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Notes to Accounts of Great Eastern Shipping Company Ltd.

Mar 31, 2014

Note 1 : Corporate Information

The Great Eastern Shipping Company Ltd. (the Company) is a public limited company registered in India under the provision of the Companies Act, 1913. Its shares are listed at Bombay Stock Exchange and National Stock Exchange in India and at the Luxembourg Stock Exchange. The Company is a major player in the Indian Shipping industry.

Note 2 : Capital and Other Commitment

Estimated amount of contracts, net of advances paid thereon amounting to Rs. 135.23 crores (Previous Year Rs. 18.99 crores), remaining to be executed on capital account and not provided for - Rs. 1103.64 crores (Previous Year Rs. 158.40 crores).

Note 3 : Contingent Liabilities

(Rs. in crores) Sr. Particulars Current Year Previous Year No.

Claims against the Company, not acknowledged as debts :

(a) Sales Tax demands under BST Act, CST Act and VAT Act against which the 7.46 7.46 Company has preferred appeals.

(b) Lease Tax liability in respect of a matter decided against the Company, against 17.40 17.40 which the Company has filed a revision petition in the Madras High Court.

(c) Demand from the Office of the Collector & District Magistrate, Mumbai City and 4.34 4.34 from Brihanmumbai Mahanagarpalika towards transfer charges for transfer of premises not acknowledged by the Company.

(d) Demand for Custom Duty disputed by the Company 7.29 6.50 [The Company has given bank guarantees amounting to Rs. 3.63 crores (Previous Year Rs. 2.71 crores) against the said Custom Duty demand which are included under ''Guarantees'' below]

(e) Service Tax Demands disputed by the Company 4.75 4.75

(f) Income Tax Demands for various Assessment Years disputed by the Company 5.47 11.98 Guarantees :

(a) Guarantees given by banks counter guaranteed by the Company. 75.20 3.24

(b) Guarantees given to banks on behalf of subsidiaries. 97.58 108.80

The Company has also provided performance guarantees in favour of parties which have contracted with its subsidiaries which would require it to assume the benefits and costs of these contracts in the event the subsidiaries are not able to fulfill the same, in which event, the Company does not expect any net liability or outflow of resources.

Note 4 : Hedging Contracts

The Company uses foreign exchange forward contracts, currency and interest rate swaps and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts, currency and interest rate swaps and options reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts, currency and interest rate swaps and options for trading or speculation purposes.

The Company also uses commodity futures contracts for hedging the exposure to bunker price risk.

The derivative/forward contracts mentioned under (i) above, having been entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions and the interest rate risk, have been designated as hedge instruments that qualify as effective cash flow hedges. The mark-to-market loss/(gain) on these foreign exchange derivative/forward contracts outstanding as on March 31, 2014 amounting to loss of Rs. 911.44 crores (Previous Year : loss of Rs. 712.24 crores) has been recorded in the Hedging Reserve Account.

In addition to above, the balance in Hedging Reserve Account also includes gain on cancellation of forward contracts amounting to Rs. ''NIL'' (Previous Year : gain of Rs. 0.07 crores) which will be recognised in the Statement of Profit and Loss in the same period or periods during which the hedged transaction affects profit and loss or is transferred to the cost of the hedged non-monetary asset upon acquisition in accordance with the principles of hedge accounting enunciated in Accounting Standard ''(AS) 30 – Financial Instruments : Recognition and Measurement'' as issued by the Institute of Chartered Accountants of India.

The derivative contracts mentioned under (ii) above, having been entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions, have been designated as hedge instruments that qualify as effective fair value hedges. The mark-to-market loss/(gain) on these foreign exchange derivative contracts outstanding as on March 31, 2014 amounting to gain of Rs. 0.36 crores (Previous Year : gain of Rs. ''NIL'') has been recorded in the Statement of Profit and Loss.

