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India’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services Provider

Great Offshore is India’s leading integrated offshore oilfield services provider to the upstream

oil and gas exploration industry.

Since its first venture in 1983 – nearly a quarter of a century ago – your Company has grown

steadily and is today one of the largest companies in the private sector of the oil and gas space

in India. In fact, it is the only private offshore services contractor in India offering a wide

spectrum of offshore services through its diverse fleet of exploratory rigs, offshore support vessels

and construction barges. The Company also offers port and terminal support services.

Your Company’s philosophy of upgrading and modernising its fleet continually ensures that

all its assets are being well maintained and equipped with state of the art technology.

Your Company operates within India and also has a growing international presence with some

of its vessels deployed in the Middle East, North Sea, South Africa and South East Asia.

Headquartered in Mumbai, your Company has representative offices in Malaysia and the United

Arab Emirates.

Your Company’s commitment is to safety, and it works tirelessly to ensure that both its onshore

and offshore operations are carried out with the greatest care, diligence and respect for the

environment. It is a recipient of numerous safety awards in all the regions in which it operates.

Your Company is also audited and certified to international standards and has been awarded

ISO:9001 and ISO:14001 certifications.

Enterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that drive

Great Offshore.Great Offshore.Great Offshore.Great Offshore.Great Offshore.

Project Execution Project Execution Project Execution Project Execution Project Execution

Eleven walkway bridges, totaling to 397.22 metres long, were installed for Ratnagiri

Gas and Power Private Limited (RGPPL) at Dabhol, Maharashtra.

The Project was completed on schedule on 31st December, 2007.

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Contents

Company Profile ....................................................................................................... 02

Chairman’s Letter ..................................................................................................... 03

Notice ....................................................................................................................... 04

Directors’ Report ...................................................................................................... 15

Corporate Governance ............................................................................................. 26

Asset Profile .............................................................................................................. 40

Financial Disclosures .............................................................................................. 42

Consolidated Accounts ............................................................................................. 73

Statement Pursuant to Section 212 .......................................................................... 94

Subsidiaries ............................................................................................................... 95

Third Annual General Meeting on Thursday, 10th July, 2008 at 4 p.m. at Rama Watumull Auditorium,Kishinchand Chellaram College, Dinshaw Wacha Road, Churchgate, Mumbai – 400 020.

Third Annual Report 2007 - 08

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Board of DirectorsMr. Sevantilal J. Parekh

Chairman

Mr. Vijay Kantilal Sheth

Vice Chairman cum Managing Director

Mr. Naresh Chandra

Director

Mr. Shailesh V. Haribhakti

Director

Mr. Rajiv K. Luthra

Director

Mr. Suresh Balasubramaniam

Director

Mr. Madhava Menon Shankar Narayanan

Director

Head – Legal and SecretarialMr. Badrinath Durvasula

Board Committees

Audit Committee

Mr. Suresh Balasubramaniam (Chairman)

Mr. Sevantilal J. Parekh (Member)

Mr. Shailesh V. Haribhakti (Member)

Mr. Madhava Menon Shankar Narayanan (Member)

Remuneration Committee

Mr. Sevantilal J. Parekh (Chairman)


Mr. Suresh Balasubramaniam (Member)

Shareholders’ / Investor Grievance Committee

Mr. Suresh Balasubramaniam (Chairman)

Mr. Sevantilal J. Parekh (Member)

Mr. Vijay Kantilal Sheth (Member)

Securities Allotment Committee

Mr. Sevantilal J. Parekh (Chairman)

Mr. Vijay Kantilal Sheth (Member)


Mr. Suresh Balasubramaniam (Member)

Solicitors & AdvocatesM/s Luthra & Luthra

AuditorsM/s Kalyaniwalla & Mistry, Chartered Accountants

Statutory Auditors

M/s Ashok Kapadia & Co., Chartered Accountants

Internal Auditors

BankersABN AMRO BankHong Kong and Shanghai Banking Corporation LimitedICICI Bank LimitedDeutsche BankState Bank of India

Registered OfficeEnergy House,81, Dr. D. N. Road,Mumbai – 400 001, IndiaTelephone No :+91 22 6635 2222Fax no. +91 22 22673639e-mail: [email protected]: www.greatoffshore.com

Registrar & Transfer AgentsTSR Darashaw Limited6-10 Haji Moosa Patrawala Industrial Estate20 Dr. E Moses Road,Mahalaxmi, Mumbai – 400 011.Tel No: (022) 6656 8484Fax No: (022) 6656 8494e-mail : [email protected]: www.tsrdarashaw.com

International OfficesUnited Arab EmirateP.O.Box 2756Al Khaleej Centre,Office No.613, Mankhool Road,Bur Dubai, Dubai,U.A.E.e-mail : [email protected] No : +97 14 3558285Fax No.+97 14 3558286

MalaysiaMalaysia Level 36, Menara Citibank 165,Jalan Ampang 50450 Kuala Lumpur,Malaysia.e-mail : [email protected] No : +603 2169 6256Fax : +603 2169 6258

Company Profile

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Dear Shareholders,

I am pleased to communicate with you thedevelopments of your Company on completion ofanother year of business operations.

On behalf of the Board, I take pride in informing thatyour Company is the first Indian offshore oil fieldservices Company to operate in the waters of Shakhalin,Russia. Your Company continues to leverage its domaincapabilities in the marine engineering and constructionservices and has completed several noteworthy turnkeyprojects.

For the financial year ended March 31, 2008, theCompany on a stand alone basis reported a total incomeof Rs.75,031 lakhs and a profit after tax of Rs.20,321lakhs. The Board of Directors have proposed a final

equity dividend of Rs.8 per share. This, in aggregate, with the earlier declared interim dividendof Rs.8 per share, results in a total equity dividend of 160% on face value. At Rs.16 per equityshare, total dividend outflow is to the tune of Rs.7,134 lakhs ( including tax thereof) representinga payout ratio of 35.11%.

I thank our existing shareholders and subscribers to the optionally convertible redeemablepreference shares aggregating Rs. 15,000 lakhs and foreign currency convertible bonds amountingto US$ 42 million for their support.

I am confident that your Company is adequately positioned to exploit the emerging opportunitiesin the markets it operates and will continue its efforts with a view to provide returns to all itsstakeholders.

With best wishes,

Sevantilal J. ParekhChairman

Chairman’s letter to shareholders

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NOTICENOTICE is hereby given that the THIRD ANNUAL GENERAL MEETING of the Shareholders ofGREAT OFFSHORE LIMITED will be held on Thursday, July 10, 2008 at 4.00 p.m at RamaWatumull Auditorium, Kishinchand Chellaram College, Dinshaw Wacha Road, Churchgate,Mumbai – 400 020, to transact the following business:

ORDINARY BUSINESS

1. To receive, consider and adopt the Audited Balance Sheet as at 31st March, 2008, the Profitand Loss Account for the year ended on that date, together with the Reports of the Board ofDirectors and the Auditors thereon.

2. To declare a pro-rata dividend at the rate of 5.66% on Optionally Convertible RedeemablePreference Shares for the financial year 2007-08.

3. To declare final dividend at the rate of Rs.8 per equity share for the financial year2007-08.

4. To appoint a director in place of Mr. Naresh Chandra who retires by rotation and beingeligible, offers himself for re-appointment.

5. To appoint a director in place of Mr. Rajiv K. Luthra who retires by rotation and beingeligible, offers himself for re-appointment.

6. To appoint M/s. Kalyaniwalla & Mistry, Chartered Accountants, the retiring Auditors asStatutory Auditors of the Company to hold office from the conclusion of this Annual GeneralMeeting until the conclusion of the next Annual General Meeting of the Company and to fixtheir remuneration.

SPECIAL BUSINESS

7. To consider, and if thought fit, to pass with or without modification(s), the following resolutionas an Ordinary Resolution.

“RESOLVED THAT Mr. Madhava Menon Shankar Narayanan, who was appointed as anAdditional Director of the Company with effect from October 18, 2007, by the Board ofDirectors and who holds office upto the date of this Annual General Meeting of the Companyunder Section 260 of the Companies Act, 1956 and Article 148 of the Articles of Associationof the Company and in respect of whom a notice under Section 257 of the Companies Act,1956 and Article 163 of the Articles of Association of the Company has been received froma Member signifying his intention to propose Mr. Madhava Menon Shankar Narayanan as acandidate for the office of Director of the Company, be and is hereby appointed as aDirector of the Company whose period of office shall be liable to determination by retirementof Directors by rotation.”

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8. To consider, and if though fit, to pass with or without modification(s), the following resolutionas an Ordinary Resolution.

“RESOLVED THAT in partial modification of the resolution passed by the Shareholders atthe Annual General Meeting held on August 29, 2007, Mr. Vijay Kantilal Sheth be paid acommission of Rs.720 lakhs as Managing Director of the Company for the year endedMarch 31, 2008.”


“RESOLVED THAT in partial modification of the resolution passed by the Shareholders inthe Annual General Meeting held on August 29, 2007 and pursuant to Sections 198,269,309 and other relevant provisions of the Companies Act, 1956 read with Schedule XIIIto the said Act, Mr. Vijay Kantilal Sheth, Managing Director be and is hereby re-designatedas Vice Chairman cum Managing Director of the Company with effect from April 30, 2008.

RESOLVED FURTHER THAT the terms of appointment of Mr. Vijay Kantilal Sheth, ViceChairman cum Managing Director be and is hereby revised as under, with effect from April1, 2008 for the remaining period of four years ending on March 31, 2012.

Terms:

a. Salary - Consolidated Salary of Rs.180.00 Lakhs per annum, which includes Company’scontribution to Provident Fund, Superannuation Fund and all other allowances.

b. Commission - Payment of Commission calculated with reference to the net profit of theCompany for each financial year as may be fixed by the Board of Directors not exceeding4 times of the annual salary referred to at (a) above, subject to the ceiling laid down inSection 309 of the Companies Act, 1956.

c. Perquisites:

(1) Provision of three (3) cars, the entire expenditure of which will be borne by theCompany.

(2) Provision of telecommunication facilities.

(3) Leave encashment as per rules of the Company.

(4) Reimbursement of medical expenses incurred for himself and his family.

(5) Personal accident insurance, the premium of which shall not exceed Rs. 35,000/-per annum.

(6) Housing Loan, subject to rules of the Company.

(7) Pension scheme as per Company rules.

(8) Club fees, subject to a maximum of two clubs.

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d. In the event of absence or inadequacy of profit in any financial year, Mr. Vijay KantilalSheth, Vice Chairman cum Managing Director, shall be paid as minimum remuneration,such amount as the Board may decide subject to the upper limit, if any, prescribedunder the Companies Act, 1956, from time to time.

e. Mr. Vijay Kantilal Sheth shall be entitled to retirement benefits as contemplated in the“Retirement Benefits Scheme for the Whole Time Directors of the Company”, dulyrevised and approved by the Remuneration Committee, subject to compliance with andlimits prescribed, if any, under the Companies Act, 1956 from time to time.

f. In the event of loss of his office as Vice Chairman cum Managing Director, Mr. VijayKantilal Sheth shall be paid compensation in the manner and to the extent providedunder Section 318 of the Companies Act, 1956.”


“RESOLVED THAT in supersession of the Resolution passed at the Annual General Meetingof the Company held on August 29, 2007 and pursuant to the provisions of Section 293 (1)(d) and other applicable provisions, if any, of the Companies Act, 1956 and the Articles ofAssociation of the Company, consent of the Company be and is hereby accorded to theBoard of Directors of the Company (“The Board”) for borrowing from time to time any sumor sums of money on such security and on such terms and conditions as the Board maydeem fit, notwithstanding that the money to be borrowed together with the money alreadyborrowed by the Company (apart from temporary loans obtained or to be obtained from theCompany’s Bankers in the ordinary course of business) including rupee equivalent of Foreigncurrency loans (such rupee equivalent being calculated at the exchange rate prevailing ason the date of the relevant foreign currency agreement) may exceed, at any time, theaggregate of the paid up capital of the Company and its free reserves, that is to say, reservesnot set apart for any specific purpose, provided however, the total amount so borrowed inexcess of the aggregate of the paid-up share capital of the Company and its free reservesshall not at any time exceed Rs. 5000,00,00,000/- (Rupees Five thousand crores only).

RESOLVED FURTHER THAT consent of the Company be and is hereby accorded pursuantto the provisions of Section 293(1)(a) of the Companies Act, 1956 to the Board of Directorsof the Company (the Board) to mortgage and/or charge in addition to the mortgage(s)/charge(s) created by the Company, in such form and manner and with such ranking and atsuch time(s) and on such terms as the Board may determine or think fit the whole orsubstantially the whole or any one or more of the Company’s undertakings or all itsundertakings , including all or any part of the movable and/or immovable properties of theCompany wherever situated both present and future, and/or create a floating charge on allor any part of the immovable property of the Company and the whole or any part of theundertaking or undertakings of the Company together with power to take over the managementof the business and concern of the Company in certain events of default, in favour of theCompany’s Bankers and Development/Investment Financial Institutions (hereinafter referredto as the “Lenders”) / Debenture Trustees to secure any Loans Guarantee assistance, Working

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Capital arrangement, etc. already availed/ to be availed by the Company together withinterest thereon at the agreed rate, compound interest, additional interest, liquidated damages,premium on prepayment, costs, charges, expenses and other monies payable by the Companyto the said Lenders and/or any issue of Non Convertible Debentures and/or Compulsorily orOptionally, Fully or Partly Convertible Debentures, within the overall ceiling prescribed bythe Members of the Company, in terms of Section 293(1)(d) of the Companies Act, 1956.

RESOLVED FURTHER THAT the Board be and is hereby authorised to execute all suchdeeds, documents and writings, as may be necessary for creating the aforesaid mortgagesand/or charges and to do all such acts, deeds, matters and things as may be necessary,desirable or expedient to give effect to the above resolution.”

By Order of the Board

Badrinath DurvasulaHead – Legal and Secretarial

Place : MumbaiDate : April 30, 2008

Registered Office:Energy House,81, Dr. D. N. Road,Mumbai-400001

NOTES

1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TOAPPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF / HERSELF ANDSUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY.

2. The instrument(s) appointing the proxy, if any, shall be deposited at the Registered Office ofthe Company not less than forty-eight (48) hours before the time of holding the meeting.

3. The relative explanatory statement pursuant to Section 173(2) of the Companies Act, 1956,in respect of the businesses under items 7 to 10 set out above and the details under Clause49 of the Listing Agreement with Stock Exchanges in respect of Directors proposed to beappointed/re-appointed at this Annual General Meeting is annexed hereto.

4. The Register of Members and Share Transfer Books of the Company will remain closed fromJune 27, 2008 to July 04, 2008 (both days inclusive).

5. Members are requested to intimate the Registrar and Share Transfer Agents of the Company:TSR Darashaw Limited, 6-10, Haji Moosa Patrawala Industrial Estate, 20, Dr E Moses Road,Mahalaxmi, Mumbai - 400011 of any change in their address in respect of equity sharesheld in physical mode and to their Depository Participants in respect of equity shares heldin dematerialized form.

6. Members/Proxies are requested to bring the attendance slip duly filled in.

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ANNEXURE TO NOTICE

The Explanatory Statement pursuant to Section 173 (2) of the Companies Act, 1956 for itemnumbers 7 to 10 of the accompanying notice is as under:

Item Nos. 7

Mr. Madhava Menon Shankar Narayanan was appointed by the Board of Directors of yourCompany at its Meeting held on October 18, 2007 as an Additional Director with effect fromOctober 18, 2007. By virtue of Section 260 of the Companies Act, 1956 read with Article 148 ofthe Articles of Association of your Company, Mr. Madhava Menon Shankar Narayanan wouldhold only upto the date of the ensuing Annual General Meeting.

Your Company has received a notice under Section 257 of the Companies Act, 1956 from aMember, signifying his intention to propose the name of Mr. Madhava Menon Shankar Narayananfor appointment as a Director of your Company.

He is a Managing Director of Carlyle India Advisors Pvt. Ltd. He spent six years at HathwayInvestments and during that time served as Managing Director and CEO. He was also withDeutsche Bank Capital Partners, based in Hong Kong, as a Director covering South Asia andIndia. He has led or been associated with a number of prominent private equity investments inIndia, including Johnson Tiles, Exide Industries, Hathway Cable, Asianet Satellite Communications,Pushpa Polymers, Tata Infomedia and AFL Limited.

He has received a Post Graduate Diploma in Management from XLRI Jamshedpur where he wasa Gold Medalist and stood first in the graduating class in the area of Finance and Accounting,and a Bachelor of Technology degree in Civil Engineering from the Indian Institute of TechnologyNew Delhi.

None of the Directors other than Mr. Madhava Menon Shankar Narayanan is concerned orinterested in this resolution.

Your Directors recommend the resolution as set out at Item No 7 of the Notice for yourapproval.

Item No. 8

The Shareholders at the Annual General Meeting of your Company held on August 29, 2007approved the payment of commission as a part of terms of re-appointment of Mr. Vijay KantialSheth as Managing Director to be decided by the Board of Directors not exceeding three timesof his Annual Salary (Rs 120 lakhs) and subject to the ceiling laid down in Section 309 of theCompanies Act, 1956.

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Considering the responsibility and dedicated efforts of Mr. Vijay Kantial Sheth in leading theCompany to a position of strength, your Board on the recommendation of the RemunerationCommittee has decided to pay Mr. Vijay Kantial Sheth as Managing Director, a Commission ofRs.720 lakhs for the year ended March 31, 2008, which is in excess of the maximum limitapproved by the Shareholders at the said meeting.

The approval of Shareholders is therefore sought for the payment of additional Commissionamounting to Rs.360 lakhs to Mr. Vijay Kantilal Sheth over and above the maximum limit ofRs.360 lakhs earlier approved by the Shareholder’s in the said Meeting for the year endedMarch 31, 2008.

None of the Directors other than Mr. Vijay Kantilal Sheth is concerned or interested in thisresolution.


Item No. 9:

Mr. Vijay Kantilal Sheth was appointed as the Managing Director of your Company for theperiod of five years with effect from April 1, 2007.

Mr. Vijay Kantilal Sheth is the only Executive Director, who has onerous responsibility to leadand steer the Company from the position of strength it is in today for a sustained developmentas the Company moves forward.

The Board of Directors at their Meeting held on April 30, 2008 approved the re-designation ofMr. Vijay Kantilal Sheth, Managing Director as the Vice Chairman cum Managing Director andalso revised the terms of his appointment as under, for the remaining period of four years endingon March 31, 2012 based on the recommendation of the Remuneration Committee with effectfrom April 1, 2008.

Terms:

a. Salary - Consolidated Salary of Rs. 180.00 Lakhs per annum, which includes Company’scontribution to Provident Fund, Superannuation Fund and all other allowances.

b. Commission - Payment of Commission calculated with reference to the net profit of theCompany for each financial year as may be fixed by the Board of Directors not exceeding 4times of the Annual Salary referred to at (a) above, subject to the ceiling laid down inSection 309 of the Companies Act, 1956.

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c. Perquisites:

(1) Provision of three (3) cars, the entire expenditure of which will be borne by the Company.

(2) Provision of telecommunication facilities.

(3) Leave encashment as per rules of the Company.

(4) Reimbursement of medical expenses incurred for himself and his family.

(5) Personal accident insurance, the premium of which shall not exceed Rs. 35,000/- perannum.

(6) Housing Loan, subject to rules of the Company.

(7) Pension scheme as per Company rules.

(8) Club fees, subject to a maximum of two clubs.

d. In the event of absence or inadequacy of profit in any financial year, Mr. Vijay KantilalSheth, Vice Chairman cum Managing Director, shall be paid as minimum remuneration,such amount as the Board may decide subject to the upper limit, if any, prescribed underthe Companies Act, 1956, from time to time.

e. Mr. Vijay Kantilal Sheth shall be entitled to retirement benefits as contemplated in the“Retirement Benefits Scheme for the Whole Time Directors of the Company”, duly revisedand approved by the Remuneration Committee, subject to compliance with and limitsprescribed, if any, under the Companies Act, 1956 from time to time.

f. In the event of loss of his office as Vice Chairman cum Managing Director, Mr. VijayKantilal Sheth shall be paid compensation in the manner and to the extent provided underSection 318 of the Companies Act, 1956.

None of the Directors other than Mr. Vijay Kantilal Sheth is concerned or interested in thisresolution.


Item No. 10

At the Annual General Meeting of the Members held on August 29, 2007, approval of theMembers was sought to borrow funds upto Rs 2,000 crores in excess of the paid up share capitaland free reserves of the Company. The paid up share capital and free reserves of the Company

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have since increased and as at March 31, 2008 the same stood at Rs 79,947 lakhs. As on March31, 2008, the Company had outstanding borrowings of Rs 93,014 lakhs.

The Company is constantly evaluating new business opportunities and would need funds tosupport its business plans. Hence, the Company would need funds to access from Banks,Financial Institutions and other lenders from time to time by way of long term loans for thepurpose of capital expenditure.

The Company may be required to secure some of the borrowings by creating mortgage/chargeon all or any of the movable or immovable properties of the Company in favour of the lender(s)in such form, manner and ranking as may be determined by the Board of Directors of theCompany from time to time in consultation with the lender(s).

Accordingly, the consent of the Shareholders is being sought for the enhancement of theborrowing limits and to secure such borrowings by mortgage/charge on any of the movable and/or immovable properties and/or the whole or any part of the undertaking(s) of your Company asset out in the resolution at Item No. 10 of the Notice.

None of the Directors are concerned or interested in this resolution.

Your Directors recommend the resolution as set out at Item No. 10 of the Notice for yourapproval.

By Order of the Board

Badrinath DurvasulaHead – Legal and Secretarial

Place : MumbaiDate : April 30, 2008

Registered Office:

Energy House,81, Dr. D. N. Road,Mumbai-400 001

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INFORMATION AS REQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT IN RESPECTOF DIRECTORS BEING APPOINTED/RE-APPOINTED.

1. Mr. Naresh Chandra

Mr. Naresh Chandra is a Post Graduate in Mathematics and also a trained IAS. He hasspecial expertise in the field of Administrative, Economic and Legal reforms, is a goodanalyst and a valuable advisor to the Government of India.

He was deputed to the Government of India in 1965 and worked as a Deputy Secretary inthe Ministry of Agriculture and further on he also held positions in the Ministry of Industryas Joint Secretary (1977-1981), Secretary, Water Resources (1987-1989), Defence Secretary,(1989), Home Secretary, (1990) and Cabinet Secretary (1990-1992). He also led Governmentof India delegations to Jordan, Iraq, Kuwait, UAE, Syria, Algeria and Libya.

On retirement, Mr. Naresh Chandra was appointed as a Senior Advisor to the Prime Ministerof India (1992-1995).

He served in Washington DC as the Ambassador of India to USA (1996-2001), concurrentlyaccredited as the High Commissioner to the Commonwealth of the Bahamas and as PermanentObserver to the Organisation of American States.

Mr. Naresh Chandra holds Nil equity shares of the Company.

The details of his Directorship and Membership of Committees of the Board in other PublicLimited Companies are as below:

Directorship in other Membership of Committees of the BoardPublic Limited Companies in other Public Limited Companies

Name of the Company Chairman/Member Committee

Hindustan Motors Limited Chairman Audit Committee &Shareholders’/Investors’Committee

Electrosteel Castings Limited Member Audit Committee

Bajaj Auto Limited Member Audit Committee &Shareholders’/Investors’Committee

AVTEC Limited — —

ACC Limited Member Audit Committee

Balrampur Chini Mills Limited — —

Tata ConsultancyServices Limited Member Audit Committee

Cairn India Limited Member Audit Committee &Shareholders’/Investors’Committee

Gammon Infrastructure — —Projects Limited

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2. Mr. Rajiv K. Luthra

Mr. Rajiv K. Luthra is an attorney at law and is the Founder and Managing Partner of Luthra& Luthra Law Offices, one of the largest law firms in India. He is a member of various barassociations. He has been appointed by the Government of India on the Advisory Board tothe Competition Commission of India. He has successfully handled various disinvestments,privatization and restructuring assignments and has worked on some of the largest mergersin Indian Corporate history.

Mr. Rajiv K. Luthra holds Nil equity shares of the Company.




Avery India Limited — —

BHW Home Finance Limited — —

C J International Hotels Limited Member Audit Committee

Heritage Resorts Limited — —

Hotel Scopevista Limited — —

Pench Power Limited — —

Silverlink Holdings Limited — —

Symphony InternationalHoldings Limited Chairman Audit Committee

Velocient Technologies Limited — —

The HSBC Limited — —

3. Mr. Madhava Menon Shankar NarayananMr. Madhava Menon Shankar Narayanan is a Managing Director of Carlyle India AdvisorsPvt. Ltd. He spent six years at Hathway Investments and during that time served as ManagingDirector and CEO. He was also with Deutsche Bank Capital Partners, based in Hong Kong,as a Director covering South Asia and India. He has led or been associated with a numberof prominent private equity investments in India, including Johnson Tiles, Exide Industries,Hathway Cable, Asianet Satellite Communications, Pushpa Polymers, Tata Infomedia andAFL Limited. Mr. Madhava Menon Shankar Narayanan has received a Post Graduate Diploma inManagement from XLRI Jamshedpur where he was a Gold Medalist and stood first in thegraduating class in the area of Finance and Accounting and a Bachelor of Technologydegree in Civil Engineering from the Indian Institute of Technology, New Delhi.

