Description
Aban Offshore Limited Annual Report for the financial year 2011-12
Aban Offshore Limited
Annual Report 2011-12
Contents
Introduction 02 AOL Group holding structure 16 Managing Director’s review 18 Strengths 20 Management discussion and analysis 22 De-risking our business 27 5 Years Financial Highlights 121
Disclaimer
In this annual report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements – written and oral – that we periodically make contain forwardlooking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
“When I dream alone it remains as a dream, but when we dream together it is the beginning of reality.”
– M. A. Abraham, 1939 - 2004
CORPORATE INFORMATION
BOARD OF DIRECTORS V. S. Rao P. Murari Reji Abraham K. Bharathan K. M. Jayarao Satish chandra Gupta P. Venkateswaran C. P. Gopalkrishnan AUDIT COMMITTEE V. S. Rao P. Murari K. Bharathan K. M. Jayarao P. Venkateswaran Chairman (upto 25.01.2012) Chairman (from 31.01.2012) Member Member (from 31.01.2012) Member (from 31.01.2012) Chairman (upto 25.01.2012) Vice Chairman Managing Director Director Nominee Director of ICICI Bank Director (upto 8.11.2011) Deputy Managing Director Deputy Managing Director & Secretary BANKERS & FINANCIAL INSTITUTIONS AXIS BANK LIMITED BANK OF BARODA BANK OF INDIA CANARA BANK CENTRAL BANK OF INDIA CORPORATION BANK DBS BANK LTD DnB NOR BANK ASA EXPORT IMPORT BANK OF INDIA ICICI BANK LIMITED IDBI BANK LTD INDIAN BANK INDIAN OVERSEAS BANK LIFE INSURANCE CORPORATION OF INDIA ORIENTAL BANK OF COMMERCE PUNJAB NATIONAL BANK STATE BANK OF HYDERABAD STATE BANK OF INDIA STATE BANK OF MYSORE STATE BANK OF TRAVANCORE SYNDICATE BANK THE LAKSHMI VILAS BANK LTD UNION BANK OF INDIA UCO BANK REGISTRAR AND SHARE TRANSFER AGENT CAMEO CORPORATE SERVICES LIMITED “Subramanian Building” No.1, Club House Road, Chennai – 600 002
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE K. Bharathan P. Venkateswaran C.P. Gopalkrishnan - Chairman - Member - Member
COMPENSATION COMMITTEE V. S. Rao P. Murari K. Bharathan Reji Abraham Chairman (Upto 25.01.2012) Chairman (from 31.01.2012) Member Member
REMUNERATION COMMITTEE (CONSTITUTED ON 31.01.2012) P. Murari K. Bharathan K. M. Jayarao AUDITORS FORD, RHODES, PARKS & CO., Chartered Accountants Paruvatham No.2, 56th Street, Off: 7th Avenue, Ashok Nagar Chennai – 600 083 REGISTERED OFFICE “Janpriya Crest” 113 Pantheon Road Egmore Chennai 600 008. Website :www.abanoffshore.com 2 - Chairman - Member - Member
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Aban Offshore Limited
Registered Office ‘Janpriya Crest’ 113 Pantheon Road, Egmore, Chennai 600 008. NOTICE TO MEMBERS NOTICE is hereby given that the Twenty Sixth Annual General Meeting of the Members of ABAN OFFSHORE LIMITED will be held on Friday ,the 21st September 2012 at 10.15 A.M at Narada Gana Sabha Trust (Sathguru Gnanananda Hall), No.314 (old No.254) T.T.K. Road, Chennai – 600 018 to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2012 and the Pro?t and Loss Account for the year ended as on that date, together with the reports of the Board of Directors and Auditors thereon. To consider and declare a dividend @ 8% p.a on the paid up Non Convertible Cumulative Redeemable Preference Share capital of the Company for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 29th December, 2011 and pro-rata dividend @ 10% p.a from 30th December, 2011 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 28th February, 2012 and pro-rata dividend @ 10% p.a from 1st March 2012 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 30th March, 2012 and pro-rata dividend @ 10% p.a for one day (i.e) 31st March 2012 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare a dividend @9.25% p.a. on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012 To consider and declare a dividend on Equity Shares for the year ended 31st March 2012 To appoint a Director in place of Mr. P. Murari who retires by rotation and being eligible offers himself for reappointment. To appoint a Director in place of Mr. K.Bharathan who retires by rotation and being eligible offers himself for reappointment. 10. To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION “RESOLVED THAT M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Chennai be and are hereby re appointed as the Statutory Auditors of the Company to hold of?ce from the conclusion of this Annual General Meeting to the conclusion of the next Annual General Meeting to conduct the audit on a remuneration as may be paid on a progressive billing basis to be agreed between the Auditor and the Board or any committee thereof.” SPECIAL BUSINESS 11. To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT in partial modi?cation of the resolution passed earlier and in accordance with the provisions of Sections 198, 269, 309 and other applicable provisions, if any of the Companies Act, 1956, read with Schedule XIII to the Act and subject to approval of Central Government, Mr.P.Venkateswaran Deputy Managing Director be paid the following revised remuneration for the a period of three years effective 01.04.2012 1. 2. 3. Basic Salary - Rs.8,00,000/-per month. House Rent allowance - Rs.4,80,000/- per month Gas, Electricity, water or reimbursement of expenses in lieu thereof shall be in accordance with the schemes and rules of the Company. Medical Reimbursement - Reimbursement of expenses incurred for Self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years. Leave Travel Concession - Reimbursement of expenditure incurred for self and family once a year subject to a maximum of one month’s salary. Club Fees - Actual fees for a maximum of two clubs subject to a maximum of Rs.20,000/- per annum. No admission and life membership fee will be paid. 3
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Personal Accident Insurance and other term insurance - The Premium shall be paid as per the rules of the Company. Contribution to Provident Fund and Superannuation Fund shall be paid as per the rules of the Company and shall not be included in the Computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act, 1961. Gratuity shall not exceed half a month’s salary for each completed year of service.
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Club Fees - Actual fees for a maximum of two clubs subject to a maximum of Rs.20,000/- per annum. No admission and life membership fee will be paid. Personal Accident Insurance and other term insurance - The Premium shall be paid as per the rules of the Company. Contribution to Provident Fund and Superannuation Fund shall be paid as per the rules of the Company and shall not be included in the Computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act, 1961. Gratuity shall not exceed half a month’s salary for each completed year of service.
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Commission The Deputy Managing Director shall be paid Commission not exceeding 0.50 % of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the Sections 198 and 309 of the Companies Act, 1956. The Remuneration Committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above, the remuneration payable to Mr P Venkateswaran. Minimum Remuneration Notwithstanding anything stated herein, where in any ?nancial year, Company has no pro?ts or its pro?ts are inadequate, the Company shall pay the above remuneration as minimum remuneration. 12 To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT in partial modi?cation of the resolution passed earlier and in accordance with the provisions of Sections 198, 269, 309 and other applicable provisions, if any of the Companies Act, 1956, read with Schedule XIII to the Act and subject to approval of Central Government, Mr.C.P.Gopalkrishnan Deputy Managing Director be paid the following revised remuneration for the a period of three years effective 01.04.2012. 1. 2. 3. Basic Salary - Rs.8,00,000/-per month. House Rent allowance - Rs.4,80,000/- per month Gas, Electricity, water or reimbursement of expenses in lieu thereof shall be in accordance with the schemes and rules of the Company. Medical Reimbursement - Reimbursement of expenses incurred for Self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years. Leave Travel Concession - Reimbursement of expenditure incurred for self and family once a year subject to a maximum of one month’s salary.
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Commission The Deputy Managing Director shall be paid Commission not exceeding 0.50 % of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the Sections 198 and 309 of the Companies Act, 1956 and further subject to the Deputy Managing Director con?rming to the Board that no remuneration has been received by him from subsidiaries of the Company during the ?nancial year. The Remuneration Committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above the remuneration payable to Mr C.P.Gopalkrishnan. Minimum Remuneration Notwithstanding anything stated herein, where in any ?nancial year, Company has no pro?ts or its pro?ts are inadequate, the Company shall pay the above remuneration as minimum remuneration. 13. To consider and if thought ?t to pass with or with out modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT pursuant to the provisions of Sections 198,269, 309 and 310 read with Schedule XIII and other applicable provisions if any, of the Companies Act, 1956 and subject to approval Central Government, consent of the Company be and is hereby accorded for re-appointment of Mr. Reji Abraham as Managing Director of the Company for a period of 5 years with effect from 26.09.2012 to 25.09.2017 on the following terms and conditions A. a) Remuneration Basic Salary Between Rs.15 Lacs to Rs.25 Lacs per month The remuneration committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above the Salary Payable to Mr. Reji Abraham
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Commission The Managing Director shall be paid Commission not exceeding 2% of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the sections 198 and 309 of the Companies Act, 1956. Perquisites In addition to the salary and commission payable to Mr. Reji Abraham, he shall also be entitled to perquisites like free furnished accommodation or house rent allowance of 60% of salary and reimbursement of other expenditure or allowances for utilities including furnishing and repair gas electricity and water, medical reimbursement incurred in India and abroad, leave travel concession for self and family, club fees ( this will not include Admission and Life Membership fees) medical personal accident and term insurance and such other perquisites and allowances (for self and family wherever applicable) as per the Company Policy applicable form time to time to the senior management personnel of the company or as may be decided by the Board or Committee of Board from time to time. Such perquisites and allowances will be subject to ceiling limit as may be ?xed by the Committee of Directors from time to time. For the purpose of calculating the above ceiling, perquisites and allowances shall be evaluated as per Income Tax rules wherever applicable. In the absence of any such Rule perquisites and allowances shall be evaluated at such actual cost incurred by the Company in providing such perquisites and allowances. Use of car for of?cial duties and adequate communication facilities at residence shall not be included in the computation of perquisites for the purpose of calculating ceiling Privilege Leave: On full pay and allowance as per the rules of the company. Encashment of the leave at the end of the tenure will not be included in the computation of ceiling and perquisites. He will also be entitled to Casual and sick leave as per the rules of the Company. Company’s contribution to Provident Fund, Gratuity, Superannuation or Annuity Fund as per the rules of the Company to the extent these either singly or put together are not taxable under the Income Tax Act, 1961 The total remuneration of Mr. Reji Abraham as per “a”& “b” above inclusive of value of perquisites will however be limited to the overall ceiling laid down under the sections 198 and 309 of the Companies Act, as amended from time to time.” B. Minimum Remuneration Where in any ?nancial year during the currency of tenure of the Managing Director, the Company has no pro?ts or its pro?ts are inadequate, Managing Director shall be paid remuneration by way of salary and perquisites as speci?ed above. “RESOLVED FURTHER THAT the above remuneration shall be payable to Mr.Reji Abraham for a period of three years with effect from 26.09.2012” 14
“RESOLVED FURTHER THAT Mr. Reji Abraham shall not retire by rotation during his tenure as Managing Director.” To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION “RESOLVED THAT, in accordance with the provisions of Section 81 and 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modi?cation(s) or re-enactment thereof) and relevant provisions of the Memorandum of Association and Articles of Association of the Company, Foreign Exchange Management Act, 1999, Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme, 1993, guidelines prescribed by the Securities and Exchange Board of India (“SEBI”) and subject to such approvals, consents, permissions and / or sanction of the Ministry of Finance of the Government of India, Reserve Bank of India and any other appropriate authorities, institutions or bodies, as may be necessary and subject to such terms and conditions, modi?cations, alterations as may be prescribed and/or speci?ed by any of them in granting any such approval, consent, permission or sanction, the consent, authority and approval of the Company be and is hereby accorded to the Board of Directors (hereinafter referred to as the “Board”, which term shall be deemed to include any Committee thereof) to offer, issue, and allot, in the course of one or more offerings, in one or more foreign markets, any securities (including but not limited to Equity Shares, Global Depository Receipts American Depository Receipts/Shares, Foreign Currency Convertible Bonds, Convertible Bonds, Euro - Convertible Bonds that are convertible at the option of the Company and / or at the option of the holders of such securities, securities partly or fully convertible into Equity Shares and / or securities linked to Equity Shares and / or any instruments or securities with or without detachable warrants secured or unsecured or such other types of securities representing either Equity Shares or convertible securities) (hereinafter referred to as “Securities”) to Foreign/Domestic investors, Non-residents, Foreign Institutional Investors/Foreign Companies/NRI(s)/ Foreign National(s) or such other entities or persons as may be decided by the Board, whether or not such persons/ entities/investors are Members of the Company through Prospectus, Offering Letter, Circular to the general public and / or through any other mode or on private placement basis as the case may be from time to time in one or more tranches as may be deemed appropriate by the Board on such terms and conditions as the Board may in its absolute discretion deem ?t for an amount not exceeding US$ 400 Million (US Dollar Four hundred Million only)or its equivalent currencies including green shoe option on such terms and conditions including pricing as the Board may in its sole discretion decide including the form and the persons to whom such Securities may be issued and all other terms and conditions and matters connected therewith.” 5
“RESOLVED FURTHER THAT without prejudice to the generality of the above the aforesaid issue of the Securities may have all or any term or combination of terms in accordance with normal practice including but not limited to conditions in relation to payment of interest, dividend, premium or redemption or early redemption at the option of the Company and / or to the holder(s) of the Securities and other debt service payment whatsoever and all such terms as are provided in offerings of this nature including terms for issue of additional Equity Shares of variation of interest payment and of variation of the price or the period of conversion of Securities into Equity Shares or issue of Equity Shares during the duration of the Securities or terms pertaining to voting rights or option for early redemption of Securities.” “RESOLVED FURTHER THAT the Board be and is hereby authorised to issue and allot such number of underlying Equity Shares as may be required to be issued and allotted upon conversion of any such Securities referred to above or as may be in accordance with the terms of the offering(s) and that the said Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank in all respects pari passu with the existing Equity Shares of the Company including payment of dividend.” “RESOLVED FURTHER THAT the consent of the Company be and is hereby granted in terms of Section 293(1)(a) and Section 293(1)(d) other applicable provisions, if any, of the Companies Act, 1956 and subject to all necessary approvals to the Board to borrow monies in excess of the paid up capital and free reserves and to secure, if necessary, all or any of the above mentioned Securities to be issued, by the creation of a mortgage and / or charge on all or any of the Company’s immovable and / or movable assets, both present and future in such form and manner and on such terms as may be deemed to be ?t and appropriate by the Board.” “RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed may be disposed off by the Board to such person in such manner and on such terms as the Board in its absolute discretion thinks ?t, in the best interest of the Company and as is permissible in law.” “RESOLVED FURTHER THAT the Company may enter into any arrangement with any agency or body for issue of Depository Receipts representing underlying Equity Shares/Preference Shares / other securities issued by the Company in registered or bearer form with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability or free transferability thereof as per the international practices and regulations and under the forms and practices prevalent.” “RESOLVED FURTHER THAT the Securities issued in foreign markets shall be deemed to have been made abroad and / or in the market and / or at the place of issue 6
of the Securities in the international market and may be governed by applicable foreign laws.” “RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of Securities or instruments representing the same, the Board be and is hereby authorised to determine the form, terms and timing of the offering(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount on issue / conversion of Securities, Exercise of warrants / Redemption of Securities, rate of interest, redemption period, listings on one or more stock exchanges as the Board in its absolute discretion deems ?t and to make and accept any modi?cations in the proposal as may be required by the authorities involved in such issues and on behalf of the Company to do all such acts, deeds, matters and things as it may at its discretion deem necessary or desirable for such purpose, including without limitation the Appointment of Registrar, Book-Runner, Lead-Managers, Trustees / Agents, Bankers, Global Co-ordinators, Custodians, Depositories, Consultants, Solicitors, Accountants, entering into arrangements for underwriting, marketing, listing, trading, depository and such other arrangements and agreements, as may be necessary and to issue any offer document(s) and sign all deeds, documents and to pay and remunerate all agencies / intermediaries by way of commission, brokerage, fees, charges, out of pocket expenses and the like as may be involved or connected in such offerings of securities, and also to seek listing of the securities or securities representing the same in any Indian and / or in one or more international stock exchanges with power on behalf of the Board to settle any questions, dif?culties or doubts that may arise in regard to any such issue, offer or allotment of securities and in complying with any Regulations, as it may in its absolute discretion deem ?t, without being required to seek any further clari?cation, consent or approval of the members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly by the authority of this resolution.” “RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of Directors or the Managing / Deputy Managing Director or any Director or any other Of?cer or Of?cers of the company to give effect to the aforesaid resolution.” 15 To consider and if thought ?t, to pass with or without modi?cation(s), the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT pursuant section 81(1A) and all other applicable provisions of the Companies Act 1956(including any statutory modi?cation or re-enactment thereof for the time being in force) and enabling provisions of the Memorandum and Articles of Association of the Company, the Listing Agreement entered into with the Stock
Exchanges and subject to the provisions of Chapter VIII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 as amended from time to time the provisions of the Foreign Exchange management Act, 1999 and the Foreign Exchange Management (Transfer or issue of security by a Person Resident Outside India) Regulations 2000 applicable rules, regulations, guidelines or laws and / or any approval consent, permission or sanction of the Central Government , Reserve Bank of India or any other appropriate authorities, institution or bodies (hereinafter collectively referred to as the “appropriate authorities”) and subject to such conditions as may be prescribed by any one of them while granting any such approval, consent, permission and / or sanction (hereinafter referred to as the requisite approvals) which may be agreed to by the Board of Directors of the Company (hereinafter called the “ Board” which term shall be deemed to include any committee which the Board may have constituted or hereinafter constitute to exercise its powers including the power conferred by this resolution) the Board be and is hereby authorized to issue offer and allot equity shares / fully convertible debentures / partly convertible debentures / non convertible debentures with warrants / any other securities (other than warrants) which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (collectively referred to as “QIP Securities”) to the Quali?ed Institutional Buyers (QIBs) as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 as Amended s, on the basis of placement document(s) at such time and times in one or more tranche or tranches at par or at such price or prices and on such terms and conditions and in such manner as the Board may in its absolute discretion determine in consultation with the Lead Managers, Advisors or other intermediaries for an amount not exceeding RS.2500 crores (Rupees two thousand ?ve hundred crores only) including such premium amount as may be ?nalized by the Board.” “RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue of the QIP Securities shall be the date on which the Board of the Company decide to open the proposed issue “(Relevant date)” or in case of securities which are convertible into or exchangeable with Equity Shares at a later date, the date on which the holder of such securities becomes entitled to apply for share shall be the relevant date “(Relevant Date)”. “RESOLVED FURTHER THAT the Board be and is hereby authorized to issue and allot such number of equity shares as may be required to be issued and allotted upon conversion of any securities referred above or as may be necessary in accordance with the terms of the offering all such shares shall be subject to the terms of Memorandum of Association and Articles of Association of the Company and being pari passu with the then existing shares of the
Company in all respects as may be provided under the terms of the issue and in the offering document.” “RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed may be disposed off by the Board to such persons and in such manner and on such terms as the Board in its absolute discretion thinks ?t in accordance with the provisions of law.” “RESOLVED FURTHER THAT the issue to the holders of the securities with equity shares underlying such securities shall be inter alia, subject to suitable adjustment in the number of shares, the price and the time period etc., in the event of any change in the equity capital structure of the Company consequent upon any merger, amalgamation, takeover or any other re-organisation or restructuring in the Company. “RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of securities or instruments representing the same as described above the Board be and is hereby authorized on behalf of the Company to do all such acts deeds, matters and things as it may in its absolute discretion deem necessary or desirable for such purpose, including without limitation the entering into of underwriting, marketing and institution / trustees/ agents and similar agreements / and to remunerate the managers, underwriters and all other agencies / intermediaries by way of commission, brokerage, fees and the like as may be involved or connected such offerings of such securities, with power on behalf of the Company to settle any question , dif?culties or doubts that may arise in regard to any such issue or allotment as it may in its absolute discretion deem ?t. “RESOLVED FURTHER THAT for the purpose aforesaid, the Board be and is hereby authorized to settle all questions, dif?culties or doubts that may arise in regard to the issue, offer or allotment of securities and utilization of the issue proceeds including but without limitation to the creation of such mortgage / charge under section 293(1) (a) of the said Act in respect of the aforesaid Securities either on pari passu basis or other wise or in the borrowing of loans as it may in its absolute discretion deem ?t without being required to seek any further consent or approval of the Members or otherwise to the end and intent that the Members shall be deemed to have given their approval thereto expressly by the authority of this resolution “RESOLVED FURTHER THAT the Board be and is hereby authorized to appoint such consultants, Book runners, Lead Managers, underwriters, Guarantors, Depositories, Custodians, Registrars, Trustees, Bankers, Lawyers, Merchant Bankers and any other advisors and professionals as may be required and to pay them such fees, Commissions and other expenses as they deem ?t. “RESOLVED FURTHER THAT the allotment of securities shall be to Quali?ed Institutional Buyers in accordance with the Quali?ed Institutional Placement (QIP), Chapter VIII of Securities Exchange Board of India (Issue of Capital and 7
Disclosure Requirements) Regulations 2009 as amended from time to time, and such securities shall be fully paid up and the allotment of such securities shall be completed within 12 months from the date of this resolution with out the need for fresh approval from the shareholders and placements made in pursuance of this resolution if approved shall be separated by atleast 6 months between each placement.” “RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of Directors or Managing / Deputy Managing Directors / Directors or any other of?cers / Authorised representatives of the Company to give effect to the aforesaid resolution. By Order of the Board C.P. Gopalkrishnan Deputy Managing Director & Secretary Chennai – 600 008 Date : 30th May 2012 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY FORM IN ORDER TO BE EFFECTIVE SHOULD BE LODGED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send a certi?ed copy of Board Resolution authorizing their representative to attend and vote on their behalf at the meeting The Register of Members and the Share Transfer Books of the Company will remain closed from 14.09.2012 to 21.09.2012 (both days inclusive) Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 relating the Special Business to be transacted at the Meeting is annexed hereto Dividend on Equity Shares if declared at the Annual General Meeting will be paid on or after 21.09.2012 to those persons or their mandates. (i) Whose names appear as Bene?cial Owners as at the end of the business hours on 13.09.2012 in the list of Bene?cial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of the shares held on electronic form; and
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Whose name appear as members in the Register of Members of the Company after giving effect to valid share transfers in physical form lodged with the Company / Registrar and Share Transfer Agent on or before 13.09.2012
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Dividend on Preference Shares if declared at the Annual General Meeting will be paid on or after 21.09.2012 Members holding shares in Physical form are requested to consider converting their holding to dematerialized form to eliminate all risks associated with physical shares. Members can contact the Company or Company’s Share Transfer Agent, M/s. Cameo Corporate Services Limited in this regard. Members / Proxies should bring the enclosed attendance slip duly ?lled in for attending the meeting along with the Annual Report. Members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbers for easy identi?cation of attendance at the Meeting. Members holding shares in physical form may obtain the Nomination Forms from the Company’s Registrar and Share Transfer Agent Members holding shares in electronic form may obtain the Nomination Forms from their respective Depository Participants
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Pursuant to the provisions of Section 205 (A) and 205 (c) of the Companies Act, 1956, Company has transferred unclaimed / unpaid dividends for the ?nancial years 199596 to 2003 – 04, to the Investor Education and Protection Fund (IEPF) established by the Central Government. No claim shall lie against the Company in respect of unpaid/ unclaimed dividend after a period of seven years from the dates they ?rst became due for payment. Members who are holding physical shares in identical order of names in more than one account are requested to intimate to the Share Transfer Agent the ledger folio of such accounts and send the share certi?cates to enable the Company to consolidate all the holdings into an account. The share certi?cate will be returned to the members after making necessary endorsements in the due course. Members desiring any information as regards accounts of the Company are requested to write to the Company at an early date so as to enable the Company to keep information ready. Members desirous of receiving Notice/ Annual Report in electronic form may furnish their e mail id to the Company / Registrar and Share Transfer Agent. Brief resume of these directors, nature of their expertise in speci?c functional areas, names of companies in which they hold directorships, memberships and chairmanships in committees, shareholding and relationships between
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directors inter-se as stipulated. In the listing agreement with Stock Exchanges in India are provided in the report on Corporate Governance forming part of the report. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 IN RESPECT OF SPECIAL BUSINESS CONTAINED IN THE NOTICE DATED 30.05.2012 ITEM NO: 11 Mr.P.Venkateswaran was appointed as a Deputy Managing Director for a period of ?ve years effective 01.08.2011 and the same was approved by the share holders at the twenty ?fth Annual General Meeting held on 28 September, 2011. It has been proposed to revise the remuneration payable to Mr.P.Venkateswaran with effect from 01.04.2012. In view of the losses suffered during the ?nancial year 2011-12, approval of shareholders is being sought to pay the revised remuneration as contained in the proposed resolution for a period of three years effective 01.04.2012. The details as required under sub-paragraph (C) of paragraph 1 under Section II of Part II of Schedule XIII are furnished hereunder: i. ii. The payment of remuneration was approved by the Remuneration Committee at its meeting held on 15 February, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. However, the Company has not made any default in repayment of any of its debts for a continuos period of 30 days in the preceding ?nancial year before the date of his appointment. Other particulars:
iii.
I.
GENERAL INFORMATION: Particulars Nature of Industry Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Financial performance based on given indicators Oil ?eld services Not Applicable Not Applicable Details
Sl. No. 1. 2. 3.
4.
The Company suffered losses during the ?nancial year 2011-2012. However consolidated accounts show a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 is Rs. 4592.10 Million The Company has a foreign collaborator “India Offshore Inc” holding 19.13 % equity.
5. 6.
Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any
II.
INFORMATION ABOUT THE APPOINTEE: Particulars Background details Past Remuneration Details Mr.P.Venkateswaran is a graduate in Technology from Indian Institute of Technology. He has been with Company since 1986. Mr.Venkateswaran’s remuneration for the year 2010 – 11 was Rs.13.65 million. For the ?nancial year 2011-12 his remuneration was Rs. 6.39 Million NIL Mr.Venkateswaran is head of Operations of the Company. As Deputy Managing Director with more than two decades of experience in the drilling industry, he is ideally suited for the current assignment.
Sl. No. 1. 2.
3. 4.
Recognition or awards Job pro?le and his suitability
9
5. 6.
Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any. OTHER INFORMATION: Particulars Reasons of loss or inadequate pro?ts
As proposed in the resolution There is no company of comparable size in drilling industry in India.
7.
Apart from remuneration payable to Mr.P.Venkateswaran, there is no pecuniary relationship directly or indirectly with the company.
III.
Sl. No. 1.
Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
2.
Steps taken or proposed to be taken for improvement.
3.
Expected increase in productivity and pro?ts in measurable terms.
The notice may be treated as the abstract of terms and conditions of the appointment of a Whole time Director, in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. P.Venkateswaran, is interested in this resolution. Item No.12: Mr.C.P.Gopalkrishnan was appointed a Deputy Managing Director for a period of ?ve years effective 01.08.2011 and the same was approved by the shareholders at the Twenty Fifth Annual General Meeting held on 28th September, 2011. It has been proposed to revise the remuneration payable to Mr.C.P.Gopalkrishnan with effect from 01.04.2012. In view of the losses suffered during the ?nancial year 2011-12, approval of shareholders is being sought to pay the remuneration as contained in the proposed resolution for a period of three years with effect from 01.04.2012. The details as required under sub-paragraph (C) of paragraph 1 under Section II of part II of Schedule XIII are furnished hereunder: i. ii. The payment of remuneration was approved by the Remuneration Committee at its meeting held on 15 February, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. However, the Company has not made any default in repayment of any of its debts for a continuos period of 30 days in the preceding ?nancial year before the date of his appointment. Other particulars:
iii.
I.
GENERAL INFORMATION: Particulars Nature of Industry Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Oil ?eld services Not Applicable Not Applicable Details
Sl. No. 1. 2. 3.
10
4. 5. 6. II.
Financial performance based on given indicators Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any INFORMATION ABOUT THE APPOINTEE: Particulars Background details
The Company suffered losses during the ?nancial year 20112012. However accounts shows a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 is Rs.4230 Million The Company has a foreign collaborator “India Offshore Inc” holding 19.13 % equity.
Sl. No. 1.
Details Mr.C.P.Gopalkrishnan is a Member of Institute of Chartered Accountants of India, Institute of Company Secretaries of India and a law graduate. He has been with Company since 1987. Mr.C.P.Gopalkrishnan’s remuneration for the year 2010 – 11 was Rs.9.40 Million. During the ?nancial year 2012-12, he was paid a remuneration of Rs.6.39 Million. NIL Mr.Gopalkrishnan is head of ?nance and Company Secretary. As Deputy Managing Director and Company Secretary with more than two decades of experience in the drilling industry, he is ideally suited to for the current assignment. As proposed in the resolution There is no company of comparable size in drilling industry in India.
2.
Past Remuneration
3. 4.
Recognition or awards Job pro?le and his suitability
5. 6.
Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any. OTHER INFORMATION: Particulars Reasons of loss or inadequate pro?ts
7.
Apart from remuneration payable to Mr.C.P.Gopalkrishnan, there is no pecuniary relationship directly or indirectly with the company.
III.
Sl. No. 1.
Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year 2011-12. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
2. 3.
Steps taken or proposed to be taken for improvement. Expected increase in productivity and pro?ts in measurable terms.
The notice may be treated as the abstract of terms and conditions of the appointment of a Whole time Director in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. C.P.Gopalkrishnan, is interested in this resolution. Item No.13: Mr.Reji Abraham was appointed as Managing Director for a period of ?ve years effective 26.09.2007 by the members at the Annual General Meeting held on 16 August, 2007. His term expires on 25.09.2012. Considering his contributions to the growth and in the best interest of the company, the Directors at their meeting held on 30.05.2012 recommended the re-appointment of Mr.Reji Abraham as Managing Director for a further period of ?ve years effective 26.09.2012 with revision in terms of remuneration as detailed in the resolution. The resolution requires approval of the members and hence the item is placed before the Meeting. The terms of contract and the interest of the Director set out in the resolution and the Explanatory Statement may be treated as the abstract of the Memorandum under Section 302 of the Companies Act, 1956. 11
The details as required under sub-paragraph (C) of paragraph 1 under Section II of part II of Schedule XIII are furnished hereunder: i. ii. iii.
I.
The payment of remuneration was approved by the Remuneration Committee at its meeting held on 30th May, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. Other particulars:
GENERAL INFORMATION:
Sl. No
1. 2. 3. Nature of Industry
Particulars
Oil ?eld services Not Applicable Not Applicable Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Financial performance based on given indicators
Details
4.
The Company suffered losses during the ?nancial year 2011-2012. However Consolidated accounts shows a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 was Rs.4592.10 Million. The Company has a foreign collaborator holding 19.13 % equity.
5. 6. II.
Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any INFORMATION ABOUT THE APPOINTEE: Particulars Background details
Sl. No. 1.
Details Mr.Reji Abraham is a graduate in Engineering and a Post Graduate in Management Studies. He is a Promoter and has nearly 20 years of experience in business. Mr.Reji Abraham’s remuneration for the year 2010 – 11 was Rs.84.66 million. During the ?nancial year 2011-12 he was paid a remuneration of Rs.6.34 Million. NIL With nearly two decades of experience in the drilling industry and being a Promoter of the Company and as Managing Director since August, 2004, he is ideally suited to lead the Company. As proposed in the resolution There is no company of comparable size in drilling industry in India.
2.
Past Remuneration
3. 4.
Recognition or awards Job pro?le and his suitability
5. 6.
Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any.
7.
Mr.Reji Abraham is a Promoter of the Company. He is paid remuneration and rent for a portion of our Mumbai of?ce premises owned by him.
III.
OTHER INFORMATION:
Particulars Reasons of loss or inadequate pro?ts Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
Sl. No. 1.
2. 3.
Steps taken or proposed to be taken for improvement. Expected increase in productivity and pro?ts in measurable terms.
12
The notice may be treated as the abstract of terms and conditions of the appointment of a Managing Director in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. Reji Abraham, is interested in this resolution. Item No.14 In view of the growing operations of the Company and to augment the fund requirements of the Company, your Company proposed to create offer issue and allot equity shares GDRs, ADRs, FCCBs, etc., as stated in the resolution. The proposed resolution would be for renewal of approval of issuance of equity shares FCCBs, GDRs, ADRs, etc. for an amount not exceeding USD 400 Million approved by the Members of the Company at the Annual General Meeting held on 28th September, 2011. None of the Directors is concerned or interested in the resolution. Item No.15 Your Company in order to increase the ability to compete with the peer group and to enhance its global competitiveness in domestic and international markets needs to strengthen its ?nancial position by augmenting long term resources from time to time The proposed special resolution, being an enabling authorization seeks the approval of the Members to the Board of Directors without the need of any further approval from the shareholders under the Quali?ed Institutional Placement (“QIP”) with the Quali?ed Institutional Buyers (“QIB”) in accordance with the provisions of SEBI. Pursuant to the above, the Board may in one or more tranches issue and allot equity shares / fully convertible debentures / partly convertible debentures / non convertible debentures with warrants / any other securities (other than warrants) which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (Collectively referred to as “QIP Securities”) The said QIP by the Board shall be subject to the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 (as amended from time to time) including the pricing which will not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchanges during the two weeks preceding the relevant. The relevant date for the determination of applicable price for the issue of the QIP securities shall be the date of the meeting in which the Board of the Company decide to open the proposed issue or in case of securities which are convertible into or exchangeable with equity shares at a later date the date on which the holder of such securities becomes entitled to apply for the said shares, as the case may be. For reasons aforesaid an enabling resolution is therefore proposed to be passed to give adequate ?exibility and discretion to the Board to ?nalise the terms of issue. The securities issued pursuant to the offering would be listed on the Indian Stock Exchanges.
The securities issued under QIP issue pursuant to offer may, if necessary be secured by way of mortgage / hypothecation on the Company’s assets as may be ?nalized by the Board of Directors in consultation with the Security Holders / Trustees in favour of security holder / Trustees for the holders of said securities. As the documents to be executed between the security holders / trustees for the holders of the said securities and the Company may contain the power to take over the management of the Company in certain events, enabling approval is also sought under section 293(1) (a) of the Companies Act,1956. Section 81(1A) of the Companies Act, 1956 and the Listing Agreement entered with the Stock Exchanges provide, inter alia that where it is proposed to increase the subscribed share capital of the Company by allotment of further shares, such further shares shall be offered to the persons who on the date of the offer are holders of the equity shares of the Company in proportion to the Capital paid up on those shares as of that date unless the Members decide otherwise. The Special Resolution seeks the consent and authorization of the Members to the Board of Directors to make the proposed issue of securities in consultation with the Lead Managers, Legal Advisors and other intermediaries and in the event it is decided to issue Securities convertible into equity shares to issue to the holders of such convertible securities in such manner and such number of equity shares on conversion as may be required to be issued in accordance with the terms of the issue keeping in view the then prevailing market conditions and in accordance with the applicable provisions of rules and regulations or guidelines The Board recommend passing of this resolution None of the directors is concerned or interested in the resolution. Chennai - 600 008 30.05.2012 By Order of the Board C.P. Gopalkrishnan Deputy Managing Director & Secretary
13
14 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Aban O?shore is the largest o?shore rig provider based in India.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 15
Assets
Number of assets Employees Uninterrupted Market dividend capitalisation
Rs.
18
As on 31st March 2012
1,491 25
As on 31st March 2012 years
18.8
billion As on 31st March 2012
Our vision
• To continue as the market leader in providing offshore drilling services • To achieve far-reaching success by developing innovative, integrated, enterprising and world class services for the global hydrocarbon industry • To provide clients an unmatched value proposition, through its proven experience, modern technology and diverse range of services
Presence
Headquartered in Chennai, India, the Company has a presence across six countries. It has two subsidiaries, namely Aban Energies Limited (India) and Aban Holdings Pte. Limited (Singapore). The Company’s shares are listed on the Madras, Bombay and National stock exchanges in India.
Clients
• Oil & Natural Gas Corporation of India Ltd. (ONGC) • OVL (Qatar) • Reliance Industries Ltd. (RIL) • Hardy Exploration & Production (India) Inc. • Shell Brunei • Shell Malaysia • Petronas Carigali SDN BHD (Malaysia) • Gujarat State Petroleum Corporation Ltd. (GSPC) • Hindustan Oil Exploration Co. Ltd. • Cairn Energy (U.K.) • Chevron (Thailand) • Kosmos Energy • Petro SA • PEMEX Mexico • Total E&P Qatar • Petrobras • Exxon Mobil (Malaysia) and Petrogas E & P
Lineage
Aban Offshore (promoted by the late M.A Abraham in 1986) is the flagship company of the Aban Group. The promoters held a 54.11% stake in the Company as on 31st March, 2012.
Competence
The Company provides drilling services for offshore exploration and production (E&P) of hydrocarbons globally. It provides drilling services in shallow to deep waters with complete operations management.
16 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Aban Group holding structure
Aban Offshore Ltd.
100% 100%
INDIA Aban Energies Ltd. MEXICO
NORWAY
Aban Holdings Pte. Ltd.
100% 100%
Deep Driller Mexico, S.de.R.L.de.C.V.
100%
Aban International Norway AS
60%
Aban Singapore Pte. Ltd.
100% 100%
SINGAPORE
40%
Sinvest AS
Aban Abraham Pte. Ltd.
Aban 7 Pte. Ltd.
100%
Aban 8 Pte. Ltd.
Aban Pearl Pte. Ltd.
100%
DDI Holding AS
100%
Deep Drilling Pte. Ltd.
100% 100% 100% 100% 100% 100% 100% 100%
Deep Drilling-1 Pte. Ltd.
Deep Drilling-2 Pte. Ltd.
Deep Drilling-3 Pte. Ltd.
Deep Drilling-4 Pte. Ltd.
Deep Drilling-5 Pte. Ltd.
Deep Drilling-6 Pte. Ltd.
Deep Drilling-7 Pte. Ltd.
Deep Drilling-8 Pte. Ltd.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 17
Consolidated results of AOL and its subsidiaries
Particulars Turnover Less: Expenditure EBIDTA EBIDTA % Add: Other income Less: Interest Less: Depreciation Profit before tax Add: share of profit in joint venture Profit before tax and after share in joint venture Less: Provision for tax Core profit after tax Exchange fluctuation (Loss)/Gain Impairment of investment/asset Profit after tax Year ended 31st March 2012 31,629.21 12,730.93 18,898.28 59.75% 657.66 9,890.85 5,160.41 4,504.68 4,504.68 795.38 3,709.30 494.11 3,215.19
(Rs. in millions) Year ended 31st March 2011 33,472.23 11,505.15 21,967.08 65.63% 259.81 9,335.37 4,907.14 7,983.78 665.41 8,649.19 2,530.86 6,118.33 7,82.96 3,885.92 1,449.45
Highlights (consolidated), 2011-12
Total revenue (Rs. in millions)
2009-10 2010-11 2011-12 33,586.60 33,472.23 31,629.21
PAT margin (%)
2009-10 2010-11 2011-12 4.33 10.16 9.26
EBIDTA (Rs. in millions)
2009-10 2010-11 2011-12 21,004 21,967.08 18,898.28
EPS (Rs.)
2009-10 2010-11 2011-12 25.86 67.16 69.84
EBIDTA margin (%)
2009-10 2010-11 2011-12 62.54 65.63 59.75
Return on capital employed (%)
2009-10 2010-11 2011-12 11.52 9.79 8.57
PAT (Rs. in millions)
2009-10 2010-11 2011-12 1,449.45 3,215.19 3,110.00
Return on networth (%)
2009-10 2010-11 2011-12 6.79 11.24 14.26
18 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Managing Director’s review
“At Aban, we will focus on enhanced asset utilisation, increased revenues and debt reduction in 2012-13.”
Reji Abraham reviews the Company’s 2011-12 performance and prospects
Overview
The financial year under review represented an interesting paradox – while the global economy slowed, oil prices increased and yet Aban Offshore’s performance declined – a 5.50% decline in revenues and 13.97% decline in EBIDTA margin. However, profit after tax improved from Rs.1449.5 million to Rs. 3215.19 million, mainly on account of loss on the sunk asset of 2010-11. The investments by oil companies in fresh oil exploration are largely dependent on their cash flows and oil prices. In 2011-12, oil prices remained robust at around USD 90100. A number of high-cost oil wells, that were out of production when oil realisations were extremely low, now returned to production. The improved financials prompted a number of oil companies to reinvest in their exploration programmes as a result of which global rig utilisation increased from 73% in 2010 to 80% in 2011.
shareholders that Aban Offshore reported a conscious decline in its performance. Every few years, the Company is required to refurbish some of its assets in rotation. This is also a necessary compliance with society and safety requirements, which enhances our asset efficiency and reliability. During the year under review, Aban management considered it prudent to contract upgrade the following assets: • Aban II was under contract upgrade during the financial year under review • Aban III and Aban V were refurbished during the financial year under review We must assure shareholders that this refurbishment is a normal part of our business and was factored into our 2011-12 operational budget. However, we could not avoid bunching of such refurbishment/ contract upgrades due to the completion of earlier contracts and commencement of new contracts.
Positives
Some of the positives that transpired during the financial year under review comprised the following: our deepest drill ship Aban Abraham continued to be deployed with Petrobras since June 2011.
Looking ahead
I am pleased to state that following refurbishment, most of these assets were brought back on stream during the later part of the financial year under review and during the first quarter of the current year. • Aban II was put back on stream from 19 April, 2012 • Aban III was put back on stream from 22 December, 2011 • Aban V was put back on stream from 26 October, 2011 As a result, we expect to have all our rigs deployed through the current financial year (except for our FPU Tahara) at relatively attractive rates across fairly long tenures, which should translate into revenue and profit predictability.
Refurbishment
It will be pertinent to explain to our
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 19
At Aban Offshore, one of the major objectives is the need to rationalise our debt. Over the last few years, we focused on doing precisely this: through repayment, extension of tenures and reduction in the coupon rate.
Strategy
At Aban Offshore, one of the major objectives is the need to rationalise our debt. Over the last few years, we focused on doing precisely this: through repayment, extension of tenures and reduction in the coupon rate. This initiative extended into the financial year under review. Our debt maturity profile of around Rs. 1,80,000 millions was revised from three years to ten years. This indicates that banks reposed continued confidence in our sector, business model, fundamentals, integrity and prospects. Further, preference shares of 450 million were redeemed, foreign currency convertible bonds valued at Rs. 34,900 millions were redeemed and we reissued and redeemed bonds worth USD 365 million. Your Company possesses adequate resources to address these periodic liabilities. Once these liabilities are liquidated and gearing improves, we expect to mobilise additional cash
resources at a low cost whenever required to address probable inorganic growth opportunities.
Outlook
The oil demand outlook continues to be robust as the world inches to recovery. The result is that oil prices are either expected to stabilise at the upper level, which could trigger higher E&P spending by oil and gas companies and generate opportunities for rig service providers like us. Aban is attractively placed to capitalise on this emerging reality. The Company possesses an adequately diversified rig mix to address deepwater requirements which doubled in the last five years and are expected to double again over the next five years. Going ahead, we expect to enhance value through long-term deployment at attractive rates, effective cost management, progressive debt management and strengthened margins leading to enhanced shareholder value.
Going ahead
At Aban, we will always focus on enhancing our profitability through the following initiatives: • Timely deployment of our rigs. • Negotiating higher day rates • Locking our assets through longterm tenures in exchange for predictable revenue inflow and shortterm contracts where the Company needed to respond to improving day rates • Retaining our position as one of the most cost-effective rig service providers • Strengthening our safety and environmental standards in line with growing industry regulations • Achieving a high asset uptime through rigorous compliance with safe operational and environmental benchmarks
20 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
STRENGTHS
Aban is the largest Indian-owned offshore drilling rig provider.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 21
Aban deploys its rigs across six countries
Legacy
Aban is the largest Indian-owned offshore drilling rig provider. The Company is among the world’s ten largest offshore oil rig service providing companies. Over the last decade, the Company emerged as one of the world’s fastest-growing oil rig service providing companies.
Asset mix
Aban provides a diverse rig portfolio to suit varied customer needs: 15 jack-ups, two floaters and one floating production unit.
Indian multinational
Aban deploys its rigs across six countries, demonstrating its operational flexibility.
Knowledge excellence
Aban’s growing industry presence is characterised by low-cost operations, high asset uptime, global competitiveness and industry respect.
Technology
Aban invested in asset youthfulness that translates into operational dependability. The average age of nine jack-ups was four and a half years, resulting in high uptime and attractive day rates.
Premium clientele
Aban’s clientele comprises of 25 major international exploration and production companies. The Company enjoys a trusting relationship with ONGC for over two decades.
22 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
MANAGEMENT DISCUSSION AND ANALYSIS
Global oil industry
In 2010, world oil production grew by 1.8 Mb/d and surpassed the level reached in 2008. Growth was the largest since 2004 and was divided evenly between OPEC and non-OPEC countries. The largest OPEC increases were in Nigeria (+340,000 b/d) and Qatar (+220,000 b/d). NonOPEC output increased by 0.9 Mb/d, the highest since 2002, and was led by China (+271 Kb/d) – recording its largest increase ever was the US (+242 Kb/d) and Russia (+236 Kb/d). Growth remained robust in China and the Middle East with Chinese consumption growing by 860,000 b/d or 10.4%. OECD oil consumption rose by 480 Kb/d – making 2010 the first year of annual OECD growth since 2005. Despite the increase, consumption in 2010 was still 3.6 Mb/d below the peak in 2005 (Source: BP statistical review).
Distribution of proved reserves in 1990,2000 and 2010 (%)
Strengths I Management discussion and analysis I De–risking our business
Aban Offshore Limited I 23
MODU demand will increase over 2010-2020. The capital investments of projects increased significantly in the last decade along with an increase in the number of barrels produced per day, water depths and complexity of reservoir and drilling units with the latest equipment.
Energy production
Oil production continues to grow across various regions, prima facie growing in the Middle East. While the world witnessed moderate growth between 2005 and 2010, the
world will see an overall growth of more than 4% by 2015. The North American region will also play a big role, where 8% growth will make a significant contribution to the world production by 2015.
Million tonnes oil equivalent North America S and C America Europe and Eurasia Middle East Africa Asia Pacific Total Oil Production (Source: BP outlook, 2012)
1990 655.6 230.3 788.3 851.8 320.9 324.9 3171.8
1995 646.0 295.7 669.4 980.5 339.3 353.6 3284.4
2000 650.8 345.3 724.7 1140.9 370.9 379.2 3611.8
2005 645.3 347.1 844.8 1217.9 470.7 380.8 3906.6
2010 648.2 350.0 853.3 1184.6 478.2 399.4 3913.7
2015 700.1 395.5 836.7 1285.0 475.1 397.1 4089.4
Indian oil industry
Hydrocarbons satisfy a major energy demand in India; coal and oil together represent about two-thirds of the total energy used. India is the fifth-largest energy consumer globally and likely to surpass Japan and Russia to become the world's third-largest energy consumer by 2030. Crude oil production was recorded at 31.87 million metric tonnes (MMT) for April-January 2012 compared with 31.41 MMT in April-January 2011 (Source: ibef.org).
Drilling market
Offshore drilling is primarily dominated by mobile offshore drilling units. Global MODU leasing contracts until 2010 was in the region of USD 25.5 bn. Further, technological changes are occurring within the MODU industry and based on available information on leasing MODU between 2010 and 2020, global expenditure on MODU construction, leasing, maintenance and upgrades stands at USD 48.65bn in 2011. This clearly highlights the fact that MODU demand will increase over 2010-2020. The capital investments of projects increased significantly in the last decade along with an increase in the number of barrels produced per day, water depth as well as complexity of reservoir and drilling units with the latest equipment.
Outlook
As of December 2011 Drill barges Drill ships Inland barges Jack-ups Platform rigs Semi-subs Submersibles Tenders (Source: SbWire research) (in operation worldwide ) 48 73 74 491 250 210 5 40 According to Business Monitor International’s (BMI) India Oil and Gas Report for the first quarter of 2012, India's average oil and gas production for 2011 was estimated at 1.04 million barrels per day (B/D) which will reach peak production at 1.06 million B/D in 2012. Given its demand outlook, BMI project consumption is expected to rise sharply to 4.29 million B/D by 2016 from 3.44 million B/D in 2011. Total gas consumption is estimated by BMI to be around 81 billion cubic meters (BCM) in 2016 from around 58 BCM in 2011 (Source: IBEF Research).
24 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
World oil demand outlook in the reference case
Particulars OECD Developing countries Transition economies World (Source: BP outlook, 2012) 2010 46.1 35.9 4.8 86.8 2015 46.0 41.8 5.1 92.9 2020 45.2 47.2 5.3 97.8
mb/d 2035 41.9 61.9 5.9 109.7
Wind energy
India has added around 2,400 MW of wind energy capacity during FY2011-12, growing at an annual 15%. Further, trading of Renewable Energy Certificates (REC) on the power exchange since March 2011 acts as a positive incentive for more addition.
Growth in capacity addition at 15% going forward; IPP segment to remain a key driver
(Source: ICRA Research, Website of C-Wet, *Till August 2011)
OPPORTUNITIES AND THREATS:
Opportunities for the rig industry Exploration and production activities by oil and gas companies are expected to grow owing to rising oil demand and prices thus, strengthening the growth prospects for the world rig industry. Threats for the rig industry • The number of players entering the field is increasing due to the new built-up jack rigs which are affecting the charter rates negatively. This could impact the Company’s performance slightly. • The global E&P business capex is connected to crude oil prices. Low crude oil prices and reducing rig-rates could result in low E&P spends in the near future. • The Company’s vital revenue spinner may be affected in the long term owing to increased emphasis on deep-sea drilling and jack-up rig demand
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 25
Opportunities for the wind energy business
• Wind power receives various excise duties and income tax exemptions, encouraging wind power generation.
Hence, wind energy is the fastest-growing energy sector
• Wind turbine is suitable to install in remote rural areas, water pumping and grinding mills • Wind energy can be used for both distributed generation or grid interactive power generation using on-shore
or off-shore technologies
• Average capacity factor can be close or higher than 30% • It is a pollution-free, clean source of energy, with no greenhouse gas effects or harmful emissions • Wind turbines require less space for installation on farms and ranches. The turbine occupies about 2% of the
total area (the turbine’s foundation is located underground), making the land available for other purposes
• National action plan for climate change (NAPCC) – Released in June 2008 by GOI, NAPCC suggests a target of a minimum renewable energy purchase obligation (RPO) of 5% since 2009-10 with 1% increase for the next 10 years • Renewable Energy Certificate mechanism – The key objective of the REC mechanism is to develop renewable energy and facilitate its inter-state flow; this will enable obligated entities (distribution utilities and open access customers) across states to meet their RPO targets as recommended by the NAPCC. Since March 2011, RECs are traded on the power exchange for market-based price discovery, with the floor and cap being set by the CERC.
Threats in wind energy
• Inconsistent RPO norms across states • Irregular monitoring system and compliance norms • Execution risk beyond inter-connection points • Variation and inconsistency in tariff across states Future ahead The global wind industry will install more than 46 GW of new wind energy capacity in 2012, according to a five-year industry forecast published recently by the Global Wind Energy Council (GWEC) at the EWEA 2012 Conference at Bella Center in Copenhagen. By the end of 2016, total global wind power capacity will be just under 500 GW, with an annual market in that year of about 60 GW. Overall, GWEC projects average annual market growth rates of about 8% for the next five years, but with a strong 2012 and a substantial dip in 2013, total installations for the 2012-2016 period are expected to reach 255 GW, with a cumulative market growth averaging just under 16%. For the second consecutive year, the majority of new installations were outside the OECD and this trend will no doubt continue. Asia will continue to be the world’s largest market with far more new installations than any other region, installing 118 GW between now and 2016, and surpassing Europe as the world leader in cumulative installed capacity sometime during 2013, ending the period with about 200 GW in total. After nearly a decade of double and triple digit growth, the Chinese market has finally stabilised, and will remain roughly at current levels for the next few years. Having achieved a 3 GW market for the first time in 2011, the annual market in India is expected to reach 5 GW by 2015. The future of Japan’s energy system, with the near-universal rejection of nuclear power after the triple tragedy on 11 March 2011, gives hope for a new beginning for the wind industry in Japan.
26 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Operational review
Drilling division: Revenue generated from drilling declined to Rs. 32228.12 million in 2011-12 compared with Rs. 33634.05 million in the previous year. As on 31st March 2012, all rigs were operational, forecasting a positive revenue generation in the coming financial year.
Wind energy division: Revenue from the Company’s wind energy division declined to Rs. 58.75 million in 2011-12 compared with Rs 97.99 million in 2010-11. Further, 21.94 million units of power were generated in 2011-12 compared with 31.57 million units of power in 2010-11.
Segment wise performance (Consolidated)
Years Drilling Revenues 2008-09 2009-10 2010-11 2011-12 3,4419.05 33,670.50 3,3634.05 32,228.12 Profit 7,017.5 4,618.3 3,475.3 4,205.39
(Rs. in millions) Wind Energy Revenues 124.55 134.18 97.99 58.75 Profit/ (Loss) before tax (215.4) (187.9) (160.4) (194.82)
Financial review
The Company reported a consolidated total income of Rs. 32,286.87 million in 2011-12 (Rs. 33,732.04 million in 2010-11). The Company’s core profit after tax stood at Rs. 3,709.30 million in 2011-12 against Rs. 6,118.33 million in 2010-11.
ensure that employees receive an opportunity to upgrade their knowledge. Aban’s employee strength at the end of 31 March, 2012 was 1,491.
Internal audit and controls
The internal audit reviews internal control checks of the Company’s various significant operations. It is carried out regularly to ensure the effectiveness of its internal control. The Company also has an Audit Committee which is responsible for reviewing the Audit Report submitted by the internal auditors. The feedback from the Committee is considered and the necessary implementations are carried out. The Audit Committee also invites the statutory and internal auditors for regular meetings to review its internal control system. The Board of Directors are kept informed from time to time about any major observations.
Risks and concerns
The section has been addressed in a later part of the report.
Human resource management
Human resource management is critical to the Company’s growth through people recruitment, retention and enrichment. A value-centric management ensures employee loyalty, provides various compensation packages and performance-based incentives. Training and development programmes are conducted on a regularly to
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 27
MINIMISING RISKS AT ABAN
01
A slowdown in the economy can affect the Company’s prospects
04
Obsolete assets could lead to lower uptime and revenue decline.
Mitigation
Despite a global economic slowdown, oil prices performed buoyantly over the last year, driven partly by growing demand and declining availability. India’s average oil and gas production is estimated to reach a peak production of 1.06 million b/d in 2012. Concentration in specific geographies could affect prospects in the case of a slowdown in those regions
Mitigation
The Company owns 18 rigs with an average age of nine of its rigs being four and half years – one of the youngest large rig fleets globally. The Company engages in periodic refurbishment and dry docking, making its assets safe on the one hand and delivering a high uptime on the other. An improper utilisation of assets could affect business returns
02
05
Mitigation
The Company deploys rig assets across a judicious mix of long-term and short-term contracts, which enhances revenue predictability on the one hand and makes it possible to capitalise on attractive short-term rates on the other. Its two-decade rich industry presence and enduring customer relationships with leading oil and gas exploration companies makes it possible to renew contracts on schedule.
Mitigation
The Company’s footprint extends across South East Asia, South Asia, Latin America, West Africa and the Middle East. The Company derived 20% of revenues from international markets and 82% from Indian market, an adequate de-risking. . 03 Increasing competition could affect realisations.
Mitigation
New rig costs are estimated as high as USD 180-200 million with a payback period of around 6-8 years, an effective entry barrier. The Company progressively emerged as one of the world’s lowest cost rig service providers, coupled with enduring customer relationships, strengthening its overall competitiveness.
28
DIRECTORS’ REPORT
The Directors of your company are pleased to present the Twenty Sixth Annual Report along with the accounts for the year ended 31st March 2012. 1. FINANCIAL RESULTS
Rs. Millions Standalone 31 March, 2012 Income from Operations Other Income Less Expenditure Pro?t before Interest and Depreciation Less Interest Less Depreciation Pro?t for the year before Tax before Exceptional Items Less Exceptional Items Pro?t for the year before Tax Provision for Tax Fringe Bene?t Tax Provision for Deferred Tax Pro?t after Tax before share in Earnings of joint Ventures Share in earnings of Joint Ventures Pro?t for the year after tax and after share in earnings of joint venture Pro?t brought forward from the previous year Available for appropriation Transfer to Capital Redemption Reserve Transfer to General Reserve Proposed Divided – Preference Proposed Dividend- Equity Tax on Dividend – Preference Tax on Dividend – Equity Balance Carried forward 6,385.28 758.85 3,726.19 3,417.94 3,662.53 986.10 (1,230.69) (1,230.69) (23.38) (1,207.31) (1,207.31) 7,360.90 6,153.59 252.24 156.66 40.92 25.41 5,678.36 31 March, 2011 11,907.43 765.70 4,614.54 8,058.59 3,354.76 1,148.07 3,555.76 3,555.76 1,360.00 (143.70) 2,339.46 2,339.46 6,267.65 8,607.11 500.00 240.00 278.90 156.66 45.24 25.41 7,360.90 Rs. Millions Consolidated 31 March, 2012 31,629.21 657.66 13,225.04 19,061.83 9,890.85 5,160.41 4,010.57 4,010.57 818.75 (23.37) 3,215.19 3,215.19 8,070.09 11,285.28 252.24 156.66 40.92 25.41 10,810.05 31 March, 2011 33,472.23 259.81 12,801.16 20,930.88 9,335.97 4,907.14 6,687.77 3,372.87 3,314.90 2,674.58 (143.72) 784.04 665.41 1,449.45 7,866.85 9,316.30 500.00 240.00 278.90 156.66 45.24 25.41 8,070.09
Particulars
For the year ended
2.
PERFORMANCE Revenue earned during the year under review stood at Rs.7,144.13 millions. Rigs Aban II, Aban III, Aban IV, Aban V, Aban VI and Drillship Aban Ice were working satisfactorily under the existing contracts. Floating Production Unit Tahara is being actively marketed.
4.
SUBSIDIARY COMPANIES INDIAN Aban Energies Limited The Subsidiary Company activities relating to the maintenance of windmills of the Company has been satisfactory. INTERNATIONAL All Rigs are under contract and are performing well
3.
CHANGES IN SHARE CAPITAL During the year the following changes were effected in the Share Capital of the Company Preference shares to the extent of 450 Million were redeemed during the year. Preference shares which were due for redemption on 29th December, 2011, 28 February,2012 and 30th March 2012 have been extended by another three years and the coupon rates have also been revised to 10%. 5.
CONSOLIDATION OF ACCOUNTS The Audited consolidated accounts and cash ?ow statement comprising Aban Offshore Ltd and its Subsidiaries in accordance with the Accounting Standard Rules 2006 prescribed by the Institute of the Chartered Accountants of India in this regard is attached. 29
Government of India, Ministry of Company Affairs, vide General Circular No. 2/2011 dated 08.02.2011 has granted general exemption under section 212(8) of the Companies Act, 1956 from the year ending 31st March, 2011 from not attaching the full text of the ?nancial statements of subsidiaries subject to ful?llment of certain conditions prescribed in the circular. Pursuant to the said general exemption, necessary disclosures have been made in respect of the said subsidiaries in this annual Report along with the Statement pursuant to Section 212 of the Companies Act, 1956. The Audited Accounts of the said Subsidiaries and the related detailed information will be made available to the investors of the Companies / Subsidiaries seeking such information. The Annual Accounts of the Subsidiary Companies will be available for inspection by any investor at the Registered Of?ce of the Company till the conclusion of Annual General Meeting. The subsidiary Company accounts details shall be available in the Company’s website. 6. MANAGEMENT’S DISCUSSION AND ANALYSIS Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report. 7. DIVIDEND The Directors are pleased to recommend a dividend of 8 % p.a, 9% p.a upto 29th December, 2011, 28th February 2012 and 30th March 2012 and @ 10% p.a from 30 December, 2011, 01 March 2012 and 31st March 2012 respectively and 9.25 % p.a on the Non-Convertible Cumulative Redeemable Preference Share Capital of the Company and a dividend of 180 %(Rs.3.60 per share) on the paid-up Equity Share Capital of the Company for the year ended 31st March 2012. 8. DIRECTORS Mr.V.S.Rao and Mr.Satish Chandra Gupta resigned from the Board. The Board wishes to place on record its sincere appreciation for the valuable services rendered by Mr.Rao and Mr.Gupta during their tenure. Mr.P.Murari and Mr.K.Bharathan retire by rotation and being eligible, offer themselves for re appointment. The Board recommends the re appointment of Mr.Reji Abraham as Managing Director for a further period of 5 years effective 26.09.2012. He shall not be liable to retire by rotation. 9. DIRECTOR’S RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors’ Responsibility Statement, it is hereby con?rmed: 30 12. 10.
