Mar 31, 2015
1 CORPORATE INFORMATION
GOL Offshore Limited is a Public Limited Company whose equity shares
are listed on Bombay Stock Exchange Limited and National Stock Exchange
of India Limited.The Company is India's prominent integrated offshore
oilfield services provider offering a broad spectrum of services to
upstream oil and gas producers to carry out offshore exploration and
production (E&P) activities. The Company operates Drilling Rigs,
Offshore Support Vessels and undertakes Marine Construction Projects
and Services.
NOTE 2 : DEFERRED TAX LIABILITIES (NET)
Upon the introduction of Section 115 V in the Income Tax Act, 1961, the
Company has opted for computation of its income from shipping
activities under the Tonnage Tax Scheme. Thus income from the business
of operating ships is assessed on the basis of deemed Tonnage Income of
the Company and no deferred tax is applicable to this income as there
is no timing differences.
NOTE 3: Investment and unsecured loan to KEI-RSOS Maritime Limited
As on March 31, 2015, the Company has long term, strategic investment
in the equity/redeemable preference shares of it's wholly owned
subsidiary company KEI-RSOS Maritime Limited amounting to Rs.21,374
Lakhs (Previous Year Rs.18,863 Lakhs). A further sum of receivables of
Rs.3, 399 Lakhs (Previous Year Rs. 2,363 Lakhs) and a loan amount of
Rs. 3,502 Lakhs (Previous Year Rs.3, 502 Lakhs) are also due from them.
The Company has also issued bank guarantee to Indian Bank amounting to
Rs.14,168 Lakhs (Previous year Rs.14,168 lakhs) against which
outstanding facilities as on March 31, 2015 amount to Rs.3,656 Lakhs
(previous year Rs.4,719 Lakhs).
As auditors had in their report for the financial year ended 31.03.2012
onwards expressed their doubts about the realization of these amounts,
due to continuous losses suffered by the subsidiary resulting in its
net worth becoming negative, QARC of SEBI vide its Order dated 27th
April,15 has directed Restatement of financial results for Financial
year 2012-13 and 2013-14 for giving effect to the impact of the audit
qualification, and the effect of the restated adjustments to be carried
out in the annual accounts of the financial year 2014-15 as prior
period item.
The Company is in the process of filing appeal against the said order,
and believes that, the said investment being strategic and long term in
nature with a long term out look, no provision is required to be made
as the management is confident of turning around this company into
profit. Hence no reinstatement has been carried out presently, pending
final decision from the Securities Appellate Tribunal.
NOTE 4: Share Capital
The allotment of 63,380 equity shares (previous year 63,380 equity
shares) is under abeyance. These shares will be allotted upon the
receipt of the order of the Special Court established under the Special
Court (Trial of Offences relating to Transactions in Securities) Act,
1992 or such other authority as may be directed, from time to time.
Transfer of an additional 10,153 equity shares (previous year 10,153
equity shares) have been kept in abeyance pursuant to Section 206A of
the Companies Act, 1956 as their title is under Legal dispute. These
shares will be allotted as and when the dispute regarding their title
is resolved. Accordingly, in aggregate, 73,533 (63,380 10,153) equity
shares (Previous year 73,533 equity shares) have been kept in abeyance.
The unpaid dividend of Rs.2.81 Lakhs on these equity shares has not
been transferred to Investor Education and Protection Fund in view of
the legal dispute.
NOTE 5: Hedge Reserve
a) The Company has borrowings and the revenue streams in foreign
currency, which provide an inherent hedge against foreign currency
exchange rate fluctuations. Accordingly, the Company has adopted, with
regard to recognition of exchange differences arising on translation of
foreign currency borrowings, an appropriate hedge accounting policy by
applying the principles set out in AS-30 Financial Instruments:
Recognition and Measurement. The objective of adopting Hedge Accounting
is to ensure that gain or loss on the hedging instrument is recognized
in the Profit and Loss Statement in the same period when Hedged items
affect profit or loss. The Company has, w.e.f. 1st April 2008
designated borrowings in foreign currency as Hedge instrument to hedge
its foreign currency risk of its firm commitments and highly probable
forecast transactions ( of revenue streams) to be accounted as cash
flow hedge.
b) The Company recognises Mark to Market losses in respect of
derivative instruments like interest rate swaps as per the principles
enunciated in Accounting Standard (AS) 30 "Financial
Instruments:Recognition and Measurement" and in accordance with the
recommendation of the Institute of Chartered Accountants of India.
Accordingly, Mark to market (MTM) losses in respect of derivative
instruments like Interest Rate Swaps have been accounted in accordance
with principles of hedge accounting and the MTM losses on such
derivative instruments are recorded in the Hedge reserve account
instead of recognising the same in the Profit and Loss Statement. As at
March 31, 2015, MTM gain on oustanding Interest Rate Swaps and
unrealised exchange gain on foreign currency loans referred to above
amounting to Rs..9,103 lakhs (Previous Year loss Rs. 9,008 lakhs) has
been recognised in Hedge Reserves instead of crediting the same to the
Profit and Loss Statement.
c) Consequent to Recall / Recovery proceedings of certain loans by the
Lenders, the Company has discontinued hedge accounting prospectively in
respect of the said recalled loans from the date of recall notice.
Accordingly, foreign exchange fluctuation from the date of recall is
recognised in Profit & Loss Statement. The provision for exchange
fluctuation made during the year and in earlier year of Rs. 4,374 lakhs
on such recalled loan and installments which have fallen due, has been
netted off against the Hedge Reserve at the year end. The cumulative
foreign exchange fluctuation upto the date of recall will be recognized
in the Profit & Loss Statement when the corresponding hedged item
(forecasted exports) affects the Profit & Loss Statement.
NOTE 6 : Unsecured Loans
The 7.25% Unsecured Foreign Currency Convertible Bonds with an
outstanding amount of USD 40 mio due in the previous year were repaid
in full during the year after obtaining requisite approval from the
Reserve Bank of India. The interest upto the date of actual redemption
and net exchange loss, in this regard, have been fully recognised in
the Profit and Loss Statement.
NOTE 7: Interest on loan given to subsidiary Great Offshore
(International) Limited
Interest recovered on loan given to subsidiary Great Offshore
(International) Limited Rs. 3,837 lakhs (Previous Year Rs. 3,808 lakhs)
has been netted out against the interest expense on specific loans and
net interest is disclosed in the Profit and Loss Statement. Interest
Receivable upto March 31, 2015 is Rs. 5,800 lakhs (Previous Year Rs.
1,963 lakhs)
NOTE 8: Investment in and Unsecured Loan to Great Offshore
(International) Limited
The company has an investment of Rs. 155 Lakhs and has also granted
unsecured loan amounting to Rs..53,765 lakhs (Previous Year Rs.. 56,609
lakhs) to its wholly owned overseas subsidiary company Great Offshore
(International) Limited which in turn has invested/advanced the said
amount to its step down overseas subsidiaries/partnership firms for
purchase of vessels with higher capacities and latest technologies from
Bharati Shipyard Limited(BSL). In addition the Company has provided
Corporate Guarantee aggregating to Rs. 46,815 Lakhs to the lenders of
the said subsidiary which have been invoked. The investment in this
subsidiary is considered strategic and long term in nature. That
Company is in discussions with the lenders for settlement of dues and
restoration of initial repayment terms. BSL is currently in negotiation
with an Asset Reconstruction Company(ARC) who has taken over a major
part of its debts for restarting the vessel construction activity. The
vessels of the company under construction at BSL will be delivered
thereafter.In the opinion of the management, no provision is required
for investments, unsecured loan and invoked corporate guarantees as
that company is expected to turn around in the long term on improvement
of market conditions and delivery of vessels under construction.
