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Notes to Accounts of Seamec Ltd.

Mar 31, 2014

1 Corporate Information

SEAMEC Limited is a public Company incorporated under the Companies Act, 1956. The Company operates Multi Support Vessels for providing support services including marine, construction and diving services to offshore oilfields,

2 Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956, read with general circular 8/2014 dated April 4,2014 issued by the Ministry of Corporate Affairs. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year,

Rs.million

4 CONTINGENT LIABILITIES As at As at 31.03.2014 31.03.2013 Refer note (a) Refer note (a) &(b) below &(b) below

FERA Matter Refer note (a) 100 100

Custom Duty payable as per order from Commissioner of Customs(lmport) Refer note (b) 1,197 1,197

a The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Hon''ble Mumbai High Court. The Company has furnished a Bank Guarantee of Rs. 100 million to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon''ble Mumbai High Court, The bank guarantee is valid till March 31, 2014. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA,

b During the year 2011 , the Directorate of Revenue Intelligence (DRI) had instituted an enquiry in relation to payment of customs duty towards repairs/drydock undertaken on Company''s vessels SEAMEC-I, SEAMEC-II and SEAMEC-III incurred outside India since 2002. The DRI provisionally assessed customs duty of Rs. 126.60 million, which the company has paid under protest subject to adjudication in December 2011,

The Company had also furnished a bank Guarantee for Rs. 82.10 million and Bond for Rs. 821 million pursuant to the order dated 17th January 2012 of Hon''ble High Court Bombay for provisional release of its vessel SEAMEC II arrested by Customs. The above order was subject to adjudication. Hon''ble High Court observed that no duty to be charged on the acquisition cost as the vessel was originally imported prior to 2001 when import duty was not applicable on such vessel, During July - August 2012 , DRI issued show cause notice , separately for each vessel and gave the liberty to reply to Commissioner of customs (Import) as to why the duty determined of aggregate value of Rs. 285.26 million, interest, penalty etc. will not be levied on the company.

The Company while preferring adjudication have submitted replies to respective show cause notices, and hearing on adjudication proceeding completed before the Commissioner of Customs (Import) on 04-12-2012, Subsequent to above, the company has received 3 corrigendum to the original show cause notices enhancing the claim of custom duty by Rs. 65.14 million against the above claim.

Commissioner of Customs has issued order dated 28th March 2013 received by Company on 16th April 2013 on the adjudication proceedings . Commissioner of Customs, in his order , imposed duty Rs. 350 million, penalty for equivalent amount and interest and appropriation of Rs. 126.6million paid in Dec 2011. As per the order of Commissioner of Customs , total claim to Company including duty, penalty, interest and confiscation fine calculated to Rs. 1,197 million after adjustment of provisional duty already paid in Dec 2011 under protest,

The Company has since obtained stay from CESTA Appellate Tribunal, customs against the order of commissioner of customs for vessel SEAMEC-III , SEAMEC II & SEAMEC-I. Pursuant to order the company has submitted bank guarantee of Rs. 6.00 million and Rs. 3.00 million respectively. The matter is admitted for appeal, proceeding is under process, The Company is of the view that it has a strong case on merit and is contesting the same. Hence no further provision made towards additional Customs Duty, Penalty and Confiscation redemption fine as stated in the order of Commissioner of Customs ,

5 CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 38.15 million (Previous yearRs. 47.19 million).

6 TRADE RECEIVABLE

The Company withdrew one of its vessels from a charter hire contract due to commercial disputes. The Company has not recognised revenue of Rs. 281.99 million in respect of contract for the period January 2010 to March 2010 on account of uncertainty relating to acceptance and readability of claims. Further, the Company has also made a provision of Rs. 239.39 million towards outstanding receivables from the same client on grounds of prudence. The Company has been pursuing legal recourse in Mexican Court.

7 Segment Information

Secondary Segment: Geographical Segment

The Company''s secondary segments are the geographic distribution of activities. Revenue are specified by location of customers, while other geographic information cannot be segregated as explained in note below. The following table present revenue, expenditure and certain asset information regarding the company''s geographical segments:

8 Related Party disclosure

Names of Related Party & related party relationship i Related parties where control exist

Holding Company Coflexip Stena Offshore (Mauritius) Limited

Ultimate Holding Company Technip SA France

Subsidiaries Seamec International FZE

ii Related Parties with whom transactions have taken place during the year ended March 31, 2014 Refer Annexure- A

9 Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

(a) The Company has entered into forward exchange contract of US$ Nil equivalent to Rs. Nil million (Previous Year US$ 10.50 million equivalent to Rs. 568.32 million ) to hedge its receivables to be realized at a future date,

(b) Un-hedged Foreign Currency Exposure

10 Gratuity and other post-employment benefit plans

1 Defined Benefit Contribution Plans

Amount of Rs. 2.18 million (2.25 million) is recongnised as an expense and included in "Employee Benefit Expense (refer note 22) in statement of profit & Loss.