(i)
that in the preparation of the Annual Accounts for the ?nancial year ended on 31st March 2012, the applicable accounting standards had been followed along with a proper explanation relating to material departures.
(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the ?nancial year and of the pro?t of the Company for the year under review. (iii) that the Directors had taken proper and suf?cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) that the Directors had prepared the accounts for the ?nancial year ended on 31st March 2012 on a going concern basis. STOCK EXCHANGES Your Company’s Equity shares were listed in the following stock exchanges: Madras Stock Exchange Ltd, Bombay Stock Exchange Limited and National Stock Exchange of India Ltd. Preference Shares aggregating to Rs.2,810 Million issued by the Company are listed with Bombay Stock Exchange Ltd. Necessary stock exchange regulations are complied with. Applicable listing fees for the year 2012 - 13 has already been paid to the respective stock exchanges. 11. Auditors M/s Ford, Rhodes, Parks & Co., Chartered Accountants, Chennai hold of?ce until the conclusion of the ensuing Annual General Meeting and, being eligible, are recommended for re -appointment. Additional Disclosures In line with the requirements of Accounting Standards Rules 2006 of the Institute of Chartered Accountants of India, your Company has made additional disclosures in respect of the ?nancial reporting of interests in the joint venture in the notes on accounts 13. Particulars of employees As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and relevant particulars of the employees who were employed throughout the ?nancial year / part of the ?nancial year under review and were in receipt of remuneration for the
Financial Year in aggregate of not less than Rs.60,00,000 (Rs.5,00,000 per month or part thereof), are annexed. A. Conservation of Energy The Company took appropriate measures to conserve energy wherever possible although the Company’s activities in general are not energy intensive. B. Research and development The Company’s research and development activities are focused on indigenization of equipment, tools and spares, which are used in rigs and wind mills.
FOREIGN EXCHANGE EARNINGS AND OUTGO
C.
Technology absorption, adoption and innovation The Company took appropriate measures to reduce its dependence on import of technology for its operations, largely relied on the innovative skills of its employees.
14.
In terms of Section 217(1) of the Companies Act, 1956 (as amended) and the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, your Directors furnish hereunder the additional information as required.
(Rupees in Millions) 2011 - 12 Foreign exchange earned during the year Foreign exchange out?ow during the year 4592.10 1293.38 2010 - 11 10049.87 930.43
15.
Corporate Governance A detailed note on the Company’s philosophy on Corporate Governance and such other disclosures as required under the listing agreement with the Stock Exchanges is separately annexed herewith and forms part of this report.
16.
Compliance Certi?cate A Certi?cate from the Auditors of the company has been attached to this report which testi?es that the requirements of a sound Corporate Governance process as stipulated under Clause 49 of the listing agreement with the stock exchanges, was met.
17.
Acknowledgements Your Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels. The Directors also record their sincere appreciation of the support and co-operation received from the Bankers, Financial Institutions, Investors, relevant Central and State Governments Ministries, Valued Clients and Members of the Company For and on behalf of the Board
Place: Chennai Date:30.05.2012 Cautionary Statement:
Reji Abraham Managing Director
P.Murari Vice Chairman
Statement in the Management Discussion and Analysis describing the Company’s objective’s estimates expectation of projection may be Forward Looking Statement within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include Government Regulations, Taw Laws, economic developments in India and in the countries in which the Company conducts business, litigations and other allied factors.
31
ANNEXURE TO THE REPORT OF THE DIRECTORS
Statement as at 31st March 2012 pursuant to clause 12 (Disclosure in the Directors’ Report) of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 Employee Stock Options - 2005 2005
a) b) (i) No of options granted Pricing Formula 96200
2006
47000
2008
125000
2009
175000
Total
443200
Options were granted at the closing market price of the Equity Shares of the Company on the Stock Exchange where high volume of shares were traded on the day preceding the date of grant of options 431.60 1288.25 3622.85 649.75 & 1211.50
c)
Exercise Price
d) e) f) g) h) i) j) j) S. No
Total No. of Options vested Total No. of Options exercise Total No of equity shares arising as a result of exercise of options Total No. of Options Lapsed Variation of terms of Options Money raised by exercise of options Total No of options in force Details of Options granted to Senior managerial personnel Name Not Applicable
3,73,200 95,130 95,130 Equity shares of Rs.2/- Per share fully paid 1,18,780 None Rs. 2,28,08,794/1,59,290 No options were granted during the year 2011-12 Designation Not Applicable No No of Options granted during the year NIL
k)
Any other employee who received grant in any one year of options amounting to 5% or more of the options granted during the year Identi?ed employees who were granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant) Diluted Earnings per Share (EPS) pursuant to issue of Equity Share on exercise of options calculated in accordance with the accounting standard (AS 20) Earnings per share Method of calculation of employee compensation cost
l)
None
m)
Rs .(34.24)
n)
The employee compensation cost has been calculated using the intrinsic value method of accounting to account for the options issued under the Aban Employee Stock Option Scheme. The Stock based Compensation cost as per the intrinsic value method for the ?nancial year 2011 -12 is NIL. NIL
Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognized if it had used the fair value of the options The impact of this difference on pro?ts and on EPS of the Company
Not Applicable
32
o)
Weighted average exercise prices and weighted average fair values of options granted for options whose exercise price either equals or exceeds or is less than the market price of the stock A description of the method and signi?cant assumptions used during the year to estimate the fair values of Options
Weighted average exercise price - Rs.1507.60 Weighted average fair value – Rs.473.86
p)
The fair value of each option is estimated using the Black Scholes Option pricing model after applying the key assumptions i) risk free interest rate – 6.9694% ii) Expected Life – 3 years iii) Expected volatility – 43.72% iv) Expected dividends – Rs.3.42 per share v) The price of the underlying Share in the market at the Time of option grant Rs.787.05
33
34
Age Quali?cation (s) SSC B.Sc Engg (Mechanical) DME B.E. (Mech) ITI 8/11/1997 3/27/1992 9/26/2008 8/24/2008 2/21/1992 4/1/2002 7/10/1996 6/1/1996 B.Sc Engg (Mechanical) 11/23/2004 4/13/1988 3/18/2009 2/7/1997 30 30 28 30 24 30 29 20 30 32 21 36 3/20/1992 36 5/2/1987 36 55 60 53 44 52 51 47 54 50 49 51 54 46 59 60,54,097 Rig Manager 75,84,321 Driller 87,67,911 Tool Pusher 95,08,095 Tool Pusher 64,93,206 Tool Pusher B. Tech(Mech.) B.E. (Mechanical) Diploma (Mechanical Engg.) SSC 83,05,554 Sr Tool Pusher DME, AMIE in Mechanical Engg. 69,75,103 Rig Manager B.E. (Mech) 78,16,597 Rig Manager B.E. (Industrial and Production Engineering) 70,44,262 General Manager B.Sc Engg (Mechanical) (Operations) 86,85,367 Chief Mechanic 69,40,561 Rig Manager 79,32,330 Sr Tool Pusher 1,33,71,984 Chief Operating Of?cer 69,67,997 Tool Pusher Remuneration Nature of Duties (Rs.) / Designation Experience in Years Date of commenment of employment Details of Previous Employment Derrick Man, Zapata Offshore Drilling Co. Chief Engineer - ONGC Ltd Nadirco Saudi Ltd Saudi Aramco - Drilling Supervisor Not Applicable Dy . SE (Drilling) - ONGC Ltd G.E.T. in Triveni Engineering Works Ltd Saudi Aramco - Drilling Supervisor NDC Not Applicable Rig Superintendant - Jagson International Drilling Superintendent-Triveni Oil Field Services Roustabout Arya Offshore Limited Base-Manager -NICO Resources Ltd
Annexure to the Directors’ Report
Information as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) (amendment) Rules 1988, and forming part of the Directors Report for the year ended 31st March 2011. Employed throughout the Financial Year under review, were in receipt of remuneration for the Financial year in aggregate of not less than Rs. 60,00,000/(Rupees Sixty Lakhs only) per annum or Rs.5,00,000/- (Rupees Five Lakhs only) per month where employed for the part of the year
S. No.
Name
1
A.C.D' souza
2
A.P.S. Sandhu
3
Abraham Nakrampurathu Chacko
4
Anil Kishore Sharma
5
James Ravichandran
6
K.Jayarajan
7
KC Kushalappa
8
Radhesam Varma
9
Rajesh Kumar Agarwal
10
Sunil G. Abraham
11
Suresh Kumar
12
Taneja D.K.
13
Tomar R.S.
14
Vinodhan V.K.
Notes (a) Remuneration includes Salary and taxable value of perquisities as per Income tax rules (b) Nature of employment is contractual
CORPORATE GOVERNANCE
ABAN’S GOVERNANCE PHILOSOPHY At Aban Offshore Ltd (Aban) your directors are committed to practice sound governance principles and believe that good governance is an ongoing process for two reasons: to protect stakeholders’ interest and to ensure that no stakeholder bene?ts at the expense of others and the Board of Directors remain committed towards this end. The company’s Corporate governance philosophy revolves around transparency and accountability in all its interactions with the Government, shareholders and employees. The following paragraphs contain the Company’s report on its Corporate Governance practices in compliance with clause 49 of the Listing Agreement with the Stock Exchanges in India.
I
BOARD OF DIRECTORS COMPOSITION OF BOARD
Aban’s Board comprises of Six Directors -One Promoter Director, Two Non - Executive Independent Directors, Two Executive Directors and one Nominee Non Executive Independent Director representing ICICI Bank Ltd (Lender). The Board functioned directly or through various focused committees (Audit Committee, Shareholders’/ Investors’ Grievance Committee, Compensation Committee and Remuneration Committee). The Board and its committees met at regular intervals. The Board is vested with functions related to goalsetting, performance evaluation and control. The Company’s Board met 6 times during the year 2011 - 12 on the following dates: 26.05.2011,05.08.2011,28.09.2011,08.11.20 11,22.12.2011 and 31.01.2012
The names of the Directors on the Board, their attendance at the meetings and the other Directorships that they held as on 31st March, 2012 are set out below:
Name of Director(s)
Category Of Directorship
Financial year 2011-2012 Attendance at Board Meetings Last AGM Yes Yes Yes _ Yes Yes Yes Yes
As on 31st March 2012 No. of Other Directorships Public Ltd. Cos. 9 7 9 2 1 4 4 Private Ltd. Cos 17 5 16 Committee Positions in other Companies* Member Chairman
V. S. Rao (upto 25.01.2012) P. Murari Reji Abraham
Non - Executive - Independent Non - Executive - Independent Executive - Promoter
5 5 6 1 6 3 6 6
2 -
3 -
Satish Chandra Gupta Non - Executive Independent (upto 08.11.2011) K Bharathan K.M. Jaya Rao P. Venkateswaran C.P. Gopalkrishnan Non - Executive Independent Non - Executive Independent Nominee – ICICI Bank Ltd.(lender) Executive Non Promoter Executive Non Promoter
Excludes directorships in associations foreign and section 25 companies * Represents Memberships / Chairmanships in Audit Committee and Shareholders’/Investors’ Grievance Committee The required information (as enumerated in Annexure IA as referred to in Clause 49 of the Listing Agreement) was made available to the Board of Directors. The Directors who will retire by rotation and offer themselves for reappointment are: Mr. P. Murari & Mr K Bharathan. The Board recommends the re-appointment of Mr. P. Murari and Mr.K . Bharathan as Directors. The Board also recommends the reappointment of Mr. Reji Abraham as Managing Director for a further period of ?ve years effective 26.09.2012.
35
Name of Director Date of Birth Nationality Date of Appointment on Board Quali?cations Shareholding in the Company Equity Shares of Rs.2/- each Membership in Committees of the Company Chairmanship in Committees of the Company List of Companies in India which Directorship held
P Murari 19.08.1934 Indian 18.09.1996 M.A(Economics) Nil Compensation Committee and Remuneration Committee Audit Committee Adayar Gate Hotel Ltd HEG Ltd Aditya Birla Nuva Ltd Xpro India Ltd Great Eastern Energy Corporation Ltd. IDEA Cellular Ltd\ Bajaj Holding and Investment Ltd Bajaj Auto Ltd Fortis Malar Hospital Ltd. Aditya Birla Nuva Ltd. Fortis Malar Hospital Ltd. Xpro India Ltd Great Eastern Energy Ltd Adayar Gate Hotel Ltd.
K Bharathan 15.04.1960 Indian 26.12.2003 ACA
Audit Committee, Compensation Committee and Remuneration Committee Shareholders’/Investors’ Grievance Committee Ponni Sugars (Erode) Limited.
Membership / Chairmanship in other Companies
No Director is related to any other Director on the Board in terms of the de?nition of relative given under the Companies Act, 1956
REMUNERATION TO DIRECTORS Name of the Director (s) V S Rao P Murari K Bharathan Reji Abraham Satish Chandra Gupta K M Jayarao P Venkateswaran C P Gopalkrishnan Consolidated Salary ---48,00,000 --48,00,000 48,00,000 Perquisites and other benefits ---15,26,400 --15,95,520 15,95,520 Commission --------Amount in Rupees Sitting Fees 59,000 59,000 84,000 -10,000 30,000 --Total 59,000 59,000 84,000 63,26,400 10,000 30,000 63,95,520 63,95,520
•
Sitting fees for the meetings attended by Mr. Jayarao was paid to the institution M/s ICICI Bank Ltd. All Board members and senior management personnel have af?rmed the compliance with the code of conduct. A declaration signed by the Managing Director to this effect is enclosed at the end of this report. II. COMMITTEES OF THE BOARD The Board has constituted committees of Directors to deal with matters which need quick decisions and timely monitoring of the activities falling within the terms of reference. The Board Committees are as follows:
REMUNERATION TO NON-EXECUTIVE DIRECTORS No remuneration, other than sitting fees and other expenses (travelling, boarding and lodging incurred for attending the Board/ Committee meetings) were paid to the non-executive Directors in 2011-12 Code of Conduct The Board has laid down a code of conduct for all Board Members and senior management of the Company. The code of conduct is available on the website of the Company, www.abanoffshore .com 36
A.
AUDIT COMMITTEE
Composition and Attendance
Name V. S. Rao Category No. of Meeting Attended 3 3 4 1 1
Terms of Reference The Audit Committee’s Power and responsibilities include the following functions: • Overseeing of the company’s ?nancial reporting process and the disclosure of its ?nancial information to ensure that the ?nancial statement is correct, suf?cient and credible. Recommending to the Board, the appointment, reappointment and if required, the replacement or removal of the statutory auditor and the ?xation of audit fees and approval of payment to statutory auditors for any other services rendered by the them. Reviewing with the management, the annual ?nancial statements before submission to the Board for approval, focusing to primarily on: Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 b) any changes in accounting policies and practices c) Major accounting entries based on exercise of judgment by management d) quali?cations in draft audit report e) signi?cant adjustments made in the ?nancial statements arising out of audit ?ndings f) The going concern assumption g) Compliance with accounting standards h) Compliance with Stock Exchange and legal requirements concerning ?nancial statements i) Disclosure of any related party transactions i.e., Transactions of material nature with their subsidiaries, promoters, directors, management or their relatives etc., that may have potential con?ict with the interests of company at large. Its scope also included a review with management performance of statutory and internal auditors, adequacy of internal controls, the adequate structure and staf?ng of the internal audit function, reporting structure coverage and frequency of internal audit j) Discussion with internal auditors on signi?cant ?ndings and follow up there on k) Reviewing the ?ndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. l) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any areas of concern. m) Investigating the reasons behind substantial default in the event of non payments to shareholders
•
Chairman (upto 25.01.2012) P. Murari Chairman (from 31.01.2012) K. Bharathan Member K.M.Jayarao Member (from 31.01.2012) P. Venkateswaran Member (from 31.01.2012)
Mr.P.Murari was appointed as Chairman of Audit Committee consequent to resignation of Mr.V.S.Rao. Executives of Accounts Department, the Statutory and Internal Auditors were invited to attend the Audit Committee Meetings The Chairman of the Audit committee was present at the Last Annual General Meeting B. SHAREHOLDER’S / INVESTORS’ GRIEVANCE COMMITTEE
•
a)
The Company’s Shareholders / Investor Grievance Committee monitored and redressed shareholder complaints relating to share transfer, the non-receipt of Annual Report and dividend. The Committee met 4 times during the year on 26.05.2011, 05.08.2011, 08.11.2011 and 31.01.2012 Composition and Attendance
Name Mr. K. Bharathan Mr. P. Venkateswaran Mr. C.P. Gopalkrishnan Category No. of Meetings attended Chairman Member Member 4 4 4
The Company received 32 Complaints from shareholders which were answered and resolved, there were no pending complaints at the beginning or at the end of the year. Name and Designation of Compliance Of?cer: Mr. C.P. Gopalkrishnan, Deputy Managing Director & Company Secretary. C. COMPENSATION COMMITTEE
The Compensation Committee has been formed in the year 2005 with the following powers: a) Identi?cation of Classes of employees entitled to participate in the Employee Stock Option Scheme (ESOS) and the quantum of option to be granted under ESOS per employee and in aggregate. Conditions under which option vested in employees shall lapse. The exercise period within which the employee should exercise the option granted and the conditions where the granted options will lapse on failure to exercise the option within the exercise period. 37
Reviewing with the Management the annual ?nancial statements of the Indian Subsidiary Company 4 meetings of Audit Committee were held during the year ended 31st March 2012 on the following dates: 26.05.2011, 05.08.2011, 08.11.2011 and 31.01.2012 Mr. C. P. Gopalkrishnan, Deputy Managing Director & Secretary, is the Secretary of the Committee.
b) c)
d)
Speci?ed time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee, the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period. The procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of corporate actions such as rights issues, bonus issues, merger, sale of division and other. Grant, vest and exercise of option in case of employee who are on long leave. Framing suitable policies and systems to ensure that there is no violation of Securities and Exchange Board of India (Insider Trading) Regulations,1992 and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations 1995, by any employee
h)
Monitoring and from time to time altering ESOS 2005
The details of options under the Employee Stock Option 2005 (ESOS 2005) are given below: Maximum number of options that may be granted under the scheme is 18,44,000 equity shares of Rs.2/- each - Options granted during the year NIL (upto Previous Year: 4,43,200 Equity Shares of Rs.2/- each) - Options lapsed during the year 78,570 Equity Shares of Rs.2/- each (Upto Previous Year: 40,210 Equity Shares of Rs.2/- each) - Options exercised during the year: Nil (upto Previous Year: 95,130 Equity Shares of Rs.2/- each) Outstanding at the end of the year: 2,29,290 Equity Shares of Rs.2/- each (upto Previous Year: 3,07,860 Equity Shares of Rs.2/each), Options yet to be granted under the scheme: 15,19,580 Equity Shares of Rs.2/- each (Previous year: 14,41,010/- Equity Shares of of Rs.2/- each). There was no committee meeting during the year.
e)
f) g)
REMUNERATION COMMITTEE: The Company has set up a Remuneration Committee during the year. Terms of reference: (i) (ii) To recommend /review the remuneration payable to Managing Director and Whole time Directors based on their performance and defined assessment criteria. Any other matter relating to remuneration payable to Managing Director and Whole Time Directors.
Remuneration Policy: The remuneration policy of the company is directed towards rewarding performance, based on review of achievements on a periodic basis. The remuneration policy is in consonance with the existing industry practice. Composition and Attendance Name Mr. P.Murari Mr. K.Bharathan Mr. K.M.Jayarao Category Chairman Member Member No. of Meetings attended 1 1 1
III. Subsidiary Company The Indian subsidiary of the Company does not come under the purview of the material non-listed subsidiary. IV. GENERAL BODY MEETINGS The details of the date and location of the last three Annual General Meetings are given below:
Annual General Meeting Day and Date Time Venue
25th Annual General Meeting*** Wednesday 28.09.2011 24th Annual General Meeting** 23rd Annual General Meeting* Friday 24.09.2010 Wednesday 16.09.2009
11.00 A M Narada Gana Sabha Trust (Sathguru Gnandanda Hall), T.T.K Road, Chennai 600 018. 11.00 A.M Mini Hall, Music Academy No.168(old No.306), T.T.K Road, Royapettah, Chennai-600 014 11.00 A.M Mini Hall, Music Academy No.168(old No.306), T.T.K Road, Royapettah, Chennai-600 014
*** Five Special Resolutions were passed and No Postal Ballot were used / invited for voting. ** Three Special Resolutions were passed and No Postal Ballot were used / invited for voting. * Three Special Resolutions were passed. No Postal Ballot were used / invited for voting. A Summary of the items of business approved by the members as Special Resolutions, in the last three AGMs is given hereunder. 38
1.
*** AGM held on 28th September 2011 a. Auditors appointment b. Re-appoinment of Mr. P. Venkateswaran as Deputy Managing Director of the Company for a period of 5 years from 1.8.2011 to 31.07.2016. c Re-appoinment of Mr. C.P. Gopalkrishnan as Deputy Managing Director of the Company for a period of 5 years from 1.8.2011 to 31.07.2016. d. Raising fund through issue of FCCBs, GDRs, ADRs, etc e. Issue of equity related securities to QIBs **AGM held on 24th September 2010 a. Auditors appointment b. Raising fund through issue of FCCBs, GDRs, ADRs, etc c. Issue of equity related securities to QIBs *AGM held on 16th September 2009 a. Auditors appointment. b. Raising fund through issue of FCCBs, GDRs, ADRs, etc c. Issue of equity related securities to QIBs CEO /CFO CERTIFICATION VII. Means of Communication
2.
3.
V.
As required by Clause 49 V of the Listing Agreement, the CEO and CFO Certi?cation of the Financial Statement, the Cash Flow Statement and the Internal Control Systems for ?nancial reporting are enclosed at the end of this report. VI. DISCLOSURES Related Party Disclosure There has been no materially signi?cant related party transaction (transactions of a material nature) with the Company’s Subsidiaries, promoters, management, Directors or their relatives etc.,that may have a potential con?ict with the interest of the Company at large. Please refer Balance Sheet Notes to Accounts for details of related party transactions Details of Non-compliance No penalties, strictures were imposed on the Company by Stock Exchanges in India or SEBI or any statutory authority on any matter related to the Capital Market during the last 3 years VIII. GENERAL INFORMATION FOR SHAREHOLDERS
Financial Calendar Financial Year 1st April 2012 to 31st March 2013 Board meeting for considering the accounts and Dividend Posting of Annual Report Book closure dates Last date for the receipt of proxy forms Twenty Sixth Annual General Meeting Venue Time Dividend payment date Probable date of dispatch of dividend warrants Board Meeting to consider unaudited results for the ?rst 3 quarters of the ?nancial year 2012-2013 Results of the quarter ended on 30th June 2012 Results of the quarter ended on 30th September 2012 Results of the quarter ended on 31st December 2012
A timely disclosure of consistent, comparable, relevant and reliable information on corporate ?nancial performance is at the core of good governance. Towards this end, Quarterly un-audited ?nancial results were published in Business Standard (English) and Makkal Kural (Vernacular language). The results were also displayed on the company’s web site, www.abanoffshore.com The presentations made by the Company to Financial Institutions and others were posted on the website, www.abanoffshore.com The Company also regularly posts information relating to its Financial Results and Shareholding Pattern on Corp ?ling. Management Discussion and Analysis forms Part of the Annual Report.
30.05.2012 On or before 20.08.2012 14.09.2012 – 21.09.2012 18.09.2012 21.09.2012 Narada Gana Sabha Trust 314, T T K Road, Chennai - 600 018 10.15 a.m. On or after 21.09.2012 On or after 21.09.2012 On or before 14.08.2012 On or before 15.11.2012 On or before 15.02.2013
39
Listing on Stock Exchanges a. Equity shares of the Company are listed on the following Stock Exchanges Madras Stock Exchange Limited Exchange Building Post Box No.183, 11 Second Line Beach Chennai – 600 001 Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers 21st Floor, Dalal Street Mumbai – 400 001 National Stock Exchange of India Limited Exchange Plaza 5th Floor, Plot No :: C/1 G Block, Bandra – Kurla Complex Bandra (E) Mumbai 400 051 The listing fees for the Financial Year 2012-13 were paid to the Stock Exchanges in India where the Company’s Equity and Preference shares are listed. STOCK CODES:
EQUITY SHARES:
Madras Stock Exchange Limited Bombay Stock Exchange Limited National Stock Exchange of India Limited ISIN No. for Dematerialised shares
ABAN 523204 ABAN INE421A01028
The Non Convertible Cumulative Redeemable Preference Shares are listed on the Bombay Stock Exchange Limited. 700099 – 10,50,00,000 – 8% p.a. Non Convertible Cumulative Redeemable Preference Shares 700129 – 5,50,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares 700130 – 4,00,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares 700131 – 6,10,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares ISIN No. of 105,00,00,000 - 8% p.a. Non convertible Cumulative Redeemable Preference Shares INE 421A04014 ISIN No of 20,00,00,000 - 9.25% p.a. Non Convertible Cumulative Redeemable Preference shares INE421A04055 ISIN No of 4,00,00,000 - 10% Non Convertible Cumulative Redeemable Preference shares INE421A04063 ISIN No of 5,50,00,000 - 10% Non Convertible Cumulative Redeemable Preference shares INE421A04071 ISIN No of 6,10,00,000 - 10% Non – Convertible Cumulative Redeemable Preference shares INE421A04089 Care Rating Credit Analysis & Research Ltd. (CARE) has revised the ratings for the Non-Convertible Cumulative Redeemable Preference Shares (CRPS) issued by the Company. The revised ratings stands at ‘CARE C (RPS)’ [C (Redeemable Preference Shares)]. INVESTOR’S HELP DESK Company’s Registered Office Address M/s Aban Offshore Limited Janpriya Cres 113 Pantheon Road Egmore Chennai – 600 008 Phone: 91-44-2819 5555 Fax: 91-44-2819 5527 Email Id: [email protected]
40
Registrar and Share Transfer Agent (Both physical and Demat Mode) M/s Cameo Corporate Services Ltd., Unit : Aban Offshore Ltd. Subramanian Buildings 1Club House Road Chennai -600 002. Phone: 91-44-28460390 Fax: 91-44-28460129 Investors’ complaints are to be addressed to the Registrar and Share Transfer Agents. Shareholders’ rights: The Half-Yearly declaration of the financial performance (including a summary of the significant events in last six months) should be sent to the households of each shareholder. As the Company’s half-yearly results are published in English and Tamil newspapers, the same are not sent to the households of the shareholders of the Company. Share Transfer System Presently the share transfers which are received in physical form are processed and the share certificates are returned within a period of 15 days from the date of receipt, subject to documents being valid and complete in all respects. The Company delegated the authority to approving transfer, transmission etc., of the Company securities to the Company Secretary / Officer of the Company. A summary of transfer / transmission of securities of the Company so approved are placed in the subsequent Board Meeting for ratification. The Company obtains certificate from Mr.G. Ramachandran Company Secretary in Practice for compliance of Listing Agreement provisions and submit the same to the Stock Exchanges where the Company’s shares are listed. Liquidity The Company’s Equity Shares are among the most liquid and actively traded shares on the Indian Stock Exchanges more specifically in National Stock Exchange of India Ltd and Bombay Stock Exchange Limited. The Company’s Non convertible Cumulative Redeemable Preference Shares are listed in the Bombay Stock Exchange Limited. Dematerialisation of shares 97.51 % of Equity shares of the Company have been dematerialized as at 31st March, 2012. The company has entered into agreement with both National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) whereby share holders have an option to dematerialize their shares with either of the depositories. Plant Locations DRILLING LOCATIONS as at 31 March, 2012 S.No 1. 2. 3. 4. 5. 6. 7. WIND ENERGY DIVISION The Company has installed and operates 165 Wind Energy Generators at Nagercoil, Tamil Nadu. Whistleblower Policy The Company does not have a Whistle Blower Policy. Even then no employee has been denied access to the Audit Committee proceedings. Categories of shareholders as on 31st March 2012 Category Promoters Collaborators FIIs, NRIs/OCB Mutual Funds, FIs, Banks Bodies Corporate Public Total Number of folios 6 1 2,627 24 1,712 1,67,500 1,71,870 Number of shares 1,52,18,791 83,28,750 54,55,471 2,03,118 20,51,426 1,22,58,959 4,35,16,515 % 34.97 19.14 12.54 0.47 4.71 28.17 100.00 RIGS Aban II Aban III Aban IV Aban V Aban VI Tahara Aban Ice LOCATION East Coast of India Bombay High Bombay High Middle East Middle East East Coast of India Bombay High
41
Share Price Volume The monthly high and low quotation and the volume of shares traded on BSE & NSE are as under: Month High April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 718.90 641.00 600.90 550.00 497.95 422.00 439.45 450.00 377.40 458.00 571.50 526.45 Bombay Stock Exchange Low 615.80 517.05 490.95 486.00 333.25 348.00 335.70 340.00 324.45 327.70 444.60 405.10 Volume 49,02,686 36,90,212 36,49,868 41,19,280 36,24,513 32,54,750 28,53,157 35,85,538 27,53,802 44,69,731 75,21,955 45,46,185 High 719.10 640.45 601.00 549.95 497.95 421.90 439.50 450.70 398.00 457.80 571.90 527.00 National Stock Exchange Low 617.00 527.80 490.10 486.00 333.00 348.10 331.80 339.35 323.50 326.70 444.70 405.55 Volume 1,84,07,930 1,51,25,807 1,41,72,725 1,65,29,018 1,66,35,860 1,59,45,194 1,40,20,180 1,85,46,811 1,47,76,186 2,03,33,892 3,19,75,874 2,14,52,257
42
Distribution of shareholdings as on 31st March 2012 Category (Shares) 1-100 101.500 501-1,000 1,001-2,000 2,001-3,000 3,001-4,000 4,001-5,000 5,001 -10,000 10,001 & above Total Folio (s) Numbers 1,49,046 18,952 2,365 861 247 106 69 93 131 1,71,870 % 86.72 11.03 1.38 0.50 0.14 0.06 0.04 0.05 0.08 100.00 Shares Numbers 40,86,709 43,26,981 18,01,875 12,58,226 6,23,723 3,73,459 3,19,735 6,44,940 3,00,80,867 4,35,16,515 % 9.39 9.95 4.14 2.89 1.43 0.86 0.73 1.48 69.13 100.00
43
Declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Business Conduct Guidelines (Code of Conduct). In accordance with Clause 49 1D of the Listing Agreement with the Stock Exchanges, I hereby confirm that, all the Directors and the Senior Management Personnel of the Company have affirmed compliance with the Business Conduct Guidelines (Code of Conduct) as applicable to them, for the Financial Year ended on 31st March 2012. Aban Offshore Limited Chennai 30.05.2012 Reji Abraham Managing Director
Certificate by the Chief Executive Officer/Chief Financial Officer pursuant to Clause 49 of the Listing Agreement. We Reji Abraham and C.P. Gopalkrishnan certify that a) We have reviewed the financial statements and cash flow statements of M/s. Aban Offshore Limited (“the Company”) for the year ended 31st March 2012 and to the best of our knowledge and belief: i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations. b) c) d) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct. we accept responsibility for establishing and maintaining internal control and that we have evaluated the effectiveness of internal control systems of the Company. There are no deficiencies in the design or operation of internal control. we have indicated to the auditors and the Audit Committee that there are no i) Significant changes in the internal control during the year. ii) Significant changes in accounting policies during the year. iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system. Aban Offshore Limited. Chennai 30.05.2012 C.P. Gopalkrishnan Deputy Managing Director & Secretary Reji Abraham Managing Director
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AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
TO THE MEMBERS OF ABAN OFFSHORE LIMITED
We have examined the compliance of conditions of Corporate Governance by Aban Offshore Limited for the year ended on 31st March 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to review of procedures and implementation thereof, adopted by the Company, for ensuring the compliance of the conditions of Corporate Governance as prescribed in clause 49 of the above mentioned Listing Agreement. It is neither an audit nor an expression of opinion on the ?nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement. We state that no investor complaints were pending for a period exceeding one month against the Company as certi?ed by the Registrars and Share Transfer Agents of the Company based on the records maintained by them. We further state that such compliance is neither an assurance as to the future viability of the Company nor the ef?ciency or effectiveness with which the Management has conducted the affairs of the Company. For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012
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Aban Offshore Limited
AUDITORS’ REPORT
TO THE SHAREHOLDERS OF ABAN OFFSHORE LIMITED We have audited the attached Balance Sheet of M/s Aban Offshore Limited, as at 31st March 2012, Statement of Pro?t and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by the management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as follows: 1 As required by the Companies (Auditor’s Report) Order, 2003 (the ‘Order’) issued by the Central Government of India in terms of sub–section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters speci?ed in paragraphs 4 and 5 of the said Order. Further to our comments in the annexure referred to in paragraph 1 above, we report that: a b c d e We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of those books; The Balance Sheet, Pro?t and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Pro?t and Loss account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; Based on the representations made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March 2012 prima-facie disquali?ed from being appointed as director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date; In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial statements read together with the Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; in the case of the Statement of Pro?t and Loss, of the Loss for the year ended on that date; and
2
f
iii. in the case of the Cash Flow Statement, of the cash ?ows for the year ended on that date. For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012 46
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ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 1 of our report of even date) i (a) (b) The Company has maintained proper records showing full particulars including quantitative details and situation of ?xed assets. As explained to us, the ?xed assets have been physically veri?ed by the Management during the year in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. As explained to us no material discrepancies have come to the notice on such physical veri?cation. The Company has not disposed off any substantial part of ?xed assets during the year so as to affect its going concern status. As explained to us the inventories have been physically veri?ed during the year by the Management. In our opinion the frequency of veri?cation is reasonable. In our opinion and according to the information and explanations given to us, the procedures of physical veri?cation of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained records of inventory. The discrepancies noticed on veri?cation between the physical stocks and the book records have been dealt with in the books of account. The Company has not granted any loan secured or unsecured to companies, ?rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year, except unsecured loans to its wholly owned foreign subsidiary as shown below:
Unsecured Loan granted during the year Rupees in Millions Aban Holdings Pte., Ltd., Singapore 1858.30 Amount Outstanding including interest receivable and exchange difference at the end of the year Rupees in Millions 2942.68 Maximum amount outstanding including interest receivable during the year Rupees in Millions 7455.74
(c) ii (a) (b)
(c) iii (a)
Company
(b) (c) (d) (e)
Company
The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie, not prejudicial to the interest of the Company. The repayment of principal and payment of interest is on “on demand” basis as per the loan agreement. The loan given by the Company to its wholly owned foreign subsidiary company is repayable on demand and therefore the question of overdue amount does not arise. The Company has taken loan from Companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year, as shown below:
Unsecured Loan taken during the year Rupees in Millions Amount Outstanding including interest payable at the end of the year Rupees in Millions 1058.1 234.5 Maximum amount outstanding including interest payable during the year Rupees in Millions 1510.1 234.5
Aban Investments Private Limited Aban Ventures Private Limited
NIL 231.8
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(f) (g) iv
The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interest of the Company. The repayment of principal during the year and payment of interest is as per stipulations. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of ?xed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that need to be entered into the Register maintained under the said Section have been entered in the said Register. In our opinion and according the information and explanations given to us, the transactions made in pursuance of contracts or arrangements referred to in (a) above and exceeding the value of rupees ?ve lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.
v
(b)
vi vii viii
The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 or any other relevant provisions of the Act and the rules made there under. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. The Central Government has prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the wind power generating activity of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the same. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Customs Duty, Sales Tax, Value Added Tax, Service Tax, Cess and other material statutory dues applicable to it. However minor delays have been noted during the year in the remittance of Service Tax. We are informed that the Employees’ State Insurance Scheme is not applicable to the Company. According to the information explanations given to us, no undisputed amounts payable in respect of above were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable. According to the information and explanations given to us, there are no dues of Income Tax, Customs Duty, Sales Tax, Value Added Tax, Service Tax and Cess, which have not been deposited with appropriate authorities on account of any dispute.
ix
(b)
x
The Company does not have accumulated losses at the end of the ?nancial year. The Company has incurred cash losses during the ?nancial year covered by the audit though in the immediately preceeding ?nancial year the Company has not incurred cash loss. (a) Based on our veri?cation and according to the information and explanations given to us,we have noted that the company has rescheduled 10 term loans taken by the company from banks that have aggregate value of Rs.17,746.03 Million as at 31st march 2012. We have noted default in repayment of term loan instalments and interest during the year which are due to Banks and a Financial Institution. The unpaid overdue loan instalments and interest during the year in this regard as at 31st march 2012 were Rs. 159.04 Million and Rs. 357.42 Million respectively. The company has since paid Rs.132.84 Million of over due instalment and Rs.146.5 Million of over due interest due to Banks and a Financial Institution before the date of our report.
xi
(b)
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( c) xii xiii xiv xv
During the year, the Company has repaid the amount of outstandings on account of Foreign Currency Convertible Bonds in full on the due date.
Based on our examination of records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company is not a chit fund or a nidhi/ mutual bene?t fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company. The Company has given guarantees for loans taken from banks by a subsidiary of its wholly owned foreign subsidiary. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company. In our opinion and according to the explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were obtained. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short-terms funds towards long-term investment.
xvi xvii
xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year. xix xx xxi No debentures have been issued by the Company during the year and hence, the provisions of clause 4 (xix) of the Order are not applicable to the Company. During the year the Company has not raised money by way of public issue. Hence the provisions of clause 4 (xx) of the Order are not applicable to the Company. During the course of our examination of the books of account, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of any such case by the management.
For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI - Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012
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Balance Sheet
As at 31st March 2012
Note No: Equity and Liabilities Shareholders’ funds Share Capital Reserves and Surplus Non - current liabilities Long - term borrowings Deferred tax liabilities (net) Long - term provisions Current liabilities Short - term borrowings Trade payables Other current liabilities Short - term provisions TOTAL Assests Non - Current Assets Fixed Assests Tangible assests Capital work-in-progress Non - current investments Long - term loans and advances Current Assets Inventories Trade receivables Cash and bank balances Short - term loans and advances Other current assests TOTAL Summary of signi?cant accounting policies 2.1 The accompanying notes 1 to 40 are an integral part of the ?nancial statements As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 P.Murari Vice Chairman For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director As at 31st March, 2012 Rs. Millions As at 31st March, 2011 Rs. Millions
3 4
2,897.04 17,849.59 20,746.63
3,347.04 20,223.59 23,570.63 19,973.40 291.98 12.70 20,278.08 3,772.83 2,693.18 5,391.94 1,016.43 12,874.38 56,723.09
5 6 7
19,086.27 268.61 18.18 19,373.06
8 9 9 7
5,570.69 3,308.25 2,438.25 480.72 11,797.91 51,917.60
10 11 12 13 14.1 15 12 14.2
5,738.65 245.11 39,471.29 32.27 45,487.32 814.92 2,209.62 279.28 3,116.24 10.22 6,430.28 51,917.60
4,798.83 175.09 39,.590.69 35.34 44,599.95 773.70 2,646.97 810.04 7,890.22 2.21 12,123.14 56,723.09
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Statement of
Pro?t and Loss Account
Year ended 31st March, 2012 Rs. Millions Year ended 31st March, 2011 Rs. Millions
For the year ended 31st March 2012
Note No: Income Revenue from Operations Other Income Total revenue (I) Expenses Consumption of stores, spares, power and fuel Employee benefits expense Finance costs Depreciation and amortization expense Other Expenses Total (II) Profit / (loss) before tax Tax expenses Current tax Deferred tax Total tax expense Profit / (loss) for the year Earnings per equity share of Rs. 2 each(31 st March 2011: Rs. 2 each) Basic Computed on the basis of profit / (loss) for the year Diluted Computed on the basis of profit / (loss) for the year Summary of signi?cant accounting policies The accompanying notes 1 to 40 are an integral part of the ?nancial statements As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 2.1 23 18 19 20 21 22 16 17
6,385.28 758.85 7,144.13 474.33 739.18 3,662.53 986.10 2,512.68 8,374.82 (1,230.69) (23.38) (23.38) (1,207.31)
11,907.43 765.70 12,673.13 697.31 785.85 3,354.76 1,148.07 3,131.38 9,117.37 3,555.76 1,360.00 (143.70) 1216.30 2,339.46
(34.49) (34.24)
46.32 46.05
P. Murari Vice Chairman
For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Cash Flow Statement
For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Cash ?ow from operating activities: Pro?t before tax from continuing Operations Pro?t before tax Non cash adjustment to reconcile pro?t before tax to net cash ?ows Depreciation / amortization on continuing operations Loss / (pro?t) on sale of ?xed assests Provision for Employee Bene?ts Unrealised foreign exchange Loss Net gain on sale of Non Current investments Interest expenses Interest income Dividend income Operating pro?t before working capital changes Movements in working capital: Increase / (Decrease) in trade payables Increase / (Decrease) in other current liabilities (Decrease) / Increase in trade receivables (Decrease) / Increase in inventories (Decrease) / Increase inlong term loans and advances (Decrease) / Increase in short term loand and advances Cash generated from (used in) operations Direct taxes paid (net of refunds) Net cash ?ow from / (used in) operating activities (A) Cash ?ow from Investing activities Purchase of ?xed assests Capital advances Proceed from sale of ?xed assests Proceed from sale of non - current investments Proceed from sale / maturity of current investment Purchase of current investments Interests received Dividend received Net cash ?ow from / (used in) Investing activities (B) Cash ?ow from ?nancing activities Proceeds from issuance of share captial Redemption of preference shares Redemption of foreign currency convertiable bonds with premium Repayment of long term borrowings Proceeds from short term borrowings Repayment of short term borrowings Repayment of loan by foreign subsidiary Interest paid Dividends paid on equity shares Dividends paid on preference shares (450.00) (3,592.56) (887.13) 1,970.51 (276.25) 5,338.40 (3,136.53) (156.66) (278.90) 8.08 (3,012.08) 1,420.14 (3,132.45) (156.61) (278.90) (1,995.95) (10.77) 427.09 350.00 (350.00) 2.55 1.15 (1,575.93) (367.45) 5.89 12,393.07 (12,331.33) 18.04 19.66 (262.12) 613.18 (497.45) 452.25 (38.63) 3.07 275.75 3,098.57 (514.64) 2,583.93 (3.84) (1022.30) (114.63) 6,675.56 (976.52) 5,699.04 986.10 9.63 (504.23) (307.69) 3,575.35 (236.93) (1.15) 2,290.39 1,148.07 (4.06) 6.95 463.93 3,354.76 (689.42) (19.66) 7,816.33 (1,230.69) (1,230.69) 3,555.76 3,555.76 2010-2011Year ended 31st March 2011 Rs. Millions
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For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Tax on equity dividend paid Tax on preference dividend paid Net cash ?ow from (used in) ?nancing activities (C) Net increase / decrease in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks on current account On deposit account unpaid dividend account* Total cash and cash equivalents (note 17) Summary of signi?cant accounting policies 2.1 (25.41) (45.24) (1539.77) (531.77) 1.01 810.04 279.28 0.22 124.62 147.31 7.13 279.28 2010-2011Year ended 31st March 2011 Rs. Millions (26.62) (47.40) (5225.84) 211.08 (31.65) 630.61 810.04 0.71 647.10 154.23 8.00 810.04
Cash Flow Statement
*The company can utilize these balances only towards settlement of the respective unpaid dividend liability. As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director
P. Murari Vice Chairman
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Notes to Financial Statements for the year ended 31st March 2012 1. Corporate Information Aban Offshore Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the business of providing offshore drilling and production services to companies engaged in exploration, development and production of oil and gas both in domestic and international markets. The Company is also engaged in the ownership and operation of wind turbines for generation of wind power in India. 2. Basis of preparation The ?nancial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these ?nancial statements to comply in all material respects with the Accounting Standards noti?ed under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The ?nancial statements have been prepared on an accrual basis and under the historical cost convention. All the assets and liabilities have been classi?ed as current and non-current as per the Company’s normal operating cycle and other criteria set out in the RevisedSchedule VI to the Companies Act,1956. Based on the nature of business operations, the Company has ascertained its operating cycle as 12 months for the purpose of current and non- current classi?cation of assets and liabilities. The accounting policies adopted in the preparation of ?nancial statements are consistent with those of the previous year. 2.1 Summary of signi?cant accounting policies a. Change in accounting policy Presentation and disclosure of ?nancial statements During the year ended 31st March 2012, the revised Schedule VI noti?ed under the Companies Act,1956, has become applicable to the Company, for preparation and presentation of its ?nancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the ?nancial statements. However, it has signi?cant impact on presentation and disclosures made in the ?nancial statements. The Company has also reclassi?ed the previous year ?gures in accordance with the requirements applicable in the current year. b. Use of estimates The preparation of ?nancial statements in conformity with the Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result on the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. c. Tangible ?xed assets Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of ?xed asset is added to its book value only if it increases the future bene?ts from existing asset beyond its previously assessed standard of performance. All other expenses on existing assets, including day to day repair and maintenance expenditure are charged to the Statement of Pro?t and Loss for the period during which such expenses are incurred. Gains or losses from derecognition of ?xed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Pro?t and Loss when the assets are derecognized.
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Notes to Financial Statements for the year ended 31st March 2012 d. Depreciation on tangible ?xed assets Depreciation on ?xed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management or those prescribed under the Schedule XIV of the Companies Act, 1956, whichever is higher. The Company has used the following rates to provide depreciation on its ?xed assetsFixed Assets Buildings Drilling Rigs Drillship Of?ce Equipment Computers WindMills Furniture and ?xtures Vehicles Rates (SLM) 1.63% 3.34% * 3.34% * 13.91% 16.21% 10.00% 6.33% 9.50%
*Pursuant to noti?cation of Government of India, Ministry of Corporate Affairs dated 14th December 2011, the rate of depreciation on Rigs has been reduced to 3.34% p.a. on straight line basis. The depreciation on rigs and drillship has been charged accordingly with effect from the date of such noti?cation. e. Borrowings costs Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent that they are regarded as adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. f. Impairment of tangible assets An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Income in the year when the asset is identi?ed as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimate of recoverable value. g. Investments Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classi?ed as current investments. All other investments are classi?ed as long-term investments. Current investments are carried in the ?nancial statements at lower of cost or fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Pro?t and Loss. h. Inventories Inventory of stores, spares and fuel is valued at cost based on a weighted average cost/ ?rst-in-?rst-out basis.
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Notes to Financial Statements for the year ended 31st March 2012 i. Revenue recognition Income from drilling and production services is recognized as earned, based on contractual daily rates billed on monthly basis.Mobilization /demobilization fees received, if any, is recognized as earned in the year of mobilization/demobilization. Income from wind power generation is recognized based on the number of units of power generated every month at contracted rates. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Pro?t and Loss. Dividend income is recognized when the company’s right to receive dividend is established by the reporting date. j. Foreign currency transactions and balances Initial recognition Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Realized gains and losses on foreign exchange transactions during the year are recognized in the Statement of Pro?t and Loss. Exchange differences in respect of foreign currency loans/liabilities relating to ?xed assets are accounted in the Statement of Pro?t and Loss. Conversion Foreign currency current assets and current liabilities are translated at the exchange rates prevailing on the reporting date. In circumstances, where the rate prevailing on the reporting date is not stable/ highly volatile, monetary items shall be reported based on subsequent actual realization rate. Resulting gains / losses are recognized in the Statement of Pro?t and Loss. Non-monetary items such as investments, ?xed assets, denominated in foreign currency are translated at exchange rate prevailing on the date of transaction. Exchange differences All exchange differences are recognized as income or as expense in the Statemen of Pro?t and Loss during the period in which they arise. Forward exchange contracts/derivative contracts entered into to hedge foreign currency risk of an existing asset/liability The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Any pro?t or loss arising on cancellation or renewal of such forward contract is also recognized as income or as expense for the period under the respective head of account for the period.In respect of derivative contracts, gains / losses on any such contracts are recognized in the Statement of Pro?t and Loss. k. Retirement and other employee bene?ts
(a) Contribution to Provident Fund which is a de?ned contribution retirement plan is made monthly at a predetermined rate to the Provident Fund Authorities and is debited to the Statement of Pro?t and Loss on accrual basis. (b) Contribution to Superannuation Scheme which is de?ned contribution retirement plan is made annually at predetermined rate to insurance companies which administer the fund and debited to the Statement of Pro?t and Loss (c) The company makes annual contribution to Gratuity Funds administered by Insurance Companies, which is considered as de?ned bene?t plan. The present value of the de?ned bene?t is measured using the ‘Projected Unit Credit method with actuarial valuation being carried out at each Balance Sheet date by an independent valuer. Actuarial gain and losses are immediately recognized in the Statement of Pro?t and Loss. Amount of contribution, computed by the insurers is paid by the company and charged to Statement of Pro?t and Loss. No additional liability is anticipated under the scheme administered by the Insurance Companies. 56
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Notes to Financial Statements for the year ended 31st March 2012 (d) The Company makes provision for leave encashment based on actuarial valuation carried out by an independent actuary at the Balance Sheet date. l. Taxes on income The income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable in respect of income for the year. In accordance with the Accounting Standard-22 –Accounting for taxes on income issued by the Institute of Chartered Accountants of India, the deferred tax on timing difference between book pro?t and tax pro?t for the year is accounted based on the rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. However, deferred tax assets arising from timing difference are recognized to the extent of their virtual /reasonable certainty about its realizability in future years. m. Segment reporting Identi?cation of segments The Company’s operating businesses are organized and managed separately according to the nature of services provided with each segment representing strategic business unit that offers different services. Segment accounting policies The Company prepares its segment information in conformity with the accounting policies and presents the ?nancial statements of the Company as a whole. n. Earnings per share Basic earnings per share are calculated by dividing the net pro?t or loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net pro?t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. o. Provisions A provision is recognized when the company has a present obligation as a result of past event. It is probable that an out?ow of resources embodying economic bene?ts will be required to settle obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. The estimates are reviewed at each reporting date and adjusted to re?ect the current best estimates. p. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be con?rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an out?ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but disclose its existence in the ?nancial statements. q. Cash and cash equivalents Cash and cash equivalents for the purpose of the cash ?ow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 57
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Notes to Financial Statements for the year ended 31st March 2012 3. Share Capital
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Authorised shares (No. Millions) 2,500 (31 March 2011: 2,500 ) equity shares of Rs.2/- each 1000 (31 March 2011: 1000) Cumulative non convertible redeemable preference shares of Rs.10/- each Issued , subscribed and fully paid -up shares (No. Millions) Equity Shares: 36.88 (31 March 2011: 36.88) equity shares of Rs.2/- each 0.85 (31 March 2011: 0.85) equity shares of Rs.2/- each issued against conversion of foreign currency convertible bonds 0.09 (31 March 2011: 0.09 ) equity shares of Rs.2/- each issued against employee stock option scheme 5.69 (31 March 2011: 5.69) equity shares of Rs.2/- each issued against quali?ed institutional placement Shares Forfeited, 0.01(31 March 2011: 0.01) equity shares at Re 1/- each (A) Preference Shares: 77 (31 March 2011: 122) 8% non-convertible cumulative redeemable preference shares of Rs.10/-each 28 (31 March 2011: 28.00 @ 8%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 61 (31 March 2011: 61 @ 9%) 9% non-convertible cumulative redeemable preference shares of Rs.10/-each 95 (31 March 2011: 95 @ 9%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 20 (31 March 2011:20 @ 9.25%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each (B) TOTAL(A+B) 770.00 280.00 610.00 950.00 200.00 2,810.00 2,897.04 1,220.00 280.00 610.00 950.00 200.00 3,260.00 3,347.04 73.75 1.70 0.19 11.39 0.01 87.04 73.75 1.70 0.19 11.39 0.01 87.04 5,000.00 10,000.00 15,000.00 5,000.00 10,000.00 15,000.00
a.
Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31st March 2012 31st March 2011
Equity shares (A) of Rs 2 each At the beginning of the period Issued during the period-ESOP Outstanding at the end of the period
No. Millions Rs. Millions No. Millions Rs. Millions 43.51 43.51 87.04 87.04 43.50 0.01 43.51 87.02 0.02 87.04
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Notes to Financial Statements for the year ended 31st March 2012
31st March 2012 Preference shares (B) of Rs 10 each At the beginning of the period Issued during the period Redeemed during the period Outstanding at the end of the period Total Value of Outstanding Shares (A) +(B) 31st March 2011
No. Millions Rs. Millions No. Millions Rs. Millions 326.00 45.00 281.00 3,260.00 450.00 2,810.00 2,897.04 326.00 326.00 3,260.00 3,260.00 3,347.04
b.
Terms/ rights attached to equity shares The Company has only one class of equity shares having a face value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs3.60 (31st March 2011: Rs.3.60).
c.
Terms of redemption of Non-convertible Cumulative redeemable preference shares As on 31st March 2011, the terms and conditions of the Non-Convertible Cumulative redeemable preference shares were as under: • 150 Million 8% non- convertible cumulative redeemable preference shares will be redeemed at par on 16-06-2011, 16-062012 and 16-06-2013 in the ratio of 30:30:40 respectively. During the year 45 Million non-convertible redeemable preference shares which were due for redemption on 16-06-2011 were redeemed. • 156 Million 9 % non-convertible cumulative redeemable preference shares were originally scheduled for redemption at par at the end of the 5th year from the date of allotment of shares as per details given below: 55 Million shares to be redeemed on 29-12-2011 40 Million shares to be redeemed on 28-02-2012 61 Million shares to be redeemed on 30-03-2012 • 20 Million 9.25% non-convertible redeemable preference shares were originally scheduled for redemption at par on 03-08-2013 Pursuant to approval of the Board of Directors and with the consent of preference shareholders, the terms and conditions of the Non-Convertible Cumulative Redeemable Preference shares have been altered as under: • 55 Million 10% non-convertible cumulative redeemable preference shares will be redeemed at par on 29-12-2014 • 40 Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 28-02-2015 • 61Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 30-03-2015 • 20 Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 03-08-2016
d.
The company has reserved 1.84 Million equity shares of Rs.2 each for offering to employees under the Employee Stock Option Scheme (ESOS) (31st March 2011:1.84 Million equity shares of Rs.2 each )out of which 0.095 Million equity shares of Rs.2 each have been already allotted upto the balance sheet date under the scheme and included under the paid up capital (31st March 2011: 0.095 Million equity shares of Rs.2 each)(Refer note 25 for details)
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Notes to Financial Statements for the year ended 31st March 2012 e. Details of shareholders holding more than 5% shares in the company
31st March 2012 Equity shares of Rs.2 each fully paid Reji Abraham India Offshore Inc Aban Investments Private Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 31st March 2012 Preference shares of Rs.10 each fully paid 8% Non-Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Syndicate Bank Canara Bank Indian Overseas Bank Vijaya Bank Axis Bank Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.92% 31st March 2011 31st March 2011 No. Millions % holding in the class No. Millions % holding in the class
No. Millions % holding in the class No. Millions % holding in the class
10.50 17.50 14.00 17.50 42.00 101.50
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
15.00 25.01 20.00 25.01 60.00 145.02
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
9% and 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Indian Bank Vijaya Bank UCO Bank Indusind Bank Limited Yes Bank Limited
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Punjab National Bank Canara Bank Indian Overseas Bank
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Syndicate Bank Bank of India Central Bank of India Bank of Baroda Oriental Bank of Commerce 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Bank of India
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
20.00
100.00%
20.00
100.00%
As per the records of the company, including its register of shareholders/members and other declarations received from the shareholders regarding bene?cial interest, the above shareholding represents both legal and bene?cial ownerships of shares. 60
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Notes to Financial Statements for the year ended 31st March 2012 4. Reserves and Surplus
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Capital Reserve - as per last Balance Sheet Securities Premium Account Balance as per last ?nancial statements Add: on allotment under ESOS Less: amounts utilized towards redemption of foreign currency convertible bonds* 9,510.90 9,502.69 8.21 9,510.90 52.40 1,500.00 500.00 2,000.00 1,059.36 240.00 1,299.36 6,267.65 2,339.46 (500.00) (240.00) (156.66) (25.41) (252.24) (40.92) (475.23) 5,678.36 17,849.59 (156.66) (25.41) (278.90) (45.24) (1,246.22) 7,360.90 20,223.59 0.03 0.03
(691.46) 8,819.44
Investment Allowance Reserve (utilised) -as per last Balance Sheet Capital Redemption Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss
52.40 2,000.00 2,000.00
General Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss Surplus/(de?cit) in the statement of pro?t and loss Balance as per last ?nancial statements Pro?t/(loss) for the year Less: Appropriations Transfer to capital redemption reserve Transfer to general reserve Proposed equity dividend-Rs. 3.60 Per equity share (31st March 2011-Rs.3.60 Per equity share) Tax on proposed equity dividend Dividend on preference shares Tax on preference dividend Total appropriations Net Surplus/(de?cit) in the statement of pro?t and loss Total reserves and surplus * Premium on redemption of foreign currency convertible bond including withholding tax has been adjusted against the securities premium account
1,299.36 1,299.36 7,360.90 (1,207.31)
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Notes to Financial Statements for the year ended 31st March 2012 5. Long term borrowings
Non-current maturities Current maturities As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Term loans Rupee term loans from banks (secured) Rupee term loan from institution (secured) Other loans Hire purchase loan (secured) Foreign currency convertible bonds (unsecured) From a company (unsecured) The above amount includes Secured borrowings Unsecured borrowings Amount disclosed under the head "Other current liabilities" (Refer Note 9) Net Amount 18,535.24 500.00 0.43 -50.60 19,086.27 19,035.67 50.60 --19,086.27 18,218.56 750.00 4.84 -1,000.00 19,973.40 18,973.40 1,000.00 --19,973.40 305.12 319.74 3.89 -999.60 1,628.35 628.75 999.60 -(1,628.35) -1,393.66 250.00 4.56 2,901.10 500.00 5,049.32 1,648.22 3,401.10 -(5,049.32) --
1. a.
The rupee term loans from banks include the following: Term Loan of Rs.63 Million (31st March 2011:Rs.87.95 Million) from a bank carries interest @ 13% p.a. (31st March 2011:10.75% p.a.) The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Term Loan of Rs.2554.20 Million (31st March 2011:Rs.2721.07 Million) from a bank carries interest @ 14.50% p.a. (31st March 2011:11.00% p.a.). The loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Term Loan of Rs.2761.73 Million (31st March 2011:Rs.2862.53 Million) from a bank carries interest @ 13.50% p.a. (31st March 2011: 11.70% p.a.). The Loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Amount overdue on account of interest as on balance sheet date is Rs.63.94 Million for a period of 1 to 2 months. Amount since paid is Rs.32.86 Million. Term Loan of Rs.2707.30 Million (31st March 2011:Rs.2757.60 Million) from a bank carries interest @ 13.50% p.a. (31st March 2011:10.50% p.a.). The Loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs.Amount overdue on account of interest as on balance sheet date is Rs32.22 Million for a period of 1 to 2 months which is since paid. Term Loan of Rs. 900.10 Million (31st March 2011:Rs.945.10 Million) from a bank carries interest @ 13.40% p.a. (31st March 2011:12.00% p.a.). The Loan is repayable in 32 equal quarterly installments alongwith interest from 30th June 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs.Amount overdue on account of interest as on balance sheet date is Rs.21.17 Million for a period of 1 to 2 months and amount since paid is Rs.10.58 Million. Term Loan of Rs.49.52 Million (31st March 2011:Rs.167.10 Million) from a bank carries interest @ 13.75% p.a. (31st March 2011:13.00% p.a.). The Loan is repayable in 4 monthly installments alongwith interest from January 2012.The loan is secured by ?rst charge on windMills.Amount overdue on account of principal and interest as on balance sheet date is Rs.41.32 Million for a period of 1 to 3 months. Amount since paid is Rs.14.21Million.
b.
c.
d.
e.
f.
