Accounting Policies of Garware Marine Industries Ltd. Company

Mar 31, 2024

3 Summary of Significant Accounting Policies

3.1 Basis of preparation and presentation

The financial statements have been prepared on the historical cost basis except for certain financial instruments
that are measured at fair values at the end of each reporting period, as explained in the accounting policies below:
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date, regardless of whether that price is directly observable or
estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company
takes into account the characteristics of the asset or liability if market participants would take those characteristics
into account when pricing the asset or liability at the measurement date.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1,2, or 3 based
on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs
to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date;

• Level 2 inputs are inputs, other that quoted prices included within Level 1, that are observable for the asset
or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

All assets and liabilities have been classified as current and non-current as per normal operating cycle of the
Company and other criteria set out in the Schedule III to the Companies Act, 2013. Based on nature of services,
the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current
classification of assets and liabilities.

3.2 Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

3.2.1 Sale of goods/Sales of services

Revenue is net of value added taxes/GST, rebates and other similar allowances. Revenue from the sale of service
is recognised when the services are delivered, at which time all the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Company;

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

3.2.2 Dividend and interest income

Dividend income from investments is recognised when the Company''s right to receive payment has been
established.

Interest income from a financial asset is recognised when it is probable that the economic benefit will flow to
the Company and the amount of income can be measured reliably. Interest income is accrued on time basis, by
reference to the principal outstanding and at the effective interest rate applicable.

3.3 Borrowing cost

All borrowing costs are recognised as an expense in the year in which they are incurred.

3.4 Taxation

3.4.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from “profit before tax” as
reported in the statement of profit and loss because of items of income or expense that are taxable or deductible
in other years and items that are never taxable or deductible. The Company''s current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.

3.4.2 Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred
tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be
available against which those deductible temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to
be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the
liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting year.

3.4.3 Current and deferred tax for the year

Current and deferred tax are recognised in profit and loss, except when they relate to items that are recognised
in other comprehensive income, in which case, the current and deferred tax are also recognised in other
comprehensive income.

3.5 Property, plant and equipment

For transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and
equipment recognised as at 1st April 2016 (transition date) measured as per the previous GAAP and use that
carrying value as its deemed cost as of the transition date.

Cost includes purchase price, inward freight, taxes and expenses incidental to acquisition and installation, up to
the point the asset is ready for its intended use.

Depreciation on fixed assets is provided under the SLM method over the useful life of the assets.

When an asset is scrapped or otherwise disposed off, the cost and related depreciation are removed from the
books and the resultant profit or loss (including capital profit), if any, is reflected in the statement of profit and loss.

The estimated useful life and residual value is reviewed at the end of each reporting period, with the effect of any
changes in estimate being accounted for on a prospective basis.

3.6 Inventories

Inventories are valued at cost or net realisable value, whichever is lower.

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Mar 31, 2015

A. System of Accounting :

The Company generally follows the accrual basis of accounting both as to Income and Expenditure except those with significant uncertainties. Financial Statements are based on Historical costs.

B. Depreciation :

Depreciation is systematically allocated over the useful life of an asset on straight line method at rates specified in part C of schedule II of The Companies Act, 2013.

C. Fixed Assets :

All Fixed Assets are stated at cost less Depreciation.

D. Inventories :

Items of Inventories are valued on the basis given below :

Raw Materials.... At cost

Work - in - Process ... At cost

Stores, Spare, Packing Material & Fuel ... At cost

Finished Goods ... At cost or Realisable value whichever is lower

E. Investment :

Investments are stated at cost of acquisition. No provision for diminuation of permanent nature is provided on long term Investments.

F. Foreign Exchange Transactions :

Transactions are accounted on exchange rate prevailing on the date of Accounting of Transaction.

G. Staff Benefits :

The Company contributes to the Group Gratuity Scheme of Life Insurance Corporation of India for the Employees. The contribution is accounted in the year of payment. Leave encashment is also accounted on actual payment basis.

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Jun 30, 2014

A. System of Accounting :

The Company generally follows the accrual basis of accounting both as to Income and Expenditure except those with significant uncertainties. Financial Statements are based on Historical cost.

B. Depreciation :

(i) On original cost of all fixed assets installed upto 30.09.1987 on straight line method at rates prescribed U/S 205(2) (B) of the Companies Act, 1956 read with the circular No.1/86 (No.1.1.86CLV) dated 21.05.1986 of the Department of Company affairs.

(ii) On all Fixed assets installed after 30.09.1987 on straight line method at rates prescribed in schedule XIV of Companies Act, 1956.

(iii) On Leasehold land on amortisation basis.

C. Fixed Assets :

All Fixed Assets are stated at cost less Depreciation.

D. Inventories :

Items of Inventories are valued on the basis given below :

Raw Materials.... At cost

Work - in - Process ... At cost

Stores, Spare, Packing Material & Fuel ... At cost

Finished Goods ... At cost or Realisable value whichever is lower

E. Investment :

Investments are stated at cost of acquisition. No provision for diminuation of permanent nature is provided on long term Investments.

