DIRECTORS' REPORT

TO,

THE MEMBERS,

Your Directors are pleased to present their report as under: 1]

3] OPERATIONS:

• M.V.Garware-III, which is now 31 years old, has been laid up and remained idle during the year under review.

• M.V. Kailash was sold during the year under review.

• M.V.Meghna continued to work in the spot markets of the Far East, the Middle East and recently in India. The Vessel has been offered for long term contract to work in West Coast of India, the outcome of which is awaited.

• M.V.Poorna, M.V.Mahananda and M.V.Kamet continued to work on long term contract in the West Coast of India.

• The Company took delivery of One Anchor Handling Tug Cum Supply Vessel (AHTSV) viz M.V. Lachung, in February 2015. The Vessel is a 80 Ton, DP-2 AHTSV built in China. The Vessel is currently working in the spot market and has been offered to various Charterers for long term contracts the outcome of which is awaited.

• The Company had offered two "in chartered" Vessels for long term contracts in India. Both these Vessels were awarded contracts and commenced work in March and April 2015 respectively. Of these two Vessels, one, which was on Bareboat Charter to the Company's Singapore subsidiary, was acquired by the Company at the end of April 2015 (upon the expiry of the said Bareboat Charter). This Vessel, named M.V.Mana, is a 3000 DWT Platform Supply Vessel, built in 2008 by Havyard.

4] DIVIDEND:

In view of the very recently concluded expansion programme of the Company (with the acquisition of 2 Vessels at a total cost of Rs.219 crores, out of which Company contributed approximately Rs.49 crores i.e. 21% from the internal accruals) and in an attempt to conserve resources for "contingencies" for the future, your Directors regret their inability to recommend any Dividend.

5] FUTURE EXPANSION AND OUTLOOK:

There has been a drastic fall in the price of oil over last six months. There is unlikely to be much improvement in prices in 2015, with oversupply persisting and oil Companies trimming E&P expenditure, particularly on exploration activity, leading to lower requirements of rigs and consequently Offshore Vessels. The year 2015 has begun, both in terms of rates and asset values, on an extremely "soft" note and a further softening is expected due to the sudden fall in the price of oil coupled with the oversupply of Assets. Therefore the Company is in a "consolidation" phase, with no further expansion plans in the foreseeable future.

However, as stated in MDA Report, your Company has made a concerted effort to place all its vessel on a long term contract. On a consolidated basis, as at the end of the financial year, of the 13 Vessels that are owned/operated by the Company, 11 were on long term contracts. The Company continues to make efforts to ensure that all Vessels will operate on long term contracts, something that is getting more and more difficult to achieve.

6] SUBSIDIARY / WHOLLY OWNED SUBSIDIARY (WOS):

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

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

During the year under review, the Revenue from operations of GOSBV was $ 44.80 million (previous year $ 35.11 million) with a net profit of $ 5.51 million (previous year $4.25 million).

GOSBV took delivery of a newly built Platform Supply Vessel (named M.V. Olympus) which is a 4000 DWT DP2, FIFI1 Vessel built in Norway. The Company sold a Platform Supply Vessel (PSV) viz M.V. Ben Nevis. M.V.Ben Nevis and M.V.Kailash were taken on Bareboat charter from the new Owners. All the Company's Vessels, except M.V.Olympus, worked on long term charter during the entire year. However, the Company was required to renegotiate charter rates (downwards) for two of its Vessels during the year - to ensure continuity of Employment and one vessel M.V. Cristal came off contract from Petrobras after the year under review.

