The Directors of your company are pleased to present the Thirtieth Annual Report alongwith the accounts for the year ended 31st March 2016.
1. FINANCIAL RESULTS
|Particulars ||Rs. in Millions ||Rs. in Millions |
| ||Standalone ||Consolidated |
| ||For the year ended |
| ||31st March 2016 ||31st March 2015 ||31st March 2016 ||31st March 2015 |
|Income from Operations ||10141.34 ||7597.52 ||33345.53 ||40408.38 |
|Other Income ||683.69 ||584.75 ||193.65 ||443.59 |
|Less Expenditure ||3716.53 ||3784.78 ||14429.14 ||16620.26 |
|Profit before Interest and Depreciation ||7108.50 ||4397.49 ||19110.04 ||24231.71 |
|Less Interest ||843.29 ||930.15 ||9751.60 ||10910.02 |
|Less Depreciation ||980.19 ||805.77 ||6615.03 ||5979.52 |
|Profit for the year before Tax ||5285.02 ||2661.57 ||2743.41 ||7342.18 |
|Provision for Tax ||1494.65 ||618.00 ||2143.18 ||1802.33 |
|Provision for Deferred Tax ||112.76 ||137.37 ||107.59 ||135.25 |
|Profit after Tax before share in Earnings of joint Ventures ||3677.61 ||1906.21 ||492.64 ||5404.60 |
|Share in earnings of Joint Venture ||- ||- ||20.05 ||44.82 |
|Profit for the year after tax and after share in earnigs of joint ventures ||3677.61 ||1906.21 ||512.69 ||5449.42 |
|Profit brought forward from the previous year ||6970.77 ||5888.77 ||19837.08 ||15211.86 |
|Available for appropriation ||10648.37 ||7794.98 ||20349.77 ||20661.28 |
|Transfer to Capital Redemption Reserve ||260.00 ||200.00 ||260.00 ||200.00 |
|Equity Dividend paid ||2.20 ||48.04 ||2.20 ||48.04 |
|Tax on Equity Dividend ||0.45 ||8.16 ||0.45 ||8.16 |
|Proposed Divided Preference ||- ||263.57 ||- ||263.57 |
|Proposed Dividend- Equity ||- ||207.92 ||- ||207.92 |
|Tax on Dividend Preference ||- ||53.95 ||- ||53.95 |
|Tax on Dividend Equity ||- ||42.56 ||- ||42.56 |
|Balance Carried forward ||10385.73 ||6970.77 ||20087.13 ||19837.08 |
The Revenue earned during the year under review stood at Rs 10825 million RigsAban III IV VI and drillship Aban Ice were working satisfactorily under the existingcontracts.
Aban II was awarded a new contract for three years. Rig Aban V and Floating ProductionUnit Tahara are being actively marketed.
3. CHANGES IN SHARE CAPITAL
During the Year under review Promoter group were allotted 610000 shares upon paymentmade by them under Preferential allotment.
4. SUBSIDIARY COMPANIES INDIAN
Aban Energies Limited
The Subsidiary Company activities relating to the maintenance of windmills ofthe Company has been satisfactory.
Radhapuram Wintech Private Ltd
The Company has been supplying green power. The performance of the company has beensatisfactory.
Aban Green Power Private Ltd
The Company has been supplying green power. The performance of the company has beensatisfactory.
Rigs under Contract were performing satisfactorily.
5. CONSOLIDATION OF ACCOUNTS
In accordance with the Accounting Standard (AS-21) on Consolidated Financial Statementsread with AS-23 on Accounting for Investments in Association and AS-27 on FinancialReporting of Interests in Joint Ventures the audited consolidated financial statement isprovided in the Annual Report.
Pursuant to Section 129(3) of the Companies Act 2013 read with Rule 5 of the Companies(Accounts) Rules 2014 the statement containing salient features of the financialstatements of the Companys subsidiaries in Form AOC 1 is attached to the financialstatements.
The Audited consolidated accounts and cash flow statement comprising Aban Offshore Ltdand its Subsidiaries in accordance with the Accounting Standard Rules 2006 prescribed bythe Institute of the Chartered Accountants of India in this regard is attached.
