The Directors of your company are pleased to present the Thirty Third Annual Reportalong with the accounts for the year ended 31st March 2019.
1. Financial Results
Rs. in Millions
|Particulars ||Standalone ||Consolidated |
| ||For the year ended |
| ||31st March 2019 ||31st March 2018 ||31st March 2019 ||31st March 2018 |
|Income from Operations ||2628.93 ||5915.25 ||8482.66 ||14668.60 |
|Other Income ||1558.86 ||601.28 ||1127.01 ||144.95 |
|Less: Expenditure ||1791.45 ||2972.88 ||7392.59 ||8160.16 |
|Profit before Interest and Depreciation ||2396.34 ||3543.66 ||2217.08 ||6653.38 |
|Less: Interest ||1086.12 ||1133.14 ||11372.78 ||12821.03 |
|Less: Depreciation/Impairment ||1741.28 ||1731.83 ||43015.89 ||19015.81 |
|Profit/(Loss) for the year before Tax ||(431.06) ||678.69 ||(52171.59) ||(25183.45) |
|Provision for Tax ||475.01 ||791.13 ||752.40 ||1078.99 |
|Minimum Alternate Tax (MAT) Credit Entitlement ||- ||- ||- ||- |
|Provision for Deferred Tax ||(212.92) ||(198.14) ||(212.92) ||(198.14) |
|Profit/(Loss) after Taxfor the year from continuing operations ||(693.15) ||85.70 ||(52711.07) ||(26064.30) |
|Share of profit / (loss) of associate ||- ||- ||(23.42) ||(0.45) |
|Profit/(Loss) for the year ||(693.15) ||85.70 ||(52734.49) ||(26064.76) |
|Profit brought forward from the previous year ||18760.06 ||18655.09 ||23244.58 ||2800.90 |
|Available for appropriation ||18066.91 ||18740.79 ||(75979.07) ||(23263.86) |
|Net gain/(loss) through OCI ||4.57 ||0.97 ||4.38 ||0.97 |
|Expected return on plan assets & net actuarial gain/(Loss) ||(1.21) ||18.30 ||(1.21) ||18.30 |
|Transfer to Capital Redemption Reserve || ||- || ||- |
|Transfer to General Reserve || ||- || ||- |
|Balance Carried forward ||18070.27 ||18760.06 ||(75975.90) ||(23244.58) |
The Revenue earned during the year under review stood at Rs.4188 Million.Company suffered loss during the year due to increase in financial cost and impairment ofplant and machinery. Rigs under contract were working satisfactorily.
Other Rigs are being actively marketed.
3. Changes in Share Capital
There was no change in the Share Capital of the Company during the year underreview.
4. Subsidiary Companies
Aban Energies Limited
The Subsidiary Company activities relating to the maintenance of windmills ofthe Company has been satisfactory.
Rigs under Contract were performing satisfactorily.
The subsidiary company accounts details are available in the Companyswebsite.
5. Consolidation of Accounts
The consolidated financial statements of the Company are prepared in accordance withthe provisions of Section
129 of the Act 2013 read with the Companies (Accounts) Rules 2014 andRegulation 33 of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 (LODR) along with a separate statement containing the salient featuresof the financial performance of subsidiaries/ associates in the prescribed form. Theaudited consolidated financialstatements together with Auditors Report formspart of the Annual Report
As per IND AS-108 if the revenue of an operating segment is less than 10percent of the combined revenue of all operating segment then it is not mandatoryfor a company to report separately information about that segment. The revenuefrom Wind Energy division is less than 10 percent of the combined revenue of alloperating segments. Hence the Company is not reporting its Wind Energy operatingsegment in it financials.
6. Managements Discussion And Analysis
Management Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (2) (e) of SEBI (LODR) Regulations 2015 ispresented in a separate section forming part of the Annual Report.
In view of the losses suffered by the Company the Board of Directors do not recommendany dividend.
Mr. P.Murari Mr.K.Bharathan Mr. Ashok Kumar Rout and
Mrs. Subhashini Chandran being Independent Directors are being recommended for asecond term of five years with effect from 18th September 2019.
