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Notes to Accounts of Global Vectra Helicorp Ltd.

Mar 31, 2016

1. Segment reporting

The Company is engaged in providing helicopter services in India, which is considered as one business segment. The secondary segment reporting based on geographical risk factor which may be present in different countries is also not applicable, as the Company''s revenue attributable from overseas business is less than 10% of the total business. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as notified under section 133 of the Act.

2. Disclosure pursuant to Accounting Standard - 15 ''Employee Benefits Expenses''

i Contribution to provident fund and ESIC

Amount of Rs. 7,399,196 (previous year: Rs. 6,359,664) is recognized as an expense and included in "Employee benefits expenses" (refer note 21).

ii Leave wages

Amount of Rs. 4,818,491 (previous year: Rs. 4,112,291) is recognized as an expense and included in "Employee benefits expenses" (refer note 21).

iii Defined benefit plan and long term employment benefit a General description

Gratuity (Defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

Leave wages (Long term employment benefit)

Eligible employees can carry forward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the end of the calendar year are compulsorily encashed on the basis of basic salary last drawn. Leave wages are also payable to all eligible employees at the rate of daily basic salary on accumulated leave at the time of death / resignation / retirement or on attaining superannuation age.

Sick leave (Long term employment benefit)

The sick leave is not encashable and can be accumulated till 90 days for employees other than pilots, whose leave balance will

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Assumptions regarding future mortality are based on published statistics and mortality tables. The calculation of the defined benefit obligation is sensitive to the mortality assumptions.

The Company''s gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under approved securities.

3. Related parties

As per Accounting Standard 18 on "Related Party Disclosure" notified under section 133 of the Act; the disclosure of transactions with the related parties are given below:

(a) Related parties where control exists

Vectra Investment Private Limited Promoter Company

AAA Rotor Limited Promoter Company

(b) Key management personnel (''KMP'')

Lt. Gen. (Retd.) S J S Saighal Chairman

Eduard Van Dam Chief Executive Officer (upto 30 April 2015)

Anthony James Baker Chief Executive Officer (with effect from 5 March 2015)

P.Rajkumar Menon Whole-time director (up to 7 November 2014)

4 Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the Office of the Commissioner of Customs (Preventive) had seized three helicopters for alleged non-compliance of the duty waivers given to non-scheduled operators (passenger). The Company had received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs. 237,924,458 (previous year: Rs. 237,924,458) towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) had confirmed a demand of Rs. 262,195,030 (previous year: Rs. 262,195,030) towards differential duty of customs and penalty thereon for two helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect, based on recent decision from Custom Excise and Service Tax Appellate Tribunal (CESTAT) West Zonal Bench, in favour of the Company on a similar matter and on an opinion from an external legal expert and the demand being contested by the Company will be set aside by the higher appellate tribunal. An amount aggregating Rs. 53,826,044 (previous year: Rs. 53,826,044) has been paid as duty under protest during the year ended 31 March 2010.

5 Transfer Pricing

The Company’s international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2015. Management believes that the Company''s international transactions with related parties post 31 March 2015 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study / report for the year ended 31 March 2016.

6 Exceptional items

During the year ended 31 March 2016, pursuant to the approval of the Board, the Company terminated the lease of one of its helicopters, which resulted in a loss (net of revaluation reserve of '' 26,925,834 and lease outstanding) of '' 133,807,010 and has been recorded as an exceptional item. During the previous year, pursuant to the approval of the Board, the Company sold one helicopter. This sale resulted in a profit of Rs. 49,976,012 which was recorded as an exceptional item for the year ended 31 March 2015.

7 The Company has constituted a Corporate Social Responsibility (CSR) Committee as per Section 135 and Schedule VII of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014.

The CSR activities of the Company will be undertaken either through a Registered Trust or in collaboration with other Group Companies.

The Company is in the process of identifying the Projects for CSR spending. The efforts are being undertaken to implement the same in financial year 2016-17

Particulars Amount

A. Gross amount required to be spent by the Company during the year 2015-16 3,499,202

B. Amount spent during the year NIL

8 The Company''s Air Operator''s Permit (AOP) has been renewed up to 28 April 2018. The Delhi High Court has disposed off the appeal filed by the DGCA on this matter.

9 During the year, the Company received waivers from creditors aggregating to Rs. 145,467,322. The amount of liabilities written back no longer required has been included in ''Other income''

10. Prior period items

In past period certain customers of the Company have retained an amount aggregating Rs. 90,264,239 in respect of taxes levied by the Company. The Company is currently in discussion with these customers for recovering the retained amount and the Company believes that it has a strong case to collect the outstanding amounts. However, the Company pursuant to advice received from Securities and Exchange Board of India (SEBI) in the letter dated 27 April 2015, had recorded a provision aggregating Rs. 90,264,239 as at 31 March 2015 against these outstanding. Subsequently during the year ended 31 March 2016, the Company reversed the provision of Rs. 55,923,575 pursuant to receipt of the dues from one of the customers, which has been recorded as other income.

11 Prior year figures

Previous year''s figures have been regrouped / rearranged wherever necessary to conform to current year''s presentation as under:

i Interest accrued on non current bank deposits regrouped from ''Short term loans and advances'' to 11,295,389 ''Other noncurrent assets''.

ii Balances with customs, excise and service tax department regrouped from ''Short term loans and 53,826,044 advances'' to ''Long term loans and advances''


Mar 31, 2015

1. Segment reporting

The Company is engaged in providing helicopter services in India, which is considered as one business segment. The secondary segment reporting based on geographical risk factor which may be present in different countries is also not applicable, as the Company,s revenue from overseas business is less than 10% of the total business. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as notified under section 133 of the Act.

