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Notes to Accounts of Seamec Ltd.

Mar 31, 2017

Nature and Purpose of Reserves:

(1) Capital redemption reserve:

Capital redemption reserve was created upon buy back of equity shares. The Company may utilize this reserve in compliance with the provisions of the Companies Act 2013.

(2) Securities premium:

Securities premium account is created when shares are issued at premium. The reserve is utilized for the specific purposes (including buy back of equity capital ) permitted by the Companies Act 2013.

(3) Tonnage tax reserve u/s 115VT of Income Tax Act, 1961:

A tonnage tax company shall, subject to and in accordance with the provisions of section 115VT of the Income Tax Act, 1961, on yearly basis credit to tonnage tax reserve account, an amount not less than twenty percent of the book profit derived from the activities referred to in clauses (i) and (ii) of sub-section (1) of section 115V-I of the Income Tax Act, 1961. The Company can utilize this reserve as per provisions of Income Tax Act 1961.

a The case against the Company alleging violation of Foreign Exchange Regulation Act 1973 (FERA), related to acquisition of Land drilling Rig, is pending before the Hon''ble Mumbai High Court. The Company has furnished a Bank Guarantee of '' 100 million to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon''ble Mumbai High Court. The bank guarantee is valid till September 30, 2017. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA.

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

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

During July - August 2012, DRI issued show cause notice, separately for each vessel as to why the duty determined of aggregate value of Rs, 285.26 million, interest, penalty etc. will not be levied on the Company.

The Company while preferring adjudication have submitted replies to respective show cause notices, and hearing on adjudication proceeding completed before the Commissioner of Customs (Import) on December 4, 2012.

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

Commissioner of Customs has issued order dated March 28, 2013 received by Company on April 16, 2013 on the adjudication proceedings. Commissioner of Customs, in his order, imposed duty Rs, 350 million, penalty for equivalent amount and interest and appropriation of Rs, 126.60 million paid in December 2011. As per the order of Commissioner of Customs , total claim to Company including duty, penalty, interest and confiscation fine calculated to Rs, 1,197 million after adjustment of provisional duty already paid in December 2011 under protest.

The Company has since obtained stay from CESTAT Appellate Tribunal, customs against the order of commissioner of customs for vessel SEAMEC-III, SEAMEC II & SEAMEC-I. While pending the appeal, Honorable CESTAT allowed the vessels to go out of India upon furnishing the Bank Guarantee aggregating to Rs, 70 million to ensure vessels return to India during the granted period. Upon return of vessels the aggregate Bank Guarantee of Rs, 70 million has been revoked. The Company is of the view that it has a strong case on merit and is contesting the same. Hence no further provision made towards additional Customs Duty, Penalty and Confiscation redemption fine as stated in the order of Commissioner of Customs.

c During the previous year, the Company had executed marine and diving activities jointly with a diving company, wherein the customer has claimed an amount of Rs, 30 million from the Company on account of alleged defective performance which is subject to final settlement/resolution. The management''s view is that the claim in regard to the alleged defective performance pertains to the scope of work performed by the diving Company. Accordingly, the Company does not acknowledge this claim as debt because the company expects a positive outcome.

d During the year, the Company has received Audit Memo issued by the Assistant Commissioner of Service Tax, pertaining to disallowance of certain CENVAT credit availed during the period of FY 2013-14 to 2015-16 to the extent of Rs, 14.03 million. Based on the opinion taken from an expert, the management believes that they have good case and no adjustment is required in this regards.

Notes:

(a) The Company does not expect any reimbursement in respect of the above contingent liabilities.

(b) It is not practicable to estimate the timing of cash flows, if any, in respect of matters at (a) to (d) above, pending resolution of the proceedings.

38. Commitments

a. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs, 8.53 million (31.03.2016 : Rs, 20.06) (01.04.2015 Rs, NIL).

b. Other Commitment

There are no material non cancellable contractual commitments. For commitments relating to lease arrangement (refer Note-46).

