Enter the first few characters of Company and click 'Go'

Auditor Report of GOL Offshore Ltd.

Mar 31, 2016

To,

The Members,

GOL Offshore Limited

Mumbai

Report on the Standalone Financial Statements

We were engaged to audit the accompanying standalone financial statements of M/s GOL Offshore Limited ("the Company") which comprise the Balance Sheet as at March 31, 2016, Profit and Loss Statement and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters mentioned in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Standalone financial statements.

Basis for Qualified Opinion

The Company has investment in equity/redeemable preference shares of wholly owned subsidiary KEI-RSOS Maritime Limited and the carrying amount as at March 31, 2016 is Rs. 21,374 Lakhs, the balance of loan outstanding is Rs. 3,502 Lakhs and a further sum of Rs 4,423 Lakhs is due as Trade Receivables including Rs. 1,164 Lakhs recognized as income in the current year. The Company has also issued corporate guarantee to a Bank amounting to Rs. 14,168 Lakhs against which borrowing from bank outstanding on March 31, 2016 is Rs. 3,329 Lakhs. As per the latest available audited financial statements of KEI-RSOS Maritime Limited the net worth of the company has fully eroded and the cash flows are under stress as some of their assets are not earning and no impairment test has been carried out for making provision, if any required. There are disputed debtors and claims against that company which are subject matter of arbitration proceedings for which no provision is made in the accounts of that company. As stated in Note no 30 to the financial statements, no provision has been made for the diminution in the value of investments, the amount of loans and trade receivables aggregating to Rs. 29,299 Lakhs and possible liability that may arise due to devolvement of corporate guarantee mentioned above. If due provision was made, income from charter hire would be lower by Rs. 1, 164 Lakhs, expenses would be higher by Rs. 28,135 Lakhs and loss for the year higher by Rs. 29, 299 Lakhs with consequent effect on investments, receivables and long term loans and advances and shareholder''s funds with consequent effect on cash flow statement for a like amount.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in the Basis for Qualified Opinion paragraph, the standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2016; and of its losses and Cash Flows for the year ended on that date;

Emphasis of Matter

We draw attention to

i. Note: 39 of the financial statements regarding the continuing default in repayment of Loans including loans recalled and corporate guarantees invoked/ recovery and winding up proceedings initiated for reasons stated therein. The current liabilities are in excess of current assets by Rs. 99,036 Lakhs. The appropriateness of going concern assumption, classification of borrowings/assets given as a security and Hedge Accounting is dependent on the actions proposed to be taken by management/ JLF as detailed in the said note.

ii. Note nos. 34, 36 & 38 wherein the reasons and basis for making provisions against investments in and loans to subsidiaries and provisions for impairment of fixed assets have been detailed.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 ("Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure I, a statement on the matters specified in Paragraphs 3 and 4 of the said Order to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a) We sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, the Profit and Loss Statement and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) Except to the extent mentioned in our Basis of Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis of Matter paragraph and those on unpaid undisputed statutory dues and pending litigations referred to in Para No. (i)A below may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act.

g) Our reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph.

h) With respect to the adequacy of internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in Annexure - II and

i) With respect to the other matters to be included in the Auditor''s report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

A. The Company has pending litigations disclosed as contingent liabilities in its Note No.29 in addition to recovery/winding-up proceedings by creditors as mentioned in Note 39 to the financial statements as well as in basis of Qualified Opinion paragraph, the impact if any on the final settlement of the litigations is not ascertainable at this stage.

B. The Company has made provision, as required under the applicable law or accounting standards as adopted, for material foreseeable losses relating to long term contracts and derivative contracts and its appropriateness is subject to achieving matters mentioned in the Emphasis of Matter paragraph.

C. There were no delays in transferring undisputed amounts which were required to be transferred to the Investor Education and Protection Fund by the company during the year except an amount of INR 4.21 Lakhs declared in 2007 and 2008 which has not been transferred on account of legal disputes.

ANNEXURE I TO THE AUDITORS'' REPORT

Annexure referred to in paragraph 1 of our report of even date on the standalone Financial Statement of GOL

Offshore Limited for the year ended March 31, 2016 to the extent applicable.

(i) a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

b) We have been informed that the major fixed assets of the company consisting of Fleet, Rigs and I.T Equipment''s have been physically verified by the management during the year. In our opinion, the company has a program of verification which is reasonable having regard to the size of the company and the nature of its assets and operations, and we have been informed that no material discrepancies were noticed on such verification.

c) As explained to us, the title deeds of all the Immovable properties are held in the name of the Company. Since the title deeds are lodged with lenders originals of the same could not be verified by us.

(ii) We have been informed by the Management that the physical verification of Inventory is conducted as per the preset cyclical programme on monthly basis during the year on all large vessels in operation and no material discrepancies were noticed. In our opinion the frequency of such physical verification of Inventory is reasonable. In respect of inventory on smaller vessels a system of physical verification of inventory as of or close to the year end is to be introduced.

(iii) The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.Therefore the provisions of clause 3(iii)(a) to 3(iii)(c) of the said Order are not applicable to the Company.

(iv) The Company has complied with the provisions of Section 185 and 186 of the Companies in respect of the Loans, Guarantees, Investments and Securities given by it.

(v) The company has not accepted deposits in accordance with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable to the company.

(vi) According to the information and explanations given to us, we are of the opinion that, prima-facie, the company is not required to maintain cost records prescribed as per the Order issued by the Central Government under section 148 (1) of the Companies Act, 2013.

