3. MATERIAL ACCOUNTING POLICIES

These financial statements have been prepared using the
material accounting policies summarised below. These
were used throughout all the periods presented in the
said statements.

3.1. Current and Non-Current classification

The Company presents assets and liabilities in the Balance
Sheet based on current / non-current classification.

An asset is classified as current when it is:

• Expected to be realised or intended to be sold or
consumed in normal operating cycle,

• Held primarily for the purpose of trading,

• Expected to be realised within 12 months after the
reporting period, or

• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12
months after the reporting period. All other assets
are classified as non-current.

A liability is classified as current when:

• It is Expected to be settled in normal operating cycle,

• It is held primarily for the purpose of trading,

• I t is due to be settled within 12 months after the
reporting period, or

• There is no unconditional right to defer the
settlement of the liability for at least twelve months
after the reporting period. All other liabilities are
classified as non-current.

The terms of the liability that could, at the option of the
counterparty, result in its settlement by the issue of equity
instruments do not affect its classification.

Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

The operating cycle is the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents. The Company has determined its operating
cycle, as explained in schedule III of the Companies Act,
2013, as twelve months, having regard to the nature of
business being carried out by the Company. The same
has been considered for classifying assets and liabilities
as current and non-current while preparing the financial
statements.

1.2. Effects of Changes in Foreign Exchange Rates
Foreign Currency Transaction
Initial recognition and measurement

Foreign currency transactions (Monetary or Non¬
monetary items) are recorded at the exchange rate
prevailing on the date of transaction.

Subsequent measurement

Monetary assets and liabilities denominated in foreign
currency remaining unsettled at the end of the year, are
translated at the closing rates prevailing at the Balance
Sheet date.

Non-monetary items which are carried in terms of historical
cost denominated in foreign currency are reported using
the exchange rate at the date of transaction.

Exchange differences arising as a result of the above
are recognized as income or expenses in the statement
of profit and loss. Exchange differences arising on the
settlement of monetary items at rates different from
those at which they were initially recorded during the
year, or reported in previous financial statements, are
recognised as income or expenses in the year in which
they arise.

3.3. Property, Plant and Equipment

As on the date of transition to Ind-AS, the Company had
availed one time transition exemption regarding the
carrying cost of property, plant and equipment (PPE),
pursuant thereto the carrying cost as at 11^th April 2024
reported under the previous GAAP were considered as
deemed cost for reporting under Ind-AS.

Items of property, plant and equipment are stated at
cost, net of accumulated depreciation and accumulated
impairment losses, if any.

Cost of property, plant and equipment comprises its
purchase price net of any trade discounts and rebates,
including import duties and non - refundable purchase
taxes, and any directly attributable costs of bringing an
asset to working condition and location for its intended
use and estimated costs of dismantling and removing
the item and restoring the item and restoring the site on
which it is located.

Subsequent costs are included in the asset''s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Company and the
cost of the item can be measured reliably. All other repair
and maintenance cost are charged to the Statement
of Profit and Loss during the period in which they were
incurred.

If significant parts of an item of property, plant and
equipment have different useful lives, then they are
accounted for as separate items (major components) of
property, plant and equipment.

Material items such as spare parts, stand-by equipment
and service equipment are classified as property, plant
and equipment when they meet the definition of
property, plant and equipment as specified in Ind AS 16
- Property, Plant and Equipment.

An item of property, plant and equipment is derecognised
upon its disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss on
disposal of the item of property, plant and equipment is
included in the Statement of Profit and Loss.

3.4. Depreciation

Depreciation is the systematic allocation of the
depreciable amount of property, plant and equipment
over its useful life and is provided on a straight-line
basis over the useful life as prescribed in Schedule II to
the Companies Act, 2013 ("the Act") or as per technical
assessment by the Management.

Depreciable amount for property, plant and equipment
is the cost of property, plant and equipment less its
estimated residual value. The useful life of property, plant
and equipment is the period over which it is expected to
be available for use by the Company or the number of
production or similar units expected to be obtained from it
by the Company. The Company has considered the useful
lives prescribed by Schedule II of the Act, for the purpose
of depreciating its property, plant and equipment.

*Dry-docking costs are capitalised as a separate component
of vessels and amortised on a straight-line basis over the
period until the next scheduled dry-docking.

