GOL Offshore Limited is a Public Limited Company whose equity shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.The Company is India's prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers to carry out offshore exploration and production (E&P) activities. The Company operates Drilling Rigs, Offshore Support Vessels and undertakes Marine Construction Projects and Services.

NOTE 2 : DEFERRED TAX LIABILITIES (NET)

Upon the introduction of Section 115 V in the Income Tax Act, 1961, the Company has opted for computation of its income from shipping activities under the Tonnage Tax Scheme. Thus income from the business of operating ships is assessed on the basis of deemed Tonnage Income of the Company and no deferred tax is applicable to this income as there is no timing differences.

NOTE 3: Investment and unsecured loan to KEI-RSOS Maritime Limited

As on March 31, 2015, the Company has long term, strategic investment in the equity/redeemable preference shares of it's wholly owned subsidiary company KEI-RSOS Maritime Limited amounting to Rs.21,374 Lakhs (Previous Year Rs.18,863 Lakhs). A further sum of receivables of Rs.3, 399 Lakhs (Previous Year Rs. 2,363 Lakhs) and a loan amount of Rs. 3,502 Lakhs (Previous Year Rs.3, 502 Lakhs) are also due from them.

The Company has also issued bank guarantee to Indian Bank amounting to Rs.14,168 Lakhs (Previous year Rs.14,168 lakhs) against which outstanding facilities as on March 31, 2015 amount to Rs.3,656 Lakhs (previous year Rs.4,719 Lakhs).

As auditors had in their report for the financial year ended 31.03.2012 onwards expressed their doubts about the realization of these amounts, due to continuous losses suffered by the subsidiary resulting in its net worth becoming negative, QARC of SEBI vide its Order dated 27th April,15 has directed Restatement of financial results for Financial year 2012-13 and 2013-14 for giving effect to the impact of the audit qualification, and the effect of the restated adjustments to be carried out in the annual accounts of the financial year 2014-15 as prior period item.

The Company is in the process of filing appeal against the said order, and believes that, the said investment being strategic and long term in nature with a long term out look, no provision is required to be made as the management is confident of turning around this company into profit. Hence no reinstatement has been carried out presently, pending final decision from the Securities Appellate Tribunal.

NOTE 4: Share Capital

The allotment of 63,380 equity shares (previous year 63,380 equity shares) is under abeyance. These shares will be allotted upon the receipt of the order of the Special Court established under the Special Court (Trial of Offences relating to Transactions in Securities) Act, 1992 or such other authority as may be directed, from time to time. Transfer of an additional 10,153 equity shares (previous year 10,153 equity shares) have been kept in abeyance pursuant to Section 206A of the Companies Act, 1956 as their title is under Legal dispute. These shares will be allotted as and when the dispute regarding their title is resolved. Accordingly, in aggregate, 73,533 (63,380 10,153) equity shares (Previous year 73,533 equity shares) have been kept in abeyance. The unpaid dividend of Rs.2.81 Lakhs on these equity shares has not been transferred to Investor Education and Protection Fund in view of the legal dispute.

NOTE 5: Hedge Reserve

a) The Company has borrowings and the revenue streams in foreign currency, which provide an inherent hedge against foreign currency exchange rate fluctuations. Accordingly, the Company has adopted, with regard to recognition of exchange differences arising on translation of foreign currency borrowings, an appropriate hedge accounting policy by applying the principles set out in AS-30 Financial Instruments: Recognition and Measurement. The objective of adopting Hedge Accounting is to ensure that gain or loss on the hedging instrument is recognized in the Profit and Loss Statement in the same period when Hedged items affect profit or loss. The Company has, w.e.f. 1st April 2008 designated borrowings in foreign currency as Hedge instrument to hedge its foreign currency risk of its firm commitments and highly probable forecast transactions ( of revenue streams) to be accounted as cash flow hedge.

b) The Company recognises Mark to Market losses in respect of derivative instruments like interest rate swaps as per the principles enunciated in Accounting Standard (AS) 30 "Financial Instruments:Recognition and Measurement" and in accordance with the recommendation of the Institute of Chartered Accountants of India. Accordingly, Mark to market (MTM) losses in respect of derivative instruments like Interest Rate Swaps have been accounted in accordance with principles of hedge accounting and the MTM losses on such derivative instruments are recorded in the Hedge reserve account instead of recognising the same in the Profit and Loss Statement. As at March 31, 2015, MTM gain on oustanding Interest Rate Swaps and unrealised exchange gain on foreign currency loans referred to above amounting to Rs..9,103 lakhs (Previous Year loss Rs. 9,008 lakhs) has been recognised in Hedge Reserves instead of crediting the same to the Profit and Loss Statement.