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Notes to Financial Statements for the year ended 31st March 2012 g. Term Loan of Rs.4859.60 Million (31st March 2011:Rs.4996.82 Million) from a bank carries interest @ 16.25% p.a. (31st March 2011:15.50% p.a.). The Loan is repayable in 32 equal quarterly installments alongwith interest from 30th June 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rigs, Floating Production Unit and second charge on drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.136.53 Million for a period of 1 to 2 months. Amount since paid is Rs.14.80 Million. Term Loan of Rs.1849.30 Million (31st March 2011: Rs.1924.49 Million) from a bank carries interest @ 15.00% p.a. (31st March 2011: 14.25% p.a.). The Loan is repayable in 96 monthly installments alongwith interest from 30th September 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.46.72 Million for a period of 1 to 2 months. Amount since paid is Rs.23.99 Million. Term Loan of Rs.1500.79 Million (31st March 2011:Rs.1499.80 Million) from a bank carries interest @ 15.00 % p.a. (31st March 2011:14.25% p.a.). The Loan is repayable in 32 quarterly installments alongwith interest from 29th January 2014. The loan is secured by Second charge on the speci?c offshore drill ship and drilling rig.Amount overdue on account of interest as on balance sheet date is Rs.37.25 Million for a period of 1 to 2 months. Amount since paid is Rs.19.14 Million. Term Loan of Rs.469.99 Million (31st March 2011:Nil) from a bank carries interest @ 15.25 % p.a. (31st March 2011:14.25% p.a.). The Loan is repayable in 13 quarterly installments alongwith interest from 30th June 2012. The loan is secured by First charge on the speci?c offshore drill rig of foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.11.88 Million for a period of 1 to 2 months. Amount since paid is Rs.6.11 Million. Term Loan of Rs.100 Million (31st March 2011:Rs. 499.69 Million) from a bank carries interest @ 15.00 % p.a. (31st March 2011:13.25% p.a.). The Loan is repayable in one installment along with interest from 28th February 2012. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship.Amount overdue on account of principal as on balance sheet date is Rs.100.00 Million for a period of 1 month that has been since paid. Term Loan of Rs.200.00 Million (31st March 2011:Rs. 250.15 Million) from a bank carries interest @ 16.00 % p.a. (31st March 2011:14.00% p.a.). The Loan is repayable in 20 quarterly installments alongwith interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship.
h.
i.
j.
k.
l.
m. Term Loan of Rs.350.00 Million (31st March 2011: Rs.399.98 Million) from a bank carries interest @ 16.00 % p.a. (31st March 2011:13.75% p.a.). The Loan is repayable in20 quarterly installments alongwith interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drillship. n. Term Loan of Rs.474.91Million (31st March 2011:Rs.499.82 Million) from a bank carries interest @ 14.75 % p.a. (31st March 2011: 13.25% p.a.). The Loan is repayable in 23 quarterly installments alongwith interest from 30th June 2012. The loan is secured by First charge on the speci?c offshore drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.5.68 Million for a period of 1 month. Rupee Term Loan from a Financial Institution Rupee Term loan from a ?nancial institution of Rs.819.74 Million (31st March 2011:Rs.1,000.00 Million) carries interest @ 13% p.a.(31st March 2011:13% p.a.). The loan is repayable in 16 quarterly installments along with interest from March 2012. The loan is secured by pari-passu ?rst charge on drill Ship and offshore drilling Rig. Amount overdue on account of interest as on balance sheet date is Rs.19.73 Million for a period of 3 months that has been since paid. Hire purchase loan for vehicles availed from a non-banking ?nance company of Rs.4.32 Million (31st March 2011:Rs.9.41 Million) secured by hypothecation of vehicles. The company has an outstanding unsecured loan from a company amounting to Rs.1050.20 Million (31st March 2011:Rs.1500 Million) at 14.50% p.a. repayable in 12 yearly installments alongwith interest. Foreign currency convertible bonds (FCCB) –The Company had issued 1161 unsecured zero coupon FCCB of Japanese Yen 10,000,000 each aggregating to Japanese Yen 11,610 Million in April 2006.Unless previously redeemed, converted or repurchased and cancelled, the company had to redeem each bond at 121.811% of its principal amount on 15th April 2011, being the maturity date. Until this date, 620 bonds aggregating to Japanese yen 6200 Million were converted into 8,51,055 equity shares of Rs.2 each at the conversion price of Rs.2,789.04 per equity share. The remaining 541 bonds outstanding as on the maturity date were redeemed by the company @ 121.811 % of its principal amount during the year. 63
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Aban Offshore Limited
Notes to Financial Statements for the year ended 31st March 2012 6. Deferred tax liabilities (net)
As at 31st March 2012 Rs. Millions Deferred tax liability on timing differences On depreciation 268.61 268.61 As at 31st March 2011 Rs.Millions 291.98 291.98
7.
Provisions
Long - Term Short -term
As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Provision for employee bene?ts Provision for provident fund Provision for gratuity Provision for leave encashment (A) Other provisions Proposed equity dividend Provision for tax on proposed equity dividend Proposed preference dividend Provision for tax on proposed preference dividend Provision for taxation (net of advance payment of taxes) (B) TOTAL(A+B) -8.11 10.07 18.18 ----------18.18 -4.49 8.21 12.70 ----------12.70 1.59 0.19 3.71 5.49 -156.66 -25.41 252.24 -40.92 --475.23 480.72 3.85 0.11 3.44 7.40 -156.66 -25.41 278.90 -45.24 -502.82 1,009.03 1,016.43
8.
Short term borrowings
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions
Cash credit from banks (secured) Short term borrowings from banks(secured) Deposits (unsecured) -Intercorporate deposits repayable on demand the above amount includes Secured borrowings Unsecured borrowings
1,791.02 3,524.67 --255.00 5,570.69 5,315.69 255.00 5,570.69
2,067.27 1,705.56 ---3,772.83 3,772.83 -3,772.83
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Notes to Financial Statements for the year ended 31st March 2012 1. Cash credit from banks is secured by way of hypothecation of inventory of stores and spares and book debts. Moreover, two offshore jack-up rigs of the company have been offered as a second charge for certain cash credit facilities. The cash credit is repayable on demand and carries interest @15 % to 18 % p.a. Short term borrowings from banks represent buyer’s credit availed against letters of credit secured by charge on current assets and second charge on three offshore jack-up rigs and a drill ship of the company. These short term borrowings are repayable over 180 - 360 days and carry interest @ 3% to 3.50%p.a. Other current liabilities
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Trade payables Other liabilities Current maturities of long term borrowings (note 5) Interest accrued but not due on borrowings Interest accrued and due on borrowings Investor Education and Protection Fund will be credited by following amounts (as and when due) - Unpaid dividend - Unclaimed dividends Others Service tax payable TDS payable 3,308.25 1,628.35 68.57 618.12 ---11.58 53.86 57.77 2,438.25 5,746.50 2,693.18 5,049.33 18.68 229.19 ---10.04 60.43 24.27 5,391.94 8,085.12
2.
9.
10. Tangible assets
Rs.Millions Offshore LandOther Buildings Jack-up Drillship Freehold Machineries rigs Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012 At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011 128.57 128.57 128.57 128.57 150.37 150.37 150.37 150.37 8,408.32 2,898.37 1,850.86 32.87 38.32 80.82 80.82 80.82 80.82 Wind Mills Of?ce Equipment Furniture & Vehicles Fixtures 23.37 23.37 23.10 0.27 23.37 52.47 0.54 53.01 48.07 4.40 52.47 Total
2,396.81 2,396.81 2,407.81 (11.00) 2,396.81
57.99 3.33 61.32 53.34 4.65 57.99
14,197.09 1,887.60 38.32 16,123.01 13,876.30 331.79 (11.00) 14,197.09
10,297.50 2,931.24 8,098.03 2,886.19 310.29 12.18 -
8,408.32 2,898.37
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Notes to Financial Statements for the year ended 31st March 2012
Offshore LandOther Buildings Jack-up Drillship Freehold Machineries rigs Depreciation At 1st April 2011 Charge for the year Disposals At 31st March 2012 At 1st April 2010 Charge for the year Disposals At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011 128.57 128.57 34.46 2.45 36.91 32.01 2.45 34.46 113.46 115.91 6,094.12 1,122.75 527.56 260.49 6,621.68 1,383.24 5,466.42 627.70 795.79 326.96 76.74 76.74 76.74 76.74 4.08 4.08 Furniture & Vehicles Fixtures 16.30 1.48 17.78 14.83 1.47 16.30 5.59 7.07 22.30 4.13 26.43 17.96 4.34 22.30 26.58 30.17
Wind Mills 1,981.15 185.03 2,166.18 1,811.35 178.97 (9.17) 1,981.15 230.64 415.66
Of?ce Equipment 50.44 4.96 55.40 44.26 6.18 50.44 5.92 7.55
Total
9,398.26 986.10 10,384.36 8,259.36 1,148.07 (9.17) 9,398.26 5,738.65 4,798.83
6,094.12 1,122.75 3,675.82 1,548.00 2,314.20 1,775.62
a.
Capitalized borrowing costs The borrowing cost capitalized during the year ended 31 March 2012 was Rs.38.32 Million (31st March 2011: Rs.Nil).The company capitalized the borrowing cost in the offshore jack-up rigs. Vehicles include certain vehicles taken on hire purchase arrangement: - Gross block: Rs 14.77 Million (31st March 2011: Rs.14.77 Million) - Depreciation charge for the year: Rs.1.25 Million(31stMarch 2011:Rs.1.26 Million) - Accumulated depreciation: Rs.4.07 Million (31st March 2011: Rs.2.82 Million) - Net book value: Rs.10.69 Million (31st March 2011: Rs.11.95 Million)
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions
b.
11. Non- current investments
Trade Investment (valued at cost unless stated otherwise) Unquoted equity shares Investment in subsidiaries-wholly owned 0.2 Million (31st March 2011:0.2 Million) equity shares of Rs.10 each fully paid in Aban Energies Limited 850 Million(31st March 2011:850 Million) equity shares in Aban Holdings Pte Ltd, Singapore # Investment in joint ventures 0.05 Million(31st March 2011:0.05 Million) equity shares of Rs.10 each fully paid in Frontier Offshore Exploration(India) Limited (at cost less provision for other than temporary diminution in value Rs.4.99 Million(31st March 2011:Rs.4.99 Million) ) Other Investments 0.3 Million (31st March 2011: 0.3 Million) equity shares of Rs.10 each fully paid in Aban Informatics Private Limited Nil (31st March 2011: 11.9 Million) equity shares of Rs.10 each fully paid in Lanco Tanjore Power Company Limited(earlier known as Aban Power Company Limited)
2.00 39,435.23 -------19.85 --39,457.08
2.00 39,435.23
-19.85 119.40 39,576.48
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Notes to Financial Statements for the year ended 31st March 2012
Non-trade investments (valued at cost unless stated otherwise) Investment in equity shares (quoted) -0.01 Million (31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in Arihant Threads Ltd. (at cost less provision for other than temporary diminution in value of Rs.0.17 (31st March 2011: Rs.0.17 Million)) -0.01 Million (31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in Punjab Woolcombers Ltd. (at cost less provision for other than temporary diminution in value of Rs. 0.02Million (31st March 2011: 0.02 Million) -0.01 Million(31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in State Bank of Travancore Ltd. -0.01 Million(31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in ICICI Bank Ltd. -0.05 Million(31st March 2011: 0.05 Million)equity shares of Rs.5 each fully paid in Oil and Natural Gas Corporation Limited -0.03 Million(31st March 2011:0.03 Million)equity shares of Rs.10 each fully paid in Indian Bank Ltd. Investment in equity shares (unquoted) 0.01 Million (31st March 2011: 0.01 Million)equity shares of Rs.10 each fully paid in Madras Stock Exchange Limited
-----0.15 -0.79 -6.32 -2.95
-----0.15 -0.79 -6.32 2.95
4.00 14.21 39,471.29
4.00 14.21 39,590.69 10.21 39,580.48 5.18
Aggregate amount of quoted investments( Market value: Rs.24.80 Million (31st March 2011: Rs.26.36 Million) 10.21 Aggregate Value of unquoted investments 39,461.08 Aggregate provision for diminution in value of investments 5.18 # Note: Face value of the investment not provided, since investment in share capital in Singapore companies has no face value according to the Company law of Singapore
12. Loans and advances
Long-term Short- term As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Capital advances Secured, considered good Unsecured, considered good (A) Security deposit Secured, considered good Unsecured, considered good Doubtful Provision for doubtful security deposit (B) Loans and advances to related parties (note 28) Unsecured, considered good (C) ----1.75 -1.75 -1.75 -------3.14 -3.14 -3.14 ----10.77 10.77 -8.77 -8.77 -8.77 -2,951.66 2,951.66 ----26.03 -26.03 -26.03 -7,461.71 7,461.71
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Aban Offshore Limited
Notes to Financial Statements for the year ended 31st March 2012
Advances recoverable in cash or in kind Secured considered good Unsecured considered good Doubtful Provision for doubtful advances (D) Other loans and advances Advance income-tax(net of provision for taxation) Prepaid expenses Loans to employees Balances with statutory/government authorities (E) Total(A+B+C+D+E)
--------4.31 26.21 30.52 32.27
--------6.02 26.18 32.20 35.34
-88.23 -88.23 -88.23 11.82 32.32 8.38 4.29 56.81 3,116.24
-313.37 -313.37 -313.37 -81.11 5.00 3.00 89.11 7,890.22
13. Inventories
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Stores, Spares and Fuel (including stock-in- transit) 814.92 814.92 773.70 773.70
14. Trade receivables and other assets 14.1 Trade receivables
Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (A) Other receivables Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (B) Total (A+B)
--------------
--------------
-299.43 -299.43 -299.43 -1,910.19 -1,910.19 -1,910.19 2,209.62
-345.88 -345.88 -345.88 -2,301.09 -2,301.09 -2,301.09 2,646.97
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Notes to Financial Statements for the year ended 31st March 2012 14.2 Other assets
Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Unsecured, considered good unless stated otherwise Non-current bank balances (A) Others Interest accrued on ?xed deposits Interest accrued on investments Others (B) Total (A+B)
-------Non-current
--------
--10.22 --10.22 10.22 Current
--2.21 --2.21 2.21
15. Cash and bank balances
As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Cash and cash equivalents Balances with banks: -On current accounts -Deposits with original maturity of less than three months -On unpaid dividend account Cash on hand Other bank balances -Deposits with original maturity for more than 12 months -Deposits with original maturity for more than 3 months but less than 12 months - Margin money deposit
------
------
124.62 -7.13 0.22 131.97
647.10 -8.00 0.71 655.81
-------
-------
--0.49 146.82 147.31 -279.28
-33.48 -120.75 154.23 -810.04
16. Revenue from operations
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Revenue from operations Revenue from drilling and production services Revenue from wind power generation 6,326.53 58.75 6,385.28 11,820.99 86.44 11,907.43
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Notes to Financial Statements for the year ended 31st March 2012 17. Other Income
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Interest income on -Bank deposits -Loan to foreign subsidiaries -Others Dividend income on -Non current investments -Current investments Miscellaneous Income Net gain on sale of non current investments Net gain on sale of assets Rental income 10.56 226.37 0.78 0.37 209.27 307.69 3.81 758.85 2.62 686.80 0.01 1.16 18.50 46.20 4.06 6.35 765.70
18. Consumption of stores, spares, power and fuel
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Consumption of stores and spares Power and Fuel 298.79 175.54 474.33 472.87 224.44 697.31
19. Employee bene?t expense
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Salaries,wages and bonus Contribution to provident and other fund Gratuity expense (note 30) Staff welfare expenses 673.56 28.37 5.99 31.26 739.18 713.03 27.32 4.59 40.91 785.85
20. Finance Costs
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Interest * Loan processing changes Exchange difference to the extent considered as an adjustment to borrowings costs 3,575.35 74.37 12.81 3,662.53 * Excludes interest capilaized Rs :38.32 Million (31st March 2011:Nil) 3,286.57 68.19 -3,354.76
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Notes to Financial Statements for the year ended 31st March 2012 21. Depreciation and amortization expense
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Depreciation on tangible assets 986.10 986.10 1,148.07 1,148.07
22. Other expenses
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Freight and forwarding cost Rent Rates and taxes Rental charges for machinery Insurance Repairs and maintenance -Plant and machinery -Buildings -Others Drilling services and management fees Advertising and sales promotion Travelling ,conveyance and transportation Communication costs Printing and stationery Legal and professional fees Catering expenses Directors' sitting fees Payment to auditors As auditor -Audit fee -Tax audit fee -Limited review In other capacity -Taxation matters -Other services(certi?cation fees) Reimbursement of expenses Exchange Losses (net) Exchange differences(net) Miscellaneous expenses 41.66 10.28 20.59 377.38 395.85 151.83 2.38 37.23 205.82 2.71 206.30 17.92 4.90 422.22 60.88 0.24 40.18 7.80 25.98 313.28 192.39 470.16 1.59 6.64 365.45 0.75 145.92 17.35 4.94 368.02 58.44 0.32
2.50 0.40 1.15 0.35 0.88 0.17 469.58 79.46 2,512.68
2.50 0.56 1.20 1.39 0.13 500.19 500.27 105.93 3,131.38
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Notes to Financial Statements for the year ended 31st March 2012 23. Earnings per share(EPS) The following re?ects the pro?t and share data used in the basic and diluted EPS computations
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Pro?t/(Loss) after tax Less: Dividends on preference shares and tax thereon Net pro?t/(loss) for calculation of EPS (1,207.31) 293.16 (1,500.47) No. Millions Weighted average number of equity shares in calculating basic EPS Effect of dilution: Stock options granted under ESOS Weighted average number of equity shares in calculating diluted EPS Earning per share -basic Earning per share -diluted 2,339.46 324.14 2,015.31 No. Millions
43.51 0.31 43.82 (34.49) (34.24)
43.51 0.25 43.76 46.32 46.05
24. Gratuity and other de?ned bene?t plans The company operates a gratuity bene?t plan which is funded with an insurance company in the form of a qualifying insurance policy. The company operates a leave encashment plan which is not funded The following table summarizes the components of net bene?t expense recognized in the statement of pro?t and loss and the funded status and the amounts recognized in the balance sheet for such plans
Statement of pro?t and loss Net employee bene?t expense recognised in the employee cost Gratuity Leave encashment
31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Components of employer expense -Current service cost -Interest cost -Expected return on plan assets -Past service cost -Actuarial losses/(gains) Total expense recognized in the statement of pro?t and loss Actual return on plan assets
5.54 4.53 (4.10) 0.02 5.99 3.28
5.44 4.26 (4.04) (3.37) 2.29 6.05
0.50 0.99 0.84 2.33
0.49 0.92 (0.57) 0.84
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Notes to Financial Statements for the year ended 31st March 2012
Balance sheet Bene?t (asset)/liability recognized in the balance sheet Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Present value of de?ned bene?t obligation Fair value of plan assests Status [De?cit/(Surplus)] Contribution made towards the fund (Net asset)/liability recognised in balance sheet 59.06 50.76 8.30 8.30 56.34 51.75 4.59 4.59 13.78 13.78 13.78 11.64 11.64 11.64
Changes in the present value of the de?ned bene?t obligation are as follows: Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Present value of the DBO at the beginning of the year Current service cost Interest cost Actuarial (gains)/losses Bene?ts paid Present value of the DBO at the end of the year 56.34 5.54 4.54 (0.80) (6.56) 59.06 51.55 5.44 4.26 (1.36) (3.54) 56.35 11.64 0.50 0.99 0.84 (0.19) 13.78 10.80 0.49 0.92 (0.57) 11.64
Changes in the fair value of plan assets are as follows: Gratuity 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Plan assets at the beginning of the year Expected return on plan assets Actuarial gains/(losses) Actual company contribution Bene?ts paid Plan assets at the end of the year 51.75 4.10 (0.82) 2.29 (6.56) 50.76 49.25 4.04 2.01 (3.54) 51.76
Major category of plan assets as a percentage of the fair value of the total plan assets are as follows:
Gratuity 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Mutual Funds 100% 100%
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Notes to Financial Statements for the year ended 31st March 2012 The principal assumptions used in determining gratuity obligations for the company's plans are shown below:
Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 % % % % Discount rate Expected return on plan assets Rate of increase in compensation levels 8.55 8.00 6.00 8.55 8.00 6.00 8.55 6.00 8.55 -6.00
The estimate of future salary increases, considered in actuarial valuation takes into account in?ation, seniority, promotion and other relevant factors as supply and demand factors in the employment market. The expected rate of return on plan assets is based in the current investments strategy and market scenario. The above information is certi?ed by the Actuary
Amouns for the current and previous four periods are as follow:
31st March 2012 31st March 2011 31st March 2010 31st March 2009 31st March 2008 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Rs. Millions Gratuity De?ned bene?t obligation Plan assets Surplus/(de?cit) Experience adjustments on plan liabilities Experience adjustment on plan assets Leave encashment De?ned bene?t obligation Experience adjustments on plan liabilities 59.06 50.76 8.30 0.80 (0.82) 13.78 0.46 56.35 51.76 4.59 (0.67) 2.01 11.64 2.00 51.55 49.25 2.30 0.54 (4.41) 10.80 0.24 43.88 28.07 15.81 (7.06) 5.85 8.87 (1.28) 30.53 30.25 0.29 --6.66 -
25. Employee stock option scheme The Company has instituted Employee Stock Option Scheme-2005 (ESOS) duly approved by the shareholders in the extraordinary general meeting of the Company held on 23rd April 2005. As per the scheme, the compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of option. These options vest with employees over a speci?ed period subject to ful?llment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of company’s equity share at the prevailing market price on the date of the grant of option. The Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employees Stock Purchase Scheme guidelines in 1999, applicable to stock option schemes on or after 19th June 1999. Under these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. The Company has not recognized any deferred compensation expenses, as the exercise price was equal to the market value (as de?ned by SEBI) of the underlying equity shares on the grant date. Excess of exercise price over the nominal value of equity shares allotted during the year under ESOS and credited to securities premium account is Rs. NIL (31st March 2011: Rs.8.21 Million) The details of option granted are given below: Maximum number of options that may be granted under the scheme is 1.84 Million equity shares of Rs.2 each. Options granted during the year-NIL (up to 31st March 2011: 0.44 Million equity shares of Rs.2 each)-Options lapsed during the year 0.078 Million shares equity shares of Rs2 each (up to 31st March 2011: 0.04 Million equity shares of Rs.2 each)-Options exercised during the year- NIL (up to 31st March 2011: 0.095 Million equity shares of Rs.2 each)-Options outstanding at the end of year 74
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Notes to Financial Statements for the year ended 31st March 2012 :0.23 Million equity shares of Rs.2 each (up to 31st March 2011: 0.31 Million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 1.52 Million equity shares of Rs.2 each (31st March 2011: 1.441 Million equity shares of Rs.2 each) 26. Interest in joint venture The company’s interest, as a venturer, in jointly controlled entity is as follows: Name of the company Frontier Offshore Exploration (India) Limited Country of incorporation India Proportion of ownership interest 31st March 2012 25% Proportion of ownership interest 31st March 2011 25%
The company has ceased to have joint control over Frontier Offshore Exploration (India) Limited and has also provided for diminution in the value of long term investment considering the state of affairs of the joint venture company 27. Segment information A. Primary Segment-The company’s primary segments are offshore oil drilling and production services and wind power generation (Wind energy). The said business segments have been identi?ed considering the nature of services rendered and the internal ?nancial reporting system. Income and expenses have been accounted for based on their relationship to the operating activities of the segment Secondary segment- Substantial assets of the company are offshore rigs, which are mobile assets and can operate across the world, in view of which geographical segment is not considered.
31st March 2012 Rs. Millions Rs. Millions 7,085.38 58.75 2,522.95 (178.29) 2,344.66 (3,575.35) 51,495.89 421.71 31,115.10 55.87 801.07 185.03 1,995.96 (1,230.69) 31st March 2011 Rs. Millions Rs. Millions 12,579.05 94.08 6,978.13 (135.80) 6,842.33 (3,286.57) 56,061.45 601.24 31,618.16 172.85 969.11 178.96 367.45 3,555.76
B.
Primary Segment information 1. Segment revenue - Drilling -Wind energy 2. Segment results - Drilling -Wind energy less: interest expenses 3. Segment assets - Drilling -Wind energy 4. Segment liabilities - Drilling -Wind energy 5. Depreciation - Drilling -Wind energy 6. Capital expenditure including work in progress - Drilling -Wind energy
7,144.13
12,673.13
51,917.60
56,662.69
31,170.97
31,791.01
986.10
1,148.07
1,995.96
367.45
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Notes to Financial Statements for the year ended 31st March 2012 28. Related party disclosures Names of related parties and related party relationship Related parties where control exists A. Subsidiary companies (wholly owned subsidiaries) Aban Energies Limited, India Aban Holdings Pte Limited, Singapore B. Subsidiaries of Aban Holdings Pte Limited, Singapore Aban Singapore Pte Ltd, Singapore Aban 7 Pte Ltd, Singapore Aban 8 Pte Ltd, Singapore Aban Abraham Pte Ltd, Singapore Aban Pearl Pte Ltd, Singapore Aban International Norway AS, Norway Sinvest AS, Norway DDI Holding AS, Norway Deep Drilling Invest Pte Ltd, Singapore Deep Drilling 1 Pte Ltd, Singapore Deep Drilling 2 Pte Ltd, Singapore Deep Drilling 3 Pte Ltd, Singapore Deep Drilling 4 Pte Ltd, Singapore Deep Drilling 5 Pte Ltd, Singapore Deep Drilling 6 Pte Ltd, Singapore Deep Drilling 7 Pte Ltd, Singapore Deep Drilling 8 Pte Ltd, Singapore Deep Driller Mexico S de RL de CV, Mexico C. a. Others related parties with whom the company had transactions Key Management personnel (i) (ii) (iii) Reji Abraham Mr. P.Venkateswaran Mr.C.P.Gopalkrishnan Managing Director Dy. Managing Director Dy. Managing Director and Secretary
Transaction with related parties during the year
Nature of transaction Subsidiary companies Key Management Personnel
31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions 1. Machinery maintenance charges paid 2. Rent paid 3. Remuneration (Including Retirement Bene?ts) 4. Interest received/receivable 5. Advances recoverable/(payable) 6. Loan given to foreign subsidiary 7. Loan repaid 8. Dividend paid 9. Amount oustanding as at 31st March 2012 - Receivable -Payable 10.59 226.37 15.21 2,481.33 6,991.38 2,951.66 10.59 686.80 6.18 4,194.01 5,704.11 7,461.71 7.63 19.12 18.58 5.31 107.71 0.01 17.79 -
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Notes to Financial Statements for the year ended 31st March 2012
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 1. Machinery maintenance charges paid - Aban Energies Limited 2. Remuneration to Key management personnel - Mr. Reji Abraham -Mr. P.Venkateswaran -Mr. C.P.Gopalkrishnan 3. Interest received/ receivable - Aban Holdings Pte Ltd, Singapore 4. Advances recoverable - Aban Energies Limited - Aban Holdings Pte Ltd, Singapore 5. Loan given to foreign subsidiary - Aban Holdings Pte Ltd, Singapore 6. Loan repaid by foreign subsidiary - Aban Holdings Pte Ltd, Singapore 7. Rent paid - Reji Abraham 8. Dividend paid - Reji Abraham 9. Amount payable towards commission to: - Mr. Reji Abraham - Mr.P.Venkateswaran Other transactions Indian rupee loans guaranteed by personal guarantee of the Managing Director of the company-Rs.5,000.00 Million (31st March 2011: Nil) 10.59 6.34 6.39 6.39 226.37 8.98 6.23 2,481.33 6,991.38 7.63 18.46 --10.59 84.66 13.65 9.40 686.80 6.18 -4,194.01 5,704.11 5.31 17.67 73.20 3.66
29. Capital and other commitments
Capital and other commitments 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Capital and Other commitments not provided for 104.16 63.24
30. Contingent liabilities
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Guarantees given by banks on behalf of the company Corporate guarantees given by the company to banks on behalf of subsidiaries of company's wholly owned foreign subsidiary 510.65 20,749.95 1,008.94 20,232.27
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Notes to Financial Statements for the year ended 31st March 2012 31. Derivative instruments and unhedged foreign currency exposures a. Outstanding forward cover contracts/derivatives as at the balance sheet date
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions - Currency forward contracts/options - Foreign currency convertible bonds 7,217.71 8,355.40 975.30 Purpose Hedging risk of exchange rate ?uctuations Hedging risk of exchange rate ?uctuations
b.
Particulars of unhedged foreign currency exposures as at the balance sheet date
As at As at As at As at 31st March 2012 31st March 2012 31st March 2011 31st March 2011 USD Millions Rs. Millions USD Millions Rs. Millions
- Import payables -Foreign currency convertible bond
48.00 -
2,441.76 -
45.00 43.19
2,006.60 1,925.90
32. Loans and advances in the nature of loans given to subsidiaries
Balance outstanding as at 31st March 2012 Rs. Millions Aban Energies Limited (advance) Aban Holdings Pte Ltd (Loan & advance) Indian subsidiary Foreign subsidiary 8.98 2,942.68 Maximum balance outstanding during the year Rs. Millions 9.97 7,455.74 Balance outstanding ast 31st March 2011 Rs. Millions 5.96 7,455.74 Maximum balance outstanding during the previous year Rs. Millions 10.16 9,617.36
Particulars
Subsidiary
33. Value of imports calculated on CIF basis
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Capital items b. Stores and spare parts 334.08 415.19 192.67 367.46
34. Expenditure in foreign currency
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Interest on foreign currency loans b. Drilling services and management fees c. Travel and transport d. Consultancy fees e. Rental charges for machinery f. Insurance 52.01 80.20 24.21 197.05 293.51 375.09 29.86 106.95 55.73 137.12 300.44 141.08
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Notes to Financial Statements for the year ended 31st March 2012
g. Repairs to machinery h. Catering i. Salary and staff welfare j. Others 5.22 25.29 225.17 15.63 1.10 20.36 123.78 14.00
35. Imported and indigenous stores and spares consumed
Year ended Year ended Year ended Year ended 31st March 2012 31st March 2012 31st March 2011 31st March 2011 Value Value % of total % of total (Rs. Millions) (Rs. Millions) consumption consumption Stores and spares Imported Indigenous 89.09 209.70 29.82% 70.18% 291.02 181.85 61.54% 38.46%
36. Dividend remitted in foreign currency
Year of remittance (ending on) Period to which it relates Number of non-resident shareholders Number of equity shares held Net dividend remitted 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 2010-11 1 8.33 29.98 2009-10 1 8.33 29.98
37. Earnings in foreign currency
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Drilling and production services b. Interest from foreign subsidiary c. Others 4,156.79 226.37 208.94 9,317.08 686.80 45.99
38. Generation of wind power (net)
31st March 2012 Units 21,370,997 Rs. Millions 58.75 31st March 2011 Units 31,575,597 Rs. Millions 86.44
39. Dues to micro and small enterprises The Company has no dues to suppliers registered under the Micro, Small and Medium Enterprises Development Act,2006 (31st March 2011: Nil) 79
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Notes to Financial Statements for the year ended 31st March 2012 40. Previous year ?gures Till the year ended 31st March 2011, the Company was using the pre-revised Schedule VI to the Companies Act,1956, for preparation and presentation of its ?nancial statements. During the year ended 31st March 2012, the Revised Schedule VI noti?ed under the Companies Act,1956 has become applicable to the Company. The Company has reclassi?ed previous year ?gures to conform to this year’s classi?cation.
As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 P. Murari Vice Chairman
For and On behalf of the Board
K. M. Jayarao Director Reji Abraham Managing Director
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Notes to Financial Statements for the year ended 31st March 2012
Statement Pursuant to Section 212(1) (e) of the Companies Act, 1956
1 Name of the Subsidiary Company 2 Financial Year of the Subsidiary Company 3 Shares of the Subsidiary Company held by Aban Offshore Limited (a) Number of Shares (b) Face Value (c) Paid up value (d) Extent of Holding 4 Net aggregate amount of Pro?t / (Loss) of the subsidiary Company so far as they concern the members of Aban Offshore Limited not dealt with in the accounts of the Aban Offshore Limited amount to: (a) For the Subsidiary Company’s ?nancial year ended on 31.03.2012 (b) For the previous ?nancial years of the subsidiary since it became the Holding Company’s subsidiary 5 Net aggregate amount of Pro?t / (Loss) of the Subsidiary Company, dealt with in the Accounts of Aban Offshore Limited amount to: (a) For subsidiary Company's Financial Year ended 31.03.2012 (b) For the previous ?nancial years of the subsidiary since it became the Holding Company’s Subsidiary 6 As the ?nancial year of the Subsidiary Company coincides with the ?nancial year of the Holding Company, Section 212(5) of the Companies Act is not applicable Note: Aban Holdings Pte Ltd is having the following subsidiaries. Financial year of these Companies ended on 31st March 2012 (a) Aban Singapore Pte Ltd (b) Aban 7 Pte Ltd, Singapore (c) Aban 8 Pte Ltd, Singapore (d) Aban Abraham Pte Ltd, Singpore (e) Aban Pearl Pte Ltd,Singapore (f) Aban International Norway AS (g) Sinvest ASA, Norway (h) DDI Holding AS Norway (i) Deep Drilling Invest Pte Ltd, Singapore (j) Deep Drilling 1 Pte Ltd, Singapore (k) Deep Drilling 2 Pte Ltd, Singapore (l) Deep Drilling 3 Pte Ltd, Singapore (m) Deep Drilling 4 Pte Ltd, Singapore
Deep Drilling 5 Pte Ltd, Singapore (o) Deep Drilling 6 Pte Ltd, Singapore (p) Deep Drilling 7 Pte Ltd, Singapore (q) Deep Drilling 8 Pte Ltd, Singapore (r) Deep Driller Mexico S de RL de CV,Mexico For and on behalf of the Board P. Murari Vice Chairman Place: Chennai Date:30th May 2012 Reji Abraham Managing Director K.Bharathan Director K.M.Jayarao Director C.P.Gopalkrishnan Dy Managing Director & Secretary NIL NIL NIL NIL Rs.in Million (2.17) (6.07) Rs.in Million 4,424.69 842.87 2,00,070 Rs.10 Rs.10 100% 85,00,00,000 Not Applicable USD 850,000,000 100% Aban Energies Limited Year Ended 31.03.2012 Aban Holdings Pte Ltd Year Ended 31.03.2012
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Aban Energies Ltd India Rs in Millions 2.00 (8.24) 4.49 10.73 11.91 (2.16) 0.01 (2.15) (384.59) (384.59) 7,397.40 2,238.19 (421.37) 1,816.82 1,132.17 (529.73) (529.73) 442.56 (214.58) (29.78) (244.36) 1,806.02 1,699.34 (130.92) 1,568.42 30.08 (282.80) (282.80) Aban Holdings Pte Ltd,Singapore Rs in Millions 39,435.22 (3,600.77) 13,374.46 2,975.01 25,435.00 Aban Singapore Pte Ltd, Singapore Rs in Millions 25,435.00 (6,789.51) 2,237.23 32,047.74 48,456.01 Aban Abraham Pte Ltd, Singapore Rs in Millions 2,543.50 (371.91) 25,149.82 22,978.23 Aban 7 Pte Ltd, Singapore Rs in Millions 1,068.27 (239.87) 5,724.56 4,896.15 Aban 8 Pte Ltd, Singapore Rs in Millions 1,933.06 5,017.43 14,811.92 7,861.43 Aban Pearl Pte Ltd, Singapore Rs in Millions 2,950.46 (1,784.37) 1,878.24 712.15 Aban International Norway AS,Norway Rs in Millions 14,737.57 (10,713.79) 551.29 36,929.33 40,401.83 2,091.71 (2,445.14) (2,445.14) Sinvest AS,Norway Rs in Millions 6,998.24 22,589.58 235.88 234.98 29,586.32 41.52 23.38 23.38 Deep Drilling 7 Pte Ltd,Singapore Rs in Millions 2,857.74 2,462.63 11,451.64 6,131.26 976.35 458.67 135.65 594.32 750.53 88.06 22.21 110.27 K.M. Jayarao Director Rs in Millions 1,427.23 1,978.16 12,469.85 9,064.47 Deep Drilling 8 Pte Ltd,Singapore (2,456.08) (2,456.08) 57.04 68.92 9.47 78.39 1,271.47 410.81 (87.12) 323.69 1,839.28 1,569.74 194.88 1,764.62 DDI Holding AS, Norway Rs in Millions 24,400.62 (15,894.98) 0.81 42,741.09 51,245.91 Deep Drilling Invest Pte Ltd, Singapore Rs in Millions 32,701.30 928.90 498.30 482.84 33,614.74 Deep Drilling 1 Pte Ltd,Singapore Rs in Millions 6,889.76 4,561.50 17,995.59 6,544.33 Deep Drilling 2 Pte Ltd,Singapore Rs in Millions 7,414.83 8,836.50 16,521.55 270.22 Deep Drilling 3 Pte Ltd,Singapore Rs in Millions 6,610.68 8,510.67 22,223.98 7,102.64 2,093.77 1,470.90 (402.57) 1,068.33 Deep Drilling 4 Pte Ltd,Singapore Rs in Millions 1,919.57 5,771.23 12,334.21 4,643.42 1,855.69 1,417.84 1,417.84 Deep Drilling 5 Pte Ltd,Singapore Rs in Millions 3,466.61 6,897.67 12,469.74 2,105.46 1,830.37 1,349.11 1,349.10 Deep Driller Mexico S de RL De CV, Mexico 1. The Ministry of Corporate Affairs,Government of India,vide General Circular No-2 Rs in Millions 0.01 (27.61) 2.59 30.19 (26.00) (26.00) -
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Aban Offshore Limited
Statement of details to be furnished for subsidiaries as prescribed by the Ministry of Corporate Affairs
Name of the subsidiary Company
a) b) c) d) e)
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
Name of the subsidiary Company
a) b) c) d) e)
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
Name of the subsidiary Company
Note :
a) b) c) d) e) 1,514.87 787.38 (109.22) 678.16 Reji Abraham Managing Director
Deep Drilling 6 Pte Ltd,Singapore Rs in Millions 2,610.24 375.02 8,626.54 5,641.27 -
and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act 1956,subject to ful?llment of conditions stipulated in the circular. The Company has satis?ed the conditions stipulated in the circular and hence is entitled to the exemption.
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
2. Other than the Indian subsidiary Aban Energies Ltd, where accounts is in Indian Rupee, other 19 subsidiary accounts which are in US Dollar are converted into Indian Rupee at the Exchange rate of 1USD = Rs. 50.87 for the purpose of the details given above.
K. Bharathan Director C.P.Gopalakrishnan Dy Managing Director & Secretary
* includes translation reserve
P.Murari Vice- Chairman
Place:Chennai Date:30th May 2012
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AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
To The Board of Directors Aban Offshore Limited Chennai India We have audited the attached Consolidated Balance Sheet of Aban Offshore Limited the parent company and its subsidiaries as at 31st March 2012, the Consolidated Statement of Pro?t and Loss and also the Consolidated Cash Flow Statement for the year then ended. These ?nancial statements are the responsibility of Aban Offshore Limited’s Management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with Generally Accepted Auditing Standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are prepared, in all material respects, in accordance with an identi?ed ?nancial reporting framework and are free of material misstatements. An audit also includes, examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by the Management, as well as evaluating the overall ?nancial statements. We believe that our audit provides a reasonable basis for our opinion. We report that the Consolidated Financial Statements have been prepared by the company in accordance with the requirements of Accounting Standard (AS) 21 - “Consolidated Financial Statements” and AS 27 – “Financial reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India and noti?ed by Government of India under the Companies (Accounting Standard) Rules, 2006. We have audited the ?nancial statements of M/s Aban Energies Limited, Chennai, India, the Indian subsidiary of the Parent Company. The Financial Statements of Aban Holdings Pte., Ltd., Singapore, the foreign subsidiary of the Parent Company and the Consolidated Financial Statements of Foreign Subsidiary’s immediate subsidiary company, Aban Singapore Pte., Ltd., Singapore and its 17 subsidiaries, have been audited by other Auditors whose reports have been furnished to us and our opinion in respect of these subsidiaries is based solely on the report of those auditors. The ?nancial statements of a newly incorporated subsidiary Deep Driller Mexico S de RL de CV, Mexico has not been audited. The audited ?nancial statement of Aban Holdings Pte Ltd., Singapore re?ects total assets of Rs. 38809.46 Millions as at 31st March 2012 and total revenue of Rs. Nil for the year then ended. The Audited Consolidated Financial Statements of M/s Aban Singapore Pte., Limited, Singapore and its subsidiaries re?ect total net assets of Rs. 125342.09 Millions as at 31st March 2012 and total net revenue of Rs. 25366.79 Millions for the year then ended. The unaudited ?nancial statements of Deep Driller Mexico S de RL de CV, Mexico a newly incorporated subsidiary of Aban Singapore Pte Limited re?ects total assets of Rs. 2.59 Million as at 31st March 2012 and total revenue of Rs. NIL for the year then ended. On the basis of information and explanations provided to us, the audit reports on individual ?nancial statements of Aban Offshore Limited, its Indian subsidiary, and aforesaid foreign subsidiaries, we are of the opinion that: a. b. c. The Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of Aban Offshore Limited, and its subsidiaries as at 31st March 2012; The Consolidated Statement of Pro?t and Loss gives a true and fair view of the consolidated results of operations of Aban Offshore Limited, and its subsidiaries for the year then ended; and The Consolidated Cash Flow Statement gives a true and fair view of the consolidated cash ?ows of Aban Offshore Limited and its subsidiaries for the year then ended.
For FORD, RHODES, PARKS & CO., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place : Chennai Date : May 30, 2012
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Consolidated Balance Sheet
As at 31st March 2012
Note No: Equity and Liabilities Shareholders’ funds Share Capital Reserves and Surplus Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Long-term provisions Current liabilities Short -term borrowings Trade payables Other current liabilities Short -term provisions TOTAL Assets Non-current assets Fixed Assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Long-term loans and advances Other non-current assets Current assets Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL Summary of signi?cant accounting policies The accompanying notes 1 to 38 are an integral part of the ?nancial statements As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions
6 7
2,897.04 25,719.41 28,616.45 111,443.71 268.56 19.08 111,731.35 5,570.69 6,410.61 20,412.64 942.97 33,336.91 173,684.71
3,347.04 17,990.68 21,337.72 97,128.60 291.93 13.18 97,433.71 3,772.83 5,635.89 30,764.78 1,828.46 42,001.96 160,773.39
8 9 10 11 12 12 10
13.1 13.2 14 15 16.2 17 16.1 18 15 16.2
100,817.93 56,156.58 245.08 34.06 533.87 499.37 158,286.89 3,005.92 10,116.37 844.54 1,332.13 98.86 15,397.82 173,684.71 4
89,835.08 49,223.93 175.10 153.46 35.45 492.08 139,915.10 2,615.59 9,691.94 5,458.45 2,613.12 479.19 20,858.29 160,773.39
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Consolidated Statement of Pro?t and Loss Account
Note No: Income Revenue from operations Other income Total revenue (I) Expenses Consumption of stores, spares and fuel Employee bene?ts expense Finance costs Depreciation and amortization expense Other expenses Total Expenses (II) Pro?t before exceptional items and tax Less Exceptional items Pro?t/(Loss) before tax Tax expenses -Current tax -Deferred tax Total tax expense Pro?t/(Loss) for the year after tax and before share in earnings of joint venture Share of pro?t/(loss) in joint venture Pro?t/(Loss) for the year after tax and after share in earnings of joint venture Earnings per equity share of Rs.2 each (31st March 2011: Rs.2 each) Basic Computed on the basis of pro?t/(loss) for the year Diluted Computed on the basis of pro?t/(loss) for the year Summary of signi?cant accounting policies The accompanying notes 1 to 38 are an integral part of the ?nancial statements As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director
For the year ended 31st March 2012 31st March 2012 31st March 2011 Rs. Millions Rs. Millions
19 20
31,629.21 657.66 32,286.87 1,179.17 3,378.24 9,890.85 5,160.41 8,667.63 28,276.30 4,010.57 4,010.57 818.75 (23.37) 795.38 3,215.19
33,472.23 259.81 33,732.04 1,368.85 2,895.44 9,335.97 4,907.14 8,536.87 27,044.27 6,687.77 3,372.87 3,314.90 2,674.58 (143.72) 2,530.86 784.04 665.41
21 22 23 24 25
26
3,215.19 27
1,449.45
67.16 66.68 4
25.86 25.71
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Consolidated Cash Flow Statement
For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Cash Flow from operating activities Pro?t before tax from continuing Operations Pro?t before tax Non cash adjustment to reconcile pro?t before tax to net cash ?ows Depreciation/amortization on continuing operations Provision for Employee Bene?ts Pro?t on sale of Long Term and Current Investments (Net)/joint venture interest Loss on sale of Assets (Net)/Assets Sunk (Exceptional Item) Provision for Dimunition in the value of long term investments Provision for Doubtful Debts Unrealized foreign exchange loss Net gain on sale of Non Current investments Interest expenses Interest income Dividend income Operating pro?t before working capital changes Movements in working capital: Increase/(Decrease) in trade payables Increase/(Decrease) in other current liabilites Decrease/(Increase) in trade receivables Decrease/(Increase) in inventories Decrease/(Increase) in long term loans and advances Decrease/(Increase) in short term loans and advances Decrease/(Increase) in other current assets Decrease/(Increase) in other non current assets Cash generated from(used in) operations Direct taxes paid (net of refunds) Net cash ?ow from /(used in) operating activities (A) Cash Flow from investing activities Purchase of ?xed assets including Intangible Assets Capital advances Proceed from sale of ?xed assets Proceeds from sale of non-current investments Proceed from sale /maturity of current investment Purchase of Current Investments Interest received Dividends received Net cash ?ow from /(used in) investing activities (B) 5,160.41 10.03 398.84 86.97 (307.69) 9,771.97 (35.77) (1.15) 19,094.18 772.79 (8,472.10) (808.31) (387.76) (498.43) 1,291.76 388.34 (7.30) 11,373.17 (1,669.97) 9,703.20 (6,599.18) (10.77) 427.09 350.00 (350.00) 27.76 1.15 (6,153.95) 4,907.13 8.34 (108.27) 3,372.87 513.05 344.08 653.44 9,237.69 (24.17) (19.66) 22,199.40 (1,244.62) (3,327.05) (137.54) (492.08) 16,998.11 (2,286.31) 14,711.80 (5,635.50) 10,661.47 16,686.25 (12,331.33) 59.24 9,440.13 4,010.57 4,010.57 3,314.90 3,314.90 Year ended 31st March 2011 Rs. Millions
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Consolidated Cash Flow Statement
Year ended 31st March 2012 Rs. Millions Cash Flow from ?nancing activities Proceeds from issuance of share capital Proceeds from issuance of preference share capital Redemption of foreign currency convertible bonds with premium Proceeds from long term borrowings Proceeds from short term borrowings Repayment of short term borrowings Interest paid Dividends paid on equity shares Dividends paid on preference shares Tax on equiy dividend paid Tax on preference dividend paid Net cash ?ow from /(used in) ?nancing activities (C) Net increase /(decrease) in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks on current account On deposit account unpaid dividend account* Total cash and cash equivalents (note 17) Summary of signi?cant accounting policies 4 0.99 254.14 582.28 7.13 844.54 3.37 4,486.32 960.76 8.00 5,458.45 (450.00) (3,592.56) 3,448.66 1,970.51 (276.25) (8,758.33) (156.66) (278.90) (25.41) (45.24) (8,164.18) (4,614.93) 1.02 5,458.45 844.54 8.08 (11,628.80) (8,891.65) (156.61) (278.90) (26.62) (47.40) (21,021.90) 3,130.03 (31.68) 2,360.10 5,458.45 Year ended 31st March 2011 Rs. Millions
For the year ended 31st March 2012
*The company can utilize these balances only towards settlement of the respective unpaid dividend liability. As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 1. Corporate Information Aban Offshore Limited (AOL) (the Parent Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on three stock exchanges in India. The Parent Company and its 19 subsidiaries are referred to as “Group” for the purpose of this Consolidated Financial Statements. The Parent Company has a wholly-owned Indian Subsidiary Aban Energies Ltd and a wholly owned foreign subsidiary Aban Holdings Pte. Limited, Singapore. The Parent Company, the wholly owned foreign subsidiary and it’s step-down subsidiaries are engaged in the business of providing offshore drilling and production services to companies engaged in exploration, development and production of oil and gas both in domestic and international markets. The Parent Company and it’s wholly-owned Indian subsidiary are engaged in the ownership, operation and maintenance of wind turbines for generation of wind power in India 2. Basis of preparation The ?nancial statements of the Group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Group has prepared these ?nancial statements to comply in all material respects with the Accounting Standards noti?ed under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The ?nancial statements have been prepared on an accrual basis and under the historical cost convention. All the assets and liabilities have been classi?ed as current and non-current as per the Group’s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act,1956. Based on the nature of business operations, the Group has ascertained its operating cycle as 12 months for the purpose of current and non- current classi?cation of assets and liabilities. The accounting policies adopted in the preparation of ?nancial statements are consistent with those of the previous year. 3. Principles of consolidation The consolidated ?nancial statements have been prepared in accordance with the Accounting Standard-21 “Consolidated Financial Statement” and Accounting Standard -27 – “Financial reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India. (ICAI)/Companies (Accounting Standards) Rules,2006. The ?nancial statements of the Parent Company and its subsidiaries have been consolidated on a line-by-line basis by adding the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances/transactions and pro?ts in full. The excess/de?cit of cost to the Parent Company of its investment over its portion of net worth in consolidated Subsidiaries at the respective dates on which the investment in such entities was made is recognized in the ?nancial statements as goodwill/capital reserve. Foreign Subsidiaries account their transactions in United State Dollar as Reporting currency. Foreign subsidiaries are non-integral in nature. For the purpose of consolidation, monetary items and non-monetary items of assets and liabilities are translated at exchange rate prevailing at the Balance Sheet date. The items of revenue income and expenditure re?ected in the Pro?t and Loss Account are translated at the average exchange rate during the period. The differences arising out of translation are transferred to “Translation Reserve”. 4. Summary of signi?cant accounting policies a. Change in accounting policy Presentation and disclosure of ?nancial statements During the year ended 31st March 2012, the revised Schedule VI noti?ed under the Companies Act,1956, has become applicable to the Group, for preparation and presentation of its ?nancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the ?nancial statements. However, it has signi?cant impact on presentation and disclosures made in the ?nancial statements. The Group has also reclassi?ed the previous year ?gures in accordance with the requirements applicable in the current year
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 b. Use of estimates The preparation of ?nancial statements in conformity with the Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result on the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. c. Tangible ?xed assets Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of ?xed asset is added to its book value only if it increases the future bene?ts from existing asset beyond its previously assessed standard of performance. All other expenses on existing assets, including day to day repair and maintenance expenditure are charged to the Statement of Pro?t and Loss for the period during which such expenses are incurred. Gains or losses from derecognition of ?xed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Pro?t and Loss when the assets are derecognized. d. Depreciation on tangible ?xed assets Depreciation on ?xed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management or those prescribed under the Schedule XIV of the Companies Act, 1956, whichever is higher. The company has used the following rates to provide depreciation on its ?xed assetsFixed Assets Buildings Drilling Rigs Drillship Of?ce Equipment Computers Windmills Furniture and ?xtures Vehicles Rates (SLM) 1.63% 3.34%* 3.34%* 13.91% 16.21% 10.00% 6.33% 9.50%
Pursuant to noti?cation of Government of India, Ministry of Corporate Affairs dated 14th December 2011, the rate of depreciation on Rigs has been reduced to 3.34% p.a. on straight line basis. The depreciation on rigs and drillship has been charged accordingly with effect from the date of such noti?cation Depreciation on ?xed assets of foreign subsidiaries is determined using the straight line method over the useful life of assets based on the technical evaluation of the expected useful life. e. Intangible assets Intangible assets include Goodwill that re?ects the excess of the purchase price over the book value of the net assets acquired. Goodwill arising on consolidation (acquisition of subsidiaries) is not amortized but tested for impairment on an annual basis. f. Leases Where the Company is a lessee Leases in which signi?cant portion of the risks and rewards of ownership are retained by the lessor are classi?ed as operating leases. Payments made under operating leases are charged to the Statement of Pro?t and Loss on a straight-line basis over the period of lease. 89
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. g. Borrowings costs Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent that they are regarded as adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. h. Impairment of tangible assets An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Income in the year when the asset is identi?ed as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimate of recoverable value. i. Investments Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classi?ed as current investments. All other investments are classi?ed as long-term investments. Current investments are carried in the ?nancial statements at lower of cost or fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Pro?t and Loss. j. Inventories Inventory of stores, spares and fuel is valued at cost based on a weighted average cost/ ?rst-in-?rst-out basis. k. Revenue recognition Income from drilling and production services is recognized as earned, based on contractual daily rates billed on monthly basis. Mobilization /demobilization fees received, if any, is recognized as earned in the year of mobilization/demobilization. Income from wind power generation is recognized based on the number of units of power generated every month at contracted rates. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Pro?t and Loss. Dividend income is recognized when the company’s right to receive dividend is established by the reporting date l. Foreign currency translation Foreign currency transactions and balances Initial recognition Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Realized gains and losses on foreign exchange transactions during the year are recognized in the Statement of Pro?t and Loss. Exchange differences in respect of foreign currency loans/liabilities relating to ?xed assets are accounted in the Statement of Pro?t and Loss.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 Conversion Foreign currency current assets and current liabilities are translated at the exchange rates prevailing on the reporting date. In circumstances, where the rate prevailing on the reporting date is not stable/ highly volatile, monetary items shall be reported based on subsequent actual realization rate. Resulting gains / losses are recognized in the Statement of Pro?t and Loss. Non-monetary items such as investments, ?xed assets, denominated in foreign currency are translated at exchange rate prevailing on the date of transaction. Exchange differences All exchange differences are recognized as income or as expense in the Statement of Pro?t and Loss during the period in which they arise. Forward exchange contracts/derivative contracts entered into to hedge foreign currency risk of an existing asset/liability The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Any pro?t or loss arising on cancellation or renewal of such forward contract is also recognized as income or as expense for the period under the respective head of account for the period. In respect of derivative contracts, gains / losses on any such contracts are recognized in the Statement of Pro?t and Loss. Translation of integral and non-integral foreign operation The Company classi?es all its foreign operations as either “integral foreign operations” or “non-integral foreign operations”. The ?nancial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself. The assets and liabilities of a non-integral foreign operation are translated into the reporting currency at the exchange rate prevailing at the reporting date and the Statement of Pro?t and Loss are translated at average daily rates prevailing during the reporting period. The exchange differences arising on translation are accumulated in the foreign currency translation reserve. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of pro?t and loss. Where there is a change in the classi?cation of a foreign operation, the translation procedures applicable to the revised classi?cation are applied from the date of change in the classi?cation. m. Retirement and other employee bene?ts (a) Contribution to Provident Fund which is a de?ned contribution retirement plan is made monthly at a predetermined rate to the Provident Fund Authorities and is debited to the statement of pro?t and loss on accrual basis. (b) Contribution to Superannuation Scheme which is de?ned contribution retirement plan is made annually at predetermined rate to insurance companies which administer the fund and debited to the statement of Pro?t and Loss (c) Annual contribution is made to Gratuity Funds administered by Insurance Companies, which is considered as de?ned bene?t plan. The present value of the de?ned bene?t is measured using the ‘Projected Unit Credit method with actuarial valuation being carried out at each Balance Sheet date by an independent valuer. Actuarial gain and losses are immediately recognized in the statement of pro?t and loss. Amount of contribution, computed by the insurers is paid by the company and charged to statement of pro?t and loss. No additional liability is anticipated under the scheme administered by the Insurance Companies. (d) Provision for leave encashment is based on actuarial valuation carried out by an independent actuary at the Balance Sheet date. n. Taxes on income The income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable in respect of income for the year. In accordance with the Accounting Standard-22 –Accounting for taxes on income issued by the Institute of Chartered Accountants of India, the deferred tax on timing difference between book pro?t and tax pro?t for the year is accounted based on the rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. However, deferred tax assets arising from timing difference are recognized to the extent of their virtual /reasonable certainty about its realizability in future years. 91
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 o. Segment reporting
Identi?cation of segments The Group’s operating businesses are organized and managed separately according to the nature of services provided with each segment representing strategic business unit that offers different services. Segment accounting policies The segment information is prepared in conformity with the accounting policies and presenting the ?nancial statements of the Group as a whole. p. Earnings per share Basic earnings per share are calculated by dividing the net pro?t or loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net pro?t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. q. Provisions A provision is recognized when the entity has a present obligation as a result of past event. It is probable that an out?ow of resources embodying economic bene?ts will be required to settle obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. The estimates are reviewed at each reporting date and adjusted to re?ect the current best estimates. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be con?rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an out?ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the ?nancial statements. Cash and cash equivalents Cash and cash equivalents for the purpose of the cash ?ow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
r.
s.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
5.