Mr.P.Venkateswaran Executive Director is liable to retire by .rotationandbeingeligibleoffers himselfforre-appointment
9. Disclosures under Companies Act 2013: Extract of Annual Return:
The details forming part of the extract of the Annual Return in Form MGT-9 as onMarch 31 2019 is enclosed in Annexure.
Number of Board Meetings:
The Board of Directors met 5 (five) times in the year 2018- 19. The details of theBoard Meetings and the attendance of the Directors are provided in the CorporateGovernance
Constitution of Committees:
The details of various committees formed and their attendance during the yearare given in the Corporate Governance Report.
Role of Audit Committee
The Role of Audit Committee is given in the Corporate
10. Directors Responsibility Statement
Pursuant to the requirement under Section 134 (3) of the Companies Act 2013with respect to the Directors Responsibility Statement it is herebyconfirmed that:
(i) in the preparation of the Annual Accounts for the financial year ended on 31stMarch 2019 the applicable accounting standards had been followed along with a properexplanation relating to material departures.
(ii) the Directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofthe profit / loss of the Company for that period.
(iii) the Directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities.
(iv) the Directors had prepared the accounts for the financial year ended on 31st March2019 on a going concern basis.
(v) the Directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls are adequate and were operatingeffectively.
(vi) the Directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
11. Statement of Declaration by Independent Directors as required under 149(6) of theCompanies Act 2013
All the Independent Directors have given the declarations that they meet thecriteria of Independence as laid down under
Section 149 (6) of the Companies Act 2013 and SEBI (LODR) Regulations 2015. Inthe opinion of the Board they fulfill the conditions of Independence as specifiedin the Act and Rules made there under and are independent of the management.
12. Explanation by the Board on every qualification reservation or adverse remark ordisclaimer made
a) By the Auditor in his report In respect of the Qualification and disclaimer ofopinion made by the auditors in their audit report The management is in discussion withthe lenders of the wholly owned foreign subsidiary to conclude on any re-negotiationobtain replacement financing or raise funds through any fund raising exercises or any suchproposal with the lenders as on the date of this report. Considering the long-term natureof investments and in view of the efforts of the Company to turnaround the position of theoperating subsidiaries and raise funds through fund raising exercise and in the absence ofthe fair value assessment of the investments by an external expert the management is notin position to assess the impact on the carrying cost of the investments in the whollyowned foreign subsidiary also the management believes that the use of the going concernassumption in the preparation of the financial statements for the financial year ended31st March 2019 is still appropriate.
The Management believes that there are reasonable grounds to believe that the Companywill be able to pay its debts as and when they fall due as on-going discussions withlenders for re-negotiation obtain replacement financing or any fund raising exercise orany such proposal concluded. In view of the foregoing the impact of the disclaimerof opinion cannot be ascertained.
b) By the Practicing Company Secretary in his Secretarial Audit Report Nil
13. Particulars of loans guarantees or investments under section 186 of the CompaniesAct 2013
Details of loans guarantees and investments covered under the provision ofSection 186 of the Companies Act 2013 are given in Notes to the financialstatements.
14. Particulars of Contracts or arrangements with related parties referred to insub-section (1) of Section 188 of the Companies Act 2013 in the prescribed form
All Related Party Transactions that were entered into during the financial yearwere on an arms length basis and were in compliance with the applicable provisionsof the Companies Act 2013 and the listing Regulations. There were nomaterially significant by the Company during the year that would have required the shareholderapproval as required under the listing regulation.
All Related Party Transactions are placed before the Audit Committee forapproval. Suitable disclosures as required under AS 18 have been made in the Notesto the Financial Statements. Form AOC-2 is shown in Annexure B
The Board had approved policies on Related Party Transactions and MaterialSubsidiary. The Policies have been uploaded in the website under the weblink:http:// abanoffshore.com/RelatedPartyTransactionsPolicy.pdf
15. Material changes and commitments if any affecting the financial position of thecompany which have occurred between the end of the financial year of the company to whichthe financial statements relate and the date of the report
There were no material changes and commitments affecting the financial position of theCompany between the end of financial year March 31 2019 and the date of the Re port.
16. Statement indicating development and implementation of a risk management policy forthe company including identificationtherein of elements of risk if any which in theopinion of the Board may threaten the existence of the company.