The estimated amortisation period for dry-docking costs
is reviewed at each reporting date and, where necessary,
revised prospectively to reflect changes in the expected
timing of the next dry-docking.

Depreciation on property, plant and equipment which are
added / disposed of during the year, is provided on pro¬
rata basis with reference to the date of addition / deletion.

3.5. Capital work in progress and Capital advances

Cost of assets not ready for intended use, as on the end of
the reporting period, is shown as capital work in progress.

Advances given towards acquisition of Property, Plant
and Equipment outstanding at end of each reporting
period are disclosed as non-current assets.

3.6. Intangible Assets

Intangible assets with finite useful lives that are
acquired separately are carried at cost less accumulated
amortisation and accumulated impairment losses.
Intangible assets with indefinite useful lives that are
acquired separately are carried at cost less accumulated
impairment losses. Expenditure on internally generated
intangible assets is recognised in the Statement of Profit
and Loss as incurred, except for development expenditure
that satisfies the recognition criteria prescribed under Ind
AS 38, Intangible Assets, which is capitalised.

Amortization:

Intangible assets with finite useful lives are amortised on
a Straight Line basis over the estimated useful economic
life. The estimated useful life of intangible assets is
mentioned below

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

Gains or losses arising from de-recognition of an
intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the
asset and are recognized in the Statement of Profit and
Loss when the asset is derecognized.

3.7. Intangible Assets under Development

Expenditure on intangible assets eligible for capitalization
are carried as intangible assets under development where
such assets are not yet ready for their intended use.

3.8. Asset classified as held for sale

An item of Property, Plant and Equipment is classified as
an asset held for sale when the criteria specified under Ind
AS 105, Non-current Assets Held for Sale and Discontinued
Operations, are met. Such assets are measured at the
lower of their carrying amount and fair value less costs to
sell and presented separately in the Balance Sheet.

3.9. Impairment

The carrying amounts of the Company''s property, plant
and equipment and intangible assets are reviewed at the
end of each reporting period to determine whether there
is any indication of impairment. If any such indication
exists, the asset''s recoverable amounts are estimated in
order to determine the extent of impairment loss, if any.
An impairment loss is recognised whenever the carrying
amount of an asset or its cash generating unit (CGU)
exceeds its recoverable amount. The impairment loss, if
any, is recognised in the Statement of Profit and Loss in
the period in which impairment takes place.

3.10.Inventories

I nventory includes consumable stores which are carried
at lower of cost and net realisable value. Stores and
spares delivered on board of the vessels are charged to
Statement of Profit and Loss.

Cost of inventory comprises all costs of purchase, and
other costs incurred in bringing the inventories to their
present location and condition. Cost is ascertained on
first-in-first-out basis.

Net realisable value is the estimated selling price in
the ordinary course of business, less estimated cost of
completion and the estimated cost necessary to make the
sale.

3.11.Cash and Cash Equivalents

Cash and cash equivalents in the Balance Sheet and
Statement of Cash Flows comprise cash on hand and at
banks and short-term deposits with an original maturity of

three months or less, which are subject to an insignificant
risk of changes in value.

3.12.Financial Instruments

A financial instrument is any contract that gives rise to
a financial asset of one entity and a financial liability or
equity instrument of another entity.

Financial Assets
Classification

Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value
through other comprehensive income (OCI), and fair value
through profit or loss. The classification of financial assets
at initial recognition depends on the financial asset''s
contractual cash flow characteristics and the Company''s
business model for managing them.

Initial recognition and measurement

The Company initially measures a financial asset at its
fair value plus, in the case of a financial asset not at fair
value through profit or loss, transaction costs that are
attributable to the acquisition of the financial asset.

Subsequent measurement

Financial assets carried at amortised cost

A financial asset is subsequently measured at amortised
cost if it is held within a business model whose objective is
to hold the asset for collecting contractual cash flows and
the contractual terms of the asset give rise on specified
dates to cash flows that are solely payments of principal
and interest (SPPI) on the principal amount outstanding.

