To the Members
Your Directors present the 33rd Annual Report along with Audited Financial Statementsof the Company for the year ended 31st March 2017.
| || ||(Rs in crore) |
| ||2016-17 ||2015-16 |
|Revenue from Operations ||371.60 ||319.74 |
|Other Income ||26.17 ||30.48 |
|Total Income ||397.77 ||350.22 |
|Profit before Tax ||23.69 ||49.06 |
|Less: Provision for Tax || || |
|Current ||7.52 ||14.97 |
|Deferred ||(0.80) ||2.27 |
|Profit after Tax ||16.97 ||31.82 |
|Other Comprehensive Income ||(1.06) ||2.91 |
|Total Comprehensive Income ||15.91 ||34.73 |
INDIAN ACCOUNTING STANDARDS (Ind AS)
In accordance with the notification issued by the Ministry of Corporate Affairs (MCA)your Company is required to prepare Financial Statements under Indian Accounting Standards(Ind AS) prescribed under Section 133 of the Companies Act 2013 read with Rule 3 of theCompanies (Indian Accounting Standards) Rules 2015 and Companies (Accounting Standards)Amendment Rules 2016 with effect from 1st April 2016. Ind AS has replaced the existingIndian GAAP prescribed under Section 133 of the Companies Act 2013 read with Rule 7 ofCompanies (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 have been prepared in accordance with IndAS. The Financial Statements for the year ended 31st March 2016 have been restated tocomply with Ind AS to make them comparable.
The MCA notification also mandates that Ind AS shall be applicable to SubsidiaryCompanies Joint Venture or Associates of the Company.
The effect of the transition from Indian GAAP to Ind AS has been explained by way of areconciliation in the Standalone Financial Statements and Consolidated FinancialStatements.
Your Directors are pleased to recommend dividend of Rs 0.50/- (i.e. 10%) per equityshare of Rs 5/- each for the year ended 31st March 2017 subject to the approval of themembers at the ensuing Annual General Meeting.
TRANSFER TO RESERVES
During the year no amount is proposed to be transferred to the General Reserves.
RESULTS OF OPERATIONS
Total income of the Company during the year was Rs 397.77 crore as against Rs 350.22crore in the previous year The profit before tax during the year was Rs 23.69 crore asagainst Rs 49.06 crore in the previous year Profit after tax was Rs 16.97 crore as againstRs 31.82 crore in the previous year
During the year the Company deployed Rig "Rowan Louisiana" under contractwith ONGC for a period of 3 years which commenced its operations in May 2016. Further Rig'Discovery 1' has been dehired on 30th January 2017 on the expiry of contract period offive years with ONGC. Also the Company was operating Sixteen Directional Drilling unitsalong with split units on call and eleven Mud logging units.
CONSOLIDATED FINANCIAL STATEMENTS
In accordance with the provisions of Section 129(3) of the Companies Act 2013 readwith Companies (Accounts) Rules 2014 the Company has prepared Consolidated FinancialStatements as per Indian Accounting Standard Ind AS-110 on Consolidated FinancialStatements read with Ind AS-27 on Interest in Joint Ventures. The Audited ConsolidatedFinancial Statements along with Auditor's Report thereon form part of this Annual Report.
JOINT VENTURE COMPANIES
Your Company has two Joint Venture Companies namely Discovery Drilling Pte. Ltd.(DDPL)Singapore and Virtue Drilling Pte. Limited (VDPL) Singapore.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Shri Dharam Pal Jindal Director of the Company retires by rotation at the ensuingAnnual General Meeting and being eligible offers himself for re-appointment. A briefprofile has been provided in the notice of the Annual General Meeting.
Shri Raghav Jindal ceased to be the Managing Director of the Company on 31st December2016 on expiry of his term. However he continues as Non-Executive Director of the Company.
Shri Hemant Kumar Khanna was appointed as an Additional Director as well as Whole-TimeDirector of the Company for a period of five years w.e.f 1st January 2017 so he ceased tobe the Chief Executive Officer of the Company on 31st December 2016. He is also designatedas Key Managerial Person in the capacity ofWhole-Time Director in place of Chief ExecutiveOfficer
Brief resume of Directors who was proposed to be appointed/ re-appointed is furnishedin the Explanatory Statement to the notice of Annual General Meeting.
All Independent Directors of the Company have given declaration that they meet thecriteria of independence as laid down under Section 149 (6) of the Companies Act 2013 andRegulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015.
During the year the Non-Executive Directors of the Company had no pecuniaryrelationship or transactions with the Company other than sitting fees and reimbursementof expenses incurred by them for the purpose of attending meetings of the Company
Pursuant to the provisions of Section 203 of the Companies Act 2013 the KeyManagerial Personnel of the Company are Shri Hemant Kumar Khanna Whole-Time Director ShriPawan Kumar Rustagi Chief Financial Officer and Shri Rajeev Ranjan Company Secretary.