The Consolidated ?nancial statements include the ?nancial statements of Aban Offshore Limited (“the Parent Company”), its subsidiaries and joint operating company. The details of the subsidiaries and the joint operating company are given below:
Country of Incorporation India Singapore Singapore Norway Singapore Singapore Singapore Singapore Norway Norway Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Mexico Percentage of holding 100% 100% (a) (b) (b) (b) (b) (b) (c) (d) (e) (f) (f) (f) (f) (f) (f) (f) (f) (b) Accounts considered 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (unaudited) Reporting Currency Indian Rupee US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars
Name of the company Aban Energies Ltd Aban Holdings Pte Ltd Aban Singapore Pte Ltd Aban International Norway AS Aban 7 Pte Ltd Aban 8 Pte Ltd Aban Abraham Pte Ltd Aban Pearl Pte Ltd Sinvest AS DDI Holding AS Deep Drilling Invest Pte Ltd Deep Drilling 1 Pte Ltd Deep Drilling 2 PteLtd Deep Drilling 3 PteLtd Deep Drilling 4 Pte Ltd Deep Drilling 5 Pte Ltd Deep Drilling 6 Pte Ltd Deep Drilling 7 Pte Ltd Deep Drilling 8 Pte Ltd Deep Driller Mexico S de RL de CV, Mexico
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
Note: a) b) c) d) e) f) Wholly-owned subsidiary of Aban Holdings Pte Ltd Wholly-owned subsidiaries of Aban Singapore Pte Ltd Subsidiary of Aban International Norway AS (60%) and Aban Singapore Pte Ltd (40%) Wholly-owned subsidiary of Sinvest AS Wholly-owned subsidiaries of DDI Holding AS Wholly-owned subsidiary of Deep Drilling Invest Pte Ltd
The consolidated ?nancial statements have been prepared after considering adjustments to align the accounts of foreign subsidiaries with the requirements of applicable Indian Accounting Standards.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
6. Share Capital
As at 31st March 2012 Rs. Millions Authorised shares (No. Millions) 2,500 (31 March 2011: 2,500 ) equity shares of Rs.2/- each 1000 (31 March 2011: 1000 ) Cumulative non convertible redeemable preference shares of Rs.10/- each 5,000.00 5,000.00 As at 31st March 2011 Rs.Millions
10,000.00
10,000.00
15,000.00 Issued , subscribed and fully paid -up shares (No. Millions) Equity shares: 36.88 (31 March 2011: 36.88) equity shares of Rs.2/- each 0.85 (31 March 2011: 0.85) equity shares of Rs.2/- each issued against conversion of foreign currency convertible bonds 0.09 (31 March 2011: 0.09 ) equity shares of Rs.2/- each issued against employee stock option scheme 5.69 (31 March 2011: 5.69) equity shares of Rs.2/- each issued against quali?ed institutional placement Shares Forfeited, 0.01(31 March 2011: 0.01) equity shares at Re 1/- each (A) Preference shares: 77 (31 March 2011: 122) 8% non-convertible cumulative redeemable preference shares of Rs.10/-each 28 (31 March 2011: 28.00 @ 8%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 61 (31 March 2011: 61 @ 9%) 9% non-convertible cumulative redeemable preference shares of Rs.10/-each 95 (31 March 2011: 95 @ 9%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 20 (31 March 2011:20 @ 9.25%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each (B) TOTAL (A+B) 2,897.04 200.00 2,810.00 950.00 610.00 280.00 770.00 11.39 0.01 87.04 0.19 1.70 73.75
15,000.00
73.75 1.70 0.19 11.39 0.01 87.04
1,220.00 280.00 610.00 950.00 200.00 3,260.00 3,347.04
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31st March 2012 Equity shares (A) of Rs 2 each At the beginning of the period Issued during the period-ESOP Outstanding at the end of the period 43.51 43.51 87.04 87.04 43.50 0.01 43.51 87.02 0.02 87.04 No. Millions Rs. Millions 31st March 2011 No. Millions Rs. Millions
31st March 2012 Preference shares (B) of Rs 10 each At the beginning of the period Issued during the period Redeemed during the period Outstanding at the end of the period Total Value of Outstanding Shares (A) +(B) 326.00 45.00 281.00 3,260.00 450.00 2,810.00 2,897.04 No. Millions Rs. Millions
31st March 2011 No. Millions 326.00 326.00 Rs. Millions 3,260.00 3,260.00 3,347.04
b.
Terms/ rights attached to equity shares The Parent Company has only one class of equity shares having a face value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The Parent Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs3.60 (31st March 2011: Rs.3.60).
c.
Terms of redemption of Non-convertible Cumulative Redeemable Preference shares As on 31st March 2011, the terms and conditions of the Non-Convertible Cumulative redeemable preference shares were as under: 150 million 8% non- convertible cumulative redeemable preference shares will be redeemed at par on 16-06-2011, 16-06-2012 and 16-06-2013 in the ratio of 30:30:40 respectively. During the year 45 million non-convertible redeemable preference shares which were due for redemption on 16-06-2011 were redeemed. 156 million 9 % non-convertible cumulative redeemable preference shares were originally scheduled for redemption at par at the end of the 5th year from the date of allotment of shares as per details given below: 55 million shares to be redeemed on 29-12-2011 40 million shares to be redeemed on 28-02-2012 61 million shares to be redeemed on 30-03-2012 20 million 9.25% non-convertible redeemable preference shares were originally scheduled for redemption at par on 03-08-2013
•
•
•
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 Pursuant to approval of the Board of Directors and with the consent of preference shareholders, the modi?ed terms and conditions of the Non-Convertible Cumulative Redeemable Preference shares are as under: • • • • d. 55 million 10% non-convertible cumulative redeemable preference shares will be redeemed at par on 29-12-2014 40 million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 28-02-2015 61million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 30-03-2015 20 million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 03-08-2016 The company has reserved 1.84 million equity shares of Rs.2 each for offering to employees under the Employee Stock Option Scheme (ESOS) (31st March 2011:1.84 million equity shares of Rs.2 each ) out of which 0.095 million equity shares of Rs.2 each have been already allotted upto the balance sheet date under the scheme and included under the paid up capital (31st March 2011: 0.095 million equity shares of Rs.2 each) (Refer note 28 for details)
e. Details of shareholders holding more than 5% shares in the Parent Company 31st March 2012 % holding in the No. Millions class Equity shares of Rs.2 each fully paid Reji Abraham India Offshore Inc Aban Investments Private Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 31st March 2011 % holding in the No. Millions class
31st March 2012 % holding in the No. Millions class Preference shares of Rs.10 each fully paid 8% Non-Convertible Cumulative Redeemable Preference Shares of Rs.10 each Syndicate Bank Canara Bank Indian Overseas Bank Vijaya Bank Axis Bank Limited
31st March 2011 % holding in the No. Millions class
10.50 17.50 14.00 17.50 42.00 101.50
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
15.00 25.01 20.00 25.01 60.00 145.02
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
9% and 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Indian Bank Vijaya Bank UCO Bank Indusind Bank Limited Yes Bank Limited
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Punjab National Bank Canara Bank Indian Overseas Bank
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Syndicate Bank Bank of India Central Bank of India Bank of Baroda Oriental Bank of Commerce
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Bank of India
20.00
100.00%
20.00
100.00%
As per the records of the company, including its register of shareholders/members and other declarations received from the shareholders regarding bene?cial interest, the above shareholding represents both legal and bene?cial ownerships of shares.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 7. Reserves and Surplus CONSOLIDATED 31st March 2012 Rs. Millions Capital Reserve - as per last Balance Sheet Securities Premium Account Balance as per last ?nancial statements Add: on allotment under ESOS Less: amounts utlized towards redemption of foreign currency convertible bonds * Investment Allowance Reserve (utilised) -as per last Balance Sheet Capital Redemption Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss General Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss Surplus/(de?cit) in the statement of pro?t and loss Balance as per last ?nancial statements Pro?t/(loss) for the year Less: Appropriations Transfer to capital redemption reserve Transfer to general reserve Proposed equity dividend-Rs.3.60 Per equity share (31st March 2011-Rs.3.60 Per equity share) Tax on proposed equity dividend Dividend on preference shares Tax on preference dividend Total appropriations Net Surplus/(de?cit) in the statement of pro?t and loss Translation Reserve Total reserves and surplus (156.66) (25.41) (252.24) (40.92) (475.23) 10,810.05 2,703.22 25,719.41 (156.66) (25.41) (278.90) (45.24) (1,246.21) 8,070.09 (2,977.01) 17,990.68 (500.00) (240.00) 8,070.09 3,215.19 7,866.85 1,449.45 1,299.29 1,299.29 1,059.29 240.00 1,299.29 2,000.00 2,000.00 1,500.00 500.00 2,000.00 (691.46) 8,854.42 52.40 9,545.88 52.40 9,545.88 9,537.67 8.21 0.03 31st March 2011 Rs. Millions 0.03
* Premium on redemption of foreign currency convertible bond including withholding tax
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 has been adjusted against the securities premium account 8. Long term borrowings
Non-Current maturities As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Term loans Rupee term loans from banks (secured) Rupee term loan from Financial institution (secured) Foreign currency term loans from banks (secured) Other loans Bonds Hire purchase loan (secured) Foreign currency convertible bonds (unsecured) From a company (unsecured) Current maturities As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions
18,535.24 500.00 74,425.76
18,218.56 750.00 77,155.20
305.12 319.74 15,855.83
1,393.66 250.00 5,429.67
17,931.68 0.43 50.60 111,443.71
4.84 1,000.00 97,128.60
635.88 3.89 999.60 18,120.06
18,868.23 4.56 2,901.10 500.00 29,347.22
The above amount includes Secured borrowings Unsecured borrowings Amount disclosed under the head “Other current liabilities” (note 12 ) Net Amount
111,393.11 50.60 111,443.71
96,128.60 1,000.00 97,128.60
17,120.46 999.60 (18,120.06) -
25,946.12 3,401.10 (29,347.22) -
1. a.
The rupee term loans from banks include the following: Term Loan of Rs.63 million (31st March 2011:Rs.87.95 million) from a bank.The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs and carries interest @ 13% p.a. (31st March 2011:10.75% p.a.) Term Loan of Rs.2554.20 million (31st March 2011:Rs.2721.07 Million) from a bank. The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs and carries interest @ 14.50% p.a. (31st March 2011:11.00% p.a.). Term Loan of Rs.2761.73 million (31st March 2011:Rs.2862.53 million) from a bank.The Loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Amount overdue on account of interest as on balance sheet date is Rs.63.94 million for a period of 1 to 2 months. Amount since paid is Rs.32.86 million and carries interest @ 13.50% p.a. (31st March 2011: 11.70% p.a.). Term Loan of Rs.2707.30 Million (31st March 2011:Rs.2757.60 Million) from a bank The Loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari- passu ?rst charge on the speci?c offshore drill ship and drilling rigs and carries interest @ 13.50% p.a. (31st March 2011:10.50% p.a.). Amount overdue on account of interest as on balance sheet date is Rs32.22 million for a period of 1 to 2 months which is since paid. Term Loan of Rs. 900.10 million (31st March 2011:Rs.945.10 million) from a bank. The Loan is repayable in 32 equal quarterly installments along with interest from 30th June 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs and carries interest @ 13.40% p.a. (31st March 2011:12.00% p.a.). Amount overdue on
b.
c.
d.
e.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 account of interest as on balance sheet date is Rs.21.17 million for a period of 1 to 2 months and amount since paid is Rs.10.58 million. f. Term Loan of Rs.49.52 million (31st March 2011:Rs.167.10 million) from a bank The Loan is repayable in 4 monthly installments along with interest from January 2012.The loan is secured by ?rst charge on windmills and carries interest @ 13.75% p.a. (31st March 2011:13.00% p.a.). Amount overdue on account of principal and interest as on balance sheet date is Rs.41.32 million for a period of 1 to 3 months. Amount since paid is Rs.14.21million. Term Loan of Rs.4859.60 million (31st March 2011:Rs.4996.82 million) from a bank. The Loan is repayable in 32 equal quarterly installments along with interest from 30th June 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rigs, Floating Production Unit and second charge on drilling rig owned by foreign subsidiary and carries interest @ 16.25% p.a. (31st March 2011:15.50% p.a.).Amount overdue on account of interest as on balance sheet date is Rs.136.53 million for a period of 1 to 2 months. Amount since paid is Rs.14.80 million. Term Loan of Rs.1849.30 million (31st March 2011: Rs. 1924.49 million) from a bank. The Loan is repayable in 96 monthly installments along with interest from 30th September 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rig owned by foreign subsidiary and carries interest @ 15.00% p.a. (31st March 2011: 14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.46.72 million for a period of 1 to 2 months. Amount since paid is Rs.23.99 million. Term Loan of Rs.1500.79 million (31st March 2011:Rs.1499.80 million) from a bank. The Loan is repayable in 32 quarterly installments along with interest from 29th January 2014. The loan is secured by Second charge on the speci?c offshore drill ship and drilling rig and carries interest @ 15.00 % p.a. (31st March 2011:14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.37.25 million for a period of 1 to 2 months. Amount since paid is Rs.19.14 million. Term Loan of Rs.469.99 million (31st March 2011:Nil) from a bank The Loan is repayable in 13 quarterly installments along with interest from 31st March 2012. The loan is secured by First charge on the speci?c offshore drill rig of foreign subsidiary and carries interest @ 15.25 % p.a. (31st March 2011:14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.11.88 million for a period of 1 to 2 months. Amount since paid is Rs.6.11 million. Term Loan of Rs.100 Million (31st March 2011:Rs. 499.69 million) from a bank The Loan is repayable in one installment along with interest from 28th February 2012. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 14.25 % p.a. (31st March 2011:13.25% p.a.). Amount overdue on account of principal as on balance sheet date is Rs.100.00 million for a period of 1 month that has been since paid. Term Loan of Rs.200.00 million (31st March 2011:Rs. 250.15 million) from a bank The Loan is repayable in 20 quarterly installments along with interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 16.00 % p.a. (31st March 2011:14.00% p.a.). Term Loan of Rs.350.00 million (31st March 2011: Rs.399.98 million) from a bank The Loan is repayable in20 quarterly installments along with interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 16.00 % p.a. (31st March 2011:13.75% p.a.). Term Loan of Rs.474.91million (31st March 2011:Rs.499.82 million) from a bank The Loan is repayable in 24 quarterly installments along with interest from 31st March 2012. The loan is secured by First charge on the speci?c offshore drilling rig owned by foreign subsidiary and carries interest @ 14.75 % p.a. (31st March 2011: 13.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.5.68 million for a period of 1 month. Rupee Term Loan from a ?nancial institution Rupee Term loan from a ?nancial institution of Rs.819.74 million (31st March 2011:Rs.1,000.00 million) The loan is repayable in 16 quarterly installments along with interest from March 2012. The loan is secured by pari-passu ?rst charge on drill Ship and offshore drilling Rig and carries interest @ 13% p.a. (31st March 2011:13% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.19.73 million for a period of 3 months that has since been paid. 101
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 3. i. Foreign Currency Term Loans from banks include the following: Term loan of Rs.2,138.56 million [US$42,040,000] (31st March 2011: Rs.2,003.78 million[US$44,938,000]) is secured by a ?rst preferred mortgage on a rig , a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary held by the Company, and assignment of contracts and insurances, in respect of the rig. The borrowings mature on 31 January 2019 and have an interest rate of 5.00% p.a.(31st March 2011: 5.30% p.a.) at the balance sheet date. Term loan of Rs.846.32 million [US$16,637,000] (31st March 2011: Nil) is secured by a second priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned subsidiary, and corporate guarantee of Aban Singapore Pte Ltd. The borrowings mature on 23 February 2019 and have an interest rate 7.00% p.a.(31st March 2011: Nil) at the balance sheet date. Term Loan of Rs. 4,675.12 Million[US$91,903,381] (31st March 2011: Rs.4,345.19 million [US$97,513,000]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned foreign subsidiary that owns this drill ship and a pledge over 30% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.46% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 95.13 million and Rs.41.53 million respectively for a period of 30 – 60 days. Term loan of Rs.969.19 million [US$19,052,000] (31st March 2011: Rs.899.78 million [US$20,192,500]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned subsidiary that owns this drill ship and a pledge over 30% of the shares in a step-down subsidiary held by the wholly-owned foreign subsidiary. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.46% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs.19.33 million and Rs.5.10 million respectively for a period of 30 – 60 days Term loan of Rs.17,344.99 million [US$340,967,000] (31st March 2011:Rs.15,790.95 million [ US$354,375,000]) is secured by a guarantee from a shareholder of the Parent Company, to the extent of Rs. 6,511.36 million [US$128,000,000], a ?rst priority pledge over 42.86% of the shares in a subsidiary, a charge over escrow account into which dividends from such shares are to be deposited and a second charge over a drill ship owned by a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 3 January 2019 and have an interest rate of 4.00%-5% p.a.(31st March 2011: 4.00%-4.50% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs.129.44 million for a period of 30 – 60 days Term loan of Rs.3,179.38 million[US$62,500,000] (31st March 2011: Rs.3,286.30 million [US$73,750,000]) is secured by a ?rst priority pledge over 17.14% of the shares in a step-down subsidiary , a charge over escrow account into which dividends from such shares are to be deposited, 100% of the shares in another step-down subsidiary held by the wholly-owned foreign subsidiary and a third priority mortgage on a rig owned by a step-down subsidiary. The borrowings mature in February 2016 and have an interest rate of 5.00% p.a.(2011: 5.29% p.a.) at the balance sheet date. Term loan of Rs.4,383.56 million [US$86,171,800] (31st March 2011: Rs.4,707.99 million [US$105,655,000]) is secured by a ?rst and second priority mortgage on a rig ,a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary, assignment of insurances; and a charge over revenues and bank accounts to be maintained by the Borrower in respect of the rig. The borrowings mature on 30 August 2014 and have an interest rate 1%-4% p.a.(31st March 2011: 1%-4.25% p.a.%) at the balance sheet date.
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vi.
vii.
viii. Term loan of Rs.1,859.93 million[US$36,562,500] (31st March 2011: Rs.2,005.20 million [US$45,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the Company that owns this rig and a corporate guarantee of Aban Singapore Pte Ltd. The borrowings mature on 1 March 2015 and have an interest rate of 5.25% p.a.(31st March 2011: 4.55% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 143.10 million and Rs.25.25 million respectively for a period of 31 days ix. Term loan of Rs.101.61 million [US$1,997,500](31st March 2011: Rs.267.03 million [US$5,992,500]) is secured by a standby letter of credit issued by a bank, which is secured by cash deposit held in a pledged account with the same bank. The borrowings mature on 14 March 2013 and have an interest rate of 2.00% p.a.(31st March 2011: 2.00% p.a) at the balance sheet date.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 x. Term loan of Rs.111.06 million [US$2,183,000] (31st March 2011: Rs.291.86 million [US$6,549,900]) is secured by a standby letter of credit issued by a bank, which is secured by cash deposit held in a pledged account with the same bank. The borrowings mature on 14 March 2013 and have an interest rate of 2.00% p.a. (31st March 2011: 2.00% p.a.) at the balance sheet date. Term loan of Rs.1,193.13 million[US$23,454,430] (31st March 2011: Rs.1,069.19 million [US$23,994,400]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step down foreign subsidiary that owns the drill ship and a pledge over 30% of the shares of a step down subsidiary of the whollyowned foreign subsidiary of the Parent Company. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a. (31st March 2011: 4.29% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs.9.16 million and Rs.11.28 million respectively for a period of 60 days. Term loan of Rs.3,393.94 million [US$66,718,963] (31st March 2011: Rs.3,039.79 million [US$68,217,992]) is secured by a ?rst priority mortgage on a drill ship , and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned foreign subsidiary that owns the drill ship and a pledge over 30% of the shares of a step-down subsidiary of the wholly-owned subsidiary of the Parent Company. The borrowings mature on 1 February 2019 and have an interest rate of 5.50% p.a.(31st March 2011: 5.20.% p.a) at the balance sheet date. Amount overdue on account of principal and interest is Rs.25.44 million and Rs. 32.94 million respectively for a period of 30 – 60 days.
xi.
xii.
xiii. Term loan of Rs.5469.54 million [US$107,520,000] (31st March 2011: Rs.4,990.72 [US$110,317,000]) is secured by a ?rst priority mortgage over a rig of a step-down subsidiary of the wholly-owned foreign subsidiary, a ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly –owned subsidiary of the Parent Company that owns this rig and a corporate guarantee of the Aban Singapore Pte Ltd. The borrowings mature on 24 March 2019 and have an interest rate of 5%-6% p.a. (31st March 2011: 5.63% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs.25.35 million for a period of 6 days. xiv. Term loan of Rs. 7,558.26 million [US$148,580,000] (31st March 2011: Rs.6,773.12 million [US$152,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge on the receivables from the rig and a corporate guarantee from Aban Singapore Pte Ltd. The borrowings mature on 5 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.29% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 58.00 million and Rs. 78.62 million respectively for a period of 55 days. xv. Term loan of Rs.2,549.30 million [US$50,114,080] (31st March 2011: Rs.2,302.15 million [US$51,664,000]) is secured by second mortgages on two rigs of two step-down subsidiaries of the wholly-owned foreign subsidiary. The borrowings mature on 12 March 2019 and have an interest rate of 5.25% p.a. (31st March 2011: 5.63% p.a.) at the balance sheet date. xvi. Term loan of Rs.6,871.11 million [US$135,072,000] (31st March 2011: Rs.5,659.12 million [ US$127,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge on the receivables from the rig and the bank account into which such receivables are deposited and a corporate guarantee from Aban Singapore Pte Ltd. The borrowings mature on 8 February 2020 and have an interest rate of 4.79% p.a.(31st March 2011: 4.79% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 66.94 million and Rs.54.41 million respectively for a period of 6 – 53 days. xvii. Term loan of Rs. 7,223.54 million [US$142,000,000] (31st March 2011: Rs. 6,684.00 million [US$150,000,000]) is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 September 2017 and have an interest rate of 7.00% p.a.(31st March 2011: 5.21% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 406.96 million and Rs.86.88 million respectively for a period of 6 – 60 days. xviii. Term loan of Rs.7,041.53 million [US$138,422,058] (31st March 2011: Rs.6,392.13 million[US$143,450,000]) is secured by a ?rst priority pledge over 40% of the shares in a step-down subsidiary of the wholly-owned subsidiary, a charge over escrow account into which dividends from such shares are to be deposited and a second preferred mortgage over a rig owned by a step-down subsidiary and a second priority mortgage over a rig owned by another step-down subsidiary. The borrowings mature on 26 March 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.00%-4.50% p.a.) at the balance sheet 103
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 date. Amount overdue on account of principal and interest is Rs. 172.31 million and Rs.84.56 million respectively for a period of 3 – 6 days. xix. Term loan of Rs.3,815.25 million[US$75,000,000] (31st March 2011: Rs.4,456.00 million [US$100,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a ?rst pari-passu charge on a drill ship owned by the Parent Company, a ?rst pari-passu charge on a rig owned by the Parent Company, a corporate guarantee of the Parent Company. The borrowings mature on 26 February 2017 and have an interest rate of 3.00% p.a.(31st March 2011: 3.30% p.a.) at the balance sheet date. xx. Term loan of Rs. 2,097.88 million [US$41,240,000] (31st March 2011: Rs. 1,980.25 million [US$44,440,000]) is secured by a corporate guarantee from the Parent Company and a third priority mortgage on a rig owned by a step-down subsidiary of wholly-owned foreign subsidiary. The borrowings mature on 11 January 2019 and have an interest rate of 5.00% p.a.(31st March 2011: 5.30% p.a.) at the balance sheet date. xxi. Term loan of Rs.813.92 million [US$16,000,000] (31st March 2011: Rs.712.96 million [US$16,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 December 2017 and have an interest rate of 3.70% p.a.(31st March 2011: 4.00%p.a. ) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 43.39 million and Rs.8.78 million respectively for a period of 6 days. xxii. Term loan of Rs.3,592.24 million [US$70,616,000] (31st March 2011: Rs. 3,243.97 million [US$72,800,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 March 2019 and have an interest rate of 3.70% p.a.(31st March 2011: 4.00%p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 37.03 million and Rs.38.46 million respectively for a period of 6 days xxiii. Term loan of Rs. 1,220.88 million [US$24,000,000] (31st March 2011: Rs. 1,069.44 million[US$24,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company holding company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 December 2017 and have an interest rate of 3.00% p.a. (31st March 2011: 3.42% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs. 5.66 million for a period of 4 days. xxiv. Term loan of Rs. 1,831.32 million [US$36,000,000 (31st March 2011: Rs 2,005.20 million [US$45,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 31 December 2015 and have an interest rate of 2.85% p.a.(31st March 2011: 3.28% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs. 4.53 million for a period of 92 days. 4. i. Bonds Bond of Rs.6,358.75 million [US$125,000,000] (31st March 2011: Nil) is secured by a ?rst priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned foreign subsidiary, a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary ,assignment of insurances, corporate guarantee of a step-down subsidiary of the wholly-owned foreign subsidiary of the Parent Company , and a charge over bank accounts to be maintained by the Borrower in respect of the rig. The borrowings mature on 21 December 2015 and have an interest rate 12.00% p.a. (31st March 2011: NA) at the balance sheet date. Bond of Rs. 12,208.80 million US$240,000,000 (31st March 2011: Nil) is secured by a ?rst priority mortgage on two rigs owned by step-down subsidiaries of the wholly-owned subsidiary, a pledge over 100% of the shares in two step-down subsidiaries of the wholly-owned foreign subsidiary of the Parent Company, assignment of insurances, corporate guarantee of a subsidiary of the Company, assignment of sub-charters in respect of these two rigs, and a charge over bank accounts to be maintained by the Borrower in respect of these two rigs. The borrowings mature on 5 March 2015 and have an interest rate 14.25% p.a.(31st March 2011: NA) at the balance sheet date.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 5. 6. 7. Hire purchase loan for vehicles availed by Parent Company from a non-banking ?nance company of Rs.4.32 million (31st March 2011:Rs.9.41 million) secured by hypothecation of vehicles. The Parent Company has an outstanding unsecured loan from a company amounting to Rs.1050.20 million (31st March 2011:Rs.1500 million) at 14.50% p.a. repayable in 12 yearly installments along with interest. Foreign currency convertible bonds (FCCB) –The Parent Company had issued 1161 unsecured zero coupon FCCB of Japanese Yen 10,000,000 each aggregating to Japanese Yen 11,610 million in April 2006. Unless previously redeemed, converted or repurchased and cancelled, the company had to redeem each bond at 121.811% of its principal amount on 15th April 2011, being the maturity date. Until this date, 620 bonds aggregating to Japanese yen 6200 million were converted into 8,51,055 equity shares of Rs.2 each at the conversion price of Rs.2,789.04 per equity share. The remaining 541 bonds outstanding as on the maturity date were redeemed by the company @ 121.811 % of its principal amount during the year.
9.
Deferred tax liabilities (net) As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs. Millions
Deferred tax liability on timing differences On depreciation 10. Provisions Long - Term As at As at 31st March 31st March 2012 2011 Rs. Millions Rs. Millions Provision for employee bene?ts Provision for provident fund Provision for gratuity Provision for leave encashment Short - Term As at As at 31st March 31st March 2012 2011 Rs. Millions Rs. Millions 268.56 268.56 291.93 291.93
8.45 10.63 19.08
4.49 8.69 13.18
1.63 0.19 3.71 5.53
5.27 0.11 3.44 8.82
Other provisions Proposed equity dividend Provision for tax on proposed equity dividend Proposed preference dividend Provision for tax on proposed preference dividend Provision for taxation (net of advance payment of taxes)
19.08
13.18
156.66 25.41 252.24 40.92 462.21 937.44 942.97
156.66 25.41 278.90 45.24 1,313.43 1,819.64 1,828.46
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 11. Short term borrowings As at 31st March 2012 Rs. Millions Cash credit from banks (secured) Short term borrowings from banks (secured) Deposits (unsecured) -Intercorporate deposits repayable on demand 1,791.02 3,524.67 As at 31st March 2011 Rs. Millions 2,067.27 1,705.56
255.00 5,570.69
3,772.83
the above amount includes Secured borrowings Unsecured borrowings
5,315.69 255.00 5,570.69
3,772.83 3,772.83
1. Cash credit from banks is secured by way of hypothecation of inventory of stores and spares and book debts. Moreover, two offshore jack-up rigs of the company have been offered as a second charge for certain cash credit facilities. The cash credit is repaable on demand and carries interest @15 % to 18 % p.a. 2. Short term borrowings from banks represent loan (buyer’s credit) availed against letters of credit secured by charge on current assets and second charge on three offshore jack-up rigs and a drill ship of the company. These short term borrowings are repayable on demand and carry interest @ 2% to 4% p.a. 12. Other current liabilities As at 31st March 2012 Rs. Millions Trade payables Other liabilities Current maturities of long term borrowings (note 5) Interest accrued but not due on borrowings Interest accrued and due on borrowings Investor Education and Protection Fund will be credited by following amounts (as and when due) - Unpaid dividend - Unclaimed dividends Others Service tax payable/Other Liabilities Tax deducted at source payable 6,410.61 18,120.06 1,551.09 618.12 As at 31st March 2011 Rs. Millions 5,635.89 29,347.22 926.38 229.19
11.58 53.98 57.81 20,412.64 26,823.25
10.04 227.68 24.27 30,764.78 36,400.67
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 13.1 Tangible assets
Rs.Millions Offshore Buildings Jack-up rigs Drillship Furniture & Fixtures Vehicles Total
LandFreehold
Other Machineries
Wind Mills
Of?ce Equipment
Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012
128.57 128.57
150.37 150.37
84,527.35 2,770.71 10,720.51 38.32 98,056.89
26,331.50 1,264.83 3,300.29 30,896.62
80.82 80.82
2,396.81 2,396.81
85.01 3.38 3.75 92.14
59.27 5.06 64.33
57.60 0.54 0.39 58.53
113,817.30 4,039.46 14,030.00 38.32 131,925.08
At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011
128.57 128.57
150.37 150.37
96,521.74 2,440.35 (13,843.80) (590.94) 84,527.35 Offshore
24,216.87 2,704.99 (447.81) (142.55) 26,331.50
80.82 80.82
2,407.81 (11.00) 2,396.81
73.69 11.45 (0.13) 85.01
59.24 0.27 (0.24) 59.27 Furniture & Fixtures
53.22 4.40 (0.02) 57.60
123,692.33 5,161.46 (14,302.61) (733.88) 113,817.30
LandFreehold
Buildings
Jack-up rigs
Drillship
Other Machineries
Wind Mills
Of?ce Equipment
Vehicles
Total
Depreciation At 1st April 2011 Charge for the year Disposals -Exchange differences At 31st March 2012 At 1st April 2010 Charge for the year Disposals Other adjustments -Exchange differences At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011
-
34.46 2.45 36.91 32.01 2.45 34.46
19,515.73 3,620.13 1,820.20 24,956.06 16,390.85 3,606.26 (233.54) (247.84) 19,515.73
2,255.47 1,340.17 140.94 3,736.58 1,178.31 1,103.08 (26.28) 0.36 2,255.47
76.74 76.74 76.74 76.74
1,981.15 185.03 2,166.18 1,811.35 178.97 (9.17) 1,981.15
63.76 6.45 1.69 71.90 59.03 9.57 (4.84) 63.76
30.20 1.82 1.69 33.71 40.62 2.25 (12.67) 30.20
24.71 4.36 29.07 20.15 4.56 24.71
23,982.22 5,160.41 1,964.52 31,107.15 19,609.06 4,907.14 (268.99) (264.99) 23,982.22
128.57 128.57
113.46 115.90
73,100.83 65,011.61
27,160.04 24,076.03
4.08 4.09
230.63 415.66
20.24 21.25
30.62 29.07
29.46 32.89
100,817.93 89,835.08
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 a. Capitalized borrowing costs The borrowing cost capitalized during the year ended 31 March 2012 was Rs.38.32 million (31st March 2011: Rs. Nil).The co pany capitalized the borrowing cost in the offshore jack-up rigs. b Vehicles include certain vehicles taken on hire purchase arrangement: 13.2 Gross block: Rs 14.77 million (31st March 2011: Rs.14.77 million) Depreciation charge for the year: Rs.1.25 million(31stMarch 2011:Rs.1.26 million) Accumulated depreciation: Rs.4.07 million (31st March 2011: Rs.2.82 million) Net book value: Rs.10.69 million (31st March 2011: Rs.11.95 million)
Intangible assets Goodwill Rs.Millions Total 49,223.93 6,932.65 56,156.58 49,555.11 (331.18) 49,223.93 Total -
Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012 At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011
49,223.93 6,932.65 56,156.58 49,555.11 (331.18) 49,223.93 Goodwill
Impairment As at 1st April 2011 Charge for the year At 31st March 2012 At 1st April 2010 Charge for the year Other adjustments -Exchange differences At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011
-
56,156.58 49,223.93
56,156.58 49,223.93
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 Goodwill on consolidation (acquisition of foreign subsidiaries) is tested for impairment annually and whenever there is an impairment indication, the goodwill may be impaired. For the year 2011-12, the management did not note any indication that the goodwill related to the acquisition of such foreign subsidiaries may be impaired due to any reason. As the assets and liabilities & Non-integral foreign operation are translated at the exchange rate as at balance sheet date, the difference in exchange rate is re?ected under exchange difference against respective assets 14. Non-current investment As at 31st March 2012 Rs. Millions Investment in joint ventures 0.05 million(31st March 2011:0.05 million) equity shares of Rs.10 each fully paid in Frontier Offshore Exploration(India) Limited (at cost less provision for other than temporary diminution in value Rs.4.99 million(31st March 2011:Rs.4.99 million) ) Other Investments 0.3 million (31st March 2011: 0.3 million) equity shares of Rs.10 each fully paid in Aban Informatics Private Limited Nil (31st March 2011: 11.9 million) equity shares of Rs.10 each fully paid in Lanco Tanjore Power Company Limited (earlier known as Aban Power Company Limited) 11.72 Million (31st March 2011: 11.72 Million) equity shares in Petrojack ASA of Nok 5 each (at cost less dimunition in value of investment of Rs. 1718.21 Million (31st March 2011: 1718.21 Million) Non-trade investments (valued at cost unless stated otherwise) Investment in equity shares (quoted) -0.01 million (31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in Arihant Threads Ltd (at cost less provision for other than temporary diminution in value of Rs.0.17 Million (31st March 2011: Rs.0.17 million) -0.01 million (31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in Punjab Woolcombers Ltd (at cost less provision for other than temporary dimunition in value of Rs. 0.02 million (31st March 2011 ; 0.02 Million -0.01 million(31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in State Bank of Travancore Ltd -0.01 million(31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in ICICI Bank Ltd -0.05 million(31st March 2011: 0.05 million)equity shares of Rs.5 0.79 0.79 0.15 0.15 119.40 19.85 19.85 As at 31st March 2011 Rs. Millions
19.85
139.25
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 each fully paid in Oil and Natural Gas Corporation Limited -0.03 million(31st March 2011:0.03 million)equity shares of Rs.10 each fully paid in Indian Bank Ltd Investment in equity shares (unquoted) 0.01 million (31st March 2011: 0.01 million)equity shares of Rs.10 each fully paid in Madras Stock Exchange Limited 4.00 14.21 34.06 Aggregate amount of quoted investments( Market value: Rs.24.80 million (31st March 2011: Rs.26.36 million) Aggregate amount of unquoted investments Aggregate provision for diminution in value of investments
15. Loans and advances Long-term As at 31st March 2012 Rs. Millions Capital advances Secured, considered good Unsecured, considered good (A) Security deposit Secured, considered good Unsecured, considered good Doubtful Provision for doubtful security deposit (B) Loans and advances to related parties Unsecured, considered good (C) Advances recoverable in cash or kind Secured considered good Unsecured considered good Doubtful Provision for doubtful advances (D) 1.75 1.75 1.75 3.16 3.16 3.16 10.77 10.77 50.85 50.85 50.85 88.28 88.28 88.28 76.46 76.46 76.46 1,709.29 1,709.29 1,709.29 As at 31st March 2011 Rs.Millions Short-term As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions
6.32 2.95
6.32 2.95
4.00 14.21 153.46
10.21 23.85 1,723.39
10.21 143.25 1,723.39
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
Other loans and advances Advance income-tax(net of provision for taxation) Prepaid expenses Loans to employees Balances with statutory/government authorities (E) Total (A+B+C+D+E) 16. Trade receivables and other assets 16.1 Trade receivables Non-current As at 31st March 2012 Rs. Millions Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (A) Other receivables Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (B) Total (A+B) 6,997.96 6,997.96 6,997.96 10,116.37 6,548.83 6,548.83 6,548.83 9,691.94 3,118.41 682.50 3,800.91 (682.50) 3,118.41 3,143.11 344.08 3,487.19 (344.08) 3,143.11 As at 31st March 2011 Rs.Millions Current As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions 501.48 4.43 26.21 532.12 533.87 6.11 26.18 32.29 35.45 12.14 1,157.23 8.57 4.29 1,182.23 1,332.13 819.22 5.15 3.00 827.37 2,613.12
111
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
16.2 Other assets Non-current As at 31st March 2012 Rs. Millions Unsecured, considered good unless stated otherwise Non-current bank balances (A) Others Interest accrued on ?xed deposits Interest accrued on investments Others (B) Total (A+B) 17. Inventories As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions 3,005.92 2,615.59 3,005.92 2,615.59 499.37 492.08 10.22 88.64 98.86 98.86 2.21 476.98 479.19 479.19 As at 31st March 2011 Rs.Millions Current As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions
499.37
492.08
-
-
Stores, Spares and Fuel (including stock-in- transit)
18. Cash and bank balances Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Cash and cash equivalents Balances with banks: -On current accounts -Deposits with original maturity of less than three months -On unpaid dividend account Cash on hand Other bank balances -Deposits with original maturity for more than 12 months -Deposits with original maturity for more than 3 months but less than 12 months - Margin money deposit
-
-
254.14 434.97 7.13 0.99 697.23
4,978.40 314.45 8.00 3.37 5,304.22
499.37 499.37 499.37 (499.37) -
492.08 492.08 492.08 (492.08) -
0.49 146.82 147.31 844.54 844.54
Amount disclosed under non current assets
33.48 120.75 154.23 5,458.45 5,458.45
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
19. Revenue from operations Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Revenue from operations Revenue from drilling and production services Revenue from wind power generation 31,570.46 58.75 31,629.21 33,385.79 86.44 33,472.23
20. Other income Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Interest income on -Bank deposits -Others Dividend income on -Long term investments -Current investments Exchange Difference (Net) Miscellaneous Income Net gain on sale of current investments Net gain on sale of assets Pro?t on sale of joint venture interest Rental income 35.77 0.78 0.37 182.80 126.44 307.69 3.81 657.66 24.16 0.01 1.16 18.50 97.30 4.06 108.27 6.35 259.81
21. Consumption of stores, spares, power and fuel Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 982.74 1,049.18 196.43 319.67 1,179.17 1,368.85
Consumption of stores and spares Power and Fuel
22. Employee bene?t expense Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 3,277.53 2,754.39 28.93 32.61 6.34 4.59 65.44 103.85 3,378.24 2,895.44
Salaries,wages and bonus Contribution to provident and other fund Gratuity expense Staff welfare expenses
113
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
23. Finance costs Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 9,771.97 9,237.69 74.75 98.28 31.32 12.81 9,890.85 9,335.97
Interest Loan Processing Charges Amortization of ancillary borrowings costs Exchange difference to the extent considered as an adjustment to borrowings costs
24. Depreciation and amortization expense Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 5,160.41 4,907.14 5,160.41 4,907.14
Depreciation on tangible assets
25. Other expenses
Yearended 31st March 2012 Rs. Millions Freight and forwarding cost Rent Rates and taxes Rental charges for machinery Insurance Repairs and maintenance -Plant and machinery -Buildings -Others Drilling services and management fees Advertising and sales promotion Travelling ,conveyance and transportation Communication costs Printing and stationery Legal and professional fees Catering expenses Directors’ sitting fees Payment to auditors As auditor -Audit fee -Tax audit fee 41.66 90.11 21.14 507.85 1,425.34 142.60 2.38 39.94 1,333.83 2.71 797.11 71.83 5.01 965.59 216.36 0.24 Yearended 31st March 2011 Rs. Millions 40.18 87.76 26.00 439.38 593.66 461.57 1.59 6.64 1,075.82 0.75 745.78 78.10 4.94 891.87 265.97 0.32
42.96 0.46
40.79 0.62
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
-Limited review In other capacity -Taxation matters -Other services(certi?cation fees) Reimbursement of expenses Provision for diminution in value of long term investments Exchange losses(net) Exchange differences(net) Provision for doubtful debts and advances Miscellaneous expenses 1.15 0.35 0.88 0.18 494.11 398.84 2,065.00 8,667.63 1.20 1.39 0.13 513.05 500.19 782.96 344.08 1,632.13 8,536.87
26. Exceptional items
Year ended 31st March 2012 Rs. Millions Loss on asset sunk Year ended 31st March 2011 Rs. Millions 3,372.87 3,372.87
27. Earnings per share(EPS) The following re?ects the pro?t and share data used in the basic and diluted EPS computations
Year ended 31st March 2012 Rs. Millions Pro?t/(Loss) after tax Less: Dividends on preference shares and tax thereon Net pro?t/(loss) for calculation of EPS 3,215.19 293.16 2,922.03 Year ended 31st March 2011 Rs. Millions 1,449.45 324.14 1,125.31
No. Millions Weighted average number of equity shares in calculating basic EPS Effect of dilution: Stock options granted under ESOS Weighted average number of equity shares in calculating diluted EPS Earning per share -basic Earning per share -diluted 43.51 0.31 43.82 67.16 66.68
No. Millions 43.51 0.25 43.76 25.86 25.71
28. Employee stock option scheme The Parent Company has instituted Employee Stock Option Scheme-2005 (ESOS) duly approved by the shareholders in the extra-ordinary general meeting of the company held on 23rd April 2005. As per the scheme, the compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of option. These options vest with employees over a speci?ed period subject to ful?llment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of company’s equity share at the prevailing market price on the date of the grant of option. 115
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 The Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employees Stock Purchase Scheme guidelines in 1999, applicable to stock option schemes on or after 19th June 1999. Under these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. The Company has not recognized any deferred compensation expenses, as the exercise price was equal to the market value (as de?ned by SEBI) of the underlying equity shares on the grant date. Excess of exercise price over the nominal value of equity shares allotted during the year under ESOS and credited to securities premium account is Rs. NIL (31st March 2011: Rs.8.21 million) The details of option granted are given below: Maximum number of options that may be granted under the scheme is 1.84 million equity shares of Rs.2 each. Options granted during the year-NIL (up to 31st March 2011: 0.44 million equity shares of Rs.2 each)-Options lapsed during the year 0.078 million equity shares of Rs2 each (up to 31st March 2011: 0.04 million equity shares of Rs.2 each)-Options exercised during the year- NIL (up to 31st March 2011: 0.095 million equity shares of Rs.2 each)-Options outstanding at the end of year :0.23 million equity shares of Rs.2 each (up to 31st March 2011: 0.31 million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 1.52 million equity shares of Rs.2 each (31st March 2011: 1.441 million equity shares of Rs.2 each) 29. Aban Singapore Pte Ltd (“Aban Singapore”) operates a share option scheme to provide an incentive to directors and employees of Aban Singapore and related corporations to participate in the equity of the Company. Under the Scheme, the number of shares of Aban Singapore under option shall not exceed 2% of the total number of issued and paid-up shares of Aban Singapore. The options were granted on 25th August 2007. No options were granted during the current ?nancial year. The number of outstanding options held by employees of Aban Singapore and related corporations as on 31st March,2012 is 2,462,000 share options.(Previous year: 2,462,000 share options). There were no options forfeited, exercised or lapsed for the ?nancial year ended 31st March 2012. 30. The Maritime and Port Authority of Singapore has awarded “Approved International Shipping Enterprise “(AIS) status to Aban Singapore Pte Ltd and its subsidiaries with effect from 1 June 2006 for an initial period of 10 years. Aban Singapore and its operating subsidiaries are exempted from Singapore Income tax from the qualifying income under Section 13F of the Singapore Income Tax Act. However, in respect of income earned outside Singapore, necessary provision for tax has been made in accordance with applicable tax laws in respective countries. 31. Leases Operating lease: Company as lessee The wholly owned foreign subsidiary leases, of?ce space and accommodation for certain employees from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewable rights. The future aggregate minimum payments under the operating leases contracted for at the balance sheet date but not recognized as liabilities are analysed as follows: 31st March 2012 Rs.Millions Within one year After one year but not more than two years 76.20 67.00 143.20 31st March 2011 Rs.Millions 58.10 8.43 66.53
116
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 32. Interest in joint venture The Parent company’s interest, as a venturer, in jointly controlled entity is as follows: Name of the company Frontier Offshore Exploration (India) Limited Country of incorporation Proportion of ownership interest 31st March 2012 25% Proportion of ownership interest 31st March 2011 25%
India
The company has ceased to have joint control over Frontier Offshore Exploration (India) Limited and has also provided for diminution in the value of long term investment considering the state of affairs of the joint venture company 33. Segment information A. Primary Segment-The company’s primary segments are offshore oil drilling and production services and wind power generation (Wind energy). The said business segments have been identi?ed considering the nature of services rendered and the internal ?nancial reporting system. Income and expenses have been accounted for based on their relationship to the operating activities of the segment B. Secondary segment- Substantial assets of the company are offshore rigs, which are mobile assets and can operate across the world, in view of which geographical segment is not considered.
Primary Segment information 1. Segment revenue - Drilling -Wind energy 2. Segment results - Drilling -Wind energy less: interest expenses 3. Segment assets - Drilling -Wind energy 4. Segment liabilities - Drilling -Wind energy 5. Depreciation - Drilling -Wind energy 6. Capital expenditure including work in progress - Drilling -Wind energy 32,228.12 58.75 13,992.16 (178.30) (9,803.29) 173,262.99 421.71 145,012.39 55.87 4,975.38 185.03 145,068.26 32,286.87 33,634.05 97.99 12,684.72 (132.13) (9,237.69) 160,108.52 604.45 137,083.09 180.57 4,727.94 179.20 137,263.66 33,732.04 31st March 2012 Rs. Millions Rs. Millions 31st March 2011 Rs. Millions Rs. Millions
4,010.57
3,314.90
173,684.71
160,712.97
5,160.41
4,907.14
25,110.44 -
25,110.44
5,205.20 -
5,205.20
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 34. Related Party Disclosures Names of related parties and related party relationship Related parties where control exists A. Subsidiary companies (wholly owned subsidiaries) Aban Energies Limited, India Aban Holdings Pte Limited, Singapore B. Subsidiaries of Aban Holdings Pte Limited, Singapore Aban Singapore Pte Ltd, Singapore Aban 7 Pte Ltd, Singapore Aban 8 Pte Ltd, Singapore Aban Abraham Pte Ltd, Singapore Aban Pearl Pte Ltd, Singapore Aban International Norway AS, Norway Sinvest AS, Norway DDI Holding AS, Norway Deep Drilling Invest Pte Ltd, Singapore Deep Drilling 1 Pte Ltd, Singapore Deep Drilling 2 Pte Ltd, Singapore Deep Drilling 3 Pte Ltd, Singapore Deep Drilling 4 Pte Ltd, Singapore Deep Drilling 5 Pte Ltd, Singapore Deep Drilling 6 Pte Ltd, Singapore Deep Drilling 7 Pte Ltd, Singapore Deep Drilling 8 Pte Ltd, Singapore Deep Driller Mexico S de RL de CV, Mexico C. Other related parties with whom the company had transactions a. Key Management personnel (i) Reji Abraham (ii) Mr. P. Venkateswaran (iii) Mr. C. P. Gopalkrishnan Managing Director Dy. Managing Director Dy. Managing Director and Secretary
Transactions with related parties during the year
Nature of transaction Key Management Personnel 31st March 2012 Rs. Millions 1. Rent paid 2. Remuneration 3. Interest received/receivable 4. Loan repaid 5. Dividend paid 6. Amount oustanding as at 31st March 2012 -Payable 7.63 36.80 18.58 31st March 2011 Rs. Millions 5.31 124.75 0.01 0.38 17.79
76.85
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
31st March 2012 Rs. Millions 1. Remuneration to Key management personnel - Mr. Reji Abraham -Mr. P.Venkateswaran -Mr. C.P.Gopalkrishnan 2. Rent paid - Reji Abraham 3. Dividend paid - Reji Abraham 4. Amount payable towards commission to: - Mr. Reji Abraham - Mr.P.Venkateswaran Other transactions Loans guaranteed by personal guarantee by the managing director of the company-Rs.14,648 million 35. Capital and other commitments 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions 6.34 6.39 24.07 31st March 2011 Rs. Millions 84.66 13.65 26.44
7.63
5.31
18.46
17.67
-
73.20 3.65
Capital and Other commitments not provided for
104.16
63.24
36. Contingent liabilities 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions
Guarantees given by banks on behalf of the company
710.25
1,183.90
119
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
37. Derivative instruments and unhedged foreign currency exposures a. Outstanding forward cover contracts/derivatives as at the balance sheet date As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs. Millions
a. Derivative contracts oustanding as at the balance sheet date
Purpose
- Currency forward contracts/options -Foreign currency convertible bonds
7,217.71 -
9,023.40 975.30
Hedging risk of exchange rate ?uctuations Hedging risk of exchange rate ?uctuations
b. Particulars of unhedged foreign currency exposures as at the balance sheet date As at 31st March 2012 USD Millions
- Import payables -Foreign currency convertible bond -Bond Loans denominated in Norwegian Kroners in Foreign Subsidiary
As at 31st March 2012 Rs. Millions 2,441.76 -
As at 31st March 2011 USD Millions 45.00 43.19 57.33
As at 31st March 2011 Rs. Millions 2,006.60 1,925.90 2556.30
48.00 -
38. Previous year ?gures Till the year ended 31st March 2011, the Group was using the pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its ?nancial statements. During the year ended 31st March 2012, the Revised Schedule VI noti?ed under the Companies Act, 1956 has become applicable to the Group. The Group has reclassi?ed previous year ?gures to conform to this year’s classi?cation.
As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W
For and on behalf of the Board
Reji Abraham Managing Director Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Aban Offshore Limited
Financial Highlights - 5 years at a glance (Standalone)
PARTICLULARS PROFIT & LOSS ACCOUNT Income from Operation & Other Income PBDIT Finance Cost Depreciation/Exceptional Items Goodwill Amotized Profit before Tax Tax Profit after Tax BALANCE SHEET Net Fixed Asset Investment Net Current Asset Total Share Holders Fund Borrowings Defferred Tax Liability Total Return on Networth EPS (Basic)-Rs. EPS (Dilluted-Rs. Debt Equity Ratio 5983.76 39471.29 217.15 45,672.20 20746.63 24656.96 268.61 45,672.20 (5.93%) (34.49) (34.24) 1.19 4,973.96 39,590.68 8,322.76 52,887.40 23,570.66 29,024.75 291.98 52,887.40 9.93% 46.32 46.05 1.23 5,756.42 39,686.38 8,253.69 53,696.49 21,729.31 31,531.50 435.68 53,696.49 12.91% 62.18 61.22 1.45 5,242.53 13,807.49 24,747.13 43,797.15 12,451.76 30,829.88 515.51 43,797.15 20.86% 60.30 60.04 2.48 5,702.32 9,785.08 9,858.50 25,345.90 10,129.14 14,563.19 653.58 25,345.90 15.71% 34.54 33.80 1.44 7144.13 3417.94 3662.53 986.10 (1,230.69) (1,230.69) 12,673.14 7,990.44 3,286.57 1,148.08 3,555.79 1,216.30 2,339.49 13,638.33 8,777.18 3,371.42 1,091.16 4,314.60 1,510.17 2,804.43 12,295.90 7,578.11 2,550.62 972.44 4,055.05 1,457.43 2,597.62 7,387.71 4,179.65 692.43 954.47 62.93 2,469.82 878.80 1,591.01 2011-12 (Rs. Millions) 2010-11 (Rs. Millions) 2009-10 (Rs. Millions) 2008-09 (Rs. Millions) 2007-08 (Rs. Millions)
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Regd. Office: Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008.
Aban Offshore Limited
Twenty Sixth Annual General Meeting
Folio No. / DP ID & Client ID.......................................................... Name of Member / Joint Holder No. of Shares : Please tick ( ) whether Member Joint Holder 1. Joint Holder 2. Proxy I/We hereby record my presence at the 26th Annual General meeting of Aban Offshore Ltd, held on Friday, the 21st September, 2012 at 10.15 a.m. at Narada Gana Sabha Trust, (Sathguru Gnanananda Hall) No.314 TTK Road, Chennai - 600 014. Member(s) or Proxy(s) Signature Note :
1. The Shareholder / Proxy must bring the admission slip to the meeting duly completed and signed and it must be handed over at the entrance. 2. Shareholders intending to require information about accounts to be explained at the meeting are requested to inform the Company at least a week in advance of their intention to do so, so that the papers relating thereto may be made available if permissible.
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Regd. Office: Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008.
Aban Offshore Limited
PROXY FORM
Folio No. / DP ID & Client ID.......................................................... I/We .................................................. of ........................................... in the district of .......................................................... being members of Aban Offshore Ltd. hereby appoint .................................. of ................................. in the district of ... .................................. as my / our proxy to vote for me / us on my / our behalf at the 26th Annual General Meeting of the Company on to be held on Friday, the 21st September, 2012 at 10.15 a.m. at Narada Gana Sabha Trust, (Sathguru Gnanananda Hall) No.314 TTK Road, Chennai - 600 014. Signed this ................................. day of ..........................2012
Affix
Note :
1. The form should be signed across the stamp as per the specimen signature registered with the Company 2. The proxy form duly completed must reach the Registered Office of the Company at Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008. not less than 48 hours before the Meeting. 3. Proxy need not be a member.
Re. 1 Revenue Stamp
To,
If Undelivered please return to:
Aban Offshore Limited
Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008
Canara Traders & Printers Pvt. Ltd. Chennai-41
doc_491403116.pdf
Aban Offshore Limited Annual Report for the financial year 2011-12
Aban Offshore Limited
Annual Report 2011-12
Contents
Introduction 02 AOL Group holding structure 16 Managing Director’s review 18 Strengths 20 Management discussion and analysis 22 De-risking our business 27 5 Years Financial Highlights 121
Disclaimer
In this annual report, we have disclosed forward-looking information to enable investors to comprehend our prospects and take informed investment decisions. This report and other statements – written and oral – that we periodically make contain forwardlooking statements that set out anticipated results based on the management’s plans and assumptions. We have tried wherever possible to identify such statements by using words such as ‘anticipates’, ‘estimates’, ‘expects’, ‘projects’, ‘intends’, ‘plans’, ‘believes’ and words of similar substance in connection with any discussion of future performance. We cannot guarantee that these forward-looking statements will be realised, although we believe we have been prudent in our assumptions. The achievement of results is subject to risks, uncertainties and even inaccurate assumptions. Should known or unknown risks or uncertainties materialise, or should underlying assumptions prove inaccurate, actual results could vary materially from those anticipated, estimated or projected. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.
“When I dream alone it remains as a dream, but when we dream together it is the beginning of reality.”
– M. A. Abraham, 1939 - 2004
CORPORATE INFORMATION
BOARD OF DIRECTORS V. S. Rao P. Murari Reji Abraham K. Bharathan K. M. Jayarao Satish chandra Gupta P. Venkateswaran C. P. Gopalkrishnan AUDIT COMMITTEE V. S. Rao P. Murari K. Bharathan K. M. Jayarao P. Venkateswaran Chairman (upto 25.01.2012) Chairman (from 31.01.2012) Member Member (from 31.01.2012) Member (from 31.01.2012) Chairman (upto 25.01.2012) Vice Chairman Managing Director Director Nominee Director of ICICI Bank Director (upto 8.11.2011) Deputy Managing Director Deputy Managing Director & Secretary BANKERS & FINANCIAL INSTITUTIONS AXIS BANK LIMITED BANK OF BARODA BANK OF INDIA CANARA BANK CENTRAL BANK OF INDIA CORPORATION BANK DBS BANK LTD DnB NOR BANK ASA EXPORT IMPORT BANK OF INDIA ICICI BANK LIMITED IDBI BANK LTD INDIAN BANK INDIAN OVERSEAS BANK LIFE INSURANCE CORPORATION OF INDIA ORIENTAL BANK OF COMMERCE PUNJAB NATIONAL BANK STATE BANK OF HYDERABAD STATE BANK OF INDIA STATE BANK OF MYSORE STATE BANK OF TRAVANCORE SYNDICATE BANK THE LAKSHMI VILAS BANK LTD UNION BANK OF INDIA UCO BANK REGISTRAR AND SHARE TRANSFER AGENT CAMEO CORPORATE SERVICES LIMITED “Subramanian Building” No.1, Club House Road, Chennai – 600 002
SHAREHOLDERS / INVESTORS GRIEVANCE COMMITTEE K. Bharathan P. Venkateswaran C.P. Gopalkrishnan - Chairman - Member - Member
COMPENSATION COMMITTEE V. S. Rao P. Murari K. Bharathan Reji Abraham Chairman (Upto 25.01.2012) Chairman (from 31.01.2012) Member Member
REMUNERATION COMMITTEE (CONSTITUTED ON 31.01.2012) P. Murari K. Bharathan K. M. Jayarao AUDITORS FORD, RHODES, PARKS & CO., Chartered Accountants Paruvatham No.2, 56th Street, Off: 7th Avenue, Ashok Nagar Chennai – 600 083 REGISTERED OFFICE “Janpriya Crest” 113 Pantheon Road Egmore Chennai 600 008. Website :www.abanoffshore.com 2 - Chairman - Member - Member
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Aban Offshore Limited
Registered Office ‘Janpriya Crest’ 113 Pantheon Road, Egmore, Chennai 600 008. NOTICE TO MEMBERS NOTICE is hereby given that the Twenty Sixth Annual General Meeting of the Members of ABAN OFFSHORE LIMITED will be held on Friday ,the 21st September 2012 at 10.15 A.M at Narada Gana Sabha Trust (Sathguru Gnanananda Hall), No.314 (old No.254) T.T.K. Road, Chennai – 600 018 to transact the following business: ORDINARY BUSINESS 1. To receive, consider and adopt the Audited Balance Sheet as at 31st March 2012 and the Pro?t and Loss Account for the year ended as on that date, together with the reports of the Board of Directors and Auditors thereon. To consider and declare a dividend @ 8% p.a on the paid up Non Convertible Cumulative Redeemable Preference Share capital of the Company for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 29th December, 2011 and pro-rata dividend @ 10% p.a from 30th December, 2011 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 28th February, 2012 and pro-rata dividend @ 10% p.a from 1st March 2012 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare pro-rata dividend @ 9% p.a upto 30th March, 2012 and pro-rata dividend @ 10% p.a for one day (i.e) 31st March 2012 on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012. To consider and declare a dividend @9.25% p.a. on Non Convertible Cumulative Redeemable Preference Shares for the year ended 31st March 2012 To consider and declare a dividend on Equity Shares for the year ended 31st March 2012 To appoint a Director in place of Mr. P. Murari who retires by rotation and being eligible offers himself for reappointment. To appoint a Director in place of Mr. K.Bharathan who retires by rotation and being eligible offers himself for reappointment. 10. To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION “RESOLVED THAT M/s. Ford, Rhodes, Parks & Co., Chartered Accountants, Chennai be and are hereby re appointed as the Statutory Auditors of the Company to hold of?ce from the conclusion of this Annual General Meeting to the conclusion of the next Annual General Meeting to conduct the audit on a remuneration as may be paid on a progressive billing basis to be agreed between the Auditor and the Board or any committee thereof.” SPECIAL BUSINESS 11. To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT in partial modi?cation of the resolution passed earlier and in accordance with the provisions of Sections 198, 269, 309 and other applicable provisions, if any of the Companies Act, 1956, read with Schedule XIII to the Act and subject to approval of Central Government, Mr.P.Venkateswaran Deputy Managing Director be paid the following revised remuneration for the a period of three years effective 01.04.2012 1. 2. 3. Basic Salary - Rs.8,00,000/-per month. House Rent allowance - Rs.4,80,000/- per month Gas, Electricity, water or reimbursement of expenses in lieu thereof shall be in accordance with the schemes and rules of the Company. Medical Reimbursement - Reimbursement of expenses incurred for Self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years. Leave Travel Concession - Reimbursement of expenditure incurred for self and family once a year subject to a maximum of one month’s salary. Club Fees - Actual fees for a maximum of two clubs subject to a maximum of Rs.20,000/- per annum. No admission and life membership fee will be paid. 3
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Personal Accident Insurance and other term insurance - The Premium shall be paid as per the rules of the Company. Contribution to Provident Fund and Superannuation Fund shall be paid as per the rules of the Company and shall not be included in the Computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act, 1961. Gratuity shall not exceed half a month’s salary for each completed year of service.
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Club Fees - Actual fees for a maximum of two clubs subject to a maximum of Rs.20,000/- per annum. No admission and life membership fee will be paid. Personal Accident Insurance and other term insurance - The Premium shall be paid as per the rules of the Company. Contribution to Provident Fund and Superannuation Fund shall be paid as per the rules of the Company and shall not be included in the Computation of ceiling on perquisites to the extent these either singly or put together are not taxable under the Income Tax Act, 1961. Gratuity shall not exceed half a month’s salary for each completed year of service.