NOTE 9: Inventories
Closing stock of stores and spares on board the vessels amounting to
Rs. 5,136 lakhs (Previous Year Rs. 4,671 lakhs) was determined by the
management on the basis of inventory system implemented by the company.
The company has in place preset cyclical programme for physical
verification of inventory on board the vessels. Auditors have relied
upon the management certification for the valuation of stock of stores
and spares on board the vessels.
NOTE 10: Capital Work In Progress:
Capital Work in Progress of Rs. 94,192 lakhs including Rs. 11,965 lakhs
being interest and indirect expenses capitalised as appropriate in
earlier years relate to vessels under construction with various
shipyards where there was no progress during the year and is delayed
much beyond the original dates of completion. The unpaid liability on
this account is Rs. 30,006 lakhs.
During the year, the company has made efforts to revive the progress of
construction of the vessels, but it was affected due to unavailability
of adequate funds, and also due to financial difficulties and
consequent non-operation of certain shipyards. However, alternate
options are being actively pursued and the management is hopeful of
early resolution of the matter.
The management of the Company believes that the carrying value of CWIP
as reflected in the financial statements is fair and reasonable and
will have a value on realisation which is not less than the carrying
value and hence no impairment provision is considered necessary.
NOTE 11: Going Concern
As stated in Note Nos. 5, 9 and 11, the Company has not been able to
service a substantial part of its borrowings on the original due dates.
In respect of Loans, Corporate Guarantees and dues including instances
where recovery proceedings have been initiated as stated in other notes
the Company is making all efforts for early settlement by taking
various steps including: i) more aggressive employment of its vessels
and resources, ii) disposal of some assets, iii) settlement of
significant current dues and restoration of initial repayment terms iv)
entering into corrective action plan as approved by Joint Lenders
Forum. Some of its arrear dues could be settled during the year due to
these efforts. The management is very hopeful of arriving at full
settlement over a period of two years. The Company is also able to earn
operating profit margin by carrying on its business in the normal
course. Hence these accounts have been prepared on going concern
assumption which is considered appropriate.
NOTE 12: Dues to Micro & Small Enterprises
According to information available with the Company regarding the
status of the suppliers, as defined under The Micro, Small and Medium
Enterprises Development Act, 2006, amount overdue as on 31st March,
2015 to the Micro, Small and Medium enterprises on account of principal
amount, together with interest for delayed payment under the Act, is
Rs. 199 lakhs (Previous Year Rs. 23 lakhs) .
NOTE 13 The balances of Trade Receivables, Trade Payables and Loans &
Advances are subject to confirmation.
NOTE 14 Disclosures pursuant to Accounting Standard (AS) 15 (revised)
"Employee Benefits"
(a) Effective April 1, 2007 the Company adopted Accounting Standars 15
(Revised 2005) on "Employee Benefits" issued by ICAI.
(b) The Company has recognised the following amounts in the Profit and
Loss Statement for the year:
NOTE 15 : Segment reporting
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standards (AS) 17.
NOTE 16 : Related Party Disclosures
(i) List of Related Parties
(a) Parties where control exists :
Subsidiary Companies :
Deep Water Services (India) Ltd
GOL Ship Repairs Ltd (formerly Great Offshore Ship Repairs Ltd.)
KEI - RSOS Maritime Ltd
GOL Salvage Services Ltd (formerly Great Offshore Salvage Services
Limited)
Great Offshore ( International) Ltd
GOL Offshore Fujairah L.L.C. - FZE (formerly Great Offshore Fujairah
L.L.C - FZC)
Deep Water Services (International) Ltd
Norwegian Shipping I Ltd
Norwegian Shipping II Ltd
Great Offshore International (Malaysia) Ltd.
Great Offshore International Manning & Ship Management (Lubuan) Ltd.
Glory Shipping Pvt Ltd
Great Offshore Germany GmbH
SGB Verwaltungs GmbH
SGB Emssun GmbH & Co. KG
SGB Emssky GmbH & Co. KG
SGB Emsstar GmbH & Co. KG
GOL Offshore Marshall Islands Limited
(b) Other related parties with whom transactions have taken place
during the year :
1 Joint Venture :
United Helicharters Pvt Ltd.
2 Key Management Personnel :
Mr. P.C.Kapoor - Executive Director*
Mr. Vijay Kumar -Executive Director*
Mr. Navin Joshi - Company Secretary & Chief Compliance Officer
* Mr. P.C. Kapoor and Mr. Vijay Kumar ceased to be Executive Director
w.e.f 30th April 2015 upon expiry of the terms of their appointment
3 Enterprises over which Key Management Personnel Exercise Significant
Influence :
Bharati Shipyard Limited
Pinky Shipyard Pvt Ltd
Bharati Maritime Services Pvt Ltd
Harsha Infrastructure Pvt Ltd
Sea Splice Shipping Pvt Ltd
Port Side Shipping Pvt Ltd
Dhanshree Properties Pvt Ltd
Natural Power Ventures Pvt Ltd
4 Relatives of Key Managerial Personnel
Ms. Sukriti Kumar
NOTE 17 : Interest in Joint Venture
The Company has a joint venture interest in United Helicharters Pvt.
Ltd. (a company incorporated in India) and its proportionate share in
the assets, liabilities, income and expenses of the jointly controlled
entity, based on the unaudited management accounts drawn up to March
31, 2015, is as under :
NOTE 18: Consequent to the application of schedule II of the Companies
Act,2013, with effect from 01.04.2014, the depreciation has been
charged based on the useful life as estimated by the manage- ment/
consultant in earlier years. There is no material impact on Profit and
Loss Statement arising from this change.
NOTE 19: Previous year's figures have been regrouped/recasted/restated
wherever necessary.
Mar 31, 2014
1 CORPORATE INFORMATION
GOL Offshore Limited is Public Limited Company whose equity shares are
listed on Bombay Stock Exchange Limited and National Stock Exchange of
India Limited. The Foreign Currency Convertible Bonds (FCCBs) issued by
the Company are listed on Singapore Exchange Securities Trading Limited
(SGX - ST). The Company is India''s prominent integrated offshore oilfield
services provider offering a broad spectrum of services to upstream oil
and gas producers to carry out offshore exploration and production
(E&P) activities. The Company operates Drilling Rigs, Offshore Support
Vessels and undertakes Marine Construction Projects and Services.
2 Contingent Liabilities and Commitments
Rs in Lakhs
Sr. Particulars
No. As at March As at March
31, 2014 31,2013
I Contigent Liabilities
(A) Claims against the Company/disputed
dues not acknowledged as debts
Customs Duty on Tug 341 306
Sales Tax and Service Tax demand on
Charter hire payment 363 218
Income Tax Demand 1,260 -
Possible obligation in respect of
matters under arbitration 1,597 1,518
Other disputes claims 578 -
(B) Guarantees
i Guarantees Guarantees given by bank
including performance and bid bond,
counter guaranteed by the Company 12,720 5,429
ii Corporate Guarantee given to Customs
Department 583 583
iii Corporate Guarantee given to bank on
behalf of subsidiary 72,938 76,886
(C) Other Money for which the Company is
Contingently Liable
i Letters of Credit Outstanding - 9
II Commitments
Estimated amount of Contracts remaining
to be executed on Capital account and not
provided for 65,801 85,950
3 As on March 31, 2014 , the company has investment in the
equity / redeemable preference shares of its wholly owned subsidiary
company KEI - RSOS Maritime Limited amounting to Rs 18,863 lakhs
(previous year Mrs 18,863 lakhs) and also a loan outstanding amounting
to Mrs 3,502 lakhs (previous year Mrs 3,331 lakhs) . The company has
also issued bank guarantees to Indian Bank amounting to Rs 14,168 lakhs
(previous year Rs 14,168 lakhs) against which outstanding facilities as
on March 31, 2014 amount to Rs 4,719 lakhs (previous year Rs 6,327
lakhs). The said investment is strategic and long term in nature. The
management is confident of turning around the company and as such, in
the opinion of the management, no provision is considered necessary for
depletion, if any, in value of investment and loans and advances given
by the company due to losses suffered by that company.