The Companys robust risk management framework identifies and evaluates businessrisks and opportunities. The Company recognizes that these risks need to be managedand mitigated to protect its shareholders and other stakeholders to achieveits business objectives and enable sustainable growth. The risk framework is aimedat effectively mitigating the Companys various business and operational canberisks through strategic actions. Risk management is embedded in our criticalbusiness activities functions and processes. The risks are reviewed from thechange in the nature and extent of the major risks identified since the lastassessment. It also provides control measures for risks and future action plans.
The Company believes that the overall risk exposure of present and future risksremains within risk capacity.
17. Corporate social responsibility initiatives taken during the year
The Company has constituted CSR Committee in accordance with section 135 of theCompanies Act 2013. The CSR Committee has formulated and recommended to the Boarda CSR Policy indicating the activities to be undertaken by the Company which hasbeen approved by the Board. During the year the Company had engaged IL & FSSkills Development Corporation Limited Madras Medical Mission and OGM toundertake program to provide vocational/ employable skills training to youth frommarginal sections of society and preventive health care and spent around Rs.29.20Lakhs for the same. The detailed report is given in a separate Annexure E in theAnnual Report. The CSR Policy may be accessed on the Companys website at http://abanoffshore.com/pdf/CSR_Policy.pdf
18. Board Evaluation
Pursuant to the provisions of Section 134(3) (p) of the Companies Act 2013 andSEBI (LODR) Regulations 2015 the Board has carried out an annual evaluation of itsown performance performance of the Directors as well as the evaluation of theworkings of its Committees. The evaluation by the Board of its own performance andthat of its committees and individual directors were done as per the mannerdetermined by the Chairman and Independent Directors and the same has beenexplained in Corporate Governance report.
19. The details of directors or key managerial personnel who were appointed or haveresigned during the year
20. The name of companies which have become or ceased to be its subsidiaries jointventures or associate companies during the year
Caldera Petroleum (UK) Ltd has become a step down subsidiary of the companyduring the year.
21. The details relating to deposits covered under Chapter V of Companies Act 2013
During the year under review your Company did not accept any deposits withinthe meaning of provisions of Chapter V - Acceptance of Deposits by Companies of theCompanies Act 2013 read with Companies (Acceptance of Deposits) Rules 2014.
22. The details of significant by the regulators or courts or tribunals impacting thegoing concern status and companys operations in future
the No significant Regulators or Courts or Tribunals which would impact the goingconcern status of the Company.
23. The details in respect of adequacy of internal financial controls with reference tothe Financial Statements.
Details of the same are provided in the Management Discussion and Analysisattached to this Report
24. Internal financial control:
Your Company maintains appropriate systems of internal controls includingmonitoring procedures to ensure that all its assets are safeguarded against lossfrom unauthorized use/misuse or disposition. Company policies guidelines and proceduresprovide for adequate checks and balances and are meant to ensure that alltransactions are authorized recorded and reported correctly. Your company throughits own internal audit department carried out periodic audits at all locationsand functions. The internal audit department reviews the efficiency andeffectiveness of these systems procedures. Added objectives including evaluating the reliabilityof financial and operational information and ensuring compliances with applicable laws andregulations. The observations arising out of the audit are periodically reviewedand compliance ensured. Appropriate controls are in place to ensure:
(a) the orderly and efficient conduct of business including adherence to Companypolicies
(b) safeguarding of its assets
(c) prevention and detection of frauds and errors
(d) the accuracy and completeness of the accounting records and
(e) timely preparation of reliable financial information.
25. Stock Exchanges
Your Companys Equity shares are listed in BSE Limited and National StockExchange of India Ltd.
Preference Shares aggregating to Rs.2610 million issued by the Company whichwere listed in BSE Limited are under suspension.
Necessary stock exchange regulations are complied with. Applicable listing feesfor the year 2018 -19 have already been paid to the stock exchanges.
26. Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standards issued byInstitute of Company Secretaries of India.
27. Vigil Mechanism/Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a formal mechanismto the Directors and Employees to report about unethical behavior or violation ofthe Companys Code of Conduct. The Policy provides for adequate safeguardsagainst victimization of employees who avail of the mechanism and also provides fordirect access to the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/employee has been denied access to theChairman of the Audit Committee and that no complaints were received during theyear.
