Garware Offshore Services

(1) Contingent Liabilities :
 
 Particulars        As on 31st March, 2009 As on 31st March, 2008
 
                             (In Rs. Lacs)          (In Rs. Lacs)
 
 (a) Guarantees given 
 by the Banks Counter  
 Guarantees given by the 
 Company]                       1,906.60             18,048.00
 (b) Corporate Guarantee 
 on behalf of other Company
 [No such guarantee has devolved 
 on the Company]                  232.84                302.00
 TOTAL                          2,139.44             18,350.00
 
 The Company has given a Gurantee amounting to US$ 3,74,060 on behalf of
 its wholly owned subsidiary for the Advance charter of a Accomodation
 Barge and One Anchor Handling Tug Cum Supply Vessel (AHTSV). (Previous
 Year US$ 9,61,825)
 
 No liability on the Company as a result of this guarantee will
 materialise.
 
 (2) With regard to the dues payable to the Company for its vessels
 operating with ONGC from 1983-84 onwards, the Companys Review Petition
 filed before Honble Supreme Court was rejected.
 
 Upon advice from top legal experts, the Company has now filed a
 Curative Petition. The matter is pending at this stage.
 
 (3) Assets offered as securities to banks & financial institution : A)
 Term loans for acquisition of vessels
 
 (a) Outstanding term loan of US $ 12.87 million from ICICI Bank
 (Bahrain) Ltd. is secured by way of first charge of the vessel acquired
 as also first charge on one of the Anchor Handling Tug cum Supply
 Vessel (AHTSV) of the Company.
 
 Amount repayable within a year US $ 2.76 million.
 
 (b) Outstanding term loan of US $ 16.13 million from State Bank of
 India is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 1.05 million.
 
 (c) Outstanding term loan of US $ 16.75 million from State Bank of
 India is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 0.99 million.
 
 (d) Outstanding term loan of US $ 10.48 million from DVB Group Merchant
 Bank is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 1.23 million.
 
 (e) Outstanding term loan of US $ 22.21 million from DVB Group Merchant
 Bank is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 1.99 million.
 
 (f) Outstanding term loan of US $ 9.91 million from DVB Group Merchant
 Bank is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 1.11 million.
 
 (g) Outstanding term loan of US $ 12.67 million from State Bank of
 India is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 0.54 million.
 
 (h) Outstanding term loan of US $ 9.04 million from State Bank of
 Hyderabad is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 0.73 million.
 
 (i) Outstanding term loan of US $ 9.04 million from State Bank of India
 is secured by way of first charge of the vessel acquired.
 
 Amount repayable within a year US $ 0.75 million.
 
 B) Other Term Loans
 
 (a) Outstanding Corporate Term loan of Rs.1,817.66 lacs from State Bank
 of Travancore, is secured by way of second charge on one of the
 Companys AHTSV.
 
 Amount repayable within a year Rs. 508.94 lacs.
 
 (b) Outstanding Corporate Term loan of Rs.100 lacs from Bombay
 Mercantile Co-op Bank, is secured by way of first charge on one of the
 Companys AHTSV.
 
 Amount repayable within a year Rs. 100.00 lacs.
 
 (c) Outstanding Corporate Term loan of US $ 1.25 million from United
 Bank of India, which is secured by way of receivables from the
 operation of one of the Companys PSV.
 
 Amount repayable within a year US $ 1.25 million.
 
 (d) Outstanding term loan of Rs. 918.18 lacs from United Bank of India,
 which is secured by way of charge on the property / office premises to
 be acquired as also charge on one of the AHTSV of the Company.
 
 Amount repayable within a year Rs. 174.96 lacs.
 
 C) Car Finance Loans
 
 Car finances availed by the Company from ICICI Bank is secured against
 respective motor cars against which the finances are availed.
 
 Amount repayable within a year Rs. 21.00 lacs.
 
