Mar 31, 2016
1 CORPORATE INFORMATION
GOL Offshore Limited is a public Limited Company whose equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited. The Company is India''s prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers to carry out offshore exploration and production (E&P) activities. The Company operates Drilling Rigs, Offshore Support Vessels and undertakes Marine Construction Projects and Services.
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") , as applicable. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
2.2 Use of estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.
2.3 Fixed Assets and Special Survey Expenses
Fixed assets are stated at cost less accumulated depreciation. Cost includes expenses related to acquisition and financing costs on borrowings during construction period. Exchange differences on repayment are recognized in the Profit and Loss Statement and year end translation of foreign currency liabilities covered under Hedge Accounting relating to acquisition of assets are recognized in the Hedge Reserve.
The Company capitalizes expenses incurred at the time of five yearly special surveys and / or life enhancement programmes by which class certificates / operating licenses are renewed. These expenses are depreciated over a period of 5 years. Similarly, specific expenses incurred for charters for which future benefits are expected over the period of the charter are capitalized and depreciated over the charter period or five years whichever is lower.
2.4 Investments
i) Investments are classified into long-term and current investments.
ii) Long-term investments are carried at cost. Provision for diminution, if any, in the value of each long-term investment is made to recognize a decline, other than of a temporary nature.
iii) Current investments are stated at lower of cost or fair value and the resultant decline, if any, is charged to revenue.
2.5 Inventories
Inventories of fuel oil, spares, stores & consumables on board the vessels are valued at lower of cost or net realizable value on the basis of weighted average for stores and spares and FIFO for fuel
2.6 Borrowing costs
Borrowing costs that are directly attributable to the acquisition / construction of the qualifying fixed assets are capitalized as a part of the cost of respective asset, up to the date of acquisition / completion of construction. A qualifying asset is one which takes sunstantial period of time to get ready for its intended use. All other borrowing cost are charged to Profit & Loss statement
2.7 Revenue recognition
i) Charter hire earnings are recognized on accrual basis.
ii) Revenue from long term turnkey offshore projects is recognized on the percentage of completion basis, based on costs incurred and the expected costs to complete
2.8 Other income
Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.
2.9 Operating Expenses
Operating expenses and standing charges are charged to revenue on accrual basis.
2.10 Employee Benefits:
i) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, performance incentives, etc. are recognized as an expense at the undiscounted amount in the Profit and Loss Statement of the year in which the employee renders the related service.
ii) Post Employee Benefits Defined Contribution Plan
Employee benefits in the form of Provident Fund, Family Pension Fund, Superannuation Scheme and others Seamen''s Welfare Contributions, are considered as defined contribution plans and the Contributions are charged to the Profit and Loss Statement of the year when the contributions to the respective funds are due.
Defined Benefit Plan
"The liability for Gratuity, a defined benefit obligation, is accrued and provided for on the basis of actuarial valuation as at the Balance Sheet date."
Other Long Term Benefits
Long term compensated absences & Pension benefits are provided on the basis of an actuarial valuation as at the Balance Sheet date. Actuarial gains and losses comprising of experience adjustments and the effects of changes in actuarial assumptions are recognized in the Profit and Loss Statement for the year as income or expense.
2.11 Depreciation and Amortization
Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its estimated residual value.
Depreciation on tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act of 2013. In case of second hand acquisitions, depreciation is provided on the straight line method, so as to write off the cost over the estimated useful life, as technically evaluated by the management / consultants at the time of acquisition (20 to 27 years) , or at the rates prescribed in Schedule II to the Companies Act of 2013.
Tangible Assets
Fleet : |
|
New built vessels |
20 years |
Second hand vessels |
20 Years / as per technical evaluation whichever is higher |
Rigs : |
7 / 10 Years |
Barges : |
7 / 10 Years |
Lease Hold Land : |
On straight Line method over the Lease Period |
Properties : |
20 years or such other longer period as estimated |
Office Premises: |
25 years |
Other Assets : |
|
Computers |
3 years |
Vehicles |
4 years |
Furniture, Fixtures and Office equipments |
5 years |
Intangible Assets |
|
Computer Software : |
5 years |
2.12 Asset Impairment
The carrying amounts of the Company''s tangible and intangible assets are reviewed at each balance sheet date 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 recognized whenever the carrying amounts of an asset exceed its recoverable amount. The impairment loss, if any, is recognized in the Profit and Loss Statement in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of the assets is increased to the revised estimate of its recoverable amount, however subject to the increased carrying amount not exceeding the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized for the asset in prior accounting period.
2.13 Foreign Exchange Transactions
(i) Transactions in foreign currency are recorded at standard exchange rates determined monthly. Monetary assets and liabilities other than foreign currency borrowings denominated in foreign currency, remaining unsettled at the period end are translated at closing rates. The difference in translation of these monetary assets and liabilities and realized gains and losses on foreign currency transactions is recognized in the Profit and Loss Statement.
Foreign currency derivative contracts which are embedded in the loan agreements and form an integral part of the agreement are translated at closing rates and the resultant gains or losses are recognised in the Hedge Reserve Account with the revaluation gains or losses of the hedged loans. The unrealised gains or losses arising on revaluation of other foreign currency swaps and options are carried forward under Loans and Advances or Other Liabilities until settlement in line with the underlying hedged assets / liabilities.
