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Notes to Accounts of Global Vectra Helicorp Ltd.

Mar 31, 2018

A. General Information

Global Vectra Helicorp Limited (''the Company'') was incorporated in 1998 as a private limited company and was subsequently listed on 27 October 2006 the Bombay Stock Exchange and the National Stock Exchange.

The Company is mainly engaged in helicopter charter services for offshore transportation, servicing the oil and gas exploration and production sector in India. The Company is also engaged in helicopter charter services for onshore transportation.

B. Basis of preparation of financial statements

a) Statement of compliance with Ind AS

The financial statements of the Company comply with all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.

The financial statements up to and including the year ended 31 March 2017 were prepared in accordance with the accounting standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act. Accordingly, the transition to Ind AS has been carried out from the accounting principles generally accepted in India (“Indian GAAP”) which is considered as the “Previous GAAP” for purposes of Ind AS 101. An explanation of how the transition to Ind AS has affected the Company''s equity and its net profit or loss is provided in Note 50 . These financial statements are the first financial statements of the Company under Ind AS.

All assets and liabilities are classified as current or non-current as per the company''s normal operating cycle and other criteria set out in Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.

b) Standards issued but not yet effective

The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115, Revenue from Contracts with Customers (which is based on IFRS 15, Revenue from Contracts with Customers) as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The new standard is effective for accounting periods beginning on or after 1 April 2018, thus aligning the Ind AS 115 applicability date with the IFRS applicability date i.e. 1 January 2018.

Ind AS 115 replaces existing revenue recognition standards Ind AS 11, Construction Contracts and Ind AS 18, Revenue and revised guidance note of the Institute of Chartered Accountants of India (ICAI) on Accounting for Real Estate Transactions for Ind AS entities issued in 2016.

The company expects no significant impact of Ind AS 115 and plans to adopt the new standard on the required effective date.

On 18 July 2017, the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI) issued an Exposure Draft (ED) of Ind AS 116, Leases. Ind AS 116 is largely converged with IFRS 16. IFRS 16 is effective from 1 January 2019, with early adoption being permitted (as long as IFRS 15, Revenue from Contracts with Customers is also applied).

Ind AS 116 is expected to replace Ind AS 17 from its proposed effective date, being annual period''s beginning on or after 1 April 2019.

The assessment of impact of Ind AS 116 as per the Exposure Draft on the Company is to be carried out.

c) Historical cost convention

The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities including defined benefit plans - plan assets measured at fair value.

d) Use of estimates and judgements

The preparation of the financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

The areas involving critical estimates and judgements are:

i. estimation of useful lives and residual value of Property, Plant and Equipment

ii. estimation of defined benefit obligation

iii. impairment of financial assets

iv. recognition of deferred tax assets and deferred tax liabilities

v. recognition and measurement of provisions and contingencies

vi. recognition and measurement of Non-current assets held for sale

# Deductions / Adjustments include assets re-classified from leased to owned for three Cessna aircrafts.

Exchange gain / (loss) on restatement of long term monetary liabilities as at 31 March 2018 aggregating Rs. 30.52 Lakhs (previous year: Rs (429.78 Lakhs)) (net of tax) has been capitalised by adjusting the historical cost of the specifically identifiable asset. The exchange fluctuation during the year is presumed to occur evenly throuqhout the reportinq period.

On the date of transition to Ind AS, the Company has elected to measure certain Helicopters at its fair value and use that fair value as its deemed cost at the date of transition to Ind AS. Accordingly, the Company has recognized fair value changes of INR 4,907 lakhs as on April 01, 2016. On account of aforesaid adjustments, the Company has charged additional depreciation of INR 408 lakhs during the year 2016-17.

Exchange gain / (loss) on restatement of long term monetary liabilities as at 31 March 2017 aggregating Rs 429.78 Lakhs (previous year: Rs (595.15)) (net of tax) has been capitalised by adjusting the historical cost of the specifically identifiable asset. The exchange fluctuation during the year is presumed to occur evenly throughout the reporting period.

Note

Amounts with banks in deposit accounts have been pledged with banks as security for credit facilities and guarantees obtained.

Note:

In March 2018, management entered into a contract for sale of one of its Aircraft including all communications equipment per Avionics Equipment, accessories, instruments and other items of equipment installed in such Aircraft. The Aircraft shall be delivered to the purchaser at the delivery location by 20th April 2018 or such as other date as mutually agreed between purchaser and the company.