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Mr. Madhava Menon Shankar Naryanan holds Nil equity shares of the Company.

The details of his Directorship and Membership of Committees of the Board in other PublicLimited Companies is are below:



Repco Home Finance Limited Member Audit Committee

Claris Lifesciences Limited Member Audit Committee

Elitecore Technologies Limited — —

Allsec Technologies Limited Member Audit Committee &Shareholders’ Investors’Committee

Carlyle India Advisors Limited — —

4. Mr. Vijay Kantilal Sheth

Mr. Vijay Kantilal Sheth is a commerce graduate from the University of Mumbai. Aftergraduation he received training for about 15 months with Brovigs, Viking Shipping Co. A.S.,Frenley & Egers Chartering Co. Ltd and with American Express International BankingCorporation, London. He joined The Great Eastern Shipping Co. Ltd in February 1977. Hethen joined the Asian Institute of Management (Harvard affiliated) at Manila and obtained adegree of Master of Business Management.

He has wide experience and expertise in specific functional areas including market expertisein drilling, oil and gas exploration and marine logistics.

Mr. Vijay Kantilal Sheth holds 1840 equity shares of the Company.




The Bombay Sugar Market Ltd — —

Deep Water Services (India) Ltd — —

15

DIRECTORS’ REPORT

TO THE MEMBERS OFGREAT OFFSHORE LIMITED

The Directors hereby present the Third Annual Report on the business and operations of theCompany together with the Audited Financial Accounts of the Company for the Financial Yearended March 31, 2008.

(Rs. in lakhs)

Particulars 2007-08 2006-07

Total Income 75031 54465

Total Expenditure 52996 38187

Profit before tax 22035 16278

Less / Add : Provision for Tax :

I. Current 2009 2409

II. Deferred (345) (334)

III. Fringe Benefit Tax 50 61

Profit for the year after tax 20321 14142

Less : Transfer to Tonnage Tax Reserve Account underSection 115VT of the Income Tax Act, 1961 4000 2000

Add: Surplus brought forward from previous year 12176 6011

Amount available for appropriation 28497 18153

Appropriations

Transfer to Foreign Currency Fluctuation Reserve 1000 —

Transfer to General Reserve 2500 2500

Interim Dividend on Equity Shares 3049 3049

Proposed Final Dividends

on Preference Shares 848

on Equity Shares 3049

Tax on Dividends 1183 428

Balance Carried Forward 16868 12176

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During the Financial Year 2007-08, the Company recorded a total income of Rs.75,031 lakhsand earned a Profit Before Interest Depreciation and Tax of Rs.38,439 lakhs.

Dividend on Preference Shares

Your Directors are pleased to recommend a pro-rata dividend of 5.66% on Optionally ConvertibleRedeemable Preference Shares (OCRPS) for the financial year 2007-08 as per the terms of offer.The pro-rata dividend on the OCRPS amounts to Rs. 992.54 lakhs (including tax thereof).

Dividend on Equity Shares

During the year, your Directors declared and paid an interim dividend of Rs. 8/- per equityshare resulting in an outflow of Rs.3,567 lakhs (including tax thereof).

The Board of Directors are pleased to recommend a final dividend of Rs. 8/- per equity share forthe financial year 2007-08 amounting to Rs.3,567 lakhs (including tax thereof).

Hence, the total equity dividend post approval of the shareholders at the ensuing AnnualGeneral Meeting is 160% of face value (i.e. Rs.16 per share) resulting in an aggregate outflow ofRs.7,134 lakhs (including tax thereof) representing a dividend payout ratio of 35.11%.

Management Discussion and Analysis

Energy fuels industry, feeds transport and is a significant contributing factor in propelling economicgrowth momentum. Encouraging energy, security and its independence is a constant endeavourof governments worldwide.

Strong hydrocarbon demand in developing economies, in conjunction with the constraints inexploiting existing reserves and challenges faced in exploring new discoveries have redefined‘spare capacity’ attracting aggressive investments in the sector. Oil Companies have thus, adopteda twin strategy: on the one hand, to improve the recovery yields of existing producing wells andon the other hand, to pursue efforts in discovering and developing new fields.

Exploration and production

Demand growth for oil / gas

Global Scenario – Rapidly rising demand for hydrocarbons and volatile oil and gas prices areproviding fundamental strength to the Exploration & Production (E & P) Sector. As a consequence,the demand for offshore assets and other services is on the rise.

Scenario in India – India’s rapidly growing demand and spiralling hydrocarbon import bill posesa major challenge in sustaining economic growth. With ageing oil fields, domestic explorationprogrammes have never been as strong as before.

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Under the first six rounds of New Exploration Licensing Programme (NELP), 154 blocks wereawarded of which around 60% (94 blocks) are offshore. Of these offshore blocks, 64% are deepwater blocks. As per the Directorate General of Hydrocarbons of the eligible 3.14 millionsquare kms of sedimentary area, 2.15 million square kms are being licensed. Approximately58% is located offshore with 0.86 million sq kms being located in deep waters.

Company’s Performance

Drilling Activities

On completion of the Companies contract with ONGC Videsh Ltd., “Kedarnath” resumed herprevious contract with ONGC on the west coast of India. “Badrinath” resumed operations onthe west coast of India under her contract with Deep Water Services (India) Ltd. (a whollyowned subsidiary of the Company) in September 2007, post dry dock.

Offshore Logistics & Support Services

The aggregate tonnage of these assets registered a utilization of around 89% as against 86% inthe previous year. During the year, your Company entered into a mix of long term and spotfixtures. The fleet, comprising of two drilling vessels, twenty six offshore support vessels, elevenharbour tugs, one construction barge and one heavy load carrier, totaling to forty (40) vesselswere deployed with global and Indian charters. Petronas Carigali , Chaston Navigation, BehteraOffshore , Total E & P, Energy Africa Kudu (Tullow Oil), P T Aquaria Shipping, Jamil Operations& Maintenance Co. and Dockwise Shipping B V, etc. are some of your Company’s existingglobal clients whereas Hercules Offshore, Allseas Marine and Leighton Contractor (India) Pvt.Ltd. are some of the Indian clients.

Marine Engineering Services

During the year, the completion of the revamping of existing free gas module at SHG Platformfor handling condensate at SHG/SHP Platform and the installation of walkways at the jetty headfor the LNG Terminal for Ratnagiri Gas and Power Private Limited (RGPPL) at Dabhol, Maharashtrawere a vital part of success that your Company takes pride in sharing with you. ONGC awardedyour Company the NC Platform Revamp Project, which is presently under execution in consortiumwith Supreme Offshore Construction & Technical Services Ltd., Mumbai.

On completion of her previous contract with British Gas, “Gal Constructor” was chartered toDolphin Energy (Qatar) after which she worked for Dolphin Offshore, Mumbai on the westcoast of India. “Gal Constructor” registered a utilization of around 84% during the year asagainst 56% in the corresponding year.

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Port and Terminal Services

The 11 “harbour tugs” continued their existing contracts with the port administration andrecorded satisfactory results with an average utilization of 90% as against 96% in the previousyear.

Fleet Profile

As on March 31, 2008 the fleet of 40 vessels comprising of 2 drilling vessels, a constructionbarge, 26 offshore support vessels and 11 harbour tugs. During the year, the Company tookdelivery of a new built Anchor Handling Tug Supply Vessel (AHTSV) which entered service ona two year charter with Gujarat State Petroleum Corporation Ltd (GSPCL).

The Company acquired a second hand Heavy Load Carrier Vessel, which is currently undergoingrefurbishment and upgradation and thereafter is due to commence operations.

The Company also sold and delivered a 1983 built AHTSV during the fourth quarter of financialyear 2007-08.

New building contracts on order aggregating around USD 230 million include a multi supportvessel (delivery expected during mid of the second quarter of the financial year 2009-10) and ajack up rig (delivery expected during the fourth quarter of the financial year 2008-09).

Sector Outlook

Assets servicing the Oil and Gas Sector are poised to witness positive sentiments on the back ofthe mismatch in demand and supply. The urgent need and overriding concern for energysecurity is pushing global National Oil Companies (NOCs) to enhance their Exploration andProduction (E&P) budgets. This is further accentuated by the need to improve recovery rates inthe existing field reserves which have been on the decline over the years due to the increasedproduction.

India’s position is no different. Led by ONGC, all the E&P operators are aggressively chasingdevelopment programmes. The viability of marginal fields has also added a further dimension tothe offshore activities within the country. As per the Directorate General of Hydrocarbons, thebasin area is relatively under explored given that only 21% has been extensively explored andaround 32% only partially explored.

Risks Identification and Mitigation

Your Company has institutionalized it’s risk identification and risk mitigation process which areadapted to meet the needs at operating levels. Individual risk owners have been identified withimplementation of risk polices clearly being laid down.

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Your Company is fully conscious of the age of the Company’s fleet and is taking action by notonly ordering new assets but also by periodically upgrading the existing assets through theinstallation of modern and technologically advanced equipments to cater to the charter’srequirements. Your Company evaluates such decisions based on the considered view of seniormanagement keeping in mind the parameters of financial and business risk prudence.

Earnings variation in asset deployment could result in volatility in your Company’s profitability.A significant part of long term asset deployment is based on charter contracts which are a resultof competitive tendering process. Tender bids are invited throughout the year with job / assignmentrequirement / specifications varying in tenure and complexity from bid to bid . As per industrynorm your Company participates in the bidding process and is awarded varied charting perioddepending upon the needs of the clients.

Liberalization of the laws governing the sector and rationalisation of existing cabotage laws,currently protecting Indian owners may impact your Company’s operations. Liberalization of theexisting laws could invite competition from international players. Having operated internationally,the assets of your Company have proved their operational efficiency and competitiveness andhence, the risk is relatively well mitigated.

Availability of Key Personnel and Continuity of employment

With talent being a resource which has no boundaries, your Company cannot isolate itself fromattrition. However, your Company’s endeavour in addressing the needs of its employee pool bynurturing talent and imparting training will go a long way in building continuity.

Foreign Exchange Risk

Being a Company with assets deployed in different geographies and with earnings denominatedin foreign exchange there could be a risk in the earnings, on the basis of rupee to dollarexchange parity. Foreign exchange risk has and impact on the portion of operating expensesdenominated in foreign currency. Nevertheless, there exists a significant exposure to exchangerate volatility.

Quality and Safety

Your Company has been successfully carrying out asset operations governed by the stipulationsof Integrated Management System duly certified by DNV. Periodic inspections and InternalAudits ensure adherence to the relevant codes of ISO 9001:2000, ISO 14001:2004 andOHSAS 18001:1999.

During the year under review, interim certification for “Malaviya Thirty Three”, full termcertification for “Malaviya Thirty Six” and “Malaviya Twenty Three” were obtained.

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External SMC / ISPS audits have been successfully carried out on “Malaviya Twenty Three”,“Malaviya Four”, “Malaviya Thirty Six”, “Malaviya Twenty”, “Malaviya Twenty One”, “MalaviyaTwelve” and “Gal Ross Sea”.

Your Company has not only brought all harbour tugs under the Safety Culture recommendationsbut is also in the process of introducing an Integrated QHSE culture for marine constructionturnkey jobs.

Training

Statutory training requirements are being complied on the board of your Company’s vessels.Furthermore, your Company has initiated steps in the organization and provision of non mandatorytraining programmes in cooperation with and with assistance from organizations like BIBY,Anglo Eastern Maritime Training Centre and Naval Maritime Academy. These include, amongstothers, Dynamic Positioning Training (Induction and Advanced), Anchor Handling Operations,operation and handling of Fast Rescue Crafts, working in environments prone to H2S leakagesetc. Your Company has the distinction of having in place a fully functional in-house BridgeStimulator on which training programmes are being conducted with real life case studies.

Subsidiary Companies

The Audited Statement of Accounts alongwith the report of the Board of Directors relating to theCompany’s subsidiaries namely Great Offshore (Fujairah) L.L.C.-FZC and Deep Water Services(India) Limited for the year ended March 31, 2008 are annexed. In anticipation of better globalbusiness prospectus, your Company has formed two wholly owned foreign subsidiaries.

Consolidated Financial Statements

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant toClause 41 of the Listing Agreements entered into with the Stock Exchanges and prepared inaccordance with the Accounting Standards prescribed by the Institute of Chartered Accountantsof India, in this regard.

The Audited Consolidated Financial Statements together with the Auditors’ Report thereon formspart of the Annual Report. The Auditors’ Report to the Board of Directors does not contain anyqualification. For the financial year ended March 31, 2008, consolidated income from operationsat Rs.74,590 lakhs increased by 28% as compared to previous year. The financial year 2007-08registered a consolidated profit after tax of Rs.20,163 lakhs (previous year Rs. 14,518 lakhs) ona total income of Rs. 81,937 lakhs (previous year Rs. 59,007 lakhs).

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Share Capital

Fund Raising

During the financial year 2007-08, your Company increased its Share Capital employed by 32%to Rs. 136,947 lakhs. During the year under review, your Company issued and allotted 15,00,000Optionally Convertible Redeemable Preference Shares (OCRPS) of Rs 1000/- each aggregatingRs.15,000 lakhs to Export Import Bank of India (EXIM) which carries a couponrate of 10% p.a. Consequently, the Authorised Share Capital of your Company as onMarch 31, 2008 is Rs.20,000 lakhs.

Additionally, your Company also issued and allotted 7.25% Unsecured Foreign CurrencyConvertible Bonds (FCCBs) due 2012 aggregating US$ 42 million. These FCCBs are listed on theSingapore Exchange Securities Trading Limited.

Buy back of Equity Shares

Your Company considered the buy back of equity shares, keeping in view the Company’s desireto maximise shareholders’ value. This is expected to result in reduction of short term volatility inyour Company’s share price, giving a boost to earnings per share and return on equity in future,creating a long term shareholders’ value.

The Board of Directors of your Company, at its meeting held on March 31, 2008, have approvedthe buy back of the Company’s equity shares at a price not exceeding Rs 750/- per equity share,and up to an aggregate amount of Rs 5,524 Lakhs, which does not exceed 10% of the total paid-up capital and free reserves, as per the audited Balance Sheet, as at March 31, 2007.

The buy back of equity shares is from the open market through Bombay Stock Exchange Ltd.(“BSE”) and / or the National Stock Exchange of India Ltd. (NSE), where these shares are listed,from time to time in compliance with SEBI (Buy Back of Securities) Regulations, 1998.

IT Initiatives

The IT team has carried out a detailed analytical review of core systems, modules and applications.With a view to strengthen your Company’s commitment to implement company-wide solutions,a strategic development plan has been designed that will create enhanced and dynamicmanagement information systems and intelligence tools. As the strategic plan unfolds over thecoming months, new features and facilities will be added to the systems framework. During thecourse of the year, your Company implemented solutions in the areas of spares and storesprocurement, document management, departmental intranet and in decision support. Plannedupgrades to servers have been carried out and installation of systems and communications linksstrengthened.

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Your Company continues to apply its close-monitoring approach to hardware/software securityand operations and during the course of the year, there have been no security incidents resultingin the system downtime being less than 0.01% during the year.

Insurance

Internationally, the offshore marine insurance industry has had a challenging year. Tight marketconditions and continuously rising vessel valuations have put pressure on the insurance andreinsurance markets, resulting in increased premium. Your company is exposed to the volatilitiesfaced in the markets through its P&I insurance program and indirectly through its Hull reinsurancecontracts.

However, the de-tariffing of Hull and non-Hull rates in India has resulted in a relatively softerIndian domestic Insurance market, which your Company has strived to capitalise by contractingand negotiating finer terms, resulting in securing improved renewal rates for Indian placed Hulland non-Hull insurance for the fleet.

Your Company remains committed to continuous assessment of its insurance arrangements toprovide the optimum cover in acceptable structures.

Adequacy of Internal Control System

Your Company has adequate system of internal controls to safeguard its assets and duly protectthem against loss from unauthorised use or disposition and ensure that operations are reliablyauthorised by competent personnel and accurately recorded and reported. Internal Auditors,M/s. Ashok Kapadia & Co., Chartered Accountants provides their valuable inputs in assuring theadequacy of Internal Control systems.

Human Resources

Human resource policies of your Company have the interests of the work force at heart. YourCompany believes in aligning business priorities with the aspirations of the employees leadingto the development of empowered and responsive human capital. One of the constant efforts ofthe Company is to attain organisational excellence by developing and exploring the true potentialof the Company’s human capital and providing opportunities for growth and enrichment. YourCompany tries to inculcate an environment of creativity and innovation and is constantlyworking towards providing job content to its employees through empowerment, accountabilityand responsibility. Your Company cares for each and every employee and has an in-built systemof performance appraisal to recognise and reward him or her periodically and has incorporatedschemes like performance incentive pay. Your Company fosters mutual faith, trust and respectby providing ample growth opportunities and challenges to all its employees.

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Your Company strives to acquire, engage and retain a workforce that is diverse, innovative,insightful and knowledgeable and this be achieved only by investing in and upgradingorganisational talent by providing training and education to reinforce its existing strengths.

Particulars of Employees

In terms of the provisions of Section 217(2A) of the Companies Act, 1956, read with theCompanies (Particulars of Employees) Rules, 1975 as amended, the names and other particularsof the employees are set out in the annexure to the Directors’ Report. However, as per theprovisions of Section 219(1)(b)(iv) of the Act read with Clause 32 of the Listing Agreement asnotified by Securities and Exchange Board of India, the Annual Report excluding the aforesaidinformation is being sent to all the members of the Company and other entitled thereto. Membersdesirous of receiving the statement pursuant to Section 217 (2A) will be provided the same onreceipt of written request from them. The statement is also available for inspection at theRegistered Office on working days during business hours between 10 am to 1 pm, up to the dateof the Annual General Meeting.

Directors

Your Company’s Board consists of seven Directors, of which Mr. Vijay Kantilal Sheth,Vice Chairman cum Managing Director, is an Executive Director.

While Mr. Sevantilal J. Parekh is the Non Executive Chairman of the Company, Mr. NareshChandra, Mr. Shailesh V. Haribhakti, Mr. Rajiv K. Luthra, Mr. Suresh Balasubramaniam andMr. Madhava Menon Shankar Narayanan are Independent Directors on the Board.

Mr. Naresh Chandra and Mr. Rajiv K. Luthra are due to retire by rotation at this Annual GeneralMeeting, and being eligible, offer themselves for re-appointment.

Directors’ Responsibility Statement

As required by sub-section (2AA) of Section 217 of the Companies Act, 1956, Directors states:

a. that in the preparation of Annual Accounts, the applicable Accounting Standards havebeen followed along with proper explanation relating to material departures;

b. that the Directors have selected such Accounting Policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent, so as to give atrue and fair view of the state of affairs of the Company at the end of the financial yearand of the profit of the Company for that period;

c. that the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act, 1956 forsafeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d. that the Annual Accounts have been prepared on a going concern basis.

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Companies (Disclosure of Particulars in the Report of Board of Directors’ )Rules, 1988

Pursuant to the Notification No. GSR 1029 dated 31.12.1988 your Company is not required tofurnish prescribed information regarding conservation of energy and technology absorption asthe Shipping Industry is not covered by the schedule to the said rules.

The details of Foreign Exchange Earnings and Outgoings are:

(a) Foreign Exchange earned and saved (on account of freight, charter hire earnings) Rs.57,478lakhs.

(b) Foreign Exchange used including operating expenses, capital repayment, down paymentsfor acquisition of ships, interest payment amounted to Rs.41,125 lakhs.

Auditors’ Report

The Auditors’ Report to the Members read together with the relevant notes thereon are self-explanatory and hence do not warrant any comments under Section 217 of the Companies Act,1956.

Auditors

M/s. Kalyaniwalla & Mistry, Chartered Accountants, the Statutory Auditors of your Companyholds office until the conclusion of the forthcoming Annual General Meeting and being eligiblehave offered themselves for reappointment. Certificate from the Auditors has been received tothe effect that their reappointment, if made, would be within the limits prescribed under Section224(1B) of the Companies Act, 1956 and since they are not disqualified for such reappointmentwithin the meaning of Section 226 of the said Act, they shall continue to be the StatutoryAuditors.

Corporate Governance

Your Company is diligently pursuing and implementing the standards of Corporate Governanceadhering to the stipulations set out in the Listing Agreement with the Stock Exchanges. Report onCorporate Governance as stipulated under Clause 49 of the Listing Agreements with the StockExchanges is an intrinsic part of the Annual Report.

Certificate from the Statutory Auditors, M/s. Kalyaniwalla & Mistry, Chartered Accountantsconfirming the compliance of the conditions of Corporate Governance as stipulated under theaforesaid Clause 49 of the Listing Agreement.

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Dematerialisation of Securities

As Members are aware, your Company’s Equity Shares are compulsorily tradable in electronicform. As on March 31, 2008, 95.44% of your Company’s paid up capital representing36,380,283 Equity Shares are in dematerialised form. In view of numerous advantages emanatingfrom the depository system, Members holding Equity Shares in physical mode are requested toavail the facility of dematerialisation of the Company’s shares on either of the depositories, viz.CDSL / NSDL.

Acknowledgements

The Directors are grateful for the support, guidance and co-operation received from Governmentof India, all regulatory authorities including Ministry of Petroleum and Natural Gas, Ministry ofShipping, Ministry of Corporate Affairs, Ministry of Finance, Director General Shipping, Directorateof Hydrocarbons, Department of Civil Aviation, Port Trusts and Port authorities, RBI, SEBI,Registrar of Companies, Stock Exchanges and the Depositories.

Your Directors would like to express their sincere appreciation and gratitude to all valuableclients of the Company, Shareholders, Borrowers, Business Associates, Agents, Banks and FinancialInstitutions for their support and continued patronage.

Your Directors appreciate the hard work, loyalty and professionalism of the employees of yourCompany whose relentless efforts have enabled the Company to continue its journey at theforefront of the offshore oil field services sector.

For and on behalf of the Board of Directors

Sevantilal J. ParekhMumbai ChairmanApril 30, 2008

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CORPORATE GOVERNANCE REPORT

COMPANY’S PHILOSOPHY

Corporate Governance is the combination of voluntary practices and compliance with laws andregulations leading to effective control and management of the Organisation. Good CorporateGovernance leads to long term shareholder value and enhances interest of other stakeholders. Itbrings into focus the fiduciary and trusteeship value of the Board to align and direct the actionsof the organization towards creating wealth and shareholder value.

Your Company is firmly of the view that Corporate Governance is not an end in itself but afacilitator in maximizing the objective of shareholder value. Any Corporate which embodiesprinciples of Corporate Governance like openness, transparency and ownership fairness in itsfunctioning is bound to maximize shareholder value and also its own corporate values.

In keeping with the above, your Company believes in adopting the best practices in the areas ofCorporate Governance. Your Company is committed to uphold the core values of transparency,integrity, honesty and accountability and will constantly strive to benchmark itself against thebest, in its relentless pursuit to attain the highest standards of corporate values and ethics. Theobjective is to generate long term economic value for the shareholders, whilst concurrentlyrespecting the interests of the other stakeholders.

CORPORATE ETHICS

The Company adheres to the highest standards of business ethics, compliance with statutory andlegal requirements and commitment to transparency in business dealings.

CODE OF CONDUCT FOR BOARD MEMBERS AND SENIOR MANAGEMENT

The Code highlights Corporate Governance as the cornerstone for sustained managementperformance for serving all the stakeholders and for instilling pride of association.

The Code is applicable to the Board of Directors and specified Senior Management Executives.The Code impresses upon Directors and Senior Management Executives to uphold the interest ofthe Company and its stakeholders and to endeavor to fulfill all the fiduciary obligations towardsthem. Another important principle on which the Code is based is that the Directors and SeniorManagement Executives shall act in accordance with the highest standard of honesty, integrity,fairness and ethical conduct and shall exercise utmost good faith, due care and integrity inperforming their duties. The Code has been posted on the website of the Company,www.greatoffshore.com

The declaration by the Vice Chairman cum Managing Director affirming compliance of theBoard Members and Senior Management Excutives to the Code of Conduct is annexed herewith.

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BOARD OF DIRECTORS

The Board of Directors as on March 31, 2008 comprises of seven Directors, of which six areNon-Executive Directors. The Chairman is a Non-Executive Director and the number ofIndependent Directors is five.

During the year under review, eleven Board Meetings were held on April 30, 2007, July 3,2007, July 19, 2007, July 30, 2007, August 29, 2007, October 18, 2007, December 19, 2007,January 5, 2008, January 15, 2008, January 28, 2008 and March 31, 2008.

