for the Year ended 31stmarch 2019 to the members
Your Directors present their report as under:
1] financialresults :
| || |
rs. in Crores
|particulars ||Year ended ||Year ended |
| ||march 31 2019 ||march 31 2018 |
|i ncome from operations ||64.82 ||76.26 |
|other income ||0.55 ||1.69 |
|Gross income ||65.37 ||77.95 |
|expenses for the period ||50.66 ||64.13 |
|earnings before interest taxes depreciation and amortization (ebitda). ||14.71 ||13.82 |
|Finance cost ||26.54 ||21.24 |
|Depreciation ||23.42 ||23.69 |
|(Loss) / Profit Before Tax ||(35.25) ||(31.11) |
|exceptional items ||(36.47) ||(120.50) |
|(Loss) / Profit Before Tax ||(71.72) ||(151.61) |
|Provision for Taxation || || |
|Current Tax ||0.03 ||- |
|Net (Loss) / ProfitAfter Tax ||(71.75) ||(151.61) |
|Add : Balance of Profit brought forward from previous year. ||(8.47) ||143.14 |
|loss available for appropriation. ||- ||- |
|less : Tonnage Tax reserves ||- ||- |
|- General reserves ||- ||- |
|- Proposed Dividend ||- ||- |
|- Tax on Proposed Dividend ||- ||- |
|Balance Carried forward ||(80.22) ||(8.47) |
2] financialhi GhliGhts: in view of the applicability of indian accounting Standard(inD aS) to the Company the annual accounts have been prepared in accordance with therequirements of the said accounting Standards. The impact of the inD aS is stated in thenotes to the accounts. income from operation (including other operating income) for theyear ended 31.03.2019 stood at rs.64.82 crores as against rs.76.26 crores for theprevious year (a reduction of 15%) the reduction was mainly as a result of the absence ofthe in-Chartering of a Vessel. other income for the year stood at rs.0.55 crore as againstrs.1.69 crores for the previous year. expenses for the year stood at rs.50.66 crores asagainst rs.64.13 crores (a reduction of approx 21%) mainly due to reduction in "inchartering" expenses to the tune of rs.12 crores.
The net loss for the year ended 31.03.2019 stood at rs.71.75 crores as against net lossof rs.151.61 crores for the previous year. however the loss prior to exceptional itemsstood at rs.35.25 crores as against rs.31.11 crores. exceptional items amounted tors.36.47 crores consisting of Foreign exchange loss on long term loans and impairment ofassets.
During the year under review :
M.V. Mana M.V. Lachung M.V. Poorna & M.V. Meghna continued to work on termcontracts on the West Coast of India albeit at rates lower than originally contracted.
M.V. Mahananda continued to work on a term contract on the East Coast of India at arate lower than originally contracted.
M.V. Kamet continued to work on short term contract with ONGC Ltd. till April 2019. TheVessel presently is working on a term contract w.e.f. June 2019 on the West Coast ofindia.
The Shareholders are aware that in January 2017 State Bank of India (SBI) the majorterm lender - classified the Company's account as a non Performing asset (nPa) andconverted all the loans outstanding (originally disbursed in US $) into indian rupees
(INR) which has not been accepted by the Company as this would place a hugepotentially fatal financial burden on the Company. The Company's request forre-structuring / settlement of the outstanding debt payable to State Bank of India (SBI)is under consideration.
The Company is also in dialogue with a potential investor who is considering thepossibility of "stepping into the shoes" of the existing lender.
With regard to United Bank of India the Company continues to enjoy Working Capitalfacilities and has repaid all Term / Corporate Loans as on date. The Working Capitalfacilities are "regular" and interest due has been paid till date.
With regard to the unsecured loan availed from axis Bank limited the same remains tobe repaid.
4] dividend: in view of the losses incurred for the year and the inability of theCompany to serve its "Term" Debt your Directors regret their inability torecommend any Dividend.
