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Aban Offshore Ltd.

BSE: 523204 Sector: Oil & Gas
NSE: ABAN ISIN Code: INE421A01028
BSE LIVE 13:51 | 20 Nov 199.70 7.05
(3.66%)
OPEN

192.80

HIGH

200.00

LOW

192.80

NSE 13:36 | 20 Nov 196.40 3.35
(1.74%)
OPEN

193.70

HIGH

198.90

LOW

193.10

OPEN 192.80
PREVIOUS CLOSE 192.65
VOLUME 252718
52-Week high 265.60
52-Week low 161.10
P/E 11.44
Mkt Cap.(Rs cr) 1,165
Buy Price 199.45
Buy Qty 1613.00
Sell Price 199.70
Sell Qty 294.00
OPEN 192.80
CLOSE 192.65
VOLUME 252718
52-Week high 265.60
52-Week low 161.10
P/E 11.44
Mkt Cap.(Rs cr) 1,165
Buy Price 199.45
Buy Qty 1613.00
Sell Price 199.70
Sell Qty 294.00

Aban Offshore Ltd. (ABAN) - Director Report

Company director report

The Directors of your company are pleased to present the Thirty First Annual Reportalong with the accounts for the year ended 31st March 2017.

1. FINANCIAL RESULTS

Rs. in Millions

Particulars Standalone Consolidated
For the year ended
31st March 2017 31st March 2016 31st March 2017 31st March 2016
Income from Operations 8868.55 10141.34 17579.20 33345.53
Other Income 529.25 683.69 148.76 193.65
Less Expenditure 3191.38 3714.17 8513.59 14426.79
Profit before Interest and Depreciation 6206.42 7110.86 9214.37 19112.39
Less Interest 1196.15 1211.73 10904.86 10380.14
Less Depreciation 1537.94 1496.75 7011.59 9018.28
Profit/ (Loss) for the year before Tax 3472.33 4402.38 (8702.08) (286.03)
Provision for Tax 1556.91 1494.65 1904.47 2143.18
Minimum Alternate Tax (MAT) Credit Entitlement - - - -
Provision for Deferred Tax (196.02) 6.22 (196.02) 1.06
Profit/ (Loss) after Tax before share in Earnings of joint Ventures 2111.44 2901.51 (10410.53) (2430.27)
Share in earnings of associate - - 2.20 20.05
Profit/ (Loss) for the year after tax and after share in earnigs of joint ventures 2111.44 2901.51 (10408.33) (2410.22)
Profit brought forward from the previous year 16609.70 14234.14 13275.28 16211.45
Available for appropriation 18721.14 17135.65 2866.95 13801.23
Net gain/(loss) through OCI 13.95 (12.82) 13.95 (12.82)
Transfer to Capital Redemption Reserve 80.00 260.00 80.00 260.00
Transfer to General Reserve - - - -
Equity Dividend paid - 210.12 - 210.12
Tax on Equity Dividend - 43.01 - 43.01
Proposed Divided Preference - - - -
Proposed Dividend- Equity - - - -
Tax on Dividend Preference - - - -
Tax on Dividend Equity - - - -
Balance Carried forward 18655.09 16609.70 2800.90 13275.28

2. PERFORMANCE

The Revenue earned during the year under review stood at Rs.9398 million. RigsAban II Aban III Aban IV Aban VI were working satisfactorily under the existingcontracts. Drillship Aban Ice completed the Contract and was awarded a freshcontract for 3 years by ONGC.Rig Aban V and Floating Production Unit Tahara arebeing actively marketed.

3. CHANGES IN SHARE CAPITAL

There was no change in the Share Capital of the Company during the year underreview.

4. SUBSIDIARY COMPANIES

INDIAN

Aban Energies Limited

The Subsidiary Company activities relating to the maintenance of windmills ofthe Company has been satisfactory.

Consequent to divestment of sharesRadhapuram Wintech Private Ltd and AbanGreen Power Private Limited ceased to be subsidiary of Aban Offshore Limited witheffect from 26-12-2016.

INTERNATIONAL

Rigs under Contract were performing satisfactorily.

5. CONSOLIDATION OF ACCOUNTS

In accordance with the notification issued by the Ministry of Corporate Affairs (MCA)Company is required to prepare Financial Statements under Indian AccountingStandards (IND AS) prescribed under section 133 of the Companies Act 2013read with rule 3 of the Companies (Indian Accounting Standards Rules 2015 andCompanies (Acounting Standards) Amendment Rules 2016 with effect from 1st April2016. Ind AS has replaced the existing Indian GAAP prescribed under section 133 ofthe Companies Act 2013 read with rule 7 of Companies (Accounts) Rules 2014.