Helicopter classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less costs to sell at the time of the reclassification, resulting in the recognition of a write down of Rs. 266.21 lakhs as other expenses in the statement of profit or loss.

c) Terms / rights attached to shares

i) Rights, preferences and restrictions attached to shares

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

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

d) There are no shares reserved for issue under options and contracts or commitments for the sale of shares.

e) For the period of five years immediately preceding the date of the Balance Sheet, the Company has not

i) Allotted any shares as fully paid up pursuant to contracts without payment being received in cash; or

ii) Allotted any shares as fully paid up bonus shares; or

iii) Bought back any of its Equity Shares.

f). There are no securities convertible into equity / preference shares, there are no calls unpaid, no shares have been forfeited.

Company has proposed to alter the term of their existing preference shares to 659,34,900 Optionally Convertible Cumulative Redeemable Preference Shares of Rs. 10/- with an option to convert the same into 73,26,100 Equity Shares of Rs. 10/- each issued at a premium of Rs. 80/- per shares.

Accordingly, on 26 December 2017 Company has filed an application with National Company Law Tribunal (NCLT) to change the terms and conditions of their existing redeemable preference shares. On 07 May 2018, NCLT has issued a notice to relevant authorities whether they have any objection to the petition filed by the Company. As on 31 March 2018, pending final approval from NCLT the entire instrument has been classified as equity in nature.

Nature and purpose of reserves

1. Capital reserve

Capital reserve is created on waiver of Preference dividend to 5.46% Non convertible cumulative redeemable preference shareholders. No distributions are permitted.

2. Securities Premium reserve

The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. The reserve is utilised in accordance with the provisions of the Companies Act.

3. General reserve

The Company has transferred a portion of the net profit of the Company before declaring dividend to general reserve pursuant to the earlier provisions of Companies Act 1956. Mandatory transfer to general reserve is not required under the Companies Act 2013.

4. Retained earnings

The balance held in this reserve is the accumulated retained profits and includes impact of fair valuation of helicopter on transition to Ind AS (net of related tax impact): Rs. 3,737.10 lacs (March 31 2017: Rs. 4,125.20 lakhs and April 1 2016: Rs. 4,513.31 lakhs).

Excluding the amount of fair valuation balance is permitted to be distributed to shareholders as part of dividend.

5. Effective portion of cah flow hedges

The cash flow hedging reserve represents the cumulative portion of gains or losses arising on changes in fair value of designated portion of hedging instruments entered into for cash flow hedges. The cumulative gain or loss arising on changes in fair value of the designated portion of the hedging instruments that are recognised and accumulated under the heading of cash flow reserve will be reclassified to Statement of Profit and Loss only when the hedged transaction affects the profit or loss or included as a basis adjustment to the non financial hedged item.

6. Remeasurement of defined benfit obligation

Remeasurements of defined benefit (liability)/ asset comprises actuarial gains and losses and return on plan assets (excluding interest income)

**Vehicle loans carry interest charge in the range of 8.25% to 10.57%, payable in 60 equal monthly instalments. The loans have been secured against Seven (31 March 2017 : five, 01 April 2016 : four) vehicles.

***External Commercial Borrowing (''ECB'') of USD 15,298,300 is repayable in forty quarterly instalments commencing from 16 January 2009. The ECB is secured by exclusive charge over two Bell 412 helicopters. ECB of USD 9,100,000 is repayable in forty quarterly instalments commencing from 31 Jan 2012. The ECB is secured by exclusive charge over one Bell 412 helicopter. The interest terms are 3 months USD LIBOR plus 1.08% for two helicopters and 3 months USD LIBOR plus 1.16% for the third helicopter.

****External Commercial Borrowing (''ECB'') of USD 2,955,556 (31 March 2017: USD 2,955,556, 01 April 2016 :USD NIL) and USD 2,705,217 (31 March 2017: USD 2,705,217, 01 April 2016 : NIL) is repayable fifteen quarterly instalments commencing from 20 January 2019. The ECB is secured by charge over one (previous year: Nil) AgustaWestland helicopter and one (previous year: Nil) Bell 412 helicopter. The interest terms are 6 months USD LIBOR plus 2.85%.

