DOLPHIN OFFSHORE ENTERPRISES (INDIA) LIMITED

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ANALYSTS MEET

MAY 15, 2009

SIGNIFICANT

FACTORS / ISSUES

DURING FY 2008 - 09

POSITIVE FACTORS

WITH THE SUCCESSFUL COMPLETION OF THE ONGC 6 CLAMP-ON PROJECT AND ONGC BBBLRP PROJECTS EXECUTED IN CONSORTIUMS, DOLPHIN IS QUALIFIED AS INDEPENDENT EPC CONTRACTOR WITH ONGC. THIS QUALIFICATION GIVES DOLPHIN A WIDER RANGE OF PROJECTS WHICH IT CAN BID FOR.

AS INDEPENDENT EPC CONTRACTOR, DOLPHIN WINS ICP AND NQD REVAMP CONTRACTS AT A PRICE OF RS 315.37 CRORES.

POSITIVE FACTORS

RUPEE WEAKENED DURING THE YEAR RESULTING IN HIGHER REVENUES AND FOREIGN EXCHANGE GAINS, AS DOLPHIN IS A NET FOREIGN EXCHANGE EARNER.

DOLPHIN IS ABLE TO DEPLOY ITS ASSETS AND SERVICES IN CHINA, MALAYSIA AND VIETNAM, ESPECIALLY DURING THE MONSOON PERIOD, WHEN COMPANY’S ASSETS ARE TRADITIONALLY IDLE.

POSITIVE FACTORS

DOLPHIN ENJOYS THE BENEFIT OF STABLE VESSEL RATES DUE TO LONG TERM CHARTER OF SEAMEC 1 AND ABOUZAR 81.

SALE OF DOLPHIN VESSELS AND TRANSFER OF ITS MARINE DIVISION TO ITS WHOLLY OWNED SUBSIDIARY, PROCYON OFFSHORE RESULTING IN PROFIT ON SALE OF ASSETS OF RS 3.00 CRORES AND DECREASE IN OVERHEAD COSTS, WHILE IMPROVING OPERATIONAL EFFICIENCY.

NEGATIVE FACTORS

DELAYED AWARD OF THE ICP AND NQD CONTRACTS RESULTS IN LIMITED BILLINGS DURING THE YEAR.

TUMBLING OIL PRICES LEADS TO DECREASE IN JOB OPPORTUNITIES OVERSEAS.

INCREASING COMPETITION IN INDIA FROM FOREIGN COMPANIES NOW EYEING THE INDIAN MARKET, AS WELL AS FROM INDIAN COMPANIES NOW DESIROUS OF ENTERING THIS MARKET.

NEGATIVE FACTORS

BAD DEBTS OF RS 39.64 CRORES WRITTEN OFF DURING THE YEAR.

CHANGE ORDERS ON L&T SHRC CONTRACT STILL NOT RESOLVED RESULTING IN HIGH INTEREST COSTS.

STAND ALONE FINANCIAL RESULTS

FOR THE YEAR ENDED

MARCH 31, 2009

BALANCE SHEET AS AT

MARCH 31, 2009

BALANCE SHEET(CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

SOURCE OF FUNDS

SHAREHOLDERS FUNDS 110.38 73.72 49.73

LOAN FUNDS 146.92 159.19 (7.71)

DEFERRED TAXES 1.44 4.54 (68.28)

258.73 237.45 8.97

BALANCE SHEET(CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

APPLICATION OF FUNDS

FIXED ASSETS, NET 37.37 49.92 (25.14)

INVESTMENTS 19.95 14.98 33.18

NET CURRENT ASSETS 201.41 172.55 16.73

258.73 237.45 8.96

SHAREHOLDERS’ FUNDS (CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

SHARE CAPITAL 9.56 9.56 ---

RESERVES AND SURPLUS

GENERAL RESERVE 18.18 14.13 28.66

BOND REDEMPTION RESERVE 35.30 24.50 44.08

SHARE PREMIUM ACCOUNT 13.85 13.85 ----

PROFIT AND LOSS ACCOUNT 33.48 11.68 186.64

100.81 64.16 57.12

SECURED LOAN FUNDS (CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

CASH CREDIT 47.35 35.89 31.93

LOANS FROM COMPANIES & BANKS 0.52 1.00 (48.00)

TERM LOANS FROM BANKS 3.11 8.18 (61.98)

50.98 45.06 13.11

UNSECURED LOAN FUNDS

(CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

FOREIGN CURRENCY CONVERTIBLE BONDS 53.93 53.93 -----

FIXED DEPOSITS FROM DIRECTORS0.55 0.46 19.57

SHORT TERM LOANS AND ADVANCES 41.46 59.74 (30.60)

95.93 114.13 (15.94)

FCCBS

0.5% FCCBS OUTSTANDING IS USD 12 MILLION. LISTED ON SINGAPORE STOCK EXCHANGE, BUT NOT BEING TRADED.