4. Trade Receivables as disclosed in Notes 7 & 14, are net of provisions for :

(a) Rs, 1134.70 million receivable from Swiber Offshore (India) Private Limited "SOI" and Swiber Offshore Constructions Pte Ltd "SOC", Singapore, against which the Company had initiated legal action in India and Singapore. Management believes SOI does not have any significant realizable assets, and SOC is under Judicial Management in Singapore, where the Company is an unsecured creditor. Considering the above status, management had made a provision for doubtful debts of Rs, 1134.70 million in the current year.

(b) Rs, 176.50 million (net of provision of Rs, 52.30 million recognized in earlier year) receivable from Seahorse General Contracting Establishment, UAE which pertains to the year ended March 31, 2015 and in respect of which legal action was initiated. However, considering the limited progress in the matter, the Management recognized the additional provision of Rs, 176.50 million in the current year.

(C) Rs, 71.30 million receivable from Synergy Subsea Engineering LLC, UAE (''Synergy'') relating to charter hire for a vessel. There has been no substantial progress in recovery despite efforts made. The Company is now contemplating legal action, but no time frame can be reasonably ascertained, and consequently, the amount receivable has been provided for during the current year.

5 Segment Information

For management purposes, the company is organized into business units based on its services and has two reportable segments i.e Domestic and Overseas.

The chief operational decision maker monitors the operating results of its Business Segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements. The Operating segments have been identified based on geographical location of the vessel. The operating segments have been disclosed based on revenues within India and outside India.

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

6 Gratuity and other post-employment benefit plans

7 Defined Contribution Plans :

Amount of Rs, 1.81 million (31.03.2016 : Rs, 1.99 million) is recognized as an expense and included in Employee Benefit Expense (refer note 31) in statement of profit and Loss.

8 Defined Benefit Plans :

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

The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member''s length of service and salary at retirement age. The fund has the form of a trust and it is governed by the Board of Trustees, which consists of an equal number of employer and employee representatives. The Board of Trustees is responsible for the administration of the plan assets and for the definition of the investment strategy.

Each year, the Board of Trustees reviews the level of funding in the India gratuity plan. Such a review includes the asset-liability matching strategy and investment risk management policy. The Board of Trustees decides its contribution based on the results of this annual review.

The Obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation.

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

9 Leases

Operating Lease Commitments:

Office premises are obtained on operating lease / leave and license. The lease term is for the period of 1 to 9 years and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. The total lease term is for a period of 108 months out of which there is a lock-in period of initial 60 months.

Minimum lease payments under non-cancellable operating lease / leave and license are as follow ('' million):

The management assessed that the fair value of Trade receivables, cash and cash equivalents, other Bank Balance, Other financial assets, Trade payables, Borrowings and other financials liabilities, approximate their carrying amounts largely due to the short-term maturities of these instruments.

There have been no transfers between Level 1 and Level 2 during the year.

10. Managerial Remuneration

For the year ended March 31, 2016, due to inadequacy of profits, remuneration paid to the Managing Director exceeded the limit prescribed under Section 197 read with Schedule V of the Companies Act, 2013 by '' 3.67 million. Subsequently, the Ministry of Corporate Affairs vide notification dated September 12, 2016 amended the Schedule V of Companies Act, 2013 and revised the limit on the remuneration payable to the managerial personnel by a company having no profit or inadequate profit without the Central Government approval. Consequent upon the above, and based on the opinion of a legal expert, management believes that specific approval of Central Government is not required. However, as a matter of abundant caution, the Company has submitted an application to the Central Government seeking waiver from recovery of such excess amount of remuneration. The Central Government''s response is awaited. Having regard to the facts and circumstances, in the opinion of the management, no adjustments to the financial statements are warranted at this stage.

* Dues to Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

11 Financial Risk Management- Objectives And Policies

The Company''s principal financial liabilities, comprise loans and borrowings, trade and other payables. The main purpose of these financial liabilities is to finance the Company''s operations. The Company''s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks. The management assures that the Company''s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.