(ii) The Company designates borrowing in foreign currency as hedge instrument to hedge its foreign currency risk of its firm commitment and highly probable or forecasted revenue transaction to be accounted as cash flow hedge. The unrealized exchange gains or losses on transactions of foreign currency borrowing which qualify as effective hedge are recognized in the Hedge Reserve Account.
(iii) Realized gains or losses on cancellation of forward exchange contracts are recognized in the Profit and Loss Statement of the period in which they are cancelled.
2.14 Taxes on income
Tax expense comprises of current and deferred tax.
(i) Provision for current income-tax is made after taking into consideration benefits admissible under the provisions of Income Tax Act, 1961. Income from shipping activities is assessed on the basis of deemed tonnage income of the Company.
(ii) Deferred income-tax is recognized on timing differences, between taxable income and accounting income which originate in one period and are capable of reversal in one or more subsequent periods, only in respect of the non-shipping activities of the Company. The tax effect is calculated on the accumulated timing differences at the year end based on tax rates and laws, enacted or substantially enacted as of the balance sheet date.
(iii) Taxes on income related to foreign operations is determined on the basis of provisions of the relevent acts applicable in the respective foreign country and the same is accounted for in the year in which it accrues.
2.15 Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognized in financial statements but are disclosed in the notes.
Contingent Assets are neither recognized nor disclosed in the financial statements.
2.16 Earning per share
Basic earnings per share are calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares, if any.
2.17 Segment Reporting
The Company is mainly engaged in offshore business and has only one reportable segment and there is no separate reportable segment as per Accounting Standard (AS) 17.
2.18 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
2.19 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.
2.20 Leases Operating lease
Lease in which a significant portion of the risks and rewards of the ownership are retained by the lessor are classified as operating lease.
Payments under operating lease are charged to profit and loss statement on a systematic basis representative of time.
2.21 Insurance Claims
Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that the amount recoverable can be measured reliably and it is reasonable to expect ultimate collection.
2.22 Service tax input credit
Service tax input credit is accounted for in the books in the period in which the underlying service received is accounted and when there is reasonable certainty in availing / utilizing the credits.
2.23 Operating Cycle
Based on the nature of activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2015
1.1 Basis of accounting and preparation of financial statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") as applicable. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
1.2 Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
1.3 Fixed Assets and Special Survey Expenses
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and financing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Profit and Loss Statement and year end
translation of foreign currency liabilities covered under Hedge
Accounting relating to acquisition of assets are recognised in the
Hedge Reserve.
The Company capitalises expenses incurred at the time of five yearly
special surveys and / or life enhancement programmes by which class
certificates / operating licences are renewed. These expenses are
depreciated over a period of 5 years. Similarly, specific expenses
incurred for charters for which future benefits are expected over the
period of the charter are capitalised and depreciated over the charter
period or five years whichever is lower.
1.4 Investments
i) Investments are classified into long-term and current investments.
ii) Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature
iii) Current investments are stated at lower of cost or fair value and
the resultant decline, if any, is charged to revenue.
1.5 Inventories
Inventories of fuel oil, spares , stores & consumables on board the
vessels are valued at lower of cost or net realisable value.
1.6 Borrowing costs
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fixed assets are capitalised as a part
of the cost of respective asset, upto the date of acquisition /
completion of construction.
1.7 Revenue recognition
i) Charter hire earnings are recognised on accrual basis.
ii) Revenue from long term turnkey offshore projects is recognised on
the percentage of completion basis, based on costs incurred and the
expected costs to completion.
1.8 Other income
Interest income is accounted on accrual basis. Dividend income is
accounted for when the right to receive is established
1.9 Operating Expenses
Operating expenses and standing charges are charged to revenue on
accrual basis.
1.10 Employee Benefits:
i) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, performance incentives, etc. are recognised as an
expense at the undiscounted amount in the Profit and Loss Statement of
the year in which the employee renders the related service.
ii) Post Employment Benefits
Defined Contribution Plan
Employee benefits in the form of Provident Fund, Family Pension Fund,
Superannuation Scheme and others Seamen's Welfare Contributions, are
considered as defined contribution plans and the Contributions are
charged to the Profit and Loss Statement of the year when the
contributions to the respective funds are due.
Defined Benefit Plan
The liability for Gratuity, a defined benefit obligation, is accrued
and provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefits
Long term compensated absences & Pension benefits are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognised in the Profit and
Loss Statement for the year as income or expense.
1.11 Depreciation and Amortisation
Depreciable amount for assets is the cost of an asset, or other amount
substituted for cost, less its estimated residual value.
Depreciation on tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act of 2013. In case of second hand acquisitions,
depreciation is provided on the straight line method, so as to write
off the cost over the estimated useful life, as technically evaluated
by the management / consultants at the time of acquisition (20 to 27
years) , or at the rates prescribed in Schedule II to the Companies Act
of 2013
1.12 Asset Impairment
The carrying amounts of the Company's tangible and intangible assets
are reviewed at each balance sheet date 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 amounts of an asset exceed its recovered amount.
The impairment loss, if any, is recognised in the Profit and Loss
Statement in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount, however subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortisation or depreciation) had no impairment loss been recognised
for the asset in prior accounting period.
1.13 Foreign Exchange Transactions
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Profit and Loss Statement.