Accordingly the Company has adopted Indian Accounting Standard (Ind AS) witheffect from 1st April 2016 with the transition date of 1st April 2015 and the FinancialStatements for the year ended 31st March 2017 has been prepared in accordancewith Ind AS. The Financial Statement for the year ended 31st March 2016 have beenrestated to comply with Ind AS to make them comparable.

The MCA Notification also mandated that the Ind AS shall be applicable tosubsidiary Companies Joint Venture or associates of the Company. Hence the Companyhas prepared and reported Financial Statements under Ind AS w.e.f. 1stApril 2016 including restatement of the opening balance as at April 1 2015.

The effect of the transition from IGAAP to Ind AS has been explained by way of areconciliation in the Standalone and Consolidated Financial Statements.

The subsidiary Company accounts details are available in the Company's website.

6. MANAGEMENT'S DISCUSSION AND ANALYSIS

Management Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (2)(e) of SEBI (LODR) Regulations 2015 is presentedin a separate section forming part of the Annual Report.

7. DIVIDEND

In order to conserve cash the Board of Directors do not recommend any dividend.

8. DIRECTORS

Mr.C.P.Gopalkrishnan is liable to retire by rotation and being eligible offershimself for re -appointment

Mr. Pradeep Kumar Khosla was nominated by State Bank of India to the Board ofthe Company with effect from 22nd March 2017.

Mr.Reji Abraham Managing Director is seeking re- appointment for a furtherperiod of 5 years effective 26.09.2017.

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 onMarch 31 2017 is enclosed in Annexure .

2. Number of Board Meetings:

The Board of Directors met 5 (five) times in the year 2016- 17. The details of theBoard Meetings and the attendance of the Directors are provided in the CorporateGovernance Report.

3. Constitution of Committees :

The details of various committees formed and their attendance during the yearare given in the Corporate Governance Report.

4. Role of Audit Committee

The Role of Audit Committee is given in the Corporate Governance Report.

5. DIRECTOR'S 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

(i) in the preparation of the Annual Accounts for the financial year ended on 31stMarch 2017 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 safe guarding 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 March2017 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

6. Statement of Declaration by Independent Directors as required under 149(6) ofthe Companies 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 Director's Appointment and Remuneration:

I. Appointment

(a) Criteria for Determining Qualifications Positive Attributes & Independence ofDirector:

An Independent director shall possess appropriate skills experience andknowledge in one or more fields of finance law management sales marketingadministration research corporate governance operations or other disciplinesrelated to the Company's business.

(b) Positive attributes of Independent Directors:

An Independent director shall be a person of integrity who possesses relevantexpertise and experience and who shall uphold ethical standards of integrity andprobity act objectively and constructively exercise his responsibilitiesin a bona-fide manner in the interest of the company devote sufficient time and attentionto his professional obligations for informed and balances decision making andassist the company in implementing the best corporate governance practices.

(c) Independence of Independent Directors :

An Independent director should meet the requirements of the Companies Act 2013and SEBI (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 everymeeting of the Board and Rs.10000/- for committee there of attended by them.

Managing Director & Key Managerial Personnel & Other Employees

The objective of the policy is directed towards having a compensation structurethat will reward and retain talent.

The remuneration to Managing Director shall take into account the Company'soverall performance his contribution for the same and trends in the industry ingeneral in a manner which will ensure and support a high performance culture.

Remuneration to Directors Key Managerial Personnel and Senior Management willinvolve a balance between fixed and incentive pay reflecting short and long termperformance objectives 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.

7. 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 Practicing Company Secretary in his Secretarial Audit Report- Nil

8. Particulars of loans guarantees or investments under section 186 of the CompaniesAct 2013

Details of loans guarantees and investments covered under the provision ofSection 186 of the Companies Act 2013 are given in Notes to the financialstatements.

9. 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 arm's 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. Form AOC-2 is shown as a separate annexure.

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.

10. 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 31 2017 and the date of the

11. 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 Company's robust risk management framework identifies and evaluates business risksand 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 Company's 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.

12. Corporate Social Responsibility

The Company has constitited CSR Commitee in accordance with section 135 of theCompanies Act 2013. The CSR Committee has formulated and recommeded to the Board a CSRPolicy indicating the activities to be undertaken by the Company which has been approvedby the Board. The CSR Policy may be accessed on the Company's website at http://abanoffshore.com/pdf/CSR_Policy.pdf2.

The Annual Report on CSR activities is given in this Report.

13. 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. The evaluation by the Board of its own performance and that of its committeesand individual directors were done as per the manner determined by the Chairman andIndependent Directors.

14. The details of directors or key managerial personnel who were appointed or haveresigned during the year

Mr. Pradeep Kumar Khosla was nominated by the State Bank of India as Nominee Directorin the Board of the Company.

15. The name of companies which have become or ceased to be its subsidiaries jointventures or associate companies during the year

Radhapuram Wintech Private Limited and Aban Green Power Private Limited have ceased tobecome subsidiaries of the company during the year.