(vii) (a) As per the information and explanations furnished to us and according to our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues on account of Employee State Insurance and other statutory dues as applicable to the company with the appropriate authorities during the year, except for Provident Fund, Profession Tax, Advance Tax, Self-Assessment Tax, TDS, Service Tax, and Works Contract Tax where there have been serious delays in a number of cases. Undisputed amounts payable, outstanding for a period of more than six months from the date they became payable are as stated below:

Name of the statute	Nature of Dues	Amount (INR in Lakhs)	Period to which the amount relates	Due Date	Date of Payment
Income Tax Act, 1961	Self-Assessment Tax	657.88	Year Ended 31^st March''13	30.11.2013	Not Yet Paid
Income Tax Act, 1961	Interest on delayed payment of the above	166.72	Year Ended 31^st March''13	30.11.2013	Not Yet Paid
Income Tax Act, 1961	Balance Interest on the above up to 30.09.2015	265.91	Year Ended 31^st March''13	Various Dates up to 30.09.2015	Not Yet Paid
Income Tax Act, 1961	Self-Assessment Tax	1,784.15	Year Ended 31^st March''14	30.11.2014	Not Yet Paid
Income Tax Act, 1961	Interest on delayed payment of the above	253.33	Year Ended 31^st March''14	30.11.2014	Not Yet Paid
Income Tax Act, 1961	Balance Interest on the above up to 30.09.2015	203.75	Year Ended 31^st March''14	Various Dates up to 30.09.2015	Not Yet Paid
Income Tax Act, 1961	Tax Deducted at Source	31.07 10 42.37	Year Ended 31^st March''14 31^st March''15 31^st March''16	Various Dates up to 30.09.2014	Not Yet Paid
Income Tax Act, 1961	Interest on late payment of TDS	167.85 32.59	Year Ended 31^st March''15 31^st March''16	Various Dates up to 30.09.2014	Not Yet Paid
United Kingdom Corporation Tax Act, 2015	United Kingdom Payee Tax (excluding interest)	120 50 120	April''13 to Au-gust''15	10^th Day of subsequent month	Not Yet Paid

(b) According to the information and explanation given to us and as per the records of the company examined by us, there are no unpaid disputed taxes due as on 31^st March, 2016 except for the following:

Name of the Statue	Nature of dues	Amount (INR) (In Lakhs)	Period to which the total amount relates	Forum where dispute is pending
Income Tax Act, 1961	Income Tax including interest up to date of demand	347.20 29.09 512.87	2005-06 2006-07 2007-08	Deputy Commissioner of Income Tax
Income Tax Act, 1961	Income Tax including interest up to date of demand	1,660.51 84.24 600.41	2008-09 2009-10 2011-12	Income Tax Appellate Tribunal
Income Tax Act, 1961	Tax Deducted at Source including interest	660.37	2008-09 to 201415	Deputy Commissioner of Income Tax - TDS
The Tamil Nadu General Sales Tax Act 1959	Tax u/s 3A of The Tamil Nadu General Sales Tax Act, 1959	100.78	1995-96 and 1996-97	The Sales Tax Appellate Tribunal, Chennai
The Karnataka Sales Tax Act, 1957	Tax u/s 5-C of the Act	117.96	1995-96 to 2001-02	Stay granted by Supreme Court
The Karnataka Sales Tax Act, 1957	Sales Tax	6.03	2007-08	Assistant Commissioner (CT) III, Enforcement Tribunal
The Customs Act, 1962	Customs Duty	70.37	2001-02	Customs, Excise and Service Tax Appellate Tribunal
The Customs Act, 1962	Customs Duty	235.93	December 99	Commissioner of Customs (Import)
West Bengal Sales Tax Act	Sales Tax	41.59	2001-02	Taxation Tribunal, Kolkata

(viii) According to information and explanation given to us and as per our verification of the records of the company, the company has defaulted in repayment of its dues to banks and financial institutions during the year. Following are the details of the default days for the financial year 2015-16 in repayment of dues:

(Rs. in Lakhs)

Bank and Financial Institutation	Delay upto 90 Days	Delay 91-180 Days		Delay 181-365 Days	More than 365 Days
Loan
Axis Bank	7975
Central Bank of India	454
DBS	141
DVB Bank	3,330	151		1,065
HSBC Bank					2,278
ICICI Bank	6,233
IDBI Bank	1,915	1,561
Natixis	5192	861		654
Punjab National Bank		1,809
Union Bank		268
Total	25,240	4,650		1,719	2,278

Interest
Axis Bank	3766	58		36	-
Bank of Baroda	209	224		10	-
Central Bank of India	263	195		-	-
DVB Bank	1563	-		-	-
Exim Bank	-	-		-	129
Federal Bank	235	460		170	-
HSBC Bank	88	- - -			-
ICICI Bank	2641	-	-			-
IDBI Bank	1473	1155	-			-
Natixis	208	-	-			-
Punjab National Bank	397	1,496	-			-
State Bank of Hyderabad	481	108	4			-
Union bank	60	134	-			-
Total	11,384	3,830	220			129

During the year, Federal Bank had sold the outstanding loan amount to ARC, as result of which the continuing default was made good and the new agreed terms have been considered for reporting under this clause.