The Board of Directors reviews and agrees policies for managing each of these risks, which are summarized below: a Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings.

The below assumption has been made in calculating the sensitivity analysis:

(1) The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at March 31, 2017 and March 31, 2016. and April 01, 2015

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of financial instrument will fluctuate due to change in market interest rates. The company is not exposed to any significant interest rate risk as at the respective reporting dates.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The company''s exposure to the risk of changes in foreign exchange rates relates primarily to the company''s operating activities (when revenue or expense is denominated in a foreign currency). Currency risk arises when future commercial transactions and recognized assets and liabilities are denominated in a currency that is not the company''s functional currency. The company''s foreign currency transactions are mainly in United State Dollars (USD).

The Company manages its foreign currency risk by natural hedging.

The following tables demonstrate the sensitivity to a reasonably possible change in USD and other exchange rates, with all other variables held constant. The impact on the company''s profit before tax is due to changes in the fair value of monetary assets and liabilities.

b Credit Risk

Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities primarily trade receivables and from it''s financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade Receivables:

Outstanding customer receivables are regularly monitored. An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on exchange losses historical data. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.

Financial Instruments and cash deposits

Credit risk from balances with banks is managed by the company''s senior management.

The company''s maximum exposure to credit risk for the components of the balance sheet at March 31, 2017, March 31, 2016 and April 1, 2015 is the carrying amounts as illustrated in respective notes.

c Liquidity risk

Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from inability to sell a financial asset quickly at close to its fair value. Liquidity risk is managed by monitoring on a regular basis that sufficient funds are available to meet any future commitments.

The table below summarizes the maturity profile of the company''s financial liabilities based on contractual undiscounted payments.

12 Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the company. The primary objective of the company''s capital management is to maximize the shareholder value.

The company manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents. The Company''s strategy is to maintain a gearing ratio with 10%. The gearing ratios were as follows:

13 Disclosures as Required by Indian Accounting Standard (In AS) 101 First Time Adoption of Indian Accounting Standards.

These financial statements, for the year ended March 31, 2017 are the first, the company has prepared in accordance with Ind AS. For the periods up to and including the period ended March 31, 2016 the company prepared its financial statements in accordance with the accounting standards notified under section 133 of the companies Act 2013, read together with Paragraph 7 of the companies (Accounts) Rules ,2014 (Indian GAAP) and amendments there under.

Accordingly, the company has prepared financial statements which comply with Ind AS applicable for year ended March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the company''s opening balance sheet was prepared as at April 1, 2015, the company''s date of transition to Ind AS. This note explains the principal adjustments made by the company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2015 and the financial statements as at and for the year ended March 31, 2016.

Exemptions applied

Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS, The company has applied the following exemptions:

(a) The Company has elected to apply previous GAAP carrying amount of its property, plant and equipment as deemed cost as on the date of transition to Ind AS since there is no change in its functional currency on the date of transition to Ind AS.

(b) The Company has elected to apply previous GAAP carrying amount of its investment in Subsidiary as deemed cost as on the date of transition to Ind AS.

Exceptions

The following mandatory exceptions have been applied in accordance with Ind AS 101 in preparing the financial statements.

(a) Estimates

The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with India GAAP (after adjustments to reflect any differences if any, in accounting policies) apart from the following items where application of Indian GAAP did not require estimation :

Impairment of Financial assets based on Expected Credit Loss model.

The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions as at the transition date and as of March 31, 2016.

(b) Derecognition of financial assets and financial liabilities

The Company has elected to apply the derecognition requirements for financial assets and financial liabilities in IND AS 109 prospectively for transactions occurring on or after the date of transition to IND AS.

(c) 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 at the date of transition to Ind AS.

Refer reconciliation of Equity on account of conversion of financials from Indian GAAP to Ind As.