Foreign currency derivative contracts which are embedded in the loan
agreements and form an integral part of the agreement are translated at
closing rates and the resultant gains or losses are recognised in the
Hedge Reserve Account with the revaluation gains or losses of the
hedged loans. The unrealised gains or losses arising on revaluation of
other foreign currency swaps and options are carried forward under
Loans and Advances or Other Liabilities until settlement in line with
the underlying hedged assets / liabilities.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its firm commitment
and highly probable or forecasted revenue transaction to be accounted
as cash flow hedge. The unrealised exchange gains or losses on
transactions of foreign currency borrowing which qualify as effective
hedge are recognised in the Hedge Reserve Account.
(iii) Realised gains or losses on cancellation of forward exchange
contracts are recognised in the Profit and Loss Statement of the period
in which they are cancelled.
1.14 Taxes on income
Tax expense comprises of current and deferred tax.
(i) Provision for current income-tax is made on the basis of the
assessable income under the Income-tax Act, 1961. Income from shipping
activities is assessed on the basis of deemed tonnage income of the
Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods, only in
respect of the non-shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date.
(iii) Taxes on income related to foreign operations is determined on
the basis of provisions of the relevent acts applicable in the
respective foreign country and the same is accounted for in the year in
which it accrues.
1.15 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised in the accounts in respect of present
probable obligations and are based on best estimate required to settle
the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised in financial statements but
are disclosed in the notes.
Contingent Assets are neither recognised nor disclosed in the financial
statements.
1.16 Earning per share
Basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares,if
any.
1.17 Segment Reporting
The Company is mainly engaged in offshore business and has only one
reportable segment and there is no separate reportable segments as per
Accounting Standard (AS) 17.
1.18 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.19 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.
1.20 Leases
Operating lease
Lease in which a significant portion of the risks and rewards of the
ownership are retained by the lessor are classified as operating lease.
Payments under operating lease are charged to profit and loss statement
on a systematic basis representative of time.
1.21 Insurance Claims
Insurance claims are accounted for on the basis of claims admitted /
expected to be admitted and to the extent that the amount recoverable
can be measured reliably and it is reasonable to expect ultimate
collection.
1.22 Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is
reasonable certainty in availing / utilising the credits.
1.23 Operating Cycle
Based on the nature of activities of the Company and the normal time
between acquisition of assets and their realisation in cash or cash
equivalents, the Company has determined its operating cycle as 12
months for the purpose of classification of its assets and liabilities
as current and non-current.
Mar 31, 2014
A) Accounting Convention
The financial statements are prepared under the historical cost
convention, in accordance with Generally Accepted Accounting Principles
in India, the Accounting Standards notified by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956.
b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results are known / materialised.
c) Fixed Assets and Special Survey Expenses
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and financing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Profit and Loss Statement and year end
translation of foreign currency liabilities covered under Hedge
Accounting relating to acquisition of assets are recognised in the
Hedge Reserve.
The Company capitalises expenses incurred at the time of five yearly
special surveys and / or life enhancement programmes by which class
certificates / operating licences are renewed. These expenses are
depreciated over a period of 5 years. Similarly specific expenses
incurred for charters for which future benefits are expected over the
period of the charter are capitalised and depreciated over the charter
period or five years whichever is lower.
d) Investments
i) Investments are classified into long-term and current investments.
ii) Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature.
iii) Current investments are stated at lower of cost or fair value and
the resultant decline, if any, is charged to revenue.
e) Inventories
Inventories of fuel oil, spares , stores & consumables on board of the
vessels are valued at lower of cost or net realisable value.
f) Borrowing cost
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fixed assets are capitalised as a part
of the respective asset, upto the date of acquisition / completion of
construction.
g) Revenue recognition
i) Charter hire earnings are recognised on accrual basis.
ii) Revenue from long term turnkey offshore projects is recognised on
the percentage of completion
basis, based on costs incurred and the expected costs to completion.
h) Operating Expenses
Operating expenses and standing charges are charged to revenue on
accrual basis.
i) Employee Benefits:
i) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, performance incentives, etc. are recognised as an
expense at the undiscounted amount in the Profit and Loss Statement of
the year in which the employee renders the related service.
ii) Post Employee Benefits Defined Contribution Plan
Employee benefits in the form of Provident Fund, Family Pension Fund,
Superannuation Scheme and others Seamen''s Welfare Contributions, are
considered as defined contribution plans and the Contributions are
charged to the Profit and Loss Statement of the year when the
contributions to the respective funds are due.
Defined Benefit Plan
The liability for Gratuity, a defined benefit obligation, is accrued
and provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefits
Long term compensated absences & Pension benefits are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognised in the Profit and
Loss Statement for the year as income or expense.
j) Depreciation and Amortisation
Depreciation on new built vessels is provided on the straight line
method at the rates prescribed in Schedule XIV to the Companies
Act,1956 . In case of second hand acquisitions, depreciation is
provided on the straight line method, so as to write off the cost over
the estimated useful life, as technically evaluated by the management /
consultants at the time of acquisition (20 to 27 years) , or at the
rates prescribed in Schedule XIV to the Companies Act, 1956, whichever
is higher.
