Asian Oilfield Services Ltd.
|BSE: 530355||Sector: Oil & Gas|
|NSE: N.A.||ISIN Code: INE276G01015|
|BSE LIVE 15:53 | 22 Feb||164.80||
|NSE LIVE 05:30 | 01 Jan||Stock Is Not Traded.|
Asian Oilfield Services Ltd. (ASIANOILFIELD) - Director Report
Company director report
To the Members
Your Directors are pleased to present the 23rd Annual Report and the Company's auditedfinancial statement for the financial year ended March 31 2016.
Financial Results :
The Company's financial performance for the year ended March 31 2016 is summarisedbelow:
(Rupees in Lacs)
In view of loss incurred the Board regrets its inability to recommend payment ofdividend to the shareholders.
Transfer to Reserves :
The Company does not propose to transfer any sum to the General Reservein view of loss.
Company's Performance :
On consolidated basis revenue from operations for the financial year 2015-16 stood atH7766.76 Lacs which was lower by 44.85% over last year (H14083.30 Lacs in 2014-15).Overall operational expenses for the year have lowered down to H11911.97 Lacs againstH16445.17 Lacs in the previous year resulting Operating Loss of H4145.21 Lacs againstH2361.87 Lacs in the previous year. Net Loss for the year stood at H2705.55 Lacs asagainst H2701.08 Lacs of loss in the previous year.
On standalone basis revenue from operations for the financial year 2015-16 is H936.26Lacs which has increased as 5 times over last year (H136.93 Lacs in 2014-15) whereasOverall operational expenses for the year rose to H3538.51 Lacs against H1868.83 Lacs inthe previous year resulting Operating Loss was H2602.25 Lacs against H1731.90 Lacs inthe previous year. Net Loss (excluding exceptional item) for the year at H2939.60 Lacs asagainst H1676.1 1 Lacs of loss in the previous year.
Subsidiary Companies and Consolidated Financial Statements :
In accordance with the Companies Act 2013 ("the Act") and AccountingStandard (AS) - 21 on Consolidated Financial Statements read with AS - 23 on Accountingfor Investments in Associates the audited consolidated financial statement is provided inthe Annual Report.
Subsidiary Companies :
The Company has 2 subsidiaries as on March 31 2016. There are no associate companieswithin the meaning of Section 2(6) of the Companies Act 2013 ("Act"). There hasbeen no material change in the nature of business of the subsidiaries.
The Consolidated Financial Results reflect the operations of the two subsidiaries viz.Asian Oilfield & Energy Services DMCC and AOSL Petroleum Pte. Ltd.
Pursuant to provisions of Section 129(3) of the Act a statement containing salientfeatures of the financial statements of the Company's subsidiaries in Form AOC-1 isannexed as Annexure A. Pursuant to the provisions of section 136 of the Act the financialstatements of the Company consolidated financial statements along with relevant documentsand separate audited accounts in respect of subsidiaries are kept at the RegisteredOffice of the Company and are available on the website of the Company.
Performance of Subsidiaries :
Asian Oilfield & Energy Services DMCC Dubai
During the year net sales of Asian Oilfield & Energy Services DMCC decreased fromH139.46 Crores in the previous year to H68.31 Crores during the year 2015-16. However itgenerated Net Loss of H5.41 Crores against Net Profit of H9.23 Crores in the previousyear.
Asian Oilfield & Energy Services DMCC has been exploring opportunities in selectcountries in the MEA Region which would have huge opportunities in the field of Oil andGas exploration
AOSL Petroleum Pte.Ltd.
During the year AOSL Petroleum Pte. Ltd. registered no income and has caused Net Lossof H2.98 Crores against net Loss of H1.17 Crores in the previous year.
Particulars of Loans Guarantees or Investments:
The Company has not given any loans or guarantees or made any investments incontravention of the provisions of the Section 186 of the Companies Act 2013. The detailsof the loans and guarantees given and investments made by the Company are provided in thenotes to the financial statements.
Related Party Transactions :
All related party transactions that were entered into during the financial year were onarm's length basis and were in the ordinary course of Company's business. The Company hasnot entered into any contract arrangement or transaction with any related party whichcould be considered as material as defined under SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015.
The Board has approved a policy for related party transactions which has been uploadedon the website of the Company (www.asianoilfield.com).
All the related party transactions are placed before the Audit Committee as well as theBoard for approval on a quarterly basis. Omnibus approval was also obtained from the AuditCommittee and the Board on an annual basis for repetitive transactions.
Related party transactions under Accounting Standard - AS18 are disclosed in the notesto the financial statements. Prescribed Form No. AOC-2 pursuant to clause (h) ofsub-section (3) of Section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules2014 is furnished as Annexure B to this report.