The composition of the Board, attendance at Board Meetings (BM) held during the financial yearunder review and at the last Annual General Meeting (AGM), number of Directorships,Memberships/Chairmanships in Public Companies (other than your Company) and theirshareholding in the Company are as follows:

FY 2007-08 (As on March 31, 2008) ShareAttendance at holding

in the

Name of the Director CategoryCommittee Positions # Company

Board Last No of Member Chairman as on

Meeting Annual other March 31,

General Directors- 2008

Meeting hips@

Mr. Sevantilal J. Parekh Non-Executive 10 Yes 10 - 1 948Chairman

Mr. Vijay Kantilal Sheth Promoter, 11 Yes 2 - - 1840Managing Director

Mr. Naresh Chandra Non-Executive 6 No 9 7 2 -Independent

Mr. Shailesh V. Haribhakti Non-Executive 11 Yes 14 4 5 -Independent

Mr. Rajiv K. Luthra Non-Executive 7 Yes 10 1 1 -

Mr. Suresh Non-Executive 10 Yes 2 1 - -Balasubramaniam Independent

Mr. Madhava Menon Non-Executive 3 No 5 4 - -Shankar Narayanan* Independent

Mr. K. M. Sheth** Non Executive 1 No - - - -Chairman, Promoter

Mr. Tapas Icot** Non Executive 1 No - - - -

* Mr. Madhava Menon Shankar Narayanan was appointed as an Additional Director w.e.f. October 18, 2007.** Mr. K. M. Sheth ceased to be the Director of the Company w.e.f. July 3, 2007.** Mr. Tapas Icot ceased to be the Director of the Company w.e.f. July 3, 2007.@ Excluding Directorship in Private and Foreign Companies# Includes Memberships of Audit and Shareholders’ / Investor Grievance Committees. Member does not include

Chairmanship of Committees.

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Attention of the Members is invited to the relevant item of the Notice of the Annual GeneralMeeting seeking their approval for appointment / re-appointment of Directors. The informationas required under clause 49 (IV) (G) of the Listing Agreement is annexed to the Notice of theAnnual General Meeting.

COMMITTEES

A) AUDIT COMMITTEEThe Audit Committee was constituted on October 16, 2006. During the year under review fivemeetings of the Committee have been held on April 30, 2007, July 19, 2007, October 18, 2007,January 28, 2007 and March 31, 2007Audit Committee consists of four Independent Directors. They possess adequate knowledgeof Accounts, Audit, Finance. Mr. Suresh Balasubramaniam is the Chairman of the AuditCommittee.Audit Committee Meetings are also attended by the Managing Director, Company Secretary,Head – Legal and Secretarial, General Manager – Accounts & MIS, Statutory Auditors andInternal Auditors. During the period from March 7, 2008 to March 31, 2008, the Secretary ofthe Audit Committee was not the Company Secretary as the position of the Company Secretarywas vacant for the aforementioned period.The composition of the Committee and attendance at its meetings is as given below:

Name of Members Number of Meetings attended

Mr. Suresh Balasubramaniam – Chairman 4

Mr. Sevantilal J. Parekh 4

Mr. Shailesh V. Haribhakti* 3

Mr. Madhava Menon Shankar Narayanan** 1

Mr. Tapas Icot@ 1

Mr. Rajiv K. Luthra# 1

* Mr. Shailesh V. Haribhakti was appointed as a member of the Audit Committee w.e.f.August 29, 2007.

** Mr. Madhava Menon Shankar Narayanan was appointed as a member of the Audit Committeew.e.f. October 18, 2007.

@ Mr. Tapas Icot ceased to be the Member of the Audit Committee w.e.f. July 3, 2007.# Mr. Rajiv K. Luthra ceased to be the Member of the Audit Committee w.e.f. October 18, 2007.

Terms of Reference

Overseeing the Company’s financial reporting process and the disclosure of its financialinformation to ensure that the financial statements are correct, sufficient and credible;

Review the financial statements before submission to Board;

Review reports of the Statutory Auditors and Internal Auditors including the weaknesses ininternal controls reported by Internal and Statutory Auditors;

Recommending the appointment, re-appointment and fixing the remuneration of InternalAuditors.

In addition, the powers and role of the Audit Committee are as laid down under clause 49 II C& D of the Listing Agreement and Section 292A of the Companies Act, 1956.

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B) REMUNERATION COMMITTEE

The Remuneration Committee was constituted on October 16, 2006. During the year underreview, two meetings of the Committee have been held on April 18, 2007 and July 3, 2007. TheRemuneration Committee consists of 3 Independent Directors.

The composition of the Committee and attendance at its meetings is as given below:

Name of Members Number of Meetings attended

Mr. Sevantilal J. Parekh - Chairman 2

Mr. Suresh Balasubramaniam 2

Mr. Shailesh V. Haribhakti 2

Terms of Reference:

1. To determine on behalf of the Board and on behalf of the Shareholders with agreed terms ofreference the Company’s policy on specific remuneration package for Executive Directorsincluding pension rights and any compensation payment.

2. To approve the payment of remuneration to Managerial Personnel as per the Policy laiddown by the Committee.

Remuneration Policy

The remuneration of the Managing / Whole Time Director(s) is recommended by the RemunerationCommittee and is decided by the Board of Directors. The Company pays remuneration by wayof salary, perquisites and allowances (fixed component) and / or commission (variable component)to its Whole Time Director(s).

The remuneration by way of commission to the Non-Executive Directors is decided by theBoard of Directors and distributed to them based on their contribution and attendance at theBoard and Committee Meetings. The Company’s remuneration strategy aims at attracting andretaining high caliber talent. The remuneration policy is therefore market led and takes intoaccount the competitive circumstances of each business so as to attract and retain quality talentand leverage performance significantly.

The Non-Executive Directors are paid sitting fees of Rs. 20,000/- for each meeting of the Boardand Committee attended by them. In addition, the Company also reimburses out of pocketexpenses to outstation Directors for attending meetings in Mumbai.

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Non-Executive Directors

The details of sitting fees and commission paid / payable to the Non-Executive Directors for theFinancial Year 2007-08 are as given below:

(Rs in lakhs)

Name of Non-Executive Director Commission Sitting Fees

Mr. Sevantilal J. Parekh 50,00,000 3,60,000

Mr. Naresh Chandra 6,00,000 1,20,000

Mr. Shailesh V. Haribhakti 6,00,000 3,60,000

Mr. Rajiv K. Luthra 6,00,000 1,60,000

Mr. Suresh Balasubramaniam 6,00,000 3,80,000

Mr. Madhava Menon Shankar Narayanan 6,00,000 80,000

Mr. K. M. Sheth* - 20,000

Mr. Tapas Icot** - 40,000

* Mr. K. M. Sheth ceased to be the Director of the Company w.e.f. July 3, 2007.** Mr. Tapas Icot ceased to be the Director of the Company w.e.f. July 3, 2007.

Executive / Whole Time Director

The details of remuneration paid / payable to the Whole Time Director of the Company duringthe financial year 2007-08 are as given below:

(Rs in lakhs)

Name of Director Salary Perquisites & Commission RetirementAllowances Benefits

Mr. Vijay Kantilal Sheth,As per Retirement

Managing Director 120 1.90 720# Benefit Scheme for theWholetime Directorsof the Company

Note: Salary includes Company’s contribution to Provident Fund, Superannuation Fund and allother allowances.Perquisites include provision of cars, telecommunication facilities, Leaveencashment, Reimbursement of medical expenses for self and family, personal accidentinsurance, housing loan subject to company rules, pension scheme subject to Companyrules and club fees restricted to 2 clubs.

# The Shareholders, in the Annual General Meeting of the Company held onAugust, 29, 2007 approved payment of commission amounting to Rs. 360 lakhs. TheRemuneration Committee, at its Meeting held on April 29, 2008 recommended paymentof additional commission amounting to Rs. 360 lakhs additionally over and aboveRs. 360 lakhs and the Board of Directors’ at its Meeting held on April 30, 2008 approvedthe said commission, subject to the approval of the Shareholders in the ensuing AnnualGeneral Meeting of the Company.

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Shareholding of Non-Executive Directors

As on March 31, 2008, 948 equity shares are held by Mr. Sevantilal J. Parekh.

C) SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE

The Shareholders / Investors Grievance Committee was constituted on October 16, 2006. TheConstitution of the Committee is as given below:

1. Mr. Suresh Balasubramaniam - Chairman

2. Mr. Vijay Kantilal Sheth

3. Mr. Sevantilal J. Parekh

During the year under review, one meeting of the Committee was held on December 3, 2007and was attended by all the members.

Terms of reference:

1) Review the reports submitted by the Registrars and Share Transfer Agents of the Company atHalf yearly intervals.

2) Periodically interact with the Registrars and Share Transfer Agents to ascertain and look intothe quality of the Company’s Shareholders / Investors grievance redressal system and toreview the report on the functioning of the said redressal system.

3) Follow-up on the implementation of suggestions for improvement.

4) Periodically report to the Board about serious concerns if any.

During the year under review, 14 complaints were received from the shareholders and all ofthem were replied / resolved to the satisfaction of the shareholders.

Mr. Badrinath Durvasula, Head - Legal and Secretarial is the Compliance Officer. Hisaddress and contact details are as given below:

Address : Great Offshore Ltd.Energy House,81, Dr. D. N. Road,Mumbai 400 001

Phone : 022-6635 2222

Fax : 022- 2267 3639

e-mail : [email protected]

In compliance with Clause 47(f) of the Listing Agreement, the Company has designated thee-mail id [email protected] for registering the complaints of the investors.

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GENERAL MEETINGS

Location and Time of previous Annual General Meeting

General Meeting Date Time Location

2nd Annual General August 29, 2007 4:00 p.m Chavan Auditorium,Meeting Yashwantrao Chavan Pratishtan,

Gen. Jagannathrao Bhonsle Marg,Mumbai 400 021

1st Annual General December 19, 2006 3.30 p.m. Rama Watumull Auditorium,Meeting Kishinchand College,

Dinshaw Wacha Road,Churchgate,Mumbai- 400 020

All resolutions moved at the last Annual General Meeting were passed by a show of hands bymembers attended the meeting.

The following are the special resolutions passed at the last Annual General Meetings:

General Meeting held on No. of Special SummaryResolution

August 29, 2007 2 (i) Issue of Foreign Currency ConvertibleBonds (FCCBs) and OptionallyConvertible Redeemable PreferenceShares (OCRPS).

(ii) Increase the limit of investment ofForeign Instituional Investors (FIIs) upto49% of the paid-up Equity Share Capitalof the Company.

December 19, 2006 2 (i) Payments of commission to NonExecutive Directors

(ii) Keeping of Register of Members, AnnualReturns and other Statutory Register atthe office of Registrar and TransferAgent.

No resolutions were passed through postal ballot during the financial year 2007-08.

33

DISCLOSURES

a) There are no materially significant related party transactions i.e. transaction of the Companyof material nature with its Promoters, Directors or the Management, their Subsidiaries orrelatives etc. that would have potential conflict with the interests of the Company at large.

b) None of the Senior Management has made any disclosure to the Board relating to anymaterial financial and commercial transactions, where they have personal interest and thatmay have a potential conflict with the interest of the Company at large.

c) There has not been any non-compliance by the Company nor any penalties or strictureshave been imposed on the Company by the Stock Exchanges or SEBI or any statutoryauthority on any matter related to capital markets since the date of incorporation of theCompany i.e July 14, 2005.

d) The Whistle Blower Policy (WBP) has been formulated with a view to provide a mechanismfor employees of the Company to approach the Management to safeguard themselves againstvictimization. It is affirmed that no personnel has been denied access to the Audit Committee.

e) The Company has complied with the mandatory requirement of the Clause 49 pertaining toCorporate Governance and has also adopted some of the Non Mandatory requirementssuch as constitution of Remuneration Committee and adoption of the Whistle Blower Policy.

MEANS OF COMMUNICATION

The quarterly, half-yearly and yearly financial results of the Company will be sent to the StockExchanges immediately after the Board approves them. These will also be published in theprescribed format within 48 hours of the conclusion of the meeting of the Board in which theyare approved in one English newspaper circulating in the whole or substantially the whole ofIndia and in one vernacular newspaper of the state where the registered office of the Companyis situated.

The quarterly, half yearly and annual results are published in the following newspapers:

1. Economics Times2. Maharashtra Times3. Business Standard4. Financial Express5. Hindu Business Line

The results are simultaneously posted on the website of the Company at www.greatoffshore.com.The official press releases are also available on the website.

On the date of the Board Meeting held for consideration of the results, the analysts were invitedto participate in the conference call and pose their queries. For consideration of the financialresults during the year under review four conference calls were conducted on April 30, 2007,July 19, 2007, October 18, 2007 and January 28, 2008, the said dates being the dates of theBoard Meeting in which the Audited Results for the financial year ended March 2007 andunaudited quarterly results for June 2007, September 2007 and December 2007 were considered.

34

EDIFAR Filing

As per the requirements of Clause 51 of the Listing Agreement, all the data relating to quarterly,half-yearly, yearly financial results and shareholding pattern had electronically filed on theEDIFAR website www.sebiedifar.nic.in within the time frame prescribed in this regard.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion & Analysis Report (MD&A) is a part of the Annual Report.

GENERAL SHAREHOLDERS INFORMATION

Annual General Meeting

Date and Time : July 10, 2008 at 4.00 P.M

Venue : Rama Watumull Auditorium, Kishinchand College,Dinshaw Wacha Road, Churchgate, Mumbai- 400 020

Date of Book Closure : June 27, 2008 to July 4, 2008 (both days inclusive)

Dividend Payment Date : July 15, 2008

Financial Calendar 2008-09

First quarterly results : July 2008

Second quarterly results : October, 2008

Third quarterly results : January, 2009

Annual results for the financial : May, 2009year ending on 31.03.2009

Listing on Stock Exchanges

Stock Exchange Stock Code

Bombay Stock Exchange Limited 532786Phiroze Jeejeebhoy Towers,Dalal Street,Mumbai – 400 001.

National Stock Exchange of India Limited GTOFFSHOREExchange PlazaPlot No. C/1, G BlockBandra - Kurla ComplexBandra (East),Mumbai - 400 051

The Company has paid the listing fees to the Stock Exchanges for the financial year 2008-09.

35

Market Price Data

The details of monthly High and Low Market Price of the equity shares during the year 2007-08on Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE) are asgiven below :

Month BSE NSE

High (in Rs) Low (in Rs) High (in Rs) Low (in Rs)April 2007 772.40 584.00 759.70 597.80May 2007 793.70 695.00 782.55 712.30June 2007 861.95 748.00 868.00 771.55July 2007 879.00 786.00 860.60 790.85August 2007 877.00 740.00 819.90 741.50September 2007 884.90 675.45 870.30 800.60October 2007 855.00 703.20 827.15 746.60November 2007 984.80 770.00 955.15 776.60December 2007 1013.00 827.05 983.75 829.80January 2008 1149.95 637.00 1102.65 729.45February 2008 927.00 729.50 913.45 750.20March 2008 821.30 560.00 790.00 582.75

Registrar & Transfer Agents

TSR Darashaw Limited6-10 Haji Moosa Patrawala Industrial Estate20 Dr. E. Moses RoadMahalaxmiMumbai 400 011Ph. No.: (022) 6656 8484Fax No.: (022) 6656 8494e-mail : [email protected]: www.tsrdarashaw.com

0

5000

10000

15000

20000

25000

0

200

400

600

800

1000

1200

Mar - 2008

Feb - 2008

Jan - 2008

Dec - 2007

Nov - 2007

Oct - 2007

Sep - 2007

Aug - 2007

Jul - 2007

Jun - 2007

May - 2007

Apr - 2007

Sensex Great Offshore

COMPANY SHARE PRICES COMPARED TO BSE SENSEX

The Performance of the Company’s Stock price vis-à-vis Sensex

36

Share Transfer System

Shares sent for transfer in physical form are normally registered by the Registrars & ShareTransfer Agents of the Company within 15 days of receipt of the documents, if documents arefound in order. Shares under objection are returned within two weeks.

Distribution of shareholding as on March 31, 2008

Shareholding Range No of % to No of % ofshareholders Total Holders shares Total Shares

1-500 103758 95.98 5993868 15.73

501-1000 2313 2.14 1673506 4.39

1001-2000 1024 0.95 1472041 3.86

2001-3000 361 0.33 891292 2.34

3001-4000 171 0.16 598409 1.57

4001-5000 104 0.10 470472 1.23

5001-10000 162 0.15 1158425 3.04

10001 and Above 210 0.19 25860468 67.84

Total 108103 100.00 38118481 100.00

Distribution of shareholding as on March 31, 2008 based on category of shareholders is asgiven below:

Sr No Category No of shares held %age of shares held

1 Promoter Group 7647118 20.06

2 Mutual Funds & UTI 4290636 11.26

3 Banks, Financial Institutions andInsurance Companies 4510423 11.83

4 Foreign Institutional Investors 4917318 12.90

5 Private Corporate Bodies 2822051 7.40

6 Indian Public 13897274 36.47

7 NRIs/OCBs 522 0.00

8 Trust 5149 0.01

9 Shares held by Custodians andagainst which Depositary Receiptshave been issued 27990 0.07

Total 38118481 100.00

37

Dematerialisation of Shares and Liquidity:

The Company has made arrangements with both National Securities Depository Limited (NSDL)and Central Depository Services (India) Limited (CDSL) for demat facility. The ISIN of theCompany is INE892H01017.

Presently, 95.44% of our share capital is held in dematerialised form (91.57% with NSDL and3.87% with CDSL) whilst 4.56% is held in physical form.

Outstanding GDRs / ADRs or Warrants or any Convertible Instrument, conversion dates andlikely impact on equity.

27,990 GDRs are outstanding as on March 31, 2008.

Plant Location:

The Company has no plants.

Registered Office:

Energy House, 81, Dr. D. N. Road, Mumbai – 400 001

Address for Investor Correspondence:

Company Registrar & Share Transfer Agents

Great Offshore Ltd. TSR Darashaw Ltd.Secretarial Department 6-10 Haji Moosa Patrawala Indulstrial EstateEnergy House 20 Dr. E. Moses Road81, Dr. D. N. Road, Mahalaxmi,Mumbai 400 001 Mumbai 400 011Ph. No. : (022) 6635 2222 Ph. No.: (022) 6656 8484Fax No. : (022) 2267 3393 Fax No.: (022) 6656 8494e-mail : [email protected] e-mail : [email protected] : www.greatoffshore.com website: www.tsrdarashaw.com

Compliance Certificate by Auditors

The Company has obtained a Certificate from M/s. Kalyaniwalla & Mistry, Chartered Accountants,Statutory Auditors of the Company regarding compliance of the conditions of CorporateGovernance as stipulated in clause 49 of the Listing Agreement.

Vijay Kantilal ShethMumbai Vice Chairman cum Managing DirectorApril 30, 2008

38

Declaration as required under Clause 49 of the Listing Agreement regarding adherence to theCompany’s Code of Conduct

I, Vijay Kantilal Sheth, Vice Chairman cum Managing Director, to the best of my knowledge andbelief, do hereby declare that all the Members of the Board of Directors and Senior ManagementPersonnel of the Company have affirmed compliance with the Code of Conduct for the yearended March 31, 2008.

Mumbai Vijay Kantilal ShethApril 30, 2008 Vice Chairman cum Managing Director

Auditors’ Certificate on Corporate GovernanceTo the Members ofGreat Offshore Limited

We have examined the compliance of conditions of Corporate Governance by Great OffshoreLimited (the Company) for the year ended March 31, 2008 as stipulated in Clause 49 of theListing Agreements of the said Company with the Stock Exchanges in India.

The compliance of conditions of Corporate Governance is the responsibility of the Management.Our examination was limited to procedures and implementation thereof, adopted by the Companyfor ensuring compliance with the conditions of Corporate Governance. It is neither an audit, noran expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to usand the representations made by the Directors and the Management, we certify that the Companyhas complied with the conditions of Corporate Governance as stipulated in Clause 49 theabove - mentioned Listing Agreement.

We state that such compliance is neither an assurance as to the future viability of the Company,nor the efficiency or effectiveness with which the management has conducted the affairs of theCompany.

For and on behalf of

Kalyaniwalla & MistryChartered Accountants

K.M.ElaviaPartner

Membership No: 12737

Mumbai, April 30, 2008

39

CERTIFICATION BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER ASREQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT

To,

The Board of DirectorsGreat Offshore LimitedEnergy House,81, Dr. D. N. RoadMumbai – 400 001

We, Vijay Kantilal Sheth, Vice Chairman cum Managing Director and Vipul I. Acharya, GeneralManager – Accounts & MIS of Great Offshore Limited, do hereby certify that:

a. We have reviewed the financial statements and the cash flow statement of the Company forthe year 2007-2008 and that to the best of our knowledge and belief :

i. These statements do not contain any materially untrue statement or omit any materialfact or contain statements that might be misleading;

ii. These statements together present a true and fair view of the Company’s affairs and arein compliance with existing accounting standards, applicable laws and regulations.

b. There are, to the best of our knowledge and belief, no transactions entered into by theCompany during the year which are fraudulent, illegal or violative of the Company’s codeof conduct.

c. We accept responsibility for establishing and maintaining internal controls for financialreporting and that we have evaluated the effectiveness of internal control systems of theCompany pertaining to financial reporting and we have disclosed to the Auditors and theAudit Committee, deficiencies in the design or operation of such internal controls, if any, ofwhich we are aware and the steps we have taken or propose to take to rectify thesedeficiencies.

d. We have indicated wherever applicable to the Auditors and the Audit Committee:

i. Significant changes in internal control over financial reporting, if any during the year;

ii. Significant changes in accounting policies during the year and that the same have beendisclosed in the notes to the financial statements; and

iii. Instances of significant fraud of which we have become aware and the involvementtherein, if any, of the management or an employee having a significant role in theCompany’s internal control system over financial reporting.

Vijay Kantilal Sheth Vipul I AcharyaVice Chairman cum Managing Director General Manager – Accounts and MIS

MumbaiApril 30, 2008

40

ASSET PROFILEOffshore Fleet as on March 31, 2008

Category Total Type Vessel Name Year Built

DRILLING VESSELS 2 1. Badrinath 1973

2. Kedarnath 1975

OFFSHORE SUPPORT 26 Platform Supply Vessels 1 Malaviya Sixteen 2002

VESSELS (OSV’s) 2 Malaviya Eighteen 2002

3 Malaviya Nineteen 2004

4 Malaviya Twenty 2004

5 Malaviya Twenty Four 2005

6 Malaviya Twenty Nine 2006

7 Malaviya Thirty 2006

Anchor Handling 1 Malaviya One 1983Tug Supply Vessels

2 Malaviya Two 1983

3 Malaviya Three 1984

4 Malaviya Four 1984

5 Malaviya Five 1982

6 Malaviya Six 1981

7 Malaviya Ten 1999

8 Malaviya Twenty One 2005

9 Malaviya Twenty Three 2007

10 Malaviya Twenty Eight 2006

11 Malaviya Thirty Three 1978

12 Malaviya Thirty Four 1984

Fire Fighting 1 Malaviya Twenty Five 2006Supply Vessels

2 Malaviya Twenty Seven 2006

Multi Support Vessel 1 Malaviya Thirty Six 1987

Anchor Handling Tugs 1 Gal Beaufort Sea 1982

2 Gal Ross Sea 1982

3 Sangita 1994

Supply Vessel 1 Malaviya Twelve 1989

41

Category Total Type Vessel Name Year Built

HARBOUR TUGS 11 1 Anasuya 1997

2 Rishabh 1985

3 Malini 1987

4 Jyotsna S. 1989

5 Kanti 1998

6 Kumari Tarini 1998

7 Sudhir Mulji 1998

8 Vahbiz 1999

9 Ananya 2000

10 Purnima 2000

11 Birsingha 2001

CONSTRUCTION BARGE 1 1 Gal Constructor 1978

TOTAL FLEET 40

Acquisitions during Financial Year 2007-08

Category Type Vessel Name Year Built

OFFSHORE SUPPORT VESSELS Anchor Handling Tug Malaviya Twenty Three 2007Supply Vessel

Heavy Load Carrier Malaviya Thirty Three 1978Vessel

42

Report of the Auditors to the Members of Great Offshore Limited1. We have audited the attached Balance Sheet of Great Offshore Limited as at March 31,

2008 and also the Profit and Loss Account and Cash Flow Statement of the Company for theyear ended on that date, both annexed thereto. These financial statements are the responsibilityof the Company’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the CentralGovernment of India in terms of section 227 (4A) of the Companies Act, 1956, we annexhereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:a) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit.b) In our opinion, proper books of account as required by law have been kept by the

Company so far as appears from our examination of such books.c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this

report are in agreement with the books of account.d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement

dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read with the notes thereon, give the information requiredby the Companies Act, 1956 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India :i) in the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2008;ii) in the case of the Profit and Loss Account, of the profit of the Company for the year

ended on that date; andiii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that

date.5. On the basis of written representations received from the directors of the Company as on

March 31, 2008, and taken on record by the Board of Directors, we report that none of thedirectors of the Company is disqualified as on March 31, 2008, from being appointed as adirector in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For and on behalf ofKalyaniwalla & MistryChartered AccountantsK.M. ElaviaPartnerMembership No: 12737Mumbai, April 30, 2008

FINANCIAL DISCLOSURES

43

Annexure to the Auditor’s ReportReferred to in paragraph 3 of our report of even date on the accounts of Great Offshore Limitedfor the year ended March 31, 2008 :

1. (a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management as per a phased programmeof verification. In our opinion, the frequency of verification is reasonable having regardto the size of the Company and the nature of its assets. To the best of our knowledge nomaterial discrepancies were reported on such verification.

(c) In our opinion, the fixed assets disposed off during the year were not substantial and donot affect the going concern assumption.

2. (a) The management has conducted physical verification of inventory at reasonable intervals.