2. Disclosure pursuant to Accounting Standard – 15 'Employee Benefits Expenses,

i Contribution to provident fund and ESIC

Amount of Rs 6,359,664 (previous year: Rs 4,361,314) is recognized as an expense and included in "Employee benefits expenses".

ii Leave Wages

Amount of Rs 4,112,291 (previous year: Rs 978,922) is recognized as an expense and included in "Employee benefits expenses".

iii Defined benefit plan and long term employment benefit

a General description

Gratuity (Defend benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

Leave wages (Long term employment benefit)

Eligible employees can carry forward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the end of the calendar year are compulsorily encased on the basis of basic salary last drawn. Leave wages are also payable to all eligible employees at the rate of daily basic salary on accumulated leave at the time of death / resignation / retirement or on attaining superannuation age.

Sick leave (Long term employment benefit)

The sick leave is not encashable and can be accumulated till 90 days for employees other than pilots, whose leave balance will lapse at the end of the year.

3. Related parties

As per Accounting Standard 18 on "Related Party Disclosure" notified under section 133 of the Act; the disclosure of transactions with the related parties (as defined in the Act and Accounting Standard) are given below:

4. Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the office of the Commissioner of Customs (Preventive) has seized three helicopters for alleged non-compliance of the duty waivers given to non-scheduled operators (passenger). The Company has received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs 237,924,458 (previous year: Rs 237,924,458) towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) has confirmed a demand of Rs 262,195,030 (previous year: Rs 262,195,030) towards differential duty of customs and penalty thereon for two helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect, based on recent decision from Custom Excise and Service Tax Appellate Tribunal (CESTAT) West Zonal Bench, in favour of the Company on a similar matter and on an opinion from an external legal expert and the demand being contested by the Company will be set aside by a higher appellate tribunal. An amount aggregating Rs 53,826,044 (previous year: Rs 53,826,044) has been paid as duty under protest during the year ended 31 March 2010.

5. Transfer Pricing

The Company,s international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2014. Management believes that the Company,s international transactions with related parties post 31 March 2014 continue to be at arm,s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study / report for the year ended 31 March 2015.

6. Suspension of Non-Scheduled Operator,s Permit

The Director General of Civil Aviation (DGCA) vide its order dated 7 May 2012 suspended the Company,s Air Operator,s Permit (AOP). Consequently, the operations of the Company were suspended. The Company fled a Writ Petition with the single-judge bench of the Delhi High Court against the order of DGCA. Delhi High Court vide its judgment dated 11 June 2012 granted an interim relief to the Company and stayed the operation of the above mentioned order. Consequently, DGCA vide its order dated 20 June 2012 stayed its order of 7 May 2012, accordingly, the Company resumed its operations of flying aircrafts.

On 19 September 2012 the DGCA has filed an appeal which is pending before the divisional bench of the Delhi High Court seeking the interim order passed by the single-judge bench to be set aside. Pursuant to the said appeal, the Company,s AOP has been renewed and is subject to the outcome of the above court matters.

Management believes that the Company is in compliance with relevant DGCA and other applicable regulations and continues as a going concern.

7. Exceptional items

During the year ended 31 March 2015, pursuant to the approval of the Board, the Company has sold one helicopter. This sale has resulted into a Profit of Rs 49,976,012 which has been recorded as an exceptional item for the year ended 31 March 2015.

8. Prior period items

In past period certain customers of the Company have retained an amount aggregating Rs 90,264,239 (31 March 2014: Rs 90,264,239) in respect of taxes levied by the Company. The Company is currently in discussion with these customers for recovering the retained amount and the Company believes that it has a strong case to collect the outstanding amounts. However, the Company pursuant to advice received from Securities and Exchange Board of India (SEBI) in the letter dated 27 April 2015, has recorded a provision aggregating Rs 90,264,239 as at 31 March 2015 against these outstanding.


Mar 31, 2014

1.Background

Global Vectra Helicorp Limited (''the Company'') was incorporated in 1998 as a private limited company and was subsequently listed on the stock exchange on 27 October 2006. The Company is listed on the Bombay Stock Exchange Limited and the National Stock Exchange Limited. The Company is mainly engaged in helicopter charter services for offshore transportation, servicing the oil and gas exploration and production sector in India. The Company is also engaged in helicopter charter services for onshore transportation.

a) Terms / rights attached to shares

i) Rights, Preferences and Restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii) Rights, Preference and restrictions attached to Preference Shares

The Company has only one class of preference shares having a par value of Rs. 100/- per share. All the preference shares are non convertible and redeemable at par on 27 December, 2017. Each preference share is entitled to cumulative dividend of 5.46% per annum on par value.

Note:

During the year ended 31 March 2009, the Company has, in order to reflect the current reinstatement cost/market value of its assets, revalued all of its leased helicopters and owned helicopters. The revaluation for the helicopters has been carried out by international helicopters/aircraft valuers considering the total time of air frame (TTAF) (Cumulative time in Service). Accordingly, the resultant accretion to the value of the helicopters aggregating Rs. 924,551,109 has been adjusted (added) to the historical cost of the asset and a corresponding amount has been credited to revaluation reserve. Additional depreciation of the accretion to the historical cost of the asset on account of the revaluation aggregating Rs. 33,021,336 (previous year: Rs. 34,819,716) has been passed through the statement of profit and loss with an equivalent withdrawal from the revaluation reserve to the statement of profit and loss.

Further on account of the revaluation of assets during the year ended 31 March 2009, an adjustment (reduction) aggregating Rs. 26,891,368 has been made to the carrying value of two helicopters. The reduction in the carrying value of the assets has been charged to the statement of profit and loss.

*Amount disclosed in note 9 under "other current liabilities".

**ECB of JPY 894,404,000 (previous year: JPY 894,404,000) was originally repayable in twenty seven quarterly instalments commencing from 19 March 2009. During the previous year ended 31 March 2013 the repayment schedule was revised as a result of which the loan is fully paid by June 2014 (previous year: June 2014). The ECB is secured by exclusive charge over one (previous year: one) Eurocopter helicopter. The interest terms are 3months JPY LIBOR plus 8%.