16. 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.

17. The details of significant and material orders passed by the regulators or courtsor tribunals impacting the going concern status and company's operations in future

No significant the Regulators or Courts or Tribunals which would impact the goingconcern status of the Company.

18. 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.

19. 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 departmentreviews the efficiency and effectiveness of these systems toand procedures. Addedobjectives including evaluating the reliability of financial and operational informationand ensuring compliances with applicable laws and regulations. The observations arisingout of the audit are periodically reviewed and compliance ensured. Appropriate controlsare in place to ensure: (a) the orderly and efficient conduct of business includingadherence to Company policies (b) safeguarding of its assets(c) prevention and detectionof frauds and errors (d) the accuracy and completeness of the accounting records and (e)timely preparation of reliable financial information.

20. STOCK EXCHANGES

Your Company's Equity shares are listed in BSE Limited and National Stock Exchange ofIndia Ltd.

Preference Shares aggregating to Rs.2610 million issued by the Company are listed inBSE Limited.

Necessary stock exchange regulations are complied with. Applicable listing fees for theyear 2016 -17 have already been paid to the stock exchanges.

21. 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 the Company'sCode of Conduct. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and also provides for direct access to the Chairmanof 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 Company's website under theweblink" http://abanoffshore.com/pdf/ whistleblowerpolicy.pdf.

22. Disclosure under the Sexual Harassment of women at workplace (Preventionprohibition and Redressal) Act 2013.

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 year2016-17.

23. AUDITORS

M/s Ford Rhodes Parks & Co. LLP Chartered Accountants hold office till conclusionof this Annual General Meeting.

M/s P.Murali& Co Chartered Accountants Hyderabad are being recommended forappointment as Statutory Auditors to hold office till the conclusion of the 32nd AnnualGeneral Meeting.

The Audit Committee and the Board of recommended the appointment of M/s. P.Murali &Co Chartered Accountants as the Statutory Auditors for the financial year 2017-18. Thenecessary resolution is being placed before the shareholders for approval.

24. 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.

25. PARTICULARS OF EMPLOYEES

In accordance with provision to Section 136(1) of the Companies Act 2013 theDirectors' Report is being sent to all shareholders excluding the statement prescribedunder Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment and from the Auditors of thecompany has been Remuneration of Managerial Personnel) Rules 2014. The said statement isavailable for inspection by the Members at the Registered office the Company duringthe date of the Annual General Meeting.

26. The particulars prescribed under Section 134 (3)(m) of the Companies Act 2013 readwith Rule 8(3)(A) (B) & (C) of the Companies (Accounts) Rules 2014

(A) Conservation of Energy

The Company has undertaken several initiatives in this area like the following:

Installed Variable Refrigerant Flow (VRF) system for ACs in the office which is highlyenergy efficient.

Intelligent control system as a part of building management system to control powerconsumption in ACs by way of automatic switch off of electric equipment when an area isunutilized.

Changed the lifts to energy efficient technology with drives which will minimisepowerconsumption.

Migration from traditional lighting system to LED lighting system at all our Rigs andoffice.

(B) Technology Absorption

Migration from existing time based maintenance philosophy to predictive maintenancewith the help of latest electronic/ digital instrumentation.

Changing out electrical systems and controls for critical equipments with digitaldrives and Variable Frequency Drive (VFD) in all our offshore assests.

Complete process of material purchase from requirement to delivery is digitalized for apaperless environment as a measure of go green initiative.

Foreign exchange earnings and outgo (Rupees in millions)

Particulars 2016- 17 2015-16
Foreign exchange earned during the year 9304.32 10770.32
Foreign exchange outflow during the year 1456.80 1711.20

27. CORPORATE GOVERNANCE

A detailed note on the Company's philosophy on Corporate Governance and such otherdisclosures as required under the listing regulations is separately annexed herewith andforms part of this report.

28. COMPLIANCE CERTIFICATE

A Certificate attached to this report which testifies that the requirements of a soundCorporate Governance process as stipulated under Schedule V of the Listing (Obligations& Disclosure) hours till Regulations 2015 with the stock exchanges was met.

29. ACKNOWLEDGEMENTS

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

CAUTIONARY STATEMENT

Statement in the Management Discussion and Analysis describing the Company'sobjective's estimates expectation of projection may be Forward Looking Statement withinthe meaning of applicable laws and regulations. Actual results could differ materiallyfrom those expressed or implied. Important factors that could make a difference to theCompany's operations include Government Regulations Taw Laws economic developments inIndia and in the countries in which the Company conducts business litigations and otherallied factors.

For and on behalf of the Board
Reji Abraham P.Murari
Managing Director Chairman
Place : Chennai
Date : May 29 2017