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Aban Offshore Ltd.

BSE: 523204 Sector: Oil & Gas
NSE: ABAN ISIN Code: INE421A01028
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NSE 00:00 | 23 Aug 22.50 -1.00
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OPEN 23.05
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VOLUME 17460
52-Week high 122.10
52-Week low 22.30
P/E
Mkt Cap.(Rs cr) 131
Buy Price 22.40
Buy Qty 23.00
Sell Price 22.50
Sell Qty 56.00
OPEN 23.05
CLOSE 23.45
VOLUME 17460
52-Week high 122.10
52-Week low 22.30
P/E
Mkt Cap.(Rs cr) 131
Buy Price 22.40
Buy Qty 23.00
Sell Price 22.50
Sell Qty 56.00

Aban Offshore Ltd. (ABAN) - Auditors Report

Company auditors report

To the Members of ABAN OFFSHORE LIMITED

Report on the Ind AS Standalone Financial Statements

We have audited the accompanying Ind AS Standalone Financial Statements of ABANOFFSHORE LIMITED ("the company") which comprise the Balance Sheet as at 31stMarch 2018 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of changes in equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Ind AS Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013("the Act") with respect to the preparation andpresentation of these Standalone financial statements that give a true and fair view ofthe financial position financial performance and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under Section 133 of the Act read with relevant rules issued thereunder. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these IndAS Standalone FinancialStatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Ind AS Standalone Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the Ind AS Standalone Financial Statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the Ind AS Standalone Financial Statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS Standalone Financial Statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind AS Financial Statements.

An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the Ind AS Standalone Financial Statements

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS Standalone Financial Statements:

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Standalone Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2018 its Profit (including other comprehensive income) and itscash flows and changes in equity for the year ended on that date.

Emphasis of matter

We draw attention to Note No 8(a) to Standalone Ind AS financial statements:

The Company has defaulted in repayment of instalments and payment of interest on termloans from banks for an amount of INR 4900.25 million. The Banks have recalled the entireloan outstanding including interest. As such the Company has re-classified these dues tobanks from Non-current Liability to Current Liability during the year.

Our opinion is not modified in respect of above matter.

Other matters

The comparative financial information of the Company for the corresponding year ended31st March 2017 included in these standalone financial results for the year ended 31stMarch 2018 were audited by predecessor auditor who expressed an unmodified opinion onthose financial information/statements on 29th May 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of section143 of the Act we give in theAnnexure A a statement on the matters Specified in paragraphs 3 and 4 of the Order.

2 As required by section 143(3) of the Act we further report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c) The Balance Sheet Statement of Profit and Loss and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS Standalone Financial Statements comply with theapplicable Accounting Standards specified under Section 133 of the Act read with relevantrules there under.

e) On the basis of written representations received from the directors as on 31stMarch 2018 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2018 from being appointed as a director in terms ofSection 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in ‘Annexure B'; and

g) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements.

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.

iii. There are no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.

For P. Murali & Co.

Chartered Accountants Firm Registration No: 007257S

P. Murali Mohana Rao

Partner

Membership No. 023412

Place: Chennai

Date: 30.05.2018

Annexure A to the Auditors' Report

Annexure referred to in Independent Auditors' Report to the Members of M/s ABANOFFSHORE LIMITED on the Ind AS Financial Statements for the year ended 31st March 2018 wereport that:

i. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b) As explained to us all the fixed assets have been physically verified by themanagement in a phased periodical manner which in our opinion is reasonable having regardto the size of the Company and nature of its assets. No material discrepancies werenoticed on such physical verification.

c) According to the information and explanation given to us and on verification ofdocuments provided to us we are of the opinion that the title deeds of immovableproperties are held in the Company.

ii. In our opinion the inventories have been physically verified during the year by theManagement at reasonable intervals. The material discrepancies noticed on verificationbetween the physical stocks and the book records have been dealt with in the books ofaccount.