With respect to the qualifiaction by the Auditors of the Company's Subsidiary GOSBV, the same had arisen mainly as a result of changes in the Accounting System during the year under review. This issue was subsequently discussed with the Auditors and on request of GOSBV management the Auditors have agreed to perform an additional review on the subject in July 2015 by which time this is expected to be resolved.

b) Garware Offshore International Services Pte. Ltd - Singapore (GOISPL)

The Company's Wholly Owned Subsidiary, GOISPL based in Singapore achieved an operating income of $ 11.50 million (previous year $11.72 million). The Company recorded a Profit of $ 0.12 million as against a loss of $ 0.41 million for the previous year. GOISPL, during the year, had 2 Vessels - one AHTSV and one PSV on Bareboat charter. The PSV M.V. Mana, worked for majority of the Year in the North Sea spot market till March 2015, after which she commenced a long term contract in India (for upto 3 years). M.V. Mana was subsequently, in April 2015, acquired by Global Offshore Services Ltd. (India). As a result, GOISPL now has only one AHTSV vessel on bare boat charter. This Vessel is on a long term contract in Brazil.

With regard to the comment made by the Statutory Auditors in their Report on the Company's consolidated Balance Sheet consequent to the qualification made by the Auditors of GOISPL, the Board wishes to clarify as under:

"It is not possible for the Auditors to physically check the vessel's inventory since the vessels is on log term charter with Petrobras in Brazil. It is also not possible for the Auditors based in Singapore to travel Brazil for the purpose of stock taking, in view of the distance involved and especially since this visit would lead to the vessel being off-hired for a few days with a potential loss in excess of USD 100,000. In any case, as per normal practice, the Directors have certified the level of stock on the vessel to the Auditors."

In view of general exemption granted by Ministry of Corporate Affairs vide Circular No.51/12/2007-CL-III dated 8.2.2011, the annual accounts of subsidiary companies and the related information required to be enclosed under the provisions of the Companies Act, 2013 are not enclosed.

The Company undertakes that such information shall be made available to the shareholders of the holding and subsidiary companies and shall also be kept for inspection at the Registered Office of the Company. The Company shall furnish hard 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 2015-16 to Bombay Stock Exchange Ltd. and The National Stock Exchange of India Ltd.

8] FIXED DEPOSITS:

During the year under review, no Deposits were accepted under Chapter V of the Companies Act, 2013 and hence the details relating to deposits and details which are not in compliance under Chapter V of the Act are "NOT APPLICABLE".

9] RESPONSIBILITY STATEMENT:

The Directors confirm:

a) That in the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures (save and except as stated in the Directors' Report) have been made from the same.

b) That they have selected such Accounting Policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of Affairs of the Company at the end of the year and the Profit of the Company for that year ended as on 31.03.2015.

c) That they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with provision of the Companies Act, 2013, for safe-guarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d) That they have prepared the Annual Accounts on a going concern basis.

e) That the Directors have laid down internal financial controls to be followed and that such financial controls are adequate and were operating effectively.

f) That the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10] INSURANCE:

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

11] DIRECTORATE:

Mr. Aditya A. Garware retires by rotation and being eligible offers himself for re-appointment. Members are requested to re-elect him.

Mr. Aditya Garware - Vice Chairman & Managing Director has opted for a reduction in salary w.e.f. August 2014. The same will be reviewed and reset depending upon the circumstances, subject to the approval of the Board of Directors.

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. The Company has obtained a Certificate from them under Section 139 of the Companies Act, 2013 certifying that they are eligible for taking up the appointment.

There are no Qualifications in the Auditors' Report of the Company.

13] PERSONNEL:

The relations with all Employees of the Company, both Shore and Floating Staff have been cordial. Your Directors wish to express their appreciation of the services rendered by the devoted Employees.

14] DEMATERIALISATION OF SHARES:

The Company's shares continue to be traded in Electronic Form. As per Securities and 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 as Annexure I.

16] STATEMENT ON 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 criteria of the independence as provided in Sub-section (6) of Section 149 of the Companies Act, 2013.

17] NUMBER OF BOARD MEETING:

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

(i) 29th May, 2014, (ii) 4th June, 2014 (iii) 13th August, 2014 (iv) 9th October, 2014 (v) 28th October, 2014 (vi) 16th December, 2014 (vii) 3rd February, 2015.