Tangible Assets
Fleet :
New built vessels On straight line method @ prescribed in
Companies Act,1956
Second hand vessels On straight line method @ prescribed in
Companies Act,1956 or as tech- nically
evaluated by management / consultant
whichever is higher
Rigs : On straight line method to write off
original cost over estimated useful
life of 7/10 years
Barges : On straight line method to write off
original cost over estimated useful
life of 7/10 years
Lease Hold Land : On straight Line method over the Lease Period
Properties : On written down value method @ prescribed
in Companies Act,1956
Other Assets :
Computers 3 years
Vehicles 4 years
Furniture, Fixtures and
Office equipments 5 years
Intangible Assets
Computer Software : @ 20% on straight line method
k) Asset Impairment
The carrying amounts of the Company''s tangible and intangible assets
are reviewed at each balance sheet date 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 amounts of an asset exceed its recovered amount.
The impairment loss, if any, is recognised in the Profit and Loss
Statement in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount, however subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortisation or depreciation) had no impairment loss been recognised
for the asset in prior accounting period.
l) Foreign Exchange Transactions
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Profit and Loss Statement.
Foreign currency derivative contracts which are embedded in the loan
agreements and form an integral part of the agreement are translated at
closing rates and the resultant gains or losses are recognised in the
Hedge Reserve Account with the revaluation gains or losses of the
hedged loans. The unrealised gains or losses arising on revaluation of
other foreign currency swaps and options are carried forward under
Loans and Advances or Other Liabilities until settlement in line with
the underlying hedged assets / liabilities.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its firm commitment
and highly probable or forecasted revenue transaction to be accounted
as cash flow hedge. The unrealised exchange gains or losses on
transactions of foreign currency borrowing which qualify as effective
hedge are recognised in the Hedge Reserve Account.
(iii) Realised gains or losses on cancellation of forward exchange
contracts are recognised in the Profit and Loss Statement of the period
in which they are cancelled.
m) Provision for Taxation
Tax expense comprises of current and deferred tax.
(i) Provision for current income-tax is made on the basis of the
assessable income under the Income- tax Act, 1961. Income from shipping
activities is assessed on the basis of deemed tonnage income of the
Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods only in
respect of the non-shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date.
(iii) Taxes on income related to foreign operation is determined on the
basis of provisions of the relevant act applicable to the respective
foreign country and the same is accounted for in the year in which it
accrue.
n) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised in the accounts in respect of present
probable obligations and are based on best estimate required to settle
the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised in financial statements but
are disclosed in the notes. Contingent Assets are neither recognised
nor disclosed in the financial statements. o) Earning per share
Basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
p) Segment Reporting
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standard (AS) 17.
q) Cash Flow Statement
Cash Flow Statement has been prepared under the indirect method as set
out in Accounting Standard -3 ''Cash Flow Statement'' as notified under
the Companies (Accounting Standard) Rules, 2006.
r) Leases
Operating lease
Lease in which a significant portion of the risks and rewards of the
ownership are retained by the lessor are classified as operating lease.
Payments under operating lease are charged to profit and loss statement
on a systematic basis representative of time.
Mar 31, 2013
(a) Accounting Convention
The fnancial statements are prepared under the historical cost
convention, in accordance with Generally Accepted Accounting Principles
in India, the Accounting Standards notifed by the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act, 1956.
(b) use of estimates
The preparation of fnancial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the fnancial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results are known/ materialised.
(c) Fixed Assets and Special Survey Expenses
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and fnancing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Proft and Loss Statement and year end
translation of foreign currency liabilities covered under Hedge
Accounting relating to acquisition of assets are recognised in the
Hedge Reserve.
The Company capitalises expenses incurred at the time of fve yearly
special surveys and / or life enhancement programmes by which class
certifcates / operating licences are renewed. These expenses are
depreciated over a period of 5 years. Similarly specifc expenses
incurred for charters for which future benefts are expected over the
period of the charter are capitalised and depreciated over the charter
period or fve years whichever is lower.
(d) Investments
(i) Investments are classifed into long-term and current investments.
(ii) Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature.
(iii) Current investments are stated at lower of cost or fair value and
the resultant decline, if any, is charged to revenue.
(e) Inventories
Inventories of fuel oil, spares, stores & consumables on board of the
vessels are valued at lower of cost or net realisable value.
(f) Borrowing cost
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fxed assets are capitalised as a part of
the respective asset, upto the date of acquisition / completion of
construction.
(g) Revenue recognition
(i) Charter hire earnings are recognised on accrual basis.
(ii) Revenue from long term turnkey offshore projects is recognised on
the percentage of completion basis, based on costs incurred and the
expected costs to completion.
(h) Operating Expenses
Operating expenses and standing charges are charged to revenue on
accrual basis.
(i) Employee Benefts:
(i) Short Term Employee Benefts
All employee benefts payable wholly within twelve months of rendering
the services are classifed as short term employee benefts. Benefts such
as salaries, performance incentives, etc. are recognised as an expense
at the undiscounted amount in the Proft and Loss Statement of the year
in which the employee renders the related service.
(ii) Post Employee Benefts
Defned Contribution Plan
Employee benefts in the form of Provident Fund, Family Pension Fund,
Superannuation Scheme and other Seamen''s Welfare Contributions, are
considered as defned contribution plans and the contributions are
charged to the Proft and Loss Statement of the year when the
contributions to the respective funds are due.
Defned Beneft Plan
The liability for Gratuity, a defned beneft obligation, is accrued and
provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefts
Long term compensated absences & Pension benefts are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognised in the Proft and
Loss Statement for the year as income or expense.
