rendered by the employee.

(b)Gratuity

Gratuity is a post employment benefit and is in the nature of a defined benefit plan.The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit/ obligation at the balance sheet date less the fair value of plan assets,together with adjustment for unrecognized actuarial gains or losses and past service costs.The defined benefit/obligation is calculated at or near the balance sheet date by and independent actuary using the projected unit credit method. Actuarial gains and losses,if any,arising from past experience and changes in actuarial assumptions are charged or credited to the Profit and loss account in the year to which such gains or losses relate.

(c)Leave Encashment

Liability in respect of leave encashment becoming due or expected after the balance date is estimated on the basis of an actuarial valuation performed by an independent Actuary using the projected unit credit method.