4 Share Capital
The allotment of 63,380 equity shares (Previous year 63,380 equity
shares) is under abeyance. These shares will be allotted upon the
receipt of the order of the Special Court established un- der the
Special Court (Trial of Offences relating to Transactions in
Securities) Act, 1992 or such oth- er authority as may be directed,
from time to time. Transfers of an additional 10,153 equity shares
(previous year 10,153 equity shares) have been kept in abeyance
pursuant to Section 206A of the Com- panies Act, 1956 as their title is
under legal dispute. These shares will be allotted as and when the dis-
pute regarding their title is resolved. Accordingly in aggregate 73,533
(63,380 10,153) equity shares ( Previous year 73,533 equity shares)
have been kept in abeyance.
5 Hedge Reserve
a) The Company has borrowings and the revenue streams in foreign
currency, which provide an inherent hedge against foreign currency
exchange rate fluctuations. Accordingly, the Company has adopted its
accounting policy with regard to recognition of exchange differences
arising on translation of foreign currency borrowings by following an
appropriate hedge accounting policy and applying the principle set out
in AS-30 Financial Instruments: Recognition and Measurement. The
objective of adopting Hedge Accounting is to ensure that gain or loss
on the hedging instrument is recognised in the Profit and Loss
Statement in the same period when Hedge items affects profit or loss.
The Company has w.e.f. 1st April 2008 designated borrowings in foreign
currency as Hedge instrument to hedge its foreign currency risk of its
firm commitments and highly probable forecast transactions ( of revenue
streams) to be accounted as cash flow hedge. During the current year,
the net incremental exchange difference on foreign currency borrowings
and on rupee loans hedged in USD (referred in (b) below) being
derivative instruments aggregating to Rs. 9,008 Lakhs(PY Rs.1,987
Lakhs) has been debited to Hedge Reserve Account, and cumulative amount
as on 31st March 2014 is Debit of Rs. 36,493 Lakhs(PY Debit of
Rs.27,485 Lakhs).
b) The company recognises Mark to Market losses in respect of
derivatives instruments like interest rate swaps as per the principles
enunciated in Accounting Standard (AS)30 "Financial Instruments:
Recogni- tion and Measurement" and in accordance with the
recommendation of the Institute of Chartered Ac- countants of India.
Accordingly Mark to market (MTM) losses in respect of derivatives
instruments like Interest Rate Swaps have been accounted in accordance
with principle of hedge accounting and the MTM losses on such
derivative instruments is recorded in the Hedge reserve account instead
of recog- nising the same in the Profit and Loss Statement. Accordingly
as at March 31, 2014, MTM loss on out- standing Interest Rate Swaps
amounting to Rs. 12,491 Lakhs (Previous Year Rs. 11, 422 Lakhs) has
been recognised in hedge reserves instead of debiting the same to the
Profit and Loss Statement.
6 Unsecured Loans
This includes 400 nos 7.25% Unsecured Foreign Currency Bonds of USD
100,000 each aggregating to US $ 40,000,000 listed on the Singapore
Exchange Securities Trading Limited (SGX - ST) which were due for
redemption in October, 2012. Since these could not be repaid on the due
date and all efforts at extending the due date did not get the
requisite approvals, the same together with applicable interest
(Including penal inter- est) has been provided for and since paid in
full to the extent approval has been received from the Reserve Bank of
India (RBI). The net exchange loss in this regard upto the Balance
Sheet date has also been recognised in the Profit and Loss Statement.
7 Interest on loan given to subsidiary Great Offshore
(International) Limited
Interest recovered on loan given to subsidiary Great Offshore
(International) Limited Mrs 3,808 lakhs (Previous Year Rs 3,932 lakhs)
has been netted out against the interest expense on other loans and net
interest is disclosed in the Profit and Loss Statement. Interest
Receivable upto March 31, 2014 is Rs 1,963 lakhs (Previous Year Rs
2,748 lakhs)
8 Unsecured Loan to Great Offshore (International) Limited
The company has granted unsecured loan amounting to Rs 56,609 lakhs (
Previous Year Rs52,885 lakhs) to its wholly owned overseas subsidiary
company Great Offshore (International) Limited which in turn has
invested/ advanced the said amount to its step down overseas
subsidiaries/partnership firms for purchase of vessels with higher
capacities and latest technologies from Bharati Shipyard Limited, the
promoters of the Company. All such vessels procured from Bharati
Shipyard Limited are to be delivered over the next 12 to 24 months.
Recoverability of aforesaid loan and interest thereon is dependent upon
timely delivery of vessels by Bharati Shipyard Limited. In the opinion
of the management, the said advances are fully recoverable.
9 Inventories
Closing stock of stores and spares on board the vessels amounting to Rs
4,671 lakhs (Previous Year Rs 4,389 lakhs) was determined by the
management on the basis of inventory system implemented by the company.
The company has in place preset cyclical programme for physical
verification of inventory on board the ves- sels. Auditors have relied
upon the management certification for the valuation of stock of stores
and spares on board the vessels.
10 Capital Work In Progress:
Capital Work in Progress includes Rs 116,801 Lakhs relating to vessels
under construction with various shipyards where the progress is very
slow and is delayed much beyond the original dates of completion. The
unpaid liability on this account is Rs 52,114 Lakhs. In view of the
slow progress, interest and overhead expenses relating to such assets
are not being capitalized where considered appropriate.
11 Going Concern
As stated in note nos. 5, 11 and 33 the company has not been able to
service some of its borrowings on the original due dates. In respect of
FCCBs, the company has since repaid the entire amount of principal and
interest to the extent approved by the RBI and has thus made
significant progress in settlement of its overdues. In respect of
other loans and dues including instances where recovery proceedings
have been initiated, the company is making all efforts for early
settlement by taking various steps including i) more aggressive
employment of its vessels and resources, ii) disposal of some assets
including operating assets,iii) discharge of significant current
liabilities.
The management is attempting to achieve this in the ensuing financial
year. The company is also earning reasonable operating margins by
carrying on its business in the normal course. Hence these accounts
have been prepared on going concern assumption which is considered
appropriate.
12 Current Liabilities
According to information available with the Company regarding the
status of the suppliers, as defined under The Micro, Small and Medium
Enterprises Development Act, 2006, amount overdue as on 31st March,
2014 to the Micro, Small and Medium enterprises on account of principal
amount, together with interest for delayed payment under the Act, is Rs
23 lakhs (Previous Year Rs 28 lakhs).
13 The balances of Trade Receivables,Trade Payables and Loans &
Advances are subject to confirmation.
(i) Basis used to determine expected rate of return on assets:
Expected rate of return on investments is determined based on the
assessment made by the Company at the beginning of the year on the
return expected on its existing portfolio since these are generally
held to maturity, along with the estimated incremental investments to
be made during the year.
(ii)General description of significant defined plans:
Gratuity Plan:
Gratuity is payable to all eligible employees of the Company on
superannuation, death, permanent disablement and resignation in terms
of the provisions of the Payment of Gratuity Act or as per the
Company''s Scheme whichever is more beneficial. Benefit would be paid at
the time of separation based on the last drawn base salary.
Leave Encashment:
Eligible employees can carry forward and encash leave upto
superannuation, death, permanent disablement and resignation subject to
maximum accumulation allow @ 90 days for employees. The Leave over and
above 90 days is lapse every year. Benefit would be at the time of
separation based on the last drawn basic salary.
14 Previous year''s figures have been regrouped/recasted/restated
wherever necessary.