(b) In our opinion, the procedures followed by the management for physical verification ofinventory are reasonable and adequate in relation to the size of the Company andnature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepanciesnoticed on physical verification of inventories as compared to the book records werenot material in relation to the operations of the Company and the same have beenproperly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms orother parties covered in the register maintained under section 301 of the CompaniesAct, 1956.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms orother parties covered in the register maintained under section 301 of the CompaniesAct, 1956.

4. In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the company and thenature of its business, for the purchase of inventory and fixed assets, and for the sale ofgoods and services. In our opinion and according to the information and explanations givento us, there is no continuing failure to correct major weaknesses in internal control.

5. Based on the audit procedures applied by us and according to the information andexplanations provided by the management, there were no contracts or arrangements duringthe period that needed to be entered in the register required to be maintained under section301 of the Act. The provisions of clause (v) (b) of the Companies (Auditor’s Report) Order,2003 are thus not applicable.

6. In our opinion and according to the information and explanations given to us, the Companyhas not accepted any deposits from the public within the meaning of sections 58A and58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system, which in our opinion iscommensurate with the size and nature of its business.

8. As informed to us, the maintenance of cost records has not been prescribed by the CentralGovernment under section 209(1) (d) of the Companies Act, 1956, in respect of the activitiescarried on by the Company.

44

9. (a) According to the information and explanations given to us and according to the booksandrecords as produced and examined by us, in our opinion, the company is generallyregular in depositing undisputed statutory dues including Shore Staff Provident fund,Investor Education and Protection Fund, Employees State Insurance, Income tax, Salestax, Wealth tax, Service tax, Excise duty, Customs duty, Cess, and other statutory dueswith the appropriate authorities. We are informed that in respect of floating staff it is notpossible to accurately ascertain the income tax on salaries (under section 192) of theemployees. The Company regularly makes ad hoc payments to the appropriate authoritiesand on final determination the balance, if any, is paid.

(b) According to the books of account and records as produced and examined by us, thereare no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise dutyor cess which have not been deposited on account of any dispute, other than thosestated below:

Name of the statute Nature of Dues Amount Period to Forum whereRs. Lakhs which the dispute is pending

amountrelates

The Tamilnadu General Tax u/s 3A of The 100.78 1995-96 and The Sales TaxSales Tax Act, 1959 Tamilnadu General 1996-97 Appellate Tribunal.,

Sales Tax Act, 1959 Chennai

The Karnataka Sales Tax u/s 5-C of the 170.71 1995-96 to Stay granted byTax Act, 1957 Act 2001-02 Supreme Court

The Customs Act, 1962 Customs Duty 11.96 1999-00 High Court, Mumbai70.37 2001-02 Customs Excise and

Gold (Control)Appellate Tribunal

Central Excise and Service Tax 72.53 2002-03 to Superintendent ofCustoms Act 2004-05 Central Excise

West Bengal Sales Sales Tax 41.59 2001-02 The Commisioner ofTax Act Commercial Taxes,

Kolkatta

10. The Company has no accumulated losses at the end of the financial year and it has notincurred any cash losses in the current year and in the immediately preceding financialyear.

11. According to the information and explanations given to us and the records examined by us,the company has not defaulted in repayment of dues to a financial institution or bank or thedebenture holders.

45

12. According to the information and explanations given to us and the records examined by us,the Company has not granted any loans on the basis of security by way of pledge of shares,debentures or other securities.

13. In our opinion and according to the information and explanation given to us, the nature ofthe activities of the Company does not attract any special statute applicable to the chit fundand nidhi/ mutual benefit fund/ societies.

14. In our opinion, the Company has maintained proper records of the transactions and contractsof the investments dealt in by the Company and timely entries have been made therein. Theinvestments made by the Company are held in its own name except to the extent of theexemption under section 49 of the Act.

15. According to the information and explanations given to us and the records examined by us,the Company has not given any guarantees for loans taken by others from banks or financialinstitutions, the terms and conditions whereof are prima facie prejudicial to the interest ofthe Company.

16. As informed to us, the term loans were applied by the Company for the purpose for whichthey were obtained.

17. On the basis of an overall examination of the balance sheet and cash flows of the Companyand the information and explanation given to us, we report that the Company has notutilised any funds raised on short-term basis for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companiescovered under section 301 of the Act.

19. According to the explanation given to us, securities have been created in respect of thedebentures taken over by the Company pursuant to the Scheme of Arrangement.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and the information and explanations given bythe management, we report that no fraud on or by the Company has been noticed orreported during the year.



K. M. ElaviaPartnerMembership No : 12737


46

The Schedules referred to above form an integral part of the Balance Sheet.As per our Report attachedFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director

K. M. Elavia Suresh Balasubramaniam Shailesh V. HaribhaktiPartner Director DirectorMumbai, April 30, 2008 Mumbai, April 30, 2008

Balance Sheet as at March 31, 2008Current Year Previous Year

Schedule Rs. lakhs Rs. lakhsSOURCES OF FUNDS :Shareholders’ Funds :

Capital 1 18812 3812Reserves and Surplus 2 69985 58479

88797 62291Loan Funds :

Secured Loans 3 75997 74414Unsecured Loans 4 17017 242

93014 74656

TOTAL 181811 136947

APPLICATION OF FUNDS :Fixed Assets : 5

Gross Block 148876 137054Less : Depreciation 48933 40394Net Block 99943 96660Ships under Construction 39064 32206

139007 128866Investments 6 1331 128Deferred tax assets (net) 562 216Current Assets, Loans and Advances :

Inventories 7 617 572Sundry Debtors 8 17700 13755Cash and Bank balances 9 31375 4667Other Current assets 10 - 55Loans and Advances 11 14751 3273

64443 22322

Less : Current Liabilities and Provisions :Current Liabilities 12 18617 14297Provisions 13 4915 292

23532 14589

Net Current Assets 40911 7733Miscellaneous Expenditure(to the extent not written off or adjusted) 14 - 4

TOTAL 181811 136947

Significant Accounting Policies 20Notes to Accounts 21

47

Profit and Loss Account for the year ended March 31, 2008Current Year Previous Year

Schedule Rs. lakhs Rs. lakhsINCOME :Income from Operations 15 67631 53733Profit on sale of Vessel 1799 -Other Income 16 5601 732

75031 54465

EXPENDITURE :Operating Expenses 17 30634 23472Administration and Other Expenses 18 5958 4152Interest and Finance charges 19 6551 3596Depreciation 9853 6967

52996 38187Profit before tax 22035 16278Less : Provision for taxation

- Current tax 2009 2409- Deferred tax (345) (334)- Fringe Benefit tax 50 61

Profit for the year after tax 20321 14142Less : Transfer to Tonnage Tax Reserve Account

under section 115VT of the Income-tax Act,1961 4000 200016321 12142

Add : Surplus brought forward from previous year 12176 6011Amount available for appropriation 28497 18153

Appropriations :- Transfer to Foreign Currency Fluctuation Reserve 1000 -- Transfer to General Reserve 2500 2500- Interim Dividend on Equity Shares 3049 3049- Proposed Final Dividend :

- on Preference Shares 848 -- on Equity Shares 3049 -

- Tax on Dividends 1183 428Balance Carried Forward 16868 12176

28497 18153

Basic earnings per share (in Rs.) 53.31 37.10Diluted earnings per share (in Rs.) 52.17 -Significant Accounting Policies 20Notes to Accounts 21

The Schedules referred to above form an integral part of the Balance Sheet.As per our Report attachedFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director


48

Cash Flow Statement for the year ended March 31, 2008Current Year Previous Year

Rs. Lakhs Rs. Lakhs

A CASH FLOW FROM OPERATING ACTIVITIES :

NET PROFIT BEFORE TAX : 22035 16278

ADJUSTMENTS FOR :

Depreciation 9853 6967

Interest earned (577) (328)

Interest paid 6551 3596

Dividend received (219) (20)

Misc. expenses written off 4 21

Profit on sale of sundry assets - (3)

Profit on sale of Vessel (1799) -

Profit on sale of investments (Net) - (1)

Provision for doubtful debts (Net) 37 133

Foreign exchange (2930) 1223

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES : 32955 27866

ADJUSTMENTS FOR :

Trade & other receivables (14760) (6805)

Inventories (44) 101

Trade payables 3792 4134

CASH GENERATED FROM OPERATIONS 21943 25296

Taxes paid (2488) (2699)

NET CASH FLOW FROM OPERATING ACTIVITIES : 19455 22597

B CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of fixed assets (20010) (59672)

Sale of fixed assets 1813 26

Purchase of investments (29803) (701)

Sale of investments 28600 702

Interest received 631 273

Dividend received 219 20

NET CASH USED IN INVESTING ACTIVITIES : (18550) (59352)

49

C CASH FLOW FROM FINANCING ACTIVITIES :

Proceeds from issue of Foreign Currency Convertible Bonds 16855 -

Proceeds from issue of Preference Shares 15000 -

Proceeds from long term borrowings 30998 45919

Repayments of long term borrowings (26106) (7652)

Interest paid (6216) (3255)

Dividend paid (3049) (3049)

Tax on dividend (519) (428)

Share Issue expenses (686) -

Demerger expenses written off - -

NET CASH FROM FINANCING ACTIVITIES : 26277 31535

Net increase / (decrease) in cash and cash equivalents : 27182 (5220)

Cash and cash equivalents as at beginning of period 4621 9841

Cash and cash equivalents as at end of period 31803 4621

Note :Cash and cash equivalent as on March 31, 2008March 31, 2007

Cash and bank balances 31375 4667

Effect of exchange rate changes [loss / (gain)] 428 (46)

Cash and cash equivalents as restated 31803 4621

Cash Flow Statement for the year ended March 31, 2008 (contd.)Current Year Previous Year

Rs. Lakhs Rs. Lakhs

As per our Report attachedFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director


50

Schedules Annexed to and forming part of the Balance Sheet as atMarch 31, 2008

Current Year Previous YearRs. lakhs Rs. lakhs

SCHEDULE “1” :

SHARE CAPITAL :

AUTHORISED :

50,000,000 (Previous Year 50,000,000) Equity Shares of Rs.10 each 5000 50001,500,000 (Previous Year Nil) 10% Optionally Convertible Redeemable

Cumulative Preference Shares of Rs.1,000 each 15000 -

20000 5000

ISSUED :


Cumulative Preference Shares of Rs.1,000 each 15000 -

18820 3820

SUBSCRIBED & PAID UP :

38,118,481 (Previous Year 38,118,481) Equity Shares of Rs.10 eachfully paid up. 3812 3812

1,500,000 (Previous Year Nil) 10% Optionally Convertible RedeemableCumulative Preference Shares of Rs.1,000 eachfully paid up. 15000 -

18812 3812

Notes:

1. Out of above, 38,068,481 Equity Shares are allotted as fully paidup pursuant to a scheme of arrangement without payment beingreceived in cash.

2. Paid-up Equity Share Capital is net of Calls in Arrears Rs. 0.08 lakh.

51



SCHEDULE “2” :RESERVES AND SURPLUS :FOREIGN CURRENCY FLUCTUATION RESERVE

As per last Balance Sheet - -Add: Transfer from Profit & Loss Account 1000 -

1000 -SECURITIES PREMIUM ACCOUNT :

As per last Balance Sheet 3200 3200Less : Share Issue Expenses 686 -

2514 3200TONNAGE TAX RESERVE ACCOUNT UNDER SECTION115VT OF THE INCOME-TAX ACT,1961 :

As per last Balance Sheet 3850 1850Add: Transfer from Profit and Loss Account 4000 2000

7850 3850GENERAL RESERVE :

As per last Balance Sheet 39253 36753Add: Transfer from Profit and Loss Account 2500 2500

41753 39253

PROFIT AND LOSS ACCOUNT 16868 12176

69985 58479

SCHEDULE “3” :SECURED LOANS :TERM LOANS -

- From Banks 75230 73001 (Secured by mortgage of specific ships)

NON CONVERTIBLE DEBENTURES -Secured Redeemable Non-Convertible Debenturesof Rs. 1,00,00,000 each - (Refer Note 4)- 8.95 % redeemable on July 17, 2007 * - 646

- 6.05 % redeemable on September 19, 2010. 767 767

767 1413* redeemed during the year

75997 74414

SCHEDULE “4' :UNSECURED LOANS :7.25 % Foreign Currency Convertible Bonds (due 2012) 16855 -From The Great Eastern Shipping Co. Ltd. 162 242(Repayable within one year Rs. 81 Lakhs)

17017 242

52

SCHEDULE “5” :FIXED ASSETS :Particulars Cost Depreciation Net Block

As at As at Upto For Adjust- Upto As at As atApril 1, Additions Deductions March 31, March 31, the year ments on March 31, March 31, March 31,

2007 2008 2007 assets sold 2008 2008 2007

Fleet 125,265 12,944 1,292 136,917 31,951 8,116 1,292 38,775 98,142 93,314

Plant & Machinery- Rigs & Barge 9,070 - - 9,070 6,746 1,555 - 8,301 769 2,324

Ownership Flats &Office Premises 1,669 - - 1,669 859 40 - 899 770 810

Furniture, Fixturesand OfficeEquipments 750 86 - 836 662 71 - 733 103 88

Vehicles 300 122 38 384 176 71 22 225 159 124

TOTAL 137,054 13,152 1,330 148,876 40,394 9,853 1,314 48,933 99,943 -

Previous Year Total 93,193 43,916 55 137,054 33,459 6,967 32 40,394 - 96,660

Ships Under Construction 39,064 32,206

TOTAL 139,007 128,866



SCHEDULE “6” :

INVESTMENTS :

Long Term Investments - Trade(at cost - fully paid)

Equity Shares : Unquoted

Subsidiaries :1,50,000 Great Offshore Fujairah L.L.C. - FZC of US $ 1 each 66 66

50,000 Deep Water Services (India) Ltd. of Rs. 10 each 5 5Joint Venture :

5,20,000 United Helicharterers Pvt. Ltd.of Rs. 10 each 57 57

128 128

Current Investments(at lower of cost and fair value - fully paid)

Mutual Fund : UnquotedSubscribed during the year : UnitsLIC MF Liquid Plus Fund - Daily Dividend 60,05,051 601 -(Face Value Rs. 10/-)ICICI Prudential Flexible Income Plan - Daily Dividend 56,98,619 602 -(Face Value Rs. 10/-)

1203 -

1331 128

53



SCHEDULE “7” :

INVENTORIES :

Fuel Oil (at cost) 617 572

617 572

SCHEDULE “8” :

SUNDRY DEBTORS :(Unsecured)

Debts outstanding over six months :Considered good 1142 1450Considered doubtful 436 395

1578 1845Other Debts :

Considered good 16558 12305

18136 14150Less : Provision for doubtful debts 436 395

17700 13755

SCHEDULE “9” :

CASH AND BANK BALANCES :Cash on hand 13 4

Balances with scheduled banks :On current account 403 140

Balances with other banks :On call / deposits with ABN AMRO Bank, London 30958 4521(Maximum Balance Rs. 24061 lakhs,Previous Year Rs. 13981 lakhs)

On current account with ABN AMRO Bank, Dubai - -(Rs. 0.07 lakh, Previous Year Rs. 0.29 lakh)(Maximum Balance Rs. 2 lakhs, Previous Year Rs. 8 lakhs)

On current account with ABN AMRO Bank, Malaysia 1 2(Maximum Balance Rs.7 lakhs, Previous Year Rs. 8 lakhs)

30959 4523

31375 4667

SCHEDULE “10” :

OTHER CURRENT ASSETS :Interest accrued on investments and deposits - 55

- 55

54



SCHEDULE “11” :

LOANS AND ADVANCES :(Unsecured - considered good, unless otherwise stated)Advances recoverable in cash or in kind or for value to be received 13898 2977Advance to Subsidiary company 30 32Agents’ current accounts 369 239Advance payment of Income-tax & taxes deducted at source 454 25(Net of Provision for taxation)

14751 3273

SCHEDULE “12” :

CURRENT LIABILITIES :Sundry Creditors

Outstanding dues to Micro Enterprises and Small Enterprises - -Dues of other creditors 14153 12226

14153 12226Other Liabilities 2647 1069Interest accrued but not due on loans 1097 762Managerial Remuneration payable 720 240

18617 14297

SCHEDULE “13” :

PROVISIONS :Proposed Dividend on Preference Shares 848 -Proposed Final Dividend on Equity Shares 3049 -Provision for Tax on Dividends 663 -Provision for Retirement benefits 355 292

4915 292

SCHEDULE “14” :

MISCELLANEOUS EXPENDITURE :(to the extent not written off or adjusted)Deferred Revenue Expenditure :

As per last Balance Sheet 4 25Less : Amortised during the year 4 21

- 4

55



SCHEDULE “15” :INCOME FROM OPERATIONS :Charter Hire (Gross) 66030 53684[Income tax deducted at source Rs. 1820 lakhs, (Previous Year Rs. 917 lakhs)]Contract Revenue (Gross) 1601 -[Income tax deducted at source Rs. 26 lakhs, (Previous Year Rs. Nil)]Miscellaneous Receipts - 49

67631 53733

SCHEDULE “16” :OTHER INCOME :Dividend on current investments 219 20Interest earned (Gross) : - on call deposits 570 321 - others 7 7

[Income-tax deducted at source Rs. NIL, 577 328 (Previous Year Rs. 1 lakhs)]Profit on sale of current Investments - 1Gain on foreign currency transactions (net) 3983 345Profit on sale of sundry assets (net) - 3Reversal of Provision on Arbitration settlement 549 -Miscellaneous Income 273 35

5601 732

SCHEDULE “17” :OPERATING EXPENSES :Fuel, Oil and Water 1464 1309Port, Light and Canal Dues 164 71Hire of chartered ships 447 3258Outsourced Services 1222 -Brokerage and Commission 414 265Wages, Bonus and Other Expenses - Floating Staff 11894 8744Contribution to Provident and Other Funds - Floating Staff 128 207Stores 1972 1337Repairs & Maintenance - Fleet and Rigs 6182 5432Insurance & Protection Club Indemnity Fees 1713 1482Vessel Manning Expenses 870 510Project Expenses 1240 13Sundry Operating Expenses 2924 844

30634 23472

56



SCHEDULE “18” :ADMINISTRATION & OTHER EXPENSES :

Salaries and allowances 3140 2271

Contribution to Provident and Other Funds 143 134

Staff Welfare Expenses 75 52

Rent 7 11

Insurance 22 28

Repairs and Maintenance- Buildings 91 14- Others 102 79

193 93

Property Taxes 13 47

Legal & Professional expenses 1005 206

Auditors’ Remuneration (including service tax) 25 24

Provision for Doubtful Debts 77 133

Donations 10 -

Other Expenses 1248 1153

5958 4,152

SCHEDULE “19” :INTEREST & FINANCE CHARGES :

Interest on Fixed Loans 6464 3412

Finance charges 87 184

6551 3596

57

SCHEDULE “20”

SIGNIFICANT ACCOUNTING POLICIES :

(a) Accounting Convention :

The financial statements are prepared under the historical cost convention, in accordance withGenerally Accepted Accounting Principles in India, the Accounting Standards issued by the Instituteof Chartered Accountants of India and the provisions of the Companies Act, 1956.

(b) Use of Estimates :

The preparation of financial statements in conformity with Generally Accepted Accounting Principlesrequires the management to make estimates and assumptions that affect the reported balances ofassets and liabilities as of the date of the financial statements and reported amounts of income andexpenses during the period. Management believes that the estimates used in the preparation offinancial statements are prudent and reasonable. Actual results could differ from the estimates.

(c) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost includes expenses related toacquisition and financing costs on borrowings during construction period. Exchange differences onrepayment and year end translation of foreign currency liabilities relating to acquisition of assets froma country outside India are recognised in the Profit and Loss account.

(d) Investments :

i. Investments are classified into long-term and current investments.

ii. Long-term investments are carried at cost. Provision for diminution, if any, in the value of eachlong-term investment is made to recognise a decline, other than of a temporary nature.

iii. Current investments are stated at lower of cost and fair value and the resultant decline, if any, ischarged to revenue.

(e) Inventories :

Inventories of fuel oil are valued at cost on first in first out basis.

(f) Borrowing cost :

Borrowing costs that are directly attributable to the acquisition / construction of the qualifying fixedassets are capitalised as a part of the respective asset, upto the date of acquisition / completion ofconstruction.

(g) Miscellaneous Expenditure :

Expenditure incurred prior to April 1, 2003 is amortised as under:

Deferred revenue expenditure:

- Compensation payable under voluntary retirement scheme … 5 years

(h) Revenue recognition :

Charter hire earnings are recognised on accrual basis.

Revenue from long term turnkey offshore projects is recognised on the percentage of completionbasis, based on costs incurred and the expected costs to completion.

(i) Operating expenses :

(i) Operating expenses and standing charges are charged to revenue on accrual basis.

(ii) Stores and spares delivered on board the ships and rigs are charged to revenue.

(j) Employee benefits :

Defined Contribution Plan

Retirement benefits in the Provident Fund, Family Pension Fund and Superannuation Scheme, whichare defined contribution schemes, are charged to the Profit and Loss account of the year when thecontributions accrue.

58

Defined Benefit PlanThe liability for Gratuity, a defined benefit obligation, is accrued and provided for on the basis ofactuarial valuation as at the Balance Sheet date.Other Long Term BenefitsLong term compensated absences are provided on the basis of an actuarial valuation as at theBalance Sheet date. Actuarial gains and losses comprising of experience adjustments and the effectsof changes in actuarial assumptions are recognised in the Profit and Loss account for the year asincome or expense.

(k) Depreciation :(i) Fleet :

Depreciation on new built vessels is provided on the straight line method at the rates prescribedin Schedule XIV to the Companies Act, 1956. In case of second hand acquisitions, depreciationis provided on the straight line method, so as to write off the cost over the estimated useful life,as technically evaluated by the management / consultants at the time of acquisition (20 to 27years), or at the rates prescribed in Schedule XIV to the Companies Act, 1956, whichever ishigher.

(ii) Rigs :Rigs are depreciated on the straight line method so as to write off the original cost over theestimated useful life of 7 years. The existing Rigs are fully depreciated, consequently, anyadditions thereto are written off over the contract period.

(iii) Barge :The Barge is depreciated on the straight line method so as to write off the original cost over theestimated useful life of 7 years. The existing barge is fully depreciated.

(iv) Properties :Flats and Office premises are depreciated on the written down value method, at the ratesprescribed in Schedule XIV to the Companies Act, 1956.

(v) Other Assets :On the straight line method so as to write off the original cost of the asset over the estimateduseful life as under:Computers - 3 yearsVehicles - 4 yearsFurniture & Fixtures,Office Equipment, etc - 5 years

(l) Foreign Exchange Transactions :(i) Transactions in foreign currency are recorded at standard exchange rates determined monthly.

Monetary assets and liabilities denominated in foreign currency, remaining unsettled at theperiod end are translated at closing rates. The difference in translation of monetary assets andliabilities and realised gains and losses on foreign currency transactions is recognised in theProfit and Loss Account.

(ii) Forward exchange contracts, other than those entered into to hedge foreign currency risk of firmcommitments or highly probable forecast transactions, are translated at period end exchangerates. Premium or discount on such forward exchange contracts is amortised as income orexpenses over the life of the contracts.

(iii) Exchange differences in respect of forward exchange contracts entered into by the Company tohedge foreign currency risk of firm commitments or highly probable forecast transactions areaccounted for on settlement.

(iv) Realised gain or losses on cancellation of forward exchange contracts are recognised in the Profitand Loss Account of the period in which they are cancelled.

59

(v) Foreign currency derivative contracts which are embedded in the loan agreements and form anintegral part of the agreement are translated at closing rates and the resultant gains or losses arerecognised in the Profit and Loss account along with the revaluation gains or losses of thehedged loans. The unrealised gains or losses arising on revaluation of other foreign currencyswaps and options are carried forward under Loans and Advances or Other Liabilities untilsettlement in line with the underlying hedged assets / liabilities.

(m) Provision for Taxation :Tax expense comprises of current, deferred tax and fringe benefit tax.(i) Provision for current income-tax and fringe benefit tax is made on the basis of the assessable

income under the Income-tax Act, 1961. Income from shipping activities is assessed on the basisof deemed tonnage income of the Company.

(ii) Deferred income-tax is recognised on timing differences, between taxable income and accountingincome which originate in one period and are capable of reversal in one or more subsequentperiods only in respect of the non-shipping activities of the Company. The tax effect is calculatedon the accumulated timing differences at the year end based on tax rates and laws, enacted orsubstantially enacted as of the balance sheet date.

(n) Provisions and Contingent Liabilities :Provisions are recognised in the accounts in respect of present probable obligations, the amount ofwhich can be reliably estimated.Contingent Liabilities are disclosed in respect of possible obligations that arise from past events buttheir existence is confirmed by the occurrence or non occurrence of one or more uncertain futureevents not wholly within the control of the Company.

(o) Segment Reporting :The Company is mainly engaged in offshore business and there are no separate reportable segmentsas per Accounting Standard (AS) 17.

SCHEDULE “21”NOTES TO ACCOUNTSFor the year ended March 31, 20081. Great Offshore Limited was incorporated on July 14, 2005 and the offshore services business of The

Great Eastern Shipping Co. Ltd. was demerged and vested in the Company with effect from April 1,2005 pursuant to a Scheme of Arrangement sanctioned by the High Court of judicature at Mumbai. TheCompany specialises in providing offshore support solutions to the Exploration & Production Industry.In this segment the Company operates Drilling Rigs, Offshore Support Vessels and undertakes MarineConstruction Projects and services.