***** The Loan consists of Rs 2,500 lakhs (31 March 2017: Rs 2500 lakhs, 01 April 2016 : NIL) repayable in twenty five equal instalments commencing from 22 October 2016 The loan is secured by exclusive charge over one (31 March 2017: one, 01 April 2016 : NIL) Bell 412 helicopter, one (31 March 2017: one, 01 April 2016 : NIL) AS350 B3 helicopter and one (31 March 2017: one, 01 April 2016 : NIL) EC 135 P2 helicopter. The interest terms are 14%.

****** The Loan consists of Rs 850 lakhs (31 March 2017: Rs 850 lakhs, 01 April 2016 : Rs 850 lakhs) repayable in seventeen equal instalments commencing from 22 April 2015 The loan is secured by exclusive charge over one (31 March 2017: one, 01 April 2016 : one) EC 135 helicopter. The interest terms are 14%.

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

Two (previous year: five) helicopters have been obtained on finance lease basis. The legal title to these items vests with their lessors. The lease term for two helicopters is 10 years with equal quarterly instalments commencing on 15 December 2015 and 20 March 2016 for each lease respectively.

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

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

a) Exclusive charge over Nil (previous year: one) bell helicopter and Nil (previous year: one) airbus helicopter.

b) Specific assignment of book debts relating to Nil (previous year: two) helicopters.

c) Hypothecation of stock / inventory and book debts.

Interest terms are base rate 8.50%

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

a) Specific assignment of immoveable property of a company

b) Hypothecation of stock / inventory and book debts.

Interest terms are MCLR 3.25%

### The loan is repayable on demand, the interest terms are 9%

#### The loan is repayable on demand, the interest terms are 7%

On the basis of the information and records available with the management, there are no outstanding dues to the micro and small enterprises as defined in the Micro, Small and Medium Enterprises Development Act, 2006.

*The charges for licence fees on land levied by the Airports Authority of India (AAI) have been revised with effect from October 2014. The total amount claimed by AAI up to 31 March, 2018, aggregates to Rs 2,349.83 lakhs (Rs. 311.79 lakhs and Rs 779,97 lakhs for the quarter and year ended 31 March, 2018 respectively, Rs.840.42 for the period up to 01 April, 2016) against which the Company has paid under protest an amount aggregating to Rs 1,174.10 lakhs up to March 31, 2018. The Company believes that these demands are not reasonable and has consequently requested for arbitration and conciliation and has provided for differential revised charges to the extent of Rs 1,175.73 lakhs based on Management''s estimate subject to outcome of arbitration proceedings. During the quarter ended December 31, 2017, the Company received an interim order whereby, amongst other matters, the Company has been directed to deposit with AAI 50% of the amount claimed pending final settlement of the dispute.

Note - 1

Segment reporting

Operating Segment are reported in a manner consistent with the internal reporting provided to chief operating decision maker (CODM).Chief Financial Officer has been identified as the Chief Operating Decision Maker of the Company. The Company is engaged in providing helicopter services in India, which is considered as one business segment.

The Company''s revenue attributable from overseas business is less than 10% of the total business and all the non-current assets other than financial instruments, deferred tax assets, post-employment benefit assets are located in India.

Information about major customers

Approximately 64% of the revenues derived for the year ended March 31, 2018, 65% for the year ended March 31, 2017 and 60% for April 1, 2016 is from a single external customer.

Note: In F.Y 2017-18, company has converted its 5.46% Non-Convertible Cumulative Redeemable Preference Shares (65,93,490 Rs 100/- each) to optionally convertible Cumulative Preference Shares of Rs 10/- each with an option to convert the same into 73,26,100 equity shares of Rs 10/- each issued at a premium of Rs 80/- per shares)

Pursuant to the mutual consent of the Board of Directors and the preference shareholder, cumulative preference share dividend aggregating to Rs 370.13 lakhs (31 March 2017: Rs 360.00 lakhs 01 April 2016 : Rs.1,893.72 lakhs) was waived by the preference share holder up to 31 March 2018. Accordingly, dividend distribution tax is not applicable.

