Dolphin Offshore Enterprises (I)

A.  Disclosure Under AS - 15 (Revised 2005)
 
 Company has adopted the Accounting Standard (AS - 15) (Revised 2005)
 Employee Benefits” effective from April 01, 2007.
 
 I.  Defined Contribution Plans
 
 The Company has classified the various benefits provided to employees
 as under:
 
 a.  Defined Contribution Plans
 b.  Provident Fund
 c.  Superannuation Fund
 d.  State Defined Contribution Plans
 e.  Employers’ Contribution to Employees’ State Insurance
 f.  Employers’ Contribution to Employees’ Pension Scheme 1995
 
 The provident fund and the state defined contribution plan are operated
 by the Regional Provident Fund Commissioner and the Superannuation Fund
 is administered by the Trustee of the Life Insurance Corporation. Under
 the schemes, the Company is required to contribute a specified
 percentage of payroll cost to the retirement benefit schemes to fund
 the benefits. These funds are recognized by the Income Tax authorities.
 
 B.  Contingent Liabilities:
 
 i) On December 22, 2005, the Company has issued 0.5% Foreign Currency
 Convertible Bonds which - are due for redemption on December 23, 2010
 unless the bond holders exercise their option to convert these bonds
 into equity shares. As at 31.03.2009, there is an unrealised loss in
 foreign exchange of Rs.6,97.20 lacs (2008 – Gain of Rs. 5,77.80 lacs)
 on value of bonds, while the yield till 31st March 2009 is Rs.12,88.05
 lacs (2008 – Rs.6,85.08 lacs).
 
 ii) As at March 31, 2009 the Company had contingent liabilities in
 respect of bank guarantees, issued to their customers of Rs.58,77.57
 lacs (2008 – Rs.25,10.84 lacs) of which Rs. 57,14.03 lacs (2008 – Rs
 24,65.02 lacs) are outstanding as of date. These bank guarantees are
 secured by hypothecation to and in favour of the bank of the Company’s
 entire book debts [present and future], outstanding moneys,
 engagements, securities, investments and rights and further secured by
 personal guarantee of Whole-time Directors.
 
 iii) Capital commitment and guarantees on behalf of subsidiary –
 
 The Company’s wholly owned subsidiary, Dolphin Offshore Enterprises
 (Mauritius) Private Limited is currently investing in a ship building
 programme worth US$ 37 million. This Capital expenditure is being met
 through unsecured interest free loan of US$ 17 million given by the
 Company and US$ 20 million from term loans. In addition, the Company
 has given a corporate guarantee to the lenders of Dolphin Offshore
 Enterprises (Mauritius) Private Limited for US$ 20 million (2008 – US$
 20.00 million)
 
 As at March 31, 2009, the Company had already given unsecured loan of
 US$ 12.54 million (2008- US$ 9.17 million) and the balance will be paid
 during the future financial years.
 
 iv) The Company has appealed the award of the Income Tax Appellate
 Tribunal (ITAT) on the block assessment of the Company under Sec.158BC
 of Income Tax Act, 1961 raising a demand of Rs 52.97 lacs (2008 – Rs
 52.97 lacs).  There is an additional demand of Rs. 3,04.92 lacs (2008-
 Rs.2,89.01 lacs) raised by the department for the A.Y.  1998-99 to A.Y
 2004-2005 on account of Shipping reserve disallowance. This matter has 
 been referred to the Tribunal. Further the Company has appealed to the 
 CIT (A) against the demand of Rs.31.55 lacs for A.Y.2005-06 on account 
 of disallowance of dry docking charges. Any liability arising in respect 
 of above matters will be booked on completion of the proceedings.
 
 C.  Segment reporting
 
 The Company is mainly engaged in Offshore business and there are no
 separate reportable segments as per Accounting Standard (AS) 17.
 
 D.  Related Party Disclosures-
 
 Related party transactions cover transactions between the Company and
 the following persons in accordance with the Accounting Standard 18
 issued by the Institute of Chartered Accountants of India.
 
 1) Related party relationships:
 
 (As identified by the management)
 
 a) Companies under common control, including subsidiaries:
 
 i) Dolphin Offshore Projects Limited - under common control
 (Formerly known as Marwa Investment & Leasing Co. Pvt. Ltd.)
 
 ii) Kanika Shipping Limited - under common control
 
 iii) Global Dolphin Drilling Co. Limited — 59.96 % subsidiary
 
 iv) Dolphin Offshore Enterprises (Mauritius) Private Limited - 100.00 %
 subsidiary (Formerly known as Marwa Offshore Enterprises (Mauritius)
 Pvt. Limited)
 
 v) Dolphin International Risk Services Limited.  - 99.99 % subsidiary
 
 vi) Procyon Offshore Services Limited. (w.e.f 31.08.2006) - 100.00 %
 subsidiary
 
 vii) IMPaC Oil & Gas Engineering (India) Pvt. Limited.  - 40% Joint
 Venture
 (w.e.f. 25.08.2008)
 
 b) Key Management Personnel
 
 i) Rear Admiral Kirpal Singh — Executive Chairman
 ii) Mr.Satpal Singh — Managing Director
 iii) Mr.Navpreet Singh — Joint Managing Director
 
 c) Relatives of Key Management Personnel with whom the Company has had
 transactions during the year.
 
 i) Mrs.Manjit Kirpal Singh
 ii) Mrs. Prabha Chandran
 iii) Mrs.Nitu Singh
 iv) Ms. Rishma Singh
 v) Master Rohan Singh
 vi) Mrs. Ritu Singh
 vii) Master Tarun Singh
 viii) Master Akhil Singh
 
 d) Companies controlled by relatives of key management with whom the
 Company has had transactions with during the year
 
 i) Oakland Trading Private Limited
 
 E.  Hire Purchase Agreements –
 
 The Company has purchased assets under hire purchase arrangements which
 are repayable within three years from the dates of agreement. During
 the year, the Company has paid instalments of Rs. 47.42 lacs (2008 –
 Rs.41.01 lacs).  The Company has a future liability of Rs.57.70 lacs
 (2008 – Rs. 1,16.02 lacs) towards the said agreements, of which Rs.
 46.80 lacs (2008 - Rs. 58.08 lacs) is payable within one year.
 
 F.  Interest in Joint Venture:
 
 The Company has a joint venture interest in IMPaC Oil & Gas Engineering
 (India) Pvt Limited (a Company incorporated in India) and its
 proportionate share in the assets, liabilities, income and expenses of
 the jointly controlled entity, based on the audited accounts drawn upto
 31st March 2009 is as under :
 
 G.  Micro, Small and Medium Enterprises (MSMEs):
 
 To the extent information is available with the Company, there are no
 dues payable to any parties identified as Micro, Small or Medium
 Enterprises as per the Micro, Small and Medium Enterprises Development
 Act, 2006.
 
 H.  Debtors and Creditors:
 
 Balances in respect of creditors and debtors are subject to
 confirmation/reconciliation, wherever required.
 
 I.  Prior year comparatives:
 
 The prior year figures have been reclassified wherever necessary for
 comparative purposes.