***ECB of USD 15,298,300 (previous year: USD 15,298,300) is repayable in forty quarterly instalments commencing from 16 January 2009 .The ECB is secured by exclusive charge over two (previous year: two) Bell 412 helicopters. ECB of USD 9,100,000 (previous year: USD 9,100,000) is repayable in forty quarterly instalments commencing from 20 May 2012. The ECB is secured by exclusive charge over one (previous year: one) Bell 412 helicopter. The interest terms are 3 months USD LIBOR plus 1.08% for two helicopters and 3 months libor plus 1.16% for the third helicopter.

****Repayable in five years for 70% of principal amount and bullet repayment of balance 30% at the end of five years. Secured by specific assignment of book debts and exclusive charge over one (previous year: one) helicopter.

**** The Loan consists of Rs. 90,945,651 (previous year: Rs. 147,445,651) for VT-AZY and Rs. 35,850,655 (previous year: Rs. 53,350,655) for VT-GVE.

The loans are secured by exclusive charge over two (previous year: two) helicopters. Interest is payable @ 13.5% pa.

*****Finance lease obligation is secured by hypothecation of helicopters taken on lease.

Note:

2) Due to carry forward losses and consequent absence of virtual certainty of realisation of deferred tax assets, deferred tax asset as at 31 March 2013 is recognised to the extent of the deferred tax liability since the same is considered to be virtually certain of realisation.

# Secured by a pari-passu charge of the following:

a) Exclusive charge over two (previous year: two) bell helicopters and one (previous year: one) eurocopter helicopter.

b) Specific assignment of books debts relating to three (previous year: three) helicopters being charged.

c) Hypothecation of stock / inventory and book debts.

Interest terms are variable with respect to the cash credit and overdraft facilities ## The short term loan from a bank is guaranteed by a promoter of the Company. The interest terms on which loan has been obtained are variable.

### The Company had incurred various expenses pertaining to spare parts purchase and helicopter maintenance, some of which were paid by the group companies directly to the third parties. The said amounts have been converted into loans and will be governed by Reserve Bank of India Circular No. RBI/2004/154/AP(Direct Services) Circular No. 87 dated 17/04/2004. Interest terms are 3 months libor plus 0.5% On the basis of the information and records available with the management, there are no outstanding dues to the micro and small enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

(Currency: Indian Rupees) 31 March 2014 31 March 2013 3 Commitments and contingent liabilities

(a) Commitments Preference dividend on 6,593,490 (previous year: 6,593,490) 5.46% Non-convertible 117,371,348 81,370,892 cumulative redeemable preference shares

Dividend tax on Preference dividend 19,354,862 13,236,585

136,726,210 94,607,477

(b) Contingent liabilities

Claims against the Company not acknowledged as debts Employee related 6,502,900 5,063,692

Demands contested by the Company

- Customs duty related (refer note 1 below) 262,195,030 262,195,030

268,697,930 267,258,722

Note

1 Includes duty paid under protest aggregating Rs. 53,826,044 (previous year : Rs. 53,826,044) (refer note 34)

4 Segment reporting

The Company is engaged in providing helicopter services in India, which is considered as one business segment. The secondary segment reporting based on geographical risk factor which may be present in different countries is also not applicable, as the Company''s overseas business is less than 10% of the total business. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards.

5 Disclosure pursuant to Accounting Standard - 15 ''Employee Benefits''

i Contribution to provident fund and ESIC

Amount of Rs. 4,361,314 (previous year: Rs. 2,684,196) is recognized as an expense and included in "Employee benefits" (refer note 21).

ii Leave Wages

Amount of Rs. 978,922 (previous year: Rs. 905,385) is recognised as an expense and included in "Employee benefits" (refer note 21).

iii Defined benefit plan and long term employment benefit a General description

Gratuity (Defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

Leave wages (Long term employment benefit)

Eligible employees can carry forward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the end of the calendar year are compulsorily encashed on the basis of basic salary last drawn. Leave wages are also payable to all eligible employees at the rate of daily basic salary on accumulated leave at the time of death / resignation / retirement or on attaining superannuation age.

Sick leave (Long term employment benefit)

The sick leave is not encashable and can be accumulated till 90 days for employees other than pilots, whose leave balance will lapse at the end of the year.

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Company''s gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under approved securities.

6 Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the Office of the Commissioner of Customs (Preventive) has seized three helicopters for alleged non compliance of the duty waivers given to non-scheduled operators (passenger). The Company has received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs. 237,924,458 (previous year: 237,924,458) towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) has confirmed a demand of Rs. 262,195,030 (previous year: Rs. 262,195,030) towards differential duty of customs and penalty there on for two helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect and the matter is being contested by the Company with the appellate tribunal. An amount aggregating Rs. 53,826,044 (previous year: Rs. 53,826,044) has been paid as duty under protest during the year ended 31 March 2010.

7 Transfer Pricing

The Company''s international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2013. Management believes that the Company''s international transactions with related parties post 31 March 2013 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study / report for the year ended 31 March 2014.

8 Exceptional items

a In pursuance of a clarification dated 9 August 2012 issued by The Ministry of Corporate Affairs, the Company has changed the accounting policy w.e.f. from 1 April 2011 in respect of borrowing costs as prescribed under AS -16 4(e) - "Borrowing costs" and accounted for such foreign exchange differences arising from foreign currency borrowings as per AS-11 - "The Effects of Changes in Foreign Exchange Rates". Consequent to the above, Rs. 160,164,978 previously recognized as borrowing costs in the Financial Year 2011-12 has been reversed and recorded as an exceptional item during the year ended 31 March 2013. Further, the aforesaid amount of Rs. 160,164,978 has been capitalised to fixed assets and additional depreciation of Rs. 4,973,602 as been charged during the year ended 31 March 2013

b During the year ended 31 March 2013, pursuant to the approval of the Board, the Company has terminated lease / sold two of its helicopters This lease termination /sale has resulted into a loss (net) of Rs. 21,977,160 which has been recorded as an exceptional item for the year ended 31 March 2013.

c Pursuant to the Company''s request, an amount aggregating to Rs. 131,116,445 was waived by a group company against outstanding liabilities. The amount has been recorded as an exceptional item for the year ended 31 March 2013.