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Commission The Deputy Managing Director shall be paid Commission not exceeding 0.50 % of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the Sections 198 and 309 of the Companies Act, 1956. The Remuneration Committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above, the remuneration payable to Mr P Venkateswaran. Minimum Remuneration Notwithstanding anything stated herein, where in any ?nancial year, Company has no pro?ts or its pro?ts are inadequate, the Company shall pay the above remuneration as minimum remuneration. 12 To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT in partial modi?cation of the resolution passed earlier and in accordance with the provisions of Sections 198, 269, 309 and other applicable provisions, if any of the Companies Act, 1956, read with Schedule XIII to the Act and subject to approval of Central Government, Mr.C.P.Gopalkrishnan Deputy Managing Director be paid the following revised remuneration for the a period of three years effective 01.04.2012. 1. 2. 3. Basic Salary - Rs.8,00,000/-per month. House Rent allowance - Rs.4,80,000/- per month Gas, Electricity, water or reimbursement of expenses in lieu thereof shall be in accordance with the schemes and rules of the Company. Medical Reimbursement - Reimbursement of expenses incurred for Self and family subject to a ceiling of one month’s salary in a year or three months salary over a period of three years. Leave Travel Concession - Reimbursement of expenditure incurred for self and family once a year subject to a maximum of one month’s salary.
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Commission The Deputy Managing Director shall be paid Commission not exceeding 0.50 % of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the Sections 198 and 309 of the Companies Act, 1956 and further subject to the Deputy Managing Director con?rming to the Board that no remuneration has been received by him from subsidiaries of the Company during the ?nancial year. The Remuneration Committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above the remuneration payable to Mr C.P.Gopalkrishnan. Minimum Remuneration Notwithstanding anything stated herein, where in any ?nancial year, Company has no pro?ts or its pro?ts are inadequate, the Company shall pay the above remuneration as minimum remuneration. 13. To consider and if thought ?t to pass with or with out modi?cation(s) the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT pursuant to the provisions of Sections 198,269, 309 and 310 read with Schedule XIII and other applicable provisions if any, of the Companies Act, 1956 and subject to approval Central Government, consent of the Company be and is hereby accorded for re-appointment of Mr. Reji Abraham as Managing Director of the Company for a period of 5 years with effect from 26.09.2012 to 25.09.2017 on the following terms and conditions A. a) Remuneration Basic Salary Between Rs.15 Lacs to Rs.25 Lacs per month The remuneration committee be and is hereby authorized in its absolute discretion and from time to time to ?x within the range stated above the Salary Payable to Mr. Reji Abraham
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Commission The Managing Director shall be paid Commission not exceeding 2% of the net pro?ts of the Company, as may be decided by the Board or Committee thereof from time to time subject to the overall ceiling laid down under the sections 198 and 309 of the Companies Act, 1956. Perquisites In addition to the salary and commission payable to Mr. Reji Abraham, he shall also be entitled to perquisites like free furnished accommodation or house rent allowance of 60% of salary and reimbursement of other expenditure or allowances for utilities including furnishing and repair gas electricity and water, medical reimbursement incurred in India and abroad, leave travel concession for self and family, club fees ( this will not include Admission and Life Membership fees) medical personal accident and term insurance and such other perquisites and allowances (for self and family wherever applicable) as per the Company Policy applicable form time to time to the senior management personnel of the company or as may be decided by the Board or Committee of Board from time to time. Such perquisites and allowances will be subject to ceiling limit as may be ?xed by the Committee of Directors from time to time. For the purpose of calculating the above ceiling, perquisites and allowances shall be evaluated as per Income Tax rules wherever applicable. In the absence of any such Rule perquisites and allowances shall be evaluated at such actual cost incurred by the Company in providing such perquisites and allowances. Use of car for of?cial duties and adequate communication facilities at residence shall not be included in the computation of perquisites for the purpose of calculating ceiling Privilege Leave: On full pay and allowance as per the rules of the company. Encashment of the leave at the end of the tenure will not be included in the computation of ceiling and perquisites. He will also be entitled to Casual and sick leave as per the rules of the Company. Company’s contribution to Provident Fund, Gratuity, Superannuation or Annuity Fund as per the rules of the Company to the extent these either singly or put together are not taxable under the Income Tax Act, 1961 The total remuneration of Mr. Reji Abraham as per “a”& “b” above inclusive of value of perquisites will however be limited to the overall ceiling laid down under the sections 198 and 309 of the Companies Act, as amended from time to time.” B. Minimum Remuneration Where in any ?nancial year during the currency of tenure of the Managing Director, the Company has no pro?ts or its pro?ts are inadequate, Managing Director shall be paid remuneration by way of salary and perquisites as speci?ed above. “RESOLVED FURTHER THAT the above remuneration shall be payable to Mr.Reji Abraham for a period of three years with effect from 26.09.2012” 14
“RESOLVED FURTHER THAT Mr. Reji Abraham shall not retire by rotation during his tenure as Managing Director.” To consider and if thought ?t to pass with or without modi?cation(s) the following resolution as a SPECIAL RESOLUTION “RESOLVED THAT, in accordance with the provisions of Section 81 and 81(1A) and all other applicable provisions, if any, of the Companies Act, 1956 (including any statutory modi?cation(s) or re-enactment thereof) and relevant provisions of the Memorandum of Association and Articles of Association of the Company, Foreign Exchange Management Act, 1999, Issue of Foreign Currency Convertible Bonds and Ordinary Shares (through Depositary Receipt Mechanism) Scheme, 1993, guidelines prescribed by the Securities and Exchange Board of India (“SEBI”) and subject to such approvals, consents, permissions and / or sanction of the Ministry of Finance of the Government of India, Reserve Bank of India and any other appropriate authorities, institutions or bodies, as may be necessary and subject to such terms and conditions, modi?cations, alterations as may be prescribed and/or speci?ed by any of them in granting any such approval, consent, permission or sanction, the consent, authority and approval of the Company be and is hereby accorded to the Board of Directors (hereinafter referred to as the “Board”, which term shall be deemed to include any Committee thereof) to offer, issue, and allot, in the course of one or more offerings, in one or more foreign markets, any securities (including but not limited to Equity Shares, Global Depository Receipts American Depository Receipts/Shares, Foreign Currency Convertible Bonds, Convertible Bonds, Euro - Convertible Bonds that are convertible at the option of the Company and / or at the option of the holders of such securities, securities partly or fully convertible into Equity Shares and / or securities linked to Equity Shares and / or any instruments or securities with or without detachable warrants secured or unsecured or such other types of securities representing either Equity Shares or convertible securities) (hereinafter referred to as “Securities”) to Foreign/Domestic investors, Non-residents, Foreign Institutional Investors/Foreign Companies/NRI(s)/ Foreign National(s) or such other entities or persons as may be decided by the Board, whether or not such persons/ entities/investors are Members of the Company through Prospectus, Offering Letter, Circular to the general public and / or through any other mode or on private placement basis as the case may be from time to time in one or more tranches as may be deemed appropriate by the Board on such terms and conditions as the Board may in its absolute discretion deem ?t for an amount not exceeding US$ 400 Million (US Dollar Four hundred Million only)or its equivalent currencies including green shoe option on such terms and conditions including pricing as the Board may in its sole discretion decide including the form and the persons to whom such Securities may be issued and all other terms and conditions and matters connected therewith.” 5
“RESOLVED FURTHER THAT without prejudice to the generality of the above the aforesaid issue of the Securities may have all or any term or combination of terms in accordance with normal practice including but not limited to conditions in relation to payment of interest, dividend, premium or redemption or early redemption at the option of the Company and / or to the holder(s) of the Securities and other debt service payment whatsoever and all such terms as are provided in offerings of this nature including terms for issue of additional Equity Shares of variation of interest payment and of variation of the price or the period of conversion of Securities into Equity Shares or issue of Equity Shares during the duration of the Securities or terms pertaining to voting rights or option for early redemption of Securities.” “RESOLVED FURTHER THAT the Board be and is hereby authorised to issue and allot such number of underlying Equity Shares as may be required to be issued and allotted upon conversion of any such Securities referred to above or as may be in accordance with the terms of the offering(s) and that the said Equity Shares shall be subject to the Memorandum and Articles of Association of the Company and shall rank in all respects pari passu with the existing Equity Shares of the Company including payment of dividend.” “RESOLVED FURTHER THAT the consent of the Company be and is hereby granted in terms of Section 293(1)(a) and Section 293(1)(d) other applicable provisions, if any, of the Companies Act, 1956 and subject to all necessary approvals to the Board to borrow monies in excess of the paid up capital and free reserves and to secure, if necessary, all or any of the above mentioned Securities to be issued, by the creation of a mortgage and / or charge on all or any of the Company’s immovable and / or movable assets, both present and future in such form and manner and on such terms as may be deemed to be ?t and appropriate by the Board.” “RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed may be disposed off by the Board to such person in such manner and on such terms as the Board in its absolute discretion thinks ?t, in the best interest of the Company and as is permissible in law.” “RESOLVED FURTHER THAT the Company may enter into any arrangement with any agency or body for issue of Depository Receipts representing underlying Equity Shares/Preference Shares / other securities issued by the Company in registered or bearer form with such features and attributes as are prevalent in international capital markets for instruments of this nature and to provide for the tradability or free transferability thereof as per the international practices and regulations and under the forms and practices prevalent.” “RESOLVED FURTHER THAT the Securities issued in foreign markets shall be deemed to have been made abroad and / or in the market and / or at the place of issue 6
of the Securities in the international market and may be governed by applicable foreign laws.” “RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of Securities or instruments representing the same, the Board be and is hereby authorised to determine the form, terms and timing of the offering(s), including the class of investors to whom the Securities are to be allotted, number of Securities to be allotted in each tranche, issue price, face value, premium amount on issue / conversion of Securities, Exercise of warrants / Redemption of Securities, rate of interest, redemption period, listings on one or more stock exchanges as the Board in its absolute discretion deems ?t and to make and accept any modi?cations in the proposal as may be required by the authorities involved in such issues and on behalf of the Company to do all such acts, deeds, matters and things as it may at its discretion deem necessary or desirable for such purpose, including without limitation the Appointment of Registrar, Book-Runner, Lead-Managers, Trustees / Agents, Bankers, Global Co-ordinators, Custodians, Depositories, Consultants, Solicitors, Accountants, entering into arrangements for underwriting, marketing, listing, trading, depository and such other arrangements and agreements, as may be necessary and to issue any offer document(s) and sign all deeds, documents and to pay and remunerate all agencies / intermediaries by way of commission, brokerage, fees, charges, out of pocket expenses and the like as may be involved or connected in such offerings of securities, and also to seek listing of the securities or securities representing the same in any Indian and / or in one or more international stock exchanges with power on behalf of the Board to settle any questions, dif?culties or doubts that may arise in regard to any such issue, offer or allotment of securities and in complying with any Regulations, as it may in its absolute discretion deem ?t, without being required to seek any further clari?cation, consent or approval of the members or otherwise to the end and intent that the members shall be deemed to have given their approval thereto expressly by the authority of this resolution.” “RESOLVED FURTHER THAT the Board be and is hereby authorised to delegate all or any of the powers herein conferred to any Committee of Directors or the Managing / Deputy Managing Director or any Director or any other Of?cer or Of?cers of the company to give effect to the aforesaid resolution.” 15 To consider and if thought ?t, to pass with or without modi?cation(s), the following resolution as a SPECIAL RESOLUTION: “RESOLVED THAT pursuant section 81(1A) and all other applicable provisions of the Companies Act 1956(including any statutory modi?cation or re-enactment thereof for the time being in force) and enabling provisions of the Memorandum and Articles of Association of the Company, the Listing Agreement entered into with the Stock
Exchanges and subject to the provisions of Chapter VIII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 as amended from time to time the provisions of the Foreign Exchange management Act, 1999 and the Foreign Exchange Management (Transfer or issue of security by a Person Resident Outside India) Regulations 2000 applicable rules, regulations, guidelines or laws and / or any approval consent, permission or sanction of the Central Government , Reserve Bank of India or any other appropriate authorities, institution or bodies (hereinafter collectively referred to as the “appropriate authorities”) and subject to such conditions as may be prescribed by any one of them while granting any such approval, consent, permission and / or sanction (hereinafter referred to as the requisite approvals) which may be agreed to by the Board of Directors of the Company (hereinafter called the “ Board” which term shall be deemed to include any committee which the Board may have constituted or hereinafter constitute to exercise its powers including the power conferred by this resolution) the Board be and is hereby authorized to issue offer and allot equity shares / fully convertible debentures / partly convertible debentures / non convertible debentures with warrants / any other securities (other than warrants) which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (collectively referred to as “QIP Securities”) to the Quali?ed Institutional Buyers (QIBs) as per the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 as Amended s, on the basis of placement document(s) at such time and times in one or more tranche or tranches at par or at such price or prices and on such terms and conditions and in such manner as the Board may in its absolute discretion determine in consultation with the Lead Managers, Advisors or other intermediaries for an amount not exceeding RS.2500 crores (Rupees two thousand ?ve hundred crores only) including such premium amount as may be ?nalized by the Board.” “RESOLVED FURTHER THAT the relevant date for the determination of applicable price for the issue of the QIP Securities shall be the date on which the Board of the Company decide to open the proposed issue “(Relevant date)” or in case of securities which are convertible into or exchangeable with Equity Shares at a later date, the date on which the holder of such securities becomes entitled to apply for share shall be the relevant date “(Relevant Date)”. “RESOLVED FURTHER THAT the Board be and is hereby authorized to issue and allot such number of equity shares as may be required to be issued and allotted upon conversion of any securities referred above or as may be necessary in accordance with the terms of the offering all such shares shall be subject to the terms of Memorandum of Association and Articles of Association of the Company and being pari passu with the then existing shares of the
Company in all respects as may be provided under the terms of the issue and in the offering document.” “RESOLVED FURTHER THAT such of these Securities to be issued as are not subscribed may be disposed off by the Board to such persons and in such manner and on such terms as the Board in its absolute discretion thinks ?t in accordance with the provisions of law.” “RESOLVED FURTHER THAT the issue to the holders of the securities with equity shares underlying such securities shall be inter alia, subject to suitable adjustment in the number of shares, the price and the time period etc., in the event of any change in the equity capital structure of the Company consequent upon any merger, amalgamation, takeover or any other re-organisation or restructuring in the Company. “RESOLVED FURTHER THAT for the purpose of giving effect to any issue or allotment of securities or instruments representing the same as described above the Board be and is hereby authorized on behalf of the Company to do all such acts deeds, matters and things as it may in its absolute discretion deem necessary or desirable for such purpose, including without limitation the entering into of underwriting, marketing and institution / trustees/ agents and similar agreements / and to remunerate the managers, underwriters and all other agencies / intermediaries by way of commission, brokerage, fees and the like as may be involved or connected such offerings of such securities, with power on behalf of the Company to settle any question , dif?culties or doubts that may arise in regard to any such issue or allotment as it may in its absolute discretion deem ?t. “RESOLVED FURTHER THAT for the purpose aforesaid, the Board be and is hereby authorized to settle all questions, dif?culties or doubts that may arise in regard to the issue, offer or allotment of securities and utilization of the issue proceeds including but without limitation to the creation of such mortgage / charge under section 293(1) (a) of the said Act in respect of the aforesaid Securities either on pari passu basis or other wise or in the borrowing of loans as it may in its absolute discretion deem ?t without being required to seek any further consent or approval of the Members or otherwise to the end and intent that the Members shall be deemed to have given their approval thereto expressly by the authority of this resolution “RESOLVED FURTHER THAT the Board be and is hereby authorized to appoint such consultants, Book runners, Lead Managers, underwriters, Guarantors, Depositories, Custodians, Registrars, Trustees, Bankers, Lawyers, Merchant Bankers and any other advisors and professionals as may be required and to pay them such fees, Commissions and other expenses as they deem ?t. “RESOLVED FURTHER THAT the allotment of securities shall be to Quali?ed Institutional Buyers in accordance with the Quali?ed Institutional Placement (QIP), Chapter VIII of Securities Exchange Board of India (Issue of Capital and 7
Disclosure Requirements) Regulations 2009 as amended from time to time, and such securities shall be fully paid up and the allotment of such securities shall be completed within 12 months from the date of this resolution with out the need for fresh approval from the shareholders and placements made in pursuance of this resolution if approved shall be separated by atleast 6 months between each placement.” “RESOLVED FURTHER THAT the Board be and is hereby authorized to delegate all or any of the powers herein conferred to any Committee of Directors or Managing / Deputy Managing Directors / Directors or any other of?cers / Authorised representatives of the Company to give effect to the aforesaid resolution. By Order of the Board C.P. Gopalkrishnan Deputy Managing Director & Secretary Chennai – 600 008 Date : 30th May 2012 NOTES: 1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE MEETING IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND SUCH PROXY NEED NOT BE A MEMBER OF THE COMPANY. PROXY FORM IN ORDER TO BE EFFECTIVE SHOULD BE LODGED AT THE REGISTERED OFFICE OF THE COMPANY NOT LATER THAN 48 HOURS BEFORE THE COMMENCEMENT OF THE MEETING. Corporate Members intending to send their authorized representatives to attend the Meeting are requested to send a certi?ed copy of Board Resolution authorizing their representative to attend and vote on their behalf at the meeting The Register of Members and the Share Transfer Books of the Company will remain closed from 14.09.2012 to 21.09.2012 (both days inclusive) Explanatory Statement pursuant to Section 173(2) of the Companies Act, 1956 relating the Special Business to be transacted at the Meeting is annexed hereto Dividend on Equity Shares if declared at the Annual General Meeting will be paid on or after 21.09.2012 to those persons or their mandates. (i) Whose names appear as Bene?cial Owners as at the end of the business hours on 13.09.2012 in the list of Bene?cial Owners to be furnished by National Securities Depository Limited and Central Depository Services (India) Limited in respect of the shares held on electronic form; and
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Whose name appear as members in the Register of Members of the Company after giving effect to valid share transfers in physical form lodged with the Company / Registrar and Share Transfer Agent on or before 13.09.2012
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Dividend on Preference Shares if declared at the Annual General Meeting will be paid on or after 21.09.2012 Members holding shares in Physical form are requested to consider converting their holding to dematerialized form to eliminate all risks associated with physical shares. Members can contact the Company or Company’s Share Transfer Agent, M/s. Cameo Corporate Services Limited in this regard. Members / Proxies should bring the enclosed attendance slip duly ?lled in for attending the meeting along with the Annual Report. Members who hold shares in dematerialized form are requested to bring their client ID and DP ID numbers for easy identi?cation of attendance at the Meeting. Members holding shares in physical form may obtain the Nomination Forms from the Company’s Registrar and Share Transfer Agent Members holding shares in electronic form may obtain the Nomination Forms from their respective Depository Participants
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Pursuant to the provisions of Section 205 (A) and 205 (c) of the Companies Act, 1956, Company has transferred unclaimed / unpaid dividends for the ?nancial years 199596 to 2003 – 04, to the Investor Education and Protection Fund (IEPF) established by the Central Government. No claim shall lie against the Company in respect of unpaid/ unclaimed dividend after a period of seven years from the dates they ?rst became due for payment. Members who are holding physical shares in identical order of names in more than one account are requested to intimate to the Share Transfer Agent the ledger folio of such accounts and send the share certi?cates to enable the Company to consolidate all the holdings into an account. The share certi?cate will be returned to the members after making necessary endorsements in the due course. Members desiring any information as regards accounts of the Company are requested to write to the Company at an early date so as to enable the Company to keep information ready. Members desirous of receiving Notice/ Annual Report in electronic form may furnish their e mail id to the Company / Registrar and Share Transfer Agent. Brief resume of these directors, nature of their expertise in speci?c functional areas, names of companies in which they hold directorships, memberships and chairmanships in committees, shareholding and relationships between
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directors inter-se as stipulated. In the listing agreement with Stock Exchanges in India are provided in the report on Corporate Governance forming part of the report. EXPLANATORY STATEMENT PURSUANT TO SECTION 173(2) OF THE COMPANIES ACT, 1956 IN RESPECT OF SPECIAL BUSINESS CONTAINED IN THE NOTICE DATED 30.05.2012 ITEM NO: 11 Mr.P.Venkateswaran was appointed as a Deputy Managing Director for a period of ?ve years effective 01.08.2011 and the same was approved by the share holders at the twenty ?fth Annual General Meeting held on 28 September, 2011. It has been proposed to revise the remuneration payable to Mr.P.Venkateswaran with effect from 01.04.2012. In view of the losses suffered during the ?nancial year 2011-12, approval of shareholders is being sought to pay the revised remuneration as contained in the proposed resolution for a period of three years effective 01.04.2012. The details as required under sub-paragraph (C) of paragraph 1 under Section II of Part II of Schedule XIII are furnished hereunder: i. ii. The payment of remuneration was approved by the Remuneration Committee at its meeting held on 15 February, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. However, the Company has not made any default in repayment of any of its debts for a continuos period of 30 days in the preceding ?nancial year before the date of his appointment. Other particulars:
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GENERAL INFORMATION: Particulars Nature of Industry Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Financial performance based on given indicators Oil ?eld services Not Applicable Not Applicable Details
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The Company suffered losses during the ?nancial year 2011-2012. However consolidated accounts show a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 is Rs. 4592.10 Million The Company has a foreign collaborator “India Offshore Inc” holding 19.13 % equity.
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Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any
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INFORMATION ABOUT THE APPOINTEE: Particulars Background details Past Remuneration Details Mr.P.Venkateswaran is a graduate in Technology from Indian Institute of Technology. He has been with Company since 1986. Mr.Venkateswaran’s remuneration for the year 2010 – 11 was Rs.13.65 million. For the ?nancial year 2011-12 his remuneration was Rs. 6.39 Million NIL Mr.Venkateswaran is head of Operations of the Company. As Deputy Managing Director with more than two decades of experience in the drilling industry, he is ideally suited for the current assignment.
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Recognition or awards Job pro?le and his suitability
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Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any. OTHER INFORMATION: Particulars Reasons of loss or inadequate pro?ts
As proposed in the resolution There is no company of comparable size in drilling industry in India.
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Apart from remuneration payable to Mr.P.Venkateswaran, there is no pecuniary relationship directly or indirectly with the company.
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Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
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Steps taken or proposed to be taken for improvement.
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Expected increase in productivity and pro?ts in measurable terms.
The notice may be treated as the abstract of terms and conditions of the appointment of a Whole time Director, in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. P.Venkateswaran, is interested in this resolution. Item No.12: Mr.C.P.Gopalkrishnan was appointed a Deputy Managing Director for a period of ?ve years effective 01.08.2011 and the same was approved by the shareholders at the Twenty Fifth Annual General Meeting held on 28th September, 2011. It has been proposed to revise the remuneration payable to Mr.C.P.Gopalkrishnan with effect from 01.04.2012. In view of the losses suffered during the ?nancial year 2011-12, approval of shareholders is being sought to pay the remuneration as contained in the proposed resolution for a period of three years with effect from 01.04.2012. The details as required under sub-paragraph (C) of paragraph 1 under Section II of part II of Schedule XIII are furnished hereunder: i. ii. The payment of remuneration was approved by the Remuneration Committee at its meeting held on 15 February, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. However, the Company has not made any default in repayment of any of its debts for a continuos period of 30 days in the preceding ?nancial year before the date of his appointment. Other particulars:
iii.
I.
GENERAL INFORMATION: Particulars Nature of Industry Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Oil ?eld services Not Applicable Not Applicable Details
Sl. No. 1. 2. 3.
10
4. 5. 6. II.
Financial performance based on given indicators Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any INFORMATION ABOUT THE APPOINTEE: Particulars Background details
The Company suffered losses during the ?nancial year 20112012. However accounts shows a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 is Rs.4230 Million The Company has a foreign collaborator “India Offshore Inc” holding 19.13 % equity.
Sl. No. 1.
Details Mr.C.P.Gopalkrishnan is a Member of Institute of Chartered Accountants of India, Institute of Company Secretaries of India and a law graduate. He has been with Company since 1987. Mr.C.P.Gopalkrishnan’s remuneration for the year 2010 – 11 was Rs.9.40 Million. During the ?nancial year 2012-12, he was paid a remuneration of Rs.6.39 Million. NIL Mr.Gopalkrishnan is head of ?nance and Company Secretary. As Deputy Managing Director and Company Secretary with more than two decades of experience in the drilling industry, he is ideally suited to for the current assignment. As proposed in the resolution There is no company of comparable size in drilling industry in India.
2.
Past Remuneration
3. 4.
Recognition or awards Job pro?le and his suitability
5. 6.
Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any. OTHER INFORMATION: Particulars Reasons of loss or inadequate pro?ts
7.
Apart from remuneration payable to Mr.C.P.Gopalkrishnan, there is no pecuniary relationship directly or indirectly with the company.
III.
Sl. No. 1.
Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year 2011-12. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
2. 3.
Steps taken or proposed to be taken for improvement. Expected increase in productivity and pro?ts in measurable terms.
The notice may be treated as the abstract of terms and conditions of the appointment of a Whole time Director in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. C.P.Gopalkrishnan, is interested in this resolution. Item No.13: Mr.Reji Abraham was appointed as Managing Director for a period of ?ve years effective 26.09.2007 by the members at the Annual General Meeting held on 16 August, 2007. His term expires on 25.09.2012. Considering his contributions to the growth and in the best interest of the company, the Directors at their meeting held on 30.05.2012 recommended the re-appointment of Mr.Reji Abraham as Managing Director for a further period of ?ve years effective 26.09.2012 with revision in terms of remuneration as detailed in the resolution. The resolution requires approval of the members and hence the item is placed before the Meeting. The terms of contract and the interest of the Director set out in the resolution and the Explanatory Statement may be treated as the abstract of the Memorandum under Section 302 of the Companies Act, 1956. 11
The details as required under sub-paragraph (C) of paragraph 1 under Section II of part II of Schedule XIII are furnished hereunder: i. ii. iii.
I.
The payment of remuneration was approved by the Remuneration Committee at its meeting held on 30th May, 2012. There have been delays by the Company in its debt repayment obligations including interest on such debts, to its lenders. Other particulars:
GENERAL INFORMATION:
Sl. No
1. 2. 3. Nature of Industry
Particulars
Oil ?eld services Not Applicable Not Applicable Date or expected date of commencement of Commercial production In case of new companies, expected date of commencement of activities as per project approved by Financial Institutions appearing in the prospectus. Financial performance based on given indicators
Details
4.
The Company suffered losses during the ?nancial year 2011-2012. However Consolidated accounts shows a pro?t of Rs.3,215.19 Million. Net foreign exchange earned during the ?nancial year 2011-12 was Rs.4592.10 Million. The Company has a foreign collaborator holding 19.13 % equity.
5. 6. II.
Export performance and net foreign exchange collaborations: Foreign Investments or collaborators, if any INFORMATION ABOUT THE APPOINTEE: Particulars Background details
Sl. No. 1.
Details Mr.Reji Abraham is a graduate in Engineering and a Post Graduate in Management Studies. He is a Promoter and has nearly 20 years of experience in business. Mr.Reji Abraham’s remuneration for the year 2010 – 11 was Rs.84.66 million. During the ?nancial year 2011-12 he was paid a remuneration of Rs.6.34 Million. NIL With nearly two decades of experience in the drilling industry and being a Promoter of the Company and as Managing Director since August, 2004, he is ideally suited to lead the Company. As proposed in the resolution There is no company of comparable size in drilling industry in India.
2.
Past Remuneration
3. 4.
Recognition or awards Job pro?le and his suitability
5. 6.
Remuneration proposed Comparative remuneration pro?le with respect to industry, size of company, pro?le of the position and person (in case of expatriates the relevant details would be w.r.t. the country of origin. Pecuniary relationship directly or indirectly with the company, or relationship with the managerial personnel, if any.
7.
Mr.Reji Abraham is a Promoter of the Company. He is paid remuneration and rent for a portion of our Mumbai of?ce premises owned by him.
III.
OTHER INFORMATION:
Particulars Reasons of loss or inadequate pro?ts Details Majority of Company’s operating assets were idle on account of repairs and major refurbishments during the ?nancial year 201112 and hence suffered losses during the ?nancial year. The rigs which were refurbished have gone into operation and there will be steady revenue for the Company during the current year. Since all the rigs are in operation during the current year, the Company hopes to make marginal pro?ts.
Sl. No. 1.
2. 3.
Steps taken or proposed to be taken for improvement. Expected increase in productivity and pro?ts in measurable terms.
12
The notice may be treated as the abstract of terms and conditions of the appointment of a Managing Director in terms of Section 302 of the Companies Act, 1956. None of the Directors, except Mr. Reji Abraham, is interested in this resolution. Item No.14 In view of the growing operations of the Company and to augment the fund requirements of the Company, your Company proposed to create offer issue and allot equity shares GDRs, ADRs, FCCBs, etc., as stated in the resolution. The proposed resolution would be for renewal of approval of issuance of equity shares FCCBs, GDRs, ADRs, etc. for an amount not exceeding USD 400 Million approved by the Members of the Company at the Annual General Meeting held on 28th September, 2011. None of the Directors is concerned or interested in the resolution. Item No.15 Your Company in order to increase the ability to compete with the peer group and to enhance its global competitiveness in domestic and international markets needs to strengthen its ?nancial position by augmenting long term resources from time to time The proposed special resolution, being an enabling authorization seeks the approval of the Members to the Board of Directors without the need of any further approval from the shareholders under the Quali?ed Institutional Placement (“QIP”) with the Quali?ed Institutional Buyers (“QIB”) in accordance with the provisions of SEBI. Pursuant to the above, the Board may in one or more tranches issue and allot equity shares / fully convertible debentures / partly convertible debentures / non convertible debentures with warrants / any other securities (other than warrants) which are convertible into or exchangeable with equity shares on such date as may be determined by the Board but not later than 60 months from the date of allotment (Collectively referred to as “QIP Securities”) The said QIP by the Board shall be subject to the provisions of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 (as amended from time to time) including the pricing which will not be less than the average of the weekly high and low of the closing prices of the related shares quoted on the stock exchanges during the two weeks preceding the relevant. The relevant date for the determination of applicable price for the issue of the QIP securities shall be the date of the meeting in which the Board of the Company decide to open the proposed issue or in case of securities which are convertible into or exchangeable with equity shares at a later date the date on which the holder of such securities becomes entitled to apply for the said shares, as the case may be. For reasons aforesaid an enabling resolution is therefore proposed to be passed to give adequate ?exibility and discretion to the Board to ?nalise the terms of issue. The securities issued pursuant to the offering would be listed on the Indian Stock Exchanges.
The securities issued under QIP issue pursuant to offer may, if necessary be secured by way of mortgage / hypothecation on the Company’s assets as may be ?nalized by the Board of Directors in consultation with the Security Holders / Trustees in favour of security holder / Trustees for the holders of said securities. As the documents to be executed between the security holders / trustees for the holders of the said securities and the Company may contain the power to take over the management of the Company in certain events, enabling approval is also sought under section 293(1) (a) of the Companies Act,1956. Section 81(1A) of the Companies Act, 1956 and the Listing Agreement entered with the Stock Exchanges provide, inter alia that where it is proposed to increase the subscribed share capital of the Company by allotment of further shares, such further shares shall be offered to the persons who on the date of the offer are holders of the equity shares of the Company in proportion to the Capital paid up on those shares as of that date unless the Members decide otherwise. The Special Resolution seeks the consent and authorization of the Members to the Board of Directors to make the proposed issue of securities in consultation with the Lead Managers, Legal Advisors and other intermediaries and in the event it is decided to issue Securities convertible into equity shares to issue to the holders of such convertible securities in such manner and such number of equity shares on conversion as may be required to be issued in accordance with the terms of the issue keeping in view the then prevailing market conditions and in accordance with the applicable provisions of rules and regulations or guidelines The Board recommend passing of this resolution None of the directors is concerned or interested in the resolution. Chennai - 600 008 30.05.2012 By Order of the Board C.P. Gopalkrishnan Deputy Managing Director & Secretary
13
14 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Aban O?shore is the largest o?shore rig provider based in India.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 15
Assets
Number of assets Employees Uninterrupted Market dividend capitalisation
Rs.
18
As on 31st March 2012
1,491 25
As on 31st March 2012 years
18.8
billion As on 31st March 2012
Our vision
• To continue as the market leader in providing offshore drilling services • To achieve far-reaching success by developing innovative, integrated, enterprising and world class services for the global hydrocarbon industry • To provide clients an unmatched value proposition, through its proven experience, modern technology and diverse range of services
Presence
Headquartered in Chennai, India, the Company has a presence across six countries. It has two subsidiaries, namely Aban Energies Limited (India) and Aban Holdings Pte. Limited (Singapore). The Company’s shares are listed on the Madras, Bombay and National stock exchanges in India.
Clients
• Oil & Natural Gas Corporation of India Ltd. (ONGC) • OVL (Qatar) • Reliance Industries Ltd. (RIL) • Hardy Exploration & Production (India) Inc. • Shell Brunei • Shell Malaysia • Petronas Carigali SDN BHD (Malaysia) • Gujarat State Petroleum Corporation Ltd. (GSPC) • Hindustan Oil Exploration Co. Ltd. • Cairn Energy (U.K.) • Chevron (Thailand) • Kosmos Energy • Petro SA • PEMEX Mexico • Total E&P Qatar • Petrobras • Exxon Mobil (Malaysia) and Petrogas E & P
Lineage
Aban Offshore (promoted by the late M.A Abraham in 1986) is the flagship company of the Aban Group. The promoters held a 54.11% stake in the Company as on 31st March, 2012.
Competence
The Company provides drilling services for offshore exploration and production (E&P) of hydrocarbons globally. It provides drilling services in shallow to deep waters with complete operations management.
16 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Aban Group holding structure
Aban Offshore Ltd.
100% 100%
INDIA Aban Energies Ltd. MEXICO
NORWAY
Aban Holdings Pte. Ltd.
100% 100%
Deep Driller Mexico, S.de.R.L.de.C.V.
100%
Aban International Norway AS
60%
Aban Singapore Pte. Ltd.
100% 100%
SINGAPORE
40%
Sinvest AS
Aban Abraham Pte. Ltd.
Aban 7 Pte. Ltd.
100%
Aban 8 Pte. Ltd.
Aban Pearl Pte. Ltd.
100%
DDI Holding AS
100%
Deep Drilling Pte. Ltd.
100% 100% 100% 100% 100% 100% 100% 100%
Deep Drilling-1 Pte. Ltd.
Deep Drilling-2 Pte. Ltd.
Deep Drilling-3 Pte. Ltd.
Deep Drilling-4 Pte. Ltd.
Deep Drilling-5 Pte. Ltd.
Deep Drilling-6 Pte. Ltd.
Deep Drilling-7 Pte. Ltd.
Deep Drilling-8 Pte. Ltd.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 17
Consolidated results of AOL and its subsidiaries
Particulars Turnover Less: Expenditure EBIDTA EBIDTA % Add: Other income Less: Interest Less: Depreciation Profit before tax Add: share of profit in joint venture Profit before tax and after share in joint venture Less: Provision for tax Core profit after tax Exchange fluctuation (Loss)/Gain Impairment of investment/asset Profit after tax Year ended 31st March 2012 31,629.21 12,730.93 18,898.28 59.75% 657.66 9,890.85 5,160.41 4,504.68 4,504.68 795.38 3,709.30 494.11 3,215.19
(Rs. in millions) Year ended 31st March 2011 33,472.23 11,505.15 21,967.08 65.63% 259.81 9,335.37 4,907.14 7,983.78 665.41 8,649.19 2,530.86 6,118.33 7,82.96 3,885.92 1,449.45
Highlights (consolidated), 2011-12
Total revenue (Rs. in millions)
2009-10 2010-11 2011-12 33,586.60 33,472.23 31,629.21
PAT margin (%)
2009-10 2010-11 2011-12 4.33 10.16 9.26
EBIDTA (Rs. in millions)
2009-10 2010-11 2011-12 21,004 21,967.08 18,898.28
EPS (Rs.)
2009-10 2010-11 2011-12 25.86 67.16 69.84
EBIDTA margin (%)
2009-10 2010-11 2011-12 62.54 65.63 59.75
Return on capital employed (%)
2009-10 2010-11 2011-12 11.52 9.79 8.57
PAT (Rs. in millions)
2009-10 2010-11 2011-12 1,449.45 3,215.19 3,110.00
Return on networth (%)
2009-10 2010-11 2011-12 6.79 11.24 14.26
18 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Managing Director’s review
“At Aban, we will focus on enhanced asset utilisation, increased revenues and debt reduction in 2012-13.”
Reji Abraham reviews the Company’s 2011-12 performance and prospects
Overview
The financial year under review represented an interesting paradox – while the global economy slowed, oil prices increased and yet Aban Offshore’s performance declined – a 5.50% decline in revenues and 13.97% decline in EBIDTA margin. However, profit after tax improved from Rs.1449.5 million to Rs. 3215.19 million, mainly on account of loss on the sunk asset of 2010-11. The investments by oil companies in fresh oil exploration are largely dependent on their cash flows and oil prices. In 2011-12, oil prices remained robust at around USD 90100. A number of high-cost oil wells, that were out of production when oil realisations were extremely low, now returned to production. The improved financials prompted a number of oil companies to reinvest in their exploration programmes as a result of which global rig utilisation increased from 73% in 2010 to 80% in 2011.
shareholders that Aban Offshore reported a conscious decline in its performance. Every few years, the Company is required to refurbish some of its assets in rotation. This is also a necessary compliance with society and safety requirements, which enhances our asset efficiency and reliability. During the year under review, Aban management considered it prudent to contract upgrade the following assets: • Aban II was under contract upgrade during the financial year under review • Aban III and Aban V were refurbished during the financial year under review We must assure shareholders that this refurbishment is a normal part of our business and was factored into our 2011-12 operational budget. However, we could not avoid bunching of such refurbishment/ contract upgrades due to the completion of earlier contracts and commencement of new contracts.
Positives
Some of the positives that transpired during the financial year under review comprised the following: our deepest drill ship Aban Abraham continued to be deployed with Petrobras since June 2011.
Looking ahead
I am pleased to state that following refurbishment, most of these assets were brought back on stream during the later part of the financial year under review and during the first quarter of the current year. • Aban II was put back on stream from 19 April, 2012 • Aban III was put back on stream from 22 December, 2011 • Aban V was put back on stream from 26 October, 2011 As a result, we expect to have all our rigs deployed through the current financial year (except for our FPU Tahara) at relatively attractive rates across fairly long tenures, which should translate into revenue and profit predictability.
Refurbishment
It will be pertinent to explain to our
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 19
At Aban Offshore, one of the major objectives is the need to rationalise our debt. Over the last few years, we focused on doing precisely this: through repayment, extension of tenures and reduction in the coupon rate.
Strategy
At Aban Offshore, one of the major objectives is the need to rationalise our debt. Over the last few years, we focused on doing precisely this: through repayment, extension of tenures and reduction in the coupon rate. This initiative extended into the financial year under review. Our debt maturity profile of around Rs. 1,80,000 millions was revised from three years to ten years. This indicates that banks reposed continued confidence in our sector, business model, fundamentals, integrity and prospects. Further, preference shares of 450 million were redeemed, foreign currency convertible bonds valued at Rs. 34,900 millions were redeemed and we reissued and redeemed bonds worth USD 365 million. Your Company possesses adequate resources to address these periodic liabilities. Once these liabilities are liquidated and gearing improves, we expect to mobilise additional cash
resources at a low cost whenever required to address probable inorganic growth opportunities.
Outlook
The oil demand outlook continues to be robust as the world inches to recovery. The result is that oil prices are either expected to stabilise at the upper level, which could trigger higher E&P spending by oil and gas companies and generate opportunities for rig service providers like us. Aban is attractively placed to capitalise on this emerging reality. The Company possesses an adequately diversified rig mix to address deepwater requirements which doubled in the last five years and are expected to double again over the next five years. Going ahead, we expect to enhance value through long-term deployment at attractive rates, effective cost management, progressive debt management and strengthened margins leading to enhanced shareholder value.
Going ahead
At Aban, we will always focus on enhancing our profitability through the following initiatives: • Timely deployment of our rigs. • Negotiating higher day rates • Locking our assets through longterm tenures in exchange for predictable revenue inflow and shortterm contracts where the Company needed to respond to improving day rates • Retaining our position as one of the most cost-effective rig service providers • Strengthening our safety and environmental standards in line with growing industry regulations • Achieving a high asset uptime through rigorous compliance with safe operational and environmental benchmarks
20 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
STRENGTHS
Aban is the largest Indian-owned offshore drilling rig provider.
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 21
Aban deploys its rigs across six countries
Legacy
Aban is the largest Indian-owned offshore drilling rig provider. The Company is among the world’s ten largest offshore oil rig service providing companies. Over the last decade, the Company emerged as one of the world’s fastest-growing oil rig service providing companies.
Asset mix
Aban provides a diverse rig portfolio to suit varied customer needs: 15 jack-ups, two floaters and one floating production unit.
Indian multinational
Aban deploys its rigs across six countries, demonstrating its operational flexibility.
Knowledge excellence
Aban’s growing industry presence is characterised by low-cost operations, high asset uptime, global competitiveness and industry respect.
Technology
Aban invested in asset youthfulness that translates into operational dependability. The average age of nine jack-ups was four and a half years, resulting in high uptime and attractive day rates.
Premium clientele
Aban’s clientele comprises of 25 major international exploration and production companies. The Company enjoys a trusting relationship with ONGC for over two decades.
22 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
MANAGEMENT DISCUSSION AND ANALYSIS
Global oil industry
In 2010, world oil production grew by 1.8 Mb/d and surpassed the level reached in 2008. Growth was the largest since 2004 and was divided evenly between OPEC and non-OPEC countries. The largest OPEC increases were in Nigeria (+340,000 b/d) and Qatar (+220,000 b/d). NonOPEC output increased by 0.9 Mb/d, the highest since 2002, and was led by China (+271 Kb/d) – recording its largest increase ever was the US (+242 Kb/d) and Russia (+236 Kb/d). Growth remained robust in China and the Middle East with Chinese consumption growing by 860,000 b/d or 10.4%. OECD oil consumption rose by 480 Kb/d – making 2010 the first year of annual OECD growth since 2005. Despite the increase, consumption in 2010 was still 3.6 Mb/d below the peak in 2005 (Source: BP statistical review).
Distribution of proved reserves in 1990,2000 and 2010 (%)
Strengths I Management discussion and analysis I De–risking our business
Aban Offshore Limited I 23
MODU demand will increase over 2010-2020. The capital investments of projects increased significantly in the last decade along with an increase in the number of barrels produced per day, water depths and complexity of reservoir and drilling units with the latest equipment.
Energy production
Oil production continues to grow across various regions, prima facie growing in the Middle East. While the world witnessed moderate growth between 2005 and 2010, the
world will see an overall growth of more than 4% by 2015. The North American region will also play a big role, where 8% growth will make a significant contribution to the world production by 2015.
Million tonnes oil equivalent North America S and C America Europe and Eurasia Middle East Africa Asia Pacific Total Oil Production (Source: BP outlook, 2012)
1990 655.6 230.3 788.3 851.8 320.9 324.9 3171.8
1995 646.0 295.7 669.4 980.5 339.3 353.6 3284.4
2000 650.8 345.3 724.7 1140.9 370.9 379.2 3611.8
2005 645.3 347.1 844.8 1217.9 470.7 380.8 3906.6
2010 648.2 350.0 853.3 1184.6 478.2 399.4 3913.7
2015 700.1 395.5 836.7 1285.0 475.1 397.1 4089.4
Indian oil industry
Hydrocarbons satisfy a major energy demand in India; coal and oil together represent about two-thirds of the total energy used. India is the fifth-largest energy consumer globally and likely to surpass Japan and Russia to become the world's third-largest energy consumer by 2030. Crude oil production was recorded at 31.87 million metric tonnes (MMT) for April-January 2012 compared with 31.41 MMT in April-January 2011 (Source: ibef.org).
Drilling market
Offshore drilling is primarily dominated by mobile offshore drilling units. Global MODU leasing contracts until 2010 was in the region of USD 25.5 bn. Further, technological changes are occurring within the MODU industry and based on available information on leasing MODU between 2010 and 2020, global expenditure on MODU construction, leasing, maintenance and upgrades stands at USD 48.65bn in 2011. This clearly highlights the fact that MODU demand will increase over 2010-2020. The capital investments of projects increased significantly in the last decade along with an increase in the number of barrels produced per day, water depth as well as complexity of reservoir and drilling units with the latest equipment.
Outlook
As of December 2011 Drill barges Drill ships Inland barges Jack-ups Platform rigs Semi-subs Submersibles Tenders (Source: SbWire research) (in operation worldwide ) 48 73 74 491 250 210 5 40 According to Business Monitor International’s (BMI) India Oil and Gas Report for the first quarter of 2012, India's average oil and gas production for 2011 was estimated at 1.04 million barrels per day (B/D) which will reach peak production at 1.06 million B/D in 2012. Given its demand outlook, BMI project consumption is expected to rise sharply to 4.29 million B/D by 2016 from 3.44 million B/D in 2011. Total gas consumption is estimated by BMI to be around 81 billion cubic meters (BCM) in 2016 from around 58 BCM in 2011 (Source: IBEF Research).
24 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
World oil demand outlook in the reference case
Particulars OECD Developing countries Transition economies World (Source: BP outlook, 2012) 2010 46.1 35.9 4.8 86.8 2015 46.0 41.8 5.1 92.9 2020 45.2 47.2 5.3 97.8
mb/d 2035 41.9 61.9 5.9 109.7
Wind energy
India has added around 2,400 MW of wind energy capacity during FY2011-12, growing at an annual 15%. Further, trading of Renewable Energy Certificates (REC) on the power exchange since March 2011 acts as a positive incentive for more addition.
Growth in capacity addition at 15% going forward; IPP segment to remain a key driver
(Source: ICRA Research, Website of C-Wet, *Till August 2011)
OPPORTUNITIES AND THREATS:
Opportunities for the rig industry Exploration and production activities by oil and gas companies are expected to grow owing to rising oil demand and prices thus, strengthening the growth prospects for the world rig industry. Threats for the rig industry • The number of players entering the field is increasing due to the new built-up jack rigs which are affecting the charter rates negatively. This could impact the Company’s performance slightly. • The global E&P business capex is connected to crude oil prices. Low crude oil prices and reducing rig-rates could result in low E&P spends in the near future. • The Company’s vital revenue spinner may be affected in the long term owing to increased emphasis on deep-sea drilling and jack-up rig demand
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 25
Opportunities for the wind energy business
• Wind power receives various excise duties and income tax exemptions, encouraging wind power generation.
Hence, wind energy is the fastest-growing energy sector
• Wind turbine is suitable to install in remote rural areas, water pumping and grinding mills • Wind energy can be used for both distributed generation or grid interactive power generation using on-shore
or off-shore technologies
• Average capacity factor can be close or higher than 30% • It is a pollution-free, clean source of energy, with no greenhouse gas effects or harmful emissions • Wind turbines require less space for installation on farms and ranches. The turbine occupies about 2% of the
total area (the turbine’s foundation is located underground), making the land available for other purposes
• National action plan for climate change (NAPCC) – Released in June 2008 by GOI, NAPCC suggests a target of a minimum renewable energy purchase obligation (RPO) of 5% since 2009-10 with 1% increase for the next 10 years • Renewable Energy Certificate mechanism – The key objective of the REC mechanism is to develop renewable energy and facilitate its inter-state flow; this will enable obligated entities (distribution utilities and open access customers) across states to meet their RPO targets as recommended by the NAPCC. Since March 2011, RECs are traded on the power exchange for market-based price discovery, with the floor and cap being set by the CERC.
Threats in wind energy
• Inconsistent RPO norms across states • Irregular monitoring system and compliance norms • Execution risk beyond inter-connection points • Variation and inconsistency in tariff across states Future ahead The global wind industry will install more than 46 GW of new wind energy capacity in 2012, according to a five-year industry forecast published recently by the Global Wind Energy Council (GWEC) at the EWEA 2012 Conference at Bella Center in Copenhagen. By the end of 2016, total global wind power capacity will be just under 500 GW, with an annual market in that year of about 60 GW. Overall, GWEC projects average annual market growth rates of about 8% for the next five years, but with a strong 2012 and a substantial dip in 2013, total installations for the 2012-2016 period are expected to reach 255 GW, with a cumulative market growth averaging just under 16%. For the second consecutive year, the majority of new installations were outside the OECD and this trend will no doubt continue. Asia will continue to be the world’s largest market with far more new installations than any other region, installing 118 GW between now and 2016, and surpassing Europe as the world leader in cumulative installed capacity sometime during 2013, ending the period with about 200 GW in total. After nearly a decade of double and triple digit growth, the Chinese market has finally stabilised, and will remain roughly at current levels for the next few years. Having achieved a 3 GW market for the first time in 2011, the annual market in India is expected to reach 5 GW by 2015. The future of Japan’s energy system, with the near-universal rejection of nuclear power after the triple tragedy on 11 March 2011, gives hope for a new beginning for the wind industry in Japan.
26 I Annual report, 2011-12 I
Introduction I AOL Group holding structure I Financial Highlights I Managing Director’s review I
Operational review
Drilling division: Revenue generated from drilling declined to Rs. 32228.12 million in 2011-12 compared with Rs. 33634.05 million in the previous year. As on 31st March 2012, all rigs were operational, forecasting a positive revenue generation in the coming financial year.
Wind energy division: Revenue from the Company’s wind energy division declined to Rs. 58.75 million in 2011-12 compared with Rs 97.99 million in 2010-11. Further, 21.94 million units of power were generated in 2011-12 compared with 31.57 million units of power in 2010-11.
Segment wise performance (Consolidated)
Years Drilling Revenues 2008-09 2009-10 2010-11 2011-12 3,4419.05 33,670.50 3,3634.05 32,228.12 Profit 7,017.5 4,618.3 3,475.3 4,205.39
(Rs. in millions) Wind Energy Revenues 124.55 134.18 97.99 58.75 Profit/ (Loss) before tax (215.4) (187.9) (160.4) (194.82)
Financial review
The Company reported a consolidated total income of Rs. 32,286.87 million in 2011-12 (Rs. 33,732.04 million in 2010-11). The Company’s core profit after tax stood at Rs. 3,709.30 million in 2011-12 against Rs. 6,118.33 million in 2010-11.
ensure that employees receive an opportunity to upgrade their knowledge. Aban’s employee strength at the end of 31 March, 2012 was 1,491.
Internal audit and controls
The internal audit reviews internal control checks of the Company’s various significant operations. It is carried out regularly to ensure the effectiveness of its internal control. The Company also has an Audit Committee which is responsible for reviewing the Audit Report submitted by the internal auditors. The feedback from the Committee is considered and the necessary implementations are carried out. The Audit Committee also invites the statutory and internal auditors for regular meetings to review its internal control system. The Board of Directors are kept informed from time to time about any major observations.
Risks and concerns
The section has been addressed in a later part of the report.
Human resource management
Human resource management is critical to the Company’s growth through people recruitment, retention and enrichment. A value-centric management ensures employee loyalty, provides various compensation packages and performance-based incentives. Training and development programmes are conducted on a regularly to
Strengths I Management discussion and analysis I De-risking our business
Aban Offshore Limited I 27
MINIMISING RISKS AT ABAN
01
A slowdown in the economy can affect the Company’s prospects
04
Obsolete assets could lead to lower uptime and revenue decline.
Mitigation
Despite a global economic slowdown, oil prices performed buoyantly over the last year, driven partly by growing demand and declining availability. India’s average oil and gas production is estimated to reach a peak production of 1.06 million b/d in 2012. Concentration in specific geographies could affect prospects in the case of a slowdown in those regions
Mitigation
The Company owns 18 rigs with an average age of nine of its rigs being four and half years – one of the youngest large rig fleets globally. The Company engages in periodic refurbishment and dry docking, making its assets safe on the one hand and delivering a high uptime on the other. An improper utilisation of assets could affect business returns
02
05
Mitigation
The Company deploys rig assets across a judicious mix of long-term and short-term contracts, which enhances revenue predictability on the one hand and makes it possible to capitalise on attractive short-term rates on the other. Its two-decade rich industry presence and enduring customer relationships with leading oil and gas exploration companies makes it possible to renew contracts on schedule.
Mitigation
The Company’s footprint extends across South East Asia, South Asia, Latin America, West Africa and the Middle East. The Company derived 20% of revenues from international markets and 82% from Indian market, an adequate de-risking. . 03 Increasing competition could affect realisations.
Mitigation
New rig costs are estimated as high as USD 180-200 million with a payback period of around 6-8 years, an effective entry barrier. The Company progressively emerged as one of the world’s lowest cost rig service providers, coupled with enduring customer relationships, strengthening its overall competitiveness.
28
DIRECTORS’ REPORT
The Directors of your company are pleased to present the Twenty Sixth Annual Report along with the accounts for the year ended 31st March 2012. 1. FINANCIAL RESULTS
Rs. Millions Standalone 31 March, 2012 Income from Operations Other Income Less Expenditure Pro?t before Interest and Depreciation Less Interest Less Depreciation Pro?t for the year before Tax before Exceptional Items Less Exceptional Items Pro?t for the year before Tax Provision for Tax Fringe Bene?t Tax Provision for Deferred Tax Pro?t after Tax before share in Earnings of joint Ventures Share in earnings of Joint Ventures Pro?t for the year after tax and after share in earnings of joint venture Pro?t brought forward from the previous year Available for appropriation Transfer to Capital Redemption Reserve Transfer to General Reserve Proposed Divided – Preference Proposed Dividend- Equity Tax on Dividend – Preference Tax on Dividend – Equity Balance Carried forward 6,385.28 758.85 3,726.19 3,417.94 3,662.53 986.10 (1,230.69) (1,230.69) (23.38) (1,207.31) (1,207.31) 7,360.90 6,153.59 252.24 156.66 40.92 25.41 5,678.36 31 March, 2011 11,907.43 765.70 4,614.54 8,058.59 3,354.76 1,148.07 3,555.76 3,555.76 1,360.00 (143.70) 2,339.46 2,339.46 6,267.65 8,607.11 500.00 240.00 278.90 156.66 45.24 25.41 7,360.90 Rs. Millions Consolidated 31 March, 2012 31,629.21 657.66 13,225.04 19,061.83 9,890.85 5,160.41 4,010.57 4,010.57 818.75 (23.37) 3,215.19 3,215.19 8,070.09 11,285.28 252.24 156.66 40.92 25.41 10,810.05 31 March, 2011 33,472.23 259.81 12,801.16 20,930.88 9,335.97 4,907.14 6,687.77 3,372.87 3,314.90 2,674.58 (143.72) 784.04 665.41 1,449.45 7,866.85 9,316.30 500.00 240.00 278.90 156.66 45.24 25.41 8,070.09
Particulars
For the year ended
2.
PERFORMANCE Revenue earned during the year under review stood at Rs.7,144.13 millions. Rigs Aban II, Aban III, Aban IV, Aban V, Aban VI and Drillship Aban Ice were working satisfactorily under the existing contracts. Floating Production Unit Tahara is being actively marketed.
4.
SUBSIDIARY COMPANIES INDIAN Aban Energies Limited The Subsidiary Company activities relating to the maintenance of windmills of the Company has been satisfactory. INTERNATIONAL All Rigs are under contract and are performing well
3.
CHANGES IN SHARE CAPITAL During the year the following changes were effected in the Share Capital of the Company Preference shares to the extent of 450 Million were redeemed during the year. Preference shares which were due for redemption on 29th December, 2011, 28 February,2012 and 30th March 2012 have been extended by another three years and the coupon rates have also been revised to 10%. 5.
CONSOLIDATION OF ACCOUNTS The Audited consolidated accounts and cash ?ow statement comprising Aban Offshore Ltd and its Subsidiaries in accordance with the Accounting Standard Rules 2006 prescribed by the Institute of the Chartered Accountants of India in this regard is attached. 29
Government of India, Ministry of Company Affairs, vide General Circular No. 2/2011 dated 08.02.2011 has granted general exemption under section 212(8) of the Companies Act, 1956 from the year ending 31st March, 2011 from not attaching the full text of the ?nancial statements of subsidiaries subject to ful?llment of certain conditions prescribed in the circular. Pursuant to the said general exemption, necessary disclosures have been made in respect of the said subsidiaries in this annual Report along with the Statement pursuant to Section 212 of the Companies Act, 1956. The Audited Accounts of the said Subsidiaries and the related detailed information will be made available to the investors of the Companies / Subsidiaries seeking such information. The Annual Accounts of the Subsidiary Companies will be available for inspection by any investor at the Registered Of?ce of the Company till the conclusion of Annual General Meeting. The subsidiary Company accounts details shall be available in the Company’s website. 6. MANAGEMENT’S DISCUSSION AND ANALYSIS Management Discussion and Analysis Report for the year under review as stipulated under clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report. 7. DIVIDEND The Directors are pleased to recommend a dividend of 8 % p.a, 9% p.a upto 29th December, 2011, 28th February 2012 and 30th March 2012 and @ 10% p.a from 30 December, 2011, 01 March 2012 and 31st March 2012 respectively and 9.25 % p.a on the Non-Convertible Cumulative Redeemable Preference Share Capital of the Company and a dividend of 180 %(Rs.3.60 per share) on the paid-up Equity Share Capital of the Company for the year ended 31st March 2012. 8. DIRECTORS Mr.V.S.Rao and Mr.Satish Chandra Gupta resigned from the Board. The Board wishes to place on record its sincere appreciation for the valuable services rendered by Mr.Rao and Mr.Gupta during their tenure. Mr.P.Murari and Mr.K.Bharathan retire by rotation and being eligible, offer themselves for re appointment. The Board recommends the re appointment of Mr.Reji Abraham as Managing Director for a further period of 5 years effective 26.09.2012. He shall not be liable to retire by rotation. 9. DIRECTOR’S RESPONSIBILITY STATEMENT Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to the Directors’ Responsibility Statement, it is hereby con?rmed: 30 12. 10.
(i)
that in the preparation of the Annual Accounts for the ?nancial year ended on 31st March 2012, the applicable accounting standards had been followed along with a proper explanation relating to material departures.
(ii) that the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the ?nancial year and of the pro?t of the Company for the year under review. (iii) that the Directors had taken proper and suf?cient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 to safeguard the assets of the Company and for preventing and detecting fraud and other irregularities. (iv) that the Directors had prepared the accounts for the ?nancial year ended on 31st March 2012 on a going concern basis. STOCK EXCHANGES Your Company’s Equity shares were listed in the following stock exchanges: Madras Stock Exchange Ltd, Bombay Stock Exchange Limited and National Stock Exchange of India Ltd. Preference Shares aggregating to Rs.2,810 Million issued by the Company are listed with Bombay Stock Exchange Ltd. Necessary stock exchange regulations are complied with. Applicable listing fees for the year 2012 - 13 has already been paid to the respective stock exchanges. 11. Auditors M/s Ford, Rhodes, Parks & Co., Chartered Accountants, Chennai hold of?ce until the conclusion of the ensuing Annual General Meeting and, being eligible, are recommended for re -appointment. Additional Disclosures In line with the requirements of Accounting Standards Rules 2006 of the Institute of Chartered Accountants of India, your Company has made additional disclosures in respect of the ?nancial reporting of interests in the joint venture in the notes on accounts 13. Particulars of employees As required by the provisions of Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, the names and relevant particulars of the employees who were employed throughout the ?nancial year / part of the ?nancial year under review and were in receipt of remuneration for the
Financial Year in aggregate of not less than Rs.60,00,000 (Rs.5,00,000 per month or part thereof), are annexed. A. Conservation of Energy The Company took appropriate measures to conserve energy wherever possible although the Company’s activities in general are not energy intensive. B. Research and development The Company’s research and development activities are focused on indigenization of equipment, tools and spares, which are used in rigs and wind mills.