Note 5

(a) As a result of the peculiarities of the trading pattern, it is not possible to identify the heads of expenses based on the locus of consumption. Therefore it would not be feasible to provide the information relating to imports calculated on C.I.F. basis as prescribed by revised Schedule VI.

Note 6: General

Other Information required by Schedule VI (Revised) of the Companies Act, 1956, has been given only to the extent applicable. Previous year''s figures have been regrouped/restated wherever necessary to conform to current year''s classification.


Mar 31, 2013

Note 1 : Corporate Information

The Great Eastern Shipping Company Ltd. (the Company) is a public limited company registered in India under the provision of the Companies Act, 1913. Its shares are listed at Bombay Stock Exchange and National Stock Exchange in India and at the Luxembourg Stock Exchange. The Company is a major player in the Indian Shipping industry.

Note 2 : Tax Expenses

Pursuant to the introduction of Section 115VA under the Income-tax Act, 1961, the Company has opted for computation of its income from shipping activities under the Tonnage Tax Scheme. Thus, income from the business of operating ships is assessed on the basis of the deemed Tonnage Income of the Company and no deferred tax is applicable to such income as there are no timing differences. The timing difference in respect of the non-tonnage activities of the Company are not material, in view of which provision for deferred taxation is not considered necessary.

Note 3 : Disclosure pursuant to Accounting Standard (AS) 15 (Revised) "Employee Benefits"

A) Defined Contribution Plans :

The Company has recognised the following amounts in the Statement of Profit and Loss for the year :

B) Denned Benefit Plans and Other Long Term Benefits :

Valuations in respect of Gratuity, Pension Plan for Whole-time Directors and Leave Encashment have been carried out by an independent actuary, as at the Balance Sheet date on Projected Unit Credit method, based on the following assumptions:

(vii) Basis used to determine expected rate of return on assets :

Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year.

(viii) General Description of Significant Defined Benefit Plans :

Gratuity Plan :

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provisions of the Payment of Gratuity Act or as per the Company''s Scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn basic salary.

Pension Plan :

Under the Company''s Pension Scheme for the whole-time Directors as approved by the Shareholders, all the whole- time Directors are entitled to the benefits of the scheme only after attaining the age of 62 years, except for retirement due to physical disability, in which case, the benefits shall start on his retirement. The benefits are in the form of monthly pension @ 50% of his last drawn monthly salary subject to maximum of Rs.75 lakhs p.a. during his lifetime. If he predeceases the spouse, she will be paid monthly pension @ 50% of his last drawn pension during her lifetime. Benefits also include reimbursement of medical expense for self and spouse, overseas medical treatment upto Rs. 50 lakhs per illness, office space including telephone in the Company''s office premises and use of Company''s car including reimbursement of driver''s salary and other related expenses during his lifetime.

Leave Encashment

All eligible employees can carry forward and encash leave upto superannuation, death, permanent disablement or resignation subject to maximum accumulation allowed upto 15 days. The leave over and above 15 days is encashed and paid to employees on June 30th every year as per the last drawn basic salary, except for union category employees who had exercised an option to freeze the accumulated leave balance as on June 30, 2008 (over and above 15 days). This frozen accumulated leave balance will be encashed as per the last drawn basic salary at the time of superannuation, death, permanent disablement, resignation or promotion to the non-union category.

Note 4 : Segment information

The Company is considered to be a single segment company engaged in shipping business. Consequently, the Company has in its primary segment only one reportable business segment. As per AS-17 ''Segment Reporting'' if a single financial report contains both consolidated financial statements and the separate financial statement of the parent, segment information need be presented only on the basis of the consolidated financial statements. Accordingly, information required to be presented under AS-17 ''Segment Reporting'' has been given in the consolidated financial statements.

Note 5 : Related Party Transactions

(I) List of Related Parties

(a) Parties where control exists :

Subsidiary Companies :

The Great Eastern Shipping Co. (London) Ltd.