CONVERSION PRICE CURRENTLY RS 225 PER EQUITY SHARE, PRIOR TO BONUS ISSUE. POST BONUS, CONVERSION PRICE IS RS 161.

MATURITY DATE IS DECEMBER 22, 2010. YTM IS 6.5%

FIXED ASSETS (CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

AT COST 57.42 77.61 (26.01)

LESS: ACCUMULATED DEPRECIATION

(20.24) (27.76) (27.09)

NET BLOCK 37.18 49.84 (25.40)

ADD: CAPITAL WORK IN PROGRESS 0.19 0.08 137.50

NET FIXED ASSETS 37.37 49.92 (25.14)

FIXED ASSETS

DECREASE IN NET BLOCK DUE TO TRANSFER OF BLOCK OF VESSELS TO WHOLLY OWNED SUBSIDIARY, PROCYON OFFSHORE.

PROFITS ON TRANSFER OF ASSETS FROM HOLDING COMPANY TO SUBSIDIARY IS EXEMPT FROM CAPITAL GAINS TAX.

INVESTMENTS (CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

IN MUTUAL FUNDS, net 0.14 0.25 (44.00)

IN SUBSIDIARIES 19.73 14.73 (33.94)

IN JOINT VENTURES 0.08 0 -----

19.95 14.98 33.18

CURRENT ASSETS(CURRENCY: CRORES OF INDIAN RUPEES)

31.03.09 31.03.08 % CHANGE

SUNDRY DEBTORS 173.23 169.50 2.20

CASH AND BANK BALANCES 9.00 7.93 13.49

OTHER CURRENT ASSETS 26.79 27.80 (3.63)

LOANS AND ADVANCES 90.21 56.25 60.37

299.23 261.48 14.44

LOANS AND ADVANCES

LOANS AND ADVANCES HAVE INCREASED BY 60.37% DUE TO

- INCREASE IN LOAN TO SUBSIDIARY – RS 16.00 CRORES.

- DUE FROM SUBSIDIARY – RS 7.90 CRORES

- ADVANCES TO SUPPLIERS - RS 11.33 CRORES.

CURRENT LIABILITIES(CURRENCY : CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

%CHANGE

SUNDRY CREDITORS 41.76 60.24 (30.68)

ACCEPTANCES / BILLS PAYABLE21.57 17.88 20.64

CONTRACT INCOME BILLED IN ADVANCE 10.22 0.04 25,450

ACCRUED EXPENSES 9.33 1.87 398.93

OTHER CURRENT LIABILITIES 11.58 6.10 89.84

94.46 86.13 9.67

RATIOS

31.03.09 31.03.08 % CHANGE

CURRENT RATIO 1.64 1.76 (6.81)

LONG TERM DEBT RATIO 0.88 1.62 (45.68)

TOTAL DEBT EQUITY RATIO 1.33 2.16 (38.43)

RETURN ON INVESTMENT 36.25% 22.05% 64.40

PROFIT AND LOSS ACCOUNT

FOR THE YEAR ENDED

MARCH 31, 2009

PROFIT & LOSS ACCOUNT(CURRENCY : CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

%CHANGE

CONTRACT REVENUES 343.98 227.70 51.07

OPERATING EXPENSES (223.36) (174.65) 27.89

GROSS OPERATING PROFIT 120.61 53.05 127.35

GEN & ADMIN EXPENSES (61.44) (23.10) 165.97

MISCELLANEOUS INCOME 14.27 13.90 2.66

EBIDTA 73.45 43.85 67.50

PROFIT & LOSS ACCOUNT(CURRENCY : CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

%CHANGE

INTEREST (12.56) (12.07) 4.06

DEPRECIATION (5.47) (6.94) (21.18)

NET PROFIT BEFORE TAX 55.41 24.83 123.16

PROVISON FOR TAXATION (15.39) (8.58) 79.37

NET PROFIT AFTER TAX 40.01 16.26 146.06

EARNINGS PER SHARE

(CURRENCY : INDIAN RUPEE)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

%CHANGE

BASIC EARNINGS 41.83 17.34 141.23

DILUTED EARNINGS 33.51 13.68 144.96

REVENUES

MAIN CLIENTS OF THE COMPANY DURING THE YEAR WERE –

LEIGHTON - PRP PROJECT – STILL ONGOING / IN PHASES

ONGC - ICP REVAMP – STILL ONGOING

ONGC – NQD REVAMP – STILL ONGOING

PUNJ LLOYD – HEERA PROJECT – IN PHASES

REVENUES

NPCC – DIVING SERVICES – JOB COMPLETED

OFFSHORE SUBSEA WORKS – STILL ONGOING

ONGC BBBLRP – JOB COMPLETED.