Note

#Duty paid under protest aggregating Rs 538.26 Lakhs(31 March 2017 : Rs 538.26 Lakhs, 01 April 2016 : Rs 538.26 Lakhs) (Refer Note 39)

Note - 2

Micro, Small and Medium Enterprises

Under the Micro, Small and Medium Enterprises Development Act, 2006, (MSMED) which came into force from 2 October 2006, certain disclosures are required to be made relating to Micro, Small and Medium enterprises. On the basis of the information and records available with the Management, there are no outstanding dues to the Micro, Small and Medium enterprises as defined in the MSMED as set out in following disclosure:

Note - 3

Demand notice issued by the Customs authorities

During the year ended 31 March 2009, the Office of the Commissioner of Customs (Preventive) had seized three helicopters for alleged non-compliance of the duty waivers given to non-scheduled operators (passenger). The Company had received a Show Cause Cum Demand Notice (SCN) citing an amount of Rs 2,379.24 Lakhs (previous year: Rs 2,379.24 Lakhs) towards custom duty under Section 28 of the Customs Act, 1962 and applicable interest and penalty thereon. Pursuant to the receipt of the said SCN, the Commissioner of Customs (Preventive) had confirmed a demand of Rs 2,621.95 Lakhs (previous year: Rs 2,621.95 Lakhs) towards differential duty of customs and penalty thereon for two helicopters. The management believes that the Company is in compliance with the relevant customs and other regulatory guidelines in this respect, based on decision in the previous year from Custom Excise and Service Tax Appellate Tribunal (CESTAT) West Zonal Bench, in favour of the Company on a similar matter and on an opinion from an external legal expert and the demand being contested by the Company will be set aside by the higher appellate tribunal. An amount aggregating Rs 538.26 Lakhs (previous year: Rs 538.26 Lakhs) has been paid as duty under protest during the year ended 31 March 2010.

Note - 4 Transfer Pricing

The Company''s international transactions with related parties are at arms length as per the independent accountants report for the year ended 31 March 2018. Management believes that the Company''s international transactions with related parties post 31 March 2017 continue to be at arm''s length and that the transfer pricing legislation will not have any impact on these financial statements, particularly on amount of tax expenses and that of provision of taxation. Management is in the process of obtaining the transfer pricing study / report for the year ended 31 March 2018.

Note - 5

Recoverable from customers

A customer of the Company has been retaining amounts aggregating Rs 252.37 Lakhs (Service Tax liability Rs.238.52/- Lakhs upto June 30, 2017 and GST liability Rs. 13.85 Lakhs from July 2017 onwards) in respect of service tax/ GST levied by the Company on reimbursement of expenses. The Company is currently in discussion with this customer for recovering the retained amounts and management believes that they have a strong case to collect the outstanding amounts, and accordingly no provision has been made thereon.

Note - 6

Corporate Social Responsibility

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

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

The Company is in the process of identifying the Projects for CSR spending. The efforts are being undertaken to implement the same in financial year 2017-18

Note - 7

Employee benefit

The Company contributes to the following post-employment defined benefit plans in India.

(i) Contribution to provident fund and ESIC:

The Company recognised Rs.86.80 Lakhs (previous year: Rs 84.91 Lakhs) for retirement benefit contributions in the Statement of Profit and Loss.

(ii) Leave Wages

Amount of Rs 36.13 Lakhs (previous year: Rs 41.98 Lakhs) is recognised as an expense and included in “Employee benefits expense”.

(iii) Defined benefit plan and long term employment benefit

A. General description

Gratuity (Defined benefit plan)

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

Leave wages (Long term employment benefit)

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

Sick leave (Long term employment benefit)

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

Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Company''s financial statements as at balance sheet date:

B. Movement in net defined benefit (asset) liability

The following table shows a reconciliation from the opening balances to the closing balances for net defined benefit (asset) liability and its components

The estimate of future salary increases, considered in actuarial valuation takes into consideration inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.

Weighted average duration of the Projected Benefit Obligation is 7 years.

E. Sensitivity analysis

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.

Other long term employee benefits.

Compensated absences are payable to employees. The charge towards compensated absences for the year ended 31 March 2018 based on actuarial valuation using the projected accrued benefit method is Rs.90.68 Lakhs ( 31st March 2017 : Rs.83.04 Lakhs, 01st April 2016 : Rs. 68.51Lakhs).

Note - 8

Financial instruments - Fair values and risk management

A. Accounting classification and fair values

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities if the carrying amount is a reasonable approximation of fair value.

A substantial portion of the Company''s long-term debt has been contracted at floating rates of interest, which are reset at short intervals. Accordingly, the carrying value of such long-term debt approximates fair value.

B. Measurement of fair values

The three levels of the fair-value-hierarchy under Ind AS 107 are described below:

Level 1: Level 1 heirarchy includes financial instruments measured using quoted prices.

Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

C. Fair value of Financial assets and liabilities measured at amortised cost

The carrying amounts of cash and cash equivalents, other bank balances, current loans, trade receivables, short-term borrowing, trade payables, other short term financial assets and financial liabilities are considered to be the same as their fair values due to their short-term nature.

i) . The carrying amounts of cash and cash equivalents, other bank balances, current loans, trade receivables, short-term borrowing, trade payables, other short term financial assets and financial liabilities are considered to be the same as their fair values due to their short-term nature.

ii). The Company''s borrowing have been contratced at floating rate of interest, which gets reset periodically based on the market movements. Accordingly, the carring value of such borrowings approximates fair value.

iii). The other non- current financials assets include bank deposits (due for maturity beyond twelve months from the reporting date), interest accurred but not due on bank deposits. The carring value of such borrowings approximates fair value at reposting date.

Note - 9

Financial instruments - Fair values and risk management

B. Financial risk management

The Company has exposure to the following risks arising from financial instruments:

- Credit risk ;

- Liquidity risk ; and

- Market risk

i. Risk management framework

The Company''s activities expose it to a variety of financial risks, including market risk, credit risk and liquidity risk. The Company''s primary risk management focus is to minimize potential adverse effects of market risk on its financial performance. The Company''s risk management assessment and policies and processes are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor such risks and compliance with the same. Risk assessment and management policies and processes are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Board of Directors and the Audit Committee is responsible for overseeing the Company''s risk assessment and management policies and processes.

ii. Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Trade and other receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer, including the default risk of the industry has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.

Cash and cash equivalents

The Company held cash and cash equivalents with credit worthy banks and financial institustions of INR 684.11 Lakhs as at 31st March 2018 & INR 304.39 Lakhs as at 31st March 2017 and INR 170.29 Lakhs as at 1st April 2016. The credit worthiness of such banks and financial institutions is evaluated by the management on an ongoing basis and is considered to be good.

Impairment

The management has written off the following amounts of trade receivables during the years:

Management believes that the unimpaired amounts that are past due by more than 30 days are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers'' credit quality and prevailing market conditions.

Note - 10

Financial instruments - Fair values and risk management

iii. Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by ensuring, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risk to the Company''s reputation. The Company has obtained fund and non-fund based working capital lines from various banks. The Company also constantly monitors, as and when required, funding options available in the debt and capital markets with a view to maintain financial flexibility.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments.

Note - 11

Financial instruments - Fair values and risk management

iv. Market risk

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from adverse changes in market rates and prices (such as interest rates and foreign currency exchange rates) or in the price of market risk-sensitive instruments as a result of such adverse changes in market rates and prices. Market risk is attributable to all market risk-sensitive financial instruments, all foreign currency receivables and payables and all short term and long-term debt. The Company is exposed to market risk primarily related to foreign exchange rate risk and interest rate risk.

Currency risk

The fluctuation in foreign currency exchange rates may have potential impact on the Statement of Profit and Loss and equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the functional currency of the entity.

The Company, as per its risk management policy, uses foreign exchange and other derivative instruments primarily to hedge foreign exchange exposure. The Company does not use derivative financial instruments for trading or speculative purposes.

Sensitivity analysis

The Company is mainly exposed to changes in USD and EUR. The below table demonstrates the sensitivity to a 1% increase or decrease in the USD and EUR against INR, with all other variables held constant. The sensitivity analysis is prepared on the net unhedged exposure of the Company as at the reporting date. 1% represents management''s assessment of reasonably possible change in foreign exchange rate.

Note - 12

Financial Risk Management

(ii) Interest rate risk

Interest rate risk can be either fair value interest rate risk or cash flow interest rate risk. Fair value interest rate risk is the risk of changes in fair values of fixed interest bearing investments because of fluctuations in the interest rates. Cash flow interest rate risk is the risk that the future cash flows of floating interest bearing investments will fluctuate because of fluctuations in the interest rates. The Company’s main interest rate risk arised from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk.

Interest rate sensitivity - fixed rate instruments

The Company''s fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk as defined in Ind AS 107, since neither the carrying amount nor the future cash flows will fluctuate because of change in market interest rates.

Interest rate sensitivity - variable rate instruments

A reasonably possible change of 100 basis points in interest rates at the reporting date would have increased / decreased equity and profit or loss by amounts shown below. This analyses assumes that all other variables, in particular, foreign currency exchange rates, remain constant. This calculation also assumes that the change occurs at the balance sheet date and has been calculated based on risk exposures outstanding as at that date. The period end balances are not necessarily representative of the average debt outstanding during the period.