Footnotes to the reconciliation of equity as at 1 April 2015 and 31 March 2016 and profit or loss for the year ended 31 March 2016

(a) Fair Value through profit or loss (FVTPL) financial assets

Under Indian GAAP the Company accounted for investments in unquoted equity shares as investment measured at cost less provision for other than temporary diminution in the value of investments.

Under Ind AS, the Company has designated such investments as FVTPL investments. Ind AS requires FVTPL investments to be measured at fair value. At the date of transition to Ind AS, difference between the instruments fair value and Indian GAAP carrying amount has been recognized as a separate component of equity, net of related deferred taxes.

The difference between Fair Value and the Indian GAAP carrying amount has been recognized in retained earnings.

(b) Statement of Cash flows

The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

(c) Provisions

Under Indian GAAP proposed dividends including DDT are recognized as a liability in the period to which they relate, irrespective of when they are declared. Under Ind AS, a proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. On April 1, 2015. The proposed dividend for the year ended on March 31, 2015 of '' 40.84 Millions (including Dividend Distribution tax of '' 6.94 Millions) recognized under Indian GAAP was reduced from Provisions and with a corresponding impact in the retained earnings.

(d) Defined Benefit Plan

Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.

(e) Deferred Tax

Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period, whereas Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base.

The transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences and Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of '' 0.07 Million.

(f) Transaction Cost

Under the Indian GAAP the Company recognized transaction costs relating to Buyback of Equity shares in the statement of profit or loss. Ind AS 32 requires such transaction costs to be allocated to the Equity Component of the instrument.

(g) Other Comprehensive Income

Under Indian GAAP the company has not presented other comprehensive income (OCI) separately. Hence, it has reconciled Indian GAAP profit or loss to profit or loss as per Ind AS. Further, Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.

(h) Loans- Deposits

Company has given interest free refundable security deposit towards office rent, which is been brought to Fair value as per Ind AS 109. The difference between the nominal value of Security Deposit and Fair value of Security Deposit is considered as additional rent payable to the lessor. However at the same time the above difference is also recognized as interest income as per amortization pattern. The additional rent recognized is expensed out on straight line basis over the tenure of agreement.

(i) Property Plant & Equipment

The company has capitalized Spares which meets the definition of Property, Plant and Equipment as per Ind AS 16-Property, plant and Equipment. The same has been capitalized as at the transition date which were recognized as inventory as per the Indian Accounting Standard.

(j) Sale of Saturation Diving System

Company has entered into sales agreement for sale of Saturation Diving system in the year 2014-15. The agreement had deferred payment term. Payment being spread over a period of 2 years. Hence the difference between the fair value of receivable and actual amount receivable is recognized as interest income.

14. Standard issued but not effective

In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows’. The amendments are applicable to the Company from April 1, 2017.

Amendment to Ind AS 7:

The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and noncash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.

Note : Amount shown under permitted receipts represents cash withdrawn by the Company from its own banks accounts.


Mar 31, 2016

(b) Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of ''10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing General Meeting.

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.

As per records of the company, including its register of shareholders/ members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

During the year, the Company has bought back a total of 84,75,000 equity shares of Rs. 10 each at a total consideration of Rs.1,059.38 million. Accordingly, the face value of shares bought back amounting to Rs.84.75 million had been adjusted against Share Capital and the balance amount of Rs.501.75 million and Rs.472.88 million have been adjusted against the securities premium and general reserve respectively. Further, in accordance with the Section 69 of the Companies Act, 2013, the Company had transferred an amount of Rs. 84.75 million, being a sum equal to nominal value of equity shares bought back, from general reserve to capital redemption reserve.

A) The Company has availed Buyers Credit Facility from IDBI bank, carries rate of Interest at the rate 1 Year Libor 80 bps (31.03.2015 6 Months Libor 125 BPS) the same is secured by hypothecation charge on all of the Company''s Current Assets. The Facility is repayable in next one year.