OPERATING EXPENSES(CURRENCY: CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

% CHANGE

SUB CONTRACTOR CHARGES 69.23 48.02 44.17

VESSEL CHARTER & RELATED COSTS 106.50 86.89 22.57

EQUIPMENT RELATED COSTS 10.44 7.83 33.33

MATERIALS, STORES & SPARES 17.65 16.27 8.48

OTHER EXPENSES 19.54 15.64 24.94

TOTAL 223.36 174.65 27.89

VESSEL CHARTER AND RELATED COSTS

LESS THAN PROPORTIONATE INCREASE IN CHARTER COSTS AS SEAMEC 1 AND ABOUZAR 81 ARE UNDER LONG TERM CONTRACT.

COST OF FUEL DURING THE YEAR HAS DECREASED.

EQUIPMENT RELATED EXPENSES

EQUIPMENT RELATED EXPENSES HAS INCREASED BY 33.33% DURING THE YEAR DUE TO THE FACT THAT THE COMPANY’S SATURATION DIVING SYSTEMS SDS 01 AND SDS 02 WERE DEPLOYED THROUGH OUT THE YEAR, INCLUDING THE MONSOON PERIOD.

G & A EXPENSES(CURRENCY: CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

% CHANGE

EMPLOYEE COSTS 11.27 4.62 143.94

LEGAL & PROFESS. FEES 2.18 3.40 (35.88)

OFFICE RELATED EXPENSES 1.49 1.64 (9.15)

BAD DEBTS, NET 39.64 5.94 567.34

FOREIGN EXCHANGE LOSS -- 3.70 (100.00)

OTHER EXPENSES 6.86 3.80 80.53

TOTAL 61.44 23.10 165.97

EMPLOYEE COSTS

EMPLOYEE COSTS HAVE INCREASED BY RS 6.65 CRORES DUE TO INCREASE IN DIRECTORS REMUNERATION AND DUE TO INCREASE IN THE NUMBER OF PERMANENT EMPLOYEES DURING THE YEAR IN LIEU OF CONSULTANTS / CONTRACTORS.

ACCORDINGLY LEGAL & PROFESSIONAL FEES HAVE DECREASED BY 35.88%

BAD DEBTS

BAD DEBTS OF RS 39.64 CRORES MAINLY COMPRISE WRITE OFF OF DUES FROM IOEC OF RS 37.42 CRORES AND OTHER RECEIVABLES AWAITING APPROVAL OF CHANGE ORDERS.

THESE AMOUNTS, IF ANY, WILL BE WRITTEN BACK AS AND WHEN RECEIVED

MISCELLANEOUS INCOME(CURRENCY: CRORES OF INDIAN RUPEES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

% CHANGE

PROFIT ON SALE OF ASSETS 3.07 12.97 (76.33)

GAINS IN FOREIGN EXCHANGE

10.27 -- ---

OTHER INCOME 0.93 0.93 ---

TOTAL 14.27 13.90 2.66

PROFIT MARGINS(AS A PERCENTAGE OF REVENUES)

01.04.08TO

31.03.09

01.04.07TO

31.03.08

% CHANGE

GROSS OPERATING PROFIT 37.23 23.30 59.79

NET OPERATING PROFIT 17.20 13.15 30.80

EBIDTA 21.35 19.25 10.91

NET PROFIT BEFORE TAX 16.11 10.90 47.80

NET PROFIT AFTER TAX 11.63 7.14 62.89

PROFIT MARGINS

GROSS OPERATING PROFIT MARGINS HAVE INCREASED DUE TO ABILITY TO MARKET ASSETS AND SERVICES AT HIGHER PRICES AND LONGER DURATIONS.

NET PROFIT MARGINS HAVE INCREASED DUE BETTER CASHFLOWS RESULTING IN LOWER WORKING CAPITAL REQUIREMENTS.

DOLPHIN OFFSHORE ENTERPRISES (INDIA) LIMITED

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