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Global Offshore Services Ltd.

BSE: 501848 Sector: Infrastructure
NSE: GLOBOFFS ISIN Code: INE446C01013
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VOLUME 61319
52-Week high 143.50
52-Week low 30.00
P/E
Mkt Cap.(Rs cr) 92
Buy Price 36.95
Buy Qty 100.00
Sell Price 37.00
Sell Qty 574.00
OPEN 35.15
CLOSE 34.90
VOLUME 61319
52-Week high 143.50
52-Week low 30.00
P/E
Mkt Cap.(Rs cr) 92
Buy Price 36.95
Buy Qty 100.00
Sell Price 37.00
Sell Qty 574.00

Global Offshore Services Ltd. (GLOBOFFS) - Director Report

Company director report

FOR THE YEAR ENDED 31ST MARCH 2016 TO THE MEMBERS

Your Directors are pleased to present their report as under:

1] FINANCIAL RESULTS:

Rs. in Crores
PARTICULARS Year ended March 31 2016 Year ended March 31 2015
Income from operations (Net of Service Tax) 158.61 78.89
Other Operating Income 1.18 11.02
Other Income 0.42 1.50
Gross Income 160.21 91.41
Expenses for the year 89.34 46.27
Operating Profit for the year 70.87 45.14
Finance cost 18.26 9.25
Profit Before Depreciation 52.61 35.89
Depreciation 22.39 13.36
Profit Before Tax 30.22 22.53
Provision for Taxation:
Current Tax 0.20 1.85
Tax for earlier (written back)/provision 0.01
Net Profit After Tax 30.01 20.68
Add : Balance of Profit brought forward from previous year. 152.27 136.19
Profit available for appropriation. 182.28 156.87
Less : Tonnage Tax Reserves 6.10 4.60
- General Reserves - -
- Proposed Dividend - -
- Tax on Proposed Dividend - -
Balance Carried forward 176.18 152.27

2] FINANCIAL HIGHLIGHTS:

Income from Operations (including Other Operating Income) for the year ended on31.03.2016 stood at Rs.159.79 crores as against Rs.89.91 crores for the previous year.Other Income for the year stood at Rs.0.42 crores as against Rs.1.50 crores for theprevious year. The Net Profit for the year ended 31.03.2016 stood at Rs.30.01 crores asagainst Rs. 20.68 crores for the previous year. The increase in the Gross Income and thenet profit of the Company was attributed to the fact that majority of the Company’sfleet was on long term contract for most of the year and M.V. Lachung and M.V. Mana whichwere acquired late in FY 2015-16 worked on long term contracts for most of the year.

The Company continues to opt for the Tonnage Tax Scheme.

3] OPERATIONS: a) During the year under review :

• M.V.Garware-III which was laid up and remained idle was sold.

• M.V.Meghna which worked in the Middle East spot market till May 2015 wasawarded a long term contract w.e.f. June 2015. However in March 2016 the Company wascompelled to accept a reduction in the Charter rate for the Vessel rather than risktermination of the said Contract.

• M.V.Mana M.V.Mahananda and M.V.Kamet continued to work on long term contract inthe West Coast of India.

• M.V.Lachung was awarded a long term contract w.e.f. Sept 2015 working in theWest Coast of India.

• M.V.Poorna was on a long term contract till December’15 and thereafter shehas been working intermittently in the Middle East spot market.

• The Company "in chartered" one Vessel for a long term contract inIndia. b) After the year under review:

One of the Company’s charterers issued a notice for the termination of threeVessel contracts (including the contract for one "in chartered Vessel"). Thesaid notice was also issued to 24 additional ships owned by others. Shipowners were ableto convince the Charterer not to terminate the said contracts but had to accept areduction of up to 50% in the daily charter rate to ensure that the Vessels stayed oncontract. The same may apply to one more vessel on contract. The Company accepted reducedrates lest the vessels would have been off-hired and lay idle as is the case of oneother Vessel owned by the Company. Unfortunately the reduced charter rates are not enoughto service the existing repayment profile of debt payment of opex overheads and interestand therefore the Company is seeking options for changing the said profile. In themeantime as a measure to reduce costs all employees have accepted a reduction in theirsalaries till such time the situation improves.

Credit Analysis & Research Ltd (CARE) has revised its rating to BBB+. However thisrating does not take into consideration the repricing of the charter contracts of theVessels.

