Garware Offshore Services

The Directors are pleased to present their report as under:
 
                                                          Rs. in Crores
                                            Period ended     Year ended
                                            01.01.2007 to    31.12.2006
                                            31.03.2008      (12 months)
                                            (15 months)
 
 FINANCIAL RESULTS :
 
 Income from operations                      11,1.55           52.38
 Exchange gain/(Loss) Net                      16.05               -
 Other Income                                   1.17            1.36
 Gross Income                                 128.77           53.74
 Expenses for the period                       48.99           22.92
 Operating Profit for the period               79.78           30.82
 Interest                                      21.89            6.76
 Profit before Depreciation                    57.89           24.06
 Depreciation                                  16.03            7.62
 Profit before Tax                             41.86           16.44
 Provision for Taxation:
 Tonnage Tax                                    0.08            0.02
 Fringe Benefit Tax                             0.29            0.27
 Tax on Other Income                            0.49            0.13
 Net Profit for the period                     41.00           16.02
 Add/(Less):Excess / (Short)
 Prov. of Tax for earlier year                 (0.16)          (0.44)
 Net Profit after Tax                          40.84           15.58
 
 FINANCIAL HIGHLIGHTS :
 
 Income from operations for the 15 months period ended 31.03.2008 stood
 at Rs.111.55 crore as against Rs.52.38 crore for the 12 month period
 ended 31.12.2006, an increase of 113%. The gross income of the Company
 for the period ended 31.03.2008 stood at Rs.128.77 crore as against
 Rs.53.74 crore for the period ended 31.12.2006 (increase of 140%).
 
 The net profit for the period including Exchange gain of Rs. 16.05
 crore stood at Rs.40.84 crore as against Rs.15.58 crore (an increase of
 173 %).
 
 OPERATIONS:
 
 The Companys 3 (Three) Anchor Handling Tug cum Supply Vessels (AHTSV)
 continue to be on contract. The Companys 3 (Three) Platform Supply
 Vessels, are on term charter.
 
 The Companys fourth Platform Supply Vessel, M.V. Mana was delivered
 in June, 2008 and is presently operating in the North Sea Market.
 
 The Company has also taken delivery of a new built AHTSV - M.V. Poorna
 on 21.07.2008. The Vessel has been fixed on a term contract in Vietnam.
 
 With regard to the dues from ONGC for 11th to 16th year of operation of
 the AHTSVs, the appeal filed by the ONGC before the Honble Supreme
 Court has been allowed. The Company has filed a Review Petition before
 the Honble Supreme Court as per expert legal advice and the same is
 pending.
 
 Regarding disputes with ONGC on other issues, the matter has been
 successfully resolved outside Arbitration and the Company, as a result,
 has received Rs.1.28 crore.
 
 DIVIDEND :
 
 Your Directors subject to the Shareholders approval, are pleased to
 recommend a dividend of 18 % , for the 15 months period under
 review(previous year 18%).
 
 Dividend will be paid to the Shareholders whose names appear on the
 Register of Members as on 05.09.2008.
 
 The total cash outflow on account of Dividend and Tax thereon amounts
 to Rs. 5.02 crores ( previous year Rs.3.91 crores).
 
 EXPANSION / DIVERSIFICATION :
 
 In addition to the deliveries of the Platform Supply Vessel and Anchor
 Handling Tug-cum- Supply Vessel, three more Vessels are scheduled for
 delivery in the Financial Year 2008-09.
 
 Pursuant to Memorandum of Understanding signed with Havyard Leirvik AS
 for the marketing and sale of designs of Ships, the Company has
 marketed 4 (Four) Havyard designs to an Indian Shipyard during period
 under review.
 
 FUTURE OUTLOOK :
 
 The Exploration and Production (E & P) activities globally have grown
 substantially in view of the high price of Oil recently.  In India too,
 the Government has recently concluded the auction of oil blocks to E &
 P Companies under NELP VII. The Company plans to take part in this
 growth by acquiring additional Offshore related Assets in the future.
 
 As per its plan, the Company has diversified its geographical presence
 into International Markets and continues to look for deploying assets
 in the World Offshore Market.
 
 The Companys new acquisitions/building orders of PSVs and AHTSV will
 help augment earnings and profitability. In addition, depending upon
 demand, the Company envisages further acquisitions in the near future.
 
 The Company has also through its subsidiary, Garware Offshore
 International Services Pvt. Ltd. (GOISPL), Singapore, contracted to
 Bareboat Charter two Assets with effect from 2nd quarter of Financial
 Year 2010.
 
 SETTING UP OF WHOLLY OWNED SUBSIDIARY (WOS) AT SINGAPORE
 
 The Company has set up a WOS at Singapore viz. Garware Offshore
 International Services Pvt. Ltd. (GOISPL) on 2nd July, 2007. The
 Directors Report, Auditors Report and Audited Accounts of GOISPL for
 the period nine months ended 31st March, 2008 are enclosed pursuant to
 provisions of Section 212 of the Companies Act, 1956.
 