After initial measurement, such financial assets are
subsequently measured at amortised cost using the
effective interest rate (EIR) method. Amortised cost
is calculated by taking into account any discount or
premium on acquisition and fees or costs that are an
integral part of the EIR. The EIR amortisation is included in
other income in the Statement of Profit or Loss. The losses
arising from impairment are recognised in the Statement
of Profit or Loss.

Financial assets carried at fair value through other
comprehensive income (FVTOCI)

A financial asset is subsequently measured at fair value
through other comprehensive income if it is held within
a business model whose objective is achieved by both
collecting contractual cash flows and selling the financial
assets and the contractual terms of the asset give rise on
specified dates to cash flows that are solely payments
of principal and interest (SPPI) on the principal amount
outstanding.

Debt instruments included within the FVTOCI category
are measured initially as well as at each reporting date
at fair value. Fair value movements are recognized in
the other comprehensive income (OCI). However, the

company recognizes interest income, impairment losses
and reversals in the Profit and Loss. On de-recognition of
the asset, cumulative gain or loss previously recognised
in OCI is reclassified from the equity to Profit and Loss.
Interest earned whilst holding FVTOCI asset is reported as
interest income using the EIR method.

Equity instruments, except for the ones held for trading,
could also be classified as at FVTOCI, if the Company
makes an irrevocable election to do so at the time of initial
recognition. Such election is made on instrument-to-
instrument basis. In case of equity instruments classified
as at FVTOCI, all the fair value changes on the instrument,
excluding dividends, are recognised in the OCI. There is
no recycling of the amounts from OCI to statement of
profit and loss, even on sale of investment. However, the
Company may transfer the cumulative gain or loss within
equity.

Financial assets carried at fair value through profit or
loss (FVTPL)

A financial asset which is not categorized as at amortised
cost or as FVTOCI, is classified and subsequently measured
as at FVTPL.

As per the requirements of Ind AS 109—"Financial
Instruments", all investments in equity instruments and
contracts on those instruments are to be measured at
FVTPL unless designated at FVTOCI. However, there might
be situations where cost may be an appropriate estimate of
fair value. That may be the case if insufficient information is
available to measure fair value, or if there is a wide range of
possible fair value measurements and cost represents the
best estimate of fair value within that range.

In addition, the Company may elect to designate a debt
instrument, which otherwise meets amortized cost or
FVTOCI criteria, as at FVTPL. However, such election
is allowed only if doing so reduces or eliminates a
measurement or recognition inconsistency (referred to as
''accounting mismatch'').

De-recognition

A financial asset (or, where applicable, a part of a financial
asset) is primarily de-recognised (i.e., removed from the
Company''s balance sheet) when:

• The rights to receive cash flows from the asset have
expired, or

• The Company has transferred its rights to receive
cash flows from the asset or has assumed an
obligation to pay the received cash flows in full
without material delay to a third party under a ''pass¬
through'' arrangement; and either (a) the company
has transferred substantially all the risks and
rewards of the asset, or (b) the company has neither
transferred nor retained substantially all the risks
and rewards of the asset, but has transferred control
of the asset.

When the company has transferred its rights to receive
cash flows from an asset or has entered into a pass¬
through arrangement, it evaluates if and to what extent
it has retained the risks and rewards of ownership. When
it has neither transferred nor retained substantially all of
the risks and rewards of the asset, nor transferred control
of the asset, the company continues to recognise the
transferred asset to the extent of the Company''s continuing
involvement. In that case, the company also recognises an
associated liability. The transferred asset and the associated
liability are measured on a basis that reflects the rights and
obligations that the Company has retained.

Continuing involvement that takes the form of a
guarantee over the transferred asset is measured at the
lower of the original carrying amount of the asset and the
maximum amount of consideration that the company
could be required to repay.

Financial Liabilities

Classification

Financial liabilities are classified, at initial recognition,
as subsequently measured at amortised cost, except for
financial liabilities specifically classified and subsequently
measured as at fair value through profit and loss.

Initial recognition and measurement

The Company initially measures a financial liability at its
fair value plus, in the case of a financial liability not at fair
value through profit or loss, transaction costs.

Subsequent measurement

Financial liabilities carried at amortised cost

The Company measures its financial liabilities at amortised
cost using the effective interest rate method. The effective
interest rate is the rate that exactly discounts, estimated
future cash payments (including all fees, transaction costs
and other premiums or discounts) through the expected
life of the financial liability, or (where appropriate) a
shorter period, to the amortised cost on initial recognition.