In addition to the above continuing defaults in payment of dues to banks and financial institutions were noticed. The details of continuing defaults as at the balance s(heet date are given below:

Rs. in Lakhs)

Bank and Financial Institutation	Delay up to 90 Days	Delay 91-180 Days	Delay 181-365 Days	More than 365 Days
Loan
Axis Bank	1,711	-	-	-
Bank of Baroda	394	394	789	-
Central Bank of India	227	227	227	-
DVB Bank	14,445	-	-	-
Exim Bank	1,292	1,292	2,584	7,721
HSBC Bank	-	-	-	316
ICICI Bank	500	-	-	-
IDBI Bank	669	-	-	-
Punjab National Bank	-	2,323	-	-
Union Bank	268	268	536	-
Total	19,506	4,504	4,136	8,037
Interest
Axis Bank	1,024	-	-	-
Bank of Baroda	346	335	514	-
Central Bank of India	197	198	162	-
Exim Bank	701	382	733	1,756
Federal Bank	120	38	-	-
ICICI Bank	109	-	-	-
IDBI Bank	411	-	-	-
Punjab National Bank	586	382	-	-
State Bank of Hyderabad	5	-	-	-
Union bank	167	150	159	-
Total	3,666	1,485	1,568	1,756

(ix) According to the information and explanation given to us on as overall basis, and utilization certificate obtained from a Chartered Accountant in respect of two term loans and on the basis of records verified by us nothing has come to our attention that term loan has not been applied for the purpose for which the loans were obtained. During the year, no monies have been raised through public offer.

(x) According to the information and explanation given to us and the records of the company examined by us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

(xi) The company has complied with the relevant section 177 & 188 of the Companies Act, 2013 in respect of related party transactions and details have been disclosed in the financial statements as required in Accounting Standard 18.

(xii) The provision of clauses 3 (xi), (xii), (xiv), (xv) & (xvi) of the Order are not applicable to the Company.

ANNEXURE - II TO THE INDEPENDENT AUDITORS'' REPORT

Annexure referred to in para 2 (h) of our Report of even date on the standalone financial statements of GOL Offshore Limited for the year ended March 31, 2016.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GOL Offshore Limited ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that

(1) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Emphasis of Matter

We draw attention to Note No 42 to the financial statements regarding certain weakness/ deficiencies regarding internal control systems and how the same have been mitigated/ are proposed to be mitigated. Our report is not qualified in respect of the above.

For VARMA & VARMA For Motilal& Associates

Chartered Accountants Chartered Accountants

FRN 004532S FRN 106584W

Cherian K Baby Motilal Jain

Partner Partner

M. No. 16043 M No. 036811

Mumbai, May 30, 2016 Mumbai, May 30, 2016

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying standalone financial statements of M/s GOL Offshore Limited ("the Company") which comprise the Balance Sheet as at 31st March 2015, profit and Loss Statement and the cash flow statement, and a summary of significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has adequate internal financial control system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the financial statements.

Basis for Qualified Opinion

The Company has investment in equity/redeemable preference shares of wholly owned subsidiary KEI-RSOS Maritime Limited and the carrying amount as at 31st March 2015 is Rs..21,374 Lakhs, the balance of loan outstanding is Rs.. 3,502 Lakhs and a further sum of Rs.. 3,399 Lakhs is due as Trade Receivables. The Company has also issued corporate guarantee to a Bank amounting to Rs..14,168 Lakhs against which borrowing from bank outstanding on 31st March, 2015 is Rs..3,656 Lakhs. As per the latest available audited financial statements of KEI-RSOS Maritime Limited the net worth of the company has fully eroded and the cash flows are under stress as some of these assets are not earning and no impairment test has been carried out for making provision, if any required. There are disputed debtors and claims against that company which are subject matter of arbitration proceedings for which no provision is made in the accounts of that company. As stated in Note no 30 to the financial statements, no provision has been made for the diminution in the value of investments, the amount of loans and trade receivables aggregating to Rs.. 28,275 Lakhs. Had the provision for the same been made, net loss for the year would be higher by Rs. 28,275 Lakhs and shareholders' funds would have been reduced by Rs. 28,275 with consequent effect on cash flow statements for a like amount

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015; and of its Losses and Cash Flows for the year ended on that date;

Emphasis of Matter

We draw attention to Note No. 39 to the financial statements regarding the continuing default in repayment of dues to lenders and the action taken / proposed by the management for settlement of Overdues. We also draw attention to Note No. 38 regarding no progress / delays with regard to construction of vessels carried under Capital Work in Progress. The current liabilities are in excess of current assets by Rs. 95,061 Lakhs. The Company continues to carry on its operations in the normal course and accordingly these financial statements have been prepared on a going concern basis. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 issued by the Central Government of India in terms of Section 143 (11) of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in Paragraphs 3 and 4 of the said Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit, except that confirmation certificate has not been directly received from DVB Group Merchant Bank regarding balance with banks of Rs. 115 Lakhs.

b) In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c) The Balance Sheet, the Profit and Loss Statement, and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) Except to the extent mentioned in our Basis of Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) The matters mentioned in our Basis of Opinion paragraph and Emphasis of Matter paragraph and those on unpaid undisputed statutory dues and pending litigations referred to in Para No. g (i) below may have an adverse impact on the working of the Company.

g) With respect to the other matters to be included in the Auditor's report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :

i. the Company has pending litigations disclosed as contingent liabilities in its Note No.29 in addition to recovery proceedings for loans as mentioned in Note 39 to the financial statements, the impact if any on the final settlement of the litigations is not ascertainable at this stage.

ii. the Company has made provision, as required under the applicable law or accounting standards as adopted, for material foreseeable losses relating to long term contracts and derivative contracts.

iii. there were no delays in transferring undisputed amounts which were required to be transferred to the Investor Education and Protection Fund by the company during the year excluding an amount Rs. 2.81 lakhs declared in 2007 which has not been transferred on account of legal disputes.