The Audited Accounts of the said Subsidiaries and the related detailed information willbe made available to the investors of the Companies / Subsidiaries seeking suchinformation. The Annual Accounts of the Subsidiary Companies will be available forinspection by any investor at the Registered Office of the Company till the conclusion ofAnnual General Meeting. The subsidiary Company accounts details shall be available in theCompanys website.
6. MANAGEMENTS DISCUSSION AND ANALYSIS
Management Discussion and Analysis Report for the year under review as stipulated underRegulation 34 (2)(e) of SEBI (LODR) Regulations 2015 is presented in a separate sectionforming part of the Annual Report.
In order to conserve cash the Board of Directors do not recommend any dividend.
Mr.P.Venkateswaran is liable to retire by rotation and being eligible offers himselffor re appointment.
The Board recommends the reappointment of Mr. P. Venkateswaran and Mr.C.P.Gopalkrishnanas Deputy Managing Directors for a further period of five years effective 01.08.2016.
9. DISCLOSURES UNDER COMPANIES ACT 2013:
1. Extract of Annual Return:
The details forming part of the extract of the Annual Return in Form MGT-9 as on March31 2016 is enclosed in Annexure
2. Number of Board Meetings:
The Board of Directors met 5 (five) times in the year 2015-16. The details of the BoardMeetings and the attendance of the Directors are provided in the Corporate GovernanceReport.
3. Constitution of Committees:
The details of various committees formed and their attendance during the year are givenin the Corporate Governance Report.
4. Role of Audit Committee:
The Role of Audit Committee is given in the Corporate Governance Report.
10. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 134 (3) of the Companies Act 2013 withrespect to the Directors Responsibility Statement it is hereby confirmed that:
(i) in the preparation of the Annual Accounts for the financial year ended on 31stMarch 2016 the applicable accounting standards had been followed along with a properexplanation relating to material departures.
(ii) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit of the Company for that period.
(iii) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) the Directors had prepared the accounts for the financial year ended on 31st March2016 on a going concern basis.
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
11. Statement of Declaration by Independent Directors as required under 149(6) of theCompanies Act 2013
All the Independent Directors have given the declarations that they meet the criteriaof Independence as laid down under Section 149 (6) of the Companies Act 2013 and SEBI(LODR) Regulations 2015. In the opinion of the Board they fulfill the conditions ofIndependence as specified in the Act and Rules made there under and are independent of themanagement.
Policy on Directors Appointment and Remuneration:
(a) Criteria for Determining Qualification Positive Attributes &Independence of Director:
An Independent director shall possess appropriate skills experience and knowledge inone or more fields of finance law management sales marketing administrationresearch corporate governance operations or other disciplines related to theCompanys business.
(b) Positive attributes of Independents Directors:
An Independent director shall be a person of integrity who possesses relevantexpertise and experience and who shall uphold ethical standards of integrity and probityact objectively and constructively exercise his responsibilities in a bona-fide manner inthe interest of the company devote sufficient time and attention to his professionalobligations for informed and balances decision making and assist the company inimplementing the best corporate governance practices.
(c) Independence of Independent Directors:
An Independent director should meet the requirements of the Companies Act 2013 andSEBI (LODR) Regulations 2015 concerning independence of directors.
II. Remuneration Policy for Directors Key Managerial Personnel and other employees
Non Executive Directors:
Non Executive Directors shall be paid a sitting fee of Rs. 25000/- for every meetingof the Board and Rs. 10000/- for committee thereof attended by them.
Managing Director & Key Managerial Personnel and other employees
The objective of the policy is directed towards having a compensation structure thatwill reward and retain talent.
The remuneration to Managing Director shall take into account the Companysoverall performance his contribution for the same and trends in the industry in generalin a manner which will ensure and support a high performance culture.
Remuneration to Directors Key Managerial Personnel and Senior Management will involvea balance between fixed and incentive pay reflecting short and long term performanceobjectives appropriate to the working of the Company and its goals.
The above criteria and policy are subject to review by the Nomination &Remuneration committee & the Board of Directors of the Company.