2. Contingent Liabilities :Rs. Lakhs

Sr. Particulars As on As onNo. 31.3.2008 31.3.2007

(i) Guarantees given by banks including performance andbid bonds, counter guaranteed by the Company. 9569 7002

(ii) Guarantees by bank given on behalf of a subsidiary company. 1102 1529

(iii) Corporate guarantee given on behalf of subsidiary 1600 -

(iv) Corporate guarantee given to Customs 583 -

(v) Claims not acknowledged by Company in respect of:a) Customs Duty on Tug at Mundra Port 70 70b) Sales tax and Service tax demands on charter hire payments 168 168

(vi) Letters of Credit outstanding 348 -

60

3. Share Capital :

The allotment of 72,920 (Previous Year 72,920) equity shares of the Company have been kept in abeyancein accordance with section 206 A of the Companies Act, 1956, till such time as the title of the bonafide ownerof the shares is certified by the concerned Stock Exchanges as per orders from the Special Court (Trial ofOffences relating to Transactions in Securities) Act, 1992. An additional 10,153 (Previous Year 10,153)shares have also been kept in abeyance for disputed cases in consultation with the Bombay Stock Exchange.

The Company has, on September 7 2007, issued and allotted 15,00,000, 10% Optionally ConvertibleRedeemable Cumulative Preference Shares (OCRCPS) of Rs 1000/- each to Export Import Bank of India (theInvestor), in accordance with the approvals of the Board of Directors and the share holders of the Company.The OCRCPS are optionally convertible into 1,714,285 Equity shares at anytime after 12 months (lock inperiod) but not later than 16 months from the date of subscription to OCRCPS at the conversion price of Rs.875 per share, which is in compliance with Securities and Exchange Board of India guidelines.

In the event that the OCRCPS are not converted into equity shares, during the conversion period, theCompany shall redeem the same at the end of 3 years from the allotment date at the redemption price ofRs. 1000 per OCRCPS.

4. Secured Loans :

The secured redeemable non convertible debentures have been taken over from The Great EasternShipping Co. Ltd. (G. E. Shipping) under a Scheme of Arrangement. The said debentures continue to besecured by mortgage of specified immovable properties & ships of G. E. Shipping and the Company isunder an obligation to reimburse G. E. Shipping all repayments and interest in respect of the aforesaiddebentures, before the respective due dates as per the terms of the Scheme.

5. Unsecured Loans :

During the year, the Company has issued 7.25% Unsecured Foreign Currency Convertible Bonds (due2012) of US$ 100,000 each aggregating to US $ 42,000,000, listed on the Singapore Exchange SecuritiesTrading Limited (SGX-ST). These Bonds are convertible into equity shares at a price of Rs. 875/- pershare and YTM of 7.25% with a fixed rate of exchange on conversion of Rs. 39.82 = US$ 1.00.

The Bondholders may, as per the terms, convert the Bonds in whole or in part from time to time, at theiroption, during the period commencing 11th October, 2007 to 28th September, 2012. As per the MandatoryConversion Right embedded in the offer document, the Company has the option to convert the entireoutstanding bonds on the terms and conditions agreed upon. In the event, the Bonds are not redeemed;or repurchased and cancelled; or converted, the Company will redeem the Bonds on the Maturity Date.

6. Fixed Assets :

(a) Estimated amount of contracts, net of advances paid thereon, remaining to be executed on capitalaccount and not provided for - Rs. 58689 lakhs (Previous Year Rs. 74400 lakhs).

(b) The amount of exchange gain on account of fluctuation of the rupee against foreign currencies,gain or loss on hedging contracts and cancellation of forward covers relating to loan liabilitiesdeducted from the carrying amount of fixed assets during the year is Rs. Nil lakhs (Previous YearRs. 2687 lakhs).

7. Debts due from a subsidiary (considered good) :Rs. Lakhs

As on 31.3.2008 As on 31.3.2007

Outstanding over six months 417 1365

Other debts 1753 862

61

8. Loans to subsidiaries :Rs. Lakhs

As on As on Maximum balance31.3.2008 31.3.2007 outstanding

Current Year Previous Year

Great Offshore Fujairah L.L.C. – FZC 30 32 32 33

Deep Water Services (India) Ltd. - - - 170

9. The balances of debtors and creditors are subject to confirmation.10. Deferred tax :

Pursuant to the introduction of Sec 115V under the Income Tax Act, 1961, the Company has opted forcomputation of its income from shipping activities under the Tonnage Tax Scheme. Thus income fromthe business of operating ships will be assessed on the basis of the deemed Tonnage Income of theCompany and no deferred tax will be applicable to this income as there will be no timing differences.Deferred tax is accounted for in respect of the timing differences under the non-tonnage activity of theCompany.The break up of net deferred tax assets / (liability) is as under:

Rs. Lakhs

As on 31.3.2008 As on 31.3.2007

Deferred tax assets:Demerger Expenses 8 12Provision for doubtful debts and advances (Net) 17 30Difference between book and tax depreciation 537 174

562 216

Deferred tax liabilities:Difference between book and tax depreciation - -

Net deferred tax assets 562 216

11. Current Liabilities :According to information available to the Company regarding the status of the suppliers, as definedunder The Micro, Small and Medium Enterprises Development Act, 2006, amount overdue as on31st March, 2008 to the Micro, Small and Medium enterprises on account of principal amount, togetherwith interest for delayed payment under the Act, is Rs. Nil (Previous Year Rs. Nil).

12. Provisions :The Company has recognised the provisions given below in its accounts in respect of obligations arisingfrom past events, the settlement of which are expected to result in an outflow embodying economicbenefits.Manning dues and related contributions to welfare funds was Rs. 525 lakhs as on 1st April, 2007, additionduring the year was Rs. 391 lakhs (Previous Year Rs. 326 lakhs), reversed / paid during the year wasRs. 368 lakhs (Previous Year Rs. 556 lakhs), hence balance as on 31st March, 2008 is Rs. 548 lakhs.Pool Payable Provision was recognised for amounts payable to a pool of charterers estimated onthe basis of average pool earnings. Opening balance as on 1st April, 2007 was Rs. 1459 lakhs,additions during the year was Rs. 2541 lakhs (Previous Year Rs. 1878 lakhs), reversed / paid duringthe year was Rs. 2146 lakhs (Previous Year Rs. 420 lakhs), hence balance as on 31st March, 2008 isRs. 1854 lakhs.

62

13. Profit and Loss Account :

(a) Computation of Net Profit in accordance with Section 349 of the Companies Act, 1956 :

Rs. Lakhs


Profit for the year before tax 22035 16278

Add :

Managerial Remuneration 1000 403

Provision for doubtful debtsand advances 77 133

Depreciation as per books 9853 6967

10930 7503

32965 23781

Less :

Depreciation u/s 350 of theCompanies Act, 1956 9853 6967

Capital Profit: Sale of fixed assets 1799 -

11652 6967

Eligible Net Profit as per Section 349of the Companies Act, 1956. 21313 16814

Maximum limit of remuneration payableas per Section 309

(a) To Wholetime Director @ 5% ofEligible Profit 1066 841

(b) As Commission to Non-Whole-timeDirectors @ 1% 213 168

Managerial Remuneration toWholetime Director 905 359

Commission to Non-wholetime Directors 80 35

Total Managerial Remuneration(including commission and provisionfor retirement pension benefitsand excluding sitting fees) 985 394

63

(b) Managerial Remuneration :

Rs. Lakhs


(a) Salaries 94 63

(b) Contribution to Provident fund andSuperannuation fund 26 17

(c) Perquisites 2 1

(d) Commission to Managing Director 720 240

(e) Commission to Non-Whole-time Directors 80 35

(f) Retirement Pension benefits 63 38

(g) Sitting fees 15 9

TOTAL 1000 403

Note: The above does not include contribution to Gratuity Fund and provision for retirement leaveencashment benefit which are actuarially determined or on overall basis and separate figures arenot available for the managing director.

Commission to the Managing Director of Rs. 360 lakhs which is included above is subject toshareholders approval in the forthcoming Annual General Meeting.

14. Change in Accounting Policy :

(a) The Company’s (Accounting Standard) Rules,2006 issued by the Ministry of Corporate Affairs videnotification dated 7th December, 2006, which are applicable to the Company with effect from1st April, 2007, clarified that the accounting treatment of exchange differences contained inAccounting Standard 11 as notified supersede the requirements of Schedule VI of the Act.Consequently, the foreign exchange gains and losses relating to foreign currency borrowings takenfor acquiring vessels from abroad, Rs. 2852 lakhs (net) which hitherto were adjusted to the carryingcost of such assets, have been credited to the Profit and Loss Account. The profit for the year is thushigher by Rs. 2717 lakhs (net of higher depreciation for the year on such assets of Rs. 135 lakhs).

(b) The Company has effective from April 1, 2007, adopted the treatment specified by the Institute ofChartered Accountants of India in its announcements dated 29th March, 2008 for accounting ofderivatives on a mark-to-market basis and has consequently charged a loss of Rs. 222 lakhs to theProfit and Loss Account.

64

15. Employee Benefits :

(a) Effective April1,2007 the Company adopted Accounting Standard 15 ( Revised 2005) on “EmployeeBenefits” issued by ICAI.

(b) The Company has recognised the following amounts in the Profit and Loss Account for the year:

A) Defined Contribution Plans :

Rs. Lakhs


Contribution to Employees Provident Fund 126.86 104.80

Contribution to Employees Superannuation Fund 70.63 62.63

Contribution to Employees Pension Scheme 1995 4.56 4.88

Contribution to Seamen’s Provident Fund 33.37 22.78

Contribution to Seamen’s Annuity Fund 73.47 32.19

Contribution to Gratuity Fund 49.55 113.91

B) Defined Benefit Plans :

Valuations in respect of Gratuity, Pension Plan for whole-time Directors, Leave Encashment havebeen carried out by an independent actuary, as at the Balance Sheet date on Projected Unit Creditmethod, based on the following assumptions :

Actuarial Assumptions: Gratuity Pension Plan Leave Encashment

for the year Current Previous Current Previous Current PreviousYear Year Year Year Year Year

(a) Discount Rate (p.a.) 8% 7% 7.5% 7% 7.5% 7%

(b) Rate of Return onPlan Assets - - - - - -

(c) Salary Escalation rate 5% 5% - - 5% 5%

(d) Mortality LIC (1994-96) ULT

(e) Withdrawal rate AgeRelated 0.5% - - 0.5% 0.5%

(f) Expected averageremaining service - - - - 16.52 16.18

65

(i) Change in Benefit Obligation :Rs. Lakhs

Gratuity Pension Plan Leave Encashment

Current Previous Current Previous Current PreviousYear Year Year Year Year Year

Liability at the beginningof the year 523.21 465.02 292.25 254.68 62.81 69.67

Interest Cost 39.14 27.17 20.46 17.83 4.40 3.79

Current Service Cost 57.55 40.78 - - 33.88 36.82

Benefits Paid (43.17) (24.25) - - - (12.82)

Transfer from previousemployer’s - - - - - -

Provision for diminutionin fair value of planassets - - - - - -

Actuarial gain/(loss)on obligations 71.14 (14.49) (42.51) (19.74) 63.89 34.65

Liability at the endof the year 505.59 523.21 355.22 292.25 37.20 62.81

(ii) Fair value of Plan Assets :Rs. Lakhs



Fair Value of Plan Assetsat the beginning of theyear 473.45 461.25 - - - -

Expected Return onPlan Assets 33.03 33.68 - - - -

Employer’s Contribution 20.00 - - - - -

Employees Contribution - - - - - -

Benefits Paid (43.17) (24.25) - - - (12.82)

Provision for diminutionin fair value of plan assets - - - - - -

Actuarial gain/(loss) onPlan Assets 27.40 2.76 - - - 12.82

Fair Value of Plan Assetsat the end of the year 510.71 473.44 - - - -

Contributions expected tobe paid to the planin FY 2007-08 - - - - - -

66

(iii) Actual Return on Plan Assets :Rs. Lakhs



Expected Return onPlan Assets 33.03 33.68 - - - -

Actuarial gain / (loss)on Plan Assets 27.40 2.76 - - - -

Actual Return onPlan Assets 60.43 36.44 - - - -

(iv) Amount Recognised in the Balance Sheet :Rs. Lakhs



Liability at the end ofthe year 505.59 523.21 355.22 292.25 37.20 62.81

Fair Value of Plan Assetsat the end of the year 510.71 473.44 - - - (12.82)

Difference 5.12 (49.76) (355.22) (292.25) (37.20) (75.63)

Unrecognised pastservice cost - - - - - -

Amount recognised inthe Balance Sheet 5.12 49.76 (355.22) (292.25) (37.20) (75.63)

(v) Expenses recognised in the Profit & Loss Account :Rs. Lakhs



Current Service Cost 57.55 40.78 - - 33.88 36.82

Interest Cost 39.14 27.17 20.46 17.83 4.40 3.79

Expected Return onPlan Assets (33.03) (33.68) - - - -

Net Actuarial gain / (loss)to be recognized 98.55 (11.72) (42.51) (19.74) 63.89 47.47

Expenses recognised inProfit and Loss Account 34.89 (45.99) (62.97) (37.57) 25.64 6.86

67

(vi) Basis used to determine expected rate of return on assets :

Expected rate of return on investments is determined based on the assessment made by the Company atthe beginning of the year on the return expected on its existing portfolio since these are generally heldto maturity, along with the estimated incremental investments to be made during the year.

(vii) General description of significant defined plans :

Gratuity Plan :

Gratuity is payable to all eligible employees of the Company on superannuation, death, permanentdisablement and resignation in terms of the provisions of the Payment of Gratuity Act or as per theCompany’s Scheme whichever is more beneficial. Benefit would be paid at the time of separation basedon the last drawn base salary.

Pension Plan :

Under the Company’s Pension Scheme for the whole-time Directors as approved by the Shareholders,all the whole-time Directors are entitled to the benefits of the scheme only after attaining the age of 62years, except for retirement due to Physical disability, in which case, the benefits shall start on hisretirement. The benefits are in the form of monthly pension @ 50% of his last drawn monthly salarysubject to maximum of Rs.50 lakhs p.a. during his lifetime. If he predeceases the spouse, she will bepaid monthly pension @ 50% of his last drawn pension during her lifetime. The benefit also includesoffice space including telephone in the Company’s office premises and use of Company’s car includingreimbursement of driver’s salary and other related expenses during his lifetime.

Leave Eancashment :

Eligible employees can carry forward and encash leave upto superannuation, death, permanentdisablement and resignation subject to maximum accumulation allowed @ 38 days for employees onCTC basis and @ 300 days for other employees. The Leave over and above 15 days for CTC employeesand over 300 days for others is encashed and paid to employees in July every year. Benefit would bepaid at the time of separation based on the last drawn basic salary.

16. Auditors’ Remuneration (including service tax) :Rs. Lakhs


Audit Fees 15 11

In other capacities :

- Tax Audit 2 2

- Taxation 5 8

- Certification and other services 3 3

Total 25 24

17. Hedging Contracts :

(i) Derivative Instruments outstanding as at 31st March, 2008

(a) Forward Exchange Contracts : Current Year Previous Year

Purchased Sold Purchased Sold

Total No. of contracts outstanding - 7 - 1

Foreign Currency Value covered(in millions) :

US Dollars - 4 - 1

68

(b) Interest Rate Swap contracts payable at predetermined fixed rate vis-à-vis LIBOR relating toloans of USD 36 million (Previous Year USD 40 million).

(ii) The Company uses forward exchange contracts and interest rate swaps to hedge its exposure toforeign exchange and interest rate changes.

(iii) Unhedged foreign currency exposure : as on 31st March, 2008 :

Amount in Foreign Currency in Lakhs


(i) Loans liabilities and payables(a) U S Dollars 1772 1581(b) Euros 2 1(c) Arab Emirates Dinars 5 13(d) Japanese Yens 121 113(e) Great Britain Pounds 33 22(f) Norwegian Kroners 2 2(g) Singapore Dollars 16 49(h) African Rands 1 2(i) Sri Lankan Rupees 16 _(j) Saudi Riyals 1 _

(ii) Receivables(a) U S Dollars 1033 260(b) Euros 7 _(c) Arab Emirates Dinars 1 _(d) Japanese Yens 1 1(e) Great Britain Pounds 70 70(f) Singapore Dollars _ 17

18. Particulars of investments purchased and sold during the year :

No. of Units Face Value Purchase CostRupees Rs. Lakhs

ING Liquid Plus Fund- Daily Dividend 5,71,837 1,000 5714

ING Liquid Plus Fund- Daily Dividend 2,54,43,850 10 2545

LIC MF Liquid Plus Fund- Daily Dividend 1,40,51,024 10 1405

Principal Floating RateFund - Daily Dividend 5,00,73,242 10 5013

ICICI Prudential FlexibleIncome Plan - Daily Dividend 2,41,65,481 10 2555

HDFC Cash Management FundSaving Plus - Daily Dividend 7,10,12,573 10 8271

ABN Amro Money PlusInstitutional Plan - Daily Dividend 5,54,62,207 10 5546

69

19. Segment Reporting :

The Company is mainly engaged in offshore business and there are no separate reportable segments asper Accounting Standards (AS) 17.

20. Related Party Disclosures :

(i) List of Related Parties :

a) Parties where control exists :

Subsidiary Companies :

Great Offshore Fujairah L.L.C.- FZC

Deep Water Services (India) Ltd.

b) Other related parties with whom transactions have takenplace during the year :

1. Joint Venture :

United Helicharterers Pvt. Ltd.

2. Key Management Personnel :

Mr.Vijay Kantilal Sheth - Vice Chairman cum Managing Director

3. Individual exercising significant influence over the enterprise :

Mr. K. M. Sheth (till July 3, 2007)

4. Enterprises over which persons mentioned in 2 & 3 above exercise significant influence :

Delta Housing Co. Pvt. Ltd.

The Great Eastern Shipping Co. Ltd.

70

(ii) Transactions with related parties for the year ended 31st March 2008 Rs. Lakhs

Sr. Nature of Transaction Subsidiary Joint Venture Key Management Individuals exercising Enterprises over TotalNo. Companies Personnel significant influence which Individuals /

Directors exercisesignificant influence

Current Previous Current Previous Current Previous Current Previous Current Previous Current PreviousYear Year Year Year Year Year Year Year Year Year Year Year

1 Income earned onServices rendered : 1997 1522 1997 1522Deep Water Services (India) LtdRoyalty received from : - 10 14 10 14United Helicharterers Pvt Ltd

2 Interest Income receivedfrom : - 3 - 3Deep Water Services(India) Ltd

3 Reimbursement ofExpenses received from : 7 8 7 8Deep Water Services(India) Ltd

4 Interest paid to : 6 4 6 4The Great EasternShipping Co.Ltd

5 Repayment of loan by : - 170 - 170Deep Water Services(India) Ltd

6 Repayment of servicesreceived. : 2000 - 2000 -Deep Water Services(India) Ltd

7 Remuneration 905 359 905 359Mr.Vijay K.Sheth

8 Sitting Fees & Commission 5 1 5 1Mr.K.M.Sheth(retired w.e.f. 3rd July, 2007)

9 Loan received from : - 242 - 242The Great EasternShipping Co.Ltd

10 Deposit received from : - 19 - 19Delta Housing Co.Pvt Ltd

11 Deposit repaid to : - 24 - 24Delta Housing Co.Pvt Ltd

12 Loans repaid to : 40 - 40 -The Great EasternShipping Co.Ltd

13 Outstanding balancesas on 31.03.08

Loans & Advances(Receivables) :Great.Offshore (Fujairah)LLC-FZC 30 32 30 32Loans & Advances(Payables) : 202 242 202 242The Great EasternShipping Co.LtdInterest Payables : - 1 - 1The Great EasternShipping Co.LtdReceivables : 2170 2227 2170 2227Deep Water Services(India) Ltd - Rs.2170 LakhsUnited Helicharterers 46 37 46 37Pvt LtdPayables : - 2 - 2The Great EasternShipping Co.Ltd

14 Guarantees given : 2702 1529 2702 1529Deep Water Services(India) Ltd

71

21. Interest in Joint Venture :

The Company has a joint venture interest in United Helicharters Pvt. Ltd. (a company incorporated inIndia) and its proportionate share in the assets, liabilities, income and expenses of the jointly controlledentity, based on the unaudited management accounts drawn up to 31 December, 2007, is as under :

Percentage of ownership interest as at 31st March 2008. – 26%

Rs. Lakhs

As at 31st December 2007 For the period ended 31st December 2007

Assets 605 Income 962

Liability 521 Expenditure 1029

22. Basic and diluted earnings per share : Rs. Lakhs


(a) Net Profit after tax for Equity Shareholders 20321 14142

(b) Number of Equity shares as on April 1, 2007 38,118,481 38,118,481

Add: Shares allotted during the year - -

Number of Equity shares as on March 31, 2008 38,118,481 38,118,481

Weighted average number of Equity sharesoutstanding during the year 38,118,481 38,118,481

(c) Face value of Equity Share Rs.10 Rs.10

(d) Basic earnings per share Rs. 53.31 Rs. 37.10(e) Diluted earnings per share Rs. 52.17 -

23. Information pursuant to para 4D of Part II of Schedule VI of the Companies Act, 1956 has not been givenin view of exemption granted by the Department of Company Affairs, vide order no. 46/96//2008/CL-IIIdated April 30, 2008.

24. Previous Years figures have been regrouped wherever necessary to conform to current year’s classification.

72

ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OFSCHEDULE VI TO THE COMPANIES ACT, 1956

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE :

I Registaration Details :

Registaration No. U 1 1 2 0 0 M H 2 0 0 5 P L C 1 5 4 7 9 3

State Code 1 1

Balance Sheet Date 3 1 - 0 3 - 2 0 0 8

II Capital Raised during the year : Rs. lakhs

Public Issue N I L

Rights Issue N I L

Bonus Issue N I L

Private Placement 1 5 0 0 0

III Position of Mobilisation and Deployment of Funds : Rs. lakhs

Total Liabilities 2 0 5 3 4 3

Total Assets 2 0 5 3 4 3

Sources of Funds :

Paid-up Capital 1 8 8 1 2

Reserves & Surplus 6 9 9 8 5

Secured Loans 7 5 9 9 7

Unsecured Loans 1 7 0 1 7

Application of Funds :

Net Fixed Assets 1 3 9 0 0 7

Investments 1 3 3 1

Deferred Tax Assets 5 6 2

Net Current Assets 4 0 9 1 1

Misc Expenditure N I L

Accumulated Losses N I L

IV Performance of Company : Rs. lakhs

Turnover 7 5 0 3 1

Total Expenditure 5 2 9 9 6

Profit / (loss) Before Tax 2 2 0 3 5

Profit / (loss) After Tax 2 0 3 2 1

Earning Per Share 5 3 . 3 1

Dividend Rate (%) 1 6 0

V Generic Names of Three Principal Products/

Services of Company (as per monetary terms) :

Description Item Code No.

Offshore N . A .

73

Auditor’s Report on Consolidated Financial Statements to the Board of Directorsof Great Offshore Limited

1. We have audited the attached Consolidated Balance Sheet of Great Offshore Limited and itssubsidiaries (the Group) as at March 31, 2008, and also the Consolidated Profit and LossAccount and Consolidated Cash Flow Statement for the year then ended, both annexedthereto. These consolidated financial statements are the responsibility of Great OffshoreLimited’s management. Our responsibility is to express an opinion on these financialstatements based on our audit.

2. We conducted our audit in accordance with generally accepted auditing standards in India.These Standards require that we plan and perform the audit to obtain reasonable assurancewhether the financial statements are free of material misstatements. An audit includes,examining on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. We did not audit the financial statements of the Company’s joint venture, whose financialstatements reflect the Group’s share of total assets of Rs. 605 lakhs as at March 31, 2008,the Group’s share of total revenues of Rs. 962 lakhs for the year ended on that date. Thesefinancial statements are for the period of nine months ended December 2007 and ouropinion, insofar as it relates to the amounts included in respect of the joint venture is basedsolely on the basis of the unaudited management accounts certified by the Management.

4. We report that the consolidated financial statements have been prepared by the managementof Great Offshore Limited in accordance with the requirements of Accounting Standard (AS)21 - Consolidated Financial Statements and Accounting Standard (AS) 27 – Financial Reportingof Interest in Joint Ventures issued by the Institute of Chartered Accountants of India.

5. Based on our audit and on consideration of the report of the unaudited accounts certified bythe management in respect of the Company’s joint venture, in our opinion, the consolidatedfinancial statements give a true and fair view in conformity with the accounting principlesgenerally accepted in India:

a) in case of the Consolidated Balance Sheet, of the consolidated state of affairs of theGroup as at March 31, 2008;

b) in case of the Consolidated Profit and Loss Account, of the consolidated results ofoperations of the Group for the year ended on that date; and

c) in case of the Consolidated Cash Flow Statement, of the consolidated cash flows of theGroup for the year ended on that date.