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 1 of our report of even date on the standalone Financial Statement of GOL Offshore Limited for the year ended 31st March, 2015

(i) (a) The company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) We have been informed that the fixed assets of the company consisting of Fleet, Rigs and I.T Equipments have been physically verified by the management during the year. In our opinion, the company has a program of verification which is reasonable having regard to the size of the company and the nature of its assets and operations, and we have been informed that no material discrepancies were noticed on such verification.

(ii) We have been informed by the Management that the physical verification of Inventory is conducted as per the preset cyclical programme during the year. In our opinion the frequency of such physical verification of Inventory is reasonable.

(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.

(iv) In our opinion, and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion and according to the information and explanation given to us, there is no continuing failure to correct major weakness in internal control.

(v) The company has not accepted deposits in accordance with directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. Hence these provisions/rules are not applicable to the company.

(vi) According to the information and explanations given to us, we are of the opinion that, prima-facie, the company is not required to maintain cost records prescribed as per the Order issued by the Central Government under section 148 (1) of the Companies Act, 2013.

(vii) (a) As per the information and explanations furnished to us and according to our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues on account of Provident Fund, Employee State Insurance and other statutory dues as applicable to the company with the appropriate authorities during the year, except for Advance Tax, Self Assessment Tax, TDS, Service Tax,and Works Contract Tax where there have been delays in a number of cases. Undisputed amounts payable, outstanding for a period of more than six months from the date they became payable are as stated below (excluding applicable interest in all cases):

Name of the statute Nature of Dues Amount (Rs. in Lakhs)

Income Tax Act, 1961 Self Assessment 1,032.88 Tax

Income Tax Act, 1961 Interest on 166.72 delayed payment of the above

Income Tax Act, 1961 Balance Interest 124.04 on the above upto 30.09.2014

Income Tax Act, 1961 Advance Tax 267.62

535.25

535.25

446.04

Income Tax Act, 1961 Interest on 253.33 Delayed payment of the above upto 30.09.2014

Income Tax Act, 1961 Tax Deducted at Source 31.07

10.00

Income Tax Act, 1961 Interest on late payment of TDS 257.18

329.80

173.19

The Maharashtra Value Interest on Works 3.35 Added Tax Act, 2002 Contract Tax

United Kingdom United Kingdom 509.59 Corporation Tax Act, 2015 Tax

United Kingdom United Kingdom 120.00 Corporation Tax Act, 2015 Payee Tax 50.00

Name of the Statute Period to Due Date Date of which the Payment amount relates

Income Tax Act, 1961 Year Ended 30.11.2013 Not Yet Paid 31st March'13

Income Tax Act, 1961 Year Ended 30.11.2013 Not Yet Paid 31st March'13

Income Tax Act, 1961 Year Ended Various Not Yet Paid 31st March'13 Dates upto 30.09.2014

Income Tax Act, 1961 Year Ended 15.06.2013 Not Yet Paid 31st March'14 15.09.2013 15.12.2013 15.03.2014

Income Tax Act, 1961 Year Ended Various Not Yet Paid 31st March'14 Dates upto 30.09.2014

Income Tax Act, 1961 Year Ended Various Not Yet Paid 31st March'14 Dates upto 31st March'15 30.09.2014

Income Tax Act, 1961 Year Ended Various Not Yet Paid 31st March'13 Dates upto 31st March'14 30.09.2014 31st March'15

The Maharashtra Value Added Tax Act, 2002 Year Ended 10th Day of Not Yet Paid 31st March'14 subsequent month

United Kingdom Corporation Tax Act, 2015 Year Ended 31.03.2015 Not Yet Paid 31st March'14

United Kingdom Corporation Tax Act, 2015 April'13 to 10th Day of Not Yet Paid August'14 subsequent month

(b) According to the information and explanations given to us and as per the records of the company examined by us, there are no unpaid disputed tax due as on 31st March, 2015 except for the following:

Name of the Statue Nature of dues Amount (Rs.in lakhs)

Income Tax Act, 1961 Income Tax 768.30

29.09

462.83

Income Tax Act,1961 Income Tax 328.68

215.60

54.55

291.04

The Tamil Nadu Tax u/s 3A of The 100.78 General Sales Tax Tamil Nadu Act 1959 General Sales Tax Act, 1959

The Karnataka Sales Tax u/s 5-C of the 117.96 Tax Act,1957 Act

The Karnataka Sales Sales Tax 6.03 Tax Act, 1957

The Customs Act, Customs Duty 70.37 1962

The Customs Act, 1962 Customs Duty 235.93

West Bengal Sales Sales Tax 41.59 Tax Act

Name of the Statute Period to which Forum where the total amount dispute is relates pending

Income Tax Act, 1961 F.Y 2005-06 CIT, Appeals

F.Y 2006-07

F.Y. 2007-08

Income Tax Act, 1961 F.Y. 2008-09 Dispute F.Y. 2009-10 Resolution Panel F.Y. 2010-11 F.Y. 2011-12

The Tamil Nadu General Sales Tax Act 1959 F.Y. 1995-96 The Sales Tax and Appellate Tribunal, F.Y. 1996-97 Chennai

The Karnataka Sales Tax Act, 1957 F.Y. 1995-96 Stay granted by to Supreme Court F.Y. 2001-02

