The Directors of your company are pleased to present the Thirty SixthAnnual Report along with the accounts for the year ended 31st March 2022.
1. Financial Results
(Rupees in Millions)
|Particulars ||Standalone ||Consolidated |
| ||For the year ended |
| ||31 March 2022 ||31 March 2021 ||31 March 2022 ||31 March 2021 |
|Income from Operations ||820.67 ||1559.32 ||5983.40 ||10694.69 |
|Other Income ||114.79 ||331.09 ||149.52 ||2235.75 |
|Less: Expenditure ||499.71 ||953.43 ||4861.57 ||8780.19 |
|Profit before Interest and Depreciation ||435.75 ||936.98 ||1271.53 ||4150.25 |
|Less: Interest ||793.28 ||815.11 ||10966.34 ||11057.10 |
|Less: Depreciation/Impairment ||744.89 ||2994.85 ||12375.90 ||13351.19 |
|Profit/(Loss) for the year before Tax ||(1102.41) ||(2872.98) ||(22070.89) ||(20258.04) |
|Exceptional items (Profit/(Loss)) ||98.82 ||332.64 ||54.13 ||332.64 |
|Profit/(Loss) before Tax ||(1003.59) ||(2540.34) ||(21529.76) ||(19925.40) |
|Share of Profit/(Loss) of Associates ||- ||- ||(11.02) ||3.09 |
|Current Tax ||- ||- ||176.18 ||30.31 |
|Deferred Tax ||53.82 ||(227.32) ||53.82 ||(227.32) |
|Profit/(Loss) after Tax for the year from continuing operations ||(1057.40) ||(2313.02) ||(21770.78) ||(19725.30) |
|Other comprehensive Income ||- ||- ||(5126.49) ||- |
|Profit/(Loss) for the year ||(1057.40) ||(2313.02) ||(21770.79) ||(19725.30) |
|Profit brought forward from the previous year ||(28819.63) ||(26499.19) ||(185430.80) ||(165697.94) |
|Available for appropriation ||(29877.04) ||(28812.21) ||(207201.59) ||(185423.24) |
|Net gain/(loss) through OCI ||- ||- ||- ||- |
|Expected return on plan assets & net actuarial gain/ (Loss) ||3.61 ||(7.42) ||3.61 ||(7.56) |
|Transfer to Capital Redemption Reserve ||- ||- ||- ||- |
|Transfer to General Reserve ||- ||- ||- ||- |
|Balance Carried forward ||(29873.43) ||(28819.63) ||(207198.04) ||(185430.80) |
The Revenue earned during the year under review stood at Rs.935.46Million. Company suffered loss this year too due to steep fall in day rates as well asimpairment of plant and machinery. Rigs under contract were working satisfactorily.
3. Changes in Share Capital
There was no change in the Share Capital of the Company during the yearunder review.
4. Subsidiary Companies Indian
Aban Energies Limited
The Subsidiary Company activities relating to the maintenance ofwindmills of the Company has been satisfactory.
Rigs under Contract were performing satisfactorily.
The subsidiary company accounts details are available in theCompany's website.
Rigs DD1 DD3 and Aban VII owned by our step down subsidiary were soldand delivered during the last financial year ended 31st March 2022.
5. Consolidation of Accounts
The consolidated financial statements of the Company are prepared inaccordance with the provisions of Section 129 of the Act 2013 read with the Companies(Accounts) Rules 2014 and Regulation 33 of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 (LODR) along with a separate statement containing thesalient features of the financial performance of subsidiaries/associates in theprescribed form. The audited consolidated financial statements together withAuditor's Report forms part of the Annual Report.
As per IND AS-108 if the revenue of an operating segment is less than10 percent of the combined revenue of all operating segment then it is not mandatory for acompany to report separately information about that segment. The revenue from Wind Energydivision is less than 10 percent of the combined revenue of all operating segments. Hencethe Company is not reporting its Wind Energy revenue as a separate segment in itsfinancials.
6. Management's Discussion And Analysis
Management Discussion and Analysis Report for the year under review asstipulated under Regulation 34 (2) (e) of SEBI (LODR) Regulations 2015 is presented in aseparate section forming part of the Annual Report.
In the view of losses suffered by the Company the Board of Directorsdo not recommend any dividend.
Mr. P.Venkateswaran is liable to retire by rotation and being eligibleoffers himself for re-appointment.