4] DIVIDEND:

In an attempt to conserve resources for "contingencies" in the future yourDirectors regret their inability to recommend any Dividend.

5] FUTURE EXPANSION AND OUTLOOK:

As per Baker Hughes World Rig Counts the number of Oil Rigs (onshore and offshore)has reduced from 3578 in the calendar year 2014 to 2337 in the calendar year 2015 and 1606in the current calendar year. This is a reduction of 50% compared to the number of OilRigs in 2014. The drastic "slide" in the price of oil continued during the yearunder review. After "bottoming" out at sub $30 levels oil prices started toclimb again and have now reached about $45 per barrel. Unfortunately this rise ofapproximately 60% has not been enough for exploration activity to increase much –which would have a positive effect on the demand for Vessels - since there is noconfidence as yet that prices will continue rising and the increase in price is"sustaining". Experts believe exploratory activities would see some increase ifcrude oil prices cross $60 per barrel and sustains this level for a few months at least.Currently there are more than 500 vessels laid up in the world. The Company’ssubsidiary too has "stacked" two of its Vessels in Europe.

There is unlikely to be much improvement in prices in 2016 with oversupply persistingand oil Companies trimming E&P expenditure particularly on exploration activityleading to lower requirements of rigs and consequently Offshore Vessels. With therepricing of the charter rates by the Company’s charterers for three of theCompany’s vessels "idling" of one vessel owned by the Company and theexpected termination of one additional contract the Company has to now ensure that it"rides out this storm" over the next few years. Therefore Company has noexpansion plans in the foreseeable future.

6] SUBSIDIARY / WHOLLY OWNED SUBSIDIARY (WOS):

During the year under review there was no Company which became or ceased to besubsidiary / joint venture or associate Company. The Company has two Subsidiaries asdetailed below:

a) Global Offshore Services B.V. - The Netherlands (GOSBV)

Global Offshore Services B.V has gone through an exceptionally challenging phase amidstthe oil and gas sector going through price volatility and uncertainty. The revenue fromoperations for the year was $ 34.31 Mn (PY $ 44.89 Mn.) and the loss recorded for the yearended 31st March 2016 was $ 6.7 Mn. (Previous Year profit $ 5.51 Mn) During the year twoof the vessels were off-hired after successful completion of 4 year contracts. Currentlyboth of them are stacked up in North Sea. The Company has entered into a term contractwith a renowned Oil Exploration Company in Europe for three of its vessels. However thecharter rates at which the Vessels are working is not sufficient to cover opex interestand service debt repayment. One of the Company’s Vessel working in Brazil wasterminated by the Charterer without any warning whatsoever. The Company is now trying toplace this Vessel on a term contract in Brazil itself.

The Company is in an advanced stage of discussions with the lenders to arrive at anagreeable solution to tide over this difficult period. With regards to qualification inthe Auditors Report of GOSBV the Board clarify that: "GOSBV has sought thebalance confirmation from the major creditors but failed to get the response before thecompletion of the audit."

b) Garware Offshore International Services Pte Ltd – Singapore (GOISPL)

The Company’s wholly owned subsidiary GOISPL based in Singapore achieved anoperating income of $ 4.93 Mn (previous year $ 11.50 Mn). The Company suffered a loss of $1.71 Mn (Previous Year $ 0.12 mn).

During the year the Company operated only one vessel as against two vessels in theprevious year. The Vessel M.V. Everest which was on a long term contract in Brazil hasbeen terminated. The loss incurred for the current year is mainly as a result of thesubstantial reduction in the charter rate which the Company had to accept midway throughthe year.

The Company has been successful in reaching an agreement for the restructuring of theBareboat charter payable to the Owner of the vessel M.V.Everest. The said agreemententails a reduction in daily charter hire an extension of the charter period and areduction in the purchase price of the Vessel at the end of the tenure of the charter.However as stated above the Vessel which was on a long term contract in Brazil hasrecently been terminated and is presently unemployed.