The Karnataka Sales Tax Act, 1957 F.Y. 2007-08 Assistant Commissioner (CT) III, Enforcement Tribunal

The Customs Act, 1962 F.Y. 2001-02 Customs, Excise and Service Tax Appellate Tribunal

The Customs Act, 1962 December 1999 Commissioner of Customs (Import)

West Bengal Sales Tax Act F.Y. 2001-02 Taxation Tribunal, Kolkata

(c) According to the information and explanations given to us and as per the records of the company examined by us, the company has pending litigation matters regarding the Income Tax liability for FY 2008-09 to FY 2011-12 with the Dispute Resolution Panel of which the impact of pending litigations for the FY 2008-09 and FY 2010-11 on its financial position in its financial statements has been disclosed in Note 29 to the financial statements. The pending litigations pertaining to FY 2009-10 and FY 2011-12 does not have any impact on the company's financial position.

(d) According to the information and explanation given to us and as per the records of the company examined by us the amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1of1956) and rules made there under have been transferred to such fund within the prescribed time, excluding an amount of Rs.. 2.81 Lakhs declared in 2007 which has not been transferred on account of legal disputes.

(viii) According to information and explanations given to us, the company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the financial year, or in the immediately preceding financial year;

(ix) According to information and explanations given to us and as per our verification of the records of the company, the company has defaulted in repayment of its dues to Banks/Financial Institution during the year. Following are the details of the default days for the financial year 2014-15

Rs. in Lakhs

Particulars Delay Delay Delay Delay Upto 30 31-60 61-90 91-120 Days Days Days Days

Loan 29,096 8,908 7,839 7,073

Interest 6,140 4,404 4,976 3,734

Particulars Delay Delay Delay More 121-180 181-365 than 365 days Days

Loan 4,428 3,964 1,789

Interest 5,647 - -

(x) According to the information and explanations given to us and as per the verification of the records of the company, the company has given guarantee for the loans taken by its wholly owned subsidiaries from banks or financial institutions, the terms and conditions thereof are not prima facie prejudicial to the interests of the company.

(xi) According to the information and explanations given to us on an overall basis, and utilization certificate obtained from a Chartered Accountant, term loans have been applied for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us and the records of the company examined by us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For VARMA & VARMA For Motilal & Associates

Chartered Accountants Chartered Accountants

FRN 004532S FRN 106584W

CHERIAN K BABY MOTILAL JAIN

Partner Partner

M No.16043 M.No. 036811

Place: Mumbai

Date: 28th May, 2015

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of GOL Offshore Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Proft and Loss Statement and the Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with provisions of the Companies Act, 1956 ("the Act") including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our qualifed audit opinion.

Basis for Qualifed Opinion

The Company has investment in equity/redeemable preference shares of wholly owned subsidiary KEI-RSOS Maritime Limited and the carrying amount as at 31st March, 2013 is Rs.18,863 Lakhs and the balance of loan outstanding is Rs. 3,331 Lakhs. The Company has also issued a corporate guarantee to Indian Bank amounting to Rs.14,168 Lakhs against which borrowing from bank outstanding on 31st March, 2013 is Rs.6,327 Lakhs. As per the latest available audited financial statements of KEI-RSOS Maritime Limited the net worth of the company has substantially eroded and the cash flows are under stress. There are disputed debtors and claims against that company which are subject matter of arbitration proceedings for which no provision is made in the accounts of that company. As stated in note no 29 to the accounts, no provision has been made for the diminution in the value of investments and the amount of loans aggregating to Rs. 22,194 Lakhs. Had the provision for the same been made, net profit would become a loss of Rs.16,127 Lakhs and shareholders'' funds would have been reduced by Rs.22,194 Lakhs with consequent effect on cash flow statements for a like amount.

Qualifed Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements read with notes thereon give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

(b) in the case of the Profit and Loss Statement, of the profit for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date

Emphasis of Matter

We draw attention to Note 37 to the fnancial statements regarding the continuing default in repayment to the Bondholders as well as other lenders and the proposed action of the Management. The current liabilities are in excess of current assets by Rs.93,509 Lakhs. The Company continues to carry on it''s operations in the normal course and accordingly these fnancial statements have been prepared on a going concern basis. Our opinion is not qualifed in respect of this matter.

Report on Other Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (" the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

2. As required by section 227 (3) of the Act, we report that:

a. we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

c. the Balance Sheet, Proft and Loss Statement, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. except for the effects of the matter described in the basis for qualified opinion paragraph, in our opinion, the Balance Sheet, Profit and Loss Statement, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualifed as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNExuRE REFERRED TO IN PARAGRAPH 1 uNDER THE HEADING "REPORT ON OTHER LEGAL AND REGuLATORY REQuIREMENTS" OF OuR INDEPENDENT AuDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF GOL OFFSHORE LIMITED FOR THE YEAR ENDED 31ST MARCH 2013.

1 (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) We are informed that the fxed assets of the company consisting of Fleet Rigs and I.T. equipments have been physically verifed by the management during the year. The Company has a programme of verifcation in a phased manner in respect of other fxed assets. In our opinion, the phased programme of verifcation is reasonable having regard to the size of the company and the nature of its operations. We are informed that no material discrepancies have been noticed on verifcation carried out during the year.

(c) The Company has not disposed off a substantial part of the fxed assets during the year.

2 (a) We have been informed by the Management that the physical verifcation of Inventory is conducted as per the preset cyclical programme on monthly basis during the year. In our opinion the frequency of such physical verifcation of Inventory is reasonable.