c) Consequent to Recall / Recovery proceedings of certain loans by the Lenders, the Company has discontinued hedge accounting prospectively in respect of the said recalled loans from the date of recall notice. Accordingly, foreign exchange fluctuation from the date of recall is recognised in Profit & Loss Statement. The provision for exchange fluctuation made during the year and in earlier year of Rs. 4,374 lakhs on such recalled loan and installments which have fallen due, has been netted off against the Hedge Reserve at the year end. The cumulative foreign exchange fluctuation upto the date of recall will be recognized in the Profit & Loss Statement when the corresponding hedged item (forecasted exports) affects the Profit & Loss Statement.

NOTE 6 : Unsecured Loans

The 7.25% Unsecured Foreign Currency Convertible Bonds with an outstanding amount of USD 40 mio due in the previous year were repaid in full during the year after obtaining requisite approval from the Reserve Bank of India. The interest upto the date of actual redemption and net exchange loss, in this regard, have been fully recognised in the Profit and Loss Statement.

NOTE 7: Interest on loan given to subsidiary Great Offshore (International) Limited

Interest recovered on loan given to subsidiary Great Offshore (International) Limited Rs. 3,837 lakhs (Previous Year Rs. 3,808 lakhs) has been netted out against the interest expense on specific loans and net interest is disclosed in the Profit and Loss Statement. Interest Receivable upto March 31, 2015 is Rs. 5,800 lakhs (Previous Year Rs. 1,963 lakhs)

NOTE 8: Investment in and Unsecured Loan to Great Offshore (International) Limited

The company has an investment of Rs. 155 Lakhs and has also granted unsecured loan amounting to Rs..53,765 lakhs (Previous Year Rs.. 56,609 lakhs) to its wholly owned overseas subsidiary company Great Offshore (International) Limited which in turn has invested/advanced the said amount to its step down overseas subsidiaries/partnership firms for purchase of vessels with higher capacities and latest technologies from Bharati Shipyard Limited(BSL). In addition the Company has provided Corporate Guarantee aggregating to Rs. 46,815 Lakhs to the lenders of the said subsidiary which have been invoked. The investment in this subsidiary is considered strategic and long term in nature. That Company is in discussions with the lenders for settlement of dues and restoration of initial repayment terms. BSL is currently in negotiation with an Asset Reconstruction Company(ARC) who has taken over a major part of its debts for restarting the vessel construction activity. The vessels of the company under construction at BSL will be delivered thereafter.In the opinion of the management, no provision is required for investments, unsecured loan and invoked corporate guarantees as that company is expected to turn around in the long term on improvement of market conditions and delivery of vessels under construction.

NOTE 9: Inventories

Closing stock of stores and spares on board the vessels amounting to Rs. 5,136 lakhs (Previous Year Rs. 4,671 lakhs) was determined by the management on the basis of inventory system implemented by the company. The company has in place preset cyclical programme for physical verification of inventory on board the vessels. Auditors have relied upon the management certification for the valuation of stock of stores and spares on board the vessels.

NOTE 10: Capital Work In Progress:

Capital Work in Progress of Rs. 94,192 lakhs including Rs. 11,965 lakhs being interest and indirect expenses capitalised as appropriate in earlier years relate to vessels under construction with various shipyards where there was no progress during the year and is delayed much beyond the original dates of completion. The unpaid liability on this account is Rs. 30,006 lakhs.

During the year, the company has made efforts to revive the progress of construction of the vessels, but it was affected due to unavailability of adequate funds, and also due to financial difficulties and consequent non-operation of certain shipyards. However, alternate options are being actively pursued and the management is hopeful of early resolution of the matter.

The management of the Company believes that the carrying value of CWIP as reflected in the financial statements is fair and reasonable and will have a value on realisation which is not less than the carrying value and hence no impairment provision is considered necessary.

