These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

The financial statements are prepared under the historical cost convention, except for certain fixed assets which are revalued, in accordance with the generally accepted accounting principles in India and the provisions of the Companies Act, 2013.

B. Use of Estimates

The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialized.

C. Fixed Assets

Fixed Assets are stated at cost net of recoverable taxes and includes amounts less accumulated depreciation and impairment loss, if any. All costs, including financing costs till commencement of commercial production, net charges on foreign exchange contracts and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

D. Cash and cash equivalent (for purposes of Cash Flow Statement)

Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the data of acquisition), highly liquid investment that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

E. Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

F. Depreciation and Amortization

Depreciation is provided on the straight-line method based on the estimated useful lives of the assets as prescribed in Schedule II of the Companies Act, 2013. Depreciation on additions to fixed assets is charged on pro-rata basis in the year of purchase.

G. Earnings per share

As required by Accounting Standard - 20 "Earnings per Share" issued by the Institute of Chartered Accountants of India, Basic earnings per share is computed by dividing the profit after tax (including the post tax effect of exceptional items, if any) by the number of equity shares outstanding at the end of the year. Diluted earnings per share is computed by dividing the profit after tax (including the post tax effect of exceptional items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares.

H. Taxes on income Current tax

Current tax is the amount of tax payment on the taxable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred Tax

In compliance Accounting Standard - 22 issued by the institute of Chartered Accountants of India, the company has recognized in the Financial Statements deferred Tax Assets and Liabilities for future Tax implications attributable to the timing difference that result between the Profits offered for the income Tax and Profit as per the Financial Statements.

I. Impairment of Assets

An asset is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amounts.

J. Foreign Currency Transactions

Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction or that approximates the actual rate at the date of the transaction.

K. Investments

Current investments are carried at lower of cost and quoted/fair value, computed category wise. Long Term Investments are stated at cost. Provision for diminution in the value of long-term investments is made only if such a decline is other than temporary.

L. Inventories

Items of inventories are measured at lower of cost and net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs including manufacturing overheads incurred in bringing them to their respective present location and condition.

M. Revenue Recognition

(a) Income/Expenditure is generally accounted for on accrual basis, unless otherwise stated.

(b) Revenue from chartering of Fast Interceptor Craft is on accrual basis, inclusive of service tax. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.

N. Service Tax

Service tax input credit is accounted for in the books in the period in which the underlying service received and when there is no uncertainty in availing / utilizing the credits.

O. Employee Benefits

Gratuity Liability is accounted as and when due for payment. The Laws relating to Provident Funds and ESIC are not applicable to the company.

P. Borrowing Costs

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalized as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to Profit and Loss account.

Q. Provisions. Contingent Liabilities and Contingent Assets

a) Contingent Liabilities are not provided for and are disclosed by way of notes to accounts.

b) Claim against the company not acknowledged as debts Rs. 14,52,975/- (P.Y. Rs. 14,52,975/-) consist of Income Tax Dues for the financial year 2002-03, for which the Company has sought waiver of the penal interest from the office of Income Tax AppellateTribunal Range 10(1), Mumbai.

c) The Company has not made Compliance of AS-15 issued by the ICAI with regard to provision for Gratuity amounting to Rs. 16,04,135/- (P.Y. Rs. 11,89,990//-) dues payable to employees as the same is accounted as and when due for payment. Accordingly the profit of the company to that extent has been overstated and liability was understated.

R. Material events occurring afterthe Balance Sheet Date are taken into cognizance.

S. Outstanding Payment to Micro & Small Enterprises:

The Company initiated the process of identifying Micro Small and Medium Enterprises (MSME) by requesting vendors for confirmation to the letters circularized by it. As no response have been received up to now, from the vendors to whom request were made, it is considered that there are no dues / payments to SME's for the current year. Accordingly, disclosure as envisaged in Part I of schedule VI of the Companies Act, 1956 is not applicable which has been relied upon by the auditors.

T. Previous Year Figures:

Previous year's figures have been regrouped / reclassified wherever necessary to make them comparable with the current year's classification / disclosure