(b) In our opinion and according to the Information and explanations given to us, the procedures of physical verifcation of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory and as informed to us, discrepancies noticed on the physical verifcation have been properly dealt with in the books of account.

3 (a) As informed, the Company has not granted any loans, secured or unsecured, to companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loans aggregating to Rs. 900 Lakhs, from one company, covered in the register maintained under section 301 of the Companies Act, 1956 during the year. In respect of the said loans as well as other loans taken in earlier years, the maximum amount outstanding from all parties (six) at any time during the year is Rs. 2,851 Lakhs and the year-end balance is Rs. 2,605 Lakhs.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by the Company, are not prejudicial to the interests of the Company.

(d) The loan and interest is payable on demand and there are no specifc terms of repayment of principal and interest. Hence whether the principal and interest has been paid regularly or not cannot be commented upon.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of fxed assets and for the sale of services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal controls.

5 (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act 1956 and the rules framed there under are not applicable to the Company.

7 In our opinion, the Company has an internal audit system commensurate with the size of the company and nature of its business.

8 According to the information and explanations given to us, we are of the opinion that, prima-facie, the company has made and maintained Cost records pursuant to the Order issued by the Central Government under Section 209(1)(d) of the Companies Act, 1956. We have, however, not made a detailed examination of these records.

9 (a) As per the information and explanations furnished to us and according to our examination of the records of the Company, the Company has been generally regular in depositing undisputed statutory dues on account of Provident Fund, Employee State Insurance and other statutory dues as applicable to the company with the appropriate authorities during the year, except for TDS and Service Tax, wherein there have been serious delays in a large number of cases. There are no arrears of undisputed statutory dues outstanding as at the last day of the fnancial year, for a period of more than six months from the date on which they became payable.

10 There are no accumulated losses at the end of the fnancial year. The Company has also not incurred cash losses during the year and in the immediately preceding fnancial year.

11 On verification of the repayment schedules to banks and financial institutions and the books of account of the Company it is observed that the Company has defaulted in repayment of dues to banks and Foreign Currency Bonds. The following are the details of the default days for the financial year 2012-13.

(Rs.in Lakhs)

Particulars Delay upto Delay Delay Delay 30 Days 31-60 Days 61-90 Days 91-120 Days

Loan 6,934 3,471 7,206 3,586

Interest 3,136 5,207 7,168 3,322

FCCB Bonds

FCCB-Interest 504

12 According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities and hence the reporting requirements under clause 4(xii) of the Order are not applicable.

13 In our opinion, the Company is not a chit fund or a Nidhi / mutual beneft fund / society and hence the reporting requirements under clause 4(xiii) of the Order are not applicable.

14 In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments and hence the reporting requirements under clause 4(xiv) of the Order are not applicable.

15 According to the information and explanations given to us and the records of the Company examined by us, the Company has given guarantee for the loans taken by its subsidiaries from banks or fnancial institutions, the terms and conditions thereof are not prima facie prejudicial to the interests of the Company.

16 According to the information and explanations given to us and as per the records of the Company examined by us, the term loans availed by the Company during the year are seen used for the purpose which they were obtained except for Rs. 400 Lakhs being the fund raised as working capital loan, which have been utilized, explained to be temporarily, for the purpose of acquiring/ construction of capital assets. The Company has not utilized any other funds raised on short-term basis for long- term investments.

17 The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

18 The Company has not issued any debentures during the year, and hence the reporting requirements under clause 4(xix) of the Order are not applicable.

19 The Company has not raised any money by public issue during the year, and hence the reporting requirements under clause 4(xx) of the Order are not applicable.

20 According to the information and explanations given to us and as per the records of the Company examined by us, we report that no fraud on or by the Company has been noticed or reported during the year.

For VARMA & VARMA For Motilal & Associates

Chartered Accountants Chartered Accountants

FRN 004532S FRN 106584W

CHERIAN K BABY MOTILAL JAIN

Partner Proprietor

M. No.16043 M. No. 036811

Place: Mumbai Date: 23rd May, 2013

Mar 31, 2012

1. We have audited the attached Balance Sheet of Great Offshore Limited as at March 31, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) Order, 2004, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) We draw attention to Note 32 of the Notes to Account. The Company has changed its accounting policy with effect from 1st April 2011, for recognition and measurement of Mark to Market losses in respect of derivatives instruments like interest rate swaps as per the principals enunciated in Accounting Standard (AS)30 "Financial Instruments: Recognition and Measurement" and in accordance with the recommendation of the Institute of Chartered Accountants of India. Accordingly Mark to Market (MTM) losses in respect of derivative instruments like Interest rate swaps have been accounted in accordance with principal of hedge accounting and the MTM losses on such derivative instruments is recorded in the Hedge reserve account instead of recognising the same to statement of Profit and Loss. Accordingly as at 31st March 2012 MTM loss on outstanding interest rates swaps' amounting to Rs. 9,685 lakhs has been recognised in hedge reserves instead of debiting the same to statement of Profit and Loss. Accordingly the profit for the year is higher by Rs. 9,046 lakhs.

f) As on March 31, 2012, the Company has investment in equity/redeemable preference shares of wholly owned subsidiary KEI-RSOS Maritime Limited amounting to Rs. 18,863 lakhs and also a loan outstanding of Rs. 3,100 lakhs. The Company has also issued corporate guarantee to Indian Bank amounting to Rs.14,585 lakhs. As per the latest audited financial statements of KEI-RSOS Maritime Limited the net worth of the company has substantially eroded and the cash flows are under stress. No provision has been made in the financial statements of the company for depletion in value of investment and the loans and advances given by the company amounting to Rs.21,963 lakhs. Had the provision for the same been made, the profits before tax for the year would have been lower to that effect.

g) Subject to our comment in para 4(f) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

ii) in the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

5. On the basis of written representations received from the directors of the Company as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualified as on March 31, 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Referred to in paragraph 3 of our report of even date on the accounts of Great Offshore Limited for the year ended March 31, 2012:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management as per a phased programme of verification. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets. To the best of our knowledge no material discrepancies were reported on such verification.