(j) Depreciation and Amortisation
Depreciation on new built vessels is provided on the straight line
method at the rates prescribed in Schedule XIV to the Companies
Act,1956 . In case of second hand acquisitions, depreciation is
provided on the straight line method, so as to write off the cost over
the estimated useful life, as technically evaluated by the management /
consultants at the time of acquisition (20 to 27 years), or at the
rates prescribed in Schedule XIV to the Companies Act, 1956, whichever
is higher.
(k) Asset Impairment
The carrying amounts of the Company''s tangible and intangible assets
are reviewed at each balance sheet date 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 amounts of an asset exceed its recoverable
amount. The impairment loss, if any, is recognised in the Proft and
Loss Statement in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount, however subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortisation or depreciation) had no impairment loss been recognised
for the asset in prior accounting period.
(l) Foreign Exchange Transactions
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Proft and Loss Statement.
Foreign currency derivative contracts which are embedded in the loan
agreements and form an integral part of the agreement are translated at
closing rates and the resultant gains or losses are recognised in the
Hedge Reserve Account with the revaluation gains or losses of the
hedged loans. The unrealised gains or losses arising on revaluation of
other foreign currency swaps and options are carried forward under
Loans and Advances or Other Liabilities until settlement in line with
the underlying hedged assets / liabilities.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its frm commitments
and highly probable or forecasted revenue transactions to be accounted
as cash fow hedge. The unrealised exchange gains or losses on
transactions of foreign currency borrowing which qualify as effective
hedge are recognised in the Hedge Reserve Account.
(iii) Realised gains or losses on cancellation of forward exchange
contracts are recognised in the Proft and Loss Statement of the period
in which they are cancelled.
(m) Provision for Taxation
Tax expense comprises of current and deferred tax.
(i) Provision for current income-tax is made on the basis of the
assessable income under the Income- tax Act, 1961. Income from shipping
activities is assessed on the basis of deemed tonnage income of the
Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods, only in
respect of the non-shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date.
(iii) Taxes on income related to foreign operations is determined on
the basis of provisions of the relevant law applicable to the
respective foreign country and the same is accounted for in the year in
which it accrue.
(n) Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised in the accounts in respect of present
probable obligations and are based on best estimate required to settle
the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to refect the current best estimates.
Contingent Liabilities are not recognised in fnancial statements but
are disclosed in the notes. Contingent Assets are neither recognised
nor disclosed in the fnancial statements.
(o) Earning per share
Basic earnings per share is calculated by dividing the net proft for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
proft for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
(p) Segment Reporting
The Company is mainly engaged in offshore business activity and there
are no separate reportable segments as per Accounting Standard (AS) 17.
(q) Cash Flow Statement
Cash Flow Statement has been prepared under the indirect method as set
out in Accounting Standard (AS) - 3 ÂCash Flow Statement'' as notifed
under the Companies (Accounting Standard) Rules, 2006.
(r) Leases
Operating lease
Lease in which a signifcant portion of the risks and rewards of the
ownership are retained by the lessor are classifed as operating lease.
Payments under operating lease are charged to proft and loss statement
on a systematic basis representative of time.
Mar 31, 2012
A) Accounting Convention
The financial statements are prepared under the historical cost
convention, in accordance with Generally Accepted Accounting Principles
in India, the Accounting Standards notified by the Companies
(Accounting Standards) Rules, 2006 and the provisions of the Companies
Act, 1956.
b) Use of Estimates
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between actual results and estimates are recognised in the period in
which the results are known/ materialised.
c) Fixed Assets and Special Survey Expenses
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and financing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Statement of Profit and Loss and year
end translation of foreign currency liabilities relating to acquisition
of assets are recognised in the Hedge Reserve.
The Company capitalises expenses incurred at the time of five yearly
special surveys and / or life enhancement programmes by which class
certificates / operating licences are renewed. These expenses are
depreciated over a period of 5 years.
d) Investments
i) Investments are classified into long-term and current investments.
ii) Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature.
iii) Current investments are stated at lower of cost and fair value and
the resultant decline, if any, is charged to revenue.
e) Inventories
Inventories of fuel oil, spares , stores & consumables on board of the
vessels are valued at lower of cost or net realisable value.
f) Borrowing cost
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fixed assets are capitalised as a part
of the respective asset, upto the date of acquisition / completion of
construction.
g) Revenue recognition
i) Charter hire earnings are recognised on accrual basis.
ii) Revenue from long term turnkey offshore projects is recognised on
the percentage of completion basis, based on costs incurred and the
expected costs to completion.
h) Operating Expenses
Operating expenses and standing charges are charged to revenue on
accrual basis.
i) Employee Benefits
i) Short Term Employee Benefits
All employee benefits payable wholly within twelve months of rendering
the services are classified as short term employee benefits. Benefits
such as salaries, performance incentives, etc. are recognised as an
expense at the undiscounted amount in the Statement of Profit and Loss
Account of the year in which the employee renders the related service.
ii) Post Employee Benefits Defined Contribution Plan
Retirement benefits in the Provident Fund, Family Pension Fund and
Superannuation Scheme, which are defined contribution schemes, are
charged to the Statement of Profit and Loss of the year when the
contributions accrue.
