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Aban Offshore Ltd.

BSE: 523204 Sector: Oil & Gas
NSE: ABAN ISIN Code: INE421A01028
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OPEN 51.25
CLOSE 50.15
VOLUME 6699
52-Week high 74.90
52-Week low 36.15
P/E
Mkt Cap.(Rs cr) 293
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Aban Offshore Ltd. (ABAN) - Auditors Report

Company auditors report

To the Members of

ABAN OFFSHORE LIMITED

Report on the Ind AS Standalone Financial Statements

I. Opinion

We have audited the accompanying Ind AS Standalone Financial Statementsof Aban Offshore Limited ("the company") which comprise the Balance Sheet as at31st March 2022 the Statement of Profit and Loss (including Other Comprehensive Income)the Cash Flow Statement and the Statement of changes in equity for the year then endedand a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of "the Act" read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2022 the loss and total comprehensive income changes in equity and its cash flowsfor the year ended on that date.

II. Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our opinion on the standalone financialstatements.

III. Material uncertainty related to going Concern

We draw attention to Note - 41 to the Standalone financial statements -"the Company" has accumulated losses on account of which the net worth is erodedand also current liabilities exceeded current assets and the company has defaulted inrespect of installments and payment of interest on term loans these indicate thatmaterial uncertainty exists that may cast a significant doubt on the company'sability to continue as a going concern. However the management believes that the use ofthe going concern assumption on the preparation of the financial statements of "theCompany "is still appropriate in view of its continuing discussions with its lendersto obtain approval for and implementation of an appropriate debt resolution plan and that"the Company" will continue to be in operation in the foreseeable future.

Our opinion is not modified in respect of this matter.

IV. Emphasis of Matter Paragraph

i. As disclosed in Note-42 to the Standalone financial statements" COVID -19 " - the Company faced operational disruptions on some of theoffshore rigs during the year 2021-22 and operations were restored within reasonable timewith no significant impact on the financial performance. The Management believes that ithas taken into account all the possible impact of the COVID-19 pandemic in preparation ofthe financial statements. The Management believes that the pandemic is not expected tohave any significant impact on the financial performance and operating environment of theCompany in financial year 2022-23.

Our opinion is not modified in respect of this matter.

V. Key Audit Matters

Key audit matters are those matter s that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

We have determined the matters described below to be the key auditmatters to be communicated in our report.

I. Impairment of Property Plant and equipment (PPE): Refer note - 3(a) to the Ind AS Standalone Financial statements - an impairment charge of Rs.164.45million has been recognized for the year 2021-22 in respect of Jack up rigs Drillship andAssets Held for Sale.

II. Impairment of Trade Receivables: As Disclosed in Note - 20 to theStandalone financial statements during the year the company has charged an impairment ofTrade Receivables of Rs.82.85 million.

III. Write Down of Inventory: As Disclosed in Note - 6 to theStandalone financial statements during the year the company has charged a Write down ofInventory of Rs.92.32 million.

IV. Reclassification of Property Plant & Equipment (PPE) toNon-Current Assets Held for sale: Refer note - 3 (b) to the Ind AS Standalone Financialstatements the company has reclassified PPE of Rs.660.76 million as Non - Current Assetsheld for sale as at 31st March 2022.

V. Evaluation of uncertain Tax Positions: The company has materialuncertain tax positions including matters under dispute as disclosed in contingentliabilities (Refer note no - 30 "Note on Contingent Liabilities") whichinvolves significant judgement to determine the possible outcome of these disputes.

VI. Going Concern Aspect: There is erosion in the net worth of thecompany Current liabilities exceeded current assets and the company has defaulted inpayment of dues to lenders all these indicate a material uncertainty existing that maycast a significant doubt on the company's ability to continue as a going concern.

How our audit addressed the key audit matters

Our procedures included but were not limited to the following:

I. Calculation of impairment of PPE has been done by management and notby external expert agency: obtained an understanding of management's process andevaluated design and tested operating effectiveness of control's aroundidentification of indicators of impairment under Ind AS. Assessed the appropriateness ofmethodology and valuation model used by the management to estimate the recoverable valueof assets. Assessed the reasonableness of assumptions relating to revenue growth rategross margins discount rates etc. based on historical results current developments andfuture plans of business estimated by management. Accordingly brought the carrying amountof such assets to its estimated value in use which is mainly due to slump in the oil andgas industry.