 PREFERENTIAL ALLOTMENTS OF EQUITY SHARES AND CONVERTIBLE WARRANTS
 
 During the period under review, all the outstanding Convertible
 Warrants of Rs.10/- each were converted into Equity Shares. The
 25,00,000 - 10% Optionally Convertible Debentures of Rs.100/- each were
 also converted into Equity Shares. The Company has obtained listing and
 trading approvals from Bombay Stock Exchange Ltd. and National Stock
 Exchange Ltd. for all the Equity Shares allotted upon conversion of
 said Warrants and Debentures.
 
 LISTING FEES TO STOCK EXCHANGES
 
 The Company has paid the Listing Fees for the year 2008-09 to Bombay
 Stock Exchange Ltd. and National Stock Exchange Ltd.
 
 OPEN OFFER MADE BY INDIASTAR (MAURITIUS) LTD.
 
 The Open Offer made to the Shareholders of the Company by IndiaStar
 (Mauritius) Ltd. for acquisition of Equity Shares has concluded.
 
 EXTENSION OF FINANCIAL YEAR
 
 In order to coincide the Companys Financial Year with Financial Year
 required under the Income-Tax Act, 1961 and to avoid duplication of
 accounts, the same has been extended by 3 months upto 31st March, 2008.
 The subsequent Finan- cial Years will be from April to March.
 
 The Company has also obtained approval from the Registrar of Companies,
 Maharashtra for holding Annual General Meeting upto 30th September,
 2008.
 
 RESPONSIBILITY STATEMENT :
 
 The Directors confirm :
 
 a) That in the preparation of the Annual Accounts, the applicable
 accounting standards have been followed and that no material departures
 have been made from the same.
 
 b) That they have selected such Accounting Policies and applied them
 consistently and made judgements and estimates that are reasonable and
 prudent so as to give a true and fair view of the State of Affairs of
 the Company at the end of the 15 months period and the Profit of the
 Company for that period.
 
 c) That they have taken proper and sufficient care for the maintenance
 of adequate accounting records in accor- dance with provision of The
 Companies Act, 1956, for safe-guarding the assets of the Company and
 for pre- venting and detecting fraud and other irregularities.
 
 d) That they have prepared the Accounts on a going concern basis.
 
 INSURANCE :
 
 All the Vessels owned by the Company have been insured for both Hull &
 Machinery, War Risks and Protection & Indemnity (P & I) claims.
 
 FIXED DEPOSITS :
 
 During the period under review the Company has not accepted any
 deposits from the Public and Shareholders.  DIRECTORATE :
 
 Mr. George Duncan Steele Bodger was appointed as Additional Director
 during the year and hold Office till the date of the ensuing Annual
 General Meeting. Notice from a Member proposing his candidature for the
 Office of the Director has been received. Members are requested to
 appoint him as Director of the Company.
 
 Mr. Ashok B. Garware was re-appointed as Executive Chairman by the Boad
 of Directors , subject to shareholders approval, w.e.f. 01.07.2007 for
 a period of 5 years. Members are requested to approve re-appointment
 and payment of remuneration payable to him.
 
 Mrs. Maneesha S. Shah and Mr. A.K. Thanavala, Directors of the Company
 retire by rotation and being eligible, offer themselves for
 re-appointment. Members are requested to re-elect them.
 
 AUDITORS :
 
 Members are requested to appoint Statutory Auditors, Messrs. Raman S.
 Shah & Associates, Chartered Accountants for the current year and to
 fix their remuneration.
 
 PERSONNEL:
 
 The relations with all Employees of the Company, both Shore and
 Floating Staff have been extremely cordial. Your Directors wish to
 express their appreciation of the services, rendered by all the devoted
 Employees.
 
 PARTICULARS OF EMPLOYEES :
 
 Statement of Particulars of Employees as required by the Provisions of
 Section 217(2A) of The Companies Act, 1956 read with Companies
 (Particulars of Employees) Rules, 1975 as amended and forming part of
 the Directors Report is annexed here to as Annexure I.
 
 DEMATERIALISATION OF SHARES :
 
 The Companys shares continue to be traded in Electronic Form.
 
 CORPORATE GOVERNANCE :
 
 A separate report on Corporate Governance along with the Auditors
 Certificate on its compliance is given in a separate Annexure.
 
 ACKNOWLEDGEMENT
 
 The Board wish to thank the Office of Directorate General of Shipping,
 Indian Register of Shipping, Mercantile Marine Department of Government
 of India, Shipping Master, United Bank of India, ICICI Bank (Bahrain),
 State Bank of India, State Bank of Travancore, State Bank of Hyderabad
 and DVB Group Merchant Bank (Asia) Ltd. for their continued support and
 co-operation during the year.
 
                                                On Behalf of the Board
 Place : Mumbai                                          ASHOK GARWARE
 Dated : 31st July, 2008                                      CHAIRMAN