With regard to the comment made by the Statutory Auditors the Board hereby clarifythat "It is not possible for the Auditors to physically verify vessel’sinventory since the vessel was on a time charter with Petrobras in Brazil. As is thenormal practice Directors have certified the level of stock on vessel to the Auditors. Inview of general exemption granted by Ministry of Corporate Affairs vide CircularNo.51/12/2007-CL-III dated 8.2.2011 the annual accounts of subsidiary companies and therelated information required to be enclosed under the provisions of the Companies Act2013 are not enclosed. The Company undertakes that such information shall be madeavailable to the shareholders of the holding and subsidiary companies and shall also bekept for inspection at the Registered Office of the Company. The Company shall furnishhard copy of the same to any shareholder on demand.

7] LISTING FEES TO STOCK EXCHANGES:

The Company has paid the Listing Fees for the year 2016-17 to Bombay Stock ExchangeLtd. and The National Stock Exchange of India Ltd.

8] FIXED DEPOSITS:

During the year under review no Deposits were accepted remained unpaid or unclaimedas at the end of year under review pursuant to Chapter V of the Companies Act 2013 andhence the details relating to deposits and details which are not in compliance underChapter V of the Act are "NOT APPLICABLE".

9] RESPONSIBILITY STATEMENT:

The Directors confirm: a) That in the preparation of the Annual Accounts theapplicable accounting standards have been followed and that no material departures (saveand except as stated in the Directors’ Report) have been made from the same. b) Thatthey have selected such Accounting Policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the State of Affairs of the Company at the end of the year and the Profit of theCompany for that year ended as on 31.03.2016. c) That they have taken proper andsufficient care for the maintenance of adequate accounting records in accordance withprovision of the Companies Act 2013 for safe-guarding the assets of the Company and forpreventing and detecting fraud and other irregularities. d) That they have prepared theAnnual Accounts on a going concern basis. e) That the Directors have laid down internalfinancial controls to be followed and that such financial controls are adequate and wereoperating effectively. f) That the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and that such systems were adequateand operating effectively.

10] INSURANCE:

All the Vessels owned and operated by the Company and its subsidiaries have beeninsured for Hull & Machinery War Risks and Protection & Indemnity (P & I)claims. If required depending upon the Geographical location of the Vessels necessaryKidnap and Ransom (K&R) Insurance cover is also taken for the Vessels and crew.

11] DIRECTORATE:

Mr. Aditya A. Garware resigned as Managing Director of the Company w.e.f. 10thNovember 2015. He continues to be Vice Chairman of the Company. He has been appointed asConsultant by the Company w.e.f. 11th November 2015 and is paid a Consultancyfee accordingly. Mrs. Maneesha S. Shah retires by re-election and being eligible offersherself for re-appointment. Members are requested to re-elect her.

Pursuant to the recommendation of Nomination & Remuneration Committee and theauthority granted to the Board of Directors by a Special Resolution dated 28.09.2012 tovary the terms of appointment of Mr. Ashok B. Garware – Executive Chairman reductionin his salary of 35% w.e.f. June 2016 has been accepted by him (from Rs.8.00 Lakhs permonth to Rs.5.20 Lakhs per month). The consultancy fees payable to Mr. Aditya . Garwarehas also been reduced by 35% w.e.f. June 2016 (from Rs.5.50 Lakhs per month to Rs.3.57Lakhs per month).

The Independent Directors and Non-whole time Director have also volunteered to accept areduction of 35% in the sitting fees payable to them for attending Board Meetings andCommittee Meetings w.e.f. June 2016.

12] AUDITORS:

You are requested to re-appoint Statutory Auditors Messrs. Raman S. Shah &Associates Chartered Accountants for the current year and to fix their remuneration. TheCompany has obtained a Certificate from them under Section 139 of the Companies Act 2013certifying that they are eligible for taking up the appointment.

There are no Qualifications in the Auditors’ Report.

13] PERSONNEL:

The downturn in the Oil Industry has adversely affected the Company’s financialposition. In order to save costs and sustain operations the Company was compelled toreduce salaries of the shore staff at all levels at rates varying from 5% to 30%. Thisreduction has been graciously accepted by the Employees. The Board appreciates support andco-operation of all the employees.

The relations with all Employees of the Company both Shore and Floating Staff havebeen cordial. Your Directors wish to express their appreciation of the services renderedby the devoted Employees.

14] DEMATERIALISATION OF SHARES:

The Company’s shares continue to be traded in Electronic Form. As per Securitiesand Exchange Board of India (SEBI) requirement 100% of the shares held by the Promoter /Persons Acting in Concert category are in the Electronic Form.