Mar 31, 2013
1 Corporate Information
GOL Offshore Limited is Public Limited Company whose equity shares are
listed on Bombay Stock Exchange Limited and National Stock Exchange of
India Limited. The Foreign Currency Convertible Bonds (FCCBs) issued by
the Company are listed on Singapore Exchange Securities Trading Limited
(SGX - ST). The Company is India''s prominent integrated offshore
oilfeld services provider offering a broad spectrum of services to
upstream oil and gas producers to carry out offshore exploration and
production (E&P) activities. The Company operates Drilling Rigs,
Offshore Support Vessels and undertakes Marine Construction Projects
and Services.
NOTE 2 : DEFERRED TAx
Pursuant to the introduction of Section 115 V under the Income Tax Act,
1961, the Company has opted for computation of its income from shipping
activities under the Tonnage Tax Scheme. Thus income from the business
of operating ships will be assessed on the basis of deemed Tonnage
Income of the Company and no deferred tax will be applicable to this
income as there will be no timing differences.
Deferred Tax is accounted for in respect of the timing differences
under the non-tonnage activity of the Company. The break-up of net
deferred tax assets/ (liability) is as under:
NOTE 3
As on March 31, 2013, the Company has investment in the equity /
redeemable preference shares of its wholly owned subsidiary company KEI
- RSOS Maritime Limited amounting to Rs. 18,863 lakhs (previous year Rs.
18,863 lakhs) and also a loan outstanding amounting to Rs. 3,331 lakhs
(previous year Rs. 3,100 lakhs). The Company has also issued bank
guarantees to Indian Bank amounting to Rs. 14,168 lakhs (previous year Rs.
14,585 lakhs) against which outstanding facilities as on March 31, 2013
amount to Rs. 6,327 lakhs (previous year Rs. 8,775 lakhs). The said
investment is strategic and long term in nature. The management is
confdent of turning around the company and as such, in the opinion of
the management, no provision is considered necessary for depletion, if
any, in value of investment and loans and advances given by the Company
due to losses suffered by that Company.
NOTE 4 : Share Capital
During the year ended March 31, 2013, the Company allotted 8,100 equity
shares in pursuance of the order of the Special Court established under
the Special Court (Trial of Offences relating to Transactions in
Securities) Act, 1992. These shares were a part of 71,480 equity shares
which were kept in abeyance upon being notifed by the Custodian under
the said Act. The allotment of 63,380 equity shares (Previous year
71,480 equity shares) is now under abeyance, after the allotment of the
said 8,100 equity shares. These will be allotted upon the receipt of
the order of the Special Court or such other authority as may be
directed, from time to time. Transfers of an additional 10,153 equity
shares (previous year 10,153 equity shares) have been kept in abeyance
pursuant to Section 206A of the Companies Act, 1956 as their title is
under legal dispute. These shares will be allotted as and when the
dispute regarding their title is resolved.
NOTE 5 : Hedge Reserve
a) The Company has borrowings and the revenue streams in foreign
currency, which provide an inherent hedge against foreign currency
exchange rate fuctuations. Accordingly, the Company changed its
accounting policy with regard to recognition of exchange differences
arising on translation of foreign currency borrowings by following an
appropriate hedge accounting policy and applying the principle set out
in AS-30 Financial Instruments: Recognition and Measurement. The
objective of adopting Hedge Accounting is to ensure that gain or loss
on the hedging instrument is recognised in the Proft and Loss Statement
in the same period when Hedge items affects proft or loss. The Company
has w.e.f. 1st April 2008 designated borrowings in foreign currency as
Hedge instrument to hedge its foreign currency risk
of its frm commitments and highly probable forecast transactions (of
revenue streams) to be accounted as cash fow hedge. During the current
year, the net unrealised exchange difference on foreign currency
borrowings aggregating to Rs. 2,335 Lakhs has been debited to Hedge
Reserve, and net realised exchange loss debited to the Proft and Loss
Statement is Rs. 348 lakhs. As a result, balance in the Hedge Reserve is
debit of Rs. 27,485 Lakhs. (Previous Year Debit of Rs.25,498 lakhs)
b) With effect from 1st April 2011, the company has changed its
accounting policy for recognition and measurement of Mark to Market
losses in respect of derivatives instruments like interest rate swaps
as per the principles enunciated in Accounting Standard (AS)30
"Financial Instruments: Recognition and Measurement" and in accordance
with the recommendation of the Institute of Chartered Accountants of
India. Accordingly Mark to market (MTM) losses in respect of
derivatives instruments like Interest Rate Swaps have been accounted in
accordance with principle of hedge accounting and the MTM losses on
such derivatives instruments is recorded in the Hedge Reserve Account
instead of recognising the same in the Proft and Loss Statement.
Accordingly as at March 31, 2013, MTM loss on outstanding Interest Rate
Swaps amounting to Rs. 11,422 lakhs (PY Rs. 9,685 lakhs) has been
recognised in hedge reserves instead of debiting the same to the Proft
and Loss Statement.
NOTE 6 : unsecured Loans
The Company has 7.25% Unsecured Foreign Currency Convertible Bonds
(FCCB) (due Oct. 2012) of US$ 100,000 each aggregating to US $
40,000,000, listed on the Singapore Exchange Securities Trading Limited
(SGX-ST). As these bonds were neither converted nor redeemed by the
original due date, the Board of Directors have authorised the
management to approach the Trustees for the Bond Holders to extend the
redemption date to Dec''2013 subject to regulatory approvals. The matter
is presently pending fnal resolution and accordingly these outstandings
have been shown under "Short Term Borrowings" after restating the same
at closing exchange rates. The exchange loss in this regard has been
recognised in the Proft and Loss Statement.
NOTE 7 : Interest on loan given to subsidiary Great Offshore
(International) Limited
Interest recovered on loan given to subsidiary Great Offshore
(International) Limited Rs. 3,932 lakhs (Previous Year Rs.5,164 lakhs) has
been netted out against the interest expense on other loans and net
interest is disclosed in the Proft and Loss Statement. Interest
Receivable upto March 31, 2013 is Rs. 2,748 lakhs (Previous Year Rs. 1,465
lakhs)
NOTE 8 : unsecured Loan to Great Offshore (International) Limited
The company has granted unsecured loan amounting to Rs. 52,885 lakhs (
Previous Year Rs.72,658 lakhs) to its wholly owned overseas subsidiary
company Great Offshore (International) Limited which in turn has
invested/ advanced the said amount to its step down overseas
subsidiaries/partnership frms for purchase of vessels with higher
capacities and latest technologies from Bharati Shipyard Limited, the
promoters of the Company. All such vessels procured from Bharati
Shipyard Limited are to be delivered over the next 12 to 24 months.
Recoverability of aforesaid loan and interest thereon is dependent upon
timely delivery of vessels by Bharati Shipyard Limited. In the opinion
of the management, the said advances are fully recoverable.
NOTE 9 : Inventories
Closing stock of stores and spares on board the vessels amounting to Rs.
4,389 lakhs (Previous Year Rs.4616 lakhs) was determined by the
management on the basis of inventory system implemented by the Company
w.e.f. January 1, 2012. The Company has in place preset cyclical
programme for physical verifcation of inventory on board the vessels.
Auditors have relied upon the management certifcation for the valuation
of stock of stores and spares on board the vessels.
NOTE 10 : Going Concern
As stated in note nos. 5, 11 and 32 the company has not been able to
service some of its foreign currency bonds and loans on the original
due dates. In respect of FCCB, the Board of Directors have approved
extension of its due date upto December''13 subject to concurrence of
the Bond Holders and regulatory approvals as may be applicable. In
respect of other loans the company is in discussions for settlement of
the dues over the next one year. Management has taken effective steps
for collection of certain loans and advances, disposal of some assets
including some of which are still operating assets, as in the opinion
of the management, their value on sale will be higher than their value
in use as also to meet the signifcant current liabilities. The
management is very hopeful of achieving this before the end of the
current fnancial year. The company is also able to earn margin by
carrying on its business in the normal course. Hence these accounts
have been prepared on going concern assumption which is considered
appropriate.