5] future eXpansion and outlooK:
The oil & Gas industry accounts for the majority of the world's energy generation.however there are many risk factors which the oil and Gas industry faces viz. decrease indemand for oil competition from alternative energy sources oversupply of"tonnage" (particular to the industry which the Company is in) to name a few. atpresent the Company has no plans to expand operations till such time that restructuringis in place.
6] subsidiarY / WhollY oWned subsidiarY (Wos):
The Company has two subsidiaries as detailed below: a) Global Offshore Services B.V.- The Netherlands (GOSBV):
Global offshore Services B.V. continues to go through a turbulent phase amidst thefalling demand for assets in the offshore market.
The revenue from operations for the year was USD 6.58 mn (Previous Year USD 7.44 mn).The loss recorded for the year ended 31st march 2019 was USD 90.38 mn.(Previous Year loss USD 131.71 mn).
The Company continues to provide for interest as per original terms even thoughrestructuring discussions are underway with
Owners / Lenders.
During the year under review :
m.V. Ben nevis worked on short term contracts in the north Sea and Bulgaria.
m.V. makalu worked in the north Sea and Bulgaria till December 2018. She is presentlyworking on a term contract in nigeria till February 2020 (with a 1 year extension atCharterer's option).
M.V. Olympus worked till September 2018 with Maersk Oil. Thereafter it worked on a shotterm contract with TOTAL Bulgaria till
December 2018. after the year under review (in may 2019) m.V. olympus was sold inconjunction with its Senior lenders.
M.V. Cristal & M.V. Kailash were laid up during the year under review and continueto be laid up till the date of this report. However M.V. Kailash is in the process ofbeing reactivated and made fit for service by year end.
The Senior lender of m.V. Cristal decided to sell m.V. Cristal and the process isunderway.
Restructuring discussions with Owner / Lender of Vessels currently in the fleet areunderway.
b) Garware Offshore International Services Pte. Ltd. Singapore (GOISPL):
The Company's wholly owned subsidiary GoiSPl based in Singapore had an operating incomeof USD 0.61 mn against the previous year revenue of USD 1.79 Mn. The Company has made aprofit of USD 1.01 Mn against a loss of USD 2.09 Mn.
The Vessel m.V. everest on Bareboat to GoiSPl worked till mid august 2018 in libya.Upon completion of its charter the Vessel was returned to the owners against a "fulldischarge" of GoiSPl and GoSl (as charter Guarantors) from any and all liabilitywhatsoever under the charter Guarantee and the loan agreement. as a result GoiSPl wasable to write off the outstanding charter hire debt and interest payable to the ownersand therefore generated a profit for the year.
Thereafter there has been no activity in GoiSPl except for the sale of existing stockof the Company.
GOISPL is now seeking other charter / brokerage opportunities on an aggressive basisand hopes to re-commence business soon. With respect to the qualification made by theAuditors that the Management has unable to provide sufficient appropriate auditevidence with respect to recoverability of the import tax refundable amount of rs.135.26lakhs as per legal advice the import tax paid in Brazil at the time the Vessel wasimported will be refunded since the verdict of the legal case filed against the State ofRio De
Janeiro for refund is in its favour. as per the Government of Brazil rules the refundmay be paid by the State in suitable instalments over 5 years.
With respect to the qualification made by the Auditors that the net worth of GOISPLhas been eroded and is negative Rs.1825.99 lakhs and the ability to continue as a goingconcern is questioned the management wishes to state that during the year GoiSPlreturned a Vessel that was on charter to it against the release of all itsobligations past present and future - under the charter. There is presently noactivity in the Company and recurring costs are being incurred which are being defrayedby sale of stock of stores spares / recoveries of debt. GOISPL is now actively seekingchartering opportunities as a strategy of continuing operations. In view of generalexemption granted by Ministry of Corporate Affairs vide Circular No.51/12/2007-CL-IIIdated 8.2.2011 the annual accounts of subsidiary companies and the related informationrequired to be enclosed under the provisions of the Companies act 2013 are not enclosed.
The Company undertakes that such information shall be made available to theshareholders relating to holding and subsidiary companies and shall also be kept forinspection at the Registered Office of the Company. The Company shall furnish hard copy ofthe same to any shareholder on demand.