2 Defined Benefit Plans :

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recoanized in the balance sheet for the respective plans,

11 Leases

In case of assets taken on lease

Operating Lease : Company as lessee

Office premises are obtained on operating lease / leave and license. The lease term is for the period of 1 to 9 years and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. The Company has sub leased part of office premises on operating lease. The total lease term is for a period of 60 months out of which there is a lock-in period of initial 36 months with non-renewable condition after 60 months,

12 Previous year figures

Previous Year figures have been regrouped / reclassified, where necessary, to confirm this years, classification.


Mar 31, 2013

1 Corporate Information

SEAMEC Limited is a public Company incorporated under the Companies Act, 1956. The Company operates Multi Support Vessels for providing support services including marine, construction and diving services to offshore oilfields.

2 Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention except for derivative financial instruments which have been measured at fair value .

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3 CONTINGENT LIABILITIES (Rs. million) As at As at 31.03.2013 31.03.2012

Claim against the Company not acknowledge as debt Refer note (a) Refer note (a) &(b) below &(b) below

FERA Matter Refer note (a) 100 100

Custom Duty payable as per order from Commissioner of Customs(Import) Refer 1,197 Nil

Note (b)

a The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Hon''ble Mumbai High Court. The Company has furnished a Bank Guarantee of Rs. 100 million to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon''ble Mumbai High Court. The bank guarantee is valid till March31, 2013. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA.

b. During the year 2011, the Directorate or Revenue intelligence (DRI) had instituted an enquiry in relation to payment of customs duty towards repairs/drydock undertaken on Company''s vessels SEAMEC-I. SEAMEC-II and SEAMEC-III incurred outside India since 2002. The DRI provisionally assessed customs duty of Rs. 126.60 million, which the company has paid under protest subject to adjudication in December 2011.

The Company had also furnished a bank Guarantee for Rs. 82.10 million and Bond for Rs. 821 million pursuant to the order dated 17th January 2012 of Hon''ble High Court Bombay for provisional release or its vessel SEAMEC II arrested by Customs. The above order was subject to adjudication. Hon''ble High Court observed that no duty to be charged on the acquisition cost as the vessel was originally imported prior to 2001 when import duty was not applicable on such vessel.

During July - August 2012, DRI issued show cause notice, separately for each vessel and gave the liberty to reply to Commissioner or customs (Import) as to why the duty determined of aggregate value or Rs. 285.26 million, interest, penalty etc will not be levied on the company.

The Company while preferring adjudication have submitted replies to respective show cause notices, and hearing on adjudication proceeding completed before the Commissioner of Customs (Import) on 04-12-2012.

Subsequent to above, the company has received 3 corrigendum to the original show cause notices enhancing the claim of custom duty by Rs. 65.14 million against the above claim.

Commissioner or Customs has issued order dated 28th March 2013 received by Company on 16th April 2013 on the adjudication proceedings. Commissioner or Customs, in his order, Imposed duty Rs. 350 million, penalty for equivalent amount and Interest and appropriation of Rs. 126.6 million paid in Dec 2011. Penalty amount to reduce to 25% if demand of duty and interest is paid within 30 days In addition to above Confiscation redemption fine for Rs. 227.50 million has also been imposed. As per the order of Commissioner of Customs, total claim to Company including duty, penalty, interest and confiscation fine calculated to Rs. 1.197 million after adjustment or duty already paid in Dec 2011.

The Company is or the view that it has a strong case on merit and is contesting the same. Hence no further provision made towards additional Customs Duty, Penalty and Confiscation redemption fine as stated in the order of Commissioner of Customs.

4. CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 47.19 million (Previous year Rs. NIL million).

5. TRADE RECEIVABLE

The Company withdrew one of its vessels from a charter hire contract due to commercial disputes. The Company has not recognised revenue of Rs. 281.99 million in respect of contract for the period January 2010 to March 2010 on account of uncertainty relating to acceptance and realisability of claims. Further, the Company has also made a provision of Rs. 239.39 million towards outstanding receivables from the same client on grounds of prudence. The Company has been pursuing legal recourse in Mexican Court.

6. INSURANCE CLAIM

During previous year, the Company has submitted claim of Rs. 13.29 million to Hull & Machinery underwriter towards repairs to thrusters of vessel SEAMEC-III. The Company has since received the claim.