The Board recommenced the re-appointment of Mr. Reji Abraham asManaging Director of the Company for a period of 5 years subject to the approval ofshareholders.
9. Disclosures under Companies Act 2013:
Extract of Annual Return:
The Extract of the Annual Return is updated in the website of theCompany under the following link http://abanoffshore.com/pdf/mgt-7-2022.pdf
Number of Board Meetings:
The Board of Directors met 8 (Eight) times in the year 2021-22. Thedetails of the Board Meetings and the attendance of the Directors are provided in theCorporate Governance Report.
Constitution of Committees:
The details of various committees formed and their attendance duringthe year are given in the Corporate Governance Report.
Role of Audit Committee
The Role of Audit Committee is given in the Corporate GovernanceReport.
10. Director's Responsibility Statement
Pursuant to the requirement under Section 134 (3) of the Companies Act2013 with respect to the Directors' Responsibility Statement it is hereby confirmedthat:
(i) in the preparation of the Annual Accounts for the financial yearended on 31st March 2022 the applicable accounting standards had been followed along witha proper explanation relating to material departures.
(ii) the Directors had selected such accounting policies and appliedthem consistently and made judgements and estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit of the Company for that period.
(iii) the Directors had taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of theCompanies Act 2013 for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities.
(iv) the Directors had prepared the accounts for the financial yearended on 31st March 2022 on a going concern basis.
(v) the Directors had laid down internal financial controls to befollowed by the Company and that such internal financial controls are adequate and wereoperating effectively.
(vi) the Directors had devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.
11. Statement of Declaration by Independent Directors as required under149(6) of the Companies Act 2013
All the Independent Directors have given the declarations that theymeet the criteria of Independence as laid down under Section 149 (6) of the Companies Act2013 and SEBI (LODR) Regulations 2015. In the opinion of the Board they fulfill theconditions of Independence as specified in the Act and Rules made there under and areindependent of the management.
12. Explanation by the Board on every qualification reservation oradverse remark or disclaimer made -
a) By the Auditor in his report on Consolidated Financial Statement -.The disclaimer of opinion is on preparation of the financial statements on a going concernbasis. The Management has considered the operations of the Group and the Company as goingconcerns notwithstanding that the Group and the Company has incurred net loss has chargedimpairment loss on rigs of the Group and the Company inventory write-down defaulting onpayment of borrowings that have become due for payment and breach of certain covenants ofthe borrowings that have given right to the lenders to demand the borrowings to be paidimmediately and have therefore expressed existence of material uncertainties on the goingconcern assumption. The Management believes that the use of the going concern assumptionin the preparation of the financial statements for the financial year ended 31st March2022 is still appropriate. The Company and Group have entered into binding sale andpurchase agreements for the sale of some of the rigs and the Management is in discussionswith its lenders to obtain approval for and implementation of an appropriate debtresolution plan. In view of the foregoing the impact of the disclaimer of opinion cannotbe ascertained.
b) By the Practicing Company Secretary in his Secretarial Audit Report- Nil
13. Particulars of loans guarantees or investments under section 186of the Companies Act 2013
Details of loans guarantees and investments covered under theprovision of Section 186 of the Companies Act 2013 are given in Notes to the financialstatements.
14. Particulars of Contracts or arrangements with related partiesreferred to in sub-section (1) of Section 188 of the Companies Act 2013 in the prescribedform
All Related Party Transactions that were entered into during thefinancial year were on an arm's length basis and were in compliance with theapplicable provisions of the Companies Act 2013 and the listing Regulation. There were nomaterially significant Related Party Transactions made by the Company during the year thatwould have required the shareholder approval as required under the listing regulation.
All Related Party Transactions are placed before the Audit Committeefor approval. Suitable disclosures as required under AS 18 have been made in the Notes tothe Financial Statements. Form AOC-2 is shown in Annexure B
The Board had approved the amendment to the policies on Related PartyTransactions and Material Subsidiary. The Policies have been uploaded in the websiteunder the weblink: http://abanoffshore.com/ RelatedPartyTransactionsPolicy.pdf
15. Material changes and commitments if any affecting the financialposition of the company which have occurred between the end of the financial year of thecompany to which the financial statements relate and the date of the report
There were no material changes and commitments affecting the financialposition of the Company between the end of financial year March 312022 and the date ofthe Report. However rigs Aban V and Aban VI were sold and delivered during the Currentyear.