B) The ''Overdraft against FD'' facility is availed from IDBI bank. The rate of Interest for the said Facility is 1% above the interest rate of Fixed Deposits under lien with IDBI bank. The same is secured by fixed deposits with margin as 100%. The loan is repayable in next one year.

a The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Hon''ble Mumbai High Court. The Company has furnished a Bank Guarantee of Rs.100 million to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon''ble Mumbai High Court. The bank guarantee is valid till 30.09.2016. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA.

b During the year 2011, the Directorate of Revenue Intelligence (DRI) had instituted an enquiry in relation to payment of customs duty towards repairs/drydock undertaken on Company''s vessels SEAMEC-I, SEAMEC-II and SEAMEC-III incurred outside India since 2002. The DRI provisionally assessed customs duty of Rs.126.60 million, which the Company has paid under protest subject to adjudication in December 2011. The Company had also furnished a bank Guarantee for Rs.82.10 million and Bond for Rs.821 million pursuant to the order dated 17th January 2012 of Hon''ble Mumbai High Court for provisional release of its vessel SEAMEC II arrested by Customs. The above order was subject to adjudication. Hon''ble High Court observed that no duty to be charged on the acquisition cost as the vessel was originally imported prior to 2001 when import duty was not applicable on such vessel. During July - August 2012, DRI issued show cause notice, separately for each vessel as to why the duty determined of aggregate value of Rs.285.26 million, interest, penalty etc. will not be levied on the Company. The Company while preferring adjudication have submitted replies to respective show cause notices, and hearing on adjudication proceeding completed before the Commissioner of Customs (Import) on 4th December, 2012. Subsequent to above, the Company has received 3 corrigendum to the original show cause notices enhancing the claim of custom duty by Rs.65.14 million against the above claim. Commissioner of Customs has issued order dated 28th March 2013 received by Company on 16th April 2013 on the adjudication proceedings. Commissioner of Customs, in his order, imposed duty Rs. 350 million, penalty for equivalent amount and interest and appropriation of Rs.126.6million paid in Dec 2011. As per the order of Commissioner of Customs, total claim to Company including duty, penalty, interest and confiscation fine calculated to Rs.1,197 million after adjustment of provisional duty already paid in Dec 2011 under protest. The Company has since obtained stay from CESTAT Appellate Tribunal, customs against the order of commissioner of customs for vessel SEAMEC-III, SEAMEC II & SEAMEC-I. While pending the appeal, Honorable CESTAT allowed the vessels to go out of India upon furnishing the Bank Guarantee aggregating to Rs.70 million to ensure vessels return to India during the granted period. Upon return of vessels the aggregate Bank Guarantee of Rs.70 million has been revoked. The Company is of the view that it has a strong case on merit and is contesting the same. Hence no further provision made towards additional Customs Duty, Penalty and Confiscation redemption fine as stated in the order of Commissioner of Customs.

c During the year, the Company has executed marine and diving activities jointly with a diving company, wherein the customer has claimed an amount of Rs.30 million from the Company on account of alleged defective performance which is subject to final settlement/resolution. The Management believes that this claim in regards to the alleged defective performance pertains to the scope of work performed by the diving Company. Accordingly, the company does not acknowledged this claim as debt, because the Company expects a positive out come.

1. Commitments

a Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 20.06 million (31.03.2015 : Rs.Nil).

b Other Commitment

There are no material non cancellable contractual commitments. For commitments relating to lease arrangement (refer Note-36).