Defined Benefit Plan
The liability for Gratuity, a defined benefit obligation, is accrued
and provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefits
Long term compensated absences & Pension benefits are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognised in the Statement of
Profit and Loss for the year as income or expense.
j) Depreciation and Amortisation
Depreciation on new built vessels is provided on the straight line
method at the rates prescribed in Schedule XIV to the Companies
Act,1956. In case of second hand acquisitions, depreciation is provided
on the straight line method, so as to write off the cost over the
estimated useful life, as technically evaluated by the management /
consultants at the time of acquisition (20 to 27 years) , or at the
rates prescribed in Schedule XIV to the Companies Act, 1956, whichever
is higher.
k) Asset Impairment
The carrying amounts of the Company's tangible and intangible assets
are reviewed at each balance sheet date 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 amounts of an asset exceed its recovered amount.
The impairment loss, if any, is recognised in the Statement of Profit
and Loss in the period in which impairment takes place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount however, subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortisation of depreciation) had no impairment loss been recognised
for the asset in prior accounting period.
l) Foreign Exchange Transactions
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Statement of Profit and Loss.
Foreign currency derivative contracts which are embedded in the loan
agreements and form an integral part of the agreement are translated at
closing rates and the resultant gains or losses are recognised in the
Hedge Reserve Account with the revaluation gains or losses of the
hedged loans. The unrealised gains or losses arising on revaluation of
other foreign currency swaps and options are carried forward under
Loans and Advances or Other Liabilities until settlement in line with
the underlying hedged assets / liabilities.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge foreign currency risk of its firm commitment and
highly probable or forecasted revenue transaction to be accounted as
cash flow hedge. The unrealised exchange gains or losses on transaction
of foreign currency borrowing which qualify as effective hedge are
recognised in the Hedge Reserve Account.
(iii) Realised gains or losses on cancellation of forward exchange
contracts are recognised in the Statement of Profit and Loss of the
period in which they are cancelled.
m) Provision for Taxation
Tax expense comprises of current and deferred tax.
(i) Provision for current income-tax is made on the basis of the
assessable income under the Income- tax Act, 1961. Income from shipping
activities is assessed on the basis of deemed tonnage income of the
Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods only in
respect of the non-shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws enacted or substantially enacted as of the
balance sheet date.
n) Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised in the accounts in respect of present
probable obligations and are based on best estimate required to settle
the obligation at balance sheet date. These are reviewed at each
balance sheet date and adjusted to reflect the current best estimates.
Contingent Liabilities are not recognised in financial statements but
are disclosed in the notes. Contingent Assets are neither recognised
nor disclosed in the financial statements.
o) Earning per share
Basic earnings per share is calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit for the period attributable to equity shareholders and the
weighted average number of shares outstanding during the period is
adjusted for the effects of all dilutive potential equity shares.
p) Segment Reporting
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standard (AS) 17.
Mar 31, 2011
(a) Accounting Convention :
The financial statements are prepared under the historical cost
convention, in accordance with Generally Accepted Accounting Principles
in India, the Accounting Standards notifed by the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act, 1956
(b) Use of Estimates:
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires the management to make
estimates and assumptions that affect the reported balances of assets
and liabilities as of the date of the financial statements and reported
amounts of income and expenses during the period. Management believes
that the estimates used in the preparation of financial statements are
prudent and reasonable. Actual results could differ from the estimates.
(c) Fixed Assets :
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and financing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Profit and Loss Account and year end
translation of foreign currency liabilities relating to acquisition of
assets are recognized in the Hedge Reserve.
(d) Investments :
i. Investments are classifed into long-term and current investments.
ii. Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature.
iii. Current investments are stated at lower of cost and fair value
and the resultant decline, if any, is charged to revenue.
(e) Inventories :
i. Inventories of fuel oil are valued at cost on first in first out
basis. ii. Inventories of spares, stores & consumables on board the
vessels are valued at weighted average cost method.
(f) Borrowing cost:
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fixed assets are capitalized as a part of
the respective asset, upto the date of acquisition / completion of
construction.
(g) Revenue recognition:
Charter hire earnings are recognized on accrual basis.
Revenue from long term turnkey offshore projects is recognized on the
percentage of completion basis, based on costs incurred and the
expected costs to completion.
(h) Operating expenses:
Operating expenses and standing charges are charged to revenue on
accrual basis.
(i) Employee benefits:
(i) Short-term Employee benefits:
All employee benefits payable wholly within twelve months of rendering
the service are classifed as short term employee benefits. Benefits such
as salaries, performance incentives, etc. are recognized as an expense
at the undiscounted amount in the Profit and Loss Account of the year in
which the employee renders the related service.
(ii) Post Employment Benefits:
Defined Contribution Plan
Retirement benefits in the Provident Fund, Family Pension Fund and
Superannuation Scheme, which are defined contribution schemes, are
charged to the Profit and Loss account of the year when the
contributions accrue.
Defined Benefit Plan
The liability for Gratuity, a defined benefit obligation, is accrued and
provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefits
Long term compensated absences & Pension benefits are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognized in the Profit and
Loss account for the year as income or expense.
(j) Depreciation:
(i) fileet :
Depreciation on new built vessels is provided on the straight line
method at the rates prescribed in Schedule XIV to the Companies Act,
1956. In case of second hand acquisitions, depreciation is provided on
the straight line method, so as to write off the cost over the
estimated useful life, as technically evaluated by the management /
consultants at the time of acquisition (20 to 27 years), or at the
rates prescribed in Schedule XIV to the Companies Act, 1956, whichever
is higher.