15] EXTRACTS OF THE ANNUAL RETURN :

The Extracts of the Annual Return as prescribed in Form No.MGT 9 is enclosed asAnnexure I.

16] STATEMENT OF DECLARATION GIVEN BY INDEPENDENT DIRECTORS:

The Independent Directors of the Company viz. Mr. S.S. Aggarwal Mr. J.C. Chopra Mr.A.K. Thanavala and Mr. S. Y. Mulani have given a declaration that they meet the criteriaof the independence as provided in Sub-section (6) of Section 149 of the Companies Act2013.

17] NUMBER OF BOARD MEETINGS:

During the year under review eight Board Meetings were held as detailed below:

(i) 17th April 2015 (ii) 29th May 2015 (iii)11th June 2015 (iv) 13th August 2015 (v) 2ndNovember 2015 (vi) 10th November 2015 (vii) 13thFebruary 2016 & (viii)16th March 2016

18] BOARD EVALUATION:

Pursuant to the provisions of Section 178 of the Companies Act 2013 a structuredquestionnaire was prepared after taking into consideration various aspects of theBoard’s functioning its composition culture performance and ability to executespecific duties obligations and its governance and that of its Committees. Theperformance evaluation of the Independent Directors was completed. The performanceevaluation of the Executive Chairman and Non-Independent Directors was carried out by theIndependent Directors. The Board of Directors expressed their satisfaction with theevaluation process.

19] FAMILARISATION PROGRAMME FOR DIRECTORS:

At the time of appointment on the Board each Independent Director is issued a formalletter of appointment which inter alia explains the role function duties andresponsibilities expected of him as a Director of the Company. The Directors have beenprovided with a deep insight into the business of the Company including the working of thesubsidiaries. Vessel-wise details have also been furnished to them. The Directors havealso received a detailed explanation on the Compliances required from him/her under theCompanies Act 2013 SEBI (Listing Obligations of Disclosure Requirements) Regulations2015 and other relevant regulations and affirmation taken with respect to the same.

20] DETAILS OF LOANS GRANTED / INVESTMENTS MADE / GUARANTEES PROVIDED UNDER SECTION 186OF COMPANIES ACT 2013 :

The details of the aforesaid Loans/Investment/Guarantees during the year under revieware enclosed as Annexure II.

21] PARTICULARS OF CONTRACTS OR ARRANGEMENT WITH RELATED PARTIES:

The required information pursuant to the provisions of Section 188 of the CompaniesAct 2013 is enclosed in Annexure III.

22] STATEMENT ON DEVELOPMENT AND IMPLEMENTATION OF RISKS MANAGEMENT POLICY:

Risk Management is a key aspect of the "Corporate Governance Principles and Codeof Conduct" which aims to improve the governance practices across all Companyactivities. Risk management policy and processes will enable the Company to proactivelymanage uncertainty and changes in both internal and external environments in an attempt tocapitalize on opportunities and limit negative impacts.

The risk management policy of the Company identifies evaluates monitors and minimizesidentifiable risks.

23] CORPORATE SOCIAL RESPONSIBILITY (CSR):

During the year under review the Company undertook activities as detailed in AnnexureIV.

24] SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS :

There was no significant and material order passed by Regulators or Courts or Tribunalsimpacting the future operations or the "going concern" status of the Company.

25] INTERNAL FINANCIAL CONTROL:

In the opinion of Board of Directors there is adequate Internal Financial Control withrespect to the preparation and presentation of the Financial statements which form a partof this Annual Report.

26] SECRETARIAL AUDITOR:

The Board has appointed Mr. Rajkumar Tiwari as Secretarial Auditor. His Report isenclosed as Annexure V to the Directors’ Report. There is no qualification in theSecretarial Auditors’ Report.

27] DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTIONPROHIBITION AND REDRESSAL) ACT 2013:

The Company has in place "Prevention of Sexual Harassment Policy" in linewith the requirements of The Sexual Harassment of Women at the Workplace (PreventionProhibition & Redressal) Act 2013. An Internal Complaints Committee (ICC) has beenset up to redress complaints received regarding sexual harassment. All employees(permanent contractual temporary) are covered under the policy.

The number of sexual harassment complaints received and disposed off during the yearwas Nil.

28] CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS ANDOUTGO: The required details are enclosed as Annexure VI.