II. The management has done an internal assessment of trade receivablesand made an Impairment as per Ind AS in case of certain receivables the possibility ofrecovery in case of which appear to be remote as at the balance sheet date.

III. The management has Written down the Inventory on board the AssetsHeld for Sale in order to bring the Carrying value to its net realizable value.

IV. The management has explained that idle rigs of the company havebeen identified for sale and the proceeds of the same would be utilized to service theoutstanding debt to the consortium of lenders. The sale is probable within one year fromthe date of reclassification of PPE as Non- Current Assets held for sale - based on theinformation and explanations given by management we have obtained an understanding onthis process and satisfied that the reclassification is in conformity with Ind AS.

V. We have obtained from the management the details of present statusof completed/ pending disputes and taken into consideration the effect of these inrespect of uncertain tax provisions to evaluate the uncertainties as at the year end.

VI. We have considered the representation made by the management andthe available information thereon in this regard that the company's dues to banks inrespect of cash credits have been discharged pursuant to One Time Settlement Agreementsmade and as regards its dues in respect of term loans the management is in discussionwith its lenders to obtain approval for and implementation of appropriate debt resolutionplans and also that the company will continue in operation in the foreseeable future.

VI. Information Other than the Standalone Financial Statements andAuditor's Report Thereon

• The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report including Annexureto Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statementsand our auditor's report hereon.

• Our opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

• In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the standalone financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.

• If based on the work we have performed we conclude that thereis a material misstatement of this other information; we are required to report that fact.We have nothing to report in this regard.

VII. Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

VIII. Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements orif suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

IX. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order.

1) As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on March 31 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on March 312022 from being appointed as a director in termsof Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial controls over financial reporting.

g) With respect to other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:

In our opinion and according to the information given to us during theyear the company has not paid/provided managerial remuneration.

2) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and according tothe explanations given to us:

a) The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements.

b) The Company does not have any long term contracts includingderivative contracts for which there were any material foreseeable losses.

c) There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company

d) (i) The Management has represented that to the best of itsknowledge and belief other than as disclosed in the notes to the accounts no funds havebeen advanced or loaned or invested (either from borrowed funds or share premium or anyother sources or kinds of funds) by the company to or in any other person or entityincluding foreign entity ("Intermediaries") with the understanding whetherrecorded in writing or otherwise that the Intermediary shall whether directly orindirectly lend or invest in other persons or entities identified in any manner whatsoeverby or on behalf of the company ("Ultimate Beneficiaries") or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries;

(ii) The Management has represented that to the best of its knowledgeand belief other than as disclosed in the notes to the accounts no funds have beenreceived by the company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons or entitiesidentified in any manner whatsoever by or on behalf of the Funding Party ("UltimateBeneficiaries") or provide any guarantee security or the like on behalf of theUltimate Beneficiaries;

(iii) Based on such audit procedures that have been consideredreasonable and appropriate in the circumstances nothing has to come to our notice thathas caused us to believe that the representations under sub-clause (i) and (ii) abovecontain any material misstatement.

e) The Company has not declared or paid any Dividend during the year.

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to "Report on Other Legal and RegulatoryRequirements" section of our report to the Members of ABAN OFFSHORE LIMITED ofeven date)

I. In respect of the Company's Property plant and equipment:

a) (i) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand in respect of assets held for sale.

(ii) The Company does not have any Intangible Assets.

b) The Company has regular programme of physical verification ofProperty Plant & Equipment in a phased periodic manner which in our opinion isreasonable having regard to the size of the company and nature of its assets. No Materialphysical discrepancies were noticed on such physical verification.