7] listinG fees to stocK eXchanGes:
The Company has paid the listing Fees for the year 2019-20 to Bombay Stock exchangeltd. and The national Stock exchange of india ltd.
8] fiXed deposits:
During the year under review no Deposits were accepted under Chapter V of theCompanies act 2013 and hence the details relating to deposits and details which are notin compliance under Chapter V of the act are "noT aPPliCaBle".
9] responsibilitY statement:
The Directors confirm: a) That in the preparation of the annual accounts theapplicable accounting standards have been followed and that no material departures (saveand except as stated in the Directors' report) have been made from the same. b) That theyhave selected such accounting Policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of theState of affairs of the Company at the end of the year and the loss of the Company for theyear ended on 31.03.2019. c) That they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with provisions of the Companiesact 2013 for safe-guarding the assets of the Company and for preventing and detectingfraud and other irregularities. d) That they have prepared the annual accounts on a goingconcern basis. e) That they have laid down internal financial controls to be followed andthat such financial controls are adequate and were operating effectively. f) That theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
10] insurance: as on 31st march 2019 all the Vessels owned andoperated by the Company and its subsidiaries have been insured for hull & machineryWar risks and Protection & indemnity (P & i) claims except for those which werelaid up during the year.
11] directorate: mr. n. Sengupta Whole-Time Director resigned from theCompany w.e.f. 15.02.2019. mr. m.m. honkan was appointed as an additional Director andWhole-Time Director w.e.f. 01.04.2019 subject to requisite approvals.
As per the provisions of the Companies Act 2013 he holds office till the date ofAnnual General Meeting. The Board proposes to appoint him as Director.
Shareholders' approval is being sought to appoint mr. m.m. honkan as Director andWhole-Time Director w.e.f. 01.04.2019 and payment of remuneration (subject to approval ofthe secured creditors). members are requested to appoint mr. m.m. honkan as Director andWhole-Time Director and payment of remuneration as Whole Time Director. mrs. maneesha S.Shah retires by rotation and being eligible offers herself for re-appointment. members arerequested to re-elect her as a Director. mr. a. K. Thanavala mr. J.C. Chopra and mr. S.Y. mulani were re-appointed as independent Directors at the last annual General meetingheld on 11th September 2018. As such they hold office upto 31 stmarch 2024. The Company has obtained necessary declaration with respect to independencefrom them. Further they have complied with the Code forindependent Directors prescribed inSchedule iV to the Companies act 2013.
The Company has formulated a Code of Conduct for Directors and Senior managementPersonnel and the same has been complied with. The Code of Conduct for Directors andSenior management is available on the Company's website www.globaloffshore.in.
12] auditors: messrs. D. Kothary & Co. were appointed as Statutory auditors ofthe Company for a period of 5 years from the conclusion of 39th annual Generalmeeting held on 28th September 2017 till the conclusion of 44thannual General meeting.
There are no Qualifications in the Auditors' Report. However the Auditors haveenumerated "Emphasis of Matter" for the attention of the Shareholders.Management clarifies that the Company has not accepted the switchover of interest andcontinues to provide interest as per original terms especially in view of the fact thediscussions between the Company and its lender State Bank of ndia (SB i) for aSettlement are ongoing. as regards observations of the auditors in the annexure a to theauditors report the Board of Directors clarify as follows :
1] Clause ii(a) of the Annexure A to the Auditors' Report regarding verification ofthe physical inventory:
The Board clarifies that Management representatives on the Vessels has carried out thephysical verificationof the inventories and the same have been confirmedby them. TheAuditors have relied on the report of Management since it is impractical for them tocarry out physical verification of the inventory as this would also have led to asubstantial loss of charter hire which is something the Company cannot afford.