9 Recoverable from customers

As at 31 March 2014, certain customers of the Company have disputed taxes levied for the services rendered aggregating Rs. 90,264,239. The Company has initiated proceedings for recoveries of these amounts and is confident of recovery of these sums.

10 Suspension of Non-Scheduled Operator''s Permit

The Director General of Civil Aviation (DGCA) vide its order dated 7 May 2012 suspended the Company''s Non-Scheduled Operator''s Permit (NSOP). Consequently, the operations of the Company were suspended. The Company filed a Writ Petition with the single-judge bench of the Delhi High Court against the order of DGCA. Delhi High Court vide its judgment dated 11 June 2012 granted an interim relief to the Company and stayed the operation of the above mentioned order. Consequently, DGCA vide its order dated 20 June 2012 stayed its order of 7 May 2012, accordingly, the Company resumed its operations of flying aircrafts.

On 19 September 2012 the DGCA has filed an appeal which is pending before the divisional bench of the Delhi High Court seeking the interim order passed by the single-judge bench to be set aside. Pursuant to the said appeal, the Company''s Air Operator Permit (formally NSOP) has been renewed and is subject to the outcome of the above court matters.

Management believes that the Company is in compliance with relevant DGCA and other applicable Regulations and continues as a going concern.

11 Prior year figures

Previous year''s figures have been regrouped / rearranged wherever necessary to conform to current year''s presentation as under:

i Regrouped prepaid expenses from ''Other current assets'' to ''Short term loans and advances'' 27,642,877


Mar 31, 2013

Background

Global Vectra Helicorp Limited (''the Company'') was incorporated in 1998 as a private limited company and was subsequently listed on the stock exchange on 27 October 2006. The Company is listed on the Bombay Stock Exchange Limited and the National Stock Exchange Limited. The Company is mainly engaged in helicopter charter services for offshore transportation, servicing the oil and gas exploration and production sector in India.

1 Segment reporting

The Company is engagedn providing helicopter services in India, which is considered as one business segment. The secondary segment reporting based m geographical risk factor which may be present in different countries is also not applicable, as the Company''s overseas busiiess is less than 10% of the total business. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards.

2 Disclosure pursuant to Acounting Standard -15 ''Employee Benefits'' i Contribution to providnt fund and ESIC

Amount of Rs 2,684,196(previous year: Rs 2,774,984) is recognized as an expense and included in "Employee benefits" (refer note 21). i

ii Leave Wages

Amount of Rs 905,385 (p&vious year: Rs 1,765,088) is recognized as an expense and included in "Employee benefits" (refer note 21).

iii Defined benefit plan andong term employment benefit

a General description

Gratuity (Defined benefit |an)

The Company has a definetbenefit gratuity plan. Every employee who has completed five years or more of services gets gratuity on death or resignatn or retirement at 15 days salary (last drawn salary) for each completed year of service. Leave wages (Long term eiployment benefit)

Eligible employees can carry »rward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the endjothe calendar year are compulsorily encashed on the basis of basic salary last drawn. Leave wages are also payable to all
Sick leave (Long term employient benefit)

The sick leave is not encashabland can be accumulated till 90 days for employees other than pilots, whose leave balance will lapse at the end of tfe year.

3 Demand notice issued by tie Customs authorities

During the year ended 31 Mirch 2009, the Office of the Commissioner of Customs (Preventive) has seized three helicopters for alleged non compliance £ the duty waivers given to non-scheduled operators (passenger). The Company has received a Show Cause Cum Demand Nbtice (SCN) citing an amount of Rs. 237,924,458 (previous year: 237,924,458) towards custom duty under Section 28 of the Custms Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Cstoms (Preventive) has confirmed a demand of Rs. 262,195,030 (previous year: Rs. 262,195,030) towards differential duty of cusoms and penalty there on for two helicopters. The management believes that the Company is in compliance with the relevant ostoms and other regulatory guidelines in this respect and the matter is being contested by the Company with the appellate tribnal. An amount aggregating Rs. 53,826,044 (previous year: Rs. 53,826,044) has been paid as duty under protest during the year er%j 31 March 2010.

4 Remuneration paid in excess i the limits specified by the Companies Act, 1956

The remuneration paid/payable tiwhole time directors is in excess of the limits prescribed under Section 198 of the Companies Act, 1956, by Rs. 1,945,127 for the sar ended 31 March 2013 and Rs. 14,296,515 for the period prior to 1 April 2012. The Company has made an application seeking ost-facto approval and is yet to receive the same from the Central Government.

5 Exceptional items

a In pursuance of a clarification
Further, the aforesaid amount 0Rs. 160,164,978 has been capitalised to fixed assets and additional depreciation of Rs. 4,973,602 has been charged durin the year ended 31 March 2013

b During the year ended 31 March 2013, pursuant to the approval of the Board, the Company has terminated lease / sold two of its helicopters This lease termination /sale has resulted into a loss (net) of Rs. 21,977,160 which has been recorded as an exceptional item for the year ended 31 March 2013.

c Pursuant to the Company''s request, an amount aggregating to Rs. 131,116,445 was waived by a group company against outstanding liabilities. The amount has been recorded as an exceptional item for the year ended 31 March 2013.

6 Transfer Pricing

The Company''s international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2012. Management believes that the Company''s international transactions with related parties post 31 March 2012 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study / report for the year ended 31 March 2013.

7 Recoverable from customers

As at 31 March 2013, certain customers of the Company have disputed taxes levied for the services rendered aggregating Rs. 90,425,938. The Company has initiated proceedings for recoveries of these amounts and is confident of recovery of these sums.