7. Segment Information

Secondary segment: Geographical Segments

The company''s secondary segments are the geographic distribution of activities. Revenue are specified by location of customers, while other geographic information cannot be segregated as explained in note below. The following tables present revenue and certain asset information regarding the company''s geographical segments:

*Assets used in the Company''s business or liabilities contracted have not been identified to any segment, as the assets and services are used interchangeably between segments. Accordingly, no disclosure relating to segment assets and liabilities are made.

8 Related Party disclosure

Related Parties with whom transactions have taken place during the year ended 31.03.2013 Refer Annexure- A

9 Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

(a) The Company enters into forward exchange contracts being derivative instruments which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables. The Company does not have any losses on the forward contracts entered to hedge firm commitments or highly probable transactions.

The Company has entered into forward exchange contract of US$ 10.50 million equivalent to Rs. 568.32 million (Previous Year US$ 4.65 million equivalent to Rs. 236.22 million) to hedge its receivables to be realized at a future date.

10 Gratuity and other post-employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Statement of Profit and Loss

11 Leases

In case of assets taken on lease Operating Lease : Company as lessee

Office premises are obtained on operating lease / leave and license. The lease term is for the period of 1 to 9 years and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. The Company has leased out part of office premises on operating lease. The total lease term is for a period of 60 months out of which there is a lock-in period of initial 36 months with non-renewable condition after 60 months.

12 Previous year figures

Previous Year figures have been regrouped / reclassified, where necessary, to confirm this years, classification.


Mar 31, 2012

1 Corporate Information

SEAMEC Limited is a public Company incorporated under the Companies Act, 1956. The Company owns and operates four Multi Support Vessels for providing support services including marine, construction and diving services to offshore oilfields.

2 Basis of preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

03. Contingent liabilities

(Rs million)

As at 31.03.2012 As at 31.03.2011

(a) Claim against the Company Refer note Refer note not acknowledge as debts (a) (b) & (c) below (a) below

a. The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Hon'ble Mumbai High Court. The Company has furnished a Bank Guarantee of Rs 100 million to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon'ble Mumbai High Court. The bank guarantee is valid till June 30, 2012. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA.

b. During the year, two of company's vessel, Seamec III & Seamec II, were detained by Customs Authority at Mumbai for non-submission of copy of Bill of Entry of original import, purported to have been filed by original importer in 1985 & 1988 respectively. Customs Department subsequently released vessel SEAMEC-III on 30th November 2011 with a condition to furnish copy of Bill of Entry within 30 days. Customs Department seized vessel SEAMEC-II on 1st December 2011 and granted provisional release upon payment of duty on the acquisition cost of the vessel by Company in 1994 along with duty on recent upgradation and dry dock cost carried out abroad, together with a Bank Guarantee of Rs 270 million and Bond for Rs 1,350 million. Being aggrieved, the Company filled a writ petition before the Hon'ble High Court at Mumbai. The Hon'ble High Court at Mumbai, vide its order dated January 11, 2012, directed Customs Department to release the vessel SEAMEC-III without any condition and release vessel SEAMEC-II on payment of duty on the recent repairs & upgradation work carried abroad, which company also offered to pay initially, and furnishing bank guarantee of Rs 82.10 million and Bond for Rs 821 million, pending adjudication, Hon'ble High Court observed that no duty to be charged on the acquisition cost as the vessel was originally imported prior to 2001 when import duty was not applicable on such vessel. Vessel Seamec III was released on 17th January 2012 and Seamec II on 25th January 2012. Both the vessels are currently deployed for work at Indian Offshore.

c. During the year, the Directorate of Revenue Intelligence (DRI) carried out investigation to ascertain customs duty paid by company on dry-docking and repairs to vessels incurred outside India since 2002. The DRI provisionally assessed customs duty of Rs 126.60 million which the company has paid under protest and is duly accounted for. The company is contesting the duty as assessed by DRI.

4. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs NIL million (Previous year Rs 141.46 million).

5. Trade Receivable

The Company withdrew one of its vessels from a charter hire contract due to commercial disputes. The Company has not recognised revenue of Rs 281.99 million in respect of contract for the period January 2010 to March 2010 on account of uncertainty relating to acceptance and realisability of claims. Further, the Company has also made a provision of Rs 239.39 million towards outstanding receivables from the same client on grounds of prudence. The Company has been pursuing legal recourse in Mexican Court.

6. Insurance Claim

During the year, the Company has submitted claim of Rs 13.29 million to Hull & Machinery underwriter towards repairs to thrusters of vessel SEAMEC-III. The claim has since been recommended by Average Adjuster. The Company has accrued the claim as recoverable.