29] CORPORATE GOVERNANCE:

A separate report on Corporate Governance along with the Auditors’ Certificate onits compliance is given in Annexure VII.

30] DETAILS RELATING TO REMUNERATION OF DIRECTORS KEY MANAGERIAL PERSONNEL ANDEMPLOYEES:

The information required under Section 197 read with Rule 5 of Companies (Appointmentand Remuneration of Managerial personnel) Rules 2014 in respect of employees of theCompany and Directors is furnished in Annexure – VIII. As per proviso to Section136(1) of the said Act these particulars will be made available to a shareholder onrequest.

31] DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL APPOINTED OR RESIGNED DURING THEYEAR:

During the year under review Mr. Aditya Garware resigned as Managing Director w.e.f. 10thNovember 2015 and now acts as Consultant to the Company. Capt. K.P.Kekre President(Operations) reached age of superannuation and consequently was relieved from theservices. Capt. V.Baijal joined the Company w.e.f. 1st February 2016 asPresident – HSSE & Training and is also handling operations of the Company.

32] ACKNOWLEDGEMENT:

The Board wishes to thank the Office of Directorate General of Shipping MercantileMarine Department The office of the Shipping Master IRS State Bank of India State Bankof Travancore and United Bank of India for their continued support and co-operationduring the year.

On Behalf of the Board
Place : Mumbai ASHOK GARWARE
Dated : 08.08.2016 EXECUTIVE CHAIRMAN

ANNEXURE - II TO THE DIRECTORS’ REPORT

Particulars of Loans Guarantees and Investments made in Equity Shares under Section186 of Companies Act 2013 during the Financial Year 01st April 2015 to 31st March 2016.

Sr. No. Date Name of Party Loans Amount in USD Guarantee Amount in USD Investment in Equity Amount in USD
1 12.06.2015 Global Offshore Services B.V. 7500000
2 29.10.2015 Global Offshore Services B.V. 50000
3 09.11.2015 Global Offshore Services B.V. 200000
4 03.12.2015 Global Offshore Services B.V. 50000
5 17.12.2015 Global Offshore Services B.V. 50000
6 11.01.2016 Global Offshore Services B.V. 50000
7 25.01.2016 Global Offshore Services B.V. 50000
8 11.02.2016 Global Offshore Services B.V. 100000
9 15.03.2016 Global Offshore Services B.V. 100000
TOTAL 650000 7500000

ANNEXURE - III TO THE DIRECTORS’ REPORT

FORM NO. AOC.2

Form for disclosure of particulars of contracts / arrangements entered into by theCompany with related parties referred to in sub-section(1) of section 188 of the CompaniesAct 2013 including certain arms length transactions under third proviso thereto.

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Act and Rule 8(2) ofthe Companies (Accounts) Rules 2014)

1. Details of contracts or arrangements or transactions not at arm’s length basis.
(a) Name(s) of the related party and nature of relationship. NIL
(b) Nature of contracts / arrangements / transactions. NIL
(c) Duration of the contracts / arrangements / transactions. NIL
(d) Salient terms of the contracts or arrangements or transactions including the value if any. NIL
(e) Justification for entering into such contracts or arrangements or transactions. NIL
(f) Date(s) of approval by the Board. NIL
(g) Amount paid as advances if any. NIL
(h) Date on which the special resolution was passed in general meeting as required under first proviso to section 188. NIL
2. Details of material contracts or arrangement or transactions at arm’s length basis.
(a) Name(s) of the related party and nature of relationship. NIL
(b) Nature of contracts / arrangements / transactions. NIL
(c) Duration of the contracts / arrangements / transactions. NIL
(d) Salient terms of the contracts or arrangements or transactions including the value if any. NIL
(e) Date(s) of approval by the Board if any. NIL
(f) Amount paid as advances if any. NIL

ANNEXURE - IV TO THE DIRECTORS’ REPORT

CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES DURING THE YEAR 2015-2016 FORMAT OFTHE ANNUAL REPORT ON CSR ACTIVITIES TO BE INCLUDED

IN THE BOARD’S REPORT.