The Company holds certain Property Plant and Equipment as Non CurrentAssets held for Sale.

c) According to the information and explanations given to us and onverification of documents provided to us we are of the opinion that the title deedsimmovable properties are in the name of the Company.

d) During the year the Company made Impairment of Rs.164.45 Million inrespect of its Property Plant & Equipment and Non Current Assets Held for Sale.

e) According to the information and explanations given to us and on thebasis of our examination of records of the company there are no proceedings initiatedduring the year or are pending against the company as at 31st March 2022 for holding anybenami property under the Benami Transactions (Prohibition) Act 1988 (45 of 1988) andrules made thereunder.

II. In respect of the Company's Inventory:

a) As informed to us and in our opinion the inventories have beenphysically verified during the year by the Management at reasonable intervals and asexplained to us there were no material discrepancies noticed on verification between thephysical stocks and the book records.

The Company has written down Rs.92.32 Million in case of thoseinventories held on board the certain Property Plant and Equipment held for sale tobring its carrying value to its net realizable value.

b) The Company has not been sanctioned working capital limits in excessof Rs.5 Crore in Aggregate at any point of time during the year from banks or financialinstitutions on the basis of security of current assets and no quarterly returns orstatements are filed by the company.

III. (a) During the year the Company has not made investments inprovided any guarantee or security or granted any loans or advances Secured or unsecuredto Companies Firms Limited Liability Partnerships or other Parties.

(b) As during the year the Company has not made investments inprovided any guarantee or security or granted any loans or advances Secured or unsecuredto Companies Firms Limited Liability Partnerships or other Parties whether terms andconditions are prejudicial to the company's interest do not arise.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the company in the case of loans given inour opinion the repayment of principal and payment of interest has been stipulated and therepayments or receipts have been regular. However the Company has not given any advancein the nature of loan to any party during the year.

(d) According to the information and explanations given to us and onthe basis of our examination of the records of the company there is no overdue amount formore than ninety days in respect of loan given. However the Company has not given anyadvances in the nature of loans to any party during the year.

(e) According to the information and explanations given to us and onthe basis of our examination of the records of the company there is no loan falling dueduring the year which has been renewed or extended or fresh loans granted to settle theoverdues of the existing loans given to same parties.

(f) According to the information and explanations given to us and onthe basis of our examination of the records of the company the Company has not grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment.

IV. The company has provided guarantees and invested in its whollyowned foreign subsidiary Indian subsidiary and the company has also invested in othercompanies during the previous years. Based on the information and explanations given to usand as per the records examined we are of the opinion that the Company has complied withthe provisions of Sections 185 and 186 of the Companies Act 2013 where ever applicablewith respect to said transactions.

V. The Company has not accepted any deposits during the year from thepublic within the meaning of the provisions of section 73 of "the Act" and hencedirectives issued by the reserve bank of India and the provisions of section 73 to 76 orany other relevant provisions of "the Act" the Rules framed there under are notapplicable to the Company at present.

VI. The maintenance of cost records has not been specified by theCentral Government under section 148(1) of "the Act" for the business activitiescarried out by the Company.

VII. According to the information and explanations given to us inrespect of statutory dues:

a) The Company has generally been regular in depositing undisputedstatutory dues including Provident Fund Employees' State Insurance Income TaxGoods and Service Tax Customs Duty and other material statutory dues applicable to itwith the appropriate authorities.

b) There were no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance Income Tax Goods and Service Tax Customs Duty andother material statutory dues in arrears as at March 312022 for a period of more than sixmonths from the date they became payable.

c) Details of dues of Income Tax Sales Tax Service Tax Excise Dutyand Value Added Tax which have not been deposited as at March 312022 on account ofdispute are given below:

i. In respect of Income tax matters:

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 628.25 2002-2006 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 719.68 2006-2008 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 371.30 2008-2009 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 195.32 2009-2010 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 702.40 2009-2010 Commissioner of Income Tax
Income Tax Act 1961 Regular Assessment 1117.10 2010-2011 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 298.88 2010-2011 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Regular Assessment 854.33 2011-2012 Honorable High Court of Madras
Income Tax Act 1961 Regular Assessment 2571.59 2012-2014 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Regular Assessment 29.64 2013-2014 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Regular Assessment 846.82 2014-2015 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Regular Assessment 2.59 2014-2015 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Regular Assessment 541.92 2015-16 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Regular Assessment 8.93 2016-17 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Regular Assessment 1.20 2018-19 Commissioner of Income Tax Chennai

ii. In respect of Service Tax matters :