2. Trade Receivable

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

(b) In the past, the Company had entered into a Charter Party Agreement with a Charterer for chartering a vessel and provision of services, for which an amount of Rs.223.83 million was receivable by the Company. The Charterer was in turn having a contract with its Contractor which was ultimately responsible to its Principal Contractor. While on charter, there was an incident that allegedly resulted in damage to subsea pipeline of the Principal Contractor, and such damage was sought to be attributed to the Company. During the year, Company engaged an internationally reputed Surveyor to assess the alleged damage to the subsea pipeline. The Surveyor submitted a report concluding that subject to available information and assumptions, the subsea pipeline is fit for service. The same was submitted to the Charterer. Under the Charter Party there is no consequential damages that make the Company liable to pay. As on 31st March, 2016, the Charterer has withheld payment of Rs.171.57 million due to the Company (net provision of doubtful debts of Rs.52.26 million) until settlement of matter relating to the damaged subsea pipeline. During the year, the Company initiated legal proceedings against the Charterer in the Abu Dhabi Court. The Company is also in discussions with the Charterer and other parties involved to reach a settlement and enable the Charterer to initiate necessary legal recourse against its Contractor. On the basis of the information available with the Company, the Management is of the view that it will able to recover, the outstanding trade receivables.

3 (a) Value of imported and indigenous stores and fuel consumed

4. Segment Information

Secondary segment: Geographical Segments

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

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

5 Gratuity and other post-employment benefit plans

6 Defined Contribution Plans:

Amount of Rs.1,99 million (31.03.2015 : Rs.2.55 million) is recognized as an expense and included in "Employee Benefit Expense (refer note 23) in statement of profit & Loss.

7 Defined Benefit Plans :

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

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

8 Leases

In case of assets taken on lease

Operating Lease :

Company as lessee

Office premises are obtained on operating lease / leave and license. The lease term is for the period of 1 to 9 years and renewable at the option of the Company. There are no restrictions imposed by lease arrangements. The total lease term is for a period of 108 months out of which there is a lock-in period of initial 60 months,

The lease fees shall be increased by 15% over the last monthly lease fee paid after completion of every 36 months from the rent commencement date of the lease deed agreement.

9 Managerial Remuneration

(a) For the year ended 31st March, 2016, due to inadequacy of profits, the remuneration to the Managing Director exceeds the limit prescribed under Section 197 of the Companies Act, 2013 by Rs.3.67 million. The Company intends to submit application to Central Government to seek waiver from recovery of such excess remuneration.

(b) In earlier years, the Company had made applications to Central Government for waiver from recovery of excess remuneration of Rs.6.31 million and Rs.9.42 million paid to Managing Director for the years 2011-12 and 2013-14. During the year, the Central Government declined the waiver for recovery of excess remuneration for the year 2011-12. The management filed a review application, drawing reference to Notification No. 46/2011 dated 14/07/201 1 permitting listed companies to pay remuneration in excess of applicable limits subject to certain conditions being met. The Company had obtained an opinion of a legal expert in this regard, and submitted necessary confirmations to the Ministry, basis which it expects a closure of this matter for both years, and accordingly a recovery of such amount is not necessary.

* Dues to Micro, Small and Medium Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

10 Corporate Social Responsibility Expenditure as per Section -135 of the Companies Act Gross Amount required to be spent by the Company during the year :- Rs.6.87 million

Amount spent during the year Rs.1.55 million

11 Disclosure persuant to SEBI (Listing Obligation and disclosure requirement) and Section 186(4) of the Companies Act-2013 Details of Investment made are given in Note-13

12 Previous year figures

Previous year figures have been regrouped / reclassified, where necessary, to conform to current year''s classification.

As per our report of even date


Mar 31, 2014

1 Corporate Information

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

2 Basis of preparation

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

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

Rs.million

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

FERA Matter Refer note (a) 100 100

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

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

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

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

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

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

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

5 CAPITAL COMMITMENTS

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

6 TRADE RECEIVABLE

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

7 Segment Information

Secondary Segment: Geographical Segment

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

8 Related Party disclosure

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

Holding Company Coflexip Stena Offshore (Mauritius) Limited

Ultimate Holding Company Technip SA France

Subsidiaries Seamec International FZE

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

9 Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

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

(b) Un-hedged Foreign Currency Exposure

10 Gratuity and other post-employment benefit plans

1 Defined Benefit Contribution Plans

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

2 Defined Benefit Plans :

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

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

11 Leases

In case of assets taken on lease

Operating Lease : Company as lessee

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

12 Previous year figures

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


Mar 31, 2013

1 Corporate Information

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

2 Basis of preparation

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

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

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

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

FERA Matter Refer note (a) 100 100

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

Note (b)