K. M. ElaviaPartnerMembership No: 12737


CONSOLIDATED ACCOUNTS

74

Consolidated Balance Sheet as at March 31, 2008Current Year Previous Year

Rs. Lakhs Rs. LakhsSchedule

SOURCES OF FUNDS :Shareholders’ Funds :

Capital 1 18812 3812Reserves and Surplus 2 69341 57946

88153 61758Loan Funds :

Secured Loans 3 77596 74414Unsecured Loans 4 17017 242

94613 74656TOTAL 182766 136414

APPLICATION OF FUNDS :Fixed Assets : 5

Gross Block 149724 137888Less : Depreciation 49741 41199Net Block 99983 96689Ships under Construction 39064 32206

139047 128895Goodwill (on consolidation) 5 5Investments 6 1819 -Deferred tax assets (net) 657 329Current Assets, Loans and Advances :

Inventories 7 783 631Sundry Debtors 8 17482 12396Cash and Bank balances 9 31940 5764Other Current assets 10 - 55Loans and Advances 11 15629 4064

65834 22910Less : Current Liabilities and Provisions :

Current Liabilities 12 19710 15457Provisions 13 4886 272

24596 15729Net Current Assets 41238 7181Miscellaneous Expenditure 14(to the extent not written off or adjusted) - 4TOTAL 182766 136414


The Schedules referred to above form an integral part of the Balance Sheet.As per our Report attached heretoFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director


75

Current Year Previous YearRs. Lakhs Rs. Lakhs

ScheduleINCOME :Income from Operations 15 74590 58219Profit on sale of Vessel 1799 -Other Income 16 5548 788

81937 59007EXPENDITURE :Operating Expenses 17 37297 27718Administration and Other Expenses 18 6049 4217Interest and Finance charges 19 6839 3606Depreciation 9855 7090

60040 42631Profit before tax 21897 16376Less : Provision for taxation

- Current tax 2009 2409- Fringe Benefit Tax 53 63- Deferred tax (328) (614)

1734 1858Profit for the year after tax 20163 14518Less : Transfer to Tonnage Tax Reserve

Account under section 115VT ofthe Income-tax Act,1961 4000 2000

16163 12518Add : Transfer from Profit and Loss Account 11695 5102Amount available for appropriation 27858 17620

Appropriations :- Transfer to Foreign Currency Fluctuation Reserve 1000 -- Transfer to General Reserve 2500 2500- Interim Dividend on Equity Shares 3049 3049- Proposed Final Dividend

- on Preference Shares 848 -- on Equity Shares 3049 -

- Tax on Dividends 1183 428Balance Carried Forward 16229 11643

27858 17620

Basic earnings per share (in Rs.) 52.90 38.09Diluted earnings per share (in Rs.) 52.03 -Significant Accounting Policies 20Notes to Accounts 21

Consolidated Profit and Loss Account for the year endedMarch 31, 2008

The Schedules referred to above form an integral part of the Balance Sheet.As per our Report attached heretoFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director


76

Consolidated Cash Flow Statement for the year endedMarch 31, 2008

Current Year Previous YearRs. Lakhs Rs. LaKhs

A CASH FLOW FROM OPERATING ACTIVITIES :

NET PROFIT BEFORE TAX : 21897 16376

ADJUSTMENTS FOR :

Depreciation 9855 7090

Interest earned (593) (358)

Interest expensed 6839 3606

Dividend received (268) (22)

Misc. expenses written off 4 21

Profit on Sale of investments (Net) - (1)

Profit on sale of sundry assets - (3)

Provision for doubtful debts (Net) 42 133

Profit on sale of Vessel (1799) -

Deferred Revenue Expenditure written off - 723

Foreign exchange (2855) 1244

OPERATING PROFIT BEFORE WORKING CAPITAL CHANGES : 33122 28809

ADJUSTMENTS FOR :

Trade & other receivables (13653) (9598)

Inventories (152) 167

Trade payables 1355 7778

CASH GENERATED FROM OPERATIONS 20672 27156

Taxes paid (2601) (2805)

NET CASH FLOW FROM OPERATING ACTIVITIES : 18071 24351

B CASH FLOW FROM INVESTING ACTIVITIES :

Purchase of fixed assets (20024) (59680)

Sale of fixed assets 1813 26

Purchase of investments (34844) (701)

Sale of investments 33025 702

Interest received 661 294

Dividend received 268 22

NET CASH USED IN INVESTING ACTIVITIES : (19101) (59337)

77

Current Year Previous YearRs. Lakhs Rs. LaKhs

C CASH FLOW FROM FINANCING ACTIVITIES :

Proceeds from issue of Foreign Currency Convertible Bond 16855 -

Proceeds from issue of Preference shares 15000 -

Proceeds from long term borrowings 34598 45919

Repayments of long term borrowings (28106) (8622)

Interest paid (6481) (3273)

Dividend paid (3049) (3050)

Tax on dividend (519) (428)

Share issue expenses (686) -

NET CASH FROM FINANCING ACTIVITIES : 27612 30546

Net increase / (decrease) in cash and cash equivalents : 26582 (4440)

Cash and cash equivalents as at beginning of period 5844 10204

Cash and cash equivalents as at end of period 32426 5764

Note :Cash and cash equivalent as on March 31,2008 March 31,2007

Cash and bank balances 31940 5764

Effect of exchange rate changes [loss / (gain)] 486 -

Cash and cash equivalents as restated 32426 5764

Note : While preparing the Consolidated Cash Flow, the Group has considered the financial statement ofthe joint venture for the nine months ended December 31, 2007. Correspondingly, for the previousyear ended March 31, 2007 the Group had considered the financial statement of the joint venturefor the nine months ended December 31, 2006. This has resulted in a difference of Rs. 80 lakhsbetween the opening and closing cash and cash equivalent as on March 31, 2007.

As per our Report attachedFor and on behalf of For and on behalf of the BoardKALYANIWALLA & MISTRY Sevantilal J. Parekh Vijay Kantilal ShethChartered Accountants Chairman Vice Chairman cum

Managing Director


Consolidated Cash Flow Statement for the year endedMarch 31, 2008 (contd.)

78

Schedules Annexed to and forming part of the Consolidated BalanceSheet as at March 31, 2008


SCHEDULE “1” :

SHARE CAPITAL :AUTHORISED :


Cumulative Preference Shares of Rs. 1,000 each 15000 -

20000 5000

ISSUED :


Cumulative Preference Shares of Rs. 1,000 each 15000 -

18820 3820

SUBSCRIBED & PAID UP :

38,118,481 (Previous Year 38,118,481) Equity Shares of Rs.10 eachfully paid up. 3812 3812

1,500,000 (Previous Year Nil) 10% Optionally Convertible RedeemableCumulative Preference Shares of Rs. 1,000 eachfully paid up. 15000 -

18812 3812

Notes :

1. Out of above, 38,068,481 Equity Shares are allotted as fully paid uppursuant to a scheme of arrangement without payment being receivedin cash.

2. Paid-up Equity Share Capital is net of Calls in Arrears Rs. 0.08 lakh.

79



SCHEDULE “2” :RESERVES AND SURPLUS :FOREIGN CURRENCY FLUCTUATION RESERVE

As per last Balance Sheet - -Add: Transfer from Profit & Loss Account 1000 -

1000SECURITIES PREMIUM ACCOUNT :

As per last Balance Sheet 3200 3200Less : Share Issue Expenses 686 -

2514 3200TONNAGE TAX RESERVE ACCOUNT UNDER SECTION115VT OF THE INCOME-TAX ACT,1961 :

As per last Balance Sheet 3850 1850Add : Transfer from Profit and Loss Account 4000 2000

7850 3850FOREIGN CURRENCY TRANSLATION RESERVE (5) -GENERAL RESERVE :

As per last Balance Sheet 39253 36753Add : Transfer from Profit and Loss Account 2500 2500

41753 39253PROFIT AND LOSS ACCOUNT 16195 11590

69307 57893Share of Joint Venture 34 53

69341 57946

SCHEDULE “3” :SECURED LOANS :TERM LOANS :

- From Banks 76829 73001 (Secured by mortgage of specific ships)

NON CONVERTIBLE DEBENTURES :Secured Redeemable Non-Convertible Debentures ofRs. 1,00,00,000 each- 8.95% redeemable on July 17, 2007 * - 646- 6.05% redeemable on September 19, 2010 767 767

767 1413* redeemed during the year

77596 74414

SCHEDULE “4' :UNSECURED LOANS :7.25% Foreign Currency Convertible Bonds (due 2012) 16855 -From a body corporate 162 242(Repayable within one year Rs. 81 Lakhs)

17017 242

80

Schedules Annexed to and forming part of the Consolidated BalanceSheet as at March 31, 2008SCHEDULE “5” :FIXED ASSETS : Rs. Lakhs

Particulars Cost Depreciation Net Block

As at Additions Deductions As on Upto For the Adj on Upto As at As at1st April March 31, 31st March year asset March 31, March 31, March 31,

2007 2008 2007 sold 2008 2008 2007

Fleet 125,267 12,944 1,292 136,919 31,951 8,116 1,292 38,775 98,144 93,316Plant & Machinery

- Rigs & Barge 9,070 - - 9,070 6,745 1,555 - 8,300 770 2,325- Others 802 - - 802 802 - - 802 - -

Ownership Flats &Office Premises 1,669 - - 1,669 859 40 - 899 770 810Furniture, Fixturesand Office Equipments 748 86 - 834 662 71 - 733 101 86

Vehicles 300 122 38 384 177 71 22 226 158 123

Total 137,856 13,152 1,330 149,678 41,196 9,853 1,314 49,735 99,943 -Previous Year Total 93,996 43,915 55 137,856 34,139 7,089 32 41,196 - 96,660

Share of Joint Venture 32 14 - 46 3 3 - 6 40 -Previous Year 24 8 - 32 2 1 - 3 - 29

Total 137,888 13,166 1,330 149,724 41,199 9,856 1,314 49,741 99,983 -Previous Year Total 94,020 43,923 55 137,888 34,141 7,090 32 41,199 - 96,689

Ships Under Construction 39,064 32,206

Total 139,047 128,895


SCHEDULE “6' :

Current Investments(at lower of cost and fair value - fully paid)

Mutual Fund : UnquotedSubscribed during the year : UnitsLIC MF Liquid Plus Fund - Daily Dividend 60,05,051 601 -(Face Value Rs. 10/-)

ICICI Prudential Flexible Income Plan - Daily Dividend 56,98,619 602(Face Value Rs. 10/-) -ABN Amro Money Plus Institutional Plan - Daily Dividend 61,56,969 616(Face Value Rs. 10/-) -

1819 -

SCHEDULE “7” :

INVENTORIES :Fuel Oil (at cost) 737 576

Share of Joint Venture 46 55

783 631

81



SCHEDULE “8” :

SUNDRY DEBTORS :

(Unsecured)

Debts outstanding over six months Considered good 1142 1450 Considered doubtful 441 395

1583 1845Other Debts

Considered good 16166 10606

17749 12451Less : Provision for doubtful debts 441 395


17482 12396

SCHEDULE “9” :

CASH AND BANK BALANCES :

Cash on hand 13 4

Balances with scheduled banks :

On current account 562 177

Balances with other banks :

On call / deposit accounts 31221 5507

On term deposit account with ABN AMRO Bank, Dubai 21 -

On current account with ABN AMRO Bank, Dubai 2 -


31940 5764

SCHEDULE “10” :

OTHER CURRENT ASSETS :

Interest accrued on investments and deposits - 55

- 55

82


SCHEDULE “11” :LOANS AND ADVANCES :(Unsecured - considered good, unless otherwise stated)Advances recoverable in cash or in kind or for value to be received 14392 3479Agents’ current accounts 369 239Advance payment of Income-tax & taxes deducted at source(Net of Provision for taxation) 773 234


15629 4064

SCHEDULE “12” :CURRENT LIABILITIES :Sundry Creditors

Outstanding dues to Micro Enterprises and Small Enterprises - -Dues of other creditors 14780 12856

14780 12856Other Liabilities 2689 1069Interest accrued but not due on loans 1096 762Managerial Remuneration payable 720 240


19710 15457

SCHEDULE “13” :PROVISIONS :Proposed Dividend on Preference Shares 848 -Proposed Final Dividend on Equity Shares 3049 -Provision for Tax on dividends 664 -Provision for Retirement benefits 355 292

4916 292Share of Joint Venture (30) (20)

4886 272

SCHEDULE “14” :MISCELLANEOUS EXPENDITURE :(to the extent not written off or adjusted)Deferred Revenue Expenditure :

As per last Balance Sheet 4 25Less : Amortised during the year 4 21

- 4

Share of Joint Venture - -

- 4


83

Schedules Annexed to and forming part of the Consolidated Profitand Loss Account for the year ended March 31, 2008


SCHEDULE “15” :INCOME FROM OPERATIONS :Charter Hire 70858 56824[Income tax deducted at source Rs. 1820 lakhs, (Previous Year Rs. 917 lakhs)]Contract Revenue (Gross) 2772 - [Income tax deducted at source Rs. 26 lakhs, (Previous Year Rs. Nil)]Miscellaneous Receipts - 49


74590 58219

SCHEDULE “16” :OTHER INCOME :Dividend on current investments 268 22Interest earned (Gross)

- on call deposits 571 322- others 22 36

[Income-tax deducted at source Rs. Nil, 593 358 (Previous Year Rs. 1 lakh)]Profit on sale of current investment - 1Gain on foreign currency transactions (net) 3860 362Profit on sale of sundry assets (net) - 3Reversal of Provision on Arbitration settlement 549 -Miscellaneous Income 278 40

5548 786Share of Joint Venture - 2

5548 788

SCHEDULE “17” :OPERATING EXPENSES :Fuel, Oil and Water 2030 2070Port, Light and Canal Dues 164 71Hire of chartered vessels / helicopters 418 3058Outsourced Services 1222 -Brokerage and Commission 414 265Wages, Bonus and Other Expenses - Floating Staff 11909 8774Contribution to Provident and Other Funds - Floating staff 128 207Stores 3953 1628Repairs and Maintenance - Fleet & Rigs 8671 7321Insurance and Protection Indemnity Club Fees 1790 1660Vessel Management Expenses 870 510Project Expenses 1784 -Other Expenses 2939 885


37297 27718

84


SCHEDULE “18” :

ADMINISTRATION & OTHER EXPENSES :

Salaries and allowances 3140 2271

Contribution to Provident and Other Funds 143 134

Staff Welfare Expenses 75 52

Rent 10 14

Insurance 22 28

Repairs and Maintenance- Buildings 91 14- Others 102 79

193 93

Property Taxes 13 47

Legal & Professional expenses 1008 206

Auditors’ Remuneration 28 33

Provision for Doubtful Debts 82 133

Donations 10 -

Other Expenses 1309 1157


6049 4217

SCHEDULE “19” :

INTEREST & FINANCE CHARGES :

Interest on fixed loans 6750 3422

Finance charges 87 184

6837 3606Share of Joint Venture 2 -

6839 3606

Schedules Annexed to and forming part of the Consolidated Profitand Loss Account for the year ended March 31, 2008

85

SCHEDULE “20” :



The financial statements are prepared under the historical cost convention, on the accrual basis ofaccounting, and in conformity with generally accepted accounting principles in India and theAccounting Standards issued by The Institute of Chartered Accountants of India.

(b) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost includes expenses related toacquisition and financing costs on borrowings during construction period. Exchange differences onrepayment and year end translation of foreign currency liabilities relating to acquisition of assets froma country outside India are adjusted to the carrying cost of the respective assets.

(c) Investments :

(i) Investments are classified into long-term and current investments.

(ii) Long-term investments are carried at cost. Provision for diminution, if any, in the value of eachlong-term investment is made to recognise a decline, other than of a temporary nature.

(iii) Current investments are stated at lower of cost and fair value and the resultant decline, if any, ischarged to revenue.

(d) Inventories :

Inventories of fuel oil are valued at cost on first in first out basis.

(e) Borrowing cost :

Borrowing costs that are directly attributable to the acquisition / construction of the qualifying fixedassets are capitalised as a part of the respective asset, upto the date of acquisition / completion ofconstruction.

(f) Miscellaneous Expenditure :

Expenditure incurred prior to April 1, 2003 is amortised as under :

Deferred revenue expenditure :

- Compensation payable under voluntary retirement scheme … 5 years

(g) Revenue recognition :

Charter hire earnings are recognised on accrual basis.

Revenue from long term turnkey offshore projects is recognised on the percentage of completionbasis, based on costs incurred and the expected costs to completion.

(h) Operating expenses :



(iii) Lease charges for helicopters are all operating leases and are charged to the profit and lossaccount.

86

(i) Employee benefits :

Defined Contribution Plan

Retirement benefits in the Provident Fund, Family Pension Fund and Superannuation Scheme, whichare defined contribution schemes, are charged to the Profit and Loss account of the year when thecontributions accrue.

Defined Benefit Plan

The liability for Gratuity, a defined benefit obligation, is accrued and provided for on the basis ofactuarial valuation as at the Balance Sheet date.

Other Long Term Benefits

Long term compensated absences are provided on the basis of an actuarial valuation as at theBalance Sheet date. Actuarial gains and losses comprising of experience adjustments and the effectsof changes in actuarial assumptions are recognised in the Profit and Loss account for the year asincome or expense.

(j) Depreciation :

(i) Fleet :

Depreciation on new built vessels is provided on the straight line method at the rates prescribedin Schedule XIV to the Companies Act, 1956. In case of second hand acquisitions, depreciationis provided on the straight line method, so as to write off the cost over the estimated useful life,as technically evaluated by the management / consultants at the time of acquisition (20 to 27years), or at the rates prescribed in Schedule XIV to the Companies Act, 1956, whichever ishigher.

(ii) Rigs :

Rigs are depreciated on the straight line method so as to write off the original cost over theestimated useful life of 7 years. The existing Rigs are fully depreciated, consequently, anyadditions thereto are written off over the contract period.

(iii) Barge :

The Barge is depreciated on the straight line method so as to write off the original cost over theestimated useful life of 7 years. The existing barge is fully depreciated.

(iv) Properties :

Flats and Office premises are depreciated on the written down value method, at the ratesprescribed in Schedule XIV to the Companies Act, 1956.

(v) Other Assets :

On the straight line method so as to write off the original cost of the asset over the estimateduseful life as under :

Computers - 3 years

Vehicles - 4 years

Furniture & Fixtures,Office Equipment, etc - 5 years

Plant and Machinery - 3 years

87

(k) Foreign Exchange Transactions :

(i) Transactions in foreign currency are recorded at standard exchange rates determined monthly.Monetary assets and liabilities denominated in foreign currency, remaining unsettled at theperiod end are translated at closing rates. The difference in translation of monetary assets andliabilities and realised gains and losses on foreign currency transactions is recognised in theProfit and Loss Account.

(ii) Forward exchange contracts, other than those entered into to hedge foreign currency risk of firmcommitments or highly probable forecast transactions, are translated at period end exchangerates. Premium or discount on such forward exchange contracts is amortised as income orexpenses over the life of the contracts.

(iii) Exchange differences in respect of forward exchange contracts entered into by the Company tohedge foreign currency risk of firm commitments or highly probable forecast transactions areaccounted for on settlement.

(iv) Realised gain or losses on cancellation of forward exchange contracts are recognised in the Profitand Loss Account of the period in which they are cancelled.

(v) Foreign currency derivative contracts which are embedded in the loan agreements and form anintegral part of the agreement are translated at closing rates and the resultant gains or losses arerecognised in the Profit and Loss account along with the revaluation gains or losses of thehedged loans. The unrealised gains or losses arising on revaluation of other foreign currencyswaps and options are carried forward under Loans and Advances or Other Liabilities untilsettlement in line with the underlying hedged assets / liabilities.

(l) Provision for Taxation :

Tax expense comprises current, deferred tax and fringe benefit tax.

(i) Provision for current income-tax and fringe benefit tax is made on the basis of the assessableincome under the Income-tax Act, 1961, except in case of a foreign subsidiary. Income fromshipping activities is assessed on the basis of deemed tonnage income of the Company.


(m) Provisions and Contingent Liabilities :

Provisions are recognised in the accounts in respect of present probable obligations, the amount ofwhich can be reliably estimated.

Contingent Liabilities are disclosed in respect of possible obligations that arise from past events buttheir existence is confirmed by the occurrence or non occurrence of one or more uncertain futureevents not wholly within the control of the Company.

(n) Segment Reporting :

The Company is mainly engaged in offshore business and there are no separate reportable segmentsas per Accounting Standard (AS) 17.

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SCHEDULE “21”:

NOTES TO CONSOLIDATED ACCOUNTSFor the year ended March 31, 2008

1. Basis of Consolidation :

(a) The consolidated financial statements relate to Great Offshore Limited, the holding Company,and its wholly owned subsidiaries and its jointly controlled entity (collectively referred to as theGroup). The consolidation of the financial statements of the Company with its subsidiaries hasbeen prepared in accordance with the requirements of Accounting Standard (AS) 21 ‘ConsolidatedFinancial Statements’ and the consolidation of its interest in joint ventures has been prepared inaccordance with Accounting Standard (AS) 27 ‘Financial Reporting of Interests in Joint Ventures’.The financial statements of the parent and its subsidiaries are combined on a line by line basisand intra group balances, intra group transactions and unrealised profits or losses are fullyeliminated. The Group’s interest in the Joint Venture is accounted for using proportionateconsolidation method. Separate line items are included to disclose the assets, liabilities, incomeand expenses of the jointly controlled entity.

(b) In case of a foreign subsidiary, revenue items are consolidated at the average rate prevailingduring the year. All assets and liabilities are converted at the rates prevailing at the end of theyear. Exchange gains / (losses) arising on conversion are recognised under Foreign CurrencyTranslation Reserve.

(c) In the consolidated financial statements, ‘Goodwill’ represents the excess of the cost to theCompany of it’s investments in the subsidiaries over it’s share of equity, at the respective dateson which investments are made. Alternatively, where the share of equity as on the date ofinvestment is in excess of the cost of investment, it is recognised as ‘Capital Reserve’ in theconsolidated financial statements.

2. The financial statements of the subsidiaries used in the consolidation are drawn upto the samereporting date as that of the Company i.e. year ended March 31, 2008. The financial statements ofthe jointly controlled entity are not available as of the reporting date and thus have been consolidatedon basis of the unaudited management accounts drawn upto 31st December, 2007.

3. Share Capital :

The allotment of 72,920 (Previous Year 72,920) equity shares of the Group have been kept inabeyance in accordance with section 206 A of the Companies Act, 1956, till such time as the title ofthe bonafide owner of the shares is certified by the concerned Stock Exchanges as per orders from theSpecial Court (Trial of Offences relating to Transactions in Securities) Act, 1992. An additional10,153 (Previous Year 10,153) shares have also been kept in abeyance for disputed cases in consultationwith the Bombay Stock Exchange.

The Group has, on September 7 2007, issued and allotted 1,500,000, 10% Optionally ConvertibleRedeemable Cumulative Preference Shares (OCRCPS) of Rs 1000/- each to Export Import Bank ofIndia (the Investor), in accordance with the approvals of the Board of Directors and the share holdersof the Group. The OCRCPS are optionally convertible into 1,714,285 Equity shares at anytime after12 months (lock in period) but not later than 16 months from the date of subscription to OCRCPS atthe conversion price of Rs. 875 per share, which is in compliance with Securities and ExchangeBoard of India guidelines.

In the event that the OCRCPS are not converted into equity shares, during the conversion period, theGroup shall redeem the same at the end of 3 years from the allotment date at the redemption price ofRs. 1000/- per OCRCPS.

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4. The subsidiary companies considered in the consolidated financial statements are :

Sr. No. Name of the Company Country of % ofIncorporation Holding

1. Great Offshore Fujairah L.L.C. – FZC U.A.E. 100%

2. Deep Water Services (India) Ltd. India 100%

5. The Group’s interest in jointly controlled entity (incorporated Joint Venture) is :

Sr. No. Name of the Company Country of Incorporation % of Holding

Current Previous Year Year

1. United Helicharters Pvt. Ltd. India 26% 26%

6. Contingent Liabilities :

Rs. Lakhs

Sr. Particulars As on As onNo. 31.3.2008 31.3.2007

(i) Guarantees given by banks including performance andbid bonds, counter guaranteed by the Group. 10671 8531

(ii) Show cause notice issued by Customs Authority, Goa,for levy of custom duty against which the Group hasfiled a writ petition. 3165 3165

(iii) Corporate guarantee given on behalf of subsidiary 1600 -

(iv) Corporate guarantee given to Customs 583 -

(v) Claims not acknowledged by Group in respect of :

a) Customs Duty on Tug at Mundra Port 70 70

b) Sales tax and Service tax demands on charter hirepayments 168 168

(vi) Letters of Credit outstanding 348 -

7. Fixed Assets :

(a) Estimated amount of contracts, net of advances paid thereon, remaining to be executed oncapital account and not provided for – Rs. 58689 Lakhs (Previous Year Rs. 74400 Lakhs).

(b) The amount of exchange gain on account of fluctuation of the rupee against foreign currencies,gain or loss on hedging contracts and cancellation of forward covers relating to loan liabilitiesdeducted from the carrying amount of fixed assets during the year is Rs. Nil (Previous YearRs. 2687 Lakhs).

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8. Deferred tax :

Pursuant to the introduction of Sec 115V under the Income Tax Act, 1961 the holding company hasopted for computation of it’s income from shipping activities under the Tonnage Tax Scheme. Thusincome from the business of operating ships will be assessed on the basis of the deemed TonnageIncome and no deferred tax will be applicable to this income as there will be no timing differences.