The interest expense (calculated based on effective
interest method) and any gain or loss on derecognition is
recognised in the Standalone Statement of Profit and Loss.

Financial assets carried at fair value through profit or
loss (FVTPL)

Financial liabilities are classified as at FVTPL when the
financial liability is held for trading or is a derivative
(except for effective hedge) or are designated upon initial
recognition as FVTPL. Gains or losses, including any interest
expense on liabilities held for trading are recognised in the
Standalone Statement of Profit and Loss.

De-recognition

A financial liability is derecognised when the obligation
under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another

from the same lender on substantially different terms, or
the terms of an existing liability are substantially modified,
such an exchange or modification is treated as the de¬
recognition of the original liability and the recognition of
a new liability. The difference in the respective carrying
amounts is recognised in the Standalone statement of
profit and loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the
net amount is reported in the Standalone Statement of
Assets and Liabilities if there is a currently enforceable
legal right to offset the recognised amounts and there is
an intention to settle on a net basis, to realise the assets
and settle the liabilities simultaneously.

3.13.Impairment

Impairment of Financial Assets

In accordance with Ind AS 109, the Company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial
assets and credit risk exposure:

• Financial assets that are measured at amortised cost

• Financial assets that are measured at FVTOCI

• Trade or other contractual receivables resulting from
transactions that are within the scope of Ind AS 115

The Company for recognition of impairment loss allowance
on Trade or other contractual receivables resulting from
transactions that are within the scope of Ind AS 115 uses
historical default rates to determine impairment loss on
the portfolio of trade receivables. At every reporting date
these historical default rates are reviewed and changes in
the forward looking estimates are analysed.

The Company follows ''general approach'' for recognition
of impairment loss allowance, on other financial assets,
wherein the Company provides for 12-month ECL on ''Low
Credit Risk'' financial assets and lifetime ECL on ''Moderate
Credit Risk'' and ''High Credit Risk'' financial assets.

I f, in a subsequent period, credit quality of the financial
asset improves such that there is no longer a significant
credit risk, then the entity reverts to recognising
impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting
from all possible default events over the expected life of
a financial instrument. The 12-month ECL is a portion of
the lifetime ECL which results from default events that are
possible within 12 months after the reporting date.

ECL is the difference between all contractual cash flows
that are due to the Company in accordance with the
contract and all the cash flows that the entity expects to
receive (i.e., all cash shortfalls), discounted at the original
EIR. When estimating the cash flows, an entity is required
to consider:

• All contractual terms of the financial instrument
(including prepayment, extension, call and similar
options) over the expected life of the financial
instrument. However, in rare cases when the
expected life of the financial instrument cannot
be estimated reliably, then the entity is required to
use the remaining contractual term of the financial
instrument.

• Cash flows from the sale of collateral held or other
credit enhancements that are integral to the
contractual terms.

• Financial assets measured as at amortised cost,
contractual revenue receivables and lease
receivables: ECL is presented as an allowance, i.e., as
an integral part of the measurement of those assets
in the balance sheet. The allowance reduces the net
carrying amount. Until the asset meets write-off
criteria, the company does not reduce impairment
allowance from the gross carrying amount.

Impairment of Non-Financial Assets

The Company assesses at each reporting date as to
whether there is any indication that any non-financial
asset or company of assets, called Cash Generating Units
(CGU) may be impaired. If any such indication exists, the
recoverable amount of the asset or CGU is estimated to
determine the extent of impairment, if any. When it is
not possible to estimate the recoverable amount of the
individual asset, the Company estimates the recoverable
amount of the CGU to which the asset belongs.

An impairment loss is recognised in the Standalone
Statement of Profit and Loss to the extent, asset''s carrying
amount exceeds its recoverable amount. The recoverable
amount is higher of an asset''s fair value less cost of
disposal and value in use. Value in use is based on the
estimated future cash flows, discounted to their present
value using pre-tax discount rate that reflects current
market assessments of the time value of money and risk
specific to the assets.

The impairment loss recognised in prior accounting
period is reversed if there has been a change in the
estimate of recoverable amount.