2] Clause no.vii(c) regarding pendency of the following income tax dues for the year2011-12 :
|Sr. name of the Statute no. ||nature of Dues ||Forum where dispute is pending ||Period to which the Demand relates ||Demand amount (in rs.) ||amount adjusted against refunds ||amount outstanding after adjustment |
|1. income Tax act 1961 ||ncome Tax i ||iTaT mumbai ||FY 2010-11 ||2691230 ||2691230 ||nil |
| || || || || ||( a gainst refund || |
| || || || || ||of aY 2016-17) || |
|2. income Tax act 1961 ||ncome Tax i ||iTaT mumbai ||FY 2011-12 ||20634358 ||11544220 ||9090138 |
| || || || || ||( a gainst refund || |
| || || || || ||of aY 2014-15) || |
|3. income Tax act 1961 ||ncome Tax i ||CiT appeals ||FY 2012-13 ||273390 ||273390 ||nil |
| || || || || ||a ( gainst refund || |
| || || || || ||of aY 2016-17) || |
The Board clarifies that Income Tax Department has already recovered disputed demand ofRs.2691230/- for the F.Y. 2010-11 and Rs.273390/- for F.Y. 2012-13 against Income TaxRefund Order issued to the Company for F.Y. 2015-16. However the appeals for all theaforesaid matters are pending for hearing before appropriate appellate authorities.
In order to retain talent the salary / fee reduction enforced earlier was reinstatedfully for all Employees / Consultants at all levels. In addition except for SeniorEmployees / Consultants an increment of 10% of the salary was given to the Employeesw.e.f. April 1st 2019.
The relations with employees of the Company both on-Shore and Floating Staff have beencordial. Your Directors wish to express their appreciation of the services renderedby the devoted employees who have stood by the Company and helped it continue operationsduring these extremely difficult times.
14] dematerialisation of shares:
The Company's shares continue to be traded inelectronic Form. as per Securities andexchange Board of india (SeBi) requirement
100% of the shares held by the Promoter / Persons Acting in Concert category are inElectronic Form.
15] eXtracts of annualreturn :
The extracts of the annual return as prescribed in Form no.mGT 9 is enclosedherewith as annexure a.
16] statement of declaration Given bY independent directors:
The independent Directors of the Company viz. mr. a.K. Thanavala mr. J.C. Chopraand mr. S. Y. mulani have given a declaration that they meet the criteria of independenceas provided in Sub-section (6) of Section 149 of the Companies act 2013.
17] number of board meetinGs:
During the year under review 6 Board meetings were held as detailed below:
(i) 30th may 2018 (ii) 31st July 2018 (iii) 07thaugust 2018 (iv) 13th november 2018 (v) 14thFebruary 2019 and (vi) 18th march 2019.
18] board evaluation:
Pursuant to the provisions of Section 178 of the Companies act 2013 and provision ofSeBi (listing obligations and Disclosure requirements) regulations 2015 the Company hasput in place an evaluation framework for evaluation of the Board Directors Chairman andCommittees with the approval of the nomination and remuneration Committee.
The evaluations for the Directors the Board and the Committees is carried out throughcirculation of questionnaires for the Directors for the Board for the Chairman of theBoard and the Committees respectively. The performance of the Board is assessed on selectparameters related to roles responsibilities and obligations of the Board relevance ofBoard discussions attention to strategic issues performance on key areas providingfeedback to executive management and assessing the quality quantity and timeliness offlow of information between the Company Management and the Board. The evaluation criteriafor the Directors is based on their participation contribution offering guidance to andunderstanding of the areas which were relevant to them in their capacity as members of theBoard. The evaluation criteria for the Chairman of the Board besides the general criteriaadopted for assessment of all Directors focuses on leadership abilities effectivemanagement of meetings and preservation of the interest of stakeholders. The evaluation ofthe Committees is based on the assessment of the clarity with which the mandate of theCommittee is defined effective discharge of the terms and reference of the Committees andassessment of effectiveness of contribution of the Committee's deliberation /recommendations to the functioning / decisions of the Board. The overall performanceevaluation process was completed to the satisfaction of the Board.
19] familarisation proGramme for directors: at the time of appointment on theBoard each independent Director is issued a formal letter of appointment which interalia explains the role function duties and responsibilities expected of him as aDirector of the Company. all the Directors have been provided with a deep insight into thebusiness of the Company including the working of the subsidiaries. Vessel-wise detailshave also been furnished to them. The Directors have also received a detailed explanationon the Compliances required from him/ her under the Companies act 2013 SeBi (listingobligations & Disclosure requirements) regulations 2015 and other relevantregulations and affirmation taken with respect to the same.