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

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

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

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

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

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

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

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

4. CAPITAL COMMITMENTS

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

5. TRADE RECEIVABLE

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

6. INSURANCE CLAIM

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

7. Segment Information

Secondary segment: Geographical Segments

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

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

8 Related Party disclosure

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

9 Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

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

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

10 Gratuity and other post-employment benefit plans

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

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

Statement of Profit and Loss

11 Leases

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

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

12 Previous year figures

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


Mar 31, 2012

1 Corporate Information

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

2 Basis of preparation

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

03. Contingent liabilities

(Rs million)

As at 31.03.2012 As at 31.03.2011

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

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

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

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

4. Capital Commitments

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

5. Trade Receivable

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

6. Insurance Claim

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

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

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

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

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

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

8. Gratuity and other post-employment benefit plans

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

Statement of Profit and Loss

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

9. Leases

In case of assets taken on lease

Operating Lease :

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

10. Previous year figures

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


Mar 31, 2011

1. Nature of Operations

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

2. Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 141,468 thousand (Previous period Rs. 28,543 thousand).

3. Contingent Liabilities

Rs. ‘000

Particulars As at As at 31.03.2011 31.03.2010

Claim against the Company not acknowledge as debts Refer note below Refer note below

The case against the Company alleging violation of Foreign Exchange Regulation Act (FERA), related to acquisition of Land drilling Rig, is pending before the Hon'ble Mumbai High Court. The Company has furnished a Bank Guarantee of Rs. 100,000 thousand to the Enforcement Directorate, FERA, towards penalty imposed, as directed by the Hon'ble Mumbai High Court. The bank guarantee is valid till June 30, 2011. No provision is considered necessary in respect of the said penalty as the management believes, based on legal opinion, that there has been no contravention to FERA.

4. Sundry Debtors

In earlier year the Company withdrew one of its vessels from a charter-hire contract due to commercial disputes. The Company has not recognised revenue of Rs. 281,985 thousand (Previous period Rs. 281,985 thousand) in respect of contract for the period January 2010 to March 2010 on account of uncertainty relating to acceptance and realisability of claims. Further, the Company has also made, in earlier year, a provision of Rs. 239,386 thousand towards outstanding receivables from the same client on grounds of prudence. The claim is pending before court in Mexico.

5. Insurance Claim

During the year the Company has received Rs. 44,442 thousand from Insurers, towards claims against damage to vessel SEAMEC-II at Curacao Dry Dock in September 2007. The relevant expenditure was expensed to profit and loss account when incurred.

6. Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

(a) The Company enters into forward exchange contracts being derivative instruments which are not intended for trading or speculative purposes but for hedge purposes to establish the amount of reporting currency required or available at the settlement date of certain payables and receivables. The Company does not have any losses on the forward contracts entered to hedge firm commitments or highly probable transactions. There are no such transactions as at the Balance Sheet date in the current and the previous period.

7. Gratuity and other post-employment benefit plans

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

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

Profit and Loss account

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

8. LeasesIn case of assets taken on lease

Operating Lease :

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

9. There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006, to whom the Company owes on account of principal amount together with the interest and accordingly no additional disclosures have been made. The above information regarding Micro, Small and Medium Enterprises, has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.

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

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


Mar 31, 2010

1. Nature of Operations

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

2. Capital Commitments

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

3. Contingent Liabilities

Rs in Thousand

As at As at 31.03.2010 31.12.2008

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

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

4. Sundry Debtors

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

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

5. Insurance Claim Received

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

6. Disclosure regarding Derivative Instruments and Unhedged Foreign Currency Exposure

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

7. Gratuity and other post-employment benefit plans

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

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

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

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

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

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