NOTE 11 : Current Liabilities
According to information available with the Company regarding the
status of the suppliers, as defned under The Micro, Small and Medium
Enterprises Development Act, 2006, amount overdue as on 31st March,
2013 to the Micro, Small and Medium enterprises on account of principal
amount, together with interest for delayed payment under the Act, is Rs.
28 lakhs (Previous Year Rs. Nil) .
NOTE 12 : The balances of Trade Receivables, Trade Payables and Loans &
Advances are subject to confrmation.
NOTE 13 : Disclosures pursuant to Accounting Standard (AS) 15 (revised)
"Employee Benefts"
(a) Effective April 1, 2007 the Company adopted Accounting Standars 15
(Revised 2005) on "Employee Benefts" issued by ICAI.
(b) The Company has recognised the following amounts in the Proft and
Loss Statement for the year:
NOTE 14 : Segment reporting
The Company is mainly engaged in offshore business activity and there
are no separate reportable segments as per Accounting Standards (AS)
17.
NOTE 15 : Related Party Disclosures (i) List of Related Parties
(a) Parties where control exists : Subsidiary Companies :
Deep Water Services (India) Ltd
GOL Ship Repairs Ltd (formerly Great Offshore Ship Repairs Limited)
KEI - RSOS Maritime Ltd
GOL Salvage Services Limited
(formerly known as Great Offshore Salvage Service Limited)
Great Offshore (International) Ltd. (Cayman Islands)
GOL Offshore Fujairah L.L.C. - FZE (formerly Great Offshore Fujairah
L.L.C - FZC)
Deep Water Services (International) Ltd. (Cayman Islands)
Norwegian Shipping I Ltd (Cyprus)
Norwegian Shipping II Ltd (Cyprus)
Great Offshore International (Malaysia) Ltd.
Great Offshore International Manning & Ship Management (Labuan) Ltd.
(Malaysia)
Glory Shipping Pvt Ltd (Dubai)
Great Offshore Germany GmbH
SGB Emssun GmbH & Co. KG (Germany)
SGB Emssky GmbH & Co. KG (Germany)
SGB Emsstar GmbH & Co. KG (Germany)
(b) Other related parties with whom transactions have taken place
during the year :
1 Joint Venture :
United Helicharters Pvt Ltd.
2 Key Management Personnel :
Mr. P.C.Kapoor - Executive Director Mr. Vijay Kumar - Executive
Director
3 Enterprises over which Key Management Personnel Exercise Signifcant
Infuence :
Bharati Shipyard Limited Pinky Shipyard Pvt Ltd Bharati Maritime
Services Pvt Ltd Harsha Infrastructure Pvt Ltd Sea Splice Shipping Pvt
Ltd Port Side Shipping Pvt Ltd Dhanshree Properties Pvt Ltd Natural
Power Ventures Pvt Ltd Weizmann Forex Ltd
4 Relatives of Key Managerial Personnel
Sukriti Kumar
NOTE 16 : Interest in Joint Venture
The Company has a joint venture interest in United Helicharters Pvt.
Ltd. (a company incorporated in India) and its proportionate share in
the assets, liabilities, income and expenses of the jointly controlled
entity, based on the unaudited management accounts drawn up to March
31, 2013, is as under :
NOTE 17 : Previous year''s fgures have been regrouped/recasted/restated
wherever necessary.
Mar 31, 2012
1 Corporate Information
Great Offshore Limited is public Limited Company whose equity shares
are listed on Bombay Stock Exchange Limited and National Stock Exchange
of India Limited. The Foreign Currency Convertible Bonds(FCCBs) issued
by the company are listed on Singapore Exchange Securities Trading
Limited (SGX - ST). The Company is India's prominent integrated
offshore oilfield services provider offering a broad spectrum of
services to upstream oil and gas producers to carry out offshore
exploration and production (E&P) activities. The Company operates
Drilling Rigs, Offshore Support Vessels and undertakes Marine
Construction Projects and Services.
(a) Terms/ Rights attached to equity shares
The company has one class of equity shares having a par value of Rs. 10/-
per share. Each shareholder is eligible for one vote per share held.
The company declares and pays dividends in Indian Rupees. The dividend
recommonded by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting.
1) The company has issued and allotted 15,00,000, 10% Optionally
Convertible Redeemable Cumulative Preference shares (OCRCPS) of Rs. 1000
each during the year 2007-08.
2) The company has redeemed 15,00,000, 10% Optionally Convertible
Redeemable Cumulative Preference shares (OCRCPS) of Rs.1000 each during
the year 2008-09.
3) The company had alloted 91,017 Equity Shares for part conversion of
7.25% Foreign Currency Convertible Bonds @ 875/- per share aggregating
to USD 2 Million in the year 2009-10.
(i) The company has availed foreign currency loans from banks which
carry interest rate of LIBOR plus 60 to 800 bps for USD loans and INR
loans from banks are at 14% to 14.90% . These loans are secured by
mortgage of specified ships. The principal payments are due monthly /
quarterly / half yearly.
(ii) Rupee loan availed from a Financial Institution during the year
carried interest rate of 13%. The loan is secured by mortgage of a ship
and second charge on a rig. The principal payment is due monthly /
quartely.
(iii) The company has also availed general purpose loans in Foreign
currency from banks which carry interest rate of LIBOR plus 190 to 500
bps and INR loans from banks at the rate of 12.50% to 16.25%. The loans
are secured by mortgage of ships, first / second charge / subservient
charge on ships / rigs / fixed assets of the company. The principal
payments / interest thereon are due monthly /quarterly / half yearly.
(iv) The loans availed from banks on mortgage of rig 'Amarnath' was
repaid during the year on sale of the rig.
(v) The loans and advances availed from related parties are unsecured
and carry interest rate of 6% to 9.50%.
NOTE 2 : DEFERRED TAX
Pursuant to the introduction of Section 115 V under the Income Tax Act,
1961, the Company has opted for computation of its income from shipping
activities under the Tonnage Tax Scheme. Thus, income from the business
of operating ships will be assessed on the basis of deemed Tonnage
Income of the Company and no deferred tax will be applicable to this
income as there will be no timing differences.
Deferred Tax is accounted for in respect of the timing differences
under the non-tonnage activity of the Company. The break-up of net
deferred tax assets/ (liabilities) is as under:
3 Contingent Liabilities Rs. in Lakhs
Sr. Particulars As at March As at March
No. 31, 2012 31, 2011
i Guarantees given by bank including
performance and bid bond, counter 6,889 9164
guarantees by the Company.
ii Corporate Guarantee given to Custom
Department 583 583
iii Corporate Guarantee given to bank
on behalf of subsidiary 68,073 39511
iv Claims not acknowledged by Company
Customs Duty on Tug 306 70
Sales Tax and Service tax demand on
Charter hire payment 271 271
Possible obligation in respect of
matters under arbitration 2,700 2700
v Letters of Credit Outstanding 195 -
4 As on March 31, 2012, the company has investment in the equity /
redeemable preference shares of its wholly owned subsidiary company KEI
- RSOS Maritime Limited amounting to Rs. 18,863 lakhs and also a loan
outstanding amounting to Rs. 3,100 lakhs. The company has also issued
corporate guarantees to Indian Bank amounting to Rs. 14,585 lakhs against
which outstanding facilities as on March 31, 2012 amount to Rs. 8,775
lakhs. The said investment is strategic and long term in nature.The
management is confident of turning around the company and as such, in
the opinion of the management, no provision is considered necessary for
depletion, if any, in value of investment and loans and advances given
by the company.