(c) In our opinion, the fixed assets disposed off during the year were not substantial and do not affect the going concern assumption.

2. (a) We have been informed by the Management that the physical verification of inventory is conducted as per the preset cyclical programme on monthly basis during the year. In our opinion the frequency of such physical verification of inventory is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company has implemented inventory system w.e.f. January 1, 2012 and is in process of strengthening the same. Discrepancies noticed on the physical verification have been properly dealt in the books of accounts.

3. (a) As informed, the company has not granted any loan, secured/ unsecured to any Companies firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly the provisions of Para 4 caluse (iii) (a) to (d) of the said order are not applicable.

(b) The Company has taken loans amounting to Rs. 18,309 lakhs from six companies covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 9,220 lakhs and the year-end balance is Rs. 2,798 lakhs.

(c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by the Company, are not prejudicial to the interest of the Company.

(d) The loan and interest is payable on demand and there are no specific terms of repayment of principal and interest hence whether the principal and interest has been paid regularly or not cannot be commented upon.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of services. Further, on the basis of our examination of the books of account and records of the Company, and according to the information and explanations given to us, we have neither come across nor we have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system, which is commensurate with the size and nature of its business.

8. As informed to us, the company is maintaining cost records as prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956. We have not, however made a detailed examination of these records.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including Shore Staff Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess, and other statutory dues with the appropriate authorities.

(b) According to the books of account and records as produced and examined by us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or cess which have not been deposited on account of any dispute, other than those stated below:

Name of the statute Nature of Dues Amount (Rs. Period to Forum where dispute in lakhs) which the is pending amount relates

The Tamil Nadu Tax u/s 3A of The 100.78 1995-96 and The Sales Tax General Sales Tax Tamil Nadu General 1996-97 Appellate Tribunal, Act 1959 Sales Tax Act, 1959 Chennai

The Karnataka Sales Tax u/s 5-C of the 170.71 1995-96 to Stay granted by Tax Act , 1957 Act 2001-02 Supreme Court

The Karnataka Sales Sales Tax 6.03 2007-08 Assistant Tax Act, 1957 Commissioner (CT) III, Enforcement Tribunal

The Customs Act, Customs Duty 70.37 2001-02 Customs Excise 1962 and Gold (Control) Appellate Tribunal

The Customs Act, Customs Duty 235.93 December 99 Commissioner of 1962 Customs (Import)

The APVAT Act, VAT 96.53 2004-05 APGST / SPVAT 2005 2005-06 Malviya Nine- deemed Transfer of right to use

Central Excise and Service Tax 72.53 2002-03 to Superintendent of Customs Act 2004-05 Central Excise

West Bengal Sales Sales Tax 41.59 2001-02 The Commissioner of Tax Act Commercial Taxes, Kolkatta

10. The Company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the current year and in the immediately preceding financial year.

11. On the scrutiny of the repayment schedules to banks and financial institutions and the books of accounts of the company it is observed that the Company has defaulted in repayment of dues to banks and financial institutions. The following are the details of the defaults days for the financial year 2011-12:

(Rs. in lakhs)

Particulars Delay upto 30 Delay Delay Delay Total Days 31-60 Days 61-90 Days 90-125 Days

Loan 151 4,420 18,043 4,750 27,365

Interest - 2,174 1,690 326 4,190

Total 151 6,594 19,734 5,076 31,555

of the above Rs. 9,120 lakhs in respect of term loan installment and Rs. 3,348 lakhs in respect of interest payment were in arrears as of the balance sheet date.

12. According to the information and explanations given to us and the records examined by us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to the chit fund and nidhi/ mutual benefit fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts of the investments dealt in by the Company and timely entries have been made therein. The investments made by the Company are held in its own name except to the extent of the exemption under section 49 of the Act.

15. The Company has given guarantees for the loans taken by its subsidiaries from banks or financial institutions, the terms and conditions thereof are not prima facie prejudicial to the interests of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the term loans were applied by the Company for the purpose for which they were obtained except for a term loan amounting to Rs.23,227 lakhs which was disbursed by a financial institution for acquisition of a vessel and was temporarily used to repay high cost debt as next stage payment for acquisition for the said vessel is still not due.

17. On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanation given to us, we report that the Company has not utilised any funds raised on short-term basis for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companies covered under section 301 of the Act.