12. Explanation by the Board on every qualification reservation or adverse remark ordisclaimer made
(a) By the Statutory Auditor in his report - NIL
(b) By the Practising Company Secretary in his Secretarial Audit Report - NIL
13. Particulars of loans guarantees or investments under section 186 of the CompaniesAct 2013
Details of loans guarantees and investments covered under the provision of Section 186of the Companies Act 2013 are given in Notes to the financial statements.
14. Particulars of Contracts or arrangements with related parties referred to insub-section (1) of Section 188 of the Companies Act 2013 in the prescribed form
All Related Party Transactions that were entered into during the financial year were onan arms length basis and were in compliance with the applicable provisions of theCompanies Act 2013 and the listing Regulation. There were no materially significantRelated Party Transactions made by the Company during the year that would have requiredthe shareholder approval as required under the listing regulation.
All Related Party Transactions are placed before the Audit Committee for approval.Suitable disclosures as required under AS 18 have been made in the Notes to the FinancialStatements.
The Board had approved policies on Related Party Transactions and Material Subsidiary.The Policies have been uploaded in the website under the weblink:http://abanoffshore.com/pdf/RelatedPartyTransactions Policy.pdf.
15. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year March 31st 2016 and the date of the Report.
16. Statement indicating development and implementation of a risk management policy forthe company including identification therein of elements of risk if any which in theopinion of the Board may threaten the existence of the company
The Companys robust risk management framework identifies and evaluates businessrisks and opportunities. The Company recognizes that these risks need to be managed andmitigated to protect its shareholders and other stakeholders to achieve its businessobjectives and enable sustainable growth. The risk framework is aimed at effectivelymitigating the Companys various business and operational risks through strategicactions. Risk management is embedded in our critical business activities functions andprocesses. The risks are reviewed from the change in the nature and extent of the majorrisks identified since the last assessment. It also provides control measures for risksand future action plans.
The Company believes that the overall risk exposure of present and future risks remainswithin risk capacity.
17. Corporate Social Responsibility initiatives taken during the year
Pursuant to Section 135 of the Companies Act 2013 read with the Companies (CorporateSocial Responsibility Policy) Rules 2014 your company at the Board meeting held on July31 2014 approved a Policy on CSR and the Policy was hosted on the website of the Company.
In terms of Section 135 read with Section 198 of the Companies Act 2013 the Companydoes not have average net profits over the three immediately previous financial years andis therefore not required to spend on Corporate Social Responsibility (CSR) activities.However during the financial year 2015-16 Company has made voluntary contributionstowards activities in the areas of promoting education preventive health care andsanitation. The projects are in accordance with Schedule VII of the Companies Act 2013.
18. Board Evaluation
Pursuant to the provisions of Section 134(3) (p) of the Companies Act 2013 and SEBI(LODR) Regulations 2015 the Board has carried out an annual evaluation of its ownperformance performance of the Directors as well as the evaluation of the workings of itsCommittees.
19. The details of directors or key managerial personnel who were appointed or haveresigned during the year- NIL
20. The name of companies which have become or ceased to be its subsidiaries jointventures or associate companies during the year- DDI Holdings AS
21. The details relating to deposits covered under Chapter V of Companies Act 2013
During the year under review your Company did not accept any deposits within themeaning of provisions of Chapter V - Acceptance of Deposits by Companies of the CompaniesAct 2013 read with Companies (Acceptance of Deposits) Rules 2014.
22. The details of significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and companys operations in future
No significant and material orders were passed by the Regulators or Courts or Tribunalswhich would impact the going concern status of the Company.
23. The details in respect of adequacy of internal financial controls with reference tothe Financial Statements.
Details of the same are provided in the Management Discussion and Analysis attached tothis Report.
24. Internal financial control:
Your Company maintains appropriate systems of internal controls including monitoringprocedures to ensure that all its assets are safeguarded against loss from unauthorizeduse/misuse or disposition. Company policies guidelines and procedures provide foradequate checks and balances and are meant to ensure that all transactions are authorizedrecorded and reported correctly. Your company through its own internal audit departmentcarried out periodic audits at all locations and functions.