20] details of loans Granted / investments made / Guarantees provided under section 186of companies act 2013 : The details of the Loans/Investment/Guarantees during theyear under review is enclosed as annexure b.
21] particulars of contracts or arranGement With related parties: There were nocontracts / arrangement with related parties as per annexure c.
22] statement on development and implementation of risKs manaGement policY: riskmanagement is a key aspect of the "Corporate Governance Principles and Code ofConduct" which aims to improve the governance practices across all Companyactivities. risk management policy and processes will enable the Company to proactivelymanage uncertainty and changes in both internal and external environments in an attempt tocapitalize on opportunities and limit negative impacts.
The risk management policy of the Company identifies evaluates monitors and minimizesidentifiable risks.
23] corporate social responsibilitY (csr):
During the year under review the Company did not undertake any CSr activity.Kindly refer to annexure d. 24] siGnificant & materialorders passed bY thereGulators:
There was no significant and material order passed by Regulators or Courts orTribunals impacting the future operations or the "going concern" status of theCompany.
25] internalfinancial control : n the opinion of Board of Directors there isadequatei internal Financial Control with respect to the preparation and presentation ofthe Financial statements which form a part of this annual report.
26] secretarialauditor :
The Board has appointed mr. rajkumar Tiwari FCS as Secretarial auditor.
In compliance of Regulation 24A of SEBI (Listing Obligation and DisclosureRequirements) Regulation 2015 Company has filed
Secretarial Compliance report with the Stock exchange issued by the Secretarialauditor.
The Secretarial auditor also carried out Secretarial audit and submitted his reportpursuant to Section 204(1) of the Companies act 2013 and rule 9 of the Companies(appointment and remuneration of managerial Personnel rules) 2014 enclosed as annexure eto the Directors' report.
In both the Reports above the Secretarial Auditor has observed that there was delay infiling Certificatefor the Compliance half year ended 30th September2018 under regulation 7(3) of SeBi (listing obligations & Disclosure requirement)regulation 2015.
The Board Clarifies that through oversight the filing could not be done in time and itwill be ensured that such incidence will not be repeated again.
27] 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 the requirementsof The Sexual harassment of Women at the Workplace (Prevention Prohibition &redressal) act 2013. an nternal Complaints Committee ( i iCC) has been set up to redresscomplaints received regarding sexual harassment. all employees (permanent contractualtemporary) are covered under the policy. no sexual harassment complaints were receivedduring the year.
28] corporate Governance:
A separate report on Corporate Governance along with the Auditors' Certificate on itscompliance is given separately in the Annual report.
29] conservation of enerGY technoloGY absorption foreiGn eXchanGe earninGs andoutGo:
The required details are enclosed in annexure f.
30] subsidiaries Joint venture of associate companies :
During the year under review there were no Companies which became or ceased to be asubsidiary joint venture or an associate Company.
31] details relatinG to remuneration of directors KeY manaGerialpersonnel andemploYees:
The information required under Section 197 read with rule 5 of Companies (appointmentand remuneration of managerial personnel) rules 2014 in respect of employees of theCompany and Directors is furnished in annexure G.
32] details of directors or KeY manaGerialpersonnel appointed or resiGned durinG theYear:
During the year under review mr. n. Sengupta Whole-Time Director resigned w.e.f.15.02.2019. mr. m. m. honkan was appointed as additional Director and Whole-Time Directorw.e.f. 01.04.2019 (subject to approvals).
There was no change in other Key managerial Personnel. acKnoWledGement:
The Board wishes to thank the Office of Directorate General of Shipping MercantileMarine Department Shipping Master IRS State
Bank of india United Bank of india and axis Bank for their continued support andco-operation during the year.
| ||on behalf of the board |
|Place : mumbai ||aditYaa . GarWare |
|Dated : 06th august 2019 ||chairman |