During the year 2016-17 7 (Seven) meetings of the Board of Directors were held. Thedetails of meetings are given in the Corporate Governance Report which forms part of thisreport.
The Board of Directors has carried out the Annual performance evaluation of its ownBoard Committees and Individual Directors pursuant to the provisions of the Companies Act2013 and the Corporate Governance requirements as prescribed under SEBI (ListingObligations and Disclosure Requirements) Regulations 2015.
The performance of the Board was evaluated by the Board after seeking inputs from allthe Directors on the basis of the criteria such as Board composition and structureseffectiveness of Board processes information and functioning etc.
The performance of the Committees was evaluated by the Board after seeking inputs fromthe Committee members on the basis of the criteria such as composition of Committeeseffectiveness of Committee meetings etc.
The Board and the Nomination and Remuneration Committee reviewed the performance of theIndividual Directors on the basis of the criteria such as contribution of the IndividualDirector to the Board and Committee meetings.
Also in a separate meeting of Independent Directors performance of Non-IndependentDirectors Board as a whole and the chairman was evaluated taking into account the viewsof Executive Director and Non-Executive Directors.
POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION
The Company's policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Directors and othermatters provided in Section 178(3) of the Companies Act 2013 has been disclosed in theCorporate Governance report which forms part of the Directors' Report.
Adequate measures have been adopted by the Company to anticipate plan and mitigate thespectrum of risks it faces. All working sites are analyzed to minimize risks associatedwith protection of environment safety of operations and health of people at work andmonitored regularly with reference to statutory regulations and guidelines. Improving workplace safety continued to be top priority at working sites. The Company's businessoperations are exposed to a variety of financial risks such as market risks (foreignexchange risk internal rate risk and price risk) Liquidity risk etc.
The Board has approved the Risk Management Policy of the Company and has authorized theAudit Committee to implement and monitor the Risk Management plan for the Company and alsoidentify and mitigate the various elements of risks if any which in the opinion of theBoard may threaten the existence of the Company
INTERNAL FINANCIAL CONTROLS
As per the provisions of Section 134(5)(e) of the Companies Act 2013 the Company hasin place adequate Internal Financial Controls with reference to the Financial Statements.Audit Committee periodically reviews the adequacy of internal financial controls.
During the year such controls were tested and no reportable material weaknesses in thedesign or operation were observed.
DIRECTORS' RESPONSIBILITY STATEMENT
As required under Section 134(5) of the Companies Act 2013 your Directors state:
(i) that in the preparation of the Annual Accounts for the year ended 31st March 2017the applicable accounting standards had been followed and there are no materialdepartures;
(ii) that the accounting policies selected and applied are consistent and the judgmentsand estimates made are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of financial year and of the profit of theCompany for that period;
(iii) that proper and sufficient care has been taken for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) that the Annual Accounts for the year ended 31st March 2017 have been prepared ona going concern basis;
(v) that the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively; and
(vi) that the Directors had devised proper system to ensure compliance with theprovisions of all applicable laws and that such system were adequate and operatingeffectively
EXTRACT OF ANNUAL RETURN
As required under Section 92(3) of the Companies Act 2013 the extract of the AnnualReturn in the prescribed form MGT-9 is annexed with this Report.
The Audit Committee of the Company consists of Shri K K Khandelwal Chairman Shri D. PJindal and Shri Vijay Kaushik as its other members. The terms of reference are inconformity with the requirements of Section 177 of the Companies Act 2013 and Regulation18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015.
The Company has adopted a Whistle blower policy and has established the necessary VigilMechanism for Directors and employees to report concerns about unethical behavior actualor suspected fraud or violation of the Company's Code of conduct. The said policy has beendisclosed on the Company's website under the web linkhttp://jindal.com/jdil/pdf/Vigil-Mechanism-JDIL.pdf
CORPORATE SOCIAL RESPONSIBILITY
The Corporate Social Responsibility Committee has formulated a Corporate SocialResponsibility Policy (CSR Policy) indicating the activities to be undertaken by theCompany monitoring the implementation of the framework of the CSR Policy and recommendingthe amount to be spent on CSR activities which has been approved by the Board. The CSRPolicy may be accessed on the website of the Company.
The Annual Report on CSR activities in the format prescribed in the Companies(Corporate Social Responsibility Policy) Rules 2014 is appended as Annexure to thisReport.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
The particulars of loans guarantees and investments have been disclosed in theStandalone Financial Statements of the Company.
CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES
All contracts/ arrangements/transactions entered into by the Company with the relatedparties during the year were in the ordinary course of business and on an arm's lengthbasis.
Information on transactions with related parties pursuant to Section 134(3)(h) of theAct read with Rule 8(2) of the Companies (Accounts) Rules 2014 are appended in Form AOC-2as Annexure to this Report.
CORPORATE GOVERNANCE REPORT
Corporate Governance Report along with Auditors' Certificate complying with theconditions of Corporate Governance as stipulated in Regulation 27 of the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 has been annexed as a part ofthis Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of your Company's performance is discussed in the ManagementDiscussion and Analysis Report which forms part of this Annual Report.