FOREIGN EXCHANGE EARNINGS AND OUTGO
C.
Technology absorption, adoption and innovation The Company took appropriate measures to reduce its dependence on import of technology for its operations, largely relied on the innovative skills of its employees.
14.
In terms of Section 217(1) of the Companies Act, 1956 (as amended) and the Companies (Disclosure of Particulars in Report of the Board of Directors) Rules 1988, your Directors furnish hereunder the additional information as required.
(Rupees in Millions) 2011 - 12 Foreign exchange earned during the year Foreign exchange out?ow during the year 4592.10 1293.38 2010 - 11 10049.87 930.43
15.
Corporate Governance A detailed note on the Company’s philosophy on Corporate Governance and such other disclosures as required under the listing agreement with the Stock Exchanges is separately annexed herewith and forms part of this report.
16.
Compliance Certi?cate A Certi?cate from the Auditors of the company has been attached to this report which testi?es that the requirements of a sound Corporate Governance process as stipulated under Clause 49 of the listing agreement with the stock exchanges, was met.
17.
Acknowledgements Your Directors wish to place on record their sincere appreciation for the contribution made by the employees at all levels. The Directors also record their sincere appreciation of the support and co-operation received from the Bankers, Financial Institutions, Investors, relevant Central and State Governments Ministries, Valued Clients and Members of the Company For and on behalf of the Board
Place: Chennai Date:30.05.2012 Cautionary Statement:
Reji Abraham Managing Director
P.Murari Vice Chairman
Statement in the Management Discussion and Analysis describing the Company’s objective’s estimates expectation of projection may be Forward Looking Statement within the meaning of applicable laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include Government Regulations, Taw Laws, economic developments in India and in the countries in which the Company conducts business, litigations and other allied factors.
31
ANNEXURE TO THE REPORT OF THE DIRECTORS
Statement as at 31st March 2012 pursuant to clause 12 (Disclosure in the Directors’ Report) of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines 1999 Employee Stock Options - 2005 2005
a) b) (i) No of options granted Pricing Formula 96200
2006
47000
2008
125000
2009
175000
Total
443200
Options were granted at the closing market price of the Equity Shares of the Company on the Stock Exchange where high volume of shares were traded on the day preceding the date of grant of options 431.60 1288.25 3622.85 649.75 & 1211.50
c)
Exercise Price
d) e) f) g) h) i) j) j) S. No
Total No. of Options vested Total No. of Options exercise Total No of equity shares arising as a result of exercise of options Total No. of Options Lapsed Variation of terms of Options Money raised by exercise of options Total No of options in force Details of Options granted to Senior managerial personnel Name Not Applicable
3,73,200 95,130 95,130 Equity shares of Rs.2/- Per share fully paid 1,18,780 None Rs. 2,28,08,794/1,59,290 No options were granted during the year 2011-12 Designation Not Applicable No No of Options granted during the year NIL
k)
Any other employee who received grant in any one year of options amounting to 5% or more of the options granted during the year Identi?ed employees who were granted options during any one year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant) Diluted Earnings per Share (EPS) pursuant to issue of Equity Share on exercise of options calculated in accordance with the accounting standard (AS 20) Earnings per share Method of calculation of employee compensation cost
l)
None
m)
Rs .(34.24)
n)
The employee compensation cost has been calculated using the intrinsic value method of accounting to account for the options issued under the Aban Employee Stock Option Scheme. The Stock based Compensation cost as per the intrinsic value method for the ?nancial year 2011 -12 is NIL. NIL
Difference between the employee compensation cost so computed at (i) above and the employee compensation cost that shall have been recognized if it had used the fair value of the options The impact of this difference on pro?ts and on EPS of the Company
Not Applicable
32
o)
Weighted average exercise prices and weighted average fair values of options granted for options whose exercise price either equals or exceeds or is less than the market price of the stock A description of the method and signi?cant assumptions used during the year to estimate the fair values of Options
Weighted average exercise price - Rs.1507.60 Weighted average fair value – Rs.473.86
p)
The fair value of each option is estimated using the Black Scholes Option pricing model after applying the key assumptions i) risk free interest rate – 6.9694% ii) Expected Life – 3 years iii) Expected volatility – 43.72% iv) Expected dividends – Rs.3.42 per share v) The price of the underlying Share in the market at the Time of option grant Rs.787.05
33
34
Age Quali?cation (s) SSC B.Sc Engg (Mechanical) DME B.E. (Mech) ITI 8/11/1997 3/27/1992 9/26/2008 8/24/2008 2/21/1992 4/1/2002 7/10/1996 6/1/1996 B.Sc Engg (Mechanical) 11/23/2004 4/13/1988 3/18/2009 2/7/1997 30 30 28 30 24 30 29 20 30 32 21 36 3/20/1992 36 5/2/1987 36 55 60 53 44 52 51 47 54 50 49 51 54 46 59 60,54,097 Rig Manager 75,84,321 Driller 87,67,911 Tool Pusher 95,08,095 Tool Pusher 64,93,206 Tool Pusher B. Tech(Mech.) B.E. (Mechanical) Diploma (Mechanical Engg.) SSC 83,05,554 Sr Tool Pusher DME, AMIE in Mechanical Engg. 69,75,103 Rig Manager B.E. (Mech) 78,16,597 Rig Manager B.E. (Industrial and Production Engineering) 70,44,262 General Manager B.Sc Engg (Mechanical) (Operations) 86,85,367 Chief Mechanic 69,40,561 Rig Manager 79,32,330 Sr Tool Pusher 1,33,71,984 Chief Operating Of?cer 69,67,997 Tool Pusher Remuneration Nature of Duties (Rs.) / Designation Experience in Years Date of commenment of employment Details of Previous Employment Derrick Man, Zapata Offshore Drilling Co. Chief Engineer - ONGC Ltd Nadirco Saudi Ltd Saudi Aramco - Drilling Supervisor Not Applicable Dy . SE (Drilling) - ONGC Ltd G.E.T. in Triveni Engineering Works Ltd Saudi Aramco - Drilling Supervisor NDC Not Applicable Rig Superintendant - Jagson International Drilling Superintendent-Triveni Oil Field Services Roustabout Arya Offshore Limited Base-Manager -NICO Resources Ltd
Annexure to the Directors’ Report
Information as per section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) (amendment) Rules 1988, and forming part of the Directors Report for the year ended 31st March 2011. Employed throughout the Financial Year under review, were in receipt of remuneration for the Financial year in aggregate of not less than Rs. 60,00,000/(Rupees Sixty Lakhs only) per annum or Rs.5,00,000/- (Rupees Five Lakhs only) per month where employed for the part of the year
S. No.
Name
1
A.C.D' souza
2
A.P.S. Sandhu
3
Abraham Nakrampurathu Chacko
4
Anil Kishore Sharma
5
James Ravichandran
6
K.Jayarajan
7
KC Kushalappa
8
Radhesam Varma
9
Rajesh Kumar Agarwal
10
Sunil G. Abraham
11
Suresh Kumar
12
Taneja D.K.
13
Tomar R.S.
14
Vinodhan V.K.
Notes (a) Remuneration includes Salary and taxable value of perquisities as per Income tax rules (b) Nature of employment is contractual
CORPORATE GOVERNANCE
ABAN’S GOVERNANCE PHILOSOPHY At Aban Offshore Ltd (Aban) your directors are committed to practice sound governance principles and believe that good governance is an ongoing process for two reasons: to protect stakeholders’ interest and to ensure that no stakeholder bene?ts at the expense of others and the Board of Directors remain committed towards this end. The company’s Corporate governance philosophy revolves around transparency and accountability in all its interactions with the Government, shareholders and employees. The following paragraphs contain the Company’s report on its Corporate Governance practices in compliance with clause 49 of the Listing Agreement with the Stock Exchanges in India.
I
BOARD OF DIRECTORS COMPOSITION OF BOARD
Aban’s Board comprises of Six Directors -One Promoter Director, Two Non - Executive Independent Directors, Two Executive Directors and one Nominee Non Executive Independent Director representing ICICI Bank Ltd (Lender). The Board functioned directly or through various focused committees (Audit Committee, Shareholders’/ Investors’ Grievance Committee, Compensation Committee and Remuneration Committee). The Board and its committees met at regular intervals. The Board is vested with functions related to goalsetting, performance evaluation and control. The Company’s Board met 6 times during the year 2011 - 12 on the following dates: 26.05.2011,05.08.2011,28.09.2011,08.11.20 11,22.12.2011 and 31.01.2012
The names of the Directors on the Board, their attendance at the meetings and the other Directorships that they held as on 31st March, 2012 are set out below:
Name of Director(s)
Category Of Directorship
Financial year 2011-2012 Attendance at Board Meetings Last AGM Yes Yes Yes _ Yes Yes Yes Yes
As on 31st March 2012 No. of Other Directorships Public Ltd. Cos. 9 7 9 2 1 4 4 Private Ltd. Cos 17 5 16 Committee Positions in other Companies* Member Chairman
V. S. Rao (upto 25.01.2012) P. Murari Reji Abraham
Non - Executive - Independent Non - Executive - Independent Executive - Promoter
5 5 6 1 6 3 6 6
2 -
3 -
Satish Chandra Gupta Non - Executive Independent (upto 08.11.2011) K Bharathan K.M. Jaya Rao P. Venkateswaran C.P. Gopalkrishnan Non - Executive Independent Non - Executive Independent Nominee – ICICI Bank Ltd.(lender) Executive Non Promoter Executive Non Promoter
Excludes directorships in associations foreign and section 25 companies * Represents Memberships / Chairmanships in Audit Committee and Shareholders’/Investors’ Grievance Committee The required information (as enumerated in Annexure IA as referred to in Clause 49 of the Listing Agreement) was made available to the Board of Directors. The Directors who will retire by rotation and offer themselves for reappointment are: Mr. P. Murari & Mr K Bharathan. The Board recommends the re-appointment of Mr. P. Murari and Mr.K . Bharathan as Directors. The Board also recommends the reappointment of Mr. Reji Abraham as Managing Director for a further period of ?ve years effective 26.09.2012.
35
Name of Director Date of Birth Nationality Date of Appointment on Board Quali?cations Shareholding in the Company Equity Shares of Rs.2/- each Membership in Committees of the Company Chairmanship in Committees of the Company List of Companies in India which Directorship held
P Murari 19.08.1934 Indian 18.09.1996 M.A(Economics) Nil Compensation Committee and Remuneration Committee Audit Committee Adayar Gate Hotel Ltd HEG Ltd Aditya Birla Nuva Ltd Xpro India Ltd Great Eastern Energy Corporation Ltd. IDEA Cellular Ltd\ Bajaj Holding and Investment Ltd Bajaj Auto Ltd Fortis Malar Hospital Ltd. Aditya Birla Nuva Ltd. Fortis Malar Hospital Ltd. Xpro India Ltd Great Eastern Energy Ltd Adayar Gate Hotel Ltd.
K Bharathan 15.04.1960 Indian 26.12.2003 ACA
Audit Committee, Compensation Committee and Remuneration Committee Shareholders’/Investors’ Grievance Committee Ponni Sugars (Erode) Limited.
Membership / Chairmanship in other Companies
No Director is related to any other Director on the Board in terms of the de?nition of relative given under the Companies Act, 1956
REMUNERATION TO DIRECTORS Name of the Director (s) V S Rao P Murari K Bharathan Reji Abraham Satish Chandra Gupta K M Jayarao P Venkateswaran C P Gopalkrishnan Consolidated Salary ---48,00,000 --48,00,000 48,00,000 Perquisites and other benefits ---15,26,400 --15,95,520 15,95,520 Commission --------Amount in Rupees Sitting Fees 59,000 59,000 84,000 -10,000 30,000 --Total 59,000 59,000 84,000 63,26,400 10,000 30,000 63,95,520 63,95,520
•
Sitting fees for the meetings attended by Mr. Jayarao was paid to the institution M/s ICICI Bank Ltd. All Board members and senior management personnel have af?rmed the compliance with the code of conduct. A declaration signed by the Managing Director to this effect is enclosed at the end of this report. II. COMMITTEES OF THE BOARD The Board has constituted committees of Directors to deal with matters which need quick decisions and timely monitoring of the activities falling within the terms of reference. The Board Committees are as follows:
REMUNERATION TO NON-EXECUTIVE DIRECTORS No remuneration, other than sitting fees and other expenses (travelling, boarding and lodging incurred for attending the Board/ Committee meetings) were paid to the non-executive Directors in 2011-12 Code of Conduct The Board has laid down a code of conduct for all Board Members and senior management of the Company. The code of conduct is available on the website of the Company, www.abanoffshore .com 36
A.
AUDIT COMMITTEE
Composition and Attendance
Name V. S. Rao Category No. of Meeting Attended 3 3 4 1 1
Terms of Reference The Audit Committee’s Power and responsibilities include the following functions: • Overseeing of the company’s ?nancial reporting process and the disclosure of its ?nancial information to ensure that the ?nancial statement is correct, suf?cient and credible. Recommending to the Board, the appointment, reappointment and if required, the replacement or removal of the statutory auditor and the ?xation of audit fees and approval of payment to statutory auditors for any other services rendered by the them. Reviewing with the management, the annual ?nancial statements before submission to the Board for approval, focusing to primarily on: Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956 b) any changes in accounting policies and practices c) Major accounting entries based on exercise of judgment by management d) quali?cations in draft audit report e) signi?cant adjustments made in the ?nancial statements arising out of audit ?ndings f) The going concern assumption g) Compliance with accounting standards h) Compliance with Stock Exchange and legal requirements concerning ?nancial statements i) Disclosure of any related party transactions i.e., Transactions of material nature with their subsidiaries, promoters, directors, management or their relatives etc., that may have potential con?ict with the interests of company at large. Its scope also included a review with management performance of statutory and internal auditors, adequacy of internal controls, the adequate structure and staf?ng of the internal audit function, reporting structure coverage and frequency of internal audit j) Discussion with internal auditors on signi?cant ?ndings and follow up there on k) Reviewing the ?ndings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the board. l) Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any areas of concern. m) Investigating the reasons behind substantial default in the event of non payments to shareholders
•
Chairman (upto 25.01.2012) P. Murari Chairman (from 31.01.2012) K. Bharathan Member K.M.Jayarao Member (from 31.01.2012) P. Venkateswaran Member (from 31.01.2012)
Mr.P.Murari was appointed as Chairman of Audit Committee consequent to resignation of Mr.V.S.Rao. Executives of Accounts Department, the Statutory and Internal Auditors were invited to attend the Audit Committee Meetings The Chairman of the Audit committee was present at the Last Annual General Meeting B. SHAREHOLDER’S / INVESTORS’ GRIEVANCE COMMITTEE
•
a)
The Company’s Shareholders / Investor Grievance Committee monitored and redressed shareholder complaints relating to share transfer, the non-receipt of Annual Report and dividend. The Committee met 4 times during the year on 26.05.2011, 05.08.2011, 08.11.2011 and 31.01.2012 Composition and Attendance
Name Mr. K. Bharathan Mr. P. Venkateswaran Mr. C.P. Gopalkrishnan Category No. of Meetings attended Chairman Member Member 4 4 4
The Company received 32 Complaints from shareholders which were answered and resolved, there were no pending complaints at the beginning or at the end of the year. Name and Designation of Compliance Of?cer: Mr. C.P. Gopalkrishnan, Deputy Managing Director & Company Secretary. C. COMPENSATION COMMITTEE
The Compensation Committee has been formed in the year 2005 with the following powers: a) Identi?cation of Classes of employees entitled to participate in the Employee Stock Option Scheme (ESOS) and the quantum of option to be granted under ESOS per employee and in aggregate. Conditions under which option vested in employees shall lapse. The exercise period within which the employee should exercise the option granted and the conditions where the granted options will lapse on failure to exercise the option within the exercise period. 37
Reviewing with the Management the annual ?nancial statements of the Indian Subsidiary Company 4 meetings of Audit Committee were held during the year ended 31st March 2012 on the following dates: 26.05.2011, 05.08.2011, 08.11.2011 and 31.01.2012 Mr. C. P. Gopalkrishnan, Deputy Managing Director & Secretary, is the Secretary of the Committee.
b) c)
d)
Speci?ed time period within which the employee shall exercise the vested options in the event of termination or resignation of an employee, the right of an employee to exercise all the options vested in him at one time or at various points of time within the exercise period. The procedure for making a fair and reasonable adjustment to the number of options and to the exercise price in case of corporate actions such as rights issues, bonus issues, merger, sale of division and other. Grant, vest and exercise of option in case of employee who are on long leave. Framing suitable policies and systems to ensure that there is no violation of Securities and Exchange Board of India (Insider Trading) Regulations,1992 and Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations 1995, by any employee
h)
Monitoring and from time to time altering ESOS 2005
The details of options under the Employee Stock Option 2005 (ESOS 2005) are given below: Maximum number of options that may be granted under the scheme is 18,44,000 equity shares of Rs.2/- each - Options granted during the year NIL (upto Previous Year: 4,43,200 Equity Shares of Rs.2/- each) - Options lapsed during the year 78,570 Equity Shares of Rs.2/- each (Upto Previous Year: 40,210 Equity Shares of Rs.2/- each) - Options exercised during the year: Nil (upto Previous Year: 95,130 Equity Shares of Rs.2/- each) Outstanding at the end of the year: 2,29,290 Equity Shares of Rs.2/- each (upto Previous Year: 3,07,860 Equity Shares of Rs.2/each), Options yet to be granted under the scheme: 15,19,580 Equity Shares of Rs.2/- each (Previous year: 14,41,010/- Equity Shares of of Rs.2/- each). There was no committee meeting during the year.
e)
f) g)
REMUNERATION COMMITTEE: The Company has set up a Remuneration Committee during the year. Terms of reference: (i) (ii) To recommend /review the remuneration payable to Managing Director and Whole time Directors based on their performance and defined assessment criteria. Any other matter relating to remuneration payable to Managing Director and Whole Time Directors.
Remuneration Policy: The remuneration policy of the company is directed towards rewarding performance, based on review of achievements on a periodic basis. The remuneration policy is in consonance with the existing industry practice. Composition and Attendance Name Mr. P.Murari Mr. K.Bharathan Mr. K.M.Jayarao Category Chairman Member Member No. of Meetings attended 1 1 1
III. Subsidiary Company The Indian subsidiary of the Company does not come under the purview of the material non-listed subsidiary. IV. GENERAL BODY MEETINGS The details of the date and location of the last three Annual General Meetings are given below:
Annual General Meeting Day and Date Time Venue
25th Annual General Meeting*** Wednesday 28.09.2011 24th Annual General Meeting** 23rd Annual General Meeting* Friday 24.09.2010 Wednesday 16.09.2009
11.00 A M Narada Gana Sabha Trust (Sathguru Gnandanda Hall), T.T.K Road, Chennai 600 018. 11.00 A.M Mini Hall, Music Academy No.168(old No.306), T.T.K Road, Royapettah, Chennai-600 014 11.00 A.M Mini Hall, Music Academy No.168(old No.306), T.T.K Road, Royapettah, Chennai-600 014
*** Five Special Resolutions were passed and No Postal Ballot were used / invited for voting. ** Three Special Resolutions were passed and No Postal Ballot were used / invited for voting. * Three Special Resolutions were passed. No Postal Ballot were used / invited for voting. A Summary of the items of business approved by the members as Special Resolutions, in the last three AGMs is given hereunder. 38
1.
*** AGM held on 28th September 2011 a. Auditors appointment b. Re-appoinment of Mr. P. Venkateswaran as Deputy Managing Director of the Company for a period of 5 years from 1.8.2011 to 31.07.2016. c Re-appoinment of Mr. C.P. Gopalkrishnan as Deputy Managing Director of the Company for a period of 5 years from 1.8.2011 to 31.07.2016. d. Raising fund through issue of FCCBs, GDRs, ADRs, etc e. Issue of equity related securities to QIBs **AGM held on 24th September 2010 a. Auditors appointment b. Raising fund through issue of FCCBs, GDRs, ADRs, etc c. Issue of equity related securities to QIBs *AGM held on 16th September 2009 a. Auditors appointment. b. Raising fund through issue of FCCBs, GDRs, ADRs, etc c. Issue of equity related securities to QIBs CEO /CFO CERTIFICATION VII. Means of Communication
2.
3.
V.
As required by Clause 49 V of the Listing Agreement, the CEO and CFO Certi?cation of the Financial Statement, the Cash Flow Statement and the Internal Control Systems for ?nancial reporting are enclosed at the end of this report. VI. DISCLOSURES Related Party Disclosure There has been no materially signi?cant related party transaction (transactions of a material nature) with the Company’s Subsidiaries, promoters, management, Directors or their relatives etc.,that may have a potential con?ict with the interest of the Company at large. Please refer Balance Sheet Notes to Accounts for details of related party transactions Details of Non-compliance No penalties, strictures were imposed on the Company by Stock Exchanges in India or SEBI or any statutory authority on any matter related to the Capital Market during the last 3 years VIII. GENERAL INFORMATION FOR SHAREHOLDERS
Financial Calendar Financial Year 1st April 2012 to 31st March 2013 Board meeting for considering the accounts and Dividend Posting of Annual Report Book closure dates Last date for the receipt of proxy forms Twenty Sixth Annual General Meeting Venue Time Dividend payment date Probable date of dispatch of dividend warrants Board Meeting to consider unaudited results for the ?rst 3 quarters of the ?nancial year 2012-2013 Results of the quarter ended on 30th June 2012 Results of the quarter ended on 30th September 2012 Results of the quarter ended on 31st December 2012
A timely disclosure of consistent, comparable, relevant and reliable information on corporate ?nancial performance is at the core of good governance. Towards this end, Quarterly un-audited ?nancial results were published in Business Standard (English) and Makkal Kural (Vernacular language). The results were also displayed on the company’s web site, www.abanoffshore.com The presentations made by the Company to Financial Institutions and others were posted on the website, www.abanoffshore.com The Company also regularly posts information relating to its Financial Results and Shareholding Pattern on Corp ?ling. Management Discussion and Analysis forms Part of the Annual Report.
30.05.2012 On or before 20.08.2012 14.09.2012 – 21.09.2012 18.09.2012 21.09.2012 Narada Gana Sabha Trust 314, T T K Road, Chennai - 600 018 10.15 a.m. On or after 21.09.2012 On or after 21.09.2012 On or before 14.08.2012 On or before 15.11.2012 On or before 15.02.2013
39
Listing on Stock Exchanges a. Equity shares of the Company are listed on the following Stock Exchanges Madras Stock Exchange Limited Exchange Building Post Box No.183, 11 Second Line Beach Chennai – 600 001 Bombay Stock Exchange Limited Phiroze Jeejeebhoy Towers 21st Floor, Dalal Street Mumbai – 400 001 National Stock Exchange of India Limited Exchange Plaza 5th Floor, Plot No :: C/1 G Block, Bandra – Kurla Complex Bandra (E) Mumbai 400 051 The listing fees for the Financial Year 2012-13 were paid to the Stock Exchanges in India where the Company’s Equity and Preference shares are listed. STOCK CODES:
EQUITY SHARES:
Madras Stock Exchange Limited Bombay Stock Exchange Limited National Stock Exchange of India Limited ISIN No. for Dematerialised shares
ABAN 523204 ABAN INE421A01028
The Non Convertible Cumulative Redeemable Preference Shares are listed on the Bombay Stock Exchange Limited. 700099 – 10,50,00,000 – 8% p.a. Non Convertible Cumulative Redeemable Preference Shares 700129 – 5,50,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares 700130 – 4,00,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares 700131 – 6,10,00,000 – 10% p.a. Non convertible Cumulative Redeemable Preference Shares ISIN No. of 105,00,00,000 - 8% p.a. Non convertible Cumulative Redeemable Preference Shares INE 421A04014 ISIN No of 20,00,00,000 - 9.25% p.a. Non Convertible Cumulative Redeemable Preference shares INE421A04055 ISIN No of 4,00,00,000 - 10% Non Convertible Cumulative Redeemable Preference shares INE421A04063 ISIN No of 5,50,00,000 - 10% Non Convertible Cumulative Redeemable Preference shares INE421A04071 ISIN No of 6,10,00,000 - 10% Non – Convertible Cumulative Redeemable Preference shares INE421A04089 Care Rating Credit Analysis & Research Ltd. (CARE) has revised the ratings for the Non-Convertible Cumulative Redeemable Preference Shares (CRPS) issued by the Company. The revised ratings stands at ‘CARE C (RPS)’ [C (Redeemable Preference Shares)]. INVESTOR’S HELP DESK Company’s Registered Office Address M/s Aban Offshore Limited Janpriya Cres 113 Pantheon Road Egmore Chennai – 600 008 Phone: 91-44-2819 5555 Fax: 91-44-2819 5527 Email Id: [email protected]
40
Registrar and Share Transfer Agent (Both physical and Demat Mode) M/s Cameo Corporate Services Ltd., Unit : Aban Offshore Ltd. Subramanian Buildings 1Club House Road Chennai -600 002. Phone: 91-44-28460390 Fax: 91-44-28460129 Investors’ complaints are to be addressed to the Registrar and Share Transfer Agents. Shareholders’ rights: The Half-Yearly declaration of the financial performance (including a summary of the significant events in last six months) should be sent to the households of each shareholder. As the Company’s half-yearly results are published in English and Tamil newspapers, the same are not sent to the households of the shareholders of the Company. Share Transfer System Presently the share transfers which are received in physical form are processed and the share certificates are returned within a period of 15 days from the date of receipt, subject to documents being valid and complete in all respects. The Company delegated the authority to approving transfer, transmission etc., of the Company securities to the Company Secretary / Officer of the Company. A summary of transfer / transmission of securities of the Company so approved are placed in the subsequent Board Meeting for ratification. The Company obtains certificate from Mr.G. Ramachandran Company Secretary in Practice for compliance of Listing Agreement provisions and submit the same to the Stock Exchanges where the Company’s shares are listed. Liquidity The Company’s Equity Shares are among the most liquid and actively traded shares on the Indian Stock Exchanges more specifically in National Stock Exchange of India Ltd and Bombay Stock Exchange Limited. The Company’s Non convertible Cumulative Redeemable Preference Shares are listed in the Bombay Stock Exchange Limited. Dematerialisation of shares 97.51 % of Equity shares of the Company have been dematerialized as at 31st March, 2012. The company has entered into agreement with both National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL) whereby share holders have an option to dematerialize their shares with either of the depositories. Plant Locations DRILLING LOCATIONS as at 31 March, 2012 S.No 1. 2. 3. 4. 5. 6. 7. WIND ENERGY DIVISION The Company has installed and operates 165 Wind Energy Generators at Nagercoil, Tamil Nadu. Whistleblower Policy The Company does not have a Whistle Blower Policy. Even then no employee has been denied access to the Audit Committee proceedings. Categories of shareholders as on 31st March 2012 Category Promoters Collaborators FIIs, NRIs/OCB Mutual Funds, FIs, Banks Bodies Corporate Public Total Number of folios 6 1 2,627 24 1,712 1,67,500 1,71,870 Number of shares 1,52,18,791 83,28,750 54,55,471 2,03,118 20,51,426 1,22,58,959 4,35,16,515 % 34.97 19.14 12.54 0.47 4.71 28.17 100.00 RIGS Aban II Aban III Aban IV Aban V Aban VI Tahara Aban Ice LOCATION East Coast of India Bombay High Bombay High Middle East Middle East East Coast of India Bombay High
41
Share Price Volume The monthly high and low quotation and the volume of shares traded on BSE & NSE are as under: Month High April 2011 May 2011 June 2011 July 2011 August 2011 September 2011 October 2011 November 2011 December 2011 January 2012 February 2012 March 2012 718.90 641.00 600.90 550.00 497.95 422.00 439.45 450.00 377.40 458.00 571.50 526.45 Bombay Stock Exchange Low 615.80 517.05 490.95 486.00 333.25 348.00 335.70 340.00 324.45 327.70 444.60 405.10 Volume 49,02,686 36,90,212 36,49,868 41,19,280 36,24,513 32,54,750 28,53,157 35,85,538 27,53,802 44,69,731 75,21,955 45,46,185 High 719.10 640.45 601.00 549.95 497.95 421.90 439.50 450.70 398.00 457.80 571.90 527.00 National Stock Exchange Low 617.00 527.80 490.10 486.00 333.00 348.10 331.80 339.35 323.50 326.70 444.70 405.55 Volume 1,84,07,930 1,51,25,807 1,41,72,725 1,65,29,018 1,66,35,860 1,59,45,194 1,40,20,180 1,85,46,811 1,47,76,186 2,03,33,892 3,19,75,874 2,14,52,257
42
Distribution of shareholdings as on 31st March 2012 Category (Shares) 1-100 101.500 501-1,000 1,001-2,000 2,001-3,000 3,001-4,000 4,001-5,000 5,001 -10,000 10,001 & above Total Folio (s) Numbers 1,49,046 18,952 2,365 861 247 106 69 93 131 1,71,870 % 86.72 11.03 1.38 0.50 0.14 0.06 0.04 0.05 0.08 100.00 Shares Numbers 40,86,709 43,26,981 18,01,875 12,58,226 6,23,723 3,73,459 3,19,735 6,44,940 3,00,80,867 4,35,16,515 % 9.39 9.95 4.14 2.89 1.43 0.86 0.73 1.48 69.13 100.00
43
Declaration by the Managing Director under Clause 49 of the Listing Agreement regarding compliance with Business Conduct Guidelines (Code of Conduct). In accordance with Clause 49 1D of the Listing Agreement with the Stock Exchanges, I hereby confirm that, all the Directors and the Senior Management Personnel of the Company have affirmed compliance with the Business Conduct Guidelines (Code of Conduct) as applicable to them, for the Financial Year ended on 31st March 2012. Aban Offshore Limited Chennai 30.05.2012 Reji Abraham Managing Director
Certificate by the Chief Executive Officer/Chief Financial Officer pursuant to Clause 49 of the Listing Agreement. We Reji Abraham and C.P. Gopalkrishnan certify that a) We have reviewed the financial statements and cash flow statements of M/s. Aban Offshore Limited (“the Company”) for the year ended 31st March 2012 and to the best of our knowledge and belief: i) these statements do not contain any materially untrue statement or omit any material fact or contain statements that might be misleading;
ii) these statements together present a true and fair view of the Company’s affairs and are in compliance with existing accounting standards, applicable laws and regulations. b) c) d) There are, to the best of our knowledge and belief, no transactions entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s code of conduct. we accept responsibility for establishing and maintaining internal control and that we have evaluated the effectiveness of internal control systems of the Company. There are no deficiencies in the design or operation of internal control. we have indicated to the auditors and the Audit Committee that there are no i) Significant changes in the internal control during the year. ii) Significant changes in accounting policies during the year. iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control system. Aban Offshore Limited. Chennai 30.05.2012 C.P. Gopalkrishnan Deputy Managing Director & Secretary Reji Abraham Managing Director
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Aban Offshore Limited
AUDITORS’ CERTIFICATE ON CORPORATE GOVERNANCE
TO THE MEMBERS OF ABAN OFFSHORE LIMITED
We have examined the compliance of conditions of Corporate Governance by Aban Offshore Limited for the year ended on 31st March 2012, as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchanges in India. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to review of procedures and implementation thereof, adopted by the Company, for ensuring the compliance of the conditions of Corporate Governance as prescribed in clause 49 of the above mentioned Listing Agreement. It is neither an audit nor an expression of opinion on the ?nancial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us, we certify that the Company has complied with conditions of Corporate Governance as stipulated in clause 49 of the above mentioned Listing Agreement. We state that no investor complaints were pending for a period exceeding one month against the Company as certi?ed by the Registrars and Share Transfer Agents of the Company based on the records maintained by them. We further state that such compliance is neither an assurance as to the future viability of the Company nor the ef?ciency or effectiveness with which the Management has conducted the affairs of the Company. For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012
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Aban Offshore Limited
AUDITORS’ REPORT
TO THE SHAREHOLDERS OF ABAN OFFSHORE LIMITED We have audited the attached Balance Sheet of M/s Aban Offshore Limited, as at 31st March 2012, Statement of Pro?t and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These ?nancial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with the Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are free of material misstatements. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by the management, as well as evaluating the overall ?nancial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We report as follows: 1 As required by the Companies (Auditor’s Report) Order, 2003 (the ‘Order’) issued by the Central Government of India in terms of sub–section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters speci?ed in paragraphs 4 and 5 of the said Order. Further to our comments in the annexure referred to in paragraph 1 above, we report that: a b c d e We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit; In our opinion, proper books of account as required by law have been kept by the Company, so far as it appears from our examination of those books; The Balance Sheet, Pro?t and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account; In our opinion, the Balance Sheet, Pro?t and Loss account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956; Based on the representations made by the Directors and taken on record by the Board of Directors of the Company and the information and explanations given to us, none of the Directors is, as at 31st March 2012 prima-facie disquali?ed from being appointed as director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date; In our opinion and to the best of our information and according to the explanations given to us, the said ?nancial statements read together with the Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: i. ii. in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; in the case of the Statement of Pro?t and Loss, of the Loss for the year ended on that date; and
2
f
iii. in the case of the Cash Flow Statement, of the cash ?ows for the year ended on that date. For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012 46
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Aban Offshore Limited
ANNEXURE TO THE AUDITORS’ REPORT
(Referred to in paragraph 1 of our report of even date) i (a) (b) The Company has maintained proper records showing full particulars including quantitative details and situation of ?xed assets. As explained to us, the ?xed assets have been physically veri?ed by the Management during the year in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. As explained to us no material discrepancies have come to the notice on such physical veri?cation. The Company has not disposed off any substantial part of ?xed assets during the year so as to affect its going concern status. As explained to us the inventories have been physically veri?ed during the year by the Management. In our opinion the frequency of veri?cation is reasonable. In our opinion and according to the information and explanations given to us, the procedures of physical veri?cation of inventories followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained records of inventory. The discrepancies noticed on veri?cation between the physical stocks and the book records have been dealt with in the books of account. The Company has not granted any loan secured or unsecured to companies, ?rms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year, except unsecured loans to its wholly owned foreign subsidiary as shown below:
Unsecured Loan granted during the year Rupees in Millions Aban Holdings Pte., Ltd., Singapore 1858.30 Amount Outstanding including interest receivable and exchange difference at the end of the year Rupees in Millions 2942.68 Maximum amount outstanding including interest receivable during the year Rupees in Millions 7455.74
(c) ii (a) (b)
(c) iii (a)
Company
(b) (c) (d) (e)
Company
The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie, not prejudicial to the interest of the Company. The repayment of principal and payment of interest is on “on demand” basis as per the loan agreement. The loan given by the Company to its wholly owned foreign subsidiary company is repayable on demand and therefore the question of overdue amount does not arise. The Company has taken loan from Companies covered in the Register maintained under Section 301 of the Companies Act, 1956, during the year, as shown below:
Unsecured Loan taken during the year Rupees in Millions Amount Outstanding including interest payable at the end of the year Rupees in Millions 1058.1 234.5 Maximum amount outstanding including interest payable during the year Rupees in Millions 1510.1 234.5
Aban Investments Private Limited Aban Ventures Private Limited
NIL 231.8
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(f) (g) iv
The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie, not prejudicial to the interest of the Company. The repayment of principal during the year and payment of interest is as per stipulations. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of ?xed assets and for the sale of services. During the course of our audit, no major weakness has been noticed in the internal controls in respect of these areas. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, that need to be entered into the Register maintained under the said Section have been entered in the said Register. In our opinion and according the information and explanations given to us, the transactions made in pursuance of contracts or arrangements referred to in (a) above and exceeding the value of rupees ?ve lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.
v
(b)
vi vii viii
The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 or any other relevant provisions of the Act and the rules made there under. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. The Central Government has prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 in respect of the wind power generating activity of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the same. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, in our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Customs Duty, Sales Tax, Value Added Tax, Service Tax, Cess and other material statutory dues applicable to it. However minor delays have been noted during the year in the remittance of Service Tax. We are informed that the Employees’ State Insurance Scheme is not applicable to the Company. According to the information explanations given to us, no undisputed amounts payable in respect of above were in arrears as at 31st March 2012 for a period of more than six months from the date they became payable. According to the information and explanations given to us, there are no dues of Income Tax, Customs Duty, Sales Tax, Value Added Tax, Service Tax and Cess, which have not been deposited with appropriate authorities on account of any dispute.
ix
(b)
x
The Company does not have accumulated losses at the end of the ?nancial year. The Company has incurred cash losses during the ?nancial year covered by the audit though in the immediately preceeding ?nancial year the Company has not incurred cash loss. (a) Based on our veri?cation and according to the information and explanations given to us,we have noted that the company has rescheduled 10 term loans taken by the company from banks that have aggregate value of Rs.17,746.03 Million as at 31st march 2012. We have noted default in repayment of term loan instalments and interest during the year which are due to Banks and a Financial Institution. The unpaid overdue loan instalments and interest during the year in this regard as at 31st march 2012 were Rs. 159.04 Million and Rs. 357.42 Million respectively. The company has since paid Rs.132.84 Million of over due instalment and Rs.146.5 Million of over due interest due to Banks and a Financial Institution before the date of our report.
xi
(b)
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( c) xii xiii xiv xv
During the year, the Company has repaid the amount of outstandings on account of Foreign Currency Convertible Bonds in full on the due date.
Based on our examination of records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities. In our opinion, the Company is not a chit fund or a nidhi/ mutual bene?t fund/ society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the Company. The Company has given guarantees for loans taken from banks by a subsidiary of its wholly owned foreign subsidiary. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company. In our opinion and according to the explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were obtained. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the Company has not utilised short-terms funds towards long-term investment.
xvi xvii
xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under Section 301 of the Companies Act, 1956 during the year. xix xx xxi No debentures have been issued by the Company during the year and hence, the provisions of clause 4 (xix) of the Order are not applicable to the Company. During the year the Company has not raised money by way of public issue. Hence the provisions of clause 4 (xx) of the Order are not applicable to the Company. During the course of our examination of the books of account, we have neither come across any instance of fraud on or by the Company, either noticed or reported during the year, nor have we been informed of any such case by the management.
For Ford, Rhodes, Parks & Co., Chartered Accountants ICAI - Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place: Chennai Date : May 30, 2012
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Aban Offshore Limited
Balance Sheet
As at 31st March 2012
Note No: Equity and Liabilities Shareholders’ funds Share Capital Reserves and Surplus Non - current liabilities Long - term borrowings Deferred tax liabilities (net) Long - term provisions Current liabilities Short - term borrowings Trade payables Other current liabilities Short - term provisions TOTAL Assests Non - Current Assets Fixed Assests Tangible assests Capital work-in-progress Non - current investments Long - term loans and advances Current Assets Inventories Trade receivables Cash and bank balances Short - term loans and advances Other current assests TOTAL Summary of signi?cant accounting policies 2.1 The accompanying notes 1 to 40 are an integral part of the ?nancial statements As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 P.Murari Vice Chairman For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director As at 31st March, 2012 Rs. Millions As at 31st March, 2011 Rs. Millions
3 4
2,897.04 17,849.59 20,746.63
3,347.04 20,223.59 23,570.63 19,973.40 291.98 12.70 20,278.08 3,772.83 2,693.18 5,391.94 1,016.43 12,874.38 56,723.09
5 6 7
19,086.27 268.61 18.18 19,373.06
8 9 9 7
5,570.69 3,308.25 2,438.25 480.72 11,797.91 51,917.60
10 11 12 13 14.1 15 12 14.2
5,738.65 245.11 39,471.29 32.27 45,487.32 814.92 2,209.62 279.28 3,116.24 10.22 6,430.28 51,917.60
4,798.83 175.09 39,.590.69 35.34 44,599.95 773.70 2,646.97 810.04 7,890.22 2.21 12,123.14 56,723.09
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Statement of
Pro?t and Loss Account
Year ended 31st March, 2012 Rs. Millions Year ended 31st March, 2011 Rs. Millions
For the year ended 31st March 2012
Note No: Income Revenue from Operations Other Income Total revenue (I) Expenses Consumption of stores, spares, power and fuel Employee benefits expense Finance costs Depreciation and amortization expense Other Expenses Total (II) Profit / (loss) before tax Tax expenses Current tax Deferred tax Total tax expense Profit / (loss) for the year Earnings per equity share of Rs. 2 each(31 st March 2011: Rs. 2 each) Basic Computed on the basis of profit / (loss) for the year Diluted Computed on the basis of profit / (loss) for the year Summary of signi?cant accounting policies The accompanying notes 1 to 40 are an integral part of the ?nancial statements As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 2.1 23 18 19 20 21 22 16 17
6,385.28 758.85 7,144.13 474.33 739.18 3,662.53 986.10 2,512.68 8,374.82 (1,230.69) (23.38) (23.38) (1,207.31)
11,907.43 765.70 12,673.13 697.31 785.85 3,354.76 1,148.07 3,131.38 9,117.37 3,555.76 1,360.00 (143.70) 1216.30 2,339.46
(34.49) (34.24)
46.32 46.05
P. Murari Vice Chairman
For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Cash Flow Statement
For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Cash ?ow from operating activities: Pro?t before tax from continuing Operations Pro?t before tax Non cash adjustment to reconcile pro?t before tax to net cash ?ows Depreciation / amortization on continuing operations Loss / (pro?t) on sale of ?xed assests Provision for Employee Bene?ts Unrealised foreign exchange Loss Net gain on sale of Non Current investments Interest expenses Interest income Dividend income Operating pro?t before working capital changes Movements in working capital: Increase / (Decrease) in trade payables Increase / (Decrease) in other current liabilities (Decrease) / Increase in trade receivables (Decrease) / Increase in inventories (Decrease) / Increase inlong term loans and advances (Decrease) / Increase in short term loand and advances Cash generated from (used in) operations Direct taxes paid (net of refunds) Net cash ?ow from / (used in) operating activities (A) Cash ?ow from Investing activities Purchase of ?xed assests Capital advances Proceed from sale of ?xed assests Proceed from sale of non - current investments Proceed from sale / maturity of current investment Purchase of current investments Interests received Dividend received Net cash ?ow from / (used in) Investing activities (B) Cash ?ow from ?nancing activities Proceeds from issuance of share captial Redemption of preference shares Redemption of foreign currency convertiable bonds with premium Repayment of long term borrowings Proceeds from short term borrowings Repayment of short term borrowings Repayment of loan by foreign subsidiary Interest paid Dividends paid on equity shares Dividends paid on preference shares (450.00) (3,592.56) (887.13) 1,970.51 (276.25) 5,338.40 (3,136.53) (156.66) (278.90) 8.08 (3,012.08) 1,420.14 (3,132.45) (156.61) (278.90) (1,995.95) (10.77) 427.09 350.00 (350.00) 2.55 1.15 (1,575.93) (367.45) 5.89 12,393.07 (12,331.33) 18.04 19.66 (262.12) 613.18 (497.45) 452.25 (38.63) 3.07 275.75 3,098.57 (514.64) 2,583.93 (3.84) (1022.30) (114.63) 6,675.56 (976.52) 5,699.04 986.10 9.63 (504.23) (307.69) 3,575.35 (236.93) (1.15) 2,290.39 1,148.07 (4.06) 6.95 463.93 3,354.76 (689.42) (19.66) 7,816.33 (1,230.69) (1,230.69) 3,555.76 3,555.76 2010-2011Year ended 31st March 2011 Rs. Millions
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For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Tax on equity dividend paid Tax on preference dividend paid Net cash ?ow from (used in) ?nancing activities (C) Net increase / decrease in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks on current account On deposit account unpaid dividend account* Total cash and cash equivalents (note 17) Summary of signi?cant accounting policies 2.1 (25.41) (45.24) (1539.77) (531.77) 1.01 810.04 279.28 0.22 124.62 147.31 7.13 279.28 2010-2011Year ended 31st March 2011 Rs. Millions (26.62) (47.40) (5225.84) 211.08 (31.65) 630.61 810.04 0.71 647.10 154.23 8.00 810.04
Cash Flow Statement
*The company can utilize these balances only towards settlement of the respective unpaid dividend liability. As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 For and On behalf of the Board K. M. Jayarao Reji Abraham Director Managing Director
P. Murari Vice Chairman
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Notes to Financial Statements for the year ended 31st March 2012 1. Corporate Information Aban Offshore Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on three stock exchanges in India. The Company is engaged in the business of providing offshore drilling and production services to companies engaged in exploration, development and production of oil and gas both in domestic and international markets. The Company is also engaged in the ownership and operation of wind turbines for generation of wind power in India. 2. Basis of preparation The ?nancial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these ?nancial statements to comply in all material respects with the Accounting Standards noti?ed under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The ?nancial statements have been prepared on an accrual basis and under the historical cost convention. All the assets and liabilities have been classi?ed as current and non-current as per the Company’s normal operating cycle and other criteria set out in the RevisedSchedule VI to the Companies Act,1956. Based on the nature of business operations, the Company has ascertained its operating cycle as 12 months for the purpose of current and non- current classi?cation of assets and liabilities. The accounting policies adopted in the preparation of ?nancial statements are consistent with those of the previous year. 2.1 Summary of signi?cant accounting policies a. Change in accounting policy Presentation and disclosure of ?nancial statements During the year ended 31st March 2012, the revised Schedule VI noti?ed under the Companies Act,1956, has become applicable to the Company, for preparation and presentation of its ?nancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the ?nancial statements. However, it has signi?cant impact on presentation and disclosures made in the ?nancial statements. The Company has also reclassi?ed the previous year ?gures in accordance with the requirements applicable in the current year. b. Use of estimates The preparation of ?nancial statements in conformity with the Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result on the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. c. Tangible ?xed assets Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of ?xed asset is added to its book value only if it increases the future bene?ts from existing asset beyond its previously assessed standard of performance. All other expenses on existing assets, including day to day repair and maintenance expenditure are charged to the Statement of Pro?t and Loss for the period during which such expenses are incurred. Gains or losses from derecognition of ?xed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Pro?t and Loss when the assets are derecognized.
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Notes to Financial Statements for the year ended 31st March 2012 d. Depreciation on tangible ?xed assets Depreciation on ?xed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management or those prescribed under the Schedule XIV of the Companies Act, 1956, whichever is higher. The Company has used the following rates to provide depreciation on its ?xed assetsFixed Assets Buildings Drilling Rigs Drillship Of?ce Equipment Computers WindMills Furniture and ?xtures Vehicles Rates (SLM) 1.63% 3.34% * 3.34% * 13.91% 16.21% 10.00% 6.33% 9.50%
*Pursuant to noti?cation of Government of India, Ministry of Corporate Affairs dated 14th December 2011, the rate of depreciation on Rigs has been reduced to 3.34% p.a. on straight line basis. The depreciation on rigs and drillship has been charged accordingly with effect from the date of such noti?cation. e. Borrowings costs Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent that they are regarded as adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. f. Impairment of tangible assets An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Income in the year when the asset is identi?ed as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimate of recoverable value. g. Investments Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classi?ed as current investments. All other investments are classi?ed as long-term investments. Current investments are carried in the ?nancial statements at lower of cost or fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Pro?t and Loss. h. Inventories Inventory of stores, spares and fuel is valued at cost based on a weighted average cost/ ?rst-in-?rst-out basis.
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Notes to Financial Statements for the year ended 31st March 2012 i. Revenue recognition Income from drilling and production services is recognized as earned, based on contractual daily rates billed on monthly basis.Mobilization /demobilization fees received, if any, is recognized as earned in the year of mobilization/demobilization. Income from wind power generation is recognized based on the number of units of power generated every month at contracted rates. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Pro?t and Loss. Dividend income is recognized when the company’s right to receive dividend is established by the reporting date. j. Foreign currency transactions and balances Initial recognition Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Realized gains and losses on foreign exchange transactions during the year are recognized in the Statement of Pro?t and Loss. Exchange differences in respect of foreign currency loans/liabilities relating to ?xed assets are accounted in the Statement of Pro?t and Loss. Conversion Foreign currency current assets and current liabilities are translated at the exchange rates prevailing on the reporting date. In circumstances, where the rate prevailing on the reporting date is not stable/ highly volatile, monetary items shall be reported based on subsequent actual realization rate. Resulting gains / losses are recognized in the Statement of Pro?t and Loss. Non-monetary items such as investments, ?xed assets, denominated in foreign currency are translated at exchange rate prevailing on the date of transaction. Exchange differences All exchange differences are recognized as income or as expense in the Statemen of Pro?t and Loss during the period in which they arise. Forward exchange contracts/derivative contracts entered into to hedge foreign currency risk of an existing asset/liability The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Any pro?t or loss arising on cancellation or renewal of such forward contract is also recognized as income or as expense for the period under the respective head of account for the period.In respect of derivative contracts, gains / losses on any such contracts are recognized in the Statement of Pro?t and Loss. k. Retirement and other employee bene?ts
(a) Contribution to Provident Fund which is a de?ned contribution retirement plan is made monthly at a predetermined rate to the Provident Fund Authorities and is debited to the Statement of Pro?t and Loss on accrual basis. (b) Contribution to Superannuation Scheme which is de?ned contribution retirement plan is made annually at predetermined rate to insurance companies which administer the fund and debited to the Statement of Pro?t and Loss (c) The company makes annual contribution to Gratuity Funds administered by Insurance Companies, which is considered as de?ned bene?t plan. The present value of the de?ned bene?t is measured using the ‘Projected Unit Credit method with actuarial valuation being carried out at each Balance Sheet date by an independent valuer. Actuarial gain and losses are immediately recognized in the Statement of Pro?t and Loss. Amount of contribution, computed by the insurers is paid by the company and charged to Statement of Pro?t and Loss. No additional liability is anticipated under the scheme administered by the Insurance Companies. 56
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Notes to Financial Statements for the year ended 31st March 2012 (d) The Company makes provision for leave encashment based on actuarial valuation carried out by an independent actuary at the Balance Sheet date. l. Taxes on income The income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable in respect of income for the year. In accordance with the Accounting Standard-22 –Accounting for taxes on income issued by the Institute of Chartered Accountants of India, the deferred tax on timing difference between book pro?t and tax pro?t for the year is accounted based on the rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. However, deferred tax assets arising from timing difference are recognized to the extent of their virtual /reasonable certainty about its realizability in future years. m. Segment reporting Identi?cation of segments The Company’s operating businesses are organized and managed separately according to the nature of services provided with each segment representing strategic business unit that offers different services. Segment accounting policies The Company prepares its segment information in conformity with the accounting policies and presents the ?nancial statements of the Company as a whole. n. Earnings per share Basic earnings per share are calculated by dividing the net pro?t or loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net pro?t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. o. Provisions A provision is recognized when the company has a present obligation as a result of past event. It is probable that an out?ow of resources embodying economic bene?ts will be required to settle obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. The estimates are reviewed at each reporting date and adjusted to re?ect the current best estimates. p. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be con?rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an out?ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but disclose its existence in the ?nancial statements. q. Cash and cash equivalents Cash and cash equivalents for the purpose of the cash ?ow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 57
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Notes to Financial Statements for the year ended 31st March 2012 3. Share Capital
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Authorised shares (No. Millions) 2,500 (31 March 2011: 2,500 ) equity shares of Rs.2/- each 1000 (31 March 2011: 1000) Cumulative non convertible redeemable preference shares of Rs.10/- each Issued , subscribed and fully paid -up shares (No. Millions) Equity Shares: 36.88 (31 March 2011: 36.88) equity shares of Rs.2/- each 0.85 (31 March 2011: 0.85) equity shares of Rs.2/- each issued against conversion of foreign currency convertible bonds 0.09 (31 March 2011: 0.09 ) equity shares of Rs.2/- each issued against employee stock option scheme 5.69 (31 March 2011: 5.69) equity shares of Rs.2/- each issued against quali?ed institutional placement Shares Forfeited, 0.01(31 March 2011: 0.01) equity shares at Re 1/- each (A) Preference Shares: 77 (31 March 2011: 122) 8% non-convertible cumulative redeemable preference shares of Rs.10/-each 28 (31 March 2011: 28.00 @ 8%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 61 (31 March 2011: 61 @ 9%) 9% non-convertible cumulative redeemable preference shares of Rs.10/-each 95 (31 March 2011: 95 @ 9%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 20 (31 March 2011:20 @ 9.25%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each (B) TOTAL(A+B) 770.00 280.00 610.00 950.00 200.00 2,810.00 2,897.04 1,220.00 280.00 610.00 950.00 200.00 3,260.00 3,347.04 73.75 1.70 0.19 11.39 0.01 87.04 73.75 1.70 0.19 11.39 0.01 87.04 5,000.00 10,000.00 15,000.00 5,000.00 10,000.00 15,000.00
a.
Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31st March 2012 31st March 2011
Equity shares (A) of Rs 2 each At the beginning of the period Issued during the period-ESOP Outstanding at the end of the period
No. Millions Rs. Millions No. Millions Rs. Millions 43.51 43.51 87.04 87.04 43.50 0.01 43.51 87.02 0.02 87.04
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Notes to Financial Statements for the year ended 31st March 2012
31st March 2012 Preference shares (B) of Rs 10 each At the beginning of the period Issued during the period Redeemed during the period Outstanding at the end of the period Total Value of Outstanding Shares (A) +(B) 31st March 2011
No. Millions Rs. Millions No. Millions Rs. Millions 326.00 45.00 281.00 3,260.00 450.00 2,810.00 2,897.04 326.00 326.00 3,260.00 3,260.00 3,347.04
b.
Terms/ rights attached to equity shares The Company has only one class of equity shares having a face value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs3.60 (31st March 2011: Rs.3.60).
c.
Terms of redemption of Non-convertible Cumulative redeemable preference shares As on 31st March 2011, the terms and conditions of the Non-Convertible Cumulative redeemable preference shares were as under: • 150 Million 8% non- convertible cumulative redeemable preference shares will be redeemed at par on 16-06-2011, 16-062012 and 16-06-2013 in the ratio of 30:30:40 respectively. During the year 45 Million non-convertible redeemable preference shares which were due for redemption on 16-06-2011 were redeemed. • 156 Million 9 % non-convertible cumulative redeemable preference shares were originally scheduled for redemption at par at the end of the 5th year from the date of allotment of shares as per details given below: 55 Million shares to be redeemed on 29-12-2011 40 Million shares to be redeemed on 28-02-2012 61 Million shares to be redeemed on 30-03-2012 • 20 Million 9.25% non-convertible redeemable preference shares were originally scheduled for redemption at par on 03-08-2013 Pursuant to approval of the Board of Directors and with the consent of preference shareholders, the terms and conditions of the Non-Convertible Cumulative Redeemable Preference shares have been altered as under: • 55 Million 10% non-convertible cumulative redeemable preference shares will be redeemed at par on 29-12-2014 • 40 Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 28-02-2015 • 61Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 30-03-2015 • 20 Million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 03-08-2016
d.
The company has reserved 1.84 Million equity shares of Rs.2 each for offering to employees under the Employee Stock Option Scheme (ESOS) (31st March 2011:1.84 Million equity shares of Rs.2 each )out of which 0.095 Million equity shares of Rs.2 each have been already allotted upto the balance sheet date under the scheme and included under the paid up capital (31st March 2011: 0.095 Million equity shares of Rs.2 each)(Refer note 25 for details)
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Notes to Financial Statements for the year ended 31st March 2012 e. Details of shareholders holding more than 5% shares in the company
31st March 2012 Equity shares of Rs.2 each fully paid Reji Abraham India Offshore Inc Aban Investments Private Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 31st March 2012 Preference shares of Rs.10 each fully paid 8% Non-Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Syndicate Bank Canara Bank Indian Overseas Bank Vijaya Bank Axis Bank Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.92% 31st March 2011 31st March 2011 No. Millions % holding in the class No. Millions % holding in the class
No. Millions % holding in the class No. Millions % holding in the class
10.50 17.50 14.00 17.50 42.00 101.50
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
15.00 25.01 20.00 25.01 60.00 145.02
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
9% and 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Indian Bank Vijaya Bank UCO Bank Indusind Bank Limited Yes Bank Limited
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Punjab National Bank Canara Bank Indian Overseas Bank
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Syndicate Bank Bank of India Central Bank of India Bank of Baroda Oriental Bank of Commerce 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 Each Bank of India
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
20.00
100.00%
20.00
100.00%
As per the records of the company, including its register of shareholders/members and other declarations received from the shareholders regarding bene?cial interest, the above shareholding represents both legal and bene?cial ownerships of shares. 60
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Notes to Financial Statements for the year ended 31st March 2012 4. Reserves and Surplus
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Capital Reserve - as per last Balance Sheet Securities Premium Account Balance as per last ?nancial statements Add: on allotment under ESOS Less: amounts utilized towards redemption of foreign currency convertible bonds* 9,510.90 9,502.69 8.21 9,510.90 52.40 1,500.00 500.00 2,000.00 1,059.36 240.00 1,299.36 6,267.65 2,339.46 (500.00) (240.00) (156.66) (25.41) (252.24) (40.92) (475.23) 5,678.36 17,849.59 (156.66) (25.41) (278.90) (45.24) (1,246.22) 7,360.90 20,223.59 0.03 0.03
(691.46) 8,819.44
Investment Allowance Reserve (utilised) -as per last Balance Sheet Capital Redemption Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss
52.40 2,000.00 2,000.00
General Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss Surplus/(de?cit) in the statement of pro?t and loss Balance as per last ?nancial statements Pro?t/(loss) for the year Less: Appropriations Transfer to capital redemption reserve Transfer to general reserve Proposed equity dividend-Rs. 3.60 Per equity share (31st March 2011-Rs.3.60 Per equity share) Tax on proposed equity dividend Dividend on preference shares Tax on preference dividend Total appropriations Net Surplus/(de?cit) in the statement of pro?t and loss Total reserves and surplus * Premium on redemption of foreign currency convertible bond including withholding tax has been adjusted against the securities premium account
1,299.36 1,299.36 7,360.90 (1,207.31)
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Notes to Financial Statements for the year ended 31st March 2012 5. Long term borrowings
Non-current maturities Current maturities As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Term loans Rupee term loans from banks (secured) Rupee term loan from institution (secured) Other loans Hire purchase loan (secured) Foreign currency convertible bonds (unsecured) From a company (unsecured) The above amount includes Secured borrowings Unsecured borrowings Amount disclosed under the head "Other current liabilities" (Refer Note 9) Net Amount 18,535.24 500.00 0.43 -50.60 19,086.27 19,035.67 50.60 --19,086.27 18,218.56 750.00 4.84 -1,000.00 19,973.40 18,973.40 1,000.00 --19,973.40 305.12 319.74 3.89 -999.60 1,628.35 628.75 999.60 -(1,628.35) -1,393.66 250.00 4.56 2,901.10 500.00 5,049.32 1,648.22 3,401.10 -(5,049.32) --
1. a.
The rupee term loans from banks include the following: Term Loan of Rs.63 Million (31st March 2011:Rs.87.95 Million) from a bank carries interest @ 13% p.a. (31st March 2011:10.75% p.a.) The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Term Loan of Rs.2554.20 Million (31st March 2011:Rs.2721.07 Million) from a bank carries interest @ 14.50% p.a. (31st March 2011:11.00% p.a.). The loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Term Loan of Rs.2761.73 Million (31st March 2011:Rs.2862.53 Million) from a bank carries interest @ 13.50% p.a. (31st March 2011: 11.70% p.a.). The Loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Amount overdue on account of interest as on balance sheet date is Rs.63.94 Million for a period of 1 to 2 months. Amount since paid is Rs.32.86 Million. Term Loan of Rs.2707.30 Million (31st March 2011:Rs.2757.60 Million) from a bank carries interest @ 13.50% p.a. (31st March 2011:10.50% p.a.). The Loan is repayable in 96 equal monthly installments alongwith interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs.Amount overdue on account of interest as on balance sheet date is Rs32.22 Million for a period of 1 to 2 months which is since paid. Term Loan of Rs. 900.10 Million (31st March 2011:Rs.945.10 Million) from a bank carries interest @ 13.40% p.a. (31st March 2011:12.00% p.a.). The Loan is repayable in 32 equal quarterly installments alongwith interest from 30th June 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs.Amount overdue on account of interest as on balance sheet date is Rs.21.17 Million for a period of 1 to 2 months and amount since paid is Rs.10.58 Million. Term Loan of Rs.49.52 Million (31st March 2011:Rs.167.10 Million) from a bank carries interest @ 13.75% p.a. (31st March 2011:13.00% p.a.). The Loan is repayable in 4 monthly installments alongwith interest from January 2012.The loan is secured by ?rst charge on windMills.Amount overdue on account of principal and interest as on balance sheet date is Rs.41.32 Million for a period of 1 to 3 months. Amount since paid is Rs.14.21Million.
b.
c.
d.
e.
f.