8 Suspension of Non-Scheduled Operator''s Permit

The Director General of Civil Aviation (DGCA) vide its order dated 7 May 2012 suspended the Company''s Non-Scheduled Operator''s Permit (NSOP). Consequently, the operations of the Company were suspended. The Company filed a Writ Petition with the single-judge bench ofthe Delhi High Court against the order of DGCA. Delhi High Court vide its judgment dated 11 June 2012 granted an interim relief to the Company and stayed the operation of the above mentioned order. Consequently, DGCA vide its order dated 20 June 2012 stayed its order of 7 May 2012, accordingly, the Company resumed its operations of flying aircrafts.

On 19 September 2012 the DGCA has filed an appeal which is pending before the divisional bench of the Delhi High Court seeking the interim order passed by the single-judge bench to be set aside. Pursuant to the said appeal, the Company''s Non- Scheduled Operator''s Permit (NSOP) has been renewed and is subject to the outcome of the above court matters. The Company''s operations remained suspended from 8 May 2012 to 20 June,2012 which has severely affected the Company''s operations for the year ended 31 March 2013. Management believes that the Company is in corroliance with relevant DGCA and other applicable Regulations and continues as a going concern.

9 Prior year figures

Previous year''s figures have been regrouped / rearranged wherever necessary to conform to turrent year''s presentation as under:

i Regrouped rates and taxes and clearing, forwarding and freight from ''Other expenses'' to 42,716,933

''Helicopter maintenance'' r

ii Regrouped ''Revenue others'' under'' Liabilities no longer required written back'' 461,941


Mar 31, 2012

Background

Global Vectra Helicorp Limited ('the Company') was incorporated in 1998 as a private limited company and was subsequently listed on the stock exchange on 27 October 2006. The Company is listed on the Bombay Stock Exchange Limited and the National Stock Exchange Limited. The Company is mainly engaged in helicopter charter services for offshore transportation, servicing the oil and gas exploration and production sector in India.

1. Share Capital

a) Terms/rights attached to shares

i) Rights, Preferences and Restrictions attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per shares.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

ii) Rights, Preference and restrictions attached to Preference Shares

The Company has only one class of preference shares having a par value of Rs. 100/- per share. All the preference shares are non convertible and redeemable at par on 27th December,2017. Each preference share is entitled to cumulative dividend of 5.46% per annum on par value .

2. Reserves and surplus

Note:

During the year ended 31 March 2009, the Company has, in order to reflect the current reinstatement cost/market value of its assets, revalued all of its leased helicopters and owned helicopters. The revaluation for the helicopters has been carried out by international helicopters/aircraft valuers considering the total time of air frame (TTAF) (Cumulative time in Service). Accordingly, the resultant accretion to the value of the helicopters aggregating Rs. 924,551,109 has been adjusted (added) to the historical cost of the asset and a corresponding amount has been credited to Revaluation Reserve. Additional depreciation of the accretion to the historical cost of the asset on account of the revaluation aggregating Rs. 3,51,79,393 (previous year: 3,95,07,034) has been passed through the statement of profit and loss with an equivalent withdrawal from the revaluation reserve to the statement of profit and loss.

Further on account of the revaluation of assets during the year ended 31 March 2009, an adjustment (reduction) aggregating Rs. 26,891,368 has been made to the carrying value of two helicopters. The reduction in the carrying value of the assets has been charged to the statement of profit and loss.

4. Long-term borrowings

* Amount disclosed in note 8 under "Other Current Liabilities".

** ECB of JPY 894,404,000 (previous year: JPY 894,404,000) is repayable in twenty seven quarterly installments commencing from 19 March 2009. The ECB is secured by exclusive charge over one (Previous Year: one) Eurocopter helicopter.

*** ECB of USD 15,298,300 (previous year : USD 15,298,300)is repayable in forty quarterly installments commencing from 16 January 2009 . The ECB is secured by exclusive charge over two (previous year : two)Bell 412 helicopters. ECB of USD 9,100",000 (previous year : USD NIL)from Export Development Canada is repayable in forty quarterly installments commencing from 20 May 2012. The ECB is secured by exclusive charge over one (previous year :Nil) Bell 412 helicopter.

**** Repayable in five years for 70% of principal amount and bullet repayment of balance 30% at the end of five years. Secured by specific assignment of book debts and exclusive charge over one (previous year: one) helicopter.

***** The Loan consists of Rs. 147,445,651 (previous year: Rs. 140,611,993) for VT-AZY and Rs. 53,350,655 (previous year: Rs. 53,708,128 for VT-GVE. Pursuant to an agreement entered with lender SREI Infrastructure Finance Ltd during the financial year, interest due but not paid amounting Rs. 10,729,213 (previous year:Nil) and 4,124,753 (previous yeanNil) for VT- AZY and VT-GVE respectively was converted to loan.

****** Finance lease obligation is secured by hypothecation of helicopters taken on lease.

3. Short-term borrowings

# Secured by a pari-passu charge of the following:

a) Exclusive charge over two (previous year : two) bell helicopters and one (previous year: one) eurocopter helicopter.

b) Specific assignment of books debts relating to four (previous year : four) helicopters being charged.

c) Hypothecation of stock/inventory and book debts.

## The short term loan from a bank is guaranteed by a non-executive promoter director of the Company.

###The Company had incurred various expenses pertaining to spare parts purchase and helicopter maintenance, some of which were paid by the group companies directly to the third parties. The said amounts have been converted into loans and will be governed by Reserve Bank of India Circular No. RBI/2004/154/AP(Direct Services) Circular No. 87 dated 17/04/2004.

4. Fixed assets

Notes:

a) Amounts disclosed in brackets are comparatives as at 31 March 2011.

b) Helicopters leased assets includes helicopters obtained under a finance lease and does not include helicopters obtained under operating lease.

c) As per the option available under paragraph 46 of AS 11 'The effect of changes in exchange rates' inserted pursuant to notification GSR 225 (E) issued by the Ministry of Corporate Affairs dated 31 March 2009, in so far as they relate to recognition of losses or gains arising on restatement of long term monetary items, the Company has availed the option of adjusting the exchange differences on restatement of long term monetary assets or liabilities to the historical cost of the depreciable asset where specifically identifiable and depreciating the same over the remaining useful life of the asset. The Company has adjusted the exchange differences arising of such long term foreign currency items (assets and liabilities) to the historical cost of the depreciable assets for all accounting periods commencing on or after 7 December 2006.