The Greatship (Singapore) Pte. Ltd.

The Great Eastern Chartering L.L.C. (FZC)

Greatship (India) Ltd. and its subsidiaries :

- Greatship Global Holdings Ltd., Mauritius.

- Greatship Global Energy Services Pte. Ltd., Singapore.

- Greatship Global Offshore Services Pte. Ltd., Singapore.

- Greatship Subsea Solutions Singapore Pte. Ltd., Singapore.

- Greatship Subsea Solutions Australia Pty. Ltd., Australia.

- Greatship (UK) Ltd., UK.

- Greatship Global Offshore Management Services Pte. Ltd., Singapore.

(b) Other related parties :

(i) Key Management Personnel :

Mr. K. M. Sheth - Executive Chairman

Mr. Bharat K. Sheth - Deputy Chairman and Managing Director

Mr. Ravi K. Sheth - Executive Director

Note 6 : Capital and Other Commitment

Estimated amount of contracts, net of advances paid thereon amounting to Rs. 18.99 crores (Previous Year Rs. 247.01 crores), remaining to be executed on capital account and not provided for - Rs. 158.40 crores (Previous Year Rs. 281.11 crores).

Note 7 : Hedging Contracts

The Company uses foreign exchange forward contracts, currency and interest rate swaps and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts, currency and interest rate swaps and options reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts, currency and interest rate swaps and options for trading or speculation purposes.

The Company also uses commodity futures contracts for hedging the exposure to bunker price risk.

1 Derivative Instruments Outstanding : i) Cash Flow Hedges :

(a) Commodity Futures Contracts for Import of Bunker :

Note 8

(a) As a result of the peculiarities of the trading pattern, it is not possible to identify the heads of expenses based on the locus of consumption. Therefore it would not be feasible to provide the information relating to imports calculated on C.I.F. basis as prescribed by revised Schedule VI.

(d) The Company has not remitted any amount in foreign currencies on account of dividend during the year.

Note 9: General

Other information required by Schedule VI (Revised) of the Companies Act, 1956, has been given only to the extent applicable. Previous year''s figures have been regrouped/restated wherever necessary to conform to current year''s classification.


Mar 31, 2012

Note 1 : Corporate Information

The Great Eastern Shipping Company Ltd. (the Company) is a public limited company registered in India under the provision of the Companies Act, 1913. Its shares are listed at Bombay Stock Exchange and National Stock Exchange in India and at the Luxembourg Stock Exchange. The Company is a major player in the Indian Shipping industry.

Note 2 : Tax Expenses

Pursuant to the introduction of Section 115VA under the Income-tax Act, 1961, the Company has opted for computation of it's income from shipping activities under the Tonnage Tax Scheme. Thus, income from the business of operating ships is assessed on the basis of the deemed Tonnage Income of the Company and no deferred tax is applicable to such income as there are no timing differences. The timing difference in respect of the non-tonnage activities of the Company are not material, in view of which provision for deferred taxation is not considered necessary.

(i) Basis used to determine expected rate of return on assets :

Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year.

(ii) General Description of Significant Defined Benefit Plans :

Gratuity Plan :

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanent disablement and resignation in terms of the provisions of the Payment of Gratuity Act or as per the Company's Scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn basic salary.

Pension Plan :

Under the Company's Pension Scheme for the whole-time Directors as approved by the Shareholders, all the whole- time Directors are entitled to the benefits of the scheme only after attaining the age of 62 years, except for retirement due to physical disability, in which case, the benefits shall start on his retirement. The benefits are in the form of monthly pension @ 50% of his last drawn monthly salary subject to maximum of Rs. 75 lakhs p.a. during his lifetime. If he predeceases the spouse, she will be paid monthly pension @ 50% of his last drawn pension during her lifetime. Benefit also include reimbursement of medical expense for self and spouse, overseas medical treatment upto Rs. 50 lakhs per illness, office space including telephone in the Company's office premises and use of Company's car including reimbursement of driver's salary and other related expenses during his lifetime.