Name of the Statute Nature of dispute Disputed demand in Rs in millions Period to which the amount relates Forum where dispute is pending
Finance Act 1994 (Service Tax dues) Regular Assessment 78.73 2006-2011 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 18.94 2011-2012 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 46.76 2006-2007 Honorable Supreme Court.
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 .60 2015-2016 CESTAT Chennai
Finance Act 1994 (Service Tax dues) Regular Assessment 223.02 2015-2017 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 6.31 2013-2015 CESTAT Mumbai
Finance Act 1994 (Service Tax dues) Regular Assessment 495.92 2009-2016 Honorable High Court Bombay
Finance Act 1994 (Service Tax dues) Regular Assessment 49.96 2017-18 CESTAT Chennai

iii. In respect of Goods and Service Tax matters :

Name of the Statute Nature of dispute Disputed demand in Rs in millions Period to which the amount relates Forum where dispute is pending
Goods & Services Tax Act 2017 Regular Assessment 13.92 2017-18 Deputy Commissioners of State tax

iv. In respect of Customs Duty matters :

Name of the Statute Nature of dispute Disputed demand in Rs in millions Period to which the amount relates Forum where dispute is pending
Customs Act 1962 Regular Assessment 107.90 2015-2016 CESTAT Mumbai

v. In respect of value Added Tax / Sales Tax matters :

Name of the Statute Nature of dispute Disputed demand in Rs in millions Period to which the amount relates Forum where dispute is pending
Maharashtra value Added Tax Regular Assessment 984.91 2010-2011 Tribunal
Maharashtra value Added Tax Regular Assessment 459.75 2012-2013 Tribunal
Maharashtra value Added Tax Regular Assessment 587.29 2013-2014 Appellate Authority
Maharashtra value Added Tax Regular Assessment 667.03 2014-2015 Hon'ble Bombay High Court
Maharashtra value Added Tax Regular Assessment 949.23 2015-2016 Hon'ble Bombay High Court
Maharashtra value Added Tax Regular Assessment 846.00 2016-17 Hon'ble Bombay High Court
Maharashtra value Added Tax Regular Assessment 155.68 2017-18 Hon'ble Bombay High Court

v. In respect of civil suits against the company Rs.94.50 Million. vii.In respect of admiralty suit against the company Rs.287.23 Million.

VIII. According to the information and explanations given to us and onthe basis of our examination of the records of the company the company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income Tax Act 1961(43 of 1961) as incomeduring the year.

IX. (a) Based on our audit procedures and according to the informationand explanations given to us we have noted default in repayment of term loan installmentsand payment of interest to banks during the year. The unpaid overdue loan installments andinterest as at 31st March 2022 are as given below:

Description of Borrowings Name of the Lender Amount Unpaid on the Due Date (in Rs. Million) Whether Interest or Principal Number of Days of Delay or Unpaid
USD Loan Account Punjab National Bank 3430.99 Principal Feb 2017 to March 2022
USD Loan Account Punjab National Bank 1414.05 Interest Feb 2017 to March 2022
Term Loan Central Bank of India 1163.87 Principal March 2017 to March 2022
Term Loan Central Bank of India 924.53 Interest March 2017 to March 2022
Medium Term Loan Indusind Bank 191.92 Principal May 2017 to March 2022
Medium Term Loan Indusind Bank 46.55 Interest May 2017 to March 2022

The banks have issued notices recalling the dues. As such the companyhas classified the dues under term loans from Non-current Liability to current liability -refer note no 8(a) to the Standalone Financial Statements.

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

(b) According to the information and explanations given to us and onthe basis of our examination of records the company has not been declared a wilfuldefaulter by any bank or financial institution or government or government authority.

(c) According to the information and explanations given to us by themanagement the company has not obtained any term loans during the year.

(d) According to the information and explanations given to us and on anoverall examination of the financial statements of the company we report that no fundsraised on short term basis have been used for long term purposes by the Company.