As a consequence, exchange loss on restatement of long term monetary liabilities at 31 March 2012 aggregating to Rs. 94,845,357 (previous year Rs. 14,132,813 decapitalised) (net of tax) has been capitalised by adjusting the historical cost of the specifically identifiable asset. The above adjustment to the historical cost of the specifically identifiable assets has resulted in additional depreciation charge aggregating to Rs. 2,081,481 (previous year: Rs. 791,427). The depreciation charge has been computed on the basis of the remaining useful life of the assets as at the date of the above adjustments. The exchange fluctuation during the year is presumed to occur evenly throughout the reporting period.

5. Deferred tax assets (net)

Note:

1) Due to carry forward losses and consquent absence of virtual certainty of realisation of deferred tax assets, deferred tax asset is recognised to the extent of the deferred tax liability since the same is considered to be virtually certain of realisation.

(Currency: Indian Rupees)

31st March, 31st March, 2012 2011

6. Commitments and contingent liabilities

(a) Commitments

Estimated amount of contracts remaining to be executed on capital account net of advances - 17,244,194

Preference dividend on 6,593,490 (previous year: 6,593,490) 5.46% 45,370,436 9,369,981

Non-convertible cumulative redeemable preference shares

Dividend tax on Preference dividend 7,396,527 1,556,354

52,766,963 17,244,194

(b) Contingent liabilities

Claims against the Company not acknowledged as debts

Employee related 3,698,534 2,490,882

Demands in respect of which appeals are in the process of being filed Customs duty related (refer note 1) 262,195,030 262,195,030

265,893,564 264,685,912

Note:

1. Includes duty paid under protest aggregating Rs. 53,826,044( previous year : Rs. 53,826,044)

7. Segment reporting

The Company is engaged in providing helicopter services in India, which is considered as one business segment. The segment reporting based on geographical risk factor which may be present in different countries is also not applicable, as the Company provides helicopter services only in the domestic market. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards.

8. Disclosure pursuant to Accounting Standard - 15 'Employee Benefits'

i. Contribution to provident fund and ESIC

Amount of Rs. 2,774,984 (previous year: Rs. 2,724,477) is recognized as an expense and included in "Personnel cost" (refer note 20 to the financial statements).

ii. Leave Wages

Amount of Rs. 1,765,088(previous year: Rs. 1,509,097) is recognized as an expense and included in "Personnel cost" (refer note 20 to the financial statements).

iii. Defined benefit plan and long term employment benefit

a. General description

Gratuity (Defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

Leave wages (Long term employment benefit)

Eligible employees can carry forward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the end of the calender year are compulsorily encashed on the basis of basic salary last drawn. Leave wages are also payable to all eligible employees at the rate of daily basic salary on accumulated leave at the time of death /resignation/retirement or on attaining superannuation age. Sick leave (Long term employment benefit)

The sick leave is not encashable and can be accumulated till 90 days for employees other than pilots, whose leave balance will lapse at the end of the year.

9. Related parties

As per Accounting Standard 18 on "Related Party Disclosure" prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, the disclosure of transactions with the related parties as defined in Accounting Standard are given below:

(a) Related parties where control exists

Vectra Investment Private Limited Parent Company up to 19th October 2006 and a Promoter Company holding 48 %.

Azal Azerbaijan Aviation Limited Promoter Company.

Ravinder Kumar Rishi Individual having control at any time during the year.

(b) Other related parties with whom transactions have taken place during the year.

Enteritises in which promoter has significant influence

Vectra Limited UK

Vectra Limited Hongkong

Indocopters Private Limited (Earlier known as Vectra Aviation Pvt. Ltd.) India

Vectra I.T. Solutions Private Limited India

Vectra Glosec Private Limited India

(c) Key managerial personnel ('KMP')

Lt. Gen. (Retd.) S J S Saighal Chairman

Mr. Eduard Van Dam Chief Executive Officer (with effect from 12th November, 2008)

Mr. P. Rajkumar Menon Whole-time director

Mr. R.S.S.L.N. Bhaskurudu Non-executive director

Dr. C.G.K. Nair Non-executive director

Dr. Gautam Sen Non-executive direcioi

Maj. Gen. (Retd.) Gurdial Singh Hundal Non-executive director

10. Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the Office of the Commissioner of Customs (Preventive) has seized three helicopters for alleged non compliance of the duty waivers given to non-scheduled operators (passenger). The Company has received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs. 237,924,458 (previous year: k 237,924,458) towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) has confirmed a demand of Rs. 262,195,030 (previous year: Rs. 262,195,030) towards differential duty of customs and penalty there on for two helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect and the matter is being contested by the Company with the appellate tribunal. An amount aggregating Rs. 53,826,044 (previous year: Rs. 53,826,044) has been paid as duty under protest during the year ended 31 March 2010.The Auditor's report has been modified in this respect.

11. Remuneration paid in excess of the limits specified by the Companies Act, 1956

The remuneration paid/payable to one whole time directors (previous year two whole time directors) exceeded the limits prescribed under the Companies Act, 1956 by 7 2,054,387 (previous year 7 12,242,128) as at 31 March 2012. The Company is yet to receive Central Government approval in respect of the same. Approval of the Central Government for excess remuneration of CEO is received on 17 September 2010.

12. Reclassification of exchange fluctuation as borrowing cost

Applicability of paragraph 4(e) of Accounting Standard 16' Borrowing Cost has resulted in exchange differences on restatement of foreign currency monetary liabilities aggregating Rs. 160,164,978 (previous year: Rs. 25,990,648) to be reclassified as finance cost.