The break up of net deferred tax assets / (liability) is as under :Rs. Lakhs

As on As on31.3.2008 31.3.2007

Deferred tax assets :Demerger Expenses 8 12Provision for doubtful debts and advances (Net) 17 30Provision for leave encashment - 2Difference between book and tax depreciation 632 285

657 329

Deferred tax liabilities :Difference between book and tax depreciation - -

Net deferred tax asset 657 329

9. Current Liabilities :According to information available to the Group regarding the status of the suppliers, as definedunder The Micro, Small and Medium Enterprises Development Act, 2006, amount overdue as on 31st

March, 2008 to the Micro, Small and Medium enterprises on account of principal amount, togetherwith interest for delayed payment under the Act, is Rs. Nil (Previous Year Rs. Nil).

10. Provisions :The Group has recognised the provisions given below in its accounts in respect of obligations arisingfrom past events, the settlement of which are expected to result in an outflow embodying economicbenefits.Manning dues and related contributions to welfare funds was Rs. 525 lakhs as on 1st April, 2007,addition during the year was Rs. 391 lakhs (Previous Year Rs. 326 lakhs), reversed / paid during theyear was Rs. 368 lakhs (Previous Year Rs. 556 lakhs), hence balance as on 31st March, 2008 isRs. 548 lakhs.Pool Payable Provision was recognised for amounts payable to a pool of charterers estimated on thebasis of average pool earnings. Opening balance as on 1st April, 2007 was Rs. 1459 lakhs, additionsduring the year was Rs. 2541 lakhs (Previous Year Rs. 1878 lakhs), reversed / paid during the yearwas Rs. 2146 lakhs (Previous Year Rs. 420 lakhs), hence balance as on 31st March, 2008 isRs. 1854 lakhs.

11. Change in Accounting Policy :(a) The Company’s (Accounting Standard) Rules, 2006 issued by the Ministry of Corporate Affairs

vide notification dated 7th December, 2006, which are applicable to the Group with effect from1st April, 2007, clarified that the accounting treatment of exchange differences contained inAccounting Standard 11 as notified supersede the requirements of Schedule VI of the Act.Consequently, the foreign exchange gains and losses relating to foreign currency borrowingstaken for acquiring vessels from abroad, Rs. 2852 (net) which hitherto were adjusted to thecarrying cost of such assets, have been credited to the Profit and Loss Account. The profit for theyear is thus higher by Rs. 2717 lakhs (net of higher depreciation for the year on such assets ofRs. 135 lakhs).

91

(b) The Group has effective from April 1, 2007, adopted the treatment specified by the Institute ofChartered Accountants of India in its announcements dated 29th March, 2008 for accounting ofderivatives on a mark-to-market basis and has consequently charged a loss of Rs. 222 lakhs tothe Profit and Loss Account.

12. Hedging Contracts :

(i) Derivative Instruments outstanding as at 31st March, 2008 :

Current Year Previous year

(a) Forward Exchange Contracts : Purchased Sold Purchased Sold

Total No. of contracts outstanding - 7 - 1

Foreign Currency Value covered(in millions) :

US Dollars - 4 - 1

(b) Interest Rate Swap contracts payable at predetermined fixed rate vis-à-vis LIBOR plusmargin relating to loans of USD 36 million (Previous year USD 40 million).

(ii) The Group uses forward exchange contracts and interest rate swaps to hedge its exposure toforeign exchange and interest rate changes.

(iii) Unhedged foreign currency exposure as on 31st March, 2008 :

Amount in Foreign Currency in Lakhs


(i) Loans liabilities and payables

(a) US Dollars 1782 1635

(b) Euros 2 1

(c) Arab Emirates Dinars 5 13

(d) Japanese Yens 121 113

(e) Great Britain Pounds 33 22

(f) Norwegian Kroners 2 2

(g) Singapore Dollars 17 49

(h) African Rands 1 2

(i) Srilankan Rupees 16 -

(j) Saudi Riyals 1 -

(ii) Receivables

(a) US Dollars 1085 299

(b) Euros 7 -

(c) Arab Emirates Dinars 1 -

(d) Japanese Yens 1 1

(e) Great Britain Pounds 70 70

(f) Norwegian Kroners - -

(g) Singapore Dollars - 17

(h) African Rands - -

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13. Leases :

Rs. Lakhs

Particulars As on 31.3.2007*

(i) The Group has taken office and residential facilities undercancellable operating lease agreements which are renewed inthe normal course of business.

Total rental expenses under cancellable operating leases. 7

(ii) The Group has taken helicopters under non-cancellable operatinglease agreements.

Lease payments recognised in the statement of Profit andLoss Accounts. 942

The total of minimum lease payments in respect of the above :

(a) not later than one year 401(b) later than one year and not later than five years 1094(c) later than five years NIL

(iii) General description of the leasing arrangements : Lease for office andresidential facilities are onleave and license basis ona fixed monthly payment.

Lease for helicopters aredetermined based on afixed monthly charge anda variable charge on thebasis of hours flown.

*Information relates solely towards the Joint Venture entered into by the Group and is as per the lastaudited statements available.

14. Segment Reporting :

The Group is mainly engaged in offshore business and there are no separate reportable segments asper Accounting Standards (AS) 17.


(i) List of Related Parties :

Related parties with whom transactions have taken place during the year.

1. Joint Venture :United Helicharterers Pvt. Ltd.

2. Key Management Personnel :Mr. Vijay K. Sheth - Vice Chairman cum Managing Director

3. Individual exercising significant influence over the enterprise :Mr. K. M. Sheth (till July 3, 2007)

4. Enterprises over which persons mentioned in 2 & 3 above exercise significant influence :Delta Housing Co. Pvt. Ltd.The Great Eastern Shipping Co. Ltd.

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16. Basic and diluted earnings per share :Rs. Lakhs

CurrentYear Previous Year

(a) Net Profit after tax for Equity Shareholders 20163 14518

(b) Number of Equity shares as on April 1, 2007 38,118,481 38,118,481

Add: Shares allotted during the year - -

Number of Equity shares as on March 31, 2008 38,118,481 38,118,481

Weighted average number of Equity sharesoutstanding during the year 38,118,481 38,118,481

(c) Face value of Equity Share Rs.10 Rs.10

(d) Basic earnings per share Rs. 52.90 Rs. 38.09

(e) Diluted earnings per share Rs. 52.03 -17. Information pursuant to para 4D of Part II of Schedule VI of the Companies Act, 1956 has not been

given in view of exemption granted by the Department of Company Affairs, vide order no. 46/96//2008/CL-III dated April 30, 2008.

18. Previous Years figures have been regrouped wherever necessary to conform to current year’sclassification.

(ii) Transactions with related parties : Rs. Lakhs

Sr. Nature of Transaction Joint Venture Key Management Individuals exercising Enterprises over TotalNo Personnel significant influence which Individuals /

Directors exercisesignificant influence

Current Previous Current Previous Current Previous Current Previous Current PreviousYear Year Year Year Year Year Year Year Year Year

1 Royalty received from : 7 10 7 10United Helicharterers Pvt Ltd

2 Interest paid to : 6 4 6 4The Great Eastern Shipping Co.Ltd

3 Remuneration 905 359 905 359 Mr.Vijay K.Sheth

4 Sitting Fees & Commission 5 1 5 1Mr.K.M.Sheth (retired w.e.f. 3rd July, 2007)

5 Loans Received from : - 242 - 242he Great Eastern Shipping Co.Ltd

6 Deposit received from : - 19 - 19Delta Housing Co.Pvt Ltd

7 Deposit repaid to : - 24 - 24Delta Housing Co.Pvt Ltd

8 Loans repaid to : 40 - 40 -The Great Eastern Shipping Co.Ltd

9 Outstanding balances as on31.03.08

Loans & Advances (Payables) 202 242 202 242The Great Eastern Shipping Co.Ltd

Interest Payables - 1 - 1The Great Eastern Shipping Co.Ltd

Receivables 34 27 34 27United Helicharterers Pvt Ltd

Payables - 2 - 2The Great Eastern Shipping Co.Ltd

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STATEMENT PURSUANT TO SECTION 212 OF THE COMPANIESACT, 1956

1. Name of Subsidiary Deep Water Great OffshoreServices (India) Ltd. Fujairah L.L.C.-FZC

2. Financial Year ended March 31, 2008 March 31, 2008

3. Date from which it become a Subsidiary April 1, 2005 April 1, 2005

4. Extent of interest of the HoldingCompany in the capital of the Subsidiary 100% 100%

5. Net aggregate amount of the Subsidiary’sprofit less losses not dealt with in theHolding Company’s Accounts :

(i) Current Year Rs. (8,769,706) Rs. (286,688)

(ii) Previous Year since it become Subsidiary Rs. (74,180,938) Rs. (807,678)

6. Net aggregate amount of the Subsidiary’sprofit less losses dealt with in the HoldingCompany’s Accounts :

(i) Current Year - -

(ii) Previous Year since it become Subsidiary - -

For and on behalf of the BoardSevantilal J. Parekh Vijay Kantilal ShethChairman Vice Chairman cum

Managing Director

Suresh Balasubramaniam Shailesh V. HaribhaktiDirector Director


95

SUBSIDIARIES

Deep Water Services (India) Limited

Great Offshore Fujairah L.L.C. - FZC

96

DEEP WATER SERVICES (INDIA) LIMITED

DEEP WATER SERVICES (INDIA) LIMITEDA wholly owned Subsidiary Company

Board of Directors Mr. Vijay Kantilal Sheth

Mr. Soli C. Engineer

Mr. Vipul I. Acharya

Mr. Suresh Balasubramaniam

Company Secretary Mr. Om Prakash Pandey

Registered Office Energy House

81, Dr. D. N. Road

Mumbai – 400 001

Auditors M/s. Kalyaniwalla & Mistry

Chartered Accountants

Kalpataru Heritage

127, Mahatma Gandhi Road

Mumbai – 400 023

SIXTH ANNUAL REPORT2007-08

97

DIRECTORS’ REPORTDear Shareholders,

The Board of Directors have pleasure in presenting the 6th Annual Report on the business andoperations of your Company together with the Audited Accounts for the financial year endedMarch 31, 2008.

FINANCIAL PERFORMANCE (Amount in Rs)

Income 2007-08 2006-07

Income from operations 799,615,397 462,043,855

Other sources 6,929,695 6,018,233

806,545,092 468,062,088

Expenditure

Operating Expenses 765,654,681 446,297,845

Administration and Other Expenses 19,443,268 1,137,058

Interest and Finance Charges 28,554,656 1,283,662

Depreciation - 12,230,740

813,652,605 460,949,305

(Loss) / Profit before tax (7,107,513) 7,112,783

Add / (Less) : Provision for tax

Current - -

Deferred (1,662,193) 28,042,371

(Loss) / Profit for the Year after tax (8,769,706) 35,155,154

Add : Balance brought forward from the previous year (51,491,354) (86,646,508)

Balance Carried Forward (60,261,060) (51,491,354)

During the year ended March 31, 2008 your Company earned an income from operations ofRs 79,96,15,397/- Your Company has suffered a loss of Rs. 71,07,513/- during the current yearas compared to profit before tax of Rs. 71,12,783/- during the pervious year.

98


DIVIDEND

Your Directors do not recommend any dividend for the year under review.

OPERATION

The drill barge “Badrinath” has performed satisfactorily during the year under review. Sheresumed operations on the west coast of India in September 2007 post dry dock.

DIRECTORS

Mr Vipul I Acharya retires by rotation and being eligible, offers himself for re-appointment.

AUDITORS

M/s Kalyaniwala & Mistry, Chartered Accountants, retire as auditors of the Company andhave given their consent for re-appointment. The shareholders will be required to electauditors for the current year and fix their remuneration.

PARTICULARS ON CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

Information as regards to a) Conservation of Energy and b) Technology Absorption is notapplicable to our Company.

PARTICULARS OF EMPLOYEES

There were no employees who were in receipt of remuneration exceeding the limits specifiedin Section 217(2A) of the Companies Act, 1956.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 the Board ofDirectors hereby state:

i) that in the preparation of the annual accounts, the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

ii) that the Directors had selected the accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a trueand fair view of the state of affairs of the Company at the end of the financial year andof the loss of the Company for that period;

iii) that the Directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

iv) that the Directors had prepared the annual accounts on a going concern basis.

FOREIGN EXCHANGE EARNING AND EXPENDITURE

Foreign exchange earned during the year under consideration was Rs 1068 lakhs.

Foreign exchange expenditure incurred during the year amounted to Rs 5114 lakhs.

For and on behalf of the Board

Vijay Kantilal ShethMumbai ChairmanApril 30, 2008

99

Report of the Auditorsto the Members of Deep Water Services (India) Ltd.1. We have audited the attached Balance Sheet of Deep Water Services (India) Limited as at

March 31, 2008 and also the Profit and Loss Account and Cash Flow Statement of theCompany for the year ended on that date, both annexed thereto. These financial statementsare the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003, issued by the CentralGovernment of India in terms of section 227 (4A) of the Companies Act, 1956, we annexhereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:a) We have obtained all the information and explanations which to the best of our

knowledge and belief were necessary for the purposes of our audit.b) In our opinion, proper books of account as required by law have been kept by the

Company so far as appears from our examination of such books.c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this

report are in agreement with the books of account.d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement

dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e) In our opinion and to the best of our information and according to the explanationsgiven to us, the said accounts read with the notes thereon, give the information requiredby the Companies Act, 1956 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:i) in the case of the Balance Sheet, of the state of affairs of the Company as at March

31, 2008;ii) in the case of the Profit and Loss Account, of the loss of the Company for the year

ended on that date; andiii) in the case of the Cash Flow Statement, of the cash flows for the year ended on that

date.5. On the basis of written representations received from the directors of the Company as on

March 31, 2008, and taken on record by the Board of Directors, we report that none of thedirectors of the Company is disqualified as on March 31, 2008, from being appointed as adirector in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

For and on behalf ofKalyaniwalla & MistryChartered Accountants

K. M. ElaviaPartnerMembership No : 12737


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Annexure to the Auditors’ ReportReferred to in paragraph 3 of our report of even date on the accounts of Deep Water Services(India) Limited for the year ended March 31, 2008:

1. (a) The Company has maintained proper records showing full particulars, includingquantitative details and situation of fixed assets.

(b) The fixed assets have been physically verified by the management during the year. Inour opinion, the frequency of verification is reasonable having regard to the size of theCompany and the nature of its assets. To the best of our knowledge no materialdiscrepancies were reported on such verification.

(c) There was no disposal of fixed assets during the year.

2. (a) The management has conducted physical verification of inventory at reasonable intervals.

(b) In our opinion, the procedures followed by the management for physical verification ofinventory are reasonable and adequate in relation to the size of the Company andnature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepanciesnoticed on physical verification of inventories as compared to the book records werenot material in relation to the operations of the Company and the same have beenproperly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms orother parties covered in the register maintained under section 301 of the CompaniesAct, 1956.

(b) The Company has not taken any loans, secured or unsecured, from companies, firms orother parties covered in the register maintained under section 301 of the CompaniesAct, 1956.

4. In our opinion and according to the information and explanations given to us, there is anadequate internal control procedure commensurate with the size of the company and thenature of its business, for the purchase of inventory and fixed assets, and for the sale ofgoods and services. In our opinion and according to the information and explanations givento us, there is no continuing failure to correct major weaknesses in internal control.

5. Based on the audit procedures applied by us and according to the information andexplanations provided by the management, we are of the opinion that there are no contractsor arrangements referred to in section 301 of the Act that need to be entered in the registerrequired to be maintained under that section.

6. In our opinion and according to the information and explanations given to us, the Companyhas not accepted any deposits from the public within the meaning of sections 58A and58AA of the Act and the rules framed there under.

7. In our opinion, the Company has an internal audit system, which in our opinion iscommensurate with the size and nature of its business.

8. As informed to us, the maintenance of cost records has not been prescribed by the CentralGovernment under section 209(1) (d) of the Companies Act, 1956, in respect of the activitiescarried on by the Company.

9. (a) According to the information and explanations given to us and according to the booksand records as produced and examined by us, in our opinion, the company is regular indepositing undisputed statutory dues including Provident Fund, Investor Education and

101

Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Servicetax, Excise duty, Customs duty, Cess, and other statutory dues with the appropriateauthorities, where applicable.

(b) According to the books of account and records as produced and examined by us, thereare no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise dutyor cess which have not been deposited on account of any dispute.

10. The Company has not been registered for a period not less than five years.

11. According to the information and explanations given to us and the records examined by us,the Company has not defaulted in repayment of dues to a financial institution or bank or thedebenture holders.

12. According to the information and explanations given to us and the records examined by us,the Company has not granted any loans on the basis of security by way of pledge of shares,debentures or other securities.

13. In our opinion and according to the information and explanation given to us, the nature ofthe activities of the Company does not attract any special statute applicable to the chit fundand nidhi / mutual benefit fund / societies.

14. The Company has not dealt or traded in shares, securities, debentures or other investmentsduring the financial year.

15. According to the information and explanations given to us and the records examined by us,the Company has not given any guarantees for loans taken by others from banks or financialinstitutions, the terms and conditions whereof are prima facie prejudicial to the interest ofthe Company.

16. As informed to us, the term loans were applied by the Company for the purpose for whichthey were obtained.

17. On the basis of an overall examination of the balance sheet and cash flows of the Companyand the information and explanation given to us, we report that the Company has notutilised any funds raised on short-term basis for long-term investments.

18. The Company has not made any preferential allotment of shares to parties or companiescovered under section 301 of the Act.

19. According to the information and explanation given to us and the records examined by us,the Company has not issued any debentures.

20. The Company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed and the information and explanations given bythe management, we report that no fraud on or by the Company has been noticed orreported during the year.





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The Schedules referred to above form an integral part of the Balance Sheet.As per our Report attached

For and on behalf of For and on behalf of the Board

Kalyaniwalla and Mistry Vijay Kantilal ShethChartered Accountants Soli C. Engineer DirectorsK. M. Elavia Vipul I. AcharyaPartnerMumbai, April 30, 2008 Mumbai, April 30, 2008

BALANCE SHEET as at March 31, 2008Current Year Previous Year

Schedule Rupees RupeesSOURCES OF FUNDS :

Shareholders’ Funds :

Capital 1 500,000 500,000

Loan Funds :

Secured Loans 2 160,000,000 -

TOTAL 160,500,000 500,000

APPLICATION OF FUNDS :

Fixed Assets : 3Gross Block 80,268,801 80,268,801Less : Depreciation 80,268,801 80,268,801

Net Block - -

Investments 4 61,569,690 -Deferred Tax Asset (net) 9,419,090 11,081,283

Current Assets, Loans and Advances :

Inventories 5 12,011,384 377,127Sundry Debtors 6 177,782,513 52,800,539Cash and Bank Balances 7 42,163,468 99,648,456Other Current Assets 8 - 1,360,150Loans and Advances 9 81,097,869 69,404,679

313,055,234 223,590,951

Less : Current Liabilities and Provisions :

Current Liabilities 10 283,805,074 285,663,588Provisions - -

283,805,074 285,663,588

Net Current Assets 29,250,160 (62,072,637)Miscellaneous Expenditure (to theextent not written off or adjusted) : 11 - -

Profit and Loss Account 60,261,060 51,491,354

TOTAL 160,500,000 500,000


}

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Profit and Loss Account for the year ended March 31, 2008

Current Year Previous YearSchedule Rupees Rupees

INCOME :

Income from Operations 12 799,615,397 462,043,855

Other Income 13 6,929,695 6,018,233

806,545,092 468,062,088

EXPENDITURE :

Operating Expenses 14 765,654,681 446,297,845

Administration and Other Expenses 15 19,443,268 1,137,058

Interest and Finance Charges 16 28,554,656 1,283,662

Depreciation - 12,230,740

813,652,605 460,949,305

(Loss) / Profit Before Tax (7,107,513) 7,112,783

Add : Provision for Tax :

- Current - -- Deferred (1,662,193) 28,042,371

(1,662,193) 28,042,371

(Loss) / Profit for the year after tax (8,769,706) 35,155,154

Add : Balance brought forward from previous year (51,491,354) (86,646,508)

Balance Carried Forward (60,261,060) (51,491,354)

Earnings Per Share (175) 703

Significant Accounting Policies 17

Notes to Accounts 18

The Schedules referred to above form an integral part of the Profit and Loss Account.

As per our Report attached


Kalyaniwalla and Mistry Vijay Kantilal ShethChartered Accountants Soli C. Engineer DirectorsK. M. Elavia Vipul I. AcharyaPartnerMumbai, April 30, 2008 Mumbai, April 30, 2008

}

104


}As per our Report attachedFor and on behalf of For and on behalf of the BoardKalyaniwalla and Mistry Vijay Kantilal ShethChartered Accountants Soli C. Engineer DirectorK. M. Elavia Vipul I. AcharyaPartner

Mumbai, April 30, 2008 Mumbai, April 30, 2008


Rupees RupeesA CASH FLOW FROM OPERATING ACTIVITIES :

NET (LOSS) / PROFIT BEFORE TAX : (7,107,513) 7,112,783ADJUSTMENTS FOR :Depreciation - 12,230,740Interest earned (1,580,443) (3,160,279)Interest paid 28,554,656 1,283,662Dividend received (4,932,248) (181,465)Deferred Revenue Expenditure written off - 72,310,053Provision for Doubtful Debts 522,215 -Foreign exchange 7,571,041 2,068,590

OPERATING PROFIT / (LOSS) BEFORE WORKINGCAPITAL CHANGES : 23,027,708 91,664,084ADJUSTMENTS FOR :Trade & other receivables (124,171,821) (50,429,464)Inventories (11,634,257) 8,704,890Trade payables (12,532,894) 134,091,365

CASH GENERATED FROM OPERATIONS (125,311,264) 184,030,875Tax paid (10,917,490) (10,429,090)

NET CASH FLOW (USED IN) / FROM OPERATING ACTIVITIES : (136,228,754) 173,601,785

B CASH FLOW FROM INVESTING ACTIVITIES :Purchase of investments (504,069,690) -Sale of investments 442,500,000 -Interest received 2,940,593 2,202,365Dividend received 4,932,248 181,465

NET CASH (USED IN) / FROM INVESTING ACTIVITIES : (53,696,849) 2,383,830

C CASH FLOW FROM FINANCING ACTIVITIES :Proceeds from long term borrowings 360,000,000 -Repayments of long term borrowings (200,000,000) (97,000,000)Interest paid (26,327,366) (2,116,008)NET CASH FROM / (USED IN) FINANCING ACTIVITIES : 133,672,634 (99,116,008)

Net increase / (decrease) in cash and cash equivalents : (56,252,969) 76,869,607Cash and cash equivalents as at beginning of period 104,289,785 27,420,178Cash and cash equivalents as at end of period 48,036,816 104,289,785

Note :Cash and cash equivalents as on : March 31,2008 March 31,2007Cash and bank balances 42,163,468 99,648,456Effect of exchange rate changes [loss / (gain)] 5,873,348 4,641,329

Cash and cash equivalents as restated 48,036,816 104,289,785

105


Current Year Previous YearRupees Rupees

SCHEDULE “1”

SHARE CAPITAL :

AUTHORISED :

50,000 Equity shares of Rs. 10 each 500,000 500,000

ISSUED, SUBSCRIBED & PAID UP :

50,000 Equity shares of Rs. 10 each fully paid up. 500,000 500,000

Note : The entire share capital is held by Great Offshore Ltd.,the holding company.