iii. The Company has given unsecured loans during the year and in earlier years to itswholly owned foreign subsidiary being the companies covered in the Register maintainedunder Section 189 of "the Act" as shown below:

Company Unsecured Loan granted during the year (Indian Rupees in Millions) Loan Amount outstanding at the end of the year (Indian Rupees in Millions) Maximum amount outstanding during the year (Indian Rupees in Millions)
Aban Holdings Pte LimitedSingapore 62.841 6876.475 6876.475

iv. The Company has granted unsecured loan provided guarantee and invested in itswholly owned foreign subsidiary and Indian subsidiaries. The Company has also invested inother companies. Based on the information and explanations

given to us we are of the opinion that the company has compiled with the provisions ofSection 185 and 186 of the Companies Act 2013 wherever applicable with respect to thesaid transactions.

v. The Company has not accepted any deposits during the year from the public within themeaning of the provisions of Section 73 of "the Act"and hence directives issuedby the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of "the Act" and the Rules framed there under are not applicable tothe Company at present.

vi. The Central Government has not prescribed maintenance of Cost Records undersub-section (1) of section 148 of "the Act" in respect of business of thecompany and hence the provision of clause 3(vi)of the Order is not applicable with regardto maintenance of cost records.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the books of account in our opinion the company is regular indepositing with appropriate authorities undisputed statutory dues including providentfund income tax sales tax service tax duty of customs duty of excise value addedtax Goods and service tax and other material Statutory dues as applicable with theappropriate authorities in India.

(b) There were no undisputed amounts payable in respect of Provident Fund EmployeeStaff Insurance Service Tax Sales Tax Income-tax and other material statutory dues inarrears as at 31st March 2018 for a period of more than 6 months from the date theybecame payable.

(c) According to the information and explanations given to us there are statutorydues which have not been deposited with appropriate authorities on account of dispute asper the details given below.

Name of the Statute Nature of dispute Disputed demand in Rs in millions Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Regular Assessment 556.40 2002-2006 High Court of Madras
Income Tax Act 1961 Regular Assessment 97.48 2008-2009 Commissioner of Income Tax
Income Tax Act 1961 Regular Assessment 396.17 2006-2008 Income Tax Appellate Tribunal
Income Tax Act 1961 Regular Assessment 418.38 2008-2009 Income Tax Appellate Tribunal
Income Tax Act 1961 Regular Assessment 812.00 2009-2010 Income Tax Appellate Tribunal
Income Tax Act 1961 Regular Assessment 1907.90 2010-2011 Income Tax Appellate Tribunal
Income Tax Act 1961 Regular Assessment 854.33 2011-2012 Income Tax Appellate Tribunal
Income Tax Act 1961 Regular Assessment 1490.36 2012-2013 Income Tax Appellate Tribunal
Finance Act 1994 (Service Tax dues) Regular Assessment 17.36 2007 Supreme Court
Finance Act 1994 (Service Tax dues) Regular Assessment 78.72 2011 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 18.94 2011-2012 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 36.78 2012-2014 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 79.80 2014-2015 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 37.31 2005-2011 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 236.49 2012-2014 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 605.75 2008-2010 CESTAT Mumbai
Finance Act 1994 (Service Tax dues) Regular Assessment 166.89 2009-2012 CESTAT Mumbai
Finance Act 1994 (Service Tax dues) Regular Assessment 0.46 2015-2016 CESTAT Mumbai
Finance Act 1994 (Service Tax dues) Regular Assessment 46.01 2015-2017 CESTAT Mumbai
Customs Act 1962 Regular Assessment 107.90 2015-2016 CESTAT Mumbai
Customs Act 1962 Regular Assessment 916.00 2016-2017 CESTAT Bombay High Court
Sales Tax Act of various states Regular Assessment 984.90 2010-2011 Joint Commissioner of Sales Tax Appeals
Sales Tax Act of various states Regular Assessment 459.75 2012-2013 Appellate Authority
Sales Tax Act of various states Regular Assessment 580.00 2013-2014 Appellate Authority

viii. Based on our audit procedures and according to the information and explanationsgiven to us we have noted default in repayment of term loan instalments and payment ofinterest to banks during the year. The unpaid overdue loan instalments and interest as at31st March 2018 are as given below:

Name of the Lender Amount of default including interest payable as at the Balance Sheet Date In INR Million Period of Default
Punjab National Bank 3257.33 April 2017 to March 2018
Central Bank of India 1425.81 June 2017 to March2018
IndusInd Bank 217.11 May 2017 to March2018

The banks have issued notices recalling the dues. As such the company has classifiedthese dues from Non-current Liability to current liability during the year - refer note no8(a)

The Company has no dues to Government during the year and has no dues to financialinstitutions and does not have any debentures.

ix. During the year the Company has not raised moneys by way of initial public offer orfurther public offer. According to the information and explanations provided to us thecompany has not taken any term loan during the year and hence the provision of clause3(ix) of the Order relating to application of term loan funds is not applicable to thecompany.

x. During the course of our examination of the books of account we have neither comeacross any instance of fraud by the company or any fraud on the company by its officers oremployees either noticed or reported during the year nor we have been informed of anysuch case by the Management.

xi. According to the information and explanations provided to us we are of the opinionthat the company has provided and paid the managerial remuneration in accordance with theprovisions of section 197 of "the Act". However with regard to re-appointmentof two non-resident whole time directors in terms of Part I of Schedule V of "theAct" the approval of Central Government is awaited.

xii. The company is not a Nidhi Company and hence the provisions of clause 3(xii) ofthe Order relating to compliance with maintenance of net owned funds and deposits arenot applicable to the company.

xiii. According to the information and explanations provided to us the transactionsentered into by the company during the year with the related parties are in compliancewith section 177 and 188 of "the Act". The details of the related partytransactions as required by the applicable Indian Accounting Standards have been disclosedby the company in the financial statements.

xiv. During the year under audit the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures and hence theprovisions of clause 3(xiv) of the Order relating to compliance with section 42 of"the Act" are not applicable to the company.

xv. According to the information and explanations provided to us during the year thecompany has not entered into any non-cash transactions with the directors or personsconcerned with him. Hence the provision of clause 3(xv) of the Order relating tocompliance with provisions of section 192 of "the Act" is not applicable to thecompany.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For P. Murali& Co.

Chartered Accountants

Firm Registration No: 007257S

P. Murali Mohana Rao

Partner

Membership No. 023412

Place: Chennai

Date: 30.05.2018

Annexure B to the Independent Auditors' Report

Report on the Internal Financial Controls over Financial Reporting under clause (i) ofthe Sub-section 3 of the Section 143 of the Companies Act 2013 (‘The Act')

We have audited the internal financial controls over financial reporting of ABANOFFSHORE LIMITED (‘the company') as of 31st March 2018 in conjunction with our auditof Ind AS Standalone Financial Statements of the company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the company's internal financialcontrols over financial reporting based on our Audit. We conducted our audit in accordancewith the Guidance note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the standards on Auditing deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an Audit of InternalFinancial Controls both applicable to an audit of Internal Financial Controls and bothissued by the ICAI. These standards and guidance note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our Audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the Auditor's Judgment including the assessment of the risk ofmaterial misstatement of the Ind AS Financial Statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion and the company's internal financial control systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS Financial Statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes these policies and procedures that (1) pertain to themaintenance of records that in reasonable detailed accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASFinancial Statements in accordance with generally accepted principles and that receiptsand expenditures are being made only in accordance with authorization of management anddirectors of the Company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the Ind AS Financial Statements.

Inherent Limitation of Internal Financial Controls over Financial Reporting

Because of the inherent limitation of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also Projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2018 based on theinternal control over financial reporting criteria established by the company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute Of CharteredAccountants of India.

For P. Murali & Co.

Chartered Accountants Firm Registration No: 007257S

P. Murali Mohana Rao

Partner

Membership No. 023412

Place: Chennai

Date: 30.05.2018