(a) Change in accounting policy
Presentation and disclosure of 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, for
preparation and presentation of its financial statements. Except
accounting for dividend on investments in subsidiary companies (see
below), the adoption of revised Schedule VI does not impact recognition
and measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
Dividend on investment in subsidiary companies
Till the year ended 31 March 2011, the company, in accordance with the
pre-revised Schedule VI requirement, was recognizing dividend declared
by subsidiary companies after the reporting date in the current year''s
statement of profit and loss if such dividend pertained to the period
ending on or before the reporting date. The revised Schedule VI,
applicable for financial years commencing on or after 1 April 2011,
does not contain this requirement. Hence, to comply with AS 9 Revenue
Recognition, the company has changed its accounting policy for
recognition of dividend income from subsidiary companies. In accordance
with the revised policy, the company recognizes dividend as income only
when the right to receive the same is established by the reporting
(b) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
(c) Tangible Fixed Assets
Fixed assets are stated at cost, net of accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Gains or losses arising from derecognition of fixed
assets are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in the
statement of profit and loss when the asset is derecognized.
Assets held for disposal are stated at lower of their net book value or
net realisable value and are shown separately in financial statements.
(d) Depreciation on tangible fixed assets
Depreciation is provided using the Straight Line Method as per the
useful lives of the assets estimated by the management, which is higher
than at the rates prescribed under schedule XIV of the Companies Act,
Machinery/ insurance spares are depreciated over the balance useful
life of the respective asset or the mother vessel, whichever is lower.
Fixed assets individually costing less than Rs. 5 thousand are fully
depreciated in the year of purchase.
(e) Intangible assets
Computer software is capitalised and amortised on a straight-line basis
over its useful life, which is estimated as five years.
(f) Impairment of tangible and intangible assets
The carrying amounts of all assets are reviewed at each balance sheet
date, if there is any indication of impairment based on internal /
external factors, whether they are recorded in excess of their
recoverable amounts, and where carrying values exceed this estimated
recoverable amount, assets are written down to their recoverable
amount. The recoverable amount is the greater of the asset''s net
selling price and value in use. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset. In determining
net selling price, recent market transactions are taken into account,
if available. If no such transactions can be identified, an appropriate
valuation model is used.
Investments which are readily realisable and intended to be held for
not more than a year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
Inventories consist of stores and consumables for use in running of
fleets. These are valued at lower of cost and net realizable value.
Cost is determined on weighted average basis. Inventory items
individually costing less than Rs 5 thousand are charged to consumption.
(i) Cash and cash equivalents
Cash and cash equivalents in cash flow statement comprise cash in hand
and at bank in current and foreign currency accounts. Term deposits
having maturity of three months or less are considered as cash
(j) Retirement and other employee benefits
i. Retirement benefits in the form of Provident Fund are a defined
contribution scheme and the contributions are charged to the Statement
of Profit and Loss for the year when the contributions to the
respective funds are due. There are no other obligations other than
the contribution payable to the respective fund.
ii. Contribution to Superannuation Fund, a defined contribution
scheme, is made to the Life Insurance Corporation of India, as per the
arrangement with them, and the contributions are charged to the
Statement of Profit and Loss for the year when the contributions to the
respective funds are due.
iii. Gratuity, a defined benefit scheme is covered by a Group Gratuity
cum Life Assurance Policy with Life Insurance Corporation of India
(LIC). Annual contribution to the fund as determined by LIC is
expensed in the year of contribution. The shortfall between the
accumulated funds available with LIC and liability as determined on the
basis of an actuarial valuation is provided for as at the year-end. The
actuarial valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to statement of profit and
loss as per projected unit credit method and are not deferred.
iv. Short term compensated absences are provided for based on
v. The company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains/losses are immediately taken to the statement
of profit and loss and are not deferred.
(k) Foreign Currency transactions
i. Initial recognition
Foreign currency transactions are recorded in the reporting currency by
applying, to the foreign currency amount, the exchange rate between the
reporting currency and the foreign currency at the date of the
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
iii. Exchange differences
Exchange differences arising on the settlement of monetary items at
rates different from those at which they were initially recorded during
the period, or reported in previous financial statements, are
recognised as income or as expenses in the period in which they arise.
iv. Forward Exchange Contracts not intended for trading or speculation
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the period in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
(l) Income Tax
Tax expense comprises of Current Tax. Current Income tax liability on
shipping income is determined based on the net tonnage of each of its
vessels, in accordance with section 115VT of the Income Tax Act, 1961.
Income other than shipping income is taxed in accordance with the other
provisions of the Income Tax Act, 1961. Further, with the applicability
of above section, there is no timing difference between taxable and
book profit. Therefore, there is no deferred tax.
(m) Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
i. Charter hire income
Charter hire income comprises income from charter hire of multi-support
vessels and income from supply of marine and diving crew and services.
Charter hire revenues are recognised at contracted rates over the
charter period. Revenues from supply of crew and services are
classified as other operating revenue and recognised on rendering of
the service, based on day rate charges as per the terms of the
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Claims are accounted when it is reasonably certain that the ultimate
collections will be received.
iv. Rental income
Rental income is accrued on time basis, by reference to agreements
(n) Operating lease
Leases where the leaser effectively retains substantially all the risks
and benefits of the ownership of the lease term, are classified as
operating leases. Operating lease payments are recognised as an expense
in the Profit and Loss Account on a straight line basis over the lease
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
embodying economic benefits, will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best
estimate required to settle the obligation at the balance sheet date.
These are reviewed at each balance sheet date and adjusted to reflect
the current best estimates.
(p) Segment Reporting
i. Primary Business Segments
The Company is primarily engaged in a single segment business of
providing support services including marine, construction and diving
services to offshore oilfields in India and abroad, and accordingly,
this is the only primary reportable segment.
ii. Secondary Geographical Segments
Secondary segmental reporting is based on geographical location of the
client. The geographical segment has been disclosed based on revenues
within India and revenues outside India.
(q) Earnings per Share
Basic earnings per share are calculated by dividing the net profit for
the period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period. For the purpose
of calculating diluted earnings per share, the net profit for the
period attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the
effects of diluted potential equity shares, if any. The Company does
not have any diluted equity shares as at the period end.
(r) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The company does not
recognize a contingent liability but discloses its existence in the
(b) Terms/rights attached to equity shares
The company has only one class of equity shares having par value of Rs 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
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