500,000 500,000

SCHEDULE “2”

SECURED LOANS :

Term Loan from bank 160,000,000 -

[Secured by hypothecation of Rig, an unconditionalirrevocable corporate guarantee and the assignment ofinsurances by Great Offshore Ltd, the holding company]

160,000,000 -

SCHEDULE “3”FIXED ASSETS :

Rupees

Particulars Cost Depreciation Net Block

As at Additions Deductions As at Upto For Adjustments Upto As at As at

April 1, March 31, March 31, the year on assets March 31, March 31, March 31,

2007 2008 2007 sold 2008 2008 2007

Plant & Machinery 80,268,801 - - 80,268,801 80,268,801 - - 80,268,801 - -

TOTAL 80,268,801 - - 80,268,801 80,268,801 - - 80,268,801 - -

Previous Year 80,268,801 - - 80,268,801 68,038,061 12,230,740 - 80,268,801 - -

106



No. of Current Year Previous YearUnits Rupees Rupees

SCHEDULE “4”INVESTMENTS :

Current Investments :(at lower of cost and fair value - fully paid)Mutual Fund : Unquoted : Subscribed duringthe yearABN Amro Money Plus Institutional Plan -Daily Dividend 6,156,969 61,569,690 -

61,569,690 -

SCHEDULE “5”INVENTORIES :

Fuel Oil (at cost) 12,011,384 377,127

12,011,384 377,127

SCHEDULE “6”SUNDRY DEBTORS :

(Unsecured and considered good)Debts outstanding :

For a period more than six months :Considered good - 5,701Considered doubtful 522,215 -

522,215 5,701Other Debts :

Considered good 177,782,513 52,794,838

178,304,728 52,800,539Less : Provision for doubtful debts 522,215 -

177,782,513 52,800,539

SCHEDULE “7”CASH AND BANK BALANCES :

Balances with scheduled banks :On current account 15,830,857 3,667,335

Balances with other banks :On call deposit with ABN AMRO Bank, London 26,332,611 95,981,121(Maximum balance Rs. 114,455,306/-,Previous Year Rs. 144,478,220/-)

42,163,468 99,648,456

SCHEDULE “8”OTHER CURRENT ASSETS :

Accrued Income - 1,360,150

- 1,360,150

107



SCHEDULE “9”LOANS AND ADVANCES :

(Unsecured - considered good unless otherwise stated)

(a) Advances recoverable in cash or in kind orfor value to be received 49,270,893 48,495,193

(b) Advance payment of taxes 31,826,976 20,909,486

81,097,869 69,404,679

SCHEDULE “10”CURRENT LIABILITIES :

Sundry Creditors

- Outstanding dues to Micro Enterprises andSmall Enterprises - -

- Dues of other creditors 62,541,309 62,957,302

62,541,309 62,957,302

Due to Great Offshore Ltd , the holding company 217,012,601 222,681,883

Other liabilities 4,251,164 24,403

283,805,074 285,663,588

SCHEDULE “11”MISCELLANEOUS EXPENDITURE :

(to the extent not written off or adjusted)

Deferred Revenue Expenditure

- Repairs and Maintenance Expenditure

As per last balance sheet - 72,310,053

Less : Amortised during the year - 72,310,053

- -

108


Schedules annexed to and forming part of the Profit and Loss Accountfor the year ended March 31, 2008


SCHEDULE “12”INCOME FROM OPERATIONS :

Charter Hire (Gross) 682,533,172 462,043,855(Income tax deducted at source Rs. 14,334,594/- ,Previous Year - Rs. 9,275,279/-)Contract Revenue (Gross) 117,082,225 -(Income tax deducted at source Rs. 1,075,242/- ,Previous Year - Rs. Nil)

799,615,397 462,043,855

SCHEDULE “13”OTHER INCOME :

Dividend Income 4,932,248 181,465Interest Income (Gross) 1,580,443 3,160,279(Income tax deducted at source Rs. Nil,Previous Year - Rs. Nil)Gain on foreign currency transactions (Net) - 2,049,297Miscellaneous Income 417,004 627,192

6,929,695 6,018,233

SCHEDULE “14”OPERATING EXPENSES :

Commissary and Quarters 1,520,831 2,974,863Repairs and maintenance 248,905,829 188,818,210(Including deferred revenue expenseswritten off Rs.Nil, Previous year Rs. 72,310,053/-)Charter hire paid 196,812,947 132,590,606Fuel and Water 56,626,164 72,060,755Supplies 198,111,465 29,147,968Towage Insurance 7,717,230 17,791,613Project Expenses 54,483,757 -Other Expenses 1,476,458 2,913,830

765,654,681 446,297,845

109

Schedules Annexed to and forming part of the Profit and Loss Accountfor the year ended March 31, 2008


SCHEDULE “15”ADMINISTRATION AND OTHER EXPENSES :

Legal and Professional fees 322,519 152,646

Auditors’ remuneration (including service tax) :

- Audit Fees 84,270 84,180

- in Other Capacity :

- Tax Audit 28,090 28,060

- Certification & other services 141,709 78,549

254,069 190,789

Miscellaneous expenses 6,001,560 793,623

Provision for Doubtful Debts 522,215 -

Loss on foreign currency transactions (net) 12,342,905 -

19,443,268 1,137,058

SCHEDULE “16”INTEREST AND FINANCE CHARGES :

Interest on Fixed Loans 28,554,656 1,283,662

28,554,656 1,283,662

110


Schedules Annexed to and forming part of the Accounts for the yearended March 31, 2008SCHEDULE “17”



The financial statements are prepared under the historical cost convention, in accordance with thegenerally accepted accounting principles in India, the Accounting Standards issued by the Institute ofChartered Accountants of India and the provisions of the Companies Act 1956.

(b) Use of Estimates :

The preparation of financial statements in conformity with Generally Accepted Accounting Principlesrequires the management to make estimates and assumptions that affect the reported balances ofassets and liabilities as of the date of the financial statements and reported amounts of income andexpenses during the period. Management believes that the estimates used in the preparation offinancial statements are prudent and reasonable. Actual results could differ from the estimates.

(c) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost includes expenses related toacquisition and financing costs on borrowings during construction period.

(d) Investments :

(i) Investments are classified into long-term and current investments.

(ii) Long-term investments are carried at cost. Provision for diminution, if any, in the value of eachlong-term investment is made to recognise a decline, other than of a temporary nature.

(iii) Current investments are stated at lower of cost and fair value and the resultant decline, if any, ischarged to revenue.

(e) Inventories :

Inventories of fuel oil are valued at cost, on first in first out basis.

(f) Borrowing cost :

Borrowing costs that are directly attributable to the acquisition / construction of the qualifying fixedassets are capitalized as a part of the respective asset, upto the date of acquisition / completion ofconstruction.

(g) Miscellaneous Expenditure :

Expenditure on refurbishment of Rig Badrinath incurred during the year 2003-04 had been deferredand is amortised over the period of the contract, namely, three years.

(h) Revenue recognition :

Charter Hire earnings are recognised on accrual basis over the contract period.

(i) Operating expenses :



111

Schedules Annexed to and forming part of the Accounts for the yearended March 31, 2008

(j) Depreciation :Depreciation on fixed assets is provided on the straight line method so as to write off the entire costover the period of the contract, namely, three years.

(k) Foreign Exchange Transactions :Transactions in foreign currency are recorded at standard exchange rates determined monthly. Monetaryassets and liablities denominated in foreign currency, remaining unsettled at the period end aretranslated at closing rates. The difference in translation of monetary assets and liablities and realisedgains and losses on foreign currency transactions is recognised in the Profit and Loss Account.

(l) Provision for Taxation :Tax expense comprises both current and deferred tax.(i) Provision for current income-tax is made on the basis of the assessable income under the

Income-tax Act, 1961. Income from shipping activities is assessed on the basis of deemedtonnage income of the Company.


SCHEDULE “18”NOTES ON ACCOUNTS :

1. Contingent liabilities :(a) Guarantees given by banks - Rs. 110,183,197/- (Previous Year Rs. 152,873,795/- )(b) Corporate Guarantee given by Great Offshore Ltd., the holding company - Rs. 160,000,000/-

(Previous Year Rs. Nil)(c) Showcause notice was issued by Custom Authority, Goa, as to why custom duty of Rs. 3165

lakhs should not be levied. The Company has filed a Writ Petition before Goa Bench of MumbaiHigh Court.

2. Secured Loan :During the year, the Company has taken a term loan from a bank, repayable at a fixed rate of interestof 11.5% p.a. The loan is secured by hypothecation of Rig and by an irrevocable corporate guaranteegiven by Great Offshore Ltd., the holding company.

3. Deferred tax :The break up of net deferred tax assests is as under :

As on As onMarch 31, 2008 March 31, 2007

Deferred tax liabilities :Deferred revenue expenditure on refurbishment of rig - -

- -Deferred tax assets :Difference between book and tax depreciation 9,419,090 11,081,283

9,419,090 11,081,283

Net deferred tax asset (9,419,090) (11,081,283)

112



4. Profit and loss account :Dividend income comprises of dividend on Mutual Fund investments - Rs. 4,932,248/-(Previous Year Rs.181,465/-).

5. Basic and diluted earnings per share :Current Year Previous Year

Rupees Rupees

(a) (Loss) / Profit for the year after tax availableto Equity Shareholders (8,769,706) 35,155,154

(b) Number of Equity Shares as on April 1, 2007 50,000 50,000Add : Shares allotted during the year - -Number of Equity Shares as on March 31, 2008 50,000 50,000

Weighted average number of Equity sharesoutstanding during the year 50,000 50,000

(c) Face value of Equity Share 10 10

(d) Basic and diluted earnings per share (175) 703


(i) List of Related Parties

Parties where control exists

Holding Company

Great Offshore Ltd.

(ii) Transactions with related parties :Holding Company


(a) Loan taken during the year - -

(b) Loan repaid during the year - 17,000,000

(c) Interest on Loan - 275,493

(d) Reimbursement of Insurance charges,Port dues & other services 672,537 16,724,974

(e) Charter Hire 199,708,639 136,608,021

(f) Outstanding balances as at March 31, 2008

Share Capital 500,000 500,000

Payables 217,012,601 222,681,883

113


7. Particulars of investments Purchased and Sold during the year :

Face Value Purchase Cost

No. of Units Rupees Rupees

LICMF Liquid Plus Fund- Daily Dividend Reinvestment 28,202,015 10 282,020,151

Principal Cash Management Fund- Daily Dividend Reinvestment 4,756,833 10 47,611,691

HDFC Cash Management Fund- Daily Dividend Reinvestment 6,219,128 10 65,228,380

ICICI Prudential Institutional Liquid Fund- Daily Dividend Reinvestment 5,094,579 10 50,948,336

8. Additional information pursuant to the provisions of paragraphs 4C and 4D of Schedule VI of theCompanies Act, 1956, to the extent not applicable are not given.

9. Previous Years figures have been regrouped wherever necessary to conform to current year’sclassification.

114


ADDITIONAL INFORMATION AS REQUIRED UNDER PART IV OFSCHEDULE VI TO THE COMPANIES ACT, 1956

BALANCE SHEET ABSTRACT AND COMPANY’S GENERAL BUSINESS PROFILE :

I Registration Details :Registration No. 1 1 - 1 3 6 7 1 4

State Code 1 1

Balance Sheet Date 3 1 - 0 3 - 2 0 0 8

II Capital Raised during the year : Amount (Rupees)

Public Issue N I L

Rights Issue N I L

Bonus Issue N I L

Private Placement N I L

III Position of Mobilisation and Deployment of Funds : Amount (Rupees)

Total Liabilities 4 4 4 3 0 5 0 7 4

Total Assets 4 4 4 3 0 5 0 7 4

Sources of Funds :

Paid-up Capital 5 0 0 0 0 0

Reserves & Surplus N I L

Secured Loans 1 6 0 0 0 0 0 0 0

Unsecured Loans N I L

Deferred Taxation (Net) N I L

Application of Funds :

Net Fixed Assets N I L

Investments 6 1 5 6 9 6 9 0

Deffered Tax Assets 9 4 1 9 0 9 0

Net Current Assets 2 9 2 5 0 1 6 0

Misc Expenditure N I L

Accumulated Losses 6 0 2 6 1 0 6 0

IV Performance of Company : Amount (Rupees)

Turnover 8 0 6 5 4 5 0 9 2

Total Expenditure 8 1 3 6 5 2 6 0 5

Profit/(loss) Before Tax ( 7 1 0 7 5 1 3 )

Profit/(loss) After Tax ( 8 7 6 9 7 0 6 )

Earning Per Share ( 1 7 5 )

Dividend Rate (%) N I L

V Generic Names of Three Principal Products/

Services of Company (as per monetary terms) :

Description Item Code No.

Offshore N . A .

115

GREAT OFFSHORE FUJAIRAH L.L.C. - FZCA wholly owned Subsidiary Company

Board of Directors Mr. Vijay Kantilal Sheth

Mr. Soli C. Engineer

Registered Office P. O. Box 5225

Fujairah

U. A. E.

Registration Number 99-E-005

Auditors M/s. Kalyaniwalla & Mistry

Chartered Accountants

Kalpataru Heritage

127, Mahatma Gandhi Road

Mumbai - 400 023

Bankers ABN-AMRO Bank

Dubai

U. A. E.

ANNUAL REPORT2007-08

116

GREAT OFFSHORE FUJAIRAH L.L.C. – FZC

DIRECTORS’ REPORTDear Shareholders,

The Directors present their report with the financial statements of the Company for the yearended March 31, 2008.

REVIEW OF BUSINESS

The results for the year and financial position of the Company are as shown in the annexedfinancial statements.

DIVIDEND

No dividends will be distributed for the year ended March 31, 2008.

DIRECTORS

The Directors of the Company during the year under review were:

Mr Vijay Kantilal Sheth

Mr Soli C. Engineer

STATEMENT OF DIRECTORS RESPONSIBILITIES

Company Law requires the Directors to prepare financial statements for each financial year,which give a true and fair view of the state of affairs of the Company and of the profit or loss ofthe Company for that period. In preparing those financial statements, the Directors are requiredto:

- select suitable accounting policies and then apply them consistently;

- make judgments and estimates that are reasonable and prudent;

- prepare the financial statements on the going concern basis unless it is inappropriate topresume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records which disclose withreasonable accuracy at any time the financial position of the Company and to enable them toensure that the financial statements comply with relevant company legislation. They are alsoresponsible for safeguarding the assets of the Company and hence for taking reasonable steps forthe prevention and detection of fraud and other irregularities.

AUDITORS

M/s. Kalyaniwalla & Mistry, Chartered Accountants, the auditors of the Company for the financialyear 2007-08 have expressed their willingness to accept re-appointment as auditors for thefinancial year 2008-09, if appointed.

For and on behalf of the Board

Vijay Kantilal ShethDirector

MumbaiApril 30, 2008

117

Report of the Auditorsto the Members of Great Offshore Fujairah L.L.C. - FZC1) We have audited the attached Balance Sheet of Great Offshore Fujairah L.L.C. - FZC as at

March 31, 2008 and the Profit and Loss Account and Cash Flow Statement of the Companyfor the year ended on that date, both annexed thereto. These financial statements are theresponsibility of the Company’s management. Our responsibility is to express an opinion onthese financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India.Those Standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audit provides a reasonable basis for our opinion.

3) a) We have obtained all the information and explanations, which to the best of ourknowledge and belief were necessary for the purposes of our audit.

b) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by thisreport are in agreement with the books of account.

c) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statementdealt with by this report comply with the Accounting Standards referred to in Schedule7 to the Accounts.

d) In our opinion and to the best of our information and according to the explanationsgiven to us the said accounts read with the notes thereon, give a true and fair view inconformity with the accounting principles generally accepted in India:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March31, 2008;

ii) in the case of the Profit and Loss Account, of the loss of the Company for the yearended on that date; and

iii) in the case of the Cash Flow Statement, of the cash flows for the year ended on thatdate.





118


Balance Sheet as at March 31, 2008Current Year Previous Year

US $ Rupees US $ Rupees

Schedule

SOURCES OF FUNDS :

Shareholders’ Funds :

Share Capital 1 150,000 6,019,500 150,000 6,510,000

Loan Funds :

Unsecured Loans 2 74,000 2,969,620 74,000 3,211,600

TOTAL 224,000 8,989,120 224,000 9,721,600

APPLICATION OF FUNDS :

Current Assets, Loans and Advances :

Cash and Bank Balances 3 56,191 2,254,945 54,248 2,354,363

Loans and Advances 4 2,750 110,358 8,525 369,985

58,941 2,365,303 62,773 2,724,348

Less : Current Liabilities and Provisions :

Current Liabilities 5 5,512 221,197 2,200 95,480

Net Current Assets 53,429 2,144,106 60,573 2,628,868

Profit and Loss Account 170,571 6,845,014 163,427 7,092,732

TOTAL 224,000 8,989,120 224,000 9,721,600


Notes to Accounts 8

The Schedules referred to above form an integral part of the Balance Sheet



Kalyaniwalla and Mistry Vijay Kantilal ShethChartered Accountants Director

K. M. Elavia Soli C. EngineerPartner Director


119

Profit and Loss Account for the year ended March 31, 2008Current Year Previous Year


Schedule

INCOME :

Interest Income 1,943 77,973 2,670 115,878

EXPENDITURE :

Administration and Other Expenses 6 9,087 364,661 8,260 358,484

Loss for the year 7,144 286,688 5,590 242,606

Loss brought forward from previous year 163,427 6,558,326 157,837 6,850,126

Loss carried forward 170,571 6,845,014 163,427 7,092,732

Earnings Per Share (0.05) (1.91) (0.04) (1.62)


Notes to Accounts 8

The Schedules referred to above form an integral part of the Profit and Loss Account






120




A. CASH FLOW FROM OPERATING ACTIVITIES :

NET LOSS BEFORE TAX : (7,144) (286,688) (5,590) (242,606)

ADJUSTMENTS FOR :

Interest earned (1,943) (77,973) (2,670) (115,878)

OPERATING LOSS BEFORE

WORKING CAPITAL CHANGES : (9,087) (364,661) (8,260) (358,484)

ADJUSTMENTS FOR :

Trade & Other Receivables 5,775 231,750 (3,472) (150,685)

Trade Payables 3,312 132,911 702 30,467

NET CASH FLOW / (USED IN)OPERATING ACTIVITIES : - - (11,030) (478,702)

B. CASH FLOW FROM INVESTING ACTIVITIES :

Interest received 1,943 77,973 2,670 115,878

NET CASH FROM INVESTING ACTIVITIES : 1,943 77,973 2,670 115,878

C. CASH FLOW FROM FINANCING ACTIVITIES : - - - -

Net increase/(decrease) in cash and cash equivalents : 1,943 77,973 (8,360) (362,824)

Cash and cash equivalents as at April 1, 2007 54,248 2,176,972 62,608 2,717,187

Cash and cash equivalents as at March 31, 2008 56,191 2,254,945 54,248 2,354,363






121

Schedules annexed to and forming part of the Accounts for the yearended March 31, 2008

Current Year Previous YearUS $ Rupees US $ Rupees

SCHEDULE “1”CAPITAL :AUTHORISED :500,000 Ordinary shares of US $ 1/- each 500,000 20,065,000 500,000 21,700,000ISSUED, SUBSCRIBED & PAID UP :150,000 Ordinary shares of

US $ 1/- each fully paid up 150,000 6,019,500 150,000 6,510,000The entire share capital is held byGreat Offshore Ltd, the holding company

150,000 6,019,500 150,000 6,510,000

SCHEDULE “2”UNSECURED LOANS :Loan from Great Offshore Ltd, the holdingcompany 74,000 2,969,620 74,000 3,211,600

74,000 2,969,620 74,000 3,211,600

SCHEDULE “3”CASH AND BANK BALANCES :Balances with banks :- On current account with : 3,897 156,387 3,897 169,130

ABN AMRO Bank, Dubai(Maximum Balance US$ 3,897/-Previous Year US$ 10,927/-)

- On call deposit account with 52,294 2,098,558 50,351 2,185,233ABN AMRO Bank, Dubai(Maximum Balance US$ 52,294/-,Previous Year US$ 61,681/-)

56,191 2,254,945 54,248 2,354,363

SCHEDULE “4”LOANS AND ADVANCES :(Unsecured - considered good unlessotherwise stated)Advances recoverable in cash or in kindor for value to be received 2,750 110,358 8,525 369,985

2,750 110,358 8,525 369,985

SCHEDULE “5”CURRENT LIABILITIES :Sundry Creditors 5,512 221,197 2,200 95,480

5,512 221,197 2,200 95,480

SCHEDULE “6”ADMINISTRATION AND OTHER EXPENSES :Office Rent 6,799 272,844 6,118 265,521Licence Fees 1,586 63,646 1,410 61,194Audit Fees 702 28,171 702 30,467Miscellaneous expenses - - 30 1,302

9,087 364,661 8,260 358,484

122



SCHEDULE “7”



The financial statements expressed in US Dollars are prepared under the historical cost convention,in accordance with generally accepted accounting principles in India, the accounting standardsissued by the Institute of Chartered Accountants of India and the provisions of the Companies Act,1956.

(b) Revenue Recognition :

Interest income arising from bank deposits is recognised on an accrual basis.

(c) Currency Translation :

Monetary assets and liabilities in foreign currencies are translated into US Dollars at rates of exchangeruling at the balance sheet date and transactions in foreign currencies during the financial year aretranslated at rates ruling on transaction dates. Exchange differences are dealt with through the Profitand Loss Account for the year.

SCHEDULE “8”

NOTES ON ACCOUNTS :

1 Amount due to Holding Company

The immediate and ultimate holding company is Great Offshore Ltd, a company incorporated inIndia. The amount due to the holding company is unsecured, interest free and has no fixed termsof repayment.

2 Basic and diluted earnings per share :Current Year Previous Year

US $ Rupees US $ Rupees(a) (Loss) / Profit for the year after tax

available to Equity Shareholders (7,144) (286,688) (5,590) (242,606)

(b) Number of Equity Shares as onApril 1, 2007 150,000 150,000 150,000 150,000Add : Shares allotted during the year - - - -

Number of Equity Shares as onMarch 31, 2008 150,000 150,000 150,000 150,000

Weighted average number of Equityshares outstanding during the year 150,000 150,000 150,000 150,000

(c) Face value of Equity Share 1 40 1 43

(d) Basic and diluted earnings per share (0.05) (1.91) (0.04) (1.62)

123

3 Related Party Disclosures :

(i) List of Related Parties

Parties where control exists

Holding Company

Great Offshore Ltd.

Current Year Previous YearUS $ Rupees US $ Rupees

(ii) Transactions with related parties :

Outstanding balances as atMarch 31, 2008

Holding Company :

Share Capital 150,000 6,019,500 150,000 6,510,000

Unsecured loan 74,000 2,969,620 74,000 3,211,600

4 Additional information pursuant to the provisions of paragraphs 4C and 4D of Schedule VI of theCompanies Act, 1956, to the extent not applicable are not given.

5 The audited financial statements are expressed in US Dollars, the currency in which the books ofaccount have been maintained. The audited financial statements do not include the Indian Rupeeequivalent figures, which have been arrived at by applying the year-end inter bank exchange rate ofUSD 1 = INR 40.13 ( Previous Year USD 1 = INR 43.40)

6 Previous Years figures have been regrouped wherever necessary to conform to current yearsclassification.


PROXY FORM

GREAT OFFSHORE LIMITED

Registered Office: Energy House, 81, Dr. D. N. Road, Mumbai 400 001

DP. ID* Registered Folio No.

Client ID*

I/We ....................................................................................................................................................................................................................

of ............................................................................................... being a member/members of Great Offshore Limited hereby appoint

...........................................................................................................................................................................................................................of

...............................................................................................................................................................................................................or failing him

........................................................................................................................................ of .................................................................................

as my/our proxy to vote for me/us and on my/our behalf at the Third Annual General Meeting of the Company held onThursday, July 10, 2008 at 4.00 p.m. or at any adjournments thereof.

Signed this ..................................... day of ............................... 2008

Place : ................................

* Applicable for shareholders holding shares in Demat form.

Note : This form, in order to be effective, should be duly completed, stamped and signed and must be deposited at theRegistered Office of the Company not less than 48 hours before the meeting. The proxy need not be a member ofthe Company.

ATTENDANCE SLIP

GREAT OFFSHORE LIMITED

Registered Office: Energy House, 81, Dr. D. N. Road, Mumbai 400 001

PLEASE FILL THE ATTENDANCE SLIP AND HAND IT OVER AT THE ENTRANCE OF THE MEETING HALLJOINT SHAREHOLDERS MAY OBTAIN ADDITIONAL SLIP ON REQUEST

DP. ID* Registered Folio No.

Client ID*

NAME ..................................................................................................................................................................................................................

ADDRESS ...........................................................................................................................................................................................................

No. of Share(s) held :

I hereby record my presence at the Third Annual General Meeting of the Company held on Thursday, July 10, 2008at 4.00 p.m. at Rama Watumull Auditorium, Kishinchand Chellaram Collage, Dinshaw Wacha Road, Churchgate, Mumbai -400 020.

Signature of the shareholder or proxy ...........................................................................................................................................................

*Applicable for shareholders holding shares in Demat form.

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Notes

India’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services ProviderIndia’s Leading Offshore Oilfield Services Provider

Great Offshore is India’s leading integrated offshore oilfield services provider to the upstream

oil and gas exploration industry.

Since its first venture in 1983 – nearly a quarter of a century ago – your Company has grown

steadily and is today one of the largest companies in the private sector of the oil and gas space

in India. In fact, it is the only private offshore services contractor in India offering a wide

spectrum of offshore services through its diverse fleet of exploratory rigs, offshore support vessels

and construction barges. The Company also offers port and terminal support services.

Your Company’s philosophy of upgrading and modernising its fleet continually ensures that

all its assets are being well maintained and equipped with state of the art technology.

Your Company operates within India and also has a growing international presence with some

of its vessels deployed in the Middle East, North Sea, South Africa and South East Asia.

Headquartered in Mumbai, your Company has representative offices in Malaysia and the United

Arab Emirates.

Your Company’s commitment is to safety, and it works tirelessly to ensure that both its onshore

and offshore operations are carried out with the greatest care, diligence and respect for the

environment. It is a recipient of numerous safety awards in all the regions in which it operates.

Your Company is also audited and certified to international standards and has been awarded

ISO:9001 and ISO:14001 certifications.

Enterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that driveEnterprise, Energy, Endurance – your Company’s tag line – are the attributes that drive

Great Offshore.Great Offshore.Great Offshore.Great Offshore.Great Offshore.

Project Execution Project Execution Project Execution Project Execution Project Execution

Eleven walkway bridges, totaling to 397.22 metres long, were installed for Ratnagiri

Gas and Power Private Limited (RGPPL) at Dabhol, Maharashtra.

The Project was completed on schedule on 31st December, 2007.

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nfomedia India Limited - Great Offshore Limited is India's ... India’s Leading Offshore Oilfield Services Provider ... For the financial year ended March 31, 2008, the ... and Loss