16. Statement indicating development and implementation of a riskmanagement policy for the company including identification therein of elements of risk ifany which in the opinion of the Board may threaten the existence of the company.
The Company's robust risk management framework identifies andevaluates business risks and opportunities. The Company recognizes that these risks needto be managed and mitigated to protect its shareholders and other stakeholders to achieveits business objectives and enable sustainable growth. The risk framework is aimed ateffectively mitigating the Company's various business and operational risks throughstrategic actions. Risk management is embedded in our critical business activitiesfunctions and processes. The risks are reviewed from the change in the nature and extentof the major risks identified since the last assessment. It also provides control measuresfor risks and future action plans.
The Company believes that the overall risk exposure of present andfuture risks remains within risk capacity.
17. Corporate social responsibility initiatives taken during the year
The Company has constituted CSR Committee in accordance with section135 of the Companies Act 2013. The CSR Committee has formulated and recommended to theBoard a CSR Policy indicating the activities to be undertaken by the Company which hasbeen approved by the Board. The average profit for the last three financial years of theCompany is Negative. Hence the need to spend on CSR does not arise. The detailed report isgiven in a separate Annexure E in the Annual Report. The CSR Policy may be accessed on theCompany's website at http:// abanoffshore.com/pdf/CSR_Policy.pdf
18. Board Evaluation
Pursuant to the provisions of Section 134(3) (p) of the Companies Act2013 and SEBI (LODR) Regulations 2015 the Board has carried out an annual evaluation ofits own performance performance of the Directors as well as the evaluation of theworkings of its Committees. The evaluation by the Board of its own performance and that ofits committees and individual directors were done as per the manner determined by theChairman and Independent Directors and the same has been explained in Corporate Governancereport.
19. The details of directors or key managerial personnel who wereappointed or have resigned during the year
The Board recommends the reappointment of Mr.Reji Abraham as ManagingDirector for a further period of five years effective 26.09.2022.
20. The name of companies which have become or ceased to be itssubsidiaries joint ventures or associate companies during the year
Aban Hydrocarbons Pte Limited ceased to be the associate of the Company
21. The details relating to deposits covered under Chapter V ofCompanies Act 2013
During the year under review your Company did not accept any depositswithin the 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 and material orders passed by theregulators or courts or tribunals impacting the going concern status and company'soperations in future
No significant and material orders were passed by the Regulators orCourts or Tribunals which would impact the going concern status of the Company.
23. The details in respect of adequacy of internal financial controlswith reference to the Financial Statements.
Details of the same are provided in the Management Discussion andAnalysis attached to this Report.
24. Internal financial control:
Your Company maintains appropriate systems of internal controlsincluding monitoring procedures to ensure that all its assets are safeguarded againstloss from unauthorized use/misuse or disposition. Company policies guidelines andprocedures provide for adequate checks and balances and are meant to ensure that alltransactions are authorized recorded and reported correctly. Your company through its owninternal audit department carried out periodic audits at all locations and functions. Theinternal audit department reviews the efficiency and effectiveness of these systems andprocedures. Added objectives including evaluating the reliability of financial andoperational information and ensuring compliances with applicable laws and regulations. Theobservations arising out of the audit are periodically reviewed and compliance ensured.Appropriate controls are in place to ensure: (a) the orderly and efficient conduct ofbusiness including adherence to Company policies (b) safeguarding of its assets (c)prevention and detection of frauds and errors (d) the accuracy and completeness of theaccounting records and (e) timely preparation of reliable financial information.
25. Stock Exchanges
Your Company's Equity shares are listed in BSE Limited andNational Stock Exchange of India Ltd.
Preference Shares aggregating to Rs. 2610 million issued by theCompany which were listed in BSE Limited are under suspension since the preference shareswere not redeemed on due dates owing to severe cash flow strain.
Necessary stock exchange regulations are complied with. Applicablelisting fees for the year 2022-23 have already been paid to the stock exchanges.
26. Compliance of Secretarial Standards
The Company has complied with the applicable Secretarial Standardsissued by Institute of Company Secretaries of India.
27. Vigil Mechanism / Whistle Blower Policy
The Company has adopted a Whistle Blower Policy to provide a formalmechanism to the Directors and Employees to report about unethical behavior or violationof the Company's Code of Conduct. The Policy provides for adequate safeguards againstvictimization of employees who avail of the mechanism and also provides for direct accessto the Chairman of the Audit Committee.