NOTE 11: Going Concern

As stated in Note Nos. 5, 9 and 11, the Company has not been able to service a substantial part of its borrowings on the original due dates. In respect of Loans, Corporate Guarantees and dues including instances where recovery proceedings have been initiated as stated in other notes the Company is making all efforts for early settlement by taking various steps including: i) more aggressive employment of its vessels and resources, ii) disposal of some assets, iii) settlement of significant current dues and restoration of initial repayment terms iv) entering into corrective action plan as approved by Joint Lenders Forum. Some of its arrear dues could be settled during the year due to these efforts. The management is very hopeful of arriving at full settlement over a period of two years. The Company is also able to earn operating profit margin by carrying on its business in the normal course. Hence these accounts have been prepared on going concern assumption which is considered appropriate.

NOTE 12: Dues to Micro & Small Enterprises

According to information available with the Company regarding the status of the suppliers, as defined under The Micro, Small and Medium Enterprises Development Act, 2006, amount overdue as on 31st March, 2015 to the Micro, Small and Medium enterprises on account of principal amount, together with interest for delayed payment under the Act, is Rs. 199 lakhs (Previous Year Rs. 23 lakhs) .

NOTE 13 The balances of Trade Receivables, Trade Payables and Loans & Advances are subject to confirmation.

NOTE 14 Disclosures pursuant to Accounting Standard (AS) 15 (revised) "Employee Benefits"

(a) Effective April 1, 2007 the Company adopted Accounting Standars 15 (Revised 2005) on "Employee Benefits" issued by ICAI.

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

NOTE 15 : Segment reporting

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

NOTE 16 : Related Party Disclosures

(i) List of Related Parties

(a) Parties where control exists :

Subsidiary Companies :

Deep Water Services (India) Ltd

GOL Ship Repairs Ltd (formerly Great Offshore Ship Repairs Ltd.)

KEI - RSOS Maritime Ltd

GOL Salvage Services Ltd (formerly Great Offshore Salvage Services Limited)

Great Offshore ( International) Ltd

GOL Offshore Fujairah L.L.C. - FZE (formerly Great Offshore Fujairah L.L.C - FZC)

Deep Water Services (International) Ltd

Norwegian Shipping I Ltd

Norwegian Shipping II Ltd

Great Offshore International (Malaysia) Ltd.

Great Offshore International Manning & Ship Management (Lubuan) Ltd.

Glory Shipping Pvt Ltd

Great Offshore Germany GmbH

SGB Verwaltungs GmbH

SGB Emssun GmbH & Co. KG

SGB Emssky GmbH & Co. KG

SGB Emsstar GmbH & Co. KG

GOL Offshore Marshall Islands Limited

(b) Other related parties with whom transactions have taken place during the year :

1 Joint Venture :

United Helicharters Pvt Ltd.

2 Key Management Personnel :

Mr. P.C.Kapoor - Executive Director*

Mr. Vijay Kumar -Executive Director*

Mr. Navin Joshi - Company Secretary & Chief Compliance Officer

* Mr. P.C. Kapoor and Mr. Vijay Kumar ceased to be Executive Director w.e.f 30th April 2015 upon expiry of the terms of their appointment

3 Enterprises over which Key Management Personnel Exercise Significant Influence :

Bharati Shipyard Limited

Pinky Shipyard Pvt Ltd

Bharati Maritime Services Pvt Ltd

Harsha Infrastructure Pvt Ltd

Sea Splice Shipping Pvt Ltd

Port Side Shipping Pvt Ltd

Dhanshree Properties Pvt Ltd

Natural Power Ventures Pvt Ltd

4 Relatives of Key Managerial Personnel

Ms. Sukriti Kumar

NOTE 17 : Interest in Joint Venture

The Company has a joint venture interest in United Helicharters Pvt. Ltd. (a company incorporated in India) and its proportionate share in the assets, liabilities, income and expenses of the jointly controlled entity, based on the unaudited management accounts drawn up to March 31, 2015, is as under :

NOTE 18: Consequent to the application of schedule II of the Companies Act,2013, with effect from 01.04.2014, the depreciation has been charged based on the useful life as estimated by the manage- ment/ consultant in earlier years. There is no material impact on Profit and Loss Statement arising from this change.

NOTE 19: Previous year's figures have been regrouped/recasted/restated wherever necessary.