F. Foreign Exchange Transactions :

Transactions are accounted on exchange rate prevailing on the date of Accounting of Transaction.

G. Staff Benefits :

The Company contributes to the Group Gratuity Scheme of Life Insurance Corporation of India for the Employees. The contribution is accounted in the year of payment. Leave encashment is also accounted on actual payment basis.

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Jun 30, 2013

A. System of Accounting :

The Company generally follows the accrual basis of accounting both as to Income and Expenditure except those with signifcant uncertainties. Financial Statements are based on Historical cost.

B. Depreciation :

( i) On original cost of all fxed assets installed upto 30.09.1987 on straight line method at rates prescribed U/S 205(2) (B) of the Companies Act, 1956 read with the circular No.1/86 (No.1.1.86CLV) dated 21.05.1986 of the Department of Company affairs.

(ii) On all Fixed assets installed after 30.09.1987 on straight line method at rates prescribed in schedule XIV of Companies Act, 1956.

(iii) On Leasehold land on amortisation basis.

C. Fixed Assets :

All Fixed Assets are stated at cost less Depreciation.

D. Inventories :

Items of Inventories are valued on the basis given below :

Raw Materials…. At cost

Work - in - Process …. At cost

Stores, Spare, Packing Material & Fuel …. At cost

Finished Goods …. At cost or Realisable value whichever is lower

E. Investment :

Investments are stated at cost of acquisition. No provision for diminuation of permanent nature is provided on long term Investments.

F. Foreign Exchange Transactions :

Transactions are accounted on exchange rate prevailing on the date of Accounting of Transaction.

G. Staff Benefts :

The Company contributes to the Group Gratuity Scheme of Life Insurance Corporation of India for the Employees. The contribution is accounted in the year of payment. Leave encashment is also accounted on actual payment basis.

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Jun 30, 2010

A. System of Accounting :

The Company generally follows the accrual basis of accounting both as to Income and Expenditure except those with significant uncertainties. Financial Statements are based on Historical cost.

B. Depreciation:

(i) On original cost of all fixed assets installed upto 30 09.1987 on straight line method at rates prescribed U/S 205(2) (B) of the Companies Act, 1956 read with the circular No.1/86 (No.1.1.86CLV) dated 21.05.1S86of the Department of Company affairs.

(ii) On all Fixed assets installed after 30.09.1987 en straight line method at rates prescribed in schedule XIV of Companies Act, 1956.

(iii) On Leasehold land on amortisation basis.

C. Fixed Assets :

All Fixed Assets are stated at cost less Depreciation.

D. Inventories:

Items of Inventories are valued on the basis given below :

Raw Materials At cost

Work - in - Process At cost

Stores, Spare, Packing Material & Fuel At cost

Finished Goods At cost or Realisable value whichever is lower

E. Investment:

investments are stated at cost of acquisition. No provision for diminuation of permanent nature has been provided on long term Investments.

F. Foreign Exchange Transactions :

Transactions are accounted on exchange rate prevailing on the date of Accounting of Transaction.

G. Staff Benefits :

The Company has its own Gratuity Fund for the Employees to cover gratuity liability contribution and is also accounted in the year of payment. Leave encashment is also accounted on actual payment basis.

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Dec 31, 2000

A. System of Accounting :

The Company generally follows the accrual basis of accounting both as to income and expenditure except those with significant uncertainties. Financial statements are based on historical cost.

B. Depreciation :

(i) On original cost of all fixed assets installed upto 30.9.1987 on straight line method at rates prescribed u/s.205(2) (b) of the Companies Act. 1956 read with the circular No. 1/86 (No. 1.1.86 CLV) dated 21.5.1986 of the Department of Company Affairs.

(ii) On all fixed assets installed after 30.9.1987 on straight line method at rates prescribed in schedule XIV of Companies Act, 1956.

(iii) On revaluation increase arising on revaluation made as on 1st of April, 1984 at the rates calculated on straight line method over residual life of such assets as assessed by the valuers. An amount of Rs. 19,14,426 (Previous year Rs. 19,14,426/-) has been transferred from Revaluation Reserve to Profit and Loss Account representing depreciation provided relating to revaluation increase.

(iv) On leasehold land on amortisation basis.

C. Fixed Assets :

(i) All fixed assets are stated at cost less Depreciation.

(ii) Revaluation of Leasehold Lands, Buiidings and Plant & machinery had been made as on 1st April, 1984 on the basis of Valuation Report submitted by M/s. P.C. Gandhi & Associates, valuers appointed for the purpose. The resultant increase on such revaluation over the written down value of these assets amounting to Rs.4,18,00,31 OAhad been credited to Revaluation Reserve.

E Investment:

Investments are stated at cost of acquisition.

F. Foreign Exchange Transactions :

Transactions are accounted on exchange rate prevailing on the date of accounting of transaction.

G. Staff Benefits :

The Company has its own gratuity fund for the employees to cover gratuity liability contribution and is

1. accounted in the year of payment. Leave encashment is also accounted on actual payment basis.