Note - 13

Hedge accounting

The Company''s risk management policy is to hedge its USD lease payments, thereby the company''s sales contracts are entered in USD. In these type of contracts, there is an embedded derivative element which helps the company in hedging the currency risk. Such contracts are generally designated as cash flow hedges.

The embedded derivative contracts are denominated in the same currency as the underlying hedged item, therefore the hedge ratio is 1:1. Most of these contracts have a maturity of more than 12 months from the reporting date.

The Company determines the existence of an economic relationship between the hedging instrument and hedged item based on the currency, amount and timing of their respective cash flows. The Company assesses whether the derivative designated in each hedging relationship is expected to be and has been effective in offsetting changes in the cash flows of the hedged item using the hypothetical derivative method.

In these hedge relationships, changes in timing of the hedged transactions is the main source of hedge ineffectiveness.

Note - 14

Capital Management

The primary objective of the Company''s capital management is to ensure that it maintains an efficient capital structure and healthy capital ratios to support its business and maximize shareholder value. The Company makes adjustments to its capital structure based on economic conditions or its business requirements. The funding requirements are met through a mixture of equity and other borrowings. The Company''s policy is to use short-term and long-term borrowings to meet anticipated funding requirements.

The Company monitors capital using the metric of Net Debt to Equity. Net Debt is defined as borrowings less cash and cash equivalents and fixed Deposits.

Notes - 15

Transition to Ind AS:

For the purposes of reporting as set out in Note 1, we have transitioned our basis of accounting from Indian generally accepted accounting principles (“IGAAP”) to Ind AS. The accounting policies set out in note 1 have been applied in preparing the financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS balance sheet at 1 April 2016 (the “transition date”).

In preparing our opening Ind AS balance sheet, we have adjusted amounts reported in financial statements prepared in accordance with IGAAP. An explanation of how the transition from IGAAP to Ind AS has affected our financial performance, cash flows and financial position is set out in the following tables and the notes that accompany the tables. On transition, we did not revise estimates previously made under IGAAP except where required by Ind AS.

A. Exemptions and exceptions availed

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from Indian GAAP to Ind AS :

1) Fair valuation as deemed cost for certain items of Property, Plant and Equipment

The Company has elected to measure certain Helicopters at its fair value and use that fair value as its deemed cost at the date of transition to Ind AS and for other Helicopters previous GAAP revaluation that was broadly comparable to fair value under Ind AS has been considered as its deemed cost at the date of transition to Ind AS.

Other items of Property, Plant and Equipment have been measured as per Ind AS 16.

2) Arrangement containing a lease

IND AS 101 provides the option to determine whether an arrangement existing at date of transition is, or contains, a lease based on the facts and circumstances at that date and not at lease start date.

Accordingly, the company has elected to determine arrangement existing at the date of transition and not at lease start date.

3) Estimates

An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consitent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

Ind AS estimates as at 1 April 2016 are consitent with the estimates as at the same date made in conformity with previous GAAP.

4) Classification and measurement of financial assets

The Company has classified the financial assets in accordance with Ind AS 109 on the basis of facts and circumstances that exist on the date of transition to Ind AS.

5) Derecognition of financial assets and financial liabilities

The Company has opted to apply the exemption available under Ind AS 101 to apply the derecognition criteria of Ind AS 109 prospectively for the transactions occurring on or after the date of transition to Ind AS.

B. Reconciliations between previous GAAP and Ind AS

Ind AS 101 requires an enity to reconcile equity and total comprehensive income for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.

Reconciliation of Statement of Cash Flows for the year ended 31st March, 2017

There were no material differences between the Statement of Cash Flows presented under Ind AS and under IGAAP.

Notes to the reconciliation:

1 Under the previous GAAP, preference shares are accounted under Equity share capital. Under Ind AS, the portion of reedemable non convertible preference share is accounted as liablity component of compound financial instrument and remaining portion is accounted in “Other Equity” as equity portion of the compound financial instrument. Under Ind AS, interest part of the liability component of the compound financial instrument is accounted as interest expense under finance cost.

2 Under the previous GAAP, interest free lease security deposit are recorded at their transaction value. Under Ind AS, all financial asset are required to be recognised at fair value. Accordingly the company has fair valued these security deposit under Ind AS. Difference between transaction value and fair value of the security deposit has been recognised as prepaid expenses.