13. Transfer Pricing

The Company's international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2011. Management believes that the Company's international transactions with related parties post 31 March 2011 continue to be at arm's length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study/report for the year ended 31st March, 2012.

14. Recoverables from customers

As at 31st March, 2012, certain customers of the Company have disputed taxes levied for the services rendered aggregating Rs. 93,949,478.The Company has initiated proceedings for recoveries of these amounts and is confident of recovery of these sums.

15. Suspension of Non-Scheduled Operator's Permit

The Director General of Civil Aviation (DGCA) vide its order dated 7th May, 2012 suspended the Company's Non-Scheduled Operator's Permit (NSOP). Consequently, the Company's operation remained suspended from 8 May 2012 to 20 June 2012. The Company filed a Writ Petition with High Court of Delhi against the order of DGCA. (Delhi High Court vide its judgment dated 11 June 2012 granted an interim relief to the Company and stayed the operation of the above mentioned impugned order. Consequently, DGCA vide its order dated 20 June 2012 stayed its Order of 7 May 2012, accordingly, the Company resumed its operations of flying aircrafts). The Management believes that the Company is in compliance with relevant DGCA and other applicable Regulations and accordingly the financial statement continues to be prepared on a going concern basis.

16. Prior year figures

Previous year's figures have been regrouped/rearranged wherever necessary to conform to current year's presentation.


Mar 31, 2010

(A) Contingent liabilities

Claims against the Company not

acknowledged as debts

Employee related 1,552,354 1,157,924

Demands in respect of which

appeals are in the process of being filed

- Customs duty related (refer note 1) 262,195,030 262,195,030

263,747,384 263,352,954



1 Includes duty paid under protest aggregating Rs 53,826,044 (previous year: Nil)

Managerial remuneration excludes provisions for/ contribution to gratuity and leave encashment, which are based on actuarial valuation determined for all employees, including Directors, as a whole.

During the year, the remuneration paid/payable to two Whole Time Directors and one chief executive officer has exceeded the limits prescribed under the Act by Rs 4,542,698 (previous year: Rs 7,095,524). The Company has applied to the Central Government for approval of the excess remuneration.

Computation of net profit in accordance with Section 349 of the Act has not been given, as commission by way of percentage of profits is not payable for the year to the directors.

2 Segment reporting

The Company is engaged in providing helicopter services in India, which is considered as one business segment. The segment reporting based on geographical risk factor which may be present in different countries is also not applicable, as the Company provides helicopter services only in the domestic market. Hence, there are no separate reportable segments, as required by the Accounting Standard 17 on "Segment Reporting" as prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards.

3 Disclosure pursuant to Accounting Standard – 15 ‘Employee Benefits

i Contribution to provident fund and ESIC

Amount of Rs 2,922,189 (previous year: Rs 2,437,268) is recognized as an expense and included in "Personnel cost".

ii Defined benefit plan and long term employment benefit

a General description

Gratuity (Defined benefit plan)

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of services gets a gratuity on death or resignation or retirement at 15 days salary (last drawn salary) for each completed year of service.

Leave wages (Long term employment benefit)

Eligible employees can carry forward leave with a maximum accumulation of thirty (30) days. All leave balances in excess of thirty (30) days at the end of the calender year are compulsorily encashed on the basis of basic salary last drawn. Leave wages are also payable to all eligible employees at the rate of daily basic salary on accumulated leave at the time of death / resignation / retirement or on attaining superannuation age.

Sick leave (Long term employment benefit)

The sick leave is not encashable and can be accumulated till 90 days for employees other than pilots, whose leave balance will lapse at the end of the year.

Estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The Companys gratuity fund is managed by Life Insurance Corporation of India. The plan assets under the fund are deposited under approved securities.

4 Related parties

As per Accounting Standard 18 on "Related Party Disclosure" prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, the disclosure of transactions with the related parties as defined in Accounting Standard are given below:

(a) Related parties where control exists

Vectra Investment Private Limited Parent Company up to 19 October 2006 and a Promoter Company holding 48 %. Azal Azerbaijan Aviation Limited Promoter Company.

Ravinder Kumar Rishi Individual having control at any time during the year.

(b) Other related parties with whom transactions have taken place during the year.

Enterprises in which promoter has significant influence

Vectra Limited UK

Vectra Limited Hongkong

Vectra Advanced Engineering Private Limited India

Indocopters Private Limited

(Earlier known as Vectra Aviation Pvt. Ltd. ) India

Vectra I.T. Solutions Private Limited India

Global Vectra Helicorp Ireland Limited Ireland

Vectra Glosec Private Limited India

(c) Key managerial personnel (‘KMP)

Lt. Gen. (Retd.) S J S Saighal Chairman

Eduard Van Dam Chief Executive Officer

(with effect from 12 November 2008)

P. Rajkumar Menon Whole-time director

Capt. D.K. Chand Whole-time director

(upto 30 January 2010)

Mr. R.S.S.L.N. Bhaskurudu Non-executive director

Dr. C.G.K. Nair Non-executive director

Maj. Gen. (Retd.) Gurdial Singh Hundal Non-executive director

As at 31 March 2010, the Company has marked to market (‘MTM) the above mentioned interest cum currency swaps and has accounted for the MTM loss of Rs 17,855,548 , (Prvious year: Nil ) During the year ended 31st March 2009 the company has earned a fair value gain of Rs 23,855,106 the same was not recorded in the books on accounts pursuant to notificaton issued by the ICAI relating to recognition of gain / loss on derivative contracts.

5 Leases

(A) The Company has taken helicopters on finance lease. As per Accounting Standard 19 as prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, in consultation with the National Advisory Committee on Accounting Standards, it is recognized as a Finance Lease Transaction. Disclosures as required by Accounting Standard 19 are as set out below:

(Currency: Indian rupees)

6 Liquidated damages levied for delay in mobilisation of helicopters

During the period October 2006 to June 2007, a customer has retained Rs 195,248,803 ( previous year Rs 201,398,111) as liquidated damages pertaining to delay in implementing Aviation Standard 4. Pursuant to completion of the conciliation proceedings under the Indian Arbitration & Conciliation Act,1996 by the customer and the company, an amount aggregating Rs 38,000,000 has been accepted as payable to the company. Accordingly, an amount aggregating Rs. 157,248,803 has been written off during the year as bad and no longer receivable.