(e) According to the information and explanations given to us and on anoverall examination of the financial statements of the company we report that the Companyhas not taken any funds from any entity or person on account of or to pay the obligationsof its subsidiaries.

(f) According to the information and explanations given to us andprocedures performed by us we report that the company has not raised any loans during theyear on the pledge of securities held in its subsidiaries.

X. (a) The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) during the year.

(b) According to the information and explanations given to us and onthe basis of our examination of the records of the company the company has not made anypreferential allotment or private placement of shares or fully or partly paid convertibledebentures during the year.

XI. (a) Based on examination of books and records of the Company andaccording to the information and explanations given to us no material fraud by theCompany or on the Company has been noticed or reported during the year.

(b) According to the information and explanations given to us noreport under sub-section (12) of section 143 of the Companies Act has been filed in formADT- 4 as prescribed under rule 13 of the companies (Audit and Auditors) Rules 2014 withthe Central Government during the year and upto the date of this report.

(c) As represented to us by the management there are no whistle blowercomplaints received by the company during the year.

XII. The Company is not a Nidhi Company as per section 406 of "theAct".

XIII. In our opinion and according to the information and explanationsgiven to us the Company is in compliance with Section 177 and 188 of the Companies Act2013 where applicable for all transactions with the related parties and the details ofrelated party transactions have been disclosed in the Note - 29 to standalone financialstatements as required by the applicable accounting standards.

XIV. (a) In our opinion and based on our examination the company hasan adequate internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports for the year underaudit issued to the Company during the year and till date in determining the naturetiming and extent of our audit procedures.

XV. According to the information and explanations given to us in ouropinion during the year the Company has not entered into any non-cash transactions withits Directors or persons connected to its directors and hence provisions of section 192 ofthe Companies Act 2013 are not applicable to the Company.

XVI. (a) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Accordingly Clause 3(XVI) (a) of the Orderis not applicable.

(b) The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934. Accordingly Clause 3(XVI) (b) of the Order is notapplicable.

(c) The Company is not a Core Investment Company as defined in theregulations made by the Reserve Bank of India. Accordingly Clause 3(XVI) (c) of the Orderis not applicable.

(d) The Company is not part of any group (as per the provisions of theCore Investment Companies (Reserve Bank) Directions 2016 as amended). Accordingly Clause3(XVI) (d) of the Order is not applicable.

XVII. The Company has incurred Cash losses in the current financialyear and in the immediately preceding financial year amounting to Rs.124.12 Million andRs.661.14 Million respectively.

XVIII. There has been no resignation of the statutory auditors of theCompany during the Year.

XIX. On basis of financial ratios ageing and expected dates ofrealization of financial assets and payment of financial liabilities other informationaccompanying the financial statements material uncertainty exist as on the date of theaudit report that whether the company is capable of meeting its liabilities existing as onthe date of balance sheet as and when they fall due within a period of one year from thebalance sheet date which depend on the outcome of the management plans on the discussionswith its lenders to obtain approval for and implementation of appropriate debt resolutionplan.

XX. In our opinion and according to the information and explanationsgiven to us there is no unspent amount under subsection (5) of section 135 of the Actpursuant to any project. Accordingly Clauses 3 (XX)(a) and 3(XX)(b) of the order are notApplicable.

XXI. In Case of the wholly owned foreign subsidiary - "AbanHoldings Pte Ltd Singapore and its subsidiary corporations" whose financialinformation have been audited by other auditors "Nexia TS Public AccountingCorporation Public accountants and Chartered Accountants Singapore" have expressedDisclaimer Opinion on the financial information for the financial period from 1st April2021 to 31st March 2022.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report to the Members of ABAN OFFSHORELIMITED of even date)

Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of ABAN OFFSHORE LIMITED ("the Company") as of March 31 2022in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishingand maintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlssystem over financial reporting of the Company.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover financial reporting includes those policies and procedures that

(1) pertain to the maintenance e of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany ;and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2022 based on thecriteria for internal control over financial reporting established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For P. Murali & Co.
Chartered Accountants
Firm Registration No: 007257S
A Krishna Rao
Partner
Membership No.020085
UDIN: 22020085AKTPSI6978
Date: 26.05.2022
Place: Chennai

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