5 Share Capital
The allotment of 71,480 equity shares of the Company have been kept in
abeyance in accordance with the section 206A of the Companies Act, 1956
till such time as the title of the bonafide holder of the shares is
certified by the concerned Stock Exchange as per the orders from the
Special Court (Trial of Offences relating to Transactions in
Securities) Act, 1992. An additional 10,153 (Previous Year 10,153)
shares have also been kept in abeyance for disputed cases in
consultation with the Bombay Stock Exchange.
6 Hedge Reserve
The Company has borrowings and the revenue streams in foreign currency,
which provides an inherent hedge against foreign currency exchange rate
fluctuations. Accordingly, the Company changed its accounting policy
with regard to recognition of exchange differences arising on
translation of foreign currency borrowings by following an appropriate
hedge accounting policy and applying the principle set out in AS-30
Financial Instruments: Recognition and Measurement. The objective of
adopting Hedge Accounting is to ensure that gain or loss on the hedging
instrument is recognised in the Statement of Profit and Loss in the
same period when Hedge items affects profit or loss. The Company has
w.e.f. 1st April 2008 designated borrowings in foreign currency as
Hedge instrument to hedge its foreign currency risk of its firm
commitments and highly probable forecast transactions ( of revenue
streams) to be accounted as cash flow hedge. During the current year,
the net unrealised exchange difference on foreign currency borrowings
aggregating to Rs. 25,568 lakhs has been credited to Hedge Reserve, and
net realised exchange gain credited to the Statement of Profit and Loss
is Rs. 311 lakhs. As a result, balance in the Hedge Reserve is debit of Rs.
25,498 lakhs. (Previous Year Credit of Rs.381 lakhs)
7 Change in Accounting Policy
With effect from 1st April 2011, the company has changed its accounting
policy for recognition and measurement of Mark to Market losses in
respect of derivatives instruments like interest rate swaps as per the
principals enunciated in Accounting Standard (AS)30 "Financial
Instruments: Recognition and Measurement" and in accordance with the
recommendation of the Institute of Chartered Accountants of India.
Accordingly Mark to Market (MTM) losses in respect of derivatives
instruments like Interest Rate Swaps have been accounted in accordance
with principal of hedge accounting and the MTM losses on such
derivative instruments is recorded in the Hedge reserve account instead
of recognising the same in the Statement of Profit and Loss.
Accordingly as at March 31, 2012, MTM loss on outstanding Interest Rate
Swaps amounting to Rs. 9,685 lakhs has been recognised in hedge reserves
instead of debiting the same to the Statement of Profit and Loss.
Accordingly the profit for the year is higher by Rs.9,046 lakhs.
8 Unsecured Loans
The Company has 7.25% Unsecured Foreign Currency Convertible Bonds
(FCCBs) (due 2012) of US$ 100,000 each aggregating to US $ 40,000,000,
listed on the Singapore Exchange Securities Trading Limited (SGX-ST).
The Bondholders may, as per the terms, convert the Bonds in whole or in
part from time to time, at their option, during the period commencing
11th October, 2007 to 28th September, 2012.
The Company had revised pricing of Foreign Currency Convertible Bonds
(FCCBs) in accordance with the new pricing norms such that each FCCB of
face value USD 100,000 will convert to 7964 equity shares of the
company as against the original proposal of each FCCB converting into
4550.86 equity shares. This will imply a conversion price of Rs. 565 per
equity share as against the original conversion price of Rs. 875 per
share. (USD 1 = Rs. 45, Original Rate USD 1 = 39.82). The necessary
approvals from the bondholders and Reserve Bank of India have been
obtained for the same.
As per the Mandatory Conversion Right embedded in the offer document,
the Company has the option to convert the entire outstanding bonds on
the terms and conditions agreed upon. In the event, the Bonds are not
repurchased and cancelled; or converted; the Company will redeem the
Bonds on the Maturity Date.
9 Fixed Assets
Estimated amount of contracts, net of advances paid thereon, remaining
to be executed on capital account and not provided for Rs. 74,198 lakhs
(Previous Year Rs. 14,742 lakhs).
10 Investment in KEI-RSOS Maritime Limited
On January 14, 2012, loan of Rs. 5,000 lakhs granted to KEI-RSOS Maritime
Limited, a wholly owned subsidiary of the Company, has been converted
into 40 lakhs, 1% Cumulative Redeemable Preference Shares of Rs. 10 each
at a premium of Rs. 115 per share.
11 Corporate Guarantee
During the year, the Company has given Corporate Guarantees to Banks,
for financing acquisition of assets by Wholly Owned Subsidiary - Great
Offshore (International) Ltd. for 47,970 lakhs (Previous Year 24,926
lakhs) , Kei-Rsos Maritime Limited - Rs. 8,775 lakhs (Previous Year Rs.
14,585 lakhs), Deepwater Services (india) Ltd - Rs.2,500 lakhs ( Previous
Year Rs. Nil)
12 Interest on loan given to subsidiary Great Offshore (International)
Limited Interest on loan given to subsidiary Great Offshore
(International) Limited Rs. 5,164 lakhs (Previous Year Rs. 2,201 lakhs) has
been netted out against the interest expense and net interest is
disclosed in the Statement of Profit & Loss Account. Interest
Receivable upto March 31, 2012 is Rs. 1,465 lakhs (Previous Year Rs. 2,201
lakhs)
13 Unsecured Loan to Great Offshore (International) Limited
The company has granted unsecured loan amounting to Rs. 72,658 lakhs
(Previous Year 70,738 lakhs) to its wholly owned overseas subsidiary
company Great Offshore (International) Limited which in turn has
invested/advanced the said amount to its step down overseas
subsidiaries/partnership firms for purchase of vessels with higher
capacities and latest technologies from Bharati Shipyard Limited, the
promoters of the Company. All such vessels procured from Bharati
Shipyard Limited are to be delivered over the next 24 to 36 months.
Recoverability of aforesaid loan and interest thereon is dependent upon
timely delivery of vessels by Bharati Shipyard Limited. In the opinion
of the management, the said advances are fully recoverable.
14 Inventories
Closing stock of stores and spares on board of the vessels amounting to
Rs. 4606 lakhs was determined by the management on the basis of inventory
system implemented by the company w.e.f. January 1, 2012. The company
has in place preset cyclical programme for physical verification of
inventory on board of the vessel .The auditors have relied upon the
management certification for the valuation of stock of stores and
spares on board of vessels.
15 Capital Advance
Capital Advance of Rs. 6,396 lakhs represents a contract between the
Company and Gultare Energy Projects Private Limited for the purchase of
six, 70 Ton Bollard Pull Harbour Tugs. As per the terms of contract the
first installment of 25% is to be made on signing of contract and on
submission of builders invoice.
16 Current Liabilities
According to information available to the Company regarding the status
of the suppliers, as defined under The Micro, Small and Medium
Enterprises Development Act, 2006, amount overdue as on 31st March,
2012 to the Micro, Small and Medium enterprises on account of principal
amount, together with interest for delayed payment under the Act, is Rs.
Nil.
17 Provisions
The Company has recognised the provisions given below in its accounts
in respect of obligations arising from past events, the settlement of
which are expected to result in an outflow embodying economic benefits.
Manning dues and related contributions to welfare funds was Rs. 329 lakhs
as on 1st April, 2011, additions during the year was Rs. 196 lakhs,
(Previous Year Rs. 176 lakhs), reversed / paid during the year was Rs.159
lakhs (Previous Year Rs. 136 lakhs), hence balance as on 31st March, 2012
is Rs. 366 lakhs (Previous Year 329 lakhs).
18 The balances of Trade Receivables and Trade Payables are subject to
confirmations.