3 On the date of transition to Ind AS, the Company has elected to measure certain Helicopters at its fair value and use that fair value as its deemed cost at the date of transition to Ind AS. Accordingly, the Company has recognized fair value changes of INR 4,907 lakhs as on April 01, 2016 and also recognised deferred tax liability of INR 1,698 lakhs. On account of aforesaid adjustments, the Company has charged additional depreciation of INR 408 lakhs and has reversed deferred tax liability of INR 141 lakhs, during the year 2016-17.

4 The Company has adopted hedge accounting prospectively from transition date as per Ind AS 109. Consequently, the Company has fair valued embedded derivatives on transition date and difference between the fair value of such contracts and previous GAAP carrying amount have been recognised in the retained earnings in the opening Ind AS balance sheet.

5 Under previous GAAP, the Company recognise lease rent as per the amounts specified in the contract. Under Ind AS, the Company is recognising lease rents on a straight line basis, provided the escalation is not in line with general inflation in India.

6 Under previous GAAP, the transaction cost on the borrowing is expensed off as and when incurred. Under Ind AS, transaction cost incurred towards origination of borrowing to be deducted from the carrying amount of borrowing on initial recognition. The costs are recognised in the Statement of Profit and Loss over the tenure of the borrowing as part of the interest expense as result of the adjustment.

7 Under the previous GAAP, the Company has recognised certain expenses in the financial year subsequent to the year to which the expenses pertain as exceptional item. Under Ind AS, those expenses have been recognised in the year to which it pertains with a corresponding adjustment to relevant head in Statement of Profit and Loss and retained earnings respectively.

8 In the financial statements prepared under Previous GAAP, deferred tax was accounted as per the income statement approach which required creation of deferred tax asset/liability on temporary differences between taxable profit and accounting profit. Under Ind AS, deferred tax is accounted as per the Balance Sheet approach which requires creation of deferred tax asset/ liability on temporary differences between the carrying amount of an asset/liability in the Balance Sheet and its corresponding tax base.

The application of Ind AS has resulted in recognition of deferred tax on new temporary differences which were not required to be recognised under Previous GAAP. In addition, the above mentioned transitional adjustments have also led to temporary differences and creation of deferred tax thereon.

Notes - 16

Previous year''s figures have been audited by a firm of Chartered Accountants other than Kalyaniwalla & Mistry LLP, Chartered Accountants, the current auditors.

Notes - 17

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


Mar 31, 2016

1. Segment reporting

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

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

i Contribution to provident fund and ESIC

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

ii Leave wages

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

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

Gratuity (Defined benefit plan)

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

Leave wages (Long term employment benefit)

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

Sick leave (Long term employment benefit)

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

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

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

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

3. Related parties

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

(a) Related parties where control exists

Vectra Investment Private Limited Promoter Company

AAA Rotor Limited Promoter Company

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

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

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

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

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

4 Demand notice issued by the Customs authorities

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

5 Transfer Pricing

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

6 Exceptional items

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

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

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

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

Particulars Amount

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

B. Amount spent during the year NIL

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

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

10. Prior period items

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

11 Prior year figures

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

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

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


Mar 31, 2015

1. Segment reporting

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

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

i Contribution to provident fund and ESIC

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

ii Leave Wages

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

iii Defined benefit plan and long term employment benefit

a General description

Gratuity (Defend benefit plan)

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

Leave wages (Long term employment benefit)

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

Sick leave (Long term employment benefit)

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

3. Related parties

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

4. Demand notice issued by the Customs authorities

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

5. Transfer Pricing

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

6. Suspension of Non-Scheduled Operator,s Permit

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

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

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

7. Exceptional items

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

8. Prior period items

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


Mar 31, 2014

1.Background

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

a) Terms / rights attached to shares

i) Rights, Preferences and Restrictions attached to equity shares

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

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

ii) Rights, Preference and restrictions attached to Preference Shares

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

Note:

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

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

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

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

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

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

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

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

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

Note:

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

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

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

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

c) Hypothecation of stock / inventory and book debts.