(ii) Rigs :
Rigs are depreciated on the straight line method so as to write off the
original cost over the estimated useful life of 7/10 years.
(iii) Barge :
The Barge is depreciated on the straight line method so as to write off
the original cost over the estimated useful life of 7/10 years.
(iv) Properties :
filats and Office premises are depreciated on the written down value
method, at the rates prescribed in Schedule XIV to the Companies Act,
1956.
(v) Other Assets :
On the straight line method so as to write off the original cost of the
asset over the estimated useful life as under:
Computers - 3 years
Vehicles - 4 years
Furniture & Fixtures,
Office Equipment, etc - 5 years
(k) Asset Impairment:
The carrying amounts of the Company's tangible and intangible assets
are reviewed at each balance sheet date 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 recognized
whenever the carrying amounts of an asset exceed its recovered amount.
The impairment loss, if any, is recognized in the statement of Profit
and Loss in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount, however subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortization of depreciation) had no impairment loss been recognized
for the asset in prior accounting period.
(l) Foreign Exchange Transactions:
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Profit and Loss Account.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its firm commitment and
highly probable or forecasted revenue transaction to be accounted as
cash fow hedge. The unrealized exchange gains or losses on transaction
foreign currency borrowing which qualify as effective hedge are
recognized in the Hedge Reserve Account.
(iii) Forward exchange contracts, other than those entered into to
hedge foreign currency risk of firm commitments or highly probable
forecast transactions, are translated at period end exchange rates.
Premium or discount on such forward exchange contracts is amortised as
income or expenses over the life of the contracts.
(iv) Exchange differences in respect of forward exchange contracts
entered into by the Company to hedge foreign currency risk of firm
commitments or highly probable forecast transactions are accounted for
on settlement.
(v) Realised gain or losses on cancellation of forward exchange
contracts are recognised in the Profit and Loss Account of the period in
which they are cancelled.
(vi) Foreign currency derivative contracts which are embedded in the
loan agreements and form an integral part of the agreement are
translated at closing rates and the resultant gains or losses are
recognized in the Profit and Loss account along with the revaluation
gains or losses of the hedged loans. The unrealised gains or losses
arising on revaluation of other foreign currency swaps and options are
carried forward under Loans and Advances or Other Liabilities until
settlement in line with the underlying hedged assets / liabilities.
(m) Special Survey Expenses:
The Company capitalises expenses incurred at the time of five yearly
special surveys and / or life enhancement programmes by which class
certificates / operating licences are renewed.
(n) Provision for Taxation:
Tax expense comprises of current, deferred tax and fringe benefit tax.
(i) Provision for current income-tax and fringe benefit tax is made on
the basis of the assessable income under the Income- tax Act, 1961.
Income from shipping activities is assessed on the basis of deemed
tonnage income of the Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods only in
respect of the non- shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date.
(o) Provisions and Contingent Liabilities:
Provisions are recognised in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events but their existence is confirmed by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company.
(p) Segment Reporting:
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standard (AS) 17.
Mar 31, 2010
(a) Accounting Convention :
The fnancial statements are prepared under the historical cost
convention, in accordance with Generally Accepted Accounting Principles
in India, the Accounting Standards notifed by the Companies (Accounting
Standards) Rules, 2006 and the provisions of the Companies Act, 1956
(b) Use of Estimates:
The preparation of fnancial statements in conformity with Generally
Accepted Accounting Principles requires the management to make
estimates and assumptions that affect the reported balances of assets
and liabilities as of the date of the fnancial statements and reported
amounts of income and expenses during the year. Management believes
that the estimates used in the preparation of fnancial statements are
prudent and reasonable. Actual results could differ from the estimates.
(c) Fixed Assets :
Fixed assets are stated at cost less accumulated depreciation. Cost
includes expenses related to acquisition and fnancing costs on
borrowings during construction period. Exchange differences on
repayment are recognised in the Proft and Loss Account and year end
translation of foreign currency liabilities relating to acquisition of
assets are recognized in the Hedge Reserve.
(d) Investments :
i. Investments are classifed into long-term and current investments.
ii. Long-term investments are carried at cost. Provision for
diminution, if any, in the value of each long-term investment is made
to recognise a decline, other than of a temporary nature.
iii. Current investments are stated at lower of cost and fair value
and the resultant decline, if any, is charged to revenue.
(e) Inventories :
Inventories of fuel oil are valued at cost on frst in frst out basis.
(f) Borrowing cost :
Borrowing costs that are directly attributable to the acquisition /
construction of the qualifying fxed assets are capitalized as a part of
the respective asset, upto the date of acquisition / completion of
construction.
(g) Revenue recognition :
Charter hire earnings are recognized on accrual basis.
Revenue from long term turnkey offshore projects is recognized on the
percentage of completion basis, based on costs incurred and the
expected costs to completion.
(h) Operating expenses :
(i) Operating expenses and standing charges are charged to revenue on
accrual basis. (ii) Stores and spares delivered on board the ships and
rigs are charged to revenue.
(i) Employee benefts:
(i) Short-term Employee benefts :
All employee benefts payable wholly within twelve months of rendering
the service are classifed as short term employee benefts. Benefts such
as salaries, performance incentives, etc. are recognized as an expense
at the undiscounted amount in the Proft and Loss Account of the year in
which the employee renders the related service.