19 Disclosures pursuant to Accounting Standard (AS) 15 (revised)
"Employee Benefits".
(a) Effective April 1, 2007 the Company adopted Accounting Standard 15
(Revised 2005) on "Employee Benefits" issued by the ICAI.
(b) The Company has recognised the following amounts in the Statement
of Profit and Loss for the year:
(vi) Basis used to determine expected rate of return on assets:
Expected rate of return on investments is determined based on the
assessment made by the Company at the beginning of the year on the
return expected on its existing portfolio since these are generally
held to maturity, along with the estimated incremental investments to
be made during the year.
(vii) General description of significant defined plans:
Gratuity Plan:
Gratuity is payable to all eligible employees of the Company on
superannuation, death, permanent disablement and resignation in terms
of the provisions of the Payment of Gratuity Act or as per the
Company's Scheme whichever is more beneficial. Benefit would be paid at
the time of separation based on the last drawn base salary.
Leave Encashment:
Eligible employees can carry forward and encash leave upon
superannuation, death, permanent disablement and resignation subject to
maximum accumulation allow @ 60 days for employees. The Leave over and
above 60 days is encashed and paid to employees in April every year.
Benefit would be at the time of separation based on the last drawn
basic salary.
20 Segment reporting
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standards (AS) 17.
21 Related Party Disclosures (i) List of Related Parties
(a) Parties where control exists :
Subsidiary Companies :
Deep Water Services (India) Ltd
KEI - RSOS Maritime Ltd
Great Offshore Salvage Services Limited
Great Offshore Ship Repairs Ltd
Great Offshore Fujairah L.L.C. - FZC
Great Offshore (International) Ltd
Glory Shipping Pvt Ltd
Great Offshore Germany GmbH
SBG Emssun GmbH & Co.
SGB EMMSKY GmbH & Co. KG.
SGB EMSSTAR GmbH & Co. KG.
Norwegian Shipping I Ltd
Norwegian Shipping II Ltd
Great Offshore International (Malaysia) Ltd.
Great Offshore International Manning & Shipping Management (Labuan)
Ltd. (Malaysia)
(b) Other related parties with whom transactions have taken place
during the year :
1 Joint Venture :
United Helicharters Pvt Ltd.
2 Key Management Personnel :
Mr. P.C.Kapoor - Executive Director
Mr. Vijay Kumar - Executive Director
Mr. Soil C. Engineer - Executive Director (upto 30th March,2012)
Mr. Chetan Mehra - Executive Director (From 2nd September,2011 to 19th
November,2011)
3 Enterprises over which Key Management Personnel Exercise Significant
Influence :
Bharati Shipyard Limited
Pinky Shipyard Pvt Ltd
Weizman Forex Limited
Bharati Maritime Services Pvt Ltd
Harsha Infrastructure Pvt Ltd
Sea Splice Shipping Pvt Ltd
Port Side Shipping Pvt Ltd
Dhanshree Properties Pvt Ltd
Natural Power Ventures Pvt Ltd
4 Relatives of Key Managerial Personnel Sukriti Kumar
22 Interest in Joint Venture
The Company has a joint venture interest in United Helicharters Pvt.
Ltd. (a company incorporated in India) and its proportionate share in
the assets, liabilities, income and expenses of the jointly controlled
entity, based on the unaudited management accounts drawn up to March
31, 2012, is as under :
23 These financial statements have been prepared in the format
prescribed by the Revised Schedule VI to the Companies Act, 1956.
Previous year's figures have been recast/ restated.
Mar 31, 2010
1. Great Offshore Limited was incorporated on July 14, 2005 and the
offshore services business of The Great Eastern Shipping Co. Ltd. was
demerged and vested in the Company with effect from April 1, 2005
pursuant to a Scheme of Arrangement sanctioned by the Mumbai High
Court. The Company specialises in providing offshore support solutions
to the Exploration & Production Industry. In this segment the Company
operates Drilling Rigs, Offshore Support Vessels and undertakes Marine
Construction Projects and services.
2. Contingent Liabilities: Rs. Lakhs
Sr. Particulars As on As on
No. 31.3.2010 31.3.2009
(i) Guarantees given by banks including
performance and bid bonds, counter 11613 14516
guaranteed by the Company.
(ii) Guarantees by bank given on behalf of a
subsidiary company 991 1064
(iii) Corporate guarantee given to Customs 583 583
(iv) Claims not acknowledged by Company in respect of:
Customs Duty 76 70
Income Tax matter in appeal 37 27
Sales tax and Service tax demands on charter hire
payments 265 265
Possible obligation in respect of matters under
arbitration 2700 1451
(v) Letters of Credit outstanding 378 -
3. Share Capital:
On October 31, 2009 the Company has allotted 91,017 fully paid Equity
Shares of Rs.10 each at a premium of Rs. 865/- per share on part
conversion of FCCBs aggregating to USD 2,000,000. Consequently, the
Issued, Subscribed and Paid up capital of the Company has increased by
Rs.9.10 lakhs.
The allotment of 71,480 equity shares of the Company have been kept in
abeyance in accordance with the section 206A of the Companies Act, 1956
till such time as the title of the bonafde holder of the shares is
certifed by the concerned Stock Exchange as per the orders from the
Special Court (Trial of Offences relating to Transactions in
Securities) Act, 1992. An additional 10,153 (Previous Year 10,153)
shares have also been kept in abeyance for disputed cases in
consultation with the Bombay Stock Exchange.
4. Reserves & Surplus :
Hedge Reserve
The Company has borrowings and the revenue streams in foreign currency,
which provides an inherent hedge against foreign currency exchange rate
fuctuations. Accordingly, the Company changed its accounting policy
with regard to recognition of exchange differences arising on
translation of foreign currency borrowings by following an appropriate
hedge accounting policy and applying the principle set out in AS-30
Financial Instruments: Recognition and Measurement. The objective of
adopting Hedge Accounting is to ensure that gain or loss on the hedging
instrument is recognized in the statement of Proft and Loss in the same
period when Hedge items affects proft or loss. The Company has w.e.f.
1st April 2008 designated borrowings in foreign currency as Hedge
instrument to hedge its foreign currency risk of its frm commitments
and highly probable forecast transactions ( of revenue streams) to be
accounted as cash fow hedge. During the current year, the net
unrealized exchange difference on foreign currency borrowings
aggregating to Rs.16361 lakhs has been recognized directly in Hedge
Reserve. As a result, balance in the Hedge Reserve is Rs.1139 lakhs.
(Previous Year Debit of Rs.17500 lakhs)
5. Secured Loans:
The secured redeemable non convertible debentures have been taken over
from The Great Eastern Shipping Co. Ltd. (G. E. Shipping) under a
Scheme of Arrangement. The said debentures continue to be secured by
mortgage of specifed immovable properties & ships of G. E. Shipping and
the Company is under an obligation to reimburse G. E. Shipping all
repayments and interest in respect of the aforesaid debentures, before
the respective due dates as per the terms of the Scheme.
6. Unsecured Loans :
The Company has 7.25% Unsecured Foreign Currency Convertible Bonds
(FCCB) (due 2012) of US$ 100,000 each aggregating to US $ 40,000,000
listed on the Singapore Exchange Securities Trading Limited (SGX-ST).
The Bondholders may, as per the terms, convert the Bonds in whole or in
part from time to time, at their option, during the period commencing
11th October, 2007 to 28th September, 2012 at a price of Rs. 875/- per
share and YTM of 7.25% with a fxed rate of exchange on conversion of
Rs. 39.82 = US$ 1.00.
During the Year, as per The Bondholders request, the Company has
converted FCCB aggregating to USD 2,000,000. As per the Mandatory
Conversion Right embedded in the offer document, the Company has the
option to convert the entire outstanding bonds on the terms and
conditions agreed upon. In the event, the Bonds are not repurchased and
cancelled; or converted; the Company will redeem the Bonds on the
Maturity Date.