Your Company hereby affirms that no Director/ employee has been deniedaccess to the Chairman of the Audit Committee and that no complaints were received duringthe year.
The whistle blower policy has been hosted in the Company's websiteunder the weblink: http://abanoffshore.com/pdf/whistleblowerpolicy.pdf.
28. Disclosure under the Sexual Harassment of women at workplace(Prevention prohibition and Redressal) Act 2013.
The Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of women at workplace (Prevention prohibitionand Redressal) Act 2013. Internal Complaints Committee (ICC) has been set up to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. No complaints were received during theyear 2021-22 nor were any pending unresolved complaints as on 31st March 2022.
M/s. P.Murali & Co Chartered Accountants Chennai continue to holdoffice till the conclusion of this Annual General Meeting.
M/s. Ford Rhodes Parks & Co. LLP Chartered Accountants Chennaiare being recommended for appointment as Statutory Auditors to hold office from theconclusion of this AGM till the conclusion of 41st AGM.
30. Additional Disclosures
In line with the requirements of Accounting Standards Rules 2006 of theInstitute of Chartered Accountants of India your Company has made additional disclosuresin respect of the financial reporting of interests in joint venture in the notes onaccounts.
31. Particulars of Employees
In accordance with proviso to Section 136(1) of the Companies Act2013 the Directors' Report is being sent to all shareholders excluding the statementprescribed under Rule 5(1) 5(2) and 5 (3) of the Companies (Appointment and Remunerationof Managerial Personnel) Rules 2014. The said statement is available for inspection bythe Members at the registered office of the Company during office hours till the date ofthe Annual General Meeting.
32. The particulars prescribed under Section 134 (3) (m) of theCompanies Act 2013 read with Rule (3) (A) (B) & (C) of the Companies (Accounts)Rules 2014 -
(A) Conservation of Energy
The Company has undertaken several initiatives in this area for thepast few years to reduce the carbon foot prints.
Alternate low energy consumption options were identified tooptimize energy.
This involved distillation plants being replaced by low energydesalination plants.
DOL starters are being replaced by drives to save on energyusage.
Energy efficient motors are being used when replacement isrequired.
Low energy consuming LED systems are procured as replacements toCFL/Tube lights.
Asset health monitoring and systems were put in place to extendlube oil service hours. This will enable reduce environmental burdens on deposal of wasteoil.
(B) Technology Absorption
Vibration and noise analysis being implemented to predict earlywarnings for equipment failures.
Torsional vibration analysis being implemented on engine drivenequipment.
VFD drives are being used in place of traditional DOL starters.
Advanced Corrosion prevention programs are implemented tominimize steel and piping deterioration.
Foreign exchange earnings and outgo
(Rupees in Millions)
| ||2021- 22 ||2020-21 |
|Foreign exchange earned during the year ||854.01 ||1581.65 |
|Foreign exchange outflow during the year ||322.23 ||650.45 |
33. Corporate Governance
A detailed note on the Company's philosophy on CorporateGovernance and such other disclosures as required under the listing regulations isseparately annexed herewith and forms part of this report.
34. Compliance Certificate
A Certificate from the Auditors of the company has been attached tothis report which testifies that the requirements of a sound Corporate Governance processas stipulated under Schedule V of the SEBI(Listing Obligations & DisclosureRequirements) Regulations2015 with the stock exchanges was met.
Your Directors wish to place on record their sincere appreciation forthe contribution made by the employees at all levels. The Directors also record theirsincere appreciation of the support and co-operation received from the Bankers FinancialInstitutions Investors relevant Central and State Governments Ministries Valued Clientsand Members of the Company.
Statement in the Management Discussion and Analysis describing theCompany's objective's estimates expectation of projection may be Forward LookingStatement within the meaning of applicable laws and regulations. Actual results coulddiffer materially from those expressed or implied. Important factors that could make adifference to the Company's operations include Government Regulations Taw Lawseconomic developments in India and in the countries in which the Company conductsbusiness litigations and other allied factors.
|For and on behalf of the Board || |
|Reji Abraham ||P.Murari |
|Managing Director ||Chairman |
|Place :Chennai || |
|Date : May 26 2022 || |