Directors' Responsibility Statement :
Pursuant to section 134(5) of the Companies Act 2013 the board of directors to thebest of their knowledge and ability confirm that:
a. In the preparation of annual accounts for the year ended March 31 2016 theapplicable accounting standards read with requirements set out under Schedule III to theAct have been followed and there are no material departures from the same;
b. They have selected such accounting policies and applied them consistently and madejudgments andestimates that are reasonable and prudent so as ^ to give a true and fairview of the state of affairs of the Company at March 31 2016 and of the loss of theCompany for the year ended on that date;
c. They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the this Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;
d. They have prepared the annual accounts on a 'going concern' basis ;
e. they have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and are operating effectively; and
f. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems are adequate and operating effectively.
Directors and Key Managerial Personnel :
During the year under review following changes occurred in theposition of Directors/KMPs of the company.
During the year under review Mr. ACM ceased to be Director of the Company onresignation from November 9 2015.
Events Occurred after closure of Financial Year till the date of Board Report
Mr. Ashwin Madhav Khandke Wholetime Director and Mr. Rahul Talwar Group CEO ceased tobe Directors of the Company on resigned from April 21 2016 and May 7 2016 respectively.
Whereas Mr. Gautam Gode Mr. Sanjay Bhargava Mr. Vikram Ranjan Agawal and Ms. SapnaKalantri the Directors representing erstwhile Promoter viz. Samara Capital Partners FundI Ltd. ceased to be directors of the Company from August 5 2016.
Mr. Rohit Agarwal who was appointed as an Additional Director with effect from August5 2016 and was appointed as Whole time Director for a period of 3 (three) years fromAugust 5 2016 subject to the approval of the Shareholders.
Mr. Rabi Narayan Bastia the Independent Director have become the Promoter Director ofthe Company due to his nomination by Oilmax Energy Pvt. Ltd. the new promoter of theCompany with effect from the date of Board Meeting held on August 5 2016.
Key Managerial Personnel :
During the year under report the following persons were I Key Managerial Personnel ofthe Company :
1. Mr. Ashwin Madhav Khandke Wholetime Director
2. Mr. Sandeep Bhatia Chief Financial Officer (w.e.f. May 21 2015 to August 11 2015)
3. Mr. Sachin Aggarwal Chief Financial Officer (w.e.f. August 11 2015 to September17 2015)
4. Ms. Kanika Bhutani Company Secretary and Compliance Officer
Declaration by Independent Directors :
The Company has received necessary declaration from all Independent Directors of theCompany confirming that they meet the criteria of independence laid down in Section 149(6)of the Companies Act 2013 as well as under Regulation 25 of SEBI (LODR) Regulations.There has beenno change in the circumstances which may affect their status as independentdirector during the year.
However Mr. Rabi Narayan Bastia the Independent Director have become the PromoterDirector of the Company due to his nomination by Oilmax Energy Pvt. Ltd. the new promoterof the Company with effect from the date of Board Meeting held on August 5 2016.
Board Evaluation :
The Board of Directors has carried out an annual evaluation of its own performanceBoard committees andIndividual Directors pursuant to the provisions of the Act and theCorporate Governance requirements as prescribedby Securities and Exchange Board of India(Listing Obligations and Disclosure Requirements)Regulations 2015 ("SEBI ListingRegulations").
The performance of the Board was evaluated by the Board after seeking inputs from allthe directors on the basis of the criteria such as the Board composition and structureeffectiveness of board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee memberson the basis of the criteria such as the composition of committeeseffectiveness of committee meetings etc.
The Board and the Nomination and Remuneration Committee ("NRC") reviewed theperformance of the Individual Directors on the basis of the criteria such as thecontribution of the individual director to the Board and committee meetings likepreparedness on the issues to be discussed meaningful and constructive contribution andinputs in meetings etc. In addition the Chairman was also evaluated on the key aspectsof his role.
In a separate meeting of Independent Directors performance of non-IndependentDirectors performance of the board as a whole and performance of the Chairman wasevaluated taking into account the views of executive directors and Non-ExecutiveDirectors. The same was discussed in the board meeting that followed the meeting of theIndependent Directors at which the performance of the Board its committees andindividual directors was also discussed. Performance evaluation of independent directorswas done by the entire board excluding the Independent Director being evaluated.
Familiarization Programme for the Independent Directors :
In Compliance with the requirements of SEBI Regulations
2015 the Company has put in place a familiarization programme for the IndependentDirectors to familiarize them with their role rights and responsibilities as Directorsthe working of the Company nature of the industry in which the Company operates businessmodel etc. The details of the familiarization programme are explained in CorporateGovernance Report.
Policy on Directors' appointment and Remuneration and other details :
The Company's policy on directors' appointment and remuneration and other mattersprovided in Section 178(3) of the Act has been disclosed in the Corporate GovernanceReport which forms part of the Board's report.