INFORMATION UNDER THE SEXUAL HARRASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has constituted an Internal Complaint Committee under Section 4 of theSexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013.During the year no complaint was filed before the said Committee.
Mr. G. Sanyal & Co. Chartered Accountants were appointed as Statutory Auditors ofthe Company from the conclusion of 30th Annual General Meeting of the Company held on 26thSeptember 2014 till the conclusion of 35th Annual General Meeting subject to theratification of their appointment at every Annual General Meeting. M/s. G Sanyal & Co;Chartered Accountants have expressed their unwillingness to continue as Statutory Auditorsof the Company from the conclusion of the ensuing Annual General Meeting.
M/s. Kanodia Sanyal & Associates Chartered Accountants have agreed to beappointed as Statutory Auditors of the Company. They have further confirmed that the saidappointment if made would be within the prescribed limits under Section 141(3)(g) of theCompanies Act 2013 and that they are not disqualified for appointment.
The Audit Committee has recommended the appointment of M/s. Kanodia Sanyal &Associates Chartered Accountants (Firm Registration No. 008396N) as the StatutoryAuditors of the Company to hold office from the conclusion of the 33rd Annual Generalmeeting until the conclusion of the 38th Annual General Meeting of the Company subject toratification by members at every Annual General Meeting.
The observations of the Auditors are explained wherever necessary in the appropriateNotes on Accounts. The Auditors' Report does not contain any qualification reservation oradverse remark.
The Board has appointed Mr. Namo Narain Agarwal (FCS No. 234) Company Secretary inpractice to conduct Secretarial Audit for the financial year ended 31st March 2017. TheSecretarial Audit Report for the year ended 31st March 2017 is annexed herewith as anannexure to this Report. The Secretarial Audit Report does not contain any qualificationreservation or adverse remark.
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 information in accordance with the provisions of Section 134(3)(m) of the CompaniesAct 2013 read with the Companies (Accounts) Rules 2014 is annexed hereto.
PARTICULARS OF EMPLOYEES
Particulars of employees as required under Section 197(12) of the Companies Act 2013(Act) read with Rules 5 (1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is annexed with this report.
Particulars of employees as required under Section 197(12) of the Companies Act 2013(Act) read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 forms part of this report. However in pursuance ofSection 136(1) of the Act this report is being sent to the shareholders of the Companyexcluding the said information. The said information is available for inspection by themembers of the Company at the registered office of the Company during working hours up tothe date of the Annual General Meeting. Any member interested in obtaining suchinformation may write to the Company Secretary at the corporate office of the Company
MATERIAL CHANGES & COMMITMENTS
No material changes and commitments affecting the financial position of the Companyhave occurred after the end of the financial year ended 31st March 2017 and till the dateof this report.
The Board expresses its grateful appreciation of the assistance and co-operationreceived from Central and State Governments Clients viz. ONGCL Oil India GAIL GSPCBanks & Financial Institutions and Shareholders.
Your Directors wish to place on record their deep sense of appreciation for the devotedcontribution made by the employees and associates at all levels.
| ||For & on behalf of the Board |
|Place : Gurgaon ||D. P. JINDAL |
|Dated : 14th August 2017 ||Chairman |
ANNEXURE TO DIRECTORS' REPORT
INFORMATION AS PER SECTION 134 (3) (m) OF THE COMPANIES ACT 2013 READ WITH THECOMPANIES (ACCOUNTS) RULES 2014 FORMING PART OF THE DIRECTORS' REPORT FOR THE YEAR ENDED31ST MARCH 2017
A. CONSERVATION OF ENERGY
a) Steps taken or impact on conservation of energy:
Since the Company has not undertaken any production activity hence notapplicable.
b) Steps taken by the Company for utilizing alternative sources of energy
c) Capital investment on energy conservation equipment's
B. TECHNOLOGY ABSORPTION
a) Efforts made towards technology absorption:
Total quality management has been the prime thrust area. The Company has been makingconsistent efforts for replacement of expatriate crew by training the Indian crew on theRigs.
b) The benefits derived like product improvement cost reduction product developmentor import substitution:
Offshore Drilling is import substitution business and results in foreign exchangesavings Import substitution of stores and spares to the maximum extent possible wasundertaken by the Company on a regular basis.
c) Information regarding imported technology (Imported during last three years):
|a) the details of technology imported ||Nil |
|b) the year of Import ||Not Applicable |
|c) whether the technology has been fully absorbed ||Not Applicable |
|d) if not fully absorbed areas where absorption has not taken place and the reasons thereof ||Not Applicable |
d) The expenditure incurred on Research and Development Nil
C. FOREIGN EXCHANGE EARNINGS AND OUTGO
Total foreign exchange used and earned
|Used ||- Rs 227.21 Crore |
|Earned* ||- Rs 376.30 Crore |
* relates to payment received for sales and services rendered to oil sector and alsothe interest income from Joint Venture Companies.