The whistle blower policy has been hosted in the Companys website underthe weblink" http://abanoffshore com/pdf/whistleblowerpolicy.pdf.
28. Disclosure under the Sexual Harassment of women at workplace (Preventionprohibition and Redressal) Act 2013.
The Company has in place an Anti-Sexual Harassment Policy in line with therequirements of the Sexual Harassment of women at workplace (Preventionprohibition and Redressal) Act 2013. Internal Complaints Committee (ICC) hasbeen set up to redress complaints received regarding sexual harassment. Allemployees (permanent contractual temporary trainees) are covered under thispolicy. No complaints were received during the year 2018-19.
M/s. P.Murali & Co Chartered Accountants Chennai continue to hold officetill the conclusion of 36th Annual General Meeting.
30. Additional Disclosures
In line with the requirements of Accounting Standards
Rules 2006 of the Institute of Chartered Accountants of India your Company hasmade additional disclosures in respect of the financial reporting of interests injoint venture in the notes on accounts.
31. Particulars of Employees
In accordance with proviso to Section 136(1) of the Companies Act 2013 theDirectors Report is being sent to all shareholders excluding the statementprescribed under Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014. The said statement is availablefor inspection by the Members at the registered office of the Company during thedate of the Annual General Meeting.
32. The particulars prescribed under Section 134 (3)(m) of the Companies Act 2013 readwith Rule (3)(A) (B) & (C) of the Companies (Accounts) Rules 2014
(A) Conservation of Energy
The Company has undertaken several initiatives in this area like the following:
Off shore Rig HVAC systems were being changed Variable Refrigerant Flow (VRF)system for ACs which is highly energy efficient. It saves approximately Fifty percent ofpower consumption.
Migration from traditional lighting system to LED lighting system at all ourRigs and office on going project waste heat recovery units planned for new Gensetinstallation on vessel.
This utilizes the heat wasted in Gas turbine exhausts. from the Auditors of thecompany has been
Energy efficient RO water maker systems were installed in place of vapourdistillation plants which have high energy consumption.
(B) Technology Absorption
RCM being implemented. Migration from existing time based maintenance philosophyto predictive maintenance with the help of latest electronic/digital instrumentation.
Changing out electrical systems and controls for critical equipments withdigital drives and Variable Frequency Drive (VFD) in all our offshore assets on thecontinuous running machinery.
Complete process of material purchase from requirement to delivery isdigitalized for a paperless environment as a measure of go green initiative and is nowbeing extended from requisition to delivery and payments.
Company started using friction reduction products like polytron in lube oilapplications. This reduces consumed energy minimizes heating reduces friction by 90%. 5%of engine/equipment is implemented with polytron during this financial year.
Oil monitoring and service extensions are being implemented reducing carbonfoot print.
Foreign exchange earnings and outgo (Rupees in millions)
|Particulars ||2018- 19 ||2017-18 |
|Foreign exchange earned during the year ||3360.27 ||6359.07 |
|Foreign exchange outflow during the year ||528.81 ||1090.96 |
33. Corporate Governance
A detailed note on the Companys philosophy on Corporate Governance and such otherdisclosures as required under the listing regulations is separately annexed herewith andforms part of this report.
34. Compliance Certificate
A Certificate attached to this report which testifies that the requirements of a soundCorporate Governance process as stipulated under Schedule V of the SEBI(ListingObligations & Disclosure Requirements) Regulations 2015 with the stock exchanges wasmet.
Your Directors wish to place on record their sincere appreciation for the contributionmade by the employees at all levels. The Directors also record their sincere appreciationof the support and co-operation received from the Bankers Financial InstitutionsInvestors relevant Central and State Governments Ministries Valued Clients and Membersof the Company.
Statement in the Management Discussion and Analysis describing the Companysobjectives estimates expectation of projection may be Forward Looking Statementwithin the meaning of applicable laws and regulations. Actual results could differmaterially from those expressed or implied. Important factors that could make a differenceto the Companys operations include Government Regulations Taw Laws economicdevelopments in India and in the countries in which the Company conducts businesslitigations and other allied factors.
| ||For and on behalf of the Board |
| ||P.Murari |
| ||Chairman |
|Place : Chennai || |
|Date : May 29 2019 || |