(ii) Post Employment Benefts :
Defned Contribution Plan
Retirement benefts in the Provident Fund, Family Pension Fund and
Superannuation Scheme, which are defned contribution schemes, are
charged to the Proft and Loss account of the year when the
contributions accrue.
Defned Beneft Plan
The liability for Gratuity, a defned beneft obligation, is accrued and
provided for on the basis of actuarial valuation as at the Balance
Sheet date.
Other Long Term Benefts
Long term compensated absences & Pension benefts are provided on the
basis of an actuarial valuation as at the Balance Sheet date. Actuarial
gains and losses comprising of experience adjustments and the effects
of changes in actuarial assumptions are recognized in the Proft and
Loss account for the year as income or expense.
(j) Depreciation: (i) Fleet :
Depreciation on new built vessels is provided on the straight line
method at the rates prescribed in Schedule XIV to the Companies Act,
1956. In case of second hand acquisitions, depreciation is provided on
the straight line method, so as to write off the cost over the
estimated useful life, as technically evaluated by the management /
consultants at the time of acquisition (20 to 27 years), or at the
rates prescribed in Schedule XIV to the Companies Act, 1956, whichever
is higher.
(ii) Rigs :
Rigs are depreciated on the straight line method so as to write off the
original cost over the estimated useful life of 7/10 years.
(iii) Barge :
The Barge is depreciated on the straight line method so as to write off
the original cost over the estimated useful life of 7/10 years.
(iv) Properties :
Flats and Offce premises are depreciated on the written down value
method, at the rates prescribed in Schedule XIV to the Companies Act,
1956.
(v) Other Assets :
On the straight line method so as to write off the original cost of the
asset over the estimated useful life as under: Computers - 3 years
Vehicles - 4 years
Furniture & Fixtures, Offce Equipment, etc - 5 years
(k) Asset Impairment :
The carrying amounts of the CompanyÃs tangible and intangible assets
are reviewed at each balance sheet date to determine whether there is
any indication of impairment. If any such indication exists, the
assetÃs recoverable amounts are estimated in order to determine the
extent of impairment loss, if any. An impairment loss is recognized
whenever the carrying amounts of an asset exceed its recovered amount.
The impairment loss, if any, is recognized in the statement of Proft
and Loss in the period in which impairment take place.
Where an impairment loss subsequently reverses, the carrying amount of
the assets is increased to the revised estimate of its recoverable
amount, however subject to the increased carrying amount not exceeding
the carrying amount that would have been determined (net of
amortization of depreciation) had no impairment loss been recognized
for the asset in prior accounting period.
(l) Foreign Exchange Transactions :
(i) Transactions in foreign currency are recorded at standard exchange
rates determined monthly. Monetary assets and liabilities other than
foreign currency borrowings denominated in foreign currency, remaining
unsettled at the period end are translated at closing rates. The
difference in translation of these monetary assets and liabilities and
realised gains and losses on foreign currency transactions is
recognised in the Proft and Loss Account.
(ii) The Company designates borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its frm commitment and
highly probable or forecasted revenue transaction to be accounted as
cash fow hedge. The unrealized exchange gains or losses on transaction
foreign currency borrowing which qualify as effective hedge are
recognized in the Hedge Reserve Account.
(iii) Forward exchange contracts, other than those entered into to
hedge foreign currency risk of frm commitments or highly probable
forecast transactions, are translated at period end exchange rates.
Premium or discount on such forward exchange contracts is amortised as
income or expenses over the life of the contracts.
(iv) Exchange differences in respect of forward exchange contracts
entered into by the Company to hedge foreign currency risk of frm
commitments or highly probable forecast transactions are accounted for
on settlement.
(v) Realised gain or losses on cancellation of forward exchange
contracts are recognised in the Proft and Loss Account of the period in
which they are cancelled.
(vi) Foreign currency derivative contracts which are embedded in the
loan agreements and form an integral part of the agreement are
translated at closing rates and the resultant gains or losses are
recognized in the Proft and Loss account along with the revaluation
gains or losses of the hedged loans. The unrealised gains or losses
arising on revaluation of other foreign currency swaps and options are
carried forward under Loans and Advances or Other Liabilities until
settlement in line with the underlying hedged assets / liabilities.
(m) Special Survey Expenses:
The Company capitalises expenses incurred at the time of fve yearly
special surveys and / or life enhancement programmes by which class
certifcates / operating licences are renewed.
(n) Provision for Taxation:
Tax expense comprises of current, deferred tax and fringe beneft tax.
(i) Provision for current income-tax and fringe beneft tax is made on
the basis of the assessable income under the Income- tax Act, 1961.
Income from shipping activities is assessed on the basis of deemed
tonnage income of the Company.
(ii) Deferred income-tax is recognised on timing differences, between
taxable income and accounting income which originate in one period and
are capable of reversal in one or more subsequent periods only in
respect of the non- shipping activities of the Company. The tax effect
is calculated on the accumulated timing differences at the year end
based on tax rates and laws, enacted or substantially enacted as of the
balance sheet date.
(o) Provisions and Contingent Liabilities:
Provisions are recognised in the accounts in respect of present
probable obligations, the amount of which can be reliably estimated.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events but their existence is confrmed by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company.
(p) Segment Reporting:
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standard (AS) 17.
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