7. Fixed Assets:
Estimated amount of contracts, net of advances paid thereon, remaining
to be executed on capital account and not provided for Rs.14841 Lakhs
(Previous Year Rs. 26375 lakhs).
8. Investments:
On November 5 2008, the Company has acquired 100% equity shares of
KEI-RSOS Maritime Limited and Rajamahendri Shipping & Oil Field
Services Limited for a consideration of Rs.14705 lakhs and Rs.573 lakhs
respectively subject to certain adjustments as per Share Purchase
Agreement. Out of the above, the consideration paid till the Balance
Sheet date amounted to Rs.13863 lakhs and Rs. 501 lakhs respectively.
9. Deferred tax:
Pursuant to the introduction of Sec 115V under the Income Tax Act,
1961, the Company has opted for computation of its income from shipping
activities under the Tonnage Tax Scheme. Thus income from the business
of operating ships will be assessed on the basis of the deemed Tonnage
Income of the Company and no deferred tax will be applicable to this
income as there will be no timing differences.
Deferred tax is accounted for in respect of the timing differences
under the non-tonnage activity of the Company.
The breakup of net deferred tax assets / (liability) is as under:
10. Current Liabilities:
According to information available to the Company regarding the status
of the suppliers, as defned under The Micro, Small and Medium
Enterprises Development Act, 2006, amount overdue as on 31st March,
2010 to the Micro, Small and Medium enterprises on account of principal
amount, together with interest for delayed payment under the Act, is
Rs. Nil .
11. Provisions:
The Company has recognized the provisions given below in its accounts
in respect of obligations arising from past events, the settlement of
which are expected to result in an outfow embodying economic benefts.
Manning dues and related contributions to welfare funds was Rs. 251
lakhs as on 1st April, 2009, additions during the year was Rs.151
lakhs, (Previous Year Rs. 130 lakhs), reversed / paid during the year
was Rs.113 lakhs (Previous Year Rs. 427 lakhs), hence balance as on
31st March, 2010 is Rs. 289 lakhs (Previous Year 251 lakhs).
Pool Payable Provision was recognised for amounts payable to a pool of
charterers estimated on the basis of average pool earnings. Opening
balance as on 1st April, 2009 was Rs. 1325 lakhs, additions during the
year was Rs.1020 lakhs, (Previous Year Rs. 1937 lakhs), reversed / paid
during the year was Rs.1916 lakhs (Previous Year Rs. 2466 lakhs), hence
balance as on 31st March, 2010 is Rs.429 lakhs.
12. The balances of debtors and creditors are subject to confirmation.
13. Change in Accounting Policy :
(a) The Company has changed its Accounting Policy with effect from 1st
April, 2009 in respect of expenses incurred at the time of fve yearly
Special Surveys and / or life enhancement programmes by which Class
certifcates / Operating licenses are renewed and capitalized the
expenses and the same will be depreciated over the period of fve years.
During the year ended 31st March 2010, the Company has capitalized
Rs.3989 lakhs expenditure incurred on fve yearly Special Surveys and
consequently charge on Proft & Loss Account is lesser by Rs.3511 lakhs.
(b) The Company has changed its accounting policy with regard to
recognition of exchange difference arising on translation of foreign
currency borrowing by following an appropriate hedge accounting policy
and applying principles set out in Accounting Standard (AS) 30 - Ã
Financial Instrument Recognition and MeasurementÃ. The objective of
adopting hedge accounting is to ensure that the gain or losses of the
hedging instrument is recognized in statement of proft and loss in same
period when the hedge affected proft or loss. The Company w.e.f. 1st
April 2008 has designated borrowing in foreign currency as hedge
instrument to hedge its foreign currency risk of its frm commitments
and highly probable forecast transactions (of revenue streams) to be
accounted as cash fow hedge. During the year, the net unrealized
exchange difference on foreign currency borrowing aggregating to Rs.
16361 lakhs has been recognized directly in Hedge Reserve. As a result,
balance in the Hedge Reserve is Rs.1139 lakhs. (Previous Year Debit of
Rs.17500 lakhs)
14. Disclosure pursuant to Accounting Standard (AS) 15 (Revised)
ÃEmployee BeneftsÃ:
(a) Effective April1,2007 the Company adopted Accounting Standard 15 (
Revised 2005) on ÃEmployee Beneftsà issued by ICAI.
(b) The Company has recognised the following amounts in the Proft and
Loss Account for the year :
B) Defned Beneft Plans:
Valuations in respect of Gratuity, Pension Plan for whole-time
Directors, Leave Encashment have been carried out by an independent
actuary, as at the Balance Sheet date on Projected Unit Credit method,
based on the following assumptions:
(vi) Basis used to determine expected rate of return on assets:
Expected rate of return on investments is determined based on the
assessment made by the Company at the beginning of the year on the
return expected on its existing portfolio since these are generally
held to maturity, along with the estimated incremental investments to
be made during the year.
(vii) General description of signifcant defned plans:
Gratuity Plan:
Gratuity is payable to all eligible employees of the Company on
superannuation, death, permanent disablement and resignation in terms
of the provisions of the Payment of Gratuity Act or as per the
CompanyÃs Scheme whichever is more benefcial. Beneft would be paid at
the time of separation based on the last drawn base salary.
Leave Encashment:
Eligible employees can carry forward and encash leave upto
superannuation, death, permanent disablement and resignation subject to
maximum accumulation allowed @ 30 days for employees. The Leave over
and above 30 days is encashed and paid to employees in April every
year. Beneft would be paid at the time of separation based on the last
drawn basic salary.
15. Hedging Contracts:
(a) Interest Rate Swap contracts payable at predetermined fxed rate
vis-ÃÂ -vis LIBOR relating to loans of USD 4.74 million (Previous Year
USD 30 million).
(b) The Company uses interest rate swaps to hedge its exposure to
foreign exchange and interest rate changes.
(c) Unhedged foreign currency exposure : as on 31st March 2010:
16. Segment Reporting:
The Company is mainly engaged in offshore business and there are no
separate reportable segments as per Accounting Standards (AS) 17.
17. Related Party Disclosures :
(i) List of Related Parties
a) Parties where control exists : Subsidiary Companies:
Great Offshore Fujairah L.L.C.- FZC
Deep Water Services (India) Ltd.
KEI - RSOS Maritime Ltd.
Rajamahendri Shipping and Oil Field Services Ltd.
Great Offshore (International) Ltd.
b) Other related parties with whom transactions have taken Place during
the year:
1. Joint Venture :
United Helicharterers Pvt. Ltd.
2. Key Management Personnel :
Mr.Vijay Kantilal Sheth - Vice Chairman cum Managing Director (upto
30-05-2009) Mr.Soli C.Engineer - Executive Director (w.e.f.29-07-2009)
3. Enterprises over which Key Management Personnel Exercise Signifcant
Infuence : Allcargo Global Logistic Limited
Bharati Shipyard Limited Indian National Shipowners Association Indian
Register of Shipping Weizmann Forex Limited
18. Interest in Joint Venture:
The Company has a joint venture interest in United Helicharters Pvt.
Ltd. (a company incorporated in India) and its proportionate share in
the assets, liabilities, income and expenses of the jointly controlled
entity, based on the unaudited management accounts drawn up to 31
December, 2009, is as under :
Percentage of ownership interest as at 31st March 2010. - 26%
19. Information pursuant to para 4D of Part II of Schedule VI of the
Companies Act, 1956 has not been given in view of exemption granted by
Government of India, Ministry of Corporate Affairs vide order
no.46/45/2010-CL-III dated April 15, 2010.
20. Previous Years fgures have been regrouped wherever necessary to
confrm to current yearÃs classifcation.