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

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

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

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

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

136,726,210 94,607,477

(b) Contingent liabilities

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

Demands contested by the Company

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

268,697,930 267,258,722

Note

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

4 Segment reporting

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

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

i Contribution to provident fund and ESIC

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

ii Leave Wages

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

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

Gratuity (Defined benefit plan)

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

Leave wages (Long term employment benefit)

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

Sick leave (Long term employment benefit)

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

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

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

6 Demand notice issued by the Customs authorities

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

7 Transfer Pricing

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

8 Exceptional items

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

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

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

9 Recoverable from customers

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

10 Suspension of Non-Scheduled Operator''s Permit

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

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

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

11 Prior year figures

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

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


Mar 31, 2013

Background

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

1 Segment reporting

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

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

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

ii Leave Wages

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

iii Defined benefit plan andong term employment benefit

a General description

Gratuity (Defined benefit |an)

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

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

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

3 Demand notice issued by tie Customs authorities

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

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

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

5 Exceptional items

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

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

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

6 Transfer Pricing

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

7 Recoverable from customers

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

8 Suspension of Non-Scheduled Operator''s Permit

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

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

9 Prior year figures

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

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

''Helicopter maintenance'' r

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


Mar 31, 2012

Background

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

1. Share Capital

a) Terms/rights attached to shares

i) Rights, Preferences and Restrictions attached to equity shares

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

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

ii) Rights, Preference and restrictions attached to Preference Shares

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

2. Reserves and surplus

Note:

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

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

4. Long-term borrowings

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

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

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

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

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

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

3. Short-term borrowings

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

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

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

c) Hypothecation of stock/inventory and book debts.

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

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

4. Fixed assets

Notes:

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

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

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

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

5. Deferred tax assets (net)

Note:

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

(Currency: Indian Rupees)

31st March, 31st March, 2012 2011

6. Commitments and contingent liabilities

(a) Commitments

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

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

Non-convertible cumulative redeemable preference shares

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

52,766,963 17,244,194

(b) Contingent liabilities

Claims against the Company not acknowledged as debts

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

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

265,893,564 264,685,912

Note:

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

7. Segment reporting

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

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

i. Contribution to provident fund and ESIC

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

ii. Leave Wages

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

iii. Defined benefit plan and long term employment benefit

a. General description

Gratuity (Defined benefit plan)

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

Leave wages (Long term employment benefit)

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

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

9. Related parties

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

(a) Related parties where control exists

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

Azal Azerbaijan Aviation Limited Promoter Company.

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

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

Enteritises in which promoter has significant influence

Vectra Limited UK

Vectra Limited Hongkong

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

Vectra I.T. Solutions Private Limited India

Vectra Glosec Private Limited India

(c) Key managerial personnel ('KMP')

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

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

Mr. P. Rajkumar Menon Whole-time director

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

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

Dr. Gautam Sen Non-executive direcioi

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

10. Demand notice issued by the Customs authorities

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

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

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

12. Reclassification of exchange fluctuation as borrowing cost

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

13. Transfer Pricing

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

14. Recoverables from customers

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

15. Suspension of Non-Scheduled Operator's Permit

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

16. Prior year figures

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


Mar 31, 2010

(A) Contingent liabilities

Claims against the Company not

acknowledged as debts

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

Demands in respect of which

appeals are in the process of being filed

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

263,747,384 263,352,954



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

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

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

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

2 Segment reporting

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

3 Disclosure pursuant to Accounting Standard – 15 ‘Employee Benefits

i Contribution to provident fund and ESIC

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

ii Defined benefit plan and long term employment benefit

a General description

Gratuity (Defined benefit plan)

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

Leave wages (Long term employment benefit)

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

Sick leave (Long term employment benefit)

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

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

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

4 Related parties

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

(a) Related parties where control exists

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

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

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

Enterprises in which promoter has significant influence

Vectra Limited UK

Vectra Limited Hongkong

Vectra Advanced Engineering Private Limited India

Indocopters Private Limited

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

Vectra I.T. Solutions Private Limited India

Global Vectra Helicorp Ireland Limited Ireland

Vectra Glosec Private Limited India

(c) Key managerial personnel (‘KMP)

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

Eduard Van Dam Chief Executive Officer

(with effect from 12 November 2008)

P. Rajkumar Menon Whole-time director

Capt. D.K. Chand Whole-time director

(upto 30 January 2010)

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

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

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

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

5 Leases

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

(Currency: Indian rupees)

6 Liquidated damages levied for delay in mobilisation of helicopters

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

7 Demand notice issued by the Customs authorities

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

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

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

9 Treatment of exchange fluctuation

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

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

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

10 Liabilities written back

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

11 Revaluation of assets

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

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

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

12 Reclassification of exchange fluctuation as borrowing cost

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

13 Transfer Pricing

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

14 Recoverables from customers

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

15 Prior year figures

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

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