18] BOARD EVALUATION:

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Clause 49 of the Listing Agreement, a structured questionnaire was prepared after taking into consideration of the various aspects of the Board's functioning, composition of the Board and its Committees, culture, execution and performance of specific duties obligations and governance.

The performance evaluation of the Independent Directors was completed. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

19] FAMILARISATION PROGRAMME FOR DIRECTORS:

At the time of appointment of an Independent Director, a formal letter of appointment was given to them, which interalia explains the role, function, duties and responsibilities expected of them as a Director of the Company. The Directors were given a deep insight of the business of the Company including the working of the subsidiaries. Vessel wise details have also been furnished to them. The Directors were also explained in detail the Compliance required from them under the Companies Act, 2013, Clause 49 of the Listing Agreement and other relevant regulations and affirmation taken with respect to the same.

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

The details of the aforesaid Loans/Investment/Guarantees, during the year under review is 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 Companies Act, 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 Code of Conduct" which aims to improve the governance practices across all Company activities. Risk management policy and processes will enable the Company to proactively manage uncertainty and changes in both internal and external environments in an attempt to capitalize on opportunities and limit negative impacts.

The risk management policy of the Company identifies, evaluates, monitors and minimizes identifiable risks.

23] CORPORATE SOCIAL RESPONSIBILITY (CSR):

During the year under review, the Company undertook CSR activities as detailed in Annexure IV.

24] SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS :

There was no significant and material order passed by Regulators or Courts or Tribunals impacting 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 with respect to the preparation and presentation of the Financial statements which form a part of this Annual Report.

26] SECRETARIAL AUDITOR:

The Board has appointed Mr. Rajkumar Tiwari as Secretarial Auditor. Their Report is enclosed as Annexure V to the Directors' Report. There are no qualifications in the Secretarial Auditors' Report.

27] CONSERVATION OF ENERGY, TECHNICAL ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

Information required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is enclosed in Annexure VI.

28] DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION  AND REDRESSAL) ACT, 2013:

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set 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 year was Nil.

29] CORPORATE GOVERNANCE:

A separate report on Corporate Governance along with the Auditors' Certificate on its compliance is given.

30] DETAILS RELATING TO REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND EMPLOYEES:

The information required under Section 197 read with Rule 5 of Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014 in respect of employees of the Company and Directors is furnished in Annexure - VII. As per provisions of Section 136(1) of the said Act, these particulars will be made available to a shareholder on request.

31] DETAILS OF DIRECTORS OR KEY MANAGERIAL PERSONNEL:

During the year under review there was no change in the Directors of the Company. Mr. Aditya Garware, Vice Chairman & Managing Director, whose contract came up for renewal during the year, opted for a reduction in Salary of 37.50%, to conserve resources of the Company.

Mr. Anil L. Devli was appointed as Chief Executive Officer (CEO) of the Company and Mr. Niladri Sengupta was appointed as Chief Financial Officer (CFO), in place of Mr. S. P. Akolkar - President (Finance) who resigned during the year. Mr. Kamal Aggarwal who was President (Technical) of the Company, resigned during the year. Mr. Zubin Mehta, who was General Manager - Technical was promoted to Vice President - Technical to take charge of the Technical Dept of the Company, which he is doing very well.

ACKNOWLEDGEMENT:

The Board wishes to thank the Office of Directorate General of Shipping, Mercantile Marine Department, Shipping Master, MPA, MI Registry, Cyprus Registry, Maltese Registry, IRS, DNV, ABS, State Bank of India, State Bank of Travancore, United Bank of India, Axis Bank, DVB Bank, DnB, Nord LB, MSFL and Offshore Merchant Partners for their continued support and co-operation during the year.

On Behalf of the Board

ASHOK GARWARE

CHAIRMAN

 Place : Mumbai

Dated : 29.05.2015