19. The Company has not issued any debentures during the year. Hence, security or charge created in respect of debentures issued is not applicable.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY

CHARTERED ACCOUNTANTS

Registration No. 104607W

VINAYAK M. PADWAL

Partner

M. No. F49639

Mumbai, May 25, 2012

Mar 31, 2010

1. We have audited the attached Balance Sheet of Great Offshore Limited as at March 31, 2010 and also the Proft and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These fnancial statements are the responsibility of the CompanyÃs management. Our responsibility is to express an opinion on these fnancial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by management, as well as evaluating the overall fnancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (AuditorÃs Report) Order, 2003, as amended by the Companies (AuditorÃs Report) Order, 2004, issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we annex hereto a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books.

c) The Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Proft and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) Without qualifying our opinion, we draw attention to Note 17(a) of Schedule 19, Notes to Account. The Company has changed its accounting policy w.e.f. April 1, 2009 in respect of expenses incurred at the time of fve yearly Special Surveys and/ or life enhancement programmes by which class certifcates/ operating licenses are renewed and instead of charging the same to Proft and Loss Account have capitalised the same and will be depreciated over the period of fve years. Accordingly, during the year ended March 31, 2010, the Company has capitalized Rs. 3989 lakhs and consequently proft for the year is higher by Rs. 3511 lakhs.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

ii) in the case of the Proft and Loss Account, of the proft of the Company for the year ended on that date; and

iii) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

5. On the basis of written representations received from the directors of the Company as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualifed as on March 31, 2010, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the AuditorsÃ Report

Referred to in paragraph 3 of our report of even date on the accounts of Great Offshore Limited for the year ended March 31, 2010:

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) The fxed assets are physically verifed by the management as per a phased programme of verifcation. In our opinion, the frequency of verifcation is reasonable having regard to the size of the Company and the nature of its assets. To the best of our knowledge no material discrepancies were reported on such verifcation.

(c) In our opinion, the fxed assets disposed off during the year were not substantial and do not affect the going concern assumption.

2. (a) The management has conducted physical verifcation of inventory at reasonable intervals.

(b) In our opinion, the procedures followed by the management for physical verifcation of inventory are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verifcation of inventories as compared to the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, frms or other parties covered in the

register maintained under section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans, secured or unsecured, from companies, frms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventory and fxed assets, and for the sale of goods and services. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act have been entered in the register required to be maintained under that section.

In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of sections 58A and 58AA of the Companies Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system, which in our opinion is commensurate with the size and nature of its business.

8. As informed to us, the maintenance of cost records has not been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956, in respect of the activities carried on by the Company.

9. (a) According to the information and explanations given to us and according to the books and records as produced

and examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including Shore Staff Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Excise duty, Customs duty, Cess, and other statutory dues with the appropriate authorities. We are informed that in respect of foating staff it is not possible to accurately ascertain the income tax on salaries (under section 192) of the employees. The Company regularly makes ad hoc payments to the appropriate authorities and on fnal determination the balance, if any, is paid.

(b) According to the books of account and records as produced and examined by us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise duty or cess which have not been deposited on account of any dispute, other than those stated below:

Name of the statute Nature of Dues Amount Period to which (Rs. In the amount Lakhs) relates The Tamilnadu General Tax u/s 3A of The 100.78 1995-96 and Sales Tax Act 1959 Tamilnadu General 1996-97 Sales Tax Act, 1959 The Karnataka Sales Tax Tax u/s 5-C of the Act 170.71 1995-96 to Act , 1957 2001-02 The Customs Act, 1962 Customs Duty 6.03 2007-08 70.37 2001-02 The APVAT Act, 2005 VAT 96.53 2004-05 2005-06 Central Excise and Service Tax 72.53 2002-03 to Customs Act 2004-05 Income Tax Act, 1961 Income Tax 36.94 2006-07 West Bengal Sales Tax Act Sales Tax 41.59 2001-02

Name of the statute Forum where dispute is pending The Tamilnadu General The Sales Tax Appellate Sales Tax Act 1959 Tribunal, Chennai The Karnataka Sales TaxStay granted by Supreme Act , 1957 Court The Customs Act, 1962 Deputy Commissioner CT Hyderabad, Andhra Pradesh. Custom Excise and Gold (Control) Appellate Tribunal The APVAT Act, 2005 APGST / SPVAT Malviya Nine - deemed Transfer of right to use Central Excise and Superintendent of Central Customs Act Excise Income Tax Act, 1961 CIT(Appeals) West Bengal Sales Tax The Commissioner of Commercial Taxes, Kolkatta Act

10. The Company has no accumulated losses as at the end of the fnancial year and it has not incurred any cash losses in the current year and in the immediately preceding fnancial year.

11. According to the information and explanations given to us and the records examined by us, the company has not defaulted in repayment of dues to a fnancial institution or bank or the debenture holders.

12. According to the information and explanations given to us and the records examined by us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities.

13. In our opinion and according to the information and explanation given to us, the nature of the activities of the Company does not attract any special statute applicable to the chit fund and nidhi/ mutual beneft fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contracts of the investments dealt in by the Company and timely entries have been made therein. The investments made by the Company are held in its own name except to the extent of the exemption under section 49 of the Act.

15. According to the information and explanations given to us and the records examined by us, the Company has not given any guarantees for loans taken by others from banks or fnancial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us and the records examined by us, on an overall basis, the term loans were applied by the Company for the purpose for which they were obtained.

17. On the basis of an overall examination of the balance sheet and cash fows of the Company and the information and explanation given to us, we report that the Company has not utilised any funds raised on short-term basis for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companies covered under section 301 of the Companies Act.

19. According to the explanation given to us, securities have been created in respect of the debentures taken over by the Company pursuant to the Scheme of Arrangement.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

KALYANIWALLA & MISTRY

Chartered Accountants

VINAYAK M. PADWAL

Partner

M. No. F49639

Firm Reg. No. 104607W

Mumbai, June 23, 2010

Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article