During the previous year the Company has received Rs 44.44 million from Insurers, towards claims against damage to vessel SEAMEC-II at Curacao Dry Dock in September 2007. The relevant expenditure was expensed to statement of profit and loss, when incurred

There are no transaction with Coflexip Stena Offshore (Mauritius) Limited, the Holding Company during the current and the previous period.

Key management personnel - Captain C J Rodricks. Managing Director. Total salary & allowances paid to him for the year ended March 31, 2012 Rs 21.72 million (Previous year Rs 15.31 million).

In absence of profit during the previous year ended March 31, 2011, not determinable on the date of such approval, the remuneration paid for the previous year was in ex-cess of the requirements of the Companies Act, 1956. The Company has made an application to the Central Government on March 14, 2011 for waiver of the excess remuneration of Rs 10.51 million. The excess remuneration has been approved by the shareholders at an Extraordinary General Meeting held on October 12, 2011. Ministry of Corporate Affairs, Government of India vide letter dated January 12, 2012 approved Rs 7.73 million subject to condition that Rs 2.78 million is recovered from Managing Director. The Company has made a representation to the Central Government for review of its above decision. The decision is pending.

7. Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure (a) The Company enters into forward exchange contracts being derivative instruments which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables. The Company does not have any losses on the forward contracts entered to hedge firm commitments or highly probable transactions.

8. Gratuity and other post-employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy. The following tables summaries the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the respective plans.

Statement of Profit and Loss

Net employee benefit expense (recognised in contribution to provident, gratuity fund and other funds)

9. Leases

In case of assets taken on lease

Operating Lease :

Office premises are obtained on operating lease / leave and license. The lease term is for the period of 1 to 9 years and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. The Company has leased out part of office premises on operating lease. The total lease term is for a period of 60 months out of which there is a lock-in period of initial 36 months with non-renewable condition after 60 months.

10. Previous year figures

Till the year ended 31 March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification.


Mar 31, 2010

1. Nature of Operations

The Company owns and operates four Multi Support Vessels for providing support services including marine, construction and diving services to offshore oilfields.

2. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 28,543 thousand (Previous Year Rs 208 thousand).

3. Contingent Liabilities

Rs in Thousand

As at As at 31.03.2010 31.12.2008

(a) Claim against the Company not acknowledge as debts Refer note below Refer note below

The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Honble Mumbai High Court. The Company has furnished a Bank Guarantee of INR 100,000 thousand to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Honble Mumbai High Court. The bank guarantee is valid till June 30, 2010. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA,

4. Sundry Debtors

a. The outstanding against prematurely terminated, in July 2007, Charter hire contract, for vessel MSV SEAMEC-III, with M/S Offshore Technologies Solutions Limited, Port of Spain, Trinidad, is Rs 59,854 thousand (US$ 1,334 thousand), payable on or before June 30, 2010 as per terms of settlement agreed to with the charterer, The charterer has since paid quarterly interest @ 8% p.a. on the balance amount, as per terms of the contract, Management considers the outstanding balance from the charterer, as good and recoverable and hence no provision is considered necessary.

b. The Company withdrew one of its vessels from a charterhire contract due to commercial disputes. The Company has not recognised revenue of Rs 281,985 thousand in respect of contract for the period January 2010 to March 2010 on account of uncertainty relating to acceptance and readability of claims. Further, the Company has also made a provision of Rs 239,386 thousand towards outstanding receivables from the same client on grounds of prudence.

5. Insurance Claim Received

During the period, the Company has received Rs 264,190 thousand from the Hull & Machinery Underwriter towards damage repair claim for repair of vessel MSV SEAMEC-II (the vessel), against receivable amounting to Rs 257,783 thousand accrued as at 31st December 2008. The amount received over and above amount accrued, is towards cost of repair to damaged vessel charged out in the previous year. The same has been treated as other income. Any further claim received against such expenditure, will be treated as other income, as and when received.

6. Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

(a) The Company enters into forward exchange contracts being derivative instruments which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables. The Company does not have any losses on the forward contracts entered to hedge firm commitments or highly probable transactions.

7. Gratuity and other post-employment benefit plans

The Company has a defined benefit gratuity plan, Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the profit and loss account and the funded status and amounts recognized in the balance sheet for the respective plans.

8. The Company does not owe any amount to Micro, Small and Medium Enterprises as per MSMED Act 2006.

9. The requirements of paragraphs 4A and 4C of part II of Schedule VI to the Companies Act, 1956 is not applicable. Further, requirements of paragraph 4D of part II of Schedule VI to the Companies Act, 1956, other than those shown above are not applicable and hence information thereof is not given.

10. The current period figures are for fifteen months as compared to twelve months in the previous period and hence the same are not comparable. The previous period figures have been regrouped / reclassified where ever necessary to confirm to current period classification.

 
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