1 A Brief outline of the Company's CSR policy including overview of projects or programs proposed to be undertaken and a reference to the web-link to the CSR policy and project or programs. The Company strives to actively contribute to the Social and Economic development of the community in which it operates.
The Company will undertake all or any of the activities specified in Schedule VII to the Companies Act 2013 as amended from time to time & other activities enumerated in its CSR policy.
2 The Composition of the CSR Committee. Mr. A.B. Garware
Mr. S.S.Aggarwal
Mr. J.C.Chopra
3 Average net profit of the Company for last three financial years. Rs. 3491.67 Lacs
4 Prescribed CSR Expenditure (two per cent of the amount as in item 3 above) Rs.69.83 Lacs
5 Details of CSR spent during the financial year :
(a) Total amount to be spent for the financial year Rs. 69.83 Lacs
(b) Amount unspent if any NIL
(c) Manner in which the amount spent during the financial year is detailed below :
CSR project or activity Identified. Sector in which the Project is covered. Projects or programs (1) Local area or other (2)Specify the State and district where projects or programs was undertaken. Amount outlay (budget) project or programs wise. Amount spent on the projects or programs Sub-heads: (1) Direct expenditure on projects or programs. (2) Overheads: Cumulative expenditure upto to the reporting period. Amount spent: Direct or through implementing agency.
1 Kasturba Gandhi National Memorial Trust. Education housing meals etc. In the State of Maharashtra NIL Rs.31.33 Lacs (Aggregate Donations) 31.33 Lacs Direct.
2 Neurology Foundation To provide treatment to needy Children and adults suffering from debilitating neurological illness In the State of Maharashtra NIL Rs.14.00 Lacs (Aggregate Donations) 14.00 Lacs Direct.
3 Women's India Trust. Improving standard of living of disadvantaged women. In the State of Maharashtra NIL Rs.13.00 Lacs (Aggregate Donations) 13.00 Lacs Direct.
4 Vision Multispeciality Hospital Health Care Goa NIL Rs.1.50 Lacs (Aggregate Donations) 1.50 Lacs Direct.
5 Apnalaya Improvement in living conditions of slum area & education to children and adult In the State of Maharashtra NIL Rs.5.00 Lacs (Aggregate Donations) 5.00 Lacs Direct.
6 Ummeed Child Development Center Education and child development In the State of Maharashtra NIL Rs.5.00 Lacs (Aggregate Donations) 5.00 Lacs Direct.
Total 69.83 Lacs
6 In case the company has failed to spend the two per cent of the average net profit of the last three financial years or any part thereof the company shall provide the reasons for not spending the amount in its Board report : Not Applicable
7 The CSR Committee confirms that the implementation and monitoring of CSR Policy is in compliance with CSR objectives and Policy of the company.

ANNEXURE - V TO THE DIRECTORS’ REPORT

FORM NO. MR-3 SECRETARIAL AUDIT REPORT

FOR THE FINANCIAL YEAR ENDED 31st March 2016

(Pursuant to Section 204(1) of the Companies Act 2013 and rule No.9 of the Companies(Appointment and Remuneration of Managerial Personnel Rules) 2014

To

The Members

Global Offshore Services Limited

101 Swapnabhoomi "A" Wing S.K. Bole Road Dadar - (West) Mumbai-400028

I have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Global Offshore ServicesLimited (CIN:L61100MH1976PLC019229) (hereinafter called "the Company").Secretarial Audit was conducted in a manner that provided me a reasonable basis forevaluating the corporate conduct/statutory compliances and expressing my opinion thereon.

Based on my verification of the Company’s books papers minute books forms andreturns filed and other records maintained by the company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit I hereby report that in my opinion the company has duringthe audit period covering the financial year ended on 31st March 2016 compliedwith the statutory provisions listed hereunder and also that the Company has properBoard-Processes and compliances- mechanism in place to the extent in the manner andsubject to the reporting made hereinafter: I have examined the books papers minutebooks forms and returns filed and other records maintained by the Company for thefinancial year ended on 31st March 2016 according to the provisions of:

(i) The Companies Act 2013 ("the Act") and the rules made thereunder;

(ii) The Securities Contracts (Regulation) Act 1956 ("SCRA") and the rulesmade thereunder;

(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;

(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings;