Number of Meetings of The Board :
Six meetings of the Board were held during the year on May 21 2015 (adjourned BoardMeeting held on May 29 2015) August 11 2015 September 28 2015 November 6 2015December 11 2015 and February 10 2016. For details of the meetings of the Board pleaserefer to the Corporate Governance Report which forms part of this report.
Audit Committee :
The details pertaining to composition of audit committee are included in the CorporateGovernance Report which forms part of this report.
Material changes and Commitments if any affecting the Financial Position of theCompany which have occurred between the end of Financial Year of the Company to which theFinancial Statement relate and the date of the report :
There were no material changes and commitments that have affected the financialposition of the Company which have occurred between the financial year ended on 31.03.2016and the report dated 1 1.08.2016.
Management Discussion and Analysis :
I n terms of the provisions of Regulation 34 of the SEBI Listing Obligations AndDisclosures Requirements Regulation (SEBI LODR) 2015 the Management Discussion andAnalysis has been given separately and forms part of this report.
Risk Management :
The Company has in place a Risk Management Policy pursuant to Section 134 of theCompanies Act and Regulation 21 of SEBI (LODR) Regulations. It establishes various levelsof accountability and overview within the Company while vesting identified managers withresponsibility for each significant risk.
The Internal Audit Department facilitates the execution of Risk Management Practices inthe Company in the areas of risk identification assessment monitoring mitigation andreporting. Through this program each Function carried on project sites addressesopportunities and risks through a comprehensive approach aligned to the Company'sobjectives. The Company has laid down procedures to inform the Audit Committee as well asthe Board of Directors about risk assessment and management procedures and status.
This risk management process which is facilitated by internal audit covers riskidentification assessment analysis and mitigation. Incorporating sustainability in theprocess also helps to align potential exposures with the risk appetite and highlightsrisks associated with chosen strategies. The major risks forming part Risk Managementprocess are linked to the audit.
The Audit Committee of the Board of the Company has been entrusted with the task toframe implement and monitor the risk management plan for the Company and it isresponsible for reviewing the risk management plan and ensuring its effectiveness with anadditional oversight in the area of financial risks and controls. Major risks identifiedby the businesses and functions are systematically addressed through mitigating actions ona continuing basis.
Internal Financial Control Systems and their adequacy :
The Company has adequate internal control systems including suitable monitoringprocedures commensurate with its size and the nature of the business. The internal controlsystems provide for all documented policies guidelines authorization and approvalprocedures. The Company has M/s. S.P. Chopra & Co. the Firm of Chartered Accountantsas an Internal Auditor which carries out audits throughout the year. The statutoryauditors while conducting the statutory audit review and evaluate the internal controlsand their observations are discussed with the Audit committee of the Board.
Corporate Social Responsibility (CSR) :
The Company has already constituted a Corporate Social Responsibility (CSR) Committeeinaccordance with Section 135 of the Companies Act 2013.
For the Company Social Responsibility is a key element of accountability and it willcontinue to strive in its behaviour and actions to surpass the levels of minimum statutorycompliance. The Company believes in the sustainable growth and prosperity of itsstakeholders and views its responsibilities not only as business responsibilities but asEthical and Social as well.
The CSR policy of the Company is placed on the website of the Company
However in view of loss the Company has not pursued any initiative on CSR activities.
Safety Environment and Health :
The Company's commitment to excellence in Health and Safety is embedded in theCompany's core values. The Company has a stringent policy of 'safety for all' whichdrives all employees to continuously break new ground in safety management for the benefitof people property environment and the communities where we operate on sites.
The Company respects human rights values its employees and the communities that itinterfaces with. The Company is aware of the environmental impact of its operations and itcontinually strives to reduce such impact by investing in technologies and solutions foreconomic growth.
The Company considers safety environment and health as the management responsibility.Regular employee training programmes are in place throughout the Company on SafetyEnvironment and Health and has well identified and widely covered safety management systemin place for ensuring not only the safety of employees but surrounding population of theproject sites as well.
Policy on prevention prohibition and redressal of Sexual Harassment at workplace :
The Company has zero tolerance for sexual harassment at the workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at the Workplace inline with the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the Rules there under. The Policy aims to provideprotection to employees at the work place and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working I environmentwhere employees feel secure.
The Company has not received any complaint of sexual harassment during the financialyear 2015-16.
Vigil mechanism/ whistle blower policy :
There is a Whistle Blower Policy in the Company and that no personnel has been deniedaccess to the Chairman of the Audit Committee. The policy provides for adequate safeguardsagainst victimization of persons who use vigil mechanism. The Whistle Blower Policy isposted on the website of the Company www.asianoilfield.com.