 D) Working Capital Facilities
 
 (a) Working Capital Facility from United Bank of India is secured by
 hypothecation of Book Debts and Tangible Assets such as stocks, stores
 and spares on board the vessel as also against collateral security by
 way of first mortgage on one (AHTSV) of the Company.
 
 (b) Working Capital Facility from State Bank of Travancore is secured
 by pari passu first charge on all current assets including stores &
 spares, fuel, oil and book debts.
 
 C) Other Long Term Benefits
 
 The charge recognised in the Profit & Loss Account for Leave Encashment
 for the year is Rs. 56.00 Lacs (Previous Year Rs. 9.90 Lacs) and the
 closing liability is Rs. 27.33 Lacs (Previous Year Rs. 12.04 Lacs).
 
 (4) Change In Accounting Policy :
 
 During the year, the Company has with effect from April 1, 2008 adopted
 the principles enunciated in Accounting Standard (AS) 30, Financial
 Instruments : Recognition and Measurement in respect of hedge
 accounting and recognition and measurement of derivatives, in
 accordance with the recommendation of the Institute of Chartered
 Accountants of India.
 
 Accordingly, foreign exchange contracts (liability relating to
 acquisition of depreciable assets) entered into to hedge foreign
 currecy risk of firm commitments or highly probable forecast
 transaction (revenue streams) which have been designated as part of the
 hedging relationship and which qualify as effective cash flow hedges
 have been accounted in accordance with the principles of hedge
 accounting and the (gains) or losses on such designated hedging
 instruments amounting to Rs. 8,231.61 Lacs is recorded in the Hedge
 Reserve Account.
 
 In the Previous year, the effects of changes in foreign currency
 exchange rates on repayments of loans and revaluation of the
 outstanding foreign currency loans relating to accquisition of
 depreciable capital assets were accounted in the Profit and Losss
 Account - Rs 1,605.75 Lacs (credit).
 
 Consequent to the change in the afforesaid accounting policies, Hedge
 Reserve has been created for Rs. 8,231.16 lacs for the year ended as at
 31st March, 2009, instead of a charge to the Profit and Loss Account.
 
 The Company does not have any foreign exchange derivative exposure in
 the nature of forward rate options, currency and interest rate swaps
 and commodity future contracts.
 
 (5) Capital Commitment :
 
 Estimated amount of contracts remaining to be executed on account of
 capital expenses is Rs. 29,400.00 Lacs, against which an advance of Rs.
 1,916.81 Lacs has been paid.
 
 (6) Current Liabilities :
 
 As per the information available with the Company, there are no Micro
 and Medium Enterprises, as defined in the Micro small, Medium
 Enterprise 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.
 
 (7) Sundry Debtors includes Rs. 642.09 Lacs due from a wholly owned
 subsidiary, previous year Rs. 85.33 Lacs.
 
 (8) Garware Nylons Limited has been ordered to be wound up by the
 Bombay High Court and Bombay High Court has appointed Official
 Liquidator on 18th December, 1998. No provision for diminution in the
 value of investment of 35,050 equity shares valued at Rs.6.01 lacs has
 been made in the books.
 
 (9) Related Party Disclosure : a) List of Related Parties :
 
 Subsidiary Companies
 
 Garware Offshore International Services Pte. Ltd, Singapore Other
 related parties with whom transactions have taken place during the
 period
 
 Key Management Personnel
 
 Ashok B. Garware - Executive Chairman
 
 Aditya A. Garware - Vice Chairman and Managing Director
 
 (15) The figures for the previous period are for 15 months as against
 the current year which are for 12 months and as such are not strictly
 comparable. The previous periods figures have been regrouped whenever
 ncecessary to confirm to current years classification.
 
 (10) Segment Reporting :
 
 The Company is engaged in only one type of business i.e. Shipping
 business and there are no separate reportable segment as per Accounting
 Standards AS-17 Segment Reporting.