7 Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the Office of the Commissioner of Customs (Preventive) has seized four helicopters for alleged non compliance of the duty waivers given to non-scheduled operators (passenger). The Company has received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs 237,924,458 towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) has confirmed a demand of Rs 262,195,030 towards differential duty of customs and penalty there on for 2 helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect and the matter is being contested by the Company with the appellate tribunal.An amount aggregating Rs 53,826,044 has been paid as duty under protest during the year ended 31 March 2010.

8 Remuneration paid in excess of the limits specified by the Companies Act, 1956

The remuneration paid/payable to two whole time directors and one chief executive officer has exceeded the limits prescribed under the Companies Act, 1956 by Rs 4,542,698 (previous year Rs 7,095,524 to two whole time directors and the Chief Executive Officer). The Company is yet to receive Central Government approval in respect of the same.

9 Treatment of exchange fluctuation

As per the option available under paragraph 46 of AS 11 ‘The effect of changes in exchange rates inserted pursuant to notification GSR 225 (E) issued by the Ministry of Corporate Affairs dated 31 March 2009, in so far as they relate to recognition of losses or gains arising on restatement of long term monetary items, the Company has availed the option of adjusting the exchange differences on restatement of long term monetary assets or liabilities to the historical cost of the depreciable asset where specifically identifiable and depreciating the same over the remaining useful life of the asset. The Company has adjusted the exchange differences arising of such long term foreign currency items (assets and liabilities) to the historical cost of the depreciable assets for all accounting periods commencing on or after 7 December 2006.

As a consequence, an amount of exchange differences (loss) on restatement of long term monetary liabilities at 31 March 2010 aggregating to Rs 343,445,115 (previous year Rs 418,971,639) (net of tax) has been de-capitalised (previous year capitalized) by adjusting the historical cost of the specifically identifiable asset. The above adjustment to the historical cost of the specifically identifiable assets has resulted in reduction in depreciation (previous year: additional depreciation) charge aggregating to Rs 2,117,961 (previous year: Rs 4,604,956). The depreciation charge has been computed on the basis of the remaining useful life of the assets as at the date of the above adjustments. The exchange fluctuation during the year is presumed to occur evenly throughout the reporting period.

Further in line with the transitional provisions laid down by the notification, exchange fluctuation (gain) on restatement of long term monetary liabilities as at 31 March 2008 aggregating Rs 151,134,593 (net of tax) has been adjusted to historical cost of the specifically identifiable depreciable asset. The adjustment (reduction) to the historical cost of the asset has resulted in a reduction in the depreciation charge aggregating Rs 4,994,347, which is reduced from accumulated depreciation as at 31 March 2009. The net adjustment aggregating Rs.146,140,246 has been made by adjusting the opening balance of reserves and surplus at 1 April 2008 by Rs 146,906,123 and the balance aggregating Rs 2,234,123 has been passed through the profit and loss account.

10 Liabilities written back

The Company has obtained a waiver from payment of lease rentals for two helicopters based on their request to the respective lessors for the termination of the lease contracts. Accordingly, liabilities due and remaining unpaid as at 31 March 2009 with respect to equated monthly installements for VT AZL obtained from Venus Projects Limited aggregating Rs 112,467,849 and operating lease charges for VT GVC obtained from Global Vectra Helicorp Ireland Limited aggregating Rs 4,475,822 have been reversed in the books of account and passed through the profit and loss account. Subsequently the Company has returned the two helicopters to its respective lessors.

11 Revaluation of assets

During the previous year ended 31 March 2009, the Company has, in order to reflect the current reinstatement cost/ market value of its assets, revalued all of its leased helicopters and owned helicopters. The revaluation for the helicopters has been carried out by international helicopters/aircraft valuers considering the total time of air frame (TTAF) (Cumulative time in Service). Accordingly, the resultant accretion to the value of the helicopters aggregating Rs 924,551,109 has been adjusted (added) to the historical cost of the asset and a corresponding amount has been credited to Revaluation Reserve. Additional depreciation of the accretion to the historical cost of the asset on account of the revaluation aggregating

Rs 66,818,352 (previous year: 5,568,196) has been passed through the profit and loss account with an equivalent withdrawal from the revaluation reserve to the profit and loss account.

Further on account of the revaluation of assets during the previous year ended 31 March 2009, an adjustment (reduction) aggregating Rs 26,819,368 has been made to the carrying value of two helicopters. The reduction in the carrying value of the assets has been charged to the profit and loss account

12 Reclassification of exchange fluctuation as borrowing cost

During the year ended 31 March 2010, applicability of paragraph 4(e) of Accounting Standard 16 Borrowing Cost has resulted in exchange differences on restatement of foreign currency monetary liabilities aggregating Rs 10,935,680 (previous year: Rs. 124,882,132) to be reclassified as finance cost. Consequently the interest on term loan and finance lease cost is higher by Rs 6,588,849 (previous year: Rs 42,711,510) and Rs 4,346,832 (previous year: Rs 82,170,621) respectively and loss on exchange fluctuation is lower by Rs 10,935,680 (previous year: Rs 124,882,132).

13 Transfer Pricing

The Companys international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2009. Management believes that the Companys international transactions with related parties post 31 March 2009 continue to be at arms length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricicng study/report for the year ended 31 March 2010.

14 Recoverables from customers

During the year ended 31 March 2010, certain customers of the Company have disputed taxes levied for the services rendered aggregating Rs 84,503,378. The Company has initiated proceedings for recoveries of these amounts and is confident of recovery of these sums.

15 Prior year figures

Previous years figures have been regrouped / rearranged wherever necessary to conform to current years presentation.

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