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Notes to Financial Statements for the year ended 31st March 2012 g. Term Loan of Rs.4859.60 Million (31st March 2011:Rs.4996.82 Million) from a bank carries interest @ 16.25% p.a. (31st March 2011:15.50% p.a.). The Loan is repayable in 32 equal quarterly installments alongwith interest from 30th June 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rigs, Floating Production Unit and second charge on drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.136.53 Million for a period of 1 to 2 months. Amount since paid is Rs.14.80 Million. Term Loan of Rs.1849.30 Million (31st March 2011: Rs.1924.49 Million) from a bank carries interest @ 15.00% p.a. (31st March 2011: 14.25% p.a.). The Loan is repayable in 96 monthly installments alongwith interest from 30th September 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.46.72 Million for a period of 1 to 2 months. Amount since paid is Rs.23.99 Million. Term Loan of Rs.1500.79 Million (31st March 2011:Rs.1499.80 Million) from a bank carries interest @ 15.00 % p.a. (31st March 2011:14.25% p.a.). The Loan is repayable in 32 quarterly installments alongwith interest from 29th January 2014. The loan is secured by Second charge on the speci?c offshore drill ship and drilling rig.Amount overdue on account of interest as on balance sheet date is Rs.37.25 Million for a period of 1 to 2 months. Amount since paid is Rs.19.14 Million. Term Loan of Rs.469.99 Million (31st March 2011:Nil) from a bank carries interest @ 15.25 % p.a. (31st March 2011:14.25% p.a.). The Loan is repayable in 13 quarterly installments alongwith interest from 30th June 2012. The loan is secured by First charge on the speci?c offshore drill rig of foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.11.88 Million for a period of 1 to 2 months. Amount since paid is Rs.6.11 Million. Term Loan of Rs.100 Million (31st March 2011:Rs. 499.69 Million) from a bank carries interest @ 15.00 % p.a. (31st March 2011:13.25% p.a.). The Loan is repayable in one installment along with interest from 28th February 2012. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship.Amount overdue on account of principal as on balance sheet date is Rs.100.00 Million for a period of 1 month that has been since paid. Term Loan of Rs.200.00 Million (31st March 2011:Rs. 250.15 Million) from a bank carries interest @ 16.00 % p.a. (31st March 2011:14.00% p.a.). The Loan is repayable in 20 quarterly installments alongwith interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship.
h.
i.
j.
k.
l.
m. Term Loan of Rs.350.00 Million (31st March 2011: Rs.399.98 Million) from a bank carries interest @ 16.00 % p.a. (31st March 2011:13.75% p.a.). The Loan is repayable in20 quarterly installments alongwith interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drillship. n. Term Loan of Rs.474.91Million (31st March 2011:Rs.499.82 Million) from a bank carries interest @ 14.75 % p.a. (31st March 2011: 13.25% p.a.). The Loan is repayable in 23 quarterly installments alongwith interest from 30th June 2012. The loan is secured by First charge on the speci?c offshore drilling rig owned by foreign subsidiary.Amount overdue on account of interest as on balance sheet date is Rs.5.68 Million for a period of 1 month. Rupee Term Loan from a Financial Institution Rupee Term loan from a ?nancial institution of Rs.819.74 Million (31st March 2011:Rs.1,000.00 Million) carries interest @ 13% p.a.(31st March 2011:13% p.a.). The loan is repayable in 16 quarterly installments along with interest from March 2012. The loan is secured by pari-passu ?rst charge on drill Ship and offshore drilling Rig. Amount overdue on account of interest as on balance sheet date is Rs.19.73 Million for a period of 3 months that has been since paid. Hire purchase loan for vehicles availed from a non-banking ?nance company of Rs.4.32 Million (31st March 2011:Rs.9.41 Million) secured by hypothecation of vehicles. The company has an outstanding unsecured loan from a company amounting to Rs.1050.20 Million (31st March 2011:Rs.1500 Million) at 14.50% p.a. repayable in 12 yearly installments alongwith interest. Foreign currency convertible bonds (FCCB) –The Company had issued 1161 unsecured zero coupon FCCB of Japanese Yen 10,000,000 each aggregating to Japanese Yen 11,610 Million in April 2006.Unless previously redeemed, converted or repurchased and cancelled, the company had to redeem each bond at 121.811% of its principal amount on 15th April 2011, being the maturity date. Until this date, 620 bonds aggregating to Japanese yen 6200 Million were converted into 8,51,055 equity shares of Rs.2 each at the conversion price of Rs.2,789.04 per equity share. The remaining 541 bonds outstanding as on the maturity date were redeemed by the company @ 121.811 % of its principal amount during the year. 63
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Aban Offshore Limited
Notes to Financial Statements for the year ended 31st March 2012 6. Deferred tax liabilities (net)
As at 31st March 2012 Rs. Millions Deferred tax liability on timing differences On depreciation 268.61 268.61 As at 31st March 2011 Rs.Millions 291.98 291.98
7.
Provisions
Long - Term Short -term
As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Provision for employee bene?ts Provision for provident fund Provision for gratuity Provision for leave encashment (A) Other provisions Proposed equity dividend Provision for tax on proposed equity dividend Proposed preference dividend Provision for tax on proposed preference dividend Provision for taxation (net of advance payment of taxes) (B) TOTAL(A+B) -8.11 10.07 18.18 ----------18.18 -4.49 8.21 12.70 ----------12.70 1.59 0.19 3.71 5.49 -156.66 -25.41 252.24 -40.92 --475.23 480.72 3.85 0.11 3.44 7.40 -156.66 -25.41 278.90 -45.24 -502.82 1,009.03 1,016.43
8.
Short term borrowings
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions
Cash credit from banks (secured) Short term borrowings from banks(secured) Deposits (unsecured) -Intercorporate deposits repayable on demand the above amount includes Secured borrowings Unsecured borrowings
1,791.02 3,524.67 --255.00 5,570.69 5,315.69 255.00 5,570.69
2,067.27 1,705.56 ---3,772.83 3,772.83 -3,772.83
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Notes to Financial Statements for the year ended 31st March 2012 1. Cash credit from banks is secured by way of hypothecation of inventory of stores and spares and book debts. Moreover, two offshore jack-up rigs of the company have been offered as a second charge for certain cash credit facilities. The cash credit is repayable on demand and carries interest @15 % to 18 % p.a. Short term borrowings from banks represent buyer’s credit availed against letters of credit secured by charge on current assets and second charge on three offshore jack-up rigs and a drill ship of the company. These short term borrowings are repayable over 180 - 360 days and carry interest @ 3% to 3.50%p.a. Other current liabilities
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Trade payables Other liabilities Current maturities of long term borrowings (note 5) Interest accrued but not due on borrowings Interest accrued and due on borrowings Investor Education and Protection Fund will be credited by following amounts (as and when due) - Unpaid dividend - Unclaimed dividends Others Service tax payable TDS payable 3,308.25 1,628.35 68.57 618.12 ---11.58 53.86 57.77 2,438.25 5,746.50 2,693.18 5,049.33 18.68 229.19 ---10.04 60.43 24.27 5,391.94 8,085.12
2.
9.
10. Tangible assets
Rs.Millions Offshore LandOther Buildings Jack-up Drillship Freehold Machineries rigs Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012 At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011 128.57 128.57 128.57 128.57 150.37 150.37 150.37 150.37 8,408.32 2,898.37 1,850.86 32.87 38.32 80.82 80.82 80.82 80.82 Wind Mills Of?ce Equipment Furniture & Vehicles Fixtures 23.37 23.37 23.10 0.27 23.37 52.47 0.54 53.01 48.07 4.40 52.47 Total
2,396.81 2,396.81 2,407.81 (11.00) 2,396.81
57.99 3.33 61.32 53.34 4.65 57.99
14,197.09 1,887.60 38.32 16,123.01 13,876.30 331.79 (11.00) 14,197.09
10,297.50 2,931.24 8,098.03 2,886.19 310.29 12.18 -
8,408.32 2,898.37
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Notes to Financial Statements for the year ended 31st March 2012
Offshore LandOther Buildings Jack-up Drillship Freehold Machineries rigs Depreciation At 1st April 2011 Charge for the year Disposals At 31st March 2012 At 1st April 2010 Charge for the year Disposals At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011 128.57 128.57 34.46 2.45 36.91 32.01 2.45 34.46 113.46 115.91 6,094.12 1,122.75 527.56 260.49 6,621.68 1,383.24 5,466.42 627.70 795.79 326.96 76.74 76.74 76.74 76.74 4.08 4.08 Furniture & Vehicles Fixtures 16.30 1.48 17.78 14.83 1.47 16.30 5.59 7.07 22.30 4.13 26.43 17.96 4.34 22.30 26.58 30.17
Wind Mills 1,981.15 185.03 2,166.18 1,811.35 178.97 (9.17) 1,981.15 230.64 415.66
Of?ce Equipment 50.44 4.96 55.40 44.26 6.18 50.44 5.92 7.55
Total
9,398.26 986.10 10,384.36 8,259.36 1,148.07 (9.17) 9,398.26 5,738.65 4,798.83
6,094.12 1,122.75 3,675.82 1,548.00 2,314.20 1,775.62
a.
Capitalized borrowing costs The borrowing cost capitalized during the year ended 31 March 2012 was Rs.38.32 Million (31st March 2011: Rs.Nil).The company capitalized the borrowing cost in the offshore jack-up rigs. Vehicles include certain vehicles taken on hire purchase arrangement: - Gross block: Rs 14.77 Million (31st March 2011: Rs.14.77 Million) - Depreciation charge for the year: Rs.1.25 Million(31stMarch 2011:Rs.1.26 Million) - Accumulated depreciation: Rs.4.07 Million (31st March 2011: Rs.2.82 Million) - Net book value: Rs.10.69 Million (31st March 2011: Rs.11.95 Million)
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions
b.
11. Non- current investments
Trade Investment (valued at cost unless stated otherwise) Unquoted equity shares Investment in subsidiaries-wholly owned 0.2 Million (31st March 2011:0.2 Million) equity shares of Rs.10 each fully paid in Aban Energies Limited 850 Million(31st March 2011:850 Million) equity shares in Aban Holdings Pte Ltd, Singapore # Investment in joint ventures 0.05 Million(31st March 2011:0.05 Million) equity shares of Rs.10 each fully paid in Frontier Offshore Exploration(India) Limited (at cost less provision for other than temporary diminution in value Rs.4.99 Million(31st March 2011:Rs.4.99 Million) ) Other Investments 0.3 Million (31st March 2011: 0.3 Million) equity shares of Rs.10 each fully paid in Aban Informatics Private Limited Nil (31st March 2011: 11.9 Million) equity shares of Rs.10 each fully paid in Lanco Tanjore Power Company Limited(earlier known as Aban Power Company Limited)
2.00 39,435.23 -------19.85 --39,457.08
2.00 39,435.23
-19.85 119.40 39,576.48
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Notes to Financial Statements for the year ended 31st March 2012
Non-trade investments (valued at cost unless stated otherwise) Investment in equity shares (quoted) -0.01 Million (31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in Arihant Threads Ltd. (at cost less provision for other than temporary diminution in value of Rs.0.17 (31st March 2011: Rs.0.17 Million)) -0.01 Million (31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in Punjab Woolcombers Ltd. (at cost less provision for other than temporary diminution in value of Rs. 0.02Million (31st March 2011: 0.02 Million) -0.01 Million(31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in State Bank of Travancore Ltd. -0.01 Million(31st March 2011: 0.01 Million) equity shares of Rs.10 each fully paid in ICICI Bank Ltd. -0.05 Million(31st March 2011: 0.05 Million)equity shares of Rs.5 each fully paid in Oil and Natural Gas Corporation Limited -0.03 Million(31st March 2011:0.03 Million)equity shares of Rs.10 each fully paid in Indian Bank Ltd. Investment in equity shares (unquoted) 0.01 Million (31st March 2011: 0.01 Million)equity shares of Rs.10 each fully paid in Madras Stock Exchange Limited
-----0.15 -0.79 -6.32 -2.95
-----0.15 -0.79 -6.32 2.95
4.00 14.21 39,471.29
4.00 14.21 39,590.69 10.21 39,580.48 5.18
Aggregate amount of quoted investments( Market value: Rs.24.80 Million (31st March 2011: Rs.26.36 Million) 10.21 Aggregate Value of unquoted investments 39,461.08 Aggregate provision for diminution in value of investments 5.18 # Note: Face value of the investment not provided, since investment in share capital in Singapore companies has no face value according to the Company law of Singapore
12. Loans and advances
Long-term Short- term As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Capital advances Secured, considered good Unsecured, considered good (A) Security deposit Secured, considered good Unsecured, considered good Doubtful Provision for doubtful security deposit (B) Loans and advances to related parties (note 28) Unsecured, considered good (C) ----1.75 -1.75 -1.75 -------3.14 -3.14 -3.14 ----10.77 10.77 -8.77 -8.77 -8.77 -2,951.66 2,951.66 ----26.03 -26.03 -26.03 -7,461.71 7,461.71
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Aban Offshore Limited
Notes to Financial Statements for the year ended 31st March 2012
Advances recoverable in cash or in kind Secured considered good Unsecured considered good Doubtful Provision for doubtful advances (D) Other loans and advances Advance income-tax(net of provision for taxation) Prepaid expenses Loans to employees Balances with statutory/government authorities (E) Total(A+B+C+D+E)
--------4.31 26.21 30.52 32.27
--------6.02 26.18 32.20 35.34
-88.23 -88.23 -88.23 11.82 32.32 8.38 4.29 56.81 3,116.24
-313.37 -313.37 -313.37 -81.11 5.00 3.00 89.11 7,890.22
13. Inventories
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Stores, Spares and Fuel (including stock-in- transit) 814.92 814.92 773.70 773.70
14. Trade receivables and other assets 14.1 Trade receivables
Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (A) Other receivables Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (B) Total (A+B)
--------------
--------------
-299.43 -299.43 -299.43 -1,910.19 -1,910.19 -1,910.19 2,209.62
-345.88 -345.88 -345.88 -2,301.09 -2,301.09 -2,301.09 2,646.97
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Notes to Financial Statements for the year ended 31st March 2012 14.2 Other assets
Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Unsecured, considered good unless stated otherwise Non-current bank balances (A) Others Interest accrued on ?xed deposits Interest accrued on investments Others (B) Total (A+B)
-------Non-current
--------
--10.22 --10.22 10.22 Current
--2.21 --2.21 2.21
15. Cash and bank balances
As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Cash and cash equivalents Balances with banks: -On current accounts -Deposits with original maturity of less than three months -On unpaid dividend account Cash on hand Other bank balances -Deposits with original maturity for more than 12 months -Deposits with original maturity for more than 3 months but less than 12 months - Margin money deposit
------
------
124.62 -7.13 0.22 131.97
647.10 -8.00 0.71 655.81
-------
-------
--0.49 146.82 147.31 -279.28
-33.48 -120.75 154.23 -810.04
16. Revenue from operations
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Revenue from operations Revenue from drilling and production services Revenue from wind power generation 6,326.53 58.75 6,385.28 11,820.99 86.44 11,907.43
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Notes to Financial Statements for the year ended 31st March 2012 17. Other Income
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Interest income on -Bank deposits -Loan to foreign subsidiaries -Others Dividend income on -Non current investments -Current investments Miscellaneous Income Net gain on sale of non current investments Net gain on sale of assets Rental income 10.56 226.37 0.78 0.37 209.27 307.69 3.81 758.85 2.62 686.80 0.01 1.16 18.50 46.20 4.06 6.35 765.70
18. Consumption of stores, spares, power and fuel
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Consumption of stores and spares Power and Fuel 298.79 175.54 474.33 472.87 224.44 697.31
19. Employee bene?t expense
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Salaries,wages and bonus Contribution to provident and other fund Gratuity expense (note 30) Staff welfare expenses 673.56 28.37 5.99 31.26 739.18 713.03 27.32 4.59 40.91 785.85
20. Finance Costs
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Interest * Loan processing changes Exchange difference to the extent considered as an adjustment to borrowings costs 3,575.35 74.37 12.81 3,662.53 * Excludes interest capilaized Rs :38.32 Million (31st March 2011:Nil) 3,286.57 68.19 -3,354.76
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Notes to Financial Statements for the year ended 31st March 2012 21. Depreciation and amortization expense
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Depreciation on tangible assets 986.10 986.10 1,148.07 1,148.07
22. Other expenses
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Freight and forwarding cost Rent Rates and taxes Rental charges for machinery Insurance Repairs and maintenance -Plant and machinery -Buildings -Others Drilling services and management fees Advertising and sales promotion Travelling ,conveyance and transportation Communication costs Printing and stationery Legal and professional fees Catering expenses Directors' sitting fees Payment to auditors As auditor -Audit fee -Tax audit fee -Limited review In other capacity -Taxation matters -Other services(certi?cation fees) Reimbursement of expenses Exchange Losses (net) Exchange differences(net) Miscellaneous expenses 41.66 10.28 20.59 377.38 395.85 151.83 2.38 37.23 205.82 2.71 206.30 17.92 4.90 422.22 60.88 0.24 40.18 7.80 25.98 313.28 192.39 470.16 1.59 6.64 365.45 0.75 145.92 17.35 4.94 368.02 58.44 0.32
2.50 0.40 1.15 0.35 0.88 0.17 469.58 79.46 2,512.68
2.50 0.56 1.20 1.39 0.13 500.19 500.27 105.93 3,131.38
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Notes to Financial Statements for the year ended 31st March 2012 23. Earnings per share(EPS) The following re?ects the pro?t and share data used in the basic and diluted EPS computations
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Pro?t/(Loss) after tax Less: Dividends on preference shares and tax thereon Net pro?t/(loss) for calculation of EPS (1,207.31) 293.16 (1,500.47) No. Millions Weighted average number of equity shares in calculating basic EPS Effect of dilution: Stock options granted under ESOS Weighted average number of equity shares in calculating diluted EPS Earning per share -basic Earning per share -diluted 2,339.46 324.14 2,015.31 No. Millions
43.51 0.31 43.82 (34.49) (34.24)
43.51 0.25 43.76 46.32 46.05
24. Gratuity and other de?ned bene?t plans The company operates a gratuity bene?t plan which is funded with an insurance company in the form of a qualifying insurance policy. The company operates a leave encashment plan which is not funded The following table summarizes the components of net bene?t expense recognized in the statement of pro?t and loss and the funded status and the amounts recognized in the balance sheet for such plans
Statement of pro?t and loss Net employee bene?t expense recognised in the employee cost Gratuity Leave encashment
31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Components of employer expense -Current service cost -Interest cost -Expected return on plan assets -Past service cost -Actuarial losses/(gains) Total expense recognized in the statement of pro?t and loss Actual return on plan assets
5.54 4.53 (4.10) 0.02 5.99 3.28
5.44 4.26 (4.04) (3.37) 2.29 6.05
0.50 0.99 0.84 2.33
0.49 0.92 (0.57) 0.84
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Notes to Financial Statements for the year ended 31st March 2012
Balance sheet Bene?t (asset)/liability recognized in the balance sheet Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Present value of de?ned bene?t obligation Fair value of plan assests Status [De?cit/(Surplus)] Contribution made towards the fund (Net asset)/liability recognised in balance sheet 59.06 50.76 8.30 8.30 56.34 51.75 4.59 4.59 13.78 13.78 13.78 11.64 11.64 11.64
Changes in the present value of the de?ned bene?t obligation are as follows: Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Present value of the DBO at the beginning of the year Current service cost Interest cost Actuarial (gains)/losses Bene?ts paid Present value of the DBO at the end of the year 56.34 5.54 4.54 (0.80) (6.56) 59.06 51.55 5.44 4.26 (1.36) (3.54) 56.35 11.64 0.50 0.99 0.84 (0.19) 13.78 10.80 0.49 0.92 (0.57) 11.64
Changes in the fair value of plan assets are as follows: Gratuity 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Plan assets at the beginning of the year Expected return on plan assets Actuarial gains/(losses) Actual company contribution Bene?ts paid Plan assets at the end of the year 51.75 4.10 (0.82) 2.29 (6.56) 50.76 49.25 4.04 2.01 (3.54) 51.76
Major category of plan assets as a percentage of the fair value of the total plan assets are as follows:
Gratuity 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Mutual Funds 100% 100%
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Notes to Financial Statements for the year ended 31st March 2012 The principal assumptions used in determining gratuity obligations for the company's plans are shown below:
Gratuity Leave encashment 31st March 2012 31st March 2011 31st March 2012 31st March 2011 % % % % Discount rate Expected return on plan assets Rate of increase in compensation levels 8.55 8.00 6.00 8.55 8.00 6.00 8.55 6.00 8.55 -6.00
The estimate of future salary increases, considered in actuarial valuation takes into account in?ation, seniority, promotion and other relevant factors as supply and demand factors in the employment market. The expected rate of return on plan assets is based in the current investments strategy and market scenario. The above information is certi?ed by the Actuary
Amouns for the current and previous four periods are as follow:
31st March 2012 31st March 2011 31st March 2010 31st March 2009 31st March 2008 Rs. Millions Rs. Millions Rs. Millions Rs. Millions Rs. Millions Gratuity De?ned bene?t obligation Plan assets Surplus/(de?cit) Experience adjustments on plan liabilities Experience adjustment on plan assets Leave encashment De?ned bene?t obligation Experience adjustments on plan liabilities 59.06 50.76 8.30 0.80 (0.82) 13.78 0.46 56.35 51.76 4.59 (0.67) 2.01 11.64 2.00 51.55 49.25 2.30 0.54 (4.41) 10.80 0.24 43.88 28.07 15.81 (7.06) 5.85 8.87 (1.28) 30.53 30.25 0.29 --6.66 -
25. Employee stock option scheme The Company has instituted Employee Stock Option Scheme-2005 (ESOS) duly approved by the shareholders in the extraordinary general meeting of the Company held on 23rd April 2005. As per the scheme, the compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of option. These options vest with employees over a speci?ed period subject to ful?llment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of company’s equity share at the prevailing market price on the date of the grant of option. The Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employees Stock Purchase Scheme guidelines in 1999, applicable to stock option schemes on or after 19th June 1999. Under these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. The Company has not recognized any deferred compensation expenses, as the exercise price was equal to the market value (as de?ned by SEBI) of the underlying equity shares on the grant date. Excess of exercise price over the nominal value of equity shares allotted during the year under ESOS and credited to securities premium account is Rs. NIL (31st March 2011: Rs.8.21 Million) The details of option granted are given below: Maximum number of options that may be granted under the scheme is 1.84 Million equity shares of Rs.2 each. Options granted during the year-NIL (up to 31st March 2011: 0.44 Million equity shares of Rs.2 each)-Options lapsed during the year 0.078 Million shares equity shares of Rs2 each (up to 31st March 2011: 0.04 Million equity shares of Rs.2 each)-Options exercised during the year- NIL (up to 31st March 2011: 0.095 Million equity shares of Rs.2 each)-Options outstanding at the end of year 74
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Notes to Financial Statements for the year ended 31st March 2012 :0.23 Million equity shares of Rs.2 each (up to 31st March 2011: 0.31 Million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 1.52 Million equity shares of Rs.2 each (31st March 2011: 1.441 Million equity shares of Rs.2 each) 26. Interest in joint venture The company’s interest, as a venturer, in jointly controlled entity is as follows: Name of the company Frontier Offshore Exploration (India) Limited Country of incorporation India Proportion of ownership interest 31st March 2012 25% Proportion of ownership interest 31st March 2011 25%
The company has ceased to have joint control over Frontier Offshore Exploration (India) Limited and has also provided for diminution in the value of long term investment considering the state of affairs of the joint venture company 27. Segment information A. Primary Segment-The company’s primary segments are offshore oil drilling and production services and wind power generation (Wind energy). The said business segments have been identi?ed considering the nature of services rendered and the internal ?nancial reporting system. Income and expenses have been accounted for based on their relationship to the operating activities of the segment Secondary segment- Substantial assets of the company are offshore rigs, which are mobile assets and can operate across the world, in view of which geographical segment is not considered.
31st March 2012 Rs. Millions Rs. Millions 7,085.38 58.75 2,522.95 (178.29) 2,344.66 (3,575.35) 51,495.89 421.71 31,115.10 55.87 801.07 185.03 1,995.96 (1,230.69) 31st March 2011 Rs. Millions Rs. Millions 12,579.05 94.08 6,978.13 (135.80) 6,842.33 (3,286.57) 56,061.45 601.24 31,618.16 172.85 969.11 178.96 367.45 3,555.76
B.
Primary Segment information 1. Segment revenue - Drilling -Wind energy 2. Segment results - Drilling -Wind energy less: interest expenses 3. Segment assets - Drilling -Wind energy 4. Segment liabilities - Drilling -Wind energy 5. Depreciation - Drilling -Wind energy 6. Capital expenditure including work in progress - Drilling -Wind energy
7,144.13
12,673.13
51,917.60
56,662.69
31,170.97
31,791.01
986.10
1,148.07
1,995.96
367.45
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Notes to Financial Statements for the year ended 31st March 2012 28. Related party disclosures Names of related parties and related party relationship Related parties where control exists A. Subsidiary companies (wholly owned subsidiaries) Aban Energies Limited, India Aban Holdings Pte Limited, Singapore B. Subsidiaries of Aban Holdings Pte Limited, Singapore Aban Singapore Pte Ltd, Singapore Aban 7 Pte Ltd, Singapore Aban 8 Pte Ltd, Singapore Aban Abraham Pte Ltd, Singapore Aban Pearl Pte Ltd, Singapore Aban International Norway AS, Norway Sinvest AS, Norway DDI Holding AS, Norway Deep Drilling Invest Pte Ltd, Singapore Deep Drilling 1 Pte Ltd, Singapore Deep Drilling 2 Pte Ltd, Singapore Deep Drilling 3 Pte Ltd, Singapore Deep Drilling 4 Pte Ltd, Singapore Deep Drilling 5 Pte Ltd, Singapore Deep Drilling 6 Pte Ltd, Singapore Deep Drilling 7 Pte Ltd, Singapore Deep Drilling 8 Pte Ltd, Singapore Deep Driller Mexico S de RL de CV, Mexico C. a. Others related parties with whom the company had transactions Key Management personnel (i) (ii) (iii) Reji Abraham Mr. P.Venkateswaran Mr.C.P.Gopalkrishnan Managing Director Dy. Managing Director Dy. Managing Director and Secretary
Transaction with related parties during the year
Nature of transaction Subsidiary companies Key Management Personnel
31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Rs. Millions Rs. Millions 1. Machinery maintenance charges paid 2. Rent paid 3. Remuneration (Including Retirement Bene?ts) 4. Interest received/receivable 5. Advances recoverable/(payable) 6. Loan given to foreign subsidiary 7. Loan repaid 8. Dividend paid 9. Amount oustanding as at 31st March 2012 - Receivable -Payable 10.59 226.37 15.21 2,481.33 6,991.38 2,951.66 10.59 686.80 6.18 4,194.01 5,704.11 7,461.71 7.63 19.12 18.58 5.31 107.71 0.01 17.79 -
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Notes to Financial Statements for the year ended 31st March 2012
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 1. Machinery maintenance charges paid - Aban Energies Limited 2. Remuneration to Key management personnel - Mr. Reji Abraham -Mr. P.Venkateswaran -Mr. C.P.Gopalkrishnan 3. Interest received/ receivable - Aban Holdings Pte Ltd, Singapore 4. Advances recoverable - Aban Energies Limited - Aban Holdings Pte Ltd, Singapore 5. Loan given to foreign subsidiary - Aban Holdings Pte Ltd, Singapore 6. Loan repaid by foreign subsidiary - Aban Holdings Pte Ltd, Singapore 7. Rent paid - Reji Abraham 8. Dividend paid - Reji Abraham 9. Amount payable towards commission to: - Mr. Reji Abraham - Mr.P.Venkateswaran Other transactions Indian rupee loans guaranteed by personal guarantee of the Managing Director of the company-Rs.5,000.00 Million (31st March 2011: Nil) 10.59 6.34 6.39 6.39 226.37 8.98 6.23 2,481.33 6,991.38 7.63 18.46 --10.59 84.66 13.65 9.40 686.80 6.18 -4,194.01 5,704.11 5.31 17.67 73.20 3.66
29. Capital and other commitments
Capital and other commitments 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Capital and Other commitments not provided for 104.16 63.24
30. Contingent liabilities
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Guarantees given by banks on behalf of the company Corporate guarantees given by the company to banks on behalf of subsidiaries of company's wholly owned foreign subsidiary 510.65 20,749.95 1,008.94 20,232.27
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Notes to Financial Statements for the year ended 31st March 2012 31. Derivative instruments and unhedged foreign currency exposures a. Outstanding forward cover contracts/derivatives as at the balance sheet date
As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions - Currency forward contracts/options - Foreign currency convertible bonds 7,217.71 8,355.40 975.30 Purpose Hedging risk of exchange rate ?uctuations Hedging risk of exchange rate ?uctuations
b.
Particulars of unhedged foreign currency exposures as at the balance sheet date
As at As at As at As at 31st March 2012 31st March 2012 31st March 2011 31st March 2011 USD Millions Rs. Millions USD Millions Rs. Millions
- Import payables -Foreign currency convertible bond
48.00 -
2,441.76 -
45.00 43.19
2,006.60 1,925.90
32. Loans and advances in the nature of loans given to subsidiaries
Balance outstanding as at 31st March 2012 Rs. Millions Aban Energies Limited (advance) Aban Holdings Pte Ltd (Loan & advance) Indian subsidiary Foreign subsidiary 8.98 2,942.68 Maximum balance outstanding during the year Rs. Millions 9.97 7,455.74 Balance outstanding ast 31st March 2011 Rs. Millions 5.96 7,455.74 Maximum balance outstanding during the previous year Rs. Millions 10.16 9,617.36
Particulars
Subsidiary
33. Value of imports calculated on CIF basis
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Capital items b. Stores and spare parts 334.08 415.19 192.67 367.46
34. Expenditure in foreign currency
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Interest on foreign currency loans b. Drilling services and management fees c. Travel and transport d. Consultancy fees e. Rental charges for machinery f. Insurance 52.01 80.20 24.21 197.05 293.51 375.09 29.86 106.95 55.73 137.12 300.44 141.08
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Notes to Financial Statements for the year ended 31st March 2012
g. Repairs to machinery h. Catering i. Salary and staff welfare j. Others 5.22 25.29 225.17 15.63 1.10 20.36 123.78 14.00
35. Imported and indigenous stores and spares consumed
Year ended Year ended Year ended Year ended 31st March 2012 31st March 2012 31st March 2011 31st March 2011 Value Value % of total % of total (Rs. Millions) (Rs. Millions) consumption consumption Stores and spares Imported Indigenous 89.09 209.70 29.82% 70.18% 291.02 181.85 61.54% 38.46%
36. Dividend remitted in foreign currency
Year of remittance (ending on) Period to which it relates Number of non-resident shareholders Number of equity shares held Net dividend remitted 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 2010-11 1 8.33 29.98 2009-10 1 8.33 29.98
37. Earnings in foreign currency
Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions a. Drilling and production services b. Interest from foreign subsidiary c. Others 4,156.79 226.37 208.94 9,317.08 686.80 45.99
38. Generation of wind power (net)
31st March 2012 Units 21,370,997 Rs. Millions 58.75 31st March 2011 Units 31,575,597 Rs. Millions 86.44
39. Dues to micro and small enterprises The Company has no dues to suppliers registered under the Micro, Small and Medium Enterprises Development Act,2006 (31st March 2011: Nil) 79
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Notes to Financial Statements for the year ended 31st March 2012 40. Previous year ?gures Till the year ended 31st March 2011, the Company was using the pre-revised Schedule VI to the Companies Act,1956, for preparation and presentation of its ?nancial statements. During the year ended 31st March 2012, the Revised Schedule VI noti?ed under the Companies Act,1956 has become applicable to the Company. The Company has reclassi?ed previous year ?gures to conform to this year’s classi?cation.
As Per our Report of even date For Ford, Rhodes, Parks & Co. Chartered Accountants ICAI - Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date : 30th May 2012 P. Murari Vice Chairman
For and On behalf of the Board
K. M. Jayarao Director Reji Abraham Managing Director
C.P. Gopalkrishnan Deputy Managing Director & Secretary
K. Bharathan Director
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Notes to Financial Statements for the year ended 31st March 2012
Statement Pursuant to Section 212(1) (e) of the Companies Act, 1956
1 Name of the Subsidiary Company 2 Financial Year of the Subsidiary Company 3 Shares of the Subsidiary Company held by Aban Offshore Limited (a) Number of Shares (b) Face Value (c) Paid up value (d) Extent of Holding 4 Net aggregate amount of Pro?t / (Loss) of the subsidiary Company so far as they concern the members of Aban Offshore Limited not dealt with in the accounts of the Aban Offshore Limited amount to: (a) For the Subsidiary Company’s ?nancial year ended on 31.03.2012 (b) For the previous ?nancial years of the subsidiary since it became the Holding Company’s subsidiary 5 Net aggregate amount of Pro?t / (Loss) of the Subsidiary Company, dealt with in the Accounts of Aban Offshore Limited amount to: (a) For subsidiary Company's Financial Year ended 31.03.2012 (b) For the previous ?nancial years of the subsidiary since it became the Holding Company’s Subsidiary 6 As the ?nancial year of the Subsidiary Company coincides with the ?nancial year of the Holding Company, Section 212(5) of the Companies Act is not applicable Note: Aban Holdings Pte Ltd is having the following subsidiaries. Financial year of these Companies ended on 31st March 2012 (a) Aban Singapore Pte Ltd (b) Aban 7 Pte Ltd, Singapore (c) Aban 8 Pte Ltd, Singapore (d) Aban Abraham Pte Ltd, Singpore (e) Aban Pearl Pte Ltd,Singapore (f) Aban International Norway AS (g) Sinvest ASA, Norway (h) DDI Holding AS Norway (i) Deep Drilling Invest Pte Ltd, Singapore (j) Deep Drilling 1 Pte Ltd, Singapore (k) Deep Drilling 2 Pte Ltd, Singapore (l) Deep Drilling 3 Pte Ltd, Singapore (m) Deep Drilling 4 Pte Ltd, Singapore
Deep Drilling 5 Pte Ltd, Singapore (o) Deep Drilling 6 Pte Ltd, Singapore (p) Deep Drilling 7 Pte Ltd, Singapore (q) Deep Drilling 8 Pte Ltd, Singapore (r) Deep Driller Mexico S de RL de CV,Mexico For and on behalf of the Board P. Murari Vice Chairman Place: Chennai Date:30th May 2012 Reji Abraham Managing Director K.Bharathan Director K.M.Jayarao Director C.P.Gopalkrishnan Dy Managing Director & Secretary NIL NIL NIL NIL Rs.in Million (2.17) (6.07) Rs.in Million 4,424.69 842.87 2,00,070 Rs.10 Rs.10 100% 85,00,00,000 Not Applicable USD 850,000,000 100% Aban Energies Limited Year Ended 31.03.2012 Aban Holdings Pte Ltd Year Ended 31.03.201281
82
Aban Energies Ltd India Rs in Millions 2.00 (8.24) 4.49 10.73 11.91 (2.16) 0.01 (2.15) (384.59) (384.59) 7,397.40 2,238.19 (421.37) 1,816.82 1,132.17 (529.73) (529.73) 442.56 (214.58) (29.78) (244.36) 1,806.02 1,699.34 (130.92) 1,568.42 30.08 (282.80) (282.80) Aban Holdings Pte Ltd,Singapore Rs in Millions 39,435.22 (3,600.77) 13,374.46 2,975.01 25,435.00 Aban Singapore Pte Ltd, Singapore Rs in Millions 25,435.00 (6,789.51) 2,237.23 32,047.74 48,456.01 Aban Abraham Pte Ltd, Singapore Rs in Millions 2,543.50 (371.91) 25,149.82 22,978.23 Aban 7 Pte Ltd, Singapore Rs in Millions 1,068.27 (239.87) 5,724.56 4,896.15 Aban 8 Pte Ltd, Singapore Rs in Millions 1,933.06 5,017.43 14,811.92 7,861.43 Aban Pearl Pte Ltd, Singapore Rs in Millions 2,950.46 (1,784.37) 1,878.24 712.15 Aban International Norway AS,Norway Rs in Millions 14,737.57 (10,713.79) 551.29 36,929.33 40,401.83 2,091.71 (2,445.14) (2,445.14) Sinvest AS,Norway Rs in Millions 6,998.24 22,589.58 235.88 234.98 29,586.32 41.52 23.38 23.38 Deep Drilling 7 Pte Ltd,Singapore Rs in Millions 2,857.74 2,462.63 11,451.64 6,131.26 976.35 458.67 135.65 594.32 750.53 88.06 22.21 110.27 K.M. Jayarao Director Rs in Millions 1,427.23 1,978.16 12,469.85 9,064.47 Deep Drilling 8 Pte Ltd,Singapore (2,456.08) (2,456.08) 57.04 68.92 9.47 78.39 1,271.47 410.81 (87.12) 323.69 1,839.28 1,569.74 194.88 1,764.62 DDI Holding AS, Norway Rs in Millions 24,400.62 (15,894.98) 0.81 42,741.09 51,245.91 Deep Drilling Invest Pte Ltd, Singapore Rs in Millions 32,701.30 928.90 498.30 482.84 33,614.74 Deep Drilling 1 Pte Ltd,Singapore Rs in Millions 6,889.76 4,561.50 17,995.59 6,544.33 Deep Drilling 2 Pte Ltd,Singapore Rs in Millions 7,414.83 8,836.50 16,521.55 270.22 Deep Drilling 3 Pte Ltd,Singapore Rs in Millions 6,610.68 8,510.67 22,223.98 7,102.64 2,093.77 1,470.90 (402.57) 1,068.33 Deep Drilling 4 Pte Ltd,Singapore Rs in Millions 1,919.57 5,771.23 12,334.21 4,643.42 1,855.69 1,417.84 1,417.84 Deep Drilling 5 Pte Ltd,Singapore Rs in Millions 3,466.61 6,897.67 12,469.74 2,105.46 1,830.37 1,349.11 1,349.10 Deep Driller Mexico S de RL De CV, Mexico 1. The Ministry of Corporate Affairs,Government of India,vide General Circular No-2 Rs in Millions 0.01 (27.61) 2.59 30.19 (26.00) (26.00) -
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Aban Offshore Limited
Statement of details to be furnished for subsidiaries as prescribed by the Ministry of Corporate Affairs
Name of the subsidiary Company
a) b) c) d) e)
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
Name of the subsidiary Company
a) b) c) d) e)
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
Name of the subsidiary Company
Note :
a) b) c) d) e) 1,514.87 787.38 (109.22) 678.16 Reji Abraham Managing Director
Deep Drilling 6 Pte Ltd,Singapore Rs in Millions 2,610.24 375.02 8,626.54 5,641.27 -
and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with section 212 of the Companies Act 1956,subject to ful?llment of conditions stipulated in the circular. The Company has satis?ed the conditions stipulated in the circular and hence is entitled to the exemption.
f) g) h) I) j)
Share Capital Reserves & Surplus * Total Assets Total Liabilities Investments (except in case of investment in subsidiaries) Turnover Pro?t/(Loss) before Taxation Provision for Taxation Pro?t/(Loss) after Taxation Proposed Dividend
2. Other than the Indian subsidiary Aban Energies Ltd, where accounts is in Indian Rupee, other 19 subsidiary accounts which are in US Dollar are converted into Indian Rupee at the Exchange rate of 1USD = Rs. 50.87 for the purpose of the details given above.
K. Bharathan Director C.P.Gopalakrishnan Dy Managing Director & Secretary
* includes translation reserve
P.Murari Vice- Chairman
Place:Chennai Date:30th May 2012
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Aban Offshore Limited
AUDITORS’ REPORT ON CONSOLIDATED FINANCIAL STATEMENTS
To The Board of Directors Aban Offshore Limited Chennai India We have audited the attached Consolidated Balance Sheet of Aban Offshore Limited the parent company and its subsidiaries as at 31st March 2012, the Consolidated Statement of Pro?t and Loss and also the Consolidated Cash Flow Statement for the year then ended. These ?nancial statements are the responsibility of Aban Offshore Limited’s Management. Our responsibility is to express an opinion on these ?nancial statements based on our audit. We conducted our audit in accordance with Generally Accepted Auditing Standards in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the ?nancial statements are prepared, in all material respects, in accordance with an identi?ed ?nancial reporting framework and are free of material misstatements. An audit also includes, examining on a test basis, evidence supporting the amounts and disclosures in the ?nancial statements. An audit also includes assessing the accounting principles used and signi?cant estimates made by the Management, as well as evaluating the overall ?nancial statements. We believe that our audit provides a reasonable basis for our opinion. We report that the Consolidated Financial Statements have been prepared by the company in accordance with the requirements of Accounting Standard (AS) 21 - “Consolidated Financial Statements” and AS 27 – “Financial reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India and noti?ed by Government of India under the Companies (Accounting Standard) Rules, 2006. We have audited the ?nancial statements of M/s Aban Energies Limited, Chennai, India, the Indian subsidiary of the Parent Company. The Financial Statements of Aban Holdings Pte., Ltd., Singapore, the foreign subsidiary of the Parent Company and the Consolidated Financial Statements of Foreign Subsidiary’s immediate subsidiary company, Aban Singapore Pte., Ltd., Singapore and its 17 subsidiaries, have been audited by other Auditors whose reports have been furnished to us and our opinion in respect of these subsidiaries is based solely on the report of those auditors. The ?nancial statements of a newly incorporated subsidiary Deep Driller Mexico S de RL de CV, Mexico has not been audited. The audited ?nancial statement of Aban Holdings Pte Ltd., Singapore re?ects total assets of Rs. 38809.46 Millions as at 31st March 2012 and total revenue of Rs. Nil for the year then ended. The Audited Consolidated Financial Statements of M/s Aban Singapore Pte., Limited, Singapore and its subsidiaries re?ect total net assets of Rs. 125342.09 Millions as at 31st March 2012 and total net revenue of Rs. 25366.79 Millions for the year then ended. The unaudited ?nancial statements of Deep Driller Mexico S de RL de CV, Mexico a newly incorporated subsidiary of Aban Singapore Pte Limited re?ects total assets of Rs. 2.59 Million as at 31st March 2012 and total revenue of Rs. NIL for the year then ended. On the basis of information and explanations provided to us, the audit reports on individual ?nancial statements of Aban Offshore Limited, its Indian subsidiary, and aforesaid foreign subsidiaries, we are of the opinion that: a. b. c. The Consolidated Balance Sheet gives a true and fair view of the consolidated state of affairs of Aban Offshore Limited, and its subsidiaries as at 31st March 2012; The Consolidated Statement of Pro?t and Loss gives a true and fair view of the consolidated results of operations of Aban Offshore Limited, and its subsidiaries for the year then ended; and The Consolidated Cash Flow Statement gives a true and fair view of the consolidated cash ?ows of Aban Offshore Limited and its subsidiaries for the year then ended.
For FORD, RHODES, PARKS & CO., Chartered Accountants ICAI – Registration No: 102860W RAMASWAMY SUBRAMANIAN Partner Membership No: 016059 Place : Chennai Date : May 30, 2012
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Consolidated Balance Sheet
As at 31st March 2012
Note No: Equity and Liabilities Shareholders’ funds Share Capital Reserves and Surplus Non-current liabilities Long-term borrowings Deferred tax liabilities (net) Long-term provisions Current liabilities Short -term borrowings Trade payables Other current liabilities Short -term provisions TOTAL Assets Non-current assets Fixed Assets Tangible assets Intangible assets Capital work-in-progress Non-current investments Long-term loans and advances Other non-current assets Current assets Inventories Trade receivables Cash and bank balances Short-term loans and advances Other current assets TOTAL Summary of signi?cant accounting policies The accompanying notes 1 to 38 are an integral part of the ?nancial statements As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions
6 7
2,897.04 25,719.41 28,616.45 111,443.71 268.56 19.08 111,731.35 5,570.69 6,410.61 20,412.64 942.97 33,336.91 173,684.71
3,347.04 17,990.68 21,337.72 97,128.60 291.93 13.18 97,433.71 3,772.83 5,635.89 30,764.78 1,828.46 42,001.96 160,773.39
8 9 10 11 12 12 10
13.1 13.2 14 15 16.2 17 16.1 18 15 16.2
100,817.93 56,156.58 245.08 34.06 533.87 499.37 158,286.89 3,005.92 10,116.37 844.54 1,332.13 98.86 15,397.82 173,684.71 4
89,835.08 49,223.93 175.10 153.46 35.45 492.08 139,915.10 2,615.59 9,691.94 5,458.45 2,613.12 479.19 20,858.29 160,773.39
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Consolidated Statement of Pro?t and Loss Account
Note No: Income Revenue from operations Other income Total revenue (I) Expenses Consumption of stores, spares and fuel Employee bene?ts expense Finance costs Depreciation and amortization expense Other expenses Total Expenses (II) Pro?t before exceptional items and tax Less Exceptional items Pro?t/(Loss) before tax Tax expenses -Current tax -Deferred tax Total tax expense Pro?t/(Loss) for the year after tax and before share in earnings of joint venture Share of pro?t/(loss) in joint venture Pro?t/(Loss) for the year after tax and after share in earnings of joint venture Earnings per equity share of Rs.2 each (31st March 2011: Rs.2 each) Basic Computed on the basis of pro?t/(loss) for the year Diluted Computed on the basis of pro?t/(loss) for the year Summary of signi?cant accounting policies The accompanying notes 1 to 38 are an integral part of the ?nancial statements As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director
For the year ended 31st March 2012 31st March 2012 31st March 2011 Rs. Millions Rs. Millions
19 20
31,629.21 657.66 32,286.87 1,179.17 3,378.24 9,890.85 5,160.41 8,667.63 28,276.30 4,010.57 4,010.57 818.75 (23.37) 795.38 3,215.19
33,472.23 259.81 33,732.04 1,368.85 2,895.44 9,335.97 4,907.14 8,536.87 27,044.27 6,687.77 3,372.87 3,314.90 2,674.58 (143.72) 2,530.86 784.04 665.41
21 22 23 24 25
26
3,215.19 27
1,449.45
67.16 66.68 4
25.86 25.71
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Consolidated Cash Flow Statement
For the year ended 31st March 2012
Year ended 31st March 2012 Rs. Millions Cash Flow from operating activities Pro?t before tax from continuing Operations Pro?t before tax Non cash adjustment to reconcile pro?t before tax to net cash ?ows Depreciation/amortization on continuing operations Provision for Employee Bene?ts Pro?t on sale of Long Term and Current Investments (Net)/joint venture interest Loss on sale of Assets (Net)/Assets Sunk (Exceptional Item) Provision for Dimunition in the value of long term investments Provision for Doubtful Debts Unrealized foreign exchange loss Net gain on sale of Non Current investments Interest expenses Interest income Dividend income Operating pro?t before working capital changes Movements in working capital: Increase/(Decrease) in trade payables Increase/(Decrease) in other current liabilites Decrease/(Increase) in trade receivables Decrease/(Increase) in inventories Decrease/(Increase) in long term loans and advances Decrease/(Increase) in short term loans and advances Decrease/(Increase) in other current assets Decrease/(Increase) in other non current assets Cash generated from(used in) operations Direct taxes paid (net of refunds) Net cash ?ow from /(used in) operating activities (A) Cash Flow from investing activities Purchase of ?xed assets including Intangible Assets Capital advances Proceed from sale of ?xed assets Proceeds from sale of non-current investments Proceed from sale /maturity of current investment Purchase of Current Investments Interest received Dividends received Net cash ?ow from /(used in) investing activities (B) 5,160.41 10.03 398.84 86.97 (307.69) 9,771.97 (35.77) (1.15) 19,094.18 772.79 (8,472.10) (808.31) (387.76) (498.43) 1,291.76 388.34 (7.30) 11,373.17 (1,669.97) 9,703.20 (6,599.18) (10.77) 427.09 350.00 (350.00) 27.76 1.15 (6,153.95) 4,907.13 8.34 (108.27) 3,372.87 513.05 344.08 653.44 9,237.69 (24.17) (19.66) 22,199.40 (1,244.62) (3,327.05) (137.54) (492.08) 16,998.11 (2,286.31) 14,711.80 (5,635.50) 10,661.47 16,686.25 (12,331.33) 59.24 9,440.13 4,010.57 4,010.57 3,314.90 3,314.90 Year ended 31st March 2011 Rs. Millions
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Consolidated Cash Flow Statement
Year ended 31st March 2012 Rs. Millions Cash Flow from ?nancing activities Proceeds from issuance of share capital Proceeds from issuance of preference share capital Redemption of foreign currency convertible bonds with premium Proceeds from long term borrowings Proceeds from short term borrowings Repayment of short term borrowings Interest paid Dividends paid on equity shares Dividends paid on preference shares Tax on equiy dividend paid Tax on preference dividend paid Net cash ?ow from /(used in) ?nancing activities (C) Net increase /(decrease) in cash and cash equivalents (A+B+C) Effect of exchange differences on cash and cash equivalents held in foreign currency Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Components of cash and cash equivalents Cash on hand With banks on current account On deposit account unpaid dividend account* Total cash and cash equivalents (note 17) Summary of signi?cant accounting policies 4 0.99 254.14 582.28 7.13 844.54 3.37 4,486.32 960.76 8.00 5,458.45 (450.00) (3,592.56) 3,448.66 1,970.51 (276.25) (8,758.33) (156.66) (278.90) (25.41) (45.24) (8,164.18) (4,614.93) 1.02 5,458.45 844.54 8.08 (11,628.80) (8,891.65) (156.61) (278.90) (26.62) (47.40) (21,021.90) 3,130.03 (31.68) 2,360.10 5,458.45 Year ended 31st March 2011 Rs. Millions
For the year ended 31st March 2012
*The company can utilize these balances only towards settlement of the respective unpaid dividend liability. As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012 For and on behalf of the Board Reji Abraham Managing Director
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 1. Corporate Information Aban Offshore Limited (AOL) (the Parent Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. Its shares are listed on three stock exchanges in India. The Parent Company and its 19 subsidiaries are referred to as “Group” for the purpose of this Consolidated Financial Statements. The Parent Company has a wholly-owned Indian Subsidiary Aban Energies Ltd and a wholly owned foreign subsidiary Aban Holdings Pte. Limited, Singapore. The Parent Company, the wholly owned foreign subsidiary and it’s step-down subsidiaries are engaged in the business of providing offshore drilling and production services to companies engaged in exploration, development and production of oil and gas both in domestic and international markets. The Parent Company and it’s wholly-owned Indian subsidiary are engaged in the ownership, operation and maintenance of wind turbines for generation of wind power in India 2. Basis of preparation The ?nancial statements of the Group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Group has prepared these ?nancial statements to comply in all material respects with the Accounting Standards noti?ed under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act,1956. The ?nancial statements have been prepared on an accrual basis and under the historical cost convention. All the assets and liabilities have been classi?ed as current and non-current as per the Group’s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act,1956. Based on the nature of business operations, the Group has ascertained its operating cycle as 12 months for the purpose of current and non- current classi?cation of assets and liabilities. The accounting policies adopted in the preparation of ?nancial statements are consistent with those of the previous year. 3. Principles of consolidation The consolidated ?nancial statements have been prepared in accordance with the Accounting Standard-21 “Consolidated Financial Statement” and Accounting Standard -27 – “Financial reporting of Interests in Joint Ventures” issued by the Institute of Chartered Accountants of India. (ICAI)/Companies (Accounting Standards) Rules,2006. The ?nancial statements of the Parent Company and its subsidiaries have been consolidated on a line-by-line basis by adding the book values of like items of assets, liabilities, income and expenses after eliminating intra-group balances/transactions and pro?ts in full. The excess/de?cit of cost to the Parent Company of its investment over its portion of net worth in consolidated Subsidiaries at the respective dates on which the investment in such entities was made is recognized in the ?nancial statements as goodwill/capital reserve. Foreign Subsidiaries account their transactions in United State Dollar as Reporting currency. Foreign subsidiaries are non-integral in nature. For the purpose of consolidation, monetary items and non-monetary items of assets and liabilities are translated at exchange rate prevailing at the Balance Sheet date. The items of revenue income and expenditure re?ected in the Pro?t and Loss Account are translated at the average exchange rate during the period. The differences arising out of translation are transferred to “Translation Reserve”. 4. Summary of signi?cant accounting policies a. Change in accounting policy Presentation and disclosure of ?nancial statements During the year ended 31st March 2012, the revised Schedule VI noti?ed under the Companies Act,1956, has become applicable to the Group, for preparation and presentation of its ?nancial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of the ?nancial statements. However, it has signi?cant impact on presentation and disclosures made in the ?nancial statements. The Group has also reclassi?ed the previous year ?gures in accordance with the requirements applicable in the current year
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 b. Use of estimates The preparation of ?nancial statements in conformity with the Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result on the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. c. Tangible ?xed assets Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Subsequent expenditure related to an item of ?xed asset is added to its book value only if it increases the future bene?ts from existing asset beyond its previously assessed standard of performance. All other expenses on existing assets, including day to day repair and maintenance expenditure are charged to the Statement of Pro?t and Loss for the period during which such expenses are incurred. Gains or losses from derecognition of ?xed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Pro?t and Loss when the assets are derecognized. d. Depreciation on tangible ?xed assets Depreciation on ?xed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management or those prescribed under the Schedule XIV of the Companies Act, 1956, whichever is higher. The company has used the following rates to provide depreciation on its ?xed assetsFixed Assets Buildings Drilling Rigs Drillship Of?ce Equipment Computers Windmills Furniture and ?xtures Vehicles Rates (SLM) 1.63% 3.34%* 3.34%* 13.91% 16.21% 10.00% 6.33% 9.50%
Pursuant to noti?cation of Government of India, Ministry of Corporate Affairs dated 14th December 2011, the rate of depreciation on Rigs has been reduced to 3.34% p.a. on straight line basis. The depreciation on rigs and drillship has been charged accordingly with effect from the date of such noti?cation Depreciation on ?xed assets of foreign subsidiaries is determined using the straight line method over the useful life of assets based on the technical evaluation of the expected useful life. e. Intangible assets Intangible assets include Goodwill that re?ects the excess of the purchase price over the book value of the net assets acquired. Goodwill arising on consolidation (acquisition of subsidiaries) is not amortized but tested for impairment on an annual basis. f. Leases Where the Company is a lessee Leases in which signi?cant portion of the risks and rewards of ownership are retained by the lessor are classi?ed as operating leases. Payments made under operating leases are charged to the Statement of Pro?t and Loss on a straight-line basis over the period of lease. 89
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place. g. Borrowings costs Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent that they are regarded as adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. h. Impairment of tangible assets An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to the Statement of Income in the year when the asset is identi?ed as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimate of recoverable value. i. Investments Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classi?ed as current investments. All other investments are classi?ed as long-term investments. Current investments are carried in the ?nancial statements at lower of cost or fair value determined on an individual investment basis. Long term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Pro?t and Loss. j. Inventories Inventory of stores, spares and fuel is valued at cost based on a weighted average cost/ ?rst-in-?rst-out basis. k. Revenue recognition Income from drilling and production services is recognized as earned, based on contractual daily rates billed on monthly basis. Mobilization /demobilization fees received, if any, is recognized as earned in the year of mobilization/demobilization. Income from wind power generation is recognized based on the number of units of power generated every month at contracted rates. Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the Statement of Pro?t and Loss. Dividend income is recognized when the company’s right to receive dividend is established by the reporting date l. Foreign currency translation Foreign currency transactions and balances Initial recognition Foreign currency transactions are recorded at the exchange rate prevailing on the date of the transaction. Realized gains and losses on foreign exchange transactions during the year are recognized in the Statement of Pro?t and Loss. Exchange differences in respect of foreign currency loans/liabilities relating to ?xed assets are accounted in the Statement of Pro?t and Loss.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 Conversion Foreign currency current assets and current liabilities are translated at the exchange rates prevailing on the reporting date. In circumstances, where the rate prevailing on the reporting date is not stable/ highly volatile, monetary items shall be reported based on subsequent actual realization rate. Resulting gains / losses are recognized in the Statement of Pro?t and Loss. Non-monetary items such as investments, ?xed assets, denominated in foreign currency are translated at exchange rate prevailing on the date of transaction. Exchange differences All exchange differences are recognized as income or as expense in the Statement of Pro?t and Loss during the period in which they arise. Forward exchange contracts/derivative contracts entered into to hedge foreign currency risk of an existing asset/liability The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Any pro?t or loss arising on cancellation or renewal of such forward contract is also recognized as income or as expense for the period under the respective head of account for the period. In respect of derivative contracts, gains / losses on any such contracts are recognized in the Statement of Pro?t and Loss. Translation of integral and non-integral foreign operation The Company classi?es all its foreign operations as either “integral foreign operations” or “non-integral foreign operations”. The ?nancial statements of an integral foreign operation are translated as if the transactions of the foreign operation have been those of the company itself. The assets and liabilities of a non-integral foreign operation are translated into the reporting currency at the exchange rate prevailing at the reporting date and the Statement of Pro?t and Loss are translated at average daily rates prevailing during the reporting period. The exchange differences arising on translation are accumulated in the foreign currency translation reserve. On disposal of a non-integral foreign operation, the accumulated foreign currency translation reserve relating to that foreign operation is recognized in the statement of pro?t and loss. Where there is a change in the classi?cation of a foreign operation, the translation procedures applicable to the revised classi?cation are applied from the date of change in the classi?cation. m. Retirement and other employee bene?ts (a) Contribution to Provident Fund which is a de?ned contribution retirement plan is made monthly at a predetermined rate to the Provident Fund Authorities and is debited to the statement of pro?t and loss on accrual basis. (b) Contribution to Superannuation Scheme which is de?ned contribution retirement plan is made annually at predetermined rate to insurance companies which administer the fund and debited to the statement of Pro?t and Loss (c) Annual contribution is made to Gratuity Funds administered by Insurance Companies, which is considered as de?ned bene?t plan. The present value of the de?ned bene?t is measured using the ‘Projected Unit Credit method with actuarial valuation being carried out at each Balance Sheet date by an independent valuer. Actuarial gain and losses are immediately recognized in the statement of pro?t and loss. Amount of contribution, computed by the insurers is paid by the company and charged to statement of pro?t and loss. No additional liability is anticipated under the scheme administered by the Insurance Companies. (d) Provision for leave encashment is based on actuarial valuation carried out by an independent actuary at the Balance Sheet date. n. Taxes on income The income tax provision comprises of current tax and deferred tax. Current tax is the amount of tax payable in respect of income for the year. In accordance with the Accounting Standard-22 –Accounting for taxes on income issued by the Institute of Chartered Accountants of India, the deferred tax on timing difference between book pro?t and tax pro?t for the year is accounted based on the rates and laws that have been enacted or substantially enacted as on the Balance Sheet date. However, deferred tax assets arising from timing difference are recognized to the extent of their virtual /reasonable certainty about its realizability in future years. 91
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 o. Segment reporting
Identi?cation of segments The Group’s operating businesses are organized and managed separately according to the nature of services provided with each segment representing strategic business unit that offers different services. Segment accounting policies The segment information is prepared in conformity with the accounting policies and presenting the ?nancial statements of the Group as a whole. p. Earnings per share Basic earnings per share are calculated by dividing the net pro?t or loss for the period attributable to equity shareholders (after deducting preference dividend and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. For the purpose of calculating diluted earnings per share, the net pro?t or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. q. Provisions A provision is recognized when the entity has a present obligation as a result of past event. It is probable that an out?ow of resources embodying economic bene?ts will be required to settle obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. The estimates are reviewed at each reporting date and adjusted to re?ect the current best estimates. Contingent liabilities A contingent liability is a possible obligation that arises from past events whose existence will be con?rmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an out?ow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where that cannot be recognized because it cannot be measured reliably. The company does not recognize a contingent liability but discloses its existence in the ?nancial statements. Cash and cash equivalents Cash and cash equivalents for the purpose of the cash ?ow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
r.
s.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
5.