The internal audit department reviews the efficiency and effectiveness of these systemsand procedures. Added objectives including evaluating the reliability of financial andoperational information and ensuring compliances with applicable laws and regulations. Theobservations arising out of the audit are periodically reviewed and compliance ensured.Appropriate controls are in place to ensure: (a) the orderly and efficient conduct ofbusiness including adherence to Company policies (b) safeguarding of its assets(c)prevention and detection of frauds and errors (d) the accuracy and completeness of theaccounting records and (e) timely preparation of reliable financial information.
25. STOCK EXCHANGES
Your Companys Equity shares are listed in Bombay Stock Exchange Limited andNational Stock Exchange of India Ltd.
Preference Shares aggregating to Rs. 2610 million issued by the Company were listed inBombay Stock Exchange Ltd.
Necessary stock exchange regulations are complied with. Applicable listing fees for theyear 2015 -16 have already been paid to the stock exchanges.
26.VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and Employees to report about unethical behavior or violation of theCompanys Code of Conduct. The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/employee has been denied access to theChairman of the Audit Committee and that no complaints were received during the year.
The whistle blower policy has been hosted in the Companys website under theweblink" http://abanoffshore. com/pdf/whistleblowerpolicy.pdf.
27. Disclosure under the Sexual Harassment of women at workplace (PreventionProhibition and Redressal) Act2013.
The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of women at workplace (Prevention prohibition and Redressal)Act 2013. Internal Complaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment. All employees (permanent contractual temporarytrainees) are covered under this policy. No complaints were received during the year2015-16.
M/s Ford Rhodes Parks & Co. LLP Chartered Accountants Chennai hold office tillthe conclusion of the 31st Annual General Meeting subject to ratification at every AnnualGeneral Meeting.
The Audit Committee and the Board of Directors have recommended the appointment of theAuditors for the financial year 2016-17. The necessary resolution is being placed beforethe shareholders for ratification.
29. ADDITIONAL DISCLOSURES
In line with the requirements of Accounting Standards Rules 2006 of the Institute ofChartered Accountants of India your Company has made additional disclosures in respect ofthe financial reporting of interests in the joint venture in the notes on accounts
30. PARTICULARS OF EMPLOYEES
In accordance with proviso to Section 136(1) of the Companies Act 2013 theDirectors Report is being sent to all shareholders excluding the statementprescribed under Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The said statement is available for inspection bythe Members at the Registered office of the Company during office hours till the date ofthe Annual General Meeting.
31. The Particular Prescribed under Section 134 (3)(m) of the Companies Act 2013 readwith Rule 8(3) (A) (B) & (C) of the Companies (Accounts) Rules 2014
The activities of the Company in general are not energy intensive. The company tookappropriate measures to conserve energy wherever possible. The Foreign exchange detailsare given below
Foreign exchange earnings and outgo ` (in millions)
| ||2015- 16 ||2014-15 |
|Foreign exchange earned during the year ||10770.32 ||7912.86 |
|Foreign exchange outflow during the year ||1711.20 ||1624.05 |
32. CORPORATE GOVERNANCE
A detailed note on the Companys philosophy on Corporate
Governance and such other disclosures as required under the listing agreement / LODRwith the Stock Exchanges is separately annexed herewith and forms part of this report.
33. COMPLIANCE CERTIFICATE
A Certificate from the Auditors of the company has been attached to this report whichtestifies that the requirements of a sound Corporate Governance process as stipulatedunder Schedule V of the listing (Obligations & Disclosure) Regulation with the stockexchanges was met.
Your Directors wish to place on record their sincere appreciation for the contributionmade by the employees at all levels. The Directors also record their sincere appreciationof the support and co-operation received from the Bankers Financial InstitutionsInvestors relevant Central and State Governments Ministries Valued Clients and Membersof the Company.
Statement in the Management Discussion and Analysis describing the Companysobjectives estimates expectation of projection may be Forward LookingStatement within the meaning of applicable laws and regulations. Actual resultscould differ materially from those expressed or implied. Important factorsthat could make a difference to the Companys operations include GovernmentRegulations Taw Laws economic developments in India and in the countries in whichthe Company conducts business litigations and other allied factors.
| ||For and on behalf of the Board || |
|Place: Chennai ||Reji Abraham ||P.Murari |
|Date: May 23 2016 ||Managing Director ||Chairman |