Significant and material orders passed by the regulators or courts :
No significant material orders have been passed by the Regulators or Courts orTribunals which would impact the goingconcern status of the Company and its futureoperations.
As per SEBI Listing Regulations corporate governance report with Practicing CompanySecretaries Certificate thereon and management discussion and analysis are attached whichform part of this report.
Human Resources :
The human resource plays a vital role in the growth and success of an organization. TheCompany has maintained cordial and harmonious relations with employees across variouslocations.
Your Company continuously invest in attraction retention and development of talent onan ongoing basis. A number of programs that provide focused people attention are currentlyunderway. Your Company thrust is on the promotion of talent internally through jobrotation and job enlargement.
Deposits from Public :
The Company has not accepted any deposits from public and as such no amount on accountof principal or interest on deposits from public was outstanding as on the date of thebalance sheet.
Conservation of energy technology absorption foreign exchange earnings and outgo :
The particulars as prescribed under Section 134(3)(m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 are
a. Conversation of Energy : Not Applicable
b. Technology Absorption : NIL
c. Foreign exchange earning & outgo :
(Amount in Rs. )
Particulars of Employees and Remuneration
The information required under Section 197 (12) of the Act read with Rule 5 (2) and (3)of The Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 isprovided in the Annexure C forming part of the Report. In terms of the first proviso toSection 136 of the Act the Report and Accounts are being sent to the Shareholdersexcluding the aforesaid Annexure. Any Shareholder interested in obtaining the same maywrite to the Company Secretary at the Registered Office of the Company. None of theemployees listed in the said Annexure is related to any Director of the Company.
(1) Statutory Auditors:
Pursuant to the provisions of Section 139 of the Act and the rules framed thereunderWalker Chandiok & Co. LLP (WCC) Chartered Accountants were appointed as statutoryauditors of the Company from the conclusion of the 22nd Annual General Meeting (AGM) ofthe Company held on 28th September 2015 till the conclusion of the 27th AGM to be held inthe year 2020 subject to ratification of their appointment at every AGM.Members arerequested to consider the ratification of the appointment of WCC and authorize the Boardof Directors to fix their remuneration. WCC have submitted a certificate confirming thattheir appointment if ratified will be in accordance with Section 139 read with Section141 of the Act.
A) The existing Auditors in their Report to the members have given one qualifiedopinion in their Report reading as under;
"As stated in Note 38 to the accompanying standalone financial statements theCompany's trade receivables short-term loans and advances and long-term loans andadvances as at March 31 2016 include H60.12 million H53.28 million and H12.87 millionrespectively (as at March 31 2015: H35.65 million H102.11 million and H18.12 millionrespectively) being considered good and recoverable by the management. However in theabsence of sufficient appropriate evidence we are unable to comment upon therecoverability of the aforesaid trade receivables short-term loans and advances and long-term loans and advances and the consequential impact if any on the accompanyingstandalone financial statements. The predecessor auditor's report on the financialstatements for the year ended March 31 2015 was also qualified in respect of thismatter"
In response thereto your Board of Directors wishes to state that the Management ofyour Company is doing regular efforts to recover the money and in view of the responsebeing received these amount of dues appear to be recoverable.
(2) Secretarial Auditors:
Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Board of Directors of the Companyhad appointed Mr. Jayesh Vyas of M/s. Jayesh Vyas and Associates Practicing CompanySecretary to undertake the Secretarial Audit of the Company for the year ended March 312016. The Secretarial Audit Report is annexed as Annexure D.
The responses of your Directors on the observations made by the Secretarial Auditor areas follows:-
Response to Point No.1
Your company is law abiding entity and filed the necessary forms & returns withthe Registrar of Companies / MCA however there was delay of 5 days which caused due tonon-availability of signatory Director.
Response to Point No. 2
Despite of proper search made for suitable candidate for the position of ChiefFinancial Officer press releases for the situation vacant were given in leading nationalnewspapers engagement with Recruitment Agencies were made interviews of many candidateswere taken by the Management but the Company was not able to find and recruit a new CFOas per the Company's requirements within the time prescribed.
However the Company has selected suitable candidate for the position of CFO of theCompany who will join the services from September 1 2016.
Share Capital :
The paid up Equity Share Capital as on March 31 2016 was H22.32 Crores.During the yearunder review the Company has not issued any shares. The Company has not issued shareswith differential voting rights. It has neither issued employee stock options nor sweatequity shares and does not have any scheme to fund its employees to purchase the shares ofthe Company.
Extract of Annual Return :
As provided under Section 92(3) of the Act the extract of Annual Return is given inAnnexure E in the prescribed Form MGT-9 which forms part of this report.
The Board places on record its deep appreciation for the continued support receivedfrom various clients vendors and suppliers and technical partners Bankers GovernmentAuthorities Employees at all levels and Stakeholders in furthering the interest of theCompany.