(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ("SEBI Act"):-

a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011;

b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992 & 2015;

c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (Not Applicable to the Company during the Audit period);

d) The Securities and Exchange Board of India (Employee Stock Option Scheme andEmployee Stock Purchase Scheme) Guidelines 1999 and The Securities and Exchange Board ofIndia (Share Based Employee Benefits) Regulations 2014 (Not Applicable to the Companyduring the Audit period);

e) The Securities and Exchange Board of India (Issue and Listing of DebtSecurities)Regulations 2008 (Not Applicable to the Company during the Audit period);

f) The Securities and Exchange Board of India (Registrar to an Issue and Share TransferAgent) Regulations 1993;

g) The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations2009 (Not Applicable to the Company during the Audit period);

h) The Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (‘Listing Regulations’) to the extent applicableduring the Audit Period;

i) The Securities and Exchange Board of India (Buyback of Securities) Regulations 1998(Not Applicable to the Company during the Audit period);

(vi) Specific laws applicable as mentioned hereunder: a) The Merchant Shipping Act1958; b) The Seamen’s Provident Fund Act

I have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards 1 and 2 issued by the Institute of Company Secretaries ofIndia;

(ii) The Listing Agreements entered into by the Company with the BSE Limited andNational Stock Exchange of India Limited; During the year under review the Company hascomplied with the provisions of the Act Rules Regulations Guidelines Standards etc.mentioned above.

I further report that

The Board of Directors of the Company is duly constituted with proper balance ofExecutive Directors Non-Executive Directors and Independent Directors. The Changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.

Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.

Resolutions have been approved by majority while the dissenting members’ if anyviews are captured and recorded as part of the minutes.

I further report that there are adequate systems and processes in the companycommensurate with the size and operations of the company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.

I further report that during the audit period there were no instances of (i)Public/ Rights/ Preferential issue of Shares / Debentures/ Sweat Equity (ii) Buy-back ofsecurities (iii) Redemption of Preference shares/ Debentures (iv)Merger / Amalgamation /reconstruction etc.(v) Foreign technical collaborations.

Place: Mumbai
Date: August 01 2016 Sd/-
CS Rajkumar R. Tiwari
Company Secretary in Practice
FCS No. 4227 C.P. No. 2400

This report is to be read with our letter of even date which is annexed as AnnexureA and forms an integral part of this report.

Annexure-A

To

The Members

Global Offshore Services Limited

101 Swapnabhoomi "A" Wing S.K. Bole Road Dadar - (West) Mumbai-400028 Myreport of even date is to be read along with this letter.

1. Maintenance of secretarial record is the responsibility of the management of theCompany. My responsibility is to express an opinion on these secretarial records based onmy audit.

2. I have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the Secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. I believe that the processes and practices I followed provide areasonable basis for my opinion.

3. I have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.

4. Where ever required I have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.

5. The Compliance of the Provisions of Corporate and other applicable laws rulesregulations standards is the responsibility of management. My examination was limited tothe verification of procedures on test basis.

6. The Secretarial Audit Report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.

Sd/-
CS Rajkumar R. Tiwari
Place: Mumbai Company Secretary in Practice
Date: August 01 2016 FCS No. 4227 C.P. No. 2400

ANNEXURE – VI TO THE DIRECTORS’ REPORT

STATEMENT REGARDING CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO AS REQUIRED UNDER CLAUSE (M) OF SUB-SECTION (1) OF SECTION 134 OF THECOMPANIES ACT 2013 AND THE COMPANIES (ACCOUNTS) RULES 2014.

Particulars
A. CONSERVATION OF ENERGY
(a) Steps taken and impact on conservation of Energy. Being a Shipping Company taking of energy Conservation steps does not arise and the impact is Not Applicable.
(b) Steps taken by the Company for utilizing alternate sources of energy. NIL
(c) The capital investment on energy conservation on equipments NIL
B. TECHNOLOGY ABSORPTION
(i) Efforts made towards technology absorption. NIL
(ii) Benefits derived like Product improvement cost reduction product development or import substitution etc. NIL
(iii) In case of imported technology (imported during the last 5 years reckoned from the beginning of the financial year) following information may be furnished. NIL
a) Technology Imported.
b) Year of Import.
c) Has technology been fully absorbed?
d) If not fully absorbed Areas where absorption has not taken place and reasons thereof.
(iv) Expenditure on R & D NIL
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
(a) Foreign exchange earned in terms of actual inflow (on account of charter hire earnings interest etc.). Rs. 17804.84 lacs
(b) Foreign exchange outgo in terms of actual outflow. Operating expenses Standby expenses and interest payment etc. Rs. 5023.14 lacs