The Consolidated ?nancial statements include the ?nancial statements of Aban Offshore Limited (“the Parent Company”), its subsidiaries and joint operating company. The details of the subsidiaries and the joint operating company are given below:
Country of Incorporation India Singapore Singapore Norway Singapore Singapore Singapore Singapore Norway Norway Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Singapore Mexico Percentage of holding 100% 100% (a) (b) (b) (b) (b) (b) (c) (d) (e) (f) (f) (f) (f) (f) (f) (f) (f) (b) Accounts considered 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (audited) 31st March 2012 (unaudited) Reporting Currency Indian Rupee US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars US Dollars
Name of the company Aban Energies Ltd Aban Holdings Pte Ltd Aban Singapore Pte Ltd Aban International Norway AS Aban 7 Pte Ltd Aban 8 Pte Ltd Aban Abraham Pte Ltd Aban Pearl Pte Ltd Sinvest AS DDI Holding AS Deep Drilling Invest Pte Ltd Deep Drilling 1 Pte Ltd Deep Drilling 2 PteLtd Deep Drilling 3 PteLtd Deep Drilling 4 Pte Ltd Deep Drilling 5 Pte Ltd Deep Drilling 6 Pte Ltd Deep Drilling 7 Pte Ltd Deep Drilling 8 Pte Ltd Deep Driller Mexico S de RL de CV, Mexico
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
Note: a) b) c) d) e) f) Wholly-owned subsidiary of Aban Holdings Pte Ltd Wholly-owned subsidiaries of Aban Singapore Pte Ltd Subsidiary of Aban International Norway AS (60%) and Aban Singapore Pte Ltd (40%) Wholly-owned subsidiary of Sinvest AS Wholly-owned subsidiaries of DDI Holding AS Wholly-owned subsidiary of Deep Drilling Invest Pte Ltd
The consolidated ?nancial statements have been prepared after considering adjustments to align the accounts of foreign subsidiaries with the requirements of applicable Indian Accounting Standards.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
6. Share Capital
As at 31st March 2012 Rs. Millions Authorised shares (No. Millions) 2,500 (31 March 2011: 2,500 ) equity shares of Rs.2/- each 1000 (31 March 2011: 1000 ) Cumulative non convertible redeemable preference shares of Rs.10/- each 5,000.00 5,000.00 As at 31st March 2011 Rs.Millions
10,000.00
10,000.00
15,000.00 Issued , subscribed and fully paid -up shares (No. Millions) Equity shares: 36.88 (31 March 2011: 36.88) equity shares of Rs.2/- each 0.85 (31 March 2011: 0.85) equity shares of Rs.2/- each issued against conversion of foreign currency convertible bonds 0.09 (31 March 2011: 0.09 ) equity shares of Rs.2/- each issued against employee stock option scheme 5.69 (31 March 2011: 5.69) equity shares of Rs.2/- each issued against quali?ed institutional placement Shares Forfeited, 0.01(31 March 2011: 0.01) equity shares at Re 1/- each (A) Preference shares: 77 (31 March 2011: 122) 8% non-convertible cumulative redeemable preference shares of Rs.10/-each 28 (31 March 2011: 28.00 @ 8%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 61 (31 March 2011: 61 @ 9%) 9% non-convertible cumulative redeemable preference shares of Rs.10/-each 95 (31 March 2011: 95 @ 9%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each 20 (31 March 2011:20 @ 9.25%) 10% non-convertible cumulative redeemable preference shares of Rs.10/-each (B) TOTAL (A+B) 2,897.04 200.00 2,810.00 950.00 610.00 280.00 770.00 11.39 0.01 87.04 0.19 1.70 73.75
15,000.00
73.75 1.70 0.19 11.39 0.01 87.04
1,220.00 280.00 610.00 950.00 200.00 3,260.00 3,347.04
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
a. Reconciliation of the shares outstanding at the beginning and at the end of the reporting period
31st March 2012 Equity shares (A) of Rs 2 each At the beginning of the period Issued during the period-ESOP Outstanding at the end of the period 43.51 43.51 87.04 87.04 43.50 0.01 43.51 87.02 0.02 87.04 No. Millions Rs. Millions 31st March 2011 No. Millions Rs. Millions
31st March 2012 Preference shares (B) of Rs 10 each At the beginning of the period Issued during the period Redeemed during the period Outstanding at the end of the period Total Value of Outstanding Shares (A) +(B) 326.00 45.00 281.00 3,260.00 450.00 2,810.00 2,897.04 No. Millions Rs. Millions
31st March 2011 No. Millions 326.00 326.00 Rs. Millions 3,260.00 3,260.00 3,347.04
b.
Terms/ rights attached to equity shares The Parent Company has only one class of equity shares having a face value of Rs.2 per share. Each holder of equity shares is entitled to one vote per share. The Parent Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. During the year ended 31st March 2012, the amount of per share dividend recognized as distributions to equity shareholders is Rs3.60 (31st March 2011: Rs.3.60).
c.
Terms of redemption of Non-convertible Cumulative Redeemable Preference shares As on 31st March 2011, the terms and conditions of the Non-Convertible Cumulative redeemable preference shares were as under: 150 million 8% non- convertible cumulative redeemable preference shares will be redeemed at par on 16-06-2011, 16-06-2012 and 16-06-2013 in the ratio of 30:30:40 respectively. During the year 45 million non-convertible redeemable preference shares which were due for redemption on 16-06-2011 were redeemed. 156 million 9 % non-convertible cumulative redeemable preference shares were originally scheduled for redemption at par at the end of the 5th year from the date of allotment of shares as per details given below: 55 million shares to be redeemed on 29-12-2011 40 million shares to be redeemed on 28-02-2012 61 million shares to be redeemed on 30-03-2012 20 million 9.25% non-convertible redeemable preference shares were originally scheduled for redemption at par on 03-08-2013
•
•
•
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 Pursuant to approval of the Board of Directors and with the consent of preference shareholders, the modi?ed terms and conditions of the Non-Convertible Cumulative Redeemable Preference shares are as under: • • • • d. 55 million 10% non-convertible cumulative redeemable preference shares will be redeemed at par on 29-12-2014 40 million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 28-02-2015 61million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 30-03-2015 20 million 10 % non-convertible cumulative redeemable preference shares will be redeemed at par on 03-08-2016 The company has reserved 1.84 million equity shares of Rs.2 each for offering to employees under the Employee Stock Option Scheme (ESOS) (31st March 2011:1.84 million equity shares of Rs.2 each ) out of which 0.095 million equity shares of Rs.2 each have been already allotted upto the balance sheet date under the scheme and included under the paid up capital (31st March 2011: 0.095 million equity shares of Rs.2 each) (Refer note 28 for details)
e. Details of shareholders holding more than 5% shares in the Parent Company 31st March 2012 % holding in the No. Millions class Equity shares of Rs.2 each fully paid Reji Abraham India Offshore Inc Aban Investments Private Limited 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 5.13 8.33 5.65 19.11 11.78% 19.14% 12.99% 43.91% 31st March 2011 % holding in the No. Millions class
31st March 2012 % holding in the No. Millions class Preference shares of Rs.10 each fully paid 8% Non-Convertible Cumulative Redeemable Preference Shares of Rs.10 each Syndicate Bank Canara Bank Indian Overseas Bank Vijaya Bank Axis Bank Limited
31st March 2011 % holding in the No. Millions class
10.50 17.50 14.00 17.50 42.00 101.50
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
15.00 25.01 20.00 25.01 60.00 145.02
10.00% 16.67% 13.33% 16.67% 40.00% 96.67%
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Notes to Consolidated Financial Statements for the year ended 31st March 2012
9% and 10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Indian Bank Vijaya Bank UCO Bank Indusind Bank Limited Yes Bank Limited
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10.00 5.00 10.00 30.00 5.00 60.00
16.39% 8.20% 16.39% 49.18% 8.20% 98.36%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Punjab National Bank Canara Bank Indian Overseas Bank
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
20.00 10.00 10.00 40.00
50.00% 25.00% 25.00% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Syndicate Bank Bank of India Central Bank of India Bank of Baroda Oriental Bank of Commerce
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
15.00 15.00 5.00 10.00 10.00 55.00
27.27% 27.27% 9.10% 18.18% 18.18% 100.00%
10% Non Convertible Cumulative Redeemable Preference Shares of Rs.10 each Bank of India
20.00
100.00%
20.00
100.00%
As per the records of the company, including its register of shareholders/members and other declarations received from the shareholders regarding bene?cial interest, the above shareholding represents both legal and bene?cial ownerships of shares.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 7. Reserves and Surplus CONSOLIDATED 31st March 2012 Rs. Millions Capital Reserve - as per last Balance Sheet Securities Premium Account Balance as per last ?nancial statements Add: on allotment under ESOS Less: amounts utlized towards redemption of foreign currency convertible bonds * Investment Allowance Reserve (utilised) -as per last Balance Sheet Capital Redemption Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss General Reserve Balance as per last ?nancial statements Add: Transfer from statement of pro?t and loss Surplus/(de?cit) in the statement of pro?t and loss Balance as per last ?nancial statements Pro?t/(loss) for the year Less: Appropriations Transfer to capital redemption reserve Transfer to general reserve Proposed equity dividend-Rs.3.60 Per equity share (31st March 2011-Rs.3.60 Per equity share) Tax on proposed equity dividend Dividend on preference shares Tax on preference dividend Total appropriations Net Surplus/(de?cit) in the statement of pro?t and loss Translation Reserve Total reserves and surplus (156.66) (25.41) (252.24) (40.92) (475.23) 10,810.05 2,703.22 25,719.41 (156.66) (25.41) (278.90) (45.24) (1,246.21) 8,070.09 (2,977.01) 17,990.68 (500.00) (240.00) 8,070.09 3,215.19 7,866.85 1,449.45 1,299.29 1,299.29 1,059.29 240.00 1,299.29 2,000.00 2,000.00 1,500.00 500.00 2,000.00 (691.46) 8,854.42 52.40 9,545.88 52.40 9,545.88 9,537.67 8.21 0.03 31st March 2011 Rs. Millions 0.03
* Premium on redemption of foreign currency convertible bond including withholding tax
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 has been adjusted against the securities premium account 8. Long term borrowings
Non-Current maturities As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Term loans Rupee term loans from banks (secured) Rupee term loan from Financial institution (secured) Foreign currency term loans from banks (secured) Other loans Bonds Hire purchase loan (secured) Foreign currency convertible bonds (unsecured) From a company (unsecured) Current maturities As at As at 31st March 2012 31st March 2011 Rs. Millions Rs. Millions
18,535.24 500.00 74,425.76
18,218.56 750.00 77,155.20
305.12 319.74 15,855.83
1,393.66 250.00 5,429.67
17,931.68 0.43 50.60 111,443.71
4.84 1,000.00 97,128.60
635.88 3.89 999.60 18,120.06
18,868.23 4.56 2,901.10 500.00 29,347.22
The above amount includes Secured borrowings Unsecured borrowings Amount disclosed under the head “Other current liabilities” (note 12 ) Net Amount
111,393.11 50.60 111,443.71
96,128.60 1,000.00 97,128.60
17,120.46 999.60 (18,120.06) -
25,946.12 3,401.10 (29,347.22) -
1. a.
The rupee term loans from banks include the following: Term Loan of Rs.63 million (31st March 2011:Rs.87.95 million) from a bank.The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs and carries interest @ 13% p.a. (31st March 2011:10.75% p.a.) Term Loan of Rs.2554.20 million (31st March 2011:Rs.2721.07 Million) from a bank. The loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs and carries interest @ 14.50% p.a. (31st March 2011:11.00% p.a.). Term Loan of Rs.2761.73 million (31st March 2011:Rs.2862.53 million) from a bank.The Loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drilling rigs. Amount overdue on account of interest as on balance sheet date is Rs.63.94 million for a period of 1 to 2 months. Amount since paid is Rs.32.86 million and carries interest @ 13.50% p.a. (31st March 2011: 11.70% p.a.). Term Loan of Rs.2707.30 Million (31st March 2011:Rs.2757.60 Million) from a bank The Loan is repayable in 96 equal monthly installments along with interest from 30th April 2013. The loan is secured by pari- passu ?rst charge on the speci?c offshore drill ship and drilling rigs and carries interest @ 13.50% p.a. (31st March 2011:10.50% p.a.). Amount overdue on account of interest as on balance sheet date is Rs32.22 million for a period of 1 to 2 months which is since paid. Term Loan of Rs. 900.10 million (31st March 2011:Rs.945.10 million) from a bank. The Loan is repayable in 32 equal quarterly installments along with interest from 30th June 2013. The loan is secured by pari-passu ?rst charge on the speci?c offshore drill ship and drilling rigs and carries interest @ 13.40% p.a. (31st March 2011:12.00% p.a.). Amount overdue on
b.
c.
d.
e.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 account of interest as on balance sheet date is Rs.21.17 million for a period of 1 to 2 months and amount since paid is Rs.10.58 million. f. Term Loan of Rs.49.52 million (31st March 2011:Rs.167.10 million) from a bank The Loan is repayable in 4 monthly installments along with interest from January 2012.The loan is secured by ?rst charge on windmills and carries interest @ 13.75% p.a. (31st March 2011:13.00% p.a.). Amount overdue on account of principal and interest as on balance sheet date is Rs.41.32 million for a period of 1 to 3 months. Amount since paid is Rs.14.21million. Term Loan of Rs.4859.60 million (31st March 2011:Rs.4996.82 million) from a bank. The Loan is repayable in 32 equal quarterly installments along with interest from 30th June 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rigs, Floating Production Unit and second charge on drilling rig owned by foreign subsidiary and carries interest @ 16.25% p.a. (31st March 2011:15.50% p.a.).Amount overdue on account of interest as on balance sheet date is Rs.136.53 million for a period of 1 to 2 months. Amount since paid is Rs.14.80 million. Term Loan of Rs.1849.30 million (31st March 2011: Rs. 1924.49 million) from a bank. The Loan is repayable in 96 monthly installments along with interest from 30th September 2013. The loan is secured by ?rst charge on the speci?c offshore drilling rig owned by foreign subsidiary and carries interest @ 15.00% p.a. (31st March 2011: 14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.46.72 million for a period of 1 to 2 months. Amount since paid is Rs.23.99 million. Term Loan of Rs.1500.79 million (31st March 2011:Rs.1499.80 million) from a bank. The Loan is repayable in 32 quarterly installments along with interest from 29th January 2014. The loan is secured by Second charge on the speci?c offshore drill ship and drilling rig and carries interest @ 15.00 % p.a. (31st March 2011:14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.37.25 million for a period of 1 to 2 months. Amount since paid is Rs.19.14 million. Term Loan of Rs.469.99 million (31st March 2011:Nil) from a bank The Loan is repayable in 13 quarterly installments along with interest from 31st March 2012. The loan is secured by First charge on the speci?c offshore drill rig of foreign subsidiary and carries interest @ 15.25 % p.a. (31st March 2011:14.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.11.88 million for a period of 1 to 2 months. Amount since paid is Rs.6.11 million. Term Loan of Rs.100 Million (31st March 2011:Rs. 499.69 million) from a bank The Loan is repayable in one installment along with interest from 28th February 2012. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 14.25 % p.a. (31st March 2011:13.25% p.a.). Amount overdue on account of principal as on balance sheet date is Rs.100.00 million for a period of 1 month that has been since paid. Term Loan of Rs.200.00 million (31st March 2011:Rs. 250.15 million) from a bank The Loan is repayable in 20 quarterly installments along with interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 16.00 % p.a. (31st March 2011:14.00% p.a.). Term Loan of Rs.350.00 million (31st March 2011: Rs.399.98 million) from a bank The Loan is repayable in20 quarterly installments along with interest from 31st December 2013. The loan is secured by pari-passu First charge on the speci?c offshore drilling rig and drill ship and carries interest @ 16.00 % p.a. (31st March 2011:13.75% p.a.). Term Loan of Rs.474.91million (31st March 2011:Rs.499.82 million) from a bank The Loan is repayable in 24 quarterly installments along with interest from 31st March 2012. The loan is secured by First charge on the speci?c offshore drilling rig owned by foreign subsidiary and carries interest @ 14.75 % p.a. (31st March 2011: 13.25% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.5.68 million for a period of 1 month. Rupee Term Loan from a ?nancial institution Rupee Term loan from a ?nancial institution of Rs.819.74 million (31st March 2011:Rs.1,000.00 million) The loan is repayable in 16 quarterly installments along with interest from March 2012. The loan is secured by pari-passu ?rst charge on drill Ship and offshore drilling Rig and carries interest @ 13% p.a. (31st March 2011:13% p.a.). Amount overdue on account of interest as on balance sheet date is Rs.19.73 million for a period of 3 months that has since been paid. 101
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 3. i. Foreign Currency Term Loans from banks include the following: Term loan of Rs.2,138.56 million [US$42,040,000] (31st March 2011: Rs.2,003.78 million[US$44,938,000]) is secured by a ?rst preferred mortgage on a rig , a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary held by the Company, and assignment of contracts and insurances, in respect of the rig. The borrowings mature on 31 January 2019 and have an interest rate of 5.00% p.a.(31st March 2011: 5.30% p.a.) at the balance sheet date. Term loan of Rs.846.32 million [US$16,637,000] (31st March 2011: Nil) is secured by a second priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned subsidiary, and corporate guarantee of Aban Singapore Pte Ltd. The borrowings mature on 23 February 2019 and have an interest rate 7.00% p.a.(31st March 2011: Nil) at the balance sheet date. Term Loan of Rs. 4,675.12 Million[US$91,903,381] (31st March 2011: Rs.4,345.19 million [US$97,513,000]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned foreign subsidiary that owns this drill ship and a pledge over 30% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.46% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 95.13 million and Rs.41.53 million respectively for a period of 30 – 60 days. Term loan of Rs.969.19 million [US$19,052,000] (31st March 2011: Rs.899.78 million [US$20,192,500]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned subsidiary that owns this drill ship and a pledge over 30% of the shares in a step-down subsidiary held by the wholly-owned foreign subsidiary. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.46% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs.19.33 million and Rs.5.10 million respectively for a period of 30 – 60 days Term loan of Rs.17,344.99 million [US$340,967,000] (31st March 2011:Rs.15,790.95 million [ US$354,375,000]) is secured by a guarantee from a shareholder of the Parent Company, to the extent of Rs. 6,511.36 million [US$128,000,000], a ?rst priority pledge over 42.86% of the shares in a subsidiary, a charge over escrow account into which dividends from such shares are to be deposited and a second charge over a drill ship owned by a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 3 January 2019 and have an interest rate of 4.00%-5% p.a.(31st March 2011: 4.00%-4.50% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs.129.44 million for a period of 30 – 60 days Term loan of Rs.3,179.38 million[US$62,500,000] (31st March 2011: Rs.3,286.30 million [US$73,750,000]) is secured by a ?rst priority pledge over 17.14% of the shares in a step-down subsidiary , a charge over escrow account into which dividends from such shares are to be deposited, 100% of the shares in another step-down subsidiary held by the wholly-owned foreign subsidiary and a third priority mortgage on a rig owned by a step-down subsidiary. The borrowings mature in February 2016 and have an interest rate of 5.00% p.a.(2011: 5.29% p.a.) at the balance sheet date. Term loan of Rs.4,383.56 million [US$86,171,800] (31st March 2011: Rs.4,707.99 million [US$105,655,000]) is secured by a ?rst and second priority mortgage on a rig ,a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary, assignment of insurances; and a charge over revenues and bank accounts to be maintained by the Borrower in respect of the rig. The borrowings mature on 30 August 2014 and have an interest rate 1%-4% p.a.(31st March 2011: 1%-4.25% p.a.%) at the balance sheet date.
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vi.
vii.
viii. Term loan of Rs.1,859.93 million[US$36,562,500] (31st March 2011: Rs.2,005.20 million [US$45,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the Company that owns this rig and a corporate guarantee of Aban Singapore Pte Ltd. The borrowings mature on 1 March 2015 and have an interest rate of 5.25% p.a.(31st March 2011: 4.55% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 143.10 million and Rs.25.25 million respectively for a period of 31 days ix. Term loan of Rs.101.61 million [US$1,997,500](31st March 2011: Rs.267.03 million [US$5,992,500]) is secured by a standby letter of credit issued by a bank, which is secured by cash deposit held in a pledged account with the same bank. The borrowings mature on 14 March 2013 and have an interest rate of 2.00% p.a.(31st March 2011: 2.00% p.a) at the balance sheet date.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 x. Term loan of Rs.111.06 million [US$2,183,000] (31st March 2011: Rs.291.86 million [US$6,549,900]) is secured by a standby letter of credit issued by a bank, which is secured by cash deposit held in a pledged account with the same bank. The borrowings mature on 14 March 2013 and have an interest rate of 2.00% p.a. (31st March 2011: 2.00% p.a.) at the balance sheet date. Term loan of Rs.1,193.13 million[US$23,454,430] (31st March 2011: Rs.1,069.19 million [US$23,994,400]) is secured by a ?rst priority mortgage on a drill ship and ?rst charge by way of hypothecation of moveable assets and receivables of a step down foreign subsidiary that owns the drill ship and a pledge over 30% of the shares of a step down subsidiary of the whollyowned foreign subsidiary of the Parent Company. The borrowings mature on 1 February 2019 and have an interest rate of 4.00% p.a. (31st March 2011: 4.29% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs.9.16 million and Rs.11.28 million respectively for a period of 60 days. Term loan of Rs.3,393.94 million [US$66,718,963] (31st March 2011: Rs.3,039.79 million [US$68,217,992]) is secured by a ?rst priority mortgage on a drill ship , and ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly-owned foreign subsidiary that owns the drill ship and a pledge over 30% of the shares of a step-down subsidiary of the wholly-owned subsidiary of the Parent Company. The borrowings mature on 1 February 2019 and have an interest rate of 5.50% p.a.(31st March 2011: 5.20.% p.a) at the balance sheet date. Amount overdue on account of principal and interest is Rs.25.44 million and Rs. 32.94 million respectively for a period of 30 – 60 days.
xi.
xii.
xiii. Term loan of Rs.5469.54 million [US$107,520,000] (31st March 2011: Rs.4,990.72 [US$110,317,000]) is secured by a ?rst priority mortgage over a rig of a step-down subsidiary of the wholly-owned foreign subsidiary, a ?rst charge by way of hypothecation of moveable assets and receivables of a step-down subsidiary of the wholly –owned subsidiary of the Parent Company that owns this rig and a corporate guarantee of the Aban Singapore Pte Ltd. The borrowings mature on 24 March 2019 and have an interest rate of 5%-6% p.a. (31st March 2011: 5.63% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs.25.35 million for a period of 6 days. xiv. Term loan of Rs. 7,558.26 million [US$148,580,000] (31st March 2011: Rs.6,773.12 million [US$152,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge on the receivables from the rig and a corporate guarantee from Aban Singapore Pte Ltd. The borrowings mature on 5 February 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.29% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 58.00 million and Rs. 78.62 million respectively for a period of 55 days. xv. Term loan of Rs.2,549.30 million [US$50,114,080] (31st March 2011: Rs.2,302.15 million [US$51,664,000]) is secured by second mortgages on two rigs of two step-down subsidiaries of the wholly-owned foreign subsidiary. The borrowings mature on 12 March 2019 and have an interest rate of 5.25% p.a. (31st March 2011: 5.63% p.a.) at the balance sheet date. xvi. Term loan of Rs.6,871.11 million [US$135,072,000] (31st March 2011: Rs.5,659.12 million [ US$127,000,000]) is secured by a ?rst priority mortgage on a rig, ?rst charge on the receivables from the rig and the bank account into which such receivables are deposited and a corporate guarantee from Aban Singapore Pte Ltd. The borrowings mature on 8 February 2020 and have an interest rate of 4.79% p.a.(31st March 2011: 4.79% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 66.94 million and Rs.54.41 million respectively for a period of 6 – 53 days. xvii. Term loan of Rs. 7,223.54 million [US$142,000,000] (31st March 2011: Rs. 6,684.00 million [US$150,000,000]) is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 September 2017 and have an interest rate of 7.00% p.a.(31st March 2011: 5.21% p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 406.96 million and Rs.86.88 million respectively for a period of 6 – 60 days. xviii. Term loan of Rs.7,041.53 million [US$138,422,058] (31st March 2011: Rs.6,392.13 million[US$143,450,000]) is secured by a ?rst priority pledge over 40% of the shares in a step-down subsidiary of the wholly-owned subsidiary, a charge over escrow account into which dividends from such shares are to be deposited and a second preferred mortgage over a rig owned by a step-down subsidiary and a second priority mortgage over a rig owned by another step-down subsidiary. The borrowings mature on 26 March 2019 and have an interest rate of 4.00% p.a.(31st March 2011: 4.00%-4.50% p.a.) at the balance sheet 103
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 date. Amount overdue on account of principal and interest is Rs. 172.31 million and Rs.84.56 million respectively for a period of 3 – 6 days. xix. Term loan of Rs.3,815.25 million[US$75,000,000] (31st March 2011: Rs.4,456.00 million [US$100,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a ?rst pari-passu charge on a drill ship owned by the Parent Company, a ?rst pari-passu charge on a rig owned by the Parent Company, a corporate guarantee of the Parent Company. The borrowings mature on 26 February 2017 and have an interest rate of 3.00% p.a.(31st March 2011: 3.30% p.a.) at the balance sheet date. xx. Term loan of Rs. 2,097.88 million [US$41,240,000] (31st March 2011: Rs. 1,980.25 million [US$44,440,000]) is secured by a corporate guarantee from the Parent Company and a third priority mortgage on a rig owned by a step-down subsidiary of wholly-owned foreign subsidiary. The borrowings mature on 11 January 2019 and have an interest rate of 5.00% p.a.(31st March 2011: 5.30% p.a.) at the balance sheet date. xxi. Term loan of Rs.813.92 million [US$16,000,000] (31st March 2011: Rs.712.96 million [US$16,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 December 2017 and have an interest rate of 3.70% p.a.(31st March 2011: 4.00%p.a. ) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 43.39 million and Rs.8.78 million respectively for a period of 6 days. xxii. Term loan of Rs.3,592.24 million [US$70,616,000] (31st March 2011: Rs. 3,243.97 million [US$72,800,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 March 2019 and have an interest rate of 3.70% p.a.(31st March 2011: 4.00%p.a.) at the balance sheet date. Amount overdue on account of principal and interest is Rs. 37.03 million and Rs.38.46 million respectively for a period of 6 days xxiii. Term loan of Rs. 1,220.88 million [US$24,000,000] (31st March 2011: Rs. 1,069.44 million[US$24,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company holding company and a ?rst pari-passu charge on two rigs and a ?oating production unit owned by the Parent Company. The borrowings mature on 26 December 2017 and have an interest rate of 3.00% p.a. (31st March 2011: 3.42% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs. 5.66 million for a period of 4 days. xxiv. Term loan of Rs. 1,831.32 million [US$36,000,000 (31st March 2011: Rs 2,005.20 million [US$45,000,000]) is secured by a standby letter of credit issued by a bank, which is secured by a corporate guarantee of the Parent Company and a ?rst priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned foreign subsidiary. The borrowings mature on 31 December 2015 and have an interest rate of 2.85% p.a.(31st March 2011: 3.28% p.a.) at the balance sheet date. Amount overdue on account of interest is Rs. 4.53 million for a period of 92 days. 4. i. Bonds Bond of Rs.6,358.75 million [US$125,000,000] (31st March 2011: Nil) is secured by a ?rst priority mortgage on a rig owned by a step-down subsidiary of the wholly-owned foreign subsidiary, a pledge over 100% of the shares in a step-down subsidiary of the wholly-owned foreign subsidiary ,assignment of insurances, corporate guarantee of a step-down subsidiary of the wholly-owned foreign subsidiary of the Parent Company , and a charge over bank accounts to be maintained by the Borrower in respect of the rig. The borrowings mature on 21 December 2015 and have an interest rate 12.00% p.a. (31st March 2011: NA) at the balance sheet date. Bond of Rs. 12,208.80 million US$240,000,000 (31st March 2011: Nil) is secured by a ?rst priority mortgage on two rigs owned by step-down subsidiaries of the wholly-owned subsidiary, a pledge over 100% of the shares in two step-down subsidiaries of the wholly-owned foreign subsidiary of the Parent Company, assignment of insurances, corporate guarantee of a subsidiary of the Company, assignment of sub-charters in respect of these two rigs, and a charge over bank accounts to be maintained by the Borrower in respect of these two rigs. The borrowings mature on 5 March 2015 and have an interest rate 14.25% p.a.(31st March 2011: NA) at the balance sheet date.
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 5. 6. 7. Hire purchase loan for vehicles availed by Parent Company from a non-banking ?nance company of Rs.4.32 million (31st March 2011:Rs.9.41 million) secured by hypothecation of vehicles. The Parent Company has an outstanding unsecured loan from a company amounting to Rs.1050.20 million (31st March 2011:Rs.1500 million) at 14.50% p.a. repayable in 12 yearly installments along with interest. Foreign currency convertible bonds (FCCB) –The Parent Company had issued 1161 unsecured zero coupon FCCB of Japanese Yen 10,000,000 each aggregating to Japanese Yen 11,610 million in April 2006. Unless previously redeemed, converted or repurchased and cancelled, the company had to redeem each bond at 121.811% of its principal amount on 15th April 2011, being the maturity date. Until this date, 620 bonds aggregating to Japanese yen 6200 million were converted into 8,51,055 equity shares of Rs.2 each at the conversion price of Rs.2,789.04 per equity share. The remaining 541 bonds outstanding as on the maturity date were redeemed by the company @ 121.811 % of its principal amount during the year.
9.
Deferred tax liabilities (net) As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs. Millions
Deferred tax liability on timing differences On depreciation 10. Provisions Long - Term As at As at 31st March 31st March 2012 2011 Rs. Millions Rs. Millions Provision for employee bene?ts Provision for provident fund Provision for gratuity Provision for leave encashment Short - Term As at As at 31st March 31st March 2012 2011 Rs. Millions Rs. Millions 268.56 268.56 291.93 291.93
8.45 10.63 19.08
4.49 8.69 13.18
1.63 0.19 3.71 5.53
5.27 0.11 3.44 8.82
Other provisions Proposed equity dividend Provision for tax on proposed equity dividend Proposed preference dividend Provision for tax on proposed preference dividend Provision for taxation (net of advance payment of taxes)
19.08
13.18
156.66 25.41 252.24 40.92 462.21 937.44 942.97
156.66 25.41 278.90 45.24 1,313.43 1,819.64 1,828.46
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 11. Short term borrowings As at 31st March 2012 Rs. Millions Cash credit from banks (secured) Short term borrowings from banks (secured) Deposits (unsecured) -Intercorporate deposits repayable on demand 1,791.02 3,524.67 As at 31st March 2011 Rs. Millions 2,067.27 1,705.56
255.00 5,570.69
3,772.83
the above amount includes Secured borrowings Unsecured borrowings
5,315.69 255.00 5,570.69
3,772.83 3,772.83
1. Cash credit from banks is secured by way of hypothecation of inventory of stores and spares and book debts. Moreover, two offshore jack-up rigs of the company have been offered as a second charge for certain cash credit facilities. The cash credit is repaable on demand and carries interest @15 % to 18 % p.a. 2. Short term borrowings from banks represent loan (buyer’s credit) availed against letters of credit secured by charge on current assets and second charge on three offshore jack-up rigs and a drill ship of the company. These short term borrowings are repayable on demand and carry interest @ 2% to 4% p.a. 12. Other current liabilities As at 31st March 2012 Rs. Millions Trade payables Other liabilities Current maturities of long term borrowings (note 5) Interest accrued but not due on borrowings Interest accrued and due on borrowings Investor Education and Protection Fund will be credited by following amounts (as and when due) - Unpaid dividend - Unclaimed dividends Others Service tax payable/Other Liabilities Tax deducted at source payable 6,410.61 18,120.06 1,551.09 618.12 As at 31st March 2011 Rs. Millions 5,635.89 29,347.22 926.38 229.19
11.58 53.98 57.81 20,412.64 26,823.25
10.04 227.68 24.27 30,764.78 36,400.67
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Notes to Consolidated Financial Statements for the year ended 31st March 2012 13.1 Tangible assets
Rs.Millions Offshore Buildings Jack-up rigs Drillship Furniture & Fixtures Vehicles Total
LandFreehold
Other Machineries
Wind Mills
Of?ce Equipment
Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012
128.57 128.57
150.37 150.37
84,527.35 2,770.71 10,720.51 38.32 98,056.89
26,331.50 1,264.83 3,300.29 30,896.62
80.82 80.82
2,396.81 2,396.81
85.01 3.38 3.75 92.14
59.27 5.06 64.33
57.60 0.54 0.39 58.53
113,817.30 4,039.46 14,030.00 38.32 131,925.08
At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011
128.57 128.57
150.37 150.37
96,521.74 2,440.35 (13,843.80) (590.94) 84,527.35 Offshore
24,216.87 2,704.99 (447.81) (142.55) 26,331.50
80.82 80.82
2,407.81 (11.00) 2,396.81
73.69 11.45 (0.13) 85.01
59.24 0.27 (0.24) 59.27 Furniture & Fixtures
53.22 4.40 (0.02) 57.60
123,692.33 5,161.46 (14,302.61) (733.88) 113,817.30
LandFreehold
Buildings
Jack-up rigs
Drillship
Other Machineries
Wind Mills
Of?ce Equipment
Vehicles
Total
Depreciation At 1st April 2011 Charge for the year Disposals -Exchange differences At 31st March 2012 At 1st April 2010 Charge for the year Disposals Other adjustments -Exchange differences At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011
-
34.46 2.45 36.91 32.01 2.45 34.46
19,515.73 3,620.13 1,820.20 24,956.06 16,390.85 3,606.26 (233.54) (247.84) 19,515.73
2,255.47 1,340.17 140.94 3,736.58 1,178.31 1,103.08 (26.28) 0.36 2,255.47
76.74 76.74 76.74 76.74
1,981.15 185.03 2,166.18 1,811.35 178.97 (9.17) 1,981.15
63.76 6.45 1.69 71.90 59.03 9.57 (4.84) 63.76
30.20 1.82 1.69 33.71 40.62 2.25 (12.67) 30.20
24.71 4.36 29.07 20.15 4.56 24.71
23,982.22 5,160.41 1,964.52 31,107.15 19,609.06 4,907.14 (268.99) (264.99) 23,982.22
128.57 128.57
113.46 115.90
73,100.83 65,011.61
27,160.04 24,076.03
4.08 4.09
230.63 415.66
20.24 21.25
30.62 29.07
29.46 32.89
100,817.93 89,835.08
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 a. Capitalized borrowing costs The borrowing cost capitalized during the year ended 31 March 2012 was Rs.38.32 million (31st March 2011: Rs. Nil).The co pany capitalized the borrowing cost in the offshore jack-up rigs. b Vehicles include certain vehicles taken on hire purchase arrangement: 13.2 Gross block: Rs 14.77 million (31st March 2011: Rs.14.77 million) Depreciation charge for the year: Rs.1.25 million(31stMarch 2011:Rs.1.26 million) Accumulated depreciation: Rs.4.07 million (31st March 2011: Rs.2.82 million) Net book value: Rs.10.69 million (31st March 2011: Rs.11.95 million)
Intangible assets Goodwill Rs.Millions Total 49,223.93 6,932.65 56,156.58 49,555.11 (331.18) 49,223.93 Total -
Cost At 1st April 2011 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2012 At 1st April 2010 Additions Disposals Other adjustments -Exchange differences -Borrowing costs At 31st March 2011
49,223.93 6,932.65 56,156.58 49,555.11 (331.18) 49,223.93 Goodwill
Impairment As at 1st April 2011 Charge for the year At 31st March 2012 At 1st April 2010 Charge for the year Other adjustments -Exchange differences At 31st March 2011 Net Block At 31st March 2012 At 31st March 2011
-
56,156.58 49,223.93
56,156.58 49,223.93
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 Goodwill on consolidation (acquisition of foreign subsidiaries) is tested for impairment annually and whenever there is an impairment indication, the goodwill may be impaired. For the year 2011-12, the management did not note any indication that the goodwill related to the acquisition of such foreign subsidiaries may be impaired due to any reason. As the assets and liabilities & Non-integral foreign operation are translated at the exchange rate as at balance sheet date, the difference in exchange rate is re?ected under exchange difference against respective assets 14. Non-current investment As at 31st March 2012 Rs. Millions Investment in joint ventures 0.05 million(31st March 2011:0.05 million) equity shares of Rs.10 each fully paid in Frontier Offshore Exploration(India) Limited (at cost less provision for other than temporary diminution in value Rs.4.99 million(31st March 2011:Rs.4.99 million) ) Other Investments 0.3 million (31st March 2011: 0.3 million) equity shares of Rs.10 each fully paid in Aban Informatics Private Limited Nil (31st March 2011: 11.9 million) equity shares of Rs.10 each fully paid in Lanco Tanjore Power Company Limited (earlier known as Aban Power Company Limited) 11.72 Million (31st March 2011: 11.72 Million) equity shares in Petrojack ASA of Nok 5 each (at cost less dimunition in value of investment of Rs. 1718.21 Million (31st March 2011: 1718.21 Million) Non-trade investments (valued at cost unless stated otherwise) Investment in equity shares (quoted) -0.01 million (31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in Arihant Threads Ltd (at cost less provision for other than temporary diminution in value of Rs.0.17 Million (31st March 2011: Rs.0.17 million) -0.01 million (31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in Punjab Woolcombers Ltd (at cost less provision for other than temporary dimunition in value of Rs. 0.02 million (31st March 2011 ; 0.02 Million -0.01 million(31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in State Bank of Travancore Ltd -0.01 million(31st March 2011: 0.01 million) equity shares of Rs.10 each fully paid in ICICI Bank Ltd -0.05 million(31st March 2011: 0.05 million)equity shares of Rs.5 0.79 0.79 0.15 0.15 119.40 19.85 19.85 As at 31st March 2011 Rs. Millions
19.85
139.25
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 each fully paid in Oil and Natural Gas Corporation Limited -0.03 million(31st March 2011:0.03 million)equity shares of Rs.10 each fully paid in Indian Bank Ltd Investment in equity shares (unquoted) 0.01 million (31st March 2011: 0.01 million)equity shares of Rs.10 each fully paid in Madras Stock Exchange Limited 4.00 14.21 34.06 Aggregate amount of quoted investments( Market value: Rs.24.80 million (31st March 2011: Rs.26.36 million) Aggregate amount of unquoted investments Aggregate provision for diminution in value of investments
15. Loans and advances Long-term As at 31st March 2012 Rs. Millions Capital advances Secured, considered good Unsecured, considered good (A) Security deposit Secured, considered good Unsecured, considered good Doubtful Provision for doubtful security deposit (B) Loans and advances to related parties Unsecured, considered good (C) Advances recoverable in cash or kind Secured considered good Unsecured considered good Doubtful Provision for doubtful advances (D) 1.75 1.75 1.75 3.16 3.16 3.16 10.77 10.77 50.85 50.85 50.85 88.28 88.28 88.28 76.46 76.46 76.46 1,709.29 1,709.29 1,709.29 As at 31st March 2011 Rs.Millions Short-term As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions
6.32 2.95
6.32 2.95
4.00 14.21 153.46
10.21 23.85 1,723.39
10.21 143.25 1,723.39
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
Other loans and advances Advance income-tax(net of provision for taxation) Prepaid expenses Loans to employees Balances with statutory/government authorities (E) Total (A+B+C+D+E) 16. Trade receivables and other assets 16.1 Trade receivables Non-current As at 31st March 2012 Rs. Millions Unsecured, considered good unless stated otherwise Outstanding for a period exceeding six months from the date they are due for payment Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (A) Other receivables Secured, considered good Unsecured, considered good Doubtful Provision for doubtful receivables (B) Total (A+B) 6,997.96 6,997.96 6,997.96 10,116.37 6,548.83 6,548.83 6,548.83 9,691.94 3,118.41 682.50 3,800.91 (682.50) 3,118.41 3,143.11 344.08 3,487.19 (344.08) 3,143.11 As at 31st March 2011 Rs.Millions Current As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions 501.48 4.43 26.21 532.12 533.87 6.11 26.18 32.29 35.45 12.14 1,157.23 8.57 4.29 1,182.23 1,332.13 819.22 5.15 3.00 827.37 2,613.12
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
16.2 Other assets Non-current As at 31st March 2012 Rs. Millions Unsecured, considered good unless stated otherwise Non-current bank balances (A) Others Interest accrued on ?xed deposits Interest accrued on investments Others (B) Total (A+B) 17. Inventories As at As at 31st March 2012 31st March 2011 Rs. Millions Rs.Millions 3,005.92 2,615.59 3,005.92 2,615.59 499.37 492.08 10.22 88.64 98.86 98.86 2.21 476.98 479.19 479.19 As at 31st March 2011 Rs.Millions Current As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs.Millions
499.37
492.08
-
-
Stores, Spares and Fuel (including stock-in- transit)
18. Cash and bank balances Non-current Current As at As at As at As at 31st March 2012 31st March 2011 31st March 2012 31st March 2011 Rs. Millions Rs.Millions Rs. Millions Rs.Millions Cash and cash equivalents Balances with banks: -On current accounts -Deposits with original maturity of less than three months -On unpaid dividend account Cash on hand Other bank balances -Deposits with original maturity for more than 12 months -Deposits with original maturity for more than 3 months but less than 12 months - Margin money deposit
-
-
254.14 434.97 7.13 0.99 697.23
4,978.40 314.45 8.00 3.37 5,304.22
499.37 499.37 499.37 (499.37) -
492.08 492.08 492.08 (492.08) -
0.49 146.82 147.31 844.54 844.54
Amount disclosed under non current assets
33.48 120.75 154.23 5,458.45 5,458.45
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
19. Revenue from operations Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Revenue from operations Revenue from drilling and production services Revenue from wind power generation 31,570.46 58.75 31,629.21 33,385.79 86.44 33,472.23
20. Other income Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions Interest income on -Bank deposits -Others Dividend income on -Long term investments -Current investments Exchange Difference (Net) Miscellaneous Income Net gain on sale of current investments Net gain on sale of assets Pro?t on sale of joint venture interest Rental income 35.77 0.78 0.37 182.80 126.44 307.69 3.81 657.66 24.16 0.01 1.16 18.50 97.30 4.06 108.27 6.35 259.81
21. Consumption of stores, spares, power and fuel Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 982.74 1,049.18 196.43 319.67 1,179.17 1,368.85
Consumption of stores and spares Power and Fuel
22. Employee bene?t expense Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 3,277.53 2,754.39 28.93 32.61 6.34 4.59 65.44 103.85 3,378.24 2,895.44
Salaries,wages and bonus Contribution to provident and other fund Gratuity expense Staff welfare expenses
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
23. Finance costs Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 9,771.97 9,237.69 74.75 98.28 31.32 12.81 9,890.85 9,335.97
Interest Loan Processing Charges Amortization of ancillary borrowings costs Exchange difference to the extent considered as an adjustment to borrowings costs
24. Depreciation and amortization expense Year ended Year ended 31st March 2012 31st March 2011 Rs. Millions Rs. Millions 5,160.41 4,907.14 5,160.41 4,907.14
Depreciation on tangible assets
25. Other expenses
Yearended 31st March 2012 Rs. Millions Freight and forwarding cost Rent Rates and taxes Rental charges for machinery Insurance Repairs and maintenance -Plant and machinery -Buildings -Others Drilling services and management fees Advertising and sales promotion Travelling ,conveyance and transportation Communication costs Printing and stationery Legal and professional fees Catering expenses Directors’ sitting fees Payment to auditors As auditor -Audit fee -Tax audit fee 41.66 90.11 21.14 507.85 1,425.34 142.60 2.38 39.94 1,333.83 2.71 797.11 71.83 5.01 965.59 216.36 0.24 Yearended 31st March 2011 Rs. Millions 40.18 87.76 26.00 439.38 593.66 461.57 1.59 6.64 1,075.82 0.75 745.78 78.10 4.94 891.87 265.97 0.32
42.96 0.46
40.79 0.62
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
-Limited review In other capacity -Taxation matters -Other services(certi?cation fees) Reimbursement of expenses Provision for diminution in value of long term investments Exchange losses(net) Exchange differences(net) Provision for doubtful debts and advances Miscellaneous expenses 1.15 0.35 0.88 0.18 494.11 398.84 2,065.00 8,667.63 1.20 1.39 0.13 513.05 500.19 782.96 344.08 1,632.13 8,536.87
26. Exceptional items
Year ended 31st March 2012 Rs. Millions Loss on asset sunk Year ended 31st March 2011 Rs. Millions 3,372.87 3,372.87
27. Earnings per share(EPS) The following re?ects the pro?t and share data used in the basic and diluted EPS computations
Year ended 31st March 2012 Rs. Millions Pro?t/(Loss) after tax Less: Dividends on preference shares and tax thereon Net pro?t/(loss) for calculation of EPS 3,215.19 293.16 2,922.03 Year ended 31st March 2011 Rs. Millions 1,449.45 324.14 1,125.31
No. Millions Weighted average number of equity shares in calculating basic EPS Effect of dilution: Stock options granted under ESOS Weighted average number of equity shares in calculating diluted EPS Earning per share -basic Earning per share -diluted 43.51 0.31 43.82 67.16 66.68
No. Millions 43.51 0.25 43.76 25.86 25.71
28. Employee stock option scheme The Parent Company has instituted Employee Stock Option Scheme-2005 (ESOS) duly approved by the shareholders in the extra-ordinary general meeting of the company held on 23rd April 2005. As per the scheme, the compensation committee of the board evaluates the performance and other criteria of employees and approves the grant of option. These options vest with employees over a speci?ed period subject to ful?llment of certain conditions. Upon vesting, employees are eligible to apply and secure allotment of company’s equity share at the prevailing market price on the date of the grant of option. 115
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 The Securities Exchange Board of India (SEBI) issued the Employee Stock Option Scheme and Employees Stock Purchase Scheme guidelines in 1999, applicable to stock option schemes on or after 19th June 1999. Under these guidelines, the excess of the market price of the underlying equity shares as of the date of the grant over the exercise price of the option is to be recognized and amortized on a straight line basis over the vesting period. The Company has not recognized any deferred compensation expenses, as the exercise price was equal to the market value (as de?ned by SEBI) of the underlying equity shares on the grant date. Excess of exercise price over the nominal value of equity shares allotted during the year under ESOS and credited to securities premium account is Rs. NIL (31st March 2011: Rs.8.21 million) The details of option granted are given below: Maximum number of options that may be granted under the scheme is 1.84 million equity shares of Rs.2 each. Options granted during the year-NIL (up to 31st March 2011: 0.44 million equity shares of Rs.2 each)-Options lapsed during the year 0.078 million equity shares of Rs2 each (up to 31st March 2011: 0.04 million equity shares of Rs.2 each)-Options exercised during the year- NIL (up to 31st March 2011: 0.095 million equity shares of Rs.2 each)-Options outstanding at the end of year :0.23 million equity shares of Rs.2 each (up to 31st March 2011: 0.31 million equity shares of Rs.2 each)-Options yet to be granted under the scheme: 1.52 million equity shares of Rs.2 each (31st March 2011: 1.441 million equity shares of Rs.2 each) 29. Aban Singapore Pte Ltd (“Aban Singapore”) operates a share option scheme to provide an incentive to directors and employees of Aban Singapore and related corporations to participate in the equity of the Company. Under the Scheme, the number of shares of Aban Singapore under option shall not exceed 2% of the total number of issued and paid-up shares of Aban Singapore. The options were granted on 25th August 2007. No options were granted during the current ?nancial year. The number of outstanding options held by employees of Aban Singapore and related corporations as on 31st March,2012 is 2,462,000 share options.(Previous year: 2,462,000 share options). There were no options forfeited, exercised or lapsed for the ?nancial year ended 31st March 2012. 30. The Maritime and Port Authority of Singapore has awarded “Approved International Shipping Enterprise “(AIS) status to Aban Singapore Pte Ltd and its subsidiaries with effect from 1 June 2006 for an initial period of 10 years. Aban Singapore and its operating subsidiaries are exempted from Singapore Income tax from the qualifying income under Section 13F of the Singapore Income Tax Act. However, in respect of income earned outside Singapore, necessary provision for tax has been made in accordance with applicable tax laws in respective countries. 31. Leases Operating lease: Company as lessee The wholly owned foreign subsidiary leases, of?ce space and accommodation for certain employees from non-related parties under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewable rights. The future aggregate minimum payments under the operating leases contracted for at the balance sheet date but not recognized as liabilities are analysed as follows: 31st March 2012 Rs.Millions Within one year After one year but not more than two years 76.20 67.00 143.20 31st March 2011 Rs.Millions 58.10 8.43 66.53
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 32. Interest in joint venture The Parent company’s interest, as a venturer, in jointly controlled entity is as follows: Name of the company Frontier Offshore Exploration (India) Limited Country of incorporation Proportion of ownership interest 31st March 2012 25% Proportion of ownership interest 31st March 2011 25%
India
The company has ceased to have joint control over Frontier Offshore Exploration (India) Limited and has also provided for diminution in the value of long term investment considering the state of affairs of the joint venture company 33. Segment information A. Primary Segment-The company’s primary segments are offshore oil drilling and production services and wind power generation (Wind energy). The said business segments have been identi?ed considering the nature of services rendered and the internal ?nancial reporting system. Income and expenses have been accounted for based on their relationship to the operating activities of the segment B. Secondary segment- Substantial assets of the company are offshore rigs, which are mobile assets and can operate across the world, in view of which geographical segment is not considered.
Primary Segment information 1. Segment revenue - Drilling -Wind energy 2. Segment results - Drilling -Wind energy less: interest expenses 3. Segment assets - Drilling -Wind energy 4. Segment liabilities - Drilling -Wind energy 5. Depreciation - Drilling -Wind energy 6. Capital expenditure including work in progress - Drilling -Wind energy 32,228.12 58.75 13,992.16 (178.30) (9,803.29) 173,262.99 421.71 145,012.39 55.87 4,975.38 185.03 145,068.26 32,286.87 33,634.05 97.99 12,684.72 (132.13) (9,237.69) 160,108.52 604.45 137,083.09 180.57 4,727.94 179.20 137,263.66 33,732.04 31st March 2012 Rs. Millions Rs. Millions 31st March 2011 Rs. Millions Rs. Millions
4,010.57
3,314.90
173,684.71
160,712.97
5,160.41
4,907.14
25,110.44 -
25,110.44
5,205.20 -
5,205.20
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012 34. Related Party Disclosures Names of related parties and related party relationship Related parties where control exists A. Subsidiary companies (wholly owned subsidiaries) Aban Energies Limited, India Aban Holdings Pte Limited, Singapore B. Subsidiaries of Aban Holdings Pte Limited, Singapore Aban Singapore Pte Ltd, Singapore Aban 7 Pte Ltd, Singapore Aban 8 Pte Ltd, Singapore Aban Abraham Pte Ltd, Singapore Aban Pearl Pte Ltd, Singapore Aban International Norway AS, Norway Sinvest AS, Norway DDI Holding AS, Norway Deep Drilling Invest Pte Ltd, Singapore Deep Drilling 1 Pte Ltd, Singapore Deep Drilling 2 Pte Ltd, Singapore Deep Drilling 3 Pte Ltd, Singapore Deep Drilling 4 Pte Ltd, Singapore Deep Drilling 5 Pte Ltd, Singapore Deep Drilling 6 Pte Ltd, Singapore Deep Drilling 7 Pte Ltd, Singapore Deep Drilling 8 Pte Ltd, Singapore Deep Driller Mexico S de RL de CV, Mexico C. Other related parties with whom the company had transactions a. Key Management personnel (i) Reji Abraham (ii) Mr. P. Venkateswaran (iii) Mr. C. P. Gopalkrishnan Managing Director Dy. Managing Director Dy. Managing Director and Secretary
Transactions with related parties during the year
Nature of transaction Key Management Personnel 31st March 2012 Rs. Millions 1. Rent paid 2. Remuneration 3. Interest received/receivable 4. Loan repaid 5. Dividend paid 6. Amount oustanding as at 31st March 2012 -Payable 7.63 36.80 18.58 31st March 2011 Rs. Millions 5.31 124.75 0.01 0.38 17.79
76.85
Disclosure in respect of transactions which are more than 10% of the total transactions of the same type with related parties during the year
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
31st March 2012 Rs. Millions 1. Remuneration to Key management personnel - Mr. Reji Abraham -Mr. P.Venkateswaran -Mr. C.P.Gopalkrishnan 2. Rent paid - Reji Abraham 3. Dividend paid - Reji Abraham 4. Amount payable towards commission to: - Mr. Reji Abraham - Mr.P.Venkateswaran Other transactions Loans guaranteed by personal guarantee by the managing director of the company-Rs.14,648 million 35. Capital and other commitments 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions 6.34 6.39 24.07 31st March 2011 Rs. Millions 84.66 13.65 26.44
7.63
5.31
18.46
17.67
-
73.20 3.65
Capital and Other commitments not provided for
104.16
63.24
36. Contingent liabilities 31st March 2012 Rs. Millions 31st March 2011 Rs. Millions
Guarantees given by banks on behalf of the company
710.25
1,183.90
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Aban Offshore Limited
Notes to Consolidated Financial Statements for the year ended 31st March 2012
37. Derivative instruments and unhedged foreign currency exposures a. Outstanding forward cover contracts/derivatives as at the balance sheet date As at 31st March 2012 Rs. Millions As at 31st March 2011 Rs. Millions
a. Derivative contracts oustanding as at the balance sheet date
Purpose
- Currency forward contracts/options -Foreign currency convertible bonds
7,217.71 -
9,023.40 975.30
Hedging risk of exchange rate ?uctuations Hedging risk of exchange rate ?uctuations
b. Particulars of unhedged foreign currency exposures as at the balance sheet date As at 31st March 2012 USD Millions
- Import payables -Foreign currency convertible bond -Bond Loans denominated in Norwegian Kroners in Foreign Subsidiary
As at 31st March 2012 Rs. Millions 2,441.76 -
As at 31st March 2011 USD Millions 45.00 43.19 57.33
As at 31st March 2011 Rs. Millions 2,006.60 1,925.90 2556.30
48.00 -
38. Previous year ?gures Till the year ended 31st March 2011, the Group was using the pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its ?nancial statements. During the year ended 31st March 2012, the Revised Schedule VI noti?ed under the Companies Act, 1956 has become applicable to the Group. The Group has reclassi?ed previous year ?gures to conform to this year’s classi?cation.
As per our report of even date For Ford, Rhodes, Parks & Co Chartered Accountants ICAI-Registration No.102860W
For and on behalf of the Board
Reji Abraham Managing Director Ramaswamy Subramanian Partner Membership No: 016059 Place: Chennai Date: May 30, 2012
C.P.Gopalkrishnan Dy.Managing Director & Secretary
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Aban Offshore Limited
Financial Highlights - 5 years at a glance (Standalone)
PARTICLULARS PROFIT & LOSS ACCOUNT Income from Operation & Other Income PBDIT Finance Cost Depreciation/Exceptional Items Goodwill Amotized Profit before Tax Tax Profit after Tax BALANCE SHEET Net Fixed Asset Investment Net Current Asset Total Share Holders Fund Borrowings Defferred Tax Liability Total Return on Networth EPS (Basic)-Rs. EPS (Dilluted-Rs. Debt Equity Ratio 5983.76 39471.29 217.15 45,672.20 20746.63 24656.96 268.61 45,672.20 (5.93%) (34.49) (34.24) 1.19 4,973.96 39,590.68 8,322.76 52,887.40 23,570.66 29,024.75 291.98 52,887.40 9.93% 46.32 46.05 1.23 5,756.42 39,686.38 8,253.69 53,696.49 21,729.31 31,531.50 435.68 53,696.49 12.91% 62.18 61.22 1.45 5,242.53 13,807.49 24,747.13 43,797.15 12,451.76 30,829.88 515.51 43,797.15 20.86% 60.30 60.04 2.48 5,702.32 9,785.08 9,858.50 25,345.90 10,129.14 14,563.19 653.58 25,345.90 15.71% 34.54 33.80 1.44 7144.13 3417.94 3662.53 986.10 (1,230.69) (1,230.69) 12,673.14 7,990.44 3,286.57 1,148.08 3,555.79 1,216.30 2,339.49 13,638.33 8,777.18 3,371.42 1,091.16 4,314.60 1,510.17 2,804.43 12,295.90 7,578.11 2,550.62 972.44 4,055.05 1,457.43 2,597.62 7,387.71 4,179.65 692.43 954.47 62.93 2,469.82 878.80 1,591.01 2011-12 (Rs. Millions) 2010-11 (Rs. Millions) 2009-10 (Rs. Millions) 2008-09 (Rs. Millions) 2007-08 (Rs. Millions)
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Regd. Office: Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008.
Aban Offshore Limited
Twenty Sixth Annual General Meeting
Folio No. / DP ID & Client ID.......................................................... Name of Member / Joint Holder No. of Shares : Please tick ( ) whether Member Joint Holder 1. Joint Holder 2. Proxy I/We hereby record my presence at the 26th Annual General meeting of Aban Offshore Ltd, held on Friday, the 21st September, 2012 at 10.15 a.m. at Narada Gana Sabha Trust, (Sathguru Gnanananda Hall) No.314 TTK Road, Chennai - 600 014. Member(s) or Proxy(s) Signature Note :
1. The Shareholder / Proxy must bring the admission slip to the meeting duly completed and signed and it must be handed over at the entrance. 2. Shareholders intending to require information about accounts to be explained at the meeting are requested to inform the Company at least a week in advance of their intention to do so, so that the papers relating thereto may be made available if permissible.
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Regd. Office: Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008.
Aban Offshore Limited
PROXY FORM
Folio No. / DP ID & Client ID.......................................................... I/We .................................................. of ........................................... in the district of .......................................................... being members of Aban Offshore Ltd. hereby appoint .................................. of ................................. in the district of ... .................................. as my / our proxy to vote for me / us on my / our behalf at the 26th Annual General Meeting of the Company on to be held on Friday, the 21st September, 2012 at 10.15 a.m. at Narada Gana Sabha Trust, (Sathguru Gnanananda Hall) No.314 TTK Road, Chennai - 600 014. Signed this ................................. day of ..........................2012
Affix
Note :
1. The form should be signed across the stamp as per the specimen signature registered with the Company 2. The proxy form duly completed must reach the Registered Office of the Company at Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008. not less than 48 hours before the Meeting. 3. Proxy need not be a member.
Re. 1 Revenue Stamp
To,
If Undelivered please return to:
Aban Offshore Limited
Janpriya Crest, 113 Pantheon Road, Egmore, Chennai - 600 008
Canara Traders & Printers Pvt. Ltd. Chennai-41
doc_491403116.pdf