Leave Encashment

All eligible employees can carry forward and encash leave upto superannuation, death, permanent disablement or resignation subject to maximum accumulation allowed upto 15 days. The leave over and above 15 days is encashed and paid to employees on June 30th every year as per the last drawn basic salary, except for union category employees who had exercised an option to freeze the accumulated leave balance as on June 30,2008 (over and above 15 days). This frozen accumulated leave balance will be encashed as per the last drawn basic salary at the time of superannuation, death, permanent disablement, resignation or promotion to the non-union category.

Note 25 : Segment information

The Company is considered to be a single segment company engaged in shipping business. Consequently, the Company has in its primary segment only one reportable business segment. As per AS-17 'Segment Reporting' if a single financial report contains both consolidated financial statement and the separate financial statement of the parent, segment information need be presented only on the basis of the consolidated financial statements. Accordingly, information required to be presented under AS-17 'Segment Reporting' has been given in the consolidated financial statements.

Note 26 : Related Party Transactions

(I) List of Related Parties

(a) Parties where control exists : Subsidiary Companies :

The Great Eastern Shipping Co. (London) Ltd. The Greatship (Singapore) Pte. Ltd. The Great Eastern Chartering LLC (FZC) Greatship (India) Ltd. and its subsidiaries :

Greatship Global Holdings Ltd., Mauritius.

Greatship Global Energy Services Pte Ltd., Singapore.

Greatship Global Offshore Services Pte Ltd., Singapore.

Greatship DOF Subsea Projects Private Ltd., India. (upto 30th December, 2011)

Greatship Subsea Solutions Singapore Pte. Ltd., Singapore.

Greatship Subsea Solutions Australia Pty. Ltd., Australia.

Greatship (UK) Ltd., UK.

Greatship Global Offshore Management Services Pte. Ltd., Singapore.

(b) Other related parties with whom transactions have taken place during the year (i) Key Management Personnel :

Mr. K. M. Sheth - Executive Chairman

Mr. Bharat K. Sheth - Deputy Chairman and Managing Director

Mr. Ravi K. Sheth - Executive Director

Note 27 : Capital and Other Commitment

Estimated amount of contracts, net of advances paid thereon, remaining to be executed on capital account and not provided for - Rs. 281.11 crores (Previous Year Rs. 1055.21 crores).

Note 28 : Contingent liabilities

(Rs. in crores)

Sr. Particulars Current Year Previous Year No.

(a) Guarantees given by banks counter guaranteed by the Company. 0.60 0.55

(b) Guarantees by bank given on behalf of a subsidiary company. 2.16 1.89

(c) Guarantees given to banks on behalf of subsidiaries. 121.06 122.84

(d) Sales Tax demands under BST Act, CST Act and VAT Act against which the 7.46 7.46 Company has preferred appeals.

(e) Lease Tax liability in respect of a matter decided against the Company, against 17.40 17.40 which the Company has filed a revision petition in the Madras High Court.

(f) Demand from the Office of the Collector & District Magistrate, Mumbai City and 4.34 4.34 from Brihanmumbai Mahanagarpalika towards transfer charges for transfer of

premises not acknowledged by the Company.

The Company has also provided performance guarantees in favour of parties which have contracted with its subsidiaries which would require it to assume the benefits and costs of these contracts in the event the subsidiaries are not able to fulfill the same, in which event, the Company does not expect any net liability or outflow of resources.

Note 29 : Hedging Contracts

The Company uses foreign exchange forward contracts, currency and interest rate swaps and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts, currency and interest rate swaps and options reduces the risk or cost to the Company and the Company does not use the foreign exchange forward contracts, currency and interest rate swaps and options for trading or speculation purposes.

The above mentioned derivative contracts having been entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions and the interest rate risk, have been designated as hedge instruments that qualify as effective cash flow hedges. The mark-to-market loss / (gain) on the foreign exchange derivative contracts outstanding as on March 31, 2012 amounting to loss of Rs. 573.42 crores (Previous Year Rs. 172.28 crores) has been recorded in the Hedging Reserve Account.

In addition to above, the balance in Hedging Reserve Account also includes loss on cancellation of forward contracts amounting to Rs. 1.77 crores (previous year Rs. NIL) which will be recognised in the Statement of Profit and Loss in the same period or periods during which the hedged transaction affects profit and loss or is transferred to the cost of the hedged non- monetary asset upon acquisition in accordance with the principles of hedge accounting enunciated in Accounting Standard '(As) 30 - Financial Instruments : Recognition and Measurement' as issued by the Institute of Chartered Accountants of India.

Note 30

(a) As a result of the peculiarities of the trading pattern, it is not possible to identify the heads of expenses based on the locus of consumption. Therefore it would not be feasible to provide the information relating to imports calculated on C.I.F. basis as prescribed by revised Schedule VI.

In the previous year, shipping companies were exempted to give information pursuant to Para 4D(a), (b), (c) and (e) of Part II of the pre-revised Schedule VI of the Companies Act, 1956, as per a notification on general exemption under Section 211 of the Companies Act, 1956, issued by the Ministry of Corporate Affairs on February 8, 2011.

(d) The Company has not remitted any amount in foreign currencies on account of dividend during the year.

Note 31

The adoption of the Revised Schedule VI does not impact recognition and measurement principles followed for preparation of Financial Statements and has no significant impact on the disclosures made in the Financial Statement.

All Assets and Liabilities have been classified as current or non current as per the Company's normal operating cycles and other criteria set out in the Revised Schedule VI to the Companies Act, 1956 which is applicable from the current year ended March 31,2012.

Note 32 : Previous Year Regrouping

Previous year's figures have been regrouped/restated wherever necessary to conform to current year's classification as per the revised Schedule VI notified under The Companies Act, 1956 which is applicable from the current year.


Mar 31, 2010

For the year ended March 31,2010.

1. Contingent Liabilities:

RS.IN LAKHS

PARTICULARY CURRENT PREVIOUS YEAR YEAR

(a) Guarantees given by banks counter guaranteed by the Company 23627 26712

(b) Guarantees by bank given on behalf of a subsidiary company /jointventure 190 409

(c) Guarantees given to banks/shipyard on behalf of subsidiaries 34898 128192

(d) Sales Tax demands under BST Act for the years 1995-96, 1996-97,1997-98, 1998-99, 746 746 2001-02, against which the Company has preferred appeals

(e) Lease Tax liability in respect of a matter decided against theCompany, against which the 1740 1740 Company has filed a revision petition in the Madras High Court

(f) Possible obligation in respect of matters under arbitration/appeal 59 59

(g) Demand from the Office of the Collector & District Magistrate,Mumbai City and from 434 434 Brihanmumbai Mahanagarpalika towards transfer charges for transfer of premises not acknowledged by the Company

2. Share Capital:

Under orders from the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992, - the allotment of 2,85,922 (previous year 2,85,922) rights equity shares of the Company have been kept in abeyance in accordance with section 206A of the Companies Act, 1956, till such time as the title of the bonafide owner is certified by the concerned Stock Exchanges. An additional 40,608 (previous year 40,608) shares have also been kept in abeyance for disputed cases in consultation with the Bombay Stock Exchange. During the year "Nil" (previous year 5,760) equity shares have been allotted out of the shares kept in abeyance.

3. Secured Loans:

(a) Term loans from banks are secured by mortgage of specific ships.

(b) Term loans from banks includes a syndicated loan of USD 32 million from a consortium of banks against security by way of assignment of bank deposit of USD 2.5 million and a financial covenant inter alia, to maintain unencumbered assets of value not less than 1.25 times the said borrowing.

(c) 6.05% 95 Secured Redeemable Non-Convertible Debentures of Rs. 1,00,00,000 each, redeemable on September 19,2010, are secured by pari-passu first charge on assets of the Company and the asset cover ratio will be not less than 1.25 times.

(d) 9.80% 2500 Secured Redeemable Non-Convertible Debentures of Rs. 10,00,000 each, redeemable on July 03, 2019 are secured by exclusive charge on ships with 1.25 times cover on the book value of ships and additional security by way of mortgage on immovable property of the Company.

4. Fixed Assets:

(a) Estimated amount of contracts, net of advances paid thereon, remaining to be executed on capital account and not provided for-Rs. 206426 lakhs (previous year Rs. 236883 lakhs).

(b) The amount of exchange gain on account of fluctuation of the rupee against foreign currencies and gains/(losses) on hedging contracts (including on cancellation of forward covers), relating to long-term monetary items for acquisition of depreciable capital assets and gains/(losses) on forward contracts for hedging capital commitments for acquisition of depreciable assets, deducted from the carrying amount of fixed assets during the year is Rs. 31022 lakhs. Corresponding loss relating to the previous year added to the carrying amount of fixed assets was Rs. 54023 lakhs.

(c) The deed of assignment in respect of the Companys leasehold property at Worli is yet to be transferred in the name of the Company.

5. Debtors and Creditors :

Debtors and Creditors are subject to confirmation, reconciliation and adjustments, if any.

6. Cash and Bank Balance:

Balances with scheduled banks on deposit account include margin deposits of Rs. 1301 lakhs (previous year Rs. 201 lakhs) placed with the bank, under a lien against guarantees issued by the said bank. Balance with other banks include a deposit of Rs. 1122 lakhi (previous year Rs. 1268 lakhs) which is under lien as security against a syndicated loan.

7. Loans and Advances:

Loans and Advances include amount due from subsidiary companies :

8. Current Liabilities:

According to the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006", no amount is overdue as on March 31, 2010, to Micro, Medium and Small Enterprises on account of principal or interest.

9. Deferred Tax:

Pursuant to the introduction of Section 115VA under the Income-tax Act, 1961, the Company has opted for computation of its income from shipping activities under the Tonnage Tax Scheme. Thus, income from the business of operating ships is assessed on the basis of the deemed Tonnage Income of the Company and no deferred tax is applicable to such income as there are no timing differences. The timing difference in respect of the non-tonnage activities of the Company are not material, in view of which provision for deferred taxation is not considered necessary.

10. Provisions:

The Company has recognised the following provisions in its accounts in respect of obligations arising from past events, the settlement of which is expected to result in an outflow embodying economic benefits.

11. The Company has provided a performance guarantees in favour of parties which have awarded a contract to the Companys wholly owned subsidiary which would require it to assume the benefits and costs of this contracts in the event the subsidiary is not able to fulfill the same, in which event, the company does not expect any net liability or outflow of resources.

12. Managerial Remuneration:

(i) Managerial Remuneration paid/payable to Directors for the year is as follows:

Notes:

The above does not include:

- Contribution to Gratuity Fund and provision for retirement leave encashment benefit as separate figures are not available in respect of the whole time directors.

- Provision for retirement pension benefits payable [Rs. 35 lakhs (previous year Rs. 778 lakhs)] (on the basis of an actuarial valuation) to the whole-time directors as per the scheme approved by the Board of Directors.

ii) Computation of Net Profit in accordance with Section 198 of the Companies Act, 1956 :

13. Disclosure pursuant to Accounting Standard (AS) 15 (Revised) "Employee Benefits":

A) Defined Contribution Plans :

The Company has recognised the following amounts in the Profit and Loss Account for the year:

B) Defined Benefit Plans and Other Long Term Benefits:

Valuations in respect of Gratuity, Pension Plan for Whole-time Directors and Leave Encashment have been carried out by an independent actuary as at the Balance Sheet date on Projected Unit Credit method, based on the following assumptions:

(vi) Basis used to determine expected rate of return on assets:

Expected rate of return on investments is determined based on the assessment made by the Company at the beginning of the year on the return expected on its existing portfolio since these are generally held to maturity, along with the estimated incremental investments to be made during the year.

(vii) General description of significant defined plans:

Gratuity Plan:

Gratuity is payable to all eligible employees ofthe Company on superannuation, death, permanent disablement and resignation in terms ofthe provisions ofthe Payment of Gratuity Act or as per the Companys Scheme whichever is more beneficial. Benefit would be paid at the time of separation based on the last drawn basic salary.

Pension Plan:

Under the Companys Pension Scheme for the Whole-time Directors as approved by the Shareholders, all the Whole- time Directors are entitled to the benefits ofthe scheme only after attaining the age of 62 years, except for retirement due to physical disability, in which case, the benefits shall start on his retirement. The benefits are in the form of monthly pension @ 50% of his last drawn monthly salary subject to maximum of Rs.75 lakhs p.a. during his lifetime. If he predeceases his spouse, she will be paid monthly pension @ 50% of his last drawn pension during her lifetime. Benefit also include reimbursement of medical expense for self and spouse, overseas medical treatment upto Rs. 50 lakhs per illness, office space including telephone in the Companys office premises and use of Companys car including reimbursement of drivers salary and other related expenses during his lifetime.

Leave Encashment:

Eligible employees can carry forward and encash leave upto superannuation, death, permanent disablement and resignation subject to maximum accumulation allowed at 15 days for employees on CTC basis and at 300 days for other employees. The leave over and above 15 days for CTC employees and over 300 days for others is encashed and paid to employees as per the balance as on June 30th every year. Benefit would be paid at the time of separation based on the last drawn basic salary.

16. Hedging Contracts:

The Company uses foreign exchange forward contracts, currency & interest rate swaps and options to hedge its exposure to movements in foreign exchange rates. The use of these foreign exchange forward contracts, currency & interest rate swaps and options reduces the risk or cost to the Company and the Company does not use foreign exchange forward contracts, currency & interest rate swaps and options for trading or speculation purposes.

The Company also uses commodity futures contracts for hedging the exposure to bunker price risk.

3. The above mentioned derivative contracts having been entered into to hedge foreign currency risk of firm commitments and highly probable forecast transactions and the interest rate risk, have been designated as hedge instruments that qualify as effective cash flow hedges. The mark-to-market loss/(gain) on the foreign exchange derivative contracts outstanding as on March 31,2010 amounting to loss of Rs. 17727 lakhs (previous year Rs. 36003 lakhs) has been recorded in the Hedging Reserve Account.

17. Segment Reporting:

The Company is only engaged in shipping business and there are no separate reportable segments as per Accounting Standard AS -17 Segment Reporting.

18. Related Party Disclosures :

(I) List of Related Parties

a) Parties where control exists :

Subsidiary Companies:

The Great Eastern Shipping Co.(London) Ltd. The Creatship (Singapore)Pte. Ltd. Great Eastern Chartering LLC - FZC Greatship (India) Ltd.and its subsidiaries :

- Greatship Holdings Ltd., Mauritius.

- Greatship Global Energy Services Pte Ltd., Singapore.

- Greatship Global Offshore Services Pte Ltd., Singapore.

- Greatship DOF Subsea Projects Private Ltd., Mumbai.

b) Other related parties with whom transactions have taken place during the year (i) Joint Venture:

CGU Logistic Ltd. (Upto March 31,2009) (ii) Key Management Personnel:

Mr. K. M. Sheth - Executive Chairman

Mr. Bharat K. Sheth - Deputy Chairman and Managing